THE WACHOVIA FUNDS
WACHOVIA EQUITY FUND
WACHOVIA QUANTITATIVE EQUITY FUND
WACHOVIA EQUITY INDEX FUND
WACHOVIA SPECIAL VALUES FUND
WACHOVIA EMERGING MARKETS FUND
WACHOVIA BALANCED FUND
WACHOVIA FIXED INCOME FUND
WACHOVIA SHORT-TERM FIXED INCOME FUND
THE WACHOVIA MUNICIPAL FUNDS
WACHOVIA GA MUNICIPAL BOND FUND
WACHOVIA NC MUNICIPAL BOND FUND
WACHOVIA SC MUNICIPAL BOND FUND
COMBINED ANNUAL REPORT
NOVEMBER 30, 1997
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Effective July 31, 1997 The Biltmore Funds became The Wachovia Funds.
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PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the combined Annual Report to Shareholders for The
Wachovia Funds and The Wachovia Municipal Funds.
This report covers the 12-month period ended November 30, 1997, and includes
commentary by portfolio management, a complete list of the funds' holdings and
the funds' financial statements. The following fund-by-fund highlights cover
performance activity in Class A Shares, Class B Shares, and Class Y Shares.
I urge you to read the portfolio manager commentary for additional information
about your fund's performance.
THE WACHOVIA FUNDS
WACHOVIA EQUITY FUND pursues growth and income through a portfolio of blue-chip
stocks issued by some of America's largest and best-known companies. In
particular, the fund's manager seeks stocks issued by companies that are both
undervalued and have good growth opportunities. At the end of the reporting
period, the fund's more than 130 stock holdings included such well-known names
as American Express, Avon, Coca-Cola, Disney, Exxon, Ford, Intel, Lilly (Eli),
McDonald's, Nike, and Xerox. Fund net assets reached $199 million at the end of
the reporting period.
<TABLE>
<CAPTION>
TOTAL RETURN* INCOME CAPITAL GAINS
BASED ON NAV DISTRIBUTIONS DISTRIBUTIONS SHARE PRICE CHANGE
<S> <C> <C> <C> <C>
Class A Shares 20.22% $ 0.13 $ 1.86 $14.81 to $15.39
Class B Shares 19.27% $ 0.04 $ 1.86 $14.79 to $15.35
Class Y Shares 20.44% $ 0.16 $ 1.86 $14.81 to $15.39
</TABLE>
WACHOVIA QUANTITATIVE EQUITY FUND pursues growth and income by investing in a
portfolio of stocks issued by large, established companies across the entire
industrial spectrum. On the last day of the reporting period, the portfolio
included quality names like Anheuser-Busch, Bell Atlantic, Bristol-Myers Squibb,
Chrysler, Coca-Cola, Dole Foods, Pepsico, Sprint, and Whirlpool. Fund net assets
ended the reporting period at $224 million.
<TABLE>
<CAPTION>
TOTAL RETURN* INCOME CAPITAL GAINS
BASED ON NAV DISTRIBUTIONS DISTRIBUTIONS SHARE PRICE CHANGE
<S> <C> <C> <C> <C>
Class A Shares 29.38% $ 0.20 $ 0.79 $15.67 to $19.00
Class B Shares 28.33% $ 0.09 $ 0.79 $15.65 to $18.95
Class Y Shares 29.60% $ 0.23 $ 0.79 $15.67 to $19.00
</TABLE>
WACHOVIA EQUITY INDEX FUND pursues a total return that approximates that of the
Standard & Poor's 500 Index ("S&P 500 Index")--a classic benchmark of stock
market performance.** As a result, the fund's extensive portfolio contained a
"who's who" of well-known, quality American companies. At the end of the
reporting period, fund net assets totaled $298 million.
<TABLE>
<CAPTION>
TOTAL RETURN* INCOME CAPITAL GAINS
BASED ON NAV DISTRIBUTIONS DISTRIBUTIONS SHARE PRICE CHANGE
<S> <C> <C> <C> <C>
Class A Shares 27.55% $ 0.28 $ 0.91 $15.98 to $18.89
Class Y Shares 27.91% $ 0.31 $ 0.91 $15.98 to $18.91
</TABLE>
WACHOVIA SPECIAL VALUES FUND pursues growth by investing in a diversified
portfolio of small-company stocks.*** Unlike many other funds that invest in
small-company stocks through a high-flying approach, this fund is managed
through a highly disciplined approach. Its manager seeks stocks issued by
well-capitalized, and well-run small companies that are selling at less than
their estimated long-term values. At the end of the period, the fund's $122
million portfolio was invested in more than 125 stocks across 16 business
sectors.
<TABLE>
<CAPTION>
TOTAL RETURN* INCOME CAPITAL GAINS
BASED ON NAV DISTRIBUTIONS DISTRIBUTIONS SHARE PRICE CHANGE
<S> <C> <C> <C> <C>
Class A Shares 33.08% $ 0.08 $ 1.61 $15.67 to $18.64
Class Y Shares 33.29% $ 0.08 $ 1.61 $15.67 to $18.67
</TABLE>
*Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so that
an investor's shares, when redeemed, may be worth more or less than their
original cost. See total returns for the reporting period adjusted for the
sales charge on page 3.
**The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation, and financial and public utility companies.
Investments cannot be made in an index.
***Small cap stocks have historically experienced greater volatility than
average.
WACHOVIA EMERGING MARKETS FUND pursues growth over the long-term by investing in
stocks of foreign companies located in emerging market countries.**** The fund's
managers use a unique "two-tier, equal weighting" approach to selecting stocks
for the fund that offers greater diversification than most emerging market
funds, with the opportunity for better protection from unexpected negative
developments in any one country. At the end of the reporting period, the fund's
portfolio contained stocks issued by companies from 31 countries. Fund net
assets ended the reporting period at $147 million. The fund's performance
reflected the negative impact of the Asian economic crisis on the emerging
markets. However, while the fund's performance was not positive, shareholders
were spared from the highly negative performance of the overall emerging
marketplace.
<TABLE>
<CAPTION>
TOTAL RETURN* INCOME
BASED ON NAV DISTRIBUTION SHARE PRICE CHANGE
<S> <C> <C> <C>
Class A Shares (3.82%) $ 0.11 $11.67 to $11.12
Class Y Shares (3.64%) $ 0.11 $11.67 to $11.13
</TABLE>
WACHOVIA BALANCED FUND pursues a popular investment objective--long-term growth
and current income--by investing in a quality combination of stocks (52.2%) and
bonds. Bond holdings were diversified across corporate bonds (15%),
mortgage-backed securities (15%), and U.S. Treasury obligations (14.4%), a
repurchase agreement (4.5%), and foreign bonds (1.5%). Over the reporting
period, fund net assets increased from $256 million to $306 million.
<TABLE>
<CAPTION>
TOTAL RETURN* INCOME CAPITAL GAINS
BASED ON NAV DISTRIBUTIONS DISTRIBUTIONS SHARE PRICE CHANGE
<S> <C> <C> <C> <C>
Class A Shares 15.17% $ 0.34 $ 1.44 $13.30 to $13.26
Class B Shares 14.19% $ 0.26 $ 1.44 $13.29 to $13.23
Class Y Shares 15.37% $ 0.37 $ 1.44 $13.30 to $13.26
</TABLE>
WACHOVIA FIXED INCOME FUND pursues a high level of total return from a
diversified portfolio of income-producing securities. At the end of the period,
the fund's $195 million in net assets were invested across U.S. Treasury
obligations (32.9%), government agency securities (19.3%), corporate bonds
(34.8%), asset-backed securities (4.8%), mutual fund shares (3.4%), a repurchase
agreement (2.2%), and foreign bonds (1.6%).
<TABLE>
<CAPTION>
TOTAL RETURN* INCOME
BASED ON NAV DISTRIBUTIONS SHARE PRICE CHANGE
<S> <C> <C> <C>
Class A Shares 6.14% $ 0.56 $9.83 to $9.85
Class B Shares 5.21% $ 0.48 $9.83 to $9.84
Class Y Shares 6.38% $ 0.58 $9.83 to $9.85
</TABLE>
WACHOVIA SHORT-TERM FIXED INCOME FUND pursues a high level of income from a
diversified portfolio that, at the end of the reporting period, consisted
primarily of corporate bonds (62.2%) and U.S. Treasury obligations (27.9%).
These short-term, income-producing securities are managed to provide an income
stream and cushion shareholders against volatility during periods of interest
rate increases. Fund net assets totaled $98 million on the last day of the
reporting period.
<TABLE>
<CAPTION>
TOTAL RETURN* INCOME
BASED ON NAV DISTRIBUTIONS SHARE PRICE CHANGE
<S> <C> <C> <C>
Class A Shares 5.10% $ 0.51 $9.79 to $9.77
Class Y Shares 5.33% $ 0.53 $9.79 to $9.77
</TABLE>
THE WACHOVIA MUNICIPAL FUNDS
WACHOVIA GEORGIA MUNICIPAL BOND FUND pursues monthly income exempt from federal
regular income tax and Georgia state personal income taxes.+ The fund invests in
a portfolio of bonds issued by municipalities across Georgia that are rated A or
higher by nationally recognized statistical rating organizations. Total net
assets reached $18 million on the last day of the reporting period.
<TABLE>
<CAPTION>
TOTAL RETURN* INCOME CAPITAL GAINS
BASED ON NAV DISTRIBUTIONS DISTRIBUTIONS SHARE PRICE CHANGE
<S> <C> <C> <C> <C>
Class A Shares 5.41% $ 0.44 $ 0.02 $11.00 to $11.11
Class Y Shares 5.63% $ 0.47 $ 0.02 $11.00 to $11.11
</TABLE>
*Performance quoted represents past performance and is not indicative of
future results. Investment return and principal value will fluctuate, so
that an investor's shares, when redeemed, may be worth more or less than
their original cost. See total returns for the reporting period adjusted for
the sales charge on page 3.
****Foreign investing involves special risks including currency risk, increased
volatility of foreign securities, and differences in auditing and other
financial standards. Emerging markets' economic structures may be less
diverse and mature, and their political systems may be less stable than
those of established markets.
++Income may be subject to the federal alternative minimum tax.
WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND pursues monthly income exempt from
federal regular income tax and North Carolina state income tax.+ At the end of
the reporting period, the fund's $55 million portfolio was invested in bonds
issued by municipalities across North Carolina. All holdings are rated A or
higher at the time of purchase by nationally recognized statistical rating
organizations.
<TABLE>
<CAPTION>
TOTAL RETURN* INCOME CAPITAL GAINS
BASED ON NAV DISTRIBUTIONS DISTRIBUTIONS SHARE PRICE CHANGE
<S> <C> <C> <C> <C>
Class A Shares 5.36% $ 0.43 $ 0.02 $11.03 to $11.15
Class Y Shares 5.57% $ 0.45 $ 0.02 $11.03 to $11.15
</TABLE>
WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND pursues monthly income exempt from
federal regular income tax and South Carolina state income taxes.+ The fund
invests in a portfolio of bonds issued by municipalities of South Carolina that
are rated A or higher by nationally recognized statistical rating organizations
at the time of purchase. Total net assets reached $108 million at the reporting
period's end.
<TABLE>
<CAPTION>
TOTAL RETURN* INCOME CAPITAL GAINS
BASED ON NAV DISTRIBUTIONS DISTRIBUTIONS SHARE PRICE CHANGE
<S> <C> <C> <C> <C>
Class A Shares 6.01% $ 0.52 $ 0.05 $11.05 to $11.12
Class Y Shares 6.23% $ 0.55 $ 0.05 $11.05 to $11.12
</TABLE>
Thank you for pursing your financial goals through one or more of these funds.
As we begin a new year, we renew out commitment to keep you up-to-date on your
investment progress through the highest level of service.
Sincerely,
/s/ John W. McGonigle
John W. McGonigle
President
January 15, 1998
* Performance quoted represents past performance and is not indicative of future
results. Investment return and principal value will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their
original cost.
+Income may be subject to the federal alternative minimum tax.
Total returns for the reporting period adjusted for the sales charge are as
follows:
Wachovia Equity Fund, Class A Shares, 14.79%; Class B Shares, 13.52% Wachovia
Quantitative Equity Fund, Class A Shares, 23.55%; Class B Shares, 23.05%
Wachovia Equity Index Fund, Class A Shares, 21.84% Wachovia Special Values Fund,
Class A Shares, 27.08% Wachovia Emerging Markets Fund, Class A Shares, (8.14%)
Wachovia Balanced Fund, Class A Shares, 9.56%; Class B Shares, 8.49% Wachovia
Fixed Income Fund, Class A Shares, 1.39%; Class B Shares, (0.03%) Wachovia
Short-Term Fixed Income Fund, Class A Shares, 2.48% Wachovia Georgia Municipal
Bond Fund, Class A Shares, 0.65% Wachovia North Carolina Municipal Bond Fund,
Class A Shares, 0.61% Wachovia South Carolina Municipal Bond Fund, Class A
Shares, 1.25%
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OVERVIEW
WACHOVIA EQUITY FUND SHAREHOLDER:
Although many equity markets in the world experienced problems in 1997,
continued fundamental strength of U.S. companies and a good economic environment
guided the U.S. equity market to another wonderful year. Despite historical
valuation measures prompting some investors to decrease equity exposure, we
remained close to fully invested in equities, which benefited your portfolio's
returns.
While the equity market performed strongly in 1997, the breadth of the market
significantly narrowed. The market was characterized by a pronounced
capitalization effect, with the largest 100 companies in the S&P 500 Index
(accounting for more than 65 percent of the capitalization-weighted index)
significantly outperforming the rest of the market. As you may have seen in news
reports, most active managers (about 90 percent) under-performed the S&P 500
Index in 1997.
The market also favored factors that are frequently associated with a "growth"
investment style, including positive earnings revisions and price momentum. In
retrospect, the winning strategy for 1997 was to be invested only in large-cap
growth companies (regardless of their valuation level) that continued to show
consistently high levels of earnings growth.
Last year's market environment was not especially favorable for our investment
style that focuses on the fundamental value of a company (including earnings
growth) relative to its current stock price. The objective is to avoid paying
too much for a stock and to sell stocks that are over-priced. Despite last
year's environment, we remain confident that our investment process is
appropriate for good long-term results.
We invested in many of the larger companies in the S&P 500 Index, but we also
held diversifying positions in somewhat smaller companies and sold a number of
large-cap stocks because of their high valuation levels. While there were some
notable success stories, a number of our stock selections fell short of
expectations last year.
WACHOVIA QUANTITATIVE EQUITY FUND SHAREHOLDER:
The Wachovia Quantitative Equity Fund employs a quantitative model to discover
attractively valued stocks, using a variety of factors that have historically
lead to strong equity performance. Some of the factors in the model pertain to
the price one pays for a company relative to various measures of value
(dividends, book value, earnings, etc.). Other inputs of the model deal with a
company's growth prospects (earnings growth, changes of analysts' estimates,
etc.). By analyzing both growth and value characteristics within the
quantitative framework, the fund seeks to do well in a wide variety of market
environments.
In 1997, the large-cap portion of the market was propelled by growth factors,
while the smaller-cap areas were driven by value factors. Predictors relating to
growth and value factors were both fairly accurate in their respective segments
of the market. The quantitative model worked well in the market environment for
1997.
WACHOVIA EQUITY INDEX FUND SHAREHOLDER:
While the equity market performed strongly in 1997, the breadth of the market
significantly narrowed. The market was characterized by a pronounced
capitalization effect, with the largest 100 companies in the S&P 500 Index
(accounting for more than 65 percent of the capitalization-weighted index)
significantly outperforming the rest of the market.
WACHOVIA SPECIAL VALUES FUND SHAREHOLDER:
Again in 1997, the overall investing environment was clearly supportive of value
realization in the small-cap stock market. Domestic economic conditions remained
strong enough to produce high levels of corporate profitability, but moderate
enough to keep inflation tame. Domestic and international monetary conditions
were ideal too, with excess liquidity finding its way into financial markets.
About 15 of our holdings were boughtout during the year, including three out of
the top ten holdings (White River, Carson Pirie Scott, Guaranty National). The
companies were acquired by larger firms usually at a big premium, benefitting
performance.
Remaining oil service stock holdings doubled or even tripled in 1997. We trimmed
positions throughout the year as stocks hit our price targets, and fully exited
oil stocks prior to the November collapse of the sector.
The Asian scare has sent many technology stocks down drastically. The overall
market volatility coupled with year-end tax loss selling has created more buying
opportunities which should put cash to use shortly. We believe the time is ripe
to pick up solid companies that will eventually turn around.
WACHOVIA EMERGING MARKETS FUND SHAREHOLDER:
Given the financial crisis which has been spreading across southeast Asia, the
management team of the Wachovia Emerging Markets Fund thought that now is an
appropriate time to revisit the issue of investing in emerging markets - the
opportunities, the risks, and the wisdom of our strategy.
The premise behind the Wachovia Emerging Markets Fund remains the same as it was
nearly three years ago when the fund was launched. Barriers around the world
were falling and billions of people were entering the global economy for the
first time. We hypothesized that their resources would be used more efficiently
and their buying power would demand more goods and services, leading to higher
rates of economic growth, particularly in the regions where this transformation
was occurring.
We launched the fund knowing the possibility of surprises that can lead to
dramatic upheaval was inherent in the nature of developing economies, just as in
the developed world. For this reason, we purposefully created a fund that took
risk into account, spreading our assets over many countries in many regions, to
offer some protection from isolated shocks. The wisdom of this strategy was
proven immediately upon the launch of the fund, with Mexico's devaluation of the
peso. Some of our competitors had large concentrations in Mexico, while our
diversified posture minimized the impact on our portfolio. That diversified
structure helped us generate the second highest return among emerging markets
funds in 1995.
The summer of 1997 has seen renewed turmoil, this time in Southeast Asia. First
Thailand, and then the Philippines, Indonesia, and Malaysia devalued their
currencies. Again, our basic structure protects our shareholders by diversifying
the fund's assets around the world. Additionally, we have been actively
underweighted in southeast Asia for some time now, and have recently reduced our
exposure to Hong Kong due to our concerns about what is going on there. We have
an underweighted exposure to the whole region, with less than a quarter of the
fund's assets in Asia.
We remain confident that the growth drivers in emerging economies still exist
and will lead to high rates of growth going forward. We recognize that there
will be interruptions along the way, and for that reason we stay committed to
our diversified fund structure. We believe the Wachovia Emerging Markets Fund
strikes the proper balance between offering investors exposure to positive
long-term trends and protection from short-term disturbances. These turbulent
times have strengthened our conviction in our process.
WACHOVIA BALANCED FUND SHAREHOLDER:
Asset allocation strategy in the fund was consistent throughout the year, with
approximately 52 percent of the fund's assets in equity securities, 44 percent
in fixed income securities and 4 percent in cash.
Although many equity markets in the world experienced problems in 1997,
continued fundamental strength of U.S. companies and a good economic environment
guided the U.S. equity market to another wonderful year. Despite historical
valuation measures prompting some investors to decrease equity exposure, we
remained close to fully invested in equities, which benefited your portfolio's
returns.
The bond portion of the fund benefitted from a longer duration relative to the
Lehman Brothers Aggregate Bond Index ("Lehman Aggregate Bond Index")+ throughout
the year. Our underweighting of mortgages also helped, as prepayments
accelerated due to falling interest rates.
WACHOVIA FIXED INCOME FUND SHAREHOLDER:
The fund benefitted from a longer duration relative to the Lehman Aggregate Bond
Index throughout the year. Our underweighting of mortgages also helped, as
prepayments accelerated due to falling interest rates.
Late in the year, U.S. corporate yields widened drastically. Our overweighting
of corporate securities detracted slightly from performance.
We believe that disinflation will prevail for the foreseeable future;
disinflation coupled with moderating economic growth should benefit fixed income
markets. Because bond yields should continue to move lower, we continue to hold
a longer average duration relative to the market.
WACHOVIA SHORT-TERM FIXED INCOME FUND SHAREHOLDER:
The shorter end of the yield curve remained fairly range bound as federal fund
rates remained stable at 5.25 percent. The fund benefitted from a longer
duration relative to the index throughout the year. Our overweight strategy in
corporates was relatively neutral to performance. Slight widening of corporate
yields relative to Treasury securities was offset by higher yields.
+The Lehman Aggregate Bond Index is an unmanaged index measuring both the
capital price changes and income provided by the underlying universe of
securities, comprised of U.S. Treasury obligations, U.S. agency obligations,
foreign obligations, U.S. investment-grade corporate debt and mortgage-backed
obligations. Investments cannot be made in an index.
WACHOVIA GEORGIA MUNICIPAL BOND FUND:
Emphasis on credit quality continued throughout the year because quality spreads
remained very narrow. Sixty-five percent of the fund's holdings was rated AAA,
and all holdings in the portfolio had a rating of A or better. We continued to
keep duration approximately 10 percent longer than the Lehman Brothers State
General Obligation Bond Index ("Lehman State General Obligation Bond Index").+
WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND:
Emphasis on credit quality continued throughout the year because quality spreads
remained very narrow. 72 percent of the fund's holdings was rated AAA, and all
holdings in the portfolio had a rating of A or better. We continued to keep
duration approximately 10 percent longer than the Lehman State General
Obligation Index.
WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND:
Emphasis on credit quality continued throughout the year because quality spreads
remained very narrow. 72 percent of the fund's holdings was rated AAA, and all
but one holding in the portfolio had a rating of A or better. We continued to
keep duration approximately 10 percent longer than the Lehman State General
Obligation Index.
++The Lehman State General Obligation Bond Index is an unmanaged index comprised
of all state general obligation debt issues and is compiled without regard to
maturities. These bonds are rated A or better and represent a variety of
coupon ranges. Index figures are total returns calculated for one-, three-,
and twelve-month periods as well as year-to-date. Total returns are also
calculated as of the index inception, December 31, 1979. Investments cannot be
made in an index.
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WACHOVIA EQUITY FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA EQUITY FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Equity Fund (Class A Shares) (the "Fund") from May 7, 1993 (start of
performance) to November 30, 1997 compared to the S&P 500 Index.+
[GRAPHIC REPRESENTATION A1 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The S&P 500 Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation, and financial and public utility companies. The S&P
500 Index is not adjusted to reflect sales loads, expenses, or other fees that
the SEC requires to be reflected in the Fund's performance. Investments cannot
be made in an index.
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WACHOVIA EQUITY FUND (CLASS B SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA EQUITY FUND (CLASS B SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Equity Fund (Class B Shares) (the "Fund") from July 23, 1996 (start of
performance) to November 30, 1997 compared to the S&P 500 Index.+
[GRAPHIC REPRESENTATION A2 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund. The ending value
of the Fund reflects a 4.00% contingent deferred sales charge on any
redemption less than two years from the purchase date. The Fund's performance
assumes the reinvestment of all dividends and distributions. The S&P 500
Index has been adjusted to reflect reinvestment of dividends on securities in
the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation, and financial and public utility companies. The S&P
500 Index is not adjusted to reflect sales loads, expenses, or other fees that
the SEC requires to be reflected in the Fund's performance. Investments cannot
be made to an index.
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WACHOVIA EQUITY FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA EQUITY FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Equity Fund (Class Y Shares) (the "Fund") from July 23, 1996 (start of
performance) to November 30, 1997 compared to the S&P 500 Index.+
[GRAPHIC REPRESENTATION A3 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 Index has been adjusted to reflect reinvestment of
dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation, and financial and public utility companies. The S&P
500 Index is not adjusted to reflect sales loads, expenses, or other fees that
the SEC requires to be reflected in the Fund's performance. Investments cannot
be made in an index.
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WACHOVIA EQUITY FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Shares Value
- ---------------------------------------------------------
<C> <S> <C>
Common Stocks--82.0%
COMMERCIAL SERVICES--0.1%
5,960 Sbarro, Inc. $ 166,880
------------
CONSUMER CYCLICAL--0.5%
22,765 (b)Lear Corp. 1,065,687
------------
CONSUMER DURABLES--3.1%
4,705 American Greetings Corp.,
Class A 172,909
49,785 Ford Motor Co. 2,140,755
6,480 General Motors 395,280
4,800 Goodyear Tire & Rubber Co. 291,300
37,410 Hasbro, Inc. 1,087,228
39,400 Newell Co. 1,608,013
12,094 Sherwin-Williams Co. 345,435
2,000 Stanley Works 88,125
------------
Total 6,129,045
------------
CONSUMER NON-DURABLES--9.0%
3,580 Avon Products, Inc. 206,969
31,295 CPC International, Inc. 3,235,121
30,563 Coca-Cola Co. 1,910,187
3,900 Fortune Brands, Inc. 141,131
14,656 Gillette Co. 1,352,932
20,345 Nike, Inc., Class B 990,547
112,331 PepsiCo, Inc. 4,142,206
75,286 Philip Morris Cos., Inc. 3,274,941
9,000 Procter & Gamble Co. 686,813
6,455 R.J.R. Nabisco, Inc., Class A 300,964
17,602 Sara Lee Corp. 930,706
5,600 Unilever N.V., ADR 325,150
4,500 Wrigley (Wm.), Jr. Co. 356,063
------------
Total 17,853,730
------------
CONSUMER SERVICES--3.8%
37,100 Disney (Walt) Co. 3,522,181
24,736 McDonald's Corp. 1,199,696
33,243 Service Corp. International 1,215,447
15,725 Tribune Co. 886,497
22,988 (b)Tricon Global Restaurants,
Inc. 777,282
------------
Total 7,601,103
------------
ELECTRICAL--0.4%
13,139 Emerson Electric Co. 722,645
------------
Common Stocks--continued
ELECTRONIC TECHNOLOGY--10.3%
28,053 (b)3Com Corp. $ 1,016,921
1,400 (b)Applied Materials, Inc. 46,200
47,121 Boeing Co. 2,503,303
46,622 (b)Cabletron Systems, Inc. 1,072,306
36,340 (b)Cisco Systems, Inc. 3,134,325
18,420 (b)Compaq Computer Corp. 1,150,099
37,805 Hewlett-Packard Co. 2,308,468
34,444 Intel Corp. 2,673,715
13,540 International Business
Machines Corp. 1,483,476
33,051 Motorola, Inc. 2,078,082
1,200 Northern Telecom Ltd. 107,775
30,635 (b)Sun Microsystems, Inc. 1,102,860
7,765 Telefonaktiebolaget LM
Ericsson, Class B 313,997
23,500 Texas Instruments, Inc. 1,157,375
5,910 United Technologies Corp. 442,881
------------
Total 20,591,783
------------
ENERGY MINERALS--3.6%
13,585 Amoco Corp. 1,222,650
29,220 Exxon Corp. 1,782,420
2,000 Kerr-McGee Corp. 132,625
13,300 Mobil Corp. 956,769
2,090 Occidental Petroleum Corp. 62,047
18,130 Phillips Petroleum Co. 878,172
40,830 Royal Dutch Petroleum Co., ADR 2,151,231
------------
Total 7,185,914
------------
FINANCE--13.6%
26,924 AMBAC 1,080,325
800 Ace, Ltd. 79,400
1,666 Aegon N.V. 141,610
1,700 Allstate Corp. 145,987
8,945 American Express Co. 705,537
50,065 American International Group,
Inc. 5,047,178
28,355 Banc One Corp. 1,456,738
16,487 Chase Manhattan Corp. 1,790,900
38,144 Chubb Corp. 2,705,840
23,650 Citicorp 2,836,522
42,120 Countrywide Credit Industries,
Inc. 1,724,287
Common Stocks--continued
FINANCE--CONTINUED
33,995 Federal Home Loan Mortgage
Corp. $ 1,402,294
57,705 Federal National Mortgage
Association 3,047,545
14,450 KeyCorp 974,472
2,120 MBIA Insurance Corporation 2,019,545
8,906 MGIC Investment Corp. 520,444
7,750 Providian Financial Corp. 341,484
3,640 Wells Fargo & Co. 1,118,390
------------
Total 27,138,498
------------
HEALTH SERVICES--2.4%
23,543 Bergen Brunswig Corp., Class A 1,010,878
9,050 Columbia/HCA Healthcare Corp. 266,975
14,480 (b)HealthCare COMPARE Corp. 754,770
86,707 (b)Tenet Healthcare Corp. 2,747,528
------------
Total 4,780,151
------------
HEALTH TECHNOLOGY--8.6%
31,290 Abbott Laboratories 2,033,850
26,143 American Home Products Corp. 1,826,742
29,425 Baxter International, Inc. 1,489,641
8,545 Becton, Dickinson & Co. 440,602
46,769 Bristol-Myers Squibb Co. 4,378,748
23,304 Johnson & Johnson 1,466,696
9,600 Lilly (Eli) & Co. 605,400
43,692 Medtronic, Inc. 2,086,293
20,632 Merck & Co., Inc. 1,951,014
7,600 Pfizer, Inc. 552,900
1,590 Warner-Lambert Co. 222,401
------------
Total 17,054,287
------------
INDUSTRIAL SERVICES--4.0%
5,700 Baker Hughes, Inc. 238,687
8,800 Halliburton Co. 474,650
70,903 (b)Philip Services Corp. 1,121,154
48,594 Schlumberger Ltd. 3,999,894
32,156 (b)Thermo Electron Corp. 1,183,743
28,957 (b)U.S. Filter Corp. 908,526
------------
Total 7,926,654
------------
MISCELLANEOUS--0.4%
32,980 (b)MedPartners, Inc. 816,255
------------
NON-ENERGY MINERALS--0.4%
5,225 Aluminum Co. of America 351,381
6,480 LTV Corp. 72,090
1,600 Potash Corporation of
Saskatchewan, Inc. 125,900
Common Stocks--continued
NON-ENERGY MINERALS--CONTINUED
6,467 (b)UCAR International, Inc. $ 258,276
------------
Total 807,647
------------
PROCESS INDUSTRIES--4.2%
30,660 Ecolab, Inc. 1,563,660
11,047 Hercules, Inc. 536,470
34,230 Kimberly-Clark Corp. 1,782,099
8,200 Mead Corp. 529,413
9,650 Millipore Corp. 373,938
10,500 Monsanto Co. 458,719
1,805 NCH, Corp. 123,078
50,630 Praxair, Inc. 2,224,556
2,801 Solutia, Inc. 63,898
18,158 Sonoco Products Co. 595,809
------------
Total 8,251,640
------------
PRODUCER MANUFACTURING--7.4%
6,000 Ametek, Inc. 142,500
16,650 Caterpillar, Inc. 798,159
4,050 Cooper Industries, Inc. 209,081
630 (b)Culligan Water Technologies 29,617
8,900 Dover Corp. 596,856
18,403 (b)FMC Corp. 1,344,569
42,850 General Electric Co. 3,160,187
34,841 Harsco Corp. 1,380,575
15,100 Honeywell, Inc. 989,050
31,307 Ingersoll-Rand Co. 1,279,674
4,450 Loews Corp. 472,256
6,300 Tecumseh Products Co., Class A 310,275
27,900 Tyco International, Ltd. 1,095,075
29,424 Xerox Corp. 2,285,877
13,660 York International Corp. 632,629
------------
Total 14,726,380
------------
RETAIL TRADE--1.0%
8,700 American Stores Co. 172,369
2,800 Circuit City Stores, Inc. 91,875
5,250 Fingerhut Companies, Inc. 108,937
29,270 Lowe's Cos., Inc. 1,344,591
9,050 (b)Toys 'R' Us, Inc. 308,831
------------
Total 2,026,603
------------
TECHNOLOGY SERVICES--3.5%
3,360 (b)Adaptec, Inc. 166,320
12,030 Avnet, Inc. 796,987
59,910 Computer Associates
International, Inc. 3,119,064
19,735 Danka Business Systems, PLC,
ADR 725,261
<CAPTION>
Shares or
Principal
Amount Value
- ---------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
TECHNOLOGY SERVICES--CONTINUED
1,400 Electronic Data Systems Corp. $ 53,200
13,445 (b)McAfee Associates, Inc. 615,109
6,400 (b)Microsoft Corp. 905,600
19,462 (b)Oracle Corp. 648,328
------------
Total 7,029,869
------------
TELECOMMUNICATIONS--0.5%
2,035 Bell Atlantic Corp. 181,624
5,950 (b)LCI International, Inc. 163,997
650 Lucent Technologies, Inc. 52,081
8,336 OY Nokia AB, Class A, ADR 692,930
------------
Total 1,090,632
------------
TRANSPORTATION--2.2%
3,650 Burlington Northern Santa Fe 333,975
76,520 CSX Corp. 4,002,952
3,350 Illinois Central Corp. 120,809
------------
Total 4,457,736
------------
UTILITIES--3.0%
7,000 BellSouth Corp. 383,250
2,450 CMS Energy Corp. 96,469
16,220 Coastal Corp. 949,884
8,005 Equity Residential Properties
Trust 400,250
52,745 GTE Corp. 2,666,919
5,900 MCI Communications Corp. 259,231
49,330 Southern Co. 1,183,920
------------
Total 5,939,923
------------
Total Common Stocks
(identified cost $126,845,277) 163,363,062
------------
U.S. Government Agencies--12.5%
FEDERAL HOME LOAN BANK--
DISCOUNT NOTES--1.2%
$ 1,250,000 Federal Home Loan Bank,
12/10/1997 1,248,262
250,000 Federal Home Loan Bank,
12/9/1997 249,700
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------
<C> <S> <C>
U.S. Government Agencies--continued
FEDERAL HOME LOAN BANK--CONTINUED
$ 1,000,000 Federal Home Loan Bank,
3/20/1998 $ 983,200
------------
Total 2,481,162
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION--
DISCOUNT NOTE--1.4%
2,750,000 Federal Home Loan Mortgage
Corp., 12/19/1997 2,742,327
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--
DISCOUNT NOTES--9.9%
17,750,000 Federal National Mortgage
Association, 12/15/1997 17,711,482
1,000,000 Federal National Mortgage
Association, 12/18/1997 997,360
1,000,000 Federal National Mortgage
Association, 3/20/1998 983,260
------------
Total 19,692,102
------------
Total U.S. Government Agencies
(identified cost $24,917,649) 24,915,591
------------
U.S. Treasury Obligations--0.6%
U.S. TREASURY BILLS--0.6%
1,200,000 12/18/1997 1,197,648
50,000 3/19/1998 49,241
------------
Total U.S. Treasury
Obligations
(identified cost $1,246,443) 1,246,889
------------
(a) Repurchase Agreement--5.4%
10,756,863 Goldman Sachs Group, LP,
5.50%, dated 11/28/1997, due
12/1/1997 (at amortized cost) 10,756,863
------------
Total Investments (identified
cost $163,766,232) $200,282,405
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA QUANTITATIVE EQUITY FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA QUANTITATIVE EQUITY FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Quantitative Equity Fund (Class A Shares) (the "Fund") from March 25,
1994 (start of performance) to November 30, 1997 compared to the S&P 500 Index.+
[GRAPHIC REPRESENTATION A4 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The S&P 500 Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation, and financial and public utility companies. The S&P
500 Index is not adjusted to reflect sales loads, expenses, or other fees that
the SEC requires to be reflected in the Fund's performance. Investments cannot
be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA QUANTITATIVE EQUITY FUND (CLASS B SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA QUANTITATIVE EQUITY FUND (CLASS B SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Quantitative Equity Fund (Class B Shares) (the "Fund") from July 23,
1996 (start of performance) to November 30, 1997 compared to the S&P 500 Index.+
[GRAPHIC REPRESENTATION A5 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund. The ending value
of the Fund reflects a 4.00% contingent deferred sales charge on any
redemption less than two years from the purchase date. The Fund's performance
assumes the reinvestment of all dividends and distributions. The S&P 500
Index has been adjusted to reflect reinvestment of dividends on securities in
the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation, and financial and public utility companies. The S&P
500 Index is not adjusted to reflect sales loads, expenses, or other fees that
the SEC requires to be reflected in the Fund's performance. Investments cannot
be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA QUANTITATIVE EQUITY FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA QUANTITATIVE EQUITY FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Quantitative Equity Fund (Class Y Shares) (the "Fund") from July 23,
1996 (start of performance) to November 30, 1997 compared to the S&P 500 Index.+
[GRAPHIC REPRESENTATION A6 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 Index has been adjusted to reflect reinvestment of
dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation, and financial and public utility companies. The S&P
500 Index is not adjusted to reflect sales loads, expenses, or other fees that
the SEC requires to be reflected in the Fund's performance. Investments cannot
be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA QUANTITATIVE EQUITY FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Shares Value
- ---------------------------------------------------------
<C> <S> <C>
Common Stocks--88.9%
CAPITAL GOODS--2.7%
5,000 General Dynamics Corp. $ 433,125
65,000 General Electric Co. 4,793,750
20,000 Harsco Corp. 792,500
------------
Total 6,019,375
------------
CONSUMER DURABLES--3.4%
60,000 Arvin Industries, Inc. 2,070,000
20,000 Chrysler Corp. 686,250
30,000 Deere & Co. 1,644,375
15,000 General Motors Corp. 915,000
20,000 Magna International, Inc.,
Class A 1,262,500
27,000 Newell Co. 1,101,938
------------
Total 7,680,063
------------
CONSUMER NON-DURABLES--19.7%
38,000 American Greetings Corp.,
Class A 1,396,500
60,000 American Stores Co. 1,188,750
30,000 Anheuser-Busch Cos., Inc. 1,295,625
72,000 Bergen Brunswig Corp., Class A 3,091,500
35,000 Bristol-Myers Squibb Co. 3,276,875
10,000 Clorox Co. 776,250
40,000 Coca Cola Enterprises, Inc. 1,222,500
20,000 ConAgra, Inc. 718,750
25,000 (b)Costco Cos., Inc. 1,107,812
68,000 Dayton-Hudson Corp. 4,517,750
20,000 Dean Foods Co. 1,062,500
50,000 Dole Food, Inc. 2,468,750
20,000 Fort James Corp. 782,500
35,000 Johnson & Johnson 2,202,812
40,000 (b)King World Productions,
Inc. 2,175,000
30,000 Nordstrom, Inc. 1,770,000
60,000 Philip Morris Cos., Inc. 2,610,000
35,000 Premark International, Inc. 914,375
30,000 Procter & Gamble Co. 2,289,375
35,000 (b)Safeway, Inc. 2,126,250
60,000 Schering Plough Corp. 3,761,250
28,000 TJX Cos., Inc. 966,000
80,000 (b)Tenet Healthcare Corp. 2,535,000
------------
Total 44,256,124
------------
Common Stocks--continued
CONSUMER SERVICES--2.9%
40,000 (b)HFS, Inc. $ 2,745,000
40,000 (b)Phycor, Inc. 985,000
23,000 Times Mirror Co., Class A 1,365,625
18,000 Tribune Co. 1,014,750
9,700 (b)Tricon Global Restaurants,
Inc. 327,981
------------
Total 6,438,356
------------
ELECTRONIC TECHNOLOGY--4.9%
70,000 Harris Corp. 3,320,625
25,000 Intel Corp. 1,940,625
40,000 (b)National Semiconductor
Corp. 1,325,000
60,000 (b)Quantum Corp. 1,597,500
15,000 (b)Storage Technology Corp. 968,438
40,000 Texas Instruments, Inc. 1,970,000
------------
Total 11,122,188
------------
ENERGY--5.6%
28,000 British Petroleum Co. PLC, ADR 2,324,000
43,000 Exxon Corp. 2,623,000
30,000 Mobil Corp. 2,158,125
35,000 Phillips Petroleum Co. 1,695,313
40,000 Royal Dutch Petroleum Co., ADR 2,107,500
30,000 Williams Cos., Inc. (The) 1,603,125
------------
Total 12,511,063
------------
FINANCE--14.9%
86,000 AMBAC 3,450,750
5,000 Ace, Ltd. 496,250
12,000 Aegon N.V. 1,020,000
30,000 Amsouth Bancorporation 1,561,875
31,000 BankAmerica Corp. 2,263,000
20,500 CIGNA Corp. 3,428,625
26,000 Chase Manhattan Corp. 2,824,250
29,000 First Union Corp. 1,413,750
55,000 Marsh & McLennan Cos., Inc. 4,094,062
25,000 NationsBank Corp. 1,501,562
65,000 PNC Bank Corp. 3,497,813
10,500 PaineWebber Group, Inc. 353,063
50,000 Reliastar Financial Corp. 1,850,000
51,000 SouthTrust Corp. 2,779,500
60,000 Travelers Group, Inc. 3,030,000
------------
Total 33,564,500
------------
Common Stocks--continued
FOOD PRODUCTS--1.6%
97,000 PepsiCo, Inc. $ 3,576,875
------------
HEALTH TECHNOLOGY--2.1%
19,000 Merck & Co., Inc. 1,796,687
110,000 Mylan Laboratories, Inc. 2,440,625
40,000 (b)Perrigo Co. 570,000
------------
Total 4,807,312
------------
MATERIALS & SERVICES--3.8%
55,000 Ecolab, Inc. 2,805,000
95,000 Ennis Business Forms, Inc. 944,062
85,000 Lubrizol Corp. 3,315,000
15,000 Olin Corp. 742,500
8,000 Schlumberger Ltd. 658,500
------------
Total 8,465,062
------------
NON-ENERGY MINERALS--2.0%
45,000 Vulcan Materials Co. 4,575,938
------------
PRODUCER MANUFACTURING--4.8%
5,000 Ball Corp. 192,500
25,000 Champion International Corp. 1,339,062
15,000 Illinois Tool Works, Inc. 822,187
82,500 Ingersoll-Rand Co. 3,372,187
100,000 Timken Co. 3,543,750
7,000 Whirlpool Corp. 383,688
14,000 Xerox Corp. 1,087,625
------------
Total 10,740,999
------------
TECHNOLOGY--8.0%
115,000 Comdisco, Inc. 3,363,750
90,000 Compaq Computer Corp. 5,619,375
60,000 Computer Associates
International, Inc. 3,123,750
20,000 International Business
Machines Corp. 2,191,250
30,000 Lockheed Martin Corp. 2,926,875
14,000 Textron, Inc. 827,750
------------
Total 18,052,750
------------
TELECOMMUNICATIONS--0.2%
5,000 Bell Atlantic Corp. 446,250
------------
TRANSPORTATION--1.2%
44,000 GATX Corp. 2,673,000
------------
<CAPTION>
Shares or
Principal
Amount Value
- ---------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
UNASSIGNED--1.2%
50,000 American General Corp. $ 2,693,750
------------
UTILITIES--9.9%
46,000 Ameritech Corp. 3,544,875
73,000 BellSouth Corp. 3,996,750
65,000 Coastal Corp. 3,806,563
60,000 DQE, Inc. 1,991,250
45,000 GPU, Inc. 1,777,500
40,000 New England Electric System 1,650,000
17,000 Pinnacle West Capital Corp. 655,563
36,000 SBC Communications, Inc. 2,621,250
20,000 SCANA Corp. 552,500
30,000 Sprint Corp. 1,756,875
------------
Total 22,353,126
------------
Total Common Stocks
(identified cost $126,428,915) 199,976,731
------------
U.S. Government Agencies--10.2%
$ 1,500,000 (d)Federal Home Loan Bank
System, Discount Note,
12/10/1997 1,497,915
4,750,000 (d)Federal Home Loan Mortgage
Corp., Discount Note,
12/16/1997 4,738,980
4,750,000 (d)Federal Home Loan Mortgage
Corp., Discount Note,
12/19/1997 4,736,748
10,000,000 (d)Federal National Mortgage
Association, Discount Note,
12/15/1997 9,978,300
2,000,000 (d)Federal National Mortgage
Association, Discount Note,
3/19/1998 1,966,760
------------
Total U.S. Government Agencies
(identified cost $22,920,961) 22,918,703
------------
U.S. Treasury Obligations--0.5%
U.S. TREASURY BILLS--0.5%
1,000,000 (d) 12/11/1997 998,560
50,000 (d) 12/18/1997 49,902
200,000 (d) 3/19/1998 196,964
------------
Total U.S. Treasury
Obligations
(identified cost $1,245,424) 1,245,426
------------
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------
<C> <S> <C>
(a) Repurchase Agreement--0.6%
$ 1,403,888 Goldman Sachs Group, LP,
5.50%, dated 11/28/1997, due
12/1/1997 (at amortized cost) $ 1,403,888
------------
Total Investments (identified
cost $151,999,188) $225,544,748
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA EQUITY INDEX FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA EQUITY INDEX FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Equity Index Fund (Class A Shares) (the "Fund") from May 7, 1993 (start
of performance) to November 30, 1997 compared to the S&P 500 Index.+
[GRAPHIC REPRESENTATION A7 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The S&P 500 Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation, and financial and public utility companies. The S&P
500 Index is not adjusted to reflect sales loads, expenses, or other fees
that the SEC requires to be reflected in the Fund's performance.
Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA EQUITY INDEX FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA EQUITY INDEX FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Equity Index Fund (Class Y Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1997 compared to the S&P 500 Index.+
[GRAPHIC REPRESENTATION A8 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 Index has been adjusted to reflect reinvestment of
dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation, and financial and public utility companies. The S&P
500 Index is not adjusted to reflect sales loads, expenses, or other fees that
the SEC requires to be reflected in the Fund's performance. Investments cannot
be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA EQUITY INDEX FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Shares Value
- ----------------------------------------------------------
<C> <S> <C>
Common Stocks--94.7%
BASIC MATERIALS--4.7%
1,607 ASARCO, Inc. $ 39,974
4,182 Air Products & Chemicals, Inc. 320,707
8,662 Alcan Aluminum, Ltd. 233,333
6,713 Allegheny Teledyne, Inc. 172,860
6,637 Aluminum Co. of America 446,338
21,372 Archer-Daniels-Midland Co. 456,826
4,085 (b)Armco, Inc. 21,702
14,224 Barrick Gold Corp. 235,585
8,766 Battle Mountain Gold Co. 44,378
2,023 Bemis Co., Inc. 85,219
4,297 (b)Bethlehem Steel Corp. 44,044
2,122 Boise Cascade Corp. 71,485
3,660 Champion International Corp. 196,039
3,567 Cyprus Amax Minerals 65,321
8,699 Dow Chemical Co. 859,026
43,153 Du Pont (E.I.) de Nemours & Co. 2,613,454
2,991 Eastman Chemical Co. 180,582
5,318 Echo Bay Mines Ltd. 12,298
2,472 Ecolab, Inc. 126,072
5,507 Engelhard Corp. 98,093
1,420 (b)FMC Corp. 103,749
7,210 Fort James Corp. 282,091
7,588 Freeport-McMoRan Copper & Gold,
Inc., Class B 158,874
3,491 Georgia-Pacific Corp. 298,044
2,063 Goodrich (B.F.) Co. 91,803
2,771 Grace (W.R.) & Co. 201,590
2,284 Great Lakes Chemical Corp. 102,494
3,780 Hercules, Inc. 183,566
5,599 Homestake Mining Co. 58,789
6,372 Inco Ltd. 121,466
1,862 Inland Steel Industries, Inc. 35,611
4,170 International Flavors &
Fragrances, Inc. 200,942
11,540 International Paper Co. 547,429
4,171 Louisiana-Pacific Corp. 84,202
1,996 Mead Corp. 128,867
22,495 Monsanto Co. 982,750
5,344 Morton International, Inc. 182,030
2,550 Nalco Chemical Co. 98,972
5,964 Newmont Mining Corp. 179,293
3,353 Nucor Corporation 167,650
6,842 PPG Industries, Inc. 396,408
2,305 Phelps Dodge Corp. 152,706
3,138 Pioneer Hi-Bred International 320,468
Common Stocks--continued
BASIC MATERIALS--CONTINUED
9,139 Placer Dome, Inc. $ 111,953
1,103 Potlatch Corp. 53,633
6,030 Praxair, Inc. 264,943
2,813 Reynolds Metals Co. 160,165
2,351 Rohm & Haas Co. 216,145
3,826 Sigma-Aldrich Corp. 138,214
3,790 Stone Container Corp. 47,375
2,173 Temple-Inland, Inc. 124,133
10,992 USX Corp. 376,476
3,271 USX-U.S. Steel Group, Inc. 102,423
2,646 Union Camp Corp. 158,925
4,740 Union Carbide Corp. 209,153
3,891 Westvaco Corp. 126,944
7,609 Weyerhaeuser Co. 401,850
4,238 Willamette Industries, Inc. 148,860
3,690 Worthington Industries, Inc. 66,881
------------
Total 14,111,203
------------
CAPITAL GOODS--8.4%
8,381 AMP, Inc. 364,050
1,073 Aeroquip-Vickers, Inc. 54,790
21,597 Allied-Signal, Inc. 801,789
3,935 Avery Dennison Corp. 164,778
1,151 Ball Corp. 44,313
38,208 Boeing Co. 2,029,779
967 Briggs & Stratton Corp. 49,438
8,121 Browning-Ferris Industries,
Inc. 289,818
2,844 Case Corp. 176,328
14,364 Caterpillar, Inc. 688,574
1,520 Cincinnati Milacron, Inc. 44,935
4,661 Cooper Industries, Inc. 240,624
8,805 Corning, Inc. 373,662
1,752 Crane Co. 73,803
4,897 Crown Cork & Seal Co., Inc. 239,035
1,460 Cummins Engine Co., Inc. 93,987
9,621 Deere & Co. 527,351
4,243 Dover Corp. 284,546
2,950 Eaton Corp. 278,591
16,922 Emerson Electric Co. 930,710
3,202 Fluor Corp. 115,072
1,551 Foster Wheeler Corp. 47,790
2,384 General Dynamics Corp. 206,514
124,940 General Electric Co. 9,214,325
1,921 General Signal Corp. 78,401
1,897 Grainger (W.W.), Inc. 177,607
1,885 Harnischfeger Industries, Inc. 71,983
Common Stocks--continued
CAPITAL GOODS--CONTINUED
4,866 Honeywell, Inc. $ 318,723
9,517 Illinois Tool Works, Inc. 521,651
6,332 Ingersoll-Rand Co. 258,820
3,197 Johnson Controls, Inc. 146,463
12,542 Laidlaw, Inc. 163,046
7,404 Lockheed Martin Corp. 722,353
2,119 McDermott International, Inc. 66,748
1,662 Millipore Corp. 64,402
15,854 Minnesota Mining &
Manufacturing Co. 1,544,774
3,386 Moore Corp. Ltd. 52,695
311 NACCO Industries, Inc., Class A 33,860
1,720 National Service Industries,
Inc. 80,517
2,786 (b)Navistar International Corp. 61,292
5,355 (b)Owens-Illinois, Inc. 181,401
2,970 PACCAR, Inc. 163,350
4,855 Pall Corp. 102,562
4,262 Parker-Hannifin Corp. 189,659
5,506 Pitney Bowes, Inc. 462,848
1,665 Raychem Corp. 157,447
7,968 Rockwell International Corp. 388,440
6,496 Tenneco, Inc. 281,358
6,296 Textron, Inc. 372,251
5,733 (b)Thermo Electron Corp. 211,046
2,097 Thomas & Betts Corp. 95,151
2,402 Timken Co. 85,121
20,334 Tyco International, Ltd. 798,110
------------
Total 25,186,681
------------
COMMUNICATION--0.4%
34,421 (b)WorldCom, Inc. 1,101,472
------------
CONSUMER CYCLICAL--5.6%
2,871 American Greetings Corp., Class
A 105,509
5,762 (b)AutoZone, Inc. 172,860
3,603 Black & Decker Corp. 132,410
3,790 Brunswick Corp. 126,728
15,629 (b)CUC International, Inc. 449,334
1,107 Centex Corp. 70,156
4,035 (b)Charming Shoppes, Inc. 19,797
25,738 Chrysler Corp. 883,135
3,757 Circuit City Stores, Inc. 123,277
3,741 (b)Clear Channel
Communications, Inc. 253,453
6,265 Cognizant Corp. 268,612
3,004 Cooper Tire & Rubber Co. 67,214
8,110 (b)Costco Cos., Inc. 359,374
3,983 Dana Corp. 186,205
8,306 Dayton-Hudson Corp. 551,830
Common Stocks--continued
CONSUMER CYCLICAL--CONTINUED
4,263 Dillards, Inc., Class A $ 155,866
3,662 Dow Jones & Co. 185,160
2,406 Echlin, Inc. 76,240
7,980 (b)Federated Department Stores,
Inc. 363,589
1,372 Fleetwood Enterprises, Inc. 48,963
2,796 (b)Fruit of the Loom, Inc.,
Class A 65,182
10,816 Gannett Co., Inc. 628,004
10,231 Gap (The), Inc. 549,277
6,872 Genuine Parts Co. 219,904
5,952 Goodyear Tire & Rubber Co. 361,212
6,058 (b)HFS, Inc. 415,730
2,700 Harcourt General, Inc. 147,825
3,852 (b)Harrah's Entertainment, Inc. 77,281
4,845 Hasbro, Inc. 140,808
9,542 Hilton Hotels Corp. 296,995
27,858 Home Depot, Inc. 1,558,307
4,444 (b)ITT Corp. 337,188
4,520 ITT Industries, Inc. 143,510
4,753 Interpublic Group Cos., Inc. 227,847
1,495 Jostens, Inc. 35,880
18,579 (b)K Mart Corp. 233,399
1,483 Kaufman & Broad Homes Corp. 32,163
3,336 Knight-Ridder, Inc. 167,217
10,362 Limited, Inc. 249,336
2,669 Liz Claiborne, Inc. 134,117
4,388 Loews Corp. 465,676
6,295 Masco Corp. 296,652
11,084 Mattel, Inc. 444,053
3,762 Maytag Corp. 121,560
3,774 McGraw-Hill Cos., Inc. 258,283
1,402 Mercantile Stores Co., Inc. 90,604
2,042 Meredith Corp. 71,215
1 (b)Meritor Automotive, Inc. 22
6,823 (b)Mirage Resorts, Inc. 162,046
11,018 Nike, Inc., Class B 536,439
2,947 Nordstrom, Inc. 173,873
2,035 Owens Corning 74,786
9,498 Penney (J.C.) Co., Inc. 610,246
2,412 Pep Boys-Manny Moe & Jack 60,601
807 Pulte Corp. 32,734
2,147 (b)Reebok International Ltd. 84,404
1,392 Russell Corp. 42,543
14,944 Sears, Roebuck & Co. 684,622
9,600 Service Corp. International 351,000
6,588 Sherwin-Williams Co. 188,170
3,396 Stanley Works 149,636
6,230 TJX Cos., Inc. 214,935
4,703 TRW, Inc. 266,895
Common Stocks--continued
CONSUMER CYCLICAL--CONTINUED
10,886 (b)Toys 'R' Us, Inc. $ 371,485
4,684 Tribune Co. 264,061
2,845 Whirlpool Corp. 155,942
------------
Total 16,793,377
------------
CONSUMER DURABLES--1.6%
1,555 Armstrong World Industries,
Inc. 107,198
12,433 Eastman Kodak Co. 753,751
45,577 Ford Motor Co. 1,959,811
27,823 General Motors Corp. 1,697,203
1,739 Polaroid Corp. 73,907
2,334 Snap-On Tools Corp. 102,550
------------
Total 4,694,420
------------
CONSUMER NON-DURABLES--7.1%
18,767 Anheuser-Busch Cos., Inc. 810,500
3,972 Block (H&R), Inc. 162,852
94,649 Coca-Cola Co. 5,915,562
6,505 Dun & Bradstreet Corp. 182,140
50,782 Johnson & Johnson 3,196,092
6,635 Lowe's Cos., Inc. 304,795
4,855 Marriott Corp. 351,684
8,875 May Department Stores Co. 477,031
46,092 Merck & Co., Inc. 4,358,575
3,659 New York Times Co., Class A 217,253
769 Springs Industries, Inc., Class
A 38,786
3,655 Times Mirror Co., Class A 217,016
2,799 U.S. Surgical Corp. 73,824
4,794 V.F. Corp. 221,423
86,419 Wal-Mart Stores, Inc. 3,451,359
5,026 Wendy's International, Inc. 105,546
24,682 Westinghouse Electric Corp. 740,460
5,681 Winn-Dixie Stores, Inc. 229,725
5,148 (b)Woolworth (F.W.) Co. 111,326
------------
Total 21,165,949
------------
CONSUMER STAPLES--11.5%
2,141 Alberto-Culver Co., Class B 66,772
9,378 Albertsons, Inc. 416,149
10,391 American Stores Co. 205,872
5,052 Avon Products, Inc. 292,069
2,633 Brown-Forman Corp., Class B 135,270
5,479 CPC International, Inc. 566,392
6,563 CVS Corp. 435,619
17,552 Campbell Soup Co. 982,912
4,142 Cardinal Health, Inc. 313,756
3,944 Clorox Co. 306,153
11,294 Colgate-Palmolive Co. 754,580
13,312 Comcast Corp., Class A 372,736
Common Stocks--continued
CONSUMER STAPLES--CONTINUED
18,046 ConAgra, Inc. $ 648,528
1,414 Coors Adolph Co., Class B 50,904
5,838 Darden Restaurants, Inc. 69,326
3,145 Deluxe Corp. 111,058
25,763 Disney (Walt) Co. 2,445,875
5,583 Donnelley (R.R.) & Sons Co. 196,801
1,443 Fleming Cos., Inc. 23,990
6,538 Fortune Brands, Inc. 236,594
6,102 General Mills, Inc. 451,548
2,290 Giant Foods, Inc., Class A 77,287
21,361 Gillette Co. 1,971,887
1,460 Great Atlantic & Pacific Tea
Co., Inc. 45,077
1,182 Harland (John H.) Co. 24,453
14,092 Heinz (H.J.) Co. 705,481
5,452 Hershey Foods Corp. 334,616
15,748 Kellogg Co. 730,313
21,243 Kimberly-Clark Corp. 1,105,964
1,403 (b)King World Productions, Inc. 76,288
9,707 (b)Kroger Co., Inc. 334,285
1,496 Longs Drug Stores Corp. 43,758
26,255 McDonald's Corp. 1,273,367
6,071 Newell Co. 247,773
58,405 PepsiCo, Inc. 2,153,684
92,460 Philip Morris Cos., Inc. 4,022,010
51,548 Procter & Gamble Co. 3,933,757
5,242 Quaker Oats Co. 277,826
4,066 Ralston Purina Co. 378,138
4,692 Rite Aid Corp. 308,499
5,721 Rubbermaid, Inc. 138,734
2,224 Safety-Kleen Corp. 61,716
18,329 Sara Lee Corp. 969,146
14,148 Seagram Co. Ltd. 457,157
2,312 Super Valu Stores, Inc. 90,891
6,655 Sysco Corp. 296,563
19,323 (b)Tele-Communications, Inc.,
Class A 442,617
21,363 Time Warner, Inc. 1,244,395
5,840 (b)Tricon Global Restaurants,
Inc. 197,465
2,337 Tupperware Corp. 55,796
7,015 UST, Inc. 216,588
24,428 Unilever N.V., ADR 1,418,351
13,467 (b)Viacom, Inc., Class B 471,345
18,785 Walgreen Co. 604,642
3,876 Whitman Corp. 101,987
4,435 Wrigley (Wm.), Jr. Co. 350,919
------------
Total 34,245,679
------------
Common Stocks--continued
ELECTRONIC TECHNOLOGY--8.8%
13,152 (b)3Com Corp. $ 476,760
5,378 (b)Advanced Micro Devices, Inc. 117,308
3,442 (b)Andrew Corp. 91,213
4,859 (b)Apple Computer, Inc. 86,247
13,912 (b)Applied Materials, Inc. 459,096
7,588 (b)Bay Networks, Inc. 228,114
6,017 (b)Cabletron Systems, Inc. 138,391
3,080 (b)Ceridian Corp. 135,135
25,532 (b)Cisco Systems, Inc. 2,202,135
28,848 Compaq Computer Corp. 1,801,197
2,944 (b)Computer Sciences Corp. 233,128
4,481 (b)DSC Communications Corp. 101,103
1,826 (b)Data General Corp. 32,754
12,623 (b)Dell Computer Corp. 1,062,699
5,831 (b)Digital Equipment Corp. 287,177
1,746 EG & G, Inc. 34,265
18,828 (b)EMC Corp. Mass 570,724
3,040 Harris Corp. 144,210
39,693 Hewlett-Packard Co. 2,423,754
62,315 Intel Corp. 4,837,202
37,483 International Business Machines
Corp. 4,106,731
5,416 (b)LSI Logic Corp. 125,922
8,039 Micron Technology, Inc. 199,970
22,718 Motorola, Inc. 1,428,394
5,540 (b)National Semiconductor Corp. 183,512
10,005 Northern Telecom Ltd. 898,574
2,545 Northrop Corp. 286,949
13,321 (b)Novell, Inc. 123,219
1,671 Perkin-Elmer Corp. 116,239
9,019 Raytheon Co. 504,500
2,959 Scientific-Atlanta, Inc. 59,180
9,332 (b)Seagate Technology, Inc. 211,720
6,755 (b)Silicon Graphics, Inc. 88,659
14,076 (b)Sun Microsystems, Inc. 506,736
1,912 Tektronix, Inc. 80,185
6,907 (b)Tellabs, Inc. 359,164
14,630 Texas Instruments, Inc. 720,528
6,672 (b)Unisys Corp. 95,493
8,984 United Technologies Corp. 673,239
------------
Total 26,231,526
------------
ENERGY--8.0%
3,501 Amerada-Hess Corp. 196,056
18,729 Amoco Corp. 1,685,610
2,277 Anadarko Petroleum Corp. 148,005
3,447 Apache Corp. 126,677
2,849 Ashland, Inc. 133,013
Common Stocks--continued
ENERGY--CONTINUED
12,242 Atlantic Richfield Co. $ 997,723
6,439 Baker Hughes, Inc. 269,633
6,727 Burlington Resources, Inc. 299,351
24,983 Chevron Corp. 2,003,324
6,682 Dresser Industries, Inc. 249,740
1 (b)Ensearch Exploration, Inc. 8
94,421 Exxon Corp. 5,759,681
9,674 Halliburton Co. 521,791
953 Helmerich & Payne, Inc. 72,488
1,819 Kerr-McGee Corp. 120,622
29,990 Mobil Corp. 2,157,406
12,641 Occidental Petroleum Corp. 375,280
4,023 (b)Oryx Energy Co. 108,621
1,801 Pennzoil Co. 119,992
10,053 Phillips Petroleum Co. 486,942
3,302 (b)Rowan Companies, Inc. 112,268
81,826 Royal Dutch Petroleum Co., ADR 4,311,207
18,891 Schlumberger Ltd. 1,554,965
2,769 Sun Co., Inc. 111,971
20,156 Texaco, Inc. 1,138,814
9,684 Union Pacific Resources Group,
Inc. 240,890
9,426 Unocal Corp. 375,273
2,058 (b)Western Atlas, Inc. 143,160
------------
Total 23,820,511
------------
FINANCE--15.4%
6,381 AON Corp. 337,794
5,717 Aetna Services, Inc. 430,919
3,714 Ahmanson (H.F.) & Co. 220,983
16,603 Allstate Corp. 1,425,783
17,889 American Express Co. 1,410,995
9,475 American General Corp. 510,466
26,759 American International Group,
Inc. 2,697,642
22,240 Banc One Corp. 1,142,580
14,481 Bank of New York Co., Inc. 778,354
26,651 BankAmerica Corp. 1,945,523
5,559 BankBoston Corp. 495,446
3,798 Bankers Trust New York Corp. 450,300
7,587 Barnett Banks, Inc. 533,935
2,029 Beneficial Corp. 157,501
2,824 CIGNA Corp. 472,314
16,160 Chase Manhattan Corp. 1,755,380
6,581 Chubb Corp. 466,840
17,481 Citicorp 2,096,627
4,027 Comerica, Inc. 343,050
7,169 Conseco, Inc. 333,807
7,724 Corestates Financial Corp. 597,162
Common Stocks--continued
FINANCE--CONTINUED
4,089 Countrywide Credit Industries,
Inc. $ 167,393
26,521 Federal Home Loan Mortgage
Corp. 1,093,991
40,488 Federal National Mortgage
Association 2,138,272
5,880 Fifth Third Bancorp 414,505
11,282 First Chicago NBD Corp. 882,816
21,422 First Union Corp. 1,044,322
9,540 Fleet Financial Group, Inc. 630,236
3,038 General RE Corp. 603,043
2,165 Golden West Financial Corp. 194,038
5,183 Green Tree Financial Corp. 158,729
4,502 Hartford Financial Services
Group, Inc. 377,042
4,076 Household International, Inc. 513,576
6,068 Huntington Bancshares, Inc. 206,312
6,827 J.P. Morgan & Co., Inc. 779,558
2,702 Jefferson-Pilot Corp. 206,196
8,289 KeyCorp 558,989
3,890 Lincoln National Corp. 277,649
3,406 MBIA Insurance Corporation 214,152
19,125 MBNA Corp. 508,008
4,355 MGIC Investment Corp. 254,495
6,430 Marsh & McLennan Cos., Inc. 478,633
9,601 Mellon Bank Corp. 544,257
12,645 Merrill Lynch & Co., Inc. 887,521
22,399 Morgan Stanley, Dean Witter,
Discover & Co. 1,216,546
8,212 National City Corp. 548,151
27,168 NationsBank Corp. 1,631,778
28,604 Norwest Corp. 1,070,862
11,714 PNC Bank Corp. 630,360
2,751 Progressive Corp. Ohio 280,602
3,578 Providian Financial Corp. 157,656
2,092 Republic New York Corp. 227,505
4,821 SAFECO Corp. 235,626
10,098 Schwab (Charles) Corp. 389,404
3,200 St. Paul Cos., Inc. 256,000
6,128 State Street Corp. 364,616
7,444 SunAmerica, Inc. 301,482
8,160 SunTrust Banks, Inc. 579,360
6,670 Synovus Financial Corp. 213,023
5,282 Torchmark Corp. 215,572
2,415 Transamerica Corp. 262,178
43,657 Travelers Group, Inc. 2,204,688
Common Stocks--continued
FINANCE--CONTINUED
9,339 U.S. Bancorp, Inc. $ 1,004,526
5,325 UNUM Corp. 252,605
4,233 USF&G Corp. 85,454
6,088 Wachovia Corp. 468,776
9,558 Washington Mutual, Inc. 660,697
3,355 Wells Fargo & Co. 1,030,824
------------
Total 46,025,425
------------
HEALTHCARE--7.8%
29,362 Abbott Laboratories 1,908,530
2,474 Allergan, Inc. 83,807
3,244 (b)Alza Corp. 86,574
24,750 American Home Products Corp. 1,729,406
10,118 (b)Amgen, Inc. 517,283
2,191 Bard (C.R.), Inc. 65,593
2,115 Bausch & Lomb, Inc. 83,807
10,665 Baxter International, Inc. 539,916
4,662 Becton, Dickinson & Co. 240,384
4,206 (b)Beverly Enterprises, Inc. 71,502
4,245 Biomet, Inc. 101,349
7,409 (b)Boston Scientific Corp. 334,794
38,036 Bristol-Myers Squibb Co. 3,561,120
24,956 Columbia/HCA Healthcare Corp. 736,202
5,655 Guidant Corp. 363,334
7,540 HBO & Co. 338,357
13,106 (b)HEALTHSOUTH Corp. 344,032
6,247 (b)Humana, Inc. 138,605
42,452 Lilly (Eli) & Co. 2,677,129
2,800 Mallinckrodt, Inc. 103,600
2,428 Manor Care, Inc. 85,587
17,845 Medtronic, Inc. 852,099
49,326 Pfizer, Inc. 3,588,466
19,374 Pharmacia & Upjohn, Inc. 653,872
27,958 Schering Plough Corp. 1,752,617
3,504 (b)St. Jude Medical, Inc. 103,806
11,556 (b)Tenet Healthcare Corp. 366,181
7,158 United Healthcare Corp. 372,663
10,355 Warner-Lambert Co. 1,448,406
------------
Total 23,249,021
------------
RAILROAD TRANSPORTATION--0.1%
14,385 Norfolk Southern Corp. 457,623
------------
TECHNOLOGY SERVICES--6.1%
61,988 AT&T Corp. 3,463,579
Common Stocks--continued
TECHNOLOGY SERVICES--CONTINUED
2,781 Adobe System, Inc. $ 116,802
19,222 (b)Airtouch Communications,
Inc. 754,463
1,828 Autodesk, Inc. 70,264
11,174 Automatic Data Processing, Inc. 628,538
20,832 Computer Associates
International, Inc. 1,084,566
5,758 Equifax, Inc. 196,492
16,931 First Data Corp. 479,359
5,069 Ikon Office Solutions, Inc. 154,288
3,194 (b)KLA-Tencor Corp. 123,768
26,401 MCI Communications Corp. 1,159,994
45,728 (b)Microsoft Corp. 6,470,512
5,622 (b)NextLevel Systems, Inc. 74,492
37,391 (b)Oracle Corp. 1,245,588
4,861 (b)Parametric Technology Corp. 245,784
952 Shared Medical Systems Corp. 60,928
4,044 Tandy Corp. 173,892
23,140 (b)U.S. West Media Group 614,656
2,058 (b)UNOVA, Inc. 34,729
12,407 Xerox Corp. 963,869
------------
Total 18,116,563
------------
TRANSPORTATION--1.0%
3,508 (b)AMR Corp. 425,126
5,936 Burlington Northern Santa Fe 543,144
8,313 CSX Corp. 434,874
1,486 Caliber System, Inc. 79,408
2,804 Delta Air Lines, Inc. 312,471
4,388 (b)Federal Express Corp. 294,270
2,967 Ryder Systems, Inc. 107,739
8,357 Southwest Airlines Co. 204,212
3,001 (b)USAirways Group, Inc. 165,430
9,428 Union Pacific Corp. 565,680
------------
Total 3,132,354
------------
UTILITIES--8.2%
7,131 Alltel Corp. 283,457
7,219 American Electric Power Co.,
Inc. 357,792
20,984 Ameritech Corp. 1,617,080
5,635 Baltimore Gas & Electric Co. 172,924
29,621 Bell Atlantic Corp. 2,643,674
37,831 BellSouth Corp. 2,071,247
5,775 Carolina Power & Light Co. 215,841
8,099 Central & SouthWest Corp. 202,475
6,017 Cinergy Corp. 214,356
4,045 Coastal Corp. 236,885
2,113 Columbia Gas System, Inc. 153,721
<CAPTION>
Shares or
Principal
Amount Value
- ----------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
UTILITIES--CONTINUED
8,969 Consolidated Edison Co. $ 338,580
3,639 Consolidated Natural Gas Co. 219,705
5,537 DTE Energy Co. 181,683
7,090 Dominion Resources, Inc. 275,624
13,732 Duke Energy Corp. 714,064
777 Eastern Enterprises 31,274
15,148 Edison International 406,156
11,677 Enron Corp. 452,484
9,207 Entergy Corp. 239,382
6,949 FPL Group, Inc. 388,710
8,772 (b)FirstEnergy Corp. 236,844
6,264 Frontier Corp. 153,468
4,608 GPU, Inc. 182,016
36,488 GTE Corp. 1,844,925
10,886 Houston Industries, Inc. 257,862
24,487 Lucent Technologies, Inc. 1,962,021
1,854 NICOR, Inc. 74,624
5,511 Niagara Mohawk Power Corp. 52,699
2,816 Northern States Power Co. 154,528
1,068 Oneok, Inc. 39,917
16,731 P G & E Corp. 472,651
6,301 P P & L Resources, Inc. 148,074
3,179 Pacific Enterprises 112,457
11,302 Pacificorp 263,478
8,492 Peco Energy Co. 206,462
1,338 Peoples Energy Corp. 49,004
8,851 Public Service Enterprises
Group, Inc. 258,339
34,876 SBC Communications, Inc. 2,539,409
3,272 Sonat, Inc. 142,537
26,134 Southern Co. 627,216
16,425 Sprint Corp. 961,889
9,176 Texas Utilities Co. 367,040
18,291 U.S. West, Inc. 826,525
8,253 Unicom Corp. 240,369
3,897 Union Electric Co. 155,149
17,303 Waste Management, Inc. 426,086
6,066 Williams Cos., Inc. (The) 324,152
------------
Total 24,496,855
------------
Total Common Stocks
(identified cost $150,950,458) 282,828,659
------------
U.S. Government Agencies--4.8%
$7,000,000 (d)Federal Home Loan Mortgage
Corp., 12/16/1997 6,983,760
1,000,000 (d)Federal Home Loan Mortgage
Corp., 12/19/1997 997,210
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------
<C> <S> <C>
U.S. Government Agencies--continued
$6,500,000 (d)Federal National Mortgage
Association, 12/15/1997 $ 6,485,895
------------
Total U.S. Government Agencies
(identified cost $14,467,955) 14,466,865
------------
U.S. Treasury Obligations--0.5%
U.S. TREASURY BILL--0.5%
1,650,000 (d)12/18/1997 (identified cost
$1,646,139) 1,646,766
------------
(a) Repurchase Agreement--0.4%
$1,065,607 Goldman Sachs Group, LP, 5.50%,
dated 11/28/1997, due 12/1/1997
(at amortized cost) $ 1,065,607
------------
Total Investments
(identified cost $168,130,159) $300,007,897
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA SPECIAL VALUES FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA SPECIAL VALUES FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Special Values Fund (Class A Shares) (the "Fund") from May 7, 1993
(start of performance) to November 30, 1997 compared to the Russell 2000 Small
Stock Index ("Russell 2000 Index").+
[GRAPHIC REPRESENTATION A9 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
*Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The Russell 2000 Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Russell 2000 Index is an unmanaged capitalization-weighted index
consisting of 2,000 small capitalization common stocks. The Russell 2000 Index
is not adjusted to reflect sales loads, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be made
in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA SPECIAL VALUES FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA SPECIAL VALUES FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Special Values Fund (Class Y Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1997 compared to the Russell 2000 Index.+
[GRAPHIC REPRESENTATION A10 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Russell 2000 Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Russell 2000 Index is an unmanaged capitalization-weighted index
consisting of 2,000 small capitalization common stocks. The Russell 2000 Index
is not adjusted to reflect sales loads, expenses, or other fees that the SEC
requires to be reflected in the Fund's performance. Investments cannot be made
in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA SPECIAL VALUES FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Shares Value
- ---------------------------------------------------------
<C> <S> <C>
Common Stocks--80.8%
BASIC MATERIALS--0.5%
33,600 Consolidated Tomoka Co. $ 630,000
------------
CAPITAL GOODS--3.7%
150,000 (b)Ansaldo Signal NV 679,688
12,000 Franklin Electronics, Inc. 689,250
30,000 Greif Brothers Corp., Class A 990,000
72,000 (b)Harding Lawson Associates
Group 702,000
42,800 Twin Disc, Inc. 1,385,650
------------
Total 4,446,588
------------
COMMERCIAL SERVICES--1.2%
4,000 Grey Advertising, Inc. 1,420,000
------------
CONSUMER CYCLICAL--1.3%
100,000 Johns Manville Corp. 1,093,750
15,790 Primex Technologies, Inc. 528,965
------------
Total 1,622,715
------------
CONSUMER DURABLES--4.1%
16,000 Allen Organ Co., Class B 682,000
29,000 Boston Acoustics, Inc. 768,500
67,900 Intermet Corp. 1,256,150
25,000 National Presto Industries,
Inc. 979,688
45,000 Stanhome, Inc. 1,158,750
27,800 (b)Tyler Corp. 142,475
------------
Total 4,987,563
------------
CONSUMER NON-DURABLES--9.1%
60,000 (b)Anacomp, Inc. 937,500
63,000 (b)Buckhead America Corp. 519,750
51,000 CPI Corp. 949,875
7,000 (b)Carson Pirie Scott & Co. 361,375
200,000 Cordiant Plc, ADR 1,300,000
21,000 (b)Craig Corp. 401,625
40,000 (b)Department 56, Inc. 1,167,500
30,000 Eskimo Pie Corp. 321,625
115,000 (b)Host Marriott Services
Corp. 1,689,062
30,000 (b)M & F Worldwide Corp. 288,750
130,000 (b)Oneita Industries, Inc. 44,688
12,000 Plenum Publishing Corp. 576,750
40,000 Price Enterprises, Inc. 720,000
110,000 (b)Spaghetti Warehouse, Inc. 770,000
11,000 Velcro Industries N.V. 1,045,000
------------
Total 11,093,500
------------
Common Stocks--continued
CONSUMER SERVICES--1.8%
25,360 (b)Chris Craft Industries,
Inc. $ 1,271,170
22,000 (b)GC Cos., Inc. 954,250
------------
Total 2,225,420
------------
CONSUMER STAPLES--0.0%
4,000 (b)Dick Clark Productions,
Inc. 56,000
------------
ENERGY--7.4%
75,000 (b)American Pacific Corp. 543,750
30,000 Berry Petroleum Co., Class A 560,625
10,800 (b)Crystal Oil Corp. 421,200
25,400 (b)Dawson Production Services,
Inc. 533,400
96,500 (b)Enserch Exploration, Inc. 808,187
80,000 (b)Forest Oil Corp. 1,275,000
34,000 Holly Corp. 918,000
73,000 (b)Offshore Energy Development
Corp. 529,250
600,000 (b)Saxon Petroleum, Inc. 315,933
71,000 Snyder Oil Corp. 1,411,125
30,250 UGI Corp. 837,547
60,000 Wiser Oil Co. 915,000
------------
Total 9,069,017
------------
FINANCE--18.7%
55,000 Angeles Mortgage Investment
Trust, Class A 928,125
50,000 Argonaut Group, Inc. 1,662,500
3,000 Berkley, W. R. Corp. 124,875
54,000 (b)CNA Surety Corp. 783,000
19,000 CapMAC Holdings, Inc. 643,625
5,000 Capital Southwest Corp. 406,250
91,000 (b)Danielson Holding Corp. 750,750
40,000 Eaton Vance Corp. 1,397,500
34,200 Financial Security Assurance
Holdings Ltd. 1,500,525
11,000 Fund American Enterprises,
Inc. 1,348,875
58,800 Guaranty National Corp. 2,109,450
24,000 IPC Holdings Ltd. 723,000
40,000 John Nuveen & Co., Inc., Class
A 1,430,000
30,000 (b)Kaiser Ventures, Inc. 420,000
40,000 Leucadia National Corp. 1,382,500
21,600 Liberty Corp. 972,000
50,000 Merchants Group, Inc. 975,000
10,000 Meridian Insurance Group, Inc. 181,250
21,000 NAC Re Corp. 937,125
42,000 PXRE Corp. 1,241,625
Common Stocks--continued
FINANCE--CONTINUED
11,196 Reliastar Financial Corp. $ 414,252
7,000 Smith Investment Co. 728,000
7,225 Somerset Group, Inc. 140,888
18,000 Stewart Information Services
Corp. 487,125
22,800 (b)Superior National Insurance
Group, Inc. 323,475
35,500 Unico American Corp. 434,875
18,000 United Wisconsin Services,
Inc. 438,750
------------
Total 22,885,340
------------
HEALTHCARE--0.6%
30,000 (b)ICU Medical, Inc. 330,000
73,000 (b)Medaphis Corp. 365,000
------------
Total 695,000
------------
METALS & MINING--1.2%
44,400 Barrick Gold Corp. 735,375
103,000 Battle Mountain Gold Co. 521,437
5,800 Newmont Gold Co. 175,813
2,500 Newmont Mining Corp. 75,156
------------
Total 1,507,781
------------
RETAIL--0.7%
56,000 (b)K Mart Corp. 703,500
10,000 (b)Pricesmart, Inc. 163,750
------------
Total 867,250
------------
SERVICES--18.0%
41,000 AK Steel Holding Corp. 807,187
25,000 (b)Alltrista Corp. 731,250
30,600 Amcast Industrial Corp. 757,350
35,000 (b)America Service Group, Inc. 599,375
39,200 (b)Audits & Surveys, Inc. 95,550
28,000 (b)BFC Construction Corp. 273,000
14,000 Blount International, Inc.,
Class A 707,875
30,000 Cascade Corp. 540,000
30,000 Cleveland Cliffs, Inc. 1,293,750
17,500 Duff & Phelps Credit Rating 630,000
105,000 (b)Emcor Group, Inc. 2,100,000
15,000 Forest City Enterprises, Inc.,
Class A 856,875
1,950 Forest City Enterprises, Inc.,
Class B 113,100
20,400 Furon Co. 805,800
12,700 Getty Realty Corp. 246,062
Common Stocks--continued
SERVICES--CONTINUED
25,000 (b)Hanger Orthopedic Group,
Inc. $ 309,375
40,000 (b)Healthcare Services Group,
Inc. 507,500
86,000 Homestake Mining Co. 903,000
68,400 LTV Corp. 760,950
12,600 Lafarge Corp. 376,425
42,000 (b)Lexford, Inc. 1,288,875
65,000 (b)Midwest Grain Products,
Inc. 910,000
110,000 (b)Morrison Knudsen Corp. 1,086,250
20,000 Raven Industries, Inc. 413,750
40,000 Roanoke Electric Corp. 890,000
64,000 (b)Royal Oak Mines, Inc. 100,000
125,500 (b)Steel West Virginia, Inc. 1,231,469
100,000 (b)Todd Shipyards Corp. 450,000
20,500 Varlen Corp. 561,188
22,700 (b)Vertex Communications Corp. 556,150
16,000 (b)White River Corp. 1,104,000
------------
Total 22,006,106
------------
TECHNOLOGY SERVICES--12.0%
57,500 (b)4Front Software,
International, Inc. 495,937
9,500 Cadmus Communications Corp. 202,469
27,000 (b)DSC Communications Corp. 609,187
95,000 (b)ESCO Electronics Corp. 1,555,625
18,000 (b)Electroglas, Inc. 342,000
35,000 (b)Evans & Sutherland Computer
Co. 1,085,000
35,000 (b)Exar Corp. 876,094
32,000 (b)FSI International, Inc. 486,000
27,000 (b)Intuit, Inc. 815,062
34,000 (b)Moore Products Co. 1,228,250
49,000 (b)Novell, Inc. 453,250
85,000 Salient 3 Communications,
Inc., Class A 1,115,625
37,500 (b)Silicon Valley Group, Inc. 890,625
80,313 Timberline Software Corp. 1,139,434
160,600 United Industrial Corp. 1,766,600
75,000 (b)Wang Laboratories, Inc. 1,659,375
------------
Total 14,720,533
------------
TRANSPORTATION--0.5%
33,000 (b)Kirby Corp. 612,563
------------
Total Common Stocks
(identified cost $76,866,187) 98,845,376
------------
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------
<C> <S> <C>
Corporate Bonds--0.5%
INDUSTRIAL SERVICES--0.2%
$ 250,000 American Rice Inc., Mtg. Bond,
13.00%, 7/31/2002 $ 245,000
------------
TRANSPORTATION--0.3%
365,000 Trans World Airlines, Inc.,
Sr. Note, 12.00%, 11/3/1998 372,300
------------
Total Corporate Bonds
(identified cost $592,782) 617,300
------------
Open-Ended Investment Companies--0.6%
130,000 Royce Global Trust, Inc.
(identified cost $604,500) 739,375
------------
Preferred Stocks--0.6% 43,000 (b)Craig Corp., Pfd.
(identified cost $484,174) $ 763,250
------------
(a) Repurchase Agreement--18.4%
$22,495,063 Goldman Sachs Group, LP,
5.50%, dated 11/28/1997, due
12/1/1997 (at amortized cost) 22,495,063
------------
Total Investments
(identified cost $101,042,706) $123,460,364
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA EMERGING MARKETS FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA EMERGING MARKETS FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Emerging Markets Fund (Class A Shares) (the "Fund") from December 23,
1994 (start of performance) to November 30, 1997 compared to the International
Finance Corporation Investable Index (Total Return Series) ("IFCI").+
[GRAPHIC REPRESENTATION A11 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The IFCI has been adjusted to reflect reinvestment of
dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The IFCI is an unmanaged market capitalization-weighted index of over 1,000
securities in 26 emerging market countries. The IFCI is not adjusted to
reflect sales charges, expenses, or other fees that the SEC requires to be
reflected in the Fund's performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA EMERGING MARKETS FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA EMERGING MARKETS FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Emerging Markets Fund (Class Y Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1997 compared to the IFCI.+
[GRAPHIC REPRESENTATION A12 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The IFCI has been adjusted to reflect reinvestment of
dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The IFCI is an unmanaged market capitalization-weighted index of over 1,000
securities in 26 emerging market countries. The IFCI is not adjusted to
reflect sales charges, expenses, or other fees that the SEC requires to be
reflected in the Fund's performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA EMERGING MARKETS FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Value in
Shares U.S. Dollars
- ------------------------------------------------------
<C> <S> <C>
Common Stocks--76.8%
ARGENTINA--7.5%
40,000 Banco Frances del Rio de la
Plata, S.A., ADR $ 1,075,000
235,403 Compania Naviera Perez
Companc, S.A., Class B 1,681,391
11,000 IRSA Inversiones y
Representaciones, S.A., GDR 336,188
20,000 Importadora y Exportadora
de la Patagonia 292,107
146,467 Juan Minetti, S.A. 419,049
60,000 Quilmes Industrial, S.A.,
ADR 780,000
124,000 (b)Siderar, S.A., Class A 518,509
375,456 Siderca, S.A., Class A 1,036,635
60,000 Telecom Argentina, S.A.,
ADR 1,841,250
92,000 YPF Sociedad Anonima, ADR 3,087,750
------------
Total 11,067,879
------------
BRAZIL--2.8%
17,809 (b)Cia Riograndense De
Telecomunicacoes 18,382
1,500,000 Companhia Paulista de
Forca e Luz 189,308
57,000 Companhia Vale Do Rio Doce 1,079,059
1,000,000 (b)Companhia de Saneamento
Basico do Estado de Sao
Paulo 225,367
30,400 Pan American Beverage,
Class A 1,041,200
14,500 Telecomunicacoes
Brasileiras, S.A., ADR 1,529,750
------------
Total 4,083,066
------------
CHILE--4.1%
25,000 Banco de A. Edwards, ADR 437,500
48,542 Chilgener, S.A., ADR 1,213,550
15,800 Compania Cervecerias
Unidas, S.A., ADR 426,600
50,000 Compania Telecomunicacion
Chile, ADR 1,353,125
20,600 Cristalerias de Chile, ADR 309,000
18,000 Embotelladora Andina, S.A.,
Class A, ADR 421,875
38,500 Enersis, S.A., ADR 1,150,188
14,100 Maderas Y Sinteticos, S.A.,
ADR 141,000
18,000 Santa Isabel, S.A., ADR 329,625
Common Stocks--continued
CHILE--CONTINUED
5,000 Sociedad Quimica Y Minera
De Chile, ADR $ 230,000
------------
Total 6,012,463
------------
CHINA--1.6%
750,000 GZI Transportation Ltd. 249,828
2,200,000 Harbin Power Equipment Co.,
Class H 335,821
11,500 (b)Huaneng Power
International Inc., Class
N, ADR 253,000
2,000,000 Maanshan Iron & Steel Co.,
Class H 256,134
1,600,000 (b)Qingling Motors Co.,
Class H 853,782
1,000,000 Shanghai Petrochemical Co.
Ltd., Class H 190,160
1,000,000 Yizheng Chemcial Fibre Co. 223,794
------------
Total 2,362,519
------------
CZECH REPUBLIC--0.3%
5,000 (b)CKD Praha Holding A.S. 163,678
12,500 (b)Komercni Banka A.S., GDR 6,250
2,500 (b)SPT Telekom A.S. 263,364
------------
Total 433,292
------------
EGYPT--2.5%
22,000 (b)Al - Ahram Beverages
Co., GDR 654,500
3,200 (b)Alexandria National Iron
& Steel Co. 152,966
50,000 (b)Commercial International
Bank Egypt, GDR 1,018,750
6,000 (b)Egypt International
Pharmaceuticals 406,705
23,000 (b)(e)MI Bank, GDR 347,875
6,400 (b)North Cairo Mills Co. 216,439
43,000 (e)Paints & Chemical
Industry, GDR 430,000
20,000 (b)Suez Cement Co., Class
S, GDR 404,500
------------
Total 3,631,735
------------
CROATIA--0.2%
20,000 (b)Pliva D.D., GDR 318,888
Common Stocks--continued
GREECE--2.9%
9,250 Alpha Credit Bank $ 557,040
4,000 Ergo Bank, S.A. 216,881
19,360 Goody's, S.A. 337,304
35,000 Hellenic Bottling Co., S.A. 824,869
12,000 Hellenic Cables S.A. 230,761
17,400 Hellenic Technodomiki 150,320
17,270 (e)Hellenic
Telecommunications
Organization 340,219
34,560 Michaniki, S.A 187,385
5,345 National Bank of Greece 500,785
25,350 Sarantis, S.A. 333,082
12,700 Titan Cement Co. 596,783
------------
Total 4,275,429
------------
HONG KONG--3.7%
375,000 Amoy Properties Ltd. 322,594
150,000 (b)Cheung Kong 1,057,527
150,000 China Light and Power
Co. Ltd. 756,762
210,000 Citic Pacific Ltd. 836,707
176,000 Dah Sing Financial Group 352,897
40,000 HSBC Holdings PLC 965,034
50,000 Hutchison Whampoa 333,105
55,000 (b)Sun Hung Kai Properties 419,777
75,000 Swire Pacific Ltd., Class A 375,471
------------
Total 5,419,874
------------
HUNGARY--1.9%
4,000 (b)(e)BorsodChem RT, GDR 111,400
8,000 Danubius Hotel and Spa RT 240,552
4,000 EGIS RT 175,549
35,000 (b)Euronet Services, Inc.,
ADR 253,750
10,000 (b)(e)Gedeon Richter, Ltd.,
GDR 938,750
15,000 (b)(e)MOL Magyar Olay, GDR 314,625
10,000 OTP Bank RT, GDR 311,250
3,500 Pick Szeged RT 219,436
25,000 (b)Zalakeramia RT, GDR 206,250
------------
Total 2,771,562
------------
INDIA--1.6%
14,200 Bajaj Auto Ltd., GDR 248,500
13,800 BSES, GDR 186,300
17,000 Gujarat Ambuja Cements, GDR 136,000
7,500 (b)(e)Hindalco Industries
Ltd., GDR 168,750
16,500 Indian Hotels Co. Ltd., GDR 313,500
24,500 Larsen & Toubro Ltd., GDR 238,875
Common Stocks--continued
INDIA--CONTINUED
20,500 (b)Mahindra and Mahindra,
Ltd., GDR $ 184,500
11,000 Ranbaxy Laboratories Ltd.,
GDR 255,750
26,000 (e)Reliance Industries
Ltd., GDR 165,880
27,000 (b)(e)State Bank of India,
GDR 357,750
350 Tata Electric Co., GDR 106,750
------------
Total 2,362,555
------------
INDONESIA--2.9%
902,950 PT Bank International
Indonesia 117,588
600,000 PT Daya Guna Samudera 633,310
1,000,000 PT Fiskaragung Perkasa 267,306
225,000 PT Gudang Garam 478,067
300,000 PT Hanjaya Mandala
Sampoerna 398,903
1,942,115 PT Indah Kiat Pulp & Paper
Corp. 452,583
35,000 PT Indosat, ADR 783,125
300,000 PT Mayora Indah 57,574
2,000,000 PT Mulia Industrindo 246,744
750,000 PT Pan Indonesia Bank 123,372
350,000 PT Semen Gresik 247,087
35,000 PT Telekomunikasi
Indonesia, Class CS, ADR 511,875
------------
Total 4,317,534
------------
KOREA, REPUBLIC OF--1.7%
30,000 (b)(e)Housing & Commercial
Bank, Korea, GDR 176,400
27,500 LG Chemical, Ltd., ADR 244,063
18,500 LG Electronics, Inc. 207,225
4,037 LG Information &
Communication Ltd 179,499
13,610 Pohang Iron and Steel Co.
Ltd. 528,340
356 SK Telecom Co. Ltd. 115,521
5,225 (b)Samsung Display Devices 156,817
10,199 (b)Samsung Electronics Co. 376,364
12,000 (b)(e)Samsung Electronics
Co., GDR 264,000
7,500 Seoul City Gas Co. Ltd. 166,738
16,334 Yukong Ltd. 156,427
------------
Total 2,571,394
------------
Common Stocks--continued
LEBANON--0.8%
40,000 (b)(e)Banque Libanaise Pour
Le Comm, Class B, GDR $ 770,000
25,000 (b)(e)Solidere, GDR 365,625
------------
Total 1,135,625
------------
LITHUANIA--0.4%
10,000 Vilniaus Bankas AB, GDR 644,952
------------
MALAYSIA--1.3%
30,000 Carlsberg Brewery(M) 102,703
100,000 Genting, BHD 229,656
200,000 Hap Seng Consolidated, BHD 278,439
40,000 Malayan Banking, BHD 102,132
58,450 O.Y.L. Industries, BHD 158,412
100,000 Perusahaan Otomobil
Nasional, BHD 134,085
220,000 Renong, BHD 112,973
147,500 (b)Telekom Malaysia, BHD 328,222
220,000 Tenaga Nasional, BHD 407,959
50,000 United Engineers Ltd. 46,216
------------
Total 1,900,797
------------
MEXICO--8.8%
55,000 Alfa, S.A. de C.V., Class A 414,501
220,000 Cemex, S.A. de C.V. 950,873
61,700 Consorcio Grupo Dina S.A.
de CV, ADR 339,350
70,800 (b)Corporacion GEO, S.A. de
C.V., Class B 430,998
27,310 Desc S.A. de C.V., Class C,
ADR 1,025,832
48,000 Empresas ICA Sociedad
Controladora, S.A. de C.V.,
ADR 744,000
160,000 Fomento Economico Mexicano,
S.A. de C.V.,
Class B 1,318,804
119,800 Grupo Carso, S.A. de C.V. 790,547
400,000 Grupo Elektra 619,468
900,000 (b)Grupo Financiero
Bancomer, S.A. de C.V.,
Class B 520,484
20,000 (b)Grupo Iusacell S.A., ADR 417,500
2,600 (b)Grupo Iusacell S.A.,
Class D, ADR 39,650
15,000 Grupo Televisa S.A., GDR 558,750
90,000 Industrias Penoles, S.A. 370,366
160,000 Organizacion Soriana, S.A.
de C.V., Class B 592,196
Common Stocks--continued
MEXICO--CONTINUED 110,000 Sanluis Corporacion, S.A.
de CV $ 830,340
56,000 Telefonos de Mexico, Class
L, ADR 2,772,000
15,000 (b)Tubos de Acero de Mexico
SA, ADR 331,875
------------
Total 13,067,534
------------
MOROCCO--0.5%
41,000 (b)(e)Banque Marocaine du
Commerce Exterieur, GDR 824,736
------------
PERU--2.6%
39,000 Banco Wiese, ADR 185,250
43,000 CPT Telefonica del Peru
S.A., Class B, ADR 903,000
13,362 Cementos Lima, S.A. 269,841
537,734 Cervecer Backus & Johnston,
Class T 487,772
70,000 Cia de Minas Buenaventura,
S.A. 431,877
44,292 Credicorp, Ltd., ADR 808,329
240,000 Luz Del Sur Servicos, S.A.,
Class B 295,262
50,361 Minsur, S.A. 125,579
143,300 Telefonica Del Peru, Class
B 297,862
------------
Total 3,804,772
------------
PHILIPPINES--3.0%
1,014,844 Ayala Land, Inc., Class B 399,259
3,500,000 (b)Belle Corp. 168,238
1,350,000 (b)Fortune Cement Corp. 121,674
3,192,000 JG Summit Holdings, Inc. 292,256
100,000 La Tondena Distillers, Inc. 52,217
250,000 Manila Electric Co., Class
B 865,522
84,000 Metropolitan Bank and Trust
Co. 684,979
56,000 Philippine Long Distance
Telephone Co., ADR 1,386,000
3,500,000 Solid Group, Inc. 184,261
500,000 (b)Union Bank of the
Philippines 236,051
------------
Total 4,390,457
------------
POLAND--1.3%
9,000 Agros Holding S.A. 160,305
13,333 (b)Bank Inicjatyw
Gospodarczych, GDR 182,995
6,500 Bank Slaski, S.A. 330,789
25,000 (b)Budimex, S.A. 101,074
Common Stocks--continued
POLAND--CONTINUED
41,000 Elektrim Spolka Akcyina,
S.A. $ 394,119
42,667 Polifarb-Cieszyn, S.A. 174,915
26,000 (b)Stomil-Olsztyn, S.A. 189,652
43,000 Wielkopolski Bank
Kredytowy, S.A. 218,829
14,800 (b)Zaklady Metali Lekkich
Kety, S.A. 209,217
------------
Total 1,961,895
------------
PORTUGAL--7.5%
62,951 BPI, SGPS, S.A. 1,399,105
74,012 Banco Commercial Portugues,
Class R 1,560,741
15,000 Banco Espirito Santo e
Comercial de Lisboa 421,948
32,700 Cimentos de Portugal, S.A.
(Cimpor) 828,206
40,000 Corticeira Amorim SA 455,050
94,000 (b)Electricidade de
Portugal, S.A. 1,698,990
46,998 Estabelecimentos Jeronimo
Martins & Filho, SGPS, S.A. 1,485,298
70,000 Portucel Industria 449,833
44,030 Portugal Telecom, SGPS,
S.A. 2,028,019
20,000 Somague-Sociedade Gestora
de Participacoes 224,750
15,700 Sonae Investimentos, SGPS,
S.A. 586,790
------------
Total 11,138,730
------------
RUSSIA--4.0%
2,000 (b)Aeroflot 242,000
3,000 Gorkovsky Auto Plant 292,500
4,236 (b)Izhorskie Zavody 272,798
2,000,000 (b)Kostromskaya Gres 110,000
14,142 (b)Kubanelectrosvyaz 327,387
25,000 Lukoil Oil Co., ADR 1,905,013
22,000 Mosenergo, ADR 720,500
11,000 (b)Nizhnovenergo 467,500
50,000 (b)Surgutneftegaz 446,270
2,000,000 (b)Unified Energy System 452,600
20,000 (b)Unified Energy System,
RDC 452,600
16,000 (b)Udmurt Telecom 144,000
10,000 (b)Yuganskneftegaz 140,000
------------
Total 5,973,168
------------
Common Stocks--continued
REPUBLIC OF SLOVENIA--0.7%
47,000 (b)(e)Blagovno Trgovinsia
Center, GDR $ 468,500
80,000 (e)Slovakofarna AS, GDR 520,000
------------
Total 988,500
------------
SOUTH AFRICA--0.2%
25,000 Sasol Ltd. 251,878
------------
TAIWAN, REPUBLIC OF--1.4%
12,840 (b)Advanced Semiconductor
Engineering,, Inc., GDR 462,645
27,432 (b)Asia Cement Corp., GDR 320,269
25,562 (b)GVC Corp., GDR 153,372
28,800 (b)President Enterprises,
GDR 331,200
49,000 (b)Yageo Corp., GDR 563,500
30,500 (b)Yang Ming Marine
Transport, GDR 216,550
------------
Total 2,047,536
------------
THAILAND--1.6%
55,000 BEC World PLC 271,925
75,000 Bangkok Bank Public Co.,
Ltd. 223,602
125,000 Hana Microelectronics Co.,
Ltd. 329,193
125,000 KCE Electronics 366,460
55,000 PTT Exploration and
Production Ltd. 792,050
90,000 Shinawatra Computer and
Communications Co., Ltd. 131,180
100,000 Thai Farmers Bank Co. 253,416
------------
Total 2,367,826
------------
TURKEY--6.0%
7,488,766 Akbank T.A.S. 487,911
2,900,000 Akcansa Cimento A.S. 503,845
6,420,000 Aksigorta 344,465
3,200,000 (b)Alcatel Teletas 408,799
3,572,500 Arcelik A.S. 314,905
3,200,000 Aygaz 482,381
2,400,000 Cimsa Cimento Sanayi Ve
Ticaret A.S. 423,107
2,040,000 Eregli Demir Ve Celik
Fabrikalari, T.A.S. 271,034
33,750,000 (b)Haci Omer Sabanci 1,897,085
3,172,734 Koc Holding, A.S. 805,376
679,100 Migros Turk, T.A.S. 641,986
820,000 Otosan Otomobil Sanayii,
A.S. 639,004
Common Stocks--continued
TURKEY--CONTINUED
5,088,000 (b)Tupras Turkiye Petrol
Rafinerileri A.S. $ 474,493
6,962,608 (b)Turk Sise ve Cam
Fabrikalari 498,104
22,215,385 Yapi ve Kredi Bankasi, A.S. 692,475
------------
Total 8,884,970
------------
VENEZUELA--3.0%
45,000 (b)Compania Anonima
Nacional Telefonos de
Venezuela,
Class D, ADR 1,777,500
808,000 Electricidade de Caracas 957,797
137,000 Mavesa SA, ADR 856,250
180,000 Siderurgica Venezolana
Sivensa, ADR 840,638
------------
Total 4,432,185
------------
Total Common Stocks
(identified cost
$116,870,062) 113,443,751
------------
Preferred Stocks--4.1%
BRAZIL--3.9%
1,800,000 Banco Itau,S.A., PN 804,830
213,000 (b)Centrais Electricas de
Santa Catarina SA-Celesc,
Preference, Series B 224,655
1,500,000 Centrais Eletricas
Brasileiras, PN, S.A.,
Series B 730,190
53,500,000 (b)Cia Paranaense de
Energia, PN, Series B 795,772
500,000 (b)Cia Riograndense De
Telecomunica coes, Pfd. 516,091
9,000,000 Companhia Energetica de
Minas Gerais, PN 434,052
5,000,000 Ericsson Telecomunica coes,
S.A. 175,785
3,000,000 Petroleo Brasileiro S.A.,
PN 657,171
5,163,257 Telecomunica coes de Minas
Gerais, PN, Series B 605,087
52,000 Telecomunica coes do
Parana, S.A., PN 296,818
14,840,000 Uniao de Bancos
Brasileiros, S.A., PN 460,197
------------
Total 5,700,648
------------
GREECE--0.0%
960 Michaniki, S.A., Pfd. 4,164
------------
Preferred Stocks--continued
RUSSIA--0.2%
550 (b)Karelia Electrosvyaz,
Pfd. $ 137,500
2,000,000 (b)Surgutneftegaz, Pfd. 184,000
------------
Total 321,500
------------
Total Preferred Stocks
(identified cost
$5,220,669) 6,026,312
------------
Rights--0.2%
KOREA, REPUBLIC OF--0.0%
3,200 (b)Alexandria National Iron
& Steel Co. 10,752
------------
THAILAND--0.2%
125,000 Hana Microelectronics Co.,
Ltd. 298,137
------------
Total Rights
(identified cost $0) 308,889
------------
Warrants--0.0%
HONG KONG--0.0%
50,000 GZI Transportation Ltd.,
Warrants 1,617
------------
INDONESIA--0.0%
109,374 PT Bank Dagang Nasional
Indonesia, Warrants 1,439
80,260 PT Bank International
Indonesia, Warrants 1,760
163,544 PT Indah Kiat Pulp & Paper
Corp., Warrants 3,721
107,143 PT Pan Indonesia Bank,
Warrants 1,351
------------
Total 8,271
------------
THAILAND--0.0%
9,375 Thai Farmers Bank Co.,
Warrants 2,853
------------
Total Warrants
(identified cost $19,946) 12,741
------------
Convertible Bond--0.0%
BRAZIL--0.0%
53,500 Companhia Vale Do Rio Doce,
Conv. Deb., 12/31/1999
(identified cost $417) 482
------------
Closed End Investment Companies--5.6%
TAIWAN--0.4%
55,000 (b)Formosa Growth Fund Ltd. 625,625
------------
Closed End Investment Companies--continued
HUNGARY--0.1%
640 (b)Hungarian Investment Co. $ 94,400
------------
INDIA--1.1%
130,000 India Fund Inc. 877,500
495,000 The India Fund 706,425
------------
Total 1,583,925
------------
MEXICO--0.6%
50,000 Mexico Fund 946,875
------------
EGYPT--0.8%
12,000 Societe Generale Arab Fund 1,200,000
------------
SOUTH AFRICA--0.6%
55,000 Southern Africa Fund, Inc. 845,625
------------
TURKEY--0.1%
12,000 Turkish Growth Fund 213,000
------------
UKRAINE--0.6%
10,000 (b)Societe Generale Ukraine
Fund 925,000
------------
Closed End Investment Companies--continued
UNITED STATES--1.2%
1,000 (b)Romania Investment Fund
Ltd $ 1,015,000
80,000 (b)Ukrane Opportunity Fund 800,000
------------
Total 1,815,000
------------
Total Closed-End
Investment companies
(identified cost
$7,281,091) 8,249,450
------------
Cash Equivalents--14.9%
Time Deposit--7.8%
11,475,464 (b)Bank of New York Co.,
Inc. 11,475,464
------------
(a) Repurchase Agreement--7.1%
UNITED STATES--7.1%
10,487,493 Goldman Sachs Group, LP, 5.50%, dated 11/28/1997, due 12/1/1997 (at
amortized
cost) 10,487,493
------------
Total Investments
(identified cost
$151,355,142) $150,004,582
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA BALANCED FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA BALANCED FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Balanced Fund (Class A Shares) (the "Fund") from May 7, 1993 (start of
performance) to November 30, 1997 compared to the S&P 500 Index+ and the Lehman
Aggregate Bond Index.
[GRAPHIC REPRESENTATION A13 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The S&P 500 Index and the Lehman Aggregate Bond Index have
been adjusted to reflect reinvestment of dividends on securities in the
indices.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation, and financial and public utility companies. The
Lehman Aggregate Bond Index is an unmanaged index measuring both the capital
price changes and income provided by the underlying universe of securities,
comprised of U.S. Treasury obligations, U.S. agency obligations, foreign
obligations, U.S. investment-grade corporate debt and mortgage-backed
obligations. The S&P 500 Index and the Lehman Aggregate Bond Index are not
adjusted to reflect sales loads, expenses, or other fees that the SEC requires
to be reflected in the Fund's performance. Investments cannot be made in an
index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA BALANCED FUND (CLASS B SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA BALANCED FUND (CLASS B SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Balanced Fund (Class B Shares) (the "Fund") from July 23, 1996 (start
of performance) to November 30, 1997 compared to the S&P 500 Index+ and the
Lehman Aggregate Bond Index.
[GRAPHIC REPRESENTATION A14 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund. The ending value
of the Fund reflects a 4.00% contingent deferred sales charge on any
redemption less than two years from the purchase date. The Fund's performance
assumes the reinvestment of all dividends and distributions. The S&P 500
Index and the Lehman Aggregate Bond Index have been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation, and financial and public utility companies. The
Lehman Aggregate Bond Index is an unmanaged index measuring both the capital
price changes and income provided by the underlying universe of securities,
comprised of U.S. Treasury obligations, U.S. agency obligations, foreign
obligations, U.S. investment-grade corporate debt and mortgage-backed
obligations. The S&P 500 Index and the Lehman Aggregate Bond Index are not
adjusted to reflect sales loads, expenses, or other fees that the SEC requires
to be reflected in the Fund's performance. Investments cannot be made in an
index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA BALANCED FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA BALANCED FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Balanced Fund (Class Y Shares) (the "Fund") from July 23, 1996 (start
of performance) to November 30, 1997 compared to the S&P 500 Index+ and the
Lehman Aggregate Bond Index.
[GRAPHIC REPRESENTATION A15 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The S&P 500 Index and the Lehman Aggregate Bond Index have
been adjusted to reflect reinvestment of dividends on securities in the
index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The S&P 500 Index is an unmanaged index comprised of common stocks in
industry, transportation, and financial and public utility companies. The
Lehman Aggregate Bond Index is an unmanaged index measuring both the capital
price changes and income provided by the underlying universe of securities,
comprised of U.S. Treasury obligations, U.S. agency obligations, foreign
obligations, U.S. investment-grade corporate debt and mortgage-backed
obligations. The S&P 500 Index and the Lehman Aggregate Bond Index are not
adjusted to reflect sales loads, expenses, or other fees that the SEC requires
to be reflected in the Fund's performance. Investments cannot be made in an
index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA BALANCED FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Shares Value
- ---------------------------------------------------------
<C> <S> <C>
Common Stocks--52.2%
CAPITAL GOODS--1.8%
14,547 Emerson Electric Co. $ 800,085
16,000 General Electric Co. 1,180,000
36,895 Harsco Corp. 1,461,964
16,000 Honeywell, Inc. 1,048,000
15,339 (b)Thermo Electron Corp. 564,667
14,093 (b)UCAR International, Inc. 562,839
------------
Total 5,617,555
------------
CONSUMER DURABLES--1.4%
28,462 Dover Corp. 1,908,733
40,000 Ford Motor Co. 1,720,000
30,000 Hasbro, Inc. 871,875
------------
Total 4,500,608
------------
CONSUMER NON-DURABLES-- 17.6%
33,199 Abbott Laboratories 2,157,935
12,465 (b)Adaptec, Inc. 617,017
42,667 American Home Products Corp. 2,981,357
15,620 Baxter International, Inc. 790,762
46,997 Bristol-Myers Squibb Co. 4,400,094
24,597 CPC International, Inc. 2,542,715
29,109 Coca-Cola Co. 1,819,312
10,792 Columbia/HCA Healthcare Corp. 318,364
41,793 Danka Business Systems, PLC,
ADR 1,535,893
35,836 Disney (Walt) Co. 3,402,180
22,870 Electronic Data Systems Corp. 869,060
15,123 Gillette Co. 1,396,042
31,830 (b)HealthCare COMPARE Corp. 1,659,139
35,550 Johnson & Johnson 2,237,428
30,758 Kimberly-Clark Corp. 1,601,338
12,955 (b)Lear Corp. 606,456
15,811 Lowe's Cos., Inc. 726,318
9,533 McDonald's Corp. 462,350
45,510 Medtronic, Inc. 2,173,102
17,050 Merck & Co., Inc. 1,612,291
57,900 Newell Co. 2,363,044
22,170 Nike, Inc., Class B 1,079,402
125,695 PepsiCo, Inc. 4,635,003
63,651 Philip Morris Cos., Inc. 2,768,818
15,000 Procter & Gamble Co. 1,144,687
28,256 R.J.R. Nabisco, Inc., Class A 1,317,436
20,332 Sara Lee Corp. 1,075,054
61,137 Service Corp. International 2,235,321
94,020 (b)Tenet Healthcare Corp. 2,979,259
Common Stocks--continued
CONSUMER NON-DURABLES--CONTINUED
7,000 Wrigley (Wm.), Jr. Co. $ 553,875
------------
Total 54,061,052
------------
ENERGY--4.0%
8,652 Amerada-Hess Corp. 484,512
9,155 Amoco Corp. 823,950
9,920 CMS Energy Corp. 390,600
6,330 Coastal Corp. 370,701
27,100 Exxon Corp. 1,653,100
7,593 Kerr-McGee Corp. 503,511
34,866 Mobil Corp. 2,508,173
37,680 Royal Dutch Petroleum Co., ADR 1,985,265
41,801 Schlumberger Ltd. 3,440,745
------------
Total 12,160,557
------------
FINANCE--9.9%
10,011 Ace, Ltd. 993,592
42,165 American International Group,
Inc. 4,250,759
30,420 Banc One Corp. 1,562,827
46,917 Block (H&R), Inc. 1,923,597
22,123 Chase Manhattan Corp. 2,403,111
38,587 Chubb Corp. 2,737,265
27,150 Citicorp 3,256,303
54,875 Countrywide Credit Industries,
Inc. 2,246,445
57,860 Federal Home Loan Mortgage
Corp. 2,386,725
64,445 Federal National Mortgage
Association 3,403,502
8,020 MBIA Insurance Corporation 504,257
21,473 MGIC Investment Corp. 1,254,828
11,310 Wells Fargo & Co. 3,474,998
------------
Total 30,398,209
------------
RESTAURANTS--0.6%
57,494 (b)Tricon Global Restaurants,
Inc. 1,944,016
------------
SERVICES--4.6%
62,273 Ecolab, Inc. 3,175,923
12,566 (b)FMC Corp. 918,103
4,907 Hercules, Inc. 238,296
7,000 Mead Corp. 451,937
27,485 Millipore Corp. 1,065,044
95,287 (b)Philip Services Corp. 1,506,726
87,521 Praxair, Inc. 3,845,454
44,380 Tyco International, Ltd. 1,741,915
<CAPTION>
Shares or
Principal
Amount Value
- ---------------------------------------------------------
<C> <S> <C>
Common Stocks--continued
SERVICES--CONTINUED
22,758 York International Corp. $ 1,053,980
------------
Total 13,997,378
------------
TECHNOLOGY SERVICES--9.6%
55,406 (b)3Com Corp. 2,008,467
10,820 Avnet, Inc. 716,825
61,797 Boeing Co. 3,282,966
11,140 (b)Cabletron Systems, Inc. 256,220
47,902 (b)Cisco Systems, Inc. 4,131,547
42,554 Compaq Computer Corp. 2,656,965
54,192 Computer Associates
International, Inc. 2,821,371
30,840 Hewlett-Packard Co. 1,883,167
29,957 Intel Corp. 2,325,412
18,248 (b)McAfee Associates, Inc. 834,846
35,330 Motorola, Inc. 2,221,374
36,878 (b)Sun Microsystems, Inc. 1,327,608
26,000 Texas Instruments, Inc. 1,280,500
48,088 Xerox Corp. 3,735,837
------------
Total 29,483,105
------------
TRANSPORTATION--1.3%
44,645 CSX Corp. 2,335,491
42,590 Illinois Central Corp. 1,535,902
------------
Total 3,871,393
------------
UTILITIES--1.4%
11,000 BellSouth Corp. 602,250
23,854 GTE Corp. 1,206,118
41,934 (b)LCI International, Inc. 1,155,806
49,392 Southern Co. 1,185,408
------------
Total 4,149,582
------------
Total Common Stocks
(identified cost $118,406,081) 160,183,455
------------
Corporate Bonds--15.0%
ASSET-BACKED SECURITIES--1.2%
$ 1,000,000 American Express Credit
Account Master Trust 1997-1,
Class A, 6.40%, 4/15/2005 1,003,750
965,000 Dayton Hudson Credit Card
Master Trust 1995-1, Class A,
6.10%, 2/25/2002 965,724
575,000 Ford Credit Auto Loan Master
Trust 1995-1 A, Class A,
6.50%,
8/15/2002 579,727
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------
<C> <S> <C>
Corporate Bonds--continued
ASSET-BACKED SECURITIES--CONTINUED
$ 1,151,200 Prudential Home Mortgage
Securities 1993-60, Class A1,
6.75%, 12/25/2023 $ 1,154,434
------------
Total 3,703,635
------------
CONSUMER SERVICES--0.7%
2,000,000 Tribune Co., Note, 6.25%,
11/10/2026 1,999,580
------------
ENERGY--0.7%
2,050,000 Kerr-McGee Corp., Deb.,
7.125%, 10/15/2027 2,079,623
------------
FINANCE--9.6%
2,500,000 Aon Capital Trust A, Company
Guarantee, 8.205%, 1/1/2027 2,749,050
1,165,000 BHP Finance (USA), Inc.,
Company Guarantee, 6.42%,
3/1/2026 1,151,218
850,000 Bankers Trust New York Corp.,
Sub. Note, 7.375%, 5/1/2008 882,955
2,500,000 Bear Stearns Cos., Inc., Note,
6.625%, 10/1/2004 2,489,675
750,000 Beneficial Corp., Note, 6.55%,
9/26/2003 753,356
1,000,000 Branch Banking & Trust Co,
Wilson, Sr. Note, 6.20%,
9/15/1999 999,020
2,500,000 CIT Group Holdings, Inc., Sr.
Note, 6.375%, 10/1/2002 2,494,425
2,250,000 Caterpillar Financial Services
Corp., Note, 6.50%, 2/1/2002 2,265,435
1,130,000 Chase Manhattan Corp., Sub.
Note, 6.75%, 9/15/2006 1,148,419
1,000,000 Fleet Financial Group, Inc.,
Sr. Note, 6.00%, 10/26/1998 998,630
750,000 Ford Motor Credit Corp., Sr.
Unsub., 6.55%, 9/10/2002 755,573
2,000,000 General Electric Capital
Corp., Deb., 6.66%, 5/1/2018 2,019,840
1,000,000 Hartford Life, Inc., Note,
7.10%,
6/15/2007 1,032,424
360,000 Household Finance Corp., Note,
7.25%, 7/15/2003 371,052
1,500,000 KFW International Finance,
Note, 7.00%, 3/1/2013 1,581,315
2,000,000 Lehman Brothers Holdings,
Inc., Note, 6.90%, 3/30/2001 2,025,540
Corporate Bonds--continued
FINANCE--CONTINUED
$ 2,000,000 Merrill Lynch & Co., Inc.,
Note, 6.55%, 8/1/2004 $ 2,005,080
3,500,000 Norwest Financial, Inc., Sr.
Note, 6.375%, 9/15/2002 3,501,015
365,000 Sears Roebuck Acceptance
Corp., Medium Term Note,
7.03%,
6/4/2003 374,344
------------
Total 29,598,366
------------
INDUSTRIAL SERVICES--0.7%
2,000,000 WMX Technologies, Inc., Note,
6.22%, 4/30/2004 2,127,400
------------
RETAIL TRADE--2.1%
2,750,000 American Home Products Corp.,
Note, 7.70%, 2/15/2000 2,825,075
3,680,000 Gap (The), Inc., Note, 6.90%,
9/15/2007 3,756,323
------------
Total 6,581,398
------------
Total Corporate Bonds
(identified cost $45,592,078) 46,090,002
------------
Foreign Bonds--1.5%
FINANCE--1.5%
1,575,000 Korea Development Bank, Bond,
6.625%, 11/21/2003 1,439,519
3,000,000 Quebec, Province of, Deb.,
9.375%, 4/1/1999 3,118,500
------------
Total Foreign Bonds
(identified cost $4,660,633) 4,558,019
------------
U.S. Government Agencies--15.0%
FEDERAL HOME LOAN BANK--1.5%
1,000,000 Discount Note, 3/20/1998 983,200
3,600,000 5.87%, 10/22/1999 3,594,924
------------
Total 4,578,124
------------
FEDERAL HOME LOAN MORTGAGE
CORPORATION--2.4%
228,673 6.50%, 12/1/2008 228,957
58,015 6.50%, 2/1/2009 58,087
713,552 6.50%, 3/1/2009 714,437
56,813 6.50%, 4/1/2009 56,884
282,060 6.50%, 6/1/2009 282,410
312,690 6.50%, 7/1/2010 313,127
4,000,000 Discount Note, 12/16/1997 3,990,720
U.S. Government Agencies--continued
FEDERAL HOME LOAN MORTGAGE CORPORATION--
CONTINUED
$ 1,750,000 Discount Note, 12/19/1997 $ 1,745,118
------------
Total 7,389,740
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION--9.0%
936,161 6.00%, 12/1/2010 922,699
1,588,122 6.00%, 4/1/2011 1,565,285
6,300,000 6.00%, 1/1/1999 6,166,125
6,000,000 6.57%, 8/22/2007 6,148,140
156,003 7.50%, 4/1/2007 159,485
816,396 7.50%, 9/1/2022 838,978
301,761 8.00%, 6/1/2022 314,378
285,711 8.00%, 1/1/2023 296,871
38,174 8.50%, 8/1/2016 40,241
51,027 8.50%, 6/1/2024 53,555
563,584 8.50%, 7/1/2024 591,498
29,182 8.50%, 10/1/2024 30,627
575,744 8.50%, 12/1/2024 604,261
10,000,000 Discount Note, 12/15/1997 9,978,300
10,125 Series 1989-75, Class C,
9/25/2018 10,996
------------
Total 27,721,439
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION--2.1%
2,490,195 6.50%, 4/15/2024 2,455,183
715,579 7.00%, 5/15/2023 719,822
1,547,532 7.00%, 8/15/2023 1,556,709
387,876 7.00%, 8/15/2023 390,176
919,735 7.00%, 12/20/2025 920,020
387,580 7.50%, 3/15/2023 396,541
------------
Total 6,438,451
------------
Total U.S. Government Agencies
(identified cost $45,869,645) 46,127,754
------------
U.S. Treasury Obligations--14.4%
(D)U.S. TREASURY BILLS--0.4%
200,000 12/18/1997 199,608
1,100,000 3/19/1998 1,083,302
------------
Total 1,282,910
------------
(D)U.S. TREASURY BONDS--4.0%
10,829,000 7.25%, 8/15/2022 12,348,417
------------
U.S. Treasury Obligations--continued
(D)U.S. TREASURY NOTES--10.0%
$ 3,300,000 4.75%, 8/31/1998 $ 3,276,801
8,890,000 5.625%, 11/30/1998 8,880,310
175,000 5.75%, 8/15/2003 173,906
1,750,000 5.875%, 11/30/2001 1,750,823
2,350,000 5.875%, 8/15/1998 2,352,204
750,000 6.00%, 12/31/1997 750,353
7,450,000 6.50%, 10/15/2006 7,746,808
1,840,000 7.25%, 8/15/2004 1,978,000
1,000,000 7.75%, 11/30/1999 1,036,250
2,530,000 8.00%, 5/15/2001 2,697,208
------------
Total 30,642,663
------------
Total U.S. Treasury
Obligations
(identified cost $43,169,355) 44,273,990
------------
(a) Repurchase Agreement--4.5%
$13,734,495 Goldman Sachs Group, LP,
5.50%, dated 11/28/1997, due
12/1/1997 (at amortized cost) $ 13,734,495
------------
Total Investments
(identified cost $271,432,287) $314,967,715
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA FIXED INCOME FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA FIXED INCOME FUND (CLASS A SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Fixed Income Fund (Class A Shares) (the "Fund") from May 7, 1993 (start
of performance) to November 30, 1997 compared to the Lehman Aggregate Bond
Index.+
[GRAPHIC REPRESENTATION A16 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The Lehman Aggregate Bond Index has been adjusted to
reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman Aggregate Bond Index is an unmanaged index measuring both the
capital price changes and income provided by the underlying universe of
securities, comprised of U.S. Treasury obligations, U.S. agency obligations,
foreign obligations, U.S. investment-grade corporate debt and mortgage-backed
obligations. The Lehman Aggregate Bond Index is not adjusted to reflect sales
loads, expenses, or other fees that the SEC requires to be reflected in the
Fund's performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA FIXED INCOME FUND (CLASS B SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA FIXED INCOME FUND (CLASS B SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Fixed Income Fund (Class B Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1997 compared to the Lehman Aggregate
Bond Index.+
[GRAPHIC REPRESENTATION A17 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund. The ending value
of the Fund reflects a 4.00% contingent deferred sales charge on any
redemption less than two years from the purchase date. The Fund's performance
assumes the reinvestment of all dividends and distributions. The Lehman
Aggregate Bond Index has been adjusted to reflect reinvestment of dividends
on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman Aggregate Bond Index is an unmanaged index measuring both the
capital price changes and income provided by the underlying universe of
securities, comprised of U.S. Treasury obligations, U.S. agency obligations,
foreign obligations, U.S. investment-grade corporate debt and mortgage-backed
obligations. The Lehman Aggregate Bond Index is not adjusted to reflect sales
loads, expenses, or other fees that the SEC requires to be reflected in the
Fund's performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA FIXED INCOME FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA FIXED INCOME FUND (CLASS Y SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Fixed Income Fund (Class Y Shares) (the "Fund") from July 23, 1996
(start of performance) to November 30, 1997 compared to the Lehman Aggregate
Bond Index.+
[GRAPHIC REPRESENTATION A18 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Lehman Aggregate Bond Index has been adjusted to reflect
reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman Aggregate Bond Index is an unmanaged index measuring both the
capital price changes and income provided by the underlying universe of
securities, comprised of U.S. Treasury obligations, U.S. agency obligations,
foreign obligations, U.S. investment-grade corporate debt and mortgage-backed
obligations. The Lehman Aggregate Bond Index is not adjusted to reflect sales
loads, expenses, or other fees that the SEC requires to be reflected in the
Fund's performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------
<C> <S> <C>
Asset-Backed Securities--4.8%
FINANCE--4.8%
$ 3,575,000 American Express Credit
Account Master Trust 1997-1,
Class A, 6.40%, 4/15/2005 $ 3,588,406
3,975,000 Chase Credit Card Master
Trust, Class A, 6.30%,
4/15/2003 3,978,697
1,885,000 First USA Credit Card Master
Trust 1997-6, Class A, 6.42%,
3/15/2005 1,893,237
------------
Total Asset-Backed Securities
(identified cost $9,428,726) 9,460,340
------------
Corporate Bonds--34.8%
CHEMICAL & ALLIED PRODUCTS--0.5%
1,000,000 Du Pont (E.I.) de Nemours &
Co., Unsecd. Note, Series G,
6.47%, 9/26/2002 1,010,760
------------
FINANCE--27.7%
3,000,000 Associates Corp. of North
America, Medium Term Note,
6.00%, 3/15/1999 2,993,520
3,165,000 BHP Finance (USA), Inc.,
Company Guarantee, 6.42%,
3/1/2026 3,127,558
3,000,000 Bankers Trust New York Corp.,
Sr. Note, 6.75%, 10/3/2001 3,027,420
1,880,000 Bankers Trust New York Corp.,
Sub. Note, 7.375%, 5/1/2008 1,952,888
1,275,000 Bear Stearns Cos., Inc., Sr.
Note, 6.50%, 8/1/2002 1,273,508
850,000 Beneficial Corp., Unsecd.
Note, Series C, 10.00%,
1/12/2001 940,618
2,000,000 Caterpillar Financial Services
Corp., Note, 6.50%, 2/1/2002 2,008,160
755,000 First Union Corp., Sub. Note,
6.824%, 8/1/2026 778,020
2,700,000 Ford Motor Credit Corp., Note,
7.25%, 5/15/1999 2,737,152
2,000,000 Hanson Overseas B.V., Sr.
Note, 6.75%, 9/15/2005 2,030,280
1,500,000 Household Finance Corp., Sr.
Note, 6.23%, 2/16/1999 1,506,585
3,750,000 Huntington National Bank,
Columbus, OH, Note, 6.05%,
8/25/1999 3,736,388
Corporate Bonds--continued
FINANCE--CONTINUED
$ 2,095,000 Ikon Capital Resources, Note,
6.94%, 5/21/2001 $ 2,136,533
1,915,000 International Lease Finance
Corp., Note, 6.97%, 1/10/2001 1,953,055
2,365,000 Korea Development Bank , Sr.
Unsub., 6.50%, 11/15/2002 2,161,279
2,665,000 Lehman Brothers Holdings,
Inc., Note, 6.90%, 3/30/2001 2,690,280
1,330,000 Lehman Brothers Holdings,
Inc., Sr. Note, 5/16/1998 1,295,566
2,835,000 Mellon Capital I, Company
Guarantee, Series A, 7.72%,
12/1/2026 2,928,697
1,375,000 Mercantile Bancorporation,
Inc., 6.80%, 6/15/2001 1,387,210
500,000 Merrill Lynch & Co., Inc.,
Medium Term Note, 6.00%,
5/20/2008 499,295
2,780,000 Merrill Lynch & Co., Inc., Sr.
Note, Series B, 6.33%,
8/25/2000 2,784,320
2,000,000 Merrill Lynch & Co., Inc., Sr.
Note, Series B, 6.80%,
4/26/2001 2,031,620
1,100,000 Metropolitan Life Ltd., 7.00%,
11/1/2005 1,119,459
2,135,000 Midland Bank PLC, Sub. Note,
8.625%, 12/15/2004 2,369,594
2,090,000 Morgan Stanley Group, Inc.,
Note, 6.875%, 3/1/2007 2,123,377
2,615,000 World Bank, Note, 5.00%,
11/28/2000 2,547,795
------------
Total 54,140,177
------------
FOOD PRODUCTS--2.2%
4,250,000 Heinz (H.J.) Co., Sr. Unsub.,
7.50%, 4/26/2000 4,361,562
------------
MACHINERY & EQUIPMENT--3.4%
4,000,000 Baker Hughes, Inc., Note,
7.625%, 2/15/1999 4,064,720
2,670,000 Ingersoll-Rand Co., Note,
6.13%, 11/18/2027 2,664,983
------------
Total 6,729,703
------------
Corporate Bonds--continued
PRODUCER MANUFACTURING--0.2%
$ 240,000 Armstrong World Industries,
Inc., Deb., 9.75%, 4/15/2008 $ 294,919
------------
RETAIL TRADE--0.8%
1,405,000 Penney (J.C.) Co., Inc., Note,
7.60%, 4/1/2007 1,492,574
------------
Total Corporate Bonds
(identified cost $67,518,431) 68,029,695
------------
Foreign Bonds--1.6%
FINANCE--1.6%
1,000,000 Israel AID, 5.625%, 9/15/2003 980,610
2,075,000 Quebec, Province of, Deb.,
7.00%, 1/30/2007 2,128,618
------------
Total Foreign Bonds
(identified cost $3,003,203) 3,109,228
------------
U.S. Government Agencies--19.3%
FEDERAL HOME LOAN MORTGAGE
CORPORATION--3.3%
3,326 12.50%, 2/1/2010 3,835
7,040 12.50%, 7/1/2011 8,163
4,442 12.50%, 3/1/2014 5,197
2,882 11.00%, 10/1/2010 3,194
15,865 11.00%, 10/1/2015 17,722
26,628 9.50%, 7/1/2016 28,633
764 9.50%, 2/1/2019 821
2,201 9.50%, 2/1/2019 2,365
8,565 9.00%, 5/15/2016 9,282
92 9.00%, 9/1/2017 99
1,169 9.00%, 1/1/2019 1,251
1,553 9.00%, 1/1/2019 1,661
5,741 8.50%, 7/1/2017 6,066
1,096 8.50%, 8/1/2017 1,158
21,764 8.00%, 1/1/2008 22,596
18,183 8.00%, 12/1/2008 18,726
953 8.00%, 1/1/2009 981
8,755 8.00%, 2/1/2009 9,017
47,189 8.00%, 4/1/2009 48,743
1,793 8.00%, 7/1/2017 1,878
3,250 8.00%, 1/1/2019 3,403
133,329 7.50%, 2/1/2023 136,662
2,307,479 7.50%, 9/1/2007 2,367,174
101,434 7.50%, 2/1/2023 103,970
165,084 7.50%, 2/1/2023 169,211
154,718 7.50%, 2/1/2023 158,586
192,949 7.50%, 2/1/2023 197,773
628,226 7.00%, 6/1/2008 639,220
692,679 6.50%, 4/1/2009 693,538
U.S. Government Agencies--continued
FEDERAL HOME LOAN MORTGAGE CORPORATION--
CONTINUED
$ 1,835,733 6.50%, 11/1/2011 $ 1,832,851
------------
Total 6,493,776
------------
FEDERAL NATIONAL MORTGAGE
ASSOCIATION--9.7%
198 12.50%, 9/1/2013 229
198 9.50%, 7/1/2016 214
1,567 9.50%, 7/1/2016 1,686
718 9.50%, 7/1/2016 774
320 9.00%, 1/1/2017 346
2,599 9.00%, 8/1/2018 2,801
443 8.50%, 2/1/2017 468
863 8.50%, 2/1/2019 910
3,696 8.00%, 11/1/2008 3,856
7,774 8.00%, 1/1/2009 8,112
28,719 8.00%, 9/1/2009 29,967
5,205,246 8.00%, 6/1/2027 5,382,536
798,493 7.50%, 4/1/2007 816,316
369,112 7.50%, 1/1/2023 379,322
193,449 7.50%, 1/1/2023 198,044
183,021 7.50%, 1/1/2023 188,083
1,796,031 7.50%, 5/1/2026 1,832,365
3,754,426 6.50%, 9/1/2012 3,741,511
3,378,528 6.50%, 9/1/2099 3,366,906
1,780,093 6.00%, 4/1/2011 1,754,495
1,372,595 6.00%, 1/1/2009 1,356,659
------------
Total 19,065,600
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION--6.3%
4,318 12.25%, 5/15/2014 4,882
8,444 12.25%, 8/15/2013 9,517
112 11.00%, 11/15/2015 128
1,050 11.00%, 11/15/2015 1,200
6,019 11.00%, 9/15/2015 6,878
7,035 11.00%, 9/15/2015 8,003
946 10.50%, 11/15/2000 980
1,544 10.50%, 11/15/2000 1,599
2,634 10.50%, 10/15/2000 2,729
2,009 10.50%, 8/15/2017 2,246
26,470 10.50%, 8/15/2017 29,797
5,959 10.50%, 7/15/2017 6,708
28,970 9.50%, 11/15/2020 31,448
10,186 9.50%, 11/15/2020 11,057
20,634 9.50%, 10/15/2020 22,400
9,818 9.50%, 10/15/2020 10,658
55,895 9.50%, 10/15/2020 60,676
U.S. Government Agencies--continued
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--
CONTINUED
$ 35,619 9.50%, 9/15/2020 $ 38,666
26,993 9.50%, 6/15/2020 29,302
28,326 9.50%, 4/15/2020 30,749
20,537 9.50%, 4/15/2020 22,294
27,845 9.50%, 4/15/2020 30,227
411 9.50%, 2/15/2019 446
3,123 9.50%, 7/15/2018 3,392
14,790 9.50%, 10/15/2017 16,066
18,223 9.50%, 9/15/2017 19,796
173,490 9.50%, 12/15/2016 188,505
13,516 9.50%, 7/15/2016 14,686
2,884 9.50%, 7/15/2016 3,133
47,017 9.50%, 6/15/2016 51,086
2,514 9.50%, 5/15/2016 2,731
1,410 9.50%, 5/15/2016 1,532
11,283 9.50%, 5/15/2016 12,259
1,524 9.50%, 6/15/2001 1,576
65,612 9.00%, 1/15/2021 70,676
48,126 9.00%, 1/15/2021 51,841
41,837 9.00%, 1/15/2021 45,066
98,125 9.00%, 1/15/2021 105,698
27,700 9.00%, 1/15/2021 29,838
32,112 9.00%, 11/15/2020 34,645
42,215 9.00%, 1/15/2020 45,546
123,038 9.00%, 12/15/2019 132,956
45,333 9.00%, 12/15/2019 48,988
43,960 9.00%, 11/15/2019 47,504
43,404 9.00%, 10/15/2019 46,902
23,022 9.00%, 6/15/2018 24,902
31,932 9.00%, 5/15/2018 34,539
8,014 9.00%, 4/15/2018 8,668
816 9.00%, 7/15/2017 883
16,124 9.00%, 6/15/2017 17,457
26,543 9.00%, 5/15/2017 28,737
70,007 9.00%, 1/15/2017 75,795
6,425 9.00%, 1/15/2017 6,956
32,681 9.00%, 1/15/2017 35,384
47,601 9.00%, 1/15/2017 51,538
33,071 9.00%, 1/15/2017 35,806
3,592 9.00%, 12/15/2016 3,893
45,668 9.00%, 11/15/2016 49,492
48,102 9.00%, 10/15/2016 52,130
281 9.00%, 10/15/2016 305
38,223 9.00%, 10/15/2016 41,424
13,329 9.00%, 10/15/2016 14,446
1,708 9.00%, 9/15/2016 1,851
31,714 9.00%, 9/15/2016 34,370
U.S. Government Agencies--continued
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--
CONTINUED
$ 14,436 9.00%, 9/15/2016 $ 15,644
28,159 9.00%, 9/15/2016 30,517
37,502 9.00%, 9/15/2016 40,642
1,815 9.00%, 8/15/2016 1,967
135 9.00%, 8/15/2016 146
16,871 9.00%, 7/15/2016 18,283
19,053 9.00%, 6/15/2016 20,542
22,892 9.00%, 6/15/2016 24,809
1,853 9.00%, 6/15/2016 2,008
33,016 9.00%, 5/15/2016 35,781
22,570 9.00%, 5/15/2016 24,460
44,300 8.50%, 6/15/2022 46,597
111,024 8.50%, 5/15/2022 116,783
118,489 8.50%, 5/15/2022 124,635
15,851 8.50%, 4/15/2022 16,673
72,336 8.50%, 12/15/2021 76,472
75,057 8.50%, 11/15/2021 79,349
30,124 8.50%, 11/15/2021 31,846
39,822 8.50%, 11/15/2021 42,099
14,662 8.50%, 9/15/2021 15,500
52,537 8.50%, 5/15/2021 55,541
3,563 8.50%, 9/15/2017 3,781
6,031 8.50%, 6/15/2017 6,402
25,766 8.50%, 7/15/2016 27,376
96,768 8.50%, 6/15/2016 102,815
34,638 8.50%, 6/15/2016 36,803
10,037 8.50%, 6/15/2016 10,664
18,397 8.50%, 5/15/2016 19,547
119,912 8.00%, 9/15/2022 124,709
196,247 8.00%, 9/15/2022 204,097
1,041,826 8.00%, 9/15/2022 1,083,499
321,159 8.00%, 5/15/2022 334,005
104,304 8.00%, 4/15/2022 108,476
10,115 8.00%, 6/15/2017 10,594
17,373 8.00%, 2/15/2017 18,197
1,190,643 7.50%, 1/15/2024 1,217,432
82,843 7.50%, 3/15/2023 84,758
140,777 7.50%, 2/15/2023 144,032
140,095 7.50%, 2/15/2023 143,334
191,223 7.50%, 12/15/2022 195,824
117,504 7.50%, 12/15/2022 120,331
185,371 7.50%, 12/15/2022 189,831
154,179 7.50%, 12/15/2022 157,889
158,953 7.50%, 11/15/2022 162,777
162,279 7.50%, 10/15/2022 166,184
182,422 7.50%, 8/15/2022 186,811
152,745 7.50%, 2/15/2022 156,420
U.S. Government Agencies--continued
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--
CONTINUED
$ 141,159 7.50%, 2/15/2022 $ 144,555
756,826 7.00%, 6/15/2023 761,314
877,921 6.50%, 5/15/2011 880,660
1,411,053 6.50%, 5/15/2009 1,418,320
1,358,948 6.00%, 5/15/2009 1,342,803
237 5.50%, 8/15/1998 236
583 5.50%, 8/15/1998 581
------------
Total 12,240,939
------------
Total U.S. Government Agencies
(identified cost $37,534,383) 37,800,315
------------
U.S. Treasury Obligations--32.9%
U.S. TREASURY BONDS--12.1%
21,730,000 6.75%, 8/15/2026 23,617,685
------------
U.S. TREASURY NOTES--20.8%
1,500,000 5.75%, 11/15/2000 1,497,885
4,195,000 5.75%, 10/31/2002 4,177,297
1,630,000 5.75%, 8/15/2003 1,619,813
2,000,000 5.875%, 2/15/2004 2,002,820
1,000,000 5.875%, 11/15/2005 997,810
3,715,000 6.25%, 10/31/2001 3,763,741
2,000,000 6.625%, 6/30/2001 2,048,740
1,000,000 6.50%, 5/15/2005 1,035,780
<CAPTION>
Principal
Amount
or Shares Value
- ---------------------------------------------------------
<C> <S> <C>
U.S. Treasury Obligations--continued
U.S. TREASURY NOTES--CONTINUED
$ 2,000,000 6.50%, 8/15/2005 $ 2,072,180
15,795,000 7.00%, 7/15/2006 16,940,138
4,200,000 7.50%, 2/15/2005 4,589,172
------------
Total 40,745,376
------------
Total U.S. Treasury
Obligations
(identified cost $63,289,980) 64,363,061
------------
Open Ended Investment Companies--3.4%
43,500 Blackrock 1999 Term Trust 405,094
227,200 Blackrock 2001 Term Trust,
Inc. 1,931,200
227,700 Blackrock Strategic Term
Trust, Inc. 1,921,219
265,700 Blackrock Target Term Trust 2,457,725
------------
Total Open Ended
Investment Companies
(identified cost $6,586,012) 6,715,238
------------
(a) Repurchase Agreement--2.2%
4,264,553 Goldman Sachs Group, LP,
5.50%, dated 11/28/1997, due
12/1/1997 (at amortized cost) 4,264,553
------------
Total Investments
(identified cost $191,625,288) $193,742,430
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA SHORT-TERM FIXED INCOME FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA SHORT-TERM FIXED INCOME FUND (CLASS A
SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Short-Term Fixed Income Fund (Class A Shares) (the "Fund") from May 7,
1993 (start of performance) to November 30, 1997 compared to the Merrill Lynch
1-3 Year U.S. Treasury Index.+
[GRAPHIC REPRESENTATION A19 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550) that was in effect prior to February 1, 1995. As of February 1,
1995, the Fund's maximum sales charge is 2.50%. The Fund's performance
assumes the reinvestment of all dividends and distributions. The Merrill
Lynch 1-3 Year U.S. Treasury Index has been adjusted to reflect reinvestment
of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Merrill Lynch 1-3 Year U.S. Treasury Index is an unmanaged index tracking
short-term U.S. government securities with maturities between 1 and 2.99
years. The index is produced by Merrill Lynch, Pierce, Fenner & Smith, Inc.
The Merrill Lynch 1-3 Year U.S. Treasury Index is not adjusted to reflect
sales loads, expenses, or other fees that the SEC requires to be reflected in
the Fund's performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA SHORT-TERM FIXED INCOME FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA SHORT-TERM FIXED INCOME FUND (CLASS Y
SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Short-Term Fixed Income Fund (Class Y Shares) (the "Fund") from July
23, 1996 (start of performance) to November 30, 1997 compared to the Merrill
Lynch 1-3 Year U.S. Treasury Index.+
[GRAPHIC REPRESENTATION A20 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Merrill Lynch 1-3 Year U.S. Treasury Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Merrill Lynch 1-3 Year U.S. Treasury Index is an unmanaged index tracking
short-term U.S. government securities with maturities between 1 and 2.99
years. The index is produced by Merrill Lynch, Pierce, Fenner & Smith, Inc.
The Merrill Lynch 1-3 Year U.S. Treasury Index is not adjusted to reflect
sales loads, expenses, or other fees that the SEC requires to be reflected in
the Fund's performance. Investment cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA SHORT-TERM FIXED INCOME FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------
<C> <S> <C>
Corporate Bonds--62.2%
CONSUMER NON-DURABLES--2.5%
$2,500,000 Walt Disney Co., 6.25%,
6/21/1999 $ 2,500,000
-----------
FINANCE--31.8%
3,000,000 Associates Corp. of North
America, 6.00%, 3/15/1999 2,993,520
2,500,000 Banc One Corp., 6.25%, 9/1/2000 2,508,574
4,000,000 Branch Banking & Trust Co,
Wilson, 6.20%, 9/15/1999 3,996,080
1,000,000 First National Bank of Chicago,
7.00%, 5/8/2000 1,015,625
2,500,000 General Motors Acceptance Corp.,
5.63%, 2/25/2000 2,466,500
3,500,000 Household Finance Corp., 6.81%,
5/25/2000 3,535,602
2,750,000 Lehman Brothers Holdings, Inc.,
6.70%, 1/24/2000 2,761,751
4,000,000 Morgan Stanley Group, Inc.,
5.625%, 3/1/1999 3,970,160
2,000,000 Norwest Corp., 6.25%, 4/15/1999 2,006,720
2,000,000 Norwest Corp., 6.75%, 5/12/2000 2,021,940
4,000,000 Sears Roebuck Acceptance Corp.,
6.19%, 2/15/2000 3,995,132
-----------
Total 31,271,604
-----------
FINANCIAL SERVICES--5.1%
5,000,000 Merrill Lynch & Co., Inc.,
6.61%,
6/15/2000 5,040,320
-----------
FOOD PRODUCTS--3.1%
3,000,000 Heinz (H.J.) Co., 7.50%,
4/26/2000 3,078,750
-----------
HEALTH SERVICES--2.6%
2,500,000 McKesson Corp., 6.60%, 3/1/2000 2,519,875
-----------
HEALTH TECHNOLOGY--2.6%
2,500,000 American Home Products Corp.,
7.70%, 2/15/2000 2,568,250
-----------
INDUSTRIAL SERVICES--2.0%
2,000,000 WMX Technologies, Inc., 6.00%,
11/2/1998 1,992,100
-----------
TECHNOLOGY SERVICES--5.1%
5,000,000 International Business Machines
Corp., 6.12%, 12/15/1998 5,006,050
-----------
<CAPTION>
Principal
Amount
or Shares Value
- ---------------------------------------------------------
<C> <S> <C>
Corporate Bonds--continued
TELECOMMUNICATIONS--5.3%
$5,000,000 AT&T Corp., 8.25%, 1/11/2000 $ 5,197,650
-----------
UTILITIES--ELECTRIC--2.1%
2,000,000 Kansas City Power and Light Co.,
6.37%, 10/15/1999 2,005,160
-----------
Total Corporate Bonds
(identified cost $61,048,990) 61,179,759
-----------
U.S. Government Agencies--4.1%
FEDERAL NATIONAL MORTGAGE
ASSOCIATION--4.1%
1,500,000 5.91%, 2/25/2000 1,499,535
2,500,000 6.20%, 6/26/2000 2,512,900
-----------
Total U.S. Government Agencies
(identified cost $4,016,435) 4,012,435
-----------
U.S. Treasury Obligations--27.9%
U.S. TREASURY NOTES--27.9%
500,000 5.50%, 11/15/1998 498,830
9,750,000 5.625%, 11/30/1998 9,739,373
17,000,000 6.375%, 4/30/1999 17,140,760
-----------
Total U.S. Treasury Obligations
(identified cost $27,337,543) 27,378,963
-----------
Open Ended Investment Companies--3.5%
285,301 Black Rock 1999 Term Trust, Inc. 2,656,866
75,978 Blackrock 1998 Term Trust, Inc. 736,037
-----------
Total Open Ended
Investment Companies
(identified cost $3,385,200) 3,392,903
-----------
(a) Repurchase Agreement--0.5%
532,377 Goldman Sachs Group, LP, 5.500%,
dated 11/28/1997, due
12/1/1997 (at amortized cost) 532,377
-----------
Total Investments
(identified cost $96,320,545) $96,496,437
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA GEORGIA MUNICIPAL BOND FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA GEORGIA MUNICIPAL BOND FUND (CLASS A
SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Georgia Municipal Bond Fund (Class A Shares) (the "Fund") from December
23, 1994 (start of performance) to November 30, 1997 compared to the Lehman
State General Obligation Bond Index.+
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
[GRAPHIC REPRESENTATION A21 OMITTED. SEE APPENDIX.]
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The Lehman State General Obligation Bond Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman State General Obligation Bond Index is an unmanaged index comprised
of all state general obligation debt issues and is compiled without regard to
maturities. These bonds are rated A or better and represent a variety of
coupon ranges. Index figures are total returns calculated for one-, three-,
and twelve-month periods as well as year-to-date. Total returns are also
calculated as of the index inception, December 31, 1979. The Lehman State
General Obligation Bond Index is not adjusted to reflect sales loads,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA GEORGIA MUNICIPAL BOND FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA GEORGIA MUNICIPAL BOND FUND (CLASS Y
SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia Georgia Municipal Bond Fund (Class Y Shares) (the "Fund") from July 23,
1996 (start of performance) to November 30, 1997 compared to the Lehman State
General Obligation Bond Index.+
[GRAPHIC REPRESENTATION A22 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Lehman State General Obligation Bond Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman State General Obligation Bond Index is an unmanaged index comprised
of all state general obligation debt issues and is compiled without regard to
maturities. These bonds are rated A or better and represent a variety of
coupon ranges. Index figures are total returns calculated for one-, three-,
and twelve-month periods as well as year-to-date. Total returns are also
calculated as of the index inception, December 31, 1979. The Lehman State
General Obligation Bond Index is not adjusted to reflect sales loads,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA GEORGIA MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -----------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--89.0%
GEORGIA--89.0%
$ 600,000 Americus-Sumter County, GA
Hospital Authority, Revenue
Bonds, 5.125% (AMBAC INS),
12/1/2018 Aaa $ 588,276
100,000 Atlanta, GA Downtown
Development Authority,
Refunding Revenue Bonds,
6.25% (Original Issue Yield:
6.435%), 10/1/2016 AA 107,510
200,000 Atlanta, GA, GO UT (Series
A), 6.125% (Original Issue
Yield: 6.18%), 12/1/2023 AA 216,488
510,000 Atlanta, GA, Urban
Residential Finance
Authority, Dorm Facility
Revenue Refunding Bonds,
5.70% (Morehouse
College)/(MBIA INS),
12/1/2010 AAA 541,972
80,000 Brunswick, GA, Water & Sewer
Refunding Revenue Bonds,
6.10% (MBIA INS)/(Original
Issue Yield: 6.27%),
10/1/2019 AAA 90,446
500,000 Burke County, GA Development
Authority, PCR (Series 6),
4.375% (Georgia Power Company
Plant Vogtle)/(AMBAC INS),
11/1/2000 AAA 503,465
90,000 Burke County, GA Development
Authority, PCR Bonds, 7.50%
(Oglethorpe Power Corp.)/
(MBIA INS), 1/1/2003 AAA 97,053
50,000 Chatham County, GA School District, GO UT, 6.75% (MBIA
INS), 8/1/2018 AAA 56,662
100,000 Cobb County, GA Solid Waste
Management Authority, Revenue
Bonds, 6.35%, 1/1/2009 AAA 112,710
200,000 De Kalb County, GA School
District, GO UT Bonds (Series
A), 6.25%, 7/1/2011 AA 226,980
1,000,000 De Kalb County, GA Water &
Sewer, Refunding Revenue
Bonds, 5.125% (Original Issue
Yield: 5.25%), 10/1/2011 AA 1,006,090
Long-Term Municipals--continued
GEORGIA--CONTINUED
$ 500,000 De Kalb County, GA Water &
Sewer, Refunding Revenue
Bonds, 5.25% (Original Issue
Yield: 5.42%), 10/1/2023 AA $ 499,965
150,000 De Kalb County, GA, GO UT
Bonds, 5.50% (Original Issue
Yield: 5.60%), 1/1/2016 AA+ 152,665
100,000 Decatur, GA Housing
Authority, Mortgage Refunding
Revenue Bonds, 6.45% (FHA and
MBIA INSs)/(Original Issue
Yield: 6.524%), 7/1/2025 AAA 104,569
500,000 Downtown Savannah, GA,
Refunding Revenue Bonds
(Series A), 4.95% (Original
Issue Yield: 5.05%), 1/1/2006 AA 512,780
120,000 Fayette County, GA School
District, GO UT Bonds, 6.125%
(Original Issue Yield:
6.30%),
3/1/2015 A+ 129,064
160,000 Fayette County, GA, Water
Revenue Bonds (Series B),
6.20% (FGIC INS)/(Original
Issue Yield: 6.30%),
10/1/2022 AAA 173,046
60,000 Forsyth County, GA School
District, GO UT Bonds, 6.70%,
7/1/2012 AA- 70,610
25,000 Fulton County, GA School District, GO UT Bonds, 5.60% (Original
Issue Yield:
5.65%),
1/1/2011 AA 26,122
300,000 Fulton County, GA Water &
Sewage System, Revenue
Refunding Bonds, 5.625% (FGIC
INS)/(Original Issue Yield:
5.75%), 1/1/2001 AAA 313,413
475,000 Fulton County, GA, Water and Sewer Refunding Revenue Bonds, 6.25%
(FGIC INS)/ (Original Issue Yield:
6.425%), 1/1/2007 AAA 533,050
500,000 Fulton De Kalb, GA Hospital
Authority, Revenue Bonds,
5.50% (MBIA INS)/(Original
Issue Yield: 5.85%), 1/1/2012 AAA 515,605
Long-Term Municipals--continued
GEORGIA--CONTINUED
$ 400,000 Gainsville & Hall County, GA
Hospital Authority, Revenue
Anticipation Certificates,
5.75% (Northeast GA
Healthcare Project)/(MBIA
INS)/(Original Issue Yield:
5.98%), 10/1/2017 AAA $ 415,812
300,000 Georgia Medical Center
Hospital Authority, Refunding
Revenue Anticipation
Certificates (Series C),
5.90% (Columbus Regional
Healthcare System)/(MBIA
INS)/ (Original Issue Yield:
5.95%),
8/1/2001 AAA 317,703
285,000 Georgia Municipal Electric Authority, Electric Power Revenue
Refunding Bonds (Series B), 6.125% (FGIC INS)/ (Original Issue
Yield:
6.30%),
1/1/2014 AAA 302,448
500,000 Georgia State HFA, Refunding Revenue SFM Bonds (Subser A-2), 6.55%
(FHA/VA
mtgs GTD), 12/1/2027 AA+ 533,900
200,000 Georgia State, GO UT Bonds
(Series B), 7.20%, 3/1/2006 AAA 237,066
500,000 Georgia State, GO UT Bonds
(Series D), 6.80%, 8/1/2000 AAA 535,145
200,000 Georgia State, GO UT Bonds
(Series F), 6.50%, 12/1/2007* AAA 231,248
430,000 Georgia State, GO UT, 6.25%,
4/1/2007 AAA 485,444
500,000 Griffin, GA, Combined Public
Utility Revenue Bonds, 5.40%
(FSA INS), 1/1/2016 AAA 510,190
655,000 Gwinnett County, GA School
District, Series A, 5.125%
(Original Issue Yield:
5.35%),
2/1/2011 AA+ 662,624
100,000 Gwinnett County, GA, Water &
Sewage Utility Certificates
of Participation, 8.40%,
8/1/2001* AAA 114,156
30,000 Hapeville, GA, Water & Sewer
Revenue Bonds, 6.20% (MBIA
INS), 7/1/2006 AAA 33,291
Long-Term Municipals--continued
GEORGIA--CONTINUED
$ 25,000 Henry County, GA & Henry
County Water & Sewer
Authority, GO LT Revenue
Refunding Bonds (Series A),
5.25% (AMBAC INS)/(Original
Issue Yield: 5.40%), 2/1/2018 AAA $ 24,783
1,000,000 Henry County, GA & Henry
County Water & Sewer
Authority, Revenue Bond,
5.00% (AMBAC INS)/(Original
Issue Yield: 5.32%), 2/1/2026 AAA 963,360
500,000 Houston County, GA School
District, GO UT Bond, 5.50%
(MBIA INS), 3/1/2016 AAA 506,550
400,000 Marietta, GA Development Authority, Revenue Bonds (Series B), 5.75%
(Life College, Inc.)/(CGIC LOC)/(Original Issue Yield:
5.91%), 9/1/2014 AAA 418,192
500,000 Meriwether County, GA School
District, GO UT Bonds, 7.00%
(FSA INS), 2/1/2007 AAA 589,365
400,000 Newton County School District, GA, GO UT Bonds, 5.625% (FGIC
INS)/(Original
Issue Yield: 5.70%), 2/1/2013 AAA 419,068
100,000 Peach County, GA School
District, GO UT Bonds, 6.30%
(MBIA INS)/(Original Issue
Yield: 6.35%), 2/1/2014 AAA 109,852
250,000 Private Colleges &
Universities Facilities of
GA, Refunding Revenue Bonds,
5.625% (Agnes Scott College
Project)/(Original Issue
Yield: 5.70%), 6/1/2023 AA- 255,133
685,000 Richmond County, GA Water &
Sewage, Refunding Revenue
Bonds, 5.25% (FGIC INS)/
(Original Issue Yield:
5.491%), 10/1/2021 AAA 677,691
200,000 Rockdale County, GA School
District, GO UT Bonds, 6.30%,
1/1/2007 A1 221,464
1,000,000 Savannah, GA EDA, Revenue
Bonds Weekly VRDNs (Georgia
Kaolin Terminals, Inc.)/
(Colonial Group, Inc. LOC) NR 1,000,000
Long-Term Municipals--continued
GEORGIA--CONTINUED
$ 150,000 Savannah, GA Resources
Recovery Development
Authority, Refunding Revenue
Bonds, 5.95% (Savannah Energy
Systems Co.), 12/1/2002 A+ $ 159,293
335,000 Savannah, GA Resources
Recovery Development
Authority, Revenue Bonds,
6.30% (Savannah Energy
Systems Co.), 12/1/2006 A+ 359,566
110,000 Savannah, GA Water & Sewage,
Revenue Bonds, 5.10%
(Original Issue Yield:
5.55%), 12/1/2010 AA- 110,740
-----------
Total Long-Term Municipals
(identified cost $16,015,142) 16,772,625
-----------
Open-Ended Investment Companies--9.8%
816,832 AIM Global Management S+T
Investments $ 816,832
357,521 Dreyfus Tax Exempt 357,521
663,180 Fidelity Tax Exempt Money
Market 663,180
-----------
Total Open-Ended
Investment companies
(at net asset value) 1,837,533
-----------
Total Investments
(identified cost $17,852,675) $18,610,158
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND (CLASS
A SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia North Carolina Municipal Bond Fund (Class A Shares) (the "Fund") from
December 23, 1994 (start of performance) to November 30, 1997 compared to the
Lehman State General Obligation Bond Index.+
[GRAPHIC REPRESENTATION A23 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The Lehman State General Obligation Bond Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman State General Obligation Bond Index is an unmanaged index comprised
of all state general obligation debt issues and is compiled without regard to
maturities. These bonds are rated A or better and represent a variety of
coupon ranges. Index figures are total returns calculated for one-, three-,
and twelve-month periods as well as year-to-date. Total returns are also
calculated as of the index inception, December 31, 1979. The Lehman State
General Obligation Bond Index is not adjusted to reflect sales loads,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND (CLASS
Y SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia North Carolina Municipal Bond Fund (Class Y Shares) (the "Fund") from
July 23, 1996 (start of performance) to November 30, 1997 compared to the Lehman
State General Obligation Bond Index.+
[GRAPHIC REPRESENTATION A24 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Lehman State General Obligation Bond Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman State General Obligation Bond Index is an unmanaged index comprised
of all state general obligation debt issues and is compiled without regard to
maturities. These bonds are rated A or better and represent a variety of
coupon ranges. Index figures are total returns calculated for one-, three-,
and twelve-month periods as well as year-to-date. Total returns are also
calculated as of the index inception, December 31, 1979. The Lehman State
General Obligation Bond Index is not adjusted to reflect sales loads,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- -----------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipal Securities--90.4%
NORTH CAROLINA--90.4%
$1,030,000 Buncombe County, NC, GO UT
Bonds, 4.90% (Original Issue
Yield: 5.15%), 4/1/2014 AA $ 1,010,409
190,000 Buncombe County, NC, GO UT
Bonds, 5.20%, 5/1/2008 AA 197,913
1,400,000 Carteret County, NC, GO UT
Bonds, 5.40% (MBIA INS)/
(Original Issue Yield:
5.60%),
5/1/2015 AAA 1,444,450
1,000,000 Centennial Authority, NC,
Revenue Bonds, 4.85% (FSA
INS)/(Original Issue Yield:
4.95%), 9/1/2009 AAA 1,001,530
100,000 Charlotte, NC, GO UT Bonds,
5.70%, 2/1/2007 AAA 107,596
1,500,000 Charlotte, NC, GO UT
Refunding Bonds, 5.00%
(Original Issue Yield:
5.05%),
2/1/2008 AAA 1,550,685
1,250,000 Charlotte, NC, GO UT
Refunding Bonds, 5.00%
(Original Issue Yield:
5.10%),
2/1/2009 AAA 1,285,512
840,000 Charlotte, NC, GO UT
Refunding Bonds, 5.00%
(Original Issue Yield:
5.15%),
2/1/2012 AAA 850,601
900,000 Charlotte, NC, GO UT Water &
Sewer Bonds (Series A),
5.30%, 4/1/2008 AAA 949,068
960,000 Charlotte-Mecklenburg Hospital Authority, NC, Health System Revenue
Refunding Bonds, 5.75% (Original Issue Yield:
6.498%), 1/1/2012 AA 1,014,058
1,000,000 Charlotte-Mecklenburg
Hospital Authority, NC,
Revenue Bonds, 5.60%
(Original Issue Yield:
5.70%), 1/15/2009 AA 1,063,530
345,000 Concord, NC, Certificate of Particiapation, 5.60% (MBIA
INS)/(Original Issue Yield:
5.70%), 6/1/2005 AAA 368,046
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$ 445,000 Concord, NC, Certificate of Participation, 5.40% (MBIA
INS)/(Original Issue Yield:
5.50%), 6/1/2003 AAA $ 466,333
210,000 Cumberland County, NC Hospital Facilities, Revenue Bonds, 6.00%
(MBIA INS)/ (Original Issue Yield:
6.84%), 10/1/2021 AAA 216,575
100,000 Cumberland County, NC,
Certificate of Participation (Series A), 6.375% (Cumberland County,
NC Civic Center Project)/(AMBAC INS)/(Original Issue Yield:
6.50%), 12/1/2010 AAA 110,417
100,000 Cumberland County, NC, GO UT,
5.70% (MBIA INS)/(Original
Issue Yield: 5.70%), 2/1/2006 AAA 106,717
615,000 Currituck County, NC, GO UT
Bonds, 5.40% (MBIA INS),
4/1/2009 AAA 647,423
110,000 Dare County, NC, GO UT Refunding Bonds, 5.00% (MBIA
INS), 5/1/2010* AAA 110,909
100,000 Durham County, NC, GO UT
Bonds, 5.75% (Original Issue
Yield: 5.95%), 2/1/2009 AAA 105,657
50,000 Durham County, NC, GO UT
Bonds, 5.80% (Original Issue
Yield: 6.00%), 4/1/2010 AAA 53,579
1,200,000 Durham County, NC, GO UT,
5.40%, 2/1/1999 AAA 1,221,996
50,000 Durham, NC Water & Sewer
Utility System, Revenue
Bonds, 5.80% (Original Issue
Yield: 5.85%), 12/1/2003 AA 53,906
100,000 Durham, NC, GO UT Revenue
Bonds, 5.80% (Original Issue
Yield: 5.95%), 2/1/2012 AAA 107,374
100,000 East Carolina University, NC,
Revenue Bonds, 5.50%
(Original Issue Yield:
5.60%), 5/1/2018 A 100,844
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$1,500,000 Fayetteville, NC Public Works
Commission, Refunding Revenue
Bonds, 4.75% (FGIC INS)/
(Original Issue Yield:
5.23%),
3/1/2014 AAA $ 1,437,540
1,000,000 Forsyth County, NC, GO UT,
4.75%, 2/1/2005 AAA 1,021,280
500,000 Franklin County, NC,
Certificates of Participation, 6.10% (Jail & School Project)/ (FGIC
INS)/(Original Issue Yield:
6.20%), 6/1/2003 AAA 543,980
320,000 Fremont, NC Housing
Development Corp., First Lien
Revenue Refunding Bonds,
6.75% (Torhunta
Apts)/(Federal National
Mortgage Association COL),
7/15/2022 Aaa 333,773
100,000 Gastonia, NC Combined
Utilities System, Revenue
Bonds, 6.00% (MBIA
INS)/(Original Issue Yield:
6.10%), 5/1/2014 AAA 106,590
500,000 Gastonia, NC, GO UT Bonds,
5.30% (FGIC INS)/(Original
Issue Yield: 5.40%), 6/1/2009 AAA 522,990
1,000,000 Greensboro, NC , Certificate
of Participation (Series A),
5.625% (Original Issue Yield:
6.05%), 12/1/2015 AA 1,032,740
105,000 Greensboro, NC , Certificates
of Participation, 6.65%
(Coliseum Arena Expansion
Project)/ (Original Issue
Yield: 6.70%), 12/1/2004 AA 114,325
100,000 Greenville, NC Combined
Enterprise System, Revenue
Bonds, 5.70% (Original Issue
Yield: 5.75%), 9/1/2006 A+ 108,094
75,000 Harnett County, NC,
Certificates of
Participation, 5.90% (AMBAC
INS), 12/1/2000 AAA 78,893
500,000 Harnett County, NC,
Certificates of
Participation, 6.20% (AMBAC
INS), 12/1/2009 AAA 545,910
600,000 High Point, NC, GO UT Revenue
Bonds, 5.60%, 3/1/2008 AA 641,172
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$1,000,000 Johnston County, NC,
Certificate of Participation,
4.50% (MBIA INS), 9/1/2000 AAA $ 1,009,240
600,000 Lee County, NC, GO UT, 5.00%
(MBIA INS)/(Original Issue
Yield: 5.05%), 4/1/2009 AAA 609,840
100,000 Martin County, NC IFA, PCR
Bonds, 6.80% (Weyerhaeuser
Co.), 5/1/2024 A 110,959
850,000 Martin County, NC IFA,
Revenue Bonds, 5.65%
(Weyerhaeuser Co.), 12/1/2023 A 856,468
1,705,000 Mecklenburg County, NC, GO UT
Bonds, 4.80% (Original Issue
Yield: 4.90%), 3/1/2009 AAA 1,713,730
1,000,000 Mecklenburg County, NC, GO UT
Bonds, 4.80%, 3/1/2008 AAA 1,010,430
100,000 Mecklenburg County, NC, GO UT
Bonds, 6.25% (United States
Treasury PRF)/(Original Issue
Yield: 6.35%), 1/1/2002
(@102) AAA 109,177
100,000 Mecklenburg County, NC, GO UT Refunding Bonds, 5.90% (Original Issue
Yield:
6.05%),
3/1/2004 AAA 106,678
1,225,000 Mecklenburg County, NC, GO
UT, 4.70% (Original Issue
Yield: 4.90%), 4/1/2010 AAA 1,203,550
100,000 North Carolina Educational
Facilities Finance Agency,
Refunding Revenue Bonds,
6.00% (Davidson College)/
(Original Issue Yield:
6.20%), 12/1/2012 AA- 106,632
450,000 North Carolina Educational
Facilities Finance Agency,
Revenue Bonds (Series B),
4.25% (Duke
University)/(Original Issue
Yield: 4.30%), 10/1/2003 AA+ 447,907
1,000,000 North Carolina Educational
Facilities Finance Agency, Revenue Bonds (Series C), 6.75% (Duke
University)/ (Original Issue Yield:
6.769%), 10/1/2021 AA+ 1,097,210
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$ 20,000 North Carolina HFA, Multi-
Family Refunding Revenue
Bonds (Series B), 6.90% (FHA
INS), 7/1/2024 AA $ 21,441
85,000 North Carolina HFA, Revenue
Bonds (Series Z), 6.60%,
9/1/2026 AA 90,388
750,000 North Carolina HFA, Revenue
Bonds, 6.20%, 3/1/2018 AA 787,065
50,000 North Carolina Medical Care
Commission Hospital,
Refunding Revenue Bonds,
6.125% (Rex
Hospital)/(Original Issue
Yield: 6.219%), 6/1/2010 A+ 53,466
1,000,000 North Carolina Medical Care
Commission Hospital, Revenue
Bonds (Series C), 5.25% (Duke
University
Hospital)/(Original Issue
Yield: 5.65%), 6/1/2017 AA 1,001,350
525,000 North Carolina Medical Care
Commission Hospital, Revenue
Bonds, 5.20% (Moore Regional
Hospital)/(FGIC INS)/(Original Issue Yield:
5.30%), 10/1/2013 AAA 525,698
1,500,000 North Carolina Medical Care Commission Hospital, Revenue Bonds,
5.375% (Wake County Hospital Systems)/(MBIA INS)/ (Original Issue
Yield:
5.75%), 10/1/2026 AAA 1,494,435
1,000,000 North Carolina Medical Care
Commission Hospital, Revenue
Bonds, 7.00% (Duke University
Hospital)/(Original Issue
Yield: 7.08%), 6/1/2021 Aaa 1,107,570
1,095,000 North Carolina Medical Care
Commission Hospital, Revenue
Refunding Bonds, 5.10%
(Wilson Memorial Hospital)/
(AMBAC INS)/(Original Issue
Yield: 5.25%), 11/1/2009 AAA 1,117,010
1,525,000 North Carolina Medical Care
Commission Hospital, Revenue
Refunding Bonds, 5.20%
(Wilson Memorial Hospital)/
(AMBAC INS)/(Original Issue
Yield: 5.35%), 11/1/2010 AAA 1,556,354
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$ 850,000 North Carolina Medical Care
Commission Hospital, Revenue
Refunding Bonds, 7.375%
(Presbyterian
Hospital)/(United States
Treasury PRF)/(Original Issue
Yield: 7.417%), 10/1/2000
(@102) Aaa $ 939,641
115,000 North Carolina Municipal
Power Agency No. 1, Catawba
Electric Revenue Refunding
Bonds, 5.90% (Original Issue
Yield: 5.95%), 1/1/2003 A- 121,392
100,000 North Carolina Municipal
Power Agency No. 1, Catawba
Electric Revenue Refunding
Bonds, 7.875% (United States
Treasury PRF), 1/1/1998
(@102) AAA 102,362
500,000 North Carolina Municipal
Power Agency No. 1, Refunding
Revenue Bonds, 7.625% (AMBAC
INS)/(Original Issue Yield:
7.70%), 1/1/2014 AAA 511,695
400,000 North Carolina State, GO UT Bonds (Series A), 4.70%,
2/1/2005 AAA 408,032
1,000,000 North Carolina State, GO UT
Refunding Bonds (Series C),
4.80% (North Carolina Prison
Facilities)/(Original Issue
Yield: 4.85%), 3/1/2009 AAA 1,007,720
575,000 Onslow County, NC, GO UT
Bonds, 5.70% (MBIA INS)/
(Original Issue Yield:
5.85%),
3/1/2013 AAA 606,516
635,000 Pitt County, NC, Refunding Revenue Bonds, 5.20% (Pitt County
Memorial Hospital)/ (Original Issue Yield:
5.30%), 12/1/2008 AA- 654,742
350,000 Raleigh, NC, Certificate
Participation Refunding
Bonds, 5.00% (Cabarrus Street
Parking Facilities
Project)/(Original Issue
Yield: 5.10%), 12/1/2009 AA 353,017
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$ 230,000 Raleigh, NC, Certificate
Participation Refunding
Bonds, 5.10% (Cabarrus Street
Parking Facilities
Project)/(Original Issue
Yield: 5.20%), 12/1/2010 AA $ 232,082
400,000 Raleigh, NC, GO UT Refunding
Bonds, 6.40%, 3/1/2006 AAA 434,324
515,000 Randolph County, NC,
Certificate of Participation,
4.25% (MBIA INS), 6/1/1999 AAA 517,240
800,000 Randolph County, NC,
Certificates of Participation, 4.875% (MBIA INS)/(Original Issue
Yield:
5.05%), 6/1/2006 AAA 817,600
500,000 Robeson County, NC, GO UT
Refunding Revenue Bonds,
4.90% (AMBAC INS), 2/1/2007 AAA 510,945
1,025,000 Sanford, NC, GO UT Bonds,
4.90% (MBIA INS), 3/1/2009 AAA 1,034,297
1,125,000 Shelby, NC Housing
Development Corp., Mortgage
Revenue Bonds, 6.10% (Hickory
Creek Apartments)/(FHA INS),
2/1/2023 AAA 1,166,468
500,000 Wake County, NC, GO UT Refunding Bonds, 4.60% (Original Issue Yield:
4.70%),
4/1/2004 AAA 508,500
650,000 Wake County, NC, GO UT Refunding Bonds, 4.70% (Original Issue Yield:
4.80%),
4/1/2005 AAA 663,312
1,000,000 Wake County, NC, GO UT, 4.50%
(Original Issue Yield:
4.62%), 3/1/2009 AAA 979,180
<CAPTION>
Principal
Amount Credit
or Shares Rating* Value
- -----------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipal Securities--continued
NORTH CAROLINA--CONTINUED
$ 500,000 Wake County, NC, GO UT,
4.90%, 3/1/2004 AAA $ 516,555
1,375,000 Wake County, NC, Hospital Revenue Bonds, 5.125% (MBIA INS)/(Original
Issue Yield:
5.35%), 10/1/2026 AAA 1,362,419
75,000 Wilmington, NC, GO UT Revenue
Bonds, 5.60% (Original Issue
Yield: 5.75%), 6/1/2010 A+ 79,205
-----------
Total Long-Term Municipal
Securities (identified cost
$48,106,076) 50,296,257
-----------
Short-Term Municipal Securities--2.6%
NORTH CAROLINA--2.6%
1,500,000 Alamance County, NC
Industrial Facilities &
Pollution Control Financing
Authority, Revenue Bonds
Weekly VRDNs (SCI Systems,
Inc.) (at amortized cost) A1 1,500,000
-----------
Open-Ended Investment Companies--5.7%
908,023 AIM Global Management
Short-Term Investments Co. 908,023
872,594 Dreyfus Tax Exempt Fund 872,594
1,387,007 Fidelity Tax Exempt Money
Market Fund 1,387,007
-----------
Total Open-Ended Investment
Companies (at net asset
value) 3,167,624
-----------
Total Investments
(identified cost $52,773,700) $54,963,881
-----------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND (CLASS A SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND (CLASS
A SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia South Carolina Municipal Bond Fund (Class A Shares) (the "Fund") from
January 11, 1991 (start of performance) to November 30, 1997 compared to the
Lehman State General Obligation Bond Index.+
[GRAPHIC REPRESENTATION A25 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* Represents a hypothetical investment of $10,000 in the Fund after deducting
the maximum sales charge of 4.50% ($10,000 investment minus $450 sales charge
= $9,550). The Fund's performance assumes the reinvestment of all dividends
and distributions. The Lehman State General Obligation Bond Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman State General Obligation Bond Index is an unmanaged index comprised
of all state general obligation debt issues and is compiled without regard to
maturities. These bonds are rated A or better and represent a variety of
coupon ranges. Index figures are total returns calculated for one-, three-,
and twelve-month periods as well as year-to-date. Total returns are also
calculated as of the index inception, December 31, 1979. The Lehman State
General Obligation Bond Index is not adjusted to reflect sales loads,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND (CLASS Y SHARES)
(UNAUDITED)
GROWTH OF $10,000 INVESTED IN WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND (CLASS
Y SHARES)
The graph below illustrates the hypothetical investment of $10,000* in the
Wachovia South Carolina Municipal Bond Fund (Class Y Shares) (the "Fund") from
July 23, 1996 (start of performance) to November 30, 1997 compared to the Lehman
State General Obligation Bond Index.+
[GRAPHIC REPRESENTATION A26 OMITTED. SEE APPENDIX.]
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. YOUR INVESTMENT RETURN
AND PRINCIPAL VALUE WILL FLUCTUATE SO WHEN SHARES ARE REDEEMED, THEY MAY BE
WORTH MORE OR LESS THAN ORIGINAL COST. MUTUAL FUNDS ARE NOT OBLIGATIONS OF OR
GUARANTEED BY ANY BANK AND ARE NOT FEDERALLY INSURED.
* The Fund's performance assumes the reinvestment of all dividends and
distributions. The Lehman State General Obligation Bond Index has been
adjusted to reflect reinvestment of dividends on securities in the index.
** Total return quoted reflects all applicable sales charges and contingent
deferred sales charges.
+ The Lehman State General Obligation Bond Index is an unmanaged index comprised
of all state general obligation debt issues and is compiled without regard to
maturities. These bonds are rated A or better and represent a variety of
coupon ranges. Index figures are total returns calculated for one-, three-,
and twelve-month periods as well as year-to-date. Total returns are also
calculated as of the index inception, December 31, 1979. The Lehman State
General Obligation Bond Index is not adjusted to reflect sales loads,
expenses, or other fees that the SEC requires to be reflected in the Fund's
performance. Investments cannot be made in an index.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Principal Credit
Amount Rating* Value
- ------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--97.8%
SOUTH CAROLINA--97.8%
$ 540,000 Barnwell County, SC School
District No. 45, GO UT
Refunding Bonds, 5.60%
(AMBAC INS)/(State Aid
Withholding LOC)/(Original
Issue Yield: 5.65%),
2/1/2012 AAA $ 562,356
570,000 Barnwell County, SC School
District No. 45, GO UT
Refunding Bonds, 5.60%
(AMBAC INS)/(State Aid
Withholding LOC)/(Original
Issue Yield: 5.70%),
2/1/2013 AAA 591,056
1,300,000 Beaufort County, SC School
District, GO UT, 4.70%,
3/1/2006 AA 1,316,068
1,000,000 Beaufort County, SC,
Certificate of
Participation, 5.00%
(Hilton Head Airport),
7/1/2001 NR 1,021,530
675,000 Beaufort County, SC,
Certificates of
Participation, 7.125%
(AMBAC INS)/ (Original
Issue Yield: 7.45%),
6/1/2012 AAA 728,156
855,000 Beaufort-Jasper, SC Water & Sewer Authority, Waterworks and Sewer
System Revenue Bonds, 5.90% (FGIC INS)/ (Original Issue Yield:
6.00%), 3/1/2016 AAA 900,255
750,000 Berkeley County, SC,
Pollution Control
Facilities Revenue Bonds,
6.50% (South Carolina
Electric and Gas),
10/1/2014 A- 815,498
1,500,000 Berkeley County, SC, Water & Sewer Refunding Revenue Bonds, 5.50%
(MBIA INS)/ (Original Issue Yield:
5.55%), 6/1/2013 AAA 1,537,980
1,000,000 Camden, SC Public Utility,
Revenue Refunding Bonds,
5.50% (MBIA INS)/(Original
Issue Yield: 5.80%),
3/1/2022 AAA 1,013,320
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$1,105,000 Charleston County, SC
Airport District, Airport
System Refunding Revenue
Bonds, 4.75% (MBIA INS),
7/1/2015 AAA $ 1,044,424
1,900,000 Charleston, SC,
Certificates of
Participation, 5.00%
(AMBAC INS)/(Original
Issue Yield: 5.39%),
9/1/2015 AAA 1,858,295
1,000,000 Charleston, SC,
Certificates of
Participation, 7.10% (MBIA
INS)/(United States
Treasury PRF), 6/1/2001
(@102) AAA 1,110,450
250,000 Charleston, SC, GO Bonds
(Series A), 6.30%,
9/1/2005 AA 270,968
1,315,000 Charleston, SC, GO UT
Bonds, 9.00% (State Aid
Withholding LOC), 6/1/2001 AA 1,520,771
310,000 Charleston, SC, Resources
Recovery Revenue Bonds
(Series A), 9.00% (Foster
Wheeler Corp.), 1/1/2005 A 320,670
400,000 Charleston, SC, Water &
Sewer Refunding Revenue
Bonds (Series A), 7.05%,
1/1/2006 AA- 406,956
1,000,000 Charleston, SC, Water &
Sewer Refunding Revenue
Bonds, 6.00% (Original
Issue Yield: 6.242%),
1/1/2012 AA- 1,052,440
1,260,000 Charleston, SC, Waterworks
& Sewer Refunding Revenue
Bonds, 5.00% (MBIA INS),
1/1/2022 AAA 1,202,254
875,000 Chester County, SC School
District, GO UT, 6.85%
(United States Treasury
PRF)/(Original Issue
Yield: 6.95%), 2/1/2012 AA 940,441
1,125,000 Chester County, SC School
District, GO UT, 6.85%
(United States Treasury
PRF)/(Original Issue
Yield: 6.90%), 2/1/2000
(@102) AA 1,209,139
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$1,500,000 Columbia, SC Waterworks &
Sewer System, Refunding
Revenue Bonds, 5.70%,
2/1/2010 AA $ 1,620,390
1,000,000 Columbia, SC, Parking
Facilities Refunding
Revenue Bonds, 5.875%
(AMBAC INS)/(Original
Issue Yield: 6.007%),
12/1/2013 AAA 1,057,630
1,065,000 Dorchester County, SC
School District No. 002,
GO UT Bonds, 5.125% (FGIC
INS)/(Original Issue
Yield: 5.25%), 2/1/2012 AAA 1,068,802
1,500,000 Dorchester County, SC
School District No. 002,
GO UT Bonds, 5.20% (FGIC
INS), 2/1/2018 AAA 1,489,140
2,250,000 Dorchester County, SC School District No. 002, GO UT Bonds, 5.20%
(FGIC INS)/(Original Issue
Yield: 5.35%), 2/1/2017 AAA 2,241,180
600,000 Dorchester County, SC
School District No. 002,
GO UT Bonds, 6.65% (MBIA
INS)/(United States
Treasury PRF)/(Original
Issue Yield: 6.85%),
7/1/1999 (@102) AAA 635,472
870,000 Edgefield County, SC School District, GO UT Bonds, 6.40% (FSA
INS)/(Original Issue
Yield: 6.60%), 2/1/2009 AAA 951,693
1,155,000 Fairfield County, SC
School District,
Certificates of
Participation, 5.50%
(Fairfield Primary
Geiger)/ (Asset Guaranty
GTD)/ (Original Issue
Yield: 5.60%), 3/1/2007 AA 1,209,054
2,000,000 Fairfield County, SC, PCR
Bonds, 6.50% (South
Carolina Electric and
Gas), 9/1/2014 A 2,186,300
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$ 500,000 Florence County, SC,
Hospital Revenue Bonds,
6.75% (Mcleod Regional
Medical Center)/(FGIC
INS)/ (Original Issue
Yield: 7.00%), 11/1/2010 AAA $ 538,840
2,805,000 Grand Strand Water &
Sewage Authority, SC, Revenue Refunding Bonds, 6.375% (South
Carolina Waterworks & Sewer System)/(MBIA INS)/ (Original Issue
Yield:
6.508%), 6/1/2012 AAA 3,223,113
800,000 Grand Strand Water &
Sewage Authority, SC,
Waterworks & Sewer System
Revenue Refunding Bonds,
6.00% (MBIA INS)/(Original
Issue Yield: 6.595%),
6/1/2019 AAA 833,568
500,000 Greenville County, SC,
Industrial Revenue Bonds,
7.10% (Lockheed Aeromod
Center Incorporated
Project), 11/1/2011 BBB+ 541,725
5,250,000 Greenville, SC Hospital
System Facilities,
Refunding Revenue Bonds
(Series B), 5.25%
(Original Issue Yield:
6.125%), 5/1/2023 AA 5,134,448
600,000 Greenville, SC Hospital
System Facilities,
Refunding Revenue Bonds,
5.75% (Original Issue
Yield: 5.95%), 5/1/2013 AA 623,088
1,500,000 Greenville, SC Hospital
System Facilities, Revenue
Bonds (Series B), 5.25%
(Original Issue Yield:
6.076%), 5/1/2017 AA 1,478,385
760,000 Greenville, SC Hospital System Facilities, Revenue Bonds, 7.00%
(Greenville Health Corporation)/ (Original Issue Yield:
7.454%), 5/1/2017* AAA 823,665
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$2,000,000 Greenville, SC Waterworks
Revenue, Revenue Bonds,
5.50% (Original Issue
Yield: 5.60%), 2/1/2022 AA $ 2,048,500
1,000,000 Hilton Head Island, SC
Public Facilities Corp.,
Certificates of
Participation, 5.40%
(AMBAC INS)/ (Original
Issue Yield: 5.599%),
3/1/2009 AAA 1,041,310
100,000 Horry County, SC, GO UT Bonds, 7.45% (United States Treasury PRF),
12/1/1988 (@102) A+ 105,414
980,000 Horry County, SC, GO UT Refunding Bonds (Series B), 4.65% (MBIA
INS),
12/1/2005 AAA 990,447
1,960,000 Lancaster County, SC
School District, GO UT,
6.50% (MBIA INS)/(Original
Issue Yield: 6.599%),
7/1/2008 AAA 2,159,724
655,000 Lexington & Richland
Counties, SC School
District No. 005, GO UT
Bonds, 5.05% (MBIA INS),
3/1/2005 AAA 678,691
175,000 Lexington County, SC,
Revenue Bonds (Series C),
8.00% (J.B. White & Co.
Project), 1/1/2011 NR 196,240
2,000,000 Lexington County, SC
Health Services District,
Inc., Refunding Revenue
Bonds, 5.125% (Original
Issue Yield: 5.50%),
11/1/2021 AAA 1,931,740
805,000 Medical University of
South Carolina, Hospital
Facilities Revenue Bonds,
5.25% (MBIA INS)/(Original
Issue Yield: 5.25%),
7/1/2004 AAA 842,811
2,000,000 North Charleston, SC Sewer
District, Refunding
Revenue Bonds (Series A),
6.00% (MBIA INS)/(Original
Issue Yield: 6.593%),
7/1/2018 AAA 2,086,040
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$ 500,000 North Charleston, SC Sewer
District, Revenue Bonds
(Series B), 6.00% (MBIA
INS)/(Original Issue
Yield: 6.593%), 7/1/2018 AAA $ 521,510
1,275,000 Oconee County, SC School
District, GO UT Bonds,
5.10% (MBIA INS)/(Original
Issue Yield: 5.50%),
9/1/2013 AAA 1,275,089
2,500,000 Oconee County, SC, PCR
Refunding Bonds, 5.80%
(Duke Energy Corp.),
4/1/2014 AA- 2,591,925
100,000 Piedmont Municipal Power
Agency, SC, Electricity
Refunding Revenue Bonds
(Series A), 7.40% (AMBAC
INS)/(Original Issue
Yield: 7.483%), 1/1/2018 AAA 102,319
590,000 Piedmont Municipal Power
Agency, SC, Electricity
Refunding Revenue Bonds,
6.85% (FGIC INS), 1/1/2007 AAA 641,643
590,000 Piedmont Municipal Power Agency, SC, Refunding Bonds, 5.50% (MBIA
INS)/ (Original Issue Yield:
5.60%), 1/1/2013 AAA 621,288
970,000 Piedmont Municipal Power Agency, SC, Refunding Revenue Bonds (Series
A), 6.375% (FGIC LOC)/ (Original Issue Yield:
6.45%), 1/1/2006 AAA 1,083,102
410,000 Piedmont Municipal Power
Agency, SC, Refunding
Revenue Bonds, 5.50% (MBIA
INS)/(Original Issue
Yield: 5.60%), 1/1/2013 AAA 431,742
1,000,000 Piedmont Municipal Power
Agency, SC, Refunding
Revenue Bonds, 6.50% (FGIC
INS)/(Original Issue
Yield: 6.88%), 1/1/2011* AAA 1,075,100
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$1,325,000 Richland-Lexington Airport District, Airport & Marina Revenue Bonds,
6.125% (Columbia Metropolitan Airport)/(AMBAC INS)/ (Original Issue
Yield:
6.40%), 1/1/2025 AAA $ 1,387,249
600,000 Richland County, SC
Hospital Facilities,
Revenue Bonds (Series
PG-A), 7.10% (Community
Provider Pooled Loan
Program)/(CGIC INS),
7/1/2005 AAA 663,510
255,000 Richland County, SC
Hospital Facilities,
Revenue Bonds, 8.125% (Sun
Health-
Orangeburg)/(Sumitomo Bank
Ltd., Osaka LOC),
10/1/2011 NR 267,788
1,500,000 Richland County, SC School
District No. 001, GO UT,
4.625%, 3/1/2022 AA 1,364,460
1,050,000 Richland County, SC School
District No. 002, GO UT
Bonds (Series B), 6.75%
(MBIA Insurance
Corporation INS), 3/1/2001 AAA 1,131,984
650,000 Richland County, SC Solid
Waste Disposal Facilities,
Revenue Bonds (Series A),
7.45% (Union Camp Corp.
Project)/(Original Issue
Yield: 7.513%), 4/1/2021 A- 716,671
1,390,000 Richland County, SC, GO UT
Refunding Bonds (Series
B), 6.25% (State Aid
Withholding LOC), 3/1/2001 AA 1,479,738
140,000 Rock Hill, SC Housing
Development Corp., Multi-
Family Refunding Revenue
Bonds, 7.50%, 7/1/2010 NR 151,078
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$1,000,000 South Carolina Job Development Authority, Revenue Bonds, 5.25%
(Anderson Area Medical Center, Inc.)/(MBIA INS)/ (Original Issue
Yield:
5.63%), 2/1/2015 AAA $ 1,002,270
500,000 South Carolina Resources
Authority, Local
Government Program,
Revenue Bonds (Series A),
7.00%, 6/1/2003 A+ 541,700
1,000,000 South Carolina State
Educational Assistance
Authority, Refunding
Revenue Bonds (Series
A-3), 5.80% (Original
Issue Yield: 5.90%),
9/1/2004 AAA 1,052,040
1,000,000 South Carolina State
Educational Assistance
Authority, Refunding
Revenue Bonds (Series B),
5.70% (Original Issue
Yield: 5.75%), 9/1/2005 A 1,044,470
405,000 South Carolina State
Educational Assistance
Authority, Revenue Bonds,
6.50% (Original Issue
Yield: 6.65%), 9/1/2004 AA 430,090
975,000 South Carolina State
Housing Finance &
Development Authority,
Refunding Revenue Bonds
(Series A), 6.15%,
7/1/2008 AA 1,029,483
1,200,000 South Carolina State
Housing Finance &
Development Authority,
Revenue Bonds (Series A),
7.30% (FHA/VA mtgs GTD),
7/1/2011 AA 1,274,652
1,000,000 South Carolina State
Housing Finance &
Development Authority,
Revenue Bonds (Series
A-1), 6.45% (FHA/VA mtgs
GTD), 7/1/2017 NR 1,063,590
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$ 500,000 South Carolina State
Housing Finance &
Development Authority,
Revenue Bonds (Series C),
7.70% (FHA/VA mtgs GTD),
7/1/2011 AA $ 526,320
520,000 South Carolina State
Housing Finance &
Development Authority,
Revenue Bonds (Series C),
7.75% (FHA/VA mtgs GTD),
7/1/2022 AA 550,742
85,000 South Carolina State
Housing Finance &
Development Authority,
Revenue Refunding Bonds
(Series A), 7.50% (FHA/VA
mtgs GTD), 7/1/2011 AA 88,396
1,000,000 South Carolina State Ports Authority, Revenue Bonds, 6.50% (AMBAC
INS)/ (Original Issue Yield:
6.75%), 7/1/2006 AAA 1,078,830
1,000,000 South Carolina State Ports Authority, Revenue Bonds, 6.625% (AMBAC
INS)/ (Original Issue Yield:
6.823%), 7/1/2011 AAA 1,078,090
525,000 South Carolina State Ports Authority, Revenue Bonds, 6.75% (AMBAC
INS)/ (Original Issue Yield:
6.90%), 7/1/2021 AAA 566,690
2,000,000 South Carolina State
Public Service Authority,
Revenue Bond, 5.00% (MBIA
INS)/ (Original Issue
Yield: 5.20%), 1/1/2015 AAA 1,968,320
1,950,000 South Carolina State
Public Service Authority,
Revenue Bonds (Series D),
6.50% (Santee
Cooper)/(AMBAC
INS)/(Original Issue
Yield: 6.553%), 7/1/2014 AAA 2,160,308
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$1,000,000 South Carolina State
Public Service Authority,
Revenue Refunding Bonds,
5.00% (Original Issue
Yield: 5.30%), 1/1/2018 AAA $ 967,940
4,500,000 South Carolina State, GO
UT Revenue Bonds (Series
A), 5.00% (Original Issue
Yield: 5.45%), 3/1/2008 AAA 4,627,305
590,000 South Carolina State,
State Capital Improvement
(Series B), 5.75%,
8/1/2000 AAA 616,060
1,500,000 Spartanburg County, SC Health Services District, Inc., Refunding
Revenue Bonds, 5.50% (AMBAC INS)/ (Original Issue Yield:
5.70%), 4/15/2015 AAA 1,537,455
1,500,000 Spartanburg County, SC
Health Services District,
Inc., Revenue Bonds, 5.50%
(MBIA INS)/(Original Issue
Yield: 6.00%), 4/15/2027 AAA 1,515,075
1,000,000 Spartanburg County, SC
Hospital Facilities,
Revenue Refunding Bonds,
6.55% (Spartanburg General
Hospital System)/(FSA
INS), 4/15/2010 AAA 1,087,480
200,000 Spartanburg County, SC
Hospital Facilities,
Revenue Refunding Bonds,
7.80% (Mary Black Memorial
Project)/(United States
Treasury PRF)/(Original
Issue Yield: 7.80%),
10/1/2000 NR 210,184
100,000 Spartanburg County, SC
Hospital Facilities,
Revenue Refunding Bonds,
8.25% (Mary Black Memorial
Project)/(United States
Treasury PRF), 10/1/2008 NR 105,455
450,000 Spartanburg, SC Leased
Housing Corp., Refunding
Revenue Bonds, 7.50%,
10/1/2011 NR 485,712
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$1,000,000 Spartanburg, SC,
Waterworks Revenue
Refunding Bonds, 5.00%
(FGIC INS), 6/1/2027 AAA $ 959,800
1,000,000 Sumter County, SC Hospital
Facilities, Revenue
Refunding Bonds, 6.625%
(Tuomey Regional Medical
Center)/ (MBIA
INS)/(Original Issue
Yield: 6.98%), 11/15/2004 AAA 1,129,640
1,000,000 University South Carolina,
Parking Facilities
Refunding Revenue Bonds,
5.00% (MBIA INS)/(Original
Issue Yield: 5.40%),
5/1/2015 AAA 983,970
1,465,000 University of South
Carolina, Revenue Bonds,
5.70% (MBIA INS), 6/1/2020 AAA 1,517,169
1,300,000 Western Carolina Regional
Sewer Authority, SC, Sewer
System Revenue Bonds,
5.50% (FGIC INS)/(Original
Issue Yield: 5.627%),
3/1/2010 AAA 1,345,448
<CAPTION>
Principal
Amount Credit
or Shares Rating* Value
- ------------------------------------------------------------
<C> <S> <C> <C>
Long-Term Municipals--continued
SOUTH CAROLINA--CONTINUED
$1,000,000 York County, SC, GO UT
Refunding Bonds, 4.90%
(AMBAC INS)/(Original
Issue Yield: 5.10%),
6/1/2010 AAA $ 994,450
------------
Total Long-Term
Municipals
(identified cost
$100,416,365) 106,205,767
------------
Open-Ended Investment Companies--0.4%
128,472 AIM Global Management S/T
Investments 128,472
229,906 Dreyfus Tax Exempt 229,906
81,320 Fidelity Tax Exempt Money
Market 81,320
------------
Total Open-Ended
Investment Companies
(at net asset value) 439,698
------------
Total Investments
(identified cost
$100,856,063) $106,645,465
------------
</TABLE>
(See Notes to Portfolios of Investments)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES TO PORTFOLIOS OF INVESTMENTS
* Please refer to the Appendix of the Statement of Additional Information for
an an explanation of the credit ratings. Current credit ratings are
unaudited.
(a) The repurchase agreements are fully collateralized by U.S. Government
and/or agency obligations based on market prices at the date of the
portfolio.
(b) Non-income producing.
(c) Current rate and next demand date shown.
(d) Represents securities held as collateral within a margin account, used to
ensure the Fund is able to satisfy the obligations of its outstanding long
futures contracts.
(e) Denotes a restricted security which is subject to restrictions on resale
under federal securities laws. At November 30, 1997, Emerging Markets Fund
held restricted securities amounting to $6,372,239, which represents 23.18%
of net assets.
The following abbreviations are used in these portfolios:
ADR-- American Depositary Receipt AMBAC-- American Municipal Bond Assurance
Corporation AMT-- Alternative Minimum Tax CGIC-- Capital Guaranty Insurance
Corporation COL-- Collateralized FGIC-- Financial Guaranty Insurance Company
FHA-- Federal Housing Administration FHA/VA-- Federal Housing Administration/
Veterans Administration FSA-- Financial Security Assurance GDR-- Global
Depositary Receipt GO-- General Obligation GTD-- Guaranteed HFA-- Housing
Finance Authority IFA-- Industrial Finance Authority INS-- Insured LOC-- Letter
of Credit LP--Limited Partnership LT-- Limited Tax LTD-- Limited MBIA--
Municipal Bond Investors Assurance MTN-- Medium Term Note PCFA-- Pollution
Control Finance Authority PCR-- Pollution Control Revenue PLC-- Public Limited
Company PO-- Principal Only PRF-- Prerefunded REMIC-- Real Estate Mortgage
Investment Conduit SA-- Support Agreement SFM-- Single Family Mortgage UT--
Unlimited Tax VA-- Veterans Administration VRDNs-- Variable Rate Demand Notes
<TABLE>
<CAPTION>
Net
Unrealized Gross Gross
Cost of Appreciation/ Unrealized Unrealized
Investments (Depreciation) Appreciation Depreciation
for Federal for Federal for Federal for Federal Total Net
Fund Tax Purposes Tax Purposes Tax Purposes Tax Purposes Assets**
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Equity Fund $ 164,122,779 $ 36,159,626 $ 38,084,752 $ 1,925,126 $ 199,179,467
Quantitative Equity Fund 151,999,188 73,545,560 75,004,055 1,458,495 224,990,860
Equity Index Fund 168,182,766 131,825,131 134,547,498 2,722,367 298,765,974
Special Values Fund 101,060,656 22,399,708 25,509,115 3,109,407 122,266,313
Emerging Markets Fund 151,482,151 (1,477,569) 23,992,639 25,470,208 147,696,162
Balanced Fund 271,653,342 43,314,373 45,110,525 1,796,152 306,967,481
Fixed Income Fund 191,628,275 2,114,155 2,642,503 528,348 195,577,462
Short-Term Fixed Income Fund 96,320,545 175,892 238,705 62,813 98,296,420
Georgia Municipal Bond Fund 17,866,745 743,413 743,413 0 18,838,907
North Carolina Municipal Bond Fund 52,785,170 2,178,711 2,178,711 0 55,667,327
South Carolina Municipal Bond Fund 100,856,043 5,789,402 5,799,453 10,051 108,576,910
</TABLE>
** The categories of investments are shown as a percentage of net assets at
November 30, 1997.
At November 30, 1997, the following Funds had investments that were subject to
alternative minimum tax:
<TABLE>
<CAPTION>
Percentage of total market value
Fund subject to alternative minimum tax
---- ----------------------------------
<S> <C>
Georgia Municipal Bond Fund 8.24%
North Carolina Municipal Bond Fund 2.65%
South Carolina Municipal Bond Fund 11.05%
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Wachovia Wachovia Wachovia
Wachovia Quantitative Wachovia Special Emerging Wachovia
Equity Equity Equity Values Markets Balanced
Fund Fund Index Fund Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets:
Investments in securities, at value $200,282,405 $225,544,748 $300,007,897 $100,965,301 $150,004,582 $314,967,715
Investments in repurchase agreements -- -- -- 22,495,063 -- --
Cash 167,426 -- 779 -- -- --
Income receivable 229,083 345,995 516,685 178,742 157,114 1,883,201
Receivable for investments sold 214,799 -- -- -- 2,616,237 1,177,927
Receivable for shares sold 546,048 2,441,029 5,664,522 1,070,392 48,925 1,399,578
Receivable for foreign currency sold -- -- 843 -- -- --
Receivable for daily variation margin -- -- 2,936 -- -- 68,840
Deferred expenses 1,557 7,435 3,860 471 19,696 5,625
------------ ------------ ------------ ------------ ------------ ------------
Total assets 201,441,318 228,339,207 306,197,522 124,709,969 152,846,554 319,502,886
------------ ------------ ------------ ------------ ------------ ------------
Liabilities:
Payable for investments purchased 298,546 -- 214,607 55,000 3,505,152 433,938
Payable for shares redeemed 1,881,084 3,261,357 7,121,584 2,298,738 190,568 5,809,250
Income distribution payable -- -- 9,716 -- -- --
Payable to Bank -- 9,500 -- 25,848 1,279,240 50,023
Payable for taxes withheld -- -- -- -- 14,479 --
Payable for dollar roll transactions -- -- -- -- -- 6,147,200
Payable for daily variation margin 2,825 2,700 3,210 -- -- 3,461
Payable for foreign currency purchased -- -- 843 -- -- --
Accrued expenses 79,396 74,790 81,588 64,070 160,953 91,533
------------ ------------ ------------ ------------ ------------ ------------
Total liabilities 2,261,851 3,348,347 7,431,548 2,443,656 5,150,392 12,535,405
------------ ------------ ------------ ------------ ------------ ------------
Net Assets Consist of:
Paid in capital 140,919,003 130,233,742 160,007,162 87,506,983 151,014,261 241,081,997
Net unrealized appreciation (depreciation)
of investments, futures contracts, and
translation of assets and liabilities in
foreign currency 37,254,509 74,248,262 132,396,423 22,417,658 (1,496,159) 44,095,589
Accumulated net realized gain (loss) on
investments, futures, and foreign currency
transactions 20,866,044 20,174,710 5,803,756 11,603,810 (3,438,850) 20,300,768
Undistributed net investment income 139,911 334,146 558,633 737,862 1,616,910 1,489,127
------------ ------------ ------------ ------------ ------------ ------------
Total Net Assets $199,179,467 $224,990,860 $298,765,974 $122,266,313 $147,696,162 $306,967,481
------------ ------------ ------------ ------------ ------------ ------------
Net Assets
Class A Shares $ 39,493,574 $ 35,408,904 $ 50,915,082 $ 37,765,754 $ 7,995,785 $ 50,968,137
------------ ------------ ------------ ------------ ------------ ------------
Class B Shares $ 3,448,020 $ 6,563,769 $ -- $ -- $ -- $ 5,916,216
------------ ------------ ------------ ------------ ------------ ------------
Class Y Shares $156,237,873 $183,018,187 $247,850,892 $ 84,500,559 $139,700,377 $250,083,128
------------ ------------ ------------ ------------ ------------ ------------
Shares Outstanding
Class A Shares 2,566,787 1,863,738 2,695,619 2,026,216 718,728 3,844,910
Class B Shares 224,652 346,358 -- -- -- 447,025
Class Y Shares 10,149,940 9,631,236 13,107,447 4,526,418 12,552,477 18,854,954
------------ ------------ ------------ ------------ ------------ ------------
Total Shares Outstanding 12,941,379 11,841,332 15,803,066 6,552,634 13,271,205 23,146,889
------------ ------------ ------------ ------------ ------------ ------------
Net Asset Value Per Share
Class A Shares $ 15.39 $ 19.00 $ 18.89 $ 18.64 $ 11.12 $ 13.26
------------ ------------ ------------ ------------ ------------ ------------
Class B Shares $ 15.35 $ 18.95 -- -- -- $ 13.23
------------ ------------ ------------ ------------ ------------ ------------
Class Y Shares $ 15.39 $ 19.00 $ 18.91 $ 18.67 $ 11.13 $ 13.26
------------ ------------ ------------ ------------ ------------ ------------
Offering Price Per Share*
Class A Shares $ 16.12** $ 19.90** $ 19.78** $ 19.52** $ 11.64** $ 13.88**
------------ ------------ ------------ ------------ ------------ ------------
Class B Shares $ 15.35 $ 18.95 -- -- -- $ 13.23
------------ ------------ ------------ ------------ ------------ ------------
Class Y Shares $ 15.39 $ 19.00 $ 18.91 $ 18.67 $ 11.13 $ 13.26
------------ ------------ ------------ ------------ ------------ ------------
Redemption Proceeds Per Share*
Class A Shares $ 15.39 $ 19.00 $ 18.89 $ 18.64 $ 11.12 $ 13.26
------------ ------------ ------------ ------------ ------------ ------------
Class B Shares $ 14.58*** $ 18.00*** -- -- -- $12.57****
------------ ------------ ------------ ------------ ------------ ------------
Class Y Shares $ 15.39 $ 19.00 $ 18.91 $ 18.67 $ 11.13 $ 13.26
------------ ------------ ------------ ------------ ------------ ------------
Investments, at identified cost $163,766,232 $151,999,188 $168,130,159 $101,042,706 $151,355,142 $271,432,287
------------ ------------ ------------ ------------ ------------ ------------
Investments, at tax cost $164,122,779 $151,999,188 $168,182,766 $101,060,656 $151,482,151 $271,653,342
------------ ------------ ------------ ------------ ------------ ------------
</TABLE>
* See "What Shares Cost" in the Prospectus.
** Computation of Offering Price: 100+95.50 of net asset value.
*** Computation of Offering Price: 100+97.50 of net asset value.
**** Computation of Redemption Proceeds: 95+100 of net asset value.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
STATEMENTS OF ASSETS AND LIABILITIES--CONTINUED
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Wachovia Wachovia Wachovia
Wachovia Short-Term Wachovia North South
Fixed Fixed Georgia Carolina Carolina
Income Income Municipal Municipal Municipal
Fund Fund Bond Fund Bond Fund Bond Fund
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in securities, at value $193,742,430 $96,496,437 $18,610,158 $54,963,881 $106,645,465
Cash -- 100,544 56 -- --
Income receivable 2,650,211 1,695,230 280,309 763,733 1,871,996
Receivable for investments sold -- -- -- -- --
Receivable for shares sold 1,923,047 1,747,467 8,093 134,423 477,909
Receivable for foreign currency sold -- -- -- -- --
Receivable for daily variation margin -- -- -- -- --
Deferred expenses 3,466 3,833 7,736 9,903 --
------------ ----------- ----------- ----------- ------------
Total assets 198,319,154 100,043,511 18,906,352 55,871,940 108,995,370
------------ ----------- ----------- ----------- ------------
Liabilities:
Payable for investments purchased -- -- -- -- --
Payable for shares redeemed 2,609,620 1,693,607 -- -- 101,543
Income distribution payable -- -- 39,089 144,873 256,472
Payable to Bank 72,873 -- -- -- --
Payable for taxes withheld -- -- -- -- --
Payable for dollar roll transactions -- -- -- -- --
Payable for daily variation margin -- -- -- -- --
Payable for foreign currency purchased -- -- -- -- --
Accrued expenses 59,199 53,484 28,356 59,740 60,445
------------ ----------- ----------- ----------- ------------
Total liabilities 2,741,692 1,747,091 67,445 204,613 418,460
------------ ----------- ----------- ----------- ------------
Net Assets Consist of:
Paid in capital 196,146,396 101,768,561 18,089,650 53,457,381 102,777,077
Net unrealized appreciation (depreciation) of
investments, futures contracts, and translation of
assets and liabilities in foreign currency 2,117,142 175,892 757,483 2,190,181 5,789,402
Accumulated net realized gain (loss) on investments,
futures, and foreign currency transactions (2,941,199) (4,087,885) (8,226) 8,497 10,431
Undistributed net investment income 255,123 439,852 -- 11,268 --
------------ ----------- ----------- ----------- ------------
Total Net Assets $195,577,462 $98,296,420 $18,838,907 $55,667,327 $108,576,910
------------ ----------- ----------- ----------- ------------
Net Assets
Class A Shares $ 10,039,081 $ 7,233,065 $ 6,530,770 $11,586,629 $ 64,695,929
------------ ----------- ----------- ----------- ------------
Class B Shares $ 139,982 $ -- $ -- $ -- $ --
------------ ----------- ----------- ----------- ------------
Class Y Shares $185,398,399 $91,063,355 $12,308,137 $44,080,698 $ 43,880,981
------------ ----------- ----------- ----------- ------------
Shares Outstanding
Class A Shares 1,019,583 740,426 587,886 1,038,756 5,816,382
Class B Shares 14,221 -- -- -- --
Class Y Shares 18,829,643 9,322,019 1,107,977 3,951,904 3,944,866
------------ ----------- ----------- ----------- ------------
Total Shares Outstanding 19,863,447 10,062,445 1,695,863 4,990,660 9,761,248
------------ ----------- ----------- ----------- ------------
Net Asset Value Per Share
Class A Shares $ 9.85 $ 9.77 $ 11.11 $ 11.15 $ 11.12
------------ ----------- ----------- ----------- ------------
Class B Shares $ 9.84 -- -- -- --
------------ ----------- ----------- ----------- ------------
Class Y Shares $ 9.85 $ 9.77 $ 11.11 $ 11.15 $ 11.12
------------ ----------- ----------- ----------- ------------
Offering Price Per Share*
Class A Shares $ 10.31** $ 10.02*** $ 11.63** $ 11.68** $ 11.64**
------------ ----------- ----------- ----------- ------------
Class B Shares $ 9.84 -- -- -- --
------------ ----------- ----------- ----------- ------------
Class Y Shares $ 9.85 $ 9.77 $ 11.11 $ 11.15 $ 11.12
------------ ----------- ----------- ----------- ------------
Redemption Proceeds Per Share*
Class A Shares $ 9.85 $ 9.77 $ 11.11 $ 11.15 $ 11.12
------------ ----------- ----------- ----------- ------------
Class B Shares $ 9.35*** -- -- -- --
------------ ----------- ----------- ----------- ------------
Class Y Shares $ 9.85 $ 9.77 $ 11.11 $ 11.15 $ 11.12
------------ ----------- ----------- ----------- ------------
Investments, at identified cost $191,625,288 $96,320,545 $17,852,675 $52,773,700 $100,856,063
------------ ----------- ----------- ----------- ------------
Investments, at tax cost $191,628,275 $96,320,545 $17,866,745 $52,785,170 $100,856,063
------------ ----------- ----------- ----------- ------------
</TABLE>
* See "What Shares Cost" in the Prospectus.
** Computation of Offering Price: 100+95.50 of net asset value.
*** Computation of Offering Price: 100+97.50 of net asset value.
**** Computation of Redemption Proceeds: 95+100 of net asset value.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
STATEMENTS OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Wachovia Wachovia
Wachovia Wachovia Wachovia Special Emerging Wachovia
Equity Quantitative Equity Values Markets Balanced
Fund Equity Fund Index Fund Fund Fund Fund
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ 2,253,490 $ 3,447,703 $ 4,316,514 $ 1,291,324 $ 2,759,645 $ 2,244,900
Interest 1,407,088 806,563 1,579,176 631,427 578,212 8,483,184
----------- ----------- ----------- ----------- ----------- -----------
Total income 3,660,578 4,254,266 5,895,690 1,922,751 3,337,857 10,728,084
----------- ----------- ----------- ----------- ----------- -----------
Expenses:
Investment advisory fee 1,230,414 1,345,445 808,170 766,650 1,604,745 1,986,263
Administrative personnel and services fee 147,147 160,933 225,519 80,170 134,379 237,616
Custodian fees 35,155 38,441 52,637 19,166 482,734 55,053
Transfer and dividend disbursing agent fees and
expenses 116,152 113,230 86,193 89,699 102,110 104,068
Trustees' fees 7,047 5,418 7,578 3,211 5,914 13,124
Auditing fees 15,000 15,013 14,913 9,564 15,000 14,858
Legal fees 5,961 4,992 8,352 4,104 14,540 12,938
Portfolio accounting fees 83,840 80,421 65,964 50,188 67,383 102,930
Distribution services fee--Class B Shares 16,418 25,574 -- -- -- 28,954
Shareholder services fee--Class A Shares 62,655 54,409 67,684 44,077 17,112 66,011
Shareholder services fee--Class B Shares 5,473 8,525 -- -- -- 9,652
Share registration costs 34,758 32,071 43,752 33,951 30,459 51,767
Printing and postage 4,402 4,120 3,457 3,947 5,324 5,441
Insurance premiums 3,934 5,072 1,019 2,739 2,983 3,678
Miscellaneous 17,775 13,445 13,032 15,290 11,580 16,936
----------- ----------- ----------- ----------- ----------- -----------
Total expenses 1,786,131 1,907,109 1,398,270 1,122,756 2,494,263 2,709,289
----------- ----------- ----------- ----------- ----------- -----------
Waivers and reimbursements--
Waiver of investment advisory fee (119,625) (146,406) (61,816) (15,052) -- (446,571)
Reimbursement of other operating expenses -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total waivers and reimbursements (119,625) (146,406) (61,816) (15,052) -- (446,571)
----------- ----------- ----------- ----------- ----------- -----------
Net expenses 1,666,506 1,760,703 1,336,454 1,107,704 2,494,263 2,262,718
----------- ----------- ----------- ----------- ----------- -----------
Net investment income 1,994,072 2,493,563 4,559,236 815,047 843,594 8,465,366
----------- ----------- ----------- ----------- ----------- -----------
Realized and Unrealized Gain (Loss) on
Investments:
Net realized gain (loss) on investments, futures
contracts and foreign currency transactions 21,611,578 21,181,733 9,330,534 11,566,029 (2,010,173) 21,825,742
Net change in unrealized appreciation
(depreciation) of investments, futures contracts
and translation of assets and liabilities in
foreign currency 8,827,358 25,902,907 52,679,625 14,611,780 (6,335,506) 10,777,276
----------- ----------- ----------- ----------- ----------- -----------
Net realized and unrealized gain (loss) on
investments, futures contracts and foreign
currency 30,438,936 47,084,640 62,010,159 26,177,809 (8,345,679) 32,603,018
----------- ----------- ----------- ----------- ----------- -----------
Change in net assets resulting from
operations $32,433,008 $49,578,203 $66,569,395 $26,992,856 $(7,502,085) $41,068,384
----------- ----------- ----------- ----------- ----------- -----------
Foreign taxes withheld from dividends $ -- $ -- $ -- $ -- $ 229,433 $ --
----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
STATEMENTS OF OPERATIONS--CONTINUED
YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Wachovia Wachovia Wachovia
Wachovia Short-Term Wachovia North South
Fixed Fixed Georgia Carolina Carolina
Income Income Municipal Municipal Municipal
Fund Fund Bond Fund Bond Fund Bond Fund
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ 140,117 $ 37,059 $ -- $ -- $ --
Interest 12,370,498 7,168,238 782,849 2,438,907 5,724,914
----------- ---------- --------- ---------- ----------
Total income 12,510,615 7,205,297 782,849 2,438,907 5,724,914
----------- ---------- --------- ---------- ----------
Expenses:
Investment advisory fee 1,123,245 632,994 113,578 365,397 767,628
Administrative personnel and services fee 156,900 96,093 12,683 40,794 85,740
Custodian fees 37,446 23,018 3,029 9,744 20,470
Transfer and dividend disbursing agent fees and expenses 89,117 52,061 51,907 59,285 89,291
Trustees' fees 6,722 4,865 674 763 5,314
Auditing fees 15,013 15,058 13,486 14,267 10,740
Legal fees 7,771 6,658 690 3,885 6,857
Portfolio accounting fees 90,792 59,221 63,432 73,714 69,125
Distribution services fee--Class B Shares 919 -- -- -- --
Shareholder services fee--Class A Shares 13,137 6,504 15,543 27,427 144,641
Shareholder services fee--Class B Shares 306 -- -- -- --
Share registration costs 40,046 39,064 29,493 36,333 20,581
Printing and postage 5,607 4,699 5,335 8,279 3,015
Insurance premiums 2,139 1,757 1,088 1,324 2,117
Miscellaneous 16,008 14,263 7,976 8,675 1,890
----------- ---------- --------- ---------- ----------
Total expenses 1,605,168 956,255 318,914 649,887 1,227,409
----------- ---------- --------- ---------- ----------
Waivers and reimbursements--
Waiver of investment advisory fee (205,339) (224,696) (113,578) (208,414) (489,271)
Reimbursement of other operating expenses -- -- (50,501) -- --
----------- ---------- --------- ---------- ----------
Total waivers and reimbursements (205,339) (224,696) (164,079) (208,414) (489,271)
----------- ---------- --------- ---------- ----------
Net expenses 1,399,829 731,559 (154,835) 441,473 738,138
----------- ---------- --------- ---------- ----------
Net investment income 11,110,786 6,473,738 628,014 1,997,434 4,986,776
----------- ---------- --------- ---------- ----------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) on investments, futures contracts
and foreign currency transactions 401,138 (47,627) (8,085) 10,685 10,650
Net change in unrealized appreciation (depreciation) of
investments, futures contracts and translation of assets
and liabilities in foreign currency 187,933 (466,786) 206,101 796,079 1,147,316
----------- ---------- --------- ---------- ----------
Net realized and unrealized gain (loss) on investments,
futures contracts and foreign currency 589,071 (514,413) 198,016 806,764 1,157,966
----------- ---------- --------- ---------- ----------
Change in net assets resulting from operations $11,699,857 $5,959,325 $ 826,030 $2,804,198 $6,144,742
----------- ---------- --------- ---------- ----------
Foreign taxes withheld from dividends $ -- $ -- $ -- $ -- $ --
----------- ---------- --------- ---------- ----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Wachovia Wachovia Wachovia
Equity Fund Quantitative Equity Fund Equity Index Fund
--------------------------- --------------------------- ---------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
November 30, November 30, November 30, November 30, November 30, November 30,
1997 1996 1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations--
Net investment income $ 1,994,072 $ 2,201,687 $ 2,493,563 $ 2,254,916 $ 4,559,236 $ 4,454,110
Net realized gain (loss) on
investments, futures contracts and
foreign currency transactions 21,611,578 19,131,328 21,181,733 7,530,844 9,330,534 10,769,067
Net change in unrealized appreciation
(depreciation) of investments,
futures contracts and translation of
assets and liabilities in foreign
currency 8,827,358 10,638,899 25,902,907 21,813,876 52,679,625 35,375,170
------------ ------------- ------------ ------------- ------------ -------------
Change in net assets resulting from
operations 32,433,008 31,971,914 49,578,203 31,599,636 66,569,395 50,598,347
------------ ------------- ------------ ------------- ------------ -------------
Distributions to Shareholders--
Distributions from net investment
income
Class A Shares (232,040) (2,069,120) (252,900) (1,630,989) (407,720) (3,509,012)
Class B Shares (4,850) (554) (14,224) (1,415) -- --
Class Y Shares (1,617,271) (317,016) (2,258,523) (496,978) (4,327,003) (993,850)
Distributions from net realized gain on
investments, futures contracts and
foreign currency
Class A Shares (2,671,987) (7,457,396) (807,333) (2,223,749) (1,056,751) (10,955,920)
Class B Shares (136,882) -- (76,012) -- -- --
Class Y Shares (16,595,269) -- (7,488,144) -- (12,242,705) --
------------ ------------- ------------ ------------- ------------ -------------
Change in net assets from
distributions to shareholders (21,258,299) (9,844,086) (10,897,136) (4,353,131) (18,034,179) (15,458,782)
------------ ------------- ------------ ------------- ------------ -------------
Share Transactions--
Proceeds from sale of shares 69,940,131 189,693,742 41,943,131 174,821,403 91,500,545 262,739,184
Net asset value of shares issued to
shareholders in payment of dividends
declared 16,317,548 8,245,418 10,021,886 4,130,882 17,882,140 15,191,415
Cost of shares redeemed (49,207,949) (199,262,124) (35,382,919) (158,365,608) (91,139,571) (267,923,924)
------------ ------------- ------------ ------------- ------------ -------------
Change in net assets from share
transactions 37,049,730 (1,322,964) 16,582,098 20,586,677 18,243,114 10,006,675
------------ ------------- ------------ ------------- ------------ -------------
Change in net assets 48,224,439 20,804,864 55,263,165 47,833,182 66,778,330 45,146,240
Net Assets:
Beginning of period 150,955,028 130,150,164 169,727,695 121,894,513 231,987,644 186,841,404
------------ ------------- ------------ ------------- ------------ -------------
End of period $199,179,467 $ 150,955,028 $224,990,860 $ 169,727,695 $298,765,974 $ 231,987,644
------------ ------------- ------------ ------------- ------------ -------------
Undistributed net investment income
included in net assets at end of period $ 139,911 -- $ 334,146 $ 366,230 $ 558,633 $ 734,120
------------ ------------- ------------ ------------- ------------ -------------
Net gain (loss) as computed for federal
tax purposes $ 21,969,527 $ 19,406,213 $ 20,877,543 $ 8,371,356 $ 6,555,110 $ 13,269,519
------------ ------------- ------------ ------------- ------------ -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS--CONTINUED
<TABLE>
<CAPTION>
Wachovia Wachovia Wachovia
Special Values Fund Emerging Markets Fund Balanced Fund
-------------------------- --------------------------- ---------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
November 30, November 30, November 30, November 30, November 30, November 30,
1997 1996 1997 1996 1997 1996
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations--
Net investment income $ 815,047 $ 278,972 $ 843,594 $ 714,746 $ 8,465,366 $ 6,828,442
Net realized gain (loss) on
investments, futures contracts
and foreign currency transactions 11,566,029 6,976,279 (2,010,173) 61,826 21,825,742 27,473,989
Net change in unrealized
appreciation (depreciation) of
investments, futures contracts
and translation of assets and
liabilities in foreign currency 14,611,780 5,819,755 (6,335,506) 7,809,461 10,777,276 5,189,140
------------ ------------ ------------ ------------- ------------ -------------
Change in net assets resulting
from operations 26,992,856 13,075,006 (7,502,085) 8,586,033 41,068,384 39,491,571
------------ ------------ ------------ ------------- ------------ -------------
Distributions to Shareholders--
Distributions from net investment
income
Class A Shares (37,238) (159,350) (48,643) (220,244) (672,386) (5,630,367)
Class B Shares -- -- -- -- (71,302) (2,544)
Class Y Shares (307,189) -- (1,158,562) -- (7,260,971) (1,430,793)
Distributions from net realized
gain on investments, futures
contracts and foreign currency
Class A Shares (749,987) (1,814,204) (1,807) -- (2,073,561) (5,927,062)
Class B Shares -- -- -- -- (233,429) --
Class Y Shares (6,186,789) -- (43,032) -- (25,776,332) --
------------ ------------ ------------ ------------- ------------ -------------
Change in net assets from
distributions to shareholders (7,281,203) (1,973,554) (1,252,044) (220,244) (36,087,981) (12,990,766)
------------ ------------ ------------ ------------- ------------ -------------
Share Transactions--
Proceeds from sale of shares 60,929,497 84,294,300 46,209,018 170,757,238 93,790,901 287,699,284
Net asset value of shares issued to
shareholders in payment of
dividends declared 4,550,589 1,868,520 366,510 99,884 33,640,055 12,337,554
Cost of shares redeemed (28,264,108) (56,018,664) (18,648,451) (121,975,580) (81,676,189) (277,726,827)
------------ ------------ ------------ ------------- ------------ -------------
Change in net assets from share
transactions 37,215,978 30,144,156 27,927,077 48,881,542 45,754,767 22,310,011
------------ ------------ ------------ ------------- ------------ -------------
Change in net assets 56,927,631 41,245,608 19,172,948 57,247,331 50,735,170 48,810,816
Net Assets:
Beginning of period 65,338,682 24,093,074 128,523,214 71,275,883 256,232,311 207,421,495
------------ ------------ ------------ ------------- ------------ -------------
End of period $122,266,313 $65,338,682 $147,696,162 $ 128,523,214 $306,967,481 $ 256,232,311
------------ ------------ ------------ ------------- ------------ -------------
Undistributed net investment income
included in net assets at end of
period $ 737,862 $ 267,242 $ 1,616,910 $ 1,478,908 $ 1,489,127 $ 1,028,420
------------ ------------ ------------ ------------- ------------ -------------
Net gain (loss) as computed for
federal tax purposes $ 11,599,442 $6,991,741 $ (3,405,307) $ 269,156 $ 21,079,435 $ 28,082,552
------------ ------------ ------------ ------------- ------------ -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS--CONTINUED
<TABLE>
<CAPTION>
Wachovia Wachovia
Wachovia Short-Term Fixed Income Georgia Municipal Bond
Fixed Income Fund Fund Fund
--------------------------- --------------------------- --------------------------
Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
November 30, November 30, November 30, November 30, November 30, November 30,
1997 1996 1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations--
Net investment income $ 11,110,786 $ 10,631,415 $ 6,473,738 $ 6,549,285 $ 628,014 $ 495,030
Net realized gain (loss) on investments 401,138 1,687,779 (47,627) (495,516) (8,085) 31,331
Net change in unrealized appreciation
(depreciation) of investments 187,933 (2,913,248) (466,786) (187,582) 206,101 79,327
------------ ------------- ------------ ------------- ------------ ------------
Change in net assets resulting from
operations 11,699,857 9,405,946 5,959,325 5,866,187 826,030 605,688
------------ ------------- ------------ ------------- ------------ ------------
Distributions to Shareholders--
Distributions from net investment income
Class A Shares (322,564) (8,570,109) (146,241) (5,949,042) (276,085) (484,412)
Class B Shares (6,034) (1,660) -- -- -- --
Class Y Shares (10,855,582) (2,030,423) (6,039,048) (1,398,673) (351,929) (10,618)
Distributions from net realized gain on
investments
Class A Shares -- -- -- -- (16,530) (11,785)
Class B Shares -- -- -- -- -- --
Class Y Shares -- -- -- -- (14,820) --
------------ ------------- ------------ ------------- ------------ ------------
Change in net assets from
distributions to shareholders (11,184,180) (10,602,192) (6,185,289) (7,347,715) (659,364) (506,815)
------------ ------------- ------------ ------------- ------------ ------------
Share Transactions--
Proceeds from sale of shares 69,384,069 247,240,013 25,140,979 137,936,967 7,467,225 12,804,228
Net asset value of shares issued to
shareholders in payment of
distributions declared 7,430,398 8,147,703 5,994,718 7,199,936 279,914 298,680
Cost of shares redeemed (62,554,695) (243,235,068) (50,426,221) (150,562,107) (3,408,420) (9,088,233)
------------ ------------- ------------ ------------- ------------ ------------
Change in net assets from share
transactions 14,259,772 12,152,648 (19,290,524) (5,425,204) 4,338,719 4,014,675
------------ ------------- ------------ ------------- ------------ ------------
Change in net assets 14,775,449 10,956,402 (19,516,488) (6,906,732) 4,505,385 4,113,548
Net Assets:
Beginning of period 180,802,013 169,845,611 117,812,908 124,719,640 14,333,522 10,219,974
------------ ------------- ------------ ------------- ------------ ------------
End of period $195,577,462 $ 180,802,013 $ 98,296,420 $ 117,812,908 $18,838,907 $14,333,522
------------ ------------- ------------ ------------- ------------ ------------
Undistributed net investment income
included in net assets at end of period $ 255,123 $ 328,517 $ 439,852 $ 150,693 -- --
------------ ------------- ------------ ------------- ------------ ------------
Net gain (loss) as computed for federal
tax purposes $ 264,995 $ 1,803,528 $ (86,270) $ (467,185) $ 5,985 $ 31,331
------------ ------------- ------------ ------------- ------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
STATEMENTS OF CHANGES IN NET ASSETS--CONTINUED
<TABLE>
<CAPTION>
Wachovia Wachovia
North Carolina Municipal South Carolina Municipal
Bond Fund Bond Fund
-------------------------- --------------------------
Year Year Year Year
Ended Ended Ended Ended
November 30, November 30, November 30, November 30,
1997 1996 1997 1996
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets
Operations--
Net investment income $1,997,434 $1,188,362 $ 4,986,776 $ 5,055,130
Net realized gain (loss) on investments 10,685 86,649 10,650 403,809
Net change in unrealized appreciation (depreciation) of investments 796,079 607,688 1,147,316 (118,760)
------------ ------------ ------------ ------------
Change in net assets resulting from operations 2,804,198 1,882,699 6,144,742 5,340,179
------------ ------------ ------------ ------------
Distributions to Shareholders--
Distributions from net investment income
Class A Shares (473,828) (1,149,617) (3,029,296) (4,983,121)
Class B Shares -- -- -- --
Class Y Shares (1,512,338) (38,745) (1,957,480) (72,009)
Distributions from net realized gain on investments
Class A Shares (28,618) (91,423) (255,495) (300,151)
Class B Shares -- -- -- --
Class Y Shares (60,175) -- (148,165) --
------------ ------------ ------------ ------------
Change in net assets from distributions to shareholders (2,074,959) (1,279,785) (5,390,436) (5,355,281)
------------ ------------ ------------ ------------
Share Transactions--
Proceeds from sale of shares 20,407,274 51,438,806 20,124,701 58,383,436
Net asset value of shares issued to shareholders in payment of
distributions declared 523,177 580,018 2,257,902 2,158,700
Cost of shares redeemed (8,027,587) (29,265,298) (17,051,285) (51,760,595)
------------ ------------ ------------ ------------
Change in net assets from share transactions 12,902,864 22,753,526 5,331,318 8,781,541
------------ ------------ ------------ ------------
Change in net assets 13,632,103 23,356,440 6,085,624 8,766,439
Net Assets:
Beginning of period 42,035,224 18,678,784 102,491,286 93,724,847
------------ ------------ ------------ ------------
End of period $55,667,327 $42,035,224 $108,576,910 $102,491,286
------------ ------------ ------------ ------------
Undistributed net investment income included in net assets at end of
period $ 11,268 -- -- --
------------ ------------ ------------ ------------
Net gain (loss) as computed for federal tax purposes $ 20,140 $ 86,649 $ 10,650 $ 403,809
------------ ------------ ------------ ------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
FINANCIAL HIGHLIGHTS--CLASS A SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Net Realized and Distributions from
Unrealized Gain/ Net Realized Gain
(Loss) on on Investment
Net Investments, Transactions,
Net Asset Investment Futures Distributions Futures
Value, Income/ Contracts, and Total from from Net Contracts and
Period Ended beginning (Operating Foreign Currency Investment Investment Foreign Currency Total
November 30, of period Loss) Transactions Operations Income Transactions Distributions
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
WACHOVIA EQUITY FUND
1993(a) $ 10.00 0.12 0.25 0.37 (0.09) -- (0.09)
1994 $ 10.28 0.20 0.12 0.32 (0.20) (0.08) (0.28)
1995 $ 10.32 0.23 2.64 2.87 (0.25) (0.23) (0.48)
1996 $ 12.71 0.22(i) 2.83 3.05 (0.22) (0.73) (0.95)
1997 $ 14.81 0.14(i) 2.43 2.57 (0.13) (1.86) (1.99)
WACHOVIA QUANTITATIVE EQUITY FUND
1994(b) $ 10.00 0.12 (0.43) (0.31) (0.09) -- (0.09)
1995 $ 9.60 0.22 3.51 3.73 (0.22) -- (0.22)
1996 $ 13.11 0.24(i) 2.77 3.01 (0.21) (0.24) (0.45)
1997 $ 15.67 0.18(i) 4.14 4.32 (0.20) (0.79) (0.99)
WACHOVIA EQUITY INDEX FUND
1993(a) $ 10.00 0.15 0.43 0.58 (0.11) -- (0.11)
1994 $ 10.47 0.25 (0.19) 0.06 (0.24) (0.02) (0.26)
1995 $ 10.27 0.28 3.37 3.65 (0.27) (0.03) (0.30)
1996 $ 13.62 0.32(i) 3.13 3.45 (0.31) (0.78) (1.09)
1997 $ 15.98 0.25(i) 3.85 4.10 (0.28) (0.91) (1.19)
WACHOVIA SPECIAL VALUES FUND
1993(a) $ 10.00 (0.002) 0.242 0.24 -- -- --
1994 $ 10.24 0.06 (0.22) (0.16) (0.05) (0.28) (0.33)
1995 $ 9.75 0.09 2.42 2.51 (0.02) (0.06) (0.08)
1996 $ 12.18 0.35 4.13 4.48 (0.08) (0.91) (0.99)
1997 $ 15.67 0.13(i) 4.53 4.66 (0.08) (1.61) (1.69)
WACHOVIA EMERGING MARKETS FUND
1995(c) $ 10.00 0.05 0.36 0.41 -- -- --
1996 $ 10.41 0.09(i) 1.20 1.29 (0.03) -- (0.03)
1997 $ 11.67 0.03(i) (0.47) (0.44) (0.11) -- (0.11)
WACHOVIA BALANCED FUND
1993(a) $ 10.00 0.19 0.29 0.48 (0.15) -- (0.15)
1994 $ 10.33 0.35 (0.38) (0.03) (0.33) (0.04) (0.37)
1995 $ 9.93 0.40 2.13 2.53 (0.38) (0.16) (0.54)
1996 $ 11.92 0.38(i) 1.72 2.10 (0.38) (0.34) (0.72)
1997 $ 13.30 0.34(i) 1.40 1.74 (0.34) (1.44) (1.78)
WACHOVIA FIXED INCOME FUND
1993(a) $ 10.00 0.31 (0.01) 0.30 (0.30) -- (0.30)
1994 $ 10.00 0.56 (0.98) (0.42) (0.55) (0.06) (0.61)
1995 $ 8.97 0.58 0.92 1.50 (0.57) -- (0.57)
1996 $ 9.90 0.61(i) (0.09) 0.52 (0.59) -- (0.59)
1997 $ 9.83 0.54(i) 0.04 0.58 (0.56) -- (0.56)
WACHOVIA SHORT-TERM FIXED INCOME FUND
1993(a) $ 10.00 0.27 (0.10) 0.17 (0.26) -- (0.26)
1994 $ 9.91 0.45 (0.33) 0.12 (0.45) -- (0.45)
1995 $ 9.58 0.59 0.24 0.83 (0.52) -- (0.52)
1996 $ 9.89 0.56(i) (0.06) 0.50 (0.60) -- (0.60)
1997 $ 9.79 0.50(i) (0.01) 0.49 (0.51) -- (0.51)
WACHOVIA GEORGIA MUNICIPAL BOND FUND
1995(c) $ 10.00 0.41 0.96 1.37 (0.41) -- (0.41)
1996 $ 10.96 0.47 0.05 0.52 (0.47) (0.01) (0.48)
1997 $ 11.00 0.44 0.13 0.57 (0.44) (0.02) (0.46)
WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND
1995(c) $ 10.00 0.43 0.99 1.42 (0.43) -- (0.43)
1996 $ 10.99 0.45 0.09 0.54 (0.45) (0.05) (0.50)
1997 $ 11.03 0.43 0.14 0.57 (0.43) (0.02) (0.45)
WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND (D)
9/30/91(e) $ 10.00 0.43 0.17 0.60 (0.43) -- (0.43)
9/30/92 $ 10.17 0.60 0.36 0.96 (0.60) -- (0.60)
9/30/93 $ 10.53 0.59 0.74 1.33 (0.59) -- (0.59)
11/30/93(f) $ 11.27 0.10 (0.15) (0.05) (0.10) -- (0.10)
11/30/94 $ 11.12 0.56 (1.04) (0.48) (0.56) (0.03) (0.59)
11/30/95 $ 10.05 0.56 1.10 1.66 (0.56) (0.10) (0.66)
11/30/96 $ 11.05 0.55 0.03 0.58 (0.55) (0.03) (0.58)
11/30/97 $ 11.05 0.53 0.11 0.64 (0.52) (0.05) (0.57)
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 10, 1993 (date of initial
public investment) to November 30, 1993.
(b) Reflects operations for the period from March 28, 1994 (date of initial
public investment) to November 30, 1994.
(c) Reflects operations for the period from December 26, 1994 (date of initial
public investment) to November 30, 1995.
(d) Prior to November 30, 1993 the Fund's fiscal year end was September 30.
(e) Reflects operations for the period from January 11, 1991 (date of initial
public investment) to September 30, 1991.
(f) Reflects operations for the two months ended November 30, 1993.
(g) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(h) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(i) Per share information is based on average shares outstanding.
(j) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
FINANCIAL HIGHLIGHTS--CLASS A SHARES--CONTINUED
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Ratios to Average Net Assets Average
Net Asset Net Net Assets, Commission
Period Ended Value, end Total Investment Expense Waiver/ end of period Rate Portfolio
November 30, of period Return(g) Expenses Income Reimbursement(h) (000 omitted) Paid(j) Turnover Rate
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WACHOVIA EQUITY FUND
1993(a) $ 10.28 3.68% 0.81%* 2.18%* 0.32%* $ 61,997 -- 50%
1994 $ 10.32 3.10% 0.87% 1.98% 0.16% $ 87,022 -- 35%
1995 $ 12.71 28.74% 0.90% 1.99% 0.07% $ 130,150 -- 65%
1996 $ 14.81 25.56% 0.90% 1.62% 0.15% $ 20,774 $ 0.0652 64%
1997 $ 15.39 20.22% 1.14% 0.95% 0.07% $ 39,494 $ 0.0434 124%
WACHOVIA QUANTITATIVE EQUITY FUND
1994(b) $ 9.60 (3.08%) 0.90%* 1.83%* 0.10%* $ 91,979 -- 64%
1995 $ 13.11 39.33% 0.87% 1.93% 0.10% $ 121,895 -- 63%
1996 $ 15.67 23.74% 0.87% 1.70% 0.15% $ 15,742 $ 0.0532 44%
1997 $ 19.00 29.38% 1.11% 1.09% 0.07% $ 35,413 $ 0.0493 74%
WACHOVIA EQUITY INDEX FUND
1993(a) $ 10.47 5.80% 0.43%* 2.54%* 0.12%* $ 149,266 -- 9%
1994 $ 10.27 0.56% 0.46% 2.44% 0.08% $ 183,852 -- 9%
1995 $ 13.62 36.15% 0.48% 2.39% 0.05% $ 186,841 -- 60%
1996 $ 15.98 27.19% 0.48% 2.23% 0.13% $ 18,154 $ 0.0137 12%
1997 $ 18.89 27.55% 0.72% 1.46% 0.02% $ 50,917 $ 0.0247 4%
WACHOVIA SPECIAL VALUES FUND
1993(a) $ 10.24 2.40% 1.25%* (0.03%)* 1.79%* $ 12,072 -- 68%
1994 $ 9.75 (1.61%) 1.13% 0.63% 1.09% $ 17,431 -- 62%
1995 $ 12.18 25.91% 1.29% 0.80% 0.58% $ 24,093 -- 57%
1996 $ 15.67 39.78% 1.21% 0.47% 0.29% $ 6,642 $ 0.0650 38%
1997 $ 18.64 33.08% 1.35% 0.74% 0.01% $ 37,766 $ 0.0534 46%
WACHOVIA EMERGING MARKETS FUND
1995(c) $ 10.41 4.10% 1.80%* 0.85%* 0.28%* $ 71,276 -- 17%
1996 $ 11.67 12.45% 1.69% 0.73% 0.09% $ 5,488 $ 0.0009 30%
1997 $ 11.12 (3.82%) 1.79% 0.26% 0.00% $ 7,996 $ 0.0011 60%
WACHOVIA BALANCED FUND
1993(a) $ 10.33 4.89% 0.75%* 3.30%* 0.19%* $ 166,271 -- 60%
1994 $ 9.93 (0.39%) 0.75% 3.46% 0.17% $ 194,430 -- 74%
1995 $ 11.92 26.32% 0.76% 3.58% 0.16% $ 207,421 -- 102%
1996 $ 13.30 18.55% 0.76% 3.05% 0.24% $ 18,619 $ 0.0545 99%
1997 $ 13.26 15.17% 1.02% 2.77% 0.16% $ 50,968 $ 0.0732 143%
WACHOVIA FIXED INCOME FUND
1993(a) $ 10.00 3.02% 0.68%* 5.44%* 0.19%* $ 140,325 -- 149%
1994 $ 8.97 (4.30%) 0.71% 5.90% 0.13% $ 148,751 -- 148%
1995 $ 9.90 17.20% 0.74% 6.07% 0.10% $ 169,846 -- 155%
1996 $ 9.83 5.51% 0.74% 6.05% 0.18% $ 4,853 -- 181%
1997 $ 9.85 6.14% 0.98% 5.65% 0.11% $ 10,039 -- 174%
WACHOVIA SHORT-TERM FIXED INCOME FUND
1993(a) $ 9.91 1.69% 0.58%* 4.78%* 0.22%* $ 154,459 -- 73%
1994 $ 9.58 1.27% 0.60% 4.62% 0.18% $ 148,326 -- 151%
1995 $ 9.89 8.82% 0.63% 5.83% 0.18% $ 124,720 -- 147%
1996 $ 9.79 5.29% 0.63% 5.50% 0.27% $ 1,675 -- 145%
1997 $ 9.77 5.10% 0.87% 5.49% 0.19% $ 7,233 -- 215%
WACHOVIA GEORGIA MUNICIPAL BOND FUND
1995(c) $ 10.96 13.93% 0.92%* 4.30%* 1.88%* $ 10,220 -- 14%
1996 $ 11.00 4.97% 0.89% 4.40% 1.61% $ 7,531 -- 14%
1997 $ 11.11 5.41% 1.14% 4.03% 1.11% $ 6,531 -- 25%
WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND
1995(c) $ 10.99 14.40% 0.85%* 4.40%* 1.19%* $ 18,679 -- 19%
1996 $ 11.03 5.17% 0.84% 4.24% 0.77% $ 13,752 -- 7%
1997 $ 11.15 5.36% 1.07% 3.91% 0.44% $ 11,563 -- 17%
WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND (D)
9/30/91(e) $ 10.17 6.32% 0.82%* 5.73%* 0.86%* $ 21,438 -- 0%
9/30/92 $ 10.53 9.73% 0.61% 5.83% 0.73% $ 63,139 -- 0%
9/30/93 $ 11.27 13.03% 0.55% 5.46% 0.62% $ 82,674 -- 4%
11/30/93(f) $ 11.12 (0.48%) 0.55%* 5.11%* 0.60%* $ 83,371 -- 2%
11/30/94 $ 10.05 (4.52%) 0.60% 5.22% 0.59% $ 75,995 -- 23%
11/30/95 $ 11.05 16.97% 0.58% 5.23% 0.55% $ 93,725 -- 15%
11/30/96 $ 11.05 5.54% 0.57% 5.10% 0.59% $ 65,981 -- 20%
11/30/97 $ 11.12 6.01% 0.81% 4.79% 0.48% $ 64,696 -- 12%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 10, 1993 (date of initial
public investment) to November 30, 1993.
(b) Reflects operations for the period from March 28, 1994 (date of initial
public investment) to November 30, 1994.
(c) Reflects operations for the period from December 26, 1994 (date of initial
public investment) to November 30, 1995.
(d) Prior to November 30, 1993 the Fund's fiscal year end was September 30.
(e) Reflects operations for the period from January 11, 1991 (date of initial
public investment) to September 30, 1991.
(f) Reflects operations for the two months ended November 30, 1993.
(g) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(h) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(i) Per share information is based on average shares outstanding.
(j) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
FINANCIAL HIGHLIGHTS--CLASS B SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
Distributions
Net Realized and from Net Realized
Unrealized Gain/ Gain on
(Loss) on Investment
Investments, Transactions,
Net Asset Futures Distributions Futures Contracts
Value, Net Contracts and Total From from Net and Foreign
Period Ended beginning Investment Foreign Currency Investment Investment Currency Total
November 30, of period Income Transactions Operations Income Transactions Distributions
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
WACHOVIA EQUITY FUND
1996(a) $ 12.43 0.02 2.37 2.39 (0.03) -- (0.03)
1997 $ 14.79 0.04 2.42 2.46 (0.04) (1.86) (1.90)
WACHOVIA QUANTITATIVE EQUITY FUND
1996(a) $ 13.09 0.04 2.56 2.60 (0.04) -- (0.04)
1997 $ 15.65 0.08 4.10 4.18 (0.09) (0.79) (0.88)
WACHOVIA BALANCED FUND
1996(a) $ 11.68 0.09 1.59 1.68 (0.07) -- (0.07)
1997 $ 13.29 0.26 1.38 1.64 (0.26) (1.44) (1.70)
WACHOVIA FIXED INCOME FUND
1996(a) $ 9.45 0.15 0.40 0.55 (0.17) -- (0.17)
1997 $ 9.83 0.48 0.01 0.49 (0.48) -- (0.48)
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 22, 1996 (date of initial
public investment) to November 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
FINANCIAL HIGHLIGHTS--CLASS B SHARES--CONTINUED
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
<TABLE>
<CAPTION>
Ratios to Average Net Assets Average
Net Asset Net Expense Net Assets, Commission
Period Ended Value, Total Investment Waiver/ end of period Rate
November 30, end of period Return(b) Expenses Income Reimbursement(c) (000 omitted) Paid(d)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
WACHOVIA EQUITY FUND
1996(a) $ 14.79 19.25% 1.90%* 0.02%* 0.20%* $ 976 $ 0.0652
1997 $ 15.35 19.27% 1.90% 0.18% 0.06% $ 3,448 $ 0.0434
WACHOVIA QUANTITATIVE EQUITY FUND
1996(a) $ 15.65 19.90% 1.87%* 0.46%* 0.11%* $ 1,414 $ 0.0532
1997 $ 18.95 28.33% 1.85% 0.31% 0.07% $ 6,564 $ 0.0493
WACHOVIA BALANCED FUND
1996(a) $ 13.29 14.47% 1.76%* 1.93%* 0.16%* $ 1,821 $ 0.0545
1997 $ 13.23 14.19% 1.78% 2.01% 0.16% $ 5,916 $ 0.0732
WACHOVIA FIXED INCOME FUND
1996(a) $ 9.83 5.83% 1.74%* 5.20%* 0.13%* $ 113 --
1997 $ 9.84 5.21% 1.75% 4.89% 0.11% $ 140 --
<CAPTION>
Portfolio
Period Ended Turnover
November 30, Rate
- ------------ -----------
<S> <C>
WACHOVIA EQUITY FUND
1996(a) 64%
1997 124%
WACHOVIA QUANTITATIVE EQUITY FUND
1996(a) 44%
1997 74%
WACHOVIA BALANCED FUND
1996(a) 99%
1997 143%
WACHOVIA FIXED INCOME FUND
1996(a) 181%
1997 174%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 22, 1996 (date of initial
public investment) to November 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
FINANCIAL HIGHLIGHTS--CLASS Y SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Net Realized and Distributions from
Unrealized Gain/ Net Realized Gain
(Loss) on on Investment
Investments, Transactions,
Net Asset Futures Distributions Futures Contracts
Value, Net Contracts, and Total From from Net and Foreign
Period Ended beginning Investment Foreign Currency Investment Investment Currency Total
November 30, of period Income Transactions Operations Income Transactions Distributions
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
WACHOVIA EQUITY FUND
1996(a) $ 12.43 0.03 2.40 2.43 (0.05) -- (0.05)
1997 $ 14.81 0.17 2.43 2.60 (0.16) (1.86) (2.02)
WACHOVIA QUANTITATIVE EQUITY FUND
1996(a) $ 13.09 0.04 2.60 2.64 (0.06) -- (0.06)
1997 $ 15.67 0.23 4.12 4.35 (0.23) (0.79) (1.02)
WACHOVIA EQUITY INDEX FUND
1996(a) $ 13.37 .09(d) 2.60 2.69 (0.08) -- (0.08)
1997 $ 15.98 0.29 3.86 4.15 (0.31) (0.91) (1.22)
WACHOVIA SPECIAL VALUES FUND
1996(a) $ 13.62 0.03 2.02 2.05 -- -- --
1997 $ 15.67 0.16 4.53 4.69 (0.08) (1.61) (1.69)
WACHOVIA EMERGING MARKETS FUND
1996(a) $ 11.92 0.01(d) (0.26) (0.25) -- -- --
1997 $ 11.67 0.07 (0.50) (0.43) (0.11) -- (0.11)
WACHOVIA BALANCED FUND
1996(a) $ 11.68 0.08 1.63 1.71 (0.09) -- (0.09)
1997 $ 13.30 0.38 1.39 1.77 (0.37) (1.44) (1.81)
WACHOVIA FIXED INCOME FUND
1996(a) $ 9.45 0.17 0.40 0.57 (0.19) -- (0.19)
1997 $ 9.83 0.57 0.03 0.60 (0.58) -- (0.58)
WACHOVIA SHORT-TERM FIXED INCOME FUND
1996(a) $ 9.67 0.11(d) 0.18 0.29 (0.17) -- (0.17)
1997 $ 9.79 0.56 (0.05) 0.51 (0.53) -- (0.53)
WACHOVIA GEORGIA MUNICIPAL BOND FUND
1996(a) $ 10.71 0.17 0.29 0.46 (0.17) -- (0.17)
1997 $ 11.00 0.47 0.13 0.60 (0.47) (0.02) (0.49)
WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND
1996(a) $ 10.71 0.16 0.32 0.48 (0.16) -- (0.16)
1997 $ 11.03 0.46 0.13 0.59 (0.45) (0.02) (0.47)
WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND
1996(a) $ 10.73 0.20 0.32 0.52 (0.20) -- (0.20)
1997 $ 11.05 0.55 0.12 0.67 (0.55) (0.05) (0.60)
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 22, 1996 (date of initial
public investment) to November 30,1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Per share information is based on average shares outstanding.
(e) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS AND THE WACHOVIA MUNICIPAL FUNDS
FINANCIAL HIGHLIGHTS--CLASS Y SHARES--CONTINUED
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Ratios to Average Net Assets Average
Net Asset Net Expense Net Assets, Commission
Period Ended Value, Total Investment Waiver/ end of period Rate
November 30, end of period Return(b) Expenses Income Reimbursement(c) (000 omitted) Paid(e)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
WACHOVIA EQUITY FUND
1996(a) $ 14.81 19.57% 0.90%* 0.91%* 0.19%* $ 129,205 $ 0.0652
1997 $ 15.39 20.44% 0.90% 1.18% 0.07% $ 156,238 $ 0.0434
WACHOVIA QUANTITATIVE EQUITY FUND
1996(a) $ 15.67 20.19% 0.87%* 1.19%* 0.11%* $ 152,571 $ 0.0532
1997 $ 19.00 29.60% 0.87% 1.35% 0.08% $ 183,019 $ 0.0493
WACHOVIA EQUITY INDEX FUND
1996(a) $ 15.98 20.14% 0.48%* 1.92%* 0.06%* $ 213,833 $ 0.0137
1997 $ 18.91 27.91% 0.47% 1.72% 0.02% $ 248,030 $ 0.0247
WACHOVIA SPECIAL VALUES FUND
1996(a) $ 15.67 15.05% 1.15%* 1.76%* 0.24%* $ 58,697 $ 0.0650
1997 $ 18.67 33.29% 1.11% 0.88% 0.02% $ 84,501 $ 0.0534
WACHOVIA EMERGING MARKETS FUND
1996(a) $ 11.67 0.00% 0.63%* 0.45%* 0.13%* $ 123,036 $ 0.0009
1997 $ 11.13 (3.73%) 1.54% 0.54% 0.00% $ 139,700 $ 0.0011
WACHOVIA BALANCED FUND
1996(a) $ 13.30 14.69% 0.76%* 2.85%* 0.16%* $ 235,791 $ 0.0545
1997 $ 13.26 15.37% 0.77% 3.02% 0.16% $ 250,083 $ 0.0732
WACHOVIA FIXED INCOME FUND
1996(a) $ 9.83 6.12% 0.75%* 6.33%* 0.14%* $ 175,836 --
1997 $ 9.85 6.38% 0.74% 5.91% 0.11% $ 185,398 --
WACHOVIA SHORT-TERM FIXED INCOME FUND
1996(a) $ 9.79 3.00% 0.64%* 5.77%* 0.19%* $ 116,138 --
1997 $ 9.77 5.33% 0.63% 5.63% 0.20% $ 91,063 --
WACHOVIA GEORGIA MUNICIPAL BOND FUND
1996(a) $ 11.00 4.31% 0.89%* 4.84%* 1.57%* $ 6,803 --
1997 $ 11.11 5.63% 0.92% 4.24% 1.06% $ 12,308 --
WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND
1996(a) $ 11.03 4.55% 0.84%* 4.16%* 0.65%* $ 28,283 --
1997 $ 11.15 5.57% 0.85% 4.16% 0.42% $ 44,104 --
WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND
1996(a) $ 11.05 4.86% 0.57%* 5.56%* 0.54%* $ 36,511 --
1997 $ 11.12 6.23% 0.58% 5.01% 0.48% $ 43,881 --
<CAPTION>
Portfolio
Period Ended Turnover
November 30, Rate
- ------------ ---------
<S> <C>
WACHOVIA EQUITY FUND
1996(a) 64%
1997 124%
WACHOVIA QUANTITATIVE EQUITY FUND
1996(a) 44%
1997 74%
WACHOVIA EQUITY INDEX FUND
1996(a) 12%
1997 4%
WACHOVIA SPECIAL VALUES FUND
1996(a) 38%
1997 46%
WACHOVIA EMERGING MARKETS FUND
1996(a) 30%
1997 60%
WACHOVIA BALANCED FUND
1996(a) 99%
1997 143%
WACHOVIA FIXED INCOME FUND
1996(a) 181%
1997 174%
WACHOVIA SHORT-TERM FIXED INCOME FUND
1996(a) 145%
1997 215%
WACHOVIA GEORGIA MUNICIPAL BOND FUND
1996(a) 14%
1997 25%
WACHOVIA NORTH CAROLINA MUNICIPAL BOND FUND
1996(a) 7%
1997 17%
WACHOVIA SOUTH CAROLINA MUNICIPAL BOND FUND
1996(a) 20%
1997 12%
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from July 22, 1996 (date of initial
public investment) to November 30, 1996.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(d) Per share information is based on average shares outstanding.
(e) Represents total commissions paid on portfolio securities divided by total
portfolio shares purchased or sold on which commissions were charged.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE WACHOVIA FUNDS
THE WACHOVIA MUNICIPAL FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
1. ORGANIZATION
The Wachovia Funds and The Wachovia Municipal Funds (individually referred to as
the "Trust" or collectively as the "Trusts") are registered under the Investment
Company Act of 1940, as amended (the "Act") as open-end management investment
companies. The Trusts consist of fifteen portfolios. The financial statements of
the following portfolios (individually referred to as the "Fund" or collectively
as the "Funds") are presented herein:
THE WACHOVIA FUNDS*
<TABLE>
<CAPTION>
Portfolio Name Investment Objective
<S> <C>
Wachovia Equity Fund ("Equity Fund") To produce growth of principal and income.
Wachovia Quantitative Equity Fund To provide growth of principal and income.
("Quantitative Equity Fund")
Wachovia Equity Index Fund ("Equity
Index Fund") To provide a
total return that approximates
that of the stock market as
measured by the S&P 500 Index.
Wachovia Special Values Fund ("Special To produce growth of principal.
Values Fund")
Wachovia Emerging Markets Fund To produce long-term capital appreciation.
("Emerging Markets Fund")
Wachovia Balanced Fund ("Balanced Fund") To provide long-term growth of
principal and current income. Wachovia Fixed Income Fund ("Fixed Income Fund")
To seek a high level of total return. Wachovia Short-Term Fixed Income Fund To
produce a high level of current income with a minimum of principal ("Short-Term
Fixed Income Fund") volatility. </TABLE>
THE WACHOVIA MUNICIPAL FUNDS
<TABLE>
<CAPTION>
Portfolio Name Investment Objective
<S> <C>
Wachovia Georgia Municipal Bond Fund ("Georgia To provide current income which is exempt from federal regular income
Municipal Bond Fund")** tax and the personal income taxes imposed by the State of Georgia.
Wachovia North Carolina Municipal Bond Fund To provide current income which is exempt from federal regular income
("North Carolina Municipal Bond Fund")** tax and the income tax imposed by the State of North Carolina.
Wachovia South Carolina Municipal Bond Fund To provide current income which is exempt from federal regular income
("South Carolina Municipal Bond Fund")** tax and South Carolina state income taxes.
</TABLE>
* In addition, The Wachovia Funds offer the following money market portfolios,
each having distinctive investment objectives and policies: Wachovia Money
Market Fund, Wachovia Prime Cash Management Fund, Wachovia Tax-Free Money
Market Fund, and Wachovia U.S. Treasury Money Market Fund. The financial
statements of the money market portfolios are presented separately.
** Non-diversified portfolio.
The assets of each portfolio are segregated and a shareholder's interest is
limited to the portfolio in which shares are held.
On July 31, 1997, the Trust, and each of the underlying portfolios and classes,
changed its name from The Biltmore Funds and The Biltmore Municipal Funds to The
Wachovia Funds and The Wachovia Municipal Funds, respectively.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing
service, taking into consideration yield, liquidity, risk, credit quality,
coupon, maturity, type of issue, and any other factors or market data the
pricing service deems relevant. U.S. government securities, listed
corporate bonds, other fixed income and asset-backed securities, unlisted
securities and private placement securities are generally valued at the
latest bid prices as furnished by an independent pricing service. Listed
equity securities and investments in closed-end investment companies are
valued at the last sale price reported on a national securities exchange.
Short-term securities are valued at the prices provided by an independent
pricing service. However, short-term securities with remaining maturities
of sixty days or less at the time of purchase may be valued at amortized
cost, which approximates fair market value. Investments in other open-end
regulated investment companies are valued at net asset value. With respect
to valuation of foreign securities, trading in foreign cities may be
completed at times which vary from the closing of the New York Stock
Exchange. Therefore, foreign securities are valued at the latest closing
price on the exchange on which they are traded prior to the closing of the
New York Stock Exchange. Foreign securities quoted in foreign currencies
are translated into U.S. dollars at the foreign exchange rate in effect at
12:00 noon, eastern time, on the day the value of the foreign security is
determined.
REPURCHASE AGREEMENTS--It is the policy of the Funds to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Funds to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Funds' adviser to be creditworthy pursuant to the guidelines and/or
standards established and reviewed by the Boards of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Funds
could receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code"). Dividend
income and distributions to shareholders are recorded on the ex-dividend
date. Certain dividends from foreign securities may be recorded after the
ex-dividend date based upon when the Fund is reasonably able to obtain
information.
FEDERAL TAXES--It is the Funds' policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of their income. Accordingly, no
provisions for federal tax are necessary.
Withholding taxes on foreign interest and dividends have been provided for
in accordance with the Emerging Markets Fund's understanding of the
applicable countries' tax rules and rates.
At November 30, 1997, the Funds listed below, for federal tax purposes, had
capital loss carryforwards, as noted, which will reduce each Fund's taxable
income arising from future net realized gain on investments, if any, to the
extent permitted by the Code, and thus will reduce the amount of the
distributions to shareholders which would otherwise be necessary to relieve
the Funds of any liability for federal tax.
<TABLE>
<CAPTION>
Total Amount Amount Amount Amount Amount
Tax Loss Expiring Expiring Expiring Expiring Expiring
Fund Carryforward In 2001 In 2002 In 2003 In 2004 In 2005
<S> <C> <C> <C> <C> <C> <C>
Fixed Income Fund $ 2,938,421 -- $ 1,681,174 $ 1,257,247 -- --
Short-Term Fixed Income Fund $ 4,087,884 $ 493,199 $ 2,790,650 $ 250,580 $ 467,184 $ 86,271
Emerging Markets Fund $ 3,405,307 -- -- -- -- $ 3,405,307
</TABLE>
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in
when-issued or delayed delivery transactions. The Funds record when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by each Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period not to exceed five years from each Fund's
commencement date.
FUTURES CONTRACTS--The Funds listed below purchase stock index futures
contracts to manage cashflows, enhance yield, and to potentially reduce
transaction costs. Upon entering into a stock index futures contract with a
broker, the Funds listed below are required to deposit in a segregated
account a specified amount of cash or U.S. government securities. Futures
contracts are valued daily and unrealized gains or losses are recorded in a
"variation margin" account. Daily, the Funds receive from or pay to the
broker a specified amount of cash based upon changes in the variation
margin account. When a contract is closed, the Funds recognize a realized
gain or loss.
For the period ended November 30, 1997, the following Funds had realized
gains/losses on futures contracts as follows:
<TABLE>
<CAPTION>
Realized Gain (Loss)
Fund on Futures Contracts
<S> <C>
Equity Fund $ 2,961,752
Quantitative Equity Fund $ 2,859,521
Equity Index Fund $ 8,532,246
Balanced Fund $ 3,367,405
</TABLE>
Futures contracts have market risks, including the risk that the change in
the value of the contract may not correlate with changes in the value of
the underlying securities.
At November 30, 1997, the Funds had outstanding futures contracts as set
forth below:
EQUITY FUND
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
<C> <S> <C> <C>
December 1997 113 S&P 500 Index Futures Long $ 738,336
</TABLE>
QUANTITATIVE EQUITY FUND
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
<C> <S> <C> <C>
December 1997 108 S&P 500 Index Futures Long $ 702,702
</TABLE>
EQUITY INDEX FUND
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
<C> <S> <C> <C>
December 1997 72 S&P 500 Index Futures Long $ 518,685
</TABLE>
BALANCED FUND
<TABLE>
<CAPTION>
Contracts to Unrealized
Expiration Date Deliver/Receive Position Appreciation
<C> <S> <C> <C>
December 1997 80 S&P 500 Index Futures Long $ 560,160
</TABLE>
FOREIGN EXCHANGE CONTRACTS--Emerging Markets Fund may enter into foreign
currency exchange contracts as a way of managing foreign exchange rate
risk. The Fund may enter into these contracts for the purchase or sale of a
specific foreign currency at a fixed price on a future date as a hedge or
cross hedge against either specific transactions or portfolio positions.
The objective of the Fund's foreign currency hedging transactions is to
reduce the risk that the U.S. dollar value of the Fund's foreign currency
denominated securities will decline in value due to changes in foreign
currency exchange rates. All foreign currency exchange contracts are
"marked to market" daily at the applicable translation rates resulting in
unrealized gains or losses. Realized gains or losses are recorded at the
time the foreign currency exchange contract is offset by entering into a
closing transaction or by the delivery or receipt of the currency. Risk may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of their contracts and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
At November 30, 1997, Emerging Markets Fund had no outstanding foreign
currency contracts.
FOREIGN CURRENCY TRANSLATION--The accounting records of Emerging Markets
Fund are maintained in U.S. dollars. All assets and liabilities denominated
in foreign currencies ("FC") are translated into U.S. dollars based on the
rate of exchange of such currencies against U.S. dollars on the date of
valuation. Purchases and sales of securities, income and expenses are
translated at the rate of exchange quoted on the respective date that such
transactions are recorded. Differences between income and expense amounts
recorded and collected or paid are adjusted when reported by the custodian
bank. The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from investments.
Reported net realized foreign exchange gains or losses arise from sales of
portfolio securities, sales and maturities of short-term securities, sales
of FCs, currency gains or losses realized between the trade and settlement
dates on securities transactions, the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes
in the value of assets and liabilities other than investments in securities
at fiscal year end, resulting from changes in the exchange rate.
RECLASSIFICATION--In accordance with Statement of Position 93-2
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies
("SOP 93-2"), permanent book and tax differences have been reclassified to
paid-in-capital. These differences are primarily due to differing
treatments for foreign currency transactions and defaulted interest.
Amounts for the Short-Term Fixed Income Fund, as of November 30, 1997, have
been reclassified to reflect the following:
<TABLE>
<CAPTION>
Increase (Decrease)
Accumulated Net Undistributed Net
Fund Paid In Capital Realized Gain/Loss Investment Income
<S> <C> <C> <C>
Emerging Markets Fund $ 565,648 $ (1,366,658) $ 801,010
Short-Term Fixed Income $ (710) -- $ 710
</TABLE>
Net investment income, net realized gains/losses, and net assets were not
affected by this change.
RESTRICTED SECURITIES--Restricted securities are securities that may only
be resold upon registration under federal securities laws or in
transactions exempt from such registration. In some cases, the issuer of
restricted securities has agreed to register such securities for resale, at
the issuer's expense either upon demand by the Emerging Markets Fund or in
connection with another registered offering of the securities. Many
restricted securities may be resold in the secondary market in transactions
exempt from registration. Such restricted securities may be determined to
be liquid under criteria established by the Trustees. The Fund will not
incur any registration costs upon such resales. The Fund's restricted
securities are valued at the price provided by dealers in the secondary
market or, if no market prices are available, at the fair value as
determined by the Fund's pricing committee.
Additional information on each restricted security held by Emerging Markets
Fund at November 30, 1997 is as follows:
<TABLE>
<CAPTION>
Security Acquisition Dates Acquisition Costs
<S> <C> <C>
Banque Libanaise Pour Le Commerce, Class B 12/11/96 $ 472,000
Banque Marocaine du Commerce 3/10/97 701,100
Blagovno Trgovinsia Center, GDR 6/6/97 336,700
BorsodChem RT, GDR 2/15/96 49,800
Gedeon Richter, GDR 11/10/95-11/26/96 394,754
Hellenic Telecommunications Organization 11/15/96-11/24/97 378,643
Hindalco Industries Ltd., GDR 6/21/95-10/4/95 159,375
Housing & Commercial Bank, Korea, GDR 11/24/97 216,000
MI Bank, GDR 6/25/97 363,400
MOL Magyar Olaj, GDR 5/7/97 243,750
Paints & Chemical Industry, GDR 9/26/97 505,250
Relliance Industries Ltd., GDR 6/21/95 78,750
Samsung Electronics Co., GDR 11/24/97 246,000
</TABLE>
<TABLE>
<CAPTION>
Security Acquisition Dates Acquisition Costs
<S> <C> <C>
SKB Banka, GDR 1/30/97 228,000
Slovakofarna AS, GDR 10/7/97-10/9/97 783,000
Solidere, GDR 11/27/96 287,500
State Bank of India, GDR 10/3/96 283,000
</TABLE>
DOLLAR ROLL TRANSACTIONS--The Balanced Fund enters into dollar roll
transactions, with respect to mortgage securities issued by GNMA, FNMA, and
FHLMC, in which the Fund sells mortgage securities to financial
institutions and simultaneously agrees to accept substantially similar
(same type, coupon and maturity) securities at a later date at an agreed
upon price. Dollar roll transactions are short-term financing arrangements
which will not exceed twelve months. The Fund will use the proceeds
generated from the transactions to invest in short-term investments, which
may enhance the Fund's current yield and total return.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust of both The Wachovia Funds and The Wachovia Municipal
Funds permits the Trustees to issue an unlimited number of full and fractional
shares of beneficial interest (without par value).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Equity Fund Quantitative Equity Fund
---------------------------------------------------- ----------------------------------------------------
Year Ended Year Ended
November 30, November 30,
1997 1996 1997 1996
CLASS A SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 1,212,590 $ 17,823,475 3,573,564 $ 46,093,419 965,307 $ 16,810,698 2,247,495 $ 30,400,863
Shares issued to
shareholders in
payment of
distributions
declared 225,294 2,879,078 648,674 7,928,297 68,846 1,031,632 280,873 3,632,489
Shares redeemed (274,007) (3,944,850) (13,058,201) (177,023,298) (175,182) (2,990,173) (10,818,173) (154,534,825)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from Class A Shares
transactions 1,163,877 $ 16,757,703 (8,835,963) ($123,001,582) 858,971 $ 14,852,157 (8,289,805) ($120,501,473)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1997 1996* 1997 1996*
CLASS B SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 157,378 $ 2,214,029 68,238 $ 938,331 259,394 $ 4,504,492 90,413 $ 1,298,561
Shares issued to
shareholders in
payment of
distributions
declared 10,960 139,526 38 519 6,072 90,190 100 1,415
Shares redeemed (9,672) (136,298) (2,290) (31,569) (9,470) (162,976) (151) (2,206)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from Class B Shares
transactions 158,666 $ 2,217,257 65,986 $ 907,281 255,996 $ 4,431,706 90,362 $ 1,297,770
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
</TABLE>
* For the period from July 22, 1996 (date of initial public investment) to
November 30, 1996.
<TABLE>
<CAPTION>
Equity Fund continued Quantitative Equity Fund continued
--------------------------------------------------- ----------------------------------------------------
Year Ended Year Ended
November 30, November 30,
1997 1996* 1997 1996*
CLASS Y SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 3,554,442 $ 49,902,627 10,334,286 $142,661,992 1,230,624 $ 20,627,941 9,959,050 $ 143,121,979
Shares issued to share-
holders in payment of
distributions declared 1,041,021 13,298,944 23,469 316,602 596,353 8,900,064 35,172 496,978
Shares redeemed (3,170,735) (45,126,801) (1,632,543) (22,207,257) (1,933,606) (32,229,770) (256,357) (3,828,577)
---------- ------------ ----------- ------------ ---------- ------------ ----------- -------------
Net change resulting
from Class Y Shares
transactions 1,424,728 $ 18,074,770 8,725,212 $120,771,337 (106,629) ($ 2,701,765) 9,737,865 $ 139,790,380
---------- ------------ ----------- ------------ ---------- ------------ ----------- -------------
Net change resulting
from fund shares
transactions 2,747,271 $ 37,049,730 (44,765) ($1,322,964) 1,008,338 $ 16,582,098 1,538,422 $ 20,586,677
---------- ------------ ----------- ------------ ---------- ------------ ----------- -------------
<CAPTION>
Equity Index Fund Special Values Fund
---------------------------------------------------- ----------------------------------------------------
Year Ended Year Ended
November 30, November 30,
1997 1996 1997 1996
CLASS A SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 1,795,756 $ 31,728,579 4,245,012 $ 58,360,015 1,739,422 $ 30,963,930 2,051,670 $ 28,299,705
Shares issued to
shareholders in
payment of
distributions
declared 92,034 1,446,794 1,080,710 14,197,673 55,077 3,766,298 163,047 1,868,520
Shares redeemed (328,029) (5,569,777) (17,907,828) (256,433,877) (192,159) (24,998,451) (3,768,276) (55,765,196)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from Class A Shares
transactions 1,559,761 $ 27,605,596 (12,582,106) ($183,876,189) 1,602,340 $ 9,731,777 (1,553,559) ($ 25,596,971)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1997 1996* 1997 1996*
CLASS Y SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 3,625,782 $ 59,771,966 14,081,776 $ 204,392,991 1,949,765 $ 29,965,567 3,761,852 $ 55,994,595
Shares issued to
shareholders in
payment of
distributions
declared 1,067,983 16,435,346 69,106 993,742 264,487 784,291 -- --
Shares redeemed (4,964,256) (85,569,794) (772,944) (11,455,108) (1,432,685) (3,265,657) (17,001) (253,468)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from Class Y Shares
transactions (270,491) ($ 9,362,482) 13,377,938 $ 193,931,625 781,567 $ 27,484,201 3,744,851 $ 55,741,127
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from fund shares
transactions 1,289,270 $ 18,243,114 795,832 $ 10,055,436 2,383,907 $ 37,215,978 2,191,292 $ 30,144,156
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
</TABLE>
* For the period from July 22, 1996 (date of initial public investment) to
November 30, 1996.
<TABLE>
<CAPTION>
Emerging Markets Fund Balanced Fund
---------------------------------------------------- ----------------------------------------------------
Year Ended Year Ended
November 30, November 30,
1997 1996* 1997 1996*
CLASS A SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 397,024 $ 5,133,749 3,906,620 $ 45,872,322 2,645,070 $ 34,032,927 4,734,155 $ 56,693,222
Shares issued to
shareholders in
payment of
distributions
declared 4,411 51,046 9,503 99,884 224,438 2,637,286 933,946 10,904,370
Shares redeemed (152,774) (1,893,197) (10,296,117) (121,538,320) (424,714) (5,378,843) (21,667,531) (267,918,591)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from Class A Shares
transactions 248,661 $ 3,291,598 (6,379,994) ($ 75,566,114) 2,444,794 $ 31,291,370 (15,999,430) ($200,320,999)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1997 1996* 1997 1996*
CLASS B SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold -- -- -- -- 307,846 $ 3,836,282 138,824 $ 1,742,415
Shares issued to
shareholders in
payment of
distributions
declared -- -- -- -- 25,319 297,800 199 2,452
Shares redeemed -- -- -- -- (23,218) (287,652) (1,945) (24,476)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from Class B Shares
transactions -- -- -- -- 309,947 $ 3,846,430 137,078 $ 1,720,391
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1997 1996* 1997 1996*
CLASS Y SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 3,238,727 $ 41,075,269 10,575,616 $ 124,884,916 4,538,586 $ 55,921,692 18,394,067 $ 229,263,647
Shares issued to
shareholders in
payment of
distributions
declared 27,266 315,464 -- -- 2,622,663 30,704,969 116,320 1,430,732
Shares redeemed (1,251,929) (16,755,254) (37,203) (437,260) (6,039,198) (76,009,694) (777,484) (9,783,760)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from Class Y Shares
transactions 2,014,064 $ 24,635,479 10,538,413 $ 124,447,656 1,122,051 $ 10,616,967 17,732,903 $ 220,910,619
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from fund shares
transactions 2,262,725 $ 27,927,077 4,158,419 $ 48,881,542 3,876,792 $ 45,754,767 1,870,551 $ 22,310,011
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
</TABLE>
* For the period from July 22, 1996 (date of initial public investment) to
November 30, 1996.
<TABLE>
<CAPTION>
Fixed Income Fund Short-Term Fixed Income Fund
---------------------------------------------------- ----------------------------------------------------
Year Ended Year Ended
November 30, November 30,
1997 1996 1997 1996
CLASS A SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 763,371 $ 7,449,000 6,715,943 $ 64,981,743 598,882 $ 5,854,415 1,790,753 $ 17,444,566
Shares issued to
shareholders in
payment of
distributions
declared 27,666 268,160 660,839 6,370,033 12,820 124,911 596,490 5,812,653
Shares redeemed (265,357) (2,587,866) (24,034,268) ($231,527,214) (42,556) (415,946) (14,822,145) (144,192,757)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from Class A Shares
transactions 525,680 $ 5,129,294 (16,657,486) ($160,175,438) 569,146 $ 5,563,380 (12,434,902) ($120,935,538)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1997 1996* 1997 1996
CLASS B SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 2,843 $ 27,578 11,286 $ 108,503 -- -- -- --
Shares issued to
shareholders in
payment of
distributions
declared 624 6,032 173 1,660 -- -- -- --
Shares redeemed (705) (6,809) -- -- -- -- -- --
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from Class B Shares
transactions 2,762 $ 26,801 11,459 $ 110,163 -- -- -- --
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1997 1996* 1997 1996*
CLASS Y SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 6,398,418 $ 61,907,491 18,920,202 $ 182,149,767 1,976,003 $ 19,286,564 12,375,109 $ 120,492,401
Shares issued to
shareholders in
payment of
distributions
declared 741,178 7,156,206 185,028 1,776,010 603,014 5,869,807 142,721 1,387,283
Shares redeemed (6,203,149) (59,960,020) (1,212,034) (11,707,854) (5,121,485) (50,010,275) (653,343) (6,369,350)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from Class Y Shares
transactions 936,447 $ 9,103,677 17,893,196 $ 172,217,923 (2,542,468) ($24,853,904) 11,864,487 $ 115,510,334
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from fund shares
transactions 1,464,889 $ 14,259,772 1,247,169 $ 12,152,648 (1,973,322) ($19,290,524) (570,415) ($ 5,425,204)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
</TABLE>
* For the period from July 22, 1996 (date of initial public investment) to
November 30, 1996.
<TABLE>
<CAPTION>
Georgia Municipal Bond Fund North Carolina Municipal Bond Fund
---------------------------------------------------- ----------------------------------------------------
Year Ended Year Ended
November 30, November 30,
1997 1996 1997 1996
CLASS A SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 67,805 $ 739,368 560,134 $ 6,056,816 172,088 $ 1,866,534 2,169,547 $ 23,350,755
Shares issued to
shareholders in
payment of
distributions
declared 21,179 231,331 27,478 297,430 38,242 419,303 53,359 578,075
Shares redeemed (185,896) (2,024,593) (835,094) (9,088,233) (418,688) (4,556,530) (2,674,655) (29,234,426)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from Class A Shares
transactions (96,912) ($ 1,053,894) (247,482) ($ 2,733,987) (208,358) ($ 2,270,693) (451,749) ($ 5,305,596)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
<CAPTION>
1997 1996* 1997 1996*
CLASS Y SHARES Shares Dollars Shares Dollars Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 612,513 $ 6,727,857 618,468 $ 6,747,412 1,693,364 $ 18,540,740 2,567,467 $ 28,088,051
Shares issued to
shareholders in
payment of
distributions
declared 4,440 48,583 113 1,250 9,477 103,874 176 1,943
Shares redeemed (127,557) (1,383,827) -- -- (315,766) (3,471,057) (2,814) (30,872)
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from Y Shares
transactions 489,396 $ 5,392,613 618,581 $ 6,748,662 1,387,075 $ 15,173,557 2,564,829 $ 28,059,122
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
Net change resulting
from fund shares
transactions 392,484 $ 4,338,719 371,099 $ 4,014,675 1,178,717 $ 12,902,864 2,113,080 $ 22,753,526
---------- ------------ ----------- ------------- ---------- ------------ ----------- -------------
<CAPTION>
South Carolina Municipal Bond Fund
----------------------------------------------------
Year Ended
November 30,
1997 1996*
CLASS A SHARES Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 714,128 $ 7,829,566 2,016,192 $ 21,951,155
Shares issued to
shareholders in
payment of
distributions
declared 190,426 2,085,665 197,897 2,151,141
Shares redeemed (1,062,157) (11,623,252) (4,721,556) (51,567,032)
---------- ------------ ----------- -------------
Net change resulting
from Class A Shares
transactions (157,603) ($ 1,708,021) (2,507,467) ($ 27,464,736)
---------- ------------ ----------- -------------
<CAPTION>
1997 1996*
CLASS Y SHARES Shares Dollars Shares Dollars
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 1,119,082 $ 12,295,135 3,322,198 $ 36,432,281
Shares issued to
shareholders in
payment of
distributions
declared 15,737 172,237 683 7,559
Shares redeemed (495,245) (5,428,033) (17,589) (193,563)
---------- ------------ ----------- -------------
Net change resulting
from Class Y Shares
transactions 639,574 $ 7,039,339 3,305,292 $ 36,246,277
---------- ------------ ----------- -------------
Net change resulting
from fund shares
transactions 481,971 $ 5,331,318 797,825 $ 8,781,541
---------- ------------ ----------- -------------
</TABLE>
* For the period from July 22, 1996 (date of initial public investment) to
November 30, 1996.
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Asset Management, the Funds' investment
adviser (the "Adviser"), receives for its services an annual investment advisory
fee based on a percentage of each Fund's average daily net assets as listed
below. The Adviser may voluntarily choose to waive any portion of its fee. The
Adviser can modify or terminate this voluntary waiver at any time at its sole
discretion.
<TABLE>
<CAPTION>
Fund Annual Rate
<S> <C>
Equity Fund 0.70%
Quantitative Equity Fund 0.70%
Equity Index Fund 0.30%
Special Values Fund 0.80%
Emerging Markets Fund 1.00%
Balanced Fund 0.70%
Fixed Income Fund 0.60%
Short-Term Fixed Income Fund 0.55%
Georgia Municipal Bond Fund 0.75%
North Carolina Municipal Bond Fund 0.75%
South Carolina Municipal Bond Fund 0.75%
</TABLE>
SUB ADVISORY FEE--The Adviser has entered into a sub-advisory agreement with
Twin Capital Management, Inc. (the "Sub-Adviser"). The Sub-Adviser furnishes
certain advisory services to the Adviser for Quantitative Equity Fund, including
investment research, quantitative analysis, statistical and other factual
information, and recommendations based on the Sub-Adviser's analysis, and
assists the Adviser in identifying securities for potential purchase and/or
sale. The Sub-Adviser is entitled to receive an annual fee of $55,000 payable by
the Advisor. The Sub-Adviser may elect to waive some or all of its fee.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Funds
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Trusts for the period.
DISTRIBUTION SERVICES FEE--Equity Fund, Quantitative Equity Fund, Balanced Fund,
and Fixed Income Fund have adopted a Distribution Plan (the "Plan") pursuant to
Rule 12b-1 under the Act. Under the terms of the Plan, the Funds will compensate
Federated Securities Corp. ("FSC"), the principal distributor, from their
respective net assets to finance certain activities intended to result in the
sale of Class B Shares. The Plan provides that each Fund may incur distribution
expenses up to 0.75% of the average daily net assets of each Fund's Class B
Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any
portion of its fee and/or reimburse certain operating expenses of the Funds. FSC
can modify or terminate this voluntary waiver and/or reimbursement at any time
at its sole discretion.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with FAS, the Fund will pay FAS up to 0.25% of average daily net assets of each
Fund's Class A Shares and Class B Shares for the period. The fee paid to FAS is
used to finance certain services for shareholders and to maintain shareholder
accounts. FAS may voluntarily choose to waive any portion of its fee. FAS can
modify or terminate this voluntary waiver at any time at its sole discretion.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ"), through its subsidiary, Federated Shareholder Services Company
("FSSC") serves as transfer and dividend disbursing agent for the Funds. The fee
paid to FSSC is based on the size, type, and number of accounts and transactions
made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ, through its subsidiary, FAS, maintains the
Funds' accounting records for which it receives a fee. The fee is based on the
level of each Fund's average daily net assets for the period, plus out-of-pocket
expenses. FAS may voluntarily choose to waive any portion of its fee.
CUSTODIAN FEES--Wachovia Bank, N.A. is the Funds' custodian. The fee is based on
the level of each Fund's average daily net assets for the period, plus
out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses were borne initially by FAS.
The Funds have agreed to reimburse FAS for the organizational expenses during
the five-year period following the effective date of each Fund. For the period
ended November 30, 1997, the Funds made the following reimbursements to FAS
pursuant to this agreement:
<TABLE>
<CAPTION>
Organizational Organizational
Fund Expenses Expenses Paid
<S> <C> <C>
Equity Fund $ 34,484 $ 10,859
Quantitative Equity Fund 34,484 11,324
Equity Index Fund 34,484 10,707
Special Values Fund 33,777 11,071
Emerging Markets Fund 40,764 --
Balanced Fund 31,904 10,457
Fixed Income Fund 34,484 10,656
Short-Term Fixed Income Fund 34,484 11,303
Georgia Municipal Bond Fund 30,000 6,753
North Carolina Municipal Bond Fund 30,000 6,086
</TABLE>
GENERAL--Certain of the Officers of the Trusts are Officers and Directors or
Trustees of the above companies.
5. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding short-term securities, for the
period ended November 30, 1997, were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales
<S> <C> <C>
Equity Fund $ 201,260,493 $ 182,370,577
Quantitative Equity Fund 137,639,873 130,740,719
Equity Index Fund 159,800,557 154,418,291
Special Values Fund 51,244,193 39,783,851
Emerging Markets Fund 100,106,444 86,754,567
Balanced Fund 412,347,360 392,132,102
Fixed Income Fund 324,690,003 311,058,686
Short-Term Fixed Income Fund 239,714,794 255,741,842
Georgia Municipal Bond Fund 6,180,997 3,633,360
North Carolina Municipal Bond Fund 17,265,142 7,598,533
South Carolina Municipal Bond Fund 15,411,519 11,460,059
</TABLE>
6. CONCENTRATION OF CREDIT RISK
Emerging Markets Fund invests in securities of non-U.S. issuers. Although the
Fund maintains a diversified investment portfolio, the political or economic
developments within a paticular country or region may have an adverse effect on
the ability of domiciled issuers to meet their obligations. Additionally,
political or economic developments may have an effect on the liquidity and
volatility of the Fund's portfolio securities and currency holdings.
At November 30, 1997, the diversification of industries for the Emerging Markets
Fund was as follows:
<TABLE>
<CAPTION>
% of
Industry Net Assets
<S> <C>
Finance 28.1%
Basic Industries 4.9%
Capital Goods 3.1%
Consumer Basics 6.1%
Energy 5.2%
Misc. 28.9%
Technology 1.0%
Utilities 14.1%
General Business 4.1%
Consumer Non-Durables 1.6%
Consumer Durables 2.0%
Consumer 0.5%
Shelter 1.7%
Transportation 0.2%
</TABLE>
Since each of the portfolios/series of The Wachovia Municipal Funds invest a
substantial portion of its assets in issuers located in one state, the Funds
will be more susceptible to factors adversely affecting issuers of that state
than would be a comparable tax-exempt mutual fund that invests nationally. In
order to reduce the credit risk associated with such factors, at November 30,
1997, the securities in the Funds' portfolios of investments were backed by
letters of credit or bond insurance of various financial institutions and
financial guaranty assurance agencies, as indicated below. The largest
percentage of investments insured by or supported (backed) by a letter of credit
from any one institution or agency is also indicated below.
<TABLE>
<CAPTION>
% of Portfolio % of Portfolio Backed by
Fund Guaranteed/Insured Largest Guarantor/Insurer
<S> <C> <C>
Georgia Municipal Bond Fund 47.9% 15.0%
North Carolina Municipal Bond Fund 38.0% 19.9%
South Carolina Municipal Bond Fund 58.0% 27.6%
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Trustees and Shareholders of
THE WACHOVIA FUNDS and THE WACHOVIA MUNICIPAL FUNDS:
(formerly The Biltmore Funds and The Biltmore Municipal Funds)
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Wachovia Balanced Fund, Wachovia Emerging
Markets Fund, Wachovia Equity Fund, Wachovia Equity Index Fund, Wachovia Fixed
Income Fund, Wachovia Quantitative Equity Fund, Wachovia Short-Term Fixed Income
Fund, Wachovia Special Values Fund, Wachovia Georgia Municipal Bond Fund,
Wachovia North Carolina Municipal Bond Fund, and Wachovia South Carolina
Municipal Bond Fund (portfolios of The Wachovia Funds and The Wachovia Municipal
Funds, respectively) as of November 30, 1997, and the related statements of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended and financial highlights for the
periods presented. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1997, by correspondence with the custodian and brokers or other
appropriate auditing procedures where replies from brokers were not received. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Wachovia Balanced Fund, Wachovia Emerging Markets Fund, Wachovia Equity Fund,
Wachovia Equity Index Fund, Wachovia Fixed Income Fund, Wachovia Quantitative
Equity Fund, Wachovia Short-Term Fixed Income Fund, Wachovia Special Values
Fund, Wachovia Georgia Municipal Bond Fund, Wachovia North Carolina Municipal
Bond Fund, and Wachovia South Carolina Municipal Bond Fund of The Wachovia Funds
and The Wachovia Municipal Funds, respectively, at November 30, 1997, and the
results of their operations for the year then ended, changes in their net assets
for each of the two years in the period then ended, and financial highlights for
the periods presented, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
January 23, 1998
THIS PAGE INTENTIONALLY LEFT BLANK
THIS PAGE INTENTIONALLY LEFT BLANK
THIS PAGE INTENTIONALLY LEFT BLANK
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRUSTEES OFFICERS
<TABLE>
<S> <C>
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Charles L. Davis, Jr.
D. Dean Kaylor Vice President and Assistant Treasurer
Charles S. Way, Jr. Peter J. Germain
Secretary
Gail Cagney
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves risk, including possible
loss of principal.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Fund's prospectus which contains facts concerning
its investment objective and policies, management fees, expenses and other
information.
Federated Securities Corp.
is the distributor of the funds.
831-27 (1/98) G01512-17(1/98)
WACHOVIA MONEY MARKET FUND
INSTITUTIONAL SHARES
Annual Report
November 30, 1997
WACHOVIA
- --------------------------------------------------------------------------------
Effective July 31, 1997 The Biltmore Funds became The Wachovia Funds
================================================================================
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Annual Report to Shareholders of the Wachovia Money
Market Fund, Institutional Shares, for the 12-month period ended November 30,
1997. This report includes a list of the fund's holdings and the fund's complete
financial information.
During the reporting period, the fund's portfolio of high-quality money market
securities provided shareholders with dividends totaling $0.05 per share. Of
course, the fund also maintained a stable share value of $1.00.* The fund's
assets rose by more than $100 million, reaching $477.9 million at the end of the
reporting period.
Thank you for selecting Wachovia Money Market Fund as a liquid, stable
investment for your ready cash. As we begin a new year, we renew our commitment
to keep you up-to-date on your investment, and provide your account with the
highest level of service.
Sincerely,
John W. McGonigle
President
January 15, 1998
* Money market mutual funds seek to maintain a stable net asset value of $1.00
per share. There is no assurance that they will be able to do so. An
investment in the fund is neither insured nor guaranteed by the U.S.
government.
================================================================================
WACHOVIA MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Principal
Amount Value
<C> <S> <C>
- --------------------------------------------------------------------------------------------------------
Bank Notes--3.3%
BANKING & FINANCE--3.3%
$ 16,000,000 Lasalle National Bank, Chicago, 5.960% - 6.240%,
2/17/1998 - 4/21/1998 $ 16,000,000
---------------
Bankers Acceptance--1.9%
BANKING & FINANCE--1.9%
4,000,000 Bank of Hawaii, 5.920%, 5/11/1998 3,897,139
5,000,000 SunTrust Bank, Atlanta, 5.830%, 7/14/1998 4,998,231
---------------
Total Bankers Acceptances 8,895,370
---------------
Time Deposits--8.4%
BANKING--8.4%
20,000,000 Citibank, Toronto, 5.710%, 1/26/1998 20,000,000
20,000,000 Toronto-Dominion Bank, 5.700%, 1/6/1998 20,000,000
---------------
Total Time Deposits 40,000,000
---------------
Certificates of Deposit--21.5%
10,000,000 Bank of America NT and SA, San Francisco, 5.840%, 10/29/1998 10,000,000
12,500,000 Barclays Bank PLC, London, 5.770% - 5.830%, 1/16/1998 -
3/5/1998 12,499,540
20,000,000 CIBC Wood Gundy Securities Corp., 5.680% - 5.760%,
2/12/1998 - 2/27/1998 19,998,602
3,000,000 Credit Suisse First Boston, 6.250%, 4/10/1998 3,000,000
19,000,000 Deutsche Bank, New York, 5.910%, 9/2/1998 18,999,202
5,000,000 Morgan Guaranty Trust Co., New York, 5.850%, 3/16/1998 4,999,587
10,000,000 National Westminster Bank, New Jersey, 5.750%, 2/27/1998 10,000,000
8,500,000 Rabobank Nederland, Utrecht, 5.990%, 3/24/1998 8,502,067
15,000,000 Swiss Bank Corp., Basle, 6.040%, 2/17/1998 15,000,000
---------------
Total Certificates of Deposit 102,998,998
---------------
(a) Commercial Paper--43.4%
CHEMICAL & ALLIED PRODUCTS--4.1%
20,000,000 Du Pont (E.I.) de Nemours & Co., 5.690%, 5/14/1998 19,495,244
---------------
FINANCE - CONSUMER--4.2%
20,000,000 Xerox Credit Corp., 5.533%, 12/4/1997 19,990,850
---------------
FINANCE - AUTOMOTIVE--4.2%
20,000,000 Ford Motor Credit Corp., 5.540%, 12/4/1997 19,990,800
---------------
FINANCIAL SERVICES--26.8%
$ 20,000,000 Associates Corp. of North America, 5.633% - 5.769%,
1/14/1998 - 2/12/1998 $ 19,817,398
20,000,000 Bell Atlantic Financial Services, Inc., 5.734%, 1/6/1998 19,886,200
20,000,000 General Electric Capital Corp., 5.627%, 3/5/1998 19,712,778
20,000,000 General Electric Capital Services, 5.587%, 1/7/1998 19,886,739
20,000,000 Rio Tinto America, Inc., 5.663%, 2/6/1998 19,792,300
10,000,000 SBC Communications Capital Corp., 5.570%, 12/1/1997 10,000,000
19,000,000 USAA Capital Corp., 5.570%, 12/4/1997 18,991,323
---------------
Total 128,086,738
---------------
PRINTING & PUBLISHING--4.1%
20,000,000 Gannett Co., Inc., 5.706%, 1/15/1998 19,858,750
---------------
Total Commercial Paper 207,422,382
---------------
Corporate Bonds--1.0%
FINANCIAL SERVICES--1.0%
5,000,000 Commercial Credit Co., 5.500%, 5/15/1998 4,990,009
---------------
(b) Notes - Variable--2.1%
FINANCE--2.1%
10,000,000 First Union National Bank, Charlotte, N.C., 5.670%, 12/2/1997 10,000,000
---------------
(c) Repurchase Agreements--17.9%
80,000,000 CS First Boston Corp., 5.720%, dated 11/28/1997, due 12/1/1997 80,000,000
5,435,521 Goldman Sachs Group, LP, 5.500%, dated 11/28/1997, due
12/1/1997 5,435,521
---------------
Total Repurchase Agreements 85,435,521
---------------
Total Investments, at amortized cost and value (d) $ 475,742,280
---------------
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
(b) Current rate and next reset date shown.
(c) The repurchase agreements are fully collateralized by U.S. government
and/or agency obligations based on market prices at the date of the
portfolio.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($477,917,997) at November 30, 1997.
================================================================================
WACHOVIA MONEY MARKET FUND
The following acronyms are used throughout this portfolio:
LP--Limited Partnership
PLC--Public Limited Company
SA--Support Agreement
(See Notes which are an integral part of the Financial Statements)
================================================================================
WACHOVIA MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Assets:
Investments in repurchase agreements $ 85,435,521
Investments in securities 390,306,759
---------------
Total investments in securities, at amortized cost and value $ 475,742,280
Income receivable 4,320,535
Receivable for shares sold 674
Deferred expenses 1,549
---------------
Total assets 480,065,038
Liabilities:
Payable for shares redeemed 48,754
Payable to Bank 1,941,250
Accrued expenses 157,037
---------------
Total liabilities 2,147,041
---------------
Net Assets for 477,917,997 shares outstanding $ 477,917,997
---------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Institutional Shares: ($157,438,376 / 157,438,376 shares outstanding) $1.00
---------------
Investment Shares: ($320,479,621 / 320,479,621 shares outstanding) $1.00
---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
================================================================================
WACHOVIA MONEY MARKET FUND
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 23,995,517
Expenses:
Investment advisory fee $ 2,133,189
Administrative personnel and services fee 357,303
Custodian fees 76,496
Transfer and dividend disbursing agent fees and expenses 43,847
Trustees' fees 16,828
Auditing fees 15,068
Legal fees 6,731
Portfolio accounting fees 96,261
Distribution services fee--Investment Shares 1,086,207
Share registration costs 46,199
Printing and postage 27,001
Insurance premiums 2,593
Miscellaneous 6,803
-------------
Total expenses 3,914,526
Waiver of investment advisory fee (1,207,652)
-------------
Net expenses 2,706,874
-------------
Net investment income $ 21,288,643
-------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
================================================================================
WACHOVIA MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended November 30,
----------------------------------
1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 21,288,643 $ 16,486,344
---------------- ----------------
Distributions to Shareholders--
Distributions from net investment income
Institutional Shares (8,124,369) (6,851,442)
Investment Shares (13,164,274) (9,634,902)
---------------- ----------------
Change in net assets resulting from distributions
to shareholders (21,288,643) (16,486,344)
---------------- ----------------
Share Transactions--
Proceeds from sale of shares 654,823,654 617,636,182
Net asset value of shares issued to shareholders
in payment of distributions declared 51,644 10,615
Cost of shares redeemed (542,967,934) (543,313,516)
---------------- ----------------
Change in net assets resulting from share transactions 111,907,364 74,333,281
---------------- ----------------
Change in net assets 111,907,364 74,333,281
Net Assets:
Beginning of period 366,010,633 291,677,352
---------------- ----------------
End of period $ 477,917,997 $ 366,010,633
---------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
================================================================================
WACHOVIA MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.05 0.06 0.04 0.03
Less distributions
Distributions from net investment income (0.05) (0.05) (0.06) (0.04) (0.03)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Total return (a) 5.37% 5.25% 5.75% 3.77% 3.05%
Ratios to average net assets
Expenses 0.38% 0.37% 0.38% 0.38% 0.25%
Net investment income 5.24% 5.14% 5.61% 3.74% 3.00%
Expense waiver/reimbursement (b) 0.28% 0.32% 0.34% 0.40% 0.56%
Supplemental data
Net assets, end of period (000 omitted) $157,438 $135,748 $126,042 $129,233 $177,090
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
================================================================================
WACHOVIA MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.05 0.05 0.03 0.03
Less distributions
Distributions from net investment income (0.05) (0.05) (0.05) (0.03) (0.03)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Total return (a) 4.95% 4.83% 5.40% 3.46% 2.74%
Ratios to average net assets
Expenses 0.78% 0.77% 0.72% 0.68% 0.55%
Net investment income 4.85% 4.74% 5.27% 3.44% 2.70%
Expense waiver/reimbursement (b) 0.28% 0.32% 0.40% 0.50% 0.66%
Supplemental data
Net assets, end of period (000 omitted) $320,480 $230,263 $165,636 $56,105 $9,842
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
===============================================================================
WACHOVIA MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
1. ORGANIZATION
The Wachovia Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act") as an open-end, management investment company.
The Trust consists of twelve portfolios. The financial statements included
herein are only those of Wachovia Money Market Fund (the "Fund"), a diversified
portfolio. The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held.
The Fund offers two classes of shares: Institutional Shares and Investment
Shares. Investment Shares are identical in all respects to Institutional Shares
except that Investment Shares are sold pursuant to a distribution plan (the
"Plan") adopted in accordance with Rule 12b-1 under the Act. The investment
objective of the Fund is to provide income consistent with stability of
principal and liquidity.
On July 31, 1997, the Trust, and each of the underlying portfolios and classes,
changed its name from The Biltmore Funds to The Wachovia Funds.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund uses the amortized cost method to value its
portfolio securities in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards established and reviewed by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Fund could
receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by the Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period not to exceed five years from the Fund's
commencement date.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Year Ended November 30,
------------------------------
1997 1996
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
Institutional Shares
Shares sold 266,957,724 333,951,621
Shares redeemed (245,267,123) (324,245,481)
-------------- --------------
Net change resulting from Institutional Share transactions 21,690,601 9,706,140
-------------- --------------
<CAPTION>
Year Ended November 30,
------------------------------
1997 1996
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------
Investment Shares
Shares sold 387,865,930 283,684,561
Shares issued to shareholders in payment of distributions declared 51,644 10,615
Shares redeemed (297,700,811) (219,068,035)
-------------- --------------
Net change resulting from Investment Share transactions 90,216,763 64,627,141
-------------- --------------
Net change resulting from share transactions 111,907,364 74,333,281
-------------- --------------
</TABLE>
At November 30, 1997, capital paid-in aggregated $477,917,997.
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Asset Management, the Fund's investment
adviser (the "Adviser"), receives for its services an annual investment advisory
fee equal to 0.50% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Fund
with certain administrative personnel and services. The fee paid to FAS is based
on the level of average aggregate net assets of the Trust and the Wachovia
Municipal Funds for the period. Prior to December 4, 1997, the administrative
fee during any fiscal year for the funds aggregated at least $75,000. After that
date, FAS ceased imposing a minimum administrative fee.
DISTRIBUTION SERVICES FEE--Under the terms of the Plan, the Fund will compensate
Federated Securities Corp. ("FSC"), the principal distributor, from the net
assets of the Fund to finance activities intended to result in the sale of the
Fund's Investment Shares. The Plan provides that the Fund may incur distribution
expenses up to 0.40% of the average daily net assets of its Investment Shares,
annually, to compensate FSC.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated Services
Company ("FServ"), through its subsidiary, Federated Shareholder Services
Company ("FSSC"), serves as transfer and dividend disbursing agent for the Fund.
The fee paid to FSSC is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ, through its subsidiary FAS, maintains the
Fund's accounting records for which it receives a fee. The fee is based on the
level of the Fund's average daily net assets for the period, plus out-of-pocket
expenses.
CUSTODIAN FEES--Wachovia Bank N.A. is the Fund's custodian for which it receives
a fee. The fee is based on the level of the Fund's average daily net assets for
the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses of $63,357 were borne initially
by FAS. The Fund has agreed to reimburse FAS for the organizational expenses
during the five year period following effective date. For the period ended
November 30, 1997, the Fund paid $2,212 pursuant to this agreement.
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
===============================================================================
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Trustee and Shareholders of
THE WACHOVIA MONEY MARKET FUND:
(formerly The Biltmore Money Market Fund)
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Wachovia Money Market Fund (one of the
portfolios comprising The Wachovia Funds) as of November 30, 1997, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended and
financial highlights for the periods presented. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1997, by correspondence with the custodian and brokers or other
appropriate auditing procedures where replies from brokers were not received. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Wachovia Money Market Fund of The Wachovia Funds at November 30, 1997, and the
results of its operations for the year then ended, changes in its net assets for
each of the two years in the period then ended, and financial highlights for the
periods presented, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
January 20, 1998
===============================================================================
TRUSTEES OFFICERS
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Charles L. Davis, Jr.
D. Dean Kaylor Vice President and Assistant Treasurer
Charles S. Way, Jr. Peter J. Germain
Secretary
Gail Cagney
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves risk, including possible
loss of principal. Although money market funds seek to maintain a stable net
asset value of $1.00 per share, there is no assurance that they will be able to
do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
Federated Securities Corp. Cusip 929901106
is the distributor of the fund Cusip 929901205
831-16 (1/98) G01512-05 (1/98)
WACHOVIA PRIME CASH
MANAGEMENT FUND
WACHOVIA TAX-FREE
MONEY MARKET FUND
WACHOVIA U.S. TREASURY
MONEY MARKET FUND
Annual Report
November 30, 1997
- ------------------------------------------------------------------------WACHOVIA
Effective July 31, 1997 The Biltmore Funds became the Wachovia Funds
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Annual Report to Shareholders of the Wachovia money
market funds, Institutional Shares, for the 12-month period ended November 30,
1997.This report includes a list of each fund's holdings and the fund's complete
financial information.
Each Wachovia money market fund continued to provide investors with daily income
on their ready cash, while maintaining a stable $1.00 share value.* The
fund-by-fund highlights are as follows:
WACHOVIA PRIME CASH MANAGEMENT FUND
The fund's portfolio of high quality money market securities provided
shareholders with dividends totaling $0.05 per share, while maintaining a stable
share value of $1.00.* The fund's net assets reached $1.4 billion at the end of
the reporting period.
WACHOVIA TAX-FREE MONEY MARKET FUND
The fund's portfolio of tax-free money market securities, which at the end of
the 12-month period were diversified among municipalities across the U.S.,
provided shareholders with federally tax-free dividends totaling $0.03 per
share,** while maintaining a stable share value of $1.00.* The fund's net assets
rose to reach $268.3 million at the end of the reporting period.
WACHOVIA U.S. TREASURY MONEY MARKET FUND
Fund net assets soared by more than $200 million to reach $627.8 million, as the
fund's portfolio of U.S. Treasury money market securities paid dividends of
$0.05 per share while maintaining a stable share value of $1.00.*
Thank you for choosing a Wachovia money market fund to keep your cash working
for you--every day. As we begin a new year, we renew our commitment to keep you
up-to-date on your investment, and provide your account with the highest level
of service.
Sincerely,
/s/ John W. McGonigle
John W. McGonigle
President
January 15, 1998
* Money market mutual funds seek to maintain a stable net asset value of $1.00
per share. There is no assurance that they will be able to do so. An
investment in the funds is neither insured nor guaranteed by the U.S.
government.
** Income may be subject to the federal alternative minimum tax and state and
local taxes.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA PRIME CASH MANAGEMENT FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C>
Bank Notes--4.3%
$ 42,000,000 Lasalle National Bank, Chicago, 5.770% - 6.240%,
4/21/1998 - 7/30/1998 $ 42,000,000
20,000,000 Morgan Guaranty Trust Co., New York, 5.850%, 3/16/1998 19,998,349
-----------------
Total Bank Notes 61,998,349
-----------------
Bankers Acceptance--1.7%
25,000,000 SunTrust Bank, Atlanta, 5.830%, 7/14/1998 24,991,154
-----------------
Time Deposits--10.0%
10,000,000 ABN AMRO Bank, Canada, 5.625%, 12/8/1997 10,000,000
25,000,000 Royal Bank of Scotland PLC, Edinburgh, 5.750%, 10/28/1998 25,000,000
60,000,000 Toronto-Dominion Bank, 5.700% - 5.780%,
2/20/1998 - 5/26/1998 60,000,000
50,000,000 Union Bank of Switzerland, Zurich, 5.625%, 12/3/1997 50,000,000
-----------------
Total Time Deposits 145,000,000
-----------------
Certificates Of Deposit--21.8%
30,000,000 Barclays Bank PLC, London, 5.770% - 5.830%,
1/16/1998 - 3/5/1998 29,999,019
60,000,000 CIBC Wood Gundy Securities Corp., 5.680% - 5.760%,
2/12/1998 - 2/27/1998 59,997,203
12,000,000 Credit Suisse First Boston, 6.250%, 4/10/1998 12,000,000
70,000,000 Deutsche Bank, New York, 5.640% - 5.910%,
1/12/1998 - 9/2/1998 70,003,041
35,000,000 Morgan Guaranty Trust Co., New York, 5.590%, 12/19/1997 35,000,347
25,000,000 National Westminster Bank, New Jersey, 5.750%, 2/27/1998 25,000,000
29,000,000 Rabobank Nederland, Utrecht, 5.780% - 5.990%,
2/3/1998 - 3/24/1998 29,005,795
10,000,000 Regions Bank, Alabama, 5.710%, 2/26/1998 10,000,000
45,000,000 Swiss Bank Corp., Basle, 6.040%, 2/17/1998 45,000,000
-----------------
Total Certificates of Deposit 316,005,405
-----------------
(a) Commercial Paper--39.6%
CHEMICAL & ALLIED PRODUCTS--3.4%
50,000,000 Du Pont (E.I.) de Nemours & Co., 5.630% - 5.660%,
3/3/1998 - 3/6/1998 49,284,486
-----------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA PRIME CASH MANAGEMENT FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C>
(a) Commercial Paper--continued
CONSUMER NON-DURABLES--4.4%
$ 65,000,000 Gannett Co., Inc., 5.630%, 1/20/1998 $ 64,497,153
-----------------
FINANCE-6.1%
25,000,000 Panasonic Finance, Inc., 5.690%, 2/6/1998 24,741,771
63,500,000 SBC Communications, Inc., 5.570% - 5.600%,
12/1/1997 - 12/2/1997 63,494,118
-----------------
Total 88,235,889
-----------------
FINANCE - AUTOMOTIVE--3.4%
50,000,000 Ford Motor Credit Corp., 5.540%, 12/4/1997 49,977,000
-----------------
FINANCE - COMMERCIAL--12.6%
25,000,000 AI Credit Corp., 5.560%, 12/16/1997 24,942,396
35,000,000 Associates Corp. of North America, 5.680% - 5.770%,
1/23/1998 - 2/12/1998 34,629,104
25,000,000 General Electric Capital Corp., 5.590%, 1/7/1998 24,858,424
25,000,000 General Electric Capital Services, 5.640%, 1/13/1998 24,833,674
20,000,000 USAA Capital Corp., 5.620%, 1/20/1998 19,847,500
54,000,000 Xerox Credit Corp., 5.550% - 5.620%, 12/12/1997 - 2/9/1998 53,637,303
-----------------
Total 182,748,401
-----------------
FINANCE - FOOD & BEVERAGE--2.1%
30,000,000 Sara Lee Corp., 5.520%, 12/23/1997 29,899,900
-----------------
FINANCE - TELECOMMUNICATIONS--2.4%
35,000,000 Bell Atlantic Financial Services, Inc., 5.600%, 12/22/1997 34,886,483
-----------------
INDUSTRIAL SERVICES--2.1%
30,000,000 Exxon Imperial U.S., Inc., 5.550%, 12/2/1997 29,995,383
-----------------
OFFICE EQUIPMENT--1.4%
20,400,000 Xerox Corp., 5.600%, 1/7/1998 20,283,635
-----------------
UTILITIES - ELECTRIC--1.7%
25,000,000 General Electric Co., 5.730%, 1/22/1998 24,795,250
-----------------
Total Commercial Paper 574,603,580
-----------------
Corporate Bonds--0.4%
FINANCE - COMMERCIAL--0.4%
6,000,000 Commercial Credit Co., 5.500%, 5/15/1998 5,988,011
-----------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA PRIME CASH MANAGEMENT FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C>
(b) Notes - Variable--2.8%
FINANCE - BANKS--2.8%
$ 40,000,000 First Union National Bank, Charlotte, N.C., 5.670%, 12/2/1997 $ 40,000,000
-----------------
(c) Repurchase Agreements--19.1%
162,198,303 Goldman Sachs Group, LP, 5.500%, dated 11/28/1997,
due 12/1/1997 162,198,303
15,000,000 CS First Boston Corp., 5.720%, dated 11/28/1997,
due 12/1/1997 15,000,000
100,000,000 Morgan Stanley Group, Inc., 5.700%, dated 11/28/1997,
due 12/1/1997 100,000,000
-----------------
Total Repurchase Agreements 277,198,303
-----------------
Total Investments, at amortized cost and value (d) $ 1,445,784,802
-----------------
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
(b) Current rate and next reset date shown.
(c) The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($1,450,194,663) at November 30, 1997.
The following acronyms are used throughout this portfolio:
LP--Limited Partnership
PLC--Public Limited Company
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA PRIME CASH MANAGEMENT FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Assets:
Investments in repurchase agreements $ 277,198,303
Investments in securities 1,168,586,499
-----------------
Total investments in securities, at amortized cost and value $ 1,445,784,802
Income receivable 11,185,330
Deferred expenses 99,144
-----------------
Total assets 1,457,069,276
Liabilities:
Payable to bank 6,656,647
Accrued expenses 217,966
-----------------
Total liabilities 6,874,613
-----------------
Net Assets for 1,450,194,663 shares outstanding $ 1,450,194,663
-----------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
$1,450,194,663 / 1,450,194,663 shares outstanding $1.00
-----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA PRIME CASH MANAGEMENT FUND
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<S> <C> <C> <C>
Investment Income:
Interest $ 75,844,366
Expenses:
Investment advisory fee $ 4,057,063
Administrative personnel and services fee 1,132,184
Custodian fees 172,735
Transfer and dividend disbursing agent fees and expenses 27,669
Trustees' fees 48,543
Auditing fees 15,068
Legal fees 38,315
Portfolio accounting fees 135,679
Share registration costs 168,797
Printing and postage 8,792
Insurance premiums 5,589
Miscellaneous 6,129
------------
Total expenses 5,816,563
Waivers--
Waiver of investment advisory fee $ (2,841,923)
Waiver of administrative personnel and services fee (383,724)
Waiver of transfer and dividend disbursing agent fees and
expenses (24,068)
Waiver of portfolio accounting fees (133,079)
-------------
Total waivers (3,382,794)
------------
Net expenses 2,433,769
-------------
Net investment income $ 73,410,597
-------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA PRIME CASH MANAGEMENT FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended November 30,
--------------------------------------
1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 73,410,597 $ 56,117,058
------------------ ------------------
Distributions to Shareholders--
Distributions from net investment income (73,410,597) (56,117,058)
------------------ ------------------
Share Transactions--
Proceeds from sale of shares 2,702,347,584 2,583,312,246
Cost of shares redeemed (2,429,007,461) (2,286,061,101)
------------------ ------------------
Change in net assets resulting from share transactions 273,340,123 297,251,145
------------------ ------------------
Change in net assets 273,340,123 297,251,145
Net Assets:
Beginning of period 1,176,854,540 879,603,395
------------------ ------------------
End of period $ 1,450,194,663 $ 1,176,854,540
------------------ ------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA PRIME CASH MANAGEMENT FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
--------------------------------------------
1997 1996 1995 1994(a)
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.05 0.06 0.04
Less distributions
Distributions from net investment income (0.05) (0.05) (0.06) (0.04)
--------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- ---------
Total return (b) 5.55% 5.44% 5.95% 4.02%
Ratios to average net assets
Expenses 0.18% 0.18% 0.18% 0.18%*
Net investment income 5.43% 5.34% 5.80% 4.31%*
Expense waiver/reimbursement (c) 0.25% 0.27% 0.27% 0.28%*
Supplemental data
Net assets, end of period (000 omitted) $1,450,195 $1,176,855 $879,603 $816,008
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from December 2, 1993 (date of initial
public investment) to November 30, 1994.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Mutual Funds--4.6%
$ 3,592,896 AIM Global Management S\T Investments $ 3,592,896
658,886 Dreyfus Tax Exempt 658,886
8,053,687 Fidelity Tax Exempt Money Market 8,053,687
---------------
Total 12,305,469
---------------
Short-Term Municipals--95.0%
ALABAMA--2.6%
2,310,000 Alabama HFA, Refunding Revenue Bonds (Series B)
Weekly VRDNs 2,310,000
1,000,000 Birmingham, AL, (Series A) Weekly VRDNs 1,000,000
3,320,000 Birmingham, AL, GO (Series 1992A) Weekly VRDNs
(Regions Bank, Alabama LOC) 3,320,000
405,000 Tuscaloosa County, AL Port Authority, (Series 1989A) Weekly VRDNs
(Capstone Hotel Ltd.)/(SouthTrust Bank of Alabama, Birmingham LOC) 405,000
---------------
Total 7,035,000
---------------
ARIZONA--0.1%
200,000 Phoenix, AZ, GO UT Bonds Daily VRDNs 200,000
---------------
CALIFORNIA--4.9%
6,230,000 Los Angeles County, CA, 4.50% TRANs, 6/30/1998 6,255,674
3,000,000 Oakland, CA, 4.50% TRANs, 6/30/1998 3,013,024
3,800,000 Sonoma Valley, CA Unified School District, GO UT, 4.50% TRANs, 7/2/1998 3,814,946
---------------
Total 13,083,644
---------------
COLORADO--2.2%
6,000,000 Colorado State General Fund, (Series A), 4.50% TRANs,
6/26/1998 6,022,287
---------------
DELAWARE--1.3%
3,400,000 Wilmington, DE Hospital, Refunding Revenue Bonds Daily VRDNs (Franciscan
Health Care) 3,400,000
---------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
FLORIDA--8.2%
$ 5,000,000 Broward County, FL HFA, Revenue Bonds Weekly VRDNs (Welleby Apartments) $ 5,000,000
7,400,000 Collier County, FL HFA, Multi-Family Revenue Bonds
(Series 1985) Weekly VRDNs (River Reach Project) 7,400,000
1,750,000 Escambia County, FL Health Facilities Authority, IDR Bonds (Series A)
Monthly VRDNs (Florida Convalescent Centers Inc.)/ (Toronto-Dominion
Bank LOC) 1,750,000
700,000 Polk County, FL IDA, Refunding Revenue Bonds Monthly VRDNs (Florida
Convalescent Centers Inc.)/(Toronto-Dominion Bank LOC) 700,000
1,000,000 Polk County, FL IDA, Refunding Revenue Bonds Weekly VRDNs (IMC
Fertilizer, Inc. Project)/(Rabobank Nederland, Utrecht LOC) 1,000,000
4,700,000 Southeast Volusia Hospital District, Revenue Bonds (Series 1995) Weekly
VRDNs (Bert Fish Medical Center (FL))/(SouthTrust Bank of Alabama,
Birmingham LOC) 4,700,000
1,500,000 St. Lucie County, FL PCR, 3.70% CP (Florida Power & Light Co.),
Mandatory Tender 1/8/1998 1,500,000
---------------
Total 22,050,000
---------------
GEORGIA--8.6%
5,000,000 De Kalb Private Hospital Authority, GA Weekly VRDNs (Egleston Children's
Hospital)/(SunTrust Bank, Atlanta LOC) 4,999,999
8,600,000 De Kalb Private Hospital Authority, GA, Revenue Anticipation
Certificates (Series B) Weekly VRDNs
(Emory University )/(SunTrust Bank, Atlanta LOC) 8,600,000
1,000,000 Georgia Municipal Electric Authority, Series P, 7.70% Bonds (United
States Treasury PRF), 1/1/1998 (@102) 1,023,344
2,710,000 Georgia Municipal Electric Authority, Series Q, 8.20% Bonds (United
States Treasury PRF), 1/1/1998 (@102) 2,725,802
2,900,000 Lowndes County, GA Residential Care Facilities for the Elderly Authority
Weekly VRDNs (South Georgia Health Alliance Project) 2,900,000
915,000 Macon-Bibb County, GA Urban Development Authority, Refunding Revenue
Bonds (Series 1995) Weekly VRDNs (Macon Hotel Investors Project)/(NBD
Bank, Michigan LOC) 915,000
1,440,000 Marietta, GA Housing Authority, Revenue Bonds, 3.65% TOBs (Falls at
Bells Ferry)/(Guardian S&L, Houston LOC) 1/15/1998 1,440,000
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
GEORGIA--CONTINUED
$ 500,000 Monroe County, GA Development Authority IDRB, Refunding Revenue Bonds
Weekly VRDNs (Forsyth Inns, Inc.)/(NBD Bank, Michigan LOC) $ 500,000
---------------
Total 23,104,145
---------------
ILLINOIS--11.2%
1,000,000 Chicago, IL Metropolitan Sanitation District, GO UT, 8.40% Bonds (United
States Treasury PRF), 1/1/1998 (@102) 1,023,981
1,500,000 Chicago, IL, Series B Weekly VRDNs (Canadian Imperial Bank of Commerce,
Toronto LOC) 1,500,000
5,000,000 Illinois Development Finance Authority Weekly VRDNs 5,000,000
740,000 Illinois Development Finance Authority, Revenue Bonds Weekly VRDNs
(Aurora Central Catholic High School)/(Northern Trust Corp. LOC) 740,000
1,000,000 Illinois Development Finance Authority, Revenue Bonds Weekly VRDNs (Lake
Forest Academy)/(Northern Trust Corp. LOC) 1,000,000
1,205,000 Illinois Development Finance Authority, Revenue Bonds Weekly VRDNs
(Little City Foundation)/(Lasalle National Bank, Chicago LOC)
1,205,000 3,800,000 Illinois Development Finance Authority, Revenue Bonds
Weekly VRDNs (St.
Ignatius College)/(Northern Trust Corp. LOC) 3,800,000
1,625,000 Illinois Development Finance Authority, Revenue Bonds Weekly VRDNs (St.
Paul's House)/(Lasalle National Bank, Chicago LOC) 1,625,000
4,500,000 Illinois Development Finance Authority, Series A Weekly VRDNs
(Presbyterian Home Lake)/(Lasalle National Bank, Chicago LOC) 4,500,000
3,000,000 Illinois State Toll Highway Authority, (Series 1993B) Weekly VRDNs (MBIA
Insurance Corporation INS)/(Societe Generale, Paris LIQ)/(Societe
Generale, Paris LOC) 3,000,000
5,600,000 Jackson-Union Counties, IL Regional Port District Facilities Weekly
VRDNs (Enron Transportation Services) 5,600,000
1,000,000 Orland Hills, IL, Multi-family Mortgage Revenue Bonds Weekly VRDNs
(Lasalle National Corp. LOC) 1,000,000
---------------
Total 29,993,981
---------------
KANSAS--1.1%
3,000,000 Burlington, KS, PCR Bonds, 3.80% CP (Kansas City Power And Light Co.),
Mandatory Tender 1/15/1998 3,000,000
---------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
KENTUCKY--0.3%
$ 700,000 Georgetown, KY Educational Institution, Revenue Bonds Weekly VRDNs
(Georgetown College) $ 700,000
---------------
LOUISIANA--1.7%
1,700,000 Calcasieu Parish, LA, IDB, PCR Bonds Weekly VRDNs (Citgo Petroleum
Corp.) 1,700,000
2,800,000 Lake Charles, LA Harbor & Terminal District, Revenue Bonds Weekly VRDNs
(Citgo Petroleum Corp.) 2,800,000
---------------
Total 4,500,000
---------------
MAINE--1.3%
3,510,000 Maine State, GO UT Public Improvement Bonds, 5.00% TOBs
6/15/1998 3,529,556
---------------
MASSACHUSETTS--3.8%
7,300,000 Commonwealth of Massachusetts Daily VRDNs (National Westminster Bank,
PLC, London LOC) 7,300,000
3,000,000 Massachusetts Municipal Wholesale Electric Company, Power Supply System
Revenue Bonds (1994 Series C) Weekly VRDNs (Canadian Imperial Bank of
Commerce, Toronto LOC) 3,000,000
---------------
Total 10,300,000
---------------
MICHIGAN--0.7%
2,000,000 Michigan Municipal Bond Authority, (Series B), 4.50% Bonds,
7/2/1998 2,007,762
---------------
MISSISSIPPI--1.8%
2,340,000 Jackson County, MS, 3.75% TOBs (Chevron Corp. GTD), Mandatory Tender
2/2/1998 2,340,000
1,500,000 Jackson County, MS, PCR Refunding Bonds Daily VRDNs (Chevron U.S.A.,
Inc.) 1,500,000
1,000,000 Perry County, MS Industrial Revenue, Revenue Bonds Weekly VRDNs (Leaf
River Forest Project) 1,000,000
---------------
Total 4,840,000
---------------
MISSOURI--0.7%
1,800,000 Kansas City, MO IDA, IDRB Weekly VRDNs (Mid-American Health Services) 1,800,000
---------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
NEW YORK--2.0%
$ 4,000,000 New York City, NY, (Subseries B-4) Daily VRDNs (MBIA Insurance
Corporation INS)/(National Westminster Bank, PLC, London LIQ) $ 4,000,000
700,000 New York City, NY, GO UT Bonds Daily VRDNs 700,000
300,000 New York City, NY, GO UT Refunding Bonds (Subseries E3) Daily VRDNs
(Morgan Guaranty Trust Co., New York LOC) 300,000
500,000 New York City, NY, Subseries E-2 Daily VRDNs (Morgan Guaranty Trust Co.,
New York LOC) 500,000
---------------
Total 5,500,000
---------------
NORTH CAROLINA--4.4%
1,100,000 North Carolina Eastern Municipal Power Agency, (Series B), 3.60% CP
(Morgan Guaranty Trust Co., New York and Union Bank of Switzerland,
Zurich LOCs), Mandatory Tender 2/5/1998 1,100,000
2,700,000 North Carolina Eastern Municipal Power Agency, (Series B), 3.80% CP
(Morgan Guaranty Trust Co., New York and Union Bank of Switzerland,
Zurich LOCs), Mandatory Tender 1/21/1998 2,700,000
2,000,000 North Carolina Educational Facilities Finance Agency Weekly VRDNs
(Gardner Webb University)/(First Union National Bank, Charlotte, N.C.
LOC) 2,000,000
5,900,000 North Carolina Medical Care Commission Hospital, Revenue Bonds (Series
A) Weekly VRDNs (Pooled Financing Program)/ (Nationsbank, N.A.,
Charlotte LOC) 5,900,000
---------------
Total 11,700,000
---------------
OHIO--1.5%
965,000 Centerville, OH, Health Care Revenue Bonds Weekly VRDNs (Bethany
Lutheran Village)/(PNC Bank, Ohio, N.A. LOC) 965,000
2,000,000 Columbus, OH, Series 1 Weekly VRDNs (Westdeutsche Landesbank
Girozentrale LOC) 2,000,000
1,100,000 Ohio State Air Quality Development Authority, Series A, 3.95% Bonds
(Ohio Edison Co.)/(Toronto-Dominion Bank LOC),
2/1/1997 (@100) 1,100,172
---------------
Total 4,065,172
---------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
PENNSYLVANIA--3.1%
$ 5,000,000 Allegheny County, PA IDA, Revenue Bonds (Series A) Weekly VRDNs (United
Jewish Federation of Greater Pittsburgh VRDB) $ 5,000,000
1,700,000 Pennsylvania State Higher Education Facilities Authority, Series A7,
4.75% TOBs (St. Joseph's University), Mandatory Tender
4/1/1998 1,704,361
1,500,000 Sewickley Valley, PA Hospital Authority, Revenue Bonds, 3.55% TOBs (PNC
Bank, N.A. LOC), Mandatory Tender
12/16/1997 1,500,000
---------------
Total 8,204,361
---------------
SOUTH CAROLINA--1.5%
4,000,000 Richland County, SC, (Series B), 4.00% Bonds,
12/1/1997 4,000,000
---------------
TENNESSEE--7.7%
2,170,000 Metropolitan Government Nashville & Davidson County, TN HEFA, Refunding
Revenue Bonds Weekly VRDNs (West Meade Place Project)/(NationsBank,
South LOC) 2,170,000
3,000,000 Metropolitan Government Nashville & Davidson County, TN IDB,
Multi-Family Housing Revenue Bonds (Series B) Weekly VRDNs (Arbor Crest
L.P.)/(Chase Manhattan Bank N.A., New York and Lasalle National Corp.
LOCs) 3,000,000
3,450,000 Metropolitan Nashville Tennessee AA, (Series 1993) Weekly VRDNs (FGIC
INS)/(Societe Generale, Paris LIQ)/(Societe Generale, Paris LOC) 3,450,000
2,000,000 Montgomery Co, TN Public Building Authority Weekly VRDNs (NationsBank
Corp. LOC) 2,000,000
10,055,000 Tennessee State School Board Authority, (Series 1996A) Weekly VRDNs
(Union Bank of Switzerland, Zurich LIQ) 10,055,000
---------------
Total 20,675,000
---------------
TEXAS--10.8%
3,805,000 Fort Worth, TX Independent School District, General Obligation Unltd.,
6.00% Bonds, 2/15/1998 3,821,062
3,000,000 Harris County, TX, 4.25% TRANs, 2/27/1998 3,003,896
5,000,000 Lower Neches Valley, TX, Refunding Revenue Bonds, 3.75% TOBs (Chevron
U.S.A., Inc.) 2/15/2017 5,000,000
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
TEXAS--CONTINUED
$ 3,000,000 Midland Independent School District, TX, Variable Rate Unlimited Tax
School Building Bonds (Series 1997), 3.91% TOBs (Texas Permanent School
Fund Guarantee Program GTD), Mandatory Tender 1/15/1998 $ 3,000,035
4,000,000 Richardson, TX Independent School District, (Series A) Weekly VRDNs
(PSFG GTD)/(Union Bank of Switzerland, Zurich SA) 4,000,000
10,000,000 Texas State, (Series A), 4.75% TRANs, 8/31/1998 10,068,438
---------------
Total 28,893,431
---------------
UTAH--2.6%
7,000,000 Utah State, (Series B), 3.60% Bonds, 12/11/1997 7,000,000
---------------
VIRGINIA--4.3%
5,915,000 Commonwealth of Virginia, GO UT, 5.00% Bonds,
6/1/1998 5,952,229
1,960,000 Harrisonburg, VA Redevelopment & Housing Authority, Multi-Family Housing
Revenue Bonds, 3.70% TOBs (Rolling Brook Village Apartments)/(Guardian
S&L, Houston LOC) 2/1/1998 1,960,000
2,600,000 Roanoke, VA IDA, (Series B) Daily VRDNs (Carillion Health System) 2,600,000
1,000,000 Virginia State Transportation Board, 7.80% Bonds (Route 28
Project)/(United States Treasury PRF), 3/1/1998 (@102) 1,014,737
---------------
Total 11,526,966
---------------
WASHINGTON--3.4%
9,190,000 Port Anacortes, WA Industrial Development Corp., 3.75% TOBs (Texaco,
Inc.) 12/3/1997 9,190,000
---------------
WISCONSIN--2.0%
5,400,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds
(Series 1994) Weekly VRDNs (Felician Health Care, Inc. Project)/(Lasalle
National Bank, Chicago LOC) 5,400,000
---------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
WYOMING--1.2%
$ 3,200,000 Uinta County, WY, PCR Refunding Bonds Daily VRDNs (Chevron U.S.A., Inc.) $ 3,200,000
---------------
Total Short-Term Municipals 254,921,305
---------------
Total Investments, at amortized cost and value (a) $ 267,226,774
---------------
</TABLE>
(a) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($268,324,609) at November 30, 1997.
The following acronyms are used throughout this portfolio:
CP--Commercial Paper
FGIC--Financial Guaranty Insurance Company GO--General Obligation GTD--Guaranty
HEFA--Health and Education Facilities Authority HFA--Housing Finance Authority
IDA--Industrial Development Authority IDB--Industrial Development Bond
IDR--Industrial Development Revenue IDRB--Industrial Development Revenue Bond
INS--Insured LIQ--Liquidity Agreement LOCs--Letter(s) of Credit LOC--Letter of
Credit MBIA--Municipal Bond Investors Assurance PCR--Pollution Control Revenue
PLC--Public Limited Company PRF--Prerefunded PSFG--Permanent School Fund
Guarantee SA--Support Agreement TOBs--Tender Option Bonds TRANs--Tax and Revenue
Anticipation Notes UT--Unlimited Tax VRDB--Variable Rate Demand Bond
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Assets:
Total investments in securities, at amortized cost and value $ 267,226,774
Income receivable 1,977,479
Receivable for shares sold 175
Deferred expenses 1,565
---------------
Total assets 269,205,993
Liabilities:
Income distribution payable $ 34,458
Payable to bank 756,136
Accrued expenses 90,790
----------
Total liabilities 881,384
---------------
Net Assets for 268,324,609 shares outstanding $ 268,324,609
---------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Institutional Shares: ($182,472,936 / 182,472,936 shares outstanding) $1.00
---------------
Investment Shares: ($85,851,673 / 85,851,673 shares outstanding) $1.00
---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 9,431,157
Expenses:
Investment advisory fee $ 1,318,455
Administrative personnel and services fee 220,229
Custodian fees 51,928
Transfer and dividend disbursing agent fees and expenses 39,988
Trustees' fees 10,260
Auditing fees 15,258
Legal fees 4,338
Portfolio accounting fees 79,785
Distribution services fee--Investment Shares 340,932
Share registration costs 37,557
Printing and postage 20,225
Insurance premiums 2,249
Miscellaneous 17,684
-------------
Total expenses 2,158,888
Waiver of investment advisory fee (1,185,295)
-------------
Net expenses 973,593
------------
Net investment income $ 8,457,564
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended November 30,
----------------------------------
1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 8,457,564 $ 5,467,044
---------------- ----------------
Distributions to Shareholders--
Distributions from net investment income
Institutional Shares (5,961,634) (3,429,242)
Investment Shares (2,495,930) (2,037,802)
---------------- ----------------
Change in net assets resulting from distributions
to shareholders (8,457,564) (5,467,044)
---------------- ----------------
Share Transactions--
Proceeds from sale of shares 488,064,545 409,914,657
Cost of shares redeemed (413,538,893) (352,122,829)
---------------- ----------------
Change in net assets resulting from share transactions 74,525,652 57,791,828
---------------- ----------------
Change in net assets 74,525,652 57,791,828
Net Assets:
Beginning of period 193,798,957 136,007,129
---------------- ----------------
End of period $ 268,324,609 $ 193,798,957
---------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.03 0.04 0.02 0.02
Less distributions
Distributions from net investment income (0.03) (0.03) (0.04) (0.02) (0.02)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Total return (a) 3.41% 3.24% 3.59% 2.42% 2.30%
Ratios to average net assets
Expenses 0.24% 0.29% 0.32% 0.38% 0.29%
Net investment income 3.34% 3.22% 3.55% 2.41% 2.28%
Expense waiver/reimbursement (b) 0.45% 0.43% 0.46% 0.45% 0.60%
Supplemental data
Net assets, end of period
(000 omitted) $182,473 $118,877 $80,274 $93,867 $59,269
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.03 0.03 0.02 0.02
Less distributions
Distributions from net investment income (0.03) (0.03) (0.03) (0.02) (0.02)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Total return (a) 2.99% 2.83% 3.25% 2.11% 1.99%
Ratios to average net assets
Expenses 0.64% 0.69% 0.66% 0.68% 0.59%
Net investment income 2.93% 2.84% 3.19% 2.11% 1.98%
Expense waiver/reimbursement (b) 0.45% 0.43% 0.52% 0.55% 0.70%
Supplemental data
Net assets, end of period
(000 omitted) $85,852 $74,922 $55,733 $42,820 $23,976
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA U.S. TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C>
U.S. Government Obligations--50.6%
U.S. TREASURY BILLS 33.1%
$ 210,000,000 12/11/97 - 5/28/98 $ 207,529,609
---------------
U.S. TREASURY NOTES 17.5%
110,000,000 5.125% - 6.000%, 12/31/97 - 8/15/98 109,996,205
---------------
Total U.S. Government Obligations 317,525,814
---------------
(a) Repurchase Agreements--49.5%
145,000,000 CS First Boston Corp., 5.720%, dated 11/28/1997, due 12/1/1997 145,000,000
140,894,823 Goldman Sachs Group, LP, 5.500%, dated 11/28/1997,
due 12/1/1997 140,894,823
25,000,000 Morgan Stanley Group, Inc., 5.700%, dated 11/28/1997,
due 12/1/1997 25,000,000
---------------
Total Repurchase Agreements 310,894,823
---------------
Total Investments, at amortized cost and value (b) $ 628,420,637
---------------
</TABLE>
(a) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($627,817,529) at
November 30, 1997.
The following acronym is used throughout this portfolio:
LP--Limited Partnership
(See Notes which are an integral part of the Financial Statements)
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA U.S. TREASURY MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Assets:
Investments in repurchase agreements $ 310,894,823
Investments in securities 317,525,814
---------------
Total investments in securities, at amortized cost and value $ 628,420,637
Income receivable 2,227,335
---------------
Total assets 630,647,972
Liabilities:
Income distribution payable 2,714,915
Accrued expenses 115,528
---------------
Total liabilities 2,830,443
---------------
Net Assets for 627,817,529 shares outstanding $ 627,817,529
---------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Institutional Shares: ($510,322,828 / 510,322,828 shares outstanding) $1.00
---------------
Investment Shares: ($117,494,701 / 117,494,701 shares outstanding) $1.00
---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA U.S. TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 32,893,170
Expenses:
Investment advisory fee $ 3,023,600
Administrative personnel and services fee 507,009
Custodian fees 97,881
Transfer and dividend disbursing agent fees and expenses 50,413
Trustees' fees 17,828
Auditing fees 15,002
Legal fees 10,740
Portfolio accounting fees 109,014
Distribution services fee--Investment Shares 460,735
Share registration costs 80,495
Printing and postage 6,587
Insurance premiums 5,027
Miscellaneous 17,491
-------------
Total expenses 4,401,822
Waiver of investment advisory fee (2,489,781)
-------------
Net expenses 1,912,041
-------------
Net investment income $ 30,981,129
-------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA U.S. TREASURY MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended November 30,
------------------------------------
1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 30,981,129 $ 17,428,658
------------------ ----------------
Distributions to Shareholders--
Distributions from net investment income
Institutional Shares (25,449,095) (13,103,649)
Investment Shares (5,532,034) (4,325,009)
------------------ ----------------
Change in net assets resulting from distributions
to shareholders (30,981,129) (17,428,658)
------------------ ----------------
Share Transactions--
Proceeds from sale of shares 1,984,795,509 911,111,113
Cost of shares redeemed (1,763,619,561) (800,564,843)
------------------ ----------------
Change in net assets resulting from share transactions 221,175,948 110,546,270
------------------ ----------------
Change in net assets 221,175,948 110,546,270
Net Assets:
Beginning of period 406,641,581 296,095,311
------------------ ----------------
End of period $ 627,817,529 $ 406,641,581
------------------ ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA U.S. TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.05 0.06 0.04 0.03
Less distributions
Distributions from net investment income (0.05) (0.05) (0.06) (0.04) (0.03)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Total return (a) 5.31% 5.18% 5.66% 3.70% 2.91%
Ratios to average net assets
Expenses 0.24% 0.30% 0.32% 0.36% 0.28%
Net investment income 5.20% 5.07% 5.54% 3.72% 2.87%
Expense waiver/reimbursement (b) 0.41% 0.39% 0.40% 0.51% 0.63%
Supplemental data
Net assets, end of period (000 omitted) $510,323 $302,306 $214,356 $87,531 $65,353
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA U.S. TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
-------------------------------------------------------
1997 1996 1995 1994 1993(a)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.04 0.05 0.03 0.01
Less distributions
Distributions from net investment income (0.05) (0.04) (0.05) (0.03) (0.01)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Total return (b) 4.89% 4.77% 5.30% 3.39% 1.42%
Ratios to average net assets
Expenses 0.64% 0.70% 0.66% 0.66% 0.65%*
Net investment income 4.80% 4.68% 5.21% 3.42% 2.50%*
Expense waiver/reimbursement (c) 0.41% 0.39% 0.46% 0.61% 0.73%*
Supplemental data
Net assets, end of period (000 omitted) $117,495 $104,336 $81,739 $46,396 $16,941
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 12, 1993 (date of initial public
investment) to November 30, 1993.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
1. ORGANIZATION
The Wachovia Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end, management investment company.
The Trust consists of twelve portfolios. The following portfolios are included
herein (individually referred to as the "Fund", or collectively as the "Funds"):
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT OBJECTIVE <S> <C> Wachovia Prime Cash
Management Fund To provide current income consistent with ("Prime CashFund")
stability of principal and liquidity.
Wachovia Tax-Free Money Market Fund To provide current income exempt from
federal ("Tax-Free Fund") regular income tax consistent with stability of
principal and liquidity.
Wachovia U.S. Treasury Money Market Fund To provide current income consistent
with ("U.S. Treasury Fund") stability of principal and liquidity.
</TABLE>
The financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held.
The Funds, except for Prime Cash Fund, offer two classes of shares:
Institutional Shares and Investment Shares. Prime Cash Fund only offers
Institutional Shares. Investment Shares are identical in all respects to
Institutional Shares except that Investment Shares are sold pursuant to a
distribution plan (the "Plan") adopted in accordance with Rule 12b-1 under the
Act.
On July 31, 1997, the Trust, and each of the underlying portfolios and classes,
changed its name from The Biltmore Funds to The Wachovia Funds.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Funds use the amortized cost method to value
their portfolio securities in accordance with Rule 2a-7 under the Act.
Investments in other open-end management investment companies are valued at
net asset value.
REPURCHASE AGREEMENTS--It is the policy of the Funds to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Funds to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Funds' adviser to be creditworthy pursuant to the guidelines and/or
standards established and received by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Funds
could receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUNDS
Code, as amended (the "Code"). Distributions to shareholders are recorded
on the ex-dividend date.
FEDERAL TAXES--It is the Funds' policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of their income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in
when-issued or delayed delivery transactions. The Funds record when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by each Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period not to exceed five years from each Fund's
commencement date.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At November 30, 1997 capital paid-in aggregated $1,450,194,663,
$268,324,609 and $627,817,529 for Prime Cash Fund, Tax-Free Fund, and U.S.
Treasury Fund, respectively.
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Prime Cash Fund Tax-Free Fund U.S. Treasury Fund
---------------------------- -------------------------- ----------------------------
Year Ended November 30,
--------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL SHARES
- ------------------
Shares sold 2,702,347,584 2,583,312,246 253,485,355 242,033,756 1,734,312,598 722,628,978
Shares redeemed (2,429,007,461) (2,286,061,101) (189,889,011) (203,431,120) (1,526,295,637) (634,679,247)
------------- ------------- ------------ ------------ ------------- -------------
Net change
resulting from
Institutional
Shares
transactions 273,340,123 297,251,145 63,596,344 38,602,636 208,016,961 87,949,731
------------- ------------- ------------ ------------ ------------- -------------
INVESTMENT SHARES
- ------------------
Shares sold -- -- 234,579,190 167,880,901 250,482,911 188,482,135
Shares redeemed -- -- (223,649,882) (148,691,709) (237,323,924) (165,885,596)
------------- ------------- ------------ ------------ ------------- -------------
Net change
resulting from
Investment Shares
transactions -- -- 10,929,308 19,189,192 13,158,987 22,596,539
------------- ------------- ------------ ------------ ------------- -------------
Net change
resulting from
share transactions 273,340,123 297,251,145 74,525,652 57,791,828 221,175,948 110,546,270
------------- ------------- ------------ ------------ ------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUNDS
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Asset Management, the Funds' investment
adviser (the "Adviser"), receives for its services an annual investment advisory
fee based on each Fund's average daily net assets. The Adviser may voluntarily
choose to waive any portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
<TABLE>
<CAPTION>
Fund Annual Rate
<S> <C>
Prime Cash Fund 0.30%
Tax-Free Fund 0.50%
U.S. Treasury Fund 0.50%
</TABLE>
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Funds
with certain administrative personnel and services. This fee paid to FAS is
based on the level of average aggregate net assets of the Trust and The Wachovia
Municipal Funds for the period. FAS may voluntarily waive a portion of its fee.
Prior to December 4, 1997, the administrative fee during any fiscal year for the
Funds aggregated at least $75,000. After that date, FAS ceased imposing a
minimum administrative fee.
DISTRIBUTION SERVICES FEE--Under the terms of the Plan, each Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
its net assets to finance activities intended to result in the sale of each
Fund's Investment Shares. The Plan provides that each Fund may incur
distribution expenses up to 0.40% of the average daily net assets of its
Investment Shares, annually, to compensate FSC.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ"), through its subsidiary, Federated Shareholder Services Company
("FSSC") serves as transfer and dividend disbursing agent for the Funds. The fee
paid to FSSC is based on the size, type, and number of accounts and transactions
made by shareholders. FSSC may voluntarily choose to waive any portion of its
fee.
PORTFOLIO ACCOUNTING FEES--FServ, through its subsidiary FAS, maintains the
Funds' accounting records for which it receives a fee. The fee is based on the
level of each Fund's average daily net assets for the period, plus out-of-pocket
expenses.
CUSTODIAN FEES--Wachovia Bank, N.A. is the Funds' custodian for which it
receives a fee. The fee is based on the level of each Fund's average daily net
assets for the period, plus out-of-pocket expenses.
ORGANIZATIONAL EXPENSES--Organizational expenses were borne initially by FAS.
The Funds have agreed to reimburse FAS for the organizational expenses during
the five year period following the date that each Fund becomes effective. For
the year ended November 30, 1997, pursuant to this agreement, the Funds paid FAS
as follows:
<TABLE>
<CAPTION>
Initial Organizational
Organizational Expenses
Fund Expenses Reimbursed
<S> <C> <C>
Prime Cash Fund $ 35,156 $ 11,523
Tax-Free Fund 59,661 1,994
U.S. Treasury Fund 78,399 1,518
</TABLE>
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Trustees and Shareholders of
THE WACHOVIA FUNDS:
(formerly The Biltmore Funds)
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Wachovia Prime Cash Management Fund, Wachovia
Tax-Free Money Market Fund, and Wachovia U.S. Treasury Money Market Fund
(portfolios of The Wachovia Funds) as of November 30, 1997, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended and financial
highlights for the periods presented. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1997, by correspondence with the custodian and brokers or other
appropriate auditing procedures where replies from brokers were not received. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Wachovia Prime Cash Management Fund, Wachovia Tax-Free Money Market Fund, and
Wachovia U.S. Treasury Money Market Fund of The Wachovia Funds at November 30,
1997, and the results of their operations for the year then ended, changes in
their net assets for each of the two years in the period then ended, and
financial highlights for the periods presented, in conformity with generally
accepted accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
January 20, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRUSTEES OFFICERS
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Charles L. Davis, Jr.
D. Dean Kaylor Vice President and Assistant Treasurer
Charles S. Way, Jr. Peter J. Germain
Secretary
Gail Cagney
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves risk, including possible
loss of principal. Although money market funds seek to maintain a stable net
asset value of $1.00 per share, there is no assurance that they will be able to
do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
Cusip 929901684
Cusip 929901304
Cusip 929901403
Federated Securities Corp Cusip 929901833
is the distributor of the funds Cusip 929901825
831-30 (1/98) G01512-18 (1/98)
WACHOVIA MONEY MARKET FUND
WACHOVIA TAX-FREE
MONEY MARKET FUND
WACHOVIA U.S. TREASURY
MONEY MARKET FUND
INVESTMENT SHARES
Annual Report
November 30, 1997
- ------------------------------------------------------------------------WACHOVIA
Effective July 31, 1997 The Biltmore Funds became The Wachovia Funds
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PRESIDENT'S MESSAGE
Dear Shareholder:
I am pleased to present the Annual Report to Shareholders of the Wachovia money
market funds, Investment Shares, for the 12-month period ended November 30,
1997. This report includes a list of each fund's holdings and the fund's
complete financial information.
Each Wachovia money market fund continued to provide investors with daily income
on their ready cash, while maintaining a stable $1.00 share value.* The
fund-by-fund highlights are as follows:
WACHOVIA MONEY MARKET FUND
The fund's portfolio of high quality money market securities provided
shareholders with dividends totaling $0.05 per share, while maintaining a stable
share value of $1.00.* The fund's net assets rose by more than $100 million over
the reporting period, reaching $477.9 million at November 30, 1997.
WACHOVIA TAX-FREE MONEY MARKET FUND
The fund's portfolio of tax-free money market securities, which at the end of
the 12-month period were diversified among municipalities across the U.S.,
provided shareholders with federally tax-free dividends totaling $0.03 per
share,** while maintaining a stable share value of $1.00.* The fund's net assets
stood at $268.3 million at the end of the reporting period.
WACHOVIA U.S. TREASURY MONEY MARKET FUND
Fund net assets reached $627.8 million as the fund's portfolio of U.S. Treasury
money market securities paid dividends totaling $0.05 per share, while
maintaining a stable share value of $1.00.*
Thank you for choosing a Wachovia money market fund to keep your cash working
for you--every day. As we begin a new year, we renew our commitment to keep you
up-to-date on your investment, and provide your account with the highest level
of service.
Sincerely,
/s/John W. McGonigle
John W. McGonigle
President
January 15, 1998
* Money market mutual funds seek to maintain a stable net asset value of $1.00
per share. There is no assurance that they will be able to do so. An
investment in the funds is neither insured nor guaranteed by the U.S.
government.
** Income may be subject to the federal alternative minimum tax and state and
local taxes.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Bank Notes--3.3%
BANKING & FINANCE--3.3%
$ 16,000,000 Lasalle National Bank, Chicago, 5.960% - 6.240%,
2/17/1998 - 4/21/1998 $ 16,000,000
---------------
Bankers Acceptance--1.9%
BANKING & FINANCE--1.9%
4,000,000 Bank of Hawaii, 5.920%, 5/11/1998 3,897,139
5,000,000 SunTrust Bank, Atlanta, 5.830%, 7/14/1998 4,998,231
---------------
Total Bankers Acceptances 8,895,370
---------------
Time Deposits--8.4%
BANKING--8.4%
20,000,000 Citibank, Toronto, 5.710%, 1/26/1998 20,000,000
20,000,000 Toronto-Dominion Bank, 5.700%, 1/6/1998 20,000,000
---------------
Total Time Deposits 40,000,000
---------------
Certificates of Deposit--21.5%
10,000,000 Bank of America NT and SA, San Francisco, 5.840%, 10/29/1998 10,000,000
12,500,000 Barclays Bank PLC, London, 5.770% - 5.830%,
1/16/1998 - 3/5/1998 12,499,540
20,000,000 CIBC Wood Gundy Securities Corp., 5.680% - 5.760%,
2/12/1998 - 2/27/1998 19,998,602
3,000,000 Credit Suisse First Boston, 6.250%, 4/10/1998 3,000,000
19,000,000 Deutsche Bank, New York, 5.910%, 9/2/1998 18,999,202
5,000,000 Morgan Guaranty Trust Co., New York, 5.850%, 3/16/1998 4,999,587
10,000,000 National Westminster Bank, New Jersey, 5.750%, 2/27/1998 10,000,000
8,500,000 Rabobank Nederland, Utrecht, 5.990%, 3/24/1998 8,502,067
15,000,000 Swiss Bank Corp., Basle, 6.040%, 2/17/1998 15,000,000
---------------
Total Certificates of Deposit 102,998,998
---------------
(a) Commercial Paper--43.4%
CHEMICAL & ALLIED PRODUCTS--4.1%
20,000,000 Du Pont (E.I.) de Nemours & Co., 5.690%, 5/14/1998 19,495,244
---------------
FINANCE - CONSUMER--4.2%
20,000,000 Xerox Credit Corp., 5.533%, 12/4/1997 19,990,850
---------------
FINANCE - AUTOMOTIVE--4.2%
20,000,000 Ford Motor Credit Corp., 5.540%, 12/4/1997 19,990,800
---------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
(a) Commercial Paper--continued
FINANCIAL SERVICES--26.8%
$ 20,000,000 Associates Corp. of North America, 5.633% - 5.769%,
1/14/1998 - 2/12/1998 $ 19,817,398
20,000,000 Bell Atlantic Financial Services, Inc., 5.734%, 1/6/1998 19,886,200
20,000,000 General Electric Capital Corp., 5.627%, 3/5/1998 19,712,778
20,000,000 General Electric Capital Services, 5.587%, 1/7/1998 19,886,739
20,000,000 Rio Tinto America, Inc., 5.663%, 2/6/1998 19,792,300
10,000,000 SBC Communications Capital Corp., 5.570%, 12/1/1997 10,000,000
19,000,000 USAA Capital Corp., 5.570%, 12/4/1997 18,991,323
---------------
Total 128,086,738
---------------
PRINTING & PUBLISHING--4.1%
20,000,000 Gannett Co., Inc., 5.706%, 1/15/1998 19,858,750
---------------
Total Commercial Paper 207,422,382
---------------
Corporate Bonds--1.0%
FINANCIAL SERVICES--1.0%
5,000,000 Commercial Credit Co., 5.500%, 5/15/1998 4,990,009
---------------
(b) Notes - Variable--2.1%
FINANCE--2.1%
10,000,000 First Union National Bank, Charlotte, N.C., 5.670%, 12/2/1997 10,000,000
---------------
(c) Repurchase Agreements--17.9%
80,000,000 CS First Boston Corp., 5.720%, dated 11/28/1997, due 12/1/1997 80,000,000
5,435,521 Goldman Sachs Group, LP, 5.500%, dated 11/28/1997, due
12/1/1997 5,435,521
---------------
Total Repurchase Agreements 85,435,521
---------------
Total Investments, at amortized cost and value(d) $ 475,742,280
---------------
</TABLE>
(a) Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
(b) Current rate and next reset date shown.
(c) The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio.
(d) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($477,917,997) at November 30, 1997.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUND
The following acronyms are used throughout this portfolio:
LP--Limited Partnership
PLC--Public Limited Company
SA--Support Agreement
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Assets:
Investments in repurchase agreements $ 85,435,521
Investments in securities 390,306,759
---------------
Total investments in securities, at amortized cost and value $ 475,742,280
Income receivable 4,320,535
Receivable for shares sold 674
Deferred expenses 1,549
---------------
Total assets 480,065,038
Liabilities:
Payable for shares redeemed 48,754
Payable to Bank 1,941,250
Accrued expenses 157,037
---------------
Total liabilities 2,147,041
---------------
Net Assets for 477,917,997 shares outstanding $ 477,917,997
---------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Institutional Shares: ($157,438,376 / 157,438,376 shares outstanding) $1.00
---------------
Investment Shares: ($320,479,621 / 320,479,621 shares outstanding) $1.00
---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUND
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 23,995,517
Expenses:
Investment advisory fee $ 2,133,189
Administrative personnel and services fee 357,303
Custodian fees 76,496
Transfer and dividend disbursing agent fees and expenses 43,847
Trustees' fees 16,828
Auditing fees 15,068
Legal fees 6,731
Portfolio accounting fees 96,261
Distribution services fee--Investment Shares 1,086,207
Share registration costs 46,199
Printing and postage 27,001
Insurance premiums 2,593
Miscellaneous 6,803
-------------
Total expenses 3,914,526
Waiver of investment advisory fee (1,207,652)
-------------
Net expenses 2,706,874
-------------
Net investment income $ 21,288,643
-------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended November 30,
----------------------------------
1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 21,288,643 $ 16,486,344
---------------- ----------------
Distributions to Shareholders--
Distributions from net investment income
Institutional Shares (8,124,369) (6,851,442)
Investment Shares (13,164,274) (9,634,902)
---------------- ----------------
Change in net assets resulting from distributions
to shareholders (21,288,643) (16,486,344)
---------------- ----------------
Share Transactions--
Proceeds from sale of shares 654,823,654 617,636,182
Net asset value of shares issued to shareholders
in payment of distributions declared 51,644 10,615
Cost of shares redeemed (542,967,934) (543,313,516)
---------------- ----------------
Change in net assets resulting from share transactions 111,907,364 74,333,281
---------------- ----------------
Change in net assets 111,907,364 74,333,281
Net Assets:
Beginning of period 366,010,633 291,677,352
---------------- ----------------
End of period $ 477,917,997 $ 366,010,633
---------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.05 0.05 0.03 0.03
Less distributions
Distributions from net investment income (0.05) (0.05) (0.05) (0.03) (0.03)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Total return (a) 4.95% 4.83% 5.40% 3.46% 2.74%
Ratios to average net assets
Expenses 0.78% 0.77% 0.72% 0.68% 0.55%
Net investment income 4.85% 4.74% 5.27% 3.44% 2.70%
Expense waiver/reimbursement (b) 0.28% 0.32% 0.40% 0.50% 0.66%
Supplemental data
Net assets, end of period (000 omitted) $ 320,480 $ 230,263 $ 165,636 $ 56,105 $ 9,842
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.05 0.06 0.04 0.03
Less distributions
Distributions from net investment income (0.05) (0.05) (0.06) (0.04) (0.03)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Total return (a) 5.37% 5.25% 5.75% 3.77% 3.05%
Ratios to average net assets
Expenses 0.38% 0.37% 0.38% 0.38% 0.25%
Net investment income 5.24% 5.14% 5.61% 3.74% 3.00%
Expense waiver/reimbursement (b) 0.28% 0.32% 0.34% 0.40% 0.56%
Supplemental data
Net assets, end of period (000 omitted) $ 157,438 $ 135,748 $ 126,042 $ 129,233 $ 177,090
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Mutual Funds--4.6%
$ 3,592,896 AIM Global Management S/T Investments $ 3,592,896
658,886 Dreyfus Tax Exempt 658,886
8,053,687 Fidelity Tax Exempt Money Market 8,053,687
---------------
Total 12,305,469
---------------
Short-Term Municipals--95.0%
ALABAMA--2.6%
2,310,000 Alabama HFA, Refunding Revenue Bonds (Series B)
Weekly VRDNs 2,310,000
1,000,000 Birmingham, AL, (Series A) Weekly VRDNs 1,000,000
3,320,000 Birmingham, AL, GO (Series 1992A) Weekly VRDNs
(Regions Bank, Alabama LOC) 3,320,000
405,000 Tuscaloosa County, AL Port Authority, (Series 1989A) Weekly VRDNs
(Capstone Hotel Ltd.)/(SouthTrust Bank of Alabama, Birmingham LOC) 405,000
---------------
Total 7,035,000
---------------
ARIZONA--0.1%
200,000 Phoenix, AZ, GO UT Bonds Daily VRDNs 200,000
---------------
CALIFORNIA--4.9%
6,230,000 Los Angeles County, CA, 4.50% TRANs, 6/30/1998 6,255,674
3,000,000 Oakland, CA, 4.50% TRANs, 6/30/1998 3,013,024
3,800,000 Sonoma Valley, CA Unified School District, GO UT, 4.50% TRANs, 7/2/1998 3,814,946
---------------
Total 13,083,644
---------------
COLORADO--2.2%
6,000,000 Colorado State General Fund, (Series A), 4.50% TRANs,
6/26/1998 6,022,287
---------------
DELAWARE--1.3%
3,400,000 Wilmington, DE Hospital, Refunding Revenue Bonds Daily VRDNs (Franciscan
Health Care) 3,400,000
---------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
FLORIDA--8.2%
$ 5,000,000 Broward County, FL HFA, Revenue Bonds Weekly VRDNs (Welleby Apartments) $ 5,000,000
7,400,000 Collier County, FL HFA, Multi-Family Revenue Bonds
(Series 1985) Weekly VRDNs (River Reach Project) 7,400,000
1,750,000 Escambia County, FL Health Facilities Authority, IDR Bonds (Series A)
Monthly VRDNs (Florida Convalescent Centers Inc.)/ (Toronto-Dominion
Bank LOC) 1,750,000
700,000 Polk County, FL IDA, Refunding Revenue Bonds Monthly VRDNs (Florida
Convalescent Centers Inc.)/(Toronto-Dominion Bank LOC) 700,000
1,000,000 Polk County, FL IDA, Refunding Revenue Bonds Weekly VRDNs (IMC
Fertilizer, Inc. Project)/(Rabobank Nederland, Utrecht LOC) 1,000,000
4,700,000 Southeast Volusia Hospital District, Revenue Bonds (Series 1995) Weekly
VRDNs (Bert Fish Medical Center (FL))/(SouthTrust Bank of Alabama,
Birmingham LOC) 4,700,000
1,500,000 St. Lucie County, FL PCR, 3.70% CP (Florida Power & Light Co.),
Mandatory Tender 1/8/1998 1,500,000
---------------
Total 22,050,000
---------------
GEORGIA--8.6%
5,000,000 De Kalb Private Hospital Authority, GA Weekly VRDNs (Egleston Children's
Hospital)/(SunTrust Bank, Atlanta LOC) 4,999,999
8,600,000 De Kalb Private Hospital Authority, GA, Revenue Anticipation
Certificates (Series B) Weekly VRDNs
(Emory University )/(SunTrust Bank, Atlanta LOC) 8,600,000
1,000,000 Georgia Municipal Electric Authority, Series P, 7.70% Bonds (United
States Treasury PRF), 1/1/1998 (@102) 1,023,344
2,710,000 Georgia Municipal Electric Authority, Series Q, 8.20% Bonds (United
States Treasury PRF), 1/1/1998 (@102) 2,725,802
2,900,000 Lowndes County, GA Residential Care Facilities for the Elderly Authority
Weekly VRDNs (South Georgia Health Alliance Project) 2,900,000
915,000 Macon-Bibb County, GA Urban Development Authority, Refunding Revenue
Bonds (Series 1995) Weekly VRDNs (Macon Hotel Investors Project)/(NBD
Bank, Michigan LOC) 915,000
1,440,000 Marietta, GA Housing Authority, Revenue Bonds, 3.65% TOBs (Falls at
Bells Ferry)/(Guardian S&L, Houston LOC) 1/15/1998 1,440,000
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
GEORGIA--CONTINUED
$ 500,000 Monroe County, GA Development Authority IDRB, Refunding Revenue Bonds
Weekly VRDNs (Forsyth Inns, Inc.)/(NBD Bank, Michigan LOC) $ 500,000
---------------
Total 23,104,145
---------------
ILLINOIS--11.2%
1,000,000 Chicago, IL Metropolitan Sanitation District, GO UT, 8.40% Bonds (United
States Treasury PRF), 1/1/1998 (@102) 1,023,981
1,500,000 Chicago, IL, Series B Weekly VRDNs (Canadian Imperial Bank of Commerce,
Toronto LOC) 1,500,000
5,000,000 Illinois Development Finance Authority Weekly VRDNs 5,000,000
740,000 Illinois Development Finance Authority, Revenue Bonds Weekly VRDNs
(Aurora Central Catholic High School)/(Northern Trust Corp. LOC) 740,000
1,000,000 Illinois Development Finance Authority, Revenue Bonds Weekly VRDNs (Lake
Forest Academy)/(Northern Trust Corp. LOC) 1,000,000
1,205,000 Illinois Development Finance Authority, Revenue Bonds Weekly VRDNs
(Little City Foundation)/(Lasalle National Bank, Chicago LOC)
1,205,000 3,800,000 Illinois Development Finance Authority, Revenue Bonds
Weekly VRDNs (St.
Ignatius College)/(Northern Trust Corp. LOC) 3,800,000
1,625,000 Illinois Development Finance Authority, Revenue Bonds Weekly VRDNs (St.
Paul's House)/(Lasalle National Bank, Chicago LOC) 1,625,000
4,500,000 Illinois Development Finance Authority, Series A Weekly VRDNs
(Presbyterian Home Lake)/(Lasalle National Bank, Chicago LOC) 4,500,000
3,000,000 Illinois State Toll Highway Authority, (Series 1993B) Weekly VRDNs (MBIA
Insurance Corporation INS)/(Societe Generale, Paris LIQ)/(Societe
Generale, Paris LOC) 3,000,000
5,600,000 Jackson-Union Counties, IL Regional Port District Facilities Weekly
VRDNs (Enron Transportation Services) 5,600,000
1,000,000 Orland Hills, IL, Multi-family Mortgage Revenue Bonds Weekly VRDNs
(Lasalle National Corp. LOC) 1,000,000
---------------
Total 29,993,981
---------------
KANSAS--1.1%
3,000,000 Burlington, KS, PCR Bonds, 3.80% CP (Kansas City Power And Light Co.),
Mandatory Tender 1/15/1998 3,000,000
---------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
KENTUCKY--0.3%
$ 700,000 Georgetown, KY Educational Institution, Revenue Bonds Weekly VRDNs
(Georgetown College) $ 700,000
---------------
LOUISIANA--1.7%
1,700,000 Calcasieu Parish, LA, IDB, PCR Bonds Weekly VRDNs (Citgo Petroleum
Corp.) 1,700,000
2,800,000 Lake Charles, LA Harbor & Terminal District, Revenue Bonds Weekly VRDNs
(Citgo Petroleum Corp.) 2,800,000
---------------
Total 4,500,000
---------------
MAINE--1.3%
3,510,000 Maine State, GO UT Public Improvement Bonds, 5.00% TOBs
6/15/1998 3,529,556
---------------
MASSACHUSETTS--3.8%
7,300,000 Commonwealth of Massachusetts Daily VRDNs (National Westminster Bank,
PLC, London LOC) 7,300,000
3,000,000 Massachusetts Municipal Wholesale Electric Company, Power Supply System
Revenue Bonds (1994 Series C) Weekly VRDNs (Canadian Imperial Bank of
Commerce, Toronto LOC) 3,000,000
---------------
Total 10,300,000
---------------
MICHIGAN--0.7%
2,000,000 Michigan Municipal Bond Authority, (Series B), 4.50% Bonds,
7/2/1998 2,007,762
---------------
MISSISSIPPI--1.8%
2,340,000 Jackson County, MS, 3.75% TOBs (Chevron Corp. GTD), Mandatory Tender
2/2/1998 2,340,000
1,500,000 Jackson County, MS, PCR Refunding Bonds Daily VRDNs (Chevron U.S.A.,
Inc.) 1,500,000
1,000,000 Perry County, MS Industrial Revenue, Revenue Bonds Weekly VRDNs (Leaf
River Forest Project) 1,000,000
---------------
Total 4,840,000
---------------
MISSOURI--0.7%
1,800,000 Kansas City, MO IDA, IDRB Weekly VRDNs
(Mid-American Health Services) 1,800,000
---------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
NEW YORK--2.0%
$ 4,000,000 New York City, NY, (Subseries B-4) Daily VRDNs (MBIA Insurance
Corporation INS)/(National Westminster Bank, PLC, London LIQ) $ 4,000,000
700,000 New York City, NY, GO UT Bonds Daily VRDNs 700,000
300,000 New York City, NY, GO UT Refunding Bonds (Subseries E3) Daily VRDNs
(Morgan Guaranty Trust Co., New York LOC) 300,000
500,000 New York City, NY, Subseries E-2 Daily VRDNs (Morgan Guaranty Trust Co.,
New York LOC)
---------------
Total 5,500,000
---------------
NORTH CAROLINA--4.4%
1,100,000 North Carolina Eastern Municipal Power Agency, (Series B), 3.60% CP
(Morgan Guaranty Trust Co., New York and Union Bank of Switzerland,
Zurich LOCs), Mandatory Tender 2/5/1998 1,100,000
2,700,000 North Carolina Eastern Municipal Power Agency, (Series B), 3.80% CP
(Morgan Guaranty Trust Co., New York and Union Bank of Switzerland,
Zurich LOCs), Mandatory Tender 1/21/1998 2,700,000
2,000,000 North Carolina Educational Facilities Finance Agency Weekly VRDNs
(Gardner Webb University)/(First Union National Bank, Charlotte, N.C.
LOC) 2,000,000
5,900,000 North Carolina Medical Care Commission Hospital, Revenue Bonds (Series
A) Weekly VRDNs (Pooled Financing Program)/ (Nationsbank, N.A.,
Charlotte LOC) 5,900,000
---------------
Total 11,700,000
---------------
OHIO--1.5%
965,000 Centerville, OH, Health Care Revenue Bonds Weekly VRDNs (Bethany
Lutheran Village)/(PNC Bank, Ohio, N.A. LOC) 965,000
2,000,000 Columbus, OH, Series 1 Weekly VRDNs (Westdeutsche Landesbank
Girozentrale LOC) 2,000,000
1,100,000 Ohio State Air Quality Development Authority, Series A, 3.95% Bonds
(Ohio Edison Co.)/(Toronto-Dominion Bank LOC),
2/1/1997 (@100) 1,100,172
---------------
Total 4,065,172
---------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
PENNSYLVANIA--3.1%
$ 5,000,000 Allegheny County, PA IDA, Revenue Bonds (Series A) Weekly VRDNs (United
Jewish Federation of Greater Pittsburgh VRDB) $ 5,000,000
1,700,000 Pennsylvania State Higher Education Facilities Authority, Series A7,
4.75% TOBs (St. Joseph's University), Mandatory Tender
4/1/1998 1,704,361
1,500,000 Sewickley Valley, PA Hospital Authority, Revenue Bonds, 3.55% TOBs (PNC
Bank, N.A. LOC), Mandatory Tender
12/16/1997 1,500,000
---------------
Total 8,204,361
---------------
SOUTH CAROLINA--1.5%
4,000,000 Richland County, SC, (Series B), 4.00% Bonds,
12/1/1997 4,000,000
---------------
TENNESSEE--7.7%
2,170,000 Metropolitan Government Nashville & Davidson County, TN HEFA, Refunding
Revenue Bonds Weekly VRDNs (West Meade Place Project)/(NationsBank,
South LOC) 2,170,000
3,000,000 Metropolitan Government Nashville & Davidson County, TN IDB,
Multi-Family Housing Revenue Bonds (Series B) Weekly VRDNs (Arbor Crest
L.P.)/(Chase Manhattan Bank N.A., New York and Lasalle National Corp.
LOCs) 3,000,000
3,450,000 Metropolitan Nashville Tennessee AA, (Series 1993) Weekly VRDNs (FGIC
INS)/(Societe Generale, Paris LIQ)/(Societe Generale, Paris LOC) 3,450,000
2,000,000 Montgomery Co, TN Public Building Authority Weekly VRDNs (NationsBank
Corp. LOC) 2,000,000
10,055,000 Tennessee State School Board Authority, (Series 1996A) Weekly VRDNs
(Union Bank of Switzerland, Zurich LIQ) 10,055,000
---------------
Total 20,675,000
---------------
TEXAS--10.8%
3,805,000 Fort Worth, TX Independent School District, General Obligation Unltd.,
6.00% Bonds, 2/15/1998 3,821,062
3,000,000 Harris County, TX, 4.25% TRANs, 2/27/1998 3,003,896
5,000,000 Lower Neches Valley, TX, Refunding Revenue Bonds, 3.75% TOBs (Chevron
U.S.A., Inc.) 2/15/2017 5,000,000
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
Principal
Amount Value
- --------------------------------------------------------------------------------------------------------
<C> <S> <C>
Short-Term Municipals--continued
TEXAS--CONTINUED
$ 3,000,000 Midland Independent School District, TX, Variable Rate Unlimited Tax
School Building Bonds (Series 1997), 3.91% TOBs (Texas Permanent School
Fund Guarantee Program GTD), Mandatory Tender 1/15/1998 $ 3,000,035
4,000,000 Richardson, TX Independent School District, (Series A) Weekly VRDNs
(PSFG GTD)/(Union Bank of Switzerland, Zurich SA) 4,000,000
10,000,000 Texas State, (Series A), 4.75% TRANs, 8/31/1998 10,068,438
---------------
Total 28,893,431
---------------
UTAH--2.6%
7,000,000 Utah State, (Series B), 3.60% Bonds, 12/11/1997 7,000,000
---------------
VIRGINIA--4.3%
5,915,000 Commonwealth of Virginia, GO UT, 5.00% Bonds,
6/1/1998 5,952,229
1,960,000 Harrisonburg, VA Redevelopment & Housing Authority, Multi-Family Housing
Revenue Bonds, 3.70% TOBs (Rolling Brook Village Apartments)/(Guardian
S&L, Houston LOC) 2/1/1998 1,960,000
2,600,000 Roanoke, VA IDA, (Series B) Daily VRDNs (Carillion Health System) 2,600,000
1,000,000 Virginia State Transportation Board, 7.80% Bonds (Route 28
Project)/(United States Treasury PRF), 3/1/1998 (@102) 1,014,737
---------------
Total 11,526,966
---------------
WASHINGTON--3.4%
9,190,000 Port Anacortes, WA Industrial Development Corp., 3.75% TOBs (Texaco,
Inc.) 12/3/1997 9,190,000
---------------
WISCONSIN--2.0%
5,400,000 Wisconsin Health and Educational Facilities Authority, Revenue Bonds
(Series 1994) Weekly VRDNs (Felician Health Care, Inc. Project)/(Lasalle
National Bank, Chicago LOC) 5,400,000
---------------
WYOMING--1.2%
3,200,000 Uinta County, WY, PCR Refunding Bonds Daily VRDNs (Chevron U.S.A., Inc.) 3,200,000
---------------
Total Short-Term Municipals 254,921,305
---------------
Total Investments, at amortized cost and value(a) $ 267,226,774
---------------
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
(a) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($268,324,609) at November 30, 1997.
The following acronyms are used throughout this portfolio:
CP--Commercial Paper
FGIC--Financial Guaranty Insurance Company GO--General Obligation GTD--Guaranty
HEFA--Health and Education Facilities Authority HFA--Housing Finance Authority
IDA--Industrial Development Authority IDB--Industrial Development Bond
IDR--Industrial Development Revenue IDRB--Industrial Development Revenue Bond
INS--Insured LIQ--Liquidity Agreement LOCs--Letter(s) of Credit LOC--Letter of
Credit MBIA--Municipal Bond Investors Assurance PCR--Pollution Control Revenue
PLC--Public Limited Company PRF--Prerefunded PSFG--Permanent School Fund
Guarantee SA--Support Agreement TOBs--Tender Option Bonds TRANs--Tax and Revenue
Anticipation Notes UT--Unlimited Tax VRDB--Variable Rate Demand Bond
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Assets:
Total investments in securities, at amortized cost and value $ 267,226,774
Income receivable 1,977,479
Receivable for shares sold 175
Deferred expenses 1,565
---------------
Total assets 269,205,993
Liabilities:
Income distribution payable $ 34,458
Payable to Bank 756,136
Accrued expenses 90,790
----------
Total liabilities 881,384
---------------
Net Assets for 268,324,609 shares outstanding $ 268,324,609
---------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Institutional Shares: ($182,472,936 / 182,472,936 shares outstanding) $1.00
---------------
Investment Shares: ($85,851,673 / 85,851,673 shares outstanding) $1.00
---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 9,431,157
Expenses:
Investment advisory fee $ 1,318,455
Administrative personnel and services fee 220,229
Custodian fees 51,928
Transfer and dividend disbursing agent fees and expenses 39,988
Trustees' fees 10,260
Auditing fees 15,258
Legal fees 4,338
Portfolio accounting fees 79,785
Distribution services fee--Investment Shares 340,932
Share registration costs 37,557
Printing and postage 20,225
Insurance premiums 2,249
Miscellaneous 17,684
-------------
Total expenses 2,158,888
Waiver of investment advisory fee (1,185,295)
-------------
Net expenses 973,593
------------
Net investment income $ 8,457,564
------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended November 30,
----------------------------------
1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 8,457,564 $ 5,467,044
---------------- ----------------
Distributions to Shareholders--
Distributions from net investment income
Institutional Shares (5,961,634) (3,429,242)
Investment Shares (2,495,930) (2,037,802)
---------------- ----------------
Change in net assets resulting from distribution
to shareholders (8,457,564) (5,467,044)
---------------- ----------------
Share Transactions--
Proceeds from sale of shares 488,064,545 409,914,657
Cost of shares redeemed (413,538,893) (352,122,829)
---------------- ----------------
Change in net assets resulting from share transactions 74,525,652 57,791,828
---------------- ----------------
Change in net assets 74,525,652 57,791,828
Net Assets:
Beginning of period 193,798,957 136,007,129
---------------- ----------------
End of period $ 268,324,609 $ 193,798,957
---------------- ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.03 0.03 0.02 0.02
Less distributions
Distributions from net investment income (0.03) (0.03) (0.03) (0.02) (0.02)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Total return (a) 2.99% 2.83% 3.25% 2.11% 1.99%
Ratios to average net assets
Expenses 0.64% 0.69% 0.66% 0.68% 0.59%
Net investment income 2.93% 2.84% 3.19% 2.11% 1.98%
Expense waiver/reimbursement (b) 0.45% 0.43% 0.52% 0.55% 0.70%
Supplemental data
Net assets, end of period
(000 omitted) $ 85,852 $ 74,922 $ 55,733 $ 42,820 $ 23,976
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA TAX-FREE MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.03 0.03 0.04 0.02 0.02
Less distributions
Distributions from net investment income (0.03) (0.03) (0.04) (0.02) (0.02)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Total return (a) 3.41% 3.24% 3.59% 2.42% 2.30%
Ratios to average net assets
Expenses 0.24% 0.29% 0.32% 0.38% 0.29%
Net investment income 3.34% 3.22% 3.55% 2.41% 2.28%
Expense waiver/reimbursement (b) 0.45% 0.43% 0.46% 0.45% 0.60%
Supplemental data
Net assets, end of period
(000 omitted) $ 182,473 $ 118,877 $ 80,274 $ 93,867 $ 59,269
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA U.S. TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------------------------------------------------------
<C> <S> <C>
U.S. Government Obligations--50.6%
U.S. TREASURY BILLS 33.1%
$ 210,000,000 12/11/97 - 5/28/98 $ 207,529,609
---------------
U.S. TREASURY NOTES 17.5%
110,000,000 5.125% - 6.000%, 12/31/97 - 8/15/98 109,996,205
---------------
Total U.S. Government Obligations 317,525,814
---------------
(a) Repurchase Agreements--49.5%
145,000,000 CS First Boston Corp., 5.720%, dated 11/28/1997, due 12/1/1997 145,000,000
140,894,823 Goldman Sachs Group, LP, 5.500%, dated 11/28/1997,
due 12/1/1997 140,894,823
25,000,000 Morgan Stanley Group, Inc., 5.700%, dated 11/28/1997,
due 12/1/1997 25,000,000
---------------
Total Repurchase Agreements 310,894,823
---------------
Total Investments, at amortized cost and value (b) $ 628,420,637
---------------
</TABLE>
(a) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(b) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($627,817,529) at November 30, 1997.
The following acronym is used throughout this portfolio:
LP--Limited Partnership
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA U.S. TREASURY MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Assets:
Investments in repurchase agreements $ 310,894,823
Investments in securities 317,525,814
---------------
Total investments in securities, at amortized cost and value $ 628,420,637
Income receivable 2,227,335
---------------
Total assets 630,647,972
Liabilities:
Income distribution payable 2,714,915
Accrued expenses 115,528
---------------
Total liabilities 2,830,443
---------------
Net Assets for 627,817,529 shares outstanding $ 627,817,529
---------------
Net Asset Value, Offering Price and Redemption Proceeds Per Share:
Institutional Shares: ($510,322,828 / 510,322,828 shares outstanding) $1.00
---------------
Investment Shares: ($117,494,701 / 117,494,701 shares outstanding) $1.00
---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA U.S. TREASURY MONEY MARKET FUND
STATEMENT OF OPERATIONS
YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<S> <C> <C>
Investment Income:
Interest $ 32,893,170
Expenses:
Investment advisory fee $ 3,023,600
Administrative personnel and services fee 507,009
Custodian fees 97,881
Transfer and dividend disbursing agent fees and expenses 50,413
Trustees' fees 17,828
Auditing fees 15,002
Legal fees 10,740
Portfolio accounting fees 109,014
Distribution services fee--Investment Shares 460,735
Share registration costs 80,495
Printing and postage 6,587
Insurance premiums 5,027
Miscellaneous 17,491
-------------
Total expenses 4,401,822
Waiver of investment advisory fee (2,489,781)
-------------
Net expenses 1,912,041
-------------
Net investment income $ 30,981,129
-------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA U.S. TREASURY MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended November 30,
------------------------------------
1997 1996
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
Operations--
Net investment income $ 30,981,129 $ 17,428,658
------------------ ----------------
Distributions to Shareholders--
Distributions from net investment income
Institutional Shares (25,449,095) (13,103,649)
Investment Shares (5,532,034) (4,325,009)
------------------ ----------------
Change in net assets resulting from distributions
to shareholders (30,981,129) (17,428,658)
------------------ ----------------
Share Transactions--
Proceeds from sale of shares 1,984,795,509 911,111,113
Cost of shares redeemed (1,763,619,561) (800,564,843)
------------------ ----------------
Change in net assets resulting from share transactions 221,175,948 110,546,270
------------------ ----------------
Change in net assets 221,175,948 110,546,270
Net Assets:
Beginning of period 406,641,581 296,095,311
------------------ ----------------
End of period $ 627,817,529 $ 406,641,581
------------------ ----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA U.S. TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INVESTMENT SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
-------------------------------------------------------
1997 1996 1995 1994 1993(a)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.04 0.05 0.03 0.01
Less distributions
Distributions from net investment income (0.05) (0.04) (0.05) (0.03) (0.01)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Total return (b) 4.89% 4.77% 5.30% 3.39% 1.42%
Ratios to average net assets
Expenses 0.64% 0.70% 0.66% 0.66% 0.65%*
Net investment income 4.80% 4.68% 5.21% 3.42% 2.50%*
Expense waiver/reimbursement (c) 0.41% 0.39% 0.46% 0.61% 0.73%*
Supplemental data
Net assets, end of period (000 omitted) $117,495 $104,336 $81,739 $46,396 $16,941
</TABLE>
* Computed on an annualized basis.
(a) Reflects operations for the period from May 12, 1993 (date of initial public
investment) to November 30, 1993.
(b) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(c) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA U.S. TREASURY MONEY MARKET FUND
FINANCIAL HIGHLIGHTS--INSTITUTIONAL SHARES
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------------------------------------
1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from investment operations
Net investment income 0.05 0.05 0.06 0.04 0.03
Less distributions
Distributions from net investment income (0.05) (0.05) (0.06) (0.04) (0.03)
--------- --------- --------- --------- ---------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Total return (a) 5.31% 5.18% 5.66% 3.70% 2.91%
Ratios to average net assets
Expenses 0.24% 0.30% 0.32% 0.36% 0.28%
Net investment income 5.20% 5.20% 5.54% 3.72% 2.87%
Expense waiver/reimbursement (b) 0.41% 0.39% 0.40% 0.51% 0.63%
Supplemental data
Net assets, end of period (000 omitted) $510,323 $302,306 $214,356 $87,531 $65,353
</TABLE>
(a) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(b) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 1997
1. ORGANIZATION
The Wachovia Funds (the "Trust") is registered under the Investment Company Act
of 1940, as amended (the "Act"), as an open-end, management investment company.
The Trust consists of twelve portfolios. The following portfolios are included
herein (individually referred to as the "Fund", or collectively as the "Funds"):
<TABLE>
<CAPTION>
PORTFOLIO INVESTMENT OBJECTIVE <S> <C> Wachovia Money Market
Fund To provide current income consistent with ("Money Market Fund") stability
of principal and liquidity.
Wachovia Tax-Free Money Market Fund To provide current income exempt from
federal ("Tax-Free Fund") regular income tax consistent with stability of
principal and liquidity.
Wachovia U.S. Treasury Money Market Fund To provide current income consistent
with ("U.S. Treasury Fund") stability of principal and liquidity.
</TABLE>
The financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held.
The Funds offer two classes of shares: Institutional Shares and Investment
Shares. Investment Shares are identical in all respects to Institutional Shares
except that Investment Shares are sold pursuant to a distribution plan (the
"Plan") adopted in accordance with Rule 12b-1 under the Act.
On July 31, 1997, the Trust, and each of the underlying portfolios and classes,
changed its name from The Biltmore Funds to The Wachovia Funds.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Funds use the amortized cost method to value
their portfolio securities in accordance with Rule 2a-7 under the Act.
Investments in other open-end, management investment companies are valued
at net asset value.
REPURCHASE AGREEMENTS--It is the policy of the Funds to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Funds to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Funds will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Funds' adviser to be creditworthy pursuant to the guidelines and/or
standards established and reviewed by the Board of Trustees (the
"Trustees"). Risks may arise from the potential inability of counterparties
to honor the terms of the repurchase agreement. Accordingly, the Funds
could receive less than the repurchase price on the sale of collateral
securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUNDS
Code, as amended (the "Code"). Distributions to shareholders are recorded
on the ex-dividend date.
FEDERAL TAXES--It is the Funds' policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of their income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in
when-issued or delayed delivery transactions. The Funds record when-issued
securities on the trade date and maintain security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
DEFERRED EXPENSES--The costs incurred by each Fund with respect to
registration of its shares in its first fiscal year, excluding the initial
expense of registering its shares, have been deferred and are being
amortized over a period not to exceed five years from each Fund's
commencement date.
USE OF ESTIMATES--The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts of assets, liabilities,
expenses and revenues reported in the financial statements. Actual results
could differ from those estimated.
OTHER--Investment transactions are accounted for on the trade date.
3. SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value) for each
class of shares. At November 30, 1997, capital paid-in aggregated $477,917,997,
$268,324,609 and $627,817,529 for Money Market Fund, Tax-Free Fund, and U.S.
Treasury Fund, respectively.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUNDS
Transactions in shares were as follows:
<TABLE>
<CAPTION>
Money Market Fund Tax-Free Fund U.S. Treasury Fund
-------------------------- -------------------------- ---------------------------
Year Ended November 30,
-----------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INSTITUTIONAL SHARES
- ----------------------
Shares sold 266,957,724 333,951,621 253,485,355 242,033,756 1,734,312,598 722,628,978
Shares redeemed (245,267,123) (324,245,481) (189,889,011) (203,431,120) (1,526,295,637) (634,679,247)
------------ ------------ ------------ ------------ ------------- ------------
Net change resulting
from Institutional
Shares transactions 21,690,601 9,706,140 63,596,344 38,602,636 208,016,961 87,949,731
------------ ------------ ------------ ------------ ------------- ------------
INVESTMENT SHARES
- ----------------------
Shares sold 387,865,930 283,684,561 234,579,190 167,880,901 250,482,911 188,482,135
Shares issued to
shareholders in
payment of
distributions declared 51,644 10,615 -- -- -- --
Shares redeemed (297,700,811) (219,068,035) (223,649,882) (148,691,709) (237,323,924) (165,885,596)
------------ ------------ ------------ ------------ ------------- ------------
Net change resulting
from Investment Shares
transactions 90,216,763 64,627,141 10,929,308 19,189,192 13,158,987 22,596,539
------------ ------------ ------------ ------------ ------------- ------------
Net change resulting
from share
transactions 111,907,364 74,333,281 74,525,652 57,791,828 221,175,948 110,546,270
------------ ------------ ------------ ------------ ------------- ------------
</TABLE>
4. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Wachovia Asset Management, the Funds' investment
adviser (the "Adviser"), receives for its services an annual investment advisory
fee equal to 0.50% of each Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides the Funds
with certain administrative personnel and services. This fee paid to FAS is
based on the level of average aggregate net assets of the Trust and The Wachovia
Municipal Funds for the period. Prior to December 4, 1997, the administrative
fee during any fiscal year for the Funds aggregated at least $75,000. After that
date, FAS ceased imposing a minimum administrative fee.
DISTRIBUTION SERVICES FEE--Under the terms of the Plan, each Fund will
compensate Federated Securities Corp. ("FSC"), the principal distributor, from
its net assets to finance activities intended to result in the sale of each
Fund's Investment Shares. The Plan provides that each Fund may incur
distribution expenses up to 0.40% of the average daily net assets of its
Investment Shares, annually, to compensate FSC.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company
("FServ"), through its subsidiary, Federated Shareholder Services Company
("FSSC") serves as transfer and dividend disbursing agent for the Funds. The fee
paid to FSSC is based on the size, type, and number of accounts and transactions
made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ, through its subsidiary FAS, maintains the
Funds' accounting records for which it receives a fee. The fee is based on the
level of each Fund's average daily net assets for the period, plus out-of-pocket
expenses.
CUSTODIAN FEES--Wachovia Bank, N.A. is the Funds' custodian for which it
receives a fee. The fee is based on the level of each Fund's average daily net
assets for the period, plus out-of-pocket expenses.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WACHOVIA MONEY MARKET FUNDS
ORGANIZATIONAL EXPENSES--Organizational expenses were borne initially by FAS.
The Funds have agreed to reimburse FAS for the organizational expenses during
the five-year period following the date that each Fund becomes effective. For
the year ended November 30, 1997, pursuant to this agreement, the Funds paid FAS
as follows:
<TABLE>
<CAPTION>
Initial Organizational
Organizational Expenses
Fund Expenses Reimbursed
<S> <C> <C>
Money Market Fund $63,357 $2,212
Tax-Free Fund 59,661 1,994
U.S. Treasury Fund 78,399 1,518
</TABLE>
GENERAL--Certain of the Officers of the Trust are Officers and Directors or
Trustees of the above companies.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Trustees and Shareholders of
THE WACHOVIA FUNDS:
(formerly The Biltmore Funds)
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Wachovia Money Market Fund, Wachovia Tax-Free
Money Market Fund, and Wachovia U.S. Treasury Money Market Fund (portfolios of
The Wachovia Funds) as of November 30, 1997, and the related statements of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended and financial highlights for the
periods presented. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
November 30, 1997, by correspondence with the custodian and brokers or other
appropriate auditing procedures where replies from brokers were not received. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Wachovia Money Market Fund, Wachovia Tax-Free Money Market Fund, and Wachovia
U.S. Treasury Money Market Fund of The Wachovia Funds at November 30, 1997, and
the results of their operations for the year then ended, changes in their net
assets for each of the two years in the period then ended, and financial
highlights for the periods presented, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Pittsburgh, Pennsylvania
January 20, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRUSTEES OFFICERS
James A. Hanley John W. McGonigle
Samuel E. Hudgins President and Treasurer
J. Berkley Ingram, Jr. Charles L. Davis, Jr.
D. Dean Kaylor Vice President and Assistant Treasurer
Charles S. Way, Jr. Peter J. Germain
Secretary
Gail Cagney
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves risk, including possible
loss of principal. Although money market funds seek to maintain a stable net
asset value of $1.00 per share, there is no assurance that they will be able to
do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts concerning
its objective and policies, management fees, expenses and other information.
Cusip 929901106
Cusip 929901205
Cusip 929901304
Cusip 929901403
Federated Securities Corp Cusip 929901833
is the distributor of the funds Cusip 929901825
831-21 (1/98) G01512-16 (1/98)
APPENDIX
A1. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Equity Fund, based on a 4.50% sales charge are represented by
a solid line. The Standard & Poor's 500 Index (the "S&P 500 Index") is
represented by a dotted line. The line graph is a visual representation of
change in value of a $10,000 hypothetical investment in the Class A Shares of
the fund and the S&P 500 Index. The "x"-axis reflects computation periods from
5/7/93 to 11/30/97. The "y"-axis reflects the cost of the investment. The right
margin reflects the ending value of the hypothetical investment in the fund's
Class A Shares, based on a 4.50% sales charge, as compared to the S&P 500 Index.
The ending values were $19,838 and $22,857, respectively. The legend in the
bottom quadrant of the graphic presentation indicated the fund's Class A Shares
Average Annual Total Returns for the one-year period ended 11/30/97, from the
fund's Class A Shares start of performance (5/7/93)(cumulative) to 11/30/97, and
from the fund's Class A Shares start of performance (5/7/93) to 11/30/97. The
total returns were 14.79%, 98.39%, and 16.18%, respectively.
A2. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class B
Shares of Wachovia Equity Fund, based on a 4.00% contingent deferred sales
charge on any redemption less than two years from purchase date, are represented
by a solid line. The S&P 500 Index is represented by a dotted line. The line
graph is a visual representation of change in value of a $10,000 hypothetical
investment in the Class B Shares of the fund and the S&P 500 Index. The "x"-axis
reflects computation periods from 7/23/96 to 11/30/97. The "y"-axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the fund's Class B Shares, based on a 4.00%
contingent deferred sales charge on any redemption less than two years from
purchase date, as compared to the S&P 500 Index. The ending values were $13,760
and $15,321, respectively. The legend in the bottom quadrant of the graphic
presentation indicated the fund's Class B Shares Average Annual Total Returns
for the one-year period ended 11/30/97, from the fund's Class B Shares start of
performance (7/23/96)(cumulative) to 11/30/97, and from the fund's Class B
Shares start of performance (7/23/96) to 11/30/97. The total returns were
13.52%, 37.60%, and 26.54%, respectively.
A3. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Equity Fund are represented by a solid line. The S&P 500
Index is represented by a dotted line. The line graph is a visual representation
of change in value of a $10,000 hypothetical investment in the Class Y Shares of
the fund and the S&P 500 Index. The "x"-axis reflects computation periods from
7/23/96 to 11/30/97. The "y"-axis reflects the cost of the investment. The right
margin reflects the ending value of the hypothetical investment in the fund's
Class Y Shares, as compared to the S&P 500 Index. The ending values were $14,401
and $15,321, respectively. The legend in the bottom quadrant of the graphic
presentation indicated the fund's Class Y Shares Average Annual Total Returns
for the one-year period ended 11/30/97, from the fund's Class Y Shares start of
performance (7/23/96)(cumulative) to 11/30/97, and from the fund's Class Y
Shares start of performance (7/23/96) to 11/30/97. The total returns were
20.44%, 44.01%, and 30.86%, respectively.
A4. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Quantitative Equity Fund, based on a 4.50% sales charge are
represented by a solid line. The S&P 500 Index is represented by a dotted line.
The line graph is a visual representation of change in value of a $10,000
hypothetical investment in the Class A Shares of the fund and the S&P 500 Index.
The "x"-axis reflects computation periods from 3/25/94 to 11/30/97. The "y"-axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the fund's Class A Shares, based on a 4.50%
sales charge, as compared to the S&P 500 Index. The ending values were $21,423
and $20,649, respectively. The legend in the bottom quadrant of the graphic
presentation indicated the fund's Class A Shares Average Annual Total Returns
for the one-year period ended 11/30/97, from the fund's Class A Shares start of
performance (3/25/94)(cumulative) to 11/30/97, and from the fund's Class A
Shares start of performance (3/25/94) to 11/30/97. The total returns were
23.55%, 106.49%, and 21.74%, respectively.
A5. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class B
Shares of Wachovia Quantitative Equity Fund, based on a 4.00% contingent
deferred sales charge on any redemption less than two years from purchase date,
are represented by a solid line. The S&P 500 Index is represented by a dotted
line. The line graph is a visual representation of change in value of a $10,000
hypothetical investment in the Class B Shares of the fund and the S&P 500 Index.
The "x"-axis reflects computation periods from 7/23/96 to 11/30/97. The "y"-axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the fund's Class B Shares, based on a 4.00%
contingent deferred sales charge on any redemption less than two years from
purchase date, as compared to the S&P 500 Index. The ending values were $14,964
and $15,321, respectively. The legend in the bottom quadrant of the graphic
presentation indicated the fund's Class B Shares Average Annual Total Returns
for the one-year period ended 11/30/97, from the fund's Class B Shares start of
performance (7/23/96)(cumulative) to 11/30/97, and from the fund's Class B
Shares start of performance (7/23/96) to 11/30/97. The total returns were
23.05%, 49.64%, and 34.61%, respectively.
A6. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Quantitative Equity Fund are represented by a solid line. The
S&P 500 Index is represented by a dotted line. The line graph is a visual
representation of change in value of a $10,000 hypothetical investment in the
Class Y Shares of the fund and the S&P 500 Index. The "x"-axis reflects
computation periods from 7/23/96 to 11/30/97. The "y"-axis reflects the cost of
the investment. The right margin reflects the ending value of the hypothetical
investment in the fund's Class Y Shares, as compared to the S&P 500 Index. The
ending values were $15,577 and $15,321, respectively. The legend in the bottom
quadrant of the graphic presentation indicated the fund's Class Y Shares Average
Annual Total Returns for the one-year period ended 11/30/97, from the fund's
Class Y Shares start of performance (7/23/96)(cumulative) to 11/30/97, and from
the fund's Class Y Shares start of performance (7/23/96) to 11/30/97. The total
returns were 29.60%, 55.77%, and 38.66%, respectively.
A7. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Equity Index Fund, based on a 4.50% sales charge are
represented by a solid line. The S&P 500 Index is represented by a dotted line.
The line graph is a visual representation of change in value of a $10,000
hypothetical investment in the Class A Shares of the fund and the S&P 500 Index.
The "x"-axis reflects computation periods from 5/7/93 to 11/30/97. The "y"-axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the fund's Class A Shares, based on a 4.50%
sales charge, as compared to the S&P 500 Index. The ending values were $22,442
and $22,857, respectively. The legend in the bottom quadrant of the graphic
presentation indicated the fund's Class A Shares Average Annual Total Returns
for the one-year period ended 11/30/97, from the fund's Class A Shares start of
performance (5/7/93)(cumulative) to 11/30/97, and from the fund's Class A Shares
start of performance (5/7/93) to 11/30/97. The total returns were 21.84%,
124.45%, and 19.37%, respectively.
A8. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Equity Index Fund are represented by a solid line. The S&P
500 Index is represented by a dotted line. The line graph is a visual
representation of change in value of a $10,000 hypothetical investment in the
Class Y Shares of the fund and the S&P 500 Index. The "x"-axis reflects
computation periods from 7/23/96 to 11/30/97. The "y"-axis reflects the cost of
the investment. The right margin reflects the ending value of the hypothetical
investment in the fund's Class Y Shares, as compared to the S&P 500 Index. The
ending values were $15,367 and $15,321, respectively. The legend in the bottom
quadrant of the graphic presentation indicated the fund's Class Y Shares Average
Annual Total Returns for the one-year period ended 11/30/97, from the fund's
Class Y Shares start of performance (7/23/96)(cumulative) to 11/30/97, and from
the fund's Class Y Shares start of performance (7/23/96) to 11/30/97. The total
returns were 27.91%, 53.68%, and 37.28%, respectively.
A9. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Special Values Fund, based on a 4.50% sales charge are
represented by a solid line. The Russell 2000 Small Stock Index ("Russell 2000
Index") is represented by a dotted line. The line graph is a visual
representation of change in value of a $10,000 hypothetical investment in the
Class A Shares of the fund and the Russell 2000 Index. The "x"-axis reflects
computation periods from 5/7/93 to 11/30/97. The "y"-axis reflects the cost of
the investment. The right margin reflects the ending value of the hypothetical
investment in the fund's Class A Shares, based on a 4.50% sales charge, as
compared to the Russell 2000 Index. The ending values were $22,536 and $20,228,
respectively. The legend in the bottom quadrant of the graphic presentation
indicated the fund's Class A Shares Average Annual Total Returns for the
one-year period ended 11/30/97, from the fund's Class A Shares start of
performance (5/7/93)(cumulative) to 11/30/97, and from the fund's Class A Shares
start of performance (5/7/93) to 11/30/97. The total returns were 27.08%,
125.38%, and 19.46%, respectively.
A10. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Special Values Fund are represented by a solid line. The
Russell 2000 Index is represented by a dotted line. The line graph is a visual
representation of change in value of a $10,000 hypothetical investment in the
Class Y Shares of the fund and the Russell 2000 Index. The "x"-axis reflects
computation periods from 7/23/96 to 11/30/97. The "y"-axis reflects the cost of
the investment. The right margin reflects the ending value of the hypothetical
investment in the fund's Class Y Shares, as compared to the Russell 2000 Index.
The ending values were $15,335 and $13,910, respectively. The legend in the
bottom quadrant of the graphic presentation indicated the fund's Class Y Shares
Average Annual Total Returns for the one-year period ended 11/30/97, from the
fund's Class Y Shares start of performance (7/23/96)(cumulative) to 11/30/97,
and from the fund's Class Y Shares start of performance (7/23/96) to 11/30/97.
The total returns were 33.29%, 53.36%, and 37.02%, respectively.
A11. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Emerging Markets Fund, based on a 4.50% sales charge are
represented by a solid line. The International Finance Corporation Investable
Index (Total Return Series) ("IFCI") is represented by a dotted line. The line
graph is a visual representation of change in value of a $10,000 hypothetical
investment in the Class A Shares of the fund and the IFCI. The "x"-axis reflects
computation periods from 12/23/94 to 11/30/97. The "y"-axis reflects the cost of
the investment. The right margin reflects the ending value of the hypothetical
investment in the fund's Class A Shares, based on a 4.50% sales charge, as
compared to the IFCI. The ending values were $10,752 and $8,420, respectively.
The legend in the bottom quadrant of the graphic presentation indicated the
fund's Class A Shares Average Annual Total Returns for the one-year period ended
11/30/97, from the fund's Class A Shares start of performance
(12/23/94)(cumulative) to 11/30/97, and from the fund's Class A Shares start of
performance (12/23/94) to 11/30/97. The total returns were (8.14)%, 7.53%, and
2.50%, respectively.
A12. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Emerging Markets Fund are represented by a solid line. The
IFCI is represented by a dotted line. The line graph is a visual representation
of change in value of a $10,000 hypothetical investment in the Class Y Shares of
the fund and the IFCI. The "x"-axis reflects computation periods from 7/23/96 to
11/30/97. The "y"-axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the fund's Class Y
Shares, as compared to the IFCI. The ending values were $9,434 and $8,400,
respectively. The legend in the bottom quadrant of the graphic presentation
indicated the fund's Class Y Shares Average Annual Total Returns for the
one-year period ended 11/30/97, from the fund's Class Y Shares start of
performance (7/23/96)(cumulative) to 11/30/97, and from the fund's Class Y
Shares start of performance (7/23/96) to 11/30/97. The total returns were
(3.64)%, (5.66)%, and (4.20)%, respectively.
A13. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Balanced Fund, based on a 4.50% sales charge are represented
by a solid line. The S&P 500 Index is represented by a dotted line. The Lehman
Brothers Aggregate Bond Index (the "Lehman Aggregate Bond Index") is represented
by a dashed line. The line graph is a visual representation of change in value
of a $10,000 hypothetical investment in the Class A Shares of the fund, the S&P
500 Index and the Lehman Aggregate Bond Index. The "x"-axis reflects computation
periods from 5/7/93 to 11/30/97. The "y"-axis reflects the cost of the
investment. The right margin reflects the ending value of the hypothetical
investment in the fund's Class A Shares, based on a 4.50% sales charge, as
compared to the S&P 500 Index and the Lehman Aggregate Bond Index. The ending
values were $17,209, $22,857 and $13,466, respectively. The legend in the bottom
quadrant of the graphic presentation indicated the fund's Class A Shares Average
Annual Total Returns for the one-year period ended 11/30/97, from the fund's
Class A Shares start of performance (5/7/93)(cumulative) to 11/30/97, and from
the fund's Class A Shares start of performance (5/7/93) to 11/30/97. The total
returns were 9.96%, 72.11%, and 12.62%, respectively.
A14. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class B
Shares of Wachovia Balanced Fund, based on a 4.00% contingent deferred sales
charge on any redemption less than two years from purchase date, are represented
by a solid line. The S&P 500 Index is represented by a dotted line. The Lehman
Aggregate Bond Index is represented by a dashed line. The line graph is a visual
representation of change in value of a $10,000 hypothetical investment in the
Class B Shares of the fund, the S&P 500 Index and the Lehman Aggregate Bond
Index. The "x"-axis reflects computation periods from 7/23/96 to 11/30/97. The
"y"-axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the fund's Class B Shares, based
on a 4.00% contingent deferred sales charge on any redemption less than two
years from purchase date, as compared to the S&P 500 Index and the Lehman
Aggregate Bond Index. The ending values were $12,607, $15,321, and $11,360,
respectively. The legend in the bottom quadrant of the graphic presentation
indicated the fund's Class B Shares Average Annual Total Returns for the
one-year period ended 11/30/97, from the fund's Class B Shares start of
performance (7/23/96)(cumulative) to 11/30/97, and from the fund's Class B
Shares start of performance (7/23/96) to 11/30/97. The total returns were 8.49%,
26.07%, and 18.63%, respectively.
A15. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Balanced Fund are represented by a solid line. The S&P 500
Index is represented by a dotted line. The Lehman Aggregate Bond Index is
represented by a dashed line. The line graph is a visual representation of
change in value of a $10,000 hypothetical investment in the Class Y Shares of
the fund, the S&P 500 Index and the Lehman Aggregate Bond Index. The "x"-axis
reflects computation periods from 7/23/96 to 11/30/97. The "y"-axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the fund's Class Y Shares, as compared to the S&P 500
Index and the Lehman Aggregate Bond Index. The ending values were $13,232,
$15,321 and $11,360, respectively. The legend in the bottom quadrant of the
graphic presentation indicated the fund's Class Y Shares Average Annual Total
Returns for the one-year period ended 11/30/97, from the fund's Class Y Shares
start of performance (7/23/96)(cumulative) to 11/30/97, and from the fund's
Class Y Shares start of performance (7/23/96) to 11/30/97. The total returns
were 15.37%, 32.32%, and 22.94%, respectively.
A16. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Fixed Income Fund, based on a 4.50% sales charge are
represented by a solid line. The Lehman Aggregate Bond Index is represented by a
dotted line. The line graph is a visual representation of change in value of a
$10,000 hypothetical investment in the Class A Shares of the fund and the Lehman
Aggregate Bond Index. The "x"-axis reflects computation periods from 5/7/93 to
11/30/97. The "y"-axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the fund's Class A
Shares, based on a 4.50% sales charge, as compared to the Lehman Aggregate Bond
Index. The ending values were $12,357 and $13,466, respectively. The legend in
the bottom quadrant of the graphic presentation indicated the fund's Class A
Shares Average Annual Total Returns for the one-year period ended 11/30/97, from
the fund's Class A Shares start of performance (5/7/93)(cumulative) to 11/30/97,
and from the fund's Class A Shares start of performance (5/7/93) to 11/30/97.
The total returns were 1.39%, 23.58%, and 4.74%, respectively.
A17. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class B
Shares of Wachovia Fixed Income Fund, based on a 4.00% contingent deferred sales
charge on any redemption less than two years from purchase date, are represented
by a solid line. The Lehman Aggregate Bond Index is represented by a dotted
line. The line graph is a visual representation of change in value of a $10,000
hypothetical investment in the Class B Shares of the fund and the Lehman
Aggregate Bond Index. The "x"-axis reflects computation periods from 7/23/96 to
11/30/97. The "y"-axis reflects the cost of the investment. The right margin
reflects the ending value of the hypothetical investment in the fund's Class B
Shares, based on a 4.00% contingent deferred sales charge on any redemption less
than two years from purchase date, as compared to the Lehman Aggregate Bond
Index. The ending values were $10,705 and $11,360, respectively. The legend in
the bottom quadrant of the graphic presentation indicated the fund's Class B
Shares Average Annual Total Returns for the one-year period ended 11/30/97, from
the fund's Class B Shares start of performance (7/23/96)(cumulative) to
11/30/97, and from the fund's Class B Shares start of performance (7/23/96) to
11/30/97. The total returns were (0.03)%, 7.05%, and 5.15%, respectively.
A18. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Fixed Income Fund are represented by a solid line. The Lehman
Aggregate Bond Index is represented by a dotted line. The line graph is a visual
representation of change in value of a $10,000 hypothetical investment in the
Class Y Shares of the fund and the Lehman Aggregate Bond Index. The "x"-axis
reflects computation periods from 7/23/96 to 11/30/97. The "y"-axis reflects the
cost of the investment. The right margin reflects the ending value of the
hypothetical investment in the fund's Class Y Shares, as compared to the Lehman
Aggregate Bond Index. The ending values were $11,289 and $11,360, respectively.
The legend in the bottom quadrant of the graphic presentation indicated the
fund's Class Y Shares Average Annual Total Returns for the one-year period ended
11/30/97, from the fund's Class Y Shares start of performance
(7/23/96)(cumulative) to 11/30/97, and from the fund's Class Y Shares start of
performance (7/23/96) to 11/30/97. The total returns were 6.38%, 12.89%, and
9.34%, respectively.
A19. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Short-Term Fixed Income Fund, based on a 4.50% sales charge
that was in effect prior to 2/1/95 (as of 2/1/95 the fund's maximum sales charge
is 2.50%) are represented by a solid line. The Merrill Lynch 1-3 Year U.S.
Treasury Index is represented by a dotted line. The line graph is a visual
representation of change in value of a $10,000 hypothetical investment in the
Class A Shares of the fund and the Merrill Lynch 1-3 Year U.S. Treasury Index.
The "x"-axis reflects computation periods from 5/7/93 to 11/30/97. The "y"-axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the fund's Class A Shares, based on a 4.50%
sales charge, as compared to the Merrill Lynch 1-3 Year U.S. Treasury Index. The
ending values were $11,842 and $12,707, respectively. The legend in the bottom
quadrant of the graphic presentation indicated the fund's Class A Shares Average
Annual Total Returns for the one-year period ended 11/30/97, from the fund's
Class A Shares start of performance (5/7/93)(cumulative) to 11/30/97, and from
the fund's Class A Shares start of performance (5/7/93) to 11/30/97. The total
returns were 2.48%, 20.87%, and 4.24%, respectively.
A20. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Short-Term Fixed Income Fund are represented by a solid line.
The Merrill Lynch 1-3 Year U.S. Treasury Index is represented by a dotted line.
The line graph is a visual representation of change in value of a $10,000
hypothetical investment in the Class Y Shares of the fund and the Merrill Lynch
1-3 Year U.S. Treasury Index. The "x"-axis reflects computation periods from
7/23/96 to 11/30/97. The "y"-axis reflects the cost of the investment. The right
margin reflects the ending value of the hypothetical investment in the fund's
Class Y Shares, as compared to the Merrill Lynch 1-3 Year U.S. Treasury Index.
The ending values were $10,849 and $10,930, respectively. The legend in the
bottom quadrant of the graphic presentation indicated the fund's Class Y Shares
Average Annual Total Returns for the one-year period ended 11/30/97, from the
fund's Class Y Shares start of performance (7/23/96)(cumulative) to 11/30/97,
and from the fund's Class Y Shares start of performance (7/23/96) to 11/30/97.
The total returns were 5.33%, 8.50%, and 6.19%, respectively.
A21. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia Georgia Municipal Bond Fund, based on a 4.50% sales charge
are represented by a solid line. The Lehman Brothers State General Obligations
Bond Index (the "Lehman State General Obligations Bond Index") is represented by
a dotted line. The line graph is a visual representation of change in value of a
$10,000 hypothetical investment in the Class A Shares of the fund and the Lehman
State General Obligations Bond Index. The "x"-axis reflects computation periods
from 12/23/94 to 11/30/97. The "y"-axis reflects the cost of the investment. The
right margin reflects the ending value of the hypothetical investment in the
fund's Class A Shares, based on a 4.50% sales charge, as compared to the Lehman
State General Obligations Bond Index. The ending values were $12,039 and
$12,981, respectively. The legend in the bottom quadrant of the graphic
presentation indicated the fund's Class A Shares Average Annual Total Returns
for the one-year period ended 11/30/97, from the fund's Class A Shares start of
performance (12/23/94)(cumulative) to 11/30/97, and from the fund's Class A
Shares start of performance (12/23/94) to 11/30/97. The total returns were
0.65%, 20.40%, and 6.52%, respectively.
A22. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia Georgia Municipal Bond Fund are represented by a solid line.
The Lehman State General Obligations Bond Index is represented by a dotted line.
The line graph is a visual representation of change in value of a $10,000
hypothetical investment in the Class Y Shares of the fund and the Lehman State
General Obligations Bond Index. The "x"-axis reflects computation periods from
7/23/96 to 11/30/97. The "y"-axis reflects the cost of the investment. The right
margin reflects the ending value of the hypothetical investment in the fund's
Class Y Shares, as compared to the Lehman State General Obligations Bond Index.
The ending values were $11,018 and $11,075, respectively. The legend in the
bottom quadrant of the graphic presentation indicated the fund's Class Y Shares
Average Annual Total Returns for the one-year period ended 11/30/97, from the
fund's Class Y Shares start of performance (7/23/96)(cumulative) to 11/30/97,
and from the fund's Class Y Shares start of performance (7/23/96) to 11/30/97.
The total returns were 5.63%, 10.18%, and 7.40%, respectively.
A23. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia North Carolina Municipal Bond Fund, based on a 4.50% sales
charge are represented by a solid line. The Lehman State General Obligations
Bond Index is represented by a dotted line. The line graph is a visual
representation of change in value of a $10,000 hypothetical investment in the
Class A Shares of the fund and the Lehman State General Obligations Bond Index.
The "x"-axis reflects computation periods from 12/23/94 to 11/30/97. The
"y"-axis reflects the cost of the investment. The right margin reflects the
ending value of the hypothetical investment in the fund's Class A Shares, based
on a 4.50% sales charge, as compared to the Lehman State General Obligations
Bond Index. The ending values were $12,106 and $12,981, respectively. The legend
in the bottom quadrant of the graphic presentation indicated the fund's Class A
Shares Average Annual Total Returns for the one-year period ended 11/30/97, from
the fund's Class A Shares start of performance (12/23/94)(cumulative) to
11/30/97, and from the fund's Class A Shares start of performance (12/23/94) to
11/30/97. The total returns were 0.61%, 21.07%, and 6.72%, respectively.
A24. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia North Carolina Municipal Bond Fund are represented by a solid
line. The Lehman State General Obligations Bond Index is represented by a dotted
line. The line graph is a visual representation of change in value of a $10,000
hypothetical investment in the Class Y Shares of the fund and the Lehman State
General Obligations Bond Index. The "x"-axis reflects computation periods from
7/23/96 to 11/30/97. The "y"-axis reflects the cost of the investment. The right
margin reflects the ending value of the hypothetical investment in the fund's
Class Y Shares, as compared to the Lehman State General Obligations Bond Index.
The ending values were $11,037 and $11,075, respectively. The legend in the
bottom quadrant of the graphic presentation indicated the fund's Class Y Shares
Average Annual Total Returns for the one-year period ended 11/30/97, from the
fund's Class Y Shares start of performance (7/23/96)(cumulative) to 11/30/97,
and from the fund's Class Y Shares start of performance (7/23/96) to 11/30/97.
The total returns were 5.57%, 10.38%, and 7.54%, respectively.
A25. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class A
Shares of Wachovia South Carolina Municipal Bond Fund, based on a 4.50% sales
charge are represented by a solid line. The Lehman State General Obligations
Bond Index is represented by a dotted line. The line graph is a visual
representation of change in value of a $10,000 hypothetical investment in the
Class A Shares of the fund and the Lehman State General Obligations Bond Index.
The "x"-axis reflects computation periods from 1/11/91 to 11/30/97. The "y"-axis
reflects the cost of the investment. The right margin reflects the ending value
of the hypothetical investment in the fund's Class A Shares, based on a 4.50%
sales charge, as compared to the Lehman State General Obligations Bond Index.
The ending values were $15,641 and $16,664, respectively. The legend in the
bottom quadrant of the graphic presentation indicated the fund's Class A Shares
Average Annual Total Returns for the one-year, and five-year periods ended
11/30/97, from the fund's Class A Shares start of performance
(1/11/91)(cumulative) to 11/30/97, and from the fund's Class A Shares start of
performance (1/11/91) to 11/30/97. The total returns were 1.25%, 5.87%, 56.62%,
and 6.73%, respectively.
A26. The graphic presentation here displayed consists of a line graph. The
corresponding components of the line graph are listed underneath. The Class Y
Shares of Wachovia South Carolina Municipal Bond Fund are represented by a solid
line. The Lehman State General Obligations Bond Index is represented by a dotted
line. The line graph is a visual representation of change in value of a $10,000
hypothetical investment in the Class Y Shares of the fund and the Lehman State
General Obligations Bond Index. The "x"-axis reflects computation periods from
7/23/96 to 11/30/97. The "y"-axis reflects the cost of the investment. The right
margin reflects the ending value of the hypothetical investment in the fund's
Class Y Shares, as compared to the Lehman State General Obligations Bond Index.
The ending values were $11,139 and $11,075, respectively. The legend in the
bottom quadrant of the graphic presentation indicated the fund's Class Y Shares
Average Annual Total Returns for the one-year period ended 11/30/97, from the
fund's Class Y Shares start of performance (7/23/96)(cumulative) to 11/30/97,
and from the fund's Class Y Shares start of performance (7/23/96) to 11/30/97.
The total returns were 6.23%, 11.39%, and 8.27%, respectively.
