<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
TABLE OF CONTENTS
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<S> <C>
President's Letter..................................................... 1
CAPITAL APPRECIATION FUNDS:
Investment Review...................................................... 3
Portfolios of Investments:
Aetna Growth Fund..................................................... 22
Aetna International Fund.............................................. 24
Aetna Mid Cap Fund.................................................... 26
Aetna Small Company Fund.............................................. 28
Aetna Value Opportunity Fund.......................................... 30
Aetna Technology Fund................................................. 31
Statements of Assets and Liabilities................................... 32
Statements of Operations............................................... 34
Statements of Changes in Net Assets.................................... 36
Notes to Financial Statements.......................................... 47
Additional Information................................................. 54
Financial Highlights................................................... 55
</TABLE>
<PAGE>
PRESIDENT'S LETTER
Dear Fellow Shareholder,
Thank you for investing in the Aetna Series Fund, Inc. With nearly 9,000 mutual
funds available in today's market, we appreciate your confidence in us.
A brief review of the economy over the past six months lends some interesting
insights into the performance of financial markets. The U.S. economy grew at an
astonishing annualized rate of 7.3% in the fourth quarter of 1999 and 5.4% in
the first quarter of 2000, as measured by real Gross Domestic Product. The pace
of this wealth-induced growth, combined with other inflation concerns, has led
the Federal Reserve to raise the Federal Funds rate by 0.75% since November to
its current 6.00%, and the end is not yet in sight. Still, consumers remained
confident about the economy, and economic statistics continued to show strength.
Equity markets experienced significant volatility but ended positively despite
rising interest rates. Often extreme, this volatility plagued all facets of the
stock market during the first four months of 2000, but was most noticeable in
the technology sector. Domestic bonds produced positive returns despite interest
rate increases by the Federal Reserve, and short-term interest rates moved
higher than long-term interest rates.
The Fund and its advisor, Aeltus Investment Management, Inc., strive to
continuously improve its products and services. Here are some highlights of our
recent efforts:
o AETNA PRINCIPAL PROTECTION FUND II enjoyed a successful offering, as
investors committed nearly $130 million to the fund; AETNA PRINCIPAL
PROTECTION FUND III is in its offering period until May 30, 2000.
These innovative total-return funds offer investors downside
protection--while providing investors the opportunity for upside
market potential.
o On December 22, 1999, Aeltus announced the acquisition of a minority
equity interest in ELIJAH ASSET MANAGEMENT, LLC (EAM), headquartered
in San Francisco. EAM is known as a skilled manager of specialized
growth and technology funds.
o AETNA TECHNOLOGY FUND was launched on March 1, 2000. Sub-advised by
EAM, this fund seeks long-term capital appreciation by investing
primarily in common stocks of companies in the technology sector.
o Your Board of Directors considered and agreed to submit to you a
proposal (proxy) to LIQUIDATE FOUR FUNDS: Aetna Mid Cap Fund, Aetna
Real Estate Securities Fund, Aetna High Yield Fund and Aetna Index
Plus Bond Fund. Proxy materials will be mailed to those of you in
these funds on or about May 30, 2000, with a proposed liquidation date
on or before September 1, 2000.
o On March 31, five of our funds were recognized by Morningstar, Inc.
with four and five star ratings.
This is merely a sample of some of the ways we have set out to fulfill our
commitment to bringing you our best in products and services. Again, we very
much appreciate and value your continued confidence in our funds and in Aeltus.
Sincerely,
/s/ J. Scott Fox
J. Scott Fox
President
Aetna Series Fund, Inc.
A prospectus containing more complete information including charges and expenses
is available from your financial advisor, at www.aetnafunds.com, or by calling
800-238-6263, option 2. Read the prospectus carefully before investing.
1
<PAGE>
AETNA GROWTH FUND
Growth of $10,000
{Begin Line Chart]
<TABLE>
<CAPTION>
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Jan-94 Dec-94
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aetna Growth Fund (Class I) $10,000 $10,250 $ 9,900 $10,552 $10,559 $11,343 $12,682 $13,883
S&P 500 Index $10,000 $ 9,621 $ 9,661 $10,134 $10,132 $11,119 $12,180 $13,149
Russell 1000 Growth Index $10,000 $ 9,559 $ 9,461 $10,189 $10,266 $11,243 $12,348 $13,469
------------------------------------------------------------------------------------------------------------------------------------
Dec-95 Oct-96
------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth Fund (Class I) $14,181 $15,048 $15,638 $16,322 $16,622 $18,613 $17,845 $22,177
S&P 500 Index $13,940 $14,689 $15,349 $15,823 $16,260 $18,214 $18,653 $22,320
Russell 1000 Growth Index $14,082 $14,838 $15,782 $16,350 $16,448 $18,554 $18,589 $22,561
------------------------------------------------------------------------------------------------------------------------------------
Oct-97 Oct-98
------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth Fund (Class I) $21,434 $21,612 $25,876 $26,171 $24,601 $31,137 $31,452 $33,028
S&P 500 Index $21,483 $23,118 $26,317 $26,628 $26,210 $30,629 $32,059 $32,008
Russell 1000 Growth Index $21,462 $23,302 $26,415 $27,057 $26,754 $33,228 $33,424 $33,565
------------------------------------------------------------------------------------------------------------------------------------
Oct-99 Apr-00
------------------------------------------------------------------------------------------------------------------------------------
Aetna Growth Fund (Class I) $33,731 $37,843 $41,113
S&P 500 Index $32,936 $33,796 $35,303
Russell 1000 Growth Index $35,917 $39,832 $42,641
</TABLE>
[End Line Chart]
<TABLE>
<CAPTION>
Average Annual Total Returns
for the period ended April 30, 2000*
--------------------------------------------------
1 Year 5 Years Inception
--------------------------------------------------
<S> <C> <C> <C>
Class I 30.70% 28.77% 25.06%
--------------------------------------------------
Class A:
POP (1) 22.94% 26.61% 23.22%
NAV (2) 30.43% 28.12% 24.38%
--------------------------------------------------
Class B:
w/CDSC (3) 24.40% 27.34% 23.83%
NAV 29.40% 27.49% 23.83%
--------------------------------------------------
Class C:
w/CDSC (4) 28.45% 27.50% 23.83%
NAV 29.45% 27.50% 23.83%
--------------------------------------------------
</TABLE>
*Total Return is calculated including reinvestment of income and capital gain
distributions. For periods prior to the inception of Class A, Class B and Class
C, the performance of each class is calculated by using the performance of Class
I since its inception date (01/04/94), adjusted for fees and expenses charged to
the appropriate class. Class I, Class A, Class B and Class C shares participate
in the same portfolio of securities. Past performance is no guarantee of future
results. Investment return and principal of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than the original
cost.
**The Aetna Growth Fund has changed its benchmark from the Standard & Poor's
(S&P) 500 Index to the Russell 1000 Growth Index because the Russell 1000 Growth
Index emphasizes large cap growth stocks, which are more indicative of the
securities in which the Fund invests.
AETNA GROWTH FUND
HOW DID THE FUND PERFORM DURING THE PERIOD?
The Aetna Growth Fund Class I shares generated a 21.88% total return, net of
fund expenses, for the six month period ended April 30, 2000. The benchmark,
Russell 1000 Growth Index(f), returned 18.72% for the same period.
WHAT ECONOMIC OR FINANCIAL MARKET CONDITIONS IMPACTED THE FUND?
The economy expanded at a very strong pace, reporting 7.3% growth in Gross
Domestic Product during the last quarter of 1999 and 5.4% growth during the
first quarter of 2000. This wealth-induced growth, combined with inflation
concerns
See Definition of Terms. 3
<PAGE>
relating to increased labor costs and higher oil prices, has led the Federal
Reserve Bank (the Fed) to take on a strategy of gradually increasing the Federal
Funds rate. Since November 1999, the Federal Funds rate was increased 75 basis
points to 6.00%.
Despite these interest rate hikes, consumers remained confident about the
economy and the stock market. Evidence for this confidence can be found in total
monthly inflows into equity mutual funds, measuring $17 billion in January and
$22 billion in February. (This compares to monthly averages in 1999 and 1998 of
$16 billion and $13 billion, respectively.)
Equity markets, especially large cap growth stocks, delivered solid performance
during the past six months, as measured by the Russell 1000 Growth Index which
was up 18.72% for this period. However, during the latter part of the period,
investors became more discriminating about the Price/Earnings multiple which
they were willing to pay for future earnings growth. (The Price/Earnings
multiple, or P/E, is calculated by dividing the price of one share by the
earnings per share generated by the firm. A measure of the attractiveness of a
particular security, the P/E ratio gives investors an idea of how much they are
paying for earning power.) The change was marked by a rotation out of Internet
stocks, which negatively affected the entire technology sector, into "old
economy" stocks, such as those in the Dow Jones Industrial Average.
WHAT INVESTMENTS INFLUENCED THE FUND'S PERFORMANCE OVER THE PAST SIX MONTHS?
The Fund's investments in the healthcare sector were the primary driver of
performance during the period. Both an underweight position in pharmaceuticals
and an overweight position in biotechnology, as well as strong security
selection, drove returns in the healthcare sector. Idec Pharmaceuticals was the
strongest performer in the biotechnology sector, reflecting strong revenue and
earnings growth. This stock was sold early in 2000 as valuations began to peak
in the biotechnology sector.
The Fund was positively impacted by our underweight position in consumer
staples. In particular, we did not own Procter & Gamble or Coca-Cola which both
had very poor performance, driven by negative earnings surprises and declining
earnings growth rates.
An overweight position in producer durables helped performance. Investments in
the precision instruments and telecommunications equipment industries
contributed to the outperformance. Waters Corporation, which makes analytical
testing equipment, was this sector's most significant performer, returning 78%.
Not only are the company's fundamentals very strong, but it also benefited from
increasing research and development spending in the biotech/pharmaceutical
sector, and a new product rollout. Nokia also added to performance, as strong
demand for communications infrastructure equipment and handsets lead to earnings
surprises and upward revisions to earnings estimates.
WHAT IS YOUR OUTLOOK GOING FORWARD?
The impact of the five Fed interest rate hikes since June 1999 and the prospect
of additional Fed intervention could weigh heavily on equity markets over the
next few months. As investors, we are faced with the following questions: When
will the economy begin to slow, and what will be the impact on equity markets?
If the Fed has done its job correctly, an economic slowdown should be modest.
Under these conditions, equity markets could continue to show strength but
perhaps at a slower pace and across a broader spectrum of stocks than in prior
years. Many of the factors that have positively influenced the economy and the
equity markets are still intact. Those include low inflation, improved
productivity, technological advances and global economic strength. This strong
foundation should continue to have a positive effect on the direction of the
stock market.
4 See Definition of Terms.
<PAGE>
DOMESTIC EQUITY PORTFOLIO BREAKDOWN:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
% OF EQUITY % OF RUSSELL OVER/(UNDER)
SECTOR INVESTMENTS 1000 GROWTH WEIGHTING
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Autos and Transportation -- 0.3% (0.3)%
Consumer Discretionary 14.9% 16.2% (1.3)%
Consumer Staples -- 5.8% (5.8)%
Financial Services 3.7% 7.6% (3.9)%
Healthcare 13.1% 13.2% (0.1)%
Integrated Oils -- 0.1% (0.1)%
Materials and Processing -- 0.8% (0.8)%
Other Energy 5.2% 2.0% 3.2%
Other 7.7% 5.8% 1.9%
Producer Durables 4.6% 2.9% 1.7%
Technology 46.1% 38.5% 7.6%
Utilities 4.7% 6.8% (2.1)%
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------
% OF NET
TOP TEN EQUITY HOLDINGS ASSETS
------------------------------------------------
<S> <C>
Cisco Systems, Inc. 6.2%
Intel Corp. 5.3%
General Electric Co. 4.5%
EMC Corp. 3.1%
Warner Lambert Co. 2.8%
Tyco International Ltd. 2.5%
Time Warner, Inc. 2.5%
Waters Corp. 2.4%
Microsoft Corp. 2.4%
Enron Corp. 2.3%
</TABLE>
The opinions expressed reflect those of the portfolio manager only through April
30, 2000. The manager's opinions are subject to change at any time based on
market and other conditions. The composition, industries and holdings of the
Fund are subject to change.
See Definition of Terms. 5
<PAGE>
AETNA INTERNATIONAL FUND
Growth of $10,000
{Begin Line Chart]
<TABLE>
<CAPTION>
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jan-92 Dec-92
Aetna International Fund (Class I) $10,000 $ 9,311 $ 9,521 $ 9,171 $ 8,921 $ 9,401 $10,011 $10,821
MSCI EAFE Index $10,000 $ 8,821 $ 9,016 $ 9,161 $ 8,816 $ 9,881 $10,883 $11,612
------------------------------------------------------------------------------------------------------------------------------------
Dec-93 Dec-94
Aetna International Fund (Class I) $11,620 $11,460 $11,571 $11,829 $11,627 $11,347 $11,484 $12,384
MSCI EAFE Index $11,720 $12,137 $12,766 $12,786 $12,665 $12,910 $13,015 $13,568
------------------------------------------------------------------------------------------------------------------------------------
Dec-95 Oct-96
Aetna International Fund (Class I) $12,437 $13,104 $13,806 $13,856 $13,927 $15,790 $16,098 $18,503
MSCI EAFE Index $14,128 $14,547 $14,788 $14,781 $14,633 $14,504 $14,884 $17,008
------------------------------------------------------------------------------------------------------------------------------------
Oct-97 Oct-98
Aetna International Fund (Class I) $17,552 $18,270 $21,350 $22,215 $19,347 $21,493 $22,806 $24,084
MSCI EAFE Index $15,353 $16,042 $17,748 $17,989 $16,883 $18,406 $19,488 $19,790
------------------------------------------------------------------------------------------------------------------------------------
Oct-99 Apr-00
Aetna International Fund (Class I) $24,785 $30,823 $32,536
MSCI EAFE Index $20,827 $22,006 $22,252
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Returns
for the period ended April 30, 2000*
--------------------------------------------------
1 Year 5 Years Inception
--------------------------------------------------
<S> <C> <C> <C>
Class I 42.67% 22.82% 15.23%
--------------------------------------------------
Class A:
POP (1) 34.15% 20.71% 13.69%
NAV (2) 42.31% 22.15% 14.50%
--------------------------------------------------
Class B:
w/CDSC (3) 36.43% 21.49% 14.13%
NAV 41.43% 21.68% 14.13%
--------------------------------------------------
Class C:
w/CDSC (4) 40.20% 21.66% 14.12%
NAV 41.20% 21.66% 14.12%
--------------------------------------------------
</TABLE>
*Total Return is calculated including reinvestment of income and capital gain
distributions. For periods prior to the inception of Class A, Class B and Class
C, the performance of each class is calculated by using the performance of Class
I since its inception date (01/03/92), adjusted for fees and expenses charged to
the appropriate class. Class I, Class A, Class B and Class C shares participate
in the same portfolio of securities. Past performance is no guarantee of future
results. Investment return and principal of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than the original
cost.
AETNA INTERNATIONAL FUND
HOW DID THE FUND PERFORM DURING THE PERIOD?
The Aetna International Fund Class I shares generated a 31.28% total return, net
of fund expenses, for the six month period ended April 30, 2000. The benchmark,
Morgan Stanley Capital International-Europe, Australia and Far East (MSCI EAFE)
Index(b), returned 6.84% for the same period.
WHAT ECONOMIC OR FINANCIAL MARKET CONDITIONS IMPACTED THE FUND?
Economic factors around the world finished strong in 1999. By the end of the
year, many economists were raising economic growth rate estimates and citing
solid synchronized growth. The International Monetary Fund Growth Outlook for
2000 is 3.5%, compared with 2.5% reported in 1999, a difficult year in
international markets.
6 See Definition of Terms.
<PAGE>
The European single currency, the Euro, celebrated its first birthday on January
1, 2000. The Euro provides more possibilities for long-term benefits in
promoting trading goods and services. The Euro is a long-term positive for
European stocks, and investors will reward companies that can adapt well to this
new environment.
During the period, investors began to believe the Japanese restructuring story.
Japan has successfully avoided a banking collapse and government fiscal programs
are beginning to take affect.
WHAT INVESTMENTS INFLUENCED THE FUND'S PERFORMANCE OVER THE PAST SIX MONTHS?
The Fund continued to invest in growth-oriented names. Our overweight position
in the Nordic region (at Japan's expense) proved wise. Nokia and Ericcson lead
performance in Finland and Sweden in a continued red-hot technology sector.
In Japan, equity markets slumped as they priced for poor economic news in the
fourth quarter of 1999. These markets continued to remain weak as investors sold
off some stocks in order to realize some profits ahead of fiscal year end on
March 31. The Fund's holdings in Japan were reduced to 17% of assets in
February but were increased to 24% in March based on positive economic news and
continued corporate restructuring.
The Fund's overweight position in the technology sector proved beneficial for
the entire period, though there were a few rough spots. Our overall mandate -
invest in stocks with positive business fundamentals - ignores daily and weekly
market fluctuations, looking instead for long-term growth opportunity.
Our top holdings are large, liquid names such as Phillips (Netherlands) and NTT
(Japan), in addition to Nokia and Ericsson. While these stocks participated in
market rallies, they did not suffer the dramatic declines other stocks
experienced during down markets. The Fund also holds smaller technology stocks,
but at much smaller percentages in order to better diversify risk.
Our overweighting in the manufacturing sector helped performance. Phillips,
Siemens and Vestas Wind Systems, a leading provider of wind energy, were our top
performers. We underweighted the banking and energy sectors due to higher
interest rate forecasts and lower growth prospects. During the period, currency
hedging did not produce any meaningful impact on performance.
WHAT IS YOUR OUTLOOK GOING FORWARD?
The outlook for international investing continues to be positive, boosted by
corporate restructuring and favorable economic trends. Economic growth and low
inflation paint a healthy picture for equity investing.
Merger and acquisition activity is on the rise. The pressure to appease the
shareholder is becoming greater in both Europe and Japan, leading to an increase
in hostile takeovers. In Europe, for example, 39 hostile bids were recorded in
1999 compared to 7 in 1998. The number of mergers and acquisitions increased
75% from 1998, setting a new record for the fifth consecutive year. These
corporate restructurings should lead to enhanced efficiency and thus greater
profits. Several countries in Europe possess positive earnings growth, a key
indicator for our country asset allocation.
In Japan, restructuring topped 700 deals, surpassing just over 300 in 1998.
Still, the increase in Japan represents only a small portion of Gross Domestic
Product, merely 2%, when compared to the U.S. at 21%. Overall, the economy has
bottomed, taxes have been slashed and new fiscal programs have permeated the
economy. Over the next two years, more than $480 billion dollars in Japanese
government bonds (earning 6%) will mature. These bond investors will have to
choose between investing in new 1% government bonds or investing in a rebounding
stock market. Central bank liquidity is extremely supportive of Japanese
equity. General economic figures also support Japan; there has been a spurt in
machinery orders and a pickup in personal consumption in both department store
sales and personal computers. Still, Japanese equities have a long way to go to
make up for a dismal decade.
Stocks markets in Asia and Latin America both have positive earnings growth. In
Mexico, economic growth may top 6%. In Brazil, the trend in industrial
production ought to continue its positive movement. Overall, Latin America's
economic growth
See Definition of Terms. 7
<PAGE>
rate may top 4% and inflation may fall to 7% in this new year, while Asian
(excluding Japan) growth should increase moderately to 3%.
Technology underscores a long-term positive trend for major international
markets. According to technology measures, such as personal computer demand,
Internet hosts and technology expenditures, many major foreign countries
significantly lag the United States. We expect technology expenditures to
spread in Japan, Germany and France, which will then help overall stock market
valuations by boosting productivity and supporting the global technology
industry.
International investments involve risks not present in U.S. securities,
including currency fluctuation, less public information and political and
economic uncertainty.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
% OF EQUITY % OF OVER/(UNDER)
COUNTRY WEIGHTINGS INVESTMENTS MSCI EAFE WEIGHTING
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Japan 22.8% 27.1% (4.3)%
United Kingdom 11.4% 20.3% (8.9)%
France 10.5% 10.8% (0.3)%
Netherlands 11.6% 5.1% 6.5%
Germany 5.4% 9.1% (3.7)%
Switzerland 4.5% 5.4% (0.9)%
Sweden 5.2% 3.5% 1.7%
Denmark 4.1% 0.7% 3.4%
Norway 0.4% 0.3% 0.1%
Finland 6.8% 3.6% 3.2%
Other 17.3% 14.1% 3.2%
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
% OF NET
TOP TEN EQUITY HOLDINGS ASSETS
--------------------------------------------------------------------------------
<S> <C>
Nokia Corp., ADR 3.6%
Koninklijke (Royal) Philips Electronis N.V. 3.5%
Telefonaktiebolaget LM Ericsson AB 2.7%
Vivendi 2.5%
Softbank Corp. 2.2%
Nippon Telegraph and Telephone Corporation 2.1%
Murata Manufacturing Co., Ltd. 2.1%
Vestas Wind Systems A/S 1.9%
STMicroelectronics N.V. 1.9%
British Telecommunications Plc 1.9%
</TABLE>
The opinions expressed reflect those of the portfolio manager only through April
30, 2000. The manager's opinions are subject to change at any time based on
market and other conditions. The composition, industries and holdings of the
Fund are subject to change.
8 See Definition of Terms.
<PAGE>
AETNA MID CAP FUND
Growth of $10,000
{Begin Line Chart]
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Feb-98 Oct-98 Oct-99 Apr-00
Aetna Mid Cap Fund (Class I) $10,000 $11,410 $10,530 $ 9,290 $11,200 $11,719 $11,650 $11,499 $12,930 $14,926
S&P MidCap 400 Index $10,000 $11,229 $10,372 $10,055 $11,371 $11,951 $12,376 $12,173 $13,191 $14,761
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Returns
for the period ended April 30, 2000*
--------------------------------------------------
1 Year Inception
--------------------------------------------------
<S> <C> <C>
Class I 27.36% 19.65%
--------------------------------------------------
Class A:
POP (1) 19.76% 16.21%
NAV (2) 27.04% 19.33%
--------------------------------------------------
Class B:
w/CDSC (3) 21.05% 17.30%
NAV 26.05% 18.40%
--------------------------------------------------
Class C:
w/CDSC (4) 25.10% 18.45%
NAV 26.10% 18.45%
--------------------------------------------------
</TABLE>
*Total Return is calculated including reinvestment of income and capital gain
distributions. For the period prior to the inception of Class B and Class C, the
performance is calculated by using the performance of Class I since its
inception date (02/04/98), adjusted for fees and expenses. Class I, Class A,
Class B and Class C shares participate in the same portfolio of securities. Past
performance is no guarantee of future results. Investment return and principal
of an investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than the original cost.
AETNA MID CAP FUND
HOW DID THE FUND PERFORM DURING THE PERIOD?
The Aetna Mid Cap Fund Class I shares generated a 29.80% total return, net of
fund expenses, for the six month period ended April 30, 2000. The benchmark,
Standard & Poor's (S&P) MidCap 400 Index(c), returned 21.26% for the same
period.
WHAT ECONOMIC OR FINANCIAL MARKET CONDITIONS IMPACTED THE FUND?
Mid cap stocks posted solid gains during the six months ending April 30, 2000.
The S&P MidCap 400 Index measurably outperformed the S&P 500 Index(a) (21.26%
vs.7.20%), a traditional measure of large cap stocks. (Market capitalization, or
cap, is the value of a company based on the market price of its stock. Market
cap is calculated by multiplying the number of shares outstanding by the current
price of a single share.)
See Definition of Terms. 9
<PAGE>
A continuing focus on price momentum and revenue growth set the pace for the mid
cap market during most of the period. April, the cruelest month indeed, was not
kind to the very same sectors which had performed well from November through
March. April was this sector's first down month since mid-1999.
WHAT INVESTMENTS INFLUENCED THE FUND'S PERFORMANCE OVER THE PAST SIX MONTHS?
The Fund benefited from an overweight position in the technology sector and from
an underweight position in the financial sector. It was hurt by less than
optimal stock selection in biotechnology, a very volatile industry for the
period.
A small yet material reallocation of the Fund toward more value-oriented stocks
at the end of March helped Fund performance as well. An example of good stock
selection was a position in Federated Investors, purchased in late March. (Value
stocks are those that appear currently undervalued, typically selling at a low
price/earnings ratio. Value stocks are often contrasted with growth stocks,
those that have experienced and are expected to continue to experience
consistently high growth in operations and earnings, normally paying little or
no dividends.)
Holdings in Broadcom and PMC-Sierra also helped the Fund during the period. A
position in CuraGen had a negative impact on Fund performance.
WHAT IS YOUR OUTLOOK GOING FORWARD?
There was a noticeable broadening in U.S. equity markets at the end of March.
In response, the Fund made moves to reduce sector risk by reducing its weight
in technology stocks and investing in higher quality stocks in selected sectors
where the Fund was underweight. Despite these moves, the Fund remains
overweight in the technology sector.
The Fund continues to strictly control risk relative to the S&P MidCap 400
Index.
DOMESTIC EQUITY PORTFOLIO BREAKDOWN:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
% OF EQUITY % OF S&P OVER/(UNDER)
SECTOR INVESTMENTS MIDCAP 400 WEIGHTING
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Basic Materials 4.7% 4.9% (0.2)%
Commercial Services 3.8% 5.4% (1.6)%
Consumer Discretionary 13.9% 13.0% 0.9%
Consumer Non-Discretionary 2.3% 2.5% (0.2)%
Energy 11.4% 7.9% 3.5%
Finance 12.1% 11.5% 0.6%
Healthcare 5.9% 11.1% (5.2)%
Manufacturing 7.9% 8.0% (0.1)%
Technology 27.6% 25.8% 1.8%
Utilities 10.4% 9.9% 0.5%
</TABLE>
10 See Definition of Terms.
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
% OF NET
TOP TEN EQUITY HOLDINGS ASSETS
--------------------------------------------------------------------------------
<S> <C>
Vishay Intertechnology, Inc. 2.5%
Siebel Systems, Inc. 2.4%
Altera Corp. 2.2%
Helmerich & Payne, Inc. 1.9%
Payless Shoe Source, Inc. 1.8%
TriQuint Semiconductor, Inc. 1.8%
NSTAR Corp. 1.8%
Oxford Health Plans, Inc. 1.7%
Brinker International, Inc. 1.6%
Arrow Electronics, Inc. 1.6%
</TABLE>
The opinions expressed reflect those of the portfolio manager only through April
30, 2000. The manager's opinions are subject to change at any time based on
market and other conditions. The composition, industries and holdings of the
Fund are subject to change.
See Definition of Terms. 11
<PAGE>
AETNA SMALL COMPANY FUND
Growth of $10,000
{Begin Line Chart]
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jan-94 Dec-94
Aetna Small Company Fund (Class I) $10,000 $10,070 $ 9,650 $10,320 $10,130 $11,162 $12,525 $14,138
Russell 2000 Index $10,000 $ 9,735 $ 9,356 $10,006 $ 9,819 $10,271 $11,234 $12,343
------------------------------------------------------------------------------------------------------------------------------------
Dec-95 Oct-96
Aetna Small Company Fund (Class I) $15,010 $16,227 $16,459 $16,448 $16,228 $17,415 $16,710 $20,924
Russell 2000 Index $12,611 $13,254 $13,917 $13,965 $13,749 $14,986 $13,971 $16,944
------------------------------------------------------------------------------------------------------------------------------------
Oct-97 Oct-98
Aetna Small Company Fund (Class I) $22,362 $22,554 $25,924 $23,132 $20,691 $23,141 $23,481 $24,882
Russell 2000 Index $17,784 $17,694 $19,893 $17,333 $15,674 $17,749 $18,051 $18,618
------------------------------------------------------------------------------------------------------------------------------------
Oct-99 Apr-00
Aetna Small Company Fund (Class I) $24,941 $30,955 $34,508
Russell 2000 Index $18,005 $20,899 $21,375
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Returns
for the period ended April 30, 2000*
--------------------------------------------------
1 Year 5 Year Inception
--------------------------------------------------
<S> <C> <C> <C>
Class I 46.97% 24.68% 21.65%
--------------------------------------------------
Class A:
POP (1) 38.19% 22.61% 19.85%
NAV (2) 46.67% 24.07% 20.98%
--------------------------------------------------
Class B:
w/CDSC (3) 40.56% 23.26% 20.43%
NAV 45.56% 23.43% 20.43%
--------------------------------------------------
Class C:
w/CDSC (4) 44.44% 23.42% 20.42%
NAV 45.44% 23.42% 20.42%
--------------------------------------------------
</TABLE>
*Total Return is calculated including reinvestment of income and capital gain
distributions. For periods prior to the inception of Class A, Class B and Class
C, the performance of each class is calculated by using the performance of Class
I since its inception date (01/04/94), adjusted for fees and expenses charged to
the appropriate class. Class I, Class A, Class B and Class C shares participate
in the same portfolio of securities. Past performance is no guarantee of future
results. Investment return and principal of an investment will fluctuate so that
an investor's shares, when redeemed, may be worth more or less than the original
cost.
AETNA SMALL COMPANY FUND
HOW DID THE FUND PERFORM DURING THE PERIOD?
The Aetna Small Company Fund Class I shares generated a 38.36% total return, net
of fund expenses, for the six month period ended April 30, 2000. The benchmark,
Russell 2000 Index(d), returned 18.72% for the same period.
WHAT ECONOMIC OR FINANCIAL MARKET CONDITIONS IMPACTED THE FUND?
Economic conditions remained strong throughout the six-month period. Robust
economic numbers, including a low unemployment environment, encouraged consumers
to spend. In general, consumers showed a preference for cars, housing,
appliances and technology (including computers, electronics and wireless
communications) as they took advantage of declining prices and increasing
capabilities.
12 See Definition of Terms.
<PAGE>
In financial markets, investors shared most of the consumer enthusiasm and
showed a willingness to buy cutting edge technology stocks, particularly in
three areas: telecommunications, technology and biotechnology. This enthusiasm
lasted for the first 4 1/2 months of the period. However, the Federal Reserve
Bank's hike in interest rates caused investors to pull back, particularly in
some of the growth areas. Hence, over the past four to six weeks, we saw a
definite correction in most biotech and technology stocks.
WHAT INVESTMENTS INFLUENCED THE FUND'S PERFORMANCE OVER THE PAST SIX MONTHS?
The Fund's strong performance was primarily due to our overweighted position in
two areas: biotechnology and technology. Our decision to overweight
biotechnology made a significant contribution to our strong performance. Six
holdings (Nanogen, Biosource International, Titan Pharmaceuticals, Mederex, Cell
Genesys and Cubist Pharmaceuticals) each advanced by more than 200% in the
period.
In technology, we benefited primarily from strong stock selection. Our largest
holding, Interleaf, advanced 120% in the period. Five other holdings each
increased 75% or more.
Our holdings in energy, commercial services and raw materials generally added to
performance, while holdings in the financial and consumer discretionary area
hurt performance.
WHAT IS YOUR OUTLOOK GOING FORWARD?
During the quarter, we moved money into the basic materials, energy and utility
sectors. We funded most of these moves with profits from our biotechnology and
technology holdings. While these have been two very strong sectors during the
recent past, we believe their prices are getting ahead of themselves. Therefore,
smaller exposures in these stocks is warranted at this time. Going into the
next period, we are overweight in energy, basic materials, utilities and
commercial services.
Looking forward, we see a continually challenging environment for small cap
stocks, especially in an increasing interest rate environment. However, we
still believe that small cap stocks offer competitive valuations when compared
to large cap stocks. In addition, the earnings growth outlook for small cap
stocks is superior to those of larger companies. We continue to believe that
our strategy of focusing on stocks with the strongest business momentum and
those selling at reasonable prices will outperform the market over long time
periods, as it has in the past.
The risks of investing in small company stocks may include low trading volumes,
a greater degree of change in earnings and greater short-term volatility.
DOMESTIC EQUITY PORTFOLIO BREAKDOWN:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
% OF EQUITY % OF OVER/(UNDER)
SECTOR INVESTMENTS RUSSELL 2000 WEIGHTING
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Basic Materials 6.4% 3.8% 2.6%
Commercial Services 9.2% 7.4% 1.8%
Consumer Discretionary 11.5% 12.9% (1.4)%
Consumer Non-Discretionary 2.1% 1.9% 0.2%
Energy 8.6% 5.1% 3.5%
Finance 10.1% 11.2% (1.1)%
Healthcare 16.2% 11.4% 4.8%
Manufacturing 7.1% 9.5% (2.4)%
Technology 24.9% 32.4% (7.5)%
Utilities 3.9% 4.4% (0.5)%
</TABLE>
See Definition of Terms. 13
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
% OF NET
TOP TEN EQUITY HOLDINGS ASSETS
--------------------------------------------------------------------------------
<S> <C>
Triton Energy Ltd. 2.1%
Quantum Corporation - Hard Disk Drive 1.9%
Delta & Pine Land Co. 1.7%
Vintage Petroleum, Inc. 1.6%
Louisiana-Pacific Corp. 1.5%
Banyan Systems, Inc. 1.4%
ReliaStar Financial Corp. 1.3%
Splash Technology Holdings, Inc. 1.3%
Warnaco Group, Inc. (The) 1.3%
General Semiconductor Corp. 1.2%
</TABLE>
The opinions expressed reflect those of the portfolio manager only through April
30, 2000. The manager's opinions are subject to change at any time based on
market and other conditions. The composition, industries and holdings of the
Fund are subject to change.
14 See Definition of Terms.
<PAGE>
AETNA VALUE OPPORTUNITY FUND
Growth of $10,000
{Begin Line Chart]
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Feb-98 Oct-98 Oct-99 Apr-00
Aetna Value Opportunity Fund (Class I) $10,000 $11,330 $10,560 $ 9,989 $12,110 $12,651 $12,462 $13,274 $14,023 $14,226
S&P 500 Index $10,000 $11,384 $11,518 $11,339 $13,251 $13,870 $13,847 $14,249 $14,621 $15,273
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Average Annual Total Returns
for the period ended April 30, 2000*
--------------------------------------------------
1 Year Inception
--------------------------------------------------
<S> <C> <C>
Class I 12.44% 17.06%
--------------------------------------------------
Class A:
POP (1) 5.77% 13.76%
NAV (2) 12.24% 16.81%
--------------------------------------------------
Class B:
w/CDSC (3) 6.35% 14.77%
NAV 11.35% 15.90%
--------------------------------------------------
Class C:
w/CDSC (4) 10.42% 15.91%
NAV 11.42% 15.91%
--------------------------------------------------
</TABLE>
*Total Return is calculated including reinvestment of income and capital gain
distributions. For the period prior to the inception of Class B and Class C, the
performance is calculated by using the performance of Class I since its
inception date (02/02/98), adjusted for fees and expenses. Class I, Class A,
Class B and Class C shares participate in the same portfolio of securities. Past
performance is no guarantee of future results. Investment return and principal
of an investment will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than the original cost.
AETNA VALUE OPPORTUNITY FUND
HOW DID THE FUND PERFORM DURING THE PERIOD?
The Aetna Value Opportunity Fund Class I shares generated a 7.18% total return,
net of fund expenses, for the six month period ended April 30, 2000. The
benchmark, Standard & Poor's (S&P) 500 Index(a), returned 7.20% for the same
period.
WHAT ECONOMIC OR FINANCIAL MARKET CONDITIONS IMPACTED THE FUND?
The U.S. economy expanded strongly, recording 7.3% growth in Gross Domestic
Product during the fourth quarter of 1999 and 5.4% growth during the first
quarter of 2000. This wealth-induced growth, combined with concerns around
inflation (created by increased labor costs and higher oil prices), has led the
Federal Reserve Bank (the Fed) to adopt a strategy of gradually tightening
interest rates. Since November 1999, the Federal Funds rate was increased 75
basis points to 6.00%.
See Definition of Terms. 15
<PAGE>
Despite these interest rate hikes, consumers remained confident about the
economy and the stock market. Evidence for this confidence can be found in total
monthly inflows into equity mutual funds, measuring $17 billion in January and
$22 billion in February. (This compares to monthly averages in 1999 and 1998 of
$16 billion and $13 billion, respectively.)
Equity markets delivered solid performance as measured by the S&P 500 Index.
However, during the latter part of the six month period, investors became more
discriminating about the Price/Earnings multiple they were willing to pay for
future earnings growth. (The Price/Earnings multiple, or P/E, is calculated by
dividing the price of one share by the earnings per share generated by the firm.
A measure of the attractiveness of a particular security, the P/E ratio gives
investors an idea of how much they are paying for earning power.) The change
was marked by a rotation out of Internet stocks, which negatively affected the
entire technology sector, into "old economy" stocks, such as those in the Dow
Jones Industrial Average.
WHAT INVESTMENTS INFLUENCED THE FUND'S PERFORMANCE OVER THE PAST SIX MONTHS?
Despite significant volatility, technology was the strongest performing sector
in the Fund. Superior stock selection within the sector contributed to our
strong relative performance, even though we sold some holdings purchased during
the market distress in the fall of 1998 to capture profits. Among the Fund's
largest individual holdings, Hughes Electronics rose over 32% during the period
as the market began to recognize the value of the company's satellite networks.
While the consumer sector as a whole underperformed the broader market, strong
stock selection within the group contributed to the Fund's performance. Costco
Wholesale Corporation shares rose nearly 35% during the period as the company
enjoyed strong same-store sales growth and profit margin expansion. Meanwhile,
shares of the Walt Disney Company also rose sharply, driven by strong
performance at the company's ABC and ESPN subsidiaries.
Our underweight positions and stock selection within the utilities sector were a
drag on the Fund's performance during the period. While electric utility stocks
such as AES Corp performed well, our telecommunications holdings, MCI Worldcom
and Centurytel, declined sharply as the market became concerned over price
competition in the long-distance and rural wireless markets. Both of these
positions were sold during the quarter, as we believe these concerns could
linger for some time.
WHAT IS YOUR OUTLOOK GOING FORWARD?
The impact of the five Fed interest rate hikes since June 1999 and the prospect
of additional Fed intervention could weigh heavily on equity markets over the
next few months. As investors, we are faced with the following questions: When
will the economy begin to slow, and what will be the impact on equity markets?
If the Fed has done its job correctly, an economic slowdown should be modest.
Under these conditions, equity markets could continue to show strength but
perhaps at a slower pace and across a broader spectrum of stocks than in prior
years. Many of the factors that have positively influenced the economy and the
equity markets are still intact. Those include low inflation, improved
productivity, technological advances and global economic strength. This strong
foundation should continue to have a positive effect on the direction of the
stock market.
16 See Definition of Terms.
<PAGE>
DOMESTIC EQUITY PORTFOLIO BREAKDOWN:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
% OF EQUITY % OF OVER/(UNDER)
SECTOR INVESTMENTS S&P 500 WEIGHTING
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Basic Materials 3.3% 2.3% 1.0%
Commercial Services -- 1.2% (1.2)%
Consumer Discretionary 9.4% 11.1% (1.7)%
Consumer Non-Discretionary 2.6% 5.2% (2.6)%
Energy 7.2% 6.1% 1.1%
Finance 17.0% 12.8% 4.2%
Healthcare 12.1% 10.4% 1.7%
Manufacturing 24.9% 10.0% 14.9%
Technology 17.2% 31.9% (14.7)%
Utilities 6.3% 9.0% (2.7)%
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------
% OF NET
TOP TEN EQUITY HOLDINGS ASSETS
------------------------------------------------
<S> <C>
Tyco International Ltd. 5.3%
Citigroup Inc. 4.5%
General Electric Co. 4.3%
Warner Lambert Co. 4.3%
Chevron Corp. 4.1%
Intel Corp. 4.0%
Walt Disney Co. (The) 3.8%
Columbia/HCA Healthcare Corp. 3.7%
AES Corp. 3.6%
Boeing Co. 3.4%
</TABLE>
The opinions expressed reflect those of the portfolio manager only through April
30, 2000. The manager's opinions are subject to change at any time based on
market and other conditions. The composition, industries and holdings of the
Fund are subject to change.
See Definition of Terms. 17
<PAGE>
AETNA TECHNOLOGY FUND
HOW DID THE FUND PERFORM DURING THE PERIOD?
The Aetna Technology Fund Class I shares generated a 7.30% total return, net of
fund expenses, for the period from March 1, 2000 through April 30, 2000. The
benchmark, Goldman Sachs (GS) Technology Index(e), returned -4.62% for the same
period.
WHAT ECONOMIC OR FINANCIAL MARKET CONDITIONS IMPACTED THE FUND?
Aetna Technology Fund was introduced on March 1, 2000, right into the jaws of a
very significant correction in the NASDAQ Composite and all other
technology-rich indices.
The dynamics that led to the run up and ensuing fall of the Internet names are
easy to understand. There were a relative few number of companies, the
"dot-coms", which had issued a small number of shares (usually fewer than ten
million). When the large mutual fund companies crowded into those few shares
(because every company had to own them in order to compete), the stocks surged.
These stocks are now being sold regardless of the current price. Elijah Asset
Management rarely bought into these dot-coms. They simply could not satisfy our
fundamental evaluation process.
When the correction runs its course, there will be a recovery. Again, the
companies with real businesses and real technologies will prosper. The
"me-toos", as we describe them, will be scrubbed away.
WHAT INVESTMENTS INFLUENCED THE FUND'S PERFORMANCE OVER THE PAST TWO MONTHS?
As a fund manager specializing in technology, we take market risk seriously. On
March 1, we were very cautious as we deployed our capital because we anticipated
a correction in technology stocks. Our three-part risk management strategy
included; 1) favoring larger-capitalized, quality companies, 2) diversifying
broadly across the eight technology sub-sectors, and 3) avoiding companies with
no earnings. This approach has paid off for the Fund during this overdue market
correction.
However, we too have been hurt by market turbulence. We believe this turbulence
occurred because the smaller stocks (the type we don't currently own) did not
have the liquidity to decline much further. The only stocks with remaining
liquidity were the larger cap stocks, which we did own.
Stock selection had a direct impact on the Fund's performance. Teradyne, Xilinx,
Micron Technology and Applied Materials were our four largest contributors to
the bottom line. PMC-Sierra and Robert Half International also posted healthy
returns before being sold off as their underlying business fundamentals were no
longer attractive. Microsoft and Qualcomm were detractors to performance.
WHAT IS YOUR OUTLOOK GOING FORWARD?
Since introducing the Fund two months ago, we have often talked about our
objectives: participate in the great opportunities that technology stocks have
to offer while minimizing the impact when the tide turns. We have run our
portfolio with a conservative eye, using the tested tools of diversification,
selecting dominant market players, sticking to larger capitalization stocks and
those businesses with net earnings, not net losses. Our process has succeeded,
and so we see no reason to alter it at this time.
We remain patient, sticking with our proven approach, favoring large-cap tech
companies in sectors that we believe have extraordinary growth prospects. These
companies are telecomm/datacomm, semiconductor manufacturers and equipment
companies, computer hardware, computer software, and networking stocks.
What do the days ahead hold? We believe that the rash of margin calls from
brokers to investors who borrowed to purchase securities (at a historic high in
February totaling $265 billion) will continue, and will pressure stock prices as
they are sold off to pay back loans. We also foresee several hedge funds making
headlines as they close. Individual day trading cannot return
18 See Definition of Terms.
<PAGE>
to its former level, because many of these traders will be closing their trading
accounts due to margin calls.
Over the long term, our economy should continue to grow. A growing economy is
good for technology companies. In addition, global demand for information
technology will continue to grow, despite the deep correction in the markets.
Is the long term all rosy? No. The dot-com mania that characterized 1999 and
early 2000 will be very hard pressed to return to its former glory. Too much
money has been lost, and the markets are skeptical. All of this, we believe,
will help to steer the market in the direction of evaluating companies on a
fundamental company-by-company basis. That is what we do today.
The Fund's investments are concentrated in information technology industries,
the value of its shares will be especially affected by factors peculiar to those
industries and may fluctuate more widely than the value of shares of a more
diversified portfolio.
DOMESTIC EQUITY PORTFOLIO BREAKDOWN:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
% OF EQUITY % OF GS OVER/(UNDER)
TECHNOLOGY SUB-SECTORS INVESTMENTS TECHNOLOGY WEIGHTING
--------------------------------------------------------------------------------
<S> <C> <C> <C>
Computers 11.7% 19.9% (8.2)%
Datacommunications 9.2% 11.0% (1.8)%
E-Commerce -- 1.2% (1.2)%
Electronics 42.6% 24.4% 18.2%
Internet Services 1.6% 8.0% (6.4)%
Software 6.5% 20.3% (13.8)%
Telecommunications 23.1% 13.5% 9.6%
Other 5.3% 1.7% 3.6%
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------------
% OF NET
TOP TEN EQUITY HOLDINGS ASSETS
------------------------------------------------
<S> <C>
Nokia Corp., ADR 6.8%
Teradyne, Inc. 6.5%
Cisco Systems, Inc. 5.5%
EMC Corp. 4.9%
Xilinx, Inc. 4.7%
Applied Materials, Inc. 4.7%
Intel Corp. 4.5%
Microsoft Corp. 3.6%
JDS Uniphase Corp. 3.6%
QUALCOMM, Inc. 3.3%
</TABLE>
The opinions expressed reflect those of the portfolio manager only through April
30, 2000. The manager's opinions are subject to change at any time based on
market and other conditions. The composition, industries and holdings of the
Fund are subject to change.
See Definition of Terms. 19
<PAGE>
--------------------------------------------------------------------------------
DEFINITION OF TERMS
--------------------------------------------------------------------------------
(1) On February 2, 1998, the Funds redesignated Adviser Class shares as Class A
shares. For periods prior to that date, Class A performance is calculated
by using the performance of Class I shares and deducting the Class A
front-end load and internal fees and expenses applicable to the Class A
shares. The maximum load for the Funds is 5.75%. The POP (public offering
price) returns reflect this maximum load.
(2) NAV (net asset value) returns are net of Fund expenses only and do not
reflect the deduction of a front-end load or contingent deferred sales
charges. This charge, if reflected, would reduce the performance results
shown.
(3) The Funds began offering Class B shares on March 1, 1999. For periods prior
to that date, Class B performance is calculated using the performance of
Class I shares and deducting the internal fees and expenses applicable to
the Class B shares. Class B share returns with CDSC (contingent deferred
sales charge) reflect the deduction of a maximum CDSC, assuming full
redemption at the end of the period. The CDSC applies for all shares
redeemed prior to the end of the first six years of ownership. The CDSC
charges are as follows: Year 1 - 5%, Year 2 - 4%, Year 3 - 3%, Year 4 - 3%,
Year 5 - 2%, Year 6 - 1%.
(4) The Funds began offering Class C shares on June 30, 1998. For periods prior
to that date, Class C performance is calculated using the performance of
Class I shares and deducting the internal fees and expenses applicable to
the Class C shares. Class C share returns for periods less than 18 months
reflect the deduction of the contingent deferred sales charge of 1%.
(a) The S&P 500 is the Standard & Poor's 500 Index. Performance is calculated
on a total return basis and dividends are reinvested, as reported by Frank
Russell Company.
(b) The MSCI EAFE Index (Morgan Stanley Capital International-Europe, Australia
and Far East) is a market value-weighted average of the performance of more
than 900 securities listed on the stock exchanges of countries in Europe,
Australia and the Far East. Performance is calculated on a total return
basis, as reported by Frank Russell Company.
(c) The Standard & Poor's MidCap 400 Index is an unmanaged index used to
measure stock market performance composed of companies with a weighted
average market value of $3.6 billion. Performance is calculated on a total
return basis and dividends are reinvested, as reported by Frank Russell
Company.
(d) The Russell 2000 Index consists of the smallest 2,000 of the 3,000 largest
companies, based on market capitalization.
(e) The Goldman Sachs Tecnology Index is a market capitalization-weighted index
of 190 stocks designed to measure the performance of companies in the
technology sector. Issues in the index include include producers of
sophisticated devices, services and software related to the fields of
computers, electronics, networking and Internet services.
(f) The Russell 1000 Growth Index consists of the largest 1,000 companies in
the Russell 3000 Index. This index represents the universe of large
capitalization stocks from which most active money managers typically
select.
The unmanaged indices described above are not available for individual
investment.
20
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
21
<PAGE>
CAPITAL APPRECIATION FUNDS
PORTFOLIO OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED)
GROWTH
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- ---------------
<S> <C> <C>
COMMON STOCKS (91.7%)
BIOTECH AND MEDICAL PRODUCTS (2.3%)
Amgen, Inc. [dag] ........................ 47,300 $ 2,648,800
Guidant Corp. [dag] ...................... 35,600 2,042,550
MedImmune, Inc. [dag] .................... 20,400 3,262,725
Tanox, Inc. .............................. 13,100 383,175
-----------
8,337,250
-----------
COMMERCIAL SERVICES (2.7%)
Omnicom Group, Inc. ...................... 64,800 5,900,850
Young And Rubicam, Inc. [dag] ............ 69,000 3,842,438
-----------
9,743,288
-----------
COMPUTERS (5.8%)
Apple Computer, Inc. [dag] ............... 26,200 3,250,437
Compaq Computer Corp. .................... 161,900 4,735,575
Hewlett Packard Co. ...................... 51,700 6,979,500
Sun Microsystems, Inc. [dag] ............. 67,700 6,224,169
-----------
21,189,681
-----------
CONGLOMERATE AND AEROSPACE (4.5%)
General Electric Co. ..................... 103,900 16,338,275
-----------
DATA AND IMAGING SERVICES (14.3%)
America Online, Inc. [dag] ............... 62,500 3,738,281
Cisco Systems, Inc. [dag] ................ 327,600 22,711,894
EMC Corp. [dag] .......................... 80,200 11,142,788
Microsoft Corp. [dag] .................... 123,100 8,586,225
Oracle Corp. [dag] ....................... 45,200 3,613,175
VERITAS Software Corp. [dag] ............. 20,700 2,220,398
-----------
52,012,761
-----------
DISCRETIONARY RETAIL (7.5%)
Circuit City Stores, Inc. ............... 113,300 6,663,456
Costco Wholesale Corp. [dag] ............ 53,500 2,892,344
Home Depot, Inc. ........................ 113,600 6,368,700
Target Corporation ...................... 47,400 3,155,063
Wal-Mart Stores, Inc. ................... 146,500 8,112,437
-----------
27,192,000
-----------
DIVERSIFIED FINANCIAL SERVICES (1.2%)
Citigroup Inc. .......................... 71,200 4,231,950
-----------
DRUGS (9.8%)
Allergan, Inc. .......................... 104,500 6,152,438
Bristol-Myers Squibb Co. ................ 84,000 4,404,750
Merck & Co., Inc. ....................... 91,100 6,331,450
Pfizer, Inc. ............................ 99,600 4,195,650
Schering Plough ......................... 106,800 4,305,375
Warner Lambert Co. ...................... 90,600 10,311,412
-----------
35,701,075
-----------
ELECTRIC UTILITIES (1.5%)
Calpine Corp. [dag] ...................... 60,900 5,572,350
-----------
ELECTRICAL MACHINERY AND INSTRUMENTS (3.7%)
JDS Uniphase Corporation [dag] ........... 41,200 4,271,925
PE Corp-PE Biosystems Group .............. 9,500 570,000
Waters Corp. [dag] ....................... 91,800 8,698,050
-----------
13,539,975
-----------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- ---------------
<S> <C> <C>
ELECTRONIC MEDIA (2.5%)
Time Warner, Inc. ....................... 102,000 $ 9,173,625
------------
GAS UTILITIES (2.3%)
Enron Corp. ............................. 121,300 8,453,094
------------
INSURANCE (1.1%)
American International Group, Inc. ...... 36,591 4,013,575
------------
INVESTMENT SERVICES (1.1%)
Merrill Lynch & Co., Inc. ............... 39,900 4,067,306
------------
MAJOR TELECOMMUNICATIONS (3.0%)
AT&T Wireless Group [dag] ............... 24,300 773,044
Nextel Communications, Inc. [dag]........ 50,200 5,493,762
Sprint PCS [dag] ........................ 86,400 4,752,000
------------
11,018,806
------------
OIL SERVICES (0.9%)
Halliburton Co. ......................... 77,200 3,411,275
------------
OTHER TELECOMMUNICATIONS (1.3%)
Telefonos de Mexico SA, ADR [dag] ....... 80,300 4,722,644
------------
PRODUCER GOODS (3.8%)
Corning, Inc. ........................... 22,500 4,443,750
Tyco International Ltd. ................. 200,500 9,210,469
------------
13,654,219
------------
SEMICONDUCTORS AND ELECTRONICS (22.4%)
ADC Telecommunications, Inc. [dag] ...... 113,700 6,907,275
Altera Corp. [dag] ...................... 70,700 7,229,075
Applied Materials, Inc. [dag] ........... 63,800 6,495,637
Atmel Corp. [dag] ....................... 62,200 3,043,913
Comverse Technology, Inc. [dag] ......... 57,800 5,155,038
Intel Corp. ............................. 153,400 19,453,037
KEMET Corp. [dag] ....................... 45,100 3,359,950
Motorola, Inc. .......................... 57,920 6,896,100
Nokia Corp., ADR ........................ 133,200 7,575,750
Nortel Networks Corp. ................... 53,600 6,070,200
QUALCOMM Inc. [dag] ..................... 35,900 3,892,906
Texas Instruments, Inc. ................. 35,100 5,716,913
------------
81,795,794
------------
TOTAL COMMON STOCKS
(COST $263,962,092) 334,168,943
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (11.7%)
Federal Farm Credit Bank, 5.88%, 05/01/00... $24,389,000 24,389,000
Federal Home Loan Mortgage, 5.89%, 05/16/00. 17,000,000 16,958,279
U.S. Treasury Bill, 5.52%, 05/18/00 @ ...... 100,000 99,739
U.S. Treasury Bill, 5.55%, 05/18/00 @ ...... 1,300,000 1,296,596
TOTAL SHORT-TERM INVESTMENTS ------------
(COST $42,743,614) 42,743,614
------------
TOTAL INVESTMENTS
(COST $306,705,706)(A).................................. 376,912,557
OTHER ASSETS LESS LIABILITIES............................ (12,334,755)
------------
TOTAL NET ASSETS ........................................ $364,577,802
============
</TABLE>
22 See Notes to Portfolio of Investments.
<PAGE>
--------------------------------------------------------------------------------
NOTES TO PORTFOLIO OF INVESTMENTS
(a) The cost of investments for federal income tax purposes amounts to
$315,875,968. Unrealized gains and losses, based on identified tax cost at
April 30, 2000, are as follows:
<TABLE>
<CAPTION>
<S> <C>
Unrealized gains............................. $68,314,047
Unrealized losses............................ (7,277,458)
------------
Net unrealized gain........................ $61,036,589
============
</TABLE>
<TABLE>
<CAPTION>
Information concerning open futures contracts at April 30, 2000 is shown below:
NO. OF NOTIONAL EXPIRATION UNREALIZED
CONTRACTS VALUE DATE GAIN/(LOSS)
----------- ------------- ------------ --------------
LONG CONTRACTS
----------------------
<S> <C> <C> <C> <C>
S&P 500 Index Futures... 55 $20,075,000 Jun 00 $(462,228)
============ =============
</TABLE>
[dag] Non-income producing security.
@ Security pledged to cover initial margin requirements on open futures
contracts at April 30, 2000.
Category percentages are based on net assets.
See Notes to Financial Statements. 23
<PAGE>
CAPITAL APPRECIATION FUNDS
PORTFOLIO OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED)
INTERNATIONAL
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- ---------------
<S> <C> <C>
COMMON STOCKS (95.5%)
BRAZIL (2.0%)
Embratel Participacoes S.A. (Other
Telecommunications).................... 74,800 $ 1,683,000
Tele Norte Leste Participacoes S.A.
(Other Telecommunications) ............ 1,276 22,729
Telecomunicaciones Brasileiras SA, ADR
(Other Telecommunications) ............ 10,900 1,288,243
-----------
TOTAL BRAZIL 2,993,972
-----------
DENMARK (4.1%)
Novo Nordisk A/S (Drugs) ............... 12,300 1,653,731
Tele Danmark A/S (Other
Telecommunications).................... 21,200 1,554,727
Vestas Wind Systems A/S
(Producer Goods) [dag]................. 8,600 2,880,157
-----------
TOTAL DENMARK 6,088,615
-----------
FINLAND (6.7%)
Comptel Oyj (Computer and Computer
Software Stores) [dag] ................ 63,500 1,438,508
JOT Automation Group Oyj (Electrical
Machinery and Instruments) ............ 213,800 1,548,861
Nokia Corp., ADR (Semiconductors and
Electronics)........................... 94,200 5,357,625
Perlos OYJ (Semiconductors and
Electronics) [dag] .................... 43,650 1,620,875
-----------
TOTAL FINLAND 9,965,869
-----------
FRANCE (10.4%)
Altran Technologies SA (Conglomerate and
Aerospace)............................. 6,600 1,352,003
AXA (Diversified Financial Services) ... 10,900 1,620,011
Banque Nationale de Paris (Banks and
Thrifts)............................... 12,100 980,223
Genset (Biotech and Medical Products) .. 55,200 1,573,200
Lagardere S.C.A. (Diversified Financial
Services).............................. 13,900 943,645
Schneider Electric SA (Electrical
Machinery and Instruments) ............ 33,200 2,178,252
Societe Television Francaise 1 (Major
Telecommunications).................... 2,200 1,509,577
Total Fina Elf (Oil Services) .......... 10,322 1,569,848
Vivendi (Conglomerate and Aerospace) ... 36,728 3,641,361
-----------
TOTAL FRANCE 15,368,120
-----------
GERMANY (5.3%)
Allianz AG (Insurance) ................. 2,625 1,013,025
Buderus AG (Forest Products and Building
Materials)............................. 73,700 1,247,817
DePfa Deutsche Pfandbriefbank AG (Banks
and Thrifts) .......................... 14,500 1,493,083
Intershop Communications AG (Data and
Imaging Services) [dag] ............... 3,100 1,379,951
Jenoptik AG (Semiconductors and
Electronics)........................... 23,450 675,255
Siemens AG (Electrical Machinery and
Instruments)........................... 14,200 2,100,121
-----------
TOTAL GERMANY 7,909,252
-----------
HONG KONG (2.4%)
China Telecom Ltd. (Other
Telecommunications) [dag] 17,800 2,611,038
Hutchison Whampoa Ltd. (Consumer
Services) [dag] ....................... 69,000 1,001,001
-----------
TOTAL HONG KONG 3,612,039
-----------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- ---------------
<S> <C> <C>
IRELAND (1.3%)
Allied Irish Banks Plc (Banks and
Thrifts)............................... 70,177 $ 702,158
CRH Plc (Forest Products and Building
Materials)............................. 77,994 1,250,868
-----------
TOTAL IRELAND 1,953,026
-----------
ITALY (1.8%)
Banca Nazionale del Lavoro (Banks and
Thrifts) [dag] ........................ 269,600 884,423
Telecom Italia SpA (Other
Telecommunications).................... 106,900 1,022,832
TiscaliS SpA (Major Telecommunications) 15,000 805,773
-----------
TOTAL ITALY 2,713,028
-----------
JAPAN (22.6%)
Canon, Inc. (Semiconductors and
Electronics)........................... 37,000 1,691,233
Crayfish Co., Ltd. (Data and Imaging
Services) [dag] ....................... 35,600 529,550
Crayfish Co., Ltd. (Data and Imaging
Services) [dag] ....................... 5 342,355
Internet Initiative Japan Inc.
(Computers)............................ 20,000 1,200,000
Matsushita Electric Industrial Co., Ltd.
(Electrical Machinery and Instruments) 85,000 2,249,364
Minebea Co., Ltd. (Semiconductors and
Electronics)........................... 142,000 1,734,351
Murata Manufacturing Co., Ltd.
(Semiconductors and Electronics) ...... 16,000 3,108,952
Nippon Telegraph & Telephone Corporation
(Major Telecommunications) ............ 252 3,124,497
NTT DoCoMo, Inc. (Other
Telecommunications) [dag] ............. 80 2,672,218
Seino Transportation Co., Ltd. (Surface
Transport)............................. 261,000 1,195,420
Sekisui Chemical Co., Ltd. (Specialty
Chemicals)............................. 196,000 718,168
Shin-Etsu Chemical Co., Ltd. (Specialty
Chemicals)............................. 36,000 1,902,012
Softbank Corp. (Semiconductors and
Electronics)........................... 13,200 3,256,998
Sony Corporation (Semiconductors and
Electronics) [dag] .................... 17,800 2,051,344
Sumitomo Bakelite Company Limited
(Specialty Chemicals) ................. 161,000 1,771,261
Taisho Pharmaceutical Co., Ltd. (Drugs) 68,000 2,277,677
Takefuji Corporation (Banks and Thrifts) 16,000 1,692,158
TOSHIBA Corporation (Electronic Media) . 198,000 1,920,000
-----------
TOTAL JAPAN 33,437,558
-----------
MEXICO (2.1%)
Banacci (Diversified Financial Services) 167,500 604,982
Telefonos de Mexico SA, ADR (Other
Telecommunications) [dag] ............. 42,040 2,472,483
-----------
TOTAL MEXICO 3,077,465
-----------
NETHERLANDS (11.5%)
Draka Holding N.V. (Semiconductors and
Electronics)........................... 18,300 1,173,148
ING Groep NV (Diversified Financial
Services).............................. 29,216 1,597,917
Koninklijke (Royal) Philips Electronis
N.V. (Heavy Machinery) ................ 117,200 5,240,602
KPN NV (Major Telecommunications) ...... 24,800 2,505,099
STMicroelectronics N.V. (Semiconductors
and Electronics) ...................... 15,000 2,869,071
</TABLE>
24 See Notes to Portfolio of Investments
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- ---------------
<S> <C> <C>
NETHERLANDS (CONTINUED)
United Pan-Europe Communications NV
(Other Telecommunications) [dag] .......... 32,500 $ 1,185,514
VNU UV (Print Media) ....................... 34,700 1,860,859
Wegener NV (Other Telecommunications) ...... 40,800 630,184
------------
TOTAL NETHERLANDS 17,062,394
------------
NORWAY (0.4%)
Petroleum Geo-Services ASA (Oil
Services) [dag] ........................... 38,700 605,566
------------
SOUTH KOREA (1.0%)
Samsung Electronics (Electronic Media) ..... 18,700 1,517,038
------------
SPAIN (2.3%)
Telefonica Publicidad e Informacion,
S.A. (Consumer Services) [dag] ............ 16,400 650,086
Telefonica SA (Major Telecommunications)
[dag]...................................... 122,905 2,741,691
------------
TOTAL SPAIN 3,391,777
------------
SWEDEN (5.2%)
HiQ International AB
(Data and Imaging Services) [dag] ......... 13,425 1,327,055
Information Highway AB (Computers) [dag] ... 115,700 1,188,920
Telefonaktiebolaget LM Ericsson AB
(Semiconductors and Electronics) .......... 44,800 3,962,000
Telelogic AB (Major Telecommunications)
[dag]...................................... 155,000 1,177,259
------------
TOTAL SWEDEN 7,655,234
------------
SWITZERLAND (4.5%)
Fantastic Corp. (Data and Imaging
Services) [dag] ........................... 54,000 993,992
Gretag Imaging Group (Biotech and
Medical Products) [dag] ................... 8,700 1,752,136
Logitech International S.A. (Computer
and Computer Software Stores) [dag] ....... 3,237 2,141,067
Swatch Group AG (The) (Consumer
Specialties)............................... 1,630 1,750,793
------------
TOTAL SWITZERLAND 6,637,988
------------
UNITED KINGDOM (11.9%)
AstraZeneca Group Plc (Biotech and
Medical)................................... 17,500 737,187
Bank of Scotland (Banks and Thrifts) ....... 171,800 1,530,953
British Telecommunications Plc (Other
Telecommunications)........................ 153,779 2,769,602
Cable & Wireless Plc
(Other Telecommunications) [dag] .......... 77,358 1,286,718
Celltech Group Plc (Drugs) [dag] ........... 70,000 1,152,282
Granada Group Plc (Electronic Media) [dag] . 764 7,484
Lloyds TSB Group Plc (Insurance) ........... 148,400 1,458,272
Prudential Plc (Insurance) ................. 72,500 1,118,561
Shell Transport & Trading Co. (Oil) ........ 184,200 1,505,986
Shire Pharmaceuticals Group Plc
(Drugs) [dag].............................. 39,000 1,569,750
Viatel, Inc. (Other Telecommunications)
[dag]...................................... 25,000 956,250
Vodafone AirTouch Plc (Other
Telecommunications)........................ 456,572 2,103,970
WPP Group Plc (Commercial Services) ........ 88,000 1,423,797
------------
TOTAL UNITED KINGDOM 17,620,812
------------
TOTAL COMMON STOCKS (COST $125,535,091)..... 141,609,753
------------
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
-------------- ---------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (3.5%)
Federal Hone Loan Mortgage Corp., Zero
Coupon,05/01/00........................ $5,206,000 $ 5,206,000
TOTAL SHORT-TERM INVESTMENTS
(COST $5,206,000) 5,206,000
------------
TOTAL INVESTMENTS (COST $130,741,091)(A) 146,815,753
OTHER ASSETS LESS LIABILITIES 1,479,202
------------
TOTAL NET ASSETS $148,294,955
============
</TABLE>
<TABLE>
<CAPTION>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) The cost of investments for federal income tax purposes amounts to
$131,690,714. Unrealized gains and losses, based on identified tax cost at
April 30, 2000, are as follows:
<S> <C>
Unrealized gains............................. $ 21,694,334
Unrealized losses............................ (6,569,295)
------------
Net unrealized gain......................... $ 15,125,039
============
</TABLE>
[dag] Non-income producing security.
Category percentages are based on net assets.
See Notes to Financial Statements. 25
<PAGE>
CAPITAL APPRECIATION FUNDS
PORTFOLIO OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED)
MID CAP
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- ---------------
<S> <C> <C>
COMMON STOCKS (99.0%)
AUTOMOTIVE (2.5%)
Meritor Automotive, Inc. ................ 3,900 $ 58,500
Superior Industries International, Inc... 2,700 86,906
-----------
145,406
-----------
BANKS AND THRIFTS (3.7%)
Astoria Financial Corp. ................. 2,600 71,662
Golden State Bancorp, Inc. [dag] ........ 2,500 38,438
National Commerce Bancorporation ........ 4,300 70,681
UnionBanCal Corp. ....................... 1,000 27,688
-----------
208,469
-----------
BIOTECH AND MEDICAL PRODUCTS (3.0%)
Abgenix, Inc. [dag] ..................... 400 35,825
CuraGen Corporation [dag] ............... 1,200 31,950
Medarex, Inc. [dag] ..................... 700 37,100
MedImmune, Inc. [dag] ................... 400 63,975
-----------
168,850
-----------
COMMERCIAL SERVICES (2.8%)
ACNielsen Corp. [dag] ................... 2,700 62,269
NOVA Corp. [dag] ........................ 1,500 47,437
TMP Worldwide Inc. [dag] ................ 300 19,613
Wallace Computer Services, Inc. ......... 3,000 32,812
-----------
162,131
-----------
CONSUMER FINANCE (0.3%)
Hertz Corporation (The) ................. 600 18,713
-----------
CONSUMER PRODUCTS (0.5%)
Church & Dwight Co., Inc. ............... 1,500 26,813
-----------
CONSUMER SERVICES (3.9%)
Brinker International, Inc. [dag] ....... 2,900 92,438
MGM Grand, Inc. [dag] ................... 2,400 70,800
Stewart Enterprises, Inc. ............... 12,500 60,156
-----------
223,394
-----------
CONSUMER SPECIALTIES (0.4%)
Callaway Golf Co. ....................... 1,400 23,275
-----------
DATA AND IMAGING SERVICES (5.8%)
BroadVision, Inc. [dag] ................. 900 39,544
Electronics for Imaging, Inc. [dag] ..... 800 41,800
Emulex Corp. [dag] ...................... 200 9,075
QLogic Corp. [dag] ...................... 600 60,187
Rational Software Corp. [dag] ........... 500 42,563
Siebel Systems, Inc. [dag] .............. 1,100 135,162
-----------
328,331
-----------
DISCRETIONARY RETAIL (6.2%)
American Eagle Outfitters, Inc. [dag] ... 2,500 42,500
Neiman Marcus Group, Inc. (The) [dag] ... 3,000 77,250
Payless ShoeSource, Inc. [dag] .......... 1,900 104,737
Ross Stores, Inc. ....................... 3,000 62,250
Tiffany & Co. ........................... 900 65,419
-----------
352,156
-----------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- --------------
<S> <C> <C>
DIVERSIFIED FINANCIAL SERVICES (0.5%)
John Hancock Financial Services, Inc. [dag] 1,500 $ 27,375
-----------
DRUGS (0.5%)
Perrigo Co. [dag] ....................... 5,500 31,281
-----------
ELECTRIC UTILITIES (9.3%)
Allegheny Energy, Inc. .................. 2,500 75,937
Calpine Corp. [dag] ..................... 1,000 91,500
Dynegy Inc. ............................. 1,000 65,437
Energy East Corp. ....................... 2,200 45,925
Hawaiian Electric Industries, Inc. ...... 1,800 66,600
NSTAR Corp............................... 2,300 101,344
OGE Energy Corp. ........................ 1,000 19,813
UtiliCorp United Inc. ................... 1,000 19,250
Wisconsin Energy Corp. .................. 2,000 42,750
-----------
528,556
-----------
ELECTRICAL MACHINERY AND INSTRUMENTS (2.2%)
Beckman Coulter Inc. .................... 800 51,850
JDS Uniphase Corporation [dag] .......... 200 20,738
Sensormatic Electronics Corp. [dag] ..... 3,000 50,062
-----------
122,650
-----------
ELECTRONIC MEDIA (1.0%)
Pixar, Inc. [dag] ....................... 1,600 59,500
-----------
FOOD AND BEVERAGE (1.8%)
Pepsi Bottling Group, Inc. .............. 3,200 69,000
Suiza Foods Corp. [dag] ................. 900 35,044
-----------
104,044
-----------
FOREST PRODUCTS AND BUILDING MATERIALS (3.4%)
Johns Manville Corporation .............. 5,000 52,187
Lafarge Corp. ........................... 1,100 27,775
Rayoner, Inc. ........................... 500 23,469
USG Corp. ............................... 2,200 91,850
-----------
195,281
-----------
GAS UTILITIES (2.3%)
KeySpan Energy Corp. .................... 3,100 91,062
Questar Corp. ........................... 2,200 41,388
-----------
132,450
-----------
HEALTH SERVICES (2.4%)
First Health Group Corp. [dag] .......... 1,300 39,569
Oxford Health Plans, Inc. [dag] ......... 5,000 95,000
-----------
134,569
-----------
INDUSTRIAL SERVICES (0.9%)
Granite Construction, Inc. ............. 2,100 49,875
-----------
INSURANCE (3.2%)
AMBAC, Inc. ............................ 1,200 57,600
Everest Re Group, Ltd. ................. 2,500 73,125
PMI Group, Inc. (The) .................. 1,050 50,859
-----------
181,584
-----------
INVESTMENT SERVICES (4.3%)
Donaldson, Lufkin & Jenrette, Inc. ..... 1,000 41,688
Edwards (A.G.), Inc. ................... 2,000 75,250
Federated Investors, Inc. .............. 1,500 42,375
</TABLE>
26 See Notes to Portfolio of Investments.
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
------------ ------------
<S> <C> <C>
INVESTMENT SERVICES (CONTINUED)
Goldman Sachs Group, Inc. (The) .......... 500 $ 46,625
Knight/Trimark Group, Inc. [dag] ......... 1,100 41,456
-----------
247,394
-----------
MAJOR TELECOMMUNICATIONS (0.5%)
Western Wireless Corporation ............. 600 29,813
-----------
OIL (2.7%)
Ocean Energy, Inc. [dag] ................. 6,000 77,625
Ultramar Diamond Shamrock Corp. .......... 3,000 74,250
-----------
151,875
-----------
OIL SERVICES (5.2%)
BJ Services Co. [dag] .................... 800 56,200
Helmerich & Payne, Inc. .................. 3,500 109,594
Noble Drilling Corp. [dag] ............... 1,500 59,906
Tidewater, Inc. .......................... 2,300 68,425
-----------
294,125
-----------
OTHER TELECOMMUNICATIONS (1.7%)
Aerial Communications, Inc. [dag] ........ 1,000 44,187
Telephone & Data Systems, Inc. ........... 500 51,000
-----------
95,187
-----------
PRINT MEDIA (1.3%)
Reader's Digest Association, Inc. (The)... 600 19,200
Scholastic Corp. [dag] ................... 1,200 56,025
-----------
75,225
-----------
PRODUCER GOODS (3.1%)
CommScope, Inc. [dag] .................... 1,300 61,750
Pentair, Inc. ............................ 2,000 76,500
Tecumseh Products Co. .................... 800 37,150
-----------
175,400
-----------
SEMICONDUCTORS AND ELECTRONICS (21.6%)
Altera Corp. [dag] ....................... 1,200 122,700
Applied Micro Circuits Corp. [dag] ....... 400 51,550
Arrow Electronics, Inc. [dag] ............ 2,100 92,006
Atmel Corp. [dag] ........................ 1,300 63,619
AVX Corp. ................................ 600 58,463
Credence Systems Corp. [dag] ............. 600 85,650
Cypress Semiconductor Corp. [dag] ........ 1,600 83,100
Digital Lightwave, Inc. [dag] ............ 300 20,550
Integrated Electric Services Inc. [dag] .. 700 33,644
Jabil Circuit, Inc. [dag] ................ 1,000 40,938
KEMET Corp. [dag] ........................ 1,000 74,500
LTX Corporation [dag] .................... 1,300 59,475
Microchip Technology, Inc. [dag] ......... 500 31,031
Novellus Systems, Inc. [dag] ............. 700 46,681
Powerwave Technologies, Inc. [dag] ....... 200 41,613
SDL, Inc. [dag] .......................... 400 78,000
TriQuint Semiconductor, Inc. [dag] ....... 1,000 102,812
Vishay Intertechnology, Inc. [dag] ....... 1,700 142,587
-----------
1,228,919
-----------
SPECIALTY CHEMICALS (1.3%)
Georgia Gulf Corp. ....................... 3,000 72,187
-----------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- --------------
<S> <C> <C>
TEXTILES AND APPAREL (0.7%)
Westpoint Stevens, Inc. [dag] ............ 2,000 $ 37,500
-----------
TOTAL COMMON STOCKS (COST $4,920,683) 5,632,328
-----------
TOTAL INVESTMENTS (COST $4,920,683)(A) 5,632,328
OTHER ASSETS LESS LIABILITIES 57,465
-----------
TOTAL NET ASSETS $5,689,793
===========
</TABLE>
<TABLE>
<CAPTION>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) The cost of investments for federal income tax purposes amounts to
$5,021,852. Unrealized gains and losses, based on identified tax cost at
April 30, 2000, are as follows:
<S> <C>
Unrealized gains............................. $ 926,586
Unrealized losses............................ (316,110)
------------
Net unrealized gain......................... $ 610,476
============
</TABLE>
[dag] Non-income producing security.
Category percentqages are based on net assets
See Notes to Financial Statements. 27
<PAGE>
CAPITAL APPRECIATION FUNDS
PORTFOLIO OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED)
SMALL COMPANY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- ---------------
<S> <C> <C>
COMMON STOCKS (79.8%)
AIR TRANSPORT (2.2%)
America West Holdings Corp. [dag] .......... 137,100 $ 2,005,087
Circle International Group, Inc. ........... 76,200 2,024,062
SkyWest, Inc. .............................. 20,500 863,563
------------
4,892,712
------------
AUTO PARTS AND HARDWARE (0.4%)
Aftermarket Technology Corp. [dag] ......... 71,300 828,863
------------
BANKS AND THRIFTS (4.3%)
Astoria Financial Corp. .................... 93,200 2,568,825
Citizens Banking Corp. ..................... 76,700 1,371,012
Downey Financial Corp. ..................... 25,700 767,788
First Tennessee National Corp. ............. 111,500 2,118,500
Peoples Heritage Financial Group, Inc....... 134,200 1,752,987
Wilmington Trust Corp. ..................... 24,400 1,125,450
------------
9,704,562
------------
BIOTECH AND MEDICAL PRODUCTS (10.7%)
ArQule, Inc. [dag] ......................... 161,800 1,911,262
BioSource International, Inc. [dag] ........ 95,100 933,169
Cell Genesys, Inc. [dag] ................... 99,900 1,866,881
Corvas International, Inc. [dag] ........... 83,300 744,494
Emisphere Technologies, Inc. [dag] ......... 34,600 1,420,222
Enzon, Inc. [dag] .......................... 43,800 1,631,550
Fonar Corporation [dag] .................... 819,700 1,716,247
Genelabs Technologies, Inc. [dag] .......... 185,300 972,825
i-STAT Corp. [dag] ......................... 92,800 1,200,600
Immunomedics, Inc. [dag] ................... 59,000 855,500
Nanogen, Inc. [dag] ........................ 82,500 2,016,094
NeoTherapeutics, Inc. [dag] ................ 110,100 1,431,300
OSI Pharmaceuticals, Inc. .................. 41,600 569,400
Protein Design Labs, Inc. [dag] ............ 11,600 1,177,400
SangStat Medical Corporation [dag] ......... 40,800 1,173,000
SICOR Inc. [dag] ........................... 170,300 1,926,519
SYNSORB Biotech Inc. [dag] ................. 287,600 1,114,450
Titan Pharmaceuticals, Inc. [dag] .......... 39,000 1,248,000
------------
23,908,913
------------
COMMERCIAL SERVICES (3.4%)
Getty Images, Inc. [dag] ................... 73,700 2,238,638
Heidrick & Struggles International,
Inc........................................ 25,000 900,000
Labor Ready, Inc. [dag] .................... 209,600 1,899,500
NOVA Corp. [dag] ........................... 83,900 2,653,337
------------
7,691,475
------------
COMPUTERS (1.8%)
Cray, Inc. [dag] ........................... 272,500 1,158,125
Splash Technology Holdings, Inc. [dag] ..... 216,800 2,791,300
------------
3,949,425
------------
CONGLOMERATE AND AEROSPACE (1.5%)
FuelCell Energy, Inc. [dag] ................ 42,000 1,711,500
M-Systems Flash Disk Pioneers Ltd. [dag] ... 25,900 1,709,400
------------
3,420,900
------------
--------------------------------------------------------------------------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
------------ ------------
<S> <C> <C>
CONSUMER FINANCE (0.8%)
American Capital Strategies, Ltd. .......... 75,300 $ 1,826,025
------------
CONSUMER SERVICES (0.8%)
Lone Star Steakhouse & Saloon, Inc. [dag]... 54,500 643,781
Veterinary Centers of America, Inc. [dag]... 78,800 1,063,800
------------
1,707,581
------------
CONSUMER SPECIALTIES (0.1%)
Grand Toys International, Inc. [dag] ....... 87,600 164,250
------------
DATA AND IMAGING SERVICES (8.9%)
ANSYS, Inc. [dag] .......................... 170,800 1,846,775
Avid Technology, Inc. [dag] ................ 92,900 1,277,375
Banyan Systems, Inc. [dag] ................. 231,600 3,213,450
CACI International Inc. [dag] .............. 72,500 1,699,219
Entrust Technologies, Inc. [dag] ........... 44,000 2,161,500
In Focus Systems, Inc. [dag] ............... 86,800 2,598,575
Panja Inc. [dag] ........................... 114,400 1,816,100
Quantum Corporation - Hard Disk Drive [dag]. 364,600 4,261,262
Scitex Corporation Ltd. [dag] .............. 75,200 893,000
------------
19,767,256
------------
DISCRETIONARY RETAIL (2.3%)
PC Connection, Inc. [dag] ................. 32,800 1,570,300
Tuesday Morning Corp. [dag] ................ 99,100 1,238,750
ValueVision International, Inc. [dag] ...... 56,500 1,126,469
Wilsons The Leather Experts Inc. [dag] ..... 103,200 1,251,300
------------
5,186,819
------------
ELECTRICAL MACHINERY AND INSTRUMENTS (1.1%)
Mechanical Technology Incorporated ......... 28,200 498,788
Robotic Vision Systems, Inc. [dag] ......... 131,500 1,964,281
------------
2,463,069
------------
FOOD AND BEVERAGE (1.7%)
Delta & Pine Land Co. ...................... 179,400 3,767,400
------------
FOOD AND DRUG RETAIL (1.1%)
Casey's General Stores, Inc. ............... 214,600 2,508,138
------------
FOREST PRODUCTS AND BUILDING MATERIALS (2.1%)
Louisiana-Pacific Corp. .................... 256,800 3,434,700
Potlatch Corp. ............................. 29,100 1,147,631
------------
4,582,331
------------
HEALTH SERVICES (2.5%)
Akorn, Inc. [dag] .......................... 147,200 1,021,200
Covance, Inc. [dag] ........................ 120,500 1,107,094
Oxford Health Plans, Inc. [dag] ............ 99,600 1,892,400
Sierra Health Services, Inc. [dag] ......... 179,800 640,537
XCare.net, Inc. [dag] ...................... 151,800 891,825
------------
5,553,056
------------
HEAVY MACHINERY (0.6%)
Astec Industries, Inc. [dag] ............... 56,300 1,414,538
------------
HOUSING AND FURNISHINGS (1.1%)
American Technology Corporation [dag] ...... 146,200 1,059,950
La-Z-Boy Incorporated ...................... 91,600 1,436,975
------------
2,496,925
------------
INSURANCE (2.2%)
Horace Mann Educators Corp. ................ 140,600 2,047,488
------------
</TABLE>
28 See Notes to Portfolio of Investments.
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- ---------------
<S> <C> <C>
INSURANCE (CONTINUED)
ReliaStar Financial Corp. ................ 65,400 $ 2,816,287
------------
4,863,775
------------
INVESTMENT SERVICES (0.6%)
Investors Financial Services Corp. ....... 4,800 391,800
National Discount Brokers Group, Inc.
[dag].................................... 35,500 1,036,156
------------
1,427,956
------------
MISCELLANEOUS METALS (1.0%)
Minerals Technologies Inc. ............... 48,700 2,252,375
------------
OIL (5.7%)
HS Resources, Inc. [dag] ................. 78,400 1,896,300
Triton Energy Ltd. [dag] ................. 126,900 4,623,919
Valero Energy Corp. ...................... 88,900 2,578,100
Vintage Petroleum, Inc. [dag] ............ 183,900 3,655,012
------------
12,753,331
------------
OIL SERVICES (2.1%)
Gulf Island Fabrication, Inc. [dag] ...... 27,900 421,988
McDermott International, Inc., ADR ....... 276,500 2,246,562
Superior Energy Services, Inc. [dag] ..... 212,200 1,962,850
------------
4,631,400
------------
OTHER TELECOMMUNICATIONS (2.3%)
Arch Communications Group, Inc. [dag] .... 351,200 2,612,050
IDT Corporation [dag] .................... 38,900 1,230,212
P.T. Pasifik Satelit Nusantara, ADR[dag].. 62,900 1,258,000
------------
5,100,262
------------
PRINT MEDIA (1.0%)
Reader's Digest Association, Inc. (The)... 68,400 2,188,800
------------
PRODUCER GOODS (3.0%)
Cable Design Technologies, Inc. [dag] .... 51,300 1,757,025
CoorsTek, Inc. [dag] ..................... 46,700 2,104,419
Digital Biometrics, Inc. [dag] ........... 227,200 930,100
Littlefuse, Inc. [dag] .................. 38,400 1,363,200
United Stationers, Inc. [dag] ............ 13,600 453,900
------------
6,608,644
-------------
REAL ESTATE INVESTMENT TRUSTS (0.7%)
Trizec Hahn Corp. ........................ 101,800 1,654,250
-------------
SEMICONDUCTORS AND ELECTRONICS (9.5%)
ACE*COMM Corporation [dag] ............... 238,700 1,894,681
Allen Telecom Inc. [dag] ................. 121,500 2,156,625
ANADIGICS, Inc. [dag] .................... 24,700 1,858,675
Arguss Holdings, Inc. [dag] .............. 46,500 1,011,375
Blue Wave Systems Inc. [dag] ............. 205,800 2,636,812
Cohu, Inc. .............................. 48,500 1,846,031
ESS Technology, Inc. [dag] ............... 96,900 1,259,700
General Semiconductor Corp. [dag] ........ 134,400 2,688,000
Pioneer Standard Electronics Corp. ....... 62,200 952,438
SIPEX Corporation [dag] .................. 69,400 1,587,525
Varian Semiconductor Equipment
Associates, Inc. [dag] .................. 29,300 1,970,425
Veeco Instruments Inc. [dag] ............. 19,700 1,223,863
------------
21,086,150
------------
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- ---------------
<S> <C> <C>
SPECIALTY CHEMICALS (2.0%)
Alcide Corp. [dag] ....................... 36,900 $ 551,194
Cytec Industries Inc. [dag] .............. 38,700 1,165,837
Olin Corp. ............................... 76,200 1,352,550
OM Group, Inc. ........................... 29,600 1,361,600
------------
4,431,181
------------
TEXTILES AND APPAREL (2.3%)
K-Swiss Inc. ............................. 162,600 2,408,513
Warnaco Group, Inc. (The) ................ 262,500 2,789,062
------------
5,197,575
------------
TOTAL COMMON STOCKS
(COST $185,386,758) 178,029,937
------------
<CAPTION>
PRINCIPAL
AMOUNT
--------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (21.7%)
Federal Farm Credit
Bank,5.88%,05/01/00...................... $ 27,705,000 27,705,000
Federal Home Loan
Mortgage,5.89%,05/16/00.................. 20,000,000 19,950,917
U.S. Treasury Bill,5.25%,05/18/00 @ ...... 100,000 99,752
U.S. Treasury Bill,5.55%,05/18/00 @ ...... 700,000 698,167
-------------
TOTAL SHORT-TERM INVESTMENTS
(COST $48,453,836) 48,453,836
-------------
TOTAL INVESTMENTS
(COST $233,840,594)(A) 226,483,773
OTHER ASSETS LESS LIABILITIES (3,360,866)
-------------
TOTAL NET ASSETS $223,122,907
=============
</TABLE>
<TABLE>
<CAPTION>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) The cost of investments for federal income tax purposes amounts to
$247,386,031. Unrealized gains and losses, based on identified tax cost at
April 30, 2000, are as follows:
<S> <C>
Unrealized gains............................. $ 4,874,690
Unrealized losses............................ (25,776,948)
--------------
Net unrealized loss......................... $ (20,902,258)
==============
</TABLE>
<TABLE>
<CAPTION>
Information concerning open futures contracts at April 30, 2000 is shown below:
NO. OF NOTIONAL EXPIRATION UNREALIZED
CONTRACTS VALUE DATE GAIN/(LOSS)
----------- ------------- ------------ ------------------
LONG CONTRACTS
---------------------
<S> <C> <C> <C> <C>
Russell 2000 Index
Futures.............. 64 $16,288,000 Jun 00 $(1,997,028)
============ ==============
</TABLE>
[dag] Non-income producing security.
@ Security pledged to cover initial margin requirements on open futures
contracts at April 30, 2000.
Category percentages are based on net assets.
See Notes to Financial Statements. 29
<PAGE>
CAPITAL APPRECIATION FUNDS
PORTFOLIO OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED)
VALUE OPPORTUNITY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- ---------------
<S> <C> <C>
COMMON STOCKS (94.1%)
BANKS AND THRIFTS (3.3%)
J.P. Morgan & Co. ........................ 2,500 $ 320,937
----------
COMPUTERS (3.5%)
Compag Computer Corp. .................... 6,800 198,900
International Business Machines Corp. .... 1,300 145,112
----------
344,012
----------
CONGLOMERATE AND AEROSPACE (13.1%)
Boeing Co. ............................... 8,500 337,344
General Electric Co. ..................... 2,700 424,575
General Motors Corp. - Class H + ......... 2,300 221,519
United Technologies Corp. ................ 5,000 310,937
----------
1,294,375
----------
DATA AND IMAGING SERVICES (8.7%)
America Online, Inc. + ................... 4,800 287,100
First Data Corp. ......................... 6,100 296,994
Microsoft Corp. + ........................ 3,900 272,025
----------
856,119
----------
DISCRETIONARY RETAIL (2.6%)
Costco Wholesale Corp.+ .................. 4,800 259,500
----------
DIVERSIFIED FINANCIAL SERVICES (4.5%)
Citigroup Inc. ........................... 7,500 445,781
----------
DRUGS (10.8%)
Abbott Laboratories ...................... 8,700 334,406
Pharmacia Corporation .................... 6,200 309,613
Warner Lambert Co. ....................... 3,700 421,106
----------
1,065,125
----------
ELECTRIC UTILITIES (3.6%)
AES Corp. + .............................. 3,900 350,756
----------
ELECTRICAL MACHINERY AND INSTRUMENTS (2.8%)
Waters Corp. + ........................... 2,900 274,775
----------
ELECTRONIC MEDIA (6.2%)
Mediaone Group, Inc. + ................... 3,100 234,437
Walt Disney Co. (The) + .................. 8,700 376,819
----------
611,256
----------
FOOD AND BEVERAGE (2.4%)
Anheuser-Busch Co., Inc. ................. 3,400 239,913
----------
HEALTH SERVICES (3.7%)
Columbia/HCA Healthcare Corp. ............ 12,900 366,844
----------
INSURANCE (5.8%)
American International Group, Inc. ...... 2,400 263,250
MetLife, Inc. + ......................... 18,400 304,750
----------
568,000
----------
INVESTMENT SERVICES (2.5%)
Goldman Sachs Group, Inc. (The) ......... 2,600 242,450
----------
MAJOR TELECOMMUNICATIONS (2.3%)
Western Wireless Corporation ............ 4,600 228,563
----------
OIL (6.8%)
Chevron Corp. .......................... 4,700 400,087
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- ---------------
OIL (CONTINUED)
<S> <C> <C>
Kerr-McGee Corp. ....................... 5,200 $ 269,100
----------
669,187
----------
PRODUCER GOODS (7.5%)
Minnesota Mining and Manufacturing Co. . 2,500 216,250
Tyco International Ltd. ................ 11,300 519,094
----------
735,344
----------
SEMICONDUCTORS AND ELECTRONICS (4.0%)
Intel Corp. ............................ 3,100 393,119
----------
TOTAL COMMON STOCKS (COST $8,235,658) .. 9,266,056
----------
<CAPTION>
Principal
Amount
---------
SHORT-TERM INVESTMENTS (6.1%)
Federal Farm Credit Bank, 5.88%, 05/01/00 $397,000 397,000
U.S. Treasury Bill, 5.54%, 05/18/00 @ ... 100,000 99,738
U.S. Treasury Bill, 5.55%, 05/18/00 @ ... 100,000 99,739
----------
TOTAL SHORT-TERM INVESTMENTS
(COST $596,477) 596,477
----------
TOTAL INVESTMENTS (COST $8,832,135)(a)... $9,862,533
OTHER ASSETS LESS LIABILITIES (15,111)
----------
TOTAL NET ASSETS $9,847,422
==========
NOTES TO PORTFOLIO OF INVESTMENTS
(a) The cost of investments for federal income tax purposes amounts to
$9,036,980. Unrealized gains and losses, based on identified tax cost at
April 30, 2000, are as follows:
Unrealized gains ................................... $1,804,015
Unrealized losses .................................. (258,462)
----------
Net unrealized gain .............................. $ 825,553
==========
</TABLE>
Information concerning open futures contracts at April 30, 2000 is shown
below:
<TABLE>
<CAPTION>
NO OF NOTIONAL EXPIRATION UNREALIZED
CONTRACTS VALUE DATE GAIN/(LOSS)
--------- ----- ---- ---------
LONG CONTRACTS
-------------------
<S> <C> <C> <C> <C>
S&P 500 Index Futures 1 $365,000 Jun 00 $12,366
======== =======
</TABLE>
+ Non-income producing security.
@ Security pledged to cover initial margin requirements on open futures
contracts at April 30, 2000.
Category percentages are based on net assets.
30 See Notes to Financial Statements.
<PAGE>
CAPITAL APPRECIATION FUNDS
PORTFOLIO OF INVESTMENTS - APRIL 30, 2000 (UNAUDITED)
TECHNOLOGY
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NUMBER OF MARKET
SHARES VALUE
-------------- ---------------
<S> <C> <C>
COMMON STOCKS (98.1%)
BIOTECH AND MEDICAL PRODUCTS (2.1%)
ORATEC Interventions, Inc. [dag] ........... 7,500 $ 255,469
--------------
COMPUTERS (5.3%)
Compaq Computer Corp. ...................... 9,700 283,725
Sun Microsystems, Inc. [dag] ............... 3,850 353,959
--------------
637,684
--------------
DATA AND IMAGING SERVICES (19.6%)
America Online, Inc. [dag] ................. 3,000 179,438
BroadVision, Inc. [dag] .................... 3,900 171,356
Cisco Systems, Inc. [dag] .................. 9,500 658,617
Computer Associates International, Inc. .... 3,050 170,228
EMC Corp. [dag] ............................ 4,200 583,537
Microsoft Corp. [dag] ...................... 6,150 428,962
National Instruments Corp. [dag] ........... 3,050 148,688
Yahoo! Inc. [dag] .......................... 50 6,513
--------------
2,347,339
--------------
ELECTRICAL MACHINERY AND INSTRUMENTS (3.6%)
JDS Uniphase Corporation [dag] ............. 4,100 425,119
--------------
PRODUCER GOODS (3.1%)
Corning, Inc. .............................. 1,850 365,375
--------------
SEMICONDUCTORS AND ELECTRONICS (64.4%)
Altera Corp. [dag] ......................... 2,700 276,075
Applied Materials, Inc. [dag] .............. 5,500 559,969
Atmel Corp. [dag] .......................... 5,100 249,581
Comverse Technology, Inc. [dag] ............ 2,400 214,050
Ericsson, ADR .............................. 3,000 265,313
Flextronics International Ltd. [dag] ....... 2,150 151,038
Intel Corp. ................................ 4,250 538,953
KLA Instruments Corp. [dag] ................ 3,550 265,806
Lam Research Corporation [dag] ............. 6,800 311,950
Linear Technology Corp. .................... 2,700 154,238
Lucent Technologies, Inc. .................. 2,000 124,375
Maxim Integrated Products, Inc. [dag] ...... 2,000 129,625
Micron Technology, Inc. [dag] .............. 1,800 250,650
Motorola, Inc. ............................. 3,200 381,000
Nokia Corp., ADR ........................... 14,300 813,312
Nortel Networks Corp. ...................... 2,800 317,100
PSi Technology Holdings, Inc. [dag] ........ 1,000 16,500
QUALCOMM Inc. [dag] ........................ 3,600 390,375
SCG Holding Corporation [dag] .............. 10,000 219,375
Solectron Corp. [dag] ...................... 5,700 266,831
Tellabs, Inc. [dag] ........................ 3,800 208,288
Teradyne, Inc. [dag] ....................... 7,100 781,000
Texas Instruments, Inc. ................ 1,550 252,456
Xilinx, Inc. [dag] ......................... 7,750 567,687
--------------
7,705,547
--------------
TOTAL COMMON STOCKS (COST $11,351,254) 11,736,533
--------------
<CAPTION>
MARKET
VALUE
--------------
<S> <C>
TOTAL INVESTMENTS (COST $11,351,254)(a) $11,736,533
OTHER ASSETS LESS LIABILITIES 230,589
--------------
TOTAL NET ASSETS $11,967,122
--------------
</TABLE>
<TABLE>
<CAPTION>
NOTES TO PORTFOLIO OF INVESTMENTS
(a) The cost of investments for federal income tax purposes amounts to
$11,544,020. Unrealized gains and losses, based on identified tax cost at
April 30, 2000, are as follows:
<S> <C>
Unrealized gains............................. $ 679,482
Unrealized losses............................ (486,969)
--------------
Net unrealized gain......................... $ 192,513
==============
</TABLE>
[dag] Non-income producing security.
Category percentages are based on net assets.
See Notes to Financial Statements. 31
<PAGE>
CAPITAL APPRECIATION FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
GROWTH
-------------
ASSETS:
Investments, at market value ................................ $376,912,557
Cash ........................................................ 795
Foreign currency ............................................ --
Receivable for:
Dividends and interest ..................................... 38,980
Investments sold ........................................... 5,797,182
Fund shares sold ........................................... 677,799
Recoverable foreign taxes .................................. --
Variation margin ........................................... --
Reimbursement from Investment Adviser ...................... --
Prepaid expenses ............................................ 1,361
Other assets ................................................ --
Gross unrealized gain on forward foreign currency exchange
contracts................................................... --
------------
Total assets ........................................... 383,428,674
------------
LIABILITIES:
Payable for:
Investments purchased ...................................... 15,041,930
Fund shares redeemed ....................................... 3,394,342
Variation margin ........................................... 100,375
Other liabilities ........................................... 314,225
Gross unrealized loss on forward foreign currency exchange
contracts................................................... --
------------
Total liabilities ...................................... 18,850,872
------------
NET ASSETS ............................................... $364,577,802
============
NET ASSETS REPRESENTED BY:
Paid-in capital ............................................. $259,961,428
Net unrealized gain (loss) on investments, open futures
contracts and foreign currency related transactions ........ 69,744,623
Undistributed (distributions in excess of) net investment
income...................................................... (104,781)
Accumulated net realized gain on investments ................ 34,976,532
------------
NET ASSETS ............................................... $364,577,802
============
Cost of investments ......................................... $306,705,706
Cost of foreign currency .................................... $ --
CAPITAL SHARES, $.001 PAR VALUE:
Class I:
Outstanding ................................................ 10,870,719
Net Assets ................................................. $261,051,017
Net Asset Value, offering and redemption price per share
(net assets divided by shares outstanding) ................. $ 24.01
Class A:
Outstanding ................................................ 4,076,789
Net Assets ................................................. $ 95,957,496
Net Asset Value and redemption price per share (net assets
divided by shares outstanding) ............................. $ 23.54
Offering price (net asset value divided by 1 minus maximum
sales load) ................................................ $ 24.98
Class B:
Outstanding ................................................ 194,610
Net Assets ................................................. $ 4,641,844
Net Asset Value, offering and redemption price per share
(net assets divided by shares outstanding) ................. $ 23.85
Class C:
Outstanding ................................................ 123,590
Net Assets ................................................. $ 2,927,445
Net Asset Value, offering and redemption price per share
(net assets divided by shares outstanding) ................. $ 23.69
</TABLE>
32 See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL MID CAP SMALL COMPANY VALUE OPPORTUNITY TECHNOLOGY
--------------- -------------- --------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C>
$146,815,753 $5,632,328 $226,483,773 $9,862,533 $11,736,533
348 71,033 491,737 882 244,210
5,472,986 -- -- -- --
230,213 3,037 65,290 3,031 16,472
5,555,487 -- 5,701,721 -- 76,566
603,283 -- 1,049,349 477 120,842
55,542 -- -- -- --
-- -- 264,000 -- --
3,069 4,121 -- 3,778 10,861
223 35 375 40 --
10,764 -- -- -- 40,277
36,053 -- -- -- --
------------ ---------- ------------ ---------- -----------
158,783,721 5,710,554 234,056,245 9,870,741 12,245,761
------------ ---------- ------------ ---------- -----------
9,897,437 -- 10,066,143 -- 233,750
369,272 3,500 616,999 2,754 15,238
-- -- -- 1,825 --
195,885 17,261 250,196 18,740 29,651
26,172 -- -- -- --
------------ ---------- ------------ ---------- -----------
10,488,766 20,761 10,933,338 23,319 278,639
------------ ---------- ------------ ---------- -----------
$148,294,955 $5,689,793 $223,122,907 $9,847,422 $11,967,122
============ ========== ============ ========== ===========
$116,235,170 $3,873,277 $192,319,834 $7,833,733 $11,421,755
16,056,396 711,645 (9,353,849) 1,042,764 385,279
(181,062) (14,311) 114,611 (875) (15,068)
16,184,451 1,119,182 40,042,311 971,800 175,156
------------ ---------- ------------ ---------- -----------
$148,294,955 $5,689,793 $223,122,907 $9,847,422 $11,967,122
============ ========== ============ ========== ===========
$130,741,091 $4,920,683 $233,840,594 $8,832,135 $11,351,254
$ 5,522,900 $ -- $ -- $ -- $ --
4,097,590 332,720 11,103,777 307,590 374,013
$ 66,891,988 $4,651,529 $177,864,201 $4,082,243 $ 4,013,012
$ 16.32 $ 13.98 $ 16.02 $ 13.27 $ 10.73
4,497,957 51,175 2,458,721 387,230 380,030
$ 73,186,828 $ 712,572 $ 38,247,446 $5,128,992 $ 4,074,827
$ 16.27 $ 13.92 $ 15.56 $ 13.25 $ 10.72
$ 17.26 $ 14.77 $ 16.51 $ 14.06 $ 11.37
65,043 11,377 49,870 16,680 185,301
$ 1,055,891 $ 158,399 $ 795,509 $ 220,065 $ 1,984,672
$ 16.23 $ 13.92 $ 15.95 $ 13.19 $ 10.71
442,234 12,068 391,845 31,651 176,854
$ 7,160,248 $ 167,293 $ 6,215,751 $ 416,122 $ 1,894,611
$ 16.19 $ 13.86 $ 15.86 $ 13.15 $ 10.71
</TABLE>
See Notes to Financial Statements. 33
<PAGE>
CAPITAL APPRECIATION FUNDS
STATEMENTS OF OPERATIONS
SIX MONTH PERIOD ENDED APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH
------------
<S> <C>
INVESTMENT INCOME:
Dividends ..................................................... $ 634,873
Interest ...................................................... 832,668
-----------
1,467,541
Foreign taxes withheld on dividends ........................... (3,414)
-----------
Total investment income .................................. 1,464,127
-----------
INVESTMENT EXPENSES:
Investment advisory fees ...................................... 1,132,099
Administrative services fees .................................. 161,858
Distribution plan fees - Class A .............................. 99,546
Distribution plan fees - Class B .............................. 12,462
Distribution plan fees - Class C .............................. 8,225
Shareholder services fees - Class B ........................... 4,154
Shareholder services fees - Class C ........................... 2,742
Printing and postage fees ..................................... 13,071
Custody fees .................................................. 11,342
Transfer agent fees ........................................... 71,746
Audit fees .................................................... 11,996
Directors' fees ............................................... 4,384
Registration fees ............................................. 25,642
Miscellaneous expenses ........................................ 9,641
-----------
Expenses before reimbursement and waiver from Investment
Adviser....................................................... 1,568,908
Expense reimbursement and waiver from Investment Adviser ...... --
-----------
Net investment expenses .................................. 1,568,908
-----------
Net investment gain (loss) .................................... (104,781)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments .................................................. 35,035,888
Futures and forward foreign currency exchange contracts ...... 1,038,165
Foreign currency related transactions ........................ --
-----------
Net realized gain on investments ......................... 36,074,053
-----------
Net change in unrealized gain or loss on:
Investments .................................................. 25,434,316
Futures and forward foreign currency exchange contracts ...... (825,475)
Foreign currency related transactions ........................ --
-----------
Net change in unrealized gain or loss on investments ..... 24,608,841
-----------
Net realized and change in unrealized gain or loss on
investments................................................... 60,682,894
-----------
Net increase in net assets resulting from operations .......... $60,578,113
===========
</TABLE>
34 See Notes to Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL MID CAP SMALL COMPANY VALUE OPPORTUNITY TECHNOLOGY
------------- ------- ------------- ----------------- ----------
<S> <C> <C> <C> <C> <C>
$ 652,302 $ 21,555 $ 267,059 $ 33,261 $ 2,007
101 4,861 777,848 18,590 8,862
----------- ---------- ------------ --------- --------
652,403 26,416 1,044,907 51,851 10,869
(63,642) -- -- -- (236)
----------- ---------- ------------ --------- --------
588,761 26,416 1,044,907 51,851 10,633
----------- ---------- ------------ --------- --------
509,137 21,577 636,135 25,852 14,471
59,899 2,877 74,839 3,693 1,378
71,361 975 35,699 2,883 1,120
2,110 524 1,387 745 1,636
12,467 568 14,239 1,361 1,200
703 175 462 248 545
4,156 189 4,746 454 400
4,045 1,349 2,485 1,390 201
113,764 6,066 18,580 4,667 961
53,152 13,238 64,065 14,145 6,167
12,504 10,824 10,900 10,228 7,438
1,302 95 1,163 109 201
19,326 4,713 27,344 4,555 15,855
3,179 207 3,190 232 14
----------- ---------- ------------ --------- --------
867,105 63,377 895,234 70,562 51,587
(21,957) (27,781) -- (24,246) (25,886)
----------- ---------- ------------ --------- --------
845,148 35,596 895,234 46,316 25,701
----------- ---------- ------------ --------- --------
(256,387) (9,180) 149,673 5,535 (15,068)
----------- ---------- ------------ --------- --------
17,698,788 1,126,815 36,929,010 914,712 175,156
215,083 -- 3,120,160 54,987 --
(296,848) -- -- -- --
----------- ---------- ------------ --------- --------
17,617,023 1,126,815 40,049,170 969,699 175,156
----------- ---------- ------------ --------- --------
7,690,281 316,385 (11,947,461) (178,241) 385,279
44,916 -- (1,785,987) 12,366 --
(10,785) -- -- -- --
----------- ---------- ------------ --------- --------
7,724,412 316,385 (13,733,448) (165,875) 385,279
----------- ---------- ------------ --------- --------
25,341,435 1,443,200 26,315,722 803,824 560,435
----------- ---------- ------------ --------- --------
$25,085,048 $1,434,020 $ 26,465,395 $ 809,359 $545,367
=========== ========== ============ ========= ========
</TABLE>
See Notes to Financial Statements. 35
<PAGE>
CAPITAL APPRECIATION FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH
--------------------------------
SIX MONTH
PERIOD ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment loss ....................... $ (104,781) $ (173,440)
Net realized gain on investments........... 36,074,053 36,361,412
Net change in unrealized gain or loss on
investments............................... 24,608,841 22,675,940
------------ -------------
Net increase in net assets resulting from
operations.............................. 60,578,113 58,863,912
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Class I:
From net investment income................ -- (27,477)
From net realized gains on investments.... (27,940,871) (1,603,819)
Class A:
From net realized gains on investments.... (8,441,635) (220,501)
Class B:
From net realized gains on investments.... (282,838) --
Class C:
From net realized gains on investments.... (206,144) (5,280)
------------ -------------
Decrease in net assets from distributions
to shareholders......................... (36,871,488) (1,857,077)
------------ -------------
FROM FUND SHARE TRANSACTIONS:
Class I:
Proceeds from shares sold................. 38,077,684 61,068,750
Net asset value of shares issued upon
reinvestment of distributions............ 27,912,381 1,629,572
Payments for shares redeemed.............. (28,339,643) (34,390,349)
Class A:
Proceeds from shares sold................. 117,474,117 178,296,560
Net asset value of shares issued upon
reinvestment of distributions............ 8,427,695 212,136
Payments for shares redeemed.............. (93,394,535) (141,521,466)
Class B:
Proceeds from shares sold................. 2,278,711 1,956,053
Net asset value of shares issued upon
reinvestment of distributions............ 271,514 --
Payments for shares redeemed.............. (89,625) (125,180)
Class C:
Proceeds from shares sold................. 1,232,976 1,167,486
Net asset value of shares issued upon
reinvestment of distributions............ 203,067 4,074
Payments for shares redeemed.............. (114,917) (271,809)
------------ -------------
Net increase in net assets from fund share
transactions............................ 73,939,425 68,025,827
------------ -------------
Net change in net assets................... 97,646,050 125,032,662
NET ASSETS:
Beginning of period........................ 266,931,752 141,899,090
------------ -------------
End of period.............................. $364,577,802 $266,931,752
============ =============
End of period net assets includes
distributions in excess of net investment
income.................................... $ (104,781) $ --
============ =============
</TABLE>
36 See Notes to Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH
--------------------------------
SIX MONTH
PERIOD ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
-------------- ----------------
<S> <C> <C>
SHARE TRANSACTIONS:
Class I:
Number of shares sold..................... 1,629,160 2,995,411
Number of shares issued upon reinvestment
of distributions......................... 1,307,372 85,273
Number of shares redeemed................. (1,214,123) (1,675,907)
------------ -------------
Net increase.............................. 1,722,409 1,404,777
============ =============
Class A:
Number of shares sold..................... 5,161,232 8,758,283
Number of shares issued upon reinvestment
of distributions......................... 402,276 11,278
Number of shares redeemed................. (4,075,361) (6,967,724)
------------ -------------
Net increase.............................. 1,488,147 1,801,837
============ =============
Class B:
Number of shares sold..................... 99,961 91,615
Number of shares issued upon reinvestment
of distributions......................... 12,758 --
Number of shares redeemed................. (3,810) (5,914)
------------ -------------
Net increase.............................. 108,909 85,701
============ =============
Class C:
Number of shares sold..................... 53,995 56,561
Number of shares issued upon reinvestment
of distributions......................... 9,606 214
Number of shares redeemed................. (4,978) (13,295)
------------ -------------
Net increase.............................. 58,623 43,480
============ =============
</TABLE>
See Notes to Financial Statements. 37
<PAGE>
CAPITAL APPRECIATION FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERNATIONAL
--------------------------------
SIX MONTH
PERIOD ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment loss ....................... $ (256,387) $ (204)
Net realized gain on investments........... 17,617,023 10,616,705
Net change in unrealized gain or loss on
investments............................... 7,724,412 3,828,563
------------ ------------
Net increase in net assets resulting from
operations.............................. 25,085,048 14,445,064
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Class I:
From net investment income................ -- (1,770,158)
From net realized gains on investments.... (4,975,964) (1,806,974)
Class A:
From net investment income................ -- (561,757)
From net realized gains on investments.... (4,347,608) (615,742)
Class B:
From net investment income................ -- --
From net realized gains on investments.... (33,790) --
Class C:
From net investment income................ -- (8,737)
From net realized gains on investments.... (162,631) (9,514)
------------ ------------
Decrease in net assets from distributions
to shareholders......................... (9,519,993) (4,772,882)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Class I:
Proceeds from shares sold................. 58,939,699 23,296,782
Net asset value of shares issued upon
reinvestment of distributions............ 4,928,139 3,234,912
Payments for shares redeemed.............. (47,981,629) (25,043,459)
Class A:
Proceeds from shares sold................. 55,774,194 33,971,389
Net asset value of shares issued upon
reinvestment of distributions............ 4,187,219 662,806
Payments for shares redeemed.............. (28,990,160) (17,565,072)
Class B:
Proceeds from shares sold................. 794,262 312,927
Net asset value of shares issued upon
reinvestment of distributions............ 33,222 --
Payments for shares redeemed.............. (15,309) (115,688)
Class C:
Proceeds from shares sold................. 6,566,245 1,201,662
Net asset value of shares issued upon
reinvestment of distributions............ 132,896 8,770
Payments for shares redeemed.............. (926,002) (140,159)
------------ ------------
Net increase in net assets from fund share
transactions............................ 53,442,776 19,824,870
------------ ------------
Net change in net assets................... 69,007,831 29,497,052
NET ASSETS:
Beginning of period........................ 79,287,124 49,790,072
------------ ------------
End of period.............................. $148,294,955 $ 79,287,124
============ ============
End of period net assets includes
undistributed (distributions in excess of)
net investment income..................... $ (181,062) $ 75,325
============ ============
</TABLE>
38 See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
INTERNATIONAL
--------------------------------
SIX MONTH
PERIOD ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
-------------- ----------------
<S> <C> <C>
SHARE TRANSACTIONS:
Class I:
Number of shares sold..................... 3,576,582 1,822,893
Number of shares issued upon reinvestment
of distributions......................... 335,247 309,191
Number of shares redeemed................. (2,905,920) (1,951,528)
------------ ------------
Net increase.............................. 1,005,909 180,556
============ ============
Class A:
Number of shares sold..................... 3,391,639 2,624,169
Number of shares issued upon reinvestment
of distributions......................... 285,427 63,439
Number of shares redeemed................. (1,733,342) (1,407,471)
------------ ------------
Net increase.............................. 1,943,724 1,280,137
============ ============
Class B:
Number of shares sold..................... 47,274 25,013
Number of shares issued upon reinvestment
of distributions......................... 2,293 --
Number of shares redeemed................. (948) (8,589)
------------ ------------
Net increase.............................. 48,619 16,424
============ ============
Class C:
Number of shares sold..................... 389,366 96,880
Number of shares issued upon reinvestment
of distributions......................... 9,078 837
Number of shares redeemed................. (55,563) (11,527)
------------ ------------
Net increase.............................. 342,881 86,190
============ ============
</TABLE>
See Notes to Financial Statements. 39
<PAGE>
CAPITAL APPRECIATION FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MID CAP
--------------------------------
SIX MONTH
PERIOD ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment loss ....................... $ (9,180) $ (2,362)
Net realized gain on investments........... 1,126,815 724,153
Net change in unrealized gain or loss on
investments............................... 316,385 406,952
----------- ----------
Net increase in net assets resulting from
operations.............................. 1,434,020 1,128,743
----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Class I:
From net investment income................ (5,131) --
From net realized gains on investments.... (328,733) --
Class A:
From net realized gains on investments.... (43,085) --
Class B:
From net realized gains on investments.... (6,797) --
Class C:
From net realized gains on investments.... (7,392) --
----------- ----------
Decrease in net assets from distributions
to shareholders......................... (391,138) --
----------- ----------
FROM FUND SHARE TRANSACTIONS:
Class I:
Proceeds from shares sold................. 10,322 66,452
Net asset value of shares issued upon
reinvestment of distributions............ 7,085 --
Payments for shares redeemed.............. (1,369,944) (460,627)
Class A:
Proceeds from shares sold................. 142,316 609,480
Net asset value of shares issued upon
reinvestment of distributions............ 16,191 --
Payments for shares redeemed.............. (299,258) (62,951)
Class B:
Proceeds from shares sold................. 18,751 104,910
Net asset value of shares issued upon
reinvestment of distributions............ 707 --
Class C:
Proceeds from shares sold................. 7,264 53,374
Net asset value of shares issued upon
reinvestment of distributions............ 1,803 --
Payments for shares redeemed.............. (5,007) (23,523)
----------- ----------
Net increase (decrease) in net assets from
fund share transactions................. (1,469,770) 287,115
----------- ----------
Net change in net assets................... (426,888) 1,415,858
NET ASSETS:
Beginning of period........................ 6,116,681 4,700,823
----------- ----------
End of period.............................. $ 5,689,793 $6,116,681
=========== ==========
End of period net assets includes
distributions in excess of net investment
income.................................... $ (14,311) $ --
=========== ==========
40 See Notes to Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
<CAPTION>
MID CAP
--------------------------------
SIX MONTH
PERIOD ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
-------------- ----------------
<S> <C> <C>
SHARE TRANSACTIONS:
Class I:
Number of shares sold.................... 837 6,256
Number of shares issued upon reinvestment
of distributions....................... 647 --
Number of shares redeemed................. (119,479) (40,089)
----------- ----------
Net decrease.............................. (117,995) (33,833)
=========== ==========
Class A:
Number of shares sold.................... 11,949 53,355
Number of shares issued upon reinvestment
of distributions....................... 1,483 --
Number of shares redeemed................. (22,368) (5,630)
----------- ----------
Net increase (decrease)................... (8,936) 47,725
=========== ==========
Class B:
Number of shares sold.................... 1,539 9,773
Number of shares issued upon reinvestment
of distributions....................... 65 --
----------- ----------
Net increase.............................. 1,604 9,773
=========== ==========
Class C:
Number of shares sold.................... 593 4,799
Number of shares issued upon reinvestment
of distributions....................... 166 --
Number of shares redeemed................. (420) (2,063)
----------- ----------
Net increase.............................. 339 2,736
=========== ==========
</TABLE>
See Notes to Financial Statements. 41
<PAGE>
CAPITAL APPRECIATION FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY
--------------------------------
SIX MONTH
PERIOD ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income ..................... $ 149,673 $ 200,027
Net realized gain on investments........... 40,049,170 6,016,547
Net change in unrealized gain or loss on
investments............................... (13,733,448) 3,721,287
------------ ------------
Net increase in net assets resulting from
operations.............................. 26,465,395 9,937,861
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Class I:
From net investment income................ (163,952) (133,799)
From net realized gains on investments.... (4,075,489) (180,598)
Class A:
From net investment income................ (20,484) (19,020)
From net realized gains on investments.... (1,391,975) (56,084)
Class B:
From net realized gains on investments.... (10,672) --
Class C:
From net investment income................ -- (1,567)
From net realized gains on investments.... (152,152) (7,096)
------------ ------------
Decrease in net assets from distributions
to shareholders......................... (5,814,724) (398,164)
------------ ------------
FROM FUND SHARE TRANSACTIONS:
Class I:
Proceeds from shares sold................. 122,728,402 30,751,398
Net asset value of shares issued upon
reinvestment of distributions............ 4,218,800 311,160
Payments for shares redeemed.............. (16,695,467) (16,329,891)
Class A:
Proceeds from shares sold................. 29,842,945 11,485,209
Net asset value of shares issued upon
reinvestment of distributions............ 1,368,208 72,343
Payments for shares redeemed.............. (13,502,339) (6,543,180)
Class B:
Proceeds from shares sold................. 667,247 225,992
Net asset value of shares issued upon
reinvestment of distributions............ 10,672 --
Payments for shares redeemed.............. (2,489) (114,711)
Class C:
Proceeds from shares sold................. 4,065,985 1,273,751
Net asset value of shares issued upon
reinvestment of distributions............ 120,481 7,074
Payments for shares redeemed.............. (63,576) (715,141)
------------ ------------
Net increase in net assets from fund share
transactions............................ 132,758,869 20,424,004
------------ ------------
Net change in net assets................... 153,409,540 29,963,701
NET ASSETS:
Beginning of period........................ 69,713,367 39,749,666
------------ ------------
End of period.............................. $223,122,907 $ 69,713,367
============ ============
End of period net assets includes
undistributed net investment income....... $ 114,611 $ 149,374
============ ============
</TABLE>
42 See Notes to Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SMALL COMPANY
--------------------------------
SIX MONTH
PERIOD ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
-------------- ----------------
<S> <C> <C>
SHARE TRANSACTIONS:
Class I:
Number of shares sold..................... 7,676,980 2,648,135
Number of shares issued upon reinvestment
of distributions......................... 326,786 28,083
Number of shares redeemed................. (1,028,584) (1,381,513)
------------ ------------
Net increase.............................. 6,975,182 1,294,705
============ ============
Class A:
Number of shares sold..................... 1,892,545 1,010,099
Number of shares issued upon reinvestment
of distributions......................... 109,108 6,698
Number of shares redeemed................. (885,955) (569,552)
------------ ------------
Net increase.............................. 1,115,698 447,245
============ ============
Class B:
Number of shares sold..................... 38,799 19,803
Number of shares issued upon reinvestment
of distributions......................... 827 --
Number of shares redeemed................. (164) (9,395)
------------ ------------
Net increase.............................. 39,462 10,408
============ ============
Class C:
Number of shares sold..................... 232,359 109,756
Number of shares issued upon reinvestment
of distributions......................... 9,391 640
Number of shares redeemed................. (3,610) (64,303)
------------ ------------
Net increase.............................. 238,140 46,093
============ ============
</TABLE>
See Notes to Financial Statements. 43
<PAGE>
CAPITAL APPRECIATION FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VALUE OPPORTUNITY
--------------------------------
SIX MONTH
PERIOD ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
-------------- ----------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income ..................... $ 5,535 $ 9,561
Net realized gain on investments........... 969,699 699,792
Net change in unrealized gain or loss on
investments............................... (165,875) 1,017,418
----------- ----------
Net increase in net assets resulting from
operations.............................. 809,359 1,726,771
----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS:
Class I:
From net investment income................ (15,076) (13,615)
From net realized gains on investments.... (347,202) --
Class A:
From net investment income................ (737) (789)
From net realized gains on investments.... (66,814) --
Class B:
From net realized gains on investments.... (11,560) --
Class C:
From net realized gains on investments.... (19,875) --
----------- ----------
Decrease in net assets from distributions
to shareholders......................... (461,264) (14,404)
----------- ----------
FROM FUND SHARE TRANSACTIONS:
Class I:
Proceeds from shares sold................. 40,766 102,460
Net asset value of shares issued upon
reinvestment of distributions............ 12,877 377
Payments for shares redeemed.............. (1,404,487) (716,028)
Class A:
Proceeds from shares sold................. 4,260,904 560,283
Net asset value of shares issued upon
reinvestment of distributions............ 57,263 535
Payments for shares redeemed.............. (691,761) (87,454)
Class B:
Proceeds from shares sold................. 28,701 168,677
Net asset value of shares issued upon
reinvestment of distributions............ 4,435 --
Payments for shares redeemed.............. (2,514) --
Class C:
Proceeds from shares sold................. 86,558 173,189
Net asset value of shares issued upon
reinvestment of distributions............ 12,791 --
Payments for shares redeemed.............. (3,026) (2,000)
----------- ----------
Net increase in net assets from fund share
transactions............................ 2,402,507 200,039
----------- ----------
Net change in net assets................... 2,750,602 1,912,406
NET ASSETS:
Beginning of period........................ 7,096,820 5,184,414
----------- ----------
End of period.............................. $ 9,847,422 $7,096,820
=========== ==========
End of period net assets includes
undistributed (distributions in excess of)
net investment income..................... $ (875) $ 9,403
=========== ==========
44 See Notes to Financial Statements.
<PAGE>
--------------------------------------------------------------------------------
<CAPTION>
VALUE OPPORTUNITY
--------------------------------
SIX MONTH
PERIOD ENDED
APRIL 30, 2000 YEAR ENDED
(UNAUDITED) OCTOBER 31, 1999
-------------- ----------------
<S> <C> <C>
SHARE TRANSACTIONS:
Class I:
Number of shares sold..................... 3,122 8,895
Number of shares issued upon reinvestment
of distributions......................... 1,004 33
Number of shares redeemed................. (108,682) (59,812)
----------- ----------
Net decrease.............................. (104,556) (50,884)
=========== ==========
Class A:
Number of shares sold..................... 348,457 46,889
Number of shares issued upon reinvestment
of distributions......................... 4,474 47
Number of shares redeemed................. (52,020) (7,148)
----------- ----------
Net increase.............................. 300,911 39,788
=========== ==========
Class B:
Number of shares sold..................... 2,216 14,311
Number of shares issued upon reinvestment
of distributions......................... 346 --
Number of shares redeemed................. (193) --
----------- ----------
Net increase.............................. 2,369 14,311
=========== ==========
Class C:
Number of shares sold..................... 6,838 14,648
Number of shares issued upon reinvestment
of distributions......................... 1,004 --
Number of shares redeemed................. (227) (168)
----------- ----------
Net increase.............................. 7,615 14,480
=========== ==========
</TABLE>
See Notes to Financial Statements. 45
<PAGE>
CAPITAL APPRECIATION FUNDS
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TECHNOLOGY
-------------------
PERIOD FROM
MARCH 1, 2000
(COMMENCEMENT OF
OPERATIONS)
TO APRIL 30, 2000
(UNAUDITED)
-----------------
<S> <C>
FROM OPERATIONS:
Net investment loss ...................................... $ (15,068)
Net realized gain on investments.......................... 175,156
Net change in unrealized gain or loss on investments...... 385,279
-----------
Net increase in net assets resulting from operations..... 545,367
-----------
FROM FUND SHARE TRANSACTIONS:
Class I:
Proceeds from shares sold................................ 3,808,075
Payments for shares redeemed............................. (11,088)
Class A:
Proceeds from shares sold................................ 4,301,837
Payments for shares redeemed............................. (408,010)
Class B:
Proceeds from shares sold................................ 1,954,777
Payments for shares redeemed............................. (35,240)
Class C:
Proceeds from shares sold................................ 1,874,507
Payments for shares redeemed............................. (63,103)
-----------
Net increase in net assets from fund share transactions.. 11,421,755
-----------
Net change in net assets.................................. 11,967,122
NET ASSETS:
Beginning of period....................................... --
-----------
End of period............................................. $11,967,122
===========
End of period net assets includes distributions in excess
of net investment income................................. $ (15,068)
===========
SHARE TRANSACTIONS:
Class I:
Number of shares sold.................................... 375,103
Number of shares redeemed................................ (1,090)
-----------
Net increase............................................. 374,013
===========
Class A:
Number of shares sold.................................... 420,581
Number of shares redeemed................................ (40,551)
-----------
Net increase............................................. 380,030
===========
Class B:
Number of shares sold.................................... 188,863
Number of shares redeemed................................ (3,562)
-----------
Net increase............................................. 185,301
===========
Class C:
Number of shares sold.................................... 182,937
Number of shares redeemed................................ (6,083)
-----------
Net increase............................................. 176,854
===========
</TABLE>
46 See Notes to Financial Statements.
<PAGE>
CAPITAL APPRECIATION FUNDS
ADDITIONAL INFORMATION
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
1. ORGANIZATION
Aetna Series Fund, Inc. (Company) is registered under the Investment Company Act
of 1940 (the Act) as an open-end management investment company. It was
incorporated under the laws of Maryland on June 17, 1991. The Articles of
Incorporation permit the Company to offer separate funds, each of which has its
own investment objective, policies and restrictions.
This report covers six funds, (each a Fund; collectively, the Funds), Aetna
Growth Fund (Growth), Aetna International Fund (International), Aetna Mid Cap
Fund (Mid Cap), Aetna Small Company Fund (Small Company), Aetna Value
Opportunity Fund (Value Opportunity) and Aetna Technology Fund (Technology).
The Funds are authorized to offer four classes of shares, Class I, Class A,
Class B and Class C. Class I is offered principally to institutions. Information
regarding sales charges and fees pursuant to Rule 12b-1 of the Act are as
follows:
CLASS I: No sales charges or distribution fees.
CLASS A: Generally, subject to a front-end sales charge; distribution fees of
0.25% (of average net assets of the class per year).
CLASS B: No front-end sales charge; contingent deferred sales charge (CDSC)
applies if you sell your shares within six years of purchase;
distribution fees of 0.75%; service fees of 0.25%; automatic
conversion to Class A shares after eight years.
CLASS C: No front-end sales charge; CDSC on redemptions made within 18 months
of purchase; distribution fees of 0.75%; service fees of 0.25%.
Shares in each Class were first made available to the public on the following
dates:
<TABLE>
<CAPTION>
CLASS I CLASS A CLASS B CLASS C
------- ------- ------- -------
<S> <C> <C> <C> <C>
GROWTH January 4, 1994 April 15, 1994 March 1, 1999 June 30, 1998
INTERNATIONAL December 27, 1991 April 15, 1994 March 1, 1999 June 30, 1998
MID CAP February 4, 1998 February 4, 1998 March 1, 1999 June 30, 1998
SMALL COMPANY January 4, 1994 April 15, 1994 March 1, 1999 June 30, 1998
VALUE OPPORTUNITY February 2, 1998 February 2, 1998 March 1, 1999 June 30, 1998
TECHNOLOGY March 1, 2000 March 1, 2000 March 1, 2000 March 1, 2000
</TABLE>
The following is each Fund's investment objective:
GROWTH seeks growth of capital through investment in a diversified portfolio
consisting primarily of common stocks and securities convertible into common
stocks believed to offer growth potential.
INTERNATIONAL seeks long-term capital growth primarily through investment in a
diversified portfolio of common stocks principally traded in countries outside
of North America. International will not target any given level of current
income.
MID CAP seeks growth of capital primarily through investment in a diversified
portfolio of common stocks and securities convertible into common stocks of
companies having medium market capitalizations.
SMALL COMPANY seeks growth of capital primarily through investment in a
diversified portfolio of common stocks and
47
<PAGE>
CAPITAL APPRECIATION FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
securities convertible into common stocks of companies with smaller market
capitalizations.
VALUE OPPORTUNITY seeks growth of capital primarily through investment in a
diversified portfolio of common stocks and securities convertible into common
stock.
TECHNOLOGY seeks long-term capital appreciation.
Aeltus Investment Management, Inc. (Aeltus) serves as the investment adviser to
each Fund. Elijah Asset Management, LLC (EAM) serves as the sub-adviser to
Technology. Aeltus Capital, Inc. (ACI) is each Fund's principal underwriter.
Aeltus and ACI are indirect wholly owned subsidiaries of Aetna Inc. (Aetna).
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the Funds have been prepared in
accordance with generally accepted accounting principles. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect amounts
reported therein. Actual results could differ from these estimates.
A. VALUATION OF INVESTMENTS
Exchange traded equity investments are stated at market values based upon prices
furnished by external pricing sources as reported on national securities
exchanges. Over-the-counter securities are stated at the last sale price, or if
there has been no sale that day, at the mean of the bid and asked prices. Fixed
income securities, with the exception of high yield securities, maturing in more
than sixty days for which market quotations are readily available are valued at
the mean of the last bid and asked price. High yield securities are priced at
bid by external pricing sources or brokers making a market in the security.
Short-term investments maturing in sixty days or less are valued at amortized
cost, which when combined with accrued interest, approximates market value.
Securities and fixed income investments for which market quotations are not
considered to be readily available are valued using methods approved by the
Board or Directors (Board).
The accounting records of the Funds are maintained in U.S. dollars. Investment
securities and other assets and liabilities denominated in foreign currencies
are translated into U.S. dollars at the prevailing rates of exchange at the end
of each day. Purchases and sales of securities, income receipts, and expense
payments are translated into U.S. dollars at the prevailing exchange rate on the
respective dates of the transactions. The Funds do not isolate the portion of
the results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in their market prices.
Such fluctuations are included in net realized and unrealized gain or loss on
investments.
B. FUTURES AND FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
A futures contract is an agreement between two parties to buy and sell a
specific amount of a commodity, security or financial instrument, including an
index of stocks, at a set price on a future date. The Funds invest in financial
futures contracts as a hedge against their existing portfolio securities, to
manage the risk of changes in interest rates, equity prices, currency exchange
rates or in anticipation of future purchases and sales of portfolio securities.
Upon entering into a futures contract, the Funds are required to deposit with a
broker an amount (initial margin) equal to a percentage of the purchase price
indicated by the futures contract. Subsequent deposits (variation margin) are
received or paid each day by the Funds equal to the daily fluctuations in the
market value of the contract. These amounts are recorded by the Funds as
unrealized gains or losses. When a contract is closed, the Funds record a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed. Generally,
futures contracts
48
<PAGE>
--------------------------------------------------------------------------------
held by the Funds are closed prior to expiration.
A forward foreign currency exchange contract is an agreement to pay or receive
specific amounts of a currency at a future date in exchange for another currency
at an agreed upon exchange rate. The Funds, where authorized, may use forward
foreign currency exchange contracts to hedge against foreign currency exchange
rate risks on its non-U.S. dollar denominated portfolio securities. Contracts
are recorded at market value and marked-to-market daily.
The risks associated with financial futures and forward foreign currency
exchange contracts may arise from an imperfect correlation between the change in
market value of the securities held by the Funds and the price of the contracts.
Risks may also arise from an illiquid secondary market or from the inability of
counterparties to meet the terms of the contracts.
Realized and unrealized gains or losses on financial futures and forward foreign
currency exchange contracts are reflected in the accompanying financial
statements. The amounts at risk under such futures and forward foreign currency
exchange contracts may exceed the amounts reflected in the financial statements.
The notional amounts (economic exposure) of these contracts are disclosed in the
Portfolios of Investments and elsewhere in the Notes to Financial Statements.
For federal income tax purposes, any futures and forward foreign currency
exchange contracts which remain open at the end of the fiscal year are
marked-to-market and the resultant net gain or loss is reported to shareholders
as federal taxable income.
C. ILLIQUID AND RESTRICTED SECURITIES
Illiquid securities are securities that are not readily marketable. Disposing of
illiquid investments may involve time-consuming negotiation and legal expenses,
and it may be difficult or impossible for the Funds to sell them promptly at an
acceptable price. Restricted securities are those sold under Rule 144A of the
Securities Act of 1933 (1933 Act) or are securities offered pursuant to Section
4(2) of the 1933 Act, and are subject to legal or contractual restrictions on
resale and may not be publicly sold without registration under the 1933 Act.
Illiquid and restricted securities are valued using market quotations when
readily available. In the absence of market quotations, the securities are
valued based upon their fair value determined under procedures approved by the
Board. The Funds will not pay the costs of disposition of restricted securities
other than ordinary brokerage fees, if any.
D. DELAYED DELIVERY TRANSACTIONS
The Funds may purchase or sell securities on a when-issued or forward commitment
basis. The price of the underlying securities and date when the securities will
be delivered and paid for are fixed at the time the transaction is negotiated.
The market value of the securities purchased or sold are identified in the
Funds' Portfolio of Investments. Losses may arise due to changes in the market
value of the securities or from the inability of counterparties to meet the
terms of the contract. In connection with such purchases, the Funds are required
to hold liquid assets as collateral with the Funds' custodian sufficient to
cover the purchase price.
E. FEDERAL INCOME TAXES
Each Fund has met the requirements to be taxed as a regulated investment company
for the fiscal year ended October 31, 1999, and intends to meet the requirements
for the current year. As such, each Fund is relieved of federal income taxes by
distributing all of its net taxable investment income and capital gains, if any,
in compliance with the applicable provisions of the Internal Revenue Code
(Code). Furthermore, by distributing substantially all of its net taxable
investment income and capital gains during the calendar year, each Fund will
avoid federal excise taxes in accordance with the applicable provisions of the
Code. Thus, the financial statements contain no provision for federal income
taxes.
49
<PAGE>
CAPITAL APPRECIATION FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
F. DISTRIBUTIONS
Distributions are recorded on the ex-dividend date. Income and capital gain
distributions are determined in accordance with income tax regulations which may
differ from generally accepted accounting principles. These differences are
primarily due to differing treatments for foreign currency transactions, certain
futures contracts, certain investments in foreign equity securities and
repurchases of certain securities sold at a loss. In addition, distributions of
realized gains from sales of securities held one year or less are taxable to
shareholders at ordinary income tax rates rather than preferred capital gain tax
rates in accordance with the applicable provisions of the Internal Revenue Code.
G. LINE OF CREDIT
Certain series of the Company (including Growth, International, Mid Cap, Small
Company and Value Opportunity), certain portfolios of Aetna Variable Portfolios,
Inc., Aetna Generation Portfolios, Inc., Aetna Balanced VP, Inc., Aetna Variable
Fund, Aetna Income Shares and certain series of Aetna GET Fund, collectively
Aetna Mutual Funds, have entered into a revolving credit facility, of up to
$300,000,000, with a syndicate of banks led by Citibank, N.A. For its services
as Agent, Citibank, N.A. received an agent fee of $200,000. In addition, the
revolving credit facility requires the payment of an annual commitment fee of
0.09% based on the average daily unutilized amount of the credit facility. Each
of the participating series will pay its pro rata share of both the agent fee
and commitment fee. Generally, borrowings under the facility accrue interest at
the Federal Funds Rate plus a specified margin. Repayments generally must be
made within 30 days after the date of a revolving credit advance. The revolving
credit facility became effective on November 30, 1999. No borrowings from the
line of credit have been made as of April 30, 2000.
H. OTHER
Investment transactions are accounted for on the day following trade date,
except same day settlements which are accounted for on the trade date. Interest
income is recorded on an accrual basis. Discounts and premiums on securities
purchased are accreted or amortized, respectively, using an effective yield
method over the life of the security. Dividend income and stock splits are
recorded on the ex-dividend date. Realized gains and losses from investment
transactions are determined on an identified cost basis.
3. INVESTMENT ADVISORY, SHAREHOLDER SERVICES AND DISTRIBUTION FEES
Each Fund pays Aeltus an investment advisory fee expressed as a percentage of
each Fund's average daily net assets. As each Fund's net assets exceed
predetermined thresholds, lower advisory fees apply. Below are the Funds' annual
investment advisory fee ranges and the effective annual rates before waivers as
of April 30, 2000:
<TABLE>
<CAPTION>
FEE EFFECTIVE
RANGE RATE
----- ---------
<S> <C> <C>
Growth 0.70%-0.400% 0.70%
International 0.85%-0.700% 0.85%
Mid Cap 0.75%-0.600% 0.75%
Small Company 0.85%-0.725% 0.85%
Value Opportunity 0.70%-0.550% 0.70%
Technology 1.05%-1.000% 1.05%
</TABLE>
Aeltus has entered into a subadvisory agreement with EAM, effective March 1,
2000. Subject to such policies as the Board or Aeltus may determine, EAM manages
Technology's assets in accordance with Technology's investment objective,
policies, and limitations. The subadvisory agreement provides that Aeltus will
pay EAM a subadvisory fee at an annual rate of 0.50% of
50
<PAGE>
--------------------------------------------------------------------------------
Technology's average daily net assets. For the period March 1, 2000 through
April 30, 2000, Aeltus paid EAM $6,724.
Aeltus had entered into a subadvisory agreement with Bradley, Foster & Sargent,
Inc. (Bradley) for Value Opportunity. As sub-adviser, Bradley supervised the
investment and reinvestment of equity securities. The subadvisory agreement
provided that Aeltus pay Bradley a subadvisory fee at an annual rate of 0.15% of
Value Opportunity's average daily net assets on the first $250 million and 0.10%
of Value Opportunity's average daily net assets above $250 million. For the
period November 1, 1999 through December 31, 1999, Aeltus paid Bradley $1,794.
This agreement terminated on December 31, 1999.
Aeltus entered into a consulting agreement with Bradley for Value Opportunity
under which Bradley agreed to provide assistance with shareholder
communications, contribute to marketing efforts and provide other non-investment
advisory services. For the period November 1, 1999 through December 31, 1999,
Aeltus paid Bradley $46,000. This agreement terminated on December 31, 1999.
The Company and Aeltus have entered into an Administrative Services Agreement
under which Aeltus acts as administrator and provides certain administrative and
shareholder services and is responsible for the supervision of other service
providers for each Fund. Each Fund pays Aeltus an administrative services fee at
an annual rate of 0.10% of its average daily net assets.
Aeltus has entered into a Service Agreement with Aetna Life Insurance and
Annuity Company (ALIAC) under which ALIAC will provide various administrative
and shareholder services to certain Class I shareholders of the Funds that
purchased their shares through ALIAC. In exchange for these services, Aeltus
pays ALIAC a fee of up to 0.425% of the average daily net assets associated with
those shares. For the period November 1, 1999 through April 30, 2000 Aeltus paid
ALIAC $750,995.
The Company has adopted a Shareholder Services Plan for the Class B and Class C
shares. Under the Shareholder Services Plan, ACI is paid a service fee at an
annual rate of 0.25% of the average daily net assets of Class B and Class C
shares. This fee is used as compensation for expenses incurred in servicing
shareholders' accounts.
The Company has adopted a Distribution Plan pursuant to Rule 12b-1 under the Act
for the Class A, Class B and Class C shares. The Distribution Plan provides for
payments to ACI at an annual rate of 0.25% of the average daily net assets of
Class A shares of each Fund and 0.75% of the average daily net assets of Class B
and Class C shares of each Fund. Amounts paid by the Funds are used to pay
expenses incurred by ACI in promoting the sale of Class A, Class B and Class C
shares.
Presently, the Funds' class-specific expenses are limited to distribution fees
incurred in connection with Class A, Class B and Class C shares and service fees
incurred in connection with Class B and Class C shares.
4. REIMBURSEMENT AND WAIVER FROM INVESTMENT ADVISER
Aeltus is contractually obligated through December 31, 2000 to reimburse each
Fund (except Growth) for some or all of its operating expenses or to waive fees
in order to maintain a certain expense ratio. Reimbursement and waiver
arrangements will increase a Fund's total return. Actual expenses for the period
ended April 30, 2000 were at or below contractual limits. Actual expense ratios
are included in the Financial Highlights.
51
<PAGE>
CAPITAL APPRECIATION FUNDS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
5. PURCHASES AND SALES OF INVESTMENT SECURITIES
Purchases and sales of investment securities, excluding short-term investments,
for the period ended April 30, 2000 were:
<TABLE>
<CAPTION>
COST OF PURCHASES PROCEEDS FROM SALES
----------------- -------------------
<S> <C> <C>
Growth $331,009,997 $295,841,092
International 153,396,678 113,849,970
Mid Cap 7,919,710 9,624,803
Small Company 330,947,686 233,291,845
Value Opportunity 8,526,036 6,672,398
Technology 15,089,581 3,913,483
</TABLE>
6. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
As of April 30, 2000, International had the following open forward foreign
currency exchange contracts that obligate the Fund to deliver currencies at
specified future dates. The net unrealized gain of $9,881 on these contracts, is
included in the accompanying financial statements. The terms of the open
contracts are as follows:
<TABLE>
<CAPTION>
EXCHANGE CONTRACTS
DATE TYPE CURRENCY TO RECEIVE/ IN EXCHANGE CONTRACTS UNREALIZED
INTERNATIONAL ---- -------- DELIVER FOR AT VALUE GAIN (LOSS)
------------- ----------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
5/18/00 Buy HKD 1,305,000 $ 167,336 $ 167,518 $ 182
5/18/00 Buy HKD 1,055,000 134,357 135,427 1,070
5/18/00 Buy HKD 1,440,000 183,678 184,848 1,170
5/18/00 Sell HKD 1,305,000 166,356 167,518 (1,162)
5/18/00 Sell HKD 1,055,000 134,487 135,427 (940)
5/18/00 Sell HKD 1,440,000 183,566 184,848 (1,282)
5/30/00 Sell JPY 145,735,695 1,332,867 1,355,655 (22,788)
5/30/00 Sell JPY 153,303,526 1,439,740 1,426,052 13,688
7/17/00 Sell JPY 93,770,200 899,906 879,963 19,943
--------
$ 9,881
========
</TABLE>
52
<PAGE>
--------------------------------------------------------------------------------
7. AUTHORIZED CAPITAL SHARES
The Company is authorized to issue a total of 14.8 billion shares. Of those 14.8
billion shares, all of the Funds, except International, have been allocated 100
million shares each of Class I, Class A, Class B and Class C; International has
been allocated 200 million shares each of Class I, Class A, Class B and Class C.
As of April 30, 2000, the following shares of the Funds were owned by ALIAC and
its affiliates:
<TABLE>
<CAPTION>
CLASS I CLASS A CLASS B CLASS C
------- ------- ------- -------
<S> <C> <C> <C> <C>
Growth 1,724,742 -- -- --
International 874,235 -- -- --
Mid Cap 324,877 10,000 9,346 8,279
Small Company 3,007,379 -- -- --
Value Opportunity 292,794 10,000 8,865 8,891
Technology 220,000 10,000 10,000 10,000
</TABLE>
53
<PAGE>
CAPITAL APPRECIATION FUNDS
ADDITIONAL INFORMATION
APRIL 30, 2000 (UNAUDITED)
--------------------------------------------------------------------------------
FUND CLOSURE
On March 1, 2000, the Board of Directors considered and agreed to submit to
shareholders a proposal by Aeltus to liquidate Aetna Mid Cap Fund. The Fund was
closed to new direct investors on March 6, 2000 and to new retirement plan
investors on May 15, 2000. If approved by shareholders at the July 28, 2000
meeting, the liquidation will occur on or about September 1, 2000.
54
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS
GROWTH
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
SIX MONTH
PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
CLASS I (UNAUDITED) 1999 1998 1997 1996 1995
------------------------------------------------ -------------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........... $ 22.54 $ 16.62 $ 17.02 $ 14.36 $ 13.75 $ 10.78
-------- -------- -------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................... (0.01) (0.01)[dag] 0.01[dag] 0.01[dag] 0.03[dag] 0.04[dag]
Net realized and change in unrealized gain or
loss on investments ......................... 4.56 6.13 2.09 3.88 2.39 3.02
-------- -------- -------- ------- ------- -------
Total income from investment
operations ................................. 4.55 6.12 2.10 3.89 2.42 3.06
-------- -------- -------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income .................... -- -- -- (0.03) (0.05) (0.08)
From net realized gains on investments ........ (3.08) (0.20) (2.50) (1.20) (1.76) (0.01)
-------- -------- -------- ------- ------- -------
Total distributions ......................... (3.08) (0.20) (2.50) (1.23) (1.81) (0.09)
-------- -------- -------- ------- ------- -------
Net asset value, end of period ................. $ 24.01 $ 22.54 $ 16.62 $ 17.02 $ 14.36 $ 13.75
======== ======== ======== ======= ======= =======
Total return ................................... 21.88% 37.09% 14.78% 28.95% 19.82% 28.79%
Net assets, end of period (000's) .............. $261,051 $206,238 $128,667 $82,186 $45,473 $36,936
Ratio of net investment expenses to average net
assets......................................... 0.89%(1) 0.94% 1.00% 1.17% 1.28% 1.20%
Ratio of net investment income
to average net assets ......................... 0.01%(1) (0.04)% 0.07% 0.08% 0.20% 0.36%
Ratio of expenses before reimbursement and
waiver to average net assets .................. -- -- -- -- -- 1.30%
Portfolio turnover rate ........................ 96.46% 142.28% 170.46% 141.07% 144.19% 171.75%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Notes to Financial Statements. 55
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
GROWTH
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
SIX MONTH
PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
CLASS A (UNAUDITED) 1999 1998 1997 1996 1995
-------------------------------------------- -------------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 22.15 $ 16.37 $ 16.76 $ 14.17 $ 13.63 $ 10.74
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................... (0.01) (0.06)[dag] (0.04)[dag] (0.11)[dag] (0.08)[dag] (0.06)[dag]
Net realized and change in unrealized gain
or loss on investments .................. 4.44 6.04 2.05 3.84 2.38 3.00
------- ------- ------- ------- ------- -------
Total income from investment operations . 4.43 5.98 2.01 3.73 2.30 2.94
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income ................ -- -- -- -- -- (0.05)
From net realized gains on investments .... (3.04) (0.20) (2.40) (1.14) (1.76) --
------- ------- ------- ------- ------- -------
Total distributions ..................... (3.04) (0.20) (2.40) (1.14) (1.76) (0.05)
------- ------- ------- ------- ------- -------
Net asset value, end of period ............. $ 23.54 $ 22.15 $ 16.37 $ 16.76 $ 14.17 $ 13.63
======= ======= ======= ======= ======= =======
Total return ............................... 21.71% 36.78% 14.34% 28.05% 18.97% 27.92%
Net assets, end of period (000's) .......... $95,957 $57,329 $12,877 $ 8,647 $ 4,615 $ 1,727
Ratio of net investment expenses to average
net assets ................................ 1.14%(1) 1.19% 1.32% 1.92% 2.03% 2.03%
Ratio of net investment income to
average net assets ........................ (0.24)%(1) (0.29)% (0.25)% (0.67)% (0.59)% (0.47)%
Ratio of expenses before reimbursement and
waiver to average net assets .............. -- -- -- -- -- 2.14%
Portfolio turnover rate .................... 96.46% 142.28% 170.46% 141.07% 144.19% 171.75%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
56 See Notes to Financial Statements.
<PAGE>
GROWTH
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH MARCH 1, 1999
PERIOD ENDED (DATE OF INITIAL
APRIL 30, 2000 PUBLIC OFFERING)
CLASS B (UNAUDITED) TO OCTOBER 31, 1999
---------------------------------------- -------------- -------------------
<S> <C> <C>
Net asset value, beginning of period ... $22.40 $ 19.84
------ -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................. (0.01) (0.15)[dag]
Net realized and change in unrealized
gain or loss on investments ......... 4.42 2.71
------ -------
Total income from investment
operations.......................... 4.41 2.56
------ -------
LESS DISTRIBUTIONS:
From net realized gains on investments (2.96) --
------ -------
Total distributions ................. (2.96) --
------ -------
Net asset value, end of period ......... $23.85 $ 22.40
====== =======
Total return ........................... 21.26% 12.90%
Net assets, end of period (000's) ...... $4,642 $ 1,920
Ratio of net investment expenses to
average net assets .................... 1.89%(1) 1.94%(1)
Ratio of net investment income to
average net assets .................... (0.99)%(1) (1.04)%(1)
Portfolio turnover rate ................ 96.46% 142.28%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Notes to Financial Statements. 57
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
GROWTH
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH JUNE 30, 1998
PERIOD ENDED YEAR ENDED (DATE OF INITIAL
APRIL 30, 2000 OCTOBER 31, PUBLIC OFFERING)
CLASS C (UNAUDITED) 1999 TO OCTOBER 31, 1998
--------------------------- -------------- ----------- -------------------
<S> <C> <C> <C>
Net asset value, beginning
of period ................ $22.25 $ 16.56 $ 17.86
------ ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .... (0.01) (0.22)[dag] (0.05)[dag]
Net realized and change in
unrealized gain or loss
on investments.......... 4.39 6.11 (1.25)
------ ------- -------
Total income from
investment operations . 4.38 5.89 (1.30)
------ ------- -------
LESS DISTRIBUTIONS:
From net realized gains on
investments.............. (2.94) (0.20) --
------ ------- -------
Total distributions .... (2.94) (0.20) --
------ ------- -------
Net asset value, end of
period.................... $23.69 $ 22.25 $ 16.56
====== ======= =======
Total return .............. 21.30% 35.80% (7.28)%
Net assets, end of period
(000's)................... $2,927 $ 1,446 $ 356
Ratio of net investment
expenses to average net
assets.................... 1.89%(1) 1.94% 1.99%(1)
Ratio of net investment
income to average net
assets.................... (0.99)%(1) (1.04)% (0.92)%(1)
Portfolio turnover rate ... 96.46% 142.28% 170.46%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
58 See Notes to Financial Statements.
<PAGE>
INTERNATIONAL
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
SIX MONTH
PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
CLASS I (UNAUDITED) 1999 1998 1997 1996 1995
-------------------------------------------- -------------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 13.78 $ 11.87 $ 13.65 $ 11.79 $ 10.62 $ 11.56
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................... (0.04) 0.01[dag] 0.02[dag] 0.02[dag] 0.03[dag] 0.11[dag]
Net realized and change in unrealized gain
or loss on investments ................... 4.17 3.09 1.06 2.89 1.59 (0.09)
------- ------- ------- ------- ------- -------
Total income from investment operations . 4.13 3.10 1.08 2.91 1.62 0.02
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income ................ -- (0.59) (0.40) (0.16) (0.19) (0.40)
From net realized gains on investments .... (1.59) (0.60) (2.46) (0.89) (0.26) (0.56)
------- ------- ------- ------- ------- -------
Total distributions ..................... (1.59) (1.19) (2.86) (1.05) (0.45) (0.96)
------- ------- ------- ------- ------- -------
Net asset value, end of period ............. $ 16.32 $ 13.78 $ 11.87 $ 13.65 $ 11.79 $ 10.62
======= ======= ======= ======= ======= =======
Total return ............................... 31.28% 28.10% 10.22% 26.02% 15.61% (0.04)%
Net assets, end of period (000's) .......... $66,892 $42,605 $34,556 $56,369 $45,786 $25,102
Ratio of net investment expenses to average
net assets ................................ 1.25%(1) 1.35% 1.48% 1.72% 2.17% 1.37%
Ratio of net investment income to average
net assets ................................ (0.27)%(1) 0.09% 0.15% 0.18% 0.40% 1.02%
Ratio of expenses before reimbursement and
waiver to average net assets .............. 1.29%(1) 1.53% 1.67% -- -- 1.50%
Portfolio turnover rate .................... 92.06% 175.71% 152.73% 194.41% 135.92% 32.91%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Notes to Financial Statements. 59
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
INTERNATIONAL
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
SIX MONTH
PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
CLASS A (UNAUDITED) 1999 1998 1997 1996 1995
-------------------------------------------- -------------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 13.74 $ 11.83 $ 13.57 $ 11.77 $ 10.59 $ 11.51
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................... (0.03) (0.02)[dag] (0.02)[dag] (0.07)[dag] (0.05)[dag] 0.03[dag]
Net realized and change in unrealized gain
or loss on investments .................. 4.13 3.08 1.05 2.88 1.57 (0.20)
------- ------- ------- ------- ------- -------
Total income from investment operations . 4.10 3.06 1.03 2.81 1.52 (0.17)
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income ................ -- (0.55) (0.31) (0.12) (0.08) (0.27)
From net realized gains on investments .... (1.57) (0.60) (2.46) (0.89) (0.26) (0.48)
------- ------- ------- ------- ------- -------
Total distributions ..................... (1.57) (1.15) (2.77) (1.01) (0.34) (0.75)
------- ------- ------- ------- ------- -------
Net asset value, end of period ............. $ 16.27 $ 13.74 $ 11.83 $ 13.57 $ 11.77 $ 10.59
======= ======= ======= ======= ======= =======
Total return ............................... 31.12% 27.76% 9.76% 25.07% 14.67% (0.81)%
Net assets, end of period (000's) .......... $73,187 $35,098 $15,078 $19,063 $22,893 $26,464
Ratio of net investment expenses to average
net assets ................................ 1.50%(1) 1.60% 1.82% 2.47% 2.94% 2.12%
Ratio of net investment income to average
net assets ................................ (0.52)%(1) (0.16)% (0.19)% (0.57)% (0.42)% 0.27%
Ratio of expenses before reimbursement and
waiver to average net assets .............. 1.54%(1) 1.78% 2.01% -- -- 2.25%
Portfolio turnover rate .................... 92.06% 175.71% 152.73% 194.41% 135.92% 32.91%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
60 See Notes to Financial Statements.
<PAGE>
INTERNATIONAL
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH MARCH 1, 1999
PERIOD ENDED (DATE OF INITIAL
APRIL 30, 2000 PUBLIC OFFERING)
CLASS B (UNAUDITED) TO OCTOBER 31, 1999
---------------------------------------- -------------- -------------------
<S> <C> <C>
Net asset value, beginning of period ... $13.69 $ 11.70
------ -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................. (0.02) (0.08)[dag]
Net realized and change in unrealized
gain or loss on investments ......... 4.07 2.07
------ -------
Total income from investment
operations.......................... 4.05 1.99
------ -------
LESS DISTRIBUTIONS:
From net realized gains on investments (1.51) --
------ -------
Total distributions ................. (1.51) --
------ -------
Net asset value, end of period ......... $16.23 $ 13.69
====== =======
Total return ........................... 30.79% 17.01%
Net assets, end of period (000's) ...... $1,056 $ 225
Ratio of net investment expenses to
average net assets .................... 2.25%(1) 2.35%(1)
Ratio of net investment income to
average net assets .................... (1.27)%(1) (0.91)%(1)
Ratio of expenses before reimbursement
and waiver to average net assets ...... 2.29%(1) 2.53%(1)
Portfolio turnover rate ................ 92.06% 175.71%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Notes to Financial Statements. 61
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
INTERNATIONAL
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH JUNE 30, 1998
PERIOD ENDED YEAR ENDED (DATE OF INITIAL
APRIL 30, 2000 OCTOBER 31, PUBLIC OFFERING)
CLASS C (UNAUDITED) 1999 TO OCTOBER 31, 1998
--------------------------- -------------- ----------- -------------------
<S> <C> <C> <C>
Net asset value, beginning
of period ................ $13.68 $ 11.85 $ 13.29
------ ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .... (0.02) (0.12)[dag] (0.03)[dag]
Net realized and change in
unrealized gain or loss
on investments.......... 4.04 3.10 (1.41)
------ ------- -------
Total income from
investment operations . 4.02 2.98 (1.44)
------ ------- -------
LESS DISTRIBUTIONS:
From net investment income -- (0.55) --
From net realized gains on
investments............. (1.51) (0.60) --
------ ------- -------
Total distributions .... (1.51) (1.15) --
------ ------- -------
Net asset value, end of
period.................... $16.19 $ 13.68 $ 11.85
====== ======= =======
Total return .............. 30.57% 27.01% (10.84)%
Net assets, end of period
(000's)................... $7,160 $ 1,359 $ 156
Ratio of net investment
expenses to average net
assets.................... 2.25%(1) 2.35% 2.36%(1)
Ratio of net investment
income to average net
assets.................... (1.27)%(1) (0.91)% (0.73)%(1)
Ratio of expenses before
reimbursement and waiver
to average net assets .... 2.29%(1) 2.53% 2.55%(1)
Portfolio turnover rate ... 92.06% 175.71% 152.73%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
62 See Notes to Financial Statements.
<PAGE>
MID CAP
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH FEBRUARY 4, 1998
PERIOD ENDED YEAR ENDED (COMMENCEMENT OF
APRIL 30, 2000 OCTOBER 31, OPERATIONS)
CLASS I (UNAUDITED) 1999 TO OCTOBER 31, 1998
--------------------------- -------------- ----------- -------------------
<S> <C> <C> <C>
Net asset value, beginning
of period ................ $ 11.50 $ 9.29 $ 10.00
------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .... (0.03) --[dag] (0.02)[dag]
Net realized and change in
unrealized gain or loss
on investments........... 3.25 2.21 (0.69)
------- ------- -------
Total income from
investment operations . 3.22 2.21 (0.71)
------- ------- -------
LESS DISTRIBUTIONS
From net investment income. (0.01) -- --
From net realized gains on
investments............... (0.73) -- --
------- ------- -------
Total distributions .... (0.74) -- --
------- ------- -------
Net asset value, end of
period.................... $ 13.98 $ 11.50 $ 9.29
======= ======= =======
Total return .............. 29.80% 23.79% (7.10)%
Net assets, end of period
(000's)................... $ 4,652 $ 5,184 $ 4,503
Ratio of net investment
expenses to average net
assets.................... 1.15%(1) 1.15% 1.15%(1)
Ratio of net investment
income to average net
assets.................... (0.23)%(1) 0.01% (0.21)%(1)
Ratio of expenses before
reimbursement and waiver
to average net assets .... 2.11%(1) 2.72% 3.59%(1)
Portfolio turnover rate ... 141.93% 176.30% 113.99%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Notes to Financial Statements. 63
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
MID CAP
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH FEBRUARY 4, 1998
PERIOD ENDED YEAR ENDED (COMMENCEMENT OF
APRIL 30, 2000 OCTOBER 31, OPERATIONS)
CLASS A (UNAUDITED) 1999 TO OCTOBER 31, 1998
--------------------------- -------------- ----------- -------------------
<S> <C> <C> <C>
Net asset value, beginning
of period ................ $ 11.45 $ 9.28 $ 10.00
------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .... (0.04) (0.03)[dag] (0.04)[dag]
Net realized and change in
unrealized gain or loss
oninvestments............ 3.23 2.20 (0.68)
------- ------- -------
Total income from
investment operations . 3.19 2.17 (0.72)
------- ------- -------
LESS DISTRIBUTIONS
From net realized gains on
investments............... (0.72) -- --
------- ------- -------
Total distributions .... (0.72) -- --
------- ------- -------
Net asset value, end of
period.................... $ 13.92 $ 11.45 $ 9.28
======= ======= =======
Total return .............. 29.60% 23.38% (7.20)%
Net assets, end of period
(000's)................... $ 713 $ 688 $ 115
Ratio of net investment
expenses to average net
assets.................... 1.40%(1) 1.40% 1.40%(1)
Ratio of net investment
income to average net
assets.................... (0.48)%(1) (0.24)% (0.46)%(1)
Ratio of expenses before
reimbursement and waiver
to average net assets .... 2.36%(1) 2.97% 3.84%(1)
Portfolio turnover rate ... 141.93% 176.30% 113.99%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
64 See Notes to Financial Statements.
<PAGE>
MID CAP
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH MARCH 1, 1999
PERIOD ENDED (DATE OF INITIAL
APRIL 30, 2000 PUBLIC OFFERING)
CLASS B (UNAUDITED) TO OCTOBER 31, 1999
---------------------------------------- -------------- -------------------
<S> <C> <C>
Net asset value, beginning of period ... $ 11.42 $ 10.70
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................. (0.03) (0.08)[dag]
Net realized and change in unrealized
gain or loss on investments .......... 3.18 0.80
------- -------
Total income from investment
operations.......................... 3.15 0.72
------- -------
LESS DISTRIBUTIONS
From net realized gains on investments.. (0.65) --
------- -------
Total distributions ................. (0.65) --
------- -------
Net asset value, end of period ......... $ 13.92 $ 11.42
======= =======
Total return ........................... 29.15% 6.73%
Net assets, end of period (000's) ...... $ 158 $ 112
Ratio of net investment expenses to
average net assets .................... 2.15%(1) 2.15%(1)
Ratio of net investment income to
average net assets .................... (1.23)%(1) (0.99)%(1)
Ratio of expenses before reimbursement
and waiver to average net assets ...... 3.11%(1) 3.72%(1)
Portfolio turnover rate ................ 141.93% 176.30%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Notes to Financial Statements. 65
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
MID CAP
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH JUNE 30, 1998
PERIOD ENDED YEAR ENDED (DATE OF INITIAL
APRIL 30, 2000 OCTOBER 31, PUBLIC OFFERING)
CLASS C (UNAUDITED) 1999 TO OCTOBER 31, 1998
--------------------------- -------------- ----------- -------------------
<S> <C> <C> <C>
Net asset value, beginning
of period ................ $ 11.35 $ 9.26 $ 11.12
------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .... (0.03) (0.11)[dag] (0.04)[dag]
Net realized and change in
unrealized gain or loss
on investments .......... 3.16 2.20 (1.82)
------- ------- -------
Total income from
investment operations . 3.13 2.09 (1.86)
------- ------- -------
LESS DISTRIBUTIONS
From net realized gains on
investments............... (0.62) -- --
------- ------- -------
Total distributions .... (0.62) -- --
------- ------- -------
Net asset value, end of
period.................... $ 13.86 $ 11.35 $ 9.26
======= ======= =======
Total return .............. 29.10% 22.57% (16.73)%
Net assets, end of period
(000's)................... $ 167 $ 133 $ 83
Ratio of net investment
expenses to average net
assets.................... 2.15%(1) 2.15% 2.15%(1)
Ratio of net investment
income to average net
assets.................... (1.23)%(1) (0.99)% (1.21)%(1)
Ratio of expenses before
reimbursement and waiver
to average net assets .... 3.11%(1) 3.72% 4.59%(1)
Portfolio turnover rate ... 141.93% 176.30% 113.99%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
66 See Notes to Financial Statements.
<PAGE>
SMALL COMPANY
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
SIX MONTH
PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
CLASS I (UNAUDITED) 1999 1998 1997 1996 1995
-------------------------------------------- -------------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 12.46 $ 10.43 $ 15.55 $ 14.67 $ 13.52 $ 10.39
-------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................... 0.02 0.05[dag] 0.09[dag] (0.06)[dag] (0.08)[dag] -- [dag]
Net realized and change in unrealized gain
or loss on investments .................. 4.52 2.08 (0.90) 4.45 2.64 3.15
-------- ------- ------- ------- ------- -------
Total income from investment operations . 4.54 2.13 (0.81) 4.39 2.56 3.15
-------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income ................ (0.04) (0.04) -- -- -- (0.02)
From net realized gains on investments .... (0.94) (0.06) (4.31) (3.51) (1.41) --
-------- ------- ------- ------- ------- -------
Total distributions ..................... (0.98) (0.10) (4.31) (3.51) (1.41) (0.02)
-------- ------- ------- ------- ------- -------
Net asset value, end of period ............. $ 16.02 $ 12.46 $ 10.43 $ 15.55 $ 14.67 $ 13.52
======== ======= ======= ======= ======= =======
Total return ............................... 38.36% 20.54% (7.47)% 37.80% 19.78% 30.39%
Net assets, end of period (000's) .......... $177,864 $51,423 $29,543 $22,661 $32,125 $33,511
Ratio of net investment expenses to average
net assets ................................ 1.12%(1) 1.23% 1.32% 1.58% 1.44% 1.41%
Ratio of net investment income to average
net assets ................................ 0.27%(1) 0.43% 0.46% (0.42)% (0.53)% (0.01)%
Ratio of expenses before reimbursement and
waiver to average net assets .............. -- 1.25% 1.43% -- -- 1.49%
Portfolio turnover rate .................... 175.73% 231.94% 211.87% 150.43% 163.21% 156.43%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Notes to Financial Statements. 67
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
SMALL COMPANY
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
SIX MONTH
PERIOD ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
APRIL 30, 2000 OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
CLASS A (UNAUDITED) 1999 1998 1997 1996 1995
-------------------------------------------- -------------- ----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....... $ 12.11 $ 10.15 $ 15.20 $ 14.42 $ 13.39 $ 10.35
------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................... -- 0.02[dag] 0.01[dag] (0.16)[dag] (0.18)[dag] (0.11)[dag]
Net realized and change in unrealized gain
or loss on investments .................. 4.40 2.02 (0.84) 4.36 2.62 3.15
------- ------- ------- ------- ------- -------
Total income from investment operations . 4.40 2.04 (0.83) 4.20 2.44 3.04
------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income ................ (0.01) (0.02) -- -- -- --
From net realized gains on investments .... (0.94) (0.06) (4.22) (3.42) (1.41) --
------- ------- ------- ------- ------- -------
Total distributions ..................... (0.95) (0.08) (4.22) (3.42) (1.41) --
------- ------- ------- ------- ------- -------
Net asset value, end of period ............. $ 15.56 $ 12.11 $ 10.15 $ 15.20 $ 14.42 $ 13.39
======= ======= ======= ======= ======= =======
Total return ............................... 38.31% 20.16% (7.77)% 36.73% 19.02% 29.44%
Net assets, end of period (000's) .......... $38,247 $16,269 $ 9,089 $ 7,077 $ 3,884 $ 1,285
Ratio of net investment expenses to average
net assets ................................ 1.37%(1) 1.48% 1.63% 2.33% 2.20% 2.23%
Ratio of net investment income to average
net assets ................................ 0.03%(1) 0.18% 0.15% (1.17)% (1.26)% (0.89)%
Ratio of expenses before reimbursement and
waiver to average net assets .............. -- 1.50% 1.74% -- -- 2.30%
Portfolio turnover rate .................... 175.73% 231.94% 211.87% 150.43% 163.21% 156.43%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
68 See Notes to Financial Statements.
<PAGE>
SMALL COMPANY
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH MARCH 1, 1999
PERIOD ENDED (DATE OF INITIAL
APRIL 30, 2000 PUBLIC OFFERING)
CLASS B (UNAUDITED) TO OCTOBER 31, 1999
---------------------------------------- -------------- -------------------
<S> <C> <C>
Net asset value, beginning of period ... $ 12.37 $ 10.69
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................. -- (0.05)[dag]
Net realized and change in unrealized
gain or loss on investments ......... 4.45 1.73
------- -------
Total income from investment
operations.......................... 4.45 1.68
------- -------
LESS DISTRIBUTIONS:
From net realized gains on investments (0.87) --
------- -------
Total distributions ................. (0.87) --
------- -------
Net asset value, end of period ......... $ 15.95 $ 12.37
======= =======
Total return ........................... 37.68% 15.72%
Net assets, end of period (000's) ...... $ 796 $ 129
Ratio of net investment expenses to
average net assets .................... 2.12% (1) 2.23% (1)
Ratio of net investment income to
average net assets .................... (0.73)%(1) (0.57)%(1)
Ratio of expenses before reimbursement
and waiver to average net assets ...... -- 2.25% (1)
Portfolio turnover rate ................ 175.73% 231.94%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Notes to Financial Statements. 69
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
SMALL COMPANY
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH JUNE 30, 1998
PERIOD ENDED YEAR ENDED (DATE OF INITIAL
APRIL 30, 2000 OCTOBER 31, PUBLIC OFFERING)
CLASS C (UNAUDITED) 1999 TO OCTOBER 31, 1998
--------------------------- -------------- ----------- -------------------
<S> <C> <C> <C>
Net asset value, beginning
of period ................ $ 12.32 $ 10.39 $ 12.11
------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .... 0.01 (0.07)[dag] (0.02)[dag]
Net realized and change in
unrealized gain or loss
on investments.......... 4.42 2.07 (1.70)
------- ------- -------
Total income from
investment operations . 4.43 2.00 (1.72)
------- ------- -------
LESS DISTRIBUTIONS:
From net investment income -- (0.01) --
From net realized gains on
investments............. (0.89) (0.06) --
------- ------- -------
Total distributions .... (0.89) (0.07) --
------- ------- -------
Net asset value, end of
period.................... $ 15.86 $ 12.32 $ 10.39
======= ======= =======
Total return .............. 37.65% 19.33% (14.21)%
Net assets, end of period
(000's)................... $ 6,216 $ 1,893 $ 1,118
Ratio of net investment
expenses to average net
assets.................... 2.12% (1) 2.23% 2.30% (1)
Ratio of net investment
income to average net
assets.................... (0.73)%(1) (0.57)% (0.52)%(1)
Ratio of expenses before
reimbursement and waiver
to average net assets .... -- 2.25% 2.41% (1)
Portfolio turnover rate ... 175.73% 231.94% 211.87%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
70 See Notes to Financial Statements.
<PAGE>
VALUE OPPORTUNITY
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH FEBRUARY 2, 1998
PERIOD ENDED YEAR ENDED (COMMENCEMENT
APRIL 30, 2000 OCTOBER 31, OF OPERATIONS)
CLASS I (UNAUDITED) 1999 TO OCTOBER 31, 1998
--------------------------- -------------- ----------- -------------------
<S> <C> <C> <C>
Net asset value, beginning
of period ................ $13.24 $ 9.99 $ 10.00
------ ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .... 0.02 0.03[dag] 0.03[dag]
Net realized and change in
unrealized gain or loss
on investments.......... 0.90 3.25 (0.04)
------ ------- -------
Total income from
investment operations . 0.92 3.28 (0.01)
------ ------- -------
LESS DISTRIBUTIONS:
From net investment income (0.04) (0.03) --
From net realized gains
on investments.......... (0.85) -- --
------ ------- -------
Total distributions .... (0.89) (0.03) --
------ ------- -------
Net asset value, end of
period.................... $13.27 $ 13.24 $ 9.99
====== ======= =======
Total return .............. 7.18% 32.88% (0.10)%
Net assets, end of period
(000's)................... $4,082 $ 5,455 $ 4,625
Ratio of net investment
expenses to average net
assets.................... 1.10%(1) 1.10% 1.10%(1)
Ratio of net investment
income to average net
assets.................... 0.30%(1) 0.23% 0.37%(1)
Ratio of expenses before
reimbursement and waiver
to average net assets .... 1.75%(1) 2.52% 3.41%(1)
Portfolio turnover rate ... 94.90% 124.83% 132.45%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Notes to Financial Statements. 71
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
VALUE OPPORTUNITY
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH FEBRUARY 2, 1998
PERIOD ENDED YEAR ENDED (COMMENCEMENT OF
APRIL 30, 2000 OCTOBER 31, OPERATIONS)
CLASS A (UNAUDITED) 1999 TO OCTOBER 31, 1998
--------------------------- -------------- ----------- -------------------
<S> <C> <C> <C>
Net asset value, beginning
of period ................ $13.20 $ 9.97 $ 10.00
------ ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .... -- --[dag] 0.01[dag]
Net realized and change in
unrealized gain or loss
on investments........... 0.91 3.25 (0.04)
------ ------- -------
Total income from
investment operations . 0.91 3.25 (0.03)
------ ------- -------
LESS DISTRIBUTIONS:
From net investment income (0.01) (0.02) --
From net realized gains on
investments............. (0.85) -- --
------ ------- -------
Total distributions .... (0.86) (0.02) --
------ ------- -------
Net asset value, end of
period.................... $13.25 $ 13.20 $ 9.97
====== ======= =======
Total return .............. 7.14% 32.57% (0.30)%
Net assets, end of period
(000's)................... $5,129 $ 1,139 $ 464
Ratio of net investment
expenses to average net
assets.................... 1.35%(1) 1.35% 1.35%(1)
Ratio of net investment
income to average net
assets.................... 0.05%(1) (0.02)% 0.12%(1)
Ratio of expenses before
reimbursement and waiver
to average net assets .... 2.00%(1) 2.77% 3.66%(1)
Portfolio turnover rate ... 94.90% 124.83% 132.45%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
72 See Notes to Financial Statements.
<PAGE>
VALUE OPPORTUNITY
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH MARCH 1, 1999
PERIOD ENDED (DATE OF INITIAL
APRIL 30, 2000 PUBLIC OFFERING)
CLASS B (UNAUDITED) TO OCTOBER 31, 1999
---------------------------------------- -------------- -------------------
<S> <C> <C>
Net asset value, beginning of period ... $13.14 $ 11.28
------ -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................. (0.01) (0.06)[dag]
Net realized and change in unrealized
gain or loss on investments .......... 0.86 1.92
------ -------
Total income from investment
operations.......................... 0.85 1.86
------ -------
LESS DISTRIBUTIONS:
From net realized gains on investments (0.80) --
------ -------
Total distributions ................. (0.80) --
------ -------
Net asset value, end of period ......... $13.19 $ 13.14
====== =======
Total return ........................... 6.69% 16.49%
Net assets, end of period (000's) ...... $ 220 $ 188
Ratio of net investment expenses to
average net assets .................... 2.10%(1) 2.10%(1)
Ratio of net investment income to
average net assets .................... (0.70)%(1) (0.77)%(1)
Ratio of expenses before reimbursement
and waiver to average net assets ...... 2.75%(1) 3.52%(1)
Portfolio turnover rate ................ 94.90% 124.83%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
See Notes to Financial Statements. 73
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
VALUE OPPORTUNITY
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
SIX MONTH JUNE 30, 1998
PERIOD ENDED YEAR ENDED (DATE OF INITIAL
APRIL 30, 2000 OCTOBER 31, PUBLIC OFFERING)
CLASS C (UNAUDITED) 1999 TO OCTOBER 31, 1998
--------------------------- -------------- ----------- -------------------
<S> <C> <C> <C>
Net asset value, beginning
of period ................ $13.09 $ 9.95 $ 11.04
------ ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .... (0.01) (0.09)[dag] (0.02)[dag]
Net realized and change in
unrealized gain or loss
on investments.......... 0.87 3.23 (1.07)
------ ------- -------
Total income from
investment operations . 0.86 3.14 (1.09)
------ ------- -------
LESS DISTRIBUTIONS:
From net realized gains on
investments............. (0.80) -- --
------ ------- -------
Total distributions .... (0.80) -- --
------ ------- -------
Net asset value, end of
period.................... $13.15 $ 13.09 $ 9.95
====== ======= =======
Total return .............. 6.74% 31.56% (9.88)%
Net assets, end of period
(000's)................... $ 416 $ 315 $ 95
Ratio of net investment
expenses to average net
assets.................... 2.10%(1) 2.10% 2.10%(1)
Ratio of net investment
income to average net
assets.................... (0.70)%(1) (0.77)% (0.63)%(1)
Ratio of expenses before
reimbursement and waiver
to average net assets .... 2.75%(1) 3.52% 4.41%(1)
Portfolio turnover rate ... 94.90% 124.83% 132.45%
</TABLE>
(1) Annualized.
[dag] Per share data calculated using weighted average number of shares
outstanding throughout the period.
74 See Notes to Financial Statements.
<PAGE>
TECHNOLOGY
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
MARCH 1, 2000
(COMMENCEMENT OF
OPERATIONS)
TO APRIL 30, 2000
CLASS I (UNAUDITED)
---------------------------------------------------------- -----------------
<S> <C>
Net asset value, beginning of period ..................... $10.00
------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................................... (0.02)
Net realized and change in unrealized gain or loss on
investments............................................ 0.75
------
Total income from investment operations ............... 0.73
------
Net asset value, end of period ........................... $10.73
======
Total return ............................................. 7.30%
Net assets, end of period (000's) ........................ $4,013
Ratio of net investment expenses to average net assets ... 1.50%(1)
Ratio of net investment income to average net assets ..... (0.73)%(1)
Ratio of expenses before reimbursement and waiver to
average net assets ...................................... 3.35%(1)
Portfolio turnover rate .................................. 40.95%
</TABLE>
(1) Annualized.
See Notes to Financial Statements. 75
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
TECHNOLOGY
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
MARCH 1, 2000
(COMMENCEMENT OF
OPERATIONS)
TO APRIL 30, 2000
CLASS A (UNAUDITED)
---------------------------------------------------------- -----------------
<S> <C>
Net asset value, beginning of period ..................... $10.00
------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................................... (0.01)
Net realized and change in unrealized gain or loss on
investments............................................ 0.73
------
Total income from investment operations ............... 0.72
------
Net asset value, end of period ........................... $10.72
======
Total return ............................................. 7.20%
Net assets, end of period (000's) ........................ $4,075
Ratio of net investment expenses to average net assets ... 1.75%(1)
Ratio of net investment income to average net assets ..... (0.98)%(1)
Ratio of expenses before reimbursement and waiver to
average net assets ...................................... 3.60%(1)
Portfolio turnover rate .................................. 40.95%
</TABLE>
(1) Annualized.
76 See Notes to Financial Statements.
<PAGE>
TECHNOLOGY
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
MARCH 1, 2000
(COMMENCEMENT OF
OPERATIONS)
TO APRIL 30, 2000
CLASS B (UNAUDITED)
---------------------------------------------------------- -----------------
<S> <C>
Net asset value, beginning of period ..................... $10.00
------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................................... (0.01)
Net realized and change in unrealized gain or loss on
investments............................................ 0.72
------
Total income from investment operations ............... 0.71
------
Net asset value, end of period ........................... $10.71
======
Total return ............................................. 7.10%
Net assets, end of period (000's) ........................ $1,985
Ratio of net investment expenses to average net assets ... 2.50%(1)
Ratio of net investment income to average net assets ..... (1.73)%(1)
Ratio of expenses before reimbursement and waiver to
average net assets ...................................... 4.35%(1)
Portfolio turnover rate .................................. 40.95%
</TABLE>
(1) Annualized.
See Notes to Financial Statements. 77
<PAGE>
CAPITAL APPRECIATION FUNDS
FINANCIAL HIGHLIGHTS (CONTINUED)
TECHNOLOGY
--------------------------------------------------------------------------------
Selected data for a fund share outstanding throughout each period:
<TABLE>
<CAPTION>
PERIOD FROM
MARCH 1, 2000
(COMMENCEMENT OF
OPERATIONS)
TO APRIL 30, 2000
CLASS C (UNAUDITED)
---------------------------------------------------------- -----------------
<S> <C>
Net asset value, beginning of period ..................... $10.00
------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................................... (0.01)
Net realized and change in unrealized gain or loss on
investments............................................. 0.72
------
Total income from investment operations ............... 0.71
------
Net asset value, end of period ........................... $10.71
======
Total return ............................................. 7.10%
Net assets, end of period (000's) ........................ $1,895
Ratio of net investment expenses to average net assets ... 2.50%(1)
Ratio of net investment income to average net assets ..... (1.73)%(1)
Ratio of expenses before reimbursement and waiver to
average net assets ...................................... 4.35%(1)
Portfolio turnover rate .................................. 40.95%
</TABLE>
(1) Annualized.
78 See Notes to Financial Statements.
