THE WACHOVIA FUNDS
Wachovia Equity Fund
Wachovia Quantitative Equity Fund
Wachovia Growth and Income Fund
Wachovia Equity Index Fund
Wachovia Special Values Fund
Wachovia Emerging Markets Fund
Wachovia Balanced Fund
Wachovia Fixed Income Fund
Wachovia Intermediate Fixed Income Fund
Wachovia Short-Term Fixed Income Fund
THE WACHOVIA MUNICIPAL FUNDS
Wachovia GA Municipal Bond Fund
Wachovia NC Municipal Bond Fund
Wachovia SC Municipal Bond Fund
Wachovia VA Municipal Bond Fund
Combined Annual Report
November 30, 1998
[LOGO OF WACHOVIA FUNDS]
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President's Message
Dear Shareholder:
I am pleased to present the Combined Annual Report to Shareholders for The
Wachovia Funds and The Wachovia Municipal Funds.
This report covers the 12-month fiscal year period from December 1, 1997
through November 30, 1998, and includes commentary by portfolio management, a
complete listing of fund holdings and the funds' financial statements. The
following fund-by-fund highlights cover performance activity in Class A
Shares, Class B Shares, and Class Y Shares.
I urge you to read the portfolio manager commentary for additional information
about your fund's performance.
The Wachovia Funds
Wachovia Equity Fund pursues growth through a portfolio of blue-chip stocks
issued by some of America's largest and best-known companies. In particular,
the fund's manager seeks stocks issued by companies that are both undervalued
and have good growth opportunities. At the end of the reporting period, the
fund's extensive stock holdings included such well-known names as American
Express, Coca-Cola, Dell Computer, DuPont, Exxon, General Electric, Intel, MCI
Worldcom, McDonald's, Sears, Time Warner and Wal-Mart. Fund assets reached
$259 million at the end of the reporting period.
<TABLE>
<CAPTION>
Total Return* Income Capital Gains
Based on NAV Distributions Distributions Share Price Change
------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C>
Class A Share 17.34% $0.14 $1.68 $15.39 to $15.91
Class B Shares 16.52% $0.03 $1.68 $15.35 to $15.87
Class Y Shares 17.69% $0.17 $1.68 $15.39 to $15.92
</TABLE>
Wachovia Quantitative Equity Fund pursues growth and income by investing in a
portfolio of stocks issued by large, established companies across the entire
industrial spectrum. On the last day of the reporting period, the portfolio
included quality names like Allstate, Anheuser-Busch, Bell Atlantic, Daimler-
Chrysler, Coca-Cola, Compaq Computer, Federated Department Stores, General
Electric, Harley Davidson, and Warner-Lambert. Fund assets ended the reporting
period at $309 million.
<TABLE>
<CAPTION>
Total Return* Income Capital Gains
Based on NAV Distributions Distributions Share Price Change
------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C>
Class A Shares 18.98% $0.19 $1.75 $19.00 to $20.29
Class B Shares 18.15% $0.06 $1.75 $18.95 to $20.23
Class Y Shares 19.38% $0.23 $1.75 $19.00 to $20.31
</TABLE>
Wachovia Growth and Income Fund pursues total return through growth of capital
and income. At the end of the reporting period, the fund's holdings included
such names as Anheuser-Busch, AT&T, CBS, DuPont, General Motors, Goodyear,
Intel, Merck, Procter & Gamble, Sears, Wal-Mart, and Wells Fargo. Fund assets
totaled $336.4 million at the end of the reporting period.
<TABLE>
<CAPTION>
Total Return* Income Capital Gains
Based on NAV Distributions Distributions Share Price Change
------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C>
Class A Shares 20.77% $0.10 $1.01 $20.60 to $23.54
Class Y Shares (period
from March 29, 1998
through November 30, 1998) 6.03% $0.09 -- $22.31 to $23.55
</TABLE>
Wachovia Equity Index Fund pursues a total return that approximates that of
the Standard & Poor's 500 Index--a classic benchmark of stock market
performance.** As a result, the fund's extensive portfolio contained a "who's
who" of well-known, quality American companies. Fund assets increased
substantially to reach $423 million at the end of the reporting period.
<TABLE>
<CAPTION>
Total Return* Income Capital Gains
Based on NAV Distributions Distributions Share Price Change
------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C>
Class A Shares 22.74% $0.24 $0.40 $18.89 to $22.41
Class Y Shares 23.05% $0.29 $0.40 $18.91 to $22.44
</TABLE>
*Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.
**The Standard & Poor's 500 Index is an unmanaged index comprised of common
stocks in industry, transportation, and financial and public utility
companies. Investments cannot be made in an index.
Wachovia Special Values Fund pursues growth by investing in a diversified
portfolio of small-company stocks.* Unlike many other funds that invest in
small-company stocks through a high-flying approach, this fund is managed
through a highly disciplined approach. Its manager seeks stocks issued by
well-capitalized, and well-run small companies that are selling at less than
their estimated long-term values. Reflecting the year's weakness in small-cap
stocks, the fund's return was negative. At the end of the reporting period,
the fund's net assets reached $149 million.
<TABLE>
<CAPTION>
Total Return** Income Capital Gains
Based on NAV Distributions Distributions Share Price Change
-------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C>
Class A Shares (3.86%) $0.12 $1.71 $18.64 to $16.13
Class Y Shares (3.59%) $0.15 $1.71 $18.67 to $16.18
</TABLE>
Wachovia Emerging Markets Fund pursues growth over the long term by investing
in stocks of foreign companies located in emerging market countries.*** The
fund's managers uses a unique "two-tier, equal weighting" approach to
selecting stocks for the fund that offers greater diversification than most
emerging market funds, with the opportunity for better protection from
unexpected negative developments in any one country. Unfortunately, the fund's
performance reflected the negative impact of the Asian economic crisis on the
entire emerging marketplace. Fund assets ended the reporting period at $139
million.
<TABLE>
<CAPTION>
Total Return** Income
Based on NAV Distributions Share Price Change
-------------- ------------- ------------------
<S> <C> <C> <C>
Class A Shares (23.46%) $0.10 $11.12 to $8.43
Class Y Shares (23.34%) $0.13 $11.13 to $8.44
</TABLE>
Wachovia Balanced Fund pursues a popular investment objective--long-term
growth and current income--by investing in a quality combination of stocks
(52.2% of assets at the end of the reporting period) and bonds. Bond holdings
were diversified across mortgage-backed securities (13.4%), corporate bonds
(12.9%), U.S. Treasury securities (13.5%), and a repurchase agreement (6.7%).
Over the reporting period, fund assets increased from $306 million to $423
million.
<TABLE>
<CAPTION>
Total Return** Income Capital Gains
Based on NAV Distributions Distributions Share Price Change
-------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C>
Class A Shares 14.36% $0.38 $0.90 $13.26 to $13.72
Class B Shares 13.56% $0.29 $0.90 $13.23 to $13.69
Class Y Shares 14.77% $0.41 $0.90 $13.26 to $13.74
</TABLE>
Wachovia Fixed Income Fund pursues a high level of total return from a
diversified portfolio of income-producing securities. At the end of the
period, the fund's $238 million in assets were invested across corporate bonds
(35.9%), government agency securities (26.7%), U.S. Treasury securities
(18.0%), open-ended investment companies (7.9%), asset-backed securities
(5.0%), collateralized mortgage obligations (2.8%), a repurchase agreement
(1.5%), and foreign bonds (0.9%).
<TABLE>
<CAPTION>
Total Return** Income
Based on NAV Distributions Share Price Change
-------------- ------------- ------------------
<S> <C> <C> <C>
Class A Shares 8.65% $0.54 $9.85 to $10.14
Class B Shares 7.97% $0.47 $9.84 to $10.14
Class Y Shares 8.92% $0.56 $9.85 to $10.14
</TABLE>
Wachovia Intermediate Fixed Income Fund pursues current income consistent with
preservation of capital from a diversified portfolio of intermediate-term
income-producing securities. At the end of the reporting period, the fund's
$92 million in assets was invested across U.S. Treasury securities (36.6%),
corporate bonds (33.1%), U.S. government agency securities (23.2%), open ended
investment companies (4.3%), and a repurchase agreement (2.2%).
<TABLE>
<CAPTION>
Total Return** Income
Based on NAV Distributions Share Price Change
-------------- ------------- ------------------
<S> <C> <C> <C>
Class A Shares 9.39% $0.52 $10.03 to $10.38
Class Y Shares (period from
March 29, 1998 through Novem-
ber 30, 1998) 7.11% $0.41 $10.12 to $10.38
</TABLE>
*Small-cap stocks have historically experienced greater volatility than
average.
**Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost.
***Foreign investing involves special risks including currency risk, increased
volatility of foreign securities, and differences in auditing and other
financial standards. Emerging markets economic structures may be less
diverse and mature, and their political systems may be less stable than
those of established markets.
Wachovia Short-Term Fixed Income Fund pursues a high level of income from a
diversified portfolio that, at the end of the reporting period, consisted
primarily of corporate bonds (45.0%), U.S. government obligations, (38.3%),
U.S. Treasury obligations (10.0%). These short-term, income-producing
securities are managed to provide an income stream and cushion shareholders
against volatility during periods of interest rate increases. Assets totaled
$108 million on the last day of the reporting period.
<TABLE>
<CAPTION>
Total Return* Income
Based on NAV Distributions Share Price Change
------------- ------------- ------------------
<S> <C> <C> <C>
Class A Shares 6.93% $0.51 $9.77 to $9.92
Class Y Shares 7.19% $0.53 $9.77 to $9.92
</TABLE>
The Wachovia Municipal Funds
Wachovia Georgia Municipal Bond Fund pursues monthly income exempt from
federal regular income tax and Georgia state income tax.+ The fund invests in
a portfolio of bonds issued by municipalities across Georgia that are rated A
or higher by nationally recognized rating agencies. Total assets reached $23
million on the last day of the reporting period.
<TABLE>
<CAPTION>
Total Return* Income
Based on NAV Distributions Share Price Change
------------- ------------- ------------------
<S> <C> <C> <C>
Class A Shares 6.35% $0.42 $11.11 to $11.38
Class Y Shares 6.62% $0.45 $11.11 to $11.38
</TABLE>
Wachovia North Carolina Municipal Bond Fund pursues monthly income exempt from
federal regular income tax and North Carolina state income tax.+ At the end of
the reporting period, the fund's $66 million portfolio was invested in bonds
issued by municipalities across North Carolina. All holdings are rated A or
higher at the time of purchase by nationally recognized rating agencies.
<TABLE>
<CAPTION>
Total Return* Income Capital Gains
Based on NAV Distributions Distributions Share Price Change
------------- ------------- ------------- ------------------
<S> <C> <C> <C> <C>
Class A Shares 6.82% $0.43 $0.01 $11.15 to $11.46
Class Y Shares 7.09% $0.46 $0.01 $11.15 to $11.46
</TABLE>
Wachovia South Carolina Municipal Bond Fund pursues monthly income exempt from
federal regular income tax and South Carolina state income tax.+ The fund
invests in a portfolio of bonds issued by South Carolina municipalities that
are rated A or higher at the time of purchase by nationally recognized rating
agencies. Total assets reached $122 million at the reporting period's end.
<TABLE>
<CAPTION>
Total Return* Income
Based on NAV Distributions Share Price Change
------------- ------------- ------------------
<S> <C> <C> <C>
Class A Shares 6.88% $0.51 $11.12 to $11.36
Class Y Shares 7.15% $0.54 $11.12 to $11.36
</TABLE>
*Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.
+Income may be subject to the federal alternative minimum tax.
Wachovia Virginia Municipal Bond Fund pursues monthly income exempt from
federal regular income tax and Virginia state income tax.+ The fund invests in
a portfolio of bonds issued by Virginia municipalities that are rated A or
higher at the time of purchase by nationally recognized rating agencies. Total
assets reached $107 million at the reporting period's end.
<TABLE>
<CAPTION>
Total Return* Income
Based on NAV Distributions Share Price Change
------------- ------------- ------------------
<S> <C> <C> <C>
Class A Shares 6.76% $0.42 $10.29 to $10.49
Class Y Shares (for the period
from March 29, 1998 through
November 30, 1998) 4.61% $0.32 $10.34 to $10.49
</TABLE>
Thank you for pursing your financial goals through the diversification and
professional management of the Wachovia Funds and the Wachovia Municipal
Funds. As we begin 1999, we renew out commitment to keep you up-to-date on
your investment progress through the highest level of service.
Sincerely,
/s/ John W. McGonigle
John W. McGonigle
President
January 15, 1999
*Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost.
+Income may be subject to the federal alternative minimum tax.
Total returns for the period adjusted for the sales charge (Class A Shares) or
redemption fee (Class B Shares) are as follows:
Wachovia Equity Fund, Class A Shares, 12.02%; Class B Shares, 11.52%
Wachovia Quantitative Equity Fund, Class A Shares, 13.60%; Class B Shares,
13.15%
Wachovia Growth & Income Fund, Class A Shares, 15.34%
Wachovia Equity Index Fund, Class A Shares, 17.21%
Wachovia Special Values Fund, Class A Shares, (8.20%)
Wachovia Emerging Markets Fund, Class A Shares, (26.88%)
Wachovia Balanced Fund, Class A Shares, 9.25%; Class B Shares, 8.56%
Wachovia Fixed Income Fund, Class A Shares, 3.80%; Class B Shares, 2.97%
Wachovia Intermediate Fixed Income Fund, Class A Shares, 4.48%
Wachovia Short-Term Fixed Income Fund, Class A Shares, 4.26%
Wachovia Georgia Municipal Bond Fund, Class A Shares, 1.60%
Wachovia North Carolina Municipal Bond Fund, Class A Shares, 1.97%
Wachovia South Carolina Municipal Bond Fund, Class A Shares, 2.11%
Wachovia Virginia Municipal Bond Fund, Class A Shares, (2.01%)
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Overview
1. Wachovia Equity Fund Shareholder:
While the equity market saw strong performance in 1998, the breadth of this
strong market performance was rather narrow. As it was in 1997, the market was
characterized by a pronounced capitalization effect, with the 50 largest
companies in the Standard & Poor's Daily Stock Price Index of 500 Common
Stocks (the "S&P 500")* significantly outperforming the rest of the market.
Large capitalization U.S. equities saw a fourth straight year of returns in
excess of 20%.
Growth companies outperformed value companies for the fifth straight year in
1998, as lower interest rates increased the value of future earnings growth
and concerns over global economic growth depressed the relative valuations of
economically sensitive companies. The winning strategy in 1998 was to be
invested primarily in large-cap growth companies (regardless of their
valuation level) that continued to show consistently high levels of earnings
growth.
In the midst of this challenging environment, the Wachovia Equity Fund
performed very well compared to similar funds. A strategic focus on larger
companies and the specialized analysis of our portfolio managers significantly
enhanced our performance for the year. While avoiding some of the extreme
valuations in the market, we were able to find companies whose growth
prospects were not yet fully reflected in their stock prices. We believe our
specialized approach to stock selection will continue to serve our clients
well in an environment where stock selection is likely to become more
critical.
2. Wachovia Quantitative Equity Fund Shareholder:
The Wachovia Quantitative Equity Fund performed well in 1998, with total
returns based on net asset value of 18.98%, 18.15% and 19.38% for Class A
Shares, Class B Shares and Class Y Shares, respectively.** The "value"
investing segment produced disappointing results during the year, while the
"growth" portion continued its superior performance. Larger capitalization
stocks tended to outperform smaller ones. In this environment, the fund's
performance is especially noteworthy because it was achieved using a
diversified portfolio of stocks with sector weightings closely approximating
the market.
3. Wachovia Equity Index Fund Shareholder:
While the equity market saw strong performance in 1998, the breadth of this
market strength narrowed significantly. The market was characterized by a
pronounced capitalization effect, with the S&P 500's* largest 50 companies,
which account for more than 50% of the capitalization weighted index,
significantly outperforming the rest of the market.
4. Wachovia Growth and Income Fund Shareholder:
Similar to 1997, the market was characterized by a pronounced capitalization
effect during 1998, with the 50 largest companies in the S&P 500*
significantly outperforming the rest of the market. Large capitalization U.S.
equities saw a fourth straight year of returns in excess of 20%.
Growth companies outperformed value companies for the fifth straight year, as
lower interest rates increased the value of future earnings growth and
concerns over global economic growth depressed the relative valuations of
economically sensitive companies. Investments in large cap growth companies
that displayed consistently high earnings growth proved to be a winning
strategy in 1998.
In the midst of this challenging environment, the Wachovia Growth and Income
Fund performed very well compared with similar funds. With a focus on larger
companies and the specialized analysis of our portfolio managers, our
performance was significantly enhanced during the year. While avoiding some of
the extreme valuations in the market, we were able to find companies whose
growth prospects were not yet fully reflected in their stock prices. We
believe our specialized approach to stock selection will continue to serve our
clients well in an environment where stock selection is likely to become more
critical.
*The S&P 500 is a composite index of common stocks in industry,
transportation, and financial and public utility companies. In addition, the
S&P 500 assumes reinvestment of all dividends paid by stocks listed on the
index. Taxes due on any of these distributions are not included, nor are
brokerage or other fees calculated in index figures. Investments cannot be
made in an index.
**Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. Total returns for the period adjusted for the sales charge
(Class A Shares) or redemption fee (Class B Shares) were 13.06% and 13.15%
for Class A Shares and Class B Shares, respectively.
5. Wachovia Special Values Fund Shareholder:
Despite the volatility experienced by virtually all equity markets, the
Wachovia Special Values Fund performed well in 1998 and ended the year having
outperformed the benchmark Russell 2000 Index.* Heightened merger activity in
the holdings of the fund contributed to significant outperformance during the
first half of the year. Increased proceeds from this merger activity, coupled
with a flow of new money, allowed us to build our cash position heading into
the third quarter. Combined with excellent stock selection, this cash position
allowed our portfolio to successfully weather the third quarter's broad market
correction. As many investors were compelled to sell their small-cap holdings
during the correction, we prepared the fund to buy attractive companies at
very favorable prices, and thus position the fund for a strong finish to 1998.
6. Wachovia Emerging Markets Fund Shareholder:
In spite of the global economic adversity experienced in 1998, the case for
emerging markets remains intact. A broad economic contraction or a falling
equity market does not diminish a population's improved level of education,
manufacturing competitiveness, or desire to improve its standard of living. At
the currently low prices for emerging market companies, investors are paying
little for the likely growth potential of these countries and companies.
In 1998, a number of global disturbances adversely impacted emerging equity
markets. The year began with premature enthusiasm about Asia's recovery from a
financial crisis that had accelerated in the second half of 1997. A better
understanding of the chronic stagnation in the Japanese economy brought into
question the immediate prospects of the entire Asian Basin. In addition to
macro-economic fundamentals, political events such as the riots in Indonesia,
touched off by severe economic distress, and the unanticipated nuclear tests
made by India and Pakistan added to global market anxiety. The watershed event
for global finance, and especially for emerging markets, was the devaluation
of the Russian ruble and the subsequent default on its debt. While important
geopolitically, Russia was not a pivotal economic entity. However, a number of
large investors held highly leveraged investments in Russian debt. Their hasty
exit from other emerging market securities to cover their financial
obligations caused the amplification of the Russian problem to the rest of the
world. Emerging and developed markets alike plunged. While the fourth quarter
saw a stunning rebound in many markets and for the asset class as a whole, the
recovery was insufficient to fully erase losses earlier in the year.
The Wachovia Emerging Markets Fund was not immune to these forces. In most
cases in 1998, events impacted entire regions simultaneously rather than one
country at a time; each region in turn suffered from some financial stress and
the global liquidity crisis caused by the Russian debt default hurt all
markets simultaneously. While diversification provides little protection from
highly correlated performance, as was experienced during the year, we remain
confident that our risk management approach will serve us well, particularly
in an environment where events in individual countries have a more limited
impact on neighboring economies. We believe that correlations between markets
should return to their historically lower levels and we remain committed to
our diversified investment approach.
7. Wachovia Balanced Fund Shareholder:
In the midst of a challenging environment in 1998, our equity investments
performed well relative to similar funds. A strategic focus on larger
companies and the specialized analysis by our portfolio managers significantly
enhanced our performance for the year. While avoiding some of the extreme
valuations in the market, we were able to find companies whose growth
prospects were not yet fully reflected in their stock prices. We believe our
specialized approach to stock selection will continue to serve our clients
well in an environment where stock selection is likely to become more
critical.
Wachovia's multi-disciplined fixed income investment approach served
shareholders well during a difficult year in 1998. Our approach seeks to add
value by focusing on four primary areas: duration management, yield curve
management, sector weighting, and security selection. For the year, the fixed
income portion of the fund performed very well compared to similar fund
portfolios. The excess returns were the result of the fund's managers being
prepared for a drop in yields and a steepening in the yield curve, and prudent
overweighting in higher quality corporates and selected closed-end bond funds.
*The Russell 2000 Index is a broadly diversified index consisting of
approximately 2,000 small capitalization common stocks that can be used to
compare the total returns of funds whose portfolios are invested primarily in
small capitalization common stocks. Investments cannot be made in an index.
8. Wachovia Fixed Income Fund / Intermediate Fixed Income Fund Shareholder:
Wachovia's multi-disciplined fixed income investment approach served
shareholders well during a difficult year in 1998. Our approach sought to add
value by focusing on four primary areas: duration management, yield curve
management, sector weighting, and security selection. For the year, the
Wachovia Fixed Income Fund and the Wachovia Intermediate Fixed Income Fund
outperformed the Lipper Intermediate Investment Grade Average.*
The excess returns were the result of the funds' managers being prepared for a
drop in yields and a steepening in the yield curve, and prudent overweighting
in higher quality corporates and selected closed-end bond funds.
Spread products (non-U.S. Treasury securities such as corporate bonds,
mortgages, and agency issues) dramatically underperformed U.S. Treasuries as
investors sought a safe haven from the global economic turmoil. Liquidity
evaporated and credit spreads soared to levels that exceeded even those of the
1990-91 recession, in many cases doubling and tripling in the span of just a
few weeks. Market fears were not quelled until late in the year when the
Federal Reserve Board lowered rates by a total of 75 basis points over fear of
a global liquidity crisis and slower domestic economic growth. Our fixed
income portfolio managers were prepared for these contingencies and guided the
funds to strong performance for the year.
9. Wachovia Short-Term Fixed Income Fund Shareholder:
Interest rates declined across the entire yield curve in 1998. This decline
was just under 1% for maturities of less than one year, and just over 1% for
maturities from two to five years. The Federal Reserve Board eased monetary
policy three times during the fall of 1998, dropping the federal funds target
rate from 5.50% to 4.75%. These actions primarily were the result of the
global turmoil that also led to a widening of spreads between treasuries and
non-treasury instruments.
The Wachovia Municipal Funds' Shareholder
The Wachovia Municipal Bond Funds pursued three primary portfolio strategies
during 1998: (1) improving the call structure of the fund; (2) improving the
overall credit quality of the fund; and (3) extending the durations of the
fund.
The first half of 1998 was characterized by uncommonly low volatility of
prices in the municipal bond market, with trading being quite range-bound. The
portfolio manager used opportunities during that period to restructure the
fund in line with portfolio strategies.
As the bond market began to rally during the summer, we extended the duration
in the fund. The fund benefited as long municipal rates dropped from
approximately 5.10% in late July to approximately 4.65% in early October. The
fund's returns flattened somewhat as rates crept back toward 5.00% over the
last quarter of 1998.
*Lipper indices measure the performance of the 30 largest mutual funds in each
prospective fund category.
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Wachovia Equity Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia Equity Fund (Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Equity Fund (Class A Shares) (the "Fund") from May 7, 1993 (start of
performance) to November 30, 1998 compared to the Standard and Poor's 500
Index (S&P 500).+
[GRAPHIC REPRESENTATION "A1" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than original cost. Mutual funds are not obligations
of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The S&P 500 has been adjusted to reflect
reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The S&P 500 is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
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Wachovia Equity Fund (Class B Shares)
Growth of $10,000 Invested in Wachovia Equity Fund (Class B Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Equity Fund (Class B Shares) (the "Fund") from July 23, 1996 (start
of performance) to November 30, 1998 compared to the Standard and Poor's 500
Index (S&P 500).+
[GRAPHIC REPRESENTATION "A2" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than original cost. Mutual funds are not obligations
of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund. The ending
value reflects a 3.00% contingent deferred sales charge on any redemption
less than three years from the purchase date. The maximum contingent
deferred sales charge is 5.00% on any redemption less than one year from the
purchase date. The Fund's performance assumes the reinvestment of all
dividends and distributions. The S&P 500 has been adjusted to reflect
reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The S&P 500 is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
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Wachovia Equity Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia Equity Fund (Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Equity Fund (Class Y Shares) (the "Fund") from July 23, 1996 (start
of performance) to November 30, 1998 compared to the Standard and Poor's 500
Index (S&P 500).+
[GRAPHIC REPRESENTATION "A3" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than original cost. Mutual funds are not obligations
of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 has been adjusted to reflect reinvestment of
dividends on securities in the index.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The S&P 500 is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Equity Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------
<C> <S> <C>
Common Stocks--82.6%
Basic Materials--5.1%
30,817 Aluminum Co. of America $ 2,284,310
43,275 Du Pont (E.I.) de Nemours & Co. 2,542,406
31,821 Monsanto Co. 1,441,889
18,406 Potash Corporation of Saskatchewan, Inc. 1,135,420
46,349 Praxair, Inc. 1,769,952
35,170 Rohm & Haas Co. 1,228,752
53,927 Weyerhaeuser Co. 2,703,091
------------
Total 13,105,820
------------
Capital Goods--6.1%
41,195 General Electric Co. 3,728,147
22,734 Honeywell, Inc. 1,817,299
35,539 Ingersoll-Rand Co. 1,663,669
16,794 Lockheed Martin Corp. 1,742,377
55,482 Tyco International Ltd. 3,651,409
29,784 United Technologies Corp. 3,192,472
------------
Total 15,795,373
------------
Communication Services--4.0%
27,001 (b)Airtouch Communications, Inc. 1,544,120
16,561 Alltel Corp. 877,733
14,075 BellSouth Corp. 1,228,044
115,422 (b)MCI Worldcom, Inc. 6,809,898
------------
Total 10,459,795
------------
Consumer Cyclical--5.3%
43,624 Black & Decker Corp. 2,363,875
26,778 Magna International, Inc., Class A 1,782,411
27,921 McGraw-Hill Cos., Inc. 2,498,929
33,167 Sears, Roebuck & Co. 1,573,360
51,539 Service Corp. International 1,926,270
15,187 TRW, Inc. 836,234
37,681 Wal-Mart Stores, Inc. 2,837,850
------------
Total 13,818,929
------------
Consumer Staples--14.1%
51,726 Avon Products, Inc. 2,101,369
61,969 CBS Corp. 1,847,451
13,400 CKE Restaurants, Inc. 327,462
42,144 Coca-Cola Co. 2,952,714
12,311 Comcast Corp., Class A 597,083
20,201 (b)Kroger Co., Inc. 1,071,916
20,098 McDonald's Corp. 1,408,116
28,299 Newell Co. 1,252,231
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Common Stocks--continued
Consumer Staples--continued
32,210 (b)Outback Steakhouse, Inc. $ 1,143,455
67,303 PepsiCo, Inc. 2,603,785
85,868 Philip Morris Cos., Inc. 4,803,241
50,883 Procter & Gamble Co. 4,458,623
76,780 Ralston Purina Co. 2,672,904
60,666 Rite Aid Corp. 2,813,386
53,166 (b)Safeway, Inc. 2,807,829
29,273 Time Warner, Inc. 3,095,620
6,749 (b)Viacom, Inc., Class B 449,230
------------
Total 36,406,415
------------
Energy--5.6%
11,491 Ashland, Inc. 558,750
22,935 British Petroleum Co. PLC, ADR 2,112,887
24,596 Chevron Corp. 2,056,840
81,627 Exxon Corp. 6,127,127
35,799 Mobil Corp. 3,085,426
13,023 Schlumberger Ltd. 581,965
------------
Total 14,522,995
------------
Finance--14.5%
37,403 American Express Co. 3,742,638
14,397 American General Corp. 1,014,089
41,457 American International Group, Inc. 3,896,958
14,945 Associates First Capital Corp., Class A 1,163,842
43,698 Bank One Corp. 2,242,254
59,478 BankAmerica Corp. 3,877,222
37,128 Chase Manhattan Corp. 2,355,307
97,102 Citigroup, Inc. 4,873,307
77,437 Federal Home Loan Mortgage Corp. 4,684,938
34,068 Federal National Mortgage Association 2,478,447
25,688 MBIA Insurance Corporation 1,663,298
51,748 MBNA Corp. 1,174,033
17,718 Marsh & McLennan Cos., Inc. 1,030,966
13,398 Merrill Lynch & Co., Inc. 1,004,850
35,126 SunTrust Banks, Inc. 2,452,234
------------
Total 37,654,383
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Equity Fund
<TABLE>
<CAPTION>
Shares Value
- -----------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Healthcare--11.3%
44,960 Abbott Laboratories $ 2,158,080
28,923 American Home Products Corp. 1,540,150
15,080 Becton, Dickinson & Co. 640,900
26,595 Bristol-Myers Squibb Co. 3,259,550
17,148 (b)Elan Corp. Plc, ADR 1,168,208
36,706 Lilly (Eli) & Co. 3,292,069
27,312 Merck & Co., Inc. 4,229,946
37,961 Mylan Laboratories, Inc. 1,259,831
37,921 Pfizer, Inc. 4,232,932
31,974 Pharmacia & Upjohn, Inc. 1,664,646
32,749 Schering Plough Corp. 3,483,675
28,715 Warner-Lambert Co. 2,167,983
672 (b)Watson Pharmaceuticals, Inc. 36,204
------------
Total 29,134,174
------------
Technology--13.9%
19,726 (b)Applied Materials, Inc. 764,383
24,007 (b)Ascend Communications 1,348,893
47,717 (b)Cisco Systems, Inc. 3,596,631
1 Computer Associates International, Inc.
44
19,230 (b)Dell Computer Corp. 1,169,424
31,872 (b)EMC Corp. Mass 2,310,720
40,373 Intel Corp. 4,345,144
24,994 International Business Machines Corp. 4,124,010
32,538 Lucent Technologies, Inc. 2,800,302
57,040 (b)Microsoft Corp. 6,958,880
31,608 (b)Network Associates, Inc. 1,608,057
7,601 OY Nokia AB, Class A, ADR 744,898
26,734 (b)Sun Microsystems, Inc. 1,979,987
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
<C> <S> <C>
Common Stocks--continued
Technology--continued
33,542 Texas Instruments, Inc. $ 2,561,770
16,017 Xerox Corp. 1,721,828
------------
Total 36,034,971
------------
Transportation--0.6%
47,043 Burlington Northern Santa Fe 1,599,462
------------
Utilities--2.1%
33,589 Enron Corp. 1,765,522
47,071 P G & E Corp. 1,456,259
79,103 Southern Co. 2,333,539
------------
Total 5,555,320
------------
Total Common Stocks
(identified cost $171,914,375) 214,087,637
------------
U.S. Government Agency--3.9%
$10,000,000 (d)Federal Home Loan Mortgage Corp., 12/18/1998
(identified cost $9,976,153) 9,976,900
------------
U.S. Treasury Obligation--0.9%
2,300,000 (d)United States Treasury Bill, 12/17/1998
(identified cost $2,295,209) 2,295,676
------------
(a) Repurchase Agreement--12.6%
32,725,168 Goldman Sachs Group, LP, 5.25%, dated 11/30/1998,
due 12/1/1998 (at amortized cost) 32,725,168
------------
Total Investments
(identified cost $216,910,905) $259,085,381
------------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Quantitative Equity Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia Quantitative Equity Fund
(Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Quantitative Equity Fund (Class A Shares) (the "Fund") from March 25,
1994 (start of performance) to November 30, 1998 compared to the Standard and
Poor's 500 Index (S&P 500).+
[GRAPHIC REPRESENTATION "A4" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The S&P 500 has been adjusted to reflect the
reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The S&P 500 is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Quantitative Equity Fund (Class B Shares)
Growth of $10,000 Invested in Wachovia Quantitative Equity Fund
(Class B Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Quantitative Equity Fund (Class B Shares) (the "Fund") from July 23,
1996 (start of performance) to November 30, 1998 compared to the Standard and
Poor's 500 Index (S&P 500).+
[GRAPHIC REPRESENTATION "A5" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund. The ending
value of the Fund reflects a 3.00% contingent deferred sales charge on any
redemption less than three years from the purchase date. The maximum
contingent deferred sales charge is 5.00% on any redemption less than one
year from the purchase date. The Fund's performance assumes the reinvestment
of all dividends and distributions. The S&P 500 has been adjusted to reflect
the reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The S&P 500 is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Quantitative Equity Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia Quantitative Equity Fund
(Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Quantitative Equity Fund (Class Y Shares) (the "Fund") from July 23,
1996 (start of performance) to November 30, 1998 compared to the Standard and
Poor's 500 Index (S&P 500).+
[GRAPHIC REPRESENTATION "A6" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 has been adjusted to reflect the reinvestment of
dividends on securities in the index.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The S&P 500 is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Quantitative Equity Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Shares Value
- ----------------------------------------------------------------
<C> <S> <C>
Common Stocks--89.0%
Basic Materials--3.2%
110,000 Ecolab, Inc. $ 3,403,125
40,000 Engelhard Corp. 772,500
30,000 (b)FMC Corp. 1,743,750
31,500 Vulcan Materials Co. 3,949,313
------------
Total 9,868,688
------------
Capital Goods--9.0%
10,000 Ball Corp. 427,500
65,000 Corning, Inc. 2,608,125
63,000 General Electric Co. 5,701,500
85,000 Ingersoll-Rand Co. 3,979,063
75,000 (b)Lexmark Intl. Group, Class A 5,728,125
30,000 Lockheed Martin Corp. 3,112,500
65,000 Trinity Industries, Inc. 2,514,688
60,000 Tyco International Ltd. 3,948,750
------------
Total 28,020,251
------------
Communication Services--7.0%
10,000 Alltel Corp. 530,000
92,000 Ameritech Corp. 4,979,500
40,000 Bell Atlantic Corp. 2,225,000
73,000 BellSouth Corp. 6,369,250
25,000 GTE Corp. 1,550,000
72,000 SBC Communications, Inc. 3,451,500
40,000 U.S. West, Inc. 2,490,000
------------
Total 21,595,250
------------
Consumer Cyclical--7.8%
50,000 American Greetings Corp., Class A 2,115,625
60,000 Arvin Industries, Inc. 2,520,000
40,000 (b)Best Buy Co., Inc. 2,305,000
8,000 Clorox Co. 888,500
18,705 (b)DaimlerChrysler AG 1,715,015
50,000 Dayton-Hudson Corp. 2,250,000
90,000 Ennis Business Forms, Inc. 945,000
20,000 (b)Federated Department Stores, Inc. 833,750
15,000 Gannett Co., Inc. 968,438
20,000 Maytag Corp. 1,082,500
215,000 TJX Cos., Inc. 5,509,375
50,000 Times Mirror Co., Class A 2,931,250
------------
Total 24,064,453
------------
Consumer Staples--14.6%
40,000 American Stores Co. 1,342,500
50,000 Anheuser-Busch Cos., Inc. 3,031,250
72,000 Bergen Brunswig Corp., Class A 4,482,000
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Common Stocks--continued
Consumer Staples--continued
30,000 Coca Cola Enterprises, Inc. $ 1,134,375
60,000 Fortune Brands, Inc. 2,043,750
10,000 Harley Davidson, Inc. 418,125
40,000 Heinz (H.J.) Co. 2,332,500
120,000 IBP, Inc. 3,045,000
120,000 (b)King World Productions, Inc. 3,270,000
50,000 Newell Co. 2,212,500
100,000 PepsiCo, Inc. 3,868,750
60,000 Philip Morris Cos., Inc. 3,356,250
70,000 Premark International, Inc. 2,349,375
40,000 Procter & Gamble Co. 3,505,000
40,000 Quaker Oats Co. 2,455,000
70,000 (b)Safeway, Inc. 3,696,875
100,000 Super Valu Stores, Inc. 2,581,250
-------------
Total 45,124,500
-------------
Energy--4.4%
20,000 Ashland, Inc. 972,500
76,000 Baker Hughes, Inc. 1,391,750
22,000 British Petroleum Co. PLC, ADR 2,026,750
43,000 Exxon Corp. 3,227,687
48,000 Mobil Corp. 4,137,000
40,000 Royal Dutch Petroleum Co., ADR 1,880,000
-------------
Total 13,635,687
-------------
Finance--13.6%
86,000 AMBAC 5,246,000
24,000 Aegon N.V. 2,544,000
36,000 Allstate Corp. 1,467,000
50,000 American General Corp. 3,521,875
90,000 Amsouth Bancorporation 3,802,500
15,000 BankAmerica Corp. 977,812
61,500 CIGNA Corp. 4,785,469
25,000 Chase Manhattan Corp. 1,585,937
40,000 Citigroup, Inc. 2,007,500
45,000 First Union Corp. 2,733,750
82,500 Marsh & McLennan Cos., Inc. 4,800,469
65,000 PNC Bank Corp. 3,351,563
50,000 Reliastar Financial Corp. 2,350,000
76,500 SouthTrust Corp. 2,811,375
-------------
Total 41,985,250
-------------
Healthcare--10.1%
75,000 Abbott Laboratories 3,600,000
35,000 Bristol-Myers Squibb Co. 4,289,687
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Quantitative Equity Fund
<TABLE>
<CAPTION>
Shares Value
- -------------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Healthcare--continued
50,000 Guidant Corp. $ 4,290,625
25,000 Johnson & Johnson 2,031,250
20,000 Lilly (Eli) & Co. 1,793,750
19,000 Merck & Co., Inc. 2,942,625
60,000 Schering Plough Corp. 6,382,500
100,000 (b)Tenet Healthcare Corp. 2,956,250
40,000 Warner-Lambert Co. 3,020,000
------------
Total 31,306,687
------------
Technology--13.5%
75,000 (b)Ascend Communications 4,214,062
30,000 (b)Cisco Systems, Inc. 2,261,250
230,000 Comdisco, Inc. 4,197,500
165,000 Compaq Computer Corp. 5,362,500
55,000 Computer Associates International, Inc. 2,433,750
28,000 (b)EMC Corp. Mass 2,030,000
30,000 Harris Corp. 1,138,125
10,000 Intel Corp. 1,076,250
30,000 International Business Machines Corp. 4,950,000
25,000 Lucent Technologies, Inc. 2,151,563
100,000 (b)Storage Technology Corp. 3,500,000
70,000 (b)Sun Microsystems, Inc. 5,184,375
30,000 Xerox Corp. 3,225,000
------------
Total 41,724,375
------------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
<C> <S> <C>
Common Stocks--continued
Transportation--0.9%
75,000 GATX Corp. $ 2,835,937
------------
Utilities--4.9%
180,000 Coastal Corp. 6,277,500
60,000 DQE, Inc. 2,463,750
45,000 GPU, Inc. 1,971,562
40,000 New England Electric System 1,670,000
42,000 SCANA Corp. 1,370,250
50,000 Williams Cos., Inc. (The) 1,440,625
------------
Total 15,193,687
------------
Total Common Stocks (identified cost $170,604,749) 275,354,765
------------
U.S. Government Agency--3.2%
$10,000,000 (d)Federal Home Loan Mortgage Corp., Discount Note,
12/18/1998 (identified cost $9,976,153) 9,976,900
------------
U.S. Treasury Obligation--0.6%
2,000,000 (d)United States Treasury Bill, 12/17/1998
(identified cost $1,995,813) 1,996,240
------------
(a) Repurchase Agreement--7.4%
22,957,872 Goldman Sachs Group, LP, 5.25%, dated 11/30/1998,
due 12/1/1998 (at amortized cost) 22,957,872
------------
Total Investments (identified cost $205,534,587) $310,285,777
------------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Growth and Income Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia Growth and Income Fund (Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Growth and Income Fund (Class A Shares) (the "Fund") from January 29,
1993 (start of performance) to November 30, 1998 compared to the Standard and
Poor's 500 Index ( S&P 500).+
[GRAPHIC REPRESENTATION "A7" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The S&P 500 has been adjusted to reflect the
reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The S&P 500 is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Growth and Income Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia Growth and Income Fund (Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Growth and Income Fund (Class Y Shares) (the "Fund") from March 29,
1998 (start of performance) to November 30, 1998 compared to the Standard and
Poor's 500 Index ( S&P 500).+
[GRAPHIC REPRESENTATION "A8" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 has been adjusted to reflect the reinvestment of
dividends on securities in the index.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The S&P 500 is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Growth & Income Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------
<C> <S> <C>
Common Stocks--94.6%
Basic Materials--5.7%
81,500 Allied-Signal, Inc. $ 3,586,000
50,349 Aluminum Co. of America 3,732,120
98,024 Du Pont (E.I.) de Nemours & Co. 5,758,910
47,887 Praxair, Inc. 1,828,685
87,226 Weyerhaeuser Co. 4,372,203
------------
Total 19,277,918
------------
Capital Goods--5.5%
76,211 General Electric Co. 6,897,096
65,000 Lockheed Martin Corp. 6,743,750
34,339 Tyco International Ltd. 2,259,935
23,058 United Technologies Corp. 2,471,529
------------
Total 18,372,310
------------
Communication Services--5.1%
33,880 AT&T Corp. 2,111,147
75,000 Alltel Corp. 3,975,000
60,000 Bell Atlantic Corp. 3,337,500
40,476 BellSouth Corp. 3,531,531
19,967 (b)MCI Worldcom, Inc. 1,178,053
49,522 U.S. West, Inc. 3,082,745
------------
Total 17,215,976
------------
Consumer Cyclical--6.8%
834 Black & Decker Corp. 45,192
79,272 Callaway Golf Co. 1,060,263
94,645 General Motors Corp. 6,625,150
75,000 Goodyear Tire & Rubber Co. 4,256,250
755 Magna International, Inc., Class A 50,255
584 McGraw-Hill Cos., Inc. 52,268
75,000 Sears, Roebuck & Co. 3,557,813
1,137 Service Corp. International 42,495
120,000 (b)Tommy Hilfiger Corp. 7,260,000
617 Wal-Mart Stores, Inc. 46,468
------------
Total 22,996,154
------------
Consumer Staples--16.1%
109,465 Anheuser-Busch Cos., Inc. 6,636,316
50,193 Avon Products, Inc. 2,039,091
895 CBS Corp. 26,682
103,284 Campbell Soup Co. 5,900,098
1,169 Coca-Cola Co. 81,903
89,000 Colgate-Palmolive Co. 7,620,625
100,000 Heinz (H.J.) Co. 5,831,250
141,100 PepsiCo, Inc. 5,458,806
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Common Stocks--continued
Consumer Staples--continued
152,909 Philip Morris Cos., Inc. $ 8,553,347
70,834 Procter & Gamble Co. 6,206,829
1,001 Ralston Purina Co. 34,847
36,294 Rite Aid Corp. 1,683,134
40,944 (b)Safeway, Inc. 2,162,355
20,047 Time Warner, Inc. 2,119,970
------------
Total 54,355,253
------------
Energy--7.2%
90,000 Amoco Corp. 5,304,375
661 British Petroleum Co. PLC, ADR 60,895
49,244 Chevron Corp. 4,118,029
116,616 Exxon Corp. 8,753,488
67,814 Mobil Corp. 5,844,719
------------
Total 24,081,506
------------
Finance--16.6%
792 American Express Co. 79,249
242 American General Corp. 17,046
29,660 American International Group, Inc. 2,788,040
772 Bank One Corp. 39,613
124,000 Bank of New York Co., Inc. 4,247,000
883 BankAmerica Corp. 57,561
831 Chase Manhattan Corp. 52,717
136,421 Citigroup, Inc. 6,846,629
123,727 Conseco, Inc. 4,098,457
185,714 Federal Home Loan Mortgage Corp. 11,235,697
155,000 Franklin Resources, Inc. 6,626,250
493 MBIA Insurance Corp. 31,922
298 Marsh & McLennan Cos., Inc. 17,340
30,400 Merrill Lynch & Co., Inc. 2,280,000
135,300 Morgan Stanley, Dean Witter & Co. 9,437,175
30,000 Progressive Corp., OH 4,451,250
680 SunTrust Banks, Inc. 47,473
100,000 Wells Fargo Co. 3,600,000
------------
Total 55,953,419
------------
Healthcare--11.2%
188,000 Abbott Laboratories 9,024,000
495 American Home Products Corp. 26,359
636 Bristol-Myers Squibb Co. 77,950
259 (b)Elan Corp. PLC, ADR 17,644
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Growth & Income Fund
<TABLE>
<CAPTION>
Shares Value
- -----------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Healthcare--continued
75,489 Johnson & Johnson $ 6,133,481
602 Lilly (Eli) & Co. 53,992
57,316 Merck & Co., Inc. 8,876,816
715 Pfizer, Inc. 79,812
125,572 Schering Plough Corp. 13,357,722
703 Warner-Lambert Co. 53,077
------------
Total 37,700,853
------------
Technology--16.7%
67,795 (b)Cisco Systems, Inc. 5,110,010
50,335 (b)EMC Corp. Mass 3,649,287
125,764 Intel Corp. 13,535,351
37,967 International Business Machines Corp. 6,264,555
48,150 Lucent Technologies, Inc. 4,143,909
38,720 (b)Microsoft Corp. 4,723,840
135,748 (b)Sun Microsystems, Inc. 10,053,836
50,872 Texas Instruments, Inc. 3,885,349
43,378 Xerox Corp. 4,663,135
------------
Total 56,029,272
------------
Transportation--0.8%
78,652 Burlington Northern Santa Fe 2,674,168
------------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
<C> <S> <C>
Common Stocks--continued
Utilities--2.9%
55,506 Duke Energy Corp. $ 3,472,594
646 Enron Corp. 33,955
50,000 FPL Group, Inc. 3,062,500
70,000 GPU, Inc. 3,066,875
1,887 Southern Co. 55,667
1,076 Texas Utilities Co. 47,949
------------
Total 9,739,540
------------
Total Common Stocks
(identified cost $164,826,365) 318,396,369
------------
U.S. Treasury Obligation--0.3%
$ 1,100,000 (d)United States Treasury Bill, 12/17/1998
(identified cost $1,097,701) 1,097,932
------------
(a) Repurchase Agreement--3.8%
12,763,107 Goldman Sachs Group, LP, 5.25%, dated 11/30/1998,
due 12/1/1998 (at amortized cost) 12,763,107
------------
Total Investments
(identified cost $178,687,173) $332,257,408
------------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Equity Index Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia Equity Index Fund (Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Equity Index Fund (Class A Shares) (the "Fund") from May 7, 1993
(start of performance) to November 30, 1998, compared to the Standard and
Poor's 500 Index (S&P 500).+
[GRAPHIC REPRESENTATION "A9" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The S&P 500 has been adjusted to reflect the
reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The S&P 500 is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Equity Index Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia Equity Index Fund (Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Equity Index Fund (Class Y Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1998, compared to the Standard and
Poor's 500 Index (S&P 500).+
[GRAPHIC REPRESENTATION "A10" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 has been adjusted to reflect the reinvestment of
dividends on securities in the index.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The S&P 500 is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Equity Index Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Shares Value
- -------------------------------------------------------------------------
<C> <S> <C>
Common Stocks--84.3%
Basic Materials--3.2%
1,607 (b)ASARCO, Inc. $ 31,136
8,364 Air Products & Chemicals, Inc. 318,877
8,662 Alcan Aluminum, Ltd. 230,626
6,713 Allegheny Teledyne, Inc. 138,036
21,597 Allied-Signal, Inc. 950,268
6,637 Aluminum Co. of America 491,968
1,555 Armstrong World Industries, Inc. 103,602
14,224 Barrick Gold Corp. 284,480
8,766 Battle Mountain Gold Co. 41,091
2,023 Bemis Co., Inc. 76,495
4,297 (b)Bethlehem Steel Corp. 35,450
2,122 Boise Cascade Corp. 67,241
3,660 Champion International Corp. 152,119
3,567 Cyprus Amax Minerals 40,575
8,699 Dow Chemical Co. 847,065
43,153 Du Pont (E.I.) de Nemours & Co. 2,535,239
2,991 Eastman Chemical Co. 173,291
4,944 Ecolab, Inc. 152,955
5,507 Engelhard Corp. 106,354
1,420 (b)FMC Corp. 82,537
7,210 Fort James Corp. 282,091
7,588 Freeport-McMoRan Copper & Gold, Inc., Class B 99,118
3,491 Georgia-Pacific Corp. 198,114
2,063 Goodrich (B.F.) Co. 78,265
2,771 (b)Grace (W.R.) & Co. 45,721
2,284 Great Lakes Chemical Corp. 91,217
3,780 Hercules, Inc. 124,267
5,599 Homestake Mining Co. 60,189
6,372 Inco Ltd. 73,676
4,170 International Flavors & Fragrances, Inc. 174,619
11,540 International Paper Co. 501,269
4,171 Louisiana-Pacific Corp. 70,907
3,992 Mead Corp. 121,007
22,495 Monsanto Co. 1,019,305
5,344 Morton International, Inc. 157,314
2,550 Nalco Chemical Co. 85,266
5,964 Newmont Mining Corp. 118,534
3,353 Nucor Corporation 140,826
6,842 PPG Industries, Inc. 418,645
2,305 Phelps Dodge Corp. 130,665
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Common Stocks--continued
Basic Materials--continued
9,214 Pioneer Hi-Bred International $ 275,844
9,139 Placer Dome, Inc. 133,087
1,103 Potlatch Corp. 41,707
6,030 Praxair, Inc. 230,271
2,813 Reynolds Metals Co. 154,363
7,053 Rohm & Haas Co. 246,414
5,721 Rubbermaid, Inc. 189,151
2,985 (b)Sealed Air Corp. 131,713
3,826 Sigma-Aldrich Corp. 122,910
2,173 Temple-Inland, Inc. 116,663
3,271 USX-U.S. Steel Group, Inc. 79,935
2,646 Union Camp Corp. 171,163
4,740 Union Carbide Corp. 212,115
3,891 Westvaco Corp. 109,434
7,609 Weyerhaeuser Co. 381,401
4,238 Willamette Industries, Inc. 148,065
3,690 Worthington Industries, Inc. 44,972
------------
Total 13,639,628
------------
Capital Goods--6.7%
8,381 AMP, Inc. 405,431
1,073 Aeroquip-Vickers, Inc. 39,030
3,935 Avery Dennison Corp. 188,634
1,151 Ball Corp. 49,205
38,208 Boeing Co. 1,552,184
967 Briggs & Stratton Corp. 48,773
8,121 Browning-Ferris Industries, Inc. 239,569
2,844 Case Corp. 68,967
14,364 Caterpillar, Inc. 710,120
4,661 Cooper Industries, Inc. 228,972
8,805 Corning, Inc. 353,301
2,628 Crane Co. 84,917
4,897 Crown Cork & Seal Co., Inc. 165,274
5,100 Danaher Corp. 232,687
9,621 Deere & Co. 336,134
8,486 Dover Corp. 302,314
2,950 Eaton Corp. 201,522
16,922 Emerson Electric Co. 1,099,930
4,768 General Dynamics Corp. 276,842
123,820 General Electric Co. 11,205,710
3,794 Grainger (W.W.), Inc. 160,296
1,885 Harnischfeger Industries, Inc. 18,850
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Equity Index Fund
<TABLE>
<CAPTION>
Shares Value
- -------------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Capital Goods--continued
4,866 Honeywell, Inc. $ 388,976
9,517 Illinois Tool Works, Inc. 604,924
6,332 Ingersoll-Rand Co. 296,417
3,197 Johnson Controls, Inc. 185,026
12,542 Laidlaw, Inc. 124,636
7,404 Lockheed Martin Corp. 768,165
12,590 Masco Corp. 363,536
1,520 Milacron Inc. 30,780
1,662 Millipore Corp. 46,744
15,854 Minnesota Mining & Manufacturing Co. 1,273,274
3,386 Moore Corp. Ltd. 37,034
311 NACCO Industries, Inc., Class A 27,076
1,720 National Service Industries, Inc. 66,435
2,545 Northrop Corp. 206,781
5,355 (b)Owens-Illinois, Inc. 172,029
4,855 Pall Corp. 112,879
4,262 Parker-Hannifin Corp. 148,104
11,012 Pitney Bowes, Inc. 616,672
3,330 Raychem Corp. 113,428
7,968 Rockwell International Corp. 389,934
6,496 Tenneco, Inc. 231,420
6,296 Textron, Inc. 489,120
5,733 (b)Thermo Electron Corp. 96,744
2,097 Thomas & Betts Corp. 90,826
2,402 Timken Co. 46,238
23,882 Tyco International Ltd. 1,571,734
8,984 United Technologies Corp. 962,972
21,719 Waste Management, Inc. 931,202
------------
Total 28,361,768
------------
Communication Services--6.8%
68,658 AT&T Corp. 4,278,252
21,422 (b)Airtouch Communications, Inc. 1,225,071
10,601 Alltel Corp. 561,853
41,968 Ameritech Corp. 2,271,518
59,242 Bell Atlantic Corp. 3,295,336
37,831 BellSouth Corp. 3,300,755
6,264 Frontier Corp. 188,703
36,488 GTE Corp. 2,262,256
67,629 (b)MCI Worldcom, Inc. 3,990,140
23,140 (b)MediaOne Group, Inc. 937,170
9,500 (b)NEXTEL Communications, Inc., Class A 204,250
74,252 SBC Communications, Inc. 3,559,455
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Common Stocks--continued
Communication Services--continued
16,425 Sprint Corp. $ 1,194,919
15,993 (b)Sprint PCS Group 255,880
18,922 U.S. West, Inc. 1,177,894
------------
Total 28,703,452
------------
Consumer Cyclical--7.5%
2,871 American Greetings Corp., Class A 121,479
5,762 (b)AutoZone, Inc. 173,580
3,603 Black & Decker Corp. 195,238
3,972 Block (H&R), Inc. 178,492
30,186 (b)Cendant Corp. 573,534
2,214 Centex Corp. 79,012
3,757 Circuit City Stores, Inc. 135,956
3,944 Clorox Co. 438,030
4,070 (b)Consolidated Stores Corp. 87,505
3,004 Cooper Tire & Rubber Co. 58,766
1,460 Cummins Engine Co., Inc. 54,202
6,218 Dana Corp. 242,502
16,612 Dayton-Hudson Corp. 747,540
3,145 Deluxe Corp. 109,289
4,263 Dillards, Inc., Class A 146,541
6,281 Dollar General Corp. 149,566
5,583 Donnelley (R.R.) & Sons Co. 236,929
3,662 Dow Jones & Co. 175,089
6,505 Dun & Bradstreet Corp. 196,370
7,980 (b)Federated Department Stores, Inc. 332,666
1,372 Fleetwood Enterprises, Inc. 46,219
3,202 Fluor Corp. 137,086
45,577 Ford Motor Co. 2,518,129
1,551 Foster Wheeler Corp. 26,561
2,796 (b)Fruit of the Loom, Inc., Class A 41,241
10,816 Gannett Co., Inc. 698,308
15,346 Gap (The), Inc. 1,128,890
25,410 General Motors Corp. 1,778,700
6,872 Genuine Parts Co. 226,346
5,952 Goodyear Tire & Rubber Co. 337,776
2,700 Harcourt General, Inc. 139,725
4,845 Hasbro, Inc. 169,878
9,542 Hilton Hotels Corp. 207,538
55,716 Home Depot, Inc. 2,771,871
6,265 IMS Health, Inc. 415,839
4,520 ITT Industries, Inc. 162,720
4,753 Interpublic Group Cos., Inc. 326,769
1,495 Jostens, Inc. 35,039
18,579 (b)K Mart Corp. 283,330
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Equity Index Fund
<TABLE>
<CAPTION>
Shares Value
- -------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Consumer Cyclical--continued
1,483 Kaufman & Broad Homes Corp. $ 37,353
3,336 Knight-Ridder, Inc. 171,595
5,950 (b)Kohl's Corp. 292,666
10,362 Limited, Inc. 299,850
2,669 Liz Claiborne, Inc. 90,412
13,270 Lowe's Cos., Inc. 560,657
9,780 Marriott International, Inc.,
Class A 287,287
8,875 May Department Stores Co. 535,273
3,762 Maytag Corp. 203,618
2,119 McDermott International, Inc. 56,816
3,774 McGraw-Hill Cos., Inc. 337,773
2,042 Meredith Corp. 79,255
5,750 (b)Meyer (Fred), Inc. 292,531
2,786 (b)Navistar International Corp. 72,088
7,318 New York Times Co., Class A 227,315
11,018 Nike, Inc., Class B 440,720
5,894 Nordstrom, Inc. 219,551
6,170 Omnicom Group, Inc. 329,709
2,035 Owens Corning 75,931
2,970 PACCAR, Inc. 135,135
6,000 Paychex, Inc. 298,500
9,498 Penney (J.C.) Co., Inc. 522,390
2,412 Pep Boys-Manny Moe & Jack 34,069
1,614 Pulte Corp. 41,056
2,147 (b)Reebok International Ltd. 34,218
1,392 Russell Corp. 33,147
14,944 Sears, Roebuck & Co. 708,906
9,600 Service Corp. International 358,800
6,588 Sherwin-Williams Co. 186,934
2,334 Snap-On Tools Corp. 79,356
769 Springs Industries, Inc., Class A 29,943
3,396 Stanley Works 103,790
11,000 (b)Staples, Inc. 384,312
12,460 TJX Cos., Inc. 319,287
4,703 TRW, Inc. 258,959
4,044 Tandy Corp. 182,233
3,655 Times Mirror Co., Class A 214,274
10,886 (b)Toys 'R' Us, Inc. 214,998
4,684 Tribune Co. 300,361
2,337 Tupperware Corp. 40,751
4,794 V.F. Corp. 235,206
5,148 (b)Venator Group, Inc. 40,540
85,119 Wal-Mart Stores, Inc. 6,410,525
2,845 Whirlpool Corp. 159,320
------------
Total 31,821,661
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Common Stocks--continued
Consumer Staples--12.5%
2,141 Alberto-Culver Co., Class B $ 54,863
9,378 Albertsons, Inc. 535,132
10,391 American Stores Co. 348,748
18,767 Anheuser-Busch Cos., Inc. 1,137,749
22,440 Archer-Daniels-Midland Co. 412,335
10,104 Avon Products, Inc. 410,475
10,958 BestFoods 636,934
2,633 Brown-Forman Corp., Class B 191,551
3,790 Brunswick Corp. 83,380
26,821 CBS Corp. 799,601
14,826 CVS Corp. 732,034
17,552 Campbell Soup Co. 1,002,658
9,402 (b)Clear Channel Communications, Inc. 439,543
14,650 Coca Cola Enterprises, Inc. 553,953
94,649 Coca-Cola Co. 6,631,346
11,294 Colgate-Palmolive Co. 967,049
13,312 Comcast Corp., Class A 645,632
18,046 ConAgra, Inc. 567,321
1,414 Coors Adolph Co., Class B 70,346
8,110 (b)Costco Cos., Inc. 508,902
5,838 Darden Restaurants, Inc. 92,313
77,289 Disney (Walt) Co. 2,487,740
6,538 Fortune Brands, Inc. 222,701
6,102 General Mills, Inc. 460,701
42,722 Gillette Co. 1,962,542
1,460 Great Atlantic & Pacific Tea Co., Inc. 39,876
3,852 (b)Harrah's Entertainment, Inc. 59,947
14,092 Heinz (H.J.) Co. 821,740
5,452 Hershey Foods Corp. 366,647
15,748 Kellogg Co. 576,770
21,243 Kimberly-Clark Corp. 1,117,913
2,806 (b)King World Productions, Inc. 76,463
9,707 (b)Kroger Co., Inc. 515,078
1,496 Longs Drug Stores Corp. 53,295
11,084 Mattel, Inc. 383,091
26,255 McDonald's Corp. 1,839,491
6,823 (b)Mirage Resorts, Inc. 101,492
6,071 Newell Co. 268,642
56,005 PepsiCo, Inc. 2,166,693
92,460 Philip Morris Cos., Inc. 5,171,981
51,548 Procter & Gamble Co. 4,516,893
5,242 Quaker Oats Co. 321,728
12,300 RJR Nabisco Holdings Corp. 354,394
12,198 Ralston Purina Co. 424,643
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Equity Index Fund
<TABLE>
<CAPTION>
Shares Value
- -----------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Consumer Staples--continued
9,384 Rite Aid Corp. $ 435,183
18,000 (b)Safeway, Inc. 950,625
18,329 Sara Lee Corp. 1,069,955
14,148 Seagram Co. Ltd. 485,453
4,624 Super Valu Stores, Inc. 119,357
13,310 Sysco Corp. 358,538
19,323 (b)Tele-Communications, Inc., Class A 816,397
22,443 Time Warner, Inc. 2,373,347
5,840 (b)Tricon Global Restaurants, Inc. 266,085
7,015 UST, Inc. 243,771
24,428 Unilever N.V., ADR 1,888,590
13,467 (b)Viacom, Inc., Class B 896,397
18,785 Walgreen Co. 1,008,520
5,026 Wendy's International, Inc. 100,520
5,681 Winn-Dixie Stores, Inc. 229,015
4,435 Wrigley (Wm.), Jr. Co. 390,834
------------
Total 52,764,913
------------
Energy--5.6%
3,501 Amerada-Hess Corp. 194,305
37,458 Amoco Corp. 2,207,681
4,554 Anadarko Petroleum Corp. 128,366
3,447 Apache Corp. 79,281
2,849 Ashland, Inc. 138,533
12,242 Atlantic Richfield Co. 814,093
11,995 Baker Hughes, Inc. 219,658
24,983 Chevron Corp. 2,089,203
93,011 Exxon Corp. 6,981,638
16,356 Halliburton Co. 480,457
1,906 Helmerich & Payne, Inc. 32,878
1,819 Kerr-McGee Corp. 71,851
29,990 Mobil Corp. 2,584,763
4,200 New Century Energies, Inc. 201,863
12,641 Occidental Petroleum Corp. 255,980
4,023 (b)Oryx Energy Co. 55,568
10,053 Phillips Petroleum Co. 422,226
3,302 (b)Rowan Companies, Inc. 32,401
81,826 Royal Dutch Petroleum Co., ADR 3,845,822
20,691 Schlumberger Ltd. 924,629
8,780 Sempra Energy 220,049
2,769 Sunoco, Inc. 93,800
20,156 Texaco, Inc. 1,160,230
9,684 Union Pacific Resources Group, Inc. 108,340
9,426 Unocal Corp. 319,306
------------
Total 23,662,921
------------
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Common Stocks--continued
Finance--13.8%
6,381 AON Corp. $ 367,705
5,717 Aetna Services, Inc. 441,996
33,206 Allstate Corp. 1,353,145
17,889 American Express Co. 1,790,018
9,475 American General Corp. 667,395
40,138 American International Group, Inc. 3,772,972
13,020 Associates First Capital Corp., Class A 1,013,933
10,160 BB&T Corp. 375,285
44,995 Bank One Corp. 2,308,806
28,962 Bank of New York Co., Inc. 991,949
66,335 BankAmerica Corp. 4,324,213
11,118 BankBoston Corp. 462,787
3,798 Bankers Trust Corp. 330,426
4,170 Bear Stearns Cos., Inc. 175,140
8,472 CIGNA Corp. 659,228
2,340 Capital One Financial Corp. 257,400
32,320 Chase Manhattan Corp. 2,050,300
6,581 Chubb Corp. 461,081
6,270 Cincinnati Financial Corp. 244,922
87,359 Citigroup, Inc. 4,384,330
6,040 Comerica, Inc. 389,580
11,919 Conseco, Inc. 394,817
4,089 Countrywide Credit Industries, Inc. 202,406
26,521 Federal Home Loan Mortgage Corp. 1,604,521
39,488 Federal National Mortgage Association 2,872,752
10,009 Fifth Third Bancorp 664,347
36,434 First Union Corp. 2,213,366
20,680 Fleet Financial Group, Inc. 862,098
9,300 Franklin Resources, Inc. 397,575
3,038 General RE Corp. 709,373
2,165 Golden West Financial Corp. 204,998
9,004 Hartford Financial Services Group, Inc. 496,908
18,450 Household International, Inc. 721,856
8,014 Huntington Bancshares, Inc. 237,415
6,827 J.P. Morgan & Co., Inc. 729,636
4,053 Jefferson-Pilot Corp. 276,617
16,578 KeyCorp 508,737
3,884 Lehman Brothers Holdings, Inc. 193,957
3,890 Lincoln National Corp. 325,544
4,388 Loews Corp. 438,800
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Equity Index Fund
<TABLE>
<CAPTION>
Shares Value
- ----------------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Finance--continued
3,406 MBIA Insurance Corporation $ 220,539
28,687 MBNA Corp. 650,848
4,355 MGIC Investment Corp. 191,348
9,645 Marsh & McLennan Cos., Inc. 561,218
9,601 Mellon Bank Corp. 604,263
4,960 Mercantile Bancorporation, Inc. 218,550
12,645 Merrill Lynch & Co., Inc. 948,375
22,399 Morgan Stanley, Dean Witter & Co. 1,562,330
12,212 National City Corp. 821,257
4,200 Northern Trust Corp. 339,150
11,714 PNC Bank Corp. 604,003
2,751 Progressive Corp., OH 408,180
5,100 Provident Cos., Inc. 196,031
3,578 Providian Financial Corp. 328,505
7,500 Regions Financial Corp. 290,625
4,184 Republic New York Corp. 195,602
4,821 SAFECO Corp. 207,002
5,790 SLM Holding Corp. 254,760
10,098 Schwab (Charles) Corp. 569,275
8,788 St. Paul Cos., Inc. 309,777
6,128 State Street Corp. 420,534
6,600 Summit Bancorp 275,963
7,444 SunAmerica, Inc. 589,937
8,160 SunTrust Banks, Inc. 569,670
10,005 Synovus Financial Corp. 220,735
5,282 Torchmark Corp. 200,716
2,415 Transamerica Corp. 256,594
28,017 U.S. Bancorp, Inc. 1,031,376
5,325 UNUM Corp. 286,884
4,425 Union Planters Corp. 210,741
7,777 Wachovia Corp. 679,029
301 Waddell & Reed Financial, Inc., Class A 7,176
1,294 (b)Waddell & Reed Financial, Inc., Class B 30,237
22,476 Washington Mutual, Inc. 870,945
62,154 Wells Fargo Co. 2,237,544
------------
Total 58,248,053
------------
Healthcare--10.4%
58,724 Abbott Laboratories 2,818,752
2,474 Allergan, Inc. 150,605
3,244 (b)Alza Corp. 169,499
49,500 American Home Products Corp. 2,635,875
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Common Stocks--continued
Healthcare--continued
10,118 (b)Amgen, Inc. $ 761,380
2,191 Bard (C.R.), Inc. 100,375
2,115 Bausch & Lomb, Inc. 117,383
10,665 Baxter International, Inc. 677,894
9,324 Becton, Dickinson & Co. 396,270
4,245 Biomet, Inc. 162,371
7,409 (b)Boston Scientific Corp. 366,746
38,036 Bristol-Myers Squibb Co. 4,661,787
7,613 Cardinal Health, Inc. 522,442
24,956 Columbia/HCA Healthcare Corp. 614,542
5,655 Guidant Corp. 485,270
4,103 (b)HCR Manor Care, Inc. 130,270
14,997 (b)Healthsouth Corp. 201,522
6,247 (b)Humana, Inc. 123,769
50,782 Johnson & Johnson 4,126,038
42,452 Lilly (Eli) & Co. 3,807,414
2,800 Mallinckrodt, Inc. 90,475
17,845 Medtronic, Inc. 1,207,883
45,452 Merck & Co., Inc. 7,039,379
49,326 Pfizer, Inc. 5,506,015
19,374 Pharmacia & Upjohn, Inc. 1,008,659
27,958 Schering Plough Corp. 2,974,032
3,504 (b)St. Jude Medical, Inc. 101,835
11,556 (b)Tenet Healthcare Corp. 341,624
7,158 United Healthcare Corp. 323,005
31,065 Warner-Lambert Co. 2,345,408
------------
Total 43,968,519
------------
Technology--14.3%
13,152 (b)3Com Corp. 508,818
2,781 Adobe System, Inc. 124,450
5,378 (b)Advanced Micro Devices, Inc. 148,903
3,442 (b)Andrew Corp. 55,072
4,859 (b)Apple Computer, Inc. 155,184
13,912 (b)Applied Materials, Inc. 539,090
8,200 (b)Ascend Communications 460,738
1,828 Autodesk, Inc. 66,494
11,174 Automatic Data Processing, Inc. 860,398
7,500 (b)BMC Software, Inc. 382,969
6,017 (b)Cabletron Systems, Inc. 84,238
3,080 (b)Ceridian Corp. 200,393
59,047 (b)Cisco Systems, Inc. 4,450,668
63,206 Compaq Computer Corp. 2,054,195
20,832 Computer Associates International, Inc. 921,816
5,888 (b)Computer Sciences Corp. 336,352
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Equity Index Fund
<TABLE>
<CAPTION>
Shares Value
- -----------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Technology--continued
1,826 (b)Data General Corp. $ 33,096
48,992 (b)Dell Computer Corp. 2,979,326
1,746 EG & G, Inc. 48,779
18,828 (b)EMC Corp. Mass 1,365,030
12,433 Eastman Kodak Co. 902,170
19,000 Electronic Data Systems Corp. 741,000
5,758 Equifax, Inc. 238,957
16,931 First Data Corp., Class 451,846
5,600 (b)Gateway 2000, Inc. 314,300
5,622 (b)General Instrument Corp. 158,119
15,080 HBO & Co. 376,058
3,040 Harris Corp. 115,330
39,693 Hewlett-Packard Co. 2,490,736
5,069 Ikon Office Solutions, Inc. 49,423
64,495 Intel Corp. 6,941,274
35,873 International Business Machines Corp. 5,919,045
3,194 (b)KLA-Tencor Corp. 108,796
5,416 (b)LSI Logic Corp. 83,948
49,904 Lucent Technologies, Inc. 4,294,863
8,039 Micron Technology, Inc. 332,111
93,656 (b)Microsoft Corp. 11,426,032
22,718 Motorola, Inc. 1,408,516
5,540 (b)National Semiconductor Corp. 79,638
24,562 Northern Telecom Ltd. 1,146,738
13,321 (b)Novell, Inc. 220,629
37,391 (b)Oracle Corp. 1,280,642
9,722 (b)Parametric Technology Corp. 165,274
8,050 (b)Peoplesoft, Inc. 165,528
1,671 Perkin-Elmer Corp. 155,821
1,739 Polaroid Corp. 36,954
12,919 Raytheon Co., Class B 715,390
2,959 Scientific-Atlanta, Inc. 57,331
9,332 (b)Seagate Technology, Inc. 275,294
952 Shared Medical Systems Corp. 49,861
6,755 (b)Silicon Graphics, Inc. 82,749
14,076 (b)Sun Microsystems, Inc. 1,042,504
1,912 Tektronix, Inc. 51,266
6,907 (b)Tellabs, Inc. 373,410
14,630 Texas Instruments, Inc. 1,117,366
9,494 (b)Unisys Corp. 270,579
12,407 Xerox Corp. 1,333,753
------------
Total 60,749,260
------------
Transportation--0.8%
7,016 (b)AMR Corp. 462,618
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Common Stocks--continued
Transportation--continued
17,808 Burlington Northern Santa Fe $ 605,472
8,313 CSX Corp. 346,548
5,608 Delta Air Lines, Inc. 301,080
5,576 (b)FDX Corp. 361,743
14,385 Norfolk Southern Corp. 436,944
2,967 Ryder Systems, Inc. 84,745
12,534 Southwest Airlines Co. 269,481
3,001 (b)USAir Group, Inc. 156,052
9,428 Union Pacific Corp. 458,437
------------
Total 3,483,120
------------
Utilities--2.7%
5,850 (b)AES Corp. 267,638
5,228 Ameren Corp. 215,328
7,219 American Electric Power Co., Inc. 334,781
5,635 Baltimore Gas & Electric Co. 172,924
6,727 Burlington Resources, Inc. 239,649
5,775 Carolina Power & Light Co. 267,816
8,099 Central & SouthWest Corp. 222,723
6,017 Cinergy Corp. 207,963
8,090 Coastal Corp. 282,139
3,169 Columbia Energy Group 179,841
8,969 Consolidated Edison Co. 455,737
3,639 Consolidated Natural Gas Co. 197,643
5,537 DTE Energy Co. 241,552
7,090 Dominion Resources, Inc. 327,469
13,732 Duke Energy Corp. 859,108
777 Eastern Enterprises 31,517
15,148 Edison International 416,570
11,677 Enron Corp. 613,772
9,207 Entergy Corp. 269,880
6,949 FPL Group, Inc. 425,626
8,772 FirstEnergy Corp. 271,384
4,608 GPU, Inc. 201,888
10,886 Houston Industries, Inc. 344,270
1,854 NICOR, Inc. 77,984
5,511 Niagara Mohawk Power Corp. 84,732
5,632 Northern States Power Co. 153,120
1,068 ONEOK, Inc. 37,180
14,514 P G & E Corp. 449,027
6,301 P P & L Resources, Inc. 172,096
11,302 Pacificorp 211,913
8,492 Peco Energy Co. 340,742
1,801 Pennzoil Co. 66,862
1,338 Peoples Energy Corp. 50,426
8,851 Public Service Enterprises Group, Inc. 345,189
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Equity Index Fund
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
- -------------------------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Utilities--continued
3,272 Sonat, Inc. $ 97,138
26,134 Southern Co. 770,953
10,576 Texas Utilities Co. 471,293
10,992 USX Corp. 311,898
8,253 Unicom Corp. 311,035
15,592 Williams Cos., Inc. (The) 449,245
------------
Total 11,448,051
------------
Total Common Stocks (identified cost $172,362,239) 356,851,346
------------
U.S. Government Agencies--5.9%
$15,000,000 (d)Federal Home Loan Mortgage Corp., 12/18/1998 14,965,350
10,000,000 (d)Federal National Mortgage Association, 12/9/1998 9,989,100
------------
Total U.S. Government Agencies (identified cost
$15,963,044) 24,954,450
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. Treasury Obligation--0.9%
$ 3,500,000 (d)United States Treasury Bill, 2/17/1998
(identified cost $3,492,662) $ 3,493,420
------------
(a) Repurchase Agreement--9.2%
38,843,803 Goldman Sachs Group, LP, 5.25%, dated 11/30/1998,
due 12/1/1998 (at amortized cost) 38,843,803
------------
Total Investments (identified cost $230,661,748) $424,143,019
------------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Special Values Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia Special Values Fund (Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Special Values Fund (Class A Shares) (the "Fund") from May 7, 1993
(start of performance) to November 30, 1998 compared to the Russell 2000 Small
Stock Index (Russell 2000 Index).+
[GRAPHIC REPRESENTATION "A11" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The Russell 2000 Index has been adjusted to
reflect the reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The Russell 2000 Index is an unmanaged capitalization-weighted index
consisting of 2,000 small capitalization common stocks. The Russell 2000
Index is not adjusted to reflect sales charges, expenses, or other fees that
the SEC requires to be reflected in the Fund's performance. Investments
cannot be made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Special Values Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia Special Values Fund (Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Special Values Fund (Class Y Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1998 compared to the Russell 2000 Small
Stock Index (Russell 2000 Index).+
[GRAPHIC REPRESENTATION "A12" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The Russell 2000 Index has been adjusted to reflect the
reinvestment of dividends on securities in the index.
+The Russell 2000 Index is an unmanaged capitalization-weighted index
consisting of 2,000 small capitalization common stocks. The Russell 2000
Index is not adjusted to reflect sales charges, expenses, or other fees that
the SEC requires to be reflected in the Fund's performance. Investments
cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Special Values Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Shares Value
- ---------------------------------------------------------------
<C> <S> <C>
Common Stocks--85.8%
Basic Materials--11.1%
41,000 AK Steel Holding Corp. $ 786,687
85,000 (b)American Pacific Corp. 584,375
54,400 Barrick Gold Corp. 1,088,000
153,000 Battle Mountain Gold Co. 717,187
20,800 Calgon Carbon Corp. 150,800
45,000 Cleveland Cliffs, Inc. 1,712,812
58,000 Deltic Timber Corp. 1,160,000
15,300 Furon Co. 262,969
53,500 Greif Brothers Corp., Class A 1,725,375
101,000 Homestake Mining Co. 1,085,750
98,400 LTV Corp. 541,200
5,600 Lafarge Corp. 207,550
7,000 Lone Star Industries, Inc. 529,812
4,400 Lone Star Industries, Inc., Warrants 253,000
65,000 (b)Midwest Grain Products, Inc. 877,500
34,000 Mississippi Chemical Corp. 535,500
13,500 NCH Corp. 756,000
60,000 Roanoke Electric Corp. 870,000
80,000 Rock-Tenn Co. 1,305,000
102,500 (b)Steel West Virginia, Inc. 1,076,250
13,000 Texas Industries, Inc. 376,187
------------
Total 16,601,954
------------
Capital Goods--10.3%
77,600 Amcast Industrial Corp. 1,362,850
35,000 Ampco-Pittsburgh Corp. 422,187
150,000 (b)Ansaldo Signal NV 600,000
28,000 (b)BFC Construction Corp. 222,250
24,000 Blount International, Inc., Class A 555,000
46,250 Butler Manufacturing Co. 1,075,312
9,500 Cascade Corp. 133,000
125,000 (b)Emcor Group, Inc. 2,046,875
12,000 Franklin Electronics, Inc. 783,000
72,000 (b)Harding Lawson Associates Group 504,000
30,000 (b)Kaiser Ventures, Inc. 300,000
46,900 Millipore Corp. 1,319,062
110,000 (b)Morrison Knudsen Corp. 1,058,750
10,790 Primex Technologies, Inc. 437,669
50,950 Smith (A.O.) Corp. 1,267,381
14,000 Smith Investment Co. 614,250
73,375 (b)Supreme Industries, Inc. 706,234
100,000 (b)Todd Shipyards Corp. 500,000
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Common Stocks--continued
Capital Goods--continued
62,800 Twin Disc, Inc. $ 1,365,900
6,250 Varlen Corp. 164,844
------------
Total 15,438,564
------------
Consumer Cyclical--13.9%
16,000 Allen Organ Co., Class B 600,000
43,500 Boston Acoustics, Inc. 1,068,469
63,000 (b)Buckhead America Corp. 330,750
34,900 CPI Corp. 745,987
13,800 Cadmus Communications Corp. 222,525
7,100 Capital Southwest Corp. 616,812
163,500 Cavalier Homes, Inc. 1,767,844
96,000 Cordiant Communications Group PLC, ADR 870,000
59,000 Enesco Group, Inc. 1,423,375
65,700 GP Strategies Corp. 944,437
4,000 Grey Advertising, Inc. 1,440,000
6,300 (b)Gtech Holdings Corp. 157,894
113,900 Intermet Corp. 1,559,006
100,000 Johns Manville Corp. 1,443,750
56,000 (b)K Mart Corp. 854,000
275,000 (b)Oneita Industries, Inc. 27,500
75,200 (b)Powerhouse Technologies, Inc. 893,000
84,700 (b)Racing Champions Corp. 1,228,150
43,100 Raven Industries, Inc. 732,700
12,300 Russell Corp. 292,894
60,000 (b)Saatchi & Saatchi PLC, ADR 660,000
33,100 Skyline Corp. 1,075,750
32,700 (b)Sport-Haley, Inc. 343,350
11,000 Velcro Industries N.V. 1,493,937
------------
Total 20,792,130
------------
Consumer Staples--7.4%
52,000 (b)Alltrista Corp. 1,189,500
40,920 (b)Chris Craft Industries, Inc. 1,892,550
21,000 (b)Craig Corp. 182,437
12,500 (b)Emmis Broadcasting Corp., Class A 430,469
20,000 Eskimo Pie Corp. 226,250
29,000 (b)GC Cos., Inc. 1,167,250
175,000 (b)Host Marriott Services Corp. 1,914,062
132,400 (b)M & F Worldwide Corp. 1,257,800
37,500 National Presto Industries, Inc. 1,549,219
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Special Values Fund
<TABLE>
<CAPTION>
Shares Value
- ---------------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Consumer Staples--continued
64,500 (b)On Command Corp. $ 528,094
110,000 (b)Spaghetti Warehouse, Inc. 804,375
------------
Total 11,142,006
------------
Energy--3.6%
7,600 (b)Atwood Oceanics, Inc. 142,500
65,000 Berry Petroleum Co., Class A 845,000
131,500 (b)EEX Corp. 468,469
127,765 (b)Forest Oil Corp. 1,086,003
57,000 Holly Corp. 926,250
135,200 (b)Kaneb Services, Inc. 616,850
94,000 Snyder Oil Corp. 1,210,250
27,900 Wiser Oil Co. 90,675
------------
Total 5,385,997
------------
Finance--17.6%
66,000 Argonaut Group, Inc. 1,650,000
54,000 (b)CNA Surety Corp. 793,125
47,900 Capital Re Corp. 946,025
106,100 Charter Municipal Mortgage Acceptance Co. 1,326,250
193,400 (b)Danielson Holding Corp. 701,075
12,700 Duff & Phelps Credit Rating 661,988
70,000 Eaton Vance Corp. 1,701,875
52,600 Financial Security Assurance Holdings Ltd. 2,886,425
13,600 Fund American Enterprises, Inc. 1,927,800
29,000 (b)Healthcare Recoveries, Inc. 482,125
34,000 IPC Holdings Ltd. 828,750
83,380 Insignia Properties Trust 1,031,828
59,000 John Nuveen & Co., Inc., Class A 2,183,000
80,000 Leucadia National Corp. 2,460,000
26,600 Liberty Corp. 1,290,100
50,000 Merchants Group, Inc. 1,068,750
24,000 NAC Re Corp. 1,146,000
82,000 PXRE Corp. 1,819,375
6,196 Reliastar Financial Corp. 291,212
60,000 (b)Standard Management Corp. 390,000
10,000 Stewart Information Services Corp. 494,375
32,000 Unico American Corp. 338,000
------------
Total 26,418,078
------------
Healthcare--2.7%
58,400 (b)America Service Group, Inc. 576,700
10,000 (b)Astrosystems, Inc. 25,625
24,200 (b)Hanger Orthopedic Group, Inc. 580,800
42,750 (b)Healthcare Services Group, Inc. 390,094
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Common Stocks--continued
Healthcare--continued
257,200 (b)Medaphis Corp. $ 739,450
5,000 Mine Safety Appliances Co. 325,000
48,350 (b)NovaCare, Inc. 151,094
41,400 (b)Sunrise Medical, Inc. 527,850
63,950 (b)Thermotrex Corp. 671,475
------------
Total 3,988,088
------------
Real Estate--3.2%
60,800 Aegis Realty, Inc. 608,000
33,600 Consolidated Tomoka Co. 432,600
79,800 Forest City Enterprises, Inc.,
Class A 1,955,100
3,900 Forest City Enterprises, Inc.,
Class B 99,450
84,000 Lexford Residential Trust 1,638,000
9,131 Price Enterprises, Inc. 50,221
------------
Total 4,783,371
------------
Technology--13.7%
45,000 (b)4Front Software, International, Inc. 360,000
49,000 (b)Anacomp, Inc. 698,250
149,500 (b)Cypress Semiconductor Corp. 1,523,031
125,000 (b)ESCO Electronics Corp. 1,234,375
58,000 (b)Electroglas, Inc. 841,000
47,500 (b)Evans & Sutherland Computer Co. 926,250
60,000 (b)Exar Corp. 1,035,000
61,700 (b)FSI International, Inc. 482,031
21,000 (b)Intuit, Inc. 1,215,375
46,500 (b)Kulicke & Soffa Industries 793,406
34,000 Moore Products Co. 782,000
60,900 Nam Tai Electronics, Inc. 761,250
100,000 (b)Novell, Inc. 1,656,250
117,013 (b)Phoenix Technology, Ltd. 819,088
57,000 (b)Remedy Corp. 594,938
85,000 Salient 3 Communications, Inc., Class A 850,000
87,000 (b)Silicon Valley Group, Inc. 1,071,188
130,600 United Industrial Corp. 1,297,838
37,700 (b)Vertex Communications Corp. 673,888
115,500 (b)Wang Laboratories, Inc. 2,945,250
------------
Total 20,560,408
------------
Transportation--1.7%
115,000 (b)Consolidated Freightways Corp. 1,444,688
30,000 (b)Kirby Corp. 596,250
64,000 Pittston Burlington Group 556,000
------------
Total 2,596,938
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Special Values Fund
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
- ------------------------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Utilities--0.6%
40,250 UGI Corp. $ 981,094
------------
Total Common Stocks (identified cost $123,939,250) 128,688,628
------------
Corporate Bond--0.1%
Industrial Services--0.1%
$250,000 American Rice Inc., Mtg. Bond, 13.00%, 7/31/2002
(identified cost $237,042) 137,500
------------
Open End Investment Company--0.4%
130,000 Royce Global Trust, Inc. (identified cost $604,500)
(at net asset value) 625,625
------------
Preferred Stocks--1.1%
Consumer Staples--0.7%
137,000 (b)Craig Corp., Pfd. 1,138,813
------------
Services--0.4%
40,000 Price Enterprises, Inc., Cumulative Pfd., Series A,
$1.40 540,000
------------
Total Preferred Stocks (identified cost $799,436) 1,678,813
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. Treasury Obligation--0.4%
$ 510,000 United States Treasury Bill, 12/17/1998
(identified cost $508,948) $ 509,041
------------
(a) Repurchase Agreement--12.4%
18,603,968 Goldman Sachs Group, LP, 5.25%, dated 11/30/1998,
due 12/1/1998 (at amortized cost) 18,603,968
------------
Total Investments (identified cost $144,693,144) $150,243,575
------------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Emerging Markets Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia Emerging Markets Fund (Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Emerging Markets Fund (Class A Shares) (the "Fund") from December 23,
1994 (start of performance) to November 30, 1998 compared to the International
Finance Corporation Investable Index (Total Return Series) (IFCI).+
[GRAPHIC REPRESENTATION "A13" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The IFCI has been adjusted to reflect the
reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The IFCI is an unmanaged market capitalization-weighted index of over 1,000
securities in 26 emerging market countries. The IFCI is not adjusted to
reflect sales charges, expenses, or other fees that the SEC requires to be
reflected in the Fund's performance. Investments cannot be made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Emerging Markets Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia Emerging Markets Fund (Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Emerging Markets Fund (Class Y Shares) (the "Fund") from July 23,
1996 (start of performance) to November 30, 1998 compared to the International
Finance Corporation Investable Index (Total Return Series) (IFCI).+
[GRAPHIC REPRESENTATION "A14" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The IFCI has been adjusted to reflect the reinvestment of
dividends on securities in the index.
+The IFCI is an unmanaged market capitalization-weighted index of over 1,000
securities in 26 emerging market countries. The IFCI is not adjusted to
reflect sales charges, expenses, or other fees that the SEC requires to be
reflected in the Fund's performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Emerging Markets Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Value in
Shares U.S. Dollars
- ---------------------------------------------------------------------------
<C> <S> <C>
Common Stocks--85.4%
Argentina--6.3%
100,000 Banco Del Suquia SA $ 146,020
35,000 Banco de Galicia y Buenos Aires S.A. de C.V.,
Class B, ADR 752,500
339,258 Compania Naviera Perez Companc SA, Class B 1,764,389
11,000 IRSA Inversiones y Representaciones S.A., GDR 308,000
20,000 Importadora y Exportadora de la Patagonia 188,026
50,000 Quilmes Industrial SA, ADR 471,875
175,455 Siderca S.A., Class A 256,200
80,000 Telecom Argentina S.A., ADR 2,440,000
81,000 YPF Sociedad Anonima, ADR 2,389,500
------------
Total 8,716,510
------------
Brazil--5.1%
25,000 Aracruz Cellulose, ADR 270,313
20,000 Companhia Brasileira de Distribuicao Grp, ADR 401,250
57,000 Companhia Vale Do Rio Doce 593,305
90,000 (b)Embratel Participacoes S.A., ADR 1,440,000
7,700 (b)Tele Celular Sul Participacoes SA, ADR 175,175
13,000 (b)Tele Centro Sul Participacoes S.A., ADR 741,813
3,000 (b)Tele Leste Celular Participacoes SA, ADR 125,438
3,800 (b)Tele Nordeste Celular Participacoes SA, ADR 99,513
60,000 (b)Tele Norte Leste Participacoes S.A., ADR 1,020,000
9,000 (b)Tele Sudeste Celular Participacoes S.A., ADR 243,000
29,000 (b)Telesp Celular Participacoes S.A., ADR 761,250
49,000 (b)Telesp Participacoes S.A., ADR 1,310,750
------------
Total 7,181,807
------------
Chile--4.0%
50,000 Banco de A. Edwards, ADR 606,250
25,800 Compania Cervecerias Unidas SA, ADR 554,700
</TABLE>
<TABLE>
<CAPTION>
Value in
Shares U.S. Dollars
<C> <S> <C>
Common Stocks--continued
Chile--continued
50,000 Compania Telecomunicacion Chile, ADR $ 1,159,375
20,600 Cristalerias de Chile, ADR 285,825
25,000 (b)Distribucion y Servicio D&S S.A., ADR 346,875
32,000 Embotelladora Andina S.A., Class B, ADR 452,000
25,000 Enersis S.A., ADR 584,375
48,542 Gener S.A., ADR 837,350
40,000 (b)Quinenco SA, ADR 380,000
10,000 Sociedad Quimica Y Minera De Chile, ADR 385,000
------------
Total 5,591,750
------------
China--1.1%
1,100,000 GZI Transportation Ltd. 240,087
1,500,000 Guangshen Railway Co. Ltd., Class H 224,719
2,200,000 Harbin Power Equipment Co., Class H 164,794
11,500 (b)Huaneng Power International Inc., Class N, ADR 171,063
2,000,000 Maanshan Iron & Steel Co., Class H 98,153
2,350,000 Qingling Motors Co., Class H 464,355
1,000,000 Shanghai Petrochemical Co. Ltd., Class H 104,610
1,000,000 Yizheng Chemical Fibre Co. 90,404
------------
Total 1,558,185
------------
Colombia--0.2%
29,200 Bancolombia S.A., ADR 146,000
100,000 Cementos Diamante S.A. 151,907
------------
Total 297,907
------------
Croatia--1.7%
120,000 (b)(e)Pliva D.D., GDR 1,881,996
33,250 (b)(e)Zagrebacka Banka, GDR 495,425
------------
Total 2,377,421
------------
Czech Republic--1.2%
7,100 (b)Ceske Radiokomunikace, GDR 207,320
100,000 (b)SPT Telecom A.S. 1,471,061
------------
Total 1,678,381
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Emerging Markets Fund
<TABLE>
<CAPTION>
Value in
Shares U.S. Dollars
- -----------------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Dominican Republic--0.2%
40,000 (b)Tricom SA, ADR $ 210,000
------------
Egypt--2.0%
47,000 (b)Al-Ahram Beverages Co, GDR 1,458,208
50,000 (b)Commercial International Bank Egypt, GDR 381,250
6,000 Egypt International Pharmaceuticals 308,433
23,000 (b)(e)MI Bank, GDR 196,075
23,000 (b)(e)Paints & Chemical Industry, GDR 171,925
20,000 (b)Suez Cement Co., Class S, GDR 287,000
------------
Total 2,802,891
------------
Estonia--0.2%
55,000 (b)(e)Eesti Uhispank, GDR 303,875
------------
Greece--3.9%
11,222 Alpha Credit Bank 1,064,182
14,360 Goody's S.A. 383,310
23,000 Hellenic Bottling Co., S.A. 613,937
24,000 Hellenic Cables S.A. 194,718
34,800 Hellenic Technodomiki 240,173
26,188 Hellenic Telecommunication Organization SA 653,044
5,314 National Bank of Greece 949,808
39,232 Sarantis SA 500,183
11,700 Titan Cement Co. 862,953
------------
Total 5,462,308
------------
Hong Kong--3.2%
77,000 CLP Holdings Ltd. 404,740
50,000 Cheung Kong 360,003
300,000 (b)China Telecommunications 598,605
240,000 Citic Pacific Ltd. 543,975
750,000 Cosco Pacific Ltd. 339,016
130,000 Dao Heng Bank Group Ltd. 379,439
24,300 HSBC Holdings PLC 622,956
55,000 Hong Kong Electric Holdings Ltd. 182,907
50,000 Hutchison Whampoa 356,774
20,000 Sun Hung Kai Properties 143,355
109,000 VTech Holdings Ltd. 471,587
------------
Total 4,403,357
------------
Hungary--4.0%
10,000 (b)(e)BorsodChem RT, GDR 260,000
8,000 Danubius Hotels Rt 161,958
</TABLE>
<TABLE>
<CAPTION>
Value in
Shares U.S. Dollars
<C> <S> <C>
Common Stocks--continued
Hungary--continued
35,000 (b)Euronet Services, Inc., ADR $ 133,438
30,000 (b)(e)Gedeon Richter, GDR 1,155,000
35,000 (b)(e)MOL Magyar Olay, GDR 816,347
80,000 (b)Matav RT, ADR 2,185,000
15,000 OTP Bank RT, GDR 636,000
7,000 Pick Szeged Rt 286,133
------------
Total 5,633,876
------------
India--0.9%
14,200 Bajaj Auto Ltd., GDR 211,580
13,800 BSES, GDR 167,325
16,500 Indian Hotels Co. Ltd., GDR 155,513
24,500 Larsen & Toubro Ltd., GDR 164,150
11,000 Ranbaxy Labs, GDR 156,200
26,000 (b)(e)Reliance Industries Ltd., GDR 133,250
27,000 (b)(e)State Bank of India, GDR 218,025
------------
Total 1,206,043
------------
Indonesia--2.0%
700,000 PT Daya Guna Samudera 400,673
225,000 PT Gudang Garam 290,909
1,142,115 PT Indah Kiat Pulp & Paper Corp. 411,469
517,500 PT Indosat 745,758
550,000 PT Semen Gresik 614,815
835,000 PT Telekomunikasi Indonesia 306,448
------------
Total 2,770,072
------------
Israel--2.3%
420,000 Bank Hapoalim 804,383
450,000 Bank Leumi Le-Israel 622,797
1,202 (b)Blue Square Chain Stores Properties &
Investments 14,173
8,250 Koor Industries Ltd. 705,515
70,000 (b)Supersol Ltd. 161,744
20,000 Teva Pharmaceutical Industries Ltd. 854,693
------------
Total 3,163,305
------------
Korea, Republic Of--6.5%
70,000 Dongwon Securities 550,562
70,000 Hanjin Heavy Industries 450,562
70,000 Housing & Commercial Bank, Korea 478,090
40,000 Korea Electric Power Corp. 770,466
27,500 LG Chemical, Ltd., GDR 429,688
18,500 LG Electronics, Inc. 183,367
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Emerging Markets Fund
<TABLE>
<CAPTION>
Value in
Shares U.S. Dollars
- -----------------------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Korea, Republic Of--continued
19,329 LG Information & Communication Ltd. $ 463,834
366 SK Telecom Co. Ltd. 250,604
16,981 Samsung Display Devices 617,367
54,041 Samsung Electronics Co. 2,888,535
14,254 (b)(e)Samsung Electronics Co., GDR 464,680
3,000 Samsung Fire & Marine Insurance 780,096
24,520 Seoul City Gas Co. Ltd. 580,530
16,334 SK Corp. 161,243
------------
Total 9,069,624
------------
Lebanon--0.7%
40,000 (b)(e)Banque Libanaise Pour Le Commerce, Class B,
GDR 714,000
25,000 (b)(e)Solidere, GDR 261,250
------------
Total 975,250
------------
Lithuania--0.3%
50,000 Vilniaus Bankas AB, GDR 362,500
------------
Malaysia--0.2%
16,000 Carlsberg Brewery(M) 39,158
186,000 Hap Seng Consolidated Berhad 123,837
45,450 O.Y.L. Industries Bhd 112,429
------------
Total 275,424
------------
Mexico--8.8%
375,000 Cemex SA 908,499
700,000 Cifra SA de CV 854,940
260,000 (b)Corporacion GEO, S.A. de C.V., Class B 736,610
30,310 Desc S.A. de C.V., Class C, ADR 572,101
350,000 Embotelladoras Argos S.A. 420,451
48,000 Empresas ICA Sociedad Controladora S.A., ADR 231,000
25,000 Empresas La Moderna, ADR 596,875
30,000 (b)Fomento Economico Mexicano, SA de C.V., ADR 712,500
249,800 Grupo Carso SA de CV 775,233
600,000 Grupo Elektra 314,746
550,000 Grupo Financiero Banamex Accivel, Class B 649,715
25,000 Grupo Televisa S.A., GDR 635,938
200,000 Kimberly-Clark de Mexico 546,601
30,000 Pan American Beverage, Class A 691,875
350,000 Sistema Argos SA 84,793
</TABLE>
<TABLE>
<CAPTION>
Value in
Shares U.S. Dollars
<C> <S> <C>
Common Stocks--continued
Mexico--continued
76,000 Telefonos de Mexico, Class L, ADR $ 3,538,750
------------
Total 12,270,627
------------
Morocco--0.5%
30,000 (b)(e)Banque Marocaine du Commerce Exterieur, GDR 733,008
------------
Peru--2.2%
400,000 Banco Continental 224,036
55,000 CPT Telefonica del Peru S.A., Class B, ADR 814,688
25,362 Cementos Lima S.A. 373,388
619,661 Cervecer Backus & Johnston, Class T 259,803
70,000 Cia de Minas Buenaventura SA 430,149
48,721 Credicorp Ltd. 535,931
450,000 Luz Del Sur Servicos SA, Class B 335,574
64,936 Minsur S.A. 108,071
------------
Total 3,081,640
------------
Philippines--3.3%
2,167,812 Ayala Land, Inc. 674,002
7,000,000 (b)Belle Corp. 453,046
430,000 Manila Electric Co., Class B 1,375,127
100,800 Metro Bank and Trust Co. 709,949
48,500 Philippine Long Distance Telephone Co., ADR 1,270,094
7,100,000 Solid Group, Inc. 126,142
------------
Total 4,608,360
------------
Poland--3.5%
20,000 (b)Art Marketing Syndicate SA 183,189
13,333 (b)Bank Inicjatyw Gospodarczych, GDR 209,328
6,500 Bank Slaski S.A. 302,347
54,756 (b)Budimex SA 253,125
100,000 Elektrim Spolka Akcyina S.A. 841,289
30,000 (b)(e)Exbud SA, GDR 224,040
20,000 (b)Kredyt Bank S.A., GDR 321,000
55,000 (b)Okocimskie Zaklady Piwowarskie SA 325,318
49,660 (b)Orbis SA 377,860
15,000 Prokom Software, GDR 273,000
15,000 Softbank S.A. 331,635
135,000 (b)(e)Telekomunikacja Polska SA, GDR 637,875
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Emerging Markets Fund
<TABLE>
<CAPTION>
Value in
Shares U.S. Dollars
- ---------------------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Poland--continued
50,000 WBK (Wielkopolski Bank) $ 272,773
40,000 (b)Zalady Metali Lekkich Kety 335,367
------------
Total 4,888,146
------------
Portugal--4.4%
15,951 BPI-SGPS S.A. 517,595
19,649 Banco Commercial Portugues, Class R 598,512
51,000 Banco Pinto & Sotto Mayor 929,618
8,000 Brisa Auto Estradas de Portugal 432,271
10,700 Cimpor Cimentos de Portugal 338,348
22,000 Electricidade de Portugal SA 487,259
13,496 Estabelecimentos Jeronimo Martins & Filho SGPS,
S.A. 661,747
14,030 Portugal Telecom S.A. 609,218
20,000 (b)Sonae Imobiliaria SA 361,452
6,700 Sonae Investimentos Sociedade Gestora de
Participacoes Sociais, S.A. 315,888
4,500 (b)(e)Telecel--Comunicacoes Pessoai 879,487
------------
Total 6,131,395
------------
Romania--0.3%
15,039 (b)Alro Slatina 74,226
300,000 (b)Arctic S.A. 47,572
35,000 (b)LaFarge Romcin 180,377
341,254 (b)Sanex S.A. 30,439
171,163 (b)Terapia SA 92,452
------------
Total 425,066
------------
Russia--1.1%
2,000 Aeroflot 57,000
34,142 (b)Kubanelectrosvyaz, RDC 247,530
25,000 Lukoil Holding Co., ADR 499,090
60,000 (b)Sun Brewing Ltd., GDR 210,000
140,000 Surgutneftegaz 501,956
16,000 (b)Udmurt Telecom 22,400
38,124 (b)Uralmash Zavody 23,828
------------
Total 1,561,804
------------
Slovania--0.1%
35,000 (b)(e)Blagovno Trgovinsia Center, GDR 191,625
------------
Slovakia--0.2%
80,000 (b)(e)Slovakopharma AS, GDR 278,000
------------
</TABLE>
<TABLE>
<CAPTION>
Value in
Shares U.S. Dollars
<C> <S> <C>
Common Stocks--continued
South Africa--3.2%
100,000 ABSA Group Ltd. $ 481,314
50,000 Barlow Ltd. 252,514
55,000 Liberty Life Association of Africa Ltd. 941,022
70,000 Persetel Q Data Holdings Ltd. 651,706
200,000 (b)Sanlam Ltd. 210,443
100,000 Sappi Limited 457,600
25,000 Sasol Ltd. 97,273
85,000 South African Breweries, Ltd. 1,437,882
------------
Total 4,529,754
------------
Taiwan, Republic Of China--1.2%
22,084 (b)Advanced Semiconductor Engineering, GDR 295,374
29,967 Asia Cement Corp., GDR 269,700
30,674 (b)GVC Corp., GDR 141,867
34,560 (b)President Enterprises, GDR 323,136
49,000 (b)Yageo Corp., GDR 360,150
35,075 (b)Yang Ming Marine Transport, GDR 256,048
------------
Total 1,646,275
------------
Thailand--3.9%
220,000 BEC World Public Company Ltd. 1,377,286
300,000 Bangkok Bank Public Co., Ltd. 548,477
120,000 Electricity Generating PLC 319,113
135,000 PTT Exploration and Production Public Co. 1,084,488
164,300 Shinawatra Computer Co. 696,341
35,000 Siam Cement Co., Ltd 732,964
400,000 Thai Farmers Bank Co. 720,222
------------
Total 5,478,891
------------
Turkey--5.9%
47,282,025 Akbank T.A.S. 965,066
13,939,889 Akbank T.A.S., Rights 238,634
13,920,000 Aksigorta 412,431
12,700,000 Alcatel Teletas 595,783
12,145,000 Arcelik AS 351,844
8,900,000 Aygaz 490,766
7,540,000 Eregli Demir Ve Celik Fabrikalari T.A.S. 403,361
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Emerging Markets Fund
<TABLE>
<CAPTION>
Value in
Shares U.S. Dollars
- ------------------------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Turkey--continued
45,000,000 Hurriyet Gazetecilik ve Matbaacilik A.S. $ 577,759
6,372,734 Koc Holding A.S. 597,916
679,100 Migros Turk 670,694
1,020,000 Otosan Otomobil Sanayii AS 218,264
79,375,000 Sabanci Holding 1,384,934
8,904,000 (b)Tupras Turkiye Petrol Rafinerileri A.S. 403,048
29,360,378 Turk Sise ve Cam Fabrikalari 309,301
21,000,000 Turkiye Is Bankasi 587,635
------------
Total 8,207,436
------------
Venezuela--0.8%
15,000 Compania Anonima Nacional Telefonos de Venezuela,
Class D, ADR 220,313
1,568,435 Electricid Caracas 506,605
70,000 Mavesa SA, ADR 286,237
30,000 Siderurgica Venezolana Sivensa, ADR 163,302
------------
Total 1,176,457
------------
Total Common Stocks (identified cost $133,501,127) 119,248,970
------------
Preferred Stocks--2.9%
Brazil--2.9%
1,500,000 Banco Itau SA, Preference 836,872
25,000,000 (b)Centrais Eletricas Brasileiras SA, Preference,
Series B 707,802
28,251,630 Companhia Energetica de Minas Gerais, Preference 715,172
40,000,000 Companhia Paranaense de Energia-Copel, Preference,
Series B 384,711
35,000,000 Gerdau S.A., Preference 343,909
5,000,000 Petroleo Brasileiro SA, Preference 711,966
4,200,000 Uniao de Bancos Brasileiros SA 184,312
55,000 Usinas Siderurgicas de Minas Gerais SA, Preference 149,305
------------
Total 4,034,049
------------
</TABLE>
<TABLE>
<CAPTION>
Value in
Shares U.S. Dollars
<C> <S> <C>
Preferred Stocks--continued
Russia--0.0%
550 (b)Karelia Electrosvyaz,
Pfd. $ 18,150
2,000,000 Surgutneftegaz, Pfd. 48,000
------------
Total 66,150
------------
Total Preferred Stocks
(identified cost
$4,540,066) 4,100,199
------------
Rights--0.8%
Korea, Republic Of--0.0%
3,062 L.G. Electronics, Inc.,
Rights 8,725
1,894 Samsung Display Devices,
Rights 36,482
------------
Total 45,207
------------
Thailand--0.7%
350,000 Hana Microelectronics
Co., Ltd. 872,576
------------
Turkey--0.1%
5,088,000 Tupras Turkiye Petrol
Rafinerileri A.S.,
Rights 160,173
------------
Total Rights (identified
cost $1,098,545) 1,077,956
------------
Warrants--0.0%
Hong Kong--0.0%
50,000 (b)GZI Transportation
Ltd., Warrants 65
------------
Indonesia--0.0%
109,374 (b)PT Bank Dagang
Nasional Indonesia,
Warrants 0
80,260 (b)PT Bank Internasional
Indonesia, Warrants 973
163,544 (b)PT Indah Kiat Pulp &
Paper Corp., Warrants 33,039
107,142 (b)PT Pan Indonesia
Bank, Warrants 1,515
------------
Total 35,527
------------
Philippines--0.0%
500,000 (b)Belle Corp., Warrants 1,459
------------
Thailand--0.0%
9,375 (b)Thai Farmers Bank
Co., Warrants 1,298
------------
Total Warrants
(identified cost $19,946) 38,349
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Emerging Markets Fund
<TABLE>
<CAPTION>
Principal
Amount Value in
or Shares U.S. Dollars
- ------------------------------------------------------------------------------
<C> <S> <C>
Convertible Bonds--0.0%
Brazil--0.0%
53,500 Companhia Vale Do Rio Doce, Conv. Deb., 12/31/1999
(identified cost $417) $ 446
------------
Closed End Investment Companies--5.2%
Bulgaria--0.2%
65,000 Framlington Bulgaria Fund 308,750
------------
India--1.6%
20,000 India I.T. Fund 202,600
300,000 (b)The Morgan Stanley India Investment Fund, Inc. 2,062,500
------------
Total 2,265,100
------------
Korea--0.7%
800 Korea Europe Fund 1,018,000
------------
Romania--0.8%
2,200 (b)Romania Investment Fund Ltd. 1,072,500
------------
South Africa--0.8%
105,000 Southern Africa Fund, Inc. 1,056,563
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value in
or Shares U.S. Dollars
<C> <S> <C>
Closed End Investment Companies--continued
Taiwan, Province Of China--0.5%
35,000 (b)Formosa Growth Fund Ltd. $ 660,625
------------
Ukraine--0.6%
10,000 (b)Societe Generale Ukraine Fund 405,000
80,000 (b)Ukranian Opportunity Fund 400,000
------------
Total 805,000
------------
Total Closed End
Investment Companies (identified cost $10,267,148) 7,186,538
------------
(a) Repurchase Agreements--4.2%
United States--4.2%
2,753,489 Goldman Sachs Group, LP, 5.25%, dated 11/30/1998,
due 12/1/1998 (at amortized cost) 2,753,489
3,116,696 Bank of New York Co., Inc. 4.675%, dated
11/30/1998, due 12/1/1998 (at amortized cost) 3,116,696
------------
Total Repurchase Agreements (at amortized cost) 5,870,185
------------
Total Investments
(identified cost $155,297,434) $137,522,643
------------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Balanced Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia Balanced Fund (Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Balanced Fund (Class A Shares) (the "Fund") from May 7, 1993 (start
of performance) to November 30, 1998 compared to the Standard and Poor's 500
Index (S&P 500)+ and the Lehman Brothers Aggregate Bond Index (LBABI).+
[GRAPHIC REPRESENTATION "A15" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The S&P 500 and the LBABI have been adjusted to
reflect the reinvestment of dividends on securities in the indices.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The LBABI is an
unmanaged index measuring both the capital price changes and income provided
by the underlying universe of securities, comprised of U.S. Treasury
obligations, U.S. agency obligations, foreign obligations, U.S. investment-
grade corporate debt and mortgage-backed obligations. The S&P 500 and the
LBABI are not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance. Investments
cannot be made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Balanced Fund (Class B Shares)
Growth of $10,000 Invested in Wachovia Balanced Fund (Class B Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Balanced Fund (Class B Shares) (the "Fund") from July 23, 1996 (start
of performance) to November 30, 1998 compared to the Standard and Poor's 500
Index (S&P 500)+ and the Lehman Brothers Aggregate Bond Index (LBABI).+
[GRAPHIC REPRESENTATION "A16" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund. The ending
value of the Fund reflects a 3.00% contingent deferred sales charge on any
redemption less than three years from the purchase date. The maximum
contingent deferred sales charge is 5.00% on any redemption less than one
year from the purchase date. The Fund's performance assumes the reinvestment
of all dividends and distributions. The S&P 500 and the LBABI have been
adjusted to reflect the reinvestment of dividends on securities in the
indices.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The LBABI is an
unmanaged index measuring both the capital price changes and income provided
by the underlying universe of securities, comprised of U.S. Treasury
obligations, U.S. agency obligations, foreign obligations, U.S. investment-
grade corporate debt and mortgage-backed obligations. The S&P 500 and the
LBABI are not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance. Investments
cannot be made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Balanced Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia Balanced Fund (Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Balanced Fund (Class Y Shares) (the "Fund") from July 23, 1996 (start
of performance) to November 30, 1998 compared to the Standard and Poor's 500
Index (S&P 500)+ and the Lehman Brothers Aggregate Bond Index (LBABI).+
[GRAPHIC REPRESENTATION "A17" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 and the LBABI have been adjusted to reflect the
reinvestment of dividends on securities in the indices.
+The S&P 500 is an unmanaged index comprised of common stocks in industry,
transportation, and financial and public utility companies. The LBABI is an
unmanaged index measuring both the capital price changes and income provided
by the underlying universe of securities, comprised of U.S. Treasury
obligations, U.S. agency obligations, foreign obligations, U.S. investment-
grade corporate debt and mortgage-backed obligations. The S&P 500 and the
LBABI are not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance. Investments
cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Balanced Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------
<C> <S> <C>
Common Stocks--52.2%
Basic Materials--3.2%
31,875 Aluminum Co. of America $ 2,362,734
44,760 Du Pont (E.I.) de Nemours & Co. 2,629,650
32,957 Monsanto Co. 1,493,364
19,038 Potash Corporation of Saskatchewan, Inc. 1,174,407
47,940 Praxair, Inc. 1,830,709
36,390 Rohm & Haas Co. 1,271,376
55,773 Weyerhaeuser Co. 2,795,622
------------
Total 13,557,862
------------
Capital Goods--3.9%
42,630 General Electric Co. 3,858,015
23,531 Honeywell, Inc. 1,881,009
36,758 Ingersoll-Rand Co. 1,720,734
17,370 Lockheed Martin Corp. 1,802,138
57,386 Tyco International Ltd. 3,776,716
30,806 United Technologies Corp. 3,302,018
------------
Total 16,340,630
------------
Communication Services--2.5%
27,948 (b)Airtouch Communications, Inc. 1,598,276
17,127 Alltel Corp. 907,731
14,567 BellSouth Corp. 1,270,971
119,366 (b)MCI Worldcom, Inc. 7,042,594
------------
Total 10,819,572
------------
Consumer Cyclical--3.4%
45,142 Black & Decker Corp. 2,446,132
27,744 Magna International, Inc., Class A 1,846,710
28,893 McGraw-Hill Cos., Inc. 2,585,924
34,364 Sears, Roebuck & Co. 1,630,142
53,333 Service Corp. International 1,993,321
15,716 TRW, Inc. 865,362
39,041 Wal-Mart Stores, Inc. 2,940,275
------------
Total 14,307,866
------------
Consumer Staples--8.8%
49,337 Avon Products, Inc. 2,004,316
64,137 CBS Corp. 1,912,084
13,900 CKE Restaurants, Inc. 339,681
43,597 Coca-Cola Co. 3,054,515
12,733 Comcast Corp., Class A 617,550
20,886 (b)Kroger Co., Inc. 1,108,263
20,790 McDonald's Corp. 1,456,599
29,258 Newell Co. 1,294,667
</TABLE>
<TABLE>
<CAPTION>
Shares Value
<C> <S> <C>
Common Stocks--continued
Consumer Staples--continued
33,311 (b)Outback Steakhouse, Inc. $ 1,182,541
69,645 PepsiCo, Inc. 2,694,391
88,811 Philip Morris Cos., Inc. 4,967,865
52,721 Procter & Gamble Co. 4,619,678
79,469 Ralston Purina Co. 2,766,515
62,756 Rite Aid Corp. 2,910,310
54,997 (b)Safeway, Inc. 2,904,529
30,276 Time Warner, Inc. 3,201,687
6,980 (b)Viacom, Inc., Class B 464,606
------------
Total 37,499,797
------------
Energy--3.5%
11,907 Ashland, Inc. 578,978
23,719 British Petroleum Co. PLC, ADR 2,185,113
25,487 Chevron Corp. 2,131,350
84,588 Exxon Corp. 6,349,387
37,077 Mobil Corp. 3,195,574
13,468 Schlumberger Ltd. 601,851
------------
Total 15,042,253
------------
Finance--9.2%
38,726 American Express Co. 3,875,020
14,911 American General Corp. 1,050,294
42,934 American International Group, Inc. 4,035,796
15,472 Associates First Capital Corp., Class A 1,204,882
45,279 Bank One Corp. 2,323,379
61,600 BankAmerica Corp. 4,015,550
38,453 Chase Manhattan Corp. 2,439,362
100,573 Citigroup, Inc. 5,047,507
80,175 Federal Home Loan Mortgage Corp. 4,850,587
35,273 Federal National Mortgage Association 2,566,111
26,586 MBIA Insurance Corporation 1,721,444
53,578 MBNA Corp. 1,215,551
18,350 Marsh & McLennan Cos., Inc. 1,067,741
13,871 Merrill Lynch & Co., Inc. 1,040,325
36,368 SunTrust Banks, Inc. 2,538,941
------------
Total 38,992,490
------------
Healthcare--7.1%
46,509 Abbott Laboratories 2,232,432
29,926 American Home Products Corp. 1,593,559
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Balanced Fund
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
- ------------------------------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
Healthcare--continued
15,627 Becton, Dickinson & Co. $ 664,147
27,497 Bristol-Myers Squibb Co. 3,370,101
17,680 (b)Elan Corp. Plc, ADR 1,204,450
37,978 Lilly (Eli) & Co. 3,406,152
28,286 Merck & Co., Inc. 4,380,794
39,262 Mylan Laboratories, Inc. 1,303,008
39,206 Pfizer, Inc. 4,376,370
33,041 Pharmacia & Upjohn, Inc. 1,720,197
33,820 Schering Plough Corp. 3,597,603
29,711 Warner-Lambert Co. 2,243,180
790 (b)Watson Pharmaceuticals, Inc. 42,561
------------
Total 30,134,554
------------
Technology--8.8%
20,409 (b)Applied Materials, Inc. 790,849
24,872 (b)Ascend Communications 1,397,495
49,220 (b)Cisco Systems, Inc. 3,709,920
19,920 (b)Dell Computer Corp. 1,211,385
33,023 (b)EMC Corp. Mass 2,394,167
41,771 Intel Corp. 4,495,604
25,859 International Business Machines Corp. 4,266,735
33,564 Lucent Technologies, Inc. 2,888,602
59,013 (b)Microsoft Corp. 7,199,586
32,749 (b)Network Associates, Inc. 1,666,105
7,865 OYNokia AB, Class A, ADR 770,770
27,577 (b)Sun Microsystems, Inc. 2,042,422
34,703 Texas Instruments, Inc. 2,650,442
16,592 Xerox Corp. 1,783,640
------------
Total 37,267,722
------------
Transportation--0.4%
48,688 Burlington Northern Santa Fe 1,655,392
------------
Utilities--1.4%
34,803 Enron Corp. 1,829,333
48,658 P G & E Corp. 1,505,357
81,959 Southern Co. 2,417,791
------------
Total 5,752,481
------------
Total Common Stocks (identified cost $179,758,879) 221,370,619
------------
Corporate Bonds--12.9%
Asset Backed Securities--0.5%
$ 1,000,000 American Express Credit Account Master Trust 1997-
1, Class A, 6.40%, 4/15/2005 1,023,120
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
Corporate Bonds--continued
Asset Backed Securities--continued
$ 575,000 Ford Credit Auto Loan Master Trust 1995-1 A, Class
A, 6.50%, 8/15/2002 $ 586,615
666,665 Prudential Home Mortgage Securities 1993-60, Class
A1, 6.75%, 12/25/2023 666,665
------------
Total 2,276,400
------------
Basic Materials--0.2%
800,000 Nalco Chemical Co., Bond, 6.25%, 5/15/2008 800,368
------------
Communication Services--1.0%
3,980,000 New York Telephone Co., Deb., 6.00%, 4/15/2008 4,085,510
------------
Consumer Cyclical--1.2%
2,000,000 Tribune Co., Note, 6.25%, 11/10/2026 2,074,880
3,000,000 Wal-Mart Stores, Inc., Note, .99%, 6/1/2018 3,021,810
------------
Total 5,096,690
------------
Finance--8.5%
2,500,000 Aon Capital Trust A, Company Guarantee, 8.205%,
1/1/2027 2,832,325
1,100,000 Associates Corp. of North America, Sr. Note, 6.50%,
7/15/2002 1,133,693
865,000 Bankers Trust Corp., Sub. Note, 7.375%, 5/1/2008 934,546
825,000 Beneficial Corp., 6.25%, 2/18/2003 833,836
2,000,000 CIT Group Holdings, Inc., Sr. Note, 6.375%,
10/1/2002 2,045,420
2,250,000 Caterpillar Financial Services Corp., Note, 6.50%,
2/1/2002 2,340,877
890,000 Ford Motor Credit Corp., Sr. Unsub., 6.55%,
9/10/2002 920,438
1,000,000 Hartford Life, Inc., Note, 7.10%, 6/15/2007 1,067,872
2,750,000 IBM Credit Corp., Sr. Note, 5.79%, 3/20/2010 2,770,598
1,500,000 KFW International Finance, Note, 7.00%, 3/1/2013 1,675,830
735,000 Landeskreditbank B-W, Sub. Note, 7.875%, 4/15/2004 819,363
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Balanced Fund
<TABLE>
<CAPTION>
Principal
Amount Value
- -------------------------------------------------------------------------------
<C> <S> <C>
Corporate Bonds--continued
Finance--continued
$ 2,000,000 Lehman Brothers Holdings, Inc., Bond, 6.20%,
1/15/2002 $ 1,988,180
2,500,000 Merrill Lynch & Co., Inc., Bond, 6.00%, 7/15/2005 2,510,675
1,000,000 Morgan Stanley, Dean Witter & Co., Sr. Note, Series
MTNC, 5.875%, 2/28/2001 1,009,450
1,000,000 NationsBank Corp., Medium Term Note, 6.94%,
4/12/2002 1,041,660
3,500,000 Norwest Financial, Inc., Sr. Note, 6.375%,
9/15/2002 3,599,435
3,000,000 Quebec, Province of, Deb., 9.375%, 4/1/1999 3,038,040
2,500,000 Salomon, Inc., Note, 6.375%, 10/1/2004 2,554,350
1,365,000 Sears Roebuck Acceptance Corp., Medium Term Note,
7.03%, 6/4/2003 1,434,975
1,550,000 Union Planters Corp., Sub. Note, 6.50%, 3/15/2018 1,489,287
------------
Total 36,040,850
------------
Industrial Services--0.5%
2,000,000 WMX Technologies, Inc., Note, 8.00%, 4/30/2004 2,172,320
------------
Utilities--1.0%
1,170,000 Georgia Power Co., Note, 5.50%, 12/1/2005 1,172,679
1,660,000 National Fuel Gas Co., Note, 6.303%, 5/27/2008 1,686,228
1,500,000 Ontario Hydro, Sr. Note, 6.10%, 1/30/2008 1,544,460
------------
Total 4,403,367
------------
Total Corporate Bonds
(identified cost $53,671,301) 54,875,505
------------
Mortgage Backed Securities--13.4%
Federal Home Loan Mortgage Corporation--2.7%
182,846 6.50%, 12/1/2008 185,707
44,266 6.50%, 2/1/2009 44,959
569,975 6.50%, 3/1/2009 578,895
46,966 6.50%, 4/1/2009 47,701
221,302 6.50%, 6/1/2009 224,766
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
Mortgage Backed Securities--continued
Federal Home Loan Mortgage Corporation--continued
$ 252,629 6.50%, 7/1/2010 $ 256,969
10,000,000 Discount Note, 12/18/1998 9,976,900
------------
Total 11,315,897
------------
Federal National Mortgage Association--7.7%
808,703 6.00%, 12/1/2010 810,215
1,361,427 6.00%, 3/1/2011 1,363,128
5,763,899 6.00%, 12/1/2012 5,771,104
1,862,674 6.00%, 1/1/2013 1,865,002
1,717,366 6.13%, 9/1/2008 1,758,153
3,250,000 6.57%, 8/22/2007 3,503,403
250,000 7.16%, 5/11/2005 276,328
4,920,000 7.375%, 3/28/2005 5,486,587
109,576 7.50%, 4/1/2007 112,725
620,954 7.50%, 9/1/2022 639,266
180,185 8.00%, 6/1/2022 187,054
202,533 8.00%, 1/1/2023 210,000
22,809 8.50%, 8/1/2016 23,990
22,589 8.50%, 6/1/2024 23,641
301,403 8.50%, 7/1/2024 315,436
14,140 8.50%, 10/1/2024 14,799
373,823 8.50%, 12/1/2024 391,228
10,000,000 Discount Note, 12/9/1998 9,989,100
------------
Total 32,741,159
------------
Government National Mortgage Association--2.5%
822,894 6.50%, 10/15/2008 837,896
967,324 6.50%, 12/15/2012 985,461
911,424 6.50%, 2/15/2013 928,513
967,997 6.50%, 2/15/2013 986,147
885,075 6.50%, 2/15/2013 901,670
2,356,638 6.50%, 4/15/2024 2,382,396
614,859 7.00%, 5/15/2023 629,837
1,333,930 7.00%, 8/15/2023 1,366,425
315,991 7.00%, 8/15/2023 323,688
776,452 7.00%, 12/20/2025 791,251
318,669 7.50%, 3/15/2023 329,223
------------
Total 10,462,507
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Balanced Fund
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
- ------------------------------------------------------------------------------
<C> <S> <C>
Mortgage Backed Securities--continued
Tennessee Valley Authority--0.5%
$ 2,200,000 Tennessee Valley Authority, Bond, 5.28%, 9/14/2001 $ 2,214,102
------------
Total Mortgage Backed Securities
(identified cost $55,926,971) 56,733,665
------------
Open End Investment Companies--1.1%
29,000 Blackrock 1998 Term Trust, Inc. 290,000
233,301 Blackrock 2001 Term Trust, Inc. 2,099,709
164,200 Blackrock Strategic Term Trust, Inc. 1,488,062
97,211 Blackrock Target Term Trust 935,656
------------
Total Open Ended Investment Companies (identified
cost $4,595,966) 4,813,427
------------
(d) U.S. Treasury Obligations--13.5%
U.S. Treasury Bill--0.8%
$ 3,500,000 12/17/1998 3,493,420
------------
U.S. Treasury Bonds--4.0%
1,500,000 6.125%, 11/15/2027 1,691,490
12,324,000 7.125%, 2/15/2023 15,302,957
------------
Total 16,994,447
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
(d) U.S. Treasury Obligations--continued
U.S. Treasury Notes--8.7%
$ 5,500,000 5.50%, 2/29/2000 $ 5,555,000
2,750,000 5.50%, 5/31/2000 2,783,935
3,000,000 5.625%, 5/15/2008 3,191,250
3,000,000 5.75%, 8/15/2003 3,136,410
1,830,000 5.875%, 11/15/2005 1,956,673
1,000,000 6.50%, 8/15/2005 1,101,410
4,750,000 6.50%, 10/15/2006 5,268,035
9,455,000 7.875%, 11/15/2004 10,972,244
2,530,000 8.00%, 5/15/2001 2,725,670
------------
Total 36,690,627
------------
Total U.S. Treasury Obligations (identified cost
$55,667,473) 57,178,494
------------
(a) Repurchase Agreement--6.7%
$28,281,976 Goldman Sachs Group, LP, 5.25%, dated 11/30/1998,
due 12/1/1998 (at amortized cost) 28,281,976
------------
Total Investments
(identified cost $377,902,566) $423,253,686
------------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Fixed Income Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia Fixed Income Fund (Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Fixed Income Fund (Class A Shares) (the "Fund") from May 7, 1993
(start of performance) to November 30, 1998 compared to the Lehman Brothers
Aggregate Bond Index (LBABI).+
[GRAPHIC REPRESENTATION "A18" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The LBABI has been adjusted to reflect the
reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The LBABI is an unmanaged index measuring both the capital price changes and
income provided by the underlying universe of securities, comprised of U.S.
Treasury obligations, U.S. agency obligations, foreign obligations, U.S.
investment-grade corporate debt and mortgage-backed obligations. The LBABI
is not adjusted to reflect sales charges, expenses, or other fees that the
SEC requires to be reflected in the Fund's performance. Investments cannot
be made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Fixed Income Fund (Class B Shares)
Growth of $10,000 Invested in Wachovia Fixed Income Fund (Class B Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Fixed Income Fund (Class B Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1998 compared to the Lehman Brothers
Aggregate Bond Index (LBABI).+
[GRAPHIC REPRESENTATION "A19" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund. The ending
value of the Fund reflects a 3.00% contingent deferred sales charge on any
redemption less than three years from the purchase date. The maximum
contingent deferred sales charge is 5.00% on any redemption less than one
year from the date of purchase. The Fund's performance assumes the
reinvestment of all dividends and distributions. The LBABI has been adjusted
to reflect the reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The LBABI is an unmanaged index measuring both the capital price changes and
income provided by the underlying universe of securities, comprised of U.S.
Treasury obligations, U.S. agency obligations, foreign obligations, U.S.
investment-grade corporate debt and mortgage-backed obligations. The LBABI
is not adjusted to reflect sales charges, expenses, or other fees that the
SEC requires to be reflected in the Fund's performance. Investments cannot
be made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Fixed Income Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia Fixed Income Fund (Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Fixed Income Fund (Class Y Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1998 compared to the Lehman Brothers
Aggregate Bond Index (LBABI).+
[GRAPHIC REPRESENTATION "A20" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The LBABI has been adjusted to reflect the reinvestment of
dividends on securities in the index.
+The LBABI is an unmanaged index measuring both the capital price changes and
income provided by the underlying universe of securities, comprised of U.S.
Treasury obligations, U.S. agency obligations, foreign obligations, U.S.
investment-grade corporate debt and mortgage-backed obligations. The LBABI
is not adjusted to reflect sales charges, expenses, or other fees that the
SEC requires to be reflected in the Fund's performance. Investments cannot
be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Fixed Income Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Principal
Amount Value
- -------------------------------------------------------------------------------
<C> <S> <C>
Asset-Backed Securities--5.0%
Finance--5.0%
$3,575,000 American Express Credit Account Master Trust 1997-1,
Class A, 6.40%, 4/15/2005 $ 3,657,654
3,975,000 Chase Credit Card Master Trust, Class A, 6.30%,
4/15/2003 4,013,478
2,300,000 Circuit City Credit Card Master Trust 1995-1, Class
A, 6.375%, 8/15/2005 2,346,828
1,885,000 First USA Credit Card Master Trust 1997-6, Class A,
6.42%, 3/17/2005 1,929,166
------------
Total Asset-Backed Securities (identified cost
$11,754,601) 11,947,126
------------
Collateralized Mortgage Obligations--2.8%
Finance--2.8%
1,275,000 Deutsche Mortgage and Asset Receiving Corp. 1998-C1,
Series 1998-C1, Class D, 7.23099995%, 6/15/2031 1,243,520
14,200,000 Deutsche Mortgage and Asset Receiving Corp. 1998-C1,
Series 1998-C1, Class X, 1.254%, 6/15/2031 954,098
2,400,000 Federal National Mortgage Association, Series 1994-
1, Class L, 6.50%, 1/25/2014 2,469,000
2,000,000 Nomura Asset Securities Corp. 1998-D6, Series 1998-
D6, Class A3, 6.97908%, 3/17/2028 2,045,000
------------
Total Collateralized Mortgage Obligations
(identified cost $6,776,941) 6,711,618
------------
Corporate Bonds--35.9%
Banking & Finance--0.6%
1,250,000 NationsBank Corp., 6.125%, 7/15/2004 1,285,450
Chemical & Allied Products--0.5%
1,000,000 Du Pont (E.I.) de Nemours & Co., Unsecd. Note,
Series G, 6.47%, 9/26/2002 1,037,350
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
Corporate Bonds--continued
Finance--25.1%
$2,135,000 Abbey National Bank PLC, London, Sub., 6.69%,
10/17/2005 $ 2,230,947
3,000,000 Associates Corp. of North America, Medium Term Note,
6.00%, 3/15/1999 3,006,690
1,000,000 Bankers Trust Corp., Sr. Note, 6.75%, 10/3/2001 1,023,070
1,880,000 Bankers Trust Corp., Sub. Note, 7.375%, 5/1/2008 2,031,152
1,250,000 Bear Stearns Cos., Inc., Sr. Note, 6.70%, 8/1/2003 1,283,875
2,000,000 Caterpillar Financial Services Corp., Note, 6.50%,
2/1/2002 2,058,040
755,000 First Union Corp., Sub. Note, 6.824%, 8/1/2026 823,720
2,700,000 Ford Motor Credit Corp., Note, 7.25%, 5/15/1999 2,718,225
3,000,000 Hanson Overseas B.V., Sr. Note, 7.375%, 1/15/2003 3,177,480
1,500,000 Household Finance Corp., Sr. Note, 6.23%, 2/16/1999 1,501,695
3,750,000 IBM Credit Corp., Sr. Note, 5.79%, 3/20/2010 3,778,088
2,000,000 Ikon Capital, Inc., Note, 6.33%, 12/8/2000 1,973,184
2,000,000 Inter-American Development Bank, Deb., 8.875%,
6/1/2009 2,536,500
1,915,000 International Lease Finance Corp., Note, 6.97%,
1/10/2001 1,965,730
2,135,000 Landeskreditbank B-W, Sub. Note, 7.875%, 4/15/2004 2,380,055
2,665,000 Lehman Brothers Holdings, Inc., Note, 6.90%,
3/30/2001 2,698,667
1,000,000 Lehman Brothers Holdings, Inc., Sr. Note, 8.75%,
3/15/2005 1,108,110
1,375,000 Mercantile Bancorporation, Inc., 6.80%, 6/15/2001 1,411,025
2,100,000 Merrill Lynch & Co., Inc., Bond, 6.00%, 7/15/2005 2,108,967
1,100,000 Metropolitan Life Ltd., 7.00%, 11/1/2005 1,155,132
2,090,000 Morgan Stanley Group, Inc., Note, 6.875%, 3/1/2007 2,203,174
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Fixed Income Fund
<TABLE>
<CAPTION>
Principal
Amount Value
- ------------------------------------------------------------------------------
<C> <S> <C>
Corporate Bonds--continued
Finance--continued
$2,100,000 Salomon, Inc., Note, 6.375%, 10/1/2004 $ 2,131,080
4,250,000 Smithkline Beecham Corp., Company Guarantee, 6.75%,
9/5/2000 4,377,245
2,200,000 Union Planters Corp., Sub. Note, 6.50%, 3/15/2018 2,113,826
2,000,000 Norwest Corp. Mtn. Bk. Ent., Sr. Note, Series H,
6.75%, 6/15/2007 2,108,560
2,615,000 International Bank Recon. & Dev., Note, 5.00%,
11/28/2000 2,613,536
3,000,000 Xerox Capital Trust I, Company Guarantee, 8.00%,
2/1/2027 3,274,830
------------
Total 59,792,603
------------
Machinery & Equipment--2.9%
4,000,000 Baker Hughes, Inc., Note, 7.625%, 2/15/1999 4,016,200
2,670,000 Ingersoll-Rand Co., Note, 6.13%, 11/18/2027 2,849,985
------------
Total 6,866,185
------------
Producer Manufacturing--1.0%
240,000 Armstrong World Industries, Inc., Deb., 9.75%,
4/15/2008 292,332
2,038,000 U.S.G. Corp., Deb., 8.75%, 3/1/2017 2,116,626
------------
Total 2,408,958
------------
Retail Trade--0.6%
1,405,000 Penney (J.C.) Co., Inc., Note, 7.60%, 4/1/2007 1,528,429
------------
Utilities--5.2%
3,000,000 Alabama Power Co., Sr. Note, 5.49%, 11/1/2005 2,965,290
1,400,000 Commonwealth Edison Co., Sr. Note, 6.95%, 7/15/2018 1,443,022
1,770,000 Georgia Power Co., Note, 5.50%, 12/1/2005 1,774,053
3,000,000 National Fuel Gas Co., Note, 6.303%, 5/27/2008 3,047,400
1,135,000 Ontario Hydro, Sr. Note, 6.10%, 1/30/2008 1,168,641
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
Corporate Bonds--continued
Utilities--continued
$2,000,000 SCANA Corp., Sr. Note, Series B, 6.25%, 7/8/2003 $ 2,062,760
-----------
Total 12,461,166
-----------
Total Corporate Bonds
(identified cost $83,992,107) 85,380,341
-----------
Foreign Bonds--0.9%
Finance--0.9%
1,000,000 Israel AID, 5.625%, 9/15/2003 1,021,020
1,005,000 Province of Manitoba, 9.00%, 12/15/2000 1,075,873
-----------
Total Foreign Bonds
(identified cost $2,032,808) 2,096,893
-----------
U.S. Government Agencies--26.7%
Federal Farm Credit Bank--0.7%
1,700,000 5.73%, 7/28/2003 1,745,424
-----------
Federal Home Loan Mortgage Corporation--8.9%
2,458 12.50%, 2/1/2010 2,806
3,366 12.50%, 3/1/2014 3,903
6,884 12.50%, 7/1/2011 7,907
11,925 11.00%, 10/1/2015 13,237
1,578 11.00%, 10/1/2010 1,751
752 9.50%, 2/1/2019 808
1,908 9.50%, 2/1/2019 2,051
19,315 9.50%, 7/1/2016 20,740
1,139 9.00%, 1/1/2019 1,208
1,027 9.00%, 1/1/2019 1,090
7,080 9.00%, 5/15/2016 7,595
1,071 8.50%, 8/1/2017 1,131
5,631 8.50%, 7/1/2017 5,944
1,369 8.00%, 1/1/2019 1,436
1,180 8.00%, 7/1/2017 1,237
33,922 8.00%, 4/1/2009 35,018
6,621 8.00%, 2/1/2009 6,835
650 8.00%, 1/1/2009 671
11,498 8.00%, 12/1/2008 11,829
16,338 8.00%, 1/1/2008 16,918
115,358 7.50%, 2/1/2023 118,602
63,528 7.50%, 2/1/2023 65,315
190,117 7.50%, 2/1/2023 195,463
95,661 7.50%, 2/1/2023 98,351
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Fixed Income Fund
<TABLE>
<CAPTION>
Principal
Amount Value
- -------------------------------------------------------------------------------
<C> <S> <C>
U.S. Government Agencies--continued
Federal Home Loan Mortgage Corporation--
continued
$ 129,677 7.50%, 2/1/2023 $ 133,324
38,992 7.50%, 9/1/2007 40,159
541,208 7.00%, 6/1/2008 553,991
1,930,351 6.50%, 8/1/2013 1,958,689
1,556,711 6.50%, 11/1/2011 1,579,564
566,045 6.50%, 4/1/2009 574,903
3,000,000 5.75%, 7/15/2003 3,089,520
4,300,000 5.765%, 6/11/2003 4,418,938
2,000,000 5.72%, 8/25/2003 2,053,740
4,550,000 5.625%, 3/19/2001 4,607,603
1,500,000 5.625%, 6/2/2000 1,513,830
----------
Total 21,146,107
----------
Federal National Mortgage Association--13.5%
189 12.50%, 9/1/2013 214
195 9.50%, 7/1/2016 210
1,460 9.50%, 7/1/2016 1,566
313 9.00%, 1/1/2017 332
434 8.50%, 2/1/2017 457
507 8.50%, 2/1/2019 533
25,559 8.00%, 9/1/2009 26,586
6,342 8.00%, 1/1/2009 6,597
2,856 8.00%, 11/1/2008 2,962
1,195,361 7.50%, 5/1/2026 1,150,657
300,916 7.50%, 1/1/2023 309,790
129,667 7.50%, 1/1/2023 133,353
161,855 7.50%, 1/1/2023 166,628
3,025,000 7.00%, 11/1/2028 3,087,376
1,926,547 6.50%, 7/1/2013 1,954,232
2,936,511 6.50%, 9/1/2012 2,978,708
3,248,614 6.50%, 9/1/2012 3,295,296
2,983,121 6.29%, 4/1/2008 3,098,955
2,534,216 6.10%, 8/1/2008 2,630,845
1,985,677 6.10%, 3/1/2008 2,030,970
7,950,351 6.00%, 4/1/2013 7,960,288
1,525,995 6.00%, 3/1/2011 1,527,902
994,571 6.00%, 1/1/2009 998,917
900,000 5.44%, 1/29/2001 907,452
----------
Total 32,270,826
----------
Government National Mortgage Association--3.6%
8 12.25%, 5/15/2014 9
110 11.00%, 11/15/2015 122
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
U.S. Government Agencies--continued
Government National Mortgage
Association--continued
$ 1,031 11.00%, 11/15/2015 $ 1,146
6,704 11.00%, 9/15/2015 7,429
1,621 10.50%, 8/15/2017 1,766
10,215 10.50%, 8/15/2017 11,178
1,036 10.50%, 11/15/2000 1,058
349 10.50%, 11/15/2000 357
1,723 10.50%, 10/15/2000 1,759
14,782 9.50%, 11/15/2020 15,958
4,214 9.50%, 11/15/2020 4,550
13,167 9.50%, 10/15/2020 14,215
6,412 9.50%, 10/15/2020 6,923
40,610 9.50%, 10/15/2020 43,843
28,762 9.50%, 9/15/2020 31,052
22,454 9.50%, 6/15/2020 24,242
4,639 9.50%, 4/15/2020 5,008
21,334 9.50%, 4/15/2020 23,033
22,721 9.50%, 4/15/2020 24,530
404 9.50%, 2/15/2019 436
2,235 9.50%, 7/15/2018 2,414
12,307 9.50%, 10/15/2017 13,296
14,160 9.50%, 9/15/2017 15,298
119,287 9.50%, 12/15/2016 128,903
8,764 9.50%, 7/15/2016 9,470
2,821 9.50%, 7/15/2016 3,048
30,281 9.50%, 6/15/2016 32,722
11,055 9.50%, 5/15/2016 11,946
1,944 9.50%, 5/15/2016 2,100
1,071 9.50%, 5/15/2016 1,158
23,490 9.00%, 1/15/2021 25,193
34,178 9.00%, 1/15/2021 36,656
33,531 9.00%, 1/15/2021 35,962
17,513 9.00%, 1/15/2021 18,782
18,667 9.00%, 1/15/2021 20,021
23,204 9.00%, 11/15/2020 24,908
28,849 9.00%, 1/15/2020 30,967
30,097 9.00%, 10/15/2019 32,335
27,245 9.00%, 11/15/2019 29,271
44,634 9.00%, 12/15/2019 47,953
20,785 9.00%, 6/15/2018 22,344
21,797 9.00%, 5/15/2018 23,431
5,973 9.00%, 4/15/2018 6,421
367 9.00%, 7/15/2017 395
11,812 9.00%, 6/15/2017 12,705
13,089 9.00%, 5/15/2017 14,043
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Fixed Income Fund
<TABLE>
<CAPTION>
Principal
Amount Value
- -------------------------------------------------------------------------------
<C> <S> <C>
U.S. Government Agencies--continued
Government National Mortgage Association--continued
$ 55,333 9.00%, 1/15/2017 $ 59,518
3,696 9.00%, 1/15/2017 3,976
23,063 9.00%, 1/15/2017 24,808
25,035 9.00%, 1/15/2017 26,858
24,136 9.00%, 1/15/2017 25,961
2,669 9.00%, 12/15/2016 2,864
37,242 9.00%, 11/15/2016 39,966
30,087 9.00%, 10/15/2016 32,278
276 9.00%, 10/15/2016 296
27,315 9.00%, 10/15/2016 29,305
20,373 9.00%, 9/15/2016 21,852
1,054 9.00%, 9/15/2016 1,131
30,982 9.00%, 9/15/2016 33,248
10,317 9.00%, 9/15/2016 11,068
22,323 9.00%, 9/15/2016 23,955
94 9.00%, 8/15/2016 101
1,129 9.00%, 8/15/2016 1,212
11,309 9.00%, 7/15/2016 12,133
12,541 9.00%, 6/15/2016 13,455
16,422 9.00%, 6/15/2016 17,605
847 9.00%, 6/15/2016 909
11,091 9.00%, 5/15/2016 11,902
22,586 9.00%, 5/15/2016 24,231
33,337 8.50%, 6/15/2022 35,451
77,620 8.50%, 5/15/2022 82,543
10,240 8.50%, 4/15/2022 10,890
45,440 8.50%, 12/15/2021 48,408
33,678 8.50%, 11/15/2021 35,878
13,356 8.50%, 11/15/2021 14,229
55,013 8.50%, 11/15/2021 58,606
9,226 8.50%, 9/15/2021 9,828
34,499 8.50%, 5/15/2021 36,752
1,422 8.50%, 9/15/2017 1,519
4,217 8.50%, 6/15/2017 4,505
18,740 8.50%, 7/15/2016 20,034
89,311 8.50%, 6/15/2016 95,478
24,287 8.50%, 6/15/2016 25,964
9,786 8.50%, 6/15/2016 10,461
14,790 8.50%, 5/15/2016 15,811
90,107 8.00%, 9/15/2022 93,965
110,983 8.00%, 9/15/2022 115,735
262,604 8.00%, 5/15/2022 273,849
98,040 8.00%, 4/15/2022 102,238
11,322 8.00%, 2/15/2017 11,875
9,600 8.00%, 6/15/2017 10,069
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
<C> <S> <C>
U.S. Government Agencies--continued
Government National Mortgage Association--continued
$ 843,849 7.50%, 1/15/2024 $ 871,535
66,688 7.50%, 3/15/2023 68,897
114,195 7.50%, 2/15/2023 117,977
111,971 7.50%, 2/15/2023 115,680
122,487 7.50%, 2/15/2022 126,544
112,437 7.50%, 2/15/2022 116,161
172,106 7.50%, 12/15/2022 177,807
78,066 7.50%, 12/15/2022 80,651
129,799 7.50%, 12/15/2022 134,098
124,524 7.50%, 12/15/2022 128,649
125,856 7.50%, 11/15/2022 130,024
134,923 7.50%, 10/15/2022 139,391
168,739 7.50%, 8/15/2022 174,327
657,880 7.00%, 6/15/2023 673,906
748,286 6.50%, 5/15/2011 762,780
1,167,345 6.50%, 5/15/2009 1,190,691
1,161,006 6.00%, 5/15/2009 1,171,885
------------
Total 8,534,079
------------
Total U.S. Government Agencies (identified cost
$62,722,735) 63,696,436
------------
U.S. Treasury Obligations--18.0%
U.S. Treasury Bonds--9.5%
3,650,000 6.125%, 11/15/2027 4,115,959
15,320,000 6.75%, 8/15/2026 18,463,051
------------
Total 22,579,010
------------
U.S. Treasury Notes--8.5%
550,000 5.375%, 2/15/2001 558,938
740,000 5.50%, 1/31/2003 762,896
4,000,000 5.625%, 5/15/2008 4,255,000
4,500,000 5.75%, 8/15/2003 4,704,615
2,230,000 5.875%, 11/15/2005 2,384,361
2,000,000 6.25%, 10/31/2001 2,085,940
1,255,000 6.25%, 8/31/2002 1,322,067
2,000,000 6.50%, 5/31/2001 2,087,500
2,000,000 6.625%, 6/30/2001 2,096,240
------------
Total 20,257,557
------------
Total U.S. Treasury Obligations (identified cost
$41,200,524) 42,836,567
------------
Open Ended Investment Companies--7.9%
153,200 2002 Target Term Trust, Inc. 2,163,950
408,400 Blackrock 1998 Term Trust, Inc. 4,084,000
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Fixed Income Fund
<TABLE>
<CAPTION>
Shares Value
- ------------------------------------------------------------------------------
<C> <S> <C>
Open Ended Investment Companies--continued
46,700 Blackrock 1999 Term Trust $ 452,406
357,200 Blackrock 2001 Term Trust, Inc. 3,214,800
387,800 Blackrock Strategic Term Trust, Inc. 3,514,438
548,500 Blackrock Target Term Trust 5,279,313
------------
Total Open Ended Investment Companies (identified cost
$17,890,684) 18,708,907
------------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
(a) Repurchase Agreement--1.5%
$3,630,461 Goldman Sachs Group, LP, 5.25%, dated 11/30/1998,
due 12/1/1998
(at amortized cost) $ 3,630,461
------------
Total Investments (identified
cost $230,000,861) $235,008,349
------------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Intermediate Fixed Income Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia Intermediate Fixed Income Fund
(Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Intermediate Fixed Income Fund (Class A Shares) (the "Fund") from
January 29, 1993 (start of performance) to November 30, 1998 compared to the
Lehman Brothers Govt./Corp. Intermediate Index (LBGCII).+
[GRAPHIC REPRESENTATION "A21" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The LBGCII has been adjusted to reflect the
reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The LBGCII is an unmanaged index generally representative of the performance
of government and corporate bonds with maturities between 1 and 10 years.
The LBGCII is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance. Investments
cannot be made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Intermediate Fixed Income Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia Intermediate Fixed Income Fund
(Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Intermediate Fixed Income Fund (Class Y Shares) (the "Fund") from
March 29, 1998 (start of performance) to November 30, 1998 compared to the
Lehman Brothers Govt./Corp. Intermediate Index (LBGCII).+
[GRAPHIC REPRESENTATION "A22" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The LBGCII has been adjusted to reflect the reinvestment of
dividends on securities in the index.
+The LBGCII is an unmanaged index generally representative of the performance
of government and corporate bonds with maturities between 1 and 10 years.
The LBGCII is not adjusted to reflect sales charges, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance. Investments
cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Intermediate Fixed Income Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Principal
Amount Value
- ------------------------------------------------------------------------------
<C> <S> <C>
Corporate Bonds--33.1%
Basic Materials--1.1%
$1,000,000 Monsanto Co., Note, 6.00%, 7/1/2000 $1,007,070
----------
Capital Goods--1.1%
1,000,000 Deere (John) Capital Corp., Note, 6.30%, 6/1/1999 1,004,210
----------
Consumer Cyclical--1.2%
1,000,000 Ford Motor Co., Note, 7.25%, 10/1/2008 1,105,000
----------
Consumer Non-Durables--1.2%
1,000,000 Philip Morris Cos., Inc., 7.65%, 7/1/2008 1,104,860
----------
Finance--15.3%
1,000,000 BankBoston, N.A., Sub. Note, 6.50%, 12/19/2007 1,003,700
1,000,000 CIGNA Corp., Note, 7.40%, 5/15/2007 1,062,440
500,000 Ford Motor Credit Corp., Unsecd. Note, 5.625%,
1/15/1999 499,920
2,350,000 Ford Motor Credit Corp., Unsecd. Note, 6.25%,
11/8/2000 2,389,551
1,000,000 J.P. Morgan & Co., Inc., Sub. Note, 6.70%, 11/1/2007 1,052,650
1,000,000 J.P. Morgan & Co., Inc., Sub. Note, 7.625%, 9/15/2004 1,059,470
1,000,000 Lehman Brothers Holdings, Inc., Note, 6.89%,
10/10/2000 1,015,810
1,000,000 Lehman Brothers Holdings, Inc., Note, 7.375%,
5/15/2004 1,036,940
1,000,000 Morgan Guaranty Trust Co., New York, 5.75%, 10/8/1999 998,260
1,000,000 Pitney Bowes Credit Corp., Medium Term Note, 6.78%,
7/16/2001 1,034,080
1,000,000 Sears Roebuck Acceptance Corp., 6.95%, 5/15/2002 1,034,690
1,000,000 State Street Boston Corp., 5.95%, 9/15/2003 1,009,210
1,000,000 Union Planters Corp., Sub. Note, 6.50%, 3/15/2018 960,830
----------
Total 14,157,551
----------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
Corporate Bonds--continued
Financial Services--3.8%
$ 500,000 Household International, Inc., Sr. Note, 6.00%,
3/15/1999 $ 500,260
1,000,000 Merrill Lynch & Co., Inc., Note, 6.00%, 2/12/2003 1,015,450
1,000,000 Merrill Lynch & Co., Inc., Bond, 6.00%, 7/15/2005 1,004,270
1,000,000 Salomon, Inc., Sr. Note, 7.30%, 5/15/2002 1,048,660
-----------
Total 3,568,640
-----------
Food Products--1.1%
1,000,000 Heinz (H.J.) Co., Unsecd. Note, 6.75%, 10/15/1999 1,012,230
-----------
Healthcare--1.2%
1,000,000 Bristol-Myers Squibb Co., Deb., 6.80%, 11/15/2026 1,106,890
-----------
Recreation--2.9%
2,500,000 Disney (Walt) Co., Bond, Series B, 6.75%, 3/30/2006 2,697,025
-----------
Retail--1.1%
1,000,000 Wal-Mart Stores, Inc., Note, 5.875%, 10/15/2005 1,021,040
-----------
Transportation--2.3%
1,000,000 Burlington Northern, Inc., Equip. Trust, 7.46%,
9/24/2011 1,135,430
1,000,000 CSX Corp., Deb., 7.05%, 5/1/2002 1,035,650
-----------
Total 2,171,080
-----------
Utilities--0.8%
710,000 Georgia Power Co., Note, 5.50%, 12/1/2005 711,626
-----------
Total Corporate Bonds (identified cost $29,552,339) 30,667,222
-----------
U.S. Government Agencies--23.2%
Federal Farm Credit Bank--1.1%
1,000,000 8.65%, 10/1/1999 1,028,590
-----------
Federal Home Loan Mortgage Corporation--1.1%
1,000,000 6.60%, 11/12/1999 1,013,750
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Intermediate Fixed Income Fund
<TABLE>
<CAPTION>
Principal
Amount Value
- -------------------------------------------------------------------------
<C> <S> <C>
U.S. Government Agencies--continued
Federal National Mortgage Association--21.0%
$1,000,000 8.70%, 6/10/1999 $ 1,017,190
3,717,103 7.00%, 9/1/2027 3,793,749
150,000 6.55%, 9/12/2005 161,250
3,697,557 6.50%, 7/1/2013 3,750,691
3,940,699 6.50%, 8/1/2028 3,966,550
2,625,000 6.35%, 6/10/2005 2,788,249
3,952,373 6.00%, 8/1/2013 3,957,313
-----------
Total 19,434,992
-----------
Total U.S. Government Agencies (identified cost
$21,177,083) 21,477,332
-----------
U.S. Treasury Obligations--36.6%
U.S. Treasury Bonds--12.3%
1,400,000 6.125%, 11/15/2027 1,578,724
2,100,000 7.125%, 2/15/2023 2,607,612
3,000,000 7.25%, 5/15/2016 3,669,360
2,600,000 8.00%, 11/15/2021 3,507,556
-----------
Total 11,363,252
-----------
U.S. Treasury Notes--24.3%
2,000,000 5.625%, 5/15/2008 2,127,500
2,000,000 5.75%, 8/15/2003 2,090,940
2,790,000 5.875%, 11/15/2005 2,983,124
1,000,000 6.625%, 4/30/2002 1,060,940
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
<C> <S> <C>
U.S. Treasury Obligations--continued
U.S. Treasury Notes--continued
$1,000,000 7.125%, 2/29/2000 $ 1,029,370
1,500,000 7.50%, 11/15/2001 1,617,885
2,500,000 7.75%, 11/30/1999 2,573,050
2,300,000 7.75%, 1/31/2000 2,378,706
6,500,000 9.125%, 5/15/1999 6,628,960
-----------
Total 22,490,475
-----------
Total U.S. Treasury Obligations (identified cost
$32,542,918) 33,853,727
-----------
Open End Investment Companies--4.3%
32,900 Blackrock Target Term Trust 316,663
228,000 TCW/DW Term Trust 2000 2,166,000
50,000 TCW/DW Term Trust 2002 487,500
106,600 TCW/DW Term Trust 2003 1,019,363
-----------
Total Open Ended Investment Companies (identified
cost $3,959,506) 3,989,526
-----------
(a) Repurchase Agreement--2.2%
2,017,561 Goldman Sachs Group, LP, 5.25%, dated 11/30/1998, due
12/1/1998 (at amortized cost) 2,017,561
-----------
Total Investments
(identified cost $89,249,407) $92,005,368
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Short-Term Fixed Income Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia Short-Term Fixed Income Fund
(Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Short-Term Fixed Income Fund (Class A Shares) (the "Fund") from May
7, 1993 (start of performance) to November 30, 1998 compared to the Merrill
Lynch 1-3 Year U.S. Treasury Index.+
[GRAPHIC REPRESENTATION "A23" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550) that was in effect prior to February 1, 1995. As of
February 1, 1995, the Fund's maximum sales charge is 2.50%. The Fund's
performance assumes the reinvestment of all dividends and distributions. The
Merrill Lynch 1-3 Year U.S. Treasury Index has been adjusted to reflect the
reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The Merrill Lynch 1-3 Year U.S. Treasury Index is an unmanaged index
tracking short-term U.S. government securities with maturities between 1 and
2.99 years. The index is produced by Merrill Lynch & Co., Inc. The Merrill
Lynch 1-3 Year U.S. Treasury Index is not adjusted to reflect sales charges,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Short-Term Fixed Income Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia Short-Term Fixed Income Fund
(Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Short-Term Fixed Income Fund (Class Y Shares) (the "Fund") from July
23, 1996 (start of performance) to November 30, 1998 compared to the Merrill
Lynch 1-3 Year U.S. Treasury Index.+
[GRAPHIC REPRESENTATION "A24" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The Merrill Lynch 1-3 Year U.S. Treasury Index has been
adjusted to reflect the reinvestment of dividends on securities in the
index.
+The Merrill Lynch 1-3 Year U.S. Treasury Index is an unmanaged index
tracking short-term U.S. government securities with maturities between 1 and
2.99 years. The index is produced by Merrill Lynch & Co., Inc. The Merrill
Lynch 1-3 Year U.S. Treasury Index is not adjusted to reflect sales charges,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Short-Term Fixed Income Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Principal
Amount Value
- -----------------------------------------------------------------------------
<C> <S> <C>
Corporate Bonds--45.0%
Banking & Finance--2.3%
$2,500,000 NationsBank Corp., 5.750%, 3/15/2001 $ 2,517,450
------------
Consumer Non-Durables--2.3%
2,500,000 Walt Disney Co., 6.250%, 6/21/1999 2,516,700
------------
Finance--20.6%
2,500,000 Banc One Corp., 6.250%, 9/1/2000 2,544,225
2,000,000 Bankers Trust Co., New York, 5.850%, 5/11/2000 2,001,860
1,000,000 First National Bank of Chicago, 7.000%, 5/8/2000 1,024,410
2,500,000 General Motors Acceptance Corp., 5.630%, 2/25/2000 2,518,650
1,000,000 Household Finance Corp., 6.125%, 7/15/2002 996,640
3,500,000 Household Finance Corp., 6.810%, 5/25/2000 3,561,597
2,750,000 Lehman Brothers Holdings, Inc., 6.700%, 1/24/2000 2,762,821
1,000,000 Morgan Stanley Group, Inc., 5.625%, 3/1/1999 999,620
4,000,000 Sears Roebuck Acceptance Corp., 6.190%, 2/15/2000 4,026,664
2,000,000 Wells Fargo & Co., 6.250%, 4/15/1999 2,008,200
------------
Total 22,444,687
------------
Financial Services--1.9%
2,000,000 Merrill Lynch & Co., Inc., 6.020%, 5/11/2001 2,026,708
------------
Food Products--2.9%
3,000,000 Heinz (H.J.) Co., 7.500%, 4/26/2000 3,104,070
------------
Health Services--2.3%
2,500,000 McKesson Corp., 6.600%, 3/1/2000 2,531,650
------------
Health Technology--2.4%
2,500,000 American Home Products Corp., 7.700%, 2/15/2000 2,569,224
------------
Retail--3.7%
4,000,000 Wal-Mart Stores, Inc., 5.850%, 6/1/2000 4,029,080
------------
</TABLE>
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
<C> <S> <C>
Corporate Bonds--continued
Telecommunications--4.8%
$ 5,000,000 AT&T Corp., 8.250%, 1/11/2000 $ 5,176,900
------------
Utilities-Electric--1.8%
2,000,000 Kansas City Power And Light Co., 6.370%, 10/15/1999 2,018,580
------------
Total Corporate Bonds
(identified cost $48,570,079) 48,935,049
------------
U.S. Government Agencies--38.3%
Federal Home Loan Bank--15.5%
5,600,000 5.625%, 3/19/2001 5,670,896
11,000,000 5.735%, 7/22/2003 11,226,369
------------
Total 16,897,265
------------
Federal National Mortgage Association--22.8%
2,534,107 5.850%, 7/25/2000 2,528,557
12,000,000 5.980%, 11/12/2002 12,425,640
9,827,389 6.000%, 9/1/2013 9,839,673
------------
Total 24,793,870
------------
Total U.S. Government Agencies (identified cost
$41,134,291) 41,691,135
------------
U.S. Treasury Obligations--10.0%
U.S. Treasury Note--10.0%
2,500,000 5.250%, 1/31/2001 2,533,600
1,000,000 5.625%, 12/31/2002 1,034,690
2,000,000 6.250%, 8/31/2002 2,106,880
2,000,000 6.500%, 5/31/2001 2,087,500
3,000,000 6.500%, 5/31/2002 3,175,320
------------
Total U.S. Treasury Obligations (identified cost
$10,902,227) 10,937,990
------------
Open End Investment Companies--3.2%
285,301 Blackrock 1999 Term Trust, Inc. 2,763,853
75,978 Blackrock 1998 Term Trust, Inc. 759,780
------------
Total Open Ended Investment Companies (identified
cost $3,385,200) 3,523,633
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Short-Term Fixed Income Fund
<TABLE>
<CAPTION>
Principal
Amount Value
- -----------------------------------------------------------------------------
<C> <S> <C>
(a) Repurchase Agreement--1.8%
$1,968,117 Goldman Sachs Group, LP, 5.250%, dated 11/30/1998,
due 12/1/1998 (at amortized cost) $ 1,968,117
------------
Total Investments (identified
cost $105,959,914) $107,055,924
------------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Georgia Municipal Bond Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia Georgia Municipal Bond Fund
(Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Georgia Municipal Bond Fund (Class A Shares) (the "Fund") from
December 23, 1994 (start of performance) to November 30, 1998 compared to the
Lehman Brothers State General Obligation Bond Index (LBSGOBI).+
[GRAPHIC REPRESENTATION "A25" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The LBSGOBI has been adjusted to reflect the
reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The LBSGOBI is an unmanaged index comprised of all state general obligation
debt issues and is compiled without regard to maturities. These bonds are
rated A or better and represent a variety of coupon ranges. The LBSGOBI is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Georgia Municipal Bond Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia Georgia Municipal Bond Fund
(Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Georgia Municipal Bond Fund (Class Y Shares) (the "Fund") from July
23, 1996 (start of performance) to November 30, 1998 compared to the Lehman
Brothers State General Obligation Bond Index (LBSGOBI).+
[GRAPHIC REPRESENTATION "A26" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The LBSGOBI has been adjusted to reflect the reinvestment of
dividends on securities in the index.
+The LBSGOBI is an unmanaged index comprised of all state general obligation
debt issues and is compiled without regard to maturities. These bonds are
rated A or better and represent a variety of coupon ranges. The LBSGOBI is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Georgia Municipal Bond Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--97.8%
Georgia--92.0%
$ 330,000 Alpharetta, GA Development Authority,
University and College Improvement Revenue
Bonds, 4.80% (Original Issue Yield: 4.925%),
11/1/2018 AA $ 324,789
600,000 Americus-Sumter County, GA Hospital Authority,
Revenue Bonds, 5.125% (AMBAC INS), 12/1/2018 AAA 605,526
100,000 Atlanta, GA Downtown Development Authority,
Refunding Revenue Bonds, 6.25% (Original Issue
Yield: 6.435%), 10/1/2016 AA 108,799
200,000 Atlanta, GA, GO UT (Series A), 6.125%
(Original Issue Yield: 6.18%), 12/1/2023 AA 226,496
510,000 Atlanta, GA, Urban Residential Finance
Authority, Dorm Facility Revenue Refunding
Bonds, 5.70% (Morehouse College)/(MBIA INS),
12/1/2010 AAA 560,255
80,000 Brunswick, GA, Water & Sewer Refunding Revenue
Bonds, 6.10% (MBIA INS)/(Original Issue Yield:
6.27%), 10/1/2019 AAA 93,538
75,000 Burke County, GA Development Authority, PCR
Bonds, 7.50% (Oglethorpe Power Corp.)/(MBIA
INS), 1/1/2003 AAA 80,765
50,000 Chatham County, GA School District, GO UT,
6.75% (MBIA INS), 8/1/2018 AAA 57,104
500,000 Cherokee County, GA Water & Sewer Authority,
Water Utility & Sewer Improvement Revenue
Bonds, 5.00% (FGIC INS)/(Original Issue Yield:
5.25%), 8/1/2027 AAA 497,325
790,000 Clayton County & Clayton County, GA Water
Authority, Revenue Refunding Bonds, 5.20%
(MBIA INS)/(Original Issue Yield: 5.30%),
5/1/2005 AAA 841,129
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
Georgia--continued
$ 325,000 Clayton County, GA, GO UT Correctional
Facilities and Public Improvements Bonds,
4.50%, 8/1/2001 AA $ 332,657
100,000 Cobb County, GA Solid Waste Management
Authority, Revenue Bonds, 6.35%, 1/1/2009 AAA 112,874
1,000,000 Cobb County, GA, Refunding Revenue Bonds
(Series A), 5.20% (Original Issue Yield:
5.25%), 7/1/2005 AA 1,066,250
500,000 Coweta County, GA School System, GO UT
Bonds, 5.00%, 8/1/2009 AA- 530,330
1,000,000 Dalton, GA, Refunding Revenue Bonds, 5.00%
(MBIA INS), 1/1/2004 AAA 1,050,980
200,00 De Kalb County, GA School District, GO UT
Bonds (Series A), 6.25%, 7/1/2011 AA 235,138
1,000,00 De Kalb County, GA Water & Sewer, Refunding
Revenue Bonds, 5.125% (Original Issue Yield:
5.25%), 10/1/2011 AA 1,036,670
500,000 De Kalb County, GA Water & Sewer, Refunding
Revenue Bonds, 5.25% (Original Issue Yield:
5.42%), 10/1/2023 AA 508,430
150,000 De Kalb County, GA, GO UT Bonds, 5.50%
(Original Issue Yield: 5.60%), 1/1/2016 AA+ 157,835
500,000 De Kalb County, GA, Refunding Revenue Bonds
Series A, 5.375% (Emory University ),
11/1/2005 AA 542,595
100,000 Decatur, GA Housing Authority, Mortgage
Refunding Revenue Bonds, 6.45% (FHA and MBIA
INS)/(Original Issue Yield: 6.524%),
7/1/2025 AAA 105,936
500,000 Downtown Savannah, GA, Refunding Revenue
Bonds (Series A), 4.95% (Original Issue
Yield: 5.05%), 1/1/2006 AA 523,355
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Georgia Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
Georgia--continued
$ 160,000 Fayette County, GA, Water Revenue Bonds
(Series B), 6.20% (FGIC INS)/(Original Issue
Yield: 6.30%), 10/1/2022 AAA $ 176,923
60,000 Forsyth County, GA School District, GO UT
Bonds, 6.70%, 7/1/2012 AA- 73,182
25,000 Fulton County, GA School District, GO UT
Bonds, 5.60% (Original Issue Yield: 5.65%),
1/1/2011 AA 27,323
1,950,000 Fulton County, GA Water & Sewage System,
4.75%, 1/1/2020 AA- 1,895,498
300,000 Fulton County, GA Water & Sewage System,
Revenue Refunding Bonds, 5.625% (FGIC
INS)/(Original Issue Yield: 5.75%), 1/1/2001 AAA 312,492
475,000 Fulton County, GA, Water and Sewer Refunding
Revenue Bonds, 6.25% (FGIC INS)/(Original
Issue Yield: 6.425%), 1/1/2007 AAA 544,136
500,000 Fulton De Kalb, GA Hospital Authority,
Revenue Bonds, 5.50% (MBIA INS)/(Original
Issue Yield: 5.85%), 1/1/2012 AAA 529,375
400,000 Gainsville & Hall County, GA Hospital
Authority, Revenue Anticipation Certificates,
5.75% (Northeast GA Healthcare Project)/(MBIA
INS)/(Original Issue Yield: 5.98%), 10/1/2017 AAA 428,116
300,000 Georgia Medical Center Hospital Authority,
Refunding Revenue Anticipation Certificates
(Series C), 5.90% (Columbus Regional
Healthcare System)/(MBIA INS)/(Original Issue
Yield: 5.95%), 8/1/2001 AAA 316,932
285,000 Georgia Municipal Electric Authority,
Electric Power Revenue Refunding Bonds
(Series B), 6.125% (FGIC INS)/(Original Issue
Yield: 6.30%), 1/1/2014 AAA 310,368
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
Georgia--continued
$ 500,000 Georgia State HFA, Refunding Revenue SFM Bonds
(Subser A-2), 6.55% (FHA/VA mtgs GTD),
12/1/2027 AAA $ 540,335
200,000 Georgia State, GO UT Bonds (Series B), 7.20%,
3/1/2006 AAA 239,276
500,000 Georgia State, GO UT Bonds (Series D), 6.80%,
8/1/2000 AAA 527,300
200,000 Georgia State, GO UT Bonds (Series F), 6.50%,
12/1/2007* AAA 236,410
430,000 Georgia State, GO UT, 6.25%, 4/1/2007 AAA 495,842
500,000 Georgia State, GO UT, 6.50% (Original Issue
Yield: 6.63%), 4/1/2006 AAA 578,245
655,000 Gwinnett County, GA School District, Series A,
5.125% (Original Issue Yield: 5.35%), 2/1/2011 AA+ 682,052
100,000 Gwinnett County, GA, Water & Sewage Utility
Certificates of Participation, 8.40%, 8/1/2001 AAA 111,945
1,000,000 Henry County, GA & Henry County Water & Sewer
Authority, Revenue Bond, 5.00% (AMBAC
INS)/(Original Issue Yield: 5.32%), 2/1/2026 AAA 994,780
400,000 Marietta, GA Development Authority, Revenue
Bonds (Series B), 5.75% (Life College,
Inc.)/(CGIC LOC)/(Original Issue Yield:
5.91%), 9/1/2014 AAA 434,364
500,000 Meriwether County, GA School District, GO UT
Bonds, 7.00% (FSA INS), 2/1/2007 AAA 598,035
400,000 Newton County School District, GA, GO UT
Bonds, 5.625% (FGIC INS)/(Original Issue
Yield: 5.70%), 2/1/2013 AAA 433,232
100,000 Peach County, GA School District, GO UT Bonds,
6.30% (MBIA INS)/(Original Issue Yield:
6.35%), 2/1/2014 AAA 114,231
250,000 Private Colleges & Universities Facilities of
GA, Refunding Revenue Bonds, 5.625% (Agnes
Scott College Project)/(Original Issue Yield:
5.70%), 6/1/2023 AA- 264,190
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Georgia Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
Georgia--continued
$ 685,000 Richmond County, GA Water & Sewage, Refunding
Revenue Bonds, 5.25% (FGIC INS)/(Original
Issue Yield: 5.491%), 10/1/2021 AAA $ 698,447
200,000 Rockdale County, GA School District, GO UT
Bonds, 6.30%, 1/1/2007 A1 225,218
150,000 Savannah, GA Resources Recovery Development
Authority, Refunding Revenue Bonds, 5.95%
(Savannah Energy Systems Co.), 12/1/2002 A+ 159,782
335,000 Savannah, GA Resources Recovery Development
Authority, Revenue Bonds, 6.30% (Savannah
Energy Systems Co.), 12/1/2006 A+ 358,118
110,000 Savannah, GA Water & Sewage, Revenue Bonds,
5.10% (Original Issue Yield: 5.55%),
12/1/2010 AA- 113,994
-----------
Total 22,018,917
-----------
Puerto Rico--5.8%
925,000 Puerto Rico Commonwealth Infrastructure
Financing Authority, Revenue Bonds (Series
A), 5.00% (AMBAC LOC)/(Original Issue Yield:
5.28%), 7/1/2028 AAA 927,692
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Credit
or Shares Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
Puerto Rico--continued
$ 205,000 Puerto Rico Electric Power Authority, Revenue
Bonds (Series DD), 5.00% (MBIA INS)/(Original
Issue Yield: 5.28%), 7/1/2028 AAA $ 205,617
245,000 Puerto Rico Highway and Transportation
Authority, Refunding Revenue Bonds (Series
A), 5.00% (AMBAC LOC)/(Original Issue Yield:
5.16%), 7/1/2028 AAA 245,735
-----------
Total 1,379,044
-----------
Total Long-Term Municipals (identified cost
$22,212,460) 23,397,961
-----------
Open-End Investment Companies--1.6%
39,014 AIM Global Management Money Market Fund 39,014
56,560 Dreyfus Tax Exempt Money Market Fund 56,560
275,970 Fidelity Tax Exempt Money Market Fund 275,970
-----------
Total Open-Ended Investment Companies (at net
asset value) 371,544
-----------
Total Investments (identified cost
$22,584,004) $23,769,505
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia North Carolina Municipal Bond Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia North Carolina Municipal Bond Fund
(Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia North Carolina Municipal Bond Fund (Class A Shares) (the "Fund") from
December 23, 1994 (start of performance) to November 30, 1998 compared to the
Lehman Brothers State General Obligation Bond Index (LBSGOBI).+
[GRAPHIC REPRESENTATION "A27" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The LBSGOBI has been adjusted to reflect the
reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The LBSGOBI is an unmanaged index comprised of all state general obligation
debt issues and is compiled without regard to maturities. These bonds are
rated A or better and represent a variety of coupon ranges. The LBSGOBI is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia North Carolina Municipal Bond Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia North Carolina Municipal Bond Fund
(Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia North Carolina Municipal Bond Fund (Class Y Shares) (the "Fund") from
July 23, 1996 (start of performance) to November 30, 1998 compared to the
Lehman Brothers State General Obligation Bond Index (LBSGOBI).+
[GRAPHIC REPRESENTATION "A28" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The LBSGOBI has been adjusted to reflect the reinvestment of
dividends on securities in the index.
+The LBSGOBI is an unmanaged index comprised of all state general obligation
debt issues and is compiled without regard to maturities. These bonds are
rated A or better and represent a variety of coupon ranges. The LBSGOBI is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia North Carolina Municipal Bond Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--97.3%
North Carolina--93.0%
$1,030,000 Buncombe County, NC, GO UT Bonds, 4.90%
(Original Issue Yield: 5.15%), 4/1/2014 AA $ 1,052,155
1,400,000 Carteret County, NC, GO UT Bonds, 5.40% (MBIA
INS)/(Original Issue Yield: 5.60%), 5/1/2015 AAA 1,483,748
1,000,000 Centennial Authority, NC, Revenue Bonds,
4.85% (FSA INS)/(Original Issue Yield:
4.95%), 9/1/2009 AAA 1,045,580
100,000 Charlotte, NC, GO UT Bonds, 5.70%, 2/1/2007 AAA 109,650
1,250,000 Charlotte, NC, GO UT Refunding Bonds, 5.00%
(Original Issue Yield: 5.10%), 2/1/2009 AAA 1,332,537
840,000 Charlotte, NC, GO UT Refunding Bonds, 5.00%
(Original Issue Yield: 5.15%), 2/1/2012 AAA 886,049
900,000 Charlotte, NC, GO UT Water & Sewer Bonds
(Series A), 5.30%, 4/1/2008 AAA 970,380
960,000 Charlotte-Mecklenburg Hospital Authority, NC,
Health System Revenue Refunding Bonds, 5.75%
(Original Issue Yield: 6.498%), 1/1/2012 AA 1,025,712
1,000,000 Charlotte-Mecklenburg Hospital Authority, NC,
Revenue Bonds, 5.60% (Original Issue Yield:
5.70%), 1/15/2009 AA 1,094,740
250,000 Concord, NC, (Series A) Multiple Utility
Improvement Revenue Bonds, 5.00% (MBIA INS),
12/1/2022 AAA 250,335
345,000 Concord, NC, Certificate of Participation,
5.60% (MBIA INS)/(Original Issue Yield:
5.70%), 6/1/2005 AAA 374,791
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
North Carolina--continued
$ 445,000 Concord, NC, Certificate of Participation,
5.40% (MBIA INS)/(Original Issue Yield:
5.50%), 6/1/2003 AAA $ 471,980
1,000,000 Concord, NC, Revenue Bonds (Series A), 5.00%
(MBIA INS), 12/1/2017 AAA 1,013,070
210,000 Cumberland County, NC Hospital Facilities,
Revenue Bonds, 6.00% (MBIA INS)/(Original
Issue Yield: 6.84%), 10/1/2021 AAA 220,435
1,100,000 Cumberland County, NC Industrial Facilities &
Pollution Control Financing Authority,
Revenue Bonds, 4.30% (Monsanto Co.),
10/1/2014 NR 1,100,000
100,000 Cumberland County, NC, Certificate of
Participation (Series A), 6.375% (Cumberland
County, NC Civic Center Project)/(AMBAC
INS)/(Original Issue Yield: 6.50%), 12/1/2010 AAA 114,806
615,000 Currituck County, NC, GO UT Bonds, 5.40%
(MBIA INS), 4/1/2009 AAA 663,130
100,000 Durham County, NC, GO UT Bonds, 5.75%
(Original Issue Yield: 5.95%), 2/1/2009 AAA 107,612
50,000 Durham, NC Water & Sewer Utility System,
Revenue Bonds, 5.80% (Original Issue Yield:
5.85%), 12/1/2003 AA 54,529
100,000 Durham, NC, GO UT Revenue Bonds, 5.80%
(Original Issue Yield: 5.95%), 2/1/2012 AAA 110,602
100,000 East Carolina University, NC, Revenue Bonds,
5.50% (Original Issue Yield: 5.60%), 5/1/2018 A 103,017
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia North Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
North Carolina--continued
$1,500,000 Fayetteville, NC Public Works Commission,
Refunding Revenue Bonds, 4.75% (FGIC
INS)/(Original Issue Yield: 5.23%), 3/1/2014 AAA $ 1,502,475
1,000,000 Forsyth County, NC, GO UT, 4.75%, 2/1/2005 AAA 1,045,880
160,000 Franklin County, NC, Certificates of
Participation, 6.10% (Jail & School
Project)/(FGIC INS)/(Original Issue Yield:
6.20%), 6/1/2003 AAA 174,691
315,000 Fremont, NC Housing Development Corp., First
Lien Revenue Refunding Bonds, 6.75% (Torhunta
Apts)/(Federal National Mortgage Association
COL), 7/15/2022 Aaa 332,700
100,000 Gastonia, NC Combined Utilities System,
Revenue Bonds, 6.00% (MBIA INS)/(Original
Issue Yield: 6.10%), 5/1/2014 AAA 111,866
500,000 Gastonia, NC, GO UT Bonds, 5.30% (FGIC
INS)/(Original Issue Yield: 5.40%), 6/1/2009 AAA 537,015
500,000 Gastonia, NC, GO UT, 5.40% (MBIA INS),
5/1/2011 AAA 541,885
1,000,000 Greensboro, NC, Certificate of Participation
(Series A), 5.625% (Original Issue Yield:
6.05%), 12/1/2015 AA 1,071,080
105,000 Greensboro, NC, Certificates of
Participation, 6.65% (Coliseum Arena
Expansion Project)/(Original Issue Yield:
6.70%), 12/1/2004 AA 114,827
2,535,000 Greensboro, NC, GO UT Bonds, 4.70% (Original
Issue Yield: 4.90%), 4/1/2016 AAA 2,518,497
100,000 Greenville, NC Combined Enterprise System,
Revenue Bonds, 5.70% (Original Issue Yield:
5.75%), 9/1/2006 A+ 109,946
75,000 Harnett County, NC, Certificates of
Participation, 5.90% (AMBAC INS), 12/1/2000 AAA 78,516
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
North Carolina--continued
$ 500,000 Harnett County, NC, Certificates of
Participation, 6.20% (AMBAC INS), 12/1/2009 AAA $ 565,500
600,000 High Point, NC, GO UT Revenue Bonds, 5.60%,
3/1/2008 AA 655,272
600,000 Lee County, NC, GO UT, 5.00% (MBIA
INS)/(Original Issue Yield: 5.05%), 4/1/2009 AAA 635,286
100,000 Martin County, NC IFA, PCR Bonds, 6.80%
(Weyerhaeuser Co.), 5/1/2024 A 110,556
850,000 Martin County, NC IFA, Revenue Bonds, 5.65%
(Weyerhaeuser Co.), 12/1/2023 A 865,223
1,925,000 Mecklenburg County, NC, GO UT (Series B),
4.40% (Original Issue Yield: 4.60%), 2/1/2013 AAA 1,892,410
1,705,000 Mecklenburg County, NC, GO UT Bonds, 4.80%
(Original Issue Yield: 4.90%), 3/1/2009 AAA 1,785,561
3,670,000 Mecklenburg County, NC, GO UT, 4.40%
(Original Issue Yield: 4.45%), 2/1/2011 AAA 3,674,954
1,000,000 Mecklenburg County, NC, GO UT, 4.40%,
2/1/2010 AAA 1,009,010
150,000 Moore County, NC, GO UT Bonds, 4.60% (MBIA
INS)/(Original Issue Yield: 4.65%), 6/1/2011 AAA 152,241
675,000 Moore County, NC, GO UT Public Improvements,
4.90% (MBIA INS)/(Original Issue Yield:
4.95%), 6/1/2015 AAA 684,247
600,000 Moore County, NC, GO UT Public Improvement,
4.90% (MBIA INS)/(Original Issue Yield:
4.90%), 6/1/2014 AAA 611,712
350,000 New Hanover County, NC, GO UT Bonds, 4.80%,
2/1/2017 AA- 348,925
350,000 New Hanover County, NC, GO UT Bonds, 4.80%,
2/1/2018 AA- 347,161
100,000 North Carolina Educational Facilities Finance
Agency, Refunding Revenue Bonds, 6.00%
(Davidson College)/(Original Issue Yield:
6.20%), 12/1/2012 AA 109,095
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia North Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
North Carolina--continued
$ 450,000 North Carolina Educational Facilities Finance
Agency, Revenue Bonds (Series B), 4.25% (Duke
University)/(Original Issue Yield: 4.30%),
10/1/2003 AA+ $ 459,346
1,000,000 North Carolina Educational Facilities Finance
Agency, Revenue Bonds (Series C), 6.75% (Duke
University)/(Original Issue Yield: 6.769%),
10/1/2021 AA+ 1,092,680
20,000 North Carolina HFA, Multi-Family Refunding
Revenue Bonds (Series B), 6.90% (FHA INS),
7/1/2024 AA 21,465
85,000 North Carolina HFA, Revenue Bonds (Series Z),
6.60%, 9/1/2026 AA 91,360
750,000 North Carolina HFA, Revenue Bonds, 6.20%,
3/1/2018 AA 802,755
2,000,000 North Carolina Medical Care Commission,
Refunding Revenue Bonds, 5.00% BANs, 6/1/2013 AAA 2,039,480
50,000 North Carolina Medical Care Commission,
Refunding Revenue Bonds, 6.125% (Rex
Hospital)/(Original Issue Yield: 6.219%),
6/1/2010 A+ 55,603
1,000,000 North Carolina Medical Care Commission,
Revenue Bonds (Series C), 5.25% (Duke
University Hospital)/(Original Issue Yield:
5.65%), 6/1/2017 AA 1,013,300
2,500,000 North Carolina Medical Care Commission,
Revenue Bonds, 4.75% (Firsthealth of the
Carolina's)/(Original Issue Yield: 5.14%),
10/1/2026 AA- 2,347,550
525,000 North Carolina Medical Care Commission,
Revenue Bonds, 5.20% (Moore Regional
Hospital)/(FGIC INS)/(Original Issue Yield:
5.30%), 10/1/2013 AAA 543,795
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
North Carolina--continued
$1,500,000 North Carolina Medical Care Commission,
Revenue Bonds, 5.375% (Wake County Hospital
Systems)/(MBIA INS)/(Original Issue Yield:
5.75%), 10/1/2026 AAA $ 1,544,610
1,000,000 North Carolina Medical Care Commission,
Revenue Bonds, 7.00% (Duke University
Hospital)/(Original Issue Yield: 7.08%),
6/1/2021 Aaa 1,098,410
1,095,000 North Carolina Medical Care Commission,
Revenue Refunding Bonds, 5.10% (Wilson
Memorial Hospital)/(AMBAC INS)/(Original
Issue Yield: 5.25%), 11/1/2009 AAA 1,158,039
1,525,000 North Carolina Medical Care Commission,
Revenue Refunding Bonds, 5.20% (Wilson
Memorial Hospital)/(AMBAC INS)/(Original
Issue Yield: 5.35%), 11/1/2010 AAA 1,615,417
850,000 North Carolina Medical Care Commission,
Revenue Refunding Bonds, 7.375% (Presbyterian
Hospital)/(United States Treasury
PRF)/(Original Issue Yield: 7.417%),
10/1/2000 AAA 924,775
115,000 North Carolina Municipal Power Agency No. 1,
Catawba Electric Revenue Refunding Bonds,
5.90% (Original Issue Yield: 5.95%), 1/1/2003 A- 122,612
1,000,000 North Carolina State, GO UT Refunding Bonds
(Series C), 4.80% (North Carolina Prison
Facilities)/(Original Issue Yield: 4.85%),
3/1/2009 AAA 1,035,940
575,000 Onslow County, NC, GO UT Bonds, 5.70% (MBIA
INS)/(Original Issue Yield: 5.85%), 3/1/2013 AAA 623,565
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia North Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
North Carolina--continued
$ 635,000 Pitt County, NC, Refunding Revenue Bonds,
5.20% (Pitt County Memorial Hospital)/
(Original Issue Yield: 5.30%), 12/1/2008 AA- $ 684,663
350,000 Raleigh, NC, Certificate Participation
Refunding Bonds, 5.00% (Cabarrus Street
Parking Facilities Project)/(Original Issue
Yield: 5.10%), 12/1/2009 AA 366,664
230,000 Raleigh, NC, Certificate Participation
Refunding Bonds, 5.10% (Cabarrus Street
Parking Facilities Project)/(Original Issue
Yield: 5.20%), 12/1/2010 AA 241,077
400,000 Raleigh, NC, GO UT Refunding Bonds, 6.40%,
3/1/2006 AAA 431,580
300,000 Raleigh, NC, Water Utility Improvement
Revenue Bonds, 5.125% (Original Issue Yield:
5.61%), 3/1/2022 AA+ 300,687
800,000 Randolph County, NC, Certificates of
Participation, 4.875% (MBIA INS)/(Original
Issue Yield: 5.05%), 6/1/2006 AAA 841,544
500,000 Robeson County, NC, GO UT Refunding Revenue
Bonds, 4.90% (AMBAC INS), 2/1/2007 AAA 525,835
1,025,000 Sanford, NC, GO UT Bonds, 4.90% (MBIA INS),
3/1/2009 AAA 1,077,152
1,105,000 Shelby, NC Housing Development Corp.,
Mortgage Revenue Bonds, 6.10% (Hickory Creek
Apartments)/(FHA INS), 2/1/2023 AAA 1,176,770
500,000 Wake County, NC, GO UT Refunding Bonds, 4.60%
(Original Issue Yield: 4.70%), 4/1/2004 AAA 517,445
650,000 Wake County, NC, GO UT Refunding Bonds, 4.70%
(Original Issue Yield: 4.80%), 4/1/2005 AAA 675,896
1,000,000 Wake County, NC, GO UT, 4.50% (Original Issue
Yield: 4.62%), 3/1/2009 AAA 1,023,470
500,000 Wake County, NC, GO UT, 4.90%, 3/1/2004 AAA 525,330
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Credit
or Shares Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
North Carolina--continued
$1,375,000 Wake County, NC, Hospital Revenue Bonds,
5.125% (MBIA INS)/(Original Issue Yield:
5.35%), 10/1/2026 AAA $ 1,428,694
75,000 Wilmington, NC, GO UT Revenue Bonds, 5.60%
(Original Issue Yield: 5.75%), 6/1/2010 A+ 80,993
-----------
Total 61,659,891
-----------
Puerto Rico--4.3%
525,000 Puerto Rico Commonwealth Infrastructure
Financing Authority, Revenue Bonds (Series
A), 5.00% (AMBAC LOC)/(Original Issue Yield:
5.28%), 7/1/2028 AAA 526,528
575,000 Puerto Rico Electric Power Authority, Revenue
Bonds (Series DD), 5.00% (MBIA INS)/(Original
Issue Yield: 5.28%), 7/1/2028 AAA 576,731
725,000 Puerto Rico Highway and Transportation
Authority, Refunding Revenue Bonds (Series
A), 5.00% (AMBAC LOC)/(Original Issue Yield:
5.16%), 7/1/2028 AAA 727,182
1,000,000 Puerto Rico IFA (Series A), 5.02%, 7/1/2028 NR 997,500
-----------
Total 2,827,941
-----------
Total Long-Term Municipal Securities
(identified cost $60,937,136) 64,487,832
-----------
Open-Ended Investment Companies--1.8%
14,907 AIM Global Management Money Market Fund 14,907
20,102 Dreyfus Tax Exempt Money Market Fund 20,102
1,177,893 Fidelity Tax Exempt Money Market Fund 1,177,893
-----------
Total Open-Ended Investment Companies (at net
asset value) 1,212,902
-----------
Total Investments (identified cost
$62,150,038) $65,700,734
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia South Carolina Municipal Bond Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia South Carolina Municipal Bond Fund
(Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia South Carolina Municipal Bond Fund (Class A Shares) (the "Fund") from
January 11, 1991 (start of performance) to November 30, 1998 compared to the
Lehman Brothers State General Obligation Bond Index (LBSGOBI).+
[GRAPHIC REPRESENTATION "A29" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The LBSGOBI has been adjusted to reflect the
reinvestment of dividends on securities in the index.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The LBSGOBI is an unmanaged index comprised of all state general obligation
debt issues and is compiled without regard to maturities. These bonds are
rated A or better and represent a variety of coupon ranges. The LBSGOBI is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia South Carolina Municipal Bond Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia South Carolina Municipal Bond Fund
(Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia South Carolina Municipal Bond Fund (Class Y Shares) (the "Fund") from
July 23, 1996 (start of performance) to November 30, 1998 compared to the
Lehman Brothers State General Obligation Bond Index (LBSGOBI).+
[GRAPHIC REPRESENTATION "A30" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The LBSGOBI has been adjusted to reflect the reinvestment of
dividends on securities in the index.
+The LBSGOBI is an unmanaged index comprised of all state general obligation
debt issues and is compiled without regard to maturities. These bonds are
rated A or better and represent a variety of coupon ranges. The LBSGOBI is
not adjusted to reflect sales charges, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be
made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia South Carolina Municipal Bond Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- ------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--97.5%
South Carolina--93.0%
$ 540,000 Barnwell County, SC School District No. 45,
GO UT Refunding Bonds, 5.60% (AMBAC
INS)/(State Aid Withholding LOC)/(Original
Issue Yield: 5.65%), 2/1/2012 AAA $ 582,136
570,000 Barnwell County, SC School District No. 45,
GO UT Refunding Bonds, 5.60% (AMBAC
INS)/(State Aid Withholding LOC)/(Original
Issue Yield: 5.70%), 2/1/2013 AAA 612,425
1,300,000 Beaufort County, SC School District, GO UT,
4.70%, 3/1/2006 AA 1,354,652
500,000 Beaufort County, SC, Certificate of
Participation, 5.00% (Hilton Head Airport),
7/1/2001 NR 515,315
675,000 Beaufort County, SC, Certificates of
Participation, 7.125% (AMBAC INS)/(Original
Issue Yield: 7.45%), 6/1/2012 AAA 724,451
855,000 Beaufort-Jasper, SC Water & Sewer Authority,
Waterworks and Sewer System Revenue Bonds,
5.90% (FGIC INS)/(Original Issue Yield:
6.00%), 3/1/2016 AAA 927,555
750,000 Berkeley County, SC, Pollution Control
Facilities Revenue Bonds, 6.50% (South
Carolina Electric and Gas), 10/1/2014 A 824,445
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
South Carolina--continued
$1,500,000 Berkeley County, SC, Water & Sewer Refunding
Revenue Bonds, 5.50% (MBIA INS)/(Original
Issue Yield: 5.55%), 6/1/2013 AAA $ 1,598,700
1,000,000 Camden, SC Public Utility, Revenue Refunding
Bonds, 5.50% (MBIA INS)/(Original Issue
Yield: 5.80%), 3/1/2022 AAA 1,058,160
1,105,000 Charleston County, SC Airport District,
Airport System Refunding Revenue Bonds,
4.75% (MBIA INS), 7/1/2015 AAA 1,098,061
1,000,000 Charleston, SC Waterworks and Sewer, Revenue
Refunding Bonds, 4.50% (FGIC LOC)/(Original
Issue Yield: 5.03%), 1/1/2024 AAA 935,030
1,900,000 Charleston, SC, Certificates of
Participation, 5.00% (AMBAC INS)/(Original
Issue Yield: 5.39%), 9/1/2015 AAA 1,907,961
1,000,000 Charleston, SC, Certificates of
Participation, 7.10% (MBIA INS)/(United
States Treasury PRF), 6/1/2001 AAA 1,101,450
250,000 Charleston, SC, GO Bonds (Series A), 6.30%,
9/1/2005 AA 270,795
400,000 Charleston, SC, Water & Sewer Refunding
Revenue Bonds (Series A), 7.05%, 1/1/2006 AA 403,320
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia South Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
South Carolina--continued
$1,000,000 Charleston, SC, Water & Sewer Refunding
Revenue Bonds, 6.00% (Original Issue Yield:
6.242%), 1/1/2012 AA $ 1,072,610
1,260,000 Charleston, SC, Waterworks & Sewer Refunding
Revenue Bonds, 5.00% (MBIA INS), 1/1/2022 AAA 1,248,874
875,000 Chester County, SC School District, GO UT,
6.85% (United States Treasury PRF)/(Original
Issue Yield: 6.95%), 2/1/2012 AA 927,001
1,125,000 Chester County, SC School District, GO UT,
6.85% (United States Treasury PRF)/(Original
Issue Yield: 6.90%), 2/1/2009 AA 1,191,859
1,500,000 Columbia, SC Waterworks & Sewer System,
Refunding Revenue Bonds, 5.70%, 2/1/2010 AA 1,678,260
1,000,000 Columbia, SC, Parking Facilities Refunding
Revenue Bonds, 5.875% (AMBAC INS)/(Original
Issue Yield: 6.007%), 12/1/2013 AAA 1,104,490
1,065,000 Dorchester County, SC School District No.
002, GO UT Bonds, 5.125% (FGIC
INS)/(Original Issue Yield: 5.25%), 2/1/2012 AAA 1,099,804
1,500,000 Dorchester County, SC School District No.
002, GO UT Bonds, 5.20% (FGIC INS), 2/1/2018 AAA 1,526,910
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
South Carolina--continued
$2,250,000 Dorchester County, SC School District No.
002, GO UT Bonds, 5.20% (FGIC INS)/(Original
Issue Yield: 5.35%), 2/1/2017 AAA $ 2,295,833
600,000 Dorchester County, SC School District No.
002, GO UT Bonds, 6.65% (MBIA INS)/(United
States Treasury PRF)/(Original Issue Yield:
6.85%), 7/1/2012 AAA 624,276
870,000 Edgefield County, SC School District, GO UT
Bonds, 6.40% (FSA INS)/(Original Issue
Yield: 6.60%), 2/1/2009 AAA 966,996
1,155,000 Fairfield County, SC School District,
Certificates of Participation, 5.50%
(Fairfield Primary Geiger)/(Asset Guaranty
GTD)/(Original Issue Yield: 5.60%), 3/1/2007 AA 1,242,295
2,000,000 Fairfield County, SC, PCR Bonds, 6.50%
(South Carolina Electric and Gas), 9/1/2014 A+ 2,206,760
500,000 Florence County, SC, Hospital Revenue Bonds,
6.75% (Mcleod Regional Medical Center)/(FGIC
INS)/(Original Issue Yield: 7.00%),
11/1/2010 AAA 540,050
1,500,000 Florence County, SC, Revenue Bonds, 4.75%
(Mcleod Regional Medical Center)/(MBIA
INS)/(Original Issue Yield: 4.75%),
11/1/2027 AAA 1,424,250
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia South Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
South Carolina--continued
$2,805,000 Grand Strand Water & Sewage Authority, SC,
Revenue Refunding Bonds, 6.375% (South
Carolina Waterworks & Sewer System)/(MBIA
INS)/(Original Issue Yield: 6.508%),
6/1/2012 AAA $ 3,334,472
800,000 Grand Strand Water & Sewage Authority, SC,
Waterworks & Sewer System Revenue Refunding
Bonds, 6.00% (MBIA INS)/(Original Issue
Yield: 6.595%), 6/1/2019 AAA 849,528
500,000 Greenville County, SC, Industrial Revenue
Bonds, 7.10% (Lockheed Aeromod Center
Incorporated Project), 11/1/2011 BBB+ 537,575
5,250,000 Greenville, SC Hospital System Facilities,
Refunding Revenue Bonds (Series B), 5.25%
(Original Issue Yield: 6.125%), 5/1/2023 AA 5,290,530
600,000 Greenville, SC Hospital System Facilities,
Refunding Revenue Bonds, 5.75% (Original
Issue Yield: 5.95%), 5/1/2013 AA 646,296
1,500,000 Greenville, SC Hospital System Facilities,
Revenue Bonds (Series B), 5.25% (Original
Issue Yield: 6.076%), 5/1/2017 AA 1,525,020
760,000 Greenville, SC Hospital System Facilities,
Revenue Bonds, 7.00% (Greenville Health
Corporation)/(Original Issue Yield: 7.454%),
5/1/2017* AAA 811,095
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
South Carolina--continued
$2,000,000 Greenville, SC Waterworks Revenue, Revenue
Bonds, 5.50% (Original Issue Yield: 5.60%),
2/1/2022 AA $ 2,092,620
1,000,000 Hilton Head Island, SC Public Facilities
Corp., Certificates of Participation, 5.40%
(AMBAC INS)/(Original Issue Yield: 5.599%),
3/1/2009 AAA 1,071,080
100,000 Horry County, SC, GO UT Bonds, 7.45% (United
States Treasury PRF), 12/1/1988 A+ 102,012
980,000 Horry County, SC, GO UT Refunding Bonds
(Series B), 4.65% (MBIA INS), 12/1/2005 AAA 1,020,944
1,960,000 Lancaster County, SC School District, GO UT,
6.50% (MBIA INS)/(Original Issue Yield:
6.599%), 7/1/2008 AAA 2,178,070
655,000 Lexington & Richland Counties, SC School
District No. 005, GO UT Bonds, 5.05% (MBIA
INS), 3/1/2005 AAA 692,859
175,000 Lexington County, SC, Revenue Bonds (Series
C), 8.00% (J.B. White & Co. Project),
1/1/2011 NR 186,564
2,000,000 Lexington County, SC Health Services
District, Inc., Refunding Revenue Bonds,
5.125% (FSA INS)/(Original Issue Yield:
5.50%), 11/1/2021 AAA 1,986,580
2,500,000 Lexington County, SC Health Services
District, Inc., Revenue Bonds, 5.125% (FSA
INS)/(Original Issue Yield: 5.53%),
11/1/2026 AAA 2,481,525
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia South Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
South Carolina--continued
$ 805,000 Medical University of South Carolina,
Hospital Facilities Revenue Bonds, 5.25%
(MBIA INS)/(Original Issue Yield: 5.25%),
7/1/2004 AAA $ 857,591
2,000,000 North Charleston, SC Sewer District,
Refunding Revenue Bonds (Series A), 6.00%
(MBIA INS)/(Original Issue Yield: 6.593%),
7/1/2018 AAA 2,126,480
500,000 North Charleston, SC Sewer District, Revenue
Bonds (Series B), 6.00% (MBIA INS)/(Original
Issue Yield: 6.593%), 7/1/2018 AAA 531,620
275,000 Oconee County, SC School District, GO UT
Bonds, 5.10% (MBIA INS)/(Original Issue
Yield: 5.50%), 9/1/2013 AAA 284,034
2,500,000 Oconee County, SC, PCR Refunding Bonds,
5.80% (Duke Energy Corp.), 4/1/2014 AA 2,655,875
590,000 Piedmont Municipal Power Agency, SC,
Electricity Refunding Revenue Bonds, 6.85%
(FGIC INS), 1/1/2007 AAA 637,265
590,000 Piedmont Municipal Power Agency, SC,
Refunding Bonds, 5.50% (MBIA INS)/(Original
Issue Yield: 5.60%), 1/1/2013 AAA 644,900
970,000 Piedmont Municipal Power Agency, SC,
Refunding Revenue Bonds (Series A), 6.375%
(FGIC LOC)/(Original Issue Yield: 6.45%),
1/1/2006 AAA 1,098,428
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
South Carolina--continued
$1,000,000 Piedmont Municipal Power Agency, SC,
Refunding Revenue Bonds, 6.50% (FGIC
INS)/(Original Issue Yield: 6.88%), 1/1/2011 AAA $ 1,070,330
1,325,000 Richland-Lexington Airport District, Airport
& Marina Revenue Bonds, 6.125% (Columbia
Metropolitan Airport)/(AMBAC INS)/(Original
Issue Yield: 6.40%), 1/1/2025 AAA 1,431,504
600,000 Richland County, SC Hospital Facilities,
Revenue Bonds (Series PG-A), 7.10%
(Community Provider Pooled Loan
Program)/(CGIC INS), 7/1/2005 AAA 667,206
1,500,000 Richland County, SC School District No. 001,
GO UT, 4.625%, 3/1/2022 AA 1,426,035
650,000 Richland County, SC Solid Waste Disposal
Facilities, Revenue Bonds (Series A), 7.45%
(Union Camp Corp. Project)/(Original Issue
Yield: 7.513%), 4/1/2021 A 708,331
1,390,000 Richland County, SC, GO UT Refunding Bonds
(Series B), 6.25% (State Aid Withholding
LOC), 3/1/2001 AA 1,469,703
135,000 Rock Hill, SC Housing Development Corp.,
Multi-Family Refunding Revenue Bonds, 7.50%,
7/1/2010 NR 145,634
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia South Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
South Carolina--continued
$1,000,000 South Carolina Job Development Authority,
Revenue Bonds, 5.25% (Anderson Area Medical
Center, Inc.)/(MBIA INS)/(Original Issue
Yield: 5.63%), 2/1/2015 AAA $ 1,028,140
500,000 South Carolina Resources Authority, Local
Government Program, Revenue Bonds (Series
A), 7.00%, 6/1/2003 A+ 533,315
1,000,000 South Carolina State Educational Assistance
Authority, Refunding Revenue Bonds (Series
A-3), 5.80% (Original Issue Yield: 5.90%),
9/1/2004 AAA 1,070,820
1,000,000 South Carolina State Educational Assistance
Authority, Refunding Revenue Bonds (Series
B), 5.70% (Original Issue Yield: 5.75%),
9/1/2005 A 1,066,500
975,000 South Carolina State Housing Finance &
Development Authority, Refunding Revenue
Bonds (Series A), 6.15%, 7/1/2008 AA 1,046,780
1,200,000 South Carolina State Housing Finance &
Development Authority, Revenue Bonds (Series
A), 7.30% (FHA/VA mtgs GTD), 7/1/2011 AA 1,291,176
1,000,000 South Carolina State Housing Finance &
Development Authority, Revenue Bonds (Series
A-1), 6.45% (FHA/VA mtgs GTD), 7/1/2017 NR 1,075,390
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
South Carolina--continued
$ 500,000 South Carolina State Housing Finance &
Development Authority, Revenue Bonds (Series
C), 7.70% (FHA/VA mtgs GTD), 7/1/2010 AA $ 522,520
520,000 South Carolina State Housing Finance &
Development Authority, Revenue Bonds (Series
C), 7.75% (FHA/VA mtgs GTD), 7/1/2022 AA 545,553
55,000 South Carolina State Housing Finance &
Development Authority, Revenue Refunding
Bonds (Series A), 7.50% (FHA/VA mtgs GTD),
7/1/2011 AA 57,069
1,000,000 South Carolina State Ports Authority,
Revenue Bonds, 6.50% (AMBAC INS)/(Original
Issue Yield: 6.75%), 7/1/2006 AAA 1,074,620
1,000,000 South Carolina State Ports Authority,
Revenue Bonds, 6.625% (AMBAC INS)/(Original
Issue Yield: 6.823%), 7/1/2011 AAA 1,082,280
525,000 South Carolina State Ports Authority,
Revenue Bonds, 6.75% (AMBAC INS)/(Original
Issue Yield: 6.90%), 7/1/2021 AAA 567,431
2,500,000 South Carolina State Public Service
Authority, Refunding Revenue Bonds, 5.00%
(MBIA LOC)/(Original Issue Yield: 5.20%),
1/1/2025 AAA 2,487,250
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia South Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
South Carolina--continued
$2,000,000 South Carolina State Public Service
Authority, Revenue Bond, 5.00% (MBIA
INS)/(Original Issue Yield: 5.20%), 1/1/2015 AAA $ 2,034,860
1,950,000 South Carolina State Public Service
Authority, Revenue Bonds (Series D), 6.50%
(Santee Cooper)/(AMBAC INS)/(Original Issue
Yield: 6.553%), 7/1/2014 AAA 2,166,957
1,000,000 South Carolina State Public Service
Authority, Revenue Refunding Bonds, 5.00%
(FGIC INS)/(Original Issue Yield: 5.30%),
1/1/2018 AAA 1,002,300
1,210,000 South Carolina State, GO UT Bonds (Series
A), 4.50% (State Highway), 4/1/2023 AAA 1,153,299
4,500,000 South Carolina State, GO UT Revenue Bonds
(Series A), 5.00% (Original Issue Yield:
5.45%), 3/1/2008 AAA 4,782,465
1,150,000 South Carolina State, GO UT, 4.50% (State
Highway), 4/1/2022 AAA 1,097,618
590,000 South Carolina State, State Capital
Improvement (Series B), 5.75%, 8/1/2000 AAA 612,674
2,000,000 South Carolina Transportation Infrastructure
Bank, Revenue Bonds, 4.50% (MBIA INS),
10/1/2014 AAA 1,952,280
1,500,000 Spartanburg County, SC Health Services
District, Inc., Refunding Revenue Bonds,
5.50% (AMBAC INS)/(Original Issue Yield:
5.70%), 4/15/2015 AAA 1,582,740
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
South Carolina--continued
$1,500,000 Spartanburg County, SC Health Services
District, Inc., Revenue Bonds, 5.50% (MBIA
INS)/(Original Issue Yield: 6.00%),
4/15/2027 AAA $ 1,571,805
1,000,000 Spartanburg County, SC Hospital Facilities,
Revenue Refunding Bonds, 6.55% (Spartanburg
General Hospital System)/(FSA INS),
4/15/2010 AAA 1,092,870
450,000 Spartanburg, SC Leased Housing Corp.,
Refunding Revenue Bonds, 7.50%, 10/1/2011 NR 486,927
1,000,000 Spartanburg, SC, Waterworks Revenue
Refunding Bonds, 5.00% (FGIC INS), 6/1/2027 AAA 993,230
1,000,000 Sumter County, SC Hospital Facilities,
Revenue Refunding Bonds, 6.625% (Tuomey
Regional Medical Center)/(MBIA
INS)/(Original Issue Yield: 6.98%),
11/15/2004 AAA 1,136,500
1,000,000 University South Carolina, Parking
Facilities Refunding Revenue Bonds, 5.00%
(MBIA INS)/(Original Issue Yield: 5.40%),
5/1/2015 AAA 1,014,020
1,465,000 University of South Carolina, Revenue Bonds,
5.70% (MBIA INS), 6/1/2020 AAA 1,566,393
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia South Carolina Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
South Carolina--continued
$1,300,000 Western Carolina Regional Sewer Authority,
SC, Sewer System Revenue Bonds, 5.50% (FGIC
INS)/(Original Issue Yield: 5.627%),
3/1/2010 AAA $ 1,396,395
1,000,000 York County, SC, GO UT Refunding Bonds,
4.90% (AMBAC INS)/(Original Issue Yield:
5.10%), 6/1/2010 AAA 1,020,913
------------
Total 113,739,520
------------
Puerto Rico--4.5%
3,010,000 Puerto Rico Commonwealth Infrastructure
Financing Authority, Revenue Bonds (Series
A), 5.00% (AMBAC LOC)/(Original Issue Yield:
5.28%), 7/1/2028 AAA 3,018,759
1,080,000 Puerto Rico Electric Power Authority,
Revenue Bonds (Series DD), 5.00% (MBIA
INS)/(Original Issue Yield: 5.28%), 7/1/2028 AAA 1,083,251
1,360,000 Puerto Rico Highway and Transportation
Authority, Refunding Revenue Bonds (Series
A), 5.00% (AMBAC LOC)/(Original Issue Yield:
5.16%), 7/1/2028 AAA 1,364,094
------------
Total 5,466,104
------------
Total Long-Term Municipals (identified cost
$111,292,577) 119,205,624
------------
</TABLE>
<TABLE>
<CAPTION>
Credit
Shares Rating* Value
<C> <S> <C> <C>
Open-End Investment Companies--1.2%
347,747 AIM Global Management Money Market Fund $ 347,747
173,866 Dreyfus Tax Exempt Money Market Fund 173,866
988,507 Fidelity Tax Exempt Money Market Fund 989,507
--- ------------
Total Open-Ended Investment Companies (at net
asset value) 1,511,120
--- ------------
Total Investments (identified cost $112,803,697) $120,716,744
------------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Virginia Municipal Bond Fund (Class A Shares)
Growth of $10,000 Invested in Wachovia Virginia Municipal Bond Fund
(Class A Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Virginia Municipal Bond Fund (Class A Shares) (the "Fund") from
February 1, 1993 (start of performance) to November 30, 1998 compared to the
Lehman Brothers State General Obligation Bond Index (LBSGOBI),+ the Lehman
Brothers Municipal Bond Index (LBMBI),+ and the Lehman Brothers Municipal Bond
7-Year Index (LBMB7YI).+
[GRAPHIC REPRESENTATION "A31" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales
charge = $9,550). The Fund's performance assumes the reinvestment of all
dividends and distributions. The LBSGOBI, LBMBI, and LBMB7YI have been
adjusted to reflect the reinvestment of dividends on securities in the
indices.
**Total returns quoted reflect all applicable sales charges and contingent
deferred sales charges.
+The Fund has elected to change the benchmark index from the LBSGOBI to the
LBMBI and the LBMB7YI. The LBMBI and the LBMB7YI are more representative of
the securities in which the Fund invests. The LBMBI is an unmanaged index
generally representative of the performance of the municipal bond market as
a whole. The LBMB7YI is an unmanaged index representative of municipal bonds
with remaining maturities of seven years. The indices do not reflect sales
charges, expenses, or other fees that the SEC requires to be reflected in
the Fund's performance. Investments cannot be made in an index.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Wachovia Virginia Municipal Bond Fund (Class Y Shares)
Growth of $10,000 Invested in Wachovia Virginia Municipal Bond Fund
(Class Y Shares)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Virginia Municipal Bond Fund (Class Y Shares) (the "Fund") from March
29, 1998 (start of performance) to November 30, 1998 compared to the Lehman
Brothers Municipal Bond Index (LBMBI)+ and Lehman Brothers Municipal Bond 7-
Year Index (LBMB7YI).+
[GRAPHIC REPRESENTATION "A32" OMMITTED - SEE APPENDIX]
Past performance is not predictive of future performance. Your investment
return and principal value will fluctuate so when shares are redeemed, they
may be worth more or less than the original cost. Mutual funds are not
obligations of or guaranteed by any bank and are not federally insured.
*The Fund's performance assumes the reinvestment of all dividends and
distributions. The LBMBI and LBMB7YI have been adjusted to reflect the
reinvestment of dividends on securities in the indices.
+The LBMBI is an unmanaged index generally representative of the performance
of the municipal bond market as a whole. The LBMB7YI is an unmanaged index
representative of municipal bonds with remaining maturities of seven years.
The indices do not reflect sales charges, expenses, or other fees that the
SEC requires to be reflected in the Fund's performance. Investments cannot
be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Virginia Municipal Bond Fund
Portfolio of Investments
November 30, 1998
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--97.1%
Virginia--92.4%
$ 500,000 Albemarle County, VA, Revenue Refunding
Bonds, 5.50% (Original Issue Yield: 5.634%),
8/1/2006 A+ $ 532,650
850,000 Arlington County, VA, GO UT Refunding Bonds,
6.00%, 6/1/2004 AAA 940,075
1,000,000 Arlington County, VA, GO UT, 5.40% (Original
Issue Yield: 5.55%), 6/1/2015 AAA 1,054,550
2,080,000 Arlington, VA IDA, Revenue Bonds, 5.45% (The
Nature Conservancy)/(Original Issue Yield:
5.57%), 7/1/2027 NR 2,179,653
1,100,000 Arlington, VA IDA, Revenue Refunding Bonds,
5.30% (Arlington Hospital)/(United States
Treasury PRF)/(Original Issue Yield: 5.47%),
9/1/2003 NR 1,120,834
2,000,000 Augusta County, VA IDA, Revenue Bonds,
6.625% (Augusta Hospital Corp.)/
(AMBAC INS)/(Original Issue Yield: 6.817%),
9/1/2012 AAA 2,191,780
1,000,000 Chesapeake Bay Bridge & Tunnel District, VA,
Revenue Bonds, 5.30% (FGIC INS)/(Original
Issue Yield: 5.40%), 7/1/2003 AAA 1,061,470
6,000,000 Chesapeake, VA, GO UT, 5.00% (State
Aid Withholding GTD)/(Original Issue Yield:
5.53%), 12/1/2025 AA 5,960,400
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
Virginia--continued
$ 1,000,000 Chesterfield County, VA, GO UT, 5.60%
(Original Issue Yield: 5.65%), 7/15/2006 AAA $ 1,075,930
600,000 Danville, VA, GO UT, 6.40% (Original
Issue Yield: 6.45%), 5/1/2009 NR 661,638
500,000 Danville, VA, GO UT, 6.40% (Original
Issue Yield: 6.50%), 5/1/2010 NR 551,365
1,000,000 Fairfax County, VA IDA, Revenue Refunding
Bonds, 5.00% (Inova Health System)/(AMBAC
INS)/(Original Issue Yield: 5.30%),
8/15/2013 AAA 1,042,890
2,000,000 Fairfax County, VA IDA, Revenue Refunding
Bonds, 5.00% (Inova Health
System)/(Original Issue Yield: 5.25%),
8/15/2025 AA 1,960,840
1,250,000 Fairfax County, VA IDA, Revenue Refunding
Bonds, 5.25% (Inova Health System)/(FSA
INS)/(Original Issue Yield: 5.35%),
8/15/2019 AAA 1,312,263
1,000,000 Fairfax County, VA IDA, Revenue Refunding
Bonds, 5.25% (Inova Health
System)/(Original Issue Yield: 5.35%),
8/15/2019 AA 1,053,840
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Virginia Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
Virginia--continued
$1,265,000 Fairfax County, VA Water Authority, 6.00%,
4/1/2022 $ 1,414,460
735,000 Fairfax County, VA Water Authority, 6.00%,
4/1/2022 843,479
500,000 Fairfax County, VA Water Authority, Revenue
Bonds, 5.00% (Original Issue Yield: 5.375%),
4/1/2016 AA 504,090
1,500,000 Fairfax County, VA Water Authority, Revenue
Refunding Bonds, 5.00% (Original Issue
Yield: 5.22%), 4/1/2021 AA 1,535,550
2,000,000 Fairfax County, VA Water Authority, Revenue
Refunding Bonds, 5.00% (Original Issue
Yield: 5.30%), 4/1/2029 AA 1,973,720
1,000,000 Fairfax County, VA, GO UT Refunding Bonds,
6.00% (State Aid Withholding GTD)/
(Original Issue Yield: 6.10%), 5/1/2007 AAA 1,044,410
1,000,000 Hampton, VA, GO UT, 5.90% (Original Issue
Yield: 6.00%), 1/15/2007 AA 1,118,240
1,000,000 Hanover County, VA IDA, Revenue Bonds, 5.50%
(Bon Secours Health System)/(MBIA
INS)/(Original Issue Yield: 5.93%),
8/15/2025 AAA 1,044,560
1,000,000 Hanover County, VA IDA, Revenue Bonds, 5.50%
(Memorial Regional Medical Center)/(MBIA
INS)/(Original Issue Yield: 6.00%),
8/15/2025 AAA 1,044,560
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
Virginia--continued
$1,000,000 Hanover County, VA IDA, Revenue Bonds,
6.375% (Memorial Regional Medical
Center)/(MBIA INS), 8/15/2018 AAA $ 1,192,770
2,000,000 Henrico County, VA, GO UT Refunding Bonds,
5.30% (Original Issue Yield: 5.45%),
1/15/2010 AAA 2,138,160
1,000,000 Henrico County, VA, Revenue Refunding Bonds,
6.25% (Original Issue Yield: 6.65%),
5/1/2013 AA 1,060,640
1,000,000 James City County, VA, GO UT, 5.20% (State
Aid Withholding GTD)/(FGIC INS)/(Original
Issue Yield: 5.35%), 12/15/2010 AAA 1,061,040
500,000 Loudoun County, VA Sanitation Authority,
Revenue Bonds, 4.75% (MBIA INS), 1/1/2021 AAA 484,680
1,000,000 Manassa, VA, GO UT, 5.00% (Original Issue
Yield: 5.05%), 1/1/2012 AA 1,036,590
1,000,000 Newport News, VA, GO UT (Series A), 5.20%
(Original Issue Yield: 5.35%), 1/15/2018 AA 1,017,750
1,000,000 Newport News, VA, GO UT (Series A), 6.00%
(Original Issue Yield: 6.05%), 6/1/2006 AA 1,082,850
1,000,000 Newport News, VA, GO UT (Series A), 6.00%
(Original Issue Yield: 6.10%), 6/1/2007 AA 1,085,050
1,900,000 Norfolk, VA IDA, Refunding Revenue Bonds,
5.50% (Sentara Hospitals), 11/1/2017 AA 1,978,432
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Virginia Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- ------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
Virginia--continued
$1,000,000 Norfolk, VA IDA, Refunding Revenue Bonds,
6.50% (Daughter's Charity-DePaul Hospital),
12/1/2007 AA+ $ 1,107,520
2,500,000 Norfolk, VA IDA, Refunding Revenue Bonds,
6.50% (Sentara Hospitals), 11/1/2013 AA 2,825,625
1,000,000 Norfolk, VA IDA, Revenue Bonds, 6.50%
(Children's Hospital King's Group)/(AMBAC
INS)/(Original Issue Yield: 7.043%),
6/1/2021 AAA 1,074,460
500,000 Norfolk, VA Water Revenue, Revenue Bonds,
5.90% (MBIA INS)/(Original Issue Yield:
6.194%), 11/1/2025 AAA 546,270
1,000,000 Norfolk, VA, GO UT (Series A), 5.90%
(Original Issue Yield: 6.00%), 2/1/2006 AA 1,066,000
1,000,000 Norfolk, VA, GO UT Refunding Bonds (Series
A), 6.00% (Original Issue Yield: 6.20%),
2/1/2008 AA 1,068,060
1,000,000 Norfolk, VA, GO UT Refunding Bonds, 5.25%
(Original Issue Yield: 5.35%), 2/1/2006 AA 1,061,090
2,000,000 Norfolk, VA, GO UT Refunding Bonds, 5.50%
(Original Issue Yield: 5.55%), 2/1/2008 AA 2,130,820
1,000,000 Prince William County, VA IDA, Refunding
Revenue Bonds, 5.625% (Prince William
Hospital)/(Original Issue Yield: 5.75%),
4/1/2012 NR 1,035,980
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
Virginia--continued
$1,000,000 Prince William County, VA, GO UT Refunding
Bonds, 5.90% (Original Issue Yield: 6.00%),
12/1/2003 AA $ 1,058,500
2,000,000 Richmond, VA Public Utility, Refunding
Revenue Bonds (Series A), 5.125% (Original
Issue Yield: 5.31%), 1/15/2028 A+ 1,987,900
1,500,000 Richmond, VA, GO UT Bonds, 5.50% (State Aid
Withholding INS)/(Original Issue Yield:
5.72%), 7/15/2023 AA 1,556,745
1,000,000 Richmond, VA, GO UT Refunding Bonds (Series
B), 5.00% (FGIC INS)/(Original Issue Yield:
5.259%), 1/15/2021 AAA 997,950
1,000,000 Rivanna Water & Sewer Authority, Refunding
Revenue Bonds, 4.80% (Original Issue Yield:
5.10%), 10/1/2015 NR 1,000,340
750,000 Roanoke County, VA IDA, Revenue Bonds, 5.25%
(Hollins College), 3/15/2023 A 759,188
500,000 Roanoke County, VA Water System, Refunding
Revenue Bonds, 5.00% (FGIC INS), 7/1/2021 AAA 495,635
2,000,000 Roanoke, VA IDA, 5.25% (Roanoke Memorial
Hospital Project--Carilion Health
System)/(MBIA INS)/(Original Issue Yield:
5.65%), 7/1/2025 AAA 2,015,960
3,475,000 Roanoke, VA, GO UT Bonds, 5.25% (Original
Issue Yield: 5.30%), 8/1/2024 AA 3,521,808
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Virginia Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
Virginia--continued
$1,000,000 Roanoke, VA, GO UT Bonds, 6.20%, 8/1/2005 AA $ 1,073,930
1,250,000 Roanoke, VA, GO UT Bonds, 6.30% (Original
Issue Yield: 6.35%), 8/1/2007 AA 1,351,237
1,000,000 Spotsylvania County, VA, GO UT Bonds, 5.50%
(Original Issue Yield: 5.55%), 7/15/2005 A+ 1,075,700
1,000,000 Spotsylvania County, VA, GO UT Bonds, 5.70%
(Original Issue Yield: 5.75%), 7/15/2007 A+ 1,082,420
1,500,000 University of Virginia, Refunding Revenue
Bonds (Series A), 5.20% (Original Issue
Yield: 5.45%), 6/1/2015 AA+ 1,537,470
1,000,000 Virginia Beach, VA, GO UT Bonds (Series C),
6.10% (Original Issue Yield: 6.15%),
8/1/2002 AA 1,076,980
1,000,000 Virginia Beach, VA, GO UT Bonds, 5.70%,
7/15/2006 AA 1,083,840
1,000,000 Virginia Beach, VA, GO UT Bonds, 5.80%,
7/15/2007 AA 1,087,200
1,000,000 Virginia Beach, VA, GO UT Refunding Bonds,
6.20% (State Aid Withholding INS)/(Original
Issue Yield: 6.25%), 9/1/2014 AA 1,132,060
1,000,000 Virginia College Building Authority,
Refunding Revenue Bonds, 5.80% (Washington &
Lee University Project), 1/1/2024 AAA 1,102,060
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
Virginia--continued
$1,500,000 Virginia Polytechnical Institute & State
University, Refunding Revenue Bonds (Series
C), 5.50% (Original Issue Yield: 5.70%),
6/1/2016 AA $ 1,587,000
500,000 Virginia State Housing Development
Authority, Refunding Revenue Bonds, 6.10%,
1/1/2007 AA+ 535,115
500,000 Virginia State Housing Development
Authority, Refunding Revenue Bonds, 6.20%,
1/1/2008 AA+ 538,530
500,000 Virginia State Housing Development
Authority, Refunding Revenue Bonds, 6.30%,
1/1/2009 AA+ 539,205
400,000 Virginia State Housing Development
Authority, Refunding Revenue Bonds, 6.45%,
5/1/2001 AA+ 415,620
990,000 Virginia State Housing Development
Authority, Revenue Bonds (Series A), 6.40%,
7/1/2017 AA+ 1,051,865
1,000,000 Virginia State Housing Development
Authority, Revenue Bonds (Series B), 6.35%,
1/1/2015 AA+ 1,086,880
1,000,000 Virginia State Housing Development
Authority, Revenue Bonds (Series B), 6.55%,
1/1/2011 AA+ 1,088,280
945,000 Virginia State Housing Development
Authority, Revenue Bonds (Series F), 6.40%,
7/1/2017 AA+ 1,002,607
1,000,000 Virginia State Public School Authority,
Revenue Refunding Bonds, 6.25% (Original
Issue Yield: 6.30%), 1/1/2004 AA 1,086,640
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Virginia Municipal Bond Fund
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
Virginia--continued
$ 300,000 Virginia State Public School Authority,
School Financing Revenue Bonds (Series B),
5.75% (State Aid Withholding COL), 1/1/2008 AA $ 325,059
250,000 Virginia State Resource Authority, Refunding
Revenue Bonds, 5.00% (Original Issue Yield:
5.182%), 5/1/2022 AA 247,100
1,000,000 Virginia State Resource Authority, Refunding
Revenue Bonds, 5.25% (Appomattox River Water
Authority)/
(Original Issue Yield: 5.70%), 10/1/2013 AA 1,044,550
1,000,000 Virginia State Resources Authority Water and
Sewer System, Revenue Bonds (Series A),
5.60% (Original Issue Yield: 5.75%),
10/1/2025 AA 1,108,240
690,000 Virginia State Resources Authority Water and
Sewer System, Revenue Bonds, 5.50% (Original
Issue Yield: 5.80%), 10/1/2022 AA 722,368
1,000,000 Virginia State, GO UT Bonds, 5.50% (Original
Issue Yield: 5.55%), 6/1/2006 AAA 1,079,060
1,000,000 Virginia State, GO UT Bonds, 6.00%, 6/1/2006 AAA 1,074,740
750,000 Washington County, VA IDA, Refunding Revenue
Bonds, 6.00% (Original Issue Yield: 6.16%),
7/1/2014 NR 844,597
</TABLE>
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
<C> <S> <C> <C>
Long-Term Municipals--continued
Virginia--continued
$2,000,000 Williamsburg, VA IDA, Refunding Revenue
Bonds, 5.75% (Williamsburg Community
Hospital)/
(Original Issue Yield: 5.94%), 10/1/2022 A $ 2,077,000
------------
Total 99,728,413
------------
Puerto Rico--4.7%
895,000 Puerto Rico Commonwealth Infrastructure
Financing Authority, Revenue Bonds (Series
A), 5.00% (AMBAC LOC)/
(Original Issue Yield: 5.28%), 7/1/2028 AAA 897,604
2,990,000 Puerto Rico Electric Power Authority,
Revenue Bonds (Series DD), 5.00% (MBIA
INS)/(Original Issue Yield: 5.28%), 7/1/2028 AAA 2,999,000
1,245,000 Puerto Rico Highway and Transportation
Authority, Refunding Revenue Bonds (Series
A), 5.00% (AMBAC LOC)/(Original Issue Yield:
5.16%), 7/1/2028 AAA 1,248,747
------------
Total 5,145,351
------------
Total Long-Term Municipals (identified cost
$97,591,200) 104,873,764
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Wachovia Virginia Municipal Bond Fund
<TABLE>
<CAPTION>
Shares Value
- ------------------------------------------------------------------------------
<C> <S> <C>
Open-End Investment Companies--1.3%
19,000 AIM Global Management Money Market Fund $ 19,000
939 Dreyfus Tax Exempt Money Market Fund 939
1,329,039 Fidelity Tax Exempt Money Market Fund 1,329,039
------------
Total Open-End Investment Companies (at net
asset value) 1,348,978
------------
Total Investments (identified cost
$98,940,178) $106,222,742
------------
</TABLE>
(See Notes to Portfolios of Investments)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Notes to Portfolios of Investments
* Please refer to the Appendix of the Statement of Additional Information
for an explanation of the credit ratings. Current credit ratings are
unaudited.
(a) The repurchase agreements are fully collateralized by U.S. Government
and/or agency obligations based on market prices at the date of the
portfolio.
(b) Non-income producing.
(c) Current rate and next demand date shown.
(d) Represents securities held as collateral within a margin account, used to
ensure the fund is able to satisfy the obligations of its outstanding long
futures contracts.
(e) Denotes a restricted security which is subject to restrictions on resale
under federal securities laws. At November 30, 1998, Emerging Markets Fund
held restricted securities amounting to $10,015,883, which represents
7.18% of net assets.
The following abbreviations are used in these portfolios:
<TABLE>
<S> <C>
ADR--American Depositary Receipt LOC--Letter of Credit
AMBAC--American Municipal Bond LP--Limited Partnership
Assurance Corporation LT--Limited Tax
AMT--Alternative Minimum Tax LTD--Limited
CGIC--Capital Guaranty Insurance MBIA--Municipal Bond Investors
Corporation Assurance
COL--Collateralized MTN--Medium Term Note
FGIC--Financial Guaranty Insurance PCFA--Pollution Control Finance
Corporation Authority
FHA--Federal Housing Administration PCR--Pollution Control Revenue
FHA/VA--Federal Housing PLC--Public Limited Company
Administration/Veterans PO--Principal Only
Administration PRF--Prerefunded
FSA--Financial Security Assurance REMIC--Real Estate Mortgage
GDR--Global Depositary Receipt Investment Conduit
GO--General Obligation SA--Support Agreement
GTD--Guaranteed SFM--Single Family Mortgage
HFA--Housing Finance Authority UT--Unlimited Tax
IDA--Industrial Development VA--Veterans Administration
Authority VRDNs--Variable Rate Demand Notes
IFA--Industrial Finance Authority
INS--Insured
</TABLE>
<TABLE>
<CAPTION>
Net Unrealized Gross Gross
Cost of Appreciation/ Unrealized Unrealized
Investments (Depreciation) Appreciation Depreciation
for Federal for Federal for Federal for Federal Total Net
Fund Tax Purposes Tax Purposes Tax Purposes Tax Purposes Assets**
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Equity Fund 218,061,537 41,023,844 45,226,409 4,202,565 259,153,014
Quantitative Equity Fund 205,534,587 104,751,190 107,094,769 2,343,579 309,556,888
Growth and Income Fund 179,038,208 153,219,200 153,588,736 369,536 336,481,729
Equity Index Fund 230,714,355 193,428,664 198,178,901 4,750,237 423,301,756
Special Value Fund 144,725,223 5,518,352 20,239,640 14,721,288 149,957,852
Emerging Markets Fund 156,089,268 (18,566,625) 15,507,735 34,074,360 139,574,958
Balanced Fund 379,177,634 44,076,052 47,739,587 3,663,535 423,889,391
Fixed Income Fund 230,005,182 5,003,167 5,566,953 563,786 238,043,019
Intermediate Fixed
Income Fund 89,250,783 2,754,585 2,904,783 150,198 92,589,817
Short-Term Fixed Income
Fund 105,959,914 1,096,010 1,252,119 156,109 108,869,482
Georgia Municipal Bond
Fund 22,598,074 1,171,431 1,171,431 -- 23,930,409
North Carolina Municipal
Bond Fund 62,161,508 3,539,226 3,539,226 -- 66,293,759
South Carolina Municipal
Bond Fund 112,803,697 7,913,047 7,964,932 51,885 122,227,717
Virginia Municipal Bond
Fund 98,940,178 7,282,564 7,282,564 -- 107,989,354
</TABLE>
**The categories of investments are shown as a percentage of net assets at
November 30, 1998.
At November 30, 1998, the following funds had investments that were subject to
alternative minimum tax:
<TABLE>
<CAPTION>
Percentage of total market value
Fund subject to alternative minimum tax
- ------------------------------------------------------------
<S> <C>
Georgia Municipal Bond
Fund 0.23%
North Carolina Municipal
Bond Fund 0.22%
South Carolina Municipal
Bond Fund 0.87%
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Statements of Assets and Liabilities
November 30, 1998
<TABLE>
<CAPTION>
Wachovia Wachovia Wachovia Wachovia
Wachovia Quantitative Growth & Equity Index Special
Equity Fund Equity Fund Income Fund Fund Values Fund
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in
securities, at value $226,360,213 $287,327,905 $319,494,301 $385,299,216 $131,639,607
Investments in
repurchase agreements 32,725,168 22,957,872 12,763,107 38,843,803 18,603,968
Cash -- -- -- -- 62,198
Cash denominated in
foreign currencies -- -- -- -- --
Income receivable 442,276 509,670 521,754 520,743 203,980
Receivable for
investments sold 5,132,701 -- 6,475,982 -- 414,474
Receivable for shares
sold 1,608,619 657,788 43,335 870,698 720,744
Receivable for foreign
currency sold -- -- -- -- --
Receivable for daily
variation margin -- -- -- -- --
Deferred organizational
costs -- -- -- -- --
Deferred expenses -- 1,888 -- -- --
Other assets -- -- -- -- --
------------ ------------ ------------ ------------ ------------
Total assets 266,268,977 311,455,123 339,298,479 425,534,460 151,644,971
------------ ------------ ------------ ------------ ------------
Liabilities:
Payable for investments
purchased 5,765,086 -- 2,018,841 -- 211,340
Payable for shares
redeemed -- 639,799 162,476 153,620 969,087
Income distribution
payable -- -- -- -- --
Payable to Bank 11,509 4 -- 54 --
Payable for taxes
withheld 546 2,478 -- -- 734
Capital gain
distribution payable -- -- -- -- --
Payable for dollar roll
transactions -- -- -- -- --
Payable for daily
variation margin 1,109,691 927,225 380,782 1,798,816 309,375
Payable for reverse
repurchase agreement -- -- -- -- --
Payable for foreign
currency purchased -- -- -- -- --
Accrued expenses 229,131 328,729 254,651 280,214 196,583
------------ ------------ ------------ ------------ ------------
Total liabilities 7,115,963 1,898,235 2,816,750 2,232,704 1,687,119
------------ ------------ ------------ ------------ ------------
Net Assets Consist of:
Paid in capital 188,057,608 193,212,180 141,562,382 222,315,474 135,922,922
Net unrealized
appreciation
(depreciation) of
investments, futures
contracts, and
translation of assets
and liabilities in
foreign currency 46,940,950 108,619,028 155,110,483 200,611,305 7,025,366
Accumulated net
realized gain (loss)
on investments,
futures, and foreign
currency transactions 23,969,563 7,402,955 39,310,322 (427,923) 5,445,073
Undistributed net
investment income 184,893 322,725 498,542 802,900 1,564,491
------------ ------------ ------------ ------------ ------------
Total Net Assets $259,153,014 $309,556,888 $336,481,729 $423,301,756 $149,957,852
------------ ------------ ------------ ------------ ------------
Net Assets
Class A Shares $ 53,103,435 $ 82,682,239 $130,305,850 $131,593,538 $ 59,407,916
------------ ------------ ------------ ------------ ------------
Class B Shares $ 5,725,336 $ 19,531,841 -- -- --
------------ ------------ ------------ ------------ ------------
Class Y Shares $200,324,243 $207,342,808 $206,175,879 $291,708,218 $ 90,549,936
------------ ------------ ------------ ------------ ------------
Shares Outstanding
Class A Shares 3,338,230 4,074,795 5,536,409 5,871,249 3,682,330
Class B Shares 360,763 965,534 -- -- --
Class Y Shares 12,585,867 10,211,361 8,755,463 12,997,823 5,597,418
------------ ------------ ------------ ------------ ------------
Total Shares
Outstanding 16,284,860 15,251,690 14,291,872 18,869,072 9,279,748
------------ ------------ ------------ ------------ ------------
Net Asset Value
Per Share
Class A Shares $ 15.91 $ 20.29 $ 23.54 $ 22.41 $ 16.13
------------ ------------ ------------ ------------ ------------
Class B Shares $ 15.87 $ 20.23 -- -- --
------------ ------------ ------------ ------------ ------------
Class Y Shares $ 15.92 $ 20.31 $ 23.55 $ 22.44 $ 16.18
------------ ------------ ------------ ------------ ------------
Offering Price
Per Share*
Class A Shares $ 16.66** $ 21.25** $ 24.65** $ 23.47** $ 16.89**
------------ ------------ ------------ ------------ ------------
Class B Shares $ 15.87 $ 20.23 -- -- --
------------ ------------ ------------ ------------ ------------
Class Y Shares $ 15.92 $ 20.31 $ 23.55 $ 22.44 $ 16.18
------------ ------------ ------------ ------------ ------------
Redemption Proceeds
Per Share*
Class A Shares $ 15.91 $ 20.29 $ 23.54 $ 22.41 $ 16.13
------------ ------------ ------------ ------------ ------------
Class B Shares $ 15.08**** $ 19.22**** -- -- --
------------ ------------ ------------ ------------ ------------
Class Y Shares $ 15.92 $ 20.31 $ 23.55 $ 22.44 $ 16.18
------------ ------------ ------------ ------------ ------------
Investments, at
identified cost $216,910,905 $205,534,587 $178,687,173 $230,661,748 $144,693,144
------------ ------------ ------------ ------------ ------------
Investments, at tax
cost $218,061,537 $205,534,587 $179,038,208 $230,714,355 $144,725,223
------------ ------------ ------------ ------------ ------------
</TABLE>
* See "What Shares Cost" in the Prospectus.
** Computation of Offering Price: 100\95.50 of net asset value.
*** Computation of Offering Price: 100\97.50 of net asset value.
**** Computation of Redemption Proceeds: 95\100 of net asset value.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Statements of Assets and Liabilities--Continued
November 30, 1998
<TABLE>
<CAPTION>
Wachovia Wachovia Wachovia
Emerging Wachovia Wachovia Intermediate Short Term
Markets Balanced Fixed Income Fixed Income Fixed Income
Fund Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in
securities, at value $131,652,458 $394,971,710 $231,377,888 $89,987,807 $105,087,807
Investments in
repurchase agreements 5,870,185 28,281,976 3,630,461 2,017,561 1,968,117
Cash 20,423 372,442 197,528 54,855 --
Cash denominated in
foreign currencies 1,881,257 -- -- -- --
Income receivable 373,489 2,184,809 2,791,749 811,059 1,835,587
Receivable for
investments sold 985,662 7,731,111 3,803,091 1,480,237 --
Receivable for shares
sold 117,471 603,644 716,967 16,300 255,250
Receivable for foreign
currency sold -- -- -- -- --
Receivable for daily
variation margin -- -- 32,750 -- --
Deferred organizational
costs 17,788 -- -- -- --
Deferred expenses 9,549 -- -- -- --
Other assets -- -- -- -- --
------------ ------------ ------------ ----------- ------------
Total assets 140,928,282 434,145,692 242,550,434 94,367,819 109,146,761
------------ ------------ ------------ ----------- ------------
Liabilities:
Payable for investments
purchased 846,256 8,326,753 3,605,274 1,431,708 --
Payable for shares
redeemed 78,678 625,669 -- 202,396 4,189
Income distribution
payable -- -- 420,759 2,307 18,092
Payable to Bank -- -- -- -- 92,694
Payable for taxes
withheld 156,063 3,757 -- -- --
Capital gain
distribution payable -- -- -- -- --
Payable for dollar roll
transactions -- -- -- -- --
Payable for daily
variation margin -- 864,095 -- -- --
Payable for reverse
repurchase agreement -- -- -- -- 3,071
Payable for foreign
currency purchased -- -- -- -- --
Accrued expenses 272,327 436,027 481,382 141,591 159,233
------------ ------------ ------------ ----------- ------------
Total liabilities 1,353,324 10,256,301 4,507,415 1,778,002 277,279
------------ ------------ ------------ ----------- ------------
Net Assets Consist of:
Paid in capital 186,137,170 339,299,631 232,266,624 87,979,972 110,805,917
Net unrealized
appreciation
(depreciation) of
investments, futures
contracts, and
translation of assets
and liabilities in
foreign currency (17,788,886) 49,561,424 5,089,649 2,755,961 1,096,010
Accumulated net
realized gain (loss)
on investments,
futures, and foreign
currency transactions (29,634,474) 33,237,855 751,197 1,792,016 (3,556,146)
Undistributed net
investment income 861,148 1,790,481 (64,451) 61,868 523,701
------------ ------------ ------------ ----------- ------------
Total Net Assets $139,574,958 $423,889,391 $238,043,019 $92,589,817 $108,869,482
------------ ------------ ------------ ----------- ------------
Net Assets
Class A Shares $ 8,677,221 $119,093,445 $ 24,624,425 $ 4,759,173 $ 10,437,258
------------ ------------ ------------ ----------- ------------
Class B Shares -- $ 13,963,133 $ 533,004 -- --
------------ ------------ ------------ ----------- ------------
Class Y Shares $130,897,737 $290,832,813 $212,885,590 $87,830,644 $ 98,432,224
------------ ------------ ------------ ----------- ------------
Shares Outstanding
Class A Shares 1,028,986 8,678,212 2,429,133 458,552 1,052,277
Class B Shares -- 1,019,693 52,589 -- --
Class Y Shares 15,506,830 21,167,548 21,003,470 8,461,725 9,923,268
------------ ------------ ------------ ----------- ------------
Total Shares
Outstanding 16,535,816 30,865,453 23,485,192 8,920,277 10,975,545
------------ ------------ ------------ ----------- ------------
Net Asset Value
Per Share
Class A Shares $ 8.43 $ 13.72 $ 10.14 $ 10.38 $ 9.92
------------ ------------ ------------ ----------- ------------
Class B Shares -- $ 13.69 $ 10.14 -- --
------------ ------------ ------------ ----------- ------------
Class Y Shares $ 8.44 $ 13.74 $ 10.14 $ 10.38 $ 9.92
------------ ------------ ------------ ----------- ------------
Offering Price
Per Share*
Class A Shares $ 8.83** $ 14.37** $ 10.62** $ 10.87** $ 10.17***
------------ ------------ ------------ ----------- ------------
Class B Shares -- $ 13.69 $ 10.14 -- --
------------ ------------ ------------ ----------- ------------
Class Y Shares $ 8.44 $ 13.74 $ 10.14 $ 10.38 $ 9.92
------------ ------------ ------------ ----------- ------------
Redemption Proceeds
Per Share*
Class A Shares $ 8.43 $ 13.72 $ 10.14 $ 10.38 $ 9.92
------------ ------------ ------------ ----------- ------------
Class B Shares -- $ 13.01**** $ 9.63**** -- --
------------ ------------ ------------ ----------- ------------
Class Y Shares $ 8.44 $ 13.74 $ 10.14 $ 10.38 $ 9.92
------------ ------------ ------------ ----------- ------------
Investments, at
identified cost $155,297,434 $377,902,566 $230,000,861 $89,249,407 $105,959,914
------------ ------------ ------------ ----------- ------------
Investments, at tax
cost $156,089,268 $379,177,634 $230,005,182 $89,250,783 $105,959,914
------------ ------------ ------------ ----------- ------------
</TABLE>
* See "What Shares Cost" in the Prospectus.
** Computation of Offering Price: 100\95.50 of net asset value.
*** Computation of Offering Price: 100\97.50 of net asset value.
**** Computation of Redemption Proceeds: 95\100 of net asset value.
(See Notes which are an integral part of the Financial Statement)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Statements of Assets and Liabilities--Continued
November 30, 1998
<TABLE>
<CAPTION>
Wachovia Wachovia
Wachovia North South Wachovia
Georgia Carolina Carolina Virginia
Municipal Municipal Municipal Municipal
Bond Fund Bond Fund Bond Fund Bond Fund
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets:
Investments in
securities, at value $23,769,505 $65,700,734 $120,716,744 $106,222,742
Investments in
repurchase agreements -- -- -- --
Cash 6,102 -- -- 100
Cash denominated in
foreign currencies -- -- -- --
Income receivable 425,348 957,056 1,991,789 1,868,498
Receivable for
investments sold -- -- -- --
Receivable for shares
sold 54,777 152,500 -- 359,672
Receivable for foreign
currency sold -- -- -- --
Receivable for daily
variation margin -- -- -- --
Deferred organizational
costs 9,391 8,462 -- --
Deferred expenses 7,736 6,190 -- --
Other assets -- -- -- --
----------- ----------- ------------ ------------
Total assets 24,272,859 66,824,942 122,708,533 108,451,012
----------- ----------- ------------ ------------
Liabilities:
Payable for investments
purchased -- -- -- --
Payable for shares
redeemed 238,946 123,205 85,921 --
Income distribution
payable 54,240 172,879 291,975 379,965
Payable to Bank -- 116,061 -- --
Payable for taxes
withheld -- -- -- --
Capital gain
distribution payable -- -- -- --
Payable for dollar roll
transactions -- -- -- --
Payable for daily
variation margin -- -- -- --
Payable for reverse
repurchase agreement -- -- -- --
Payable for foreign
currency purchased -- -- -- --
Accrued expenses 49,264 119,038 102,920 81,693
----------- ----------- ------------ ------------
Total liabilities 342,450 531,183 480,816 461,658
----------- ----------- ------------ ------------
Net Assets Consist of:
Paid in capital 22,697,357 62,426,951 114,102,476 102,318,540
Net unrealized
appreciation
(depreciation) of
investments, futures
contracts, and
translation of assets
and liabilities in
foreign currency 1,185,501 3,550,696 7,913,047 7,282,564
Accumulated net
realized gain (loss)
on investments,
futures, and foreign
currency transactions 47,054 316,064 209,186 (1,604,493)
Undistributed net
investment income (in
excess of) 497 48 3,008 (7,257)
----------- ----------- ------------ ------------
Total Net Assets $23,930,409 $66,293,759 $122,227,717 $107,989,354
----------- ----------- ------------ ------------
Net Assets
Class A Shares $ 6,899,698 $ 9,533,286 $ 67,457,739 $ 8,835,423
----------- ----------- ------------ ------------
Class B Shares -- -- -- --
----------- ----------- ------------ ------------
Class Y Shares $17,030,711 $56,760,473 $ 54,769,978 $ 99,153,931
----------- ----------- ------------ ------------
Shares Outstanding
Class A Shares 606,561 832,230 5,940,020 842,310
Class B Shares -- -- -- --
Class Y Shares 1,497,185 4,954,746 4,822,801 9,448,676
----------- ----------- ------------ ------------
Total Shares
Outstanding 2,103,746 5,786,976 10,762,821 10,290,986
----------- ----------- ------------ ------------
Net Asset Value
Per Share
Class A Shares $ 11.38 $ 11.46 $ 11.36 $ 10.49
----------- ----------- ------------ ------------
Class B Shares -- -- -- --
----------- ----------- ------------ ------------
Class Y Shares $ 11.38 $ 11.46 $ 11.36 $ 10.49
----------- ----------- ------------ ------------
Offering Price
Per Share*
Class A Shares $ 11.92** $ 12.00** $ 11.90** $ 10.98**
----------- ----------- ------------ ------------
Class B Shares -- -- -- --
----------- ----------- ------------ ------------
Class Y Shares $ 11.38 $ 11.46 $ 11.36 $ 10.49
----------- ----------- ------------ ------------
Redemption Proceeds
Per Share*
Class A Shares $ 11.38 $ 11.46 $ 11.36 $ 10.49
----------- ----------- ------------ ------------
Class B Shares -- -- -- --
----------- ----------- ------------ ------------
Class Y Shares $ 11.38 $ 11.46 $ 11.36 $ 10.49
----------- ----------- ------------ ------------
Investments, at
identified cost $22,584,004 $62,150,038 $112,803,697 $ 98,940,178
----------- ----------- ------------ ------------
Investments, at tax
cost $22,598,074 $62,161,508 $112,803,697 $ 98,940,178
----------- ----------- ------------ ------------
</TABLE>
* See "What Shares Cost" in the Prospectus.
** Computation of Offering Price: 100\95.50 of net asset value.
*** Computation of Offering Price: 100\97.50 of net asset value.
**** Computation of Redemption Proceeds: 95\100 of net asset value.
(See Notes which are an integral part of the Financial Statement)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Statements of Operations
Year Ended November 30, 1998
<TABLE>
<CAPTION>
Wachovia Wachovia
Wachovia Quantitative Wachovia Wachovia Special
Equity Equity Growth & Equity Values
Fund Fund Income Fund Index Fund Fund
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ 2,483,096 $ 3,741,927 $ 3,969,925 $ 4,833,416 $ 1,635,217
Interest 2,297,272 1,907,822 1,816,995 1,977,303 1,693,751
----------- ----------- ------------ ----------- ------------
Total income 4,780,368 5,649,749 5,786,920 6,810,719 3,328,968
----------- ----------- ------------ ----------- ------------
Expenses:
Investment advisory fee 1,649,632 1,910,495 2,594,690 1,068,950 1,184,902
Administrative personnel
and services fee 222,320 257,215 416,034 336,704 139,710
Custodian fees 46,940 53,250 62,598 65,982 29,623
Transfer and dividend
disbursing agent fees and
expenses 27,713 41,846 98,537 26,730 41,890
Trustees' fees 9,274 8,033 8,413 10,599 4,284
Auditing fees 15,404 15,525 7,853 15,811 15,100
Legal fees 6,713 10,617 16,445 8,338 7,158
Portfolio accounting fees 4,325 4,419 34,233 5,009 3,259
Distribution services
fee--Class A Shares -- -- 270,221 -- --
Distribution services
fee--Class B Shares 35,043 99,494 -- -- --
Shareholder services
fee--Class A Shares 119,232 147,227 180,103 210,577 147,629
Shareholder services
fee--Class B Shares 11,681 33,165 -- -- --
Share registration costs 45,481 33,890 55,322 33,439 26,666
Printing and postage 6,332 9,192 12,601 5,839 5,767
Insurance premiums 4,500 4,700 15,380 4,500 3,500
Miscellaneous 13,614 14,306 9,525 15,044 18,068
----------- ----------- ------------ ----------- ------------
Total expenses 2,218,204 2,643,374 3,781,955 1,807,522 1,627,556
----------- ----------- ------------ ----------- ------------
Waivers and
reimbursements--
Waiver of investment
advisory fee -- (4,564) (268,040) -- --
Waiver of administrative
personnel and services
fee -- -- (54,046) -- --
----------- ----------- ------------ ----------- ------------
Total waivers and
reimbursements -- (4,564) (322,086) -- --
----------- ----------- ------------ ----------- ------------
Net expenses 2,218,204 2,638,810 3,459,869 1,807,522 1,627,556
----------- ----------- ------------ ----------- ------------
Net investment income 2,562,164 3,010,939 2,327,051 5,003,197 1,701,412
----------- ----------- ------------ ----------- ------------
Realized and Unrealized
Gain (Loss) on
Investments:
Net realized gain (loss)
on investments, futures
contracts and foreign
currency transactions 25,423,254 8,106,935 39,310,322 421,731 5,464,983
Net change in unrealized
appreciation
(depreciation) of
investments, futures
contracts and
translation of assets
and liabilities in
foreign currency 9,686,441 34,370,766 20,725,093 68,214,882 (15,392,292)
----------- ----------- ------------ ----------- ------------
Net realized and
unrealized gain (loss)
on investments,
futures contracts and
foreign currency 35,109,695 42,477,701 60,035,415 68,636,613 (9,927,309)
----------- ----------- ------------ ----------- ------------
Change in net assets
resulting from
operations $37,671,859 $45,488,640 $ 62,362,466 $73,639,810 $ (8,225,897)
----------- ----------- ------------ ----------- ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Statements of Operations--Continued
Year Ended November 30, 1998
<TABLE>
<CAPTION>
Wachovia Wachovia Wachovia
Emerging Wachovia Wachovia Intermediate Short Term
Markets Balanced Fixed Fixed Fixed
Fund Fund Income Fund Income Fund Income Fund
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ 3,059,459 $ 2,446,517 $ 749,734 $ 23,111 $ 150,253
Interest 885,036 12,760,353 12,999,041 5,898,899 6,193,925
------------ ----------- ----------- ---------- ----------
Total income 3,944,495 15,206,870 13,748,775 5,922,010 6,344,178
------------ ----------- ----------- ---------- ----------
Expenses:
Investment advisory fee 1,525,827 2,727,915 1,314,978 606,905 572,413
Administrative personnel
and services fee 144,378 364,455 206,835 121,051 98,371
Custodian fees 355,411 70,931 43,833 18,962 20,815
Transfer and dividend
disbursing agent fees and
expenses 58,278 28,411 19,901 14,592 8,163
Trustees' fees 3,763 7,580 10,501 3,080 1,517
Auditing fees 16,018 15,206 15,608 3,119 12,753
Legal fees 22,704 17,535 7,764 11,614 3,749
Portfolio accounting fees 8,430 7,430 19,493 12,044 2,709
Distribution services
fee--Class A Shares -- -- -- 78,135 --
Distribution services
fee--Class B Shares -- 74,564 2,607 -- --
Shareholder services
fee--Class A Shares 22,255 211,238 43,784 7,091 24,810
Shareholder services
fee--Class B Shares -- 24,855 869 -- --
Share registration costs 32,725 60,312 34,810 46,492 27,123
Printing and postage 10,094 5,186 5,085 8,456 2,172
Insurance premiums 3,223 5,000 4,501 6,422 3,501
Miscellaneous 17,406 17,065 12,806 5,214 10,242
------------ ----------- ----------- ---------- ----------
Total expenses 2,220,512 3,637,683 1,743,375 943,177 788,338
------------ ----------- ----------- ---------- ----------
Waivers and
reimbursements--
Waiver of investment
advisory fee (3,334) (368,451) (113,808) (114,531) (106,855)
Waiver of administrative
personnel and services
fee -- -- -- (15,627) --
------------ ----------- ----------- ---------- ----------
Total waivers and
reimbursements (3,334) (368,451) (113,808) (130,158) (106,855)
------------ ----------- ----------- ---------- ----------
Net expenses 2,217,178 3,269,232 1,629,567 813,019 681,483
------------ ----------- ----------- ---------- ----------
Net investment income 1,727,317 11,937,638 12,119,208 5,108,991 5,662,695
------------ ----------- ----------- ---------- ----------
Realized and Unrealized
Gain (Loss) on
Investments:
Net realized gain (loss)
on investments, futures
contracts and foreign
currency transactions (26,904,345)* 34,803,316 3,568,877 4,965,732 536,985
Net change in unrealized
appreciation
(depreciation) of
investments, futures
contracts and
translation of assets
and liabilities in
foreign currency (16,292,727) 5,465,835 2,972,507 (1,521,439) 920,118
------------ ----------- ----------- ---------- ----------
Net realized and
unrealized gain (loss)
on investments,
futures contracts and
foreign currency (43,197,072) 40,269,151 6,541,384 3,444,293 1,457,103
------------ ----------- ----------- ---------- ----------
Change in net assets
resulting from
operations $(41,469,755) $52,206,789 $18,660,592 $8,553,284 $7,119,798
------------ ----------- ----------- ---------- ----------
</TABLE>
*Net of foreign capital gain tax of $125,627.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Statements of Operations
Year Ended November 30, 1998
<TABLE>
<CAPTION>
Wachovia Wachovia
Wachovia North South Wachovia
Georgia Carolina Carolina Virginia
Municipal Municipal Municipal Municipal
Bond Fund Bond Fund Bond Fund Bond Fund
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends $ -- $ -- $ -- $ --
Interest 1,036,252 2,980,857 6,198,908 5,776,156
---------- ---------- ---------- ----------
Total income 1,036,252 2,980,857 6,198,908 5,776,156
---------- ---------- ---------- ----------
Expenses:
Investment advisory fee 159,236 456,438 868,897 800,745
Administrative personnel and
services fee 20,037 57,431 108,509 139,351
Custodian fees 4,246 12,172 23,170 21,735
Transfer and dividend
disbursing agent fees and
expenses 7,446 9,983 15,378 14,869
Trustees' fees 1,287 2,869 1,596 3,544
Auditing fees 15,206 15,464 15,206 3,774
Legal fees 4,076 5,502 5,397 6,929
Portfolio accounting fees 8,856 10,050 6,142 19,969
Distribution services fee--
Class A Shares -- -- -- 90,942
Distribution services fee--
Class B Shares -- -- -- --
Shareholder services fee--
Class A Shares 16,789 25,947 164,454 12,835
Shareholder services fee--
Class B Shares -- -- -- --
Share registration costs 26,537 33,535 25,502 39,925
Printing and postage 4,222 1,192 8,873 11,079
Insurance premiums 3,000 3,500 3,500 7,560
Miscellaneous 11,379 9,084 6,725 5,121
---------- ---------- ---------- ----------
Total expenses 282,317 643,167 1,253,349 1,178,378
---------- ---------- ---------- ----------
Waivers and reimbursements--
Waiver of investment advisory
fee (71,319) (99,646) (421,145) (290,422)
Waiver of administrative
personnel and services fee -- -- -- (18,189)
---------- ---------- ---------- ----------
Total waivers and
reimbursements (71,319) (99,646) (421,145) (308,611)
---------- ---------- ---------- ----------
Net expenses 210,998 543,521 832,204 869,767
---------- ---------- ---------- ----------
Net investment income 825,254 2,437,336 5,366,704 4,906,389
---------- ---------- ---------- ----------
Realized and Unrealized Gain
(Loss) on Investments:
Net realized gain (loss) on
investments, futures
contracts and foreign
currency transactions 61,857 327,825 209,185 723,926
Net change in unrealized
appreciation (depreciation)
of investments, futures
contracts and translation of
assets and liabilities in
foreign currency 428,018 1,360,515 2,123,645 1,656,976
---------- ---------- ---------- ----------
Net realized and unrealized
gain (loss) on investments,
futures contracts and
foreign currency 489,875 1,688,340 2,332,830 2,380,902
---------- ---------- ---------- ----------
Change in net assets
resulting from operations $1,315,129 $4,125,676 $7,699,534 $7,287,291
---------- ---------- ---------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Wachovia Wachovia Wachovia
Equity Fund Quantitative Equity Fund Growth & Income Fund
------------------------------------------------------------------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
November 30, November 30, November 30, November 30, November 30, November 30,
1998 1997 1998 1997 1998 1997
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
Operations--
Net investment income $ 2,562,164 $ 1,994,072 $ 3,010,939 $ 2,493,563 $ 2,327,051 $ 1,978,918
Net realized gain
(loss) on investments,
futures contracts and
foreign currency
transactions 25,423,254 21,611,578 8,106,935 21,181,733 39,310,322 16,598,799
Net change in
unrealized
appreciation
(depreciation) of
investments, futures
contracts and
translation of assets
and liabilities in
foreign currency 9,686,441 8,827,358 34,370,766 25,902,907 20,725,093 52,298,822
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets
resulting from
operations 37,671,859 32,433,008 45,488,640 49,578,203 62,362,466 70,876,539
------------ ------------ ------------ ------------ ------------ ------------
Distributions to
Shareholders--
Distributions from net
investment income
Class A Shares (434,085) (232,040) (550,325) (252,900) (1,096,382) (1,922,360)
Class B Shares (9,956) (4,850) (38,995) (14,224) -- --
Class Y Shares (2,078,302) (1,617,271) (2,433,040) (2,258,523) (847,829) --
Distributions from net
realized gain on
investments, futures
contracts and foreign
currency
Class A Shares (4,382,604) (2,671,987) (3,354,334) (807,333) (16,598,781) (2,918,533)
Class B Shares (386,343) (136,882) (633,226) (76,012) -- --
Class Y Shares (17,186,819) (16,595,269) (16,891,130) (7,488,144) -- --
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets
from distributions to
shareholders (24,478,109) (21,258,299) (23,901,050) (10,897,136) (18,542,992) (4,840,893)
------------ ------------ ------------ ------------ ------------ ------------
Share Transactions--
Proceeds from sale of
shares 79,804,293 69,940,131 85,542,784 41,943,131 228,486,710 115,596,820
Net asset value of
shares issued to
shareholders in
payment of dividends
declared 18,768,160 16,317,548 21,884,659 10,021,886 9,768,460 2,817,198
Cost of shares redeemed (51,792,656) (49,207,949) (44,449,005) (35,382,919) (284,316,544) (31,873,304)
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets
from share
transactions 46,779,797 37,049,730 62,978,438 16,582,098 (46,061,374) 86,540,714
------------ ------------ ------------ ------------ ------------ ------------
Change in net assets 59,973,547 48,224,439 84,566,028 55,263,165 (2,241,900) 152,576,360
Net Assets:
Beginning of period 199,179,467 150,955,028 224,990,860 169,727,695 $338,723,629 186,147,269
------------ ------------ ------------ ------------ ------------ ------------
End of period $259,153,014 $199,179,467 $309,556,888 $224,990,860 $336,481,729 $338,723,629
------------ ------------ ------------ ------------ ------------ ------------
Undistributed net
investment income
included in net assets
at end of period $ 184,893 $ 139,911 $ 322,725 $ 334,146 $ 498,542 $ 115,684
------------ ------------ ------------ ------------ ------------ ------------
Net gain (loss) as
computed for federal
tax purposes $ 29,886,669 $ 21,969,527 $ 11,277,361 $ 20,877,543 $ 41,201,605 $ 20,174,949
------------ ------------ ------------ ------------ ------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Statements of Changes in Net Assets--Continued
<TABLE>
<CAPTION>
Wachovia Wachovia
Equity Index Fund Special Values Fund
------------------------------------------------------
Year Year Year Year
Ended Ended Ended Ended
November 30, November 30, November 30, November 30,
1998 1997 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
Operations--
Net investment income $ 5,003,197 $ 4,559,236 $ 1,701,412 $ 815,047
Net realized gain
(loss) on investments,
futures contracts and
foreign currency
transactions 421,731 9,330,534 5,464,983 11,566,029
Net change in
unrealized
appreciation
(depreciation) of
investments, futures
contracts and
translation of assets
and liabilities in
foreign currency 68,214,882 52,679,625 (15,392,292) 14,611,780
------------ ------------ ------------ ------------
Change in net assets
resulting from
operations 73,639,810 66,569,395 (8,225,897) 26,992,856
------------ ------------ ------------ ------------
Distributions to
Shareholders--
Distributions from net
investment income
Class A Shares (3,814,497) (407,720) (273,707) (37,238)
Class B Shares -- -- -- --
Class Y Shares (945,159) (4,327,003) (656,635) (307,189)
Distributions from net
realized gain on
investments, futures
contracts and foreign
currency
Class A Shares (5,186,506) (1,056,751) (3,883,188) (749,987)
Class B Shares -- -- -- --
Class Y Shares (1,188,632) (12,242,705) (7,685,327) (6,186,789)
------------ ------------ ------------ ------------
Change in net assets
from distributions to
shareholders (11,134,794) (18,034,179) (12,498,857) (7,281,203)
------------ ------------ ------------ ------------
Share Transactions--
Proceeds from sale of
shares 134,592,835 91,500,545 70,849,082 60,929,497
Net asset value of
shares issued to
shareholders in
payment of dividends
declared 10,713,271 17,882,140 11,067,462 4,550,589
Cost of shares redeemed (83,275,340) (91,139,571) (33,500,251) (28,264,108)
------------ ------------ ------------ ------------
Change in net assets
from share
transactions 62,030,766 18,243,114 48,416,293 37,215,978
------------ ------------ ------------ ------------
Change in net assets 124,535,782 66,778,330 27,691,539 56,927,631
Net Assets:
Beginning of period 298,765,974 231,987,644 122,266,313 65,338,682
------------ ------------ ------------ ------------
End of period $423,301,756 $298,765,974 $149,957,852 $122,266,313
------------ ------------ ------------ ------------
Undistributed net
investment income
included in net assets
at end of period $ 802,900 $ 558,633 $ 1,564,491 $ 737,862
------------ ------------ ------------ ------------
Net gain (loss) as
computed for federal
tax purposes $ 7,032,936 $ 6,555,110 $ 6,952,058 $ 11,599,442
------------ ------------ ------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Statements of Changes in Net Assets--Continued
<TABLE>
<CAPTION>
Wachovia Wachovia
Emerging Markets Fund Balanced Fund
-------------------------------------------------------
Year Year Year Year
Ended Ended Ended Ended
November 30, November 30, November 30, November 30,
1998 1997 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
Operations--
Net investment income $ 1,727,317 $ 843,594 $ 11,937,638 $ 8,465,366
Net realized gain
(loss) on investments,
futures contracts and
foreign currency
transactions (26,904,345) (2,010,173) 34,803,316 21,825,742
Net change in
unrealized
appreciation
(depreciation) of
investments, futures
contracts and
translation of assets
and liabilities in
foreign currency (16,292,727) (6,335,506) 5,465,835 10,777,276
------------ ------------ ------------ ------------
Change in net assets
resulting from
operations (41,469,755) (7,502,085) 52,206,789 41,068,384
------------ ------------ ------------ ------------
Distributions to
Shareholders--
Distributions from net
investment income
Class A Shares (79,885) (48,643) (2,395,836) (672,386)
Class B Shares -- -- (210,069) (71,302)
Class Y Shares (1,627,997) (1,158,562) (9,025,669) (7,260,971)
Distributions from net
realized gain on
investments, futures
contracts and foreign
currency
Class A Shares -- (1,807) (3,838,968) (2,073,561)
Class B Shares -- -- (425,121) (233,429)
Class Y Shares -- (43,032) (16,816,255) (25,776,332)
------------ ------------ ------------ ------------
Change in net assets
from distributions to
shareholders (1,707,882) (1,252,044) (32,711,918) (36,087,981)
------------ ------------ ------------ ------------
Share Transactions--
Proceeds from sale of
shares 59,662,218 46,209,018 167,115,147 93,790,901
Net asset value of
shares issued to
shareholders in
payment of dividends
declared 616,589 366,510 30,283,351 33,640,055
Cost of shares redeemed (25,222,374) (18,648,451) (99,971,459) (81,676,189)
------------ ------------ ------------ ------------
Change in net assets
from share
transactions 35,056,433 27,927,077 97,427,039 45,754,767
------------ ------------ ------------ ------------
Change in net assets (8,121,204) 19,172,948 116,921,910 50,735,170
Net Assets:
Beginning of period 147,696,162 128,523,214 306,967,481 256,232,311
------------ ------------ ------------ ------------
End of period $139,574,958 $147,696,162 $423,889,391 $306,967,481
------------ ------------ ------------ ------------
Undistributed net
investment income
included in net assets
at end of period $ 861,148 $ 1,616,910 $ 1,790,481 $ 1,489,127
------------ ------------ ------------ ------------
Net gain (loss) as
computed for federal
tax purposes $(25,282,206) $ (3,405,307) $ 39,461,216 $ 21,079,435
------------ ------------ ------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Statements of Changes in Net Assets--Continued
<TABLE>
<CAPTION>
Wachovia
Wachovia Wachovia Short-
Fixed Income Fund Intermediate Fixed Income Fund Term Fixed Income Fund
-----------------------------------------------------------------------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
November 30, November 30, November 30, November 30, November 30, November 30,
1998 1997 1998 1997 1998 1997
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
Operations--
Net investment income $ 12,119,208 $ 11,110,786 $ 5,108,991 $ 5,172,640 $ 5,662,695 $ 6,473,738
Net realized gain
(loss) on investments 3,568,877 401,138 4,965,732 8,742 536,985 (47,627)
Net change in
unrealized
appreciation
(depreciation) of
investments 2,972,507 187,933 (1,521,439) 1,259,312 920,118 (466,786)
------------ ------------ --------------- -------------- ------------ ------------
Change in net assets
resulting from
operations 18,660,592 11,699,857 8,553,284 6,440,694 7,119,798 5,959,325
------------ ------------ --------------- -------------- ------------ ------------
Distributions to
Shareholders--
Distributions from net
investment income
Class A Shares (940,460) (322,564) (2,130,033) (4,996,146) (502,454) (146,241)
Class B Shares (16,381) (6,034) -- -- -- --
Class Y Shares (11,358,420) (10,855,582) (3,157,720) -- (5,081,639) (6,039,048)
Distributions from net
realized gain on
investments
Class A Shares -- -- -- -- -- --
Class B Shares -- -- -- -- -- --
Class Y Shares -- -- -- -- -- --
------------ ------------ --------------- -------------- ------------ ------------
Change in net assets
from distributions to
shareholders (12,315,261) (11,184,180) (5,287,753) (4,996,146) (5,584,093) (6,185,289)
------------ ------------ --------------- -------------- ------------ ------------
Share Transactions--
Proceeds from sale of
shares 81,647,518 69,384,069 99,110,496 73,017,952 28,878,718 25,140,979
Net asset value of
shares issued to
shareholders in
payment of
distributions declared 7,498,622 7,430,398 592,995 415,495 5,384,024 5,994,718
Cost of shares redeemed (53,025,914) (62,554,695) (107,004,830) (21,529,499) (25,225,385) (50,426,221)
------------ ------------ --------------- -------------- ------------ ------------
Change in net assets
from share
transactions 36,120,226 14,259,772 (7,301,339) 51,903,948 9,037,357 (19,290,524)
------------ ------------ --------------- -------------- ------------ ------------
Change in net assets 42,465,557 14,775,449 (4,035,808) 53,348,496 10,573,062 (19,516,488)
Net Assets:
Beginning of period 195,577,462 180,802,013 96,625,625 43,277,129 98,296,420 117,812,908
------------ ------------ --------------- -------------- ------------ ------------
End of period $238,043,019 $195,577,462 $ 92,589,817 $ 96,625,625 $108,869,482 $ 98,296,420
------------ ------------ --------------- -------------- ------------ ------------
Undistributed net
investment income
included in net assets
at end of period $ -- $ 255,123 $ 61,868 $ 246,400 $ 523,701 $ 439,852
------------ ------------ --------------- -------------- ------------ ------------
Net gain (loss) as
computed for federal
tax purposes $ 3,793,537 $ 264,995 $ 4,972,877 $ 8,742 $ 531,738 $ (86,270)
------------ ------------ --------------- -------------- ------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Statements of Changes in Net Assets--Continued
<TABLE>
<CAPTION>
Wachovia Wachovia
Georgia Municipal North Carolina Municipal
Bond Fund Bond Fund
------------------------------------------------------
Year Year Year Year
Ended Ended Ended Ended
November 30, November 30, November 30, November 30,
1998 1997 1998 1997
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
Operations--
Net investment income $ 825,254 $ 628,014 $ 2,437,336 $ 1,997,434
Net realized gain
(loss) on investments 61,857 (8,085) 327,825 10,685
Net change in
unrealized
appreciation
(depreciation) of
investments 428,018 206,101 1,360,515 796,079
----------- ----------- ----------- -----------
Change in net assets
resulting from
operations 1,315,129 826,030 4,125,676 2,804,198
----------- ----------- ----------- -----------
Distributions to
Shareholders--
Distributions from net
investment income
Class A Shares (251,879) (276,085) (393,274) (473,828)
Class B Shares -- -- -- --
Class Y Shares (573,430) (351,929) (2,044,014) (1,512,338)
Distributions from net
realized gain on
investments
Class A Shares (2,076) (16,530) (6,494) (28,618)
Class B Shares -- -- -- --
Class Y Shares (3,949) (14,820) (25,032) (60,175)
----------- ----------- ----------- -----------
Change in net assets
from distributions to
shareholders (831,334) (659,364) (2,468,814) (2,074,959)
----------- ----------- ----------- -----------
Share Transactions--
Proceeds from sale of
shares 6,541,536 7,467,225 17,216,738 20,407,274
Net asset value of
shares issued to
shareholders in
payment of
distributions declared 271,955 279,914 527,425 523,177
Cost of shares redeemed (2,205,784) (3,408,420) (8,774,593) (8,027,587)
----------- ----------- ----------- -----------
Change in net assets
from share
transactions 4,607,707 4,338,719 8,969,570 12,902,864
----------- ----------- ----------- -----------
Change in net assets 5,091,502 4,505,385 10,626,432 13,632,103
Net Assets:
Beginning of period 18,838,907 14,333,522 55,667,327 42,035,224
----------- ----------- ----------- -----------
End of period $23,930,409 $18,838,907 $66,293,759 $55,667,327
----------- ----------- ----------- -----------
Undistributed net
investment income
included in net assets
at end of period $ 497 $ -- $ 48 $ 11,268
----------- ----------- ----------- -----------
Net gain (loss) as
computed for federal
tax purposes $ 61,164 $ 5,985 $ 327,826 $ 20,140
----------- ----------- ----------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Statements of Changes in Net Assets--Continued
<TABLE>
<CAPTION>
Wachovia Wachovia
South Carolina Municipal Virginia Municipal
Bond Fund Bond Fund
-------------------------------------------------------
Year Year Year Year
Ended Ended Ended Ended
November 30, November 30, November 30, November 30,
1998 1997 1998 1997
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
Operations--
Net investment income $ 5,366,704 $ 4,986,776 $ 4,906,389 $ 5,048,138
Net realized gain
(loss) on investments 209,185 10,650 723,926 202,630
Net change in
unrealized
appreciation
(depreciation) of
investments 2,123,645 1,147,316 1,656,976 1,718,079
------------ ------------ ------------ ------------
Change in net assets
resulting from
operations 7,699,534 6,144,742 7,287,291 6,968,847
------------ ------------ ------------ ------------
Distributions to
Shareholders--
Distributions from net
investment income
Class A Shares (2,984,948) (3,029,296) (2,135,085) (4,898,834)
Class B Shares -- -- -- --
Class Y Shares (2,379,402) (1,957,480) (3,026,800) --
Distributions from net
realized gain on
investments
Class A Shares (5,753) (255,495) -- --
Class B Shares -- -- -- --
Class Y Shares (4,021) (148,165) -- --
------------ ------------ ------------ ------------
Change in net assets
from distributions to
shareholders (5,374,124) (5,390,436) (5,161,885) (4,898,834)
------------ ------------ ------------ ------------
Share Transactions--
Proceeds from sale of
shares 23,937,897 20,124,701 110,194,596 58,796,406
Net asset value of
shares issued to
shareholders in
payment of
distributions declared 2,037,672 2,257,902 341,749 360,850
Cost of shares redeemed (14,650,172) (17,051,285) (115,832,370) (20,445,697)
------------ ------------ ------------ ------------
Change in net assets
from share
transactions 11,325,397 5,331,318 (5,296,025) 38,711,559
------------ ------------ ------------ ------------
Change in net assets 13,650,807 6,085,624 (3,170,619) 40,781,572
Net Assets:
Beginning of period 108,576,910 102,491,286 111,159,973 70,378,401
------------ ------------ ------------ ------------
End of period $122,227,717 $108,576,910 $107,989,354 $111,159,973
------------ ------------ ------------ ------------
Undistributed net
investment income
included in net assets
at end of period $ 3,008 $ -- $ -- $ 248,239
------------ ------------ ------------ ------------
Net gain (loss) as
computed for federal
tax purposes $ 207,167 $ 10,650 $ 723,926 $ 202,630
------------ ------------ ------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Financial Highlights--Class A Shares
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Distributions
from Net
Net Realized and Realized Gain on
Net Asset Net Unrealized Gain/(Loss) on Distributions Investment Transactions,
Value, Investment Investments, Futures Total from from Net Futures Contracts
Period Ended beginning Income/ Contracts, and Foreign Investment Investment and Foreign Total
November 30, of period (Operating Loss) Currency Transactions Operations Income Currency Transactions Distributions
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wachovia Equity Fund
1994 $10.28 0.20 0.12 0.32 (0.20) (0.08) (0.28)
1995 $10.32 0.23 2.64 2.87 (0.25) (0.23) (0.48)
1996 $12.71 0.22(e) 2.83 3.05 (0.22) (0.73) (0.95)
1997 $14.81 0.14(e) 2.43 2.57 (0.13) (1.86) (1.99)
1998 $15.39 0.13(e) 2.21 2.34 (0.14) (1.68) (1.82)
Wachovia Quantitative Equity Fund
1994(a) $10.00 0.12 (0.43) (0.31) (0.09) -- (0.09)
1995 $9.60 0.22 3.51 3.73 (0.22) -- (0.22)
1996 $13.11 0.24(e) 2.77 3.01 (0.21) (0.24) (0.45)
1997 $15.67 0.18(e) 4.14 4.32 (0.20) (0.79) (0.99)
1998 $19.00 0.11(e) 3.12 3.23 (0.19) (1.75) (1.94)
Wachovia Growth & Income Fund
1994 $10.20 0.17 (0.40) (0.23) (0.17) -- (0.17)
1995 $9.80 0.17 3.09 3.26 (0.17) -- (0.18)
1996 $12.88 0.15 3.67 3.82 (0.15) (0.14) (0.29)
1997 $16.41 0.13 4.44 4.57 (0.13) (0.25) (0.38)
1998** $20.60 0.11 3.94 4.05 (0.10) (1.01) (1.11)
Wachovia Equity Index Fund
1994 $10.47 0.25 (0.19) 0.06 (0.24) (0.02) (0.26)
1995 $10.27 0.28 3.37 3.65 (0.27) (0.03) (0.30)
1996 $13.62 0.32(e) 3.13 3.45 (0.31) (0.78) (1.09)
1997 $15.98 0.25(e) 3.85 4.10 (0.28) (0.91) (1.19)
1998 $18.89 0.26(e) 3.90 4.16 (0.24) (0.40) (0.64)
Wachovia Special Values Fund
1994 $10.24 0.06 (0.22) (0.16) (0.05) (0.28) (0.33)
1995 $9.75 0.09 2.42 2.51 (0.02) (0.06) (0.08)
1996 $12.18 0.35 4.13 4.48 (0.08) (0.91) (0.99)
1997 $15.67 0.13(e) 4.53 4.66 (0.08) (1.61) (1.69)
1998 $18.64 0.19(e) (0.87) (0.68) (0.12) (1.71) (1.83)
Wachovia Emerging Markets Fund
1995(b) $10.00 0.05 0.36 0.41 -- -- --
1996 $10.41 0.09(e) 1.20 1.29 (0.03) -- (0.03)
1997 $11.67 0.03(e) (0.47) (0.44) (0.11) -- (0.11)
1998 $11.12 0.09(e) (2.68) (2.59) (0.10) -- (0.10)
</TABLE>
* Computed on an annualized basis.
** Effective March 29, 1998, the fund changed investment advisers from Central
Fidelity National Bank to Wachovia Asset Management.
(a) Reflects operations for the period from March 28, 1994 (date of initial
public investment) to November 30, 1994.
(b) Reflects operations for the period from December 26, 1994 (date of initial
public investment) to November 30, 1995.
(c) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(e) Per share information is based on average shares outstanding.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Financial Highlights--Class A Shares
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Ratios to Average Net Assets
-------------------------------------------
Net Asset Net Net Assets, Portfolio
Period Ended Value, end Total Investment Expense end of period Turnover
November 30, of period Return(c) Expenses Income Waiver/Reimbursement(d) (000 omitted) Rate
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wachovia Equity Fund
1994 $10.32 3.10% 0.87% 1.98% 0.16% $ 87,022 35%
1995 $12.71 28.74% 0.90% 1.99% 0.07% $130,150 65%
1996 $14.81 25.56% 0.90% 1.62% 0.15% $ 20,774 64%
1997 $15.39 20.22% 1.14% 0.95% 0.07% $ 39,494 124%
1998 $15.91 17.34% 1.12% 0.91% -- $ 53,103 150%
Wachovia Quantitative Equity Fund
1994(a) $ 9.60 (3.08%) 0.90%* 1.83%* 0.10%* $ 91,979 64%
1995 $13.11 39.33% 0.87% 1.93% 0.10% $121,895 63%
1996 $15.67 23.74% 0.87% 1.70% 0.15% $ 15,742 44%
1997 $19.00 29.38% 1.11% 1.09% 0.07% $ 35,413 74%
1998 $20.29 18.98% 1.11% 0.95% -- $ 82,682 38%
Wachovia Growth & Income Fund
1994 $9.80 (2.26%) 1.35% 1.75% 0.40% $103,140 30%
1995 $12.88 33.59% 1.35% 1.58% 0.36% $119,484 30%
1996 $16.41 30.10% 1.35% 1.04% 0.31% $186,147 12%
1997 $20.60 28.50% 1.30% 0.70% 0.30% $338,724 13%
1998** $23.54 20.77% 1.21% 0.59% 0.08% $130,306 24%
Wachovia Equity Index Fund
1994 $10.27 0.56% 0.46% 2.44% 0.08% $183,852 9%
1995 $13.62 36.15% 0.48% 2.39% 0.05% $186,841 60%
1996 $15.98 27.19% 0.48% 2.23% 0.13% $ 18,154 12%
1997 $18.89 27.55% 0.72% 1.46% 0.02% $ 50,917 4%
1998 $22.41 22.74% 0.70% 1.23% -- $131,594 29%
Wachovia Special Values Fund
1994 $ 9.75 (1.61%) 1.13% 0.63% 1.09% $ 17,431 62%
1995 $12.18 25.91% 1.29% 0.80% 0.58% $ 24,093 57%
1996 $15.67 39.78% 1.21% 0.47% 0.29% $ 6,642 38%
1997 $18.64 33.08% 1.35% 0.74% 0.01% $ 37,766 46%
1998 $16.13 (3.86%) 1.25% 0.98% -- $ 59,408 20%
Wachovia Emerging Markets Fund
1995(b) $10.41 4.10% 1.80%* 0.85%* 0.28%* $ 71,276 17%
1996 $11.67 12.45% 1.69% 0.73% 0.09% $ 5,488 30%
1997 $11.12 (3.82%) 1.79% 0.26% -- $ 7,996 60%
1998 $ 8.43 (23.46%) 1.68% 0.90% -- $ 8,677 51%
</TABLE>
* Computed on an annualized basis.
** Effective March 29, 1998, the fund changed investment advisers from Central
Fidelity National Bank to Wachovia Asset Management.
(a) Reflects operations for the period from March 28, 1994 (date of initial
public investment) to November 30, 1994.
(b) Reflects operations for the period from December 26, 1994 (date of initial
public investment) to November 30, 1995.
(c) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(e) Per share information is based on average shares outstanding.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Financial Highlights--Class A Shares
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Distributions
from Net
Net Realized and Realized Gain on
Net Asset Net Unrealized Gain/(Loss) on Distributions Investment Transactions,
Value, Investment Investments, Futures Total from from Net Futures Contracts
Period Ended beginning Income/ Contracts, and Foreign Investment Investment and Foreign Total
November 30, of period (Operating Loss) Currency Transactions Operations Income Currency Transactions Distributions
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wachovia Balanced Fund
1994 $10.33 0.35 (0.38) (0.03) (0.33) (0.04) (0.37)
1995 $ 9.93 0.40 2.13 2.53 (0.38) (0.16) (0.54)
1996 $11.92 0.38(e) 1.72 2.10 (0.38) (0.34) (0.72)
1997 $13.30 0.34(e) 1.40 1.74 (0.34) (1.44) (1.78)
1998 $13.26 0.24(e) 1.50 1.74 (0.38) (0.90) (1.28)
Wachovia Fixed Income Fund
1994 $10.00 0.56 (0.98) (0.42) (0.55) (0.06) (0.61)
1995 $ 8.97 0.58 0.92 1.50 (0.57) -- (0.57)
1996 $ 9.90 0.61(e) (0.09) 0.52 (0.59) -- (0.59)
1997 $ 9.83 0.54(e) 0.04 0.58 (0.56) -- (0.56)
1998 $ 9.85 0.53(e) 0.30 0.83 (0.54) -- (0.54)
Wachovia Intermediate Fixed Income Fund
1994 $10.20 0.44 (0.79) (0.35) (0.43) -- (0.54)
1995 $ 9.31 0.55 0.76 1.31 (0.54) -- (0.55)
1996 $10.07 0.55 (0.11) 0.44 (0.55) -- (0.55)
1997 $ 9.96 0.54 0.06 0.60 (0.53) -- (0.53)
1998** $10.03 0.47 0.40 0.87 (0.52) -- (0.52)
Wachovia Short-Term Fixed Income Fund
1994 $ 9.91 0.45 (0.33) 0.12 (0.45) -- (0.45)
1995 $ 9.58 0.59 0.24 0.83 (0.52) -- (0.52)
1996 $ 9.89 0.56(e) (0.06) 0.50 (0.60) -- (0.60)
1997 $ 9.79 0.50(e) (0.01) 0.49 (0.51) -- (0.51)
1998 $ 9.77 0.52(e) 0.14 0.66 (0.51) -- (0.51)
Wachovia Georgia Municipal Bond Fund
1995(b) $10.00 0.41 0.96 1.37 (0.41) -- (0.41)
1996 $10.96 0.47 0.05 0.52 (0.47) (0.01) (0.48)
1997 $11.00 0.44 0.13 0.57 (0.44) (0.02) (0.46)
1998 $11.11 0.42 0.27 0.69 (0.42) + (0.42)
Wachovia North Carolina Municipal Bond Fund
1995(b) $10.00 0.43 0.99 1.42 (0.43) -- (0.43)
1996 $10.99 0.45 0.09 0.54 (0.45) (0.05) (0.50)
1997 $11.03 0.43 0.14 0.57 (0.43) (0.02) (0.45)
1998 $11.15 0.43 0.32 0.75 (0.43) (0.01) (0.44)
Wachovia South Carolina Municipal Bond Fund
1994 $11.12 0.56 (1.04) (0.48) (0.56) (0.03) (0.59)
1995 $10.05 0.56 1.10 1.66 (0.56) (0.10) (0.66)
1996 $11.05 0.55 0.03 0.58 (0.55) (0.03) (0.58)
1997 $11.05 0.53 0.11 0.64 (0.52) (0.05) (0.57)
1998 $11.12 0.51 0.24 0.75 (0.51) + (0.51)
Wachovia Virginia Municipal Bond Fund
1994 $10.31 0.38 (0.90) (0.52) (0.38) -- (0.39)
1995 $ 9.40 0.42 0.85 1.27 (0.42) -- (0.42)
1996 $10.25 0.44 (0.10) 0.34 (0.44) -- (0.44)
1997 $10.15 0.46 0.13 0.59 (0.45) -- (0.45)
1998** $10.29 0.48 0.14 0.62 (0.48) -- (0.42)
</TABLE>
* Computed on an annualized basis.
** Effective March 29, 1998, the fund changed investment advisers from Central
Fidelity National Bank to Wachovia Asset Management.
+ Less than $0.01 per share.
(a) Reflects operations for the period from March 28, 1994 (date of initial
public investment) to November 30, 1994.
(b) Reflects operations for the period from December 26, 1994 (date of initial
public investment) to November 30, 1995.
(c) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(e) Per share information is based on average shares outstanding.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Financial Highlights--Class A Shares
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Ratios to Average Net Assets
-------------------------------------------
Net Asset Net Net Assets, Portfolio
Period Ended Value, end Total Investment Expense end of period Turnover
November 30, of period Return(c) Expenses Income Waiver/Reimbursement(d) (000 omitted) Rate
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wachovia Balanced Fund
1994 $ 9.93 (0.39%) 0.75% 3.46% 0.17% $194,430 74%
1995 $11.92 26.32% 0.76% 3.58% 0.16% $207,421 102%
1996 $13.30 18.55% 0.76% 3.05% 0.24% $ 18,619 99%
1997 $13.26 15.17% 1.02% 2.77% 0.16% $ 50,968 143%
1998 $13.72 14.36% 1.01% 2.88% 0.09% $119,093 124%
Wachovia Fixed Income
Fund
1994 $ 8.97 (4.30%) 0.71% 5.90% 0.13% $148,751 148%
1995 $ 9.90 17.20% 0.74% 6.07% 0.10% $169,846 155%
1996 $ 9.83 5.51% 0.74% 6.05% 0.18% $ 4,853 181%
1997 $ 9.85 6.14% 0.98% 5.65% 0.11% $ 10,039 174%
1998 $10.14 8.65% 0.97% 5.30% 0.05% $ 24,624 111%
Wachovia Intermediate Fixed Income Fund
1994 $ 9.31 (3.51%) 1.09% 4.46% 0.40% $ 48,730 55%
1995 $10.07 14.44% 1.10% 5.60% 0.41% $ 35,796 44%
1996 $ 9.96 4.46% 1.09% 5.62% 0.31% $ 43,277 84%
1997 $10.03 6.32% 1.04% 5.50% 0.30% $ 96,626 81%
1998** $10.38 9.39% 1.06% 5.39% 0.14% $ 4,759 57%
Wachovia Short-Term Fixed Income Fund
1994 $ 9.58 1.27% 0.60% 4.62% 0.18% $148,326 151%
1995 $ 9.89 8.82% 0.63% 5.83% 0.18% $124,720 147%
1996 $ 9.79 5.29% 0.63% 5.50% 0.27% $ 1,675 145%
1997 $ 9.77 5.10% 0.87% 5.49% 0.19% $ 7,233 215%
1998 $ 9.92 6.93% 0.88% 5.22% 0.10% $ 10,437 135%
Wachovia Georgia Municipal Bond Fund
1995(b) $10.96 13.93% 0.92%* 4.30%* 1.88%* $ 10,220 14%
1996 $11.00 4.97% 0.89% 4.40% 1.61% $ 7,531 14%
1997 $11.11 5.41% 1.14% 4.03% 1.11% $ 6,531 25%
1998 $11.38 6.35% 1.17% 3.72% 0.34% $ 6,900 14%
Wachovia North Carolina Municipal Bond Fund
1995(b) $10.99 14.40% 0.85%* 4.40%* 1.19%* $ 18,679 19%
1996 $11.03 5.17% 0.84% 4.24% 0.77% $ 13,752 7%
1997 $11.15 5.36% 1.07% 3.91% 0.44% $ 11,563 17%
1998 $11.46 6.82% 1.10% 3.80% 0.16% $ 9,533 9%
Wachovia South Carolina Municipal Bond Fund
1994 $10.05 (4.52%) 0.60% 5.22% 0.59% $ 75,995 23%
1995 $11.05 16.97% 0.58% 5.23% 0.55% $ 93,725 15%
1996 $11.05 5.54% 0.57% 5.10% 0.59% $ 65,981 20%
1997 $11.12 6.01% 0.81% 4.79% 0.48% $ 64,696 12%
1998 $11.36 6.88% 0.83% 4.52% 0.36% $ 67,458 6%
Wachovia Virginia Municipal Bond Fund
1994 $ 9.40 (5.17%) 1.04% 3.90% 0.52% $ 39,978 87%
1995 $10.25 13.79% 1.05% 4.33% 0.46% $ 54,041 78%
1996 $10.15 3.50% 1.04% 4.45% 0.40% $ 70,378 37%
1997 $10.30 5.97% 0.96% 4.50% 0.40% $111,160 15%
1998** $10.49 6.76% 0.95% 4.35% 0.33% $ 8,835 15%
</TABLE>
* Computed on an annualized basis.
** Effective March 29, 1998, the fund changed investment advisers from Central
Fidelity National Bank to Wachovia Asset Management.
(a) Reflects operations for the period from March 28, 1994 (date of initial
public investment) to November 30, 1994.
(b) Reflects operations for the period from December 26, 1994 (date of initial
public investment) to November 30, 1995.
(c) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(e) Per share information is based on average shares outstanding.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Financial Highlights--Class B Shares
(For a share outstanding throughout The period)
<TABLE>
<CAPTION>
Distributions
Net Realized and from Net
Unrealized Gain/ Realized Gain
(Loss) on on Investment
Investments, Transactions,
Net Asset Futures Total Distributions Futures Contracts
Value, Net Contracts, and from from Net and Foreign
Period Ended beginning Investment Foreign Currency Investment Investment Currency Total
November 30, of period Income Transactions Operations Income Transactions Distributions
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wachovia Equity Fund
1996(a) $12.43 0.02 2.37 2.39 (0.03) -- (0.03)
1997 $14.79 0.04 2.42 2.46 (0.04) (1.86) (1.90)
1998 $15.35 0.03 2.20 2.23 (0.03) (1.68) (1.71)
Wachovia Quantitative Equity Fund
1996(a) $13.09 0.04 2.56 2.60 (0.04) -- (0.04)
1997 $15.65 0.08 4.10 4.18 (0.09) (0.79) (0.88)
1998 $18.95 0.05 3.04 3.09 (0.06) (1.75) (1.81)
Wachovia Balanced Fund
1996(a) $11.68 0.09 1.59 1.68 (0.07) -- (0.07)
1997 $13.29 0.26 1.38 1.64 (0.26) (1.44) (1.70)
1998 $13.23 0.28 1.37 1.65 (0.29) (0.90) (1.19)
Wachovia Fixed Income Fund
1996(a) $ 9.45 0.15 0.40 0.55 (0.17) -- (0.17)
1997 $ 9.83 0.48 0.01 0.49 (0.48) -- (0.48)
1998 $ 9.84 0.47 0.30 0.77 (0.47) -- (0.47)
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 22, 1996 (date of initial
public investment) to November 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Financial Highlights--Class B Shares
(For a share outstanding throughout the period)
<TABLE>
<CAPTION>
Ratios to Average Net Assets
-------------------------------------------
Net Asset Net Net Assets, Portfolio
Period Ended Value, end Total Investment Expense end of period Turnover
November 30, of period Return(b) Expenses Income Waiver/Reimbursement(c) (000 omitted) Rate
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wachovia Equity Fund
1996(a) $14.79 19.25% 1.90% 0.02% 0.20% $ 976 64%
1997 $15.35 19.27% 1.90% 0.18% 0.06% $ 3,448 124%
1998 $15.87 16.52% 1.87% 0.17% -- $ 5,725 150%
Wachovia Quantitative Equity Fund
1996(a) $15.65 19.90% 1.87%* 0.46%* 0.11%* $ 1,414 44%
1997 $18.95 28.33% 1.85% 0.31% 0.07% $ 6,564 74%
1998 $20.23 18.15% 1.86% 0.20% -- $19,532 38%
Wachovia Balanced Fund
1996(a) $13.29 14.47% 1.76%* 1.93%* 0.16%* $ 1,821 99%
1997 $13.23 14.19% 1.78% 2.01% 0.16% $ 5,916 143%
1998 $13.69 13.56% 1.76% 2.13% 0.09% $13,963 124%
Wachovia Fixed Income Fund
1996(a) $ 9.83 5.83% 1.74%* 5.20%* 0.13%* $ 113 181%
1997 $ 9.84 5.21% 1.75% 4.89% 0.11% $ 140 174%
1998 $10.14 7.97% 1.72% 4.55% 0.05% $ 533 111%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 22, 1996 (date of initial
public investment) to November 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Financial Highlights--Class Y Shares
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Distributions
Net Realized and from Net
Net Asset Unrealized Gain/(Loss) on Distributions Realized Gain on
Value Net Investments, Futures Total from from Net Investment Transactions,
Period Ended beginning Investment Contracts, and Foreign Investment Investment Futures Contracts and
November 30, of period Income Currency Transactions Operations Income Foreign Currency Transactions
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Wachovia Equity Fund
1996(a) $12.43 0.03 2.40 2.43 (0.05) --
1997 $14.81 0.17 2.43 2.60 (0.16) (1.86)
1998 $15.39 0.17 2.21 2.38 (0.17) (1.68)
Wachovia Quantitative Equity Fund
1996(a) $13.09 0.04 2.60 2.64 (0.06) --
1997 $15.67 0.23 4.12 4.35 (0.23) (0.79)
1998 $19.00 0.23 3.06 3.29 (0.23) (1.75)
Wachovia Growth & Income Fund
1998(e) $22.31 0.09 1.24 1.33 (0.09) --
Wachovia Equity Index Fund
1996(a) $13.37 0.09(d) 2.60 2.69 (0.08) --
1997 $15.98 0.29 3.86 4.15 (0.31) (0.91)
1998 $18.91 0.30 3.92 4.22 (0.29) (0.40)
Wachovia Special Values Fund
1996(a) $13.62 0.03 2.02 2.05 -- --
1997 $15.67 0.16 4.53 4.69 (0.08) (1.61)
1998 $18.67 0.21 (0.84) (0.63) (0.15) (1.71)
Wachovia Emerging Markets Fund
1996(a) $11.92 0.01(d) (0.26) (0.25) -- --
1997 $11.67 0.07 (0.50) (0.43) (0.11) --
1998 $11.13 0.13 (2.69) (2.56) (0.13) --
Wachovia Balanced Fund
1996(a) $11.68 0.08 1.63 1.71 (0.09) --
1997 $13.30 0.38 1.39 1.77 (0.37) (1.44)
1998 $13.26 0.42 1.37 1.79 (0.41) (0.90)
Wachovia Fixed Income Fund
1996(a) $ 9.45 0.17 0.40 0.57 (0.19) --
1997 $ 9.83 0.57 0.03 0.60 (0.58) --
1998 $ 9.85 0.56 0.29 0.85 (0.56) --
Wachovia Intermediate Fixed Income
Fund
1998(e) $10.12 0.42 0.25 0.67 (0.41) --
Wachovia Short-Term Fixed Income Fund
1996(a) $ 9.67 0.11(d) 0.18 0.29 (0.17) --
1997 $ 9.79 0.56 (0.05) 0.51 (0.53) --
1998 $ 9.77 0.54 0.14 0.68 (0.53) --
Wachovia Georgia Municipal Bond Fund
1996(a) $10.71 0.17 0.29 0.46 (0.17) --
1997 $11.00 0.47 0.13 0.60 (0.47) (0.02)
1998 $11.11 0.45 0.27 0.72 (0.45) +
Wachovia North Carolina Municipal Bond Fund
1996(a) $10.71 0.16 0.32 0.48 (0.16) --
1997 $11.03 0.46 0.13 0.59 (0.45) (0.02)
1998 $11.15 0.46 0.32 0.78 (0.46) (0.01)
Wachovia South Carolina Municipal Bond Fund
1996(a) $10.73 0.20 0.32 0.52 (0.20) --
1997 $11.05 0.55 0.12 0.67 (0.55) (0.05)
1998 $11.12 0.54 0.24 0.78 (0.54) +
Wachovia Virginia Municipal Bond Fund
1998(e) $10.34 0.32 0.15 0.47 (0.32) --
<CAPTION>
Period Ended Total
November 30, Distributions
- ----------------------------------------------------------------------------------------------------------------------
<S> <C>
Wachovia Equity Fund
1996(a) (0.05)
1997 (2.02)
1998 (1.85)
Wachovia Quantitative Equity Fund
1996(a) (0.06)
1997 (1.02)
1998 (1.98)
Wachovia Growth & Income Fund
1998(e) (0.09)
Wachovia Equity Index Fund
1996(a) (0.08)
1997 (1.22)
1998 (0.69)
Wachovia Special Values Fund
1996(a) --
1997 (1.69)
1998 (1.86)
Wachovia Emerging Markets Fund
1996(a) --
1997 (0.11)
1998 (0.13)
Wachovia Balanced Fund
1996(a) (0.09)
1997 (1.81)
1998 (1.31)
Wachovia Fixed Income Fund
1996(a) (0.19)
1997 (0.58)
1998 (0.56)
Wachovia Intermediate Fixed Income
Fund
1998(e) (0.41)
Wachovia Short-Term Fixed Income Fund
1996(a) (0.17)
1997 (0.53)
1998 (0.53)
Wachovia Georgia Municipal Bond Fund
1996(a) (0.17)
1997 (0.49)
1998 (0.45)
Wachovia North Carolina Municipal Bond Fund
1996(a) (0.16)
1997 (0.47)
1998 (0.47)
Wachovia South Carolina Municipal Bond Fund
1996(a) (0.20)
1997 (0.60)
1998 (0.54)
Wachovia Virginia Municipal Bond Fund
1998(e) (0.32)
</TABLE>
* Computed on an annualized basis.
+ Less than $0.01 per share.
(a) Reflects operations for the period from July 22, 1996 (date of initial
public investment) to November 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Per share information is based on average shares outstanding.
(e) Reflects operations for the period from March 29, 1998 (date of initial
public offering) to November 30, 1998.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds and The Wachovia Municipal Funds
Financial Highlights--Class Y Shares
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Ratios to Average Net Assets
------------------------------------
Net Asset Net Expense Net Assets, Portfolio
Period Ended Value, end Total Investment Waiver/ end of period Turnover
November 30, of period Return(b) Expenses Income Reimbursement(c) (000 omitted) Rate
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wachovia Equity Fund
1996(a) $14.81 19.57% 0.90%* 0.91%* 0.19%* $129,205 64%
1997 $15.39 20.44% 0.90% 1.18% 0.07% $156,238 124%
1998 $15.92 17.69% 0.90% 1.13% -- $200,324 150%
Wachovia Quantitative Equity Fund
1996(a) $15.67 20.19% 0.87%* 1.19%* 0.11%* $152,571 44%
1997 $19.00 29.60% 0.87% 1.35% 0.08% $183,019 74%
1998 $20.31 19.38% 0.87% 1.21% -- $207,343 38%
Wachovia Growth & Income Fund
1998(e) $23.55 6.03% 0.86%* 0.90%* 0.08%* $206,176 24%
Wachovia Equity Index Fund
1996(a) $15.98 20.14% 0.48%* 1.92%* 0.06%* $213,833 12%
1997 $18.91 27.91% 0.47% 1.72% 0.02% $248,030 4%
1998 $22.44 23.05% 0.45% 1.46% -- $291,708 29%
Wachovia Special Values Fund
1996(a) $15.67 15.05% 1.15%* 1.76%* 0.24%* $ 58,697 38%
1997 $18.67 33.29% 1.11% 0.88% 0.02% $ 84,501 46%
1998 $16.18 (3.59%) 1.00% 1.26% -- $ 90,550 20%
Wachovia Emerging Markets Fund
1996(a) $11.67 0.00%** 0.63%* 0.45%* 0.13%* $123,036 30%
1997 $11.13 (3.73%) 1.54% 0.54% -- $139,700 60%
1998 $ 8.44 (23.34%) 1.44% 1.04% -- $130,898 51%
Wachovia Balanced Fund
1996(a) $13.30 14.69% 0.76%* 2.85%* 0.16%* $235,791 99%
1997 $13.26 15.37% 0.77% 3.02% 0.16% $250,083 143%
1998 $13.74 14.77% 0.76% 3.15% 0.09% $290,833 124%
Wachovia Fixed Income Fund
1996(a) $ 9.83 6.12% 0.75%* 6.33%* 0.14%* $175,836 181%
1997 $ 9.85 6.38% 0.74% 5.91% 0.11% $185,398 174%
1998 $10.14 8.92% 0.72% 5.55% 0.05% $212,886 111%
Wachovia Intermediate Fixed
Income Fund
1998(e) $10.38 7.11% 0.74%* 5.39%* 0.14%* $ 87,831 57%
Wachovia Short-Term Fixed Income
Fund
1996(a) $ 9.79 3.00% 0.64%* 5.77%* 0.19%* $116,138 145%
1997 $ 9.77 5.33% 0.63% 5.63% 0.20% $ 91,063 215%
1998 $ 9.92 7.19% 0.63% 5.47% 0.10% $ 98,433 135%
Wachovia Georgia Municipal Bond
Fund
1996(a) $11.00 4.31% 0.89%* 4.84%* 1.57%* $ 6,803 14%
1997 $11.11 5.63% 0.92% 4.24% 1.06% $ 12,308 25%
1998 $11.38 6.62% 0.91% 3.96% 0.34% $ 17,030 14%
Wachovia North Carolina Municipal
Bond Fund
1996(a) $11.03 4.55% 0.84%* 4.16%* 0.65%* $ 28,283 7%
1997 $11.15 5.57% 0.85% 4.16% 0.42% $ 44,104 17%
1998 $11.46 7.09% 0.85% 4.05% 0.16% $ 56,760 9%
Wachovia South Carolina Municipal
Bond Fund
1996(a) $11.05 4.86% 0.57%* 5.56%* 0.54%* $ 36,511 20%
1997 $11.12 6.23% 0.58% 5.01% 0.48% $ 43,881 12%
1998 $11.36 7.15% 0.58% 4.77% 0.36% $ 54,770 6%
Wachovia Virginia Municipal Bond
Fund
1998(e) $10.49 4.61% 0.68%* 4.62%* 0.33%* $ 99,154 15%
</TABLE>
* Computed on an annualized basis.
+ Less than 0.01%.
(a) Reflects operations for the period from July 22, 1996 (date of initial
public investment) to November 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Per share information is based on average shares outstanding.
(e) Reflects operations for the period from March 27, 1998 (date of initial
public offering) to November 30, 1998.
(See Notes which are an integral part of the Financial Statements)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
Combined Notes to Financial Statements
November 30, 1998
1. Organization
The Wachovia Funds and The Wachovia Municipal Funds (individually referred to
as the "Trust" or collectively as the "Trusts") are registered under the
Investment Company Act of 1940, as amended (the "Act") as open-end management
investment companies. The Trusts consist of eighteen portfolios. The financial
statements of the following fourteen portfolios (individually referred to as
the "Fund" or collectively as the "Funds") are presented herein:
The Wachovia Funds*
<TABLE>
<C> <S>
Portfolio Investment Objective
--------- --------------------
Wachovia Equity Fund ("Equity Fund") To produce growth of principal
and income.
Wachovia Quantitative Equity Fund To provide growth of principal
("Quantitative Equity Fund") and income.
Wachovia Growth & Income Fund To provide total return through
("Growth & Income Fund") growth of capital and
current income.
Wachovia Equity Index Fund To provide a total return that
("Equity Index Fund") approximates that of the stock
market as measured by the S&P 500
Index.
Wachovia Special Values Fund To produce growth of principal.
("Special Values Fund")
Wachovia Emerging Markets Fund To produce long-term capital
("Emerging Markets Fund") appreciation.
Wachovia Balanced Fund To provide long-term growth of
("Balanced Fund") principal and current income.
Wachovia Intermediate Fixed Income Fund To seek current income consistent
("Intermediate Fixed Income Fund") with preservation of capital.
Wachovia Fixed Income Fund To seek a high level of total
("Fixed Income Fund") return.
Wachovia Short-Term Fixed Income Fund To produce a high level of
("Short-Term Fixed Income Fund") current income with a minimum of
principal volatility.
The Wachovia Municipal Funds
Portfolio Investment Objective
--------- --------------------
Wachovia Georgia Municipal Bond Fund To provide current income which
("Georgia Municipal Bond Fund")** is exempt from federal regular
income tax and the personal
income taxes imposed by the State
of Georgia.
Wachovia North Carolina Municipal Bond Fund To provide current income which
("North Carolina Municipal Bond Fund")** is exempt from federal regular
income tax and the personal
income taxes imposed by the State
of North Carolina.
Wachovia South Carolina Municipal Bond Fund To provide current income which
("South Carolina Municipal Bond Fund")** is exempt from federal regular
income tax and South Carolina
state income taxes.
Wachovia Virginia Municipal Bond Fund To provide a high level of
("Virginia Municipal Bond Fund")** current income that is exempt
from federal regular income tax
and the income tax imposed by the
Commonwealth of Virginia as is
consistent with the preservation
of capital.
</TABLE>
* In addition, The Wachovia Funds offer the following money market
portfolios, each having distinctive investment objectives and policies:
Wachovia Money Market Fund, Wachovia Prime Cash Management Fund, Wachovia
Tax-Free Money Market Fund, and Wachovia U.S. Treasury Money Market Fund.
The financial statements of the money market portfolios are presented
separately.
** Non-diversified portfolio.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
The assets of each portfolio are segregated and a shareholder's interest is
limited to the portfolio in which shares are held.
Effective March 29, 1998, the following events affected the organization of
the Trusts. The Growth & Income Fund, the Intermediate Fixed Income Fund, and
the Virginia Municipal Bond Fund converted into Class A Shares of the Trusts
from the MarketWatch Funds. The Equity Fund, formerly a portfolio of the
MarketWatch Funds, changed its name to the Growth & Income Fund upon
conversion. The Growth & Income Fund, the Intermediate Fixed Income Fund, and
the Virginia Municipal Bond Fund added a second class of shares, Class Y
Shares. Class A Shares resulting from the conversion of the MarketWatch Funds,
were exchanged into Class Y Shares.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
Investment Valuations--Municipal bonds are valued by an independent pricing
service, taking into consideration yield, liquidity, risk, credit quality,
coupon, maturity, type of issue, and any other factors or market data the
pricing service deems relevant. U.S. government securities, listed
corporate bonds, other fixed income and asset-backed securities, unlisted
securities and private placement securities are generally valued at the
latest bid prices as furnished by an independent pricing service. Listed
equity securities and investments in closed-end investment companies are
valued at the last sale price reported on a national securities exchange.
Short-term securities are valued at the prices provided by an independent
pricing service. However, short-term securities with remaining maturities
of sixty days or less at the time of purchase may be valued at amortized
cost, which approximates fair market value. Investments in other open-end
regulated investment companies are valued at net asset value. With respect
to valuation of foreign securities, trading in foreign cities may be
completed at times which vary from the closing of the New York Stock
Exchange. Therefore, foreign securities are valued at the latest closing
price on the exchange on which they are traded prior to the closing of the
New York Stock Exchange. Foreign securities quoted in foreign currencies
are translated into US dollars at the foreign exchange rate in effect at
noon, eastern time, on the day the value of the foreign security is
determined.
Repurchase Agreements--It is the policy of the Funds to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Funds to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Funds' adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Boards of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Funds
could receive less than the repurchase price on the sale of collateral
securities.
Investment Income, Expenses and Distributions--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date. Certain dividends from foreign securities may be recorded after the
ex-dividend date based upon when the Fund is reasonably able to obtain
information.
Federal Taxes--It is the Funds' policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of their income. Accordingly, no
provisions for federal tax are necessary.
Withholding taxes on foreign interest and dividends of $197,423 have been
provided for in accordance with the Emerging Markets Fund's understanding
of the applicable country's tax rules and rates.
At November 30, 1998, the Funds listed below, for federal tax purposes, had
capital loss carryforwards, as noted, which will reduce each Fund's taxable
income arising from future net realized gain on investments, if any, to the
extent permitted by the Code, and thus will reduce the amount of the
distributions to shareholders which would otherwise be necessary to relieve
the Funds of any liability for federal tax.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
<TABLE>
<CAPTION>
Total Amount Amount Amount Amount Amount
Tax Loss Expiring Expiring Expiring Expiring Expiring
Fund Carryforward In 2002 In 2003 In 2004 In 2005 In 2006
---- ------------ ---------- ---------- -------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Virginia Municipal Bond Fund $ 1,604,493 $1,119,966 $ 484,527
Short-Term Fixed Income Fund $ 3,556,146 $2,752,111 $ 250,580 $467,184 $ 86,271
Emerging Markets Fund $28,870,640 -- -- -- $3,405,307 $25,465,333
</TABLE>
When-Issued and Delayed Delivery Transactions--The Funds may engage in
when-issued or delayed delivery transactions. The Funds record when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
Deferred Expenses--The costs incurred by each Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering their shares, have been deferred and are being
amortized over a period not to exceed five years from each Fund's
commencement date.
Futures Contracts--The Funds listed below purchase stock index futures
contracts to manage cashflows, enhance yield, and to potentially reduce
transaction costs. Upon entering into a stock index futures contract with a
broker, the Funds listed below are required to deposit in a segregated
account a specified amount of cash or U.S. government securities. Futures
contracts are valued daily and unrealized gains or losses are recorded in a
"variation margin" account. Daily, the Funds receive from or pay to the
broker a specified amount of cash based upon changes in the variation
margin account. When a contract is closed, the Funds recognize a realized
gain or loss.
For the year ended November 30, 1998, the following Funds had realized
gains/losses on futures contracts as follows:
<TABLE>
<CAPTION>
Realized Gain (Loss)
Fund on Futures Contracts
---- --------------------
<S> <C>
Equity Fund $ 1,697,895
Quantitative Equity Fund $ 1,482,453
Growth & Income Fund $ (399,772)
Equity Index Fund $(1,209,063)
Balanced Fund $ 2,671,723
Fixed Income $ 42,439
</TABLE>
Futures contracts have market risks, including the risk that the change in
the value of the contract may not correlate with changes in the value of
the underlying securities.
At November 30, 1998, the Funds had outstanding futures contracts as set
forth below:
Equity Fund
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
--------------- --------------- -------- ------------
<S> <C> <C> <C>
December 1998 139 S&P 500 Index Futures Long $4,766,474
</TABLE>
Quantitative Equity Fund
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
--------------- --------------- -------- ------------
<S> <C> <C> <C>
December 1998 117 S&P 500 Index Futures Long $3,867,838
</TABLE>
Growth & Income Fund
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
--------------- --------------- -------- ------------
<S> <C> <C> <C>
December 1998 46 S&P 500 Index Futures Long $1,540,248
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
Equity Index Fund
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
--------------- --------------- -------- ------------
<S> <C> <C> <C>
December 1998 228 S&P 500 Index Futures Long $7,130,034
</TABLE>
Special Values
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
--------------- --------------- -------- ------------
<S> <C> <C> <C>
December 1998 55 S&P 400 Index Futures Long $1,474,935
</TABLE>
Balanced Fund
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
--------------- --------------- -------- ------------
<S> <C> <C> <C>
December 1998 109 S&P 500 Index Futures Long $4,210,304
</TABLE>
Fixed Income
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
--------------- --------------- -------- ------------
<S> <C> <C> <C>
December 1998 43 U.S. Treasury Long $ 54,249
December 1998 30 U.S. Treasury Long 27,912
----------
$ 82,161
</TABLE>
Foreign Exchange Contracts--Emerging Markets Fund may enter into foreign
currency exchange contracts as a way of managing foreign exchange rate
risk. The Fund may enter into these contracts for the purchase or sale of a
specific foreign currency at a fixed price on a future date as a hedge or
cross hedge against either specific transactions or portfolio positions.
The objective of the Fund's foreign currency hedging transactions is to
reduce the risk that the U.S. dollar value of the Fund's foreign currency
denominated securities will decline in value due to changes in foreign
currency exchange rates. All foreign currency exchange contracts are
"marked to market" daily at the applicable translation rates resulting in
unrealized gains or losses. Realized gains or losses are recorded at the
time the foreign currency exchange contract is offset by entering into a
closing transaction or by the delivery or receipt of the currency. Risk may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
At November 30, 1998, Emerging Markets Fund had no outstanding foreign
currency contracts.
Foreign Currency Translation--The accounting records of Emerging Markets
Fund are maintained in U.S. dollars. All assets and liabilities denominated
in foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales
of FCs, currency gains or losses realized between the trade and settlement
dates on securities transactions, the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes
in the value of assets and liabilities other than investments in securities
at fiscal year end, resulting from changes in the exchange rate.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
Reclassification--In accordance with Statement of Position 93-2
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies
("SOP 93-2"), permanent book and tax differences have been reclassified to
paid-in-capital. These differences are primarily due to differing
treatments for foreign currency transactions, market discount and paydowns
on certain debt instruments. Amounts for the Funds, as of November 30,
1998, have been reclassified to reflect the following:
<TABLE>
<CAPTION>
Increase (Decrease)
----------------------------------------------------------------------------------
Undistributed Net
Investment
Accumulated Income/Accumulated
Net Realized Distributions in Excess of
Fund Name Paid-In Capital Gain/Loss Net Investment Income
--------- --------------- ------------ --------------------------
<S> <C> <C> <C>
Equity Fund $358,808 $(363,969) $ 5,161
Growth and Income -0- (18) 18
Equity Index 277,546 (278,272) 726
Special Values (354) (55,205) 55,559
Emerging Markets 66,476 708,721 (775,197)
Balanced 790,595 (785,885) (4,710)
Fixed Income 2 123,519 (123,521)
Intermediate Fixed
Income 2 5,768 (5,770)
Short Term Fixed Income (1) (5,246) 5,247
Georgia Municipal Bond -0- (552) 552
North Carolina Municipal
Bond -0- 11,268 (11,268)
South Carolina Municipal
Bond 2 (656) 654
</TABLE>
Net investment income, net realized gains/losses, and net assets were not
affected by this reclassification.
Restricted Securities--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Emerging Markets Fund or in
connection with another registered offering of the securities. Many
restricted securities may be resold in the secondary market in transactions
exempt from registration. Such restricted securities may be determined to
be liquid under criteria established by the Trustees. The Fund will not
incur any registration costs upon such resales. The Fund's restricted
securities are valued at the price provided by dealers in the secondary
market or, if no market prices are available, at the fair value as
determined by the Fund's pricing committee.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
Additional information on each restricted security held by Emerging Markets
Fund at November 30, 1998 is as follows:
<TABLE>
<CAPTION>
Security Acquisition Date Acquisition Cost
-------- ---------------- ----------------
<S> <C> <C>
Zagrebacka Bank, GDR 4/29/98-5/18/98 $ 338,031
State Bank Of India, GDR 10/3/96 283,000
BorsodChem RT, GDR 4/18/97-11/19/98 210,300
Pliva D.D., GDR 5/13/98 1,956,200
Telecel--Comunicacoes Pessoai 11/3/98-11/25/98 850,624
MOL Magyar Olay, GDR 5/7/97-7/3/98 795,250
Telekomunikacja Polska SA, GDR 11/9/98 599,400
Banque Marocaine du Commerce Exterieur,
GDR 3/10/97 513,000
Reliance Industries Ltd., GDR 6/21/95-11/24/97 78,750
Gedeon Richter, GDR 11/10/95-9/22/98 1,437,254
Banque Libanaise Pour Le Commerce, Class
B, GDR 12/11/96 472,000
Solidere, GDR 11/27/96 287,500
Blagovno Trgovinsia Center, GDR 6/6/97 336,700
MI Bank, GDR 6/25/97-7/29/97 363,400
Paints & Chemical Industry, GDR 9/26/97-11/23/98 270,250
Slovakopharma AS, GDR 10/7/97-10-9/97 783,000
Samsung Electronics Co., GDR 11/24/97-9/16/98 275,254
Eesti Uhispank, GDR 3/6/98-3/10/98 746,500
Exbud SA, GDR 9/30/98-10/1/98 233,500
</TABLE>
Dollar Roll Transactions--The Balance and Fixed Income Funds enter into
dollar roll transactions, with respect to mortgage securities issued by
GNMA, FNMA and FHLMC, in which the Fund sells mortgage securities to
financial institutions and simultaneously agrees to accept substantially
similar (same type, coupon and maturity) securities at a later date at an
agreed upon price. Dollar roll transactions are short-term financing
arrangements which will not exceed twelve months. The Fund will use the
proceeds generated from the transactions to invest in short-term
investments, which may enhance the Fund's current yield and total return.
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 amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
Other--Investment transactions are accounted for on the trade date.
3. Shares of Beneficial Interest
The Declaration of Trust of both The Wachovia Funds and The Wachovia Municipal
Funds permits the Trustees to issue an unlimited number of full and fractional
shares of beneficial interest (without par value). Transactions in shares were
as follows:
<TABLE>
<CAPTION>
Equity Fund Quantitative Equity Fund
--------------------------------------------- ----------------------------------------------
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 1997
Class A Shares Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 924,716 $13,703,327 1,212,590 $17,823,475 2,588,389 $ 48,886,094 965,307 $16,810,698
Shares issued to share-
holders in payment of
distributions declared 353,528 4,797,366 225,294 2,879,078 222,235 3,819,153 68,846 1,031,632
Shares redeemed (506,801) (7,457,571) (274,007) (3,944,850) (599,567) (11,284,446) (175,182) (2,990,173)
-------- ----------- --------- ----------- --------- ------------ -------- -----------
Net change resulting
from
Class A Shares
transactions 771,443 $11,043,122 1,163,877 $16,757,703 2,211,057 $ 41,420,801 858,971 $14,852,157
-------- ----------- --------- ----------- --------- ------------ -------- -----------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
<TABLE>
<CAPTION>
Equity Fund continued Quantitative Equity Fund continued
-------------------------------------------------- --------------------------------------------------
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 1997
Class B Shares Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 139,205 $ 2,092,971 157,378 $ 2,214,029 633,822 $ 12,088,957 259,394 $ 4,504,492
Shares issued to
share-
holders in
payment of
distributions
declared 29,176 393,654 10,960 139,526 39,020 665,947 6,072 90,190
Shares redeemed (32,270) (471,352) (9,672) (136,298) (53,666) (995,247) (9,470) (162,976)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net change
resulting from
Class B Shares
transactions 136,111 $ 2,015,273 158,666 $ 2,217,257 619,176 $ 11,759,657 255,996 $ 4,431,706
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 1997
Class Y Shares Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 4,380,401 $ 64,007,995 3,554,442 $ 49,902,627 1,326,703 $ 24,567,733 1,230,624 $ 20,627,941
Shares issued to
share-
holders in
payment of
distributions
declared 1,000,056 13,577,140 1,041,021 13,298,944 1,014,452 17,399,559 596,353 8,900,064
Shares redeemed (2,944,530) (43,863,733) (3,170,735) (45,126,801) (1,761,030) (32,169,312) (1,933,606) (32,229,770)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net change
resulting from
Class Y Shares
transactions 2,435,927 $ 33,721,402 1,424,728 $ 18,074,770 580,125 $ 9,797,980 (106,629) $ (2,701,765)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net change
resulting
from fund
shares
transactions 3,343,481 $ 46,779,797 2,747,271 $ 37,049,730 3,410,358 $ 62,895,662 1,008,338 $ 16,582,098
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
Growth & Income Fund
----------------------------------------------------
Year Ended
November 30,
1998 1997
Class A Shares Shares Dollars Shares Dollars
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 500,103 $ 10,555,907 6,682,176 $115,596,820
Shares issued to
share-
holders in
payment of
distributions
declared 484,959 9,614,799 172,539 2,817,198
Exchange into
Class Y Shares (9,553,829) (213,145,727) -- --
Shares redeemed (2,336,814) (48,594,932) (1,755,496) (31,873,304)
----------- ------------- ---------- ------------
Net change
resulting from
Class A Shares
transactions (10,905,581) $(241,569,953) 5,099,219 $ 86,540,714
----------- ------------- ---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
<TABLE>
<CAPTION>
Growth & Income Fund
continued
------------------------
Period Ended
November 30,
1998 (a)
Class Y Shares Shares Dollars
- -----------------------------------------------------
<S> <C> <C>
Shares sold 215,719 $ 4,785,076
Exchange from
Class A Shares 9,553,829 213,145,727
Shares issued to
share-
holders in
payment of
distributions
declared 7,342 153,661
Shares redeemed (1,021,427) (22,575,885)
---------- ------------
Net change
resulting from
Class Y Shares
transactions 8,755,463 $195,508,579
---------- ------------
Net change
resulting from
fund shares
transactions (2,150,118) $(46,061,374)
---------- ------------
<CAPTION>
Equity Index Fund Special Values Fund
-------------------------------------------------- --------------------------------------------------
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 1997
Class A Shares Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 3,701,907 $ 76,535,465 1,795,756 $ 31,728,579 2,610,113 $ 45,663,955 1,739,422 $ 30,963,930
Shares issued to
share-
holders in
payment of
distributions
declared 109,762 2,088,409 92,034 1,446,794 248,937 4,102,490 55,077 3,766,298
Shares redeemed (636,039) (13,107,910) (328,029) (5,569,777) (1,202,936) (19,509,112) (192,159) (24,998,451)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net change
resulting from
Class A Shares
transactions 3,175,630 $ 65,515,964 1,559,761 $ 27,605,596 1,656,114 $ 30,257,333 1,602,340 $ 9,731,777
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 1997
Class Y Shares Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 2,854,402 $ 58,057,370 3,625,782 $ 59,771,966 1,475,771 $ 25,185,127 1,949,765 $ 29,965,567
Shares issued to
share-
holders in
payment of
distributions
declared 454,689 8,624,862 1,067,983 16,435,346 422,376 6,964,972 264,487 784,291
Shares redeemed (3,418,715) (70,167,430) (4,964,256) (85,569,794) (827,147) (13,991,139) (1,432,685) (3,265,657)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net change
resulting from
Class Y Shares
transactions (109,624) $ (3,485,198) (270,491) $ (9,362,482) 1,071,000 $ 18,158,960 781,567 $ 27,484,201
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net change
resulting from
fund shares
transactions 3,066,006 $ 62,030,766 1,289,270 $ 18,243,114 2,727,114 $ 48,416,293 2,383,907 $ 37,215,978
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
<CAPTION>
Emerging Markets Fund Balanced Fund
-------------------------------------------------- --------------------------------------------------
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 1997
Class A Shares Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 692,384 $ 6,536,524 397,024 $ 5,133,749 5,764,174 $ 75,056,038 2,645,070 $ 34,032,927
Shares issued to
share-
holders in
payment of
distributions
declared 7,323 79,306 4,411 51,046 490,771 6,104,654 224,438 2,637,286
Shares redeemed (389,449) (3,539,372) (152,774) (1,893,197) (1,421,643) (18,503,796) (424,714) (5,378,843)
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
Net change
resulting from
Class A Shares
transactions 310,258 $ 3,076,458 (248,661) $ (3,291,598) 4,833,302 $ 62,656,896 2,444,794 $ 31,291,370
---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------
</TABLE>
(a) Reflects Operations for the period from March 29, 1998 to November 30, 1998
(date of initial public investment).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
<TABLE>
<CAPTION>
Emerging Markets Fund continued Balanced Fund continued
------------------------------------------------ --------------------------------------------------
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 1997
Class B Shares Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold -- -- -- -- 593,884 $ 7,769,427 307,846 $ 3,836,282
Shares issued to
share-
holders in
payment of
distributions
declared -- -- -- -- 50,089 621,444 25,319 297,800
Shares redeemed -- -- -- -- (71,305) (925,661) (23,218) (287,652)
---------- ----------- ---------- ----------- ---------- ------------ ---------- ------------
Net change
resulting from
Class B Shares
transactions -- -- -- -- 572,668 $ 7,465,210 309,947 $ 3,846,430
---------- ----------- ---------- ----------- ---------- ------------ ---------- ------------
<CAPTION>
Emerging Markets Fund continued Balanced Fund
------------------------------------------------ --------------------------------------------------
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 1997
Class Y Shares Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 5,272,409 $53,125,694 3,238,727 $41,075,269 6,639,501 $ 84,289,682 4,538,586 $ 55,921,692
Shares issued to
share-
holders in
payment of
distributions
declared 49,656 537,283 27,266 315,464 1,895,507 23,557,253 2,622,663 30,704,969
Shares redeemed (2,367,712) (21,683,002) (1,251,929) (16,755,254) (6,222,414) (80,542,002) (6,039,198) (76,009,694)
---------- ----------- ---------- ----------- ---------- ------------ ---------- ------------
Net change
resulting from
Class Y Shares
transactions 2,954,353 $31,979,975 2,014,064 $24,635,479 2,312,594 $ 27,304,933 1,122,051 $ 10,616,967
---------- ----------- ---------- ----------- ---------- ------------ ---------- ------------
Net change
resulting from
fund shares
transactions 3,264,611 $35,056,433 2,262,725 $27,927,077 7,718,564 $ 97,427,039 3,876,792 $ 45,754,767
---------- ----------- ---------- ----------- ---------- ------------ ---------- ------------
<CAPTION>
Fixed Income Fund Intermediate Fixed Income Fund
------------------------------------------------ --------------------------------------------------
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 1997
Class A Shares Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 1,958,828 $19,573,923 763,371 $ 7,449,000 432,820 $ 4,395,676 7,451,883 $ 73,017,952
Shares issued to
share-
holders in
payment of
distributions
declared 89,113 890,891 27,666 268,160 36,581 370,365 42,532 415,495
Exchange into
Class Y Shares -- -- -- -- (8,913,728) (89,493,831) -- --
Shares redeemed (638,391) (6,425,094) (265,357) (2,587,866) (732,895) (7,416,845) (2,205,905) (21,529,499)
---------- ----------- ---------- ----------- ---------- ------------ ---------- ------------
Net change
resulting from
Class A Shares
transactions 1,409,550 $14,039,720 525,680 $ 5,129,294 (9,177,222) $(92,144,635) 5,288,510 $ 51,903,948
---------- ----------- ---------- ----------- ---------- ------------ ---------- ------------
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 1997
Class B Shares Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 39,258 $ 390,310 2,843 $ 27,578 -- -- -- --
Shares issued to
share-
holders in
payment of
distributions
declared 1,271 12,687 624 6,032 -- -- -- --
Shares redeemed (2,161) (21,523) (705) (6,809) -- -- -- --
---------- ----------- ---------- ----------- ---------- ------------ ---------- ------------
Net change
resulting from
Class B Shares
transactions 38,368 $ 381,474 2,762 $ 26,801 -- -- -- --
---------- ----------- ---------- ----------- ---------- ------------ ---------- ------------
</TABLE>
(a) Reflects Operations for the period from March 29, 1998 to November 30, 1998
(date of initial public investment).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
<TABLE>
<CAPTION>
Intermediate Fixed Income Fund
Fixed Income Fund continued continued
-------------------------------------------------- -------------------------------
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 (a)
Class Y Shares Shares Dollars Shares Dollars Shares Dollars
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 6,174,243 $ 61,683,285 6,398,418 $ 61,907,491 512,332 $ 5,220,989
Exchange from Class A
Shares -- -- -- -- 8,913,728 89,493,831
Shares issued to share-
holders in payment of
distributions declared 661,726 6,595,044 741,178 7,156,206 21,849 222,630
Shares redeemed (4,662,142) (46,579,297) (6,203,149) (59,960,020) (986,184) (10,094,154)
---------- ------------ ---------- ------------ ------------- ----------------
Net change resulting
from
Class Y Shares
transactions 2,173,827 $ 21,699,032 936,447 $ 9,103,677 8,461,725 84,843,296
---------- ------------ ---------- ------------ ------------- ----------------
Net change resulting
from
fund shares transactions 3,621,745 $ 36,120,226 1,464,889 $ 14,259,772 (715,497) $ (7,301,339)
---------- ------------ ---------- ------------ ------------- ----------------
</TABLE>
<TABLE>
<CAPTION>
Short-Term Fixed Income Fund
--------------------------------------------------
Year Ended
November 30,
1998 1997
Class A Shares Shares Dollars Shares Dollars
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 728,996 $ 7,145,299 598,882 $ 5,854,415
Shares issued to
share-
holders in
payment of
distributions
declared 48,837 478,947 12,820 124,911
Shares redeemed (465,982) (4,580,525) (42,556) (415,946)
---------- ------------ ---------- ------------
Net change
resulting from
Class A Shares
transactions 311,851 $ 3,043,721 569,146 $ 5,563,380
---------- ------------ ---------- ------------
<CAPTION>
Year Ended
November 30,
1998 1997
Class Y Shares Shares Dollars Shares Dollars
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 2,210,120 $ 21,733,419 1,976,003 $ 19,286,564
Shares issued to
share-
holders in
payment of
distributions
declared 500,524 4,905,077 603,014 5,869,807
Shares redeemed (2,109,395) (20,644,860) (5,121,485) (50,010,275)
---------- ------------ ---------- ------------
Net change
resulting from
Class Y Shares
transactions 601,249 $ 5,993,636 (2,542,468) $(24,853,904)
---------- ------------ ---------- ------------
Net change
resulting from
fund shares
transactions 913,100 $ 9,037,357 (1,973,322) $(19,290,524)
---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
Georgia Municipal Bond Fund North Carolina Municipal Bond Fund
-------------------------------------------------- -----------------------------------------------
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 1997
Class A Shares Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 65,313 $ 734,230 67,805 $ 739,368 73,195 $ 827,761 172,088 $ 1,866,534
Shares issued to
share-
holders in payment
of
distributions
declared 18,608 209,598 21,179 231,331 28,831 326,515 38,242 419,303
Shares redeemed (65,246) (732,153) (185,896) (2,024,593) (308,552) (3,504,406) (418,688) (4,556,530)
---------- ------------ ---------- ------------ --------- ------------ --------- -----------
Net change
resulting from
Class A Shares
transactions 18,675 $ 211,675 (96,912) $ (1,053,894) (206,526) $ (2,350,130) (208,358) $(2,270,693)
---------- ------------ ---------- ------------ --------- ------------ --------- -----------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
<TABLE>
<CAPTION>
North Carolina Municipal Bond Fund
Georgia Municipal Bond Fund continued continued
--------------------------------------------------- ----------------------------------------------
Year Ended Year Ended
November 30, November 30,
1998 1997 1998 1997
Class Y Shares Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 514,361 $ 5,807,306 612,513 $ 6,727,857 1,450,528 $16,388,977 1,693,364 $18,540,740
Shares issued to share-
holders in payment of
distributions declared 5,535 62,357 4,440 48,583 17,718 200,910 9,477 103,874
Shares redeemed (130,688) (1,473,631) (127,557) (1,383,827) (465,404) (5,270,187) (315,766) (3,471,057)
---------- ------------- ---------- ------------ --------- ----------- --------- -----------
Net change resulting
from
Y Shares transactions 389,208 $ 4,396,032 489,396 $ 5,392,613 1,002,842 $11,319,700 1,387,075 $15,173,557
---------- ------------- ---------- ------------ --------- ----------- --------- -----------
Net change resulting
from
fund shares
transactions 407,883 $ 4,607,707 392,484 $ 4,338,719 796,316 $ 8,969,570 1,178,717 $12,902,864
---------- ------------- ---------- ------------ --------- ----------- --------- -----------
</TABLE>
<TABLE>
<CAPTION>
South Carolina Municipal Bond Fund
---------------------------------------------------
Year Ended
November 30,
1998 1997
Class A Shares Shares Dollars Shares Dollars
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 742,299 $ 8,356,816 714,128 $ 7,829,566
Shares issued to
share-
holders in
payment of
distributions
declared 167,413 1,887,761 190,426 2,085,665
Shares redeemed (786,074) (8,835,765) (1,062,157) (11,623,252)
---------- ------------- ---------- ------------
Net change
resulting from
Class A Shares
transactions 123,638 $ 1,408,812 (157,603) $ (1,708,021)
---------- ------------- ---------- ------------
<CAPTION>
Year Ended
November 30,
1998 1997
Class Y Shares Shares Dollars Shares Dollars
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,382,049 $15,581,081 1,119,082 $ 12,295,135
Shares issued to
share-
holders in
payment of
distributions
declared 13,296 149,911 15,737 172,237
Shares redeemed (517,410) (5,814,407) (495,245) (5,428,033)
---------- ------------- ---------- ------------
Net change
resulting from
Class Y Shares
transactions 877,935 $ 9,916,585 639,574 $ 7,039,339
---------- ------------- ---------- ------------
Net change
resulting from
fund shares
transactions 1,001,573 $11,325,397 481,971 $ 5,331,318
---------- ------------- ---------- ------------
<CAPTION>
Virginia Municipal Bond Fund
---------------------------------------------------
Year Ended
November 30,
1998 1997
Class A Shares Shares Dollars Shares Dollars
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 293,734 $ 3,057,205 5,861,134 $58,796,406
Shares issued to
shareholders in
payment of
distributions
declared 29,282 304,418 35,790 360,850
Exchange into
Class Y Shares (9,794,711) (101,277,312) -- --
Shares redeemed (488,052) (5,071,444) (2,025,729) (20,445,697)
---------- ------------- ---------- ------------
Net change
resulting from
Class A Shares
transactions (9,959,747) $(102,987,133) 3,871,195 $38,711,559
---------- ------------- ---------- ------------
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
<TABLE>
<CAPTION>
Virginia Municipal Bond Fund
----------------------------
Period Ended
November 30, 1998 (a)
Class Y Shares Shares Dollars
- -------------------------------------------------
<S> <C> <C>
Shares sold 561,359 $ 5,860,079
Exchange from
Class A Shares 9,794,711 101,277,312
Shares issued to
shareholders in
payment of
distributions
declared 3,580 37,331
Shares redeemed (910,974) (9,483,614)
------------ ---------------
Net change
resulting from
Class Y Shares
transactions 9,448,676 $ 97,691,108
------------ ---------------
Net change
resulting from
fund shares
transactions (511,071) $ (5,296,025)
------------ ---------------
</TABLE>
(a) Reflects Operations for the period from March 29, 1998 to November 30,
1998 (date of initial public investment).
4. Investment Advisory Fee and Other Transactions with Affiliates
Investment Advisory Fee--Wachovia Asset Management, the Funds' investment
adviser (the "Adviser"), receives for its services an annual investment
advisory fee based on a percentage of each Fund's average daily net assets as
listed below. The Adviser may voluntarily choose to waive any portion of its
fee. The Adviser can modify or terminate this voluntary waiver at its sole
discretion any time after January 31, 2000.
<TABLE>
<CAPTION>
Fund Annual Rate
---- -----------
<S> <C>
Equity Fund 0.70%
Quantitative Equity Fund 0.70%
Growth & Income Fund 0.70%*
Equity Index Fund 0.30%
Special Values Fund 0.80%
Emerging Markets Fund 1.00%
Balanced Fund 0.70%
Fixed Income Fund 0.60%
Intermediate Fixed Income Fund 0.60%*
Short-Term Fixed Income Fund 0.55%
Georgia Municipal Bond Fund 0.75%
North Carolina Municipal Bond Fund 0.75%
South Carolina Municipal Bond Fund 0.75%
Virginia Municipal Bond Fund 0.74%
</TABLE>
* Prior to March 29, 1998, the annual investment advisory fee based on a
percentage of the Fund's average daily net assets for Growth & Income Fund
and Intermediate Fixed Income Fund was 1.00% and 0.74%, respectively.
Effective March 29, 1998, the following funds changed investment advisers from
Central Fidelity National Bank to Wachovia Asset Management. The fees charged
by each adviser are listed below.
<TABLE>
<CAPTION>
Wachovia Asset Central Fidelity
Fund Management National Bank
---- -------------- ----------------
<S> <C> <C>
Growth & Income Fund $1,802,137 $792,553
Intermediate Fixed Income
Fund 457,023 149,882
Virginia Municipal Bond
Fund 659,502 141,243
</TABLE>
Sub Advisory Fee--The Adviser has entered into a sub-advisory agreement with
Twin Capital Management, Inc. (the "Sub-Adviser"). The Sub-Adviser furnishes
certain advisory services to the Adviser for Quantitative Equity Fund,
including investment research, quantitative analysis, statistical and other
factual information, and recommendations based on the Sub-Adviser's analysis,
and assists the Adviser in identifying securities for potential purchase
and/or sale. The Sub-Adviser is entitled to receive an annual fee of $55,000
payable by the Adviser. The Sub-Adviser may elect to waive some or all of its
fee.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
Administrative Fee, and Transfer and Dividend Disbursing Agent and Portfolio
Accounting Fees--Federated Services Company ("FServ") provides the Funds with
certain administrative personnel and portfolio accounting services. FServ,
through its subsidiary Federated Shareholder Services Company ("FSSC"), serves
as transfer and dividend disbursing agent for the funds. The fee paid to FServ
is based on the level of average aggregate net assets of the Trusts (excluding
Wachovia Prime Money Market Fund) for the period.
Effective March 29, 1998, the following funds changed administrators, transfer
agents, and portfolio accountants from BISYS Fund Services, L.P. to FServ. The
fees charged by each administrator are listed below.
<TABLE>
<CAPTION>
BISYS Fund
Fund FServ Services, L.P.
---- -------- --------------
<S> <C> <C>
Growth & Income Fund $168,495 $247,539
Intermediate Fixed Income Fund 55,267 65,784
Virginia Municipal Bond Fund 58,804 80,547
</TABLE>
Distribution Services Fee--Equity Fund, Quantitative Equity Fund, Balanced
Fund, and Fixed Income Fund have adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Funds
will compensate Federated Securities Corp. ("FSC"), the principal distributor,
from their respective net assets to finance certain activities intended to
result in the sale of Class B Shares. The Plan provides that each Fund may
incur distribution expenses up to 0.75% of the average daily net assets of
each Fund's Class B Shares, annually, to compensate FSC. FSC may voluntarily
choose to waive any portion of its fee and/or reimburse certain operating
expenses of the Funds. FSC can modify or terminate this voluntary waiver
and/or reimbursement at any time at its sole discretion.
Prior to March 29, 1998, Growth & Income Fund, Intermediate Fixed Income Fund,
and Virginia Municipal Bond Fund could incur distribution expenses up to 0.25%
of the average daily net assets of each Fund's Class A Shares. Effective March
29, 1998, Class A shares no longer incur distribution expenses.
Shareholder Services Fee--Under the terms of a Shareholder Services Agreement
with Federated Administrative Services, ("FAS"), the Fund will pay FAS up to
0.25% of average daily net assets of each Fund's Class A Shares and Class B
Shares for the period. The fee paid to FAS is used to finance certain services
for shareholders and to maintain shareholder accounts. FAS may voluntarily
choose to waive any portion of its fee. FAS can modify or terminate this
voluntary waiver at any time at its sole discretion.
Custodian Fees--Wachovia Bank, N.A. is the Funds' custodian. The fee is based
on the level of each Fund's average daily net assets for the period, plus out-
of-pocket expenses.
Effective March 29, 1998, the following funds changed custodians from Central
Fidelity National Bank to Wachovia Bank N.A.. The fees charged by each
custodian are listed below.
<TABLE>
<CAPTION>
Central Fidelity
Fund Wachovia Bank N.A. National Bank
---- ------------------ ----------------
<S> <C> <C>
Growth & Income Fund $41,357 $21,241
Intermediate Fixed
Income Fund 12,815 6,147
Virginia Municipal
Bond Fund 14,581 7,154
</TABLE>
Organizational Expenses--Organizational expenses were borne initially by FAS.
The Funds have agreed to reimburse FAS for the organizational expenses during
the five year period following the effective date of each fund. For the year
ended November 30, 1998, the Funds made the following reimbursements to FAS
pursuant to this agreement:
<TABLE>
<CAPTION>
Organizational Organizational
Fund Expenses Expenses Paid
---- -------------- --------------
<S> <C> <C>
Emerging Markets Fund $40,764 $6,671
Georgia Municipal Bond Fund 30,000 6,127
North Carolina Municipal
Bond Fund 30,000 5,522
</TABLE>
General--Certain of the Officers of the Trusts are Officers and Directors or
Trustees of the above companies.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
5. Investment Transactions
Purchases and sales of investments, excluding short-term securities, for the
period ended November 30, 1998, were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales
- ------------------------------------------------------------
<S> <C> <C>
Equity Fund $336,203,825 $329,739,125
Quantitative Equity Fund 136,936,305 99,364,736
Growth & Income Fund 88,291,509 163,112,655
Equity Index Fund 121,175,802 98,931,209
Special Values Fund 64,470,117 24,236,018
Emerging Markets Fund 114,595,961 69,106,556
Balanced Fund 501,182,168 445,171,010
Fixed Income Fund 265,292,120 232,938,462
Intermediate Fixed Income Fund 62,055,806 67,482,496
Short-Term Fixed Income Fund 143,684,584 135,117,810
Georgia Municipal Bond Fund 8,916,427 2,727,701
North Carolina Municipal Bond Fund 21,149,139 9,704,249
South Carolina Municipal Bond Fund 17,734,199 7,060,515
Virginia Municipal Bond Fund 16,494,554 18,253,148
</TABLE>
6. Concentration of Credit Risk
Emerging Markets Fund invests in securities of non-U.S. issuers. Although the
Fund maintains a diversified investment portfolio, the political or economic
developments within a particular country or region may have an adverse effect
on the ability of domiciled issuers to meet their obligations. Additionally,
political or economic developments may have an effect on the liquidity and
volatility of portfolio securities and currency holdings.
At November 30, 1998, the diversification of industries for the Emerging
Markets Fund was as follows:
<TABLE>
<CAPTION>
Industry % of Net Assets
-------- ---------------
<S> <C>
Communication Services 17.4%
Financial Services 16.7%
Consumer Staples 10.9%
Basic Materials 7.8%
Technology 7.1%
Utilities 7.0%
Energy 6.3%
Closed End Funds 5.2%
Conglomerates 4.1%
Health Care 3.8%
Consumer Cyclicals 3.7%
Capital Goods 2.1%
Real Estate 1.7%
Transportation 1.0%
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The Wachovia Funds
The Wachovia Municipal Funds
Since The Wachovia Municipal Funds invest a substantial portion of their
assets in issuers located in one state, they will be more susceptible to
factors adversely affecting issuers of that state than would be a comparable
tax-exempt mutual fund that invests nationally. In order to reduce the credit
risk associated with such factors, at November 30, 1998, the securities in the
portfolio of investments are backed by letters of credit or bond insurance of
various financial institutions and financial guaranty assurance agencies, as
indicated below. The largest percentage of investments insured by or supported
(backed) by a letter of credit from any one institution or agency is also
indicated below.
<TABLE>
<CAPTION>
% of Portfolio
% of Portfolio Backed by Largest
Fund Guaranteed/Insured Guarantor/Insurer
- ------------------------------------------------------------------------
<S> <C> <C>
Georgia Municipal Bond Fund 53.9% 24.2%
North Carolina Municipal Bond Fund 30.8% 15.5%
South Carolina Municipal Bond Fund 57.6% 27.2%
Virginia Municipal Bond Fund 22.0% 8,78%
</TABLE>
7. Year 2000 (Unaudited)
Similar to other financial organizations, the Trusts could be adversely
affected if the computer systems used by the Trusts' service providers do not
properly process and calculate date-related information and data from and
after January 1, 2000. The Trusts' Adviser and administrator are taking
measures that they believe are reasonably designed to address the Year 2000
issue with respect to computer systems that they use and to obtain reasonable
assurances that comparable steps are being taken by each of the Trusts' other
service providers. At this time, however, there can be no assurance that these
steps will be sufficient to avoid any adverse impact to the Trusts.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
To the Trustees and Shareholders of
THE WACHOVIA FUNDS and THE WACHOVIA MUNICIPAL FUNDS:
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of Wachovia Balanced Fund, Wachovia
Emerging Markets Fund, Wachovia Equity Fund, Wachovia Equity Index Fund,
Wachovia Fixed Income Fund, Wachovia Growth and Income Fund, Wachovia
Intermediate Fixed Income Fund, Wachovia Quantitative Equity Fund, Wachovia
Short-Term Fixed Income Fund, Wachovia Special Values Fund, (10 portfolios of
The Wachovia Funds) and Wachovia Georgia Municipal Bond Fund, Wachovia North
Carolina Municipal Bond Fund, Wachovia South Carolina Municipal Bond Fund, and
Wachovia Virginia Municipal Bond Fund (4 portfolios of The Wachovia Municipal
Funds) as of November 30, 1998, and the related statements of operations for
the year then ended, the statements of changes in net assets for each of the
two years in the period then ended and financial highlights for each of the
periods presented therein, except as described below. 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. The statements of
changes in net assets for the year ended November 30, 1997 and the financial
highlights for each of the four years in the period then ended of Wachovia
Growth and Income Fund, Wachovia Intermediate Fixed Income Fund, and Wachovia
Virginia Municipal Bond Fund were audited by other auditors whose report dated
January 9, 1998, expressed an unqualified opinion on those statements and
financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of November 30, 1998, by correspondence with the custodian or other
appropriate auditing procedures where replies from brokers were not received.
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
Wachovia Balanced Fund, Wachovia Emerging Markets Fund, Wachovia Equity Fund,
Wachovia Equity Index Fund, Wachovia Fixed Income Fund, Wachovia Quantitative
Equity Fund, Wachovia Short-Term Fixed Income Fund, Wachovia Special Values
Fund (portfolios of The Wachovia Funds) and Wachovia Georgia Municipal Bond
Fund, Wachovia North Carolina Municipal Bond Fund, and Wachovia South Carolina
Municipal Bond Fund (portfolios of The Wachovia Municipal Funds) at November
30, 1998, and the results of their operations for the year then ended, changes
in their net assets for each of the two years in the period then ended, and
financial highlights for each of the periods presented therein, and the 1998
financial statements and financial highlights referred to above present
fairly, in all material respects, the financial position of Wachovia Growth
and Income Fund and Wachovia Intermediate Fixed Income Fund (portfolios of The
Wachovia Funds) and Wachovia Virginia Municipal Bond Fund of The Wachovia
Municipal Funds at November 30, 1998, and the results of their operations,
changes in their net assets and financial highlights for the year then ended,
in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
January 22, 1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Trustees Officers
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Charles L. Davis, Jr.
D. Dean Kaylor Vice President and Assistant Treasurer
Alvin J. Schexnider Peter J. Germain
Charles S. Way, Jr. Secretary
Gail Cagney
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves risk, including possible
loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts
concerning its investment objective and policies, management fees, expenses and
other information.
Federated Securities Corp.
is the distributor of the funds.
831-27 (1/99)
G01512-17 (1/99)
APPENDIX
A1. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Equity Fund (the "Fund") based on a 4.50% sales charge are
represented by a solid line. The Standard & Poor's 500 Index (the "S&P 500") is
represented by a dotted line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the Class
A Shares of the Fund and the S&P 500. The "x" axis reflects computation periods
from 5/7/93 to 11/30/98. The "y" axis reflects the cost of the investment. The
right margin reflects the ending value of the hypothetical investment in the
Fund's Class A Shares, based on a 4.50% sales charge, as compared to the S&P
500. The ending values were $23,278 and $29,846, respectively. The legend in the
bottom quadrant of the graphic presentation indicates the Fund's Class A Shares
average annual total returns for the one-year and five-year periods ended
11/30/98 and from the start of performance of the Fund's Class A Shares (5/7/93)
to 11/30/98. The total returns were 12.02%, 17.57% and 16.38%, respectively. The
legend in the bottom quadrant of the graphic presentation also indicates the
Fund's Class A Shares cumulative total return for the period from the start of
performance of the Fund's Class A Shares (5/7/93) to 11/30/98. The total return
was 132.78%.
A2. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class B
Shares of Wachovia Equity Fund (the "Fund") based on a 3.00% contingent deferred
sales charge are represented by a solid line. The Standard & Poor's 500 Index
(the "S&P 500") is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Class B Shares of the Fund and the S&P 500. The "x" axis
reflects computation periods from 7/23/96 to 11/30/98. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Class B Shares, based on a 3.00%
contingent deferred sales charge, as compared to the S&P 500. The ending values
were $16,273 and $19,350, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the Fund's Class B Shares average annual total
returns for the one-year period ended 11/30/98 and from the start of performance
of the Fund's Class B Shares (7/23/96) to 11/30/98. The total returns were
11.52% and 22.96%, respectively. The legend in the bottom quadrant of the
graphic presentation also indicates the Fund's Class B Shares cumulative total
return for the period from the start of performance of the Fund's Class B Shares
(7/23/96) to 11/30/98. The total return was 62.47%.
A3. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Equity Fund (the "Fund") are represented by a solid line. The
Standard & Poor's 500 Index (the "S&P 500") is represented by a dotted line. The
line graph is a visual representation of a comparison of change in value of a
$10,000 hypothetical investment in the Class Y Shares of the Fund and the S&P
500. The "x" axis reflects computation periods from 7/23/96 to 11/30/98. The "y"
axis reflects the cost of the investment. The right margin reflects the ending
value of the hypothetical investment in the Fund's Class Y Shares as compared to
the S&P 500. The ending values were $16,949 and $19,350, respectively. The
legend in the bottom quadrant of the graphic presentation indicates the Fund's
Class Y Shares average annual total returns for the one-year period ended
11/30/98 and from the start of performance of the Fund's Class Y Shares
(7/23/96) to 11/30/98. The total returns were 17.69% and 25.06%, respectively.
The legend in the bottom quadrant of the graphic presentation also indicates the
Fund's Class Y Shares cumulative total return for the period from the start of
performance of the Fund's Class Y Shares (7/23/96) to 11/30/98. The total return
was 69.49%.
<PAGE>
A4. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Quantitative Equity Fund (the "Fund") based on a 4.50% sales
charge are represented by a solid line. The Standard & Poor's 500 Index (the
"S&P 500") is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Class A Shares of the Fund and the S&P 500. The "x" axis
reflects computation periods from 3/25/94 to 11/30/98. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Class A Shares, based on a 4.50% sales
charge, as compared to the S&P 500. The ending values were $24,569 and $27,962,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Class A Shares average annual total returns for the
one-year period ended 11/30/98 and from the start of performance of the Fund's
Class A Shares (3/25/94) to 11/30/98. The total returns were 13.60% and 21.14%,
respectively. The legend in the bottom quadrant of the graphic presentation also
indicates the Fund's Class A Shares cumulative total return for the period from
the start of performance of the Fund's Class A Shares (3/25/94) to 11/30/98. The
total return was 145.69%.
A5. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class B
Shares of Wachovia Quantitative Equity Fund (the "Fund") based on a 3.00%
contingent deferred sales charge are represented by a solid line. The Standard &
Poor's 500 Index (the "S&P 500") is represented by a dotted line. The line graph
is a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Class B Shares of the Fund and the S&P 500. The
"x" axis reflects computation periods from 7/23/96 to 11/30/98. The "y" axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the Fund's Class B Shares, based on a 3.00%
contingent deferred sales charge, as compared to the S&P 500. The ending values
were $17,879 and $19,350, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the Fund's Class B Shares average annual total
returns for the one-year period ended 11/30/98 and from the start of performance
of the Fund's Class B Shares (7/23/96) to 11/30/98. The total returns were
13.15% and 27.93%, respectively. The legend in the bottom quadrant of the
graphic presentation also indicates the Fund's Class B Shares cumulative total
return for the period from the start of performance of the Fund's Class B Shares
(7/23/96) to 11/30/98. The total return was 78.78%.
A6. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Quantitative Equity Fund (the "Fund") are represented by a
solid line. The Standard & Poor's 500 Index (the "S&P 500") is represented by a
dotted line. The line graph is a visual representation of a comparison of change
in value of a $10,000 hypothetical investment in the Class Y Shares of the Fund
and the S&P 500. The "x" axis reflects computation periods from 7/23/96 to
11/30/98. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Fund's Class Y
Shares as compared to the S&P 500. The ending values were $18,596 and $19,350,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Class Y Shares average annual total returns for the
one-year period ended 11/30/98 and from the start of performance of the Fund's
Class Y Shares (7/23/96) to 11/30/98. The total returns were 19.38% and 30.08%,
respectively. The legend in the bottom quadrant of the graphic presentation also
indicates the Fund's Class Y Shares cumulative total return for the period from
the start of performance of the Fund's Class Y Shares (7/23/96) to 11/30/98. The
total return was 85.96%.
<PAGE>
A7. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Growth and Income Fund (the "Fund") based on a 4.50% sales
charge are represented by a solid line. The Standard & Poor's 500 Index (the
"S&P 500") is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Class A Shares of the Fund and the S&P 500. The "x" axis
reflects computation periods from 1/29/93 to 11/30/98. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Class A Shares, based on a 4.50% sales
charge, as compared to the S&P 500. The ending values were $26,039 and $30,332,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Class A Shares average annual total returns for the
one-year and five-year periods ended 11/30/98 and from the start of performance
of the Fund's Class A Shares (1/29/93) to 11/30/98. The total returns were
15.34%, 20.28% and 17.80%, respectively. The legend in the bottom quadrant of
the graphic presentation also indicates the Fund's Class A Shares cumulative
total return for the period from the start of performance of the Fund's Class A
Shares (1/29/93) to 11/30/98. The total return was 160.39%.
A8. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Growth and Income Fund (the "Fund") are represented by a
solid line. The Standard & Poor's 500 Index (the "S&P 500") is represented by a
dotted line. The line graph is a visual representation of a comparison of change
in value of a $10,000 hypothetical investment in the Class Y Shares of the Fund
and the S&P 500. The "x" axis reflects computation periods from 3/29/98 to
11/30/98. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Fund's Class Y
Shares as compared to the S&P 500. The ending values were $10,603 and $10,731,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Class Y Shares cumulative total return for the period from
the start of performance of the Fund's Class Y Shares (3/29/98) to 11/30/98. The
total return was 6.03%.
A9. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Equity Index Fund (the "Fund") based on a 4.50% sales charge
are represented by a solid line. The Standard & Poor's 500 Index (the "S&P 500")
is represented by a dotted line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the Class
A Shares of the Fund and the S&P 500. The "x" axis reflects computation periods
from 5/7/93 to 11/30/98. The "y" axis reflects the cost of the investment. The
right margin reflects the ending value of the hypothetical investment in the
Fund's Class A Shares, based on a 4.50% sales charge, as compared to the S&P
500. The ending values were $27,548 and $29,846, respectively. The legend in the
bottom quadrant of the graphic presentation indicates the Fund's Class A Shares
average annual total returns for the one-year and five-year periods ended
11/30/98 and from the start of performance of the Fund's Class A Shares (5/7/93)
to 11/30/98. The total returns were 17.21%, 21.10% and 19.95%, respectively. The
legend in the bottom quadrant of the graphic presentation also indicates the
Fund's Class A Shares cumulative total return for the period from the start of
performance of the Fund's Class A Shares (5/7/93) to 11/30/98. The total return
was 175.48%.
<PAGE>
A10. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Equity Index Fund (the "Fund") are represented by a solid
line. The Standard & Poor's 500 Index (the "S&P 500") is represented by a dotted
line. The line graph is a visual representation of a comparison of change in
value of a $10,000 hypothetical investment in the Class Y Shares of the Fund and
the S&P 500. The "x" axis reflects computation periods from 7/23/96 to 11/30/98.
The "y" axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the Fund's Class Y Shares as
compared to the S&P 500. The ending values were $18,909 and $19,350,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Class Y Shares average annual total returns for the
one-year period ended 11/30/98 and from the start of performance of the Fund's
Class Y Shares (7/23/96) to 11/30/98. The total returns were 23.05% and 31.01%,
respectively. The legend in the bottom quadrant of the graphic presentation also
indicates the Fund's Class Y Shares cumulative total return for the period from
the start of performance of the Fund's Class Y Shares (7/23/96) to 11/30/98. The
total return was 89.11%.
A11. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Special Values Fund (the "Fund") based on a 4.50% sales
charge are represented by a solid line. The Russell 2000 Small Stock Index (the
"Russell 2000") is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Class A Shares of the Fund and the Russell 2000. The "x" axis
reflects computation periods from 5/7/93 to 11/30/98. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Class A Shares, based on a 4.50% sales
charge, as compared to the Russell 2000. The ending values were $21,666 and
$17,448, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Fund's Class A Shares average annual total returns
for the one-year and five-year periods ended 11/30/98 and from the start of
performance of the Fund's Class A Shares (5/7/93) to 11/30/98. The total returns
were (8.20%), 16.17% and 14.89%, respectively. The legend in the bottom quadrant
of the graphic presentation also indicates the Fund's Class A Shares cumulative
total return for the period from the start of performance of the Fund's Class A
Shares (5/7/93) to 11/30/98. The total return was 116.68%.
A12. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Special Values Fund (the "Fund") are represented by a solid
line. The Russell 2000 Small Stock Index (the "Russell 2000") is represented by
a dotted line. The line graph is a visual representation of a comparison of
change in value of a $10,000 hypothetical investment in the Class Y Shares of
the Fund and the Russell 2000. The "x" axis reflects computation periods from
7/23/96 to 11/30/98. The "y" axis reflects the cost of the investment. The right
margin reflects the ending value of the hypothetical investment in the Fund's
Class Y Shares as compared to the Russell 2000. The ending values were $14,784
and $12,760, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Fund's Class Y Shares average annual total returns
for the one-year period ended 11/30/98 and from the start of performance of the
Fund's Class Y Shares (7/23/96) to 11/30/98. The total returns were (3.59%) and
18.03%, respectively. The legend in the bottom quadrant of the graphic
presentation also indicates the Fund's Class Y Shares cumulative total return
for the period from the start of performance of the Fund's Class Y Shares
(7/23/96) to 11/30/98. The total return was 47.85%.
<PAGE>
A13. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Emerging Markets Fund (the "Fund") based on a 4.50% sales
charge are represented by a solid line. The International Finance Corporation
Investable Index (the "IFCI") is represented by a dotted line. The line graph is
a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Class A Shares of the Fund and the IFCI. The "x"
axis reflects computation periods from 12/23/94 to 11/30/98. The "y" axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the Fund's Class A Shares, based on a 4.50%
sales charge, as compared to the IFCI. The ending values were $8,230 and $6,730,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Class A Shares average annual total returns for the
one-year period ended 11/30/98 and from the start of performance of the Fund's
Class A Shares (12/23/94) to 11/30/98. The total returns were (26.88%) and
(4.82%), respectively. The legend in the bottom quadrant of the graphic
presentation also indicates the Fund's Class A Shares cumulative total return
for the period from the start of performance of the Fund's Class A Shares
(12/23/94) to 11/30/98. The total return was (17.69%).
A14. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Emerging Markets Fund (the "Fund") are represented by a solid
line. The International Finance Corporation Investable Index (the "IFCI") is
represented by a dotted line. The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the Class
Y Shares of the Fund and the IFCI. The "x" axis reflects computation periods
from 7/23/96 to 11/30/98. The "y" axis reflects the cost of the investment. The
right margin reflects the ending value of the hypothetical investment in the
Fund's Class Y Shares as compared to the IFCI. The ending values were $7,293 and
$6,793, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Fund's Class Y Shares average annual total returns
for the one-year period ended 11/30/98 and from the start of performance of the
Fund's Class Y Shares (7/23/96) to 11/30/98. The total returns were (23.34%) and
(12.84%), respectively. The legend in the bottom quadrant of the graphic
presentation also indicates the Fund's Class Y Shares cumulative total return
for the period from the start of performance of the Fund's Class Y Shares
(7/23/96) to 11/30/98. The total return was (27.68%).
A15. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Balanced Fund (the "Fund") based on a 4.50% sales charge are
represented by a solid line. The Standard and Poor's 500 Index (the "S&P 500")
is represented by a dotted line. The Lehman Brothers Aggregate Bond Index (the
"LBABI") is represented by a dashed line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Class A Shares of the Fund, the S&P 500 and the LBABI. The "x"
axis reflects computation periods from 5/7/93 to 11/30/98. The "y" axis reflects
the cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Class A Shares, based on a 4.50% sales
charge, as compared to the S&P 500 and the LBABI. The ending values were
$19,680, 29,846 and $14,736, respectively. The legend in the bottom quadrant of
the graphic presentation indicates the Fund's Class A Shares average annual
total returns for the one-year and five-year periods ended 11/30/98 and from the
start of performance of the Fund's Class A Shares (5/7/93) to 11/30/98. The
total returns were 9.25%, 13.41% and 12.93%, respectively. The legend in the
bottom quadrant of the graphic presentation also indicates the Fund's Class A
Shares cumulative total return for the period from the start of performance of
the Fund's Class A Shares (5/7/93) to 11/30/98. The total return was 96.83%.
<PAGE>
A16. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class B
Shares of Wachovia Balanced Fund (the "Fund") based on a 3.00% contingent
deferred sales charge are represented by a solid line. The Standard & Poor's 500
Index (the "S&P 500") is represented by a dotted line. The Lehman Brothers
Aggregate Bond Index (the "LBABI") is represented by a dashed line. The line
graph is a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Class B Shares of the Fund, the S&P 500 and the
LBABI. The "x" axis reflects computation periods from 7/23/96 to 11/30/98. The
"y" axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the Fund's Class B Shares, based
on a 3.00% contingent deferred sales charge, as compared to the S&P 500 and the
LBABI. The ending values were $14,544, $19,350 and $12,432, respectively. The
legend in the bottom quadrant of the graphic presentation indicates the Fund's
Class B Shares average annual total returns for the one-year period ended
11/30/98 and from the start of performance of the Fund's Class B Shares
(7/23/96) to 11/30/98. The total returns were 8.56% and 17.21%, respectively.
The legend in the bottom quadrant of the graphic presentation also indicates the
Fund's Class B Shares cumulative total return for the period from the start of
performance of the Fund's Class B Shares (7/23/96) to 11/30/98. The total return
was 45.44%.
A17. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Balanced Fund (the "Fund") are represented by a solid line.
The Standard & Poor's 500 Index (the "S&P 500") is represented by a dotted line.
The Lehman Brothers Aggregate Bond Index (the "LBABI") is represented by a
dashed line. The line graph is a visual representation of a comparison of change
in value of a $10,000 hypothetical investment in the Class Y Shares of the Fund,
S&P 500 and the LBABI. The "x" axis reflects computation periods from 7/23/96 to
11/30/98. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Fund's Class Y
Shares as compared to the S&P 500 and the LBABI. The ending values were $15,186,
$19,350 and $12,432, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the Fund's Class Y Shares average annual total
returns for the one-year period ended 11/30/98 and from the start of performance
of the Fund's Class Y Shares (7/23/96) to 11/30/98. The total returns were
14.77% and 19.38%, respectively. The legend in the bottom quadrant of the
graphic presentation also indicates the Fund's Class Y Shares cumulative total
return for the period from the start of performance of the Fund's Class Y Shares
(7/23/96) to 11/30/98. The total return was 51.87%.
A18. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Fixed Income Fund (the "Fund") based on a 4.50% sales charge
are represented by a solid line. The Lehman Brothers Aggregate Bond Index (the
"LBABI") is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Class A Shares of the Fund and the LBABI. The "x" axis
reflects computation periods from 5/7/93 to 11/30/98. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Class A Shares, based on a 4.50% sales
charge, as compared to the LBABI. The ending values were $13,427 and $14,736,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Class A Shares average annual total returns for the
one-year and five-year periods ended 11/30/98 and from the start of performance
of the Fund's Class A Shares (5/7/93) to 11/30/98. The total returns were 3.80%,
5.44% and 5.43%, respectively. The legend in the bottom quadrant of the graphic
presentation also indicates the Fund's Class A Shares cumulative total return
for the period from the start of performance of the Fund's Class A Shares
(5/7/93) to 11/30/98. The total return was 34.27%.
<PAGE>
A19. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class B
Shares of Wachovia Fixed Income Fund (the "Fund") based on a 3.00% contingent
deferred sales charge are represented by a solid line. The Lehman Brothers
Aggregate Bond Index (the "LBABI") is represented by a dotted line. The line
graph is a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Class B Shares of the Fund and the LBABI. The "x"
axis reflects computation periods from 7/23/96 to 11/30/98. The "y" axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the Fund's Class B Shares, based on a 3.00%
contingent deferred sales charge, as compared to the LBABI. The ending values
were $11,723 and $12,432, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the Fund's Class B Shares average annual total
returns for the one-year period ended 11/30/98 and from the start of performance
of the Fund's Class B Shares (7/23/96) to 11/30/98. The total returns were 2.97%
and 6.97%, respectively. The legend in the bottom quadrant of the graphic
presentation also indicates the Fund's Class B Shares cumulative total return
for the period from the start of performance of the Fund's Class B Shares
(7/23/96) to 11/30/98. The total return was 17.23%.
A20. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Fixed Income Fund (the "Fund") are represented by a solid
line. The Lehman Brothers Aggregate Bond Index (the "LBABI") is represented by a
dotted line. The line graph is a visual representation of a comparison of change
in value of a $10,000 hypothetical investment in the Class Y Shares of the Fund
and the LBABI. The "x" axis reflects computation periods from 7/23/96 to
11/30/98. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Fund's Class Y
Shares as compared to the LBABI. The ending values were $12,296 and $12,346,
respectively. The legend in the bottom quadrant of the graphic presentation
indicates the Fund's Class Y Shares average annual total returns for the
one-year period ended 11/30/98 and from the start of performance of the Fund's
Class Y Shares (7/23/96) to 11/30/98. The total returns were 8.92% and 9.16%,
respectively. The legend in the bottom quadrant of the graphic presentation also
indicates the Fund's Class Y Shares cumulative total return for the period from
the start of performance of the Fund's Class Y Shares (7/23/96) to 11/30/98. The
total return was 22.96%.
A21. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Intermediate Fixed Income Fund (the "Fund") based on a 4.50%
sales charge are represented by a solid line. The Lehman Brothers
Government/Corporate Intermediate Index (the "LBGCII") is represented by a
dotted line. The line graph is a visual representation of a comparison of change
in value of a $10,000 hypothetical investment in the Class A Shares of the Fund
and the LBGCII. The "x" axis reflects computation periods from 1/29/93 to
11/30/98. The "y" axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the Fund's Class A
Shares, based on a 4.50% sales charge, as compared to the LBGCII. The ending
values were $13,477 and $14,454, respectively. The legend in the bottom quadrant
of the graphic presentation indicates the Fund's Class A Shares average annual
total returns for the one-year and five-year periods ended 11/30/98 and from the
start of performance of the Fund's Class A Shares (1/29/93) to 11/30/98. The
total returns were 4.48%, 5.08% and 5.24%, respectively. The legend in the
bottom quadrant of the graphic presentation also indicates the Fund's Class A
Shares cumulative total return for the period from the start of performance of
the Fund's Class A Shares (1/29/93) to 11/30/98. The total return was 34.76%.
<PAGE>
A22. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Intermediate Fixed Income Fund (the "Fund") are represented
by a solid line. The Lehman Brothers Government/Corporate Intermediate Index
(the "LBGCII") is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Class Y Shares of the Fund and the LBGCII. The "x" axis
reflects computation periods from 3/29/98 to 11/30/98. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Class Y Shares as compared to the LBGCII.
The ending values were $10,509 and $10,711, respectively. The legend in the
bottom quadrant of the graphic presentation indicates the Fund's Class Y Shares
total return for the period from the start of performance of the Fund's Class Y
Shares (3/29/98) to 11/30/98. The total return was 7.11%.
A23. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Short-Term Fixed Income Fund (the "Fund") based on a 4.50%
sales charge are represented by a solid line. The Merrill Lynch 1-3 Year U.S.
Treasury Index (the "Merrill Index") is represented by a dotted line. The line
graph is a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Class A Shares of the Fund and the Merrill Index.
The "x" axis reflects computation periods from 5/7/93 to 11/30/98. The "y" axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the Fund's Class A Shares, based on a 4.50%
sales charge, as compared to the Merrill Index. The ending values were $12,929
and $14,182, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Fund's Class A Shares average annual total returns
for the one-year and five-year periods ended 11/30/98 and from the start of
performance of the Fund's Class A Shares (5/7/93) to 11/30/98. The total returns
were 4.26%, 4.93% and 4.71%, respectively. The legend in the bottom quadrant of
the graphic presentation also indicates the Fund's Class A Shares cumulative
total return for the period from the start of performance of the Fund's Class A
Shares (5/7//93) to 11/30/98. The total return was 29.24%.
A24. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Short-Term Fixed Income Fund (the "Fund") are represented by
a solid line. The Merrill Lynch 1-3 Year U.S. Treasury Index (the "Merrill
Index") is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Class Y Shares of the Fund and the Merrill Index. The "x" axis
reflects computation periods from 7/23/96 to 11/30/98. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Class Y Shares as compared to the Merrill
Index. The ending values were $11,629 and $12,029, respectively. The legend in
the bottom quadrant of the graphic presentation indicates the Fund's Class Y
Shares average annual total returns for the one-year period ended 11/30/98 and
from the start of performance of the Fund's Class Y Shares (7/23/96) to
11/30/98. The total returns were 7.19% and 6.61%, respectively. The legend in
the bottom quadrant of the graphic presentation also indicates the Fund's Class
Y Shares cumulative total return for the period from the start of performance of
the Fund's Class Y Shares (7/23/96) to 11/30/98. The total return was 16.29%.
<PAGE>
A25. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Georgia Municipal Bond Fund (the "Fund") based on a 4.50%
sales charge are represented by a solid line. The Lehman Brothers State General
Obligation Bond Index (the "LBSGOBI") is represented by a dotted line. The line
graph is a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Class A Shares of the Fund and the LBSGOBI. The
"x" axis reflects computation periods from 12/23/94 to 11/30/98. The "y" axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the Fund's Class A Shares, based on a 4.50%
sales charge, as compared to the LBSGOBI. The ending values were $12,803 and
$13,980, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Fund's Class A Shares average annual total returns
for the one-year period ended 11/30/98 and from the start of performance of the
Fund's Class A Shares (12/23/94) to 11/30/98. The total returns were 1.60% and
6.45%, respectively. The legend in the bottom quadrant of the graphic
presentation also indicates the Fund's Class A Shares cumulative total return
for the period from the start of performance of the Fund's Class A Shares
(12/23/94) to 11/30/98. The total return was 28.05%.
A26. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Georgia Municipal Bond Fund (the "Fund") are represented by a
solid line. The Lehman Brothers State General Obligation Bond Index (the
"LBSGOBI") is represented by a dotted line. The line graph is a visual
representation of a comparison of change in value of a $10,000 hypothetical
investment in the Class Y Shares of the Fund and the LBSGOBI. The "x" axis
reflects computation periods from 7/23/96 to 11/30/98. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Class Y Shares as compared to the LBSGOBI.
The ending values were $11,748 and $11,929, respectively. The legend in the
bottom quadrant of the graphic presentation indicates the Fund's Class Y Shares
average annual total returns for the one-year period ended 11/30/98 and from the
start of performance of the Fund's Class Y Shares (7/23/96) to 11/30/98. The
total returns were 6.62% and 7.07%, respectively. The legend in the bottom
quadrant of the graphic presentation also indicates the Fund's Class Y Shares
cumulative total return for the period from the start of performance of the
Fund's Class Y Shares (7/23/96) to 11/30/98. The total return was 17.47%.
A27. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia North Carolina Municipal Bond Fund (the "Fund") based on a
4.50% sales charge are represented by a solid line. The Lehman Brothers State
General Obligation Bond Index (the "LBSGOBI") is represented by a dotted line.
The line graph is a visual representation of a comparison of change in value of
a $10,000 hypothetical investment in the Class A Shares of the Fund and the
LBSGOBI. The "x" axis reflects computation periods from 12/23/94 to 11/30/98.
The "y" axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the Fund's Class A Shares, based
on a 4.50% sales charge, as compared to the LBSGOBI. The ending values were
$12,932 and $13,980, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the Fund's Class A Shares average annual total
returns for the one-year period ended 11/30/98 and from the start of performance
of the Fund's Class A Shares (12/23/94) to 11/30/98. The total returns were
1.97% and 6.75%, respectively. The legend in the bottom quadrant of the graphic
presentation also indicates the Fund's Class A Shares cumulative total return
for the period from the start of performance of the Fund's Class A Shares
(12/23/94) to 11/30/98. The total return was 29.33%.
<PAGE>
A28. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia North Carolina Municipal Bond Fund (the "Fund") are
represented by a solid line. The Lehman Brothers State General Obligation Bond
Index (the "LBSGOBI") is represented by a dotted line. The line graph is a
visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Class Y Shares of the Fund and the LBSGOBI. The
"x" axis reflects computation periods from 7/23/96 to 11/30/98. The "y" axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the Fund's Class Y Shares as compared to the
LBSGOBI. The ending values were $11,820 and $11,929, respectively. The legend in
the bottom quadrant of the graphic presentation indicates the Fund's Class Y
Shares average annual total returns for the one-year period ended 11/30/98 and
from the start of performance of the Fund's Class Y Shares (7/23/96) to
11/30/98. The total returns were 7.09% and 7.34%, respectively. The legend in
the bottom quadrant of the graphic presentation also indicates the Fund's Class
Y Shares cumulative total return for the period from the start of performance of
the Fund's Class Y Shares (7/23/96) to 11/30/98. The total return was 18.20%.
A29. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia South Carolina Municipal Bond Fund (the "Fund") based on a
4.50% sales charge are represented by a solid line. The Lehman Brothers State
General Obligation Bond Index (the "LBSGOBI") is represented by a dotted line.
The line graph is a visual representation of a comparison of change in value of
a $10,000 hypothetical investment in the Class A Shares of the Fund and the
LBSGOBI. The "x" axis reflects computation periods from 1/11/91 to 11/30/98. The
"y" axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the Fund's Class A Shares, based
on a 4.50% sales charge, as compared to the LBSGOBI. The ending values were
$16,740 and $17,917, respectively. The legend in the bottom quadrant of the
graphic presentation indicates the Fund's Class A Shares average annual total
returns for the one-year and five-year periods ended 11/30/98 and from the start
of performance of the Fund's Class A Shares (1/11/91) to 11/30/98. The total
returns were 2.11%, 4.99% and 6.75%, respectively. The legend in the bottom
quadrant of the graphic presentation also indicates the Fund's Class A Shares
cumulative total return for the period from the start of performance of the
Fund's Class A Shares (1/11/91) to 11/30/98. The total return was 67.40%.
A30. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia South Carolina Municipal Bond Fund (the "Fund") are
represented by a solid line. The Lehman Brothers State General Obligation Bond
Index (the "LBSGOBI") is represented by a dotted line. The line graph is a
visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Class Y Shares of the Fund and the LBSGOBI. The
"x" axis reflects computation periods from 7/23/96 to 11/30/98. The "y" axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the Fund's Class Y Shares as compared to the
LBSGOBI. The ending values were $11,936 and $11,927, respectively. The legend in
the bottom quadrant of the graphic presentation indicates the Fund's Class Y
Shares average annual total returns for the one-year period ended 11/30/98 and
from the start of performance of the Fund's Class Y Shares (7/23/96) to
11/30/98. The total returns were 7.15% and 7.79%, respectively. The legend in
the bottom quadrant of the graphic presentation also indicates the Fund's Class
Y Shares cumulative total return for the period from the start of performance of
the Fund's Class Y Shares (7/23/96) to 11/30/98. The total return was 19.36%.
<PAGE>
A31. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Virginia Municipal Bond Fund (the "Fund") based on a 4.50%
sales charge are represented by a solid line. The Lehman Brothers State General
Obligation Bond Index (the "LBSGOBI") is represented by a broken line. The
Lehman Brothers Municipal Bond Index (the "LBMBI") is represented by a dotted
line. The Lehman Brothers Municipal Bond 7-Year Index (the "LBMB7YI") is
represented by a dashed line The line graph is a visual representation of a
comparison of change in value of a $10,000 hypothetical investment in the Class
A Shares of the Fund, the LBSGOBI, the LBMBI and the LBMB7YI. The "x" axis
reflects computation periods from 2/1/93 to 11/30/98. The "y" axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the Fund's Class A Shares, based on a 4.50% sales
charge, as compared to the LBSGOBI, LBMBI and the LBMB7YI. The ending values
were $12,771, $15,069, $14,973 and $14,390, respectively. The legend in the
bottom quadrant of the graphic presentation indicates the Fund's Class A Shares
average annual total returns for the one-year and five-year periods ended
11/30/98 and from the start of performance of the Fund's Class A Shares (2/1/93)
to 11/30/98. The total returns were 2.01%, 3.82% and 4.28%, respectively. The
legend in the bottom quadrant of the graphic presentation also indicates the
Fund's Class A Shares cumulative total return for the period from the start of
performance of the Fund's Class A Shares (2/1/93) to 11/30/98. The total return
was 27.71%.
A32. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Virginia Municipal Bond Fund (the "Fund") are represented by
a solid line. The Lehman Brothers State General Obligation Bond Index (the
"LBSGOBI") is represented by a dotted line. The Lehmand Brothers Municipal Bond
7-Year Index (the "LBMB7YI") is represented by a dashed line. The line graph is
a visual representation of a comparison of change in value of a $10,000
hypothetical investment in the Class Y Shares of the Fund, LBSGOBI and the
LBMB7YI. The "x" axis reflects computation periods from 3/29/98 to 11/30/98. The
"y" axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the Fund's Class Y Shares as
compared to the LBSGOBI and the LBMB7YI. The ending values were $10,461, $10,501
and $10,481, respectively. The legend in the bottom quadrant of the graphic
presentation indicates the Fund's Class Y Shares total returns for the period
from the start of performance of the Fund's Class Y Shares (3/29/98) to
11/30/98. The total returns was 4.61%.
