March 5, 1997
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Calvert Municipal Fund, Inc.
File Numbers 811-6525 and 33-44968
Ladies and Gentlemen:
Pursuant to Rule 30b2-1 of the Investment Company Act of 1940, attached is
the Annual Report to Shareholders for the year ended December 31, 1996, for the
above-referenced Registrant.
Sincerely,
Nana Juarbe
Administrative Assistant
<PAGE>
Calvert Municipal Intermediate Funds
Dear Investor:
Investors' changing outlook for the Federal Reserve's monetary policy
caused above-average volatility in the financial markets. In general, bond
yields trended higher during the first half of the year in anticipation of a Fed
tightening and then retraced a bit during the second half when Gross Domestic
Product and other indications of pricing pressures appeared benign.
Most bond investments managed to generate positive returns, but yields
covered a good bit of ground during the course of the year. The benchmark
30-year Treasury bond fluctuated within a fairly wide band of about 125 basis
points but closed 1996 just 60 basis points above its year-ago level. Stocks
posted very strong returns, for the second consecutive year. The Standard &
Poor's 500 Stock Index rose about 23%.
Municipal securities outperformed taxables, as the market recovered from
fears that the introduction of a flat-tax system would eliminate municipal
securities' tax advantage. The average intermediate-term municipal fund rose
3.74% for the year (without adjusting for the tax-advantage), compared to an
increase of 2.87% for the average taxable intermediate-term government fund.
Fund Performance and Strategy Review
Each of the Calvert state-specific municipal funds performed in-line with
their benchmarks for the one-year period covered by this report. The National
Municipal Intermediate Fund generated a one-year return about 60 basis points
above an average of similar funds. This was due mainly to the Fund's
considerable position in non-callable municipal bonds, which held their value
better than callable securities in this volatile interest rate environment. We
attempted to use this defensive strategy for the state-specific funds as well,
but these securities are not as widely available on a state-by-state basis and
so our positions were smaller.
Municipal Rates
(Graph appears here)
Graph shows municipal rates for 1, 7 and 20 year
AA General Obligations between 12/95 and 12/96
For all of the intermediate funds, we kept maturities relatively constant
and in-line with those of their peer group averages for most of the year. We
lengthened maturity a bit in the second half in anticipation of falling market
rates. Prices of longer-term securities rise in response to a decline in rates.
Rates did in fact trend lower toward the end of the year; thus, the Calvert
Funds' six month returns tended to be above the returns on an average of similar
funds.
Investment Performance
Six Twelve
Periods Ended 12/31/96 Months Months
Natinoal Municipal Intermediate 4.35% 4.32%
Lipper Int. Muni. Funds Avg. 3.92% 3.70%
California Municipal Intermediate 4.12% 4.04%
Lipper CA Int. Muni Funds Avg. 3.98% 4.05%
Florida Municipal Intermediate 3.64% 3.53%
Lipper FL Int. Muni. Funds Avg. 3.61% 3.15%
Arizona Municipal Intermediate 3.38% 3.17%
Maryland Municipal Intermediate 3.95% 3.96%
Michigan Municipal Intermediate 4.09% 4.19%
Lipper Other States Int. Muni. Funds Avg. 3.80% 3.33%
New York Municipal Intermediate 4.08% 3.79%
Lipper NY Int. Muni. Funds Avg. 3.94% 3.60%
Pennsylvania Municipal Intemediate 4.01% 3.92%
Lipper PA Int. Muni. Funds Avg. 3.91% 3.78%
Virginia Municipal Intermediate 3.84% 3.82%
Lipper VA Int. Muni Funds Avg. 3.79% 3.14%
Investment performance is for Class A shares and does not reflect the deduction
of any front-end sales charges.
Outlook
Yields will likely continue to fluctuate during the first quarter of 1997,
but we don't expect to see a clear trend in place until after the next Federal
Reserve Open Market Committee meeting. The Fed might then adopt a bias toward a
tighter monetary policy, and rates might move a bit higher, but we are not
anticipating a steep increase. Our strategy is to keep the Funds at or near
their current maturity range until the interim volatility subsides and we can
better assess the direction of rates.
Sincerely,
David Rochat
Senior Vice President
January 21, 1997
Ratings Breakdown
National Intermediate Portfolio
(Graph appears here)
AAA/Aaa AA/Aa A/A BBB/Baa NR
40% 14% 7% 15% 24%
California Intermediate Portfolio
(Graph appears here)
AAA/Aaa AA/Aa A/A BBB/Baa Cash Equivalents NR
52% 10% 14% 8% 2% 14%
Maryland Intermediate Portfolio
(Graph appears here)
AAA/Aaa AA/Aa A/A NR
37% 32% 2% 29%
Arizona Intermediate Portfolio
(Graph appears here)
AAA/Aaa AA/Aa BBB/Baa
76% 20% 4%
Florida Intermediate Portfolio
(Graph appears here)
AAA/Aaa AA/Aa BBB/Baa NR
70% 13% 9% 8%
New York Intermediate Portfolio
(Graph appears here)
AAA/Aaa AA/Aa A/A BBB/Baa NR
29% 22% 10% 29% 10%
Pennsylvania Intermediate Portfolio
(Graph appears here)
AAA/Aaa AA/Aa A/A BBB/Baa Cash Equivalents NR
42% 22% 11% 16% 6% 3%
Virginia Intermediate Portfolio
(Graph appears here)
AAA/Aaa AA/Aa BBB/Baa NR
28% 60% 2% 10%
NR: Obligation is not rated by a commercial rating service, such as Moody's
Investors Services, Inc., or Standard & Poor's Corporation; obligation has been
determined to be of approriate quality for the Portfolio by Calvert Asset
Management Company, Inc., the Investment Advisor.
Portfolio Statistics
Weighted Average Maturity
6/30/96 12/31/96
National Intermediate Portfolio 10 years 10 years
Arizona Intermediate Portfolio 6 years 8 years
California Intermediate Portfolio 9 years 9 years
Florida Intermediate Portfolio 8 years 9 years
Maryland Intermediate Portfolio 9 years 8 years
Michigan Intermediate Portfolio 7 years 8 years
New York Intermediate Portfolio 8 years 9 years
Pennsylvania Intermediate Portfolio 8 years 8 years
Virginia Intermediate Portfolio 8 years 9 years
Portfolio Statistics
Performance Comparisons
Calvert National Intermediate Portfolio
Comparison of change in value of a hypothetical $10,000 investment.
(Graph appears here)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 5/29/92
CALVERT NAT INT $12,600 $12,124 $10,669 $10,796 $9,862 $9,725
LEHMAN MUNI BD $13,000 $12,457 $10,913 $11,224 $10,163 $10,000
</TABLE>
Arizona Municipal Intermediate Portfolio
Comparison of change in vlaue of a hypothetical $10,000 investment.
(Graph appears here)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
12/31/96 12/31/95 12/31/94 12/31/93
CAZ MUNI INT $11,012 $10,714 $9,548 $9,725
LEHMAN MUNI BD $11,583 $11,099 $9,723 $10,000
</TABLE>
California Municipal Intermediate Portfolio
Comparison of change in vlaue of a hypothetical $10,000 investment.
(Graph appears here)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
12/31/96 12/31/95 12/31/94 12/31/93 12/31/92 5/29/92
CCA MUNI INT $12,616 $12,172 $10,872 $11,159 $10,248 $9,725
LEHMAN MUNI BD $13,570 $13,003 $11,391 $11,715 $10,608 $10,000
</TABLE>
Florida Municipal Intermediate Portfolio
Comparison of change in vlaue of a hypothetical $10,000 investment.
(Graph appears here)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
12/31/96 12/31/95 12/31/94 12/31/93
CFL MUNI INT $11,112 $10,470 $9,491 $9,725
LEHMAN MUNI BD $11,583 $11,099 $9,723 $10,000
</TABLE>
Maryland Municipal Intermediate Portfolio
Comparison of change in vlaue of a hypothetical $10,000 investment.
(Graph appears here)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
12/31/96 12/31/95 12/31/94 12/31/93 10/1/93
CMD MUNI INT $11,322 $10,934 $9,620 $9,911 $9,725
LEHMAN MUNI BD $11,733 $11,232 $9,840 $10,120 $10,000
</TABLE>
Michigan Municipal Intermediate Portfolio
Comparison of change in vlaue of a hypothetical $10,000 investment.
(Graph appears here)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
12/31/96 12/31/95 12/31/94 12/31/93 10/1/93
CMI MUNI INT $11,426 $11,012 $9,738 $9,980 $9,725
LEHMAN MUNI BD $11,722 $11,232 $9,840 $10,120 $10,000
</TABLE>
New York Municipal Intermediate Portfolio
Comparison of change in vlaue of a hypothetical $10,000 investment.
(Graph appears here)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
12/31/96 12/31/95 12/31/94 12/31/93 10/1/93
CNY MUNI INT $11,348 $11,008 $9,680 $9,904 $9,725
LEHMAN MUNI BD $11,722 $11,232 $9,840 $10,120 $10,000
</TABLE>
Pennsylvania Municipal Intermediate Portfolio
Comparison of change in vlaue of a hypothetical $10,000 investment.
(Graph appears here)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
12/31/96 12/31/95 12/31/94 12/31/93
CPA MUNI INT $11,112 $10,470 $9,491 $9,725
LEHMAN MUNI BD $11,583 $11,099 $9,723 $10,000
</TABLE>
Virginia Municipal Intermediate Portfolio
Comparison of change in vlaue of a hypothetical $10,000 investment.
(Graph appears here)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
12/31/96 12/31/95 12/31/94 12/31/93 10/1/93
CVA MUNI INT $11,454 $11,078 $9,736 $9,939 $9,725
LEHMAN MUNI BD $11,722 $11,232 $9,840 $10,120 $10,000
</TABLE>
Portfolio Statistics
SEC Yields
Class A
Thirty Days Ended 12/31/96
National Intermediate Portfolio 4.38%
Arizona Intermediate Portfolio 3.78%
California Intermediate Portfolio 4.26%
Florida Intermediate Portfolio 4.55%
Maryland Intermediate Portfolio 4.23%
Michigan Intermediate Portfolio 4.06%
New York Intermediate Portfolio 4.11%
Pennsylvania Intermediate Portfolio 4.24%
Virginia Intermediate Portfolio 3.80%
Yields assume reinvestment of dividends.
Average Annual Total Returns
Since
Periods Ended 12/31/96 1 Year Inception
Class A Shares
National Intermediate Portfolio (9/92) 1.46% 5.59%
Arizona Intermediate Portfolio (1/94) .40% 3.27%
California Intermediate Portfolio (5/92) 1.16% 5.20%
Florida Intermediate Portfolio (1/94) .74% 3.58%
Maryland Intermediate Portfolio (10/93) 1.16% 3.90%
Michigan Intermediate Portfolio (10/93) 1.42% 4.19%
New York Intermediate Portfolio (10/93) 1.03% 4.06%
Pennsylvania Intermediate Portfolio (1/94) 1.14% 4.10%
Virginia Intermediate Portfolio (10/93) .87% 4.27%
Total returns assume reinvestment of dividends and, for Class A shares,
reflect the deduction of the Fund's maximum sales charge of 2.75%.
Report of Independent Accountants
To the Board of Directors and Shareholders of Calvert Municipal Fund, Inc.:
We have audited the accompanying statements of net assets of Calvert
Municipal Fund, Inc. (comprised of Calvert National, Arizona, California,
Maryland, Michigan, New York, Pennsylvania and Virginia Municipal Intermediate
Funds) as of December 31, 1996, 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 the following financial highlights: Calvert
National Municipal Intermediate Fund for each of the four years in the period
then ended and the period September 30, 1992 (commencement of operations)
through December 31, 1992; Calvert California Municipal Intermediate Fund for
each of the four years in the period then ended and for the period May 29, 1992
(commencement of operations) through December 31, 1992; Calvert Maryland,
Michigan, New York, and Virginia Municipal Intermediate Funds for each of the
three years in the period then ended and for the period October 1, 1993
(commencement of operations) through December 31, 1993; and Calvert Arizona and
Pennsylvania Municipal Intermediate Funds for each of the three years in the
period then ended and for the period January 1, 1994 (commencement of
operations) through December 31, 1994. 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 investments owned as of
December 31, 1996, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the funds noted in the first paragraph as of December 31, 1996, the
results of their operations, changes in their net assets and financial
highlights for the respective periods referred to above, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
February 7, 1997
Report of Independent Accountants
To the Board of Trustees of First Variable Rate Fund for Government Income
and Shareholders of Calvert Florida Municipal Intermediate Fund:
We have audited the accompanying statement of net assets of Calvert Florida
Municipal Intermediate Fund (one of the portfolios comprising the First Variable
Rate Fund for Government Income) as of December 31, 1996, and the related
statement of operations for the year then ended, statement of changes in net
assets for each of the two years in the period then ended and financial
highlights for each of the three years in the period then ended. 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 investments owned as of
December 31, 1996, by correspondence with the custodian. 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
Calvert Florida Municipal Intermediate Fund as of December 31, 1996, the results
of its operations, the changes in its net assets and financial highlights for
the respective periods stated in the first paragraph in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
February 7, 1997
National Portfolio
Statement of Net Assets
December 31, 1996
Principal
Amount Value
Municipal Obligations - 100.2%
Arizona - 2.6%
$1,000,000 Maricopa County School District General Obligation
Bonds, 7.50%, 7/1/07, AMBAC Insured $1,206,860
California - 11.5%
1,000,000 California State Public Lease Works Lease Revenue Bonds,
5.25%, 12/1/07, AMBAC Insured 1,023,330
1,625,000 Los Angeles Multi-Family Housing Revenue Bonds,
5.85%, 12/1/27 1,675,164
752,156 Regents of the University of California, Los Angeles
Lease Revenue Bonds,6.00%, 5/15/02 766,432
500,000 Sacramento Yolo Port District Improvement Lease Revenue VRDN,
4.00%, 11/1/22, LOC: Wells Fargo Bank
San Francisco International Airport Series-2 #5 Municipal
Transportation Revenue Bonds:
500,000 5.90%, 5/1/05, FGIC Insured 535,245
750,000 6.00%, 5/1/06, FGIC Insured 807,652
400,000 Tahoe City Public Utility District Certificates of
Participation, Series B,6.30%, 6/1/04 419,748
Colorado - 2.6%
1,100,000 Denver City and County Airport Revenue Bonds, Series A,
7.10%, 11/15/01 1,194,259
Connecticut - 2.4%
1,000,000 Connecticut Special Tax Obligation Revenue Bonds, Transportation
Infrastructure Project, 6.00%, 9/1/06 1,083,010
Florida - 9.2%
1,000,000 Dade County Education Facilities Authority Revenue Bonds,
University of Miami, 6.00%, 4/1/08, MBIA Insured 1,076,230
1,000,000 Dade County Multi-Family Housing Revenue Bonds,
5.90%, 6/1/26 1,028,640
2,000,000 Tampa Capital Improvement Program Revenue Bonds,
Series B, 8.375%,
10/1/18, IA: Multi-Bank 2,110,820
Georgia - 6.8%
1,500,000 Atlanta Airport Authority Facility Revenue Bonds,
6.50%, 1/1/07, AMBAC Insured 1,685,430
1,800,000 Georgia State General Obligation Bonds, 3.25%, 7/1/12 1,421,388
Hawaii - 2.9%
1,400,000 Honolulu City & County Improvement General Obligation
Bonds, 5.00%, 10/1/13 1,340,150
lllinois - 2.5%
1,000,000 Chicago Water Revenue Bonds, 6.50%, 11/1/10,
FGIC Insured 1,120,700
Indiana - 5.0%
2,000,000 Indianapolis Local Public Improvement Bond Bank
Revenue Bonds, 6.75%, 2/1/14 2,286,540
Principal
Amount Value
Louisiana - 1.0%
$425,000 Louisiana Public Facility Authority Student Loan
Revenue Bonds, 6.50%, 3/1/02 $449,773
Maryland - 13.0%
982,845 Baltimore County Economic Development Revenue VRDN, 4.75%,
12/1/02, LOC: First National Bank of Maryland 982,845
1,010,000 Cambridge Economic Development Authority Revenue Bonds,
Dorchester Hospital, 7.25%, 4/1/04 1,085,356
1,218,000 Cecil County Health Department Certificates of
Participation, 7.875%, 7/1/14 1,281,835
700,000 Maryland State Economic Development Authority Revenue
Bonds, Series A, 6.375%, 11/1/09, LOC: First National
Bank of Maryland, (Optional Tender 10/31/99 @100) 702,282
1,829,000 Prince Georges County Economic Development Authority
Revenue Bonds, 5.68%, 8/1/11, LOC: First National
Bank of Maryland, (Tender 1/1/01 @100) 1,860,605
Michigan - 2.4%
1,045,000 Michigan Higher Education Facilities Authority
Revenue Bonds, 6.00%, 11/1/03 1,079,735
New Hampshire - 0.5%
250,000 Sullivan County Regional Refuse Disposal District
General Obligation Bonds, 6.40%, 12/1/97 249,713
New Mexico - 0.1%
50,000 New Mexico Educational Assistance Foundation Student
Loan Revenue Bonds, 6.30%, 12/1/02 53,344
New York - 7.5%
800,000 New York City General Obligation Bonds, Series E,
5.75%, 2/15/09 795,120
119,100 New York City Hospital Revenue Bonds, Bronx Lease,
5.75%, 12/1/97 119,030
200,000 New York State Certificates of Participation,
5.45%, 2/1/00 203,046
1,250,000 New York State Environmental Facilities Corp. Pollution
Control Revenue Bonds, 5.20%, 12/15/16 1,208,987
1,000,000 New York State Local Government Assistance Corporation
Revenue Bonds, 6.00%, 4/1/14 1,064,370
Ohio - 3.0%
1,395,000 Ohio State General Obligation Bonds, 4.95%, 8/1/08 1,387,411
Pennsylvania - 4.5%
1,000,000 Philadelphia Airport Revenue Bonds, 5.70%, 6/15/07,
AMBAC Insured 1,044,830
1,000,000 Philadelphia Hospitals & Higher Education Facilities
Authority Revenue Bonds, 5.85%, 7/1/02 1,021,650
South Dakota - 2.7%
1,125,000 Heartland Consumers Power District Revenue Bonds,
6.00%, 1/1/09, FSA Insured 1,210,849
Texas - 3.4%
1,500,000 North Texas Higher Education Student Loan Revenue
Bonds, Series B, 5.55%, 4/1/03 1,548,150
Principal
Amount Value
Virginia - 11.1%
$320,000 Arlington County Community Housing Finance Revenue
Bonds, 6.00%, 6/1/09 $330,230
1,000,000 Chesapeake Industrial Development Authority Revenue
Bonds, 6.00%, 6/1/07, MBIA Insured 1,081,220
Virginia State Housing Development Authority
Revenue Bonds:
300,000 Series A, 6.90%, 7/1/07 315,984
1,120,000 Series I, 6.00%, 7/1/03 1,168,261
1,000,000 Virginia College Building Authority Revenue Bonds,
Twenty First Century College Project, 5.00%, 8/1/09 979,850
1,200,000 West Point Industrial Development Authority Pollution
Control Revenue Bonds, Chesapeake Corp. Project,
6.375%, 5/1/03 1,204,296
Other - 5.5%
480,020 Fort Mojave Indian Tribe of Arizona, California and Nevada Public
Facilities Combined Limited Obligation and Revenue Bonds
Adjustable Rate and Tender Series of 1993, 5.75%, 12/1/18,
(Tender 12/1/97 @ 100) 480,020
2,000,000 Oneida Utility Commission Government Lease Revenue Bonds,
6.25%, 7/1/97 2,015,022
Total Municipal Obligations (Cost $43,616,708) 45,705,412
Contracts
Options Purchased - 0.0%
47 Call Options on March U.S. Treasury Bond Futures,
Expiration 2/22/97, Strike Price 118 9,547
Total Options (Premium $41,595) 9,547
TOTAL INVESTMENTS (Cost $43,658,303) - 100.2% 45,714,959
Other assets and liabilities, net - (0.2%) (103,022)
Net Assets - 100% $45,611,937
Net Assets Consist of:
Paid-in capital applicable to 4,318,970 outstanding Class A shares
of common stock, $0.01 par value with 250,000,000 Class A
shares authorized $44,385,822
Undistributed net investment income 81,236
Accumulated net realized gain (losses) on investments (911,777)
Net unrealized appreciation (depreciation) on investments 2,056,656
Net assets $45,611,937
Net Asset Value per Share $10.56
See notes to financial statements.
Arizona Portfolio
Statement of Net Assets
December 31, 1996
Principal
Amount Value
Arizona Municipal Obligations - 97.4%
$100,000 Arizona State Certificates of Participation, 5.20%,
5/1/97, AMBAC Insured $100,503
75,000 Arizona State Transportation Board Revenue Bonds,
4.50%, 7/1/03, AMBAC Insured 74,729
Arizona State Transportation Board Highway
Revenue Bonds:
200,000 6.00%, 7/1/08 217,332
75,000 7.00%, 7/1/09, (Pre-refunded 7/1/00 @ 101) 82,264
100,000 Casa Grande Excise Tax Revenue Bonds, 5.70%, 4/1/06,
FGIC Insured 105,135
100,000 Cochise County School District General Obligation Bonds,
7.50%, 7/1/09, FGIC Insured 121,464
100,000 Glendale General Obligation Bonds, 5.15%, 7/1/03,
FGIC Insured 103,685
100,000 Maricopa County Certificates of Participation, 5.125%,
6/1/97 100,590
50,000 Maricopa County Creighton School District #14 General
Obligation Bonds, 6.90%, 7/1/03, FGIC Insured 56,434
200,000 Maricopa County School District #6 General Obligation
Bonds, 6.75%, 7/1/02, AMBAC Insured 221,608
150,000 Maricopa County General Obligation Bonds, Series A,
5.80%, 7/1/04 160,432
50,000 Maricopa County Glendale School District #40 General
Obligation Bonds, 6.30%, 7/1/03, FGIC Insured,
(Pre-refunded 7/1/01@101) 54,294
100,000 Maricopa County Paradise Valley School District #69
General Obligation Bonds, Zero Coupon, 7/1/01,
AMBAC Insured 81,529
Maricopa County Peoria School District #11 General
Obligation Bonds:
50,000 5.40%, 7/1/02, MBIA Insured 52,196
100,000 7.50%, 7/1/07, AMBAC Insured 120,686
105,000 Maricopa County Tempe Elementary School District #3
General Obligation Capital Appreciation Bonds,
Zero Coupon, 7/1/04, AMBAC Insured 72,818
70,000 Maricopa County Tolleson School District #214 General
Obligation Bonds, 5.35%, 7/1/03, FGIC Insured 72,276
25,000 Mesa General Obligation Bonds, 5.70%, 7/1/03,
FGIC Insured 26,559
95,000 Peoria Municipal Development Authority Revenue Bonds,
7.00%, 7/1/00, AMBAC Insured 103,188
50,000 Phoenix Street and Highway User Revenue Bonds,
6.10%, 7/1/00, MBIA Insured 52,946
15,000 Pima County General Obligation Bonds, 5.50%, 7/1/02 15,716
50,000 Pima County Unified School District Sunnyside #12
General Obligation Bonds, 5.35%, 7/1/03, AMBAC Insured 52,229
125,000 Prescott Valley Property Corp. Municipal Facilities
Revenue Bonds, 5.55%, 1/1/06, FGIC Insured 130,210
120,000 Scottsdale General Obligation Bonds, Series D,
6.50%, 7/1/01 130,493
Principal
Amount Value
$350,000 Tucson General Obligation Bonds, Zero Coupon, 7/1/13 $140,927
100,000 Tucson Street and Highway Revenue Bonds, Series A,
7.00%, 7/1/11, MBIA Insured 117,275
TOTAL INVESTMENTS (Cost $2,490,693) - 97.4% 2,567,518
Other assets and liabilities, net - 2.6% 67,284
Net Assets - 100% $2,634,802
Net Assets Consist of:
Paid-in capital applicable to 523,621 outstanding Class A shares
of common stock, $0.01 par value with 250,000,000 Class A
shares authorized $2,572,413
Undistributed net investment income 10,452
Accumulated net realized gain (losses) on investments (24,888)
Net unrealized appreciation (depreciation) on investments 76,825
Net assets $2,634,802
Net Asset Value per Share $5.03
California Portfolio
Statement of Net Assets
December 31, 1996
Principal
Amount Value
California Municipal Obligations - 98.5%
$595,000 California Educational Facilities Revenue Bonds,
University of San Francisco, 5.90%, 10/1/02 $641,583
1,000,000 California General Obligation Bonds, 6.40%, 9/1/07 1,121,610
California State Department Water Resources Revenue Bonds:
1,000,000 5.70%, 12/1/03 1,071,340
1,000,000 6.00%, 12/1/10 1,084,700
1,750,000 California State Public Works Department of Corrections
Lease Revenue Bonds, 5.25%, 12/1/07, AMBAC Insured 1,790,828
1,448,000 California Statewide Development Authority Multi-Family
Housing Revenue Bonds, 8.50%, 11/1/00 1,453,792
1,000,000 Los Angeles General Obligation Bonds, Series A, 7.50%,
9/1/01, MBIA Insured 1,128,510
725,000 Los Angeles Community Redevelopment Agency Housing Revenue
Bonds, 5.50%, 12/1/05 737,839
1,000,000 Los Angeles Department of Water and Power Revenue Bonds,
5.40%, 9/1/06 1,036,320
3,000,000 Los Angeles Multi-Family Housing Revenue Bonds, 5.85%,
12/1/27 3,092,610
1,000,000 Los Angeles Wastewater System Revenue Bonds, Series A,
8.50%, 6/1/02, MBIA Insured 1,186,420
750,000 Merced County Certificates of Participation, 5.625%,
10/1/02, FSA Insured 793,208
687,000 Oceanside Unified School District Certificates of
Participation, 7.25%, 8/1/02 708,839
1,000,000 Port of Oakland Revenue Bonds, Series D, 7.00%, 11/1/02,
MBIA Insured 1,125,400
414,070 Regents of University of California, Los Angeles,
Certificates of Participation, 6.32%, 3/15/99 430,451
12,346 Regents of University of California, San Diego,
Certificates of Participation, 7.65%, 6/1/97 12,428
Sacramento Certificates of Participation:
693,568 6.75%, 3/1/02 706,649
1,370,923 6.50%, 1/1/04 1,437,399
1,000,000 Sacramento City Financing Authority Revenue Bonds,
Series B, 5.00%, 11/1/14 951,200
200,000 Sacramento Yolo Port District Improvement Lease Revenue
VRDN, 4.00%, 11/1/22, LOC: Wells Fargo Bank 200,000
2,000,000 San Diego County Children Center Project Certificates
of Participation, 6.00%, 10/1/02 2,029,200
1,000,000 San Diego County Transportation Commission Revenue Bonds,
5.25%, 4/1/06, FGIC Insured 1,030,200
1,000,000 San Diego County Vista Detention Facility Certificates of
Participation, 5.00%, 4/1/05, MBIA Insured 1,017,510
500,000 San Diego Multi-Family Housing Revenue VRDN, 6.50%,
12/1/08, LOC: Daiwa Bank 500,000
1,500,000 San Francisco City & County General Obligation Bonds,
5.50%, 6/15/13, FGIC Insured 1,508,010
Principal
Amount Value
$1,500,000 San Francisco International Airport Revenue Bonds,
5.50%, 5/1/21, MBIA Insured $1,474,200
1,500,000 Southern California Public Power Authority Revenue
Bonds, 5.375%, 1/1/09, MBIA Insured 1,519,936
1,000,000 Southern California Rapid Transit District Special
Assessment Bonds, 5.90%, 9/1/07, AMBAC Insured 1,079,810
500,000 Southern California Metropolitan Water District
Waterworks Revenue Bonds, 5.00%, 7/1/10 487,545
Tahoe City Public Utility District Certificates of
Participation, Series B:
505,000 5.75%, 6/1/99 517,655
745,000 5.90%, 6/1/00 768,617
885,000 6.25%, 6/1/03 926,798
1,000,000 University of California Multi Purpose Project Revenue
Bonds, Series C, 5.125%, 9/1/13, AMBAC Insured 960,290
620,000 Valley Health System Certificates of Participation,
6.25%, 5/15/99 629,678
Total Municipal Obligations (Cost $33,871,818) 35,160,575
Contracts
Options Purchased - 0.0%
53 Call Options on March U.S. Treasury Bond Futures,
Expiration 2/22/97,
Strike Price 118 10,765
Total Options (Premium $46,905) 10,765
TOTAL INVESTMENTS (Cost $33,918,723) - 98.5% 35,171,340
Other assets and liabilities, net - 1.5% 522,090
Net Assets - 100% $35,693,430
Net Assets Consist of:
Paid-in capital applicable to 3,418,878 outstanding Class A
shares of common stock, $0.01 par value with 250,000,000
Class A shares authorized $35,466,538
Undistributed net investment income 46,997
Accumulated net realized gain (losses) on investments (1,072,722)
Net unrealized appreciation (depreciation) on investments 1,252,617
Net assets $35,693,430
Net Asset Value per Share $10.44
See notes to financial statements.
Florida Portfolio
Statement of Net Assets
December 31, 1996
Principal
Amount Value
Florida Municipal Obligations - 102.3%
$150,000 Boca Raton Beach Acquisition Revenue Bonds, 4.60%, 1/1/05,
MBIA Insured $148,892
195,000 Brevard County Sales Tax Revenue Bonds, 5.40%, 12/1/06,
MBIA Insured 201,967
410,000 Brevard County School Board Certificates of Participation,
5.40%, 7/1/10 417,405
100,000 Broward County School District General Obligation Bonds,
7.20%, 2/15/00 105,021
150,000 Broward County Solid Waste System Revenue Bonds, 5.80%,
7/1/07, MBIA Insured 158,058
260,000 City of Miami General Obligation Bonds, 5.90%, 12/1/06,
FGIC Insured 278,320
150,000 Dade County Aviation Revenue Bonds, 5.60%, 10/1/05, AMBAC
Insured 158,700
300,000 Dade County Educational Facilities Authority Revenue Bonds,
6.00%, 4/1/08, MBIA Insured 322,869
500,000 Dade County Multi-Family Housing Revenue Bonds, 5.90%,
6/1/26 514,320
100,000 Dade County Water and Sewer Systems Revenue Bonds, 5.00%,
10/1/00, FGIC Insured 102,533
150,000 East County Water Control District Water Revenue Bonds,
Series 1994, 5.45%, 11/1/02, Asset Guaranty Insured 155,308
175,000 Florida State Board of Regents Parking System Revenue
Bonds, 5.00%, 7/1/08, FSA Insured 174,395
250,000 Florida State Department of Transportation General
Obligation Bonds, 5.00%, 7/1/07 251,217
300,000 Florida State Multi-Family Housing Revenue Bonds, Cypress
Lake, 5.75%, 12/1/07, LOC: Heller Financial 304,635
500,000 Hillsborough County Port District Special Refunding
Revenue Bonds, 5.75%, 6/1/13, FSA Insured 510,980
150,000 Hillsborough County Solid Waste Revenue Bonds, 5.40%,
10/1/05, MBIA Insured 156,249
125,000 Hollywood Water and Sewer Revenue Bonds, 6.75%, 10/1/11,
FGIC Insured (Prerefunded 10/1/01 @ 102) 139,376
100,000 Jacksonville Excise Tax Revenue Bonds, 6.25%, 10/1/05,
AMBAC Insured 108,883
100,000 Jacksonville Water and Sewer Revenue Bonds, 5.20%, 10/1/02,
MBIA Insured 103,582
150,000 Lee County Transportation Facilities Revenue Bonds, 5.625%,
10/1/08, MBIA Insured 157,202
115,000 Marion County School Board Certificates of Participation,
5.30%, 8/1/02, FSA Insured 118,965
120,000 Palm Beach Housing Finance Revenue VRDN, 5.3625%, 3/1/22,
INSUR: Firemans Insurance Co. 120,000
Principal
Amount Value
$150,000 St. Petersburg Professional Sports Facility Revenue
Bonds, 5.10%, 10/1/04, MBIA Insured $154,339
200,000 Tallahassee Consolidated Utility System Revenue
Bonds, 4.60%, 10/1/02 201,444
200,000 Tampa Capital Improvement Revenue Bonds, 8.375%,
10/1/18, IA:
Multi-Bank 211,082
370,000 Volusia Multi-Family Housing Revenue VRDN, 4.375%,
9/1/05, GA: Household Financial Corp. 370,000
TOTAL INVESTMENTS (Cost $5,494,359) - 102.3% 5,645,742
Other assets and liabilities, net - (2.3%) (129,354)
Net Assets - 100% $5,516,388
Net Assets Consist of:
Paid-in capital applicable to 1,098,333 Class A shares of
beneficial interest, unlimited number of no par shares
authorized: $5,512,803
Undistributed net investment income 6,053
Accumulated net realized gain (losses) on investments (153,851)
Net unrealized appreciation (depreciation) on investments 151,383
Net assets $5,516,388
Net Asset Value per Share $5.02
See notes to financial statements.
Maryland Portfolio
Statement of Net Assets
December 31, 1996
Principal
Amount Value
Maryland Municipal Obligations - 97.4%
$500,000 Anne Arundel County General Obligation Bonds,
5.125%, 4/15/09 $499,240
Baltimore City General Obligation Bonds:
385,000 8.90%, 10/15/99, MBIA Insured 432,189
500,000 6.00%, 10/15/04, AMBAC Insured 545,690
295,895 Baltimore County Economic Development Authority Revenue
VRDN, 4.75%, 12/1/02, LOC: First National Bank
of Maryland 295,895
915,000 Cambridge Economic Development Revenue Bonds,
7.25%, 4/1/04 983,268
400,000 Carroll County General Obligation Bonds,
6.25%, 11/1/08 (Prerefunded 11/1/01 @ 102) 438,724
500,000 Cecil County General Obligation Bonds, 5.10%, 12/1/07,
FGIC Insured 504,255
446,000 Cecil County Health Department Certificates of
Participation, 7.875%, 7/1/14 469,375
615,000 Charles County General Obligation Bonds, 5.00%, 3/1/09 606,144
400,000 Frederick County General Obligation Bonds, 5.00%, 8/1/09 392,660
250,000 Harford County General Obligation Bonds, 4.80%, 3/1/09 240,613
400,000 Howard County General Obligation Bonds, 5.25%, 8/15/05 416,000
250,000 Maryland Industrial Development Financing Authority Revenue
Bonds, 5.20%, 12/1/05 252,512
180,000 Maryland Industrial Development Financing Authority Revenue
Bonds, 6.375%, 11/1/09, LOC: First National Bank
of Maryland (Optional tender 10/31/99 @ 100) 180,587
370,000 Maryland Stadium Authority Revenue Bonds, 5.375%, 12/15/03,
AMBAC Insured 386,672
Maryland State Certificates of Participation for
St. Mary's County:
155,000 5.20%, 6/1/04 160,782
180,000 5.20%, 12/1/04 187,092
Maryland State Economic Development Authority Revenue
Bonds, Series A:
165,000 6.10%, 1/1/00 173,276
500,000 8.625%, 10/1/19 511,645
250,000 Maryland Water Quality Administration Revenue Bonds, 5.40%,
9/1/13 249,165
Montgomery County General Obligation Bonds:
250,000 9.75%, 6/1/01 303,398
230,000 7.00%, 5/1/03 261,269
250,000 Northeast Maryland Waste Disposal Authority Revenue Bonds,
5.80%, 7/1/04 256,255
250,000 Ocean City General Obligation Bonds, 6.00%, 3/15/01,
MBIA Insured 264,890
979,419 Ocean City Industrial Development Authority Revenue VRDN,
5.3625%, 7/1/13, LOC: First National Bank of Maryland 979,419
300,000 Prince Georges County Certificates of Participation,
5.90%, 9/15/08, MBIA Insured 318,450
400,000 Rockville General Obligation Bonds, 4.875%, 4/15/06 401,152
Principal
Amount Value
$400,000 University of Maryland Auxiliary System Revenue Bonds,
5.20%, 4/1/06 $410,216
400,000 Washington, D.C. Metropolitan Area Transit Authority
Revenue Bonds, 6.00%, 7/1/07, FGIC Insured 434,412
150,000 Washington Suburban Sanitary District Revenue Bonds,
5.00%, 6/1/03 153,898
TOTAL INVESTMENTS (Cost $11,276,577) - 97.4% 11,709,143
Other assets and liabilities, net - 2.3% 313,864
Net Assets - 100% $12,023,007
Net Assets Consist of:
Paid-in capital applicable to 2,388,381 outstanding Class A shares
of common stock, $0.01 par value with 250,000,000 Class A
shares authorized $11,947,220
Undistributed net investment income 26,265
Accumulated net realized gain (losses) on investments (383,044)
Net unrealized appreciation (depreciation) on investments 432,566
Net assets $12,023,007
Net Asset Value per Share $5.03
See notes to financial statements.
Michigan Portfolio
Statement of Net Assets
December 31, 1996
Principal
Amount Value
Michigan Municipal Obligations - 98.9%
$150,000 Bay City Water Supply Revenue Bonds, 4.80%, 10/1/02,
AMBAC Insured $152,126
350,000 Brighton Area School District General Obligation Bonds,
Zero Coupon, 5/1/00, AMBAC Insured 302,341
150,000 Cedar Springs Public School District General Obligation
Bonds, 7.65%, 5/1/03 174,545
250,000 Clarkston Community School General Obligation Bonds, 5.25%,
5/1/07, FGIC Insured 254,973
175,000 Detroit Water Supply System Revenue Bonds, 5.30%, 7/1/09,
MBIA Insured 176,594
250,000 Greenville Public School District General Obligation Bonds,
5.75%, 5/1/06, MBIA Insured 264,378
200,000 Hartland Consolidated School District General Obligation
Bonds, 5.25%, 5/1/02 206,770
250,000 Jenison Public School General Obligation Bonds, 5.40%,
5/1/08, FGIC Insured 255,022
Michigan Higher Education Facility Authority Revenue Bonds:
500,000 6.00%, 11/1/03 516,620
610,000 7.00%, 11/1/05 693,869
465,000 Michigan State Housing Development Authority Revenue VRDN,
River Place Plaza Apts., 5.25%, 10/1/11 464,484
Michigan State Building Authority Facilities Revenue Bonds
250,000 Series I, 5.00%, 10/1/01 256,135
250,000 Series II, 6.25%, 10/1/01, AMBAC Insured 269,388
300,000 Milan Area Schools General Obligation Bonds,
5.00%, 5/1/13 284,256
100,000 Morely Stanwood Community School General Obligation Bonds,
5.15%, 5/1/07, FGIC Insured 101,250
250,000 Mount Pleasant School District General Obligation Bonds,
5.65%, 5/1/05 263,032
500,000 Oakland County Economic Development Corporation Limited
Obligation Revenue Bonds, Cranbrook Educational
Community, 6.375%, 11/1/14 538,130
30,000 Southfield Economic Development Authority Corporation
VRDN, 5.775%, 5/15/11, INSUR: Fireman's Insurance Co. 30,000
235,000 University of Michigan Revenue Bonds, 5.60%, 11/15/11 39,477
80,000 Yale Public School District General Obligation Bonds,
5.10%, 5/1/06, AMBAC Insured 81,359
205,000 Zeeland Public Schools General Obligation Bonds, 5.70%,
5/1/07, MBIA Insured 215,115
TOTAL INVESTMENTS (Cost $5,502,608) - 98.9% $5,739,864
Other assets and liabilities, net - 1.1% 63,935
Net Assets - 100% $5,803,799
Net Assets Consist of: Value
Paid-in capital applicable to 1,137,278 outstanding Class A shares
of common stock, $0.01 par value with 250,000,000 Class A
shares authorized $5,816,354
Undistributed net investment income 3,383
Accumulated net realized gain (losses) on investments (253,194)
Net unrealized appreciation (depreciation) on investments 237,256
Net assets $5,803,799
Net Asset Value per Share $5.10
See notes to financial statements.
New York Portfolio
Statement of Net Assets
December 31, 1996
Principal
Amount Value
New York Municipal Obligations - 97.6%
$150,000 Dundee Central School District General Obligation
Bonds, 5.70%, 6/15/07, AMBAC Insured $158,991
Glen Cove General Obligation Bonds:
225,000 5.50%, 1/15/03 232,441
215,000 5.60%, 1/15/04 222,828
215,000 5.70%, 1/15/05 223,703
180,000 Metropolitan Transit Authority Commuter Facility Revenue
Bonds, Series A, 5.70%, 7/1/02, MBIA Insured 189,694
New York City General Obligation Bonds:
200,000 Series D, 5.70%, 8/15/06 201,910
200,000 Series E, 5.75%, 2/15/09 198,780
97,849 New York City Hospital Corporation Bronx Lease,
5.75%, 12/1/97 97,792
100,000 New York City Industrial Development Agency Civil Facility
Revenue Bonds, USTA National Tennis Center, 7.75%,
11/15/02, FSA Insured 115,663
100,000 New York City Municipal Water Finance Revenue
Bonds, 4.75%, 6/15/01 100,396
75,000 New York Local Government Assistance Corp. Revenue
Bonds, 5.00%, 4/1/06 75,049
500,000 New York State Environmental Pollution Control Revenue
Bonds, 5.70%, 1/15/12 514,855
150,000 New York State Project Finance Agency Revenue Bonds, HUD
Sec. 236, Series A, 4.75%, 11/1/04, FSA Insured 148,638
200,000 New York State Dormitory Authority Revenue Bonds,
5.50%, 5/15/07 199,674
200,000 New York State Dormitory Authority Revenue Bonds for City
University, 5.625%, 7/1/16 195,488
50,000 New York State Dormitory Authority Revenue Bonds for
Manhattan College, 5.70%, 7/1/00, Asset
Guaranty Insured 51,858
50,000 New York State Dormitory Authority Revenue Bonds for
Mt. Sinai Medical School, 6.50%, 7/1/03, MBIA Insured 54,466
75,000 New York State General Obligation Bonds, 5.75%, 9/15/01 79,027
210,000 New York State General Obligation Bonds, Series B,
6.25%, 8/15/05 230,813
100,000 New York State Local Assistance Corp. Revenue Bonds,
Series E, 6.00%, 4/1/14 106,437
100,000 New York State Power Authority Revenue Bonds,
6.50%, 1/1/08 111,765
240,000 New York State Thruway Authority Highway Revenue Bonds,
Series B, 5.375%, 4/1/02, FGIC Insured 249,648
110,000 New York State Urban Development Corporation Revenue Bonds,
5.60%, 1/1/07 111,938
150,000 Oneida County General Obligation Bonds, 5.70%, 3/15/01 155,190
25,000 Onondaga County Unlimited Tax General Obligation Bonds,
9.60%, 6/15/00 29,259
325,000 Orange County Industrial Development Authority VRDN,
5.445%, 12/1/05, LOC: United Jersey Bank 325,000
Principal
Amount Value
$500,000 Oyster Bay General Obligation Bonds, 5.00%, 2/15/10 $489,150
150,000 Suffolk County Industrial Development Agency Bonds,
6.00%, 2/1/08, FGIC Insured 163,038
100,000 Syracuse General Obligation Bonds, Series C,
4.80%, 10/15/06 99,792
275,000 Triborough Building and Tunnel Revenue Bonds, Series A,
5.00%, 1/1/07 274,788
140,000 Westchester County General Obligation Bonds,
6.70%, 2/1/01 152,750
500,000 Westchester County Industrial Development Agency Civic
Facility Revenue Bonds, 6.25%, 4/1/05 508,470
TOTAL INVESTMENTS (Cost $5,921,260) - 97.6% 6,069,291
Other assets and liabilities, net - 2.4% 148,664
Net Assets - 100% $6,217,955
Net Assets Consist of:
Paid-in capital applicable to 1,221,688 outstanding Class A shares
of common stock, %0.01 par value with 250,000,000 Class A
shares authorized $6,085,275
Undistributed net investment income 6,583
Accumulated net realized gain (losses) on investments (21,934)
Net unrealized appreciation (depreciation) on investments 148,031
Net assets $6,217,955
Net Asset Value per Share $5.09
See notes to financial statements.
Pennsylvania Portfolio
Statement of Net Assets
December 31, 1996
Principal
Amount Value
Municipal Obligations - 96.0%
Pennsylvania - 93.6%
$170,000 Allegheny County General Obligation Bonds, Series C-42,
5.00%, 10/1/07 $169,986
100,000 Allegheny County Higher Education Building Authority
Revenue Bonds, Duquesne University Project,
6.50%, 3/1/10, AMBAC Insured 112,477
230,000 Allegheny County Higher Education Building Authority
Revenue Bonds, Series A, 6.00%, 2/15/08 232,212
165,000 Bucks County General Obligation Bonds, Series A,
6.00%, 3/1/01 174,875
250,000 Cambria Township Water Authority Industrial User
Revenue Bonds, 6.00%, 12/1/12, LOC: Banque Paribas 258,242
130,000 Central Bucks County School District General
Obligation Bonds, 6.40%, 2/1/01 139,464
175,000 Chester County General Obligation Bonds, 5.50%,12/15/07 180,497
180,000 Delaware County Memorial Hospital Revenue Bonds, 5.25%,
8/15/07, MBIA Insured 182,772
90,000 Erie County General Obligation Bonds, Series B,
6.75%, 9/1/16, (Pre-refunded 9/1/01 @ 100) 98,669
100,000 Latrobe Industrial Development Authority Revenue Bonds,
St. Vincent College, 6.40%, 5/1/06 107,095
50,000 Media Borough Water Revenue Bonds, 5.60%, 1/1/01,
MBIA Insured 52,160
150,000 Montgomery County Industrial Development Revenue VRDN,
4.05%, 12/1/13, LOC: PNC Bank 150,000
Pennsylvania Housing Finance Agency Revenue Bonds,
Series C-40:
40,000 5.85%, 4/1/02 41,344
35,000 5.85%, 10/1/02 36,273
75,000 Pennsylvania Infrastructure Investment Authority Revenue
Bonds, 5.75%, 9/1/99 77,842
120,000 Pennsylvania Intergovernmental Co-op Revenue Bonds,
5.25%, 6/15/06, FGIC Insured 121,966
Pennsylvania State General Obligation Bonds:
100,000 Series I, 5.30%, 5/1/06 102,960
100,000 Series II, 5.10%, 6/15/03, MBIA Insured 102,994
75,000 Pennsylvania State Industrial Development Authority Revenue
Bonds, 6.00%, 1/1/05, AMBAC Insured 80,869
65,000 Peters Township School District General Obligation Bonds,
6.00%, 5/15/04, FGIC Insured 68,935
300,000 Philadelphia Airport Revenue Bonds, 5.75%, 6/15/08,
AMBAC Insured 311,943
195,000 Philadelphia Hospital and Higher Education Revenue Bonds,
Belmont Center, 5.75%, 10/1/07 198,623
85,000 Philadelphia Hospital and Higher Education Revenue Bonds,
Community College, Series B, 5.40%, 5/1/02, MBIA Insured 88,230
150,000 Philadelphia Water and Wastewater Revenue Bonds, 5.50%,
6/15/15, Capital Guaranty Insured 146,598
100,000 Pittsburgh General Obligation Bonds, Series A, 5.70%,
9/1/08, MBIA Insured 103,504
Principal
Amount Value
$175,000 Pittsburgh Urban Redevelopment Authority Revenue Bonds,
6.00%, 8/1/08 $176,627
35,000 Ridley Park Hospital Authority Revenue Bonds,
Tayler Hospital, 5.125%, 12/1/98 34,897
110,000 Seneca Valley School District General Obligation Bonds,
5.80%, 2/15/11 113,330
Sharon Regional Health Systems Authority Revenue Bonds:
100,000 5.50%, 12/1/97 101,024
220,000 5.75%, 12/1/98 223,412
75,000 State Public School Building Authority Revenue Bonds,
Harrisburg Area Community College, 6.70%, 10/01/00,
MBIA Insured 80,546
125,000 Wilkes Barre Area School District General Obligation
Bonds, 5.75%, 4/1/06, FGIC Insured 132,103
Other - 2.4%
105,000 Puerto Rico Commonwealth Highway and Transportation
Revenue Bonds, 5.00%, 7/1/02 106,106
TOTAL INVESTMENTS (Cost $4,139,137) - 96.0% 4,308,575
Other assets and liabilities, net - 4.0% 177,541
Net Assets - 100% $4,486,116
Net Assets Consist of:
Paid-in capital applicable to 883,146 outstanding Class A shares
of common stock, $0.01 par value with 250,000,000 Class A
shares authorized $4,380,692
Undistributed net investment income 24,762
Accumulated net realized gain (losses) on investments (88,776)
Net unrealized appreciation (depreciation) on investments 169,438
Net assets $4,486,116
Net Asset Value per Share $5.08
See notes to financial statements.
Virginia Portfolio
Statement of Net Assets
December 31, 1996
Principal
Amount Value
Virginia Municipal Obligations - 98.0%
$565,000 Arlington County Community Housing Finance Revenue
Bonds, 6.00%, 6/1/09 $583,063
300,000 Arlington County General Obligation Bonds,
5.50%, 8/1/06 314,175
450,000 Chesapeake Bay Bridge and Tunnel Revenue Bonds, 5.50%,
7/1/06, FGIC Insured 469,967
300,000 Chesapeake County General Obligation Bonds,
5.60%, 5/1/00 312,633
Chesapeake County Industrial Development Authority
Revenue Bonds, MBIA Insured:
110,000 6.00%, 6/1/07 118,934
175,000 6.00%, 6/1/08 189,441
500,000 Fairfax County Industrial Development Authority
Revenue Bonds, Inova Health Systems Project,
5.50%, 8/15/08 514,250
400,000 Hampton City General Obligation Bonds, 5.90%, 1/15/07 430,160
500,000 Hanover County Industrial Development Authority Revenue
Bonds, 5.30%, 8/15/07, MBIA Insured 510,975
500,000 Henrico County Industrial Development Authority
Revenue Bonds, 5.45%, 1/1/14 494,925
200,000 Loudoun County General Obligation Bonds, Series A,
5.40%, 10/1/06 207,752
Loudoun County Certificates of Participation, FSA Insured:
200,000 6.10%, 3/1/02 214,172
190,000 6.30%, 3/1/04 206,735
Metropolitan Washington Airport Authority Revenue Bonds,
Series A, MBIA Insured:
100,000 6.10%, 10/1/01 106,371
300,000 5.60%, 10/1/06 312,087
300,000 Norfolk General Obligation Bonds, Series A,
5.40%, 2/1/02 312,798
195,000 Norfolk Industrial Development Revenue Bonds,
Sentara Hospital Project, 6.60%, 11/1/00 209,157
500,000 Northern Virginia Transportation District Revenue Bonds,
Series A, 5.125%, 5/15/10 490,675
300,000 Peninsula Ports Health System Riverside Health Revenue Bonds,
6.00%, 7/1/01 317,148
200,000 Richmond General Obligation Bonds, Series A,
4.80%, 1/15/01 202,632
450,000 Riverside Regulatory Jail Authority Revenue Bonds,
5.70%, 7/1/08, MBIA Insured: 471,371
435,000 Virginia College Building Authority Revenue Bonds,
Hampton University Project, 5.20%, 4/1/02 444,861
500,000 Virginia College Building Authority Revenue Bonds,
Twenty First Century College Project, 5.00%, 8/1/09 489,925
340,000 Virginia Beach General Obligation Bonds, 5.40%, 7/15/08 352,230
Principal
Amount Value
Virginia State Housing Authority Revenue Bonds:
$115,000 6.875%, 1/1/17 $115,180
200,000 Series A, 6.50%, 7/1/03 210,808
270,000 Series A, 6.90%, 7/1/07 284,386
400,000 Series C, 6.00%, 1/1/03 413,816
120,000 Series C, 6.75%, 7/1/11 125,641
500,000 Virginia State Multi-Family Housing Revenue Bonds,
5.85%, 5/1/08 504,970
Virginia State Public Building Authority Revenue Bonds:
100,000 Series A, 5.80%, 8/1/02 105,920
400,000 Series A, 6.00%, 8/1/03 425,928
230,000 Series B, 5.625%, 8/1/02 242,038
Virginia State Public School Authority
Revenue Bonds, Series A:
200,000 6.00%, 8/1/01 212,632
200,000 6.00%, 8/1/03 215,598
265,000 Virginia State Transportation Board Revenue Bonds,
Route 28 Project, 5.75%, 4/1/00 276,273
320,000 Washington County Industrial Development Revenue Bonds,
5.625%, 7/1/02 330,291
300,000 West Point Industrial Development Authority Revenue Bonds,
Chesapeake Corporation, 6.375%, 5/1/03 301,074
300,000 Winchester Industrial Development Authority Revenue Bonds,
Shenandoah University, 6.05%, 10/1/05,
Asset Guaranty Insured 319,842
TOTAL INVESTMENTS (Cost $11,951,513) - 98.0% 12,360,834
Other assets and liabilities, net - 2.0% 256,741
Net Assets - 100% $12,617,575
Net Assets Consist of:
Paid-in capital applicable to 2,475,015 outstanding Class A shares
of common stock, $0.01 par value with 250,000,000 Class A
shares authorized $12,405,245
Undistributed net investment income 16,879
Accumulated net realized gain (losses) on investments (213,870)
Net unrealized appreciation (depreciation) on investments 409,321
Net assets $12,617,575
Net Asset Value per Share $5.10
Explanation of Guarantees: Abbreviations:
GA - Guaranty Agreement AMBAC - American Municipal Bond Assurance Corp.
IA - Investment Agreement FGIC - Financial Guaranty Insurance Companhy
INSUR - Insurance FSA - Financial Security Advisor
LOC - Letter of Credit MBIA - Municipal Bond Insurance Association
VRDN: Variable Rate Demand Notes
See notes to financial statements.
Statements of Operations
Year Ended December 31, 1996
National Arizona California
Net Investment Income Portfolio Portfolio Portfolio
Investment Income
Interest income $2,683,074 $136,567 $1,999,246
Expenses
Investment advisory fee 275,574 16,538 217,159
Transfer agency fees and expenses 32,227 2,759 24,472
Distribution Plan expenses:
Class A -- -- --
Class C 43,314 4,584 25,757
Directors' fees and expenses 4,579 279 3,625
Administrative fees 45,929 2,756 36,193
Custodian fees 14,721 8,518 11,726
Registration fees 44,889 798 3,774
Reports to shareholders 22,304 2,423 18,819
Professional fees 41,439 2,171 32,192
Miscellaneous 10,405 1,751 9,419
Reimbursement from Advisor -- (1,720) --
Total expenses 535,381 40,857 383,136
Fees paid indirectly (14,721) (8,518) (11,726)
Net expenses 520,660 32,339 371,410
Net Investment Income 2,162,414 104,228 1,627,836
Realized and Unrealized Gain
(Loss) on Investments
Net realized gain (loss) on securities 154,953 1,822 99,571
Change in unrealized appreciation or
depreciation (492,296) (24,832) (367,520)
Net Realized and Unrealized
Gain (Loss) on Investments (337,343) (23,010) (267,949)
Increase (Decrease) in
Net Assets Resulting
from Operations $1,825,071 $81,218 $1,359,887
See notes to financial statements.
Statements of Operations
Year Ended December 31, 1996
Florida Maryland Michigan
Net Investment Income Portfolio Portfolio Portfolio
Investment Income
Interest income $260,610 $665,947 $317,960
Expenses
Investment advisory fee 30,771 72,423 36,078
Transfer agency fees and expenses 2,162 9,807 4,739
Distribution Plan expenses:
Class A -- -- --
Class C 2,530 19,969 9,899
Directors' fees and expenses 501 1,205 600
Administrative fees 5,128 12,071 6,013
Custodian fees 7,028 8,333 5,326
Registration fees 27 1,738 2,675
Reports to shareholders 1,939 6,238 3,254
Professional fees 945 10,200 4,639
Miscellaneous 1,710 3,711 2,256
Reimbursement from Advisor (757) (4,556) (2,136)
Total expenses 51,984 141,139 73,343
Fees paid indirectly (7,028) (8,333) (5,326)
Net expenses 44,956 132,806 68,017
Net Investment Income215,654 533,141 249,943
Realized and Unrealized Gain
(Loss) on Investments
Net realized gain (loss) on securities 10,036 2,279 (526)
Net realized gain (loss) on futures (9,444) -- --
592 2,279 (526)
Change in unrealized appreciation or
depreciation (12,347) (106,935) (14,620)
Net Realized and Unrealized
Gain (Loss) on Investments(11,755)(104,656) (15,146)
Increase (Decrease) in
Net Assets Resulting
from Operations $203,899 $428,485 $234,797
See notes to financial statements.
Statements of Operations
Year Ended December 31, 1996
New York Pennsylvania Virginia
Net Investment Income Portfolio Portfolio Portfolio
Net Investment Income
Investment Income
Interest income $332,756 $242,865 $634,655
Expenses
Investment advisory fee 38,381 27,180 72,322
Transfer agency fees and expenses 7,183 3,841 8,953
Distribution Plan expenses:
Class A -- -- --
Class C 16,473 10,246 23,096
Directors' fees and expenses 635 444 1,190
Administrative fees 6,397 4,530 12,054
Custodian fees 9,746 8,269 9,540
Registration fees 1,645 270 664
Reports to shareholders 4,688 2,818 5,967
Professional fees 5,197 3,885 9,969
Miscellaneous 2,307 1,777 3,219
Reimbursement from Advisor (2,696) (2,486) (3,829)
Total expenses 89,956 60,774 143,145
Fees paid indirectly (9,746) (8,269) (9,540)
Net expenses 80,210 52,505 133,605
Net Investment Income252,546 190,360 501,050
Realized and Unrealized Gain
(Loss) on Investments
Net realized gain (loss) on securities (3,774) (5,813) 68,788
Net realized gain (loss) on futures (18,774) (6,727) --
(22,548) (12,540) 68,788
Change in unrealized appreciation or
depreciation 1,084 (22,000) (123,053)
Net Realized and Unrealized
Gain (Loss) on Investments (21,464) (34,540) (54,265)
Increase (Decrease) in
Net Assets Resulting
from Operations $231,082 $155,820 $446,785
See notes to financial statements.
National Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1996 1995
Operations
Net investment income $2,162,414 $2,182,647
Net realized gain (loss) 154,953 180,892
Change in unrealized appreciation or depreciation (492,296) 3,344,214
Increase (Decrease) in Net Assets
Resulting from Operations 1,825,071 5,707,753
Distributions to shareholders from
Net investment income:
Class A shares (1,940,913) (1,871,643)
Class C shares (203,415) (258,008)
Total distributions (2,144,328) (2,129,651)
Capital share transactions
Shares sold:
Class A shares 13,543,646 10,495,422
Class C shares 3,114,924 2,406,040
Reinvestment of distributions:
Class A shares 1,548,570 1,591,998
Class C shares 199,801 249,454
Shares redeemed:
Class A shares (9,392,644) (11,179,645)
Class C shares (9,607,268) (2,843,762)
Total capital share transactions (592,971) 719,507
Total Increase (Decrease) in Net Assets (912,228) 4,297,609
Net Assets
Beginning of year 46,524,165 42,226,556
End of year (including undistributed net investment
income of $81,236 and $63,128, respectively) $45,611,937 $46,524,165
Capital Share Activity
Shares sold:
Class A shares 1,286,733 1,025,259
Class C shares 299,658 234,908
Reinvestment of distributions:
Class A shares 147,867 155,373
Class C shares 19,197 24,339
Shares redeemed:
Class A shares (895,904) (1,086,473)
Class C shares (921,429) (276,399)
Total capital share activity (63,878) 77,007
See notes to financial statements.
Arizona Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1996 1995
California Portfolio
Operations
Net investment income $104,228 $121,426
Net realized gain (loss) 1,822 (3,129)
Change in unrealized appreciation or depreciation (24,832) 206,511
Increase (Decrease) in Net Assets
Resulting from Operations 81,218 324,808
Distributions to shareholders from
Net investment income:
Class A shares (85,015) (93,528)
Class C shares (17,574) (26,117)
Total distributions (102,589) (119,645)
Capital share transactions
Shares sold:
Class A shares 919,546 454,542
Class C shares 64,050 439,306
Reinvestment of distributions:
Class A shares 72,460 80,888
Class C shares 17,573 26,063
Shares redeemed:
Class A shares (390,378) (653,606)
Class C shares (816,670) (221,408)
Total capital share transactions (133,419) 125,785
Total Increase (Decrease) in Net Assets (154,790) 330,948
Net Assets
Beginning of year 2,789,592 2,458,644
End of year (including undistributed net investment
income of $10,452 and $16,341, respectively) $2,634,802 $2,789,592
Capital Share Activity
Shares sold:
Class A shares 183,666 92,028
Class C shares 12,912 89,307
Reinvestment of distributions:
Class A shares 14,476 16,405
Class C shares 3,518 5,275
Shares redeemed:
Class A shares (77,803) (130,936)
Class C shares (163,192) (44,417)
Total capital share activity 26,423 27,662
See notes to financial Statements.
California Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1996 1995
Operations
Net investment income $1,627,836 $1,749,189
Net realized gain (loss) 99,571 (451,127)
Change in unrealized appreciation or depreciation (367,520) 3,042,286
Increase (Decrease) in Net Assets
Resulting from Operations 1,359,887 4,340,348
Distributions to shareholders from
Net investment income:
Class A shares (1,517,194) (1,583,527)
Class C shares (117,484) (131,146)
Total distributions (1,634,678) (1,714,673)
Capital share transactions
Shares sold:
Class A shares 9,255,621 5,412,823
Class C shares 1,279,993 2,331,477
Reinvestment of distributions:
Class A shares 1,074,634 1,256,420
Class C shares 114,171 126,340
Shares redeemed:
Class A shares (8,831,034) (8,756,573)
Class C shares (5,441,016) (1,592,232)
Total capital share transactions (2,547,631) (1,221,745)
Total Increase (Decrease) in Net Assets (2,822,422) 1,403,930
Net Assets
Beginning of year 38,515,852 37,111,922
End of year (including undistributed net investment
income of $46,997 and $53,498, respectively) $35,693,430 $38,515,852
Capital Share Activity
Shares sold:
Class A shares 889,558 542,117
Class C shares 124,022 227,545
Reinvestment of distributions:
Class A shares 103,600 124,485
Class C shares 11,072 12,342
Shares redeemed:
Class A shares (850,135) (866,544)
Class C shares (526,009) (155,539)
Total capital share activity (247,892) (115,594)
See notes to financial Statements.
Florida Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1996 1995
Operations
Net investment income $215,654 $191,803
Net realized gain (loss) 592 4,049
Change in unrealized appreciation or depreciation (12,347) 318,886
Increase (Decrease) in Net Assets
Resulting from Operations 203,899 514,738
Distributions to shareholders from
Net investment income:
Class A shares (205,633) (162,144)
Class C shares (10,301) (23,545)
Total distributions (215,934) (185,689)
Capital share transactions
Shares sold:
Class A shares 1,924,160 871,164
Class C shares 53,368 849,670
Reinvestment of distributions:
Class A shares 146,384 125,837
Class C shares 9,206 22,513
Shares redeemed:
Class A shares (440,515) (774,066)
Class C shares (457,422) (1,436,954)
Total capital share transactions 1,235,181 (341,836)
Total Increase (Decrease) in Net Assets 1,223,146 (12,787)
Net Assets
Beginning of year 4,293,242 4,306,029
End of year (including undistributed net investment
income of $6,053 and $5,751, respectively) $5,516,388 $4,293,242
Capital Share Activity
Shares sold:
Class A shares 387,621 176,473
Class C shares 10,776 172,828
Reinvestment of distributions:
Class A shares 29,358 25,511
Class C shares 1,853 4,600
Shares redeemed:
Class A shares (87,903) (158,099)
Class C shares (92,042) (294,884)
Total capital share activity 249,663 (73,571)
See notes to financial Statements.
Maryland Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1996 1995
Operations
Net investment income $533,141 $506,384
Net realized gain (loss) 2,279 9,818
Change in unrealized appreciation or depreciation (106,935) 800,898
Increase (Decrease) in Net Assets
Resulting from Operations 428,485 1,317,100
Distributions to shareholders from
Net investment income:
Class A shares (427,812) (408,905)
Class C shares (91,849) (89,534)
Total distributions (519,661) (498,439)
Capital share transactions
Shares sold:
Class A shares 4,655,361 1,967,910
Class C shares 1,091,676 1,072,783
Reinvestment of distributions:
Class A shares 361,985 386,944
Class C shares 79,464 84,349
Shares redeemed:
Class A shares (2,357,802) (1,023,822)
Class C shares (3,636,207) (622,911)
Total capital share transactions 194,477 1,865,253
Total Increase (Decrease) in Net Assets 103,301 2,683,914
Net Assets
Beginning of year 11,919,706 9,235,792
End of year (including undistributed net investment
income of $26,265 and $9,927, respectively) $12,023,007 $11,919,706
Capital Share Activity
Shares sold:
Class A shares 929,544 399,883
Class C shares 217,973 220,140
Reinvestment of distributions:
Class A shares 72,459 78,953
Class C shares 16,019 17,209
Shares redeemed:
Class A shares (473,179) (208,618)
Class C shares (731,705) (127,350)
Total capital share activity (31,111) 380,217
See notes to financial Statements.
Michigan Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1996 1995
Operations
Net investment income $249,943 $285,321
Net realized gain (loss) (526) (2,602)
Change in unrealized appreciation or depreciatio (14,620) 480,650
Increase (Decrease) in Net Assets
Resulting from Operations 234,797 763,369
Distributions to shareholders from
Net investment income:
Class A shares (214,870) (221,995)
Class C shares (42,186) (52,701)
Total distributions (257,056) (274,696)
Capital share transactions
Shares sold:
Class A shares 1,768,456 382,890
Class C shares 413,783 660,141
Reinvestment of distributions:
Class A shares 184,760 205,420
Class C shares 38,664 50,195
Shares redeemed:
Class A shares (703,139) (1,671,061)
Class C shares (1,928,904) (537,683)
Total capital share transactions (226,380) (910,098)
Total Increase (Decrease) in Net Assets (248,639) (421,425)
Net Assets
Beginning of year 6,052,438 6,473,863
End of year (including undistributed net investment
income of $3,383 and $10,972, respectively) $5,803,799 $6,052,438
Capital Share Activity
Shares sold:
Class A shares 350,281 76,786
Class C shares 82,385 133,744
Reinvestment of distributions:
Class A shares 36,549 40,515
Class C shares 7,685 10,071
Shares redeemed:
Class A shares (139,386) (336,033)
Class C shares (382,779) (108,446)
Total capital share activity (45,265) (183,363)
See notes to financial Statements.
New York Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1996 1995
Operations
Net investment income $252,546 $205,959
Net realized gain (loss) (22,548) 58,326
Change in unrealized appreciation or depreciation 1,084 321,005
Increase (Decrease) in Net Assets
Resulting from Operations 231,082 585,290
Distributions to shareholders from
Net investment income:
Class A shares (180,596) (138,235)
Class C shares (69,116) (64,975)
Net realized gain on investments:
Class A shares (4,252) (3,276)
Class C shares -- (2,184)
Total distributions (253,964) (208,670)
Capital share transactions
Shares sold:
Class A shares 3,815,003 1,203,462
Class C shares 1,146,085 1,297,708
Reinvestment of distributions:
Class A shares 163,741 125,466
Class C shares 67,745 66,301
Shares redeemed:
Class A shares (1,337,801) (651,008)
Class C shares (3,578,862) (220,073)
Total capital share transactions 275,911 1,821,856
Total Increase (Decrease) in Net Assets 253,029 2,198,476
Net Assets
Beginning of year 5,964,926 3,766,450
End of year (including undistributed net investment
income of $6,583 and $4,267, respectively) $6,217,955 $5,964,926
Capital Share Activity
Shares sold:
Class A shares 755,503 242,440
Class C shares 228,187 261,376
Reinvestment of distributions:
Class A shares 32,402 25,237
Class C shares 13,474 13,326
Shares redeemed:
Class A shares (264,199) (131,215)
Class C shares (709,949) (43,869)
Total capital share activity 55,418 367,295
See notes to financial Statements.
Pennsylvania Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1996 1995
Operations
Net investment income $190,360 $173,336
Net realized gain (loss) (12,540) 797
Change in unrealized appreciation or depreciation (22,000) 255,153
Increase (Decrease) in Net Assets
Resulting from Operations 155,820 429,286
Distributions to shareholders from
Net investment income:
Class A shares (138,021) (104,356)
Class C shares (42,430) (54,268)
Total distributions (180,451) (158,624)
Capital share transactions
Shares sold:
Class A shares 2,352,099 596,745
Class C shares 259,159 651,919
Reinvestment of distributions:
Class A shares 97,735 89,501
Class C shares 40,440 52,898
Shares redeemed:
Class A shares (480,482) (200,531)
Class C shares (2,028,428) (230,968)
Total capital share transactions 240,523 959,564
Total Increase (Decrease) in Net Assets 215,892 1,230,226
Net Assets
Beginning of year 4,270,224 3,039,998
End of year (including undistributed net investment
income of $24,762 and $14,800, respectively) $4,486,116 $4,270,224
Capital Share Activity
Shares sold:
Class A shares 464,737 119,450
Class C shares 51,179 130,801
Reinvestment of distributions:
Class A shares 19,408 17,796
Class C shares 8,037 10,698
Shares redeemed:
Class A shares (95,924) (39,855)
Class C shares (401,715) (46,716)
Total capital share activity 45,722 192,174
See notes to financial Statements.
Virginia Portfolio
Statements of Changes in Net Assets
Year Ended Year Ended
December 31, December 31,
Increase (Decrease) in Net Assets 1996 1995
Operations
Net investment income $501,050 $461,149
Net realized gain (loss) 68,788 (10,942)
Change in unrealized appreciation or depreciation (123,053) 750,318
Increase (Decrease) in Net Assets
Resulting from Operations 446,785 1,200,525
Distributions to shareholders from
Net investment income:
Class A shares (397,746) (336,168)
Class C shares (100,982) (115,066)
Total distributions (498,728) (451,234)
Capital share transactions
Shares sold:
Class A shares 5,790,886 2,338,809
Class C shares 817,861 745,321
Reinvestment of distributions:
Class A shares 348,686 308,556
Class C shares 100,737 114,344
Shares redeemed:
Class A shares (805,200) (1,740,892)
Class C shares (4,085,103) (646,090)
Total capital share transactions 2,167,867 1,120,048
Total Increase (Decrease) in Net Assets 2,115,924 1,869,339
Net Assets
Beginning of year 10,501,651 8,632,312
End of year (including undistributed net investment
income of $16,879 and $14,557, respectively) $12,617,575 $10,501,651
Capital Share Activity
Shares sold:
Class A shares 1,142,057 467,546
Class C shares 161,108 148,103
Reinvestment of distributions:
Class A shares 68,920 61,650
Class C shares 19,934 22,834
Shares redeemed:
Class A shares (158,926) (345,109)
Class C shares (806,106) (129,264)
Total capital share activity 426,987 225,760
See notes to financial statements.
Notes To Financial Statements
Note A-Significant Accounting Policies
General: The Calvert Municipal Fund is comprised of eight Municipal
Intermediate Portfolios: National, Arizona, California, Maryland, Michigan, New
York, Pennsylvania, and Virginia. The First Variable Rate Fund for Government
Income has one Municipal Intermediate Portfolio, Florida. Each of the
Portfolios, collectively the "Fund", are registered under the Investment Company
Act of 1940 as open-end management investment companies. The operations of each
Portfolio are accounted for separately. Shares of each Portfolio are sold with a
maximum front-end sales charge of 2.75%. On October 29, 1996, all outstanding
Class C shares in the Fund were converted into an equivalent value of Class A
shares. This transaction was a non-taxable exchange and no sales charge was
applied to the Class A shares issued.
Security Valuation: Municipal securities are valued utilizing the average
of bid prices or at bid prices based on a matrix system (which considers such
factors as security prices, yields, maturities and ratings) furnished by dealers
through an independent pricing service. Securities listed or traded on a
national securities exchange are valued at the last reported sale price. Other
securities and assets for which market quotations are not available or deemed
inappropriate are valued in good faith under the direction of the Board of
Directors.
Options: The Fund may write or purchase options. The option premium is the
basis for recognition of unrealized or realized gain or loss on the option. The
cost of securities acquired or the proceeds from securities sold through the
exercise of the option is adjusted by the amount of the premium. The National
and California Portfolios were granted options authority by shareholders in May
and June 1996, respectively.
Futures Contracts: The Fund may enter into futures contracts agreeing to
buy or sell a financial instrument for a set price at a future date. The Fund
maintains securities with a value equal to its obligation under each contract.
Initial margin deposits of either cash or securities are made upon entering into
futures contracts; thereafter, variation margin payments are made or received
daily reflecting the change in market value. Unrealized or realized gains and
losses are recognized based on the change in market value. Risks of futures
contracts arise from the possible illiquidity of the futures markets and the
movement in the value of the investment or in interest rates. The National and
California Portfolios were granted futures authority by shareholders in May and
June 1996, respectively.
Security Transactions and Investment Income: Security transactions are
accounted for on trade date. Realized gains and losses are recorded on an
identified cost basis. Interest income, accretion of discount and amortization
of premium are recorded on an accrual basis.
Distributions to Shareholders: Distributions to shareholders are recorded
by the Fund on ex-dividend date. Dividends from net investment income are paid
monthly. Distributions from net realized capital gains, if any, are paid at
least annually. Distributions are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles;
accordingly, periodic reclassifications are made within the Fund's capital
accounts to reflect income and gains available for distribution under income tax
regulations. The Fund designates $4,254 as capital gain dividends for taxable
year ended December 31, 1996 for New York Portfolio. Estimates: The preparation
of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of income and expenses during the reporting period. Actual results could differ
from those estimates.
Expense Offset Arrangements: The Fund has an arrangement with its custodian
bank whereby the custodian's fees are paid indirectly by credits earned on the
Fund's cash on deposit with the bank. Such deposit arrangement is an alternative
to overnight investments.
Federal Income Taxes: No provision for federal income or excise tax is
required since the Fund intends to continue to qualify as a regulated investment
company under the Internal Revenue Code and to distribute substantially all of
its earnings.
NOTE B-Related Party Transactions
Calvert Asset Management Company, Inc. (the "Advisor") is wholly-owned by
Calvert Group, Ltd. ("Calvert"), which is indirectly wholly-owned by Acacia
Mutual Life Insurance Company. The Advisor provides investment advisory services
and pays the salaries and fees of officers and affiliated Directors of the Fund.
For its services, the Advisor receives a monthly fee based on the following
annual rates of average daily net assets of each Portfolio: .60% on the first
$500 million, .50% on the next $500 million and .40% on the excess of $1
billion.
The Advisor reimburses the Portfolios for their respective operating
expenses (excluding brokerage fees, taxes, interest, Distribution Plan expenses
and extraordinary items) exceeding the following annual rates of average daily
net assets: 2.5% on the first $30 million, 2.0% on the next $70 million and 1.5%
on the excess of $100 million.
The Advisor also voluntarily reimbursed the Portfolios for advisory fees or
other operating expenses as reflected in the table on the following page.
Expenses paid or waived by the Advisor may be repaid by the Portfolios
through December 31, 1997. Recapture is permitted only to the extent it does not
result in a Portfolio's aggregate expenses exceeding 2% of its annual average
net assets. Expenses subject to recovery are reflected in the table on the
following page.
Calvert Administrative Services Company, an affiliate of the Advisor,
provides administrative services to the Fund for an annual fee, payable monthly,
of .10% of the average daily net assets of each Portfolio.
Calvert Distributors, Inc., an affiliate of the Advisor, is the distributor
and principal underwriter for the Fund. Distribution Plans, adopted by each
class of shares, allow the Fund to pay the distributor for expenses and services
associated with distribution of shares. The expenses paid may not exceed .15%
and .80% annually of average daily net assets of Class A and Class C,
respectively. (See Note A regarding the elimination of Class C shares.) The
Distributor currently does not charge any Distribution Plan expenses to Class A.
The Distributor receives a portion of commissions charged on sales of each
Portfolio's Class A shares as shown in the table below.
Calvert Shareholder Services, Inc., an affiliate of the Advisor, acts as
transfer, dividend disbursing and shareholder servicing agent for the Fund.
Certain transactions with affiliates were:
Expenses
Voluntary Subject to Distributor
Reimbursements Recovery Commissions
<TABLE>
<CAPTION>
<S> <C> <C> <C>
National -- $109 $13,952
Arizona $1,720 18,628 1,262
California -- -- 14,066
Florida 757 20,133 849
Maryland 4,556 53,715 4,214
Michigan 2,136 28,277 670
New York 2,696 28,649 1,977
Pennsylvania 2,486 23,028 1,228
Virginia 3,829 43,311 9,039
</TABLE>
Each Director who is not affiliated with the Advisor received an annual fee
of $20,250 plus up to $1,200 for each Board and Committee meeting attended.
Director's fees are allocated to each of the funds served. Effective August 1,
1996, annual fees and meeting fees were increased to $20,500 and $1,500,
respectively.
NOTE C-Investment Activity
During the year, purchases and sales of investments, other than short-term
securities, were:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
National Arizona California Florida Maryland
Purchases: $10,265,457 $476,044 $8,470,895 $2,262,827 $1,354,897
Sales: 9,740,109 571,507 10,707,881 843,298 765,180
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Michigan New York Pennsylvania Virginia
Purchases: $935,865 $2,261,508 $999,560 $2,906,540
Sales: 1,118,754 986,155 376,875 480,757
</TABLE>
The cost of investments owned at December 31, 1996 was substantially the
same for federal income tax and financial reporting purposes for each Portfolio.
The table below presents the components of net unrealized appreciation
(depreciation) as of December 31, 1996, and the net realized capital loss
carryforwards as of December 31, 1996 with expiration dates.
Unrealized Unrealized Capital Loss Expiration
Appreciation Depreciation Carry Forward Dates
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
National $2,100,389 $43,733 $943,824 2002
Arizona 76,825 -- 24,887 2003
California 1,293,965 41,348 1,083,633 2003
Florida 151,383 -- 153,856 2002
Maryland 444,438 11,872 383,043 2002
Michigan 238,103 847 253,194 2003
New York 152,647 4,616 21,937 2004
Pennsylvania 169,746 308 82,816 2004
Virginia 421,943 12,622 213,873 2003
</TABLE>
Capital losses may be utilized to offset current and future capital gains
until expiration.
As a cash management practice, Portfolios may sell or purchase short-term
variable rate demand notes from other Portfolios managed by the Advisor. All
transactions are executed at independently derived prices.
Financial Highlights -- National Portfolio
Class A Shares -- Years Ended
December 31,
1996 1995 1994 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net asset value, beginning $10.62 $9.81 $10.42 $10.01
Income from investment operations
Net investment income .50 .51 .50 .48
Net realized and unrealized
gain (loss) (.06) .80 (.62) .45
Total from investment
operations .44 1.31 (.12) .93
Distributions from
Net investment income (.50) (.50) (.49) (.48)
Net realized gains -- -- -- (.04)
Total distributions (.50) (.50) (.49) (.52)
Total increase (decrease) in
net asset value (.06) .81 (.61) .41
Net asset value, ending $10.56 $10.62 $9.81 $10.42
Total return* 4.32% 13.64% (1.18%) 9.47%
Ratios to average net assets:
Net investment income 4.83% 4.97% 4.88% 5.01%
Total expenses + 1.04% .96% -- --
Net expenses 1.01% .94% .69% .10%
Expenses reimbursed -- -- .32% .45%
Portfolio turnover 23% 57% 122% 162%
Net assets, ending
(in thousands) $45,612 $40,146 $36,159 $37,467
Number of shares outstanding,
ending (in thousands) 4,319 3,780 3,686 3,596
</TABLE>
Class C Shares -- Periods Ended
Class A Shares
Period Ended
December 31,
1992^ 1996 1995 1994^^
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net asset value, beginning $10.00 $10.58 $9.79 $10.28
Income from investment operations
Net investment income .13 .33 .41 .34
Net realized and unrealized
gain (loss) .01 (.13) .79 (.48)
Total from investment
operations .14 .20 1.20 (.14)
Distributions from
Net investment income (.13) (.33) (.41) (.35)
Total increase (decrease) in
net asset value .01 (.13) .79 (.49)
Net asset value, ending $10.01 $10.45 $10.58 $9.79
Total return* 5.40% 1.90% 12.50% (1.12%)
Ratios to average net assets:
Net investment income 5.36%(a) 3.77%(a) 4.00% 4.01%(a)
Total expenses + -- 2.10%(a) 1.94% --
Net expenses -- 2.07%(a) 1.92% 1.71%(a)
Expenses reimbursed 4.34%(a) -- -- .58%(a)
Portfolio turnover 12% 17% 57% 122%
Net assets, ending
(in thousands) $1,542 $5,810 $6,378 $6,067
Number of shares outstanding,
ending (in thousands) 154 556 603 620
</TABLE>
Financial Highlights -- Arizona Portfolio
Years Ended
December 31,
Class A Shares 1996 1995 1994
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net asset value, beginning $5.07 $4.71 $5.00
Income from investment operations
Net investment income .19 .22 .19
Net realized and unrealized gain (loss)
on investments . (.03) .36 (.29)
Total from investment operations .16 .58 (.10)
Distributions from
Net investment income (.20) (.22) (.19)
Total increase (decrease) in
net asset value (.04) .36 (.29)
Net asset value, ending $5.03 $5.07 $4.71
Total return* 3.17% 12.44% (1.84%)
Ratios to average net assets:
Net investment income 3.96% 4.43% 4.13%
Total expenses + 1.31% .53% --
Net expenses 1.00% .41% .38%
Expenses reimbursed .06% .54% .97%
Portfolio turnover 18% 10% 22%
Net assets, ending (in thousands) $2,635 $2,045 $2,004
Number of shares outstanding,
ending (in thousands) 524 403 426
</TABLE>
Periods Ended
October 29, December 31,
Class C Shares 1996 1995 1994^^
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net asset value, beginning $5.07 $4.70 $4.96
Income from investment operations
Net investment income .13 .17 .13
Net realized and unrealized gain (loss)
on investments (.07) .38 (.25)
Total from investment operations .06 .55 (.12)
Distributions from
Net investment income (.13) (.18) (.14)
Total increase (decrease) in net
asset value (.07) .37 (.26)
Net asset value, ending $5.00 $5.07 $4.70
Total return* 1.17% 11.77% (2.07%)
Ratios to average net assets:
Net investment income 3.09%(a) 3.57% 3.26%(a)
Total expenses + 2.16%(a) 1.38% --
Net expenses 1.84%(a) 1.25% 1.43%(a)
Expenses reimbursed .08%(a) .73% 1.24%(a)
Portfolio turnover 18% 10% 22%
Net assets, ending (in thousands) $707 $744 $454
Number of shares outstanding,
ending (in thousands) 142 147 97
</TABLE>
Financial Highlights -- California Portfolio
Class A Shares -- Years Ended
December 31,
1996 1995 1994 1993
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net asset value, beginning $10.51 $9.81 $10.56 $10.24
Income from investment operations
Net investment income .48 .47 .48 .53
Net realized and unrealized
gain (loss) on investments (.07) .69 (.76) .36
Total from investment
operations .41 1.16 (.28) .89
Distributions from
Net investment income (.48) (.46) (.47) (.53)
Net realized gains -- -- -- (.04)
Total distributions (.48) (.46) (.47) (.57)
Total increase (decrease) in
net asset value (.07) .70 (.75) .32
Net asset value, ending $10.44 $10.51 $9.81 $10.56
Total return* 4.04% 12.07% (2.57%) 8.88%
Ratios to average net assets:
Net investment income 4.59% 4.59% 4.67% 5.12%
Total expenses + .97% .91% -- --
Net expenses .94% .89% .76% .21%
Expenses reimbursed -- -- .13% .12%
Portfolio turnover 25% 47% 68% 21%
Net assets, ending
(in thousands) $35,693 $34,424 $34,111 $35,726
Number of shares outstanding,
ending (in thousands) 3,419 3,276 3,476 3,383
</TABLE>
Class C Shares -- Periods Ended
Class A Shares
Period Ended
December 31,
1992# 1996 1995 1994^^
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net asset value, beginning $10.00 $10.47 $9.79 $10.40
Income from investment operations
Net investment income .29 .31 .38 .31
Net realized and unrealized
gain (loss) on investments .24 (.10) .68 (.59)
Total from investment operations .53 .21 1.06 (.28)
Distributions from
Net investment income (.29) (.32) (.38) (.33)
Total increase (decrease) in net
asset value .24 (.11) .68 (.61)
Net asset value, ending $10.24 $10.36 $10.47 $9.79
Total return* 10.00% 2.02% 10.99% (2.42%)
Ratios to average net assets:
Net investment income 5.24%(a) 3.60%(a) 3.67% 3.60%(a)
Total expenses + -- 1.92%(a) 1.82% --
Net expenses -- 1.89%(a) 1.80% 1.86%(a)
Expenses reimbursed .38%(a) -- -- .38%(a)
Portfolio turnover 3% 20% 47% 68%
Net assets, ending
(in thousands) $16,046 $3,415 $4,092 $3,000
Number of shares outstanding,
ending (in thousands) 1,567 330 391 307
</TABLE>
Financial Highlights -- Florida Portfolio
Years Ended
December 31,
Class A Shares 1996 1995 1994
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net asset value, beginning $5.06 $4.67 $5.00
Income from investment operations
Net investment income .21 .24 .21
Net realized and unrealized gain (loss)
on investments (.04) .38 (.33)
Total from investment operations .17 .62 (.12)
Distributions from
Net investment income (.21) (.23) (.21)
Total increase (decrease) in net
asset value (.04) .39 (.33)
Net asset value, ending $5.02 $5.06 $4.67
Total return* 3.53% 13.48% (2.44%)
Ratios to average net assets:
Net investment income 4.28% 4.73% 4.64%
Total expenses + .94% .43% --
Net expenses .81% .35% .21%
Expenses reimbursed .01% .43% .80%
Portfolio turnover 19% 44% 93%
Net assets, ending (in thousands) $5,516 $3,892 $3,387
Number of shares outstanding,
ending (in thousands) 1,098 769 725
</TABLE>
Periods Ended
October 29, December 31,
Class C Shares 1996 1995 1994^^
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net asset value, beginning $5.05 $4.67 $4.93
Income from investment operations
Net investment income .13 .19 .15
Net realized and unrealized gain (loss)
on investments (.08) .37 (.26)
Total from investment operations .05 .56 (.11)
Distributions from
Net investment income (.13) (.18) (.15)
Total increase (decrease) in net
asset value (.08) .38 (.26)
Net asset value, ending $4.97 $5.05 $4.67
Total return* 1.10% 12.28% (1.84%)
Ratios to average net assets:
Net investment income 3.12%(a) 3.82% 3.58%(a)
Total expenses + 2.07%(a) 1.33% --
Net expenses 1.93%(a) 1.25% 1.32%(a)
Expenses reimbursed .06%(a) .65% 1.02%(a)
Portfolio turnover 17% 44% 93%
Net assets, ending (in thousands) $353 $401 $919
Number of shares outstanding,
ending (in thousands) 71 79 197
</TABLE>
Financial Highlights -- Maryland Portfolio
Periods Ended
December 31,
Class A Shares 1996 1995 1994 1993##
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net asset value, beginning $5.06 $4.67 $5.05 $5.00
Income from investment operations
Net investment income .23 .24 .24 .04
Net realized and unrealized
gain (loss) on investments (.04) .39 (.39) .05
Total from investment operations .19 .63 (.15) .09
Distributions from
Net investment income (.22) (.24) (.23) (.04)
Total increase (decrease) in
net asset value (.03) .39 (.38) .05
Net asset value, ending $5.03 $5.06 $4.67 $5.05
Total return* 3.96% 13.66% (2.94%) 7.46%
Ratios to average net assets:
Net investment income 4.59% 4.87% 5.01% 4.42%(a)
Total expenses + 1.00% .51% -- --
Net expenses .94% .48% .17% --
Expenses reimbursed .04% .43% .86% .80%(a)
Portfolio turnover 8% 11% 77% 14%
Net assets, ending
(in thousands) $12,023 $9,411 $7,429 $5,401
Number of shares outstanding,
ending (in thousands) 2,338 1,860 1,589 1,070
</TABLE>
Periods Ended
October 29, December 31,
Class C Shares 1996 1995 1994^^
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net asset value, beginning $5.04 $4.66 $4.97
Income from investment operations
Net investment income .16 .20 .16
Net realized and unrealized gain (loss)
on investments (.08) .38 (.30)
Total from investment operations .08 .58 (.14)
Distributions from
Net investment income (.15) (.20) (.17)
Total increase (decrease) in net
asset value (.07) .38 (.31)
Net asset value, ending $4.97 $5.04 $4.66
Total return* 1.67% 12.55% (2.60%)
Ratios to average net assets:
Net investment income 3.77%(a) 4.01% 4.29%(a)
Total expenses + 1.80%(a) 1.36% --
Net expenses 1.73%(a) 1.33% 1.17%(a)
Expenses reimbursed .05%(a) .53% .93%(a)
Portfolio turnover 7% 11% 77%
Net assets, ending (in thousands) $3,291 $2,509 $1,806
Number of shares outstanding,
ending (in thousands) 662 498 388
</TABLE>
Financial Highlights -- Michigan Portfolio
Periods Ended
December 31,
Class A Shares 1996 1995 1994 1993##
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net asset value, beginning $5.12 $4.74 $5.09 $5.00
Income from investment operations
Net investment income .22 .24 .23 .04
Net realized and unrealized
gain (loss) on investments (.01) .37 (.35) .09
Total from investment operations .21 .61 (.12) .13
Distributions from
Net investment income (.23) (.23) (.23) (.04)
Total increase (decrease) in
net asset value (.02) .38 (.35) .09
Net asset value, ending $5.10 $5.12 $4.74 $5.09
Total return* 4.19% 13.08% (2.42%) 10.28%
Ratios to average net assets:
Net investment income 4.37% 4.76% 4.76% 4.27%(a)
Total expenses + 1.02% .52% -- --
Net expenses .93% .48% .18% --
Expenses reimbursed .02% .39% .84% .89%(a)
Portfolio turnover 18% 22% 65% --
Net assets, ending (in thousands) $5,804 $4,556 $5,255 $4,287
Number of shares outstanding,
ending (in thousands) 1,137 890 1,109 842
</TABLE>
Periods Ended
October 29, December 31,
Class C Shares 1996 1995 1994^^
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net asset value, beginning $5.11 $4.74 $5.02
Income from investment operations
Net investment income .14 .20 .16
Net realized and unrealized gain (loss)
on investments (.06) .36 (.28)
Total from investment operations .08 .56 (.12)
Distributions from
Net investment income (.15) (.19) (.16)
Total increase (decrease) in net
asset value (.07) .37 (.28)
Net asset value, ending $5.04 $5.11 $4.74
Total return* 1.52% 11.96% (2.12%)
Ratios to average net assets:
Net investment income 3.34%(a) 3.91% 3.95%(a)
Total expenses + 2.00%(a) 1.37% --
Net expenses 1.91%(a) 1.33% 1.16%(a)
Expenses reimbursed .08%(a) .52% .87%(a)
Portfolio turnover 18% 22% 65%
Net assets, ending (in thousands) $1,189 $1,497 $1,219
Number of shares outstanding,
ending (in thousands) 236 293 257
</TABLE>
Financial Highlights -- New York Portfolio
Periods Ended
December 31,
Class A Shares 1996 1995 1994 1993##
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net asset value, beginning $5.12 $4.71 $5.05 $5.00
Income from investment operations
Net investment income .21 .22 .23 .04
Net realized and unrealized
gain (loss) on investments (.02) .41 (.34) .05
Total from investment operations .19 .63 (.11) .09
Distributions from
Net investment income (.22) (.22) (.23) (.04)
Net realized gains -- -- -- --
Total distributions (.22) (.22) (.23) (.04)
Total increase (decrease) in
net asset value (.03) .41 (.34) .05
Net asset value, ending $5.09 $5.12 $4.71 $5.05
Total return* 3.79% 13.72% (2.26%) 7.22%
Ratios to average net assets:
Net investment income 4.20% 4.47% 4.77% 3.81%(a)
Total expenses + 1.13% .58% -- --
Net expenses .98% .50% .18% --
Expenses reimbursed .03% .49% 1.13% 2.00%(a)
Portfolio turnover 19% 13% 56% --
Net assets, ending (in thousands) $6,218 $3,573 $2,648 $2,236
Number of shares outstanding,
ending (in thousands) 1,222 698 562 433
</TABLE>
Periods Ended
October 29, December 31,
Class C Shares 1996 1995 1994^^
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net asset value, beginning $5.11 $4.71 $4.98
Income from investment operations
Net investment income .14 .19 .16
Net realized and unrealized gain (loss)
on investments (.06) .40 (.27)
Total from investment operations .08 .59 (.11)
Distributions from
Net investment income (.14) (.19) (.16)
Net realized gain -- -- --
Total distributions (.14) (.19) (.16)
Total increase (decrease) in net
asset value (.06) .40 (.27)
Net asset value, ending $5.05 $5.11 $4.71
Total return* 1.64% 12.63% (1.97%)
Ratios to average net assets:
Net investment income 3.41%(a) 3.65% 3.93%(a)
Total expenses + 1.98%(a) 1.40% --
Net expenses 1.83%(a) 1.33% 1.22%(a)
Expenses reimbursed .06%(a) .59% .92%(a)
Portfolio turnover 10% 13% 56%
Net assets, ending (in thousands) $2,365 $2,392 $1,119
Number of shares outstanding,
ending (in thousands) 468 468 237
</TABLE>
Financial Highlights -- Pennsylvania Portfolio
Years Ended
December 31,
Class A Shares 1996 1995 1994
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net asset value, beginning $5.10 $4.71 $5.00
Income from investment operations
Net investment income .21 .25 .22
Net realized and unrealized gain (loss)
on investments (.02) .37 (.29)
Total from investment operations .19 .62 (.07)
Distributions from
Net investment income (.21) (.23) (.22)
Total increase (decrease) in
net asset value (.02) .39 (.29)
Net asset value, ending $5.08 $5.10 $4.71
Total return* 3.92% 13.51% (1.29%)
Ratios to average net assets:
Net investment income 4.45% 5.10% 4.94%
Total expenses + 1.11% .49% --
Net expenses .93% .41% .26%
Expenses reimbursed .05% .54% .94%
Portfolio turnover 9% 17% 96%
Net assets, ending (in thousands) $4,486 $2,522 $1,872
Number of shares outstanding,
ending (in thousands) 883 495 398
</TABLE>
Periods Ended
October 29, December 31,
Class C Shares 1996 1995 1994^^
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net asset value, beginning $5.11 $4.72 $4.91
Income from investment operations
Net investment income .15 .21 .16
Net realized and unrealized gain (loss)
on investments (.07) .37 (.19)
Total from investment operations .08 .58 (.03)
Distributions from
Net investment income (.14) (.19) (.16)
Total increase (decrease) in
net asset value (.06) .39 (.19)
Net asset value, ending $5.05 $5.11 $4.72
Total return* 1.63% 12.55% (.30%)
Ratios to average net assets:
Net investment income 3.58%(a) 4.29% 4.20%(a)
Total expenses + 1.92%(a) 1.32% --
Net expenses 1.74%(a) 1.24% 1.22%(a)
Expenses reimbursed .08%(a) .62% 1.15%(a)
Portfolio turnover 9% 17% 96%
Net assets, ending (in thousands) $1,555 $1,748 $1,168
Number of shares outstanding,
ending (in thousands) 308 342 248
</TABLE>
Financial Highlights -- Virginia Portfolio
Periods Ended
December 31,
Class A Shares 1996 1995 1994 1993##
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net asset value, beginning $5.13 $4.74 $5.06 $5.00
Income from investment operations
Net investment income .22 .24 .23 .05
Net realized and unrealized gain
(loss) on investments (.03) .39 (.32) .06
Total from investment operations .19 .63 (.09) .11
Distributions from
Net investment income (.22) (.24) (.23) (.05)
Total increase (decrease) in
net asset value (.03) .39 (.32) .06
Net asset value, ending $5.10 $5.13 $4.74 $5.06
Total return* 3.82% 13.54% (2.04%) 8.65%
Ratios to average net assets:
Net investment income 4.35% 4.86% 4.87% 4.81%(a)
Total expenses + 1.00% .54% -- --
Net expenses .92% .51% .19% --
Expenses reimbursed .03% .38% .86% 1.54%(a)
Portfolio turnover 4% 11% 65% 28%
Net assets, ending
(in thousands) $12,618 $7,295 $5,866 $2,720
Number of shares outstanding,
ending (in thousands) 2,475 1,423 1,239 537
</TABLE>
Periods Ended
October 29, December 31,
Class C Shares 1996 1995 1994^^
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Net asset value, beginning $5.13 $4.74 $4.99
Income from investment operations
Net investment income .15 .20 .16
Net realized and unrealized gain (loss)
on investments (.06) .39 (.25)
Total from investment operations .09 .59 (.09)
Distributions from
Net investment income (.15) (.20) (.16)
Total increase (decrease) in
net asset value (.06) .39 (.25)
Net asset value, ending $5.07 $5.13 $4.74
Total return* 1.75% 12.62% (1.54%)
Ratios to average net assets:
Net investment income 3.54%(a) 4.07% 4.19%(a)
Total expenses + 1.79%(a) 1.35% --
Net expenses 1.71%(a) 1.31% .94%(a)
Expenses reimbursed .04%(a) .43% .99%(a)
Portfolio turnover 4% 11% 65%
Net assets, ending (in thousands) $3,505 $3,207 $2,766
Number of shares outstanding,
ending (in thousands) 692 625 583
</TABLE>
