SEMI-ANNUAL REPORT OCTOBER 31. 1999
[Logo of SouthTrust Funds]
SouthTrust U.S. Treasury Money Market Fund
SouthTrust Income Fund
SouthTrust Bond Fund
SouthTrust Alabama Tax-Free Income Fund
SouthTrust Value Fund
SouthTrust Growth Fund
SOUTHTRUST FUNDS
PRESIDENT'S MESSAGE
- -------------------------------------------------------------------------------
Dear Valued Investor:
I am pleased to present the Semi-Annual Report of the SouthTrust Funds for
the six-month period ended October 31, 1999. This report begins with a
discussion by fund portfolio managers about the economy, the financial markets,
and fund strategies over the reporting period. Next, you'll find a complete
listing of investments and financial statements for the funds.
This report also contains information on two new additions to the SouthTrust
Funds family--SouthTrust Alabama Tax-Free Income Fund and SouthTrust Growth
Fund--which began operations on August 20, 1999.*
The following is a summary of the performance of each SouthTrust Fund over
the six-month reporting period.
SouthTrust U.S. Treasury Money Market Fund
(formerly, SouthTrust Treasury Obligations Money Market Fund)
This conservative portfolio of U.S. Treasury securities gives investors a
way to keep their ready cash accessible while it earns daily income. The fund
paid a total of $0.02 per share in dividends over the reporting period. Total
net assets in the fund reached $720.2 million at the end of the reporting
period.**
SouthTrust Income Fund
This fund's income-focused portfolio consisted primarily of corporate bonds
(42.9%), U.S. government agency bonds (39.2%), and U.S. Treasury notes (6.9%).
This combination of investments produced dividends totaling $0.29 per share. Due
to the rising interest rate environment that caused a general decline in bond
prices, the fund's net asset value declined from $9.78 on the first day of the
reporting period to $9.55 on the last day of the reporting period. As a result,
over the reporting period, the fund produced a total return of 0.65%, or (2.82%)
adjusted for the fund's sales charge.*** Total net assets in the fund reached
$61.4 million at the end of the reporting period.
SouthTrust Bond Fund
This fund's portfolio of corporate and government bonds offers investors an
all-around approach to income. At the end of the reporting period, the fund's
portfolio consisted primarily of corporate bonds (35.6%), U.S. government agency
bonds (25.7%), and U.S. Treasury bonds and notes (36.4%). This mix of
income-producing investments paid dividends totaling $0.28 per share. Due to the
rising
SOUTHTRUST FUNDS
PRESIDENT'S MESSAGE
(Continued)
- -------------------------------------------------------------------------------
interest rate environment that caused a general decline in bond prices, the
fund's net asset value declined from $10.24 on the first day of the reporting
period to $9.83 on the last day of the reporting period. As a result, over the
reporting period, the fund produced a total return of (1.27%), or (4.71%)
adjusted for the fund's sales charge.*** Total net assets in the fund reached
$121.7 million at the end of the reporting period.
SouthTrust Alabama Tax-Free Income Fund
This new fund, which began operation as a mutual fund on August 20, 1999, is
designed for tax-sensitive Alabama residents.* The fund pursues double-tax- free
income--income free from federal regular income tax and Alabama state income tax
by investing in high-quality securities issued by Alabama municipalities.+ Over
the reporting period, the fund produced a total return of (2.28%), or (5.66%)
adjusted for the fund's sales charge.***
SouthTrust Value Fund
(formerly, SouthTrust Core Equity Fund)
This fund's portfolio primarily consists of undervalued stocks with
long-term growth potential issued by large, established, and well-managed
companies that are leaders in their industries. During the reporting period,
value stock prices were weak in a stock market that favored growth stocks. As a
result, over the reporting period, the fund produced a total return of (1.46%),
or (5.88%) adjusted for the fund's sales charge.*** Contributing to the total
return were $0.03 per share in dividends and $0.57 per share in capital gains.
Total net assets in the fund reached $334.7 million at the end of the reporting
period.
SouthTrust Growth Fund
SouthTrust Growth Fund began operation as a mutual fund on August 20, 1999.*
This fund invests in stocks issued by large, established U.S. companies that
have a record of growth in price and earnings--and have high potential to
continue that growth. This fund complements SouthTrust Value Fund, which invests
in value stocks issued by large, high-quality companies. Over the reporting
period, the fund produced a total return of 6.76%, or 1.96% adjusted for the
fund's sales charge.***
SOUTHTRUST FUNDS
PRESIDENT'S MESSAGE
(Concluded)
- -------------------------------------------------------------------------------
Thank you for participating in one or more key financial markets through the
professional management and diversification of the SouthTrust Funds, where "It's
About Trust." We look forward to keeping you up-to-date on your progress.
Sincerely,
/s/ Edward C. Gonzales
Edward C. Gonzales
President
December 15, 1999
- -----------
* The SouthTrust Alabama Tax-Free Income Fund and the SouthTrust Growth
Fund are the successors to a portfolio of common trust funds managed by
the Adviser. At the Funds' commencement of operations on August 20, 1999,
the assets from the common trust funds were transferred to the Funds in
exchange for Fund shares. The quoted performance data includes the
performance of the common trust funds for the periods before the Funds'
registration statement became effective on August 10, 1999, as adjusted
to reflect the Funds' expenses and sales loads. The common trust funds
were not registered under the Investment Company Act of 1940 ("1940 Act")
and therefore were not subject to certain investment restrictions that
are imposed by the 1940 Act. If the common trust funds had been
registered under the 1940 Act, the performance may have been adversely
affected.
** An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.
Although money market funds seek to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in the SouthTrust
U.S. Treasury Money Market Fund.
*** Performance quoted reflects past performance and is no guarantee of future
results. Investment return and principal value will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their
original cost.
+ Income may be subject to the federal alternative minimum tax.
SOUTHTRUST FUNDS
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
Maybe it's the stock market that has driven investors to speculate? Over the
last six months and the last 12 months, interest rates have been on a fairly
steady increasing trend, thus making for one of the weaker bond markets in
history. It's of little wonder that bonds now look to be underowned and of
relatively attractive value. Meanwhile, the media is filled with stories of
skyrocketing initial public offerings and tremendous returns from funds focusing
on technology and the best performing growth stocks. Given all the bullish
stories, many investors might be surprised that the popular Standard & Poor's
500 Index ("S&P 500")* only eked out a total return of 2.7% over the last six
months, and that resulted from the strong October close. Unfortunately, even
that return looked attractive compared with those achieved by most investors.
Since far more stocks were down than up during this time frame, it's of little
surprise that speculators have taken to chasing the big profits that grab
headlines! This has resulted in many investors, including some professional
investors, foregoing fundamental analysis and valuation in favor of
momentum-following strategies. In contrast to the early 1970's when growth
stocks became similarly richly priced, fundamental analysis today is considered
by many investors a hindrance to profitable investing. In the context of
investment history, this market would appear to offer both tremendous risk and
potential reward. The market's narrow focus has left bonds and most stocks out
of favor and well-positioned to benefit once momentum- following strategies stop
working and market interest rotates into more time- tested fundamental
valuation-based styles.
Economic Perspective
The last six months witnessed a U.S. economy that continued to exhibit
strong growth and the onset of building inflationary pressures, as evidenced by
continued low unemployment rates and an increase of greater that 5% in the CRB
Raw Industrial Materials Index.** The fact that manufacturing activity is strong
and demand is increasing was further highlighted by the September National
- -----------
* The S&P 500 is a capitalization-weighted index of 500 stocks designed to
measure performance of the broad domestic economy through changes in the
aggregate market value of 500 stocks representing all major industries. The
index is unmanaged, and investments cannot be made in an index.
** The CRB Raw Industrial Materials Index is a measure of price movements of raw
industrial commodities. The index is unmanaged, and investments cannot be
made in an index.
SOUTHTRUST FUNDS
INVESTMENT REVIEW
(Continued)
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Association of Purchasing Managers Index (NAPM),*** which rose to 57.8% from
54.2% during August. Readings of 50% or higher are considered to demonstrate
growth in the industrial side of the economy, so this was really a very strong
result.
The Federal Reserve Board (the "Fed") responded to these pressures by
increasing short-term rates 25 basis points in June and another 25 basis points
at its August meeting. Globally, similar sentiments were echoed by European
Central Bank President Willem Duisenberg who warned, "Current monetary
developments indicate that the liquidity situation in the euro area is at
present rather generous." Major central banks are clearly taking a more
aggressive posture against inflation than we have seen in the recent past, and
we can probably expect further action both at home and overseas before year end.
While this potentially causes more volatility in markets in the near term, a
proactive rather than reactive response to inflation is conducive to a healthier
long-term market environment.
While many observers have expressed concerns about the impact of Y2K on
the first quarter 2000, we believe that these survivalist fears have been
blown out of proportion to some degree and that the Y2K effects will most
likely be short lived in duration and have no lasting impact on the capital
markets. However, there are risks to the present strong U.S. economy, most
notably the generous stock market valuations that continue to be present in
the major market indices (Dow Jones Industrial Average+, S&P 500). Should a
catalyst present itself to take the market lower, there is a possibility that
the wealth effect present in the stock market in recent years would reverse
itself, triggering dramatically lower levels of consumer spending and
confidence. This reduction in demand would then impact manufacturing and
employment, putting the brakes on this period of almost unparalleled
prosperity.
- -----------
*** The NAPM is based on a survey of over 250 companies within twenty-one
industries covering all 50 states. It is the first indicator each month of
manufacturing performance during the past 30-day period and is also a
leading indicator of future economic activity and pricing decisions. The
index is unmanaged, and investments cannot be made in an index.
+ The Dow Jones Industrial Average represents share prices of select blue chip
industrial corporations as well as public utility and transportation
companies. The index is unmanaged, and investments cannot be made in an
index.
SOUTHTRUST FUNDS
INVESTMENT REVIEW
(Continued)
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Fixed Income Market
Last year the Fed responded to mid-year stock market problems, which
resulted in a near panic by early October, with three interest rate cuts. This
year, concerns over a weak economy and the stock market have all but disappeared
and the Fed has taken back two of its three rate cuts. Given the Fed's current
bias towards tightening, it is quite probable the Fed will hike rates a third
time in the near future. The current economic expansion is now over eight years
old, making it one of the longest in history. In spite of its length, the
expansion has been one of the slowest in history, although strength has
consistently exceeded expectations in recent years. Now, real Gross Domestic
Product growth forecasts for 2000 are approaching 4%, well above the low 2%
forecasts of recent years. With the increased confidence in the economy has come
normal inflation worries that crop up late in the economic cycle. Although there
have been some inflationary signs early in the production cycle, so far global
competition, that has made for an excess supply of production capacity, goods
and services, has kept inflation from being passed on to the consumer. Strong
productivity gains have been adequate to offset increasing labor costs, which
represent about two-thirds of manufacturing costs. While higher inflation is
always a possibility, the same trends that have kept inflation under control so
far this decade still appear to be in place. As a result, we think continued
moderate inflation is the most probable outcome.
While the direction and level of inflation is a primary driver of bond
prices, supply and demand is obviously an important consideration.
Individuals'
investment exposure (% of investment holdings) to bonds is now the lowest it's
been since 1984 and only about one-half of what it was in 1994. Meanwhile,
institutional ownership of bonds is the lowest in history. While investors will
likely continue to shun bonds until stocks encounter difficulties, the potential
for a dramatic increase in demand exists. Individuals and institutions are also
currently highly leveraged. High consumer confidence, resulting from stock
market optimism, has even resulted in a negative savings rate. While the
government's method of calculating the savings rate can be criticized, there is
no debate that consumers have been borrowing and spending with near reckless
abandon. At some point, probably when the current bullish euphoria over stocks
ends, consumers will slow down their spending, increase their savings and pay
down debt, thereby reducing the supply of bonds and potentially increasing the
demand for bonds. If the resulting economic slowdown pushes the economy into
recession, the upside for bonds is significant. While this thesis is currently
unpopular, bonds may well play an even more important role in providing some
stability to balanced investment portfolios than they have historically.
SOUTHTRUST FUNDS
INVESTMENT REVIEW
(Continued)
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Equity Review
The bull market of recent years may have slowed so far in 1999, but the
outlook remains optimistic. A bull market's three primary supports are economic
growth that facilitates corporate profit gains, moderate inflation that makes
for low interest rates and a favorable supply/demand balance for equities. All
three of these factors are likely to remain positive for the next year, or
longer. Economic expansions do not end without imbalances, usually in the form
of rising inventories and excessive capacity additions. Due to industrial
America's shift to just-in-time inventory discipline and technology gains that
have facilitated increased production out of existing facilities, neither of
these imbalances are on the horizon. As a result, continued economic growth
should drive corporate profit growth throughout 2000.
While we've already discussed the favorable outlook for the economy and
inflation, the supply/demand balance for equities is also positive. Demographic
trends indicate that more Americans will desire to have a nest egg for
retirement. The baby boom generation is now in its maximum earning years.
Interest rates are generally too low to provide much attraction (relative to the
high expected returns from stocks) at the present time, so there should continue
to be a strong, steady flow of money going into the stock market. In addition,
defined contribution retirement plans have largely replaced defined benefit
plans, meaning that maximizing investment returns has become extremely important
to plan participants. Thus, demand for equities could be robust for years to
come. And with corporate profits strong, the major corporations that dominate
the stock market averages will likely continue to repurchase their shares,
keeping the supply/demand balance for equities favorable.
This overview, however, misses what has been a very difficult stock market
for many investors. So far in 1999, far more stocks are down than up and the
advance-decline line, showing the breadth of the market, is in a multi-year
downtrend. By far, the bulk of positive returns this year has come from
technology stocks. For the first 10 months of 1999, the S&P 500 technology
sector is up 32%, and now represents close to one quarter of the market
capitalization of the index. Technology, which only represented 7% of the S&P
500 as recently as 1992, has been one of the few success stories in an
increasingly narrow stock market. While valuations of technology stocks and many
other market leaders have moved to hard-to-justify levels, many stocks have gone
unnoticed and represent excellent value and opportunity. This, in turn, creates
the potential for very attractive investment returns for disciplined investment
managers. Our new SouthTrust
SOUTHTRUST FUNDS
INVESTMENT REVIEW
(Concluded)
- -------------------------------------------------------------------------------
Growth Fund has built an excellent track record++ and gives investors the
opportunity to participate in large, market leading companies. We believe that
the fund's disciplined approach to buying stocks when they are selling at the
lower end of their historical valuation ranges should work to the benefit of
investors when the current momentum-following craze ends. Meanwhile, we
believe that our SouthTrust Value Fund is well positioned to be a beneficiary
once the stock market rotates back to value. Its approach of buying above-
average companies with above-average long-term growth potential when they are
out-of-favor and look to be exceptionally attractively valued has worked to
the benefit of investors through many market cycles. While this style is far
from the currently successful momentum-following style that often totally
ignores company fundamentals, it should return to favor. Although many
investors today think that the current growth phenomenon is permanent,
leadership will eventually rotate back to value and, as is often the case,
yesterday's laggards will become tomorrows leaders. By the time the consensus
accepts value as leading the way forever, it will be time for growth to resume
its leadership. History suggests strong performance by growth tends to be
followed by value outperforming for a number of years. Most academic studies
show value to outperform growth the majority of the time and to provide the
better long-term performance history. The strong economy, earnings growth, and
moderate but increasing inflation should favor disciplined value investors
leading the way into the twenty-first century.
- -----------
++Past performance is no guarantee of future results. Prior to the Growth Fund's
commencement of operations as a mutual fund on August 20, 1999, the fund was a
common trust fund (CTF) managed by the Adviser. The CTF was not registered
under the Investment Company Act of 1940 and therefore was not subject to
certain investment restrictions. If the CTF had been registered as a mutual
fund, performance may have been lower.
SOUTHTRUST U.S. TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
------------ -------------------------------------------------- ------------
<C> <S> <C>
U.S. TREASURY OBLIGATIONS--24.2%
U.S. TREASURY BILLS--10.3%
$ 25,000,000 (1)4.778%, 12/16/1999 $ 24,853,750
25,000,000 (1)5.030%, 12/9/1999 24,872,278
25,000,000 (1)5.030%, 12/23/1999 24,825,222
------------
TOTAL 74,551,250
------------
U.S. TREASURY NOTES--13.9%
25,000,000 5.375%, 1/31/2000 25,008,640
25,000,000 5.375%, 6/30/2000 25,022,243
25,000,000 5.375%, 7/31/2000 24,992,532
25,000,000 5.875%, 11/15/1999 25,009,678
------------
TOTAL 100,033,093
------------
TOTAL U.S. TREASURY OBLIGATIONS 174,584,343
------------
REPURCHASE AGREEMENTS(2)--75.9%
35,000,000 Barclays de Zoete Wedd Securities, Inc., 5.200%,
dated 10/29/1999, due 11/1/1999 35,000,000
35,000,000 Chase Government Securities, Inc., 5.220%, dated
10/29/1999, due 11/1/1999 35,000,000
35,000,000 Donaldson, Lufkin and Jenrette Securities Corp.,
5.220%, dated 10/29/1999, due 11/1/1999 35,000,000
35,000,000 Dresdner Securities (USA), Inc., 5.200%, dated
10/29/1999, due 11/1/1999 35,000,000
126,495,000 Greenwich Capital Markets, Inc., 5.210%, dated
10/29/1999, due 11/1/1999 126,495,000
35,000,000 J.P. Morgan & Co., Inc., 5.220%, dated 10/29/1999,
due 11/1/1999 35,000,000
35,000,000 Lehman Brothers, Inc., 5.160%, dated 10/29/1999,
due 11/1/1999 35,000,000
35,000,000 Merrill Lynch, Pierce, Fenner and Smith, 5.190%,
dated 10/29/1999, due 11/1/1999 35,000,000
</TABLE>
SOUTHTRUST U.S. TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Concluded)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
------------ ------------------------------------------------- ------------
<C> <S> <C>
$ 35,000,000 Morgan Stanley, Dean Witter & Co., 5.190%, dated
10/29/1999, due 11/1/1999 $ 35,000,000
140,000,000 Warburg Securities, 5.220%, dated 10/29/1999, due
11/1/1999 140,000,000
------------
TOTAL REPURCHASE AGREEMENTS 546,495,000
------------
TOTAL INVESTMENTS
(at amortized cost)(3) $721,079,343
============
</TABLE>
- -----------
(1) Yield at date of purchase.
(2) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(3) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($720,177,507) at October 31, 1999.
See Notes which are an integral part of the Financial Statements
SOUTHTRUST INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ---------------------------------------------------- -----------
<C> <S> <C>
CORPORATE BONDS--42.9%
CHEMICALS--3.2%
$1,000,000 Praxair, Inc., Note, 6.15%, 4/15/2003 $ 973,404
1,000,000 Solutia, Inc., Note, 6.50%, 10/15/2002 974,388
-----------
TOTAL 1,947,792
-----------
CONSUMER NON-DURABLES--0.9%
50,000 Gillette Co., Note, 6.25%, 8/15/2003 49,688
500,000 Procter & Gamble Co., Deb., 8.70%, 8/1/2001 520,901
-----------
TOTAL 570,589
-----------
CONSUMER SERVICES--6.2%
1,000,000 Service Corp. International, Note, 6.30%, 3/15/2003 859,572
1,000,000 Service Corp. International, Note, 6.375%, 10/1/2000 950,409
2,000,000 Times Mirror Co., Note, 6.65%, 10/15/2001 2,003,340
-----------
TOTAL 3,813,321
-----------
ENERGY--4.7%
1,000,000 Amoco Corp., Company Guarantee, 6.25%, 10/15/2004 991,004
1,802,133 Chevron Corp., Deb., 8.11%, 12/1/2004 1,865,680
-----------
TOTAL 2,856,684
-----------
FINANCIAL SERVICES--16.4%
450,000 BellSouth Capital Funding Corp., Deb., 6.04%,
11/15/2026 445,398
20,000 Chubb Corp., Deb., 8.75%, 11/15/1999 20,019
2,000,000 Comdisco, Inc., Sr. Note, 7.25%, 9/1/2002 1,988,760
1,000,000 Ford Motor Credit Corp., Note, 6.375%, 10/6/2000 1,000,895
1,000,000 Ford Motor Credit Corp., Unsecd. Note, 8.20%,
2/15/2002 1,031,409
1,000,000 General Motors Acceptance Corp., Note, 6.625%,
10/1/2002 995,942
1,000,000 General Motors Acceptance Corp., Sr. Note, 6.625%,
1/10/2002 1,000,240
</TABLE>
SOUTHTRUST INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
$ 250,000 KeyBank, N.A., Bank Note, 6.50%, 4/15/2008 $ 239,126
1,000,000 Merrill Lynch & Co., Inc., Note, 8.375%, 2/9/2000 1,005,622
100,000 Morgan Stanley, Dean Witter & Co., Note, 8.10%,
6/24/2002 103,222
1,000,000 NationsBank Corp., Sub. Note, 6.875%, 2/15/2005 987,622
200,000 Norwest Financial, Inc., Note, 6.125%, 8/1/2003 195,111
200,000 Republic New York Corp., Deb., 7.875%, 12/12/2001 203,608
850,000 Sears Roebuck Acceptance Corp., Medium Term Note,
Series 2, 6.86%, 8/6/2001 848,073
-----------
TOTAL 10,065,047
-----------
UTILITIES--11.5%
1,000,000 AT&T Capital Corp., Company Guarantee, 5.86%,
4/26/2002 968,378
1,500,000 Ameritech Capital Funding Corp., Company Guarantee,
5.95%, 1/15/2038 1,451,424
200,000 BellSouth Telecommunications, Inc., Unsecd. Note,
6.375%, 6/15/2004 196,770 1,500,000 Edison International Inc., Note,
6.875%, 9/15/2004 1,489,173 1,000,000 Michigan Consolidated Gas, 1st Mtg.
Bond, 5.75%,
5/1/2001 991,992
1,000,000 SBC Communications, Inc., Deb., 6.50%, 7/1/2003 984,936
1,000,000 U.S. West Communications, Inc., Unsecd. Note, 6.375%,
10/15/2002 993,239
-----------
TOTAL 7,075,912
-----------
TOTAL CORPORATE BONDS
(identified cost $26,753,631) 26,329,345
-----------
</TABLE>
SOUTHTRUST INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ---------------------------------------------- -----------
<C> <S> <C>
GOVERNMENT AGENCIES--39.2%
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--7.3%
$1,414,413 7.00%, 9/15/2008 $ 1,416,478
2,000,000 7.00%, 2/15/2009 2,001,460
1,050,805 7.50%, 12/15/2022 1,058,350
-----------
TOTAL 4,476,288
-----------
FEDERAL HOME LOAN BANK--5.6%
500,000 5.80%, 12/1/1999 500,185
1,000,000 6.00%, 8/15/2002 992,347
2,000,000 7.00%, 11/13/2007 1,961,320
-----------
TOTAL 3,453,852
-----------
FEDERAL HOME LOAN MORTGAGE CORPORATION--9.1%
872,684 6.50%, 1/15/2006 866,632
1,000,000 6.50%, 9/15/2021 973,660
153,995 7.00%, 8/1/2003 154,116
987,912 7.00%, 5/15/2004 989,400
1,122,035 7.50%, 2/1/2023 1,130,753
200,000 7.75%, 11/7/2001 205,997
1,250,000 7.95%, 3/15/2021 1,271,492
-----------
TOTAL 5,592,050
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--17.2%
1,139,206 6.50%, 8/1/2013 1,119,611
200,000 6.54%, 9/18/2002 198,963
1,775,000 6.59%, 5/16/2002 1,783,616
1,000,000 6.65%, 11/14/2007 972,414
1,000,000 6.85%, 6/25/2021 991,692
2,000,000 6.95%, 11/13/2006 1,978,182
1,000,000 6.97%, 10/30/2007 973,449
1,000,000 7.05%, 2/12/2007 988,518
1,500,000 8.00%, 7/25/2005 1,521,764
-----------
TOTAL 10,528,209
-----------
</TABLE>
SOUTHTRUST INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Concluded)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
or Shares Value
---------- ----------------------------------------------------- -----------
<C> <S> <C>
TOTAL GOVERNMENT AGENCIES
(identified cost $24,608,887) $24,050,399
-----------
U.S. TREASURY OBLIGATIONS--6.9%
U.S. TREASURY NOTES--6.9%
$1,000,000 5.625%, 9/30/2001 996,875
200,000 6.125%, 12/31/2001 201,063
1,000,000 6.375%, 3/31/2001 1,008,438
1,000,000 6.50%, 8/31/2001 1,011,875
1,000,000 7.75%, 2/15/2001 1,025,312
-----------
TOTAL U.S. TREASURY OBLIGATIONS
(identified cost $4,243,258) 4,243,563
-----------
FOREIGN GOVERNMENTS--4.9%
1,500,000 Quebec, Province of, Note, 5.67%, 2/27/2026 1,497,584
1,500,000 Marshall Islands, Republic of, Note, 6.50%, 11/1/2000 1,497,405
-----------
TOTAL FOREIGN GOVERNMENTS
(identified cost $2,992,500) 2,994,989
-----------
PREFERRED STOCKS--2.0%
UTILITIES--2.0%
35,000 AT&T Corp., Cumulative Pfd., $2.18 883,750
14,000 Tennessee Valley Authority, Cumulative Pfd., Series
95-A, $2.00 350,875
-----------
TOTAL PREFERRED STOCKS
(identified cost $1,329,140) 1,234,625
-----------
MUTUAL FUND--1.1%
665,639 AIM Short-Term Investment Co. Prime Portfolio (at net
asset value) 665,639
-----------
TOTAL INVESTMENTS
(identified cost $60,593,055)(1) $59,518,560
===========
</TABLE>
- -----------
(1) The cost of investments for federal tax purposes amounts to $60,593,055. The
net unrealized depreciation of investments on a federal tax basis amounts to
$1,074,495 which is comprised of $105,226 appreciation and $1,179,721
depreciation at October 31, 1999.
Note: The categories of investments are shown as a percentage of net assets
($61,351,469) at October 31, 1999.
See Notes which are an integral part of the Financial Statements
SOUTHTRUST BOND FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
---------- --------------------------------------------------- ------------
<C> <S> <C>
CORPORATE BONDS--35.6%
BANKING--3.8%
$2,000,000 BB&T Corp., Sub. Note, 7.25%, 6/15/2007 $ 1,977,476
2,500,000 Bank of New York Co., Inc., Sub. Note, 8.50%,
12/15/2004 2,636,768
------------
TOTAL 4,614,244
------------
CHEMICALS--3.2%
2,000,000 Praxair, Inc., Note, 6.15%, 4/15/2003 1,946,808
2,000,000 Solutia, Inc., Note, 6.50%, 10/15/2002 1,948,776
------------
TOTAL 3,895,584
------------
COMMERCIAL SERVICES--1.6%
2,000,000 Equifax, Inc., Sr. Note, 6.50%, 6/15/2003 1,965,138
------------
CONSUMER NON-DURABLES--2.5%
1,000,000 Philip Morris Cos., Inc., Unsecd. Note, 7.125%,
12/1/1999 1,000,346
2,000,000 Times Mirror Co., Note, 6.65%, 10/15/2001 2,003,340
------------
TOTAL 3,003,686
------------
CONSUMER SERVICES--2.1%
3,000,000 Service Corp. International, Note, 6.30%, 3/15/2003 2,578,716
------------
FINANCIAL SERVICES--3.2%
2,000,000 AT&T Capital Corp., Medium Term Note, 5.86%,
4/26/2002 1,936,756
2,000,000 National Rural Utilities Cooperative Finance Corp.,
Sr. Note, 6.75%, 9/1/2001 2,007,557
------------
TOTAL 3,944,313
------------
PROCESS INDUSTRIES--4.1%
5,000,000 Archer-Daniels-Midland Co., Deb., 7.125%, 3/1/2013 4,940,825
------------
RETAIL TRADE--1.6%
2,000,000 Wal-Mart Stores, Inc., Sr. Unsecd. Note, 6.875%,
8/10/2009 2,011,272
------------
</TABLE>
SOUTHTRUST BOND FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ------------------------------------------------ ------------
<C> <S> <C>
TRANSPORTATION--2.4%
$2,000,000 CSX Transportation, Inc., Equip. Trust, 6.47%,
6/15/2011 $ 1,889,402
1,000,000 Norfolk Southern Corp., Equip. Trust, Series C,
7.75%, 8/15/2006 1,026,439
------------
TOTAL 2,915,841
------------
UTILITIES--11.1%
5,000,000 BellSouth Telecommunications, Inc., Deb., 7.00%,
10/1/2025 4,711,910
1,500,000 Edison International, Note, 6.875%, 9/15/2004 1,489,173
2,000,000 GTE North, Inc., Deb., 5.65%, 11/15/2008 1,822,673
755,000 New Jersey Bell Telephone Co., Deb., 7.375%,
6/1/2012 748,366
5,000,000 Pacific Bell, Note, 6.125%, 2/15/2008 4,715,500
------------
TOTAL 13,487,622
------------
TOTAL CORPORATE BONDS
(identified cost $45,061,583) 43,357,241
------------
GOVERNMENT AGENCIES--25.7%
FEDERAL HOME LOAN BANK--1.6%
2,000,000 7.03%, 7/14/2009 2,005,740
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION--5.4%
3,500,000 6.52%, 1/2/2002 3,523,912
1,122,035 7.50%, 2/1/2023 1,130,753
1,250,000 7.95%, 3/15/2021 1,271,492
591,598 9.50%, 2/15/2020 616,181
------------
TOTAL 6,542,338
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION--16.2%
5,000,000 5.375%, 3/15/2002 4,910,200
5,000,000 5.75%, 4/15/2003 4,910,425
5,000,000 6.00%, 5/15/2008 4,790,915
5,000,000 8.00%, 7/25/2005 5,072,550
------------
TOTAL 19,684,090
------------
</TABLE>
SOUTHTRUST BOND FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ---------------------------------------------- ------------
<C> <S> <C>
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--2.5%
$2,000,000 7.00%, 2/15/2009 $ 2,001,460
1,050,805 7.50%, 12/15/2022 1,058,350
------------
TOTAL 3,059,810
------------
TOTAL GOVERNMENT AGENCIES
(identified cost $32,332,196) 31,291,978
------------
U.S. TREASURY OBLIGATIONS--36.4%
U.S. TREASURY BONDS--17.4%
4,000,000 (1)5.50%, 8/15/2028 3,556,252
5,000,000 (1)6.125%, 11/15/2027 4,831,250
6,000,000 (1)6.375%, 8/15/2027 5,979,378
4,000,000 (1)7.50%, 11/15/2016 4,415,000
1,000,000 (1)7.875%, 2/15/2021 1,157,188
1,000,000 (1)8.00%, 11/15/2021 1,174,688
------------
TOTAL 21,113,756
------------
U.S. TREASURY NOTES--19.0%
4,000,000 6.125%, 12/31/2001 4,021,252
2,000,000 (1)6.25%, 10/31/2001 2,016,250
2,000,000 (1)6.25%, 2/15/2003 2,018,126
2,000,000 (1)6.375%, 9/30/2001 2,020,000
3,000,000 (1)6.50%, 5/15/2005 3,054,375
1,500,000 (1)6.50%, 8/15/2005 1,527,657
3,000,000 (1)6.625%, 5/15/2007 3,079,689
4,125,000 (1)7.25%, 5/15/2004 4,322,229
1,000,000 (1)7.25%, 8/15/2004 1,049,375
------------
TOTAL 23,108,953
------------
TOTAL U.S. TREASURY OBLIGATIONS
(identified cost $44,246,642) 44,222,709
------------
</TABLE>
SOUTHTRUST BOND FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Concluded)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
------- ----------------------------------------------------- ------------
<C> <S> <C>
MUTUAL FUND--0.7%
817,605 AIM Short-Term Investment Co. Prime Portfolio (at net
asset value) $ 817,605
------------
TOTAL INVESTMENTS
(identified cost $122,458,026)(2) $119,689,533
============
</TABLE>
- -----------
(1) Certain principal amounts on loan to broker.
(2) The cost of investments for federal tax purposes amounts to $122,458,026.
The net unrealized depreciation of investments on a federal tax basis
amounts to $2,768,493 which is comprised of $1,235,493 appreciation and
$4,003,986 depreciation at October 31, 1999.
Note: The categories of investments are shown as a percentage of net assets
($121,659,206) at October 31, 1999.
See Notes which are an integral part of the Financial Statements
SOUTHTRUST ALABAMA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(1) Value
---------- ---------------------------------------- --------- -----------
<C> <S> <C> <C>
LONG-TERM MUNICIPALS--98.0%
ALABAMA--93.8%
$1,020,000 Alabama Building Renovation Finance
Authority, Refunding Revenue Bonds,
5.25% (AMBAC INS)/(Original Issue Yield:
4.85%), 9/1/2007 AAA $ 1,032,668
500,000 Alabama Drinking Water Finance
Authority, (Series A) Revenue Bond,
4.60% (AMBAC INS), 8/15/2009 AAA 480,878
1,000,000 Alabama Drinking Water Finance
Authority, (Series A) Revenue Bond,
4.70% (AMBAC INS), 8/15/2011 AAA 952,017
1,000,000 Alabama Industrial Access Road and
Bridge Corp., Revenue Bond, 4.90%
(Original Issue Yield: 5.00%), 6/1/2005 A1 1,003,350
500,000 Alabama Industrial Access Road and
Bridge Corp., Revenue Bond, 5.15%
(Original Issue Yield: 5.20%), 6/1/2002 A1 509,306
640,000 Alabama Mental Health Finance Authority,
Refunding Bond, 4.88% (MBIA INS),
5/1/2003 AAA 648,634
500,000 Alabama Private Colleges & Universities
Facilities Authority, (Series A) Revenue
Bond, 4.90% (FGIC INS), 7/1/2005 AAA 497,522
1,000,000 Alabama Special Care Facilities Finance
Authority, Revenue Bonds (Series A),
4.50% (Charity Obligated
Group)/(Original Issue Yield: 4.60%),
11/1/2009 AA+ 957,967
</TABLE>
SOUTHTRUST ALABAMA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(1) Value
---------- ---------------------------------------- --------- -----------
<C> <S> <C> <C>
$ 500,000 Alabama State Board Education, Revenue
Bond, 5.00% (Shelton State Community
College)/(MBIA INS), 10/1/2006 AAA $ 505,811
750,000 Alabama State Corrections Institution
Finance Authority (Series A) Crossover
Refunding Bond, 4.80% (MBIA INS)/
(Original Issue Yield: 5.00%), 4/1/2002 AAA 760,237
1,000,000 Alabama State IDA, Special Tax Refunding
Bonds, 5.00% (Original Issue Yield:
5.05%), 11/1/2003 A2 1,013,384
1,500,000 Alabama State Public School & College
Authority, (Series A), 5.50% (MBIA
INS)/(Original Issue Yield: 5.85%),
9/1/2029 AAA 1,389,450
1,000,000 Alabama State Public School & College
Authority, (Series C), 5.75%, 7/1/2017 AA 986,280
1,000,000 Alabama State Public School & College
Authority, Revenue Bonds, 4.75%
(Original Issue Yield: 4.85%), 11/1/2006 Aa3 1,003,545
1,875,000 Alabama State Public School & College
Authority, Revenue Bonds, 5.00%,
11/1/2004 Aa3 1,917,439
1,000,000 Alabama State Public School & College
Authority, Revenue Refunding Bonds,
4.63% (Original Issue Yield: 4.77%),
12/1/2002 Aa3 1,009,416
1,000,000 Alabama State Public School & College
Authority, Revenue Refunding Bonds,
4.75% (Original Issue Yield: 4.87%),
12/1/2003 Aa3 1,013,303
800,000 Alabama Water PCA, (Series A) Revenue
Bonds, 4.75% (AMBAC INS), 8/15/2010 AAA 770,488
</TABLE>
SOUTHTRUST ALABAMA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(1) Value
---------- --------------------------------------- --------- -----------
<C> <S> <C> <C>
$1,000,000 Alabama Water PCA, (Series A) Revenue
Bonds, 4.75% (AMBAC INS), 8/15/2011 AAA $ 956,372
1,000,000 Alabama Water PCA, (Series A) Revenue
Bonds, 5.00% (AMBAC INS), 8/15/2004 AAA 1,021,281
1,000,000 Alabama Water PCA, Revenue Refunding
Bonds, 4.75% (AMBAC INS), 8/15/2005 AAA 1,002,444
1,020,000 Alabama Water PCA, Revenue Refunding
Bonds, 4.75% (AMBAC INS), 8/15/2006 AAA 1,017,003
500,000 Albertville, AL, GO Unlimited Warrants,
4.50% (MBIA INS)/(Original Issue Yield:
4.50%), 2/1/2006 AAA 489,301
500,000 Anniston, AL, Regional Medical Center
Board, (Series A) Revenue Bonds, 4.80%
(AMBAC INS)/(Original Issue Yield:
4.90%), 6/1/2010 AAA 485,831
500,000 Auburn, AL, GO Unlimited Warrants,
4.75%, 12/1/2008 A+ 484,548
500,000 Auburn, AL, GO Unlimited Warrants,
4.80%, 12/1/2009 A+ 485,193
500,000 Bessemer, AL, Governmental Utility
Services Corporation Water Supply,
Revenue Bonds, 4.55% (MBIA
INS)/(Original Issue Yield: 4.65%),
6/1/2007 AAA 488,999
500,000 Birmingham, AL, Waterworks & Sewer
Board, (Series A) Revenue Refunding
Bonds, 5.20% (Original Issue Yield:
5.30%), 1/1/2002 Aa3 510,560
105,000 Childersburg, AL, IDB, PCR Bonds, 7.40%
(Kimberly-Clark Corp.), 11/15/1999 AA 105,168
</TABLE>
SOUTHTRUST ALABAMA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(1) Value
---------- --------------------------------------- --------- -----------
<C> <S> <C> <C>
$1,000,000 DCH Health Care Authority, AL, Revenue
Refunding Bonds, 4.50% (MBIA
INS)/(Original Issue Yield: 4.55%),
6/1/2007 AAA $ 981,067 500,000 DCH Health Care Authority, AL,
Revenue Refunding Bonds, 5.00% (MBIA
INS),
6/1/2002 AAA 509,083
165,000 Hartselle, AL, Medical Clinic Board,
Revenue Bonds, 6.25% (Hospital
Corporation America), 10/1/2002 NR 165,864
750,000 Huntsville, AL, Health Care Authority,
Revenue Refunding Bonds (Series A), 5.00% (MBIA INS)/(Original Issue
Yield:
5.05%), 6/1/2009 AAA 747,143
1,000,000 Huntsville, AL, Water Systems, Revenue
Refunding Bonds, 4.63%, 11/1/2006 AA 992,914
500,000 Jefferson County, AL, Board of
Education, Refunding Warrants (Series
A), 4.50% (FSA INS), 2/15/2004 AAA 500,744
1,000,000 Jefferson County, AL, Board of
Education, Refunding Warrants (Series
A), 4.50% (FSA INS), 2/15/2003 AAA 1,004,195
1,000,000 Jefferson County, AL, Board of Education, School Improvements, 5.35%
(AMBAC INS)/(Original Issue Yield:
5.35%), 2/15/2008 AAA 1,043,740
1,500,000 Jefferson County, AL, Sewer Revenue
Bonds (Series D), 5.75% (Original Issue
Yield: 5.83%), 2/1/2027 AAA 1,444,950
1,000,000 Jefferson County, AL, Sewer Revenue
Refunding Bonds, 5.50% (MBIA
INS)/(Original Issue Yield: 5.60%),
9/1/2005 AAA 1,051,206
</TABLE>
SOUTHTRUST ALABAMA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(1) Value
---------- ---------------------------------------- --------- -----------
<C> <S> <C> <C>
$1,000,000 Jefferson County, AL, GO Unlimited
Warrants, 5.00% (Original Issue Yield:
5.05%), 4/1/2003 AA- $ 1,019,471
1,500,000 Jefferson County, AL, GO Unlimited
Warrants, 5.25% (Original Issue Yield:
5.45%), 4/1/2008 AA- 1,507,028
500,000 Madison County, AL, Board of Education,
Refunding Bonds (Series B), 4.63% (FSA
INS)/(Original Issue Yield: 4.65%),
3/1/2011 AAA 473,716
1,000,000 Madison, AL, GO Unlimited Warrants,
6.00% (MBIA INS)/(Original Issue Yield:
6.10%), 4/1/2023 AAA 998,070
500,000 Mobile County, AL, Board of School
Commissioners, Warrants, 4.80% (AMBAC
INS), 3/1/2002 AAA 504,924
750,000 Mobile, AL, Water & Sewer Commissioners,
Revenue Bonds, 4.80% (AMBAC
INS)/(Original Issue Yield: 4.90%),
1/1/2004 AAA 757,006
500,000 Montgomery County, AL, GO Unlimited
Warrants, 5.00%, 11/1/2001 AAA 506,751
1,000,000 Montgomery, AL, Baptist Medical Center
Special Care Facilities Finance
Authority, Revenue Refunding Bonds
(Series A), 5.20% (Baptist Medical
Center, AL)/(AMBAC INS)/(Original Issue
Yield: 5.30%), 5/1/2013 AAA 976,315
</TABLE>
SOUTHTRUST ALABAMA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(1) Value
---------- ---------------------------------------- --------- -----------
<C> <S> <C> <C>
$1,000,000 Montgomery, AL, Baptist Medical Center
Special Care Facilities Finance
Authority, Revenue Refunding Bonds
(Series A), 4.60% (Baptist Medical
Center, AL)/(AMBAC INS)/(Original Issue
Yield: 4.70%), 5/1/2009 AAA $ 967,088
600,000 Montgomery, AL, Baptist Medical Center
Special Care Facilities Finance
Authority, Revenue Refunding Bonds
(Series A), 5.00% (Baptist Medical
Center, AL)/(AMBAC INS), 5/1/2007 AAA 603,728
500,000 Montgomery, AL, GO Unlimited Warrants (Series A), 4.85% (Original
Issue Yield:
4.85%), 10/1/2004 AA 503,462
500,000 Pelham, AL, GO Unlimited Warrants, 4.60%
(AMBAC INS), 11/1/2005 AAA 494,835
500,000 Pelham, AL, GO Unlimited Warrants, 4.60%
(AMBAC INS), 11/1/2006 AAA 491,194
635,000 Pelham, AL, GO Unlimited Warrants, 4.60%
(AMBAC INS)/(Original Issue Yield:
4.65%), 11/1/2008 AAA 614,525
700,000 Pelham, AL, GO Unlimited Warrants, 4.60%
(AMBAC INS)/(Original Issue Yield:
4.70%), 11/1/2009 AAA 670,188
230,000 Pelham, AL, GO Unlimited Warrants, 4.63%
(AMBAC INS)/(Original Issue Yield:
4.80%), 11/1/2010 AAA 218,003
</TABLE>
SOUTHTRUST ALABAMA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Credit
Amount Rating(1) Value
---------- ---------------------------------------- --------- -----------
<C> <S> <C> <C>
$1,590,000 Shelby County, AL, Board of Education,
GO Limited Warrants (Series A), 4.75%
(AMBAC INS), 2/1/2009 AAA $ 1,543,521
500,000 The Board of Trustees of the University of Alabama, Revenue Bonds
(Series A), 5.25% (AMBAC INS)/(Original Issue Yield:
5.25%), 6/1/2010 AAA 501,690
500,000 The Board of Trustees of the University
of Alabama, Revenue Bonds (Series A),
5.25% (AMBAC INS), 6/1/2008 AAA 512,126
1,000,000 The Board of Trustees of the University of Alabama, Revenue
Refunding Bonds (Series C), 4.60% (Original Issue Yield:
4.70%), 10/1/2004 AA- 998,658
1,000,000 The Board of Trustees of the University of Alabama, Revenue
Refunding Bonds, 4.50% (AMBAC INS)/(Original Issue Yield:
4.60%), 6/1/2002 AAA 1,006,033
500,000 The Board of Trustees of the University of Alabama, Revenue
Refunding Bonds, 4.60% (MBIA INS)/(Original Issue Yield:
4.65%), 6/1/2008 AAA 487,856
500,000 Tuscaloosa, AL, City Board of Education, Refunding Bonds, 5.38%
(AMBAC INS),
2/15/2001 AAA 506,947
500,000 University of South Alabama, Revenue
Refunding Bonds, 4.60% (AMBAC
INS)/(Original Issue Yield: 4.70%),
11/15/2007 AAA 488,492
</TABLE>
SOUTHTRUST ALABAMA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount Credit
or Shares Rating(1) Value
---------- ---------------------------------------- --------- -----------
<C> <S> <C> <C>
$ 500,000 Walker County, AL, Public Building
Authority, Refunding Bonds, 4.20% (AMBAC
INS)/ (Original Issue Yield: 4.20%),
12/1/2002 AAA $ 497,838
-----------
TOTAL 49,788,766
-----------
PUERTO RICO--4.2%
750,000 Puerto Rico Commonwealth, Aqueduct &
Sewer Authority, Revenue Refunding
Bonds, 4.90% (Commonwealth of Puerto
Rico LOC)/(Original Issue Yield: 4.95%),
7/1/2004 A 761,522
500,000 Puerto Rico Commonwealth, GO UT, 4.50%,
7/1/2001 A 502,693
500,000 Puerto Rico, Electric Power Authority,
Revenue Bonds (Series DD), 5.00% (FSA
INS), 7/1/2009 AAA 497,693
500,000 Puerto Rico, Public Building Authority,
Revenue Bonds (Series B), 5.13% (MBIA
INS)/(Original Issue Yield: 5.40%),
7/1/2017 AAA 456,488
-----------
TOTAL 2,218,396
-----------
TOTAL LONG-TERM MUNICIPALS (identified cost
$52,707,969) 52,007,162
-----------
MUTUAL FUND--0.4%
201,883 Federated Tax-Free Obligations Fund (at
net asset value) 201,883
-----------
TOTAL INVESTMENTS (identified cost $52,909,852)(2) $52,209,045
===========
</TABLE>
SOUTHTRUST ALABAMA TAX-FREE INCOME FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Concluded)
- -------------------------------------------------------------------------------
(1) Please refer to "Investment Ratings" in the Statement of Additional
Information for an explanation of the credit ratings.
(2) The cost of investments for federal tax purposes amounts to $52,909,852. The
net unrealized depreciation of investments on a federal tax basis amounts to
$700,807 which is comprised of $254,649 appreciation and $955,456
depreciation at October 31, 1999.
Note: The categories of investments are shown as a percentage of net assets
($53,061,665) at October 31, 1999.
The following acronyms are used throughout this portfolio:
AMBAC--American Municipal Bond Assurance Corporation FGIC--Financial Guaranty
Insurance Company FSA--Financial Security Assurance GO--General Obligation
IDA--Industrial Development Authority IDB--Industrial Development Bond
INS--Insured LOC--Letter of Credit MBIA--Municipal Bond Investors Assurance
PCA--Pollution Control Authority PCR--Pollution Control Revenue UT--Unlimited
Tax
See Notes which are an integral part of the Financial Statements
SOUTHTRUST VALUE FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
---------- ---------------------------------- ------------
<C> <S> <C>
COMMON STOCKS--97.1%
BASIC MATERIALS--1.9%
215,000 Lafarge Corp. $ 6,382,813
------------
CAPITAL GOODS--9.5%
87,500 Honeywell, Inc. 9,225,781
170,000 Ingersoll-Rand Co. 8,882,500
140,300 (1)Jacobs Engineering Group, Inc. 4,980,650
85,000 United Technologies Corp. 5,142,500
259,300 (1)Wolverine Tube, Inc. 3,565,375
------------
TOTAL 31,796,806
------------
CONSUMER CYCLICAL--8.8%
245,000 Deluxe Corp. 6,921,250
225,000 (1)Jones Apparel Group, Inc. 7,115,625
245,000 Masco Corp. 7,472,500
150,000 (1)School Specialty, Inc. 2,221,875
250,000 Sherwin-Williams Co. 5,593,750
------------
TOTAL 29,325,000
------------
CONSUMER STAPLES--5.6%
279,300 Dial Corp. 6,528,638
155,000 PepsiCo, Inc. 5,376,563
250,000 Sara Lee Corp. 6,765,625
------------
TOTAL 18,670,826
------------
ENERGY--8.8%
155,000 Coastal Corp. 6,529,375
195,000 Conoco, Inc., Class B 5,289,375
185,000 Halliburton Co. 6,972,187
200,000 Transocean Offshore, Inc. 5,437,500
180,000 USX-Marathon Group 5,242,500
------------
TOTAL 29,470,937
------------
FINANCE--16.3%
180,000 Ace, Ltd. 3,498,750
110,000 Ambac Financial Group, Inc. 6,572,500
67,500 American International Group, Inc. 6,948,281
97,000 Bank of America Corp 6,244,375
170,000 Bank of New York Co., Inc. 7,118,750
</TABLE>
SOUTHTRUST VALUE FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
--------- ------------------------------------- ------------
<C> <S> <C>
85,000 Chase Manhattan Corp. $ 7,426,875
119,000 Federal National Mortgage Association 8,419,250
115,000 SunTrust Banks, Inc. 8,416,562
------------
TOTAL 54,645,343
------------
HEALTH CARE--11.3%
120,000 Abbott Laboratories 4,845,000
65,000 Aetna, Inc. 3,266,250
98,000 Bristol-Myers Squibb Co. 7,527,625
600,000 (1)HEALTHSOUTH, Corp. 3,450,000
62,500 Johnson & Johnson 6,546,875
110,000 Merck & Co., Inc. 8,751,875
170,000 (1)Tenet Healthcare Corp. 3,304,375
------------
TOTAL 37,692,000
------------
MISCELLANEOUS--1.2%
363,500 (1)Modis Professional Services, Inc. 4,066,656
------------
RETAIL--5.1%
115,000 (1)Federated Department Stores, Inc. 4,909,063
110,000 Lowe's Cos., Inc. 6,050,000
495,000 (1)Office Depot, Inc. 6,156,562
------------
TOTAL 17,115,625
------------
TECHNOLOGY--21.2%
92,500 (1)ADC Telecommunications, Inc. 4,411,094
100,000 (1)Computer Sciences Corp. 6,868,750
145,000 Diebold, Inc. 3,806,250
145,000 First Data Corp. 6,624,688
225,000 Harris Corp. 5,048,438
64,000 Hewlett-Packard Co. 4,740,000
93,000 Intel Corp. 7,201,688
80,000 International Business Machines Corp. 7,870,000
110,000 (1)Sun Microsystems, Inc. 11,639,374
215,000 (1)SunGuard Data Systems, Inc. 5,254,063
155,000 (1)Symantec Corp. 7,401,250
------------
TOTAL 70,865,595
------------
</TABLE>
SOUTHTRUST VALUE FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Concluded)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
--------- --------------------------------------------- ------------
<C> <S> <C>
TELECOMMUNICATION
SERVICES--7.4%
120,000 AT&T Corp. $ 5,610,000
138,000 GTE Corp. 10,350,000
119,600 Sprint Corp. 8,887,774
------------
TOTAL 24,847,774
------------
TOTAL COMMON STOCKS
(identified cost $246,234,786) 324,879,375
------------
MUTUAL FUND--1.6%
5,190,691 AIM Short-Term Investment Co. Prime Portfolio
(at net asset value) 5,190,691
------------
TOTAL INVESTMENTS
(identified cost $251,425,477)(2) $330,070,066
============
</TABLE>
- -----------
(1) Non-income producing security.
(2) The cost of investments for federal tax purposes amounts to $251,425,477.
The net unrealized appreciation of investments on a federal tax basis
amounts to $78,644,589 which is comprised of $96,457,274 appreciation and
$17,812,685 depreciation at October 31, 1999.
Note: The categories of investments are shown as a percentage of net assets
($334,650,099) at October 31, 1999.
See Notes which are an integral part of the Financial Statements
SOUTHTRUST GROWTH FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------- ------------------------------------- -----------
<C> <S> <C>
Common Stocks--98.6%
CONSUMER NON-DURABLES--12.0%
13,000 Anheuser-Busch Cos., Inc. $ 933,563
14,000 BestFoods 822,500
18,000 Coca-Cola Co. 1,062,000
35,500 Dial Corp. 829,813
23,500 Gillette Co. 850,406
30,000 PepsiCo, Inc. 1,040,625
32,000 Philip Morris Cos., Inc. 806,000
15,000 Procter & Gamble Co. 1,573,125
37,800 Sara Lee Corp. 1,022,962
-----------
TOTAL 8,940,994
-----------
CONSUMER SERVICES--2.0%
20,000 McDonald's Corp. 825,000
26,100 The Walt Disney Co. 688,388
-----------
TOTAL 1,513,388
-----------
ELECTRONIC TECHNOLOGY--16.2%
21,000 Hewlett-Packard Co. 1,555,313
34,400 Intel Corp. 2,663,850
27,500 International Business Machines Corp. 2,705,313
12,200 Motorola, Inc. 1,188,738
38,000 (1)Sun Microsystems, Inc. 4,020,874
-----------
TOTAL 12,134,088
-----------
ENERGY MINERALS--0.5%
4,500 Exxon Corp. 333,280
-----------
FINANCE--17.9%
29,651 American International Group, Inc. 3,052,200
17,000 Bank of America Corp 1,094,375
48,400 Bank of New York Co., Inc. 2,026,750
9,000 Chase Manhattan Corp. 786,375
16,850 Chubb Corp. 924,644
26,100 Fannie Mae 1,846,574
22,500 Providian Financial Corp. 2,452,500
16,600 SunTrust Banks, Inc. 1,214,913
-----------
TOTAL 13,398,331
-----------
</TABLE>
SOUTHTRUST GROWTH FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------- ----------------------------- -----------
<C> <S> <C>
HEALTH TECHNOLOGY--11.4%
36,500 Abbott Laboratories $ 1,473,688
40,000 Bristol-Myers Squibb Co. 3,072,500
8,500 Johnson & Johnson 890,375
21,500 Merck & Co., Inc. 1,710,593
34,200 Pfizer, Inc. 1,350,900
-----------
TOTAL 8,498,056
-----------
INDUSTRIAL SERVICES--1.4%
28,500 Halliburton Co. 1,074,093
-----------
PROCESS INDUSTRIES--1.0%
34,500 Sherwin-Williams Co. 771,938
-----------
PRODUCER MANUFACTURING--9.0%
12,000 AlliedSignal, Inc. 683,250
12,500 Caterpillar, Inc. 690,625
18,975 General Electric Co. 2,572,297
3,600 Honeywell, Inc. 379,575
8,400 Illinois Tool Works, Inc. 615,300
16,900 Ingersoll-Rand Co. 883,025
30,000 Masco Corp. 915,000
-----------
TOTAL 6,739,072
-----------
RETAIL TRADE--11.1%
43,000 Home Depot, Inc. 3,246,500
40,000 (1)Staples, Inc. 887,500
57,000 Wal-Mart Stores, Inc. 3,231,188
37,000 Walgreen Co. 931,938
-----------
TOTAL 8,297,126
-----------
TECHNOLOGY SERVICES--4.0%
14,000 (1)Computer Sciences Corp. 961,625
10,000 Electronic Data Systems Corp. 585,000
8,700 First Data Corp. 397,481
11,500 (1)Microsoft Corp. 1,064,469
-----------
TOTAL 3,008,575
-----------
UTILITIES--12.1%
16,500 AT&T Corp. 771,375
56,000 Coastal Corp. 2,359,000
</TABLE>
SOUTHTRUST GROWTH FUND
PORTFOLIO OF INVESTMENTS
October 31, 1999 (Unaudited) (Concluded)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Value
-------- --------------------------------------------- -----------
<C> <S> <C>
24,700 GTE Corp. $ 1,852,500
10,000 (1)MCI Worldcom, Inc. 858,125
17,634 SBC Communications, Inc. 898,232
30,600 Sprint Corp. 2,273,964
-----------
TOTAL 9,013,196
-----------
TOTAL COMMON STOCKS
(identified cost $37,823,010) 73,722,137
-----------
MUTUAL FUND--1.3%
995,813 AIM Short-Term Investment Co. Prime Portfolio
(at net asset value) 995,813
-----------
TOTAL INVESTMENTS
(identified cost $38,818,823)(2) $74,717,950
===========
</TABLE>
- -----------
(1) Non-income producing security.
(2) The cost of investments for federal tax purposes amounts to $38,818,823. The
net unrealized appreciation of investments on a federal tax basis amounts to
$35,899,127 which is comprised of $36,846,090 appreciation and $946,963
depreciation at October 31, 1999.
Note: The categories of investments are shown as a percentage of net assets
($74,769,282) at October 31, 1999.
See Notes which are an integral part of the Financial Statements
SOUTHTRUST FUNDS
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S.
Treasury
Money Market Income Bond
Fund Fund Fund
------------ ----------- ------------
<S> <C> <C> <C>
Assets:
Investments in repurchase
agreements..................... $546,495,000 $ -- $ --
Investments in securities........ 174,584,343 59,518,560 119,689,533
------------ ----------- ------------
Total investments in securities,
at value....................... $721,079,343 $59,518,560 $119,689,533
------------ ----------- ------------
Short-term investments held as
collateral for securities
lending........................ -- -- 38,174,623
Cash............................. 150 50 --
Income receivable................ 2,073,528 826,802 1,993,614
Receivable for investments sold.. -- 2,024,354 --
Receivable for shares sold....... -- -- 2,728
Deferred organizational costs.... -- 3,976 --
------------ ----------- ------------
Total assets..................... 723,153,021 62,373,742 159,860,498
------------ ----------- ------------
Liabilities:
Payable for investments
purchased...................... -- 998,824 --
Payable for shares redeemed...... -- 56 --
Payable to Bank.................. -- -- --
Payable on collateral to broker.. -- -- 38,174,623
Income distribution payable...... 2,871,267 -- --
Accrued expenses................. 104,247 23,393 26,669
------------ ----------- ------------
Total liabilities................ 2,975,514 1,022,273 38,201,292
------------ ----------- ------------
Net Assets Consist of:
Paid in capital.................. 720,177,507 64,186,517 125,268,097
Net unrealized appreciation
(depreciation) of investments.. -- (1,074,495)(1) (2,768,493)
Accumulated net realized gain
(loss) on investments.......... -- (1,793,961) (1,019,357)
Undistributed net investment
income......................... -- 33,408 178,959
------------ ----------- ------------
Total Net Assets................. $720,177,507 $61,351,469 $121,659,206
------------ ----------- ------------
Shares Outstanding............... 720,177,507 6,423,121 12,376,840
------------ ----------- ------------
Net Asset Value Per Share:
(Net Assets/Shares
Outstanding)................... $ 1.00 $ 9.55 $ 9.83
------------ ----------- ------------
Offering Price Per Share(3)...... -- $ 9.90(4) $ 10.19(4)
------------ ----------- ------------
Redemption Proceeds Per Share(3). -- $ 9.45(6) $ 9.73(6)
------------ ----------- ------------
Investments, at identified cost.. -- 60,593,055 122,458,026
------------ ----------- ------------
Investments, at tax cost......... -- 60,593,055 122,458,026
============ =========== ============
</TABLE>
See Notes which are an integral part of the Financial Statements
SOUTHTRUST FUNDS
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999 (Unaudited) (Concluded)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Alabama
Tax-Free Value Growth
Income Fund Fund Fund
----------- ------------ -----------
<S> <C> <C> <C>
Assets:
Investments in repurchase
agreements..................... $ -- $ -- $ --
Investments in securities........ 52,209,045 330,070,066 74,717,950
----------- ------------ -----------
Total investments in securities,
at value....................... $52,209,045 $330,070,066 $74,717,950
----------- ------------ -----------
Short-term investments held as
collateral for securities
lending........................ -- -- --
Cash............................. 9,235 -- 44,561
Income receivable................ 861,556 261,481 63,916
Receivable for investments sold.. -- 8,493,989 --
Receivable for shares sold....... -- 20,970 100
Deferred organizational costs.... -- -- --
----------- ------------ -----------
Total assets..................... 53,079,836 338,846,506 74,826,527
----------- ------------ -----------
Liabilities:
Payable for investments
purchased...................... -- 3,242,961 --
Payable for shares redeemed...... -- 5,653 --
Payable to Bank.................. -- 892,122 --
Payable on collateral to broker.. -- -- --
Income distribution payable...... -- -- --
Accrued expenses................. 18,171 55,671 57,245
----------- ------------ -----------
Total liabilities................ 18,171 4,196,407 57,245
----------- ------------ -----------
Net Assets Consist of:
Paid in capital.................. 53,802,568 237,023,563 36,990,143
Net unrealized appreciation
(depreciation) of investments.. (700,807)(1) 78,644,589 35,899,127(2)
Accumulated net realized gain
(loss) on investments.......... (89,761) 18,874,774 1,867,870
Undistributed net investment
income......................... 49,665 107,173 12,142
----------- ------------ -----------
Total Net Assets................. $53,061,665 $334,650,099 $74,769,282
----------- ------------ -----------
Shares Outstanding............... 5,309,163 19,611,384 7,171,228
----------- ------------ -----------
Net Asset Value Per Share:
(Net Assets/Shares Outstanding). $ 9.99 $ 17.06 $ 10.43
----------- ------------ -----------
Offering Price Per Share(3)...... $ 10.35(4) $ 17.86(5) $ 10.92(5)
----------- ------------ -----------
Redemption Proceeds Per Share(3). $ 9.89(6) $ 16.89(6) $ 10.33(6)
----------- ------------ -----------
Investments, at identified cost.. 52,909,852 251,425,477 38,818,823
----------- ------------ -----------
Investments, at tax cost......... 52,909,852 251,425,477 38,818,823
=========== ============ ===========
</TABLE>
- -----------
(1) Includes $(14,647) and $(744,116), respectively, of unrealized depreciation
at August 20, 1999, related to the tax-free transfer of assets from the
Common Trust Funds managed by the Adviser.
(2) Includes $24,978,778 and $9,888,439, respectively, of unrealized
appreciation at August 20, 1999 and August 27, 1999, related to the tax-free
transfer of assets from the Common Trust Funds managed by the Adviser.
(3) See "What Do Shares Cost?" in the prospectus. (4) Computation of offering
price: 100/96.5 of net asset value. (5) Computation of offering price: 100/95.5
of net asset value. (6) Computation of redemption proceeds: 99/100 of net asset
value.
See Notes which are an integral part of the Financial Statements
SOUTHTRUST FUNDS
STATEMENT OF OPERATIONS
Six Months Ended October 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S.
Treasury Alabama
Money Market Income Bond Tax-Free
Fund Fund Fund Income Fund(1)
------------ ----------- ----------- --------------
<S> <C> <C> <C> <C>
Investment Income:
Dividends............... $ -- $ 33,075 $ -- $ --
Interest................ 17,811,180 1,920,107 4,182,303 487,568
----------- ----------- ----------- --------
Total income............ 17,811,180 1,953,182 4,182,303 487,568
----------- ----------- ----------- --------
Expenses:
Investment advisory fee. 1,783,627 173,116 383,252 63,731
Administrative personnel
and services fee...... 369,841 50,410 66,258 10,858
Custodian fees.......... 30,405 2,885 6,388 1,182
Transfer and dividend
disbursing agent fees
and expenses.......... 1,093 9,960 5,839 6,690
Directors'/Trustees'
fees.................. 9,262 575 2,393 412
Auditing fees........... 6,666 6,775 7,834 2,611
Legal fees.............. 3,703 1,205 3,169 1,099
Portfolio accounting
fees.................. 42,551 20,469 22,409 8,305
Shareholder services
fee................... 407,444 34,161 70,212 26,554
Share registration
costs................. 17,005 6,287 6,987 8,630
Printing and postage.... 4,059 3,015 3,586 2,338
Insurance premiums...... 935 365 696 826
Miscellaneous........... 6,040 8,725 6,175 1,378
----------- ----------- ----------- --------
Total expenses.......... 2,682,631 317,948 585,198 134,614
----------- ----------- ----------- --------
Waivers--
Waiver of investment
advisory fee.......... (677,778) (86,558) -- (42,487)
Waiver of shareholder
services fee.......... (325,955) (27,329) (56,170) (21,244)
Waiver of administrative
personnel and services
fee................... -- (20,480) -- --
----------- ----------- ----------- --------
Total waivers........... (1,003,733) (134,367) (56,170) (63,731)
----------- ----------- ----------- --------
Net expenses............ 1,678,898 183,581 529,028 70,883
----------- ----------- ----------- --------
Net investment income.. 16,132,282 1,769,601 3,653,275 416,685
----------- ----------- ----------- --------
Realized and Unrealized
Gain
(Loss) on Investments:
Net realized gain (loss)
on investments........ -- (272,524) (687,011) (89,761)
Change in unrealized
appreciation
(depreciation) of
investments........... -- (1,094,150) (4,641,282) 43,309
----------- ----------- ----------- --------
Net realized and
unrealized gain (loss)
on investments........ -- (1,366,674) (5,328,293) (46,452)
----------- ----------- ----------- --------
Change in net assets
resulting
from operations....... $16,132,282 $ 402,927 $(1,675,018) $370,233
=========== =========== =========== ========
</TABLE>
- -----------
(1) Reflects operations for the period from August 20, 1999 (date of initial
public investment) to October 31, 1999.
See Notes which are an integral part of the Financial Statements
SOUTHTRUST FUNDS
STATEMENT OF OPERATIONS
Period Ended October 31, 1999 (Unaudited) (Concluded)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value Growth
Fund Fund(1)
------------ ----------
<S> <C> <C>
Investment Income:
Dividends........................................... $ 2,238,380 $ 157,687
Interest............................................ 209,497 6,883
------------ ----------
Total income........................................ 2,447,877 164,570
------------ ----------
Expenses:
Investment advisory fee............................. 1,386,562 96,511
Administrative personnel and services fee........... 191,871 13,156
Custodian fees...................................... 18,488 1,446
Transfer and dividend disbursing agent fees and
expenses.......................................... 3,163 7,051
Directors'/Trustees' fees........................... 5,733 435
Auditing fees....................................... 7,077 2,757
Legal fees.......................................... 2,219 1,161
Portfolio accounting fees........................... 32,323 8,858
Shareholder services fee............................ 191,995 32,170
Share registration costs............................ 7,268 9,832
Printing and postage................................ 3,200 2,465
Insurance premiums.................................. 2,120 869
Miscellaneous....................................... 7,136 1,453
------------ ----------
Total expenses...................................... 1,859,155 178,164
------------ ----------
Waivers--
Waiver of investment advisory fee................... -- --
Waiver of shareholder services fee.................. (153,596) (25,736)
Waiver of administrative personnel and services fee. -- --
------------ ----------
Total waivers....................................... (153,596) (25,736)
------------ ----------
Net expenses........................................ 1,705,559 152,428
------------ ----------
Net investment income.............................. 742,318 12,142
------------ ----------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) on investments............. 18,991,207 1,867,870
Change in unrealized appreciation (depreciation) of
investments....................................... (24,946,982) 1,031,910
------------ ----------
Net realized and unrealized gain (loss) on
investments....................................... (5,955,775) 2,899,780
------------ ----------
Change in net assets resulting from operations..... $ (5,213,457) $2,911,922
============ ==========
</TABLE>
- -----------
(1) Reflects operations for the period from August 20, 1999 (date of initial
public investment) to October 31, 1999.
See Notes which are an integral part of the Financial Statements
SOUTHTRUST FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. Treasury Income
Money Market Fund Fund
------------------------------ -------------------------
Six Months Six Months
Ended Ended
(unaudited) Year Ended (unaudited) Year Ended
October 31, April 30, October 31, April 30,
1999 1999 1999 1999
------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
Increase (Decrease) in
Net Assets:
Operations--
Net investment income.. $ 16,132,282 $ 29,303,763 $ 1,769,601 $ 2,624,430
Net realized gain
(loss) on
investments.......... -- -- (272,524) 113,077
Net change in
unrealized
appreciation
(depreciation)
of investments....... -- -- (1,094,150) (386,729)
------------- --------------- ----------- ------------
Change in net assets
resulting
from operations...... 16,132,282 29,303,763 402,927 2,350,778
------------- --------------- ----------- ------------
Distributions to
Shareholders--
Distributions from net
investment income.... (16,132,282) (29,303,763) (1,772,458) (2,625,125)
Distributions from net
realized gain on
investment
transactions......... -- -- -- --
------------- --------------- ----------- ------------
Change in net assets
from distributions to
shareholders......... (16,132,282) (29,303,763) (1,772,458) (2,625,125)
------------- --------------- ----------- ------------
Share Transactions--
Proceeds from sale of
shares............... 801,128,323 2,420,255,869 11,135,480 27,055,242
Proceeds from shares
issued in connection
with the tax-free
transfer of assets
from the Common Trust
Funds................ -- -- 6,361,767 --
Net asset value of
shares issued
to shareholders in
payment
of distributions
declared............. 6,236,978 2,316,665 795,517 1,107
Cost of shares
redeemed............. (774,871,236) (2,366,757,874) (8,017,270) (14,305,452)
------------- --------------- ----------- ------------
Change in net assets
resulting from share
transactions......... 32,494,065 55,814,660 10,275,494 12,750,897
------------- --------------- ----------- ------------
Change in net assets... 32,494,065 55,814,660 8,905,963 12,476,550
Net Assets:
Beginning of period.... 687,683,442 631,868,782 52,445,506 39,968,956
------------- --------------- ----------- ------------
End of period.......... $ 720,177,507 $ 687,683,442 $61,351,469 $ 52,445,506
------------- --------------- ----------- ------------
Undistributed net
investment income
included in net
assets at the end of
the period........... $ -- $ -- $ 33,408 $ 36,265
============= =============== =========== ============
Net gain (loss) as
computed for federal
tax purposes......... $ -- $ -- $ (272,524) $ --
============= =============== =========== ============
</TABLE>
See Notes which are an integral part of the Financial Statements
SOUTHTRUST FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
(Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Alabama
Bond Tax-Free
Fund Income Fund
-------------------------- -----------
Six Months Period
Ended Ended
(unaudited) Year Ended (unaudited)
October 31, April 30, October 31,
1999 1999 1999(1)
------------ ------------ -----------
<S> <C> <C> <C>
Increase (Decrease) in Net Assets:
Operations--
Net investment income................ $ 3,653,275 $ 6,543,440 $ 416,685
Net realized gain (loss) on
investments........................ (687,011) 1,552,929 (89,761)
Net change in unrealized appreciation
(depreciation) of investments...... (4,641,282) (1,619,125) 43,309
------------ ------------ -----------
Change in net assets resulting from
operations......................... (1,675,018) 6,477,244 370,233
------------ ------------ -----------
Distributions to Shareholders--
Distributions from net investment
income............................. (3,556,976) (6,596,944) (367,020)
Distributions from net realized gain
on investment transactions......... -- (2,103,163) --
------------ ------------ -----------
Change in net assets from
distributions to shareholders...... (3,556,976) (8,700,107) (367,020)
------------ ------------ -----------
Share Transactions--
Proceeds from sale of shares......... 10,238,837 37,707,215 2,153,547
Proceeds from shares issued in
connection with the tax-free
transfer of assets from the Common
Trust Funds........................ -- -- 57,200,317
Net asset value of shares issued to
shareholders
in payment of distributions
declared........................... 2,919,149 36,387 2,846
Cost of shares redeemed.............. (16,162,360) (20,275,478) (6,298,258)
------------ ------------ -----------
Change in net assets resulting from
share transactions................. (3,004,374) 17,468,124 53,058,452
------------ ------------ -----------
Change in net assets................. (8,236,368) 15,245,261 53,061,665
Net Assets:
Beginning of period.................. 129,895,574 114,650,313 --
------------ ------------ -----------
End of period........................ $121,659,206 $129,895,574 $53,061,665
------------ ------------ -----------
Undistributed net investment income
included
in net assets at the end of the
period............................. $ 178,959 $ 82,523 $ 49,665
============ ============ ===========
Net gain (loss) as computed for
federal tax purposes............... $ (687,011) $ 1,866,223 $ (89,761)
============ ============ ===========
</TABLE>
- -----------
(1) Reflects operations for the period from August 20, 1999 (date of initial
public investment) to October 31, 1999.
See Notes which are an integral part of the Financial Statements
SOUTHTRUST FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
(Concluded)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value Growth
Fund Fund
-------------------------- -----------
Six Months Period
Ended Ended
(unaudited) Year Ended (unaudited)
October 31, April 30, October 31,
1999 1999 1999(1)
------------ ------------ -----------
<S> <C> <C> <C>
Increase (Decrease) in Net Assets:
Operations--
Net investment income................ $ 742,318 $ 1,761,228 $ 12,142
Net realized gain on investments..... 18,991,207 12,149,054 1,867,870
Net change in unrealized appreciation
(depreciation) of investments...... (24,946,982) 258,129 1,031,910
------------ ------------ -----------
Change in net assets resulting from
operations......................... (5,213,457) 14,168,411 2,911,922
------------ ------------ -----------
Distributions to Shareholders--
Distributions from net investment
income............................. (711,653) (1,741,817) --
Distributions from net realized gain
on investment transactions......... (12,143,371) (34,486,631) --
------------ ------------ -----------
Change in net assets from
distributions to shareholders...... (12,855,024) (36,228,448) --
------------ ------------ -----------
Share Transactions--
Proceeds from sale of shares......... 6,300,632 45,298,138 2,520,202
Proceeds from shares issued in
connection with the tax-free
transfer of assets from
the Common Trust Funds............. -- -- 70,325,290
Net asset value of shares issued to
shareholders in payment of
distributions declared............. 11,277,132 31,652,987 --
Cost of shares redeemed.............. (53,590,467) (79,016,339) (988,132)
------------ ------------ -----------
Change in net assets resulting from
share transactions................. (36,012,703) (2,065,214) 71,857,360
------------ ------------ -----------
Change in net assets................. (54,081,184) (24,125,251) 74,769,282
Net Assets:
Beginning of period.................. 388,731,283 412,856,534 --
------------ ------------ -----------
End of period........................ $334,650,099 $388,731,283 $74,769,282
------------ ------------ -----------
Undistributed net investment income
included in net assets at the end
of the period...................... $ 107,173 $ 76,905 $ 12,142
============ ============ ===========
Net gain as computed for federal tax
purposes........................... $ 18,991,207 $ 12,144,199 $ 1,867,870
============ ============ ===========
</TABLE>
- -----------
(1) Reflects operations for the period from August 20, 1999 (date of initial
public investment) to October 31, 1999.
See Notes which are an integral part of the Financial Statements
[This Page Intentionally Left Blank]
SOUTHTRUST FUNDS
FINANCIAL HIGHLIGHTS
- -------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Distributions
Net asset Net realized Distributions from net
Year value, Net and unrealized Total from from net realized
Ended beginning investment gain (loss) on investment investment gain on
April 30, of period income investments operations income investments
- --------- --------- ---------- -------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
U.S.Treasury
Money Market Fund
1995 $ 1.00 0.05 -- 0.05 (0.05) --
1996 $ 1.00 0.05 -- 0.05 (0.05) --
1997 $ 1.00 0.05 -- 0.05 (0.05) --
1998 $ 1.00 0.05 -- 0.05 (0.05) --
1999 $ 1.00 0.05 -- 0.05 (0.05) --
1999(3) $ 1.00 0.02 -- 0.02 (0.02) --
Income Fund
1996(5) $10.00 0.16 (0.25) (0.09) (0.14) --
1997 $ 9.77 0.56 (0.09) 0.47 (0.56) --
1998 $ 9.68 0.58 0.13 0.71 (0.58) --
1999 $ 9.81 0.57 (0.03) 0.54 (0.57) --
1999(3) $ 9.78 0.29 (0.23) 0.06 (0.29) --
Bond Fund
1995 $10.04 0.61 (0.09) 0.52 (0.61) --
1996 $ 9.95 0.59 0.03 0.62 (0.56) --
1997 $10.01 0.61 (0.03) 0.58 (0.64) --
1998 $ 9.95 0.60 0.45 1.05 (0.60) --
1999 $10.40 0.55 0.02 0.57 (0.56) (0.18)
1999(3) $10.24 0.29 (0.42) (0.13) (0.28) --
Alabama Tax-Free
Fund
1999(6) $10.00 0.08 (0.02) 0.06 (0.07) --
Value Fund
1995 $10.08 0.20 1.43 1.63 (0.20) --
1996 $11.51 0.23 3.33 3.56 (0.23) (0.44)
1997 $14.40 0.20 2.59 2.79 (0.21) (1.17)
1998 $15.81 0.15 5.26 5.41 (0.15) (2.02)
1999 $19.05 0.08 0.43 0.51 (0.08) (1.58)
1999(3) $17.90 0.04 (0.28) (0.24) (0.03) (0.57)
Growth Fund
1999(6) $10.00 0.00(7) 0.43 0.43 -- --
</TABLE>
- -----------
(1) Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
(2) During the period, certain fees were voluntarily waived. If such voluntary
waivers had not occurred, the ratios would have been as indicated.
(3) Six months ended October 31, 1999 (unaudited). (4) Computed on an annualized
basis. (5) Reflects operations for the period from January 10, 1996 (date of
initial
public investment) to April 30, 1996.
(6) Reflects operations for the period from August 20, 1999 (date of initial
public investment) to October 31, 1999 (unaudited).
(7) Less than $0.01 per share.
SOUTHTRUST FUNDS
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(For a share outstanding throughout each period)
<TABLE>
<CAPTION>
Ratios to average net assets
--------------------------------------------
Net Net
Net invest- assets Port-
asset Net ment end of folio
value, invest- Expenses income period turn-
Total end of Total ment (after (after (000 over
distributions period return(1) Expenses(2) income(2) waivers) waivers) omitted) rate
- ------------- ------ --------- ----------- --------- -------- -------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(0.05) $ 1.00 4.62% 0.73% 4.26% 0.43% 4.56% $314,200 --
(0.05) $ 1.00 5.26% 0.70% 4.89% 0.48% 5.11% $445,729 --
(0.05) $ 1.00 4.88% 0.71% 4.58% 0.51% 4.78% $524,462 --
(0.05) $ 1.00 5.14% 0.67% 4.84% 0.48% 5.03% $631,869 --
(0.05) $ 1.00 4.77% 0.64% 4.46% 0.45% 4.65% $687,683 --
(0.02) $ 1.00 2.29% 0.75%(4) 4.24%(4) 0.47%(4) 4.52%(4) $720,178 --
(0.14) $ 9.77 (0.93)% 0.90%(4) 5.25%(4) 0.85%(4) 5.30%(4) $ 78,147 61%
(0.56) $ 9.68 4.90% 1.24% 5.27% 0.92% 5.59% $ 38,598 112%
(0.58) $ 9.81 7.46% 1.19% 5.42% 0.75% 5.86% $ 39,969 112%
(0.57) $ 9.78 5.58% 1.16% 5.35% 0.75% 5.76% $ 52,446 48%
(0.29) $ 9.55 0.65% 1.10%(4) 5.68%(4) 0.64%(4) 6.14%(4) $ 61,351 44%
(0.61) $ 9.95 5.41% 1.03% 6.01% 0.75% 6.29% $ 76,409 48%
(0.56) $10.01 6.78% 0.95% 6.20% 0.87% 6.28% $ 83,257 28%
(0.64) $ 9.95 5.98% 0.91% 6.13% 0.86% 6.18% $ 91,185 63%
(0.60) $10.40 10.80% 0.85% 5.87% 0.84% 5.88% $114,650 107%
(0.74) $10.24 5.54% 0.84% 5.26% 0.84% 5.26% $129,897 119%
(0.28) $ 9.83 (1.27)% 0.92%(4) 5.63%(4) 0.83%(4) 5.72%(4) $121,659 43%
(0.07) $ 9.99 0.57% 1.27%(4) 3.32%(4) 0.67%(4) 3.92%(4) $ 53,062 14%
(0.20) $11.51 16.36% 1.13% 1.56% 0.74% 1.95% $138,281 57%
(0.67) $14.40 31.51% 0.98% 1.64% 0.87% 1.75% $204,421 39%
(1.38) $15.81 19.99% 0.97% 1.30% 0.94% 1.33% $272,665 27%
(2.17) $19.05 36.39% 0.94% 0.77% 0.94% 0.77% $412,857 75%
(1.66) $17.90 5.17% 0.91% 0.48% 0.91% 0.48% $388,731 45%
(0.60) $17.06 (1.46)% 1.01%(4) 0.31%(4) 0.92%(4) 0.40%(4) $334,650 20%
-- $10.43 4.30% 1.38%(4) (0.11)%(4) 1.18%(4) 0.09%(4) $ 74,769 9%
</TABLE>
SOUTHTRUST FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
October 31, 1999 (Unaudited)
- -------------------------------------------------------------------------------
(1) Organization
SouthTrust Funds (the "Company"), (formerly, SouthTrust Vulcan Funds) is
registered under the Investment Company Act of 1940, as amended (the "Act"), as
an open-end management investment company. The Company consists of six
portfolios (individually referred to as the "Fund", or collectively as the
"Funds") which are presented herein:
<TABLE>
<CAPTION>
Portfolio Name Diversification Investment Objective
------------------- --------------- ----------------------------------------
<C> <C> <S>
U.S. Treasury Money Diversified To provide as high a level of current
Market Fund ("U.S. income as is consistent with maintaining
Treasury") liquidity and stability of principal.
(formerly, Treasury
Obligations Money
Market Fund)
- ------------------------------------------------------------------------------
Income Fund Diversified To provide current income.
("Income")
- ------------------------------------------------------------------------------
Bond Fund ("Bond") Diversified To provide a
level of total return consistent with a
portfolio of high-quality debt securities.
- ------------------------------------------------------------------------------
Alabama Tax-Free Non- To provide current income exempt from Income Fund
diversified federal income tax and the income tax ("Alabama imposed by the
State of Alabama.
Tax-Free")
- ------------------------------------------------------------------------------
Value Fund Diversified To provide long-term capital
("Value") appreciation, with income a secondary
(formerly, Core consideration.
Equity Fund)
- ------------------------------------------------------------------------------
Growth Fund Diversified To provide capital appreciation.
("Growth")
</TABLE>
The assets of each portfolio are segregated and a shareholder's interest is
limited to the portfolio in which shares are held.
SOUTHTRUST FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
October 31, 1999 (Unaudited) (Continued)
- -------------------------------------------------------------------------------
On August 20, 1999, the following Funds received a tax-free transfer of assets
from the Common Trust Funds managed by the Adviser as follows:
<TABLE>
<CAPTION>
Income Alabama Tax-Free Growth
---------- ---------------- -----------
<S> <C> <C> <C>
SouthTrust Fund Shares Issued 660,620 5,720,032 5,087,923
- -------------------------------------------------------------------------
Common Trust Funds Net Assets
Received $6,361,767 $57,200,317 $50,879,228
- -------------------------------------------------------------------------
Unrealized Appreciation
(Depreciation)* $(14,647) $(744,116) $24,978,778
</TABLE>
*Unrealized Appreciation (Depreciation) is included in the Common Trust Funds'
net assets received above.
On August 27, 1999, Growth received a tax-free transfer of assets from the
Common Trust Funds managed by the Adviser as follows:
<TABLE>
<CAPTION>
Growth
-----------
<S> <C>
SouthTrust Fund Shares Issued 1,931,089
- -----------------------------------------------------
Common Trust Funds Net Assets Received $19,446,062
- -----------------------------------------------------
Unrealized Appreciation* $9,888,439
</TABLE>
*Unrealized Appreciation is included in the Common Trust Funds' net assets
received above.
(2) Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Company in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
Investment Valuations--Municipal bonds are valued by an independent pricing
service, taking into consideration yield, liquidity, risk, credit quality,
coupon, maturity, type of issue and any other factors or market data the pricing
service deems relevant. U.S. government securities are generally valued at the
mean between the over-the-counter bid and asked prices as furnished by an
independent pricing service. Listed corporate bonds, (other fixed income and
asset-backed securities), and unlisted securities and private placement
securities are generally valued at
SOUTHTRUST FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
October 31, 1999 (Unaudited) (Continued)
- -------------------------------------------------------------------------------
the mean of the latest bid and asked price as furnished by an independent
pricing service. Listed equity securities are valued at the last sale price
reported on a national securities exchange. For U.S. Treasury, the use of the
amortized cost method to value its portfolio securities is in accordance with
Rule 2a-7 under the Act. For fluctuating net asset value Funds within the
Company, short-term securities are valued at the prices provided by an
independent pricing service. However, short-term securities purchased with
remaining maturities of 60 days or less may be valued at amortized cost, which
approximates fair market value. Investments in other open-end regulated
investment companies are valued at net asset value.
Repurchase Agreements--It is the policy of the Company to require the
custodian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System, or to have segregated within the custodian bank's
vault, all securities held as collateral under repurchase agreement
transactions. Additionally, procedures have been established by the Company to
monitor, on a daily basis, the market value of each repurchase agreement's
collateral to ensure that the value of collateral at least equals the repurchase
price to be paid under the repurchase agreement transaction.
The Company will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Company's adviser to be creditworthy. Risks may arise from the potential
inability of counterparties to honor the terms of the repurchase agreement.
Accordingly, the Company could receive less than the repurchase price on the
sale of collateral securities.
Investment Income, Expenses and Distributions--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized as
required by the Internal Revenue Code, as amended (the "Code"). Dividend income
and distributions to shareholders are recorded on the ex-dividend date.
Federal Taxes--It is the Company's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
At April 30, 1999, the Company, for federal tax purposes, had capital loss
carryforwards, as noted below, which will reduce the Company's
SOUTHTRUST FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
October 31, 1999 (Unaudited) (Continued)
- -------------------------------------------------------------------------------
taxable income arising from future net realized gain on investments, if any, to
the extent permitted by the Code, and thus will reduce the amount of the
distributions to shareholders which would otherwise be necessary to relieve the
Company of any liability for federal tax.
Pursuant to the Code, such capital loss carryforward will expire as follows:
<TABLE>
<CAPTION>
Expiration Year
------------------ Total Tax Loss
Fund 2005 2006 Carryforward
- ---- ---------- ------- --------------
<S> <C> <C> <C>
Income $1,448,015 $73,422 $1,521,437
</TABLE>
Additionally, net capital losses of $332,346 in Bond attributable to security
transactions after October 31, 1998, are treated as arising on May 1, 1999, the
first day of the Funds' next taxable year.
When-Issued and Delayed Delivery Transactions--The Company may engage in
when-issued or delayed delivery transactions. The Company records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the securities
purchased. Securities purchased on a when-issued or delayed delivery basis are
marked to market daily and begin earning interest on the settlement date.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts of assets, liabilities, expenses and
revenues reported in the financial statements. Actual results could differ from
those estimated.
Securities Lending--Under guidelines adopted by the Board of Trustees (the
"Trustees"), each Fund may lend portfolio securities to brokers/dealers and
other financial organizations in order to generate additional income. Loans of
portfolio securities by a Fund will be collateralized by cash, letters of credit
or U.S. government securities which are maintained at 100% of the current market
value of the loaned securities.
Loans will be made to firms deemed by the Company's adviser to be of good
financial standing and will not be made unless, in the judgement of the
Company's adviser, the consideration to be earned from such loans would justify
the risk. The risks associated with lending portfolio securities
SOUTHTRUST FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
October 31, 1999 (Unaudited) (Continued)
- -------------------------------------------------------------------------------
consist of possible decline in value of collateral, possible delays receiving
additional collateral or in the recovery of the loaned securities or expenses
from enforcing the Funds' rights should the borrower of the securities fail
financially.
As of October 31, 1999, the value of securities loaned, the payable on
collateral due to broker and the value of reinvested cash collateral securities
were as follows: <TABLE> <CAPTION>
Payable on Market Value of
Market Value of Collateral Reinvested
Fund Securities Loaned Due to Broker Collateral Securities
- ---- ----------------- ------------- ---------------------
<S> <C> <C> <C>
Bond $36,927,041 $38,174,623 $38,174,623
</TABLE>
Individual reinvested cash collateral securities in excess of 5% of Fund net
assets at October 31, 1999 are as follows:
<TABLE>
<CAPTION>
Market
Security Fund Value
- -------- ---- -----------
<S> <C> <C>
PaineWebber, Inc., Repurchase Agreement,
5.38%, 11/1/99 Bond $37,000,000
</TABLE>
Other--Investment transactions are accounted for on the trade date.
(3) Shares of Beneficial Interest
The Master Trust Agreement permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (par value of $0.001).
Transactions in shares were as follows:
<TABLE>
<CAPTION>
U.S. Treasury Income
---------------------------- ----------------------
Six Months Six Months
Ended Year Ended Ended Year Ended
October 31, April 30, October 31, April 30,
1999 1999 1999 1999
------------ -------------- ----------- ----------
<S> <C> <C> <C> <C>
Shares sold............. 801,128,323 2,420,255,869 1,152,693 2,733,455
Shares issued in
connection with the
tax-free transfer of
assets from the Common
Trust Funds............ -- -- 660,620 --
Shares issued to
shareholders in payment
of distributions
declared............... 6,236,978 2,316,665 82,576 112
Shares redeemed......... (774,871,236) (2,366,757,874) (832,691) (1,445,930)
------------ -------------- --------- ----------
Net change resulting
from share
transactions........... 32,494,065 55,814,660 1,063,198 1,287,637
============ ============== ========= ==========
</TABLE>
SOUTHTRUST FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
October 31, 1999 (Unaudited) (Continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Bond
-----------------------
Alabama
Six Months Tax-Free
Ended Year Ended Period Ended
October 31, April 30, October 31,
1999 1999 1999(1)
----------- ---------- ------------
<S> <C> <C> <C>
Shares sold............................... 1,025,463 3,571,054 213,699
Shares issued in connection with the tax-
free transfer of assets from the Common
Trust Funds.............................. -- -- 5,720,032
Shares issued to shareholders in payment
of distributions declared................ 294,260 3,452 282
Shares redeemed........................... (1,631,770) (1,913,583) (624,850)
---------- ---------- ---------
Net change resulting from share
transactions............................. (312,047) 1,660,923 5,309,163
========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
Value
-----------------------
Six Months Growth
Ended Year Ended Period Ended
October 31, April 30, October 31,
1999 1999 1999(1)
----------- ---------- ------------
<S> <C> <C> <C>
Shares sold............................... 357,474 2,677,341 252,806
Shares issued in connection with the tax-
free transfer of assets from the Common
Trust Funds............................. -- -- 7,019,012
Shares issued to shareholders in payment
of distributions declared............... 629,883 2,265,450 --
Shares redeemed........................... (3,098,253) (4,895,145) (100,590)
---------- ---------- ---------
Net change resulting from share
transactions............................ (2,110,896) 47,646 7,171,228
========== ========== =========
</TABLE>
(1) For the period from August 20, 1999 (date of initial public investment) to
October 31, 1999.
(4) Investment Advisory Fee and Other Transactions with Affiliates
Investment Advisory Fee--SouthTrust Bank, N.A., the Company's investment
adviser (the "Adviser"), receives for its services an annual investment advisory
fee based on a percentage of each Fund's average daily net assets as shown
below. The Adviser may voluntarily choose to waive any portion of its fee. The
Adviser can modify or terminate this voluntary waiver at any time at its sole
discretion. <TABLE> <CAPTION>
Annual
Fund Rate
- ------------------------
<S> <C>
U.S. Treasury 0.50%
- ------------------------
Income 0.60%
- ------------------------
Bond 0.60%
- ------------------------
Alabama Tax-Free 0.60%
- ------------------------
Value 0.75%
- ------------------------
Growth 0.75%
- ------------------------
</TABLE>
SOUTHTRUST FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
October 31, 1999 (Unaudited) (Continued)
- -------------------------------------------------------------------------------
Distribution Services Fee--The Company has adopted a Distribution Plan ("the
Plan") pursuant to Rule 12b-1 under the Act on behalf of Income, Alabama Tax-
Free and Growth. Under the terms of the Plan, the Funds will compensate
Federated Securities Corp., ("FSC") the principal distributor, from the net
assets of the Funds to finance activities intended to result in the sale of the
Funds' Shares. The Plan provides that the Funds may incur distribution expenses
according to the following schedule annually, to compensate FSC.
<TABLE>
<CAPTION>
Percentage of the
Average Daily Net
Fund Name Assets of Fund
- ---------------- -----------------
<S> <C>
Income 0.25%
- -----------------------------------
Alabama Tax-Free 0.25%
- -----------------------------------
Growth 0.25%
- -----------------------------------
</TABLE>
The Funds did not pay or accrue a distribution services fee for the six months
ended October 31, 1999. The Company has no present intention to activate the
Plan.
Shareholder Services Fee--Under the terms of a Shareholder Services Agreement
with the Adviser, the Funds will pay the Adviser up to 0.25% of average daily
net assets of the Funds for the period. The fee paid to the Adviser is used to
finance certain services for shareholders and to maintain shareholder accounts.
The Adviser may voluntarily choose to waive any portion of its fee. The Adviser
can modify or terminate this voluntary waiver at any time at its sole
discretion.
Administrative Fee--Federated Services Company ("FServ"), through its
subsidiary Federated Administrative Services ("FAS"), provides the Company with
certain administrative personnel and services. The fee is based on the level of
average aggregate net assets of the Company for the period. FAS may voluntarily
choose to waive any portion of its fee. FAS can modify or terminate this
voluntary waiver at any time at its sole discretion.
Transfer and Dividend Disbursing Agent Fees and Expenses--FServ, through its
subsidiary Federated Shareholder Services Company ("FSSC"), serves as transfer
and dividend disbursing agent for the Company. The fee paid to FSSC is based on
the size, type, and number of accounts and transactions made by shareholders.
SOUTHTRUST FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
October 31, 1999 (Unaudited) (Continued)
- -------------------------------------------------------------------------------
Portfolio Accounting Fees--FServ also maintains the Company's accounting
records for which it receives a fee. The fee is based on the level of each
Fund's average net assets for the period, plus out-of-pocket expenses.
General--Certain of the Officers of the Company are Officers and Directors or
Trustees of the above companies.
(5) Investment Transactions
Purchases and sales of investments, excluding short-term securities, for the six
months ended October 31, 1999, were as follows:
<TABLE>
<CAPTION>
Fund Purchases Sales
- ------------------- ----------- ------------
<S> <C> <C>
Income $30,451,529 $ 24,339,600
- ---------------------------------------------
Bond 54,233,941 52,169,653
- ---------------------------------------------
Alabama Tax-Free(1) 7,822,780 12,107,630
- ---------------------------------------------
Value 71,953,855 108,491,336
- ---------------------------------------------
Growth(1) 7,906,464 6,562,277
- ---------------------------------------------
</TABLE>
(1) Represents the period from August 20, 1999 (date of initial public
investment) to October 31, 1999.
(6) Concentration of Credit Risk
Since Alabama Tax-Free invests a substantial portion of its assets in issuers
located in one state, it will be more susceptible to factors adversely affecting
issuers of that state than would be a comparable tax-exempt mutual fund that
invests nationally. In order to reduce the credit risk associated with such
factors, at October 31, 1999, 63.9% of the securities in the portfolio of
investments are backed by letters of credit or bond insurance of various
financial institutions and financial guaranty assurance agencies. The percentage
of investments insured by or supported (backed) by a letter of credit from any
one institution or agency did not exceed 37.6% of total investments.
(7) Organizational Expenses
Organizational expenses for Income were initially borne by FServ. Income has
reimbursed FServ for these expenses. These expenses have been deferred and are
being amortized over the five-year period following
SOUTHTRUST FUNDS
COMBINED NOTES TO FINANCIAL STATEMENTS
October 31, 1999 (Unaudited) (Continued)
- -------------------------------------------------------------------------------
Income's effective date. For the six months ended October 31, 1999, Income
expensed $1,788 of organizational expenses. Organizational expenses for the
other Funds in the Company have been fully expensed.
(8) Year 2000
Similar to other financial organizations, the Funds could be adversely affected
if the computer systems used by the Funds' service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. The Fund's Adviser and administrator are taking measures that they
believe are reasonably designed to address the Year 2000 issue with respect to
computer systems that they use and to obtain reasonable assurances that
comparable steps are being taken by each of the Funds' other service providers.
At this time, however, there can be no assurance that these steps will be
sufficient to avoid any adverse impact to the Funds.
TRUSTEES
Charles G. Brown, III
Russell W. Chambliss
Thomas M. Grady
Lawrence W. Greer
Billy L. Harbert, Jr.
William O. Vann
OFFICERS
William O. Vann
Chairman
Edward C. Gonzales
President
Beth S. Broderick
Vice President and Treasurer
Peter J. Germain
Vice President
C. Todd Gibson
Secretary
No Bank Guarantee Not FDIC Insured May Lose Value
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the Company's prospectuses, which contain facts
concerning the Funds' objectives and policies, management fees, expenses and
other information.
No Bank Guarantee Not FDIC Insured May Lose Value
Investment Adviser: SouthTrust Bank, N.A.
Distributor: Federated Securities Corp.
Cusip 844734103
Cusip 844734400
Cusip 844734202
Cusip 844734608
Cusip 844734301
Cusip 844734509
8042603 (12/99)
