<PAGE> 1
December 31, 1999
Semi-Annual Report to Shareholders
of
[FIRST FUNDS LOGO]
Discipline, Consistency, Patience(R)
[PHOTO]
[FIRST TENNESSEE LOGO]
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LETTER FROM THE PRESIDENT
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Dear Shareholder:
The last six months of the 20th Century was marked by economic prosperity,
electronic commerce taking center stage on the Internet, the anticipation of Y2K
and rising interest rates. It now appears that the U.S. economy is in its
longest period of expansion ever. Such growth enabled the stock market to
regularly set record level highs.
First Funds too has experienced prosperity with the Growth & Income Portfolio
reaching a $1 billion milestone in November. Its 600% increase in assets under
management in four years can be attributed to the Discipline, Consistency,
Patience(R) exhibited by Edward Goldstein's and David Thompson's portfolio
management strategy. Discover in the following pages how they assess the equity
market over the past six months and what they anticipate for the months ahead.
We encourage you to learn about the other portfolio managers and what has taken
place within those portfolios and their respective markets. The report also
includes performance graphs and portfolio details such as sector allocations.
Following that section are the financial statements of each Portfolio including
the list of each investment holding. And the final section contains the
accompanying notes to the financial statements.
Through www.firstfunds.com, First Funds continues to support our current
shareholders and our prospective shareholders by providing daily prices,
performance, portfolio management commentaries, and more. Also feel free to call
us at 1-800-442-1941, option 1 for your portfolio questions and literature
requests.
First Funds accepts the job of managing your investment dollars with pride and
we thank you for your current investment and additional ones in the future.
---------------------------------------------
FIRST FUNDS
Sincerely,
o Are NOT insured by the FDIC or
/s/ RICHARD RANTZOW any other governmental agency.
Richard C. Rantzow o Are NOT bank deposits or other
President obligations of or guaranteed by
First Tennessee Bank National
Association or any of its affiliates.
o Involve investment risks,
including the possible loss of the
principal amount invested.
---------------------------------------------
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FIRST FUNDS GROWTH & INCOME PORTFOLIO
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GROWTH & INCOME PORTFOLIO MANAGERS
EDWARD GOLDSTEIN AND DAVID THOMPSON, CFA
[PHOTO] Mr. Goldstein is Executive Vice President of Memphis,
Tennessee-based Highland Capital Management Corp.,
sub-adviser to the Portfolio. A 1971 graduate of Boston
University, he went on to receive his MBA from Columbia
University in 1976. Joining Goldman, Sachs & Company in New
York in 1976, he became a vice president in the
international department with responsibility for Japan, the
Middle East and Latin America. Mr. Goldstein joined Highland
Capital in 1989, and has been Portfolio Manager for the
Portfolio since 1994.
Mr. Thompson is Senior Vice President with Highland Capital
Management Corp. and is a Chartered Financial Analyst. After
graduating from the University of Mississippi in 1981, he
worked as an analyst for Gulf Oil for three years, then went
on to receive his MBA from the University of North Carolina
in 1986. With nine years of experience managing both
individual and institutional investment portfolios at major
regional banks, Mr. Thompson joined Highland Capital's
equity team in 1995.
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SIX MONTHS IN REVIEW
Market Review
The six months ended December 31, 1999 once again demonstrated the volatility
that stock market investors may endure. Fortunately, many investors were pleased
with the end results. During the third quarter of 1999 the S&P 500 lost 6.25%
which was the result of rising interest rates and recurring concerns about
inflation. Crude oil, a component of inflation measures, essentially doubled
from its early year lows.
The stock market's performance in the fourth quarter of 1999 was very strong.
While many investors had worried about the implications of Y2K on the financial
markets earlier in the year, the fourth quarter turned into an upside surprise.
The S&P gained 14.9% in the quarter, despite the fact that the Fed raised
interest rates. The economy was robust with a Gross Domestic Product growth rate
of 4.3%, yet inflation remained in check. The lack of inflationary pressure
continued to surprise analysts considering the length of this economic
expansion, and the fact that unemployment at 4.1% was the lowest level in 29
years.
COMPARISON OF CHANGE IN VALUE OF A $750,000 INVESTMENT IN THE FIRST FUNDS GROWTH
& INCOME PORTFOLIO (CLASS I) AND THE S&P 500.
[GRAPH]
Please note: Class I inception is August 2, 1993. Minimum investment for Class I
is $750,000. Past performance is not predictive of future results.*
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FIRST FUNDS GROWTH & INCOME PORTFOLIO
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COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FIRST FUNDS GROWTH
& INCOME PORTFOLIO (CLASS II) AND THE S&P 500.
[GRAPH]
Please Note: Class II inception is December 20, 1995. Class II is subject to a
maximum initial front-end sales load of 5.75% and $9,425 is the net initial
investment after the sales load is deducted. Past performance is not predictive
of future results.*
PORTFOLIO UPDATE
The Portfolio remains overweighted in the financial, health care, and
telecommunication sectors, while being underweighted in capital goods, basic
industries, technology, and utilities. The financial sector did not perform well
in the fourth quarter of 1999 due to the rising interest rate environment.
However, the fundamental earnings outlooks for the stocks that we own within the
financial sector are attractive. Health care stocks also underperformed the
market due to concerns of slowing growth rates, the lack of new blockbuster
drugs in the pipeline and the potential of political risk regarding health care
that usually surface in an election year. Telecommunication stocks generally
performed well and the growth outlook continues to be impressive as technology
enhances the use of wireless phones.
In aggregate, the Portfolio continues to have a growth rate in earnings per
share that well exceeds the expected growth rate of the S&P 500, yet the
Portfolio has a price earnings multiple that is at a discount to the market.
Superior growth at a discount price is a combination that we feel bodes well for
our long term performance.
CURRENT STRATEGY AND OUTLOOK
Due to the recent increase in interest rates and the expectations that the
Federal Reserve will again raise rates in early February, we would not be
surprised to see a volatile stock market in the first half of 2000. The market
has generally shrugged off the past three rate hikes and subsequent increases
may not be so easily disregarded. On the inflationary front we continue to
expect inflation to be subdued. The recent reports on both the consumer and
producer price indexes indicate that inflation remains in check. However, we are
past the point of the lowest inflation levels that occurred in 1998 due to
global deflation resulting from weak economies in Asia and the Pacific Rim.
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[GROWTH & INCOME PORTFOLIO
INVESTMENT PROFILE AS OF DECEMBER 31, 1999
[PIE CHART]
<TABLE>
<S> <C>
SHORT-TERM INVESTMENTS 1.4%
TELECOMMUNICATIONS 15.4%
CAPITAL GOODS 3.8%
CONSUMER CYCLICALS 7.7%
CONSUMER STAPLES 11.9%
ENERGY 6.5%
FINANCE & INSURANCE 20.7%
HEALTH CARE 16.7%
TECHNOLOGY 15.9%
</TABLE>
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FIRST FUNDS GROWTH & INCOME PORTFOLIO
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COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FIRST FUNDS GROWTH
& INCOME PORTFOLIO (CLASS III) AND THE S&P 500.
[GRAPH]
Please note: Class III inception is December 9, 1993. Past performance is not
predictive of future results.*
The economy should continue to grow at a rate greater than 3% and we foresee
that economic growth may slow in the second half of 2000 as the effect of higher
interest rates finally begins to take hold. With the economy remaining strong
and inflation low, corporate profits should grow at a high single digit rate in
2000.
On the heels of five consecutive years of 20% gains in stocks, we would not
expect that scenario to be repeated in 2000. The market should revert back to
more normal returns in the 10% range. We will continue to keep the Portfolio
positioned much as it has been for the past three years, with overweightings in
financial, health care, and telecommunication stocks. The fundamentals of these
groups continue to be favorable, and while financial stocks have suffered in the
face of rising rates, we would expect them to perform better in the second half
of 2000 as rate pressures subside.
Although some companies, such as emerging technologies have been attractive to
investors despite having little or no earning power we believe the fundamentals
of stocks will ultimately determine their performance. Investing in companies
with solid fundamentals that sell at attractive valuations continues to be our
focus.
GROWTH & INCOME PORTFOLIO
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURN* TOTAL RETURN*
SINCE SINCE
INCEPTION 1 YEAR 5 YEAR INCEPTION
--------- ------ ------ ---------
<S> <C> <C> <C> <C>
CLASS I 276.73% 22.45% 27.24% 22.96%
CLASS II 251.03% 15.06% 25.45% 21.62%
CLASS III 251.64% 21.13% 25.87% 21.65%
CLASS IV 251.15% 15.96% 25.68% 21.62%
S&P 500 274.94% 21.05% 23.56% 22.87%
</TABLE>
*Total Returns are for the period ended 12/31/1999 and reflect reinvestment of
all dividends, capital gains distributions, all fee waivers in effect, and any
expense reimbursements. Without the fee waivers and expense reimbursements, the
Total Return figures would have been lower. Portfolio inception date is
8/2/1993. On 12/9/1993, the Portfolio commenced sales of Class III shares, which
include a higher transfer agency fee, a .75% distribution fee and a .25%
shareholder services fee. Performance information prior to 12/9/1993 for Class
III shares is based on the performance of Class I shares and does not reflect
the effects of these fees, which, if included, would lower Class III
performance. Quotation of Class III performance reflects a 1% Deferred Sales
Load applied to redemptions made during the first year after purchase. Without
this load, the figures quoted would have been 20.13% for 1 Year. The Portfolio
commenced sales of Class II shares on 12/20/1995, which include a higher
transfer agency fee and a .25% shareholder services fee. Class II performance
shown is based on a maximum 5.75% initial sales charge. Performance information
for Class II shares prior to their inception date is based on the performance of
Class I shares and does not reflect the effects of these fees which, if
included, would lower Class II performance. The Portfolio commenced sales of
Class IV shares on 8/3/1999. These shares include a higher transfer agency fee
and a 1.00% distribution fee. Performance information for Class IV shares prior
to their inception reflect applicable Class III and Class I performance data.
Class IV performance shown is based on a maximum 5.00% CDSC. Class IV shares of
the Portfolio are subject to a 5.00% CDSC which declines to 0.00% for shares
held up to six years. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS.
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<PAGE> 6
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FIRST FUNDS CAPITAL APPRECIATION PORTFOLIO
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CAPITAL APPRECIATION PORTFOLIO MANAGEMENT TEAM
[PHOTO] Curt D. McLeod is Vice President for IAI and joined the
company in 1997. Previously, he worked as a portfolio
manager for 11 years with Piper Jaffray Companies. Mr.
McLeod is a Chartered Financial Analyst and has a Bachelor
of Arts in Finance from the University of St. Thomas.
Scott Billeadeau is Vice President for IAI and joined the
company in 1999. Prior to joining IAI he was a Senior
Portfolio Manager for Tradestreet Investment Associates,
Inc. Mr. Billeadeau is a Chartered Financial Analyst and has
an Economics Degree from Princeton University.
Robert E. Scott is Vice President for IAI and joined the company in 1994.
Previously Mr. Scott was a Research Specialist for the American Embassy in
Tokyo, Japan. He is a Chartered Financial Analyst and graduated from Harvard
University.
Robert J. Mlnarik is Vice President for IAI. He joined the company in 1996 and
prior to that was a Major in the United States Marine Corps. Mr. Mlnarik
graduated from the University of Michigan with a Bachelor of Science Degree.
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SIX MONTHS IN REVIEW
MARKET REVIEW
The stock market sold off last summer due to concerns over higher interest
rates. The Federal Reserve raised short-term interest rates twice during the
summer and then once again in November. The stock market shrugged off the rate
increases with a sharp rally, ending 1999 at record heights. Prompting the
market upswing were reports of strong economic growth, continued consumer
spending, and healthy corporate profit growth. The domestic economy grew at a
revised 5.5% annual rate in the third quarter of last year and fourth quarter
growth continued at a stronger than expected pace. Consumer spending, which
makes up roughly two-thirds of GDP, remained strong as Americans exuded
confidence due to low unemployment and bright job prospects.
The continuing strong economic growth has given investors the confidence to
broaden their investment horizons into small company stocks. Over the last six
months, small cap stocks have outperformed large cap
COMPARISON OF CHANGE IN VALUE OF A $750,000 INVESTMENT IN THE FIRST FUNDS
CAPITAL APPRECIATION PORTFOLIO (CLASS I) AND THE RUSSELL 2500 GROWTH INDEX.
[GRAPH]
Please note: Class I inception is September 2, 1997. Minimum investment for
Class I is $750,000. Past performance is not predictive of future results.*
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<PAGE> 7
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FIRST FUNDS CAPITAL APPRECIATION PORTFOLIO
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COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FIRST FUNDS CAPITAL
APPRECIATION PORTFOLIO (CLASS II) AND THE RUSSELL 2500 GROWTH INDEX.
[GRAPH]
Please note: Class II inception is October 2, 1997. Class II is subject to a
maximum initial front-end sales load of 5.75% and $9,425 is the net initial
investment after the sales load is deducted. Past performance is not predictive
of future results.*
stocks. This recent trend is a reversal of the large cap market leadership that
has been in place for the last few years. In fact, this was the first year in
the last five in which small stocks outperformed large stocks. The other market
factor benefiting the Portfolio was the fact that investors favored growth
stocks over value stocks. Investors have focused their attention on those
companies that will deliver rapid earnings growth over the next few years.
PORTFOLIO UPDATE
The market's rally was led by the technology and communications services
sectors. Technology companies reported very strong earnings and investors
reacted favorably with the belief that business investment in technology will
continue. The best performers were beneficiaries of the Internet and the
movement to rapidly deploy faster communications networks. Within the Portfolio,
technology stocks rose over 40% as a group with a handful of the holdings
doubling in the last six months. Leading the way in the technology area were
DSET Corp., Remec Inc., Sawtek Inc., Mercury Computer Systems Inc., and
Tollgrade Communications Inc. Another bright spot in the Portfolio was the
capital goods sector with a gain of over 80%. DII Group Inc. and Three-Five
Systems Inc. were the outstanding performers in that area.
Due to the higher interest rate environment, the financial sector was the only
group to post negative results over the last six months within the small cap
market. Financial stocks have historically been a small percentage of the
Portfolio. The two areas within the Portfolio that did detract significantly
from performance were the basic materials and consumer services sectors. A
handful of stocks in those two sectors including Flanders, Strayer Education,
Papa Johns International, and Advantage Learning Systems posted negative results
due to earnings shortfalls.
Transaction activity within the Portfolio was higher than normal as many new
stocks were added and
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CAPITAL APPRECIATION PORTFOLIO
INVESTMENT PROFILE AS OF DECEMBER 31, 1999
[PIE CHART]
<TABLE>
<S> <C>
SHORT-TERM INVESTMENTS 3.7%
BUSINESS SERVICES 7.6%
CAPITAL GOODS 9.3%
CONSUMER CYCLICALS 6.5%
CONSUMER NON-DURABLES 0.5%
CONSUMER SERVICES 3.0%
CONSUMER STAPLES 3.6%
ENERGY 2.3%
FINANCIAL 3.7%
HEALTH CARE 6.7%
MULTI-INDUSTRY 1.0%
RETAIL 4.1%
TECHNOLOGY 45.0%
TRANSPORTATION 1.0%
</TABLE>
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<PAGE> 8
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FIRST FUNDS CAPITAL APPRECIATION PORTFOLIO
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COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FIRST FUNDS CAPITAL
APPRECIATION PORTFOLIO (CLASS III) AND THE RUSSELL 2500 GROWTH INDEX.
[GRAPH]
Please note: Class III inception is October 2, 1997. Past performance is not
predictive of future results.*
disappointing stocks were sold. As a result of the activity, the long term
growth rate of the Portfolio has been upgraded, rising to almost 27% from about
20% four months ago. It is a high quality portfolio of companies with stronger
profitability (as measured by ROE and ROA) than that of the benchmark. And, all
of this priced at a large valuation discount to the index (as indicated by P/E).
CURRENT STRATEGY AND OUTLOOK
The sharp market rise over the last few months suggests near term caution.
Anecdotal evidence suggests inflation pressures are mounting although it has yet
to appear in the official statistics. The Federal Reserve is also poised to
raise short-term interest rates which usually stalls the market. Longer term,
however, small cap stocks remain attractive. The Portfolio holds well managed
companies that are demonstrating higher and accelerating growth prospects and
the valuations are still attractive relative to the large cap market. The
Portfolio has performed well in the recent past and we expect to continue to
deliver strong results to shareholders.
CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURN* TOTAL RETURN*
SINCE SINCE
INCEPTION 1 YEAR INCEPTION
--------- ------ ---------
<S> <C> <C> <C>
CLASS I 28.56% 27.83% 11.39%
CLASS II 14.49% 20.06% 6.21%
CLASS III 19.05% 25.29% 8.07%
CLASS IV 16.70% 21.98% 7.12%
RUSSELL 2500 47.90% 55.50% 47.90%
GROWTH INDEX
</TABLE>
*Total Returns are for the period ended 12/31/1999 and reflect reinvestment of
all dividends, capital gains distributions, all fee waivers in effect and any
expense reimbursements. Without the fee waivers and expense reimbursements, the
Total Return figures would have been lower. Class I inception date is 9/2/1997.
The Portfolio commenced sales of Class II shares on 10/2/1997. These shares
include a higher transfer agency fee and a .25% shareholder services fee. Class
II performance shown is based on a maximum 5.75% initial sales charge. On
10/2/1997, the Portfolio commenced sales of Class III shares, which include a
higher transfer agency fee, a .75% distribution fee and a .25% shareholder
services fee. Quotation of Class III performance reflects a 1% Deferred Sales
Load applied to redemptions made during the first year after purchase. Without
this load, the figures quoted would have been 26.29% for 1 Year. The Portfolio
commenced sales of Class IV shares on 8/3/1999. These shares include a higher
transfer agency and a 1.00% distribution fee. Class IV shares of Capital
Appreciation prior to their inception reflect applicable Class III performance
data. Class IV performance shown is based on a maximum 5.00% CDSC. Class IV
shares of the Portfolio are subject to a 5.00% CDSC which declines to 0.00% for
shares held up to six years. PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE
RESULTS.
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<PAGE> 9
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FIRST FUNDS BOND PORTFOLIO
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BOND PORTFOLIO MANAGERS
JAMES TURNER AND STEVEN WISHNIA
[PHOTO] Mr. Turner is Senior Vice President with Highland Capital
Management Corp., the sub-adviser to the Portfolio. A 1959
Graduate of the U.S. Military Academy, he received a
master's of science degree from Stanford University in 1964.
Mr. Turner was a vice president in the Trust Investment
Department of FirsTier Bank, N.A. in Omaha, Nebraska from
1979 through 1986. In 1986 he joined First Tennessee
Investment Management, and was part of that group's merger
with Highland Capital in 1994. He has managed/co-managed the
Portfolio since 1993.
Mr. Wishnia is President of Highland Capital Management
Corp. A 1972 graduate of Pace University, Mr. Wishnia was
Treasurer of S.G. Securities, a closed-end mutual fund in
Boston, MA from 1973 to 1975, prior to joining Highland
Investment Corporation, the predecessor firm to Highland
Capital. Mr. Wishnia was a co-founder of Highland Capital in
1987; he has co-managed the Portfolio since 1994.
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SIX MONTHS IN REVIEW
MARKET REVIEW
The bond market continued its weak trend into the second half of 1999 capping
off a difficult year. Yields rose for virtually all maturities. For example,
rates on 2, 10, and 30 year Treasuries rose .71%, .65%, and .51%, respectively,
for the last 6 months of the Century.
Rates rose for several reasons. First, labor markets grew tighter as the
unemployment rate hit a historically low level of 4.1%. As a result, the market
became increasingly concerned that workers might succeed in bidding up the price
of their wages.
Second, domestic growth remained strong while foreign economies continued to
recover which put upward pressure on some commodity prices. Third, OPEC
maintained its constraint on oil exports, causing prices to reach their highest
levels since the Gulf War. All of these factors suggested that unacceptably
higher inflation might be just ahead and warranted higher yields to compensate
for the risk. Echoing this concern, the Federal Reserve raised short-term rates
twice since July 1, 1999, and 0.25% each time.
COMPARISON OF CHANGE IN VALUE OF A $750,000 INVESTMENT IN THE FIRST FUNDS BOND
PORTFOLIO (CLASS I) AND THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX.
[GRAPH]
Please note: Class I inception is August 2, 1993. Minimum investment for Class I
is $750,000. Past performance is not predictive of future results.*
viii ---------------------------------------------------------------------------
<PAGE> 10
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FIRST FUNDS BOND PORTFOLIO
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COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FIRST FUNDS BOND
PORTFOLIO (CLASS II) AND THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX.
[GRAPH]
Please note: Class II inception is December 20, 1995. Class II is subject to a
maximum front-end initial sales load of 3.75% and $9,625 is the net initial
investment after the sales load is deducted. Past performance is not predictive
of future results.*
PORTFOLIO UPDATE
There were only modest changes in asset classes during the last six months
within the Portfolio. Government and corporate bonds decreased by a combined
total of 3.0%. Cash increased by the same amount, a reflection of the somewhat
cautious stance we took.
Mortgage-backed securities performed the best with a return of 1.32% for the
period. Benefiting this fixed income category is the inherently shorter maturity
structure and the tendency to outperform in a rising interest rate environment.
Corporate and government securities returned 0.32% and 0.04%, respectively. Only
disappointing earnings news that stemmed from merger and acquisition activity
minimized the potential for greater returns. Intermediate maturities performed
best for corporate and government securities with long maturities doing the
worst. Fortunately, the Portfolio was underweighted in long maturities of both
sectors.
As far as structure over the past six months, the Portfolio's average maturity
and duration decreased from 8.6 to 8.2 years and 5.4 to 5.1 years, respectively.
Average credit quality remained unchanged at A+.
CURRENT STRATEGY AND OUTLOOK
Many bond investors remain concerned about the prospects for inflation due to
strength in the global economy, the shrinking labor pool and an oil-led rise in
commodity prices. Even though these factors have been a source of worry for some
time, inflation has remained quite subdued. Overall inflation in 1999 was only
2.7%. Without the impact of oil, inflation was up just 1.9%, the lowest level in
34 years.
Counteracting inflationary pressures have been ample global capacity and
competition, the internet phenomena and continued improvements in worker
productivity. Nevertheless, many investors question whether these factors will
be able to mitigate inflationary forces going forward.
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BOND PORTFOLIO
INVESTMENT PROFILE AS OF DECEMBER 31, 1999
[PIE CHART]
<TABLE>
<S> <C>
MONEY MARKET MUTUAL FUNDS 3.5%
CORPORATE BONDS 63.3%
U.S. GOVERNMENT & AGENCY OBLIGATIONS 32.4%
MORTGAGE-BACKED OBLIGATIONS 0.8%
</TABLE>
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<PAGE> 11
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FIRST FUNDS BOND PORTFOLIO
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COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FIRST FUNDS BOND
PORTFOLIO (CLASS III) AND THE LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX.
[GRAPH]
Please note: Class III inception is December 2, 1993. Past performance is not
predictive of future results.*
Since many investors suspect that inflation could rise in the months ahead,
sentiment in the bond market is negative. Meanwhile, the Portfolio is
maintaining a moderately defensive stance in anticipation of somewhat higher
interest rates. Corporate bonds remain overweighted because yields are
reasonably generous. And, with rates having risen recently, corporations may be
reluctant to issue new bonds because of the higher costs of financing. This
constraint on supply should benefit existing corporate bonds.
BOND PORTFOLIO
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURN* TOTAL RETURN*
SINCE SINCE
INCEPTION 1 YEAR 5 YEAR INCEPTION
--------- ------ ------ ---------
<S> <C> <C> <C> <C>
CLASS I 39.80% (2.61)% 7.13% 5.36%
CLASS II 32.60% (6.42)% 6.00% 4.50%
CLASS III 30.29% (4.18)% 5.98% 4.21%
LEHMAN BROS. 42.48% (2.16)% 7.61% 5.67%
GOV'T/CORP.
BOND INDEX
</TABLE>
*Total Returns are for the period ended 12/31/1999 and reflect reinvestment of
all dividends, capital gains distributions, all fee waivers in effect and any
expense reimbursements. Without the fee waivers and expense reimbursements, the
Total Return figures would have been lower. Portfolio inception date is
8/2/1993. On 12/2/1993, the Portfolio commenced sales of Class III shares, which
include a higher transfer agency fee, a .50% distribution fee and a .25%
shareholder services fee. Performance information prior to 12/2/1993 for Class
III is based on the performance of Class I shares and does not reflect the
effects of these fees, which, if included, would lower Class III performance.
Quotation of Class III performance reflects a 1% Deferred Sales Load applied to
redemptions made during the first year after purchase. Without this load, the
figures quoted would have been (3.21)% for 1 Year. The Portfolio commenced sales
of Class II shares on 12/20/1995. These shares include a higher transfer agency
fee and a .25% shareholder services fee. Class II performance shown is based on
a maximum 3.75% initial sales charge. Performance information for Class II
shares prior to their inception date is based on the performance of Class I
shares and does not reflect the effects of these fees which, if included, would
lower Class II performance. Past performance is not predictive of future
results.
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<PAGE> 12
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FIRST FUNDS INTERMEDIATE BOND PORTFOLIO
- --------------------------------------------------------------------------------
INTERMEDIATE BOND PORTFOLIO MANAGERS
RALPH W. HERBERT AND TED L. FLICKINGER, JR.
[PHOTO] Mr. Herbert is Vice President for Martin & Company, the
sub-adviser to the Portfolio. He is a graduate of the
University of Tennessee and in 1979 he began his career with
First American Bank. In 1987 he joined Culver Securities as
a municipal debt underwriter and two years later became
portfolio manager for Valley Fidelity Bank. That bank merged
with First Tennessee Bank in 1991. Mr. Herbert joined Martin
& Company in 1998 when the firm became a subsidiary of First
Tennessee National Corporation.
Mr. Flickinger is Executive Vice President for Martin &
Company and is a Chartered Financial Analyst. Prior to
joining the firm in 1990, he was an assistant manager of the
investment department of Home Federal Bank of Tennessee for
six years. His 21-year career includes management positions
in the investment departments of The Park National Bank and
Fidelity Federal Savings and Loan of Knoxville.
- --------------------------------------------------------------------------------
SIX MONTHS IN REVIEW
MARKET REVIEW
The bond market was negatively impacted over the past six months as the Federal
Reserve raised interest rates three times (including the rate increase on June
31, 1999) from 4.75% to 5.50%. The 10-year Treasury note rose from 5.78% to
6.44% over this same period of time. Treasury securities performed the worst and
corporate and agency issues that had under-performed treasuries for the third
quarter, outperformed treasuries the last three months of 1999. Even with strong
relative performance in the fourth quarter, corporate bonds remain 1999's worst
performing sector.
Spreads between Treasury bonds and other fixed income sectors widened in the
early part of the third quarter but narrowed by the end of the fourth quarter.
Credit spreads remain relatively wide compared to historical spread data and we
would expect that this relationship would improve, especially given the passing
of Y2K concerns.
COMPARISON OF CHANGE IN VALUE OF A $750,000 INVESTMENT IN THE FIRST FUNDS
INTERMEDIATE BOND PORTFOLIO (CLASS I) AND THE LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CORPORATE BOND INDEX.
[GRAPH]
Please note: Class I inception is March 2, 1998. Minimum investment for Class I
is $750,000. Past performance is not predictive of future results.*
- --------------------------------------------------------------------------- xi
<PAGE> 13
- --------------------------------------------------------------------------------
FIRST FUNDS INTERMEDIATE BOND PORTFOLIO
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FIRST FUNDS
INTERMEDIATE BOND PORTFOLIO (CLASS II) AND THE LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CORPORATE BOND INDEX.
[GRAPH]
Please note: Class II inception is March 9, 1998. Class II is subject to a
maximum initial front-end sales load of 2.50% and $9,750 is the net initial
investment after the sales load is deducted. Past performance is not predictive
of future results.*
Agency yields have approached 7% for 10-year issues which represents a spread of
almost 60 basis points to the benchmark 10-year Treasury. Spreads between Agency
bonds and Treasury securities averaged between 30-40 basis points just a few
years ago when rates were in much the same range as they are now.
The current economic expansion is the longest in U.S. history and has had to
survive wars, monetary crises, and the liquidity crisis. The unemployment rate
remains near all-time lows and consumer spending remained robust throughout the
third and fourth quarter. This continued economic strength, the increase in
price per barrel of oil and the expanding current account deficit has heightened
the Federal Reserve's inflationary concerns. The Fed may continue its recent
tightening initiative by increasing interest rates again in the near future.
PORTFOLIO UPDATE
The Portfolio maintained a slightly longer duration (3.7 years) than normal
throughout the third quarter. Even with the slight contraction in relative
spreads, agency and corporate bonds offered an attractive value based on
historical returns. During the fourth quarter we maintained our targeted
duration as real returns continued to improve as bond yields rose.
The higher spreads on agency and corporate issues made these sectors more
attractive than Treasuries. Throughout the past two quarters, Treasury to agency
swaps were used to extend the duration of the Portfolio. The Portfolio is
over-weighted in the 7 to 10-year sectors versus the Lehman Brothers
Intermediate Government / Corporate Bond Index. We also sold some of our lowest
rated credits with the belief that if interest rates continued to rise, that
these corporate bonds could be hurt more than the higher-rated bonds within the
Portfolio.
- --------------------------------------------------------------------------------
INTERMEDIATE BOND PORTFOLIO
INVESTMENT PROFILE AS OF DECEMBER 31, 1999
[PIE CHART]
<TABLE>
<S> <C>
MONEY MARKET MUTUAL FUNDS 3.7%
CORPORATE BONDS 44.7%
U.S. GOVERNMENT & AGENCY OBLIGATIONS 50.8%
MORTGAGE-BACKED OBLIGATIONS 0.8%
</TABLE>
- --------------------------------------------------------------------------------
xii ---------------------------------------------------------------------------
<PAGE> 14
- --------------------------------------------------------------------------------
FIRST FUNDS INTERMEDIATE BOND PORTFOLIO
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FIRST FUNDS
INTERMEDIATE BOND PORTFOLIO (CLASS III) AND THE LEHMAN BROTHERS INTERMEDIATE
GOVERNMENT/CORPORATE BOND INDEX.
[GRAPH]
Please note: Class III inception is May 19, 1998. Past performance is not
predictive of future results.*
CURRENT STRATEGY AND OUTLOOK
We recently increased the duration of the Portfolio from 105% to 110% of the
Lehman Brothers Intermediate Government/Corporate Bond Index's duration (3.8
years). This move was justified as real returns had improved to warrant the
increase in interest rate risk.
Agency and corporate spreads remain attractive and we continue to overweight
those sectors. The spreads relative to treasuries in these sectors remain wide
but should contract more as liquidity becomes more available after year-end and
Y2K liquidity concerns subside. If this contraction in spreads occurs, it should
provide some price performance versus the index. At this time, the Portfolio is
positioned to take on more interest rate risk should real returns rise. If
interest rates decline, we should capture good price appreciation, as well,
without the risk of longer-term bonds.
INTERMEDIATE BOND PORTFOLIO
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURN* TOTAL RETURN*
SINCE SINCE
INCEPTION 1 YEAR INCEPTION
--------- ------ ---------
<S> <C> <C> <C>
CLASS I 6.79% 0.25% 3.65%
CLASS II 3.55% (2.54)% 1.94%
CLASS III 4.11% (1.58)% 2.52%
LEHMAN BROS. 7.52% 0.39% 4.03%
INTERMEDIATE
GOV'T/CORP.
BOND INDEX
</TABLE>
*Total Returns are for the period ended 12/31/1999 and reflect reinvestment of
all dividends, capital gains distributions, all fee waivers in effect and any
expense reimbursements. Without the fee waivers and expense reimbursements, the
Total Return figures would have been lower. Class I inception date is 3/2/1998.
The Portfolio commenced sales of Class II shares on 3/9/1998. These shares
include a higher transfer agency fee and a .25% shareholder services fee. Class
II performance shown is based on a maximum 2.50% initial sales charge. On
5/19/1998, the Portfolio commenced sales of Class III shares, which include a
higher transfer agency fee, a .50% distribution fee and a .25% shareholder
services fee. Quotation of Class III performance reflects a 1% Deferred Sales
Load applied to redemptions made during the first year after purchase. Without
this load, the figures quoted would have been (0.59)% for 1 Year. Past
performance is not predictive of future results.
- --------------------------------------------------------------------------- xiii
<PAGE> 15
- --------------------------------------------------------------------------------
FIRST FUNDS TENNESSEE TAX-FREE PORTFOLIO
- --------------------------------------------------------------------------------
TENNESSEE TAX-FREE PORTFOLIO MANAGERS
RALPH W. HERBERT AND TED L. FLICKINGER, JR.
[PHOTO] Mr. Herbert is Vice President for Martin & Company, the
sub-adviser to the Portfolio. He is a graduate of the
University of Tennessee and in 1979 he began his career with
First American Bank. In 1987 he joined Culver Securities as
a municipal debt underwriter and two years later became
portfolio manager for Valley Fidelity Bank. That bank merged
with First Tennessee Bank in 1991. Mr. Herbert joined Martin
& Company in 1998 when the firm became a subsidiary of First
Tennessee National Corporation.
Mr. Flickinger is Executive Vice President for Martin &
Company and is a Chartered Financial Analyst. Prior to
joining the firm in 1990, he was an assistant manager of the
investment department of Home Federal Bank of Tennessee for
six years. His 21-year career includes management positions
in the investment departments of The Park National Bank and
Fidelity Federal Savings and Loan of Knoxville.
- --------------------------------------------------------------------------------
SIX MONTHS IN REVIEW
MARKET REVIEW
The fixed income markets fell victim to rising rates for much of the past six
months. The Federal Reserve Bank raised its Fed Funds rate three times
(including the rate increase on June 30, 1999) from 4.75% to 5.50%. The 30-year
Treasury bond finished the year losing 14.9% on a total return basis. Long
municipal bonds did not suffer quite as badly as Treasuries, but were down 6.7%.
The municipal curve recorded much the same distribution of returns as most other
fixed income instruments but not to as great an extent. Over the past six
months, municipal bonds under ten years performed relatively well. The First
Funds Tennessee Tax-Free Portfolio has almost 70% of the Portfolio invested in
10 years or less.
Municipal bonds have been subject to negative factors over the last six months:
1) There was a significant amount of selling pressure on the long end of the
COMPARISON OF CHANGE IN VALUE OF A $750,000 INVESTMENT IN THE FIRST FUNDS
TENNESSEE TAX-FREE PORTFOLIO (CLASS I) AND THE LEHMAN BROTHERS 10-YEAR MUNICIPAL
BOND INDEX.
[GRAPH]
Please note: Class I inception is December 15, 1995. Minimum investment for
Class I is $750,000. Past performance is not predictive of future results.*
xiv ---------------------------------------------------------------------------
<PAGE> 16
- --------------------------------------------------------------------------------
FIRST FUNDS TENNESSEE TAX-FREE PORTFOLIO
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FIRST FUNDS
TENNESSEE TAX-FREE PORTFOLIO (CLASS II) AND THE LEHMAN BROTHERS 10-YEAR
MUNICIPAL BOND INDEX.
[GRAPH]
Please note: Class II inception is December 29, 1995. Class II is subject to a
maximum front-end initial sales load of 2.50% and $9,750 is the net initial
investment after the sales load is deducted. Past performance is not predictive
of future results.*
municipal curve due to tax loss selling in the fourth quarter. Many investors
decided to take losses to offset gains recorded elsewhere in their portfolios;
and 2) Municipal bonds also fell victim to the de minimus safe harbor or accrued
market discount (AMD) rule, which penalizes investors with taxes on any gain
realized from purchasing certain discounted municipal bonds. These two effects
were especially felt on the long end of the yield curve and on intermediate term
bonds issued over the past 6 to 12 months. Once a bond's price falls below the
de minimis level, there tends to be a significant penalty for selling that
issue. This problem could continue for the foreseeable future until yields begin
to decline. Institutional swapping for new issues seems to exacerbate the
condition. And 3) Many institutional buyers such as property and casualty
insurers have been net sellers of municipal bonds. P&C insurers' earnings have
suffered, lessening their need for tax-free income.
The U.S economic expansion, should it continue until early spring, will mark the
longest expansion in American history. The stock market had set new highs on a
regular basis and the unemployment rate remained near all-time lows as consumer
spending was robust throughout the third and fourth quarter. This continued
economic strength, the increase in price per barrel of oil and the expanding
current account deficit has heightened the Federal Reserve's concern. Keeping
all these in balance may require the Fed to continue its recent tightening
initiative by increasing interest rates again in the near future.
PORTFOLIO UPDATE
As bond yields rose during the third and fourth quarter, the duration of the
Portfolio extended from 5.7 years to 6.0 years. The lengthening was justified as
real returns had improved sufficiently enough to warrant the increase in
interest rate risk. This was primarily accomplished by buying five to ten year
- --------------------------------------------------------------------------------
TENNESSEE TAX-FREE PORTFOLIO
INVESTMENT PROFILE AS OF DECEMBER 31, 1999
[PIE CHART]
<TABLE>
<S> <C>
MONEY MARKET MUTUAL FUNDS 0.3%
TENNESSEE GENERAL OBLIGATION BONDS 45.9%
TENNESSEE REVENUE BONDS 49.2%
OTHER STATE GENERAL OBLIGATION BONDS 2.4%
OTHER STATE REVENUE BONDS 2.2%
</TABLE>
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------- xv
<PAGE> 17
- --------------------------------------------------------------------------------
FIRST FUNDS TENNESSEE TAX-FREE PORTFOLIO
- --------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE FIRST FUNDS
TENNESSEE TAX-FREE PORTFOLIO (CLASS III) AND THE LEHMAN BROTHERS 10-YEAR
MUNICIPAL BOND INDEX.
[GRAPH]
Please note: Class III inception is December 15, 1995. Past performance is not
predictive of future results.*
bonds and selling shorter bonds. In addition, tax-adjusted rates of return on
municipal bonds reached levels that we felt justified going out a little further
on the yield curve.
CURRENT STRATEGY AND OUTLOOK
Ten-year municipal bonds continue to exceed historic relative yields versus U.S.
Treasury bonds and they offer good value. The Portfolio is positioned to take on
more interest rate risk should real returns continue to increase. Given its
shorter than average duration the portfolio should withstand higher interest
rates and if interest rates decline, the Portfolio is positioned to capture some
appreciation in price as well.
TENNESSEE TAX-FREE PORTFOLIO
<TABLE>
<CAPTION>
CUMULATIVE AVERAGE ANNUAL
TOTAL RETURN* TOTAL RETURN*
SINCE SINCE
INCEPTION 1 YEAR INCEPTION
--------- ------ ---------
<S> <C> <C> <C>
CLASS I 19.48% (0.64)% 4.50%
CLASS II 15.59% (3.26)% 3.68%
CLASS III 18.08% (2.10)% 4.19%
CLASS IV 16.88% (4.24)% 3.93%
LEHMAN BROS. 19.84% (1.71)% 4.63%
10-YEAR
MUNICIPAL
BOND INDEX
</TABLE>
*Total Returns are for the period ended 12/31/1999 and reflect reinvestment of
all dividends, capital gains distributions, all fee waivers in effect and any
expense reimbursements. Without the fee waivers and expense reimbursements, the
Total Return figures would have been lower. Class I inception date is
12/15/1995. On 12/15/1995, the Portfolio also commenced sales of Class III
shares, which include a higher transfer agency fee and a .50% distribution fee.
On 12/29/1995, the Portfolio commenced sales of Class II shares, which include a
higher transfer agency fee and a .10% shareholder services fee. Class II
performance shown is based on a maximum 2.50% initial sales charge. Quotation of
Class III performance reflects a 1% Deferred Sales Load applied to redemptions
made during the first year after purchase. Without this load, the figures quoted
would have been (1.11)% for 1 Year. The Portfolio commenced sales of Class IV
shares on 8/3/1999. These shares include a higher transfer agency fee and a
0.70% distribution fee. Class IV shares prior to their inception reflect
applicable Class III performance data. Class IV performance shown is based on a
maximum 3.00% CDSC. Class IV shares of the Tennessee Tax-Free Portfolio are
subject to a 3.00% CDSC which declines to 0.00% for shares held up to five
years. Past performance is not predictive of future results.
xvi ---------------------------------------------------------------------------
<PAGE> 18
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
DEFINITION OF COMMON TERMS
BOND RATINGS
The quality of bonds can, to some degree, be determined from the
ratings of the two most prominent rating services: Moody's and Standard &
Poor's. The ratings are used by the government and industry regulatory agencies,
the investing public, and portfolio managers as a guide to the relative security
and value of each bond. The ratings are not used as an absolute factor in
determining the strength of the pledge securing a particular issue. However,
since Moody's and Standard & Poor's rate bonds on a fee basis, some issuers
choose not to be rated. Many non-rated issues are sound investments. The rating
symbols of the two services are shown in the accompanying table.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MOODY'S INVESTORS STANDARD & POOR'S CORP.
SERVICES, INC. (Plus (+) or minus (-))
----------------- -----------------------
<S> <C> <C>
Prime Aaa AAA
Excellent Aa AA
Good A A
Average Baa BBB
Fair Ba BB
Poor B B
Marginal Caa C
</TABLE>
- --------------------------------------------------------------------------------
DIVIDEND
Net income distributed to shareholders generated by securities in a
Portfolio. The Bond, Intermediate Bond, Tennessee Tax-Free, and all the Money
Market Portfolios pay dividends monthly. The Growth & Income Portfolio pays
dividends quarterly and the Capital Appreciation Portfolio pays dividends
annually.
GAIN (OR LOSS)
If a stock or bond appreciates in price, there is an unrealized gain;
if it depreciates there is an unrealized loss. A gain or loss is "realized" upon
the sale of a security; if a Portfolio's net gains exceed net losses, there may
be a capital gain distribution to shareholders. There could also be an ordinary
income distribution if the net gain is short term or no distribution if there is
a capital loss carryover.
GENERAL OBLIGATION BONDS
General Obligation Bonds (GOs) are debt-backed by the general taxing
power of the issuer. Payment of the obligation may be backed by a specific tax
or the issuer's general tax fund. Examples of GOs include sidewalk bonds, sewer
bonds and street bonds. These bonds are also known as full faith and credit
bonds because the debt is a general obligation of the issuer.
INSURED BONDS
Insured Bonds refer to municipal obligations which are covered by an
insurance policy issued by independent insurance companies. The policies insure
the payment of principal and/or interest of the issuer. Examples of such
companies are MBIA (Municipal Bond Investors Assurance Corporation), and AMBAC
(American Municipal Bond Assurance Corporation).
NET ASSET VALUE (NAV)
NAV is the total value of all securities and other assets held by a
portfolio, minus liabilities, divided by the number of shares outstanding. It is
the value of a single share of a mutual fund on a given day. The total value of
your investment would be the NAV multiplied by the number of shares you own. NAV
generally fluctuates daily for all the First Funds Portfolios except the Money
Market Portfolios, which seek to maintain a stable $1.00 per share NAV.
REVENUE BONDS
Revenue Bonds are issued to provide capital for the construction of a
revenue-producing facility. The interest and principal payments are backed to
the extent that the facility produces revenue to pay. Examples of revenue bonds
include toll bridges, roads, parking lots and ports. The municipality is not
obligated to cover debt payments on revenue bonds in default.
- --------------------------------------------------------------------------- xvii
<PAGE> 19
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
DEFINITION OF COMMON TERMS (continued)
SEC YIELD
The SEC Yield was mandated by the Securities and Exchange Commission in
1988 as a standardized yield calculation intended to put performance
presentations for all bond and money market funds on a level playing field. The
SEC yield does not take into account income derived from capital gains, option
writing, futures, or return of capital. The formula also adjusts the income from
premium or discounted bonds to reflect the amortization of that bond.
TOTAL RETURN
Total return measures a Portfolio's performance over a stated period of
time, taking into account the combination of dividends paid and the gain or loss
in the value of the securities held in the Portfolio. It may be expressed on an
average annual basis or a cumulative basis (total change over a given period).
DEFINITION OF INDICES
STANDARD & POOR'S 500 is a broad-based measurement of changes in stock market
conditions based on the average performance of 500 widely-held common stocks. It
is an unmanaged index.
LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX, an unmanaged index, is a broad
measure of bond performance, and includes reinvestment of dividends and capital
gains. This index includes only investment-grade bonds with maturities over one
year.
LEHMAN BROTHERS INTERMEDIATE GOVERNMENT/CORPORATE BOND INDEX, an unmanaged
index, is a broad measure of bond performance, and includes reinvestment of
dividends and capital gains. This index includes only investment-grade bonds
with maturities of up to ten years.
LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX, an unmanaged index, is a broad
measure of shorter-term municipal bond performance and includes reinvestment of
dividends and capital gains.
RUSSELL 2500 INDEX, an unmanaged index, measures performance of the 2,500
smallest companies in the Russell 3000 Index which represents approximately 23%
of the total market capitalization of the Russell 3000. As of the latest
reconstitution, the average market capitalization was approximately $659
million; the median market capitalization was approximately $438 million. The
largest company in the index had an approximate market capitalization of $2.6
billion.
The Russell 2500 Index is broken down further into a growth component and a
value component. The Capital Appreciation Portfolio uses the Russell 2500 Growth
Index as a benchmark.
THE RUSSELL 2500 GROWTH INDEX measures the performance of those Russell 2500
companies with higher price-to-book ratios and higher forecasted growth values.
xviii --------------------------------------------------------------------------
<PAGE> 20
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GROWTH & INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Value
Shares (Note 1)
------ --------
<S> <C> <C>
COMMON STOCKS - 98.6%
CAPITAL GOODS - 3.8%
General Electric Co. 243,900 $ 37,743,525
------------
CONSUMER CYCLICALS - 7.7%
Federated Department Stores, Inc.* 451,200 22,813,800
Interpublic Group of Companies, Inc. 927,300 53,493,619
------------
TOTAL CONSUMER CYCLICALS 76,307,419
------------
CONSUMER STAPLES - 11.9%
Belo (A.H.) Corp., Class A 869,000 17,011,375
Pepsico, Inc. 854,300 30,114,075
Kimberly Clark Corp. 435,000 28,383,750
Sysco Corp.* 1,097,400 43,415,887
------------
TOTAL CONSUMER STAPLES 118,925,087
------------
ENERGY - 6.5%
Coastal Corp. 855,050 30,300,834
Repsol S.A. ADR 486,651 11,314,636
Texaco, Inc.* 435,100 23,631,369
------------
TOTAL ENERGY 65,246,839
------------
FINANCE & INSURANCE - 20.7%
American International Group, Inc. 337,780 36,522,462
Chase Manhattan Corp. 478,050 37,138,509
Federal Home Loan Mortgage Corp. 526,400 24,773,700
Federal National Mortgage Assn. 174,300 10,882,856
FleetBoston Financial Corp. 819,131 28,515,998
Unumprovident Corp.* 305,700 9,801,506
Wells Fargo & Co.* 1,003,900 40,595,206
XL Capital Ltd., Class A 356,000 18,467,500
------------
TOTAL FINANCE & INSURANCE 206,697,737
------------
HEALTH CARE - 16.7%
Abbott Laboratories 600,800 21,816,550
Alza Corp.* 230,000 7,963,750
American Home Products Corp. 442,450 17,449,122
Elan Corp., plc ADR* 1,041,650 30,728,675
Guidant Corp.* 381,400 17,925,800
Medtronic, Inc. 703,950 25,650,178
Merck & Co., Inc. 280,200 18,790,912
Schering-Plough Corp. 611,200 25,785,000
------------
TOTAL HEALTH CARE 166,109,987
------------
TECHNOLOGY - 15.9%
Electronic Data Systems Corp. 671,900 44,975,306
EMC Corp.* 486,400 53,139,200
Equifax Inc. 494,700 11,656,369
Motorola, Inc. 327,750 $ 48,261,188
------------
TOTAL TECHNOLOGY 158,032,063
------------
Value
Shares (Note 1)
TELECOMMUNICATIONS - 15.4%
GTE Corp. 519,375 $ 36,648,398
MCI WorldCom, Inc.* 611,143 32,390,605
Sprint Corp. 583,400 39,270,113
Vodafone Airtouch plc ADR* 903,125 44,704,688
-------------
TOTAL TELECOMMUNICATIONS 153,013,804
-------------
TOTAL COMMON STOCKS
(Cost $605,596,068) 982,076,461
-------------
SHORT-TERM INVESTMENTS - 1.4%
MONEY MARKET MUTUAL FUNDS - 1.4%
SSGA Prime Money Market Fund 7,075,462 7,075,462
SSGA U.S. Treasury Money Market Fund 7,075,462 7,075,462
-------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $14,150,924) 14,150,924
-------------
TOTAL INVESTMENTS - 100%
(Cost $619,746,992) $ 996,227,385
=============
*Non-income producing security
ADR - American Depository Receipt
INCOME TAX INFORMATION:
At December 31, 1999, the net unrealized appreciation based on
cost for income tax purposes of $619,746,992 was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost $ 398,661,628
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value (22,181,235)
-------------
Net unrealized appreciation $ 376,480,393
=============
OTHER INFORMATION:
Purchases and sales of securities, other than short-term
securities, for the six months ended December 31, 1999 aggregated
$111,329,165 and $78,046,223, respectively.
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
1
<PAGE> 21
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Value
Shares (Note 1)
------ --------
<S> <C> <C>
COMMON STOCKS - 96.3%
BUSINESS SERVICES - 7.6%
Advance Paradiam, Inc.* 9,700 $ 208,550
AMDOCS Limited 19,960 688,620
Diamond Technology Partner, Inc.* 3,300 284,213
Infocure Corp.* 20,300 633,106
ISSGroup, Inc.* 13,100 930,100
National Computer Systems, Inc. 16,700 626,250
-----------
TOTAL BUSINESS SERVICES 3,370,839
-----------
CAPITAL GOODS - 9.3%
AstroPower, Inc.* 13,400 185,925
DII Group Inc.* 12,500 886,719
JLG Industry, Inc. 28,400 452,625
Three Five Systems, Inc.* 30,800 1,262,800
Zebra Technologies Corp., Class A* 23,400 1,355,738
-----------
TOTAL CAPITAL GOODS 4,143,807
-----------
CONSUMER CYCLICALS - 6.5%
Catalina Marketing Corp.* 9,000 1,041,750
Aftermarket Technology Corp.* 153,000 1,826,438
-----------
TOTAL CONSUMER CYCLICALS 2,868,188
-----------
CONSUMER NON-DURABLES - 0.5%
Advanced LTG Technologies Inc. 35,300 202,975
-----------
CONSUMER SERVICES - 3.0%
Jakks Pac, Inc.* 47,150 878,169
Papa Johns International, Inc.* 17,300 450,881
-----------
TOTAL CONSUMER SERVICES 1,329,050
---------
CONSUMER STAPLES - 3.6%
Apollo Group, Inc., Class A* 19,700 394,000
Valassis Communications, Inc.* 28,100 1,187,225
-----------
TOTAL CONSUMER STAPLES 1,581,225
-----------
ENERGY - 2.3%
Petroleum Geo-Services ASA-ADR* 56,900 1,013,531
-----------
FINANCIAL - 3.7%
Radian Group, Inc. 31,159 1,487,842
Triad Guaranty, Inc.* 6,600 149,738
-----------
TOTAL FINANCIAL 1,637,580
-----------
HEALTH CARE- 8.7%
Eclipse Surgical Technologies* 21,200 156,350
Express Scripts, Inc.* 5,600 358,400
Maxygen Inc.* 2,100 149,100
Mentor Corp. 42,000 1,086,750
Novoste Corp.* 23,900 397,338
Patterson Dental Co.* 16,900 718,250
Renal Care Group Inc.* 42,400 988,450
-----------
TOTAL HEALTH CARE 3,854,638
-----------
MULTI-INDUSTRY - 1.0%
Architel Systems Corp. 12,800 $ 171,200
Official Payments Corp.* 5,300 275,600
-----------
TOTAL MULTI-INDUSTRY -- 446,800
-----------
RETAIL - 4.1%
Wild Oats Markets, Inc. 33,450 740,081
99 Cents Only Stores* 28,600 1,093,950
-----------
TOTAL RETAIL -- 1,834,031
-----------
TECHNOLOGY - 45.0%
COMPUTER PERIPHERALS - 12.3%
Aspect Development, Inc.* 11,100 760,350
Audio Codes Ltd 3,700 337,162
CCC Information Services Group, Inc* 98,400 1,685,100
Emulex Corp.* 3,900 440,456
Great Plains Software, Inc.* 14,500 1,083,875
Transaction Systems Architects, Inc* 26,400 739,200
Xircom, Inc. 5,300 397,500
-----------
TOTAL COMPUTER PERIPHERALS 5,443,643
-----------
COMPUTER SERVICES - 2.7%
Mastech Corp.* 48,200 1,192,950
-----------
ELECTRONIC COMPONENTS - 11.9%
Anadigics Inc.* 23,800 1,123,062
Artesyn Technologies, Inc. 8,900 185,787
Etec Systems, Inc.* 8,800 394,900
Galileo Technology Ltd.* 25,400 611,187
Lattice Semiconductor Corp.* 16,000 755,000
Sawtek, Inc.* 19,900 1,324,594
Veeco Instruments, Inc. 5,100 238,425
Zoran Corp.* 11,000 613,250
-----------
TOTAL ELECTRONIC COMPONENTS 5,246,205
-----------
TELECOMMUNICATIONS - 18.1%
Advanced Radio Telecom Corp.* 17,500 416,719
American Mobile Satellite Corp.* 28,100 591,856
Antec Corp.* 11,800 430,700
Com21, Inc.* 23,400 523,575
DSET Corp.* 31,900 1,192,262
GRIC Communications, Inc 1,300 32,988
Mercury Computer Systems, Inc.* 28,800 990,000
Remec, Inc.* 57,700 1,467,744
Tollgrade Communications,Inc.* 44,100 1,515,938
Zamba Corp.* 49,500 853,875
-----------
TOTAL TELECOMMUNICATIONS 8,015,657
-----------
TOTAL TECHNOLOGY 19,898,455
-----------
TRANSPORTATION - 1.0%
Atlas Air Inc.* 15,700 430,769
-----------
TOTAL COMMON STOCKS
(Cost $32,616,323) 42,611,888
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
2
<PAGE> 22
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL APPRECIATION PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
<S> <C> <C>
SHORT-TERM INVESTMENTS - 3.7%
MONEY MARKET MUTUAL FUNDS - 3.7%
SSGAPrime Money Market Fund 810,251 $ 810,251
SSGA U.S. Treasury Money Market Fund 806,534 806,534
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $1,616,785) 1,616,785
------------
TOTAL INVESTMENTS - 100%
(Cost $35,233,108) $ 44,228,673
============
*Non-income producing security
ADR - American Depositary Receipt
INCOME TAX INFORMATION:
At December 31, 1999, the net unrealized appreciation based on
cost for income tax purposes of $35,517,040 was as follows:
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost $ 10,402,136
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value (1,690,503)
-------------
Net unrealized appreciation $ 8,711,633
=============
</TABLE>
OTHER INFORMATION:
Purchases and sales of securities, other than short-term
securities, for the six months ended December 31, 1999 aggregated
$26,562,046 and $25,932,362, respectively.
<TABLE>
<CAPTION>
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Principal Value
Date Coupon Amount (Note 1)
- ---- ------ --------- --------
<S> <C> <C> <C>
U.S GOVERNMENT & AGENCY OBLIGATIONS - 32.4%
U.S. TREASURY BONDS - 15.9%
05/15/16 7.250% $ 12,120,000 $ 12,669,194
08/15/23 6.250% 25,120,000 23,691,300
------------
36,360,494
------------
U.S. TREASURY NOTES - 10.7%
05/31/01 6.500% 2,940,000 2,951,945
02/28/02 6.250% 1,100,000 1,099,657
08/15/02 6.375% 2,945,000 2,950,522
10/31/02 5.750% 1,000,000 985,938
08/15/03 5.750% 2,750,000 2,692,423
02/15/04 5.875% 1,915,000 1,883,284
02/15/06 5.625% 3,930,000 3,760,519
08/15/07 6.125% 4,450,000 4,337,362
02/15/08 5.500% 4,185,000 3,920,822
------------
24,582,472
------------
FEDERAL HOME LOAN BANK - 1.4%
11/06/02 6.250% 2,200,000 2,165,374
11/20/02 6.170% 1,100,000 1,080,577
------------
3,245,951
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 3.5%
02/15/01 5.000% 2,000,000 1,970,004
12/14/01 4.750% 2,500,000 2,420,865
11/12/02 6.340% 1,100,000 1,084,024
03/15/09 5.750% 2,775,000 2,528,380
------------
8,003,273
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 0.9%
10/11/06 7.150% 2,000,000 1,948,058
------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $78,067,821) 74,140,248
------------
CORPORATE BONDS & NOTES - 63.3%
BANKS - 2.3%
First Chicago Corp.
01/15/03 7.625% 3,250,000 3,303,732
First Empire Cap Tr I
02/01/27 8.234% 2,200,000 2,052,402
------------
TOTAL BANKS -- 5,356,134
------------
BROKER/DEALERS - 7.3%
Bear Stearns Co.
08/01/02 6.500% 3,000,000 2,944,974
Donaldson, Lufkin & Jenrette, Inc.
07/15/03 6.170% 3,000,000 2,896,698
11/01/05 6.875% 1,000,000 961,975
02/15/16 5.625% 2,000,000 1,976,804
Lehman Brothers, Inc.
02/26/01 6.000% 2,500,000 2,468,908
04/15/03 7.250% 3,500,000 3,475,581
Merrill Lynch, Inc.
01/15/07 7.000% 2,125,000 2,056,371
------------
TOTAL BROKER/DEALERS 16,781,311
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
3
<PAGE> 23
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Principal Value
Date Coupon Amount (Note 1)
- ---- ------ ------ --------
<C> <C> <C> <C>
CORPORATE BONDS & NOTES (CONTINUED)
CAPITAL GOODS - 11.2%
Arrow Electronics, Inc.
01/15/07 7.000% $ 3,800,000 $ 3,644,603
Dover Corp.
11/15/05 6.450% 3,525,000 3,372,819
Lockheed Martin Corp.
05/15/01 6.850% 2,250,000 2,226,906
03/15/03 6.750% 3,500,000 3,402,718
05/15/06 7.250% 2,300,000 2,195,782
Raytheon Co.
08/15/00 6.300% 2,500,000 2,492,120
07/15/05 6.500% 3,800,000 3,571,954
Tyco International Limited
11/01/01 6.500% 2,700,000 2,677,649
06/15/28 7.000% 2,300,000 1,989,249
------------
TOTAL CAPITAL GOODS 25,573,800
------------
CONSUMER NON-DURABLES - 2.5%
Anheuser Busch, Inc.
06/01/05 6.750% 1,200,000 1,176,630
09/01/05 7.000% 2,400,000 2,373,230
Coca-Cola Enterprises, Inc.
10/15/36 6.700% 2,250,000 2,216,228
------------
TOTAL CONSUMER NON-DURABLES 5,766,088
------------
CONSUMER SERVICES - 16.4%
Airtouch Communications, Inc.
05/01/08 6.650% 4,450,000 4,194,695
Belo (AH) Corp.
06/01/02 6.875% 4,000,000 3,940,200
Computer Sciences Corp.
03/15/09 6.250% 4,200,000 3,834,768
MCI Worldcom, Inc.
04/15/02 6.125% 4,425,000 4,319,782
Price/Costco, Inc.
06/15/05 7.125% 3,700,000 3,664,158
Rite Aid Corp.
08/15/13 6.875% 3,450,000 2,346,000
Sprint Cap Corp.
11/15/28 6.875% 2,300,000 2,046,011
USA Waste Services, Inc.
10/01/04 7.000% 3,000,000 2,704,461
WMX Technologies, Inc.
10/15/00 6.250% 3,100,000 3,029,227
Wal-Mart Stores, Inc.
02/01/00 5.650% 3,800,000 3,798,598
Waste Management Step Bond
10/01/02 7.700% 3,800,000 3,639,792
------------
TOTAL CONSUMER SERVICES 37,517,692
------------
FINANCIAL SERVICES - 12.1%
ASSOCIATES CORP. OF NORTH AMERICA
10/15/02 6.375% 1,000,000 983,443
05/15/37 5.960% 1,500,000 1,500,075
BHP Finance USA
03/01/06 6.690% 3,500,000 3,292,839
CNA Financial Corp.
04/15/05 6.500% 2,775,000 2,602,417
Countrywide Home Loans, Inc.
10/22/04 6.840% 2,500,000 2,436,335
Ford Motor Credit Co.
09/25/01 7.000% $ 3,445,000 $ 3,449,003
General Motors Acceptance Corp.
12/07/01 5.350% 3,500,000 3,399,032
Nationwide Mutual Insurance
Co. 144A*
02/15/04 6.500% 1,000,000 959,098
Provident Companies, Inc.
03/15/28 7.250% 2,600,000 2,267,634
Sun Canada Financial Co.
12/15/07 6.625% 2,850,000 2,663,841
TXU Eastern Funding Co. 144A*
05/15/09 6.750% 4,600,000 4,209,929
------------
TOTAL FINANCIAL SERVICES 27,763,646
------------
HEALTHCARE - 0.9%
Cardinal Health, Inc.
02/15/04 6.500% 2,000,000 1,930,074
------------
TOTAL HEALTHCARE 1,930,074
------------
TRAVEL & TRANSPORTATION - 3.7%
Norfolk Southern Corp.
02/15/04 7.875% 2,400,000 2,433,626
Northwest Airlines Corp.
07/02/16 7.670% 2,204,907 2,151,504
Union Pacific Corp.
01/15/04 6.125% 4,000,000 3,850,956
------------
TOTAL TRAVEL & TRANSPORTATION 8,436,086
------------
UTILITIES - 6.9%
Coastal Corp.
02/01/09 6.375% 4,000,000 3,643,612
Enron Corp.
07/15/28 6.950% 3,150,000 2,767,410
GTE Corp.
04/15/06 6.360% 4,400,000 4,170,434
11/01/08 6.900% 3,200,000 3,078,330
Public Service Electric & Gas Co.
11/01/01 7.875% 2,000,000 2,021,736
------------
TOTAL UTILITIES 15,681,522
------------
TOTAL CORPORATE BONDS & NOTES
(Cost $151,751,374) 144,806,353
------------
MORTGAGE-BACKED OBLIGATIONS - 0.8%
Federal National Mortgage
Association, Pool #250885
04/01/27 7.500% 1,664,996 1,647,963
Government National Mortgage
Association, Pool #26825
09/15/08 9.000% 75,166 78,960
------------
TOTAL MORTGAGE-BACKED OBLIGATIONS
(Cost $1,735,218) 1,726,923
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4 ------------------------------------------------------------------------------
<PAGE> 24
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Principal Value
Date Coupon Amount (Note 1)
<S> <C> <C>
MONEY MARKET MUTUAL FUND - 3.5%
SSGA Prime Money Market Fund $ 8,145,688 $ 8,145,688
-------------
TOTAL MONEY MARKET MUTUAL FUND 8,145,688
(Cost $8,145,688) -------------
TOTAL INVESTMENTS - 100%
(Cost $239,700,101) $ 228,819,212
=============
* Security exempt from registration under Rule 144A of the
Securities Act of 1933. This security may be resold in
transactions exempt from registration, normally to qualified
institutional buyers. At December 31, 1999, these securities
amounted to a value of $5,169,027 or 2.2% of net assets.
INCOME TAX INFORMATION:
At December 31, 1999, the net unrealized depreciation based on
cost for income ax purposes of $239,773,176 was as follows:
Aggregate gross unrealized appreciation for
all investments in which there was an excess
of value over tax cost $ 70,815
Aggregate gross unrealized depreciation for
all investments in which there was an excess
of tax cost over value (11,024,779)
--------------
Net unrealized depreciation $ (10,953,964)
==============
</TABLE>
OTHER INFORMATION:
Purchases and sales of securities, other than short-term
securities, for the six months ended December 31, 1999 aggregated
$14,986,939 and $13,150,391, respectively. Purchases and sales of
U.S. Government and Agency securities, other than short-term
securities, for the six months ended December 31, 1999 aggregated
$4,879,866 and $9,045,391, respectively.
<TABLE>
<CAPTION>
INTERMEDIATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Principal Value
Date Coupon Amount (Note 1)
- ---- ------ --------- --------
<S> <C> <C> <C>
U.S GOVERNMENT & AGENCY OBLIGATIONS - 50.8%
U.S. TREASURY NOTES - 18.3%
08/31/00 6.250% $ 3,000,000 $ 3,006,564
10/31/00 5.750% 3,000,000 2,993,439
04/30/01 6.250% 2,000,000 2,001,876
08/31/01 6.500% 2,500,000 2,510,158
05/31/02 6.500% 2,000,000 2,010,000
08/15/02 6.375% 1,000,000 1,001,875
08/15/07 6.125% 9,000,000 8,772,192
05/15/08 5.625% 10,000,000 9,406,250
11/15/08 4.750% 10,000,000 8,821,880
------------
40,524,234
------------
FEDERAL HOME LOAN BANK - 7.4%
09/20/00 6.125% 3,000,000 2,995,710
11/05/01 5.350% 2,500,000 2,446,135
11/06/02 6.250% 600,000 590,557
11/20/02 6.170% 700,000 687,640
09/02/03 5.575% 5,000,000 4,800,330
08/15/06 6.375% 5,000,000 4,832,813
------------
16,353,185
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 8.9%
11/12/02 6.340% 700,000 689,833
01/15/04 5.000% 5,000,000 4,675,700
01/05/07 6.700% 5,500,000 5,400,356
03/15/09 5.750% 10,000,000 9,111,280
------------
19,877,169
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 14.4%
09/20/00 6.110% 2,000,000 1,996,484
03/15/01 5.625% 5,000,000 4,952,065
01/15/03 5.250% 5,000,000 4,804,165
02/13/04 5.125% 5,000,000 4,691,395
11/13/06 6.950% 2,100,000 2,038,216
01/15/09 5.250% 10,000,000 8,805,520
06/15/09 6.375% 5,000,000 4,764,585
------------
32,052,430
TENNESSEE VALLEY AUTHORITY - 1.8%
11/01/00 6.000% 4,000,000 3,984,932
------------
TOTAL U.S. GOVERNMENT & AGENCY OBLIGATIONS
(Cost $117,238,797) 112,791,950
------------
CORPORATE BONDS & NOTES - 44.7%
BANKS - 4.7%
BancOne Corp.
05/01/07 7.600% 725,000 721,474
Bank One Texas
02/15/08 6.250% 5,000,000 4,625,870
First Chicago Corp.
01/15/03 7.625% 1,525,000 1,550,213
National City Corp.
03/01/04 6.625% 1,650,000 1,599,495
Wachovia Corp.
02/20/01 5.400% 2,000,000 1,970,576
------------
TOTAL BANKS 10,467,628
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
5
<PAGE> 25
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERMEDIATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Principal Value
Date Coupon Amount (Note 1)
- ---- ------ --------- --------
<S> <C> <C> <C>
CORPORATE BONDS & NOTES (CONTINUED)
BASIC MATERIALS - 4.0%
Aluminum Co. of America
02/01/01 5.750% $ 4,000,000 $ 3,962,640
E.I. du Pont de Nemours & Co.
10/11/00 6.210% 2,000,000 1,995,966
09/01/02 6.500% 3,000,000 2,979,171
------------
TOTAL BASIC MATERIALS 8,937,777
------------
BROKER/DEALERS - 6.3%
Merrill Lynch & Co., Inc.
02/12/03 6.000% 4,000,000 3,873,880
01/15/04 5.880% 4,000,000 3,808,816
08/01/04 6.550% 1,400,000 1,358,925
Morgan Stanley Group, Inc.
03/01/07 6.875% 5,000,000 4,811,830
------------
TOTAL BROKER/DEALERS 13,853,449
------------
CAPITAL GOODS - 4.4%
Lockheed Martin Corp.
05/15/01 6.850% 650,000 643,328
03/15/03 6.750% 1,300,000 1,263,867
McDonnell Douglas Corp.
07/01/00 8.250% 4,600,000 4,638,102
Raytheon Co.
08/15/02 6.450% 1,350,000 1,319,463
Rockwell International
09/15/02 6.750% 2,000,000 1,984,328
------------
TOTAL CAPITAL GOODS 9,849,088
------------
CONSUMER NON-DURABLES - 1.5%
Nike, Inc.
06/16/00 6.510% 2,000,000 1,999,988
PHILIP MORRIS, INC.
01/01/01 9.000% 1,250,000 1,265,596
------------
TOTAL CONSUMER NON-DURABLES 3,265,584
------------
CONSUMER SERVICES - 7.1%
CPC International, Inc.
09/19/00 6.200% 2,000,000 1,992,990
PITNEY BOWES, INC.
07/16/01 6.780% 1,000,000 1,000,184
02/01/05 5.950% 5,000,000 4,740,900
SAFEWAY, INC.
09/15/04 6.850% 1,400,000 1,368,657
WALT DISNEY CO.
12/15/03 5.125% 5,000,000 4,677,985
WAL-MART STORES, INC.
05/15/02 6.750% 2,000,000 1,997,694
------------
TOTAL CONSUMER SERVICES 15,778,410
------------
FINANCIAL SERVICES - 8.3%
CNA Financial Corp.
11/15/03 6.250% 2,000,000 1,903,484
Cigna Corp.
01/15/06 6.375% 1,350,000 1,249,051
Dow Jones & Co., Inc.
12/01/00 5.750% 1,000,000 993,224
Ford Motor Credit Co.
11/08/00 6.250% $ 2,000,000 $ 1,993,256
09/25/01 7.000% 1,000,000 1,001,162
General Electric Capital Corp.
04/15/02 7.450% 2,000,000 2,025,892
12/15/07 6.290% 5,000,000 4,944,670
05/01/18 6.666% 2,000,000 2,000,096
Household Finance Corp.
06/30/00 6.375% 250,000 249,924
Norwest Corp.
04/01/00 7.125% 2,000,000 2,005,820
------------
TOTAL FINANCIAL SERVICES 18,366,579
------------
TRAVEL & TRANSPORTATION - 1.7%
Norfolk Southern Corp.
05/15/07 7.350% 3,800,000 3,715,154
------------
UTILITIES - 6.7%
GTE Corp.
11/01/08 6.900% 3,500,000 3,366,923
Kentucky Utilities Co.
06/15/00 5.950% 2,000,000 1,995,878
National Rural Utilities
04/01/01 6.450% 2,000,000 1,996,846
New York Telephone
02/15/04 6.250% 875,000 842,893
Texas Utilities Co.
10/01/02 6.200% 2,000,000 1,956,798
U.S. West Capital Funding, Inc.
07/15/05 6.250% 5,000,000 4,726,630
------------
TOTAL UTILITIES 14,885,968
------------
TOTAL CORPORATE BONDS & NOTES
(Cost $102,148,015) 99,119,637
------------
MORTGAGE-BACKED OBLIGATIONS - 0.8%
Federal Home Loan Mortgage Corporation
Series 1665 Class KA
07/15/00 6.500% 49,273 49,230
Federal Home Loan Mortgage Corporation
Series 1698 Class E
10/15/06 6.000% 1,644,368 1,639,221
Federal National Mortgage Association
Class PK
06/25/00 6.500% 84,795 84,450
------------
TOTAL MORTGAGE-BACKED OBLIGATIONS
(Cost $1,776,332) 1,772,901
------------
MONEY MARKET MUTUAL FUND - 3.7%
SSGA Prime Money Market Fund 8,235,422 8,235,422
------------
TOTAL MONEY MARKET MUTUAL FUND 8,235,422
------------
(Cost $8,235,422)
TOTAL INVESTMENTS - 100%
(Cost $229,398,566) $ 221,919,910
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
6 ------------------------------------------------------------------------------
<PAGE> 26
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTERMEDIATE BOND PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
<S> <C>
INCOME TAX INFORMATION:
At December 31, 1999, the net unrealized depreciation based on
cost for income tax purposes of $229,398,566 was as follows:
Aggregate gross unrealized appreciation for all investments
in which there was an excess of value over tax cost $ 102,386
Aggregate gross unrealized depreciation for all investments
in which there was an excess of tax cost over value (7,581,042)
------------
Net unrealized depreciation $ (7,478,656)
============
</TABLE>
OTHER INFORMATION:
Purchases and sales of securities, other than short-term
securities, for the six months ended December 31, 1999
aggregated $26,616,217 and $26,743,853, respectively.
Purchases and sales of U.S. Government and Agency
securities, other than short-term securities, for the six
months ended December 31, 1999 aggregated $24,632,236 and
$17,009,531, respectively.
<TABLE>
<CAPTION>
TENNESSEE TAX-FREE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Bond Rating Principal Value
Date Coupon Moody/S&P Amount (Note 1)
- ---- ------ --------- ------ --------
<S> <C> <C> <C> <C>
TENNESSEE MUNICIPAL OBLIGATIONS - 95.1%
GENERAL OBLIGATION BONDS - 45.9%
ANDERSON COUNTY
Refunding & Improvement -
Rural Elementary School
03/01/08 5.150%, FGIC Aaa/AAA $ 500,000 $ 500,335
Chattanooga
09/01/02 5.000% Aa3/AA 1,900,000 1,924,459
11/01/06 5.600% aa3/AA 500,000 517,028
05/01/08 5.400%, FSA Aaa/AAA 500,000 506,424
Crockett County
04/01/11 5.000%, AMBAC Aaa/NR 500,000 481,220
Franklin City
Special School District
06/01/12 5.100% Aa3/NR 2,500,000 2,428,262
Franklin County
03/01/13 5.250%, MBIA Aaa/AAA 750,000 733,223
Gatlinburg
11/01/04 4.500%, FGIC Aaa/NR 3,000,000 2,966,499
Grundy County
05/01/06 5.350%, FGIC Aaa/AAA 300,000 306,587
Hamilton County
07/01/03 5.200% Aa2/NR 1,000,000 1,018,871
07/01/05 5.400% Aa2/NR 500,000 511,926
Jackson
Refunding & Improvement
03/01/14 5.125%, MBIA Aaa/NR 3,100,000 2,915,104
Johnson City
03/01/04 6.500% A1/NR 250,000 255,957
06/01/07 4.350%, FGIC Aaa/AAA 1,000,000 959,495
06/01/08 5.600%, FSA Aaa/AAA 500,000 519,985
06/01/12 5.900%, FSA Aaa/AAA 245,000 257,687
05/01/14 5.550%, FGIC Aaa/AAA 2,250,000 2,238,822
Kingsport
09/01/02 5.500% A1/NR 1,000,000 1,023,536
09/01/06 5.000%, MBIA Aaa/NR 1,150,000 1,150,567
09/01/07 5.900% A1/A+ 1,000,000 1,050,176
Knox County
04/01/08 5.100% Aa/AA 2,000,000 2,001,174
02/01/12 5.000% Aa3/AA 2,000,000 1,919,292
Knoxville
Refunding & Improvement, MBIA
05/01/07 5.250%, Aaa/AAA 3,000,000 3,038,448
05/01/08 5.300%, Aaa/AAA 1,350,000 1,362,903
Maury County
04/01/07 5.125%, AMBAC Aaa/AAA 2,000,000 2,009,888
Memphis
08/01/06 5.200% Aa/AA 500,000 511,654
10/01/10 4.375% Aa2/AA 2,500,000 2,301,485
11/01/10 5.200% Aa/AA 1,000,000 995,834
07/01/12 5.250% Aa/AA 3,000,000 2,932,845
11/01/13 5.250% Aa/AA 1,000,000 970,275
Metropolitan Nashville & Davidson
05/15/07 5.700% Aa/AA 1,000,000 1,029,098
12/01/07 5.000% Aa/AA 1,000,000 1,001,253
11/15/10 5.125% Aa2/AA 500,000 491,792
11/15/11 5.125% Aa2/AA 1,000,000 972,215
Monroe County
05/01/03 5.200%, AMBAC Aaa/AAA 500,000 511,717
Murfreesboro
05/01/00 6.250% A1/NR 250,000 251,782
08/01/04 5.500% A1/NR 1,000,000 1,027,622
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------- 7
<PAGE> 27
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
TENNESSEE TAX-FREE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
<TABLE>
<CAPTION>
Due Bond Rating Principal Value
Date Coupon Moody/S&P Amount (Note 1)
- ---- ------ ----------- --------- --------
<S> <C> <C> <C> <C>
TENNESSEE MUNICIPAL OBLIGATIONS (CONTINUED)
GENERAL OBLIGATION BONDS (CONTINUED)
Oak Ridge
07/01/08 5.400% Aa/A+ $1,000,000 $1,012,729
07/01/10 5.550% Aa/A+ 500,000 506,342
Putnam County, MBIA
04/01/05 5.250% Aaa/AAA 3,000,000 3,058,977
04/01/07 5.100% Aaa/AAA 1,540,000 1,545,502
Rutherford County
04/01/08 5.200% Aa3/AA- 2,000,000 2,013,464
04/01/09 5.250% Aa3/AA- 500,000 502,072
Sevier County
04/01/08 5.250%, FGIC Aaa/AAA 750,000 766,861
Shelby County
04/01/03 5.000% Aa2/AA+ 500,000 505,939
03/01/04 5.550% Aa2/AA+ 1,000,000 1,016,802
04/01/09 5.500% NR/AA+ 375,000 388,359
04/01/09 5.500% Aa3/AA+ 1,125,000 1,143,314
06/01/09 5.625% Aa2/AA+ 1,000,000 1,034,738
11/01/09 5.300% Aa2/AA+ 3,000,000 3,054,813
03/01/10 5.500% Aa3/AA+ 2,000,000 2,056,320
04/01/10 5.500% Aa2/AA+ 750,000 779,116
04/01/14 5.625% Aa3/AA+ 1,500,000 1,494,038
04/01/14 5.625% NR/AA+ 500,000 520,559
Tennessee State
06/01/05 6.700% Aaa/AAA 1,000,000 1,044,746
03/01/06 5.300% Aaa/AAA 2,500,000 2,578,260
05/01/06 5.000% Aaa/AAA 600,000 603,518
03/01/07 5.400% Aaa/AAA 1,740,000 1,800,968
05/01/08 5.000% Aaa/AAA 5,000,000 4,976,105
05/01/09 4.750% Aaa/AAA 2,000,000 1,941,170
05/01/11 5.000% Aaa/AAA 4,000,000 3,885,180
05/01/13 5.300% Aaa/AAA 750,000 737,287
Tipton County
04/01/12 5.250%, AMBAC Aaa/NR 500,000 494,621
Weakley County
05/01/09 5.000%, FGIC Aaa/AAA 350,000 342,826
White House
02/01/12 5.300%, MBIA Aaa/AAA 1,000,000 983,329
Williamson County
04/01/06 5.500% Aa1/NR 2,000,000 2,043,066
05/01/10 4.800% Aa1/NR 1,000,000 962,077
Wilson County
03/30/07 5.000%, FSA Aaa/NR 2,000,000 1,983,078
04/01/07 5.250% A1/NR 1,000,000 1,011,338
06/01/13 5.500%, FGIC Aaa/AAA 500,000 512,788
-----------
TOTAL GENERAL OBLIGATION BONDS 92,895,742
-----------
REVENUE BONDS - 49.2%
AIRPORT AUTHORITY - 1.2%
Memphis - Shelby County
09/01/12 5.350% Baa2/BBB 500,000 473,528
Metropolitan Nashville
07/01/08 4.600%, FGIC Aaa/AAA 2,000,000 1,933,058
-----------
TOTAL AIRPORT AUTHORITY 2,406,586
-----------
HEALTH & EDUCATION - 20.1%
Anderson County
Methodist Medical Center
07/01/05 5.500% A1/NR 1,400,000 1,416,404
07/01/08 5.700% A1/NR 1,000,000 1,011,991
Blount County
07/01/09 5.250% Baa1/NR 2,765,000 2,633,781
Bradley County
03/01/06 5.300%, MBIA Aaa/AAA 500,000 510,917
03/01/10 4.250%, FGIC Aaa/AAA 4,065,000 3,711,609
Bristol
Memorial Hospital
09/01/13 5.125%, FGIC Aaa/AAA 1,500,000 1,412,619
Chattanooga-Hamilton
10/01/04 5.375%, FSA Aaa/AAA 2,000,000 2,040,094
Franklin
09/01/09 4.750% NR/A+ 2,150,000 2,062,869
Jackson
04/01/06 5.300% A1/A+ 1,000,000 998,336
04/01/07 5.300% A1/A+ 2,000,000 2,004,598
04/01/10 5.500%, AMBAC Aaa/AAA 400,000 403,052
Johnson City
07/01/09 5.125%, MBIA NR/AAA 5,705,000 5,575,080
Knox County
04/01/05 4.875% Baa1/NR 2,600,000 2,551,466
Knox County
Ft. Sanders
01/01/04 7.000%, MBIA Aaa/AAA 500,000 510,000
Knox County
Baptist Health
04/15/11 5.500%, CONLEE NR/AAA 3,000,000 3,008,019
Metropolitan Nashville & Davidson
Baptist Hospital
11/01/05 5.000%, MBIA Aaa/AAA 1,000,000 996,434
Metropolitan Nashville & Davidson
Meharry
12/01/04 7.875% Aaa/NR 190,000 203,837
Monroe County
05/01/06 5.250%, FSA Aaa/NR 1,500,000 1,526,552
Shelby County
Methodist Healthcare, MBIA
04/01/03 5.000% Aaa/AAA 2,000,000 2,014,748
08/01/06 4.350% NR/AAA 2,335,000 2,243,062
08/01/12 5.500% Aaa/AAA 2,000,000 1,994,508
Sullivan County
Holston Valley Healthcare, MBIA
02/15/09 7.200% Aaa/AAA 750,000 767,708
02/15/13 5.750% Aaa/AAA 1,000,000 1,010,513
-----------
TOTAL HEALTH & EDUCATION 40,608,197
-----------
HOUSING - 1.0%
Metropolitan Nashville & Davidson
Multi-Family Housing
02/01/21 5.200%, FSA NR/AAA 1,000,000 1,011,488
Tennessee Housing
Development Agency
07/01/03 6.700% Aa2/AA 190,000 193,844
01/01/11 5.800% Aa2/AA 400,000 408,878
07/01/13 5.800% Aa2/AA 350,000 353,934
-----------
TOTAL HOUSING 1,968,144
-----------
INDUSTRIAL DEVELOPMENT - 0.8%
Hamilton County
09/01/01 5.300%, FGIC Aaa/AAA 1,000,000 1,011,201
</TABLE>
The accompanying notes are an integral part of the financial statements.
8 ------------------------------------------------------------------------------
<PAGE> 28
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TENNESSEE TAX-FREE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Bond Rating Principal Value
Date Coupon Moody/S&P Amount (Note 1)
- ---- ------ --------- ------ --------
<S> <C> <C> <C> <C>
TENNESSEE MUNICIPAL OBLIGATIONS (CONTINUED)
REVENUE BONDS (CONTINUED)
INDUSTRIAL DEVELOPMENT (CONTINUED)
Memphis-Shelby County
03/15/05 5.400% NR/AA- $ 650,000 $ 666,523
-----------
TOTAL INDUSTRIAL DEVELOPMENT 1,677,724
-----------
PUBLIC BUILDING AUTHORITY - 0.9%
Gatlinburg
12/01/01 6.500%, AMBAC Aaa/AAA 500,000 517,771
Sevier County, AMBAC
09/01/06 5.500% Aaa/AAA 775,000 789,936
09/01/10 5.400% Aaa/NR 500,000 503,607
-----------
TOTAL PUBLIC BUILDING AUTHORITY 1,811,314
-----------
STATE AUTHORITY - 3.9%
Tennessee State Local
Development Authority
03/01/02 6.600% A2/AA- 250,000 260,804
10/01/02 5.600% NR/A 400,000 410,087
03/01/03 6.700% A2/AA- 750,000 783,256
03/01/05 5.500% A2/AA- 2,500,000 2,583,680
03/01/14 5.125%, MBIA Aaa/AAA 2,000,000 1,869,668
10/01/14 6.450% NR/A 1,000,000 1,068,459
Tennessee State School
Board Authority
05/01/11 5.500% A1/AA 500,000 519,430
05/01/11 6.875% A1/AA 500,000 511,996
-----------
TOTAL STATE AUTHORITY 8,007,380
-----------
UTILITY - 21.3%
Clarksville
Water, Sewer & Gas, MBIA
02/01/01 5.500% Aaa/AAA 500,000 504,892
02/01/10 5.300% Aaa/NR 900,000 897,178
Dickson
Electric
09/01/11 5.625%, MBIA Aaa/AAA 1,000,000 1,024,099
Fayetteville
Electric
04/01/11 5.250% A/NR 1,750,000 1,720,698
Franklin
Water & Sewer
09/01/11 5.000% Aa2/NR 750,000 729,282
Harpeth Valley
Utility District
09/01/03 5.250% A1/A 1,000,000 1,019,272
09/01/06 5.500% A1/A 500,000 511,673
09/01/11 5.500% A1/A 1,650,000 1,654,636
Johnson City
Electric, Mbia
05/01/10 5.400%, Aaa/AAA 500,000 502,621
05/01/12 5.100%, Aaa/AAA 1,500,000 1,444,063
Knox Chapman
Water & Sewer
01/01/04 5.500%, MBIA AAa/AAA 565,000 580,687
Knoxville
Electric
07/01/12 5.700% Aa3/aA 500,000 517,312
Knoxville
Gas
03/01/03 5.300% Aa3/AA 1,000,000 1,028,726
03/01/14 5.350% Aa3/AA 2,760,000 2,664,134
Knoxville
Waste Water
04/01/01 4.375% Aa3/AA 2,000,000 1,995,310
La Follette
Electric, Ambac
06/01/11 5.800% Aaa/AAA 430,000 455,024
03/01/15 5.250% Aaa/NR 1,000,000 951,708
La Vergne
Water & Sewer
03/01/14 5.400% A1/NR 500,000 487,406
Lawrenceburg
Electric
07/01/06 5.200%, MBIA Aaa/AAA 345,000 347,268
Lenoir City
Electric
06/01/07 5.000%, AMBAC Aaa/NR 2,000,000 2,002,370
Madison
Utility District
02/01/10 5.600%, MBIA Aaa/AAA 500,000 509,733
Memphis
Electric
01/01/03 5.800% Aa/AAA 3,000,000 3,082,899
01/01/10 5.000% Aa/AAA 1,000,000 972,411
Memphis
Sanitation Sewer System
01/01/05 5.250% Aa2/AA+ 2,250,000 2,284,551
Metropolitan Nashville & Davidson
Electric
05/15/06 4.700% Aa3/AA 2,000,000 1,943,066
Metropolitan Nashville & Davidson
Water & Sewer
01/01/08 5.000%, FGIC Aaa/AAA 4,000,000 3,989,572
01/01/13 5.200%, FGIC Aaa/AAA 1,500,000 1,470,864
01/01/15 5.750%, AMBAC Aaa/AAA 1,000,000 1,039,802
Rutherford County
Water Works
02/01/11 5.100%, FGIC Aaa/NR 500,000 485,965
Sevier County
Gas
05/01/11 5.400%, AMBAC Aaa/NR 1,000,000 993,231
Sumner County
Solid Waste
08/01/04 5.125%, AMBAC Aaa/AAA 1,500,000 1,520,091
Tennessee
Energy Acquisition
09/01/05 4.400%, AMBAC Aaa/AAA 4,000,000 3,874,920
-----------
TOTAL UTILITY 43,205,464
-----------
TOTAL REVENUE BONDS 99,684,809
-----------
TOTAL TENNESSEE MUNICIPAL OBLIGATIONS
(Cost $195,817,855) 192,580,551
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
9
<PAGE> 29
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TENNESSEE TAX-FREE PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Bond Rating Principal Value
Date Coupon Moody/S&P Amount (Note 1)
- ---- ------ --------- ------ --------
<S> <C> <C> <C> <C>
OTHER STATE MUNICIPAL OBLIGATIONS - 4.6%
GENERAL OBLIGATION BONDS - 2.4%
Austin, Texas
09/01/06 7.000% Aa/AA $ 750,000 $ 764,401
Harris County, Texas
08/15/15 6.500% NR/NR 300,000 319,235
08/15/15 6.500% Aa2/AA 785,000 821,210
Indiana
02/01/04 5.500% NR/AAA 500,000 513,563
Las Vegas, Nevada
10/01/09 6.600%, FGIC Aaa/AAA 1,000,000 1,060,029
Louisiana State
05/01/07 6.500%, AMBAC Aaa/AAA 1,250,000 1,324,076
-------------
TOTAL GENERAL OBLIGATIONS BONDS 4,802,514
-------------
REVENUE BONDS - 2.2%
HEALTH & EDUCATION - 0.5%
Wisconsin State
Health & Education Facilities
11/15/10 6.250% NR/AA+ 1,000,000 1,042,425
-------------
TRANSPORTATION - 0.5%
Indianapolis
Public Improvement Transportation
07/01/10 6.000% Aa/AA- 950,000 987,331
-------------
UTILITY - 1.2%
Washington State
Public Power Supply
07/01/01 7.000%, FGIC Aaa/AAA 1,250,000 1,292,274
Wisconsin State
Clean Water
06/01/05 6.700% NR/AA+ 1,000,000 1,049,444
-------------
TOTAL UTILITY 2,341,718
-------------
TOTAL REVENUE BONDS 4,371,474
-------------
TOTAL OTHER STATE MUNICIPAL OBLIGATIONS
(Cost $8,795,174) 9,173,988
-------------
Shares
------
MONEY MARKET MUTUAL FUND - 0.3%
Federated Tennessee Municipal
Cash Trust 696,321 696,321
-------------
TOTAL MONEY MARKET MUTUAL FUND 696,321
-------------
TOTAL INVESTMENTS - 100%
(Cost $205,309,350) $ 202,450,860
=============
</TABLE>
The Portfolio had the following insurance concentration greater than 10% at
December 31, 1999 (as a percentage of net assets):
MBIA 18.6%
FGIC 11.0%
INCOME TAX INFORMATION:
At December 31, 1999, the net unrealized depreciation based on
cost for income tax purposes of $205,309,350 was as follows:
<TABLE>
<S> <C>
Aggregate gross unrealized appreciation for all
investments in which there was an excess of value
over tax cost $ 1,392,889
Aggregate gross unrealized depreciation for all
investments in which there was an excess of tax
cost over value (4,251,379)
-----------
Net unrealized depreciation $(2,858,490)
===========
</TABLE>
OTHER INFORMATION:
Purchases and sales of securities, other than short-term securities, for the
six months ended December 31, 1999 aggregated $4,740,125 and $10,991,526,
respectively.
RATINGS:
The Moody's and S&P ratings are believed to be the most recent ratings at
December 31, 1999.
UNAUDITED INCOME TAX INFORMATION:
Tennessee Tax-Free Portfolio had designated all dividends paid during the six
months ended December 31, 1999 as exempt-interest dividends. Thus, 100% of
these distributions are exempt from Federal income tax.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
10
<PAGE> 30
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Discount Rate or Principal Value
Date Coupon Rate Amount (Note 1)
- ---- ---------------- --------- --------
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS - 86.8%
U.S. TREASURY BILLS - 86.8%
01/20/00 4.41% $ 9,000,000 $ 8,979,100
------------
TOTAL U.S. TREASURY OBLIGATIONS 8,979,100
------------
Maturity
Amount
------
REPURCHASE AGREEMENTS - 13.2%
Shearson Lehman, 3.00%,
dated 12/31/99, due 01/03/00,
collateralized by $1,393,269 U.S. Treasury
Bond, 6.25%, due 08/15/23 1,366,342 1,366,000
------------
TOTAL REPURCHASE AGREEMENTS 1,366,000
------------
TOTAL INVESTMENTS - 100% $ 10,345,100
============
INCOME TAX INFORMATION:
Total Cost for Federal Income Tax Purposes - $10,345,100
</TABLE>
<TABLE>
<CAPTION>
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Discount Rate or Principal Value
Date Coupon Rate Amount (Note 1)
- ---- ---------------- --------- --------
<S> <C> <C> <C>
U.S TREASURY OBLIGATIONS - 8.8%
U.S TREASURY BILLS - 8.8%
01/20/00 4.41% $10,000,000 $ 9,981,000
-------------
TOTAL U.S. TREASURY OBLIGATIONS 9,981,000
-------------
U.S. GOVERNMENT OBLIGATIONS - 86.0%
FEDERAL AGRICULTURE MORTGAGE CORP. - 4.4%
01/18/00 5.66% 5,000,000 4,986,825
-------------
FEDERAL FARM CREDIT BANK - 5.3%
01/18/00 4.76% 3,000,000 2,999,849
02/01/00 4.80% 3,000,000 2,999,859
-------------
5,999,708
-------------
FEDERAL HOME LOAN BANK - 24.6%
01/19/00 5.11% 7,000,000 6,981,470
01/26/00 5.24% 3,000,000 2,989,083
02/15/00 5.64% 5,000,000 4,965,187
03/03/00 5.10% 3,000,000 2,999,853
04/26/00 5.72% 5,000,000 4,910,422
01/04/00 5.92%* 5,000,000 4,997,398
-------------
27,843,413
-------------
FEDERAL HOME LOAN MORTGAGE CORP. - 14.1%
01/11/00 5.72% 5,000,000 4,992,083
01/21/00 5.67% 4,000,000 3,987,600
02/22/00 5.52% 7,000,000 6,944,187
-------------
15,923,870
-------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 37.6%
01/18/00 5.63% 5,000,000 4,986,896
01/24/00 5.78% 2,000,000 1,992,665
01/27/00 5.43% 2,000,000 2,000,861
03/09/00 5.69% 3,000,000 2,968,210
03/16/00 5.85% 3,000,000 2,964,000
03/23/00 5.97% 5,000,000 5,000,000
05/18/00 5.51% 8,000,000 7,831,027
06/01/00 5.81% 3,000,000 2,928,560
01/03/00 4.94%* 7,000,000 6,998,112
01/02/00 6.30%* 5,000,000 4,998,027
-------------
42,668,358
-------------
TOTAL U.S. GOVERNMENT OBLIGATIONS 97,422,174
-------------
REPURCHASE AGREEMENTS - 5.2%
Shearson Lehman, 3.00%,
dated 12/31/99, due 01/03/00,
collateralized by $6,037,920 U.S. Treasury
Note, 6.50%, due 05/31/01 5,920,480 5,919,000
-------------
TOTAL REPURCHASE AGREEMENTS 5,919,000
-------------
TOTAL INVESTMENTS - 100% $ 113,322,174
-------------
</TABLE>
* Floating or variable rate security - rate disclosed as of December 31,
1999. Maturity date represents the next interest rate reset date.
INCOME TAX INFORMATION:
Total cost for Federal income tax purposes - $113,322,174
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
11
<PAGE> 31
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Discount Rate or Principal Value
Date Coupon Rate Amount (Note 1)
- ---- ---------------- --------- --------
<S> <C> <C> <C>
MUNICIPAL BONDS & NOTES - 100.0%
ARIZONA - 1.7%
Maricopa County
Development Authority
02/15/00 3.75% $ 1,000,000 $ 1,000,000
-----------
CONNECTICUT - 2.5%
Connecticut State
Health & Education
01/06/00 5.10%* 1,400,000 1,400,000
-----------
DELAWARE - 3.5%
Delaware State
Economic Development Authority
01/05/00 5.65%* 2,000,000 2,000,000
-----------
GEORGIA - 4.5%
Cobb County Housing Authority
Post Bridge Project
01/05/00 5.50%* 550,000 550,000
Monroe County
Pollution Control
01/03/00 5.05%* 1,300,000 1,300,000
Smyrna Housing Authority
Villages Project
01/05/00 5.50%* 700,000 700,000
-----------
2,550,000
-----------
ILLINOIS - 3.3%
Cook County
01/05/00 5.80%* 1,900,000 1,900,000
-----------
INDIANA - 3.9%
Sullivan Pollution Control
02/14/00 3.75% 1,200,000 1,200,000
03/08/00 3.80% 1,000,000 1,000,000
-----------
2,200,000
-----------
KANSAS - 5.4%
City of Burlington
Pollution Control
02/11/00 3.75% 1,000,000 1,000,000
Wyandotte County
02/01/00 3.30% 2,095,750 2,095,750
-----------
3,095,750
-----------
LOUISIANA - 7.6%
Louisiana
Public Hospital
01/05/00 5.65%* 1,300,000 1,300,000
Louisiana State
Offshore Term
01/03/00 4.70%* 2,000,000 2,000,000
Plaquemines Port
03/08/00 3.85% 1,000,000 1,000,000
-----------
4,300,000
-----------
MARYLAND - 1.7%
Montgomery County
Economic Development
01/05/00 4.81%* 1,000,000 1,000,000
-----------
MICHIGAN - 4.1%
Detroit
Sewer
01/05/00 5.55%* 1,300,000 1,300,000
Lakeview
Calhoun School District
08/22/00 4.00% 1,000,000 1,001,542
-----------
2,301,542
-----------
MINNESOTA - 4.1%
Minneapolis
01/06/00 5.40%* 2,330,000 2,330,000
-----------
MISSOURI - 3.9%
Columbia
02/01/00 5.10% 1,000,000 1,001,375
Missouri State
Environmental Improvement
01/05/00 5.65%* 1,200,000 1,200,000
-----------
2,201,375
-----------
NEVADA - 1.7%
Clark County, Airport Authority
01/05/00 5.15%* 965,000 965,000
-----------
NEW JERSEY - 1.8%
Barnegat
01/10/00 3.93% 1,000,000 1,000,068
-----------
NEW YORK - 3.0%
Long Island
Power Authority
01/05/00 5.50%* 1,100,000 1,100,000
New York City
Transitional
01/05/00 5.50%* 100,000 100,000
New York City
Water & Sewer System
01/03/00 4.50%* 500,000 500,000
-----------
1,700,000
-----------
NORTH CAROLINA - 4.1%
Mecklenburg County
01/06/00 5.30%* 2,300,000 2,300,000
-----------
OHIO - 6.7%
Mansfield City
School District
07/18/00 4.40% 2,000,000 2,005,160
Medina County Housing
Oaks at Medina
01/06/00 5.47%* 1,800,000 1,800,000
-----------
3,805,160
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
12
<PAGE> 32
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Discount Rate or Principal Value
Date Coupon Rate Amount (Note 1)
- ---- ---------------- --------- --------
<S> <C> <C> <C>
MUNICIPAL BONDS & NOTES (CONTINUED)
OKLAHOMA - 1.8%
Tulsa County
Independent School
05/01/00 4.88% $ 1,000,000 $ 1,004,035
------------
PENNSYLVANIA - 4.7%
Luzerne County
Convention Center
01/06/00 5.35%* 1,790,000 1,790,000
Pennsylvania State
Higher Education
01/05/00 5.50%* 300,000 300,000
Sayre
Healthcare Facilities
01/05/00 5.65%* 400,000 400,000
Washington County
Higher Education
01/05/00 5.55%* 200,000 200,000
------------
2,690,000
------------
SOUTH CAROLINA - 1.6%
Piedmont
Power Agency
01/05/00 5.65%* 900,000 900,000
------------
TENNESSEE - 8.6%
Chattanooga Health, Education & Housing
Baylor
01/05/00 5.55%* 1,110,000 1,110,000
Clarksville Public Building Authority
01/06/00 5.40%* 1,250,000 1,250,000
Memphis
01/05/00 5.80%* 700,000 700,000
Metro. Gov't Nashville
Airport
01/05/00 5.65%* 800,000 800,000
Washington County
Industrial Development Springbrook
Property
01/05/00 5.55%* 1,050,000 1,050,000
------------
4,910,000
------------
TEXAS - 4.8%
Harris County
02/17/00 3.90% 1,000,000 1,000,000
Texas State
08/31/00 4.50% 1,700,000 1,706,834
------------
2,706,834
------------
UTAH - 0.9%
Salt Lake City
01/05/00 5.65%* 500,000 500,000
------------
VIRGINIA - 7.4%
Hampton
Housing Authority
01/05/00 5.50%* 2,000,000 2,000,000
Lynchburg
Industrial Development Authority
01/05/00 5.75%* 2,200,000 2,200,000
------------
4,200,000
------------
WASHINGTON - 6.7%
King County
School District No. 403
06/01/00 4.00% 1,000,000 1,004,060
Port Anacortes
02/09/00 3.70% 1,500,000 1,500,000
Snohomish County
Public Utilities
01/05/00 5.15%* 1,300,000 1,300,000
------------
3,804,060
------------
TOTAL MUNICIPAL BONDS & NOTES 56,763,824
------------
TOTAL INVESTMENTS - 100% $ 56,763,824
============
</TABLE>
* Floating or variable rate security - rate disclosed as of December 31, 1999.
Maturity date represents the next interest rate reset date.
INCOME TAX INFORMATION:
Total cost for Federal income tax purposes - $56,763,824
UNAUDITED INCOME TAX INFORMATION:
Municipal Money Market Portfolio had designated all dividends paid during the
six months ended December 31, 1999 as exempt-interest dividends. Thus, 100% of
these distributions are exempt from Federal income tax.
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
13
<PAGE> 33
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CASH RESERVE PORTFOLIO
PORTFOLIO OF INVESTMENTS
December 31, 1999 (Unaudited)
(Showing Percentage of Total Value of Investments)
Due Discount Rate or Principal Value
Date Coupon Rate Amount (Note 1)
- ---- ---------------- --------- --------
<S> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS - 22.2%
Federal Home Loan Bank
01/03/00 5.08% $ 25,603,000 $ 25,600,866
-------------
CERTIFICATE OF DEPOSIT - 1.7%
Nationsbank Carolinas
01/06/00 5.00% 2,000,000 1,999,995
------------
COMMERCIAL PAPER - 47.5%
ASSET-BACKED SECURITIES - 6.9%
CC USA, Inc.
02/18/00 5.50% 3,000,000 2,978,000
Centric Capital Corp.
02/29/00 5.65% 5,000,000 4,953,701
------------
7,931,701
------------
BROKER/DEALERS - 3.4%
Morgan Stanley Dean Witter &Co.
03/28/00 6.15% 4,000,000 3,940,550
------------
BUSINESS CREDIT INSTITUTIONS - 3.4%
General Electric Capital Corp.
04/11/00 5.83% 4,000,000 3,934,574
------------
ENERGY - 6.9%
Alcatel Alsthom Inc.
03/15/00 5.95% 4,000,000 3,951,078
Allegheny Energy Inc.
03/10/00 5.78% 4,000,000 3,955,687
------------
7,906,765
------------
FINANCIAL SERVICES - 14.3%
Atlantis One Funding Corp.
04/20/00 5.80% 4,000,000 3,929,111
Banque National De Paris
05/31/00 6.05% 3,635,000 3,542,757
Norwest Financial Inc.
03/09/00 5.92% 4,000,000 3,955,271
Paccar Financial Corp.
01/03/00 4.50% 5,000,000 4,998,750
------------
16,425,889
------------
MOTOR VEHICLES & CAR BODIES - 3.4%
DaimlerChrysler Corp.
03/29/00 5.83% 4,000,000 3,942,996
-------------
PERSONAL CREDIT INSTITUTIONS - 5.7%
Associates Corp. of North America
03/31/00 5.89% 5,000,000 4,926,375
HD Real Estate Funding Corp.
02/22/00 5.80% 1,604,000 1,590,562
------------
6,516,937
------------
TOBACCO - 4.3%
UST Inc.
03/28/00 5.90% 5,000,000 4,928,708
-------------
TOTAL COMMERCIAL PAPER 55,528,120
-------------
VARIABLE RATE NOTES - 28.6%
ASSET-BACKED SECURITIES - 3.5%
SMM Trust 1999-E**
04/05/00 6.11%* 4,000,000 4,000,000
------------
BROKER/DEALERS - 4.3%
Goldman Sachs Group**
01/07/00 6.33%* 5,000,000 5,000,154
------------
CHEMICAL & ALLIED PRODUCTS - 3.5%
Dow Chemical Co.
03/15/00 6.02%* 4,000,000 3,999,700
------------
FINANCIAL SERVICES - 8.7%
Bank One Corp.
10/06/00 6.18%* 4,000,000 3,998,870
Fleet Financial Group Inc.
07/28/00 6.27%* 2,000,000 2,000,094
Key Bank
06/14/00 6.03%* 4,000,000 3,998,935
------------
9,997,899
------------
SHORT-TERM BUSINESS CREDIT INSTITUTIONS - 7.8%
AT&T Corp.**
07/13/00 6.14%* 4,000,000 3,999,152
Texaco Capital Corp.
05/03/00 6.01%* 5,000,000 4,998,345
------------
8,997,497
------------
TOTAL VARIABLE RATE NOTES 31,995,250
------------
TOTAL INVESTMENTS - 100% $115,124,231
============
</TABLE>
* Floating or variable rate security - rate disclosed as of December 31,
1999. Maturity date represents the next interest rate reset.
** Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December 31,
1999, these securities amounted to a value of $12,999,306 or 11.3% of net
assets.
INCOME TAX INFORMATION:
Total cost for income tax purposes - $115,124,231
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
14
<PAGE> 34
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
GROWTH & INCOME CAPITAL APPRECIATION
PORTFOLIO PORTFOLIO
--------------- ---------------------
<S> <C> <C>
ASSETS:
Investments, at value (cost-see below)(Note 1) $ 996,227,385 $ 44,228,673
Receivable for investments sold 2,346,089 0
Receivable for portfolio shares sold 746,997 5,950
Dividends receivable 1,110,411 2,105
Interest receivable 101,983 6,852
Other assets 27,957 0
--------------- ---------------
Total assets 1,000,560,822 44,243,580
--------------- ---------------
LIABILITIES:
Payable for shares redeemed 42,894 0
Accrued advisory fee 414,831 23,117
Accrued administration fee 121,966 4,961
Accrued co-administration fee 41,219 1,720
Accrued 12b-1 fee 68,246 261
Accrued shareholder servicing fee 42,432 652
Other payables and accrued expenses 196,642 68,493
--------------- ---------------
Total liabilities 928,230 99,204
--------------- ---------------
NET ASSETS $ 999,632,592 $ 44,144,376
=============== ===============
NET ASSETS CONSIST OF:
Paid in capital $ 599,515,272 $ 36,622,656
Overdistributed net investment income (242,489) (156,720)
Accumulated net realized gain (loss) on
investments 23,879,416 (1,317,125)
Net unrealized appreciation
in value of investments 376,480,393 8,995,565
--------------- ---------------
NET ASSETS $ 999,632,592 $ 44,144,376
=============== ===============
COST OF INVESTMENTS $ 619,746,992 $ 35,233,108
=============== ===============
NET ASSET VALUE PER SHARE
Net Assets
Class I $ 792,784,770 $ 40,826,933
Class II $ 101,902,462 $ 2,775,056
Class III $ 102,581,403 $ 539,089
Class IV $ 2,363,957 $ 3,298
--------------- ---------------
Shares outstanding of $.001 par value capital
stock, unlimited shares authorized
Class I 31,755,191 3,256,678
Class II 4,077,924 222,933
Class III 4,166,564 44,192
Class IV 94,982 263
--------------- ---------------
Net Asset Value and redemption price per
share
Class I $ 24.97 $ 12.54
Class II $ 24.99 $ 12.45
Class III $ 24.62 $ 12.20
Class IV $ 24.89 $ 12.55
--------------- ---------------
Maximum offering price per share
Class I (no sales charge) $ 24.97 $ 12.54
Class II (net asset value plus maximum
sales charge of 5.75% of offering price) $ 26.51 $ 13.21
Class III (no sales charge) $ 24.62 $ 12.20
Class IV(no sales charge) $ 24.89 $ 12.55
--------------- ---------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------- 15
<PAGE> 35
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
BOND INTERMEDIATE BOND TENNESSEE TAX-FREE
PORTFOLIO PORTFOLIO PORTFOLIO
------------- ----------------- ------------------
<S> <C> <C> <C>
ASSETS:
Investments, at value (cost-see below) (Note 1) $ 228,819,212 $ 221,919,910 $ 202,450,860
Receivable for portfolio shares sold 2,462 14,123 35,000
Interest receivable 4,221,971 3,877,460 3,246,115
Other assets 3,525 4,072 3,734
------------- ------------- -------------
Total assets 233,047,170 225,815,565 205,735,709
------------- ------------- -------------
LIABILITIES:
Payable for shares redeemed 13,261 680 152,095
Accrued advisory fee 27,789 0 0
Accrued administration fee 28,640 28,311 28,817
Accrued co-administration fee 9,543 9,422 8,734
Dividends payable 343,104 583,485 672,120
Accrued 12b-1 fee 2,440 395 3,087
Accrued shareholder servicing fee 2,109 1,208 1,017
Other payables and accrued expenses 66,127 96,525 99,921
------------- ------------- -------------
Total liabilities 493,013 720,026 965,791
------------- ------------- -------------
NET ASSETS $ 232,554,157 $ 225,095,539 $ 204,769,918
============= ============= =============
NET ASSETS CONSIST OF:
Paid in capital $ 243,618,917 $ 232,830,918 $ 207,860,956
(Over) Undistributed net investment income (103,231) 107,640 32,314
Accumulated net realized loss on
investments (80,640) (364,363) (264,862)
Net unrealized depreciation
in value of investments (10,880,889) (7,478,656) (2,858,490)
------------- ------------- -------------
NET ASSETS $ 232,554,157 $ 225,095,539 $ 204,769,918
============= ============= =============
COST OF INVESTMENTS $ 239,700,101 $ 229,398,566 $ 205,309,350
============= ============= =============
NET ASSET VALUE PER SHARE
Net Assets
Class I $ 224,536,632 $ 217,711,127 $ 180,063,854
Class II $ 5,585,641 $ 6,403,574 $ 11,224,665
Class III $ 2,431,884 $ 980,838 $ 13,377,768
Class IV n/a n/a $ 103,631
------------- ------------- -------------
Shares outstanding of $.001 par value capital
stock, unlimited shares authorized
Class I 23,675,790 22,716,281 18,279,344
Class II 590,421 668,149 1,137,123
Class III 256,201 102,371 1,356,862
Class IV n/a n/a 10,517
------------- ------------- -------------
Net Asset Value and redemption price per
share
Class I $ 9.48 $ 9.58 $ 9.85
Class II $ 9.46 $ 9.58 $ 9.87
Class III $ 9.49 $ 9.58 $ 9.86
Class IV n/a n/a $ 9.85
------------- ------------- -------------
Maximum offering price per share
Class I (no sales charge) $ 9.48 $ 9.58 $ 9.85
Class II (net asset value plus maximum
sales charge of 3.75%, 2.50% and 2.50%,
respectively, of offering price) $ 9.83 $ 9.83 $ 10.12
Class III (no sales charge) $ 9.49 $ 9.58 $ 9.86
Class IV(no sales charge) n/a n/a $ 9.85
------------- ------------- -------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
16 -------------------------------------------------------------------------
<PAGE> 36
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
U.S. TREASURY U.S. GOVERNMENT MUNICIPAL CASH
MONEY MARKET MONEY MARKET MONEY MARKET RESERVE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (1)(Note 1) $ 10,345,100 $ 113,322,174 $ 56,763,824 $ 115,124,231
Cash 88 0 16,546 405
Receivable for portfolio shares sold 29,250 0 0 84,016
Interest receivable 114 397,210 372,448 394,963
Other assets 0 1,075 448 1,136
------------- ------------- ------------- -------------
Total assets 10,374,552 113,720,459 57,153,266 115,604,751
------------- ------------- ------------- -------------
LIABILITIES:
Payable for shares redeemed 29,250 0 0 45,825
Dividends payable 31,285 424,957 144,392 144,987
Accrued management fee 0 9,058 4,465 9,264
Accrued administration fee 0 6,786 0 10,375
Accrued co-administration fee 0 2,309 1,277 2,323
Accrued 12b-1 fee 1,853 1,857 1,038 15,754
Other payables and accrued expenses 37,858 88,151 23,453 53,985
------------- ------------- ------------- -------------
Total liabilities 100,246 533,118 174,625 282,513
------------- ------------- ------------- -------------
NET ASSETS $ 10,274,306 $ 113,187,341 $ 56,978,641 $ 115,322,238
============= ============= ============= =============
NET ASSETS CONSIST OF:
Paid in capital $ 10,283,409 $ 113,202,924 $ 56,982,907 $ 115,323,387
(Over) undistributed net investment income 73 331 (357) (1,366)
Accumulated net realized gain (loss)
on investments (9,176) (15,914) (3,909) 217
------------- ------------- ------------- -------------
NET ASSETS $ 10,274,306 $ 113,187,341 $ 56,978,641 $ 115,322,238
============= ============= ============= =============
NET ASSET VALUE, offering price and
redemption price per share (2) $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= =============
</TABLE>
(1) Including repurchase agreements for the U.S. Treasury Money Market, U.S.
Government Money Market, Municipal Money Market, and Cash Reserve
Portfolios in the amounts of $1,445,000, $5,990,000, $0 and $0
respectively.
(2)
<TABLE>
<CAPTION>
Shares Outstanding
Net $.001 par value, unlimited
Assets shares authorized)
------------- --------------------------
<S> <C> <C>
U.S. Treasury Money Market
Class I $ 8,370,724 8,375,480
Class III 1,903,482 1,907,829
Class IV 100 100
U.S. Government Money Market
Class I 109,060,119 109,075,510
Class III 4,127,222 4,127,414
Municipal Money Market
Class I 51,130,951 51,135,190
Class III 5,847,690 5,847,717
Cash Reserve
Class I 34,040,343 34,039,922
Class III 81,281,895 81,283,465
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------- 17
<PAGE> 37
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the Six Months ended December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
GROWTH & INCOME CAPITAL APPRECIATION
PORTFOLIO PORTFOLIO
--------------- --------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends $ 5,361,330 $ 13,148
Interest 1,145,604 49,367
------------ ------------
Total investment income 6,506,934 62,515
------------ ------------
EXPENSES:
Management fee (Note 3) 3,174,756 153,406
Administration fee (Note 4) 732,636 27,072
Co-administration fee (Note 4) 244,212 9,024
Fund accounting/Custodian fee 92,789 33,271
Transfer Agent fee 154,948 317
Transfer Agent Out of Pocket fee:
Class I 429 215
Class II 13,739 1,276
Class III 12,344 263
Class IV 79 0
Blue Sky fee:
Class I 9,536 0
Class II 4,416 387
Class III 10,120 218
Class IV 83 0
Distribution fee:
Class III 364,520 1,490
Class IV 3,949 3
Shareholder servicing fee:
Class II 113,385 2,712
Class III 121,507 496
Trustees fee 9,892 2,727
Registration fee 0 2,512
Audit 64,400 0
Legal 26,824 2,504
Reports to Shareholders 22,983 1,685
Miscellaneous 46,338 6,729
------------ ------------
Total expenses before waiver 5,223,885 246,307
Waiver of expenses (Note 5) (732,636) (27,072)
------------ ------------
Net expenses 4,491,249 219,235
------------ ------------
NET INVESTMENT INCOME (LOSS) 2,015,685 (156,720)
------------ ------------
Net realized gain on investments 54,724,496 1,834,965
Change in net unrealized appreciation/
depreciation 4,473,043 6,323,244
------------ ------------
Net gain on investments 59,197,539 8,158,209
------------ ------------
NET INCREASE IN NET ASSETS
FROM OPERATIONS $ 61,213,224 $ 8,001,489
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
18 -------------------------------------------------------------------------
<PAGE> 38
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the Six Months ended December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
BOND INTERMEDIATE BOND TENNESSEE TAX-FREE
PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------------- ------------------
<S> <C> <C> <C>
INTEREST INCOME $ 7,579,579 $ 6,950,959 $ 5,294,732
----------- ----------- -----------
EXPENSES:
Management fee (Note 3) 643,541 559,609 531,925
Administration fee (Note 4) 175,511 167,883 159,578
Co-administration fee (Note 4) 58,504 55,961 53,192
Fund Accounting/Custodian fee 56,718 51,626 75,017
Transfer Agent fee 30,953 34,173 17,235
Transfer Agent Out of Pocket fee:
Class I 214 515 28
Class II 229 673 758
Class III 787 98 1,047
Class IV -- -- 3
Blue Sky fee:
Class I 1,272 1,874 252
Class II 1,277 523 252
Class III 730 522 252
Class IV -- -- 2
Distribution fee:
Class III 9,635 3,922 58,095
Class IV -- -- 195
Shareholder Servicing fee:
Class II 6,747 6,757 6,120
Class III 3,202 1,304 0
Trustees fee 4,558 4,105 3,987
Registration fee 0 3,128 3,607
Audit 5,120 4,380 8,888
Legal 4,232 4,048 14,816
Reports to Shareholders 4,243 11,470 13,402
Miscellaneous 14,185 13,382 12,765
----------- ----------- -----------
Total expenses before waiver 1,021,658 925,953 961,416
Waiver of expenses (Note 5) (471,261) (560,923) (551,290)
Fees reimbursed by administrator (Note 5) 0 0 (2,860)
----------- ----------- -----------
Net expenses 550,397 365,030 407,266
----------- ----------- -----------
NET INVESTMENT INCOME 7,029,182 6,585,929 4,887,466
----------- ----------- -----------
Net realized loss on investments (130,015) (279,516) (241,029)
Change in net unrealized appreciation/
depreciation (7,551,860) (4,110,372) (4,416,847)
----------- ----------- -----------
Net loss on investments (7,681,875) (4,389,888) (4,657,876)
----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ (652,693) $ 2,196,041 $ 229,590
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------- 19
<PAGE> 39
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
For the Six Months Ended December 31, 1999 (Unaudited)
<TABLE>
<CAPTION>
U.S. TREASURY U.S. GOVERNMENT MUNICIPAL
MONEY MARKET MONEY MARKET MONEY MARKET CASH RESERVE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INTEREST INCOME $ 321,584 $ 2,548,525 $ 947,797 $ 2,813,070
----------- ----------- ----------- -----------
EXPENSES:
Management fee (Note 3) 3,396 120,877 67,844 127,723
Administration fee (Note 4) 4,641 36,280 20,339 38,401
Co-administration fee (Note 4) 3,094 24,186 13,559 25,601
Fund accounting/Custodian fee 25,963 24,492 233 15,634
Blue sky fee:
Class I 690 1,772 1,406 1,327
Class III 2,624 1,598 1,840 1,750
Class IV 14 -- -- --
Distribution fee:
Class III 3,638 4,995 6,610 88,044
Class IV 70 -- -- --
Transfer Agent fee 4,601 12,571 13,055 16,283
Trustees fee 184 1,855 0 2,002
Audit 552 0 0 0
Legal 184 1,656 0 2,647
Reports to shareholders 368 3,406 1,000 4,449
Registration 0 0 0 14,106
Miscellaneous 4,289 5,825 4,000 6,172
----------- ----------- ----------- -----------
Total expenses before waiver 54,308 239,513 129,886 344,139
Waiver of expenses (Note 5) (18,210) (84,641) (47,467) (89,547)
----------- ----------- ----------- -----------
Net expenses 36,098 154,872 82,419 254,592
----------- ----------- ----------- -----------
NET INVESTMENT INCOME 285,486 2,393,653 865,378 2,558,478
----------- ----------- ----------- -----------
Net realized gain (loss) on investments 8,581 (6,987) 1 0
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 294,067 $ 2,386,666 $ 865,379 $ 2,558,478
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
20 -------------------------------------------------------------------------
<PAGE> 40
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
GROWTH & INCOME CAPITAL APPRECIATION
PORTFOLIO PORTFOLIO
---------------------------------------------------------------------------------
FOR THE SIX MONTHS FOR THE YEAR FOR THE SIX MONTHS FOR THE YEAR
ENDED DECEMBER 31, ENDED JUNE 30, ENDED DECEMBER 31, ENDED JUNE 30,
1999 (UNAUDITED) 1999 1999(UNAUDITED) 1999
------------------ -------------- ------------------ ---------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income (loss) $ 2,015,685 $ 3,696,398 $ (156,720) $ (343,925)
Net realized gain (loss) on
investments 54,724,496 88,739,605 1,834,965 (3,081,885)
Change in net unrealized
appreciation/depreciation 4,473,043 104,769,457 6,323,244 2,466,249
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
from operations 61,213,224 197,205,460 8,001,489 (959,561)
------------- ------------- ------------- -------------
DISTRIBUTIONS:
From net investment income:
Class I (2,084,015) (3,611,722) 0 0
Class II (171,838) (98,157) 0 0
Class III 0 0 0 0
Class IV 0 0 0 0
From net realized gain:
Class I (83,965,430) (18,142,545) 0 (780,800)
Class II (10,248,758) (1,602,790) 0 (37,718)
Class III (10,564,379) (2,209,366) 0 (10,677)
Class IV (196,133) 0 0 0
------------- ------------- ------------- -------------
Net decrease in net assets
from distributions (107,230,553) (25,664,580) 0 (829,195)
------------- ------------- ------------- -------------
SHARE TRANSACTIONS (NOTE 2):
Proceeds from sales of shares 69,929,406 116,277,623 688,298 2,147,360
Reinvested dividends 67,417,122 15,884,506 0 796,222
Cost of shares redeemed (61,105,206) (111,879,817) (791,933) (3,913,074)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
from share transactions 76,241,322 20,282,312 (103,635) (969,492)
------------- ------------- ------------- -------------
Total increase (decrease) in
net assets 30,223,993 191,823,192 7,897,854 (2,758,248)
NET ASSETS:
Beginning of period 969,408,599 777,585,407 36,246,522 39,004,770
------------- ------------- ------------- -------------
End of period* $ 999,632,592 $ 969,408,599 $ 44,144,376 $ 36,246,522
============= ============= ============= =============
*Includes (over) undistributed
net investment income of $ (242,489) $ (2,321) $ (156,720) $ 0
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------- 21
<PAGE> 41
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
BOND INTERMEDIATE BOND
PORTFOLIO PORTFOLIO
-------------------------------------------------------------------------------
For the Six Months For the Year For the Six Months For the Year
Ended December 31, Ended June 30, Ended December 31, Ended June 30,
1999 (Unaudited) 1999 1999 (Unaudited) 1999
-------------------- -------------- ------------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 7,029,182 $ 13,212,685 $ 6,585,929 $ 12,357,769
------------- ------------- -------------- -------------
Net realized gain (loss) on investments (130,015) 1,106,799 (279,516) 157,324
Change in net unrealized
appreciation/depreciation (7,551,860) (9,618,801) (4,110,372) (5,299,490)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
from operations (652,693) 4,700,683 2,196,041 7,215,603
------------- ------------- ------------- -------------
DISTRIBUTIONS:
From net investment income:
Class I (6,808,783) (12,947,111) (6,406,221) (12,192,668)
Class II (154,721) (205,107) (152,816) (133,188)
Class III (66,006) (118,305) (26,225) (31,913)
From net realized gain:
Class I (746,146) (1,953,692) 0 (478,824)
Class II (18,564) (29,251) 0 (6,249)
Class III (8,127) (23,546) 0 (1,405)
------------- ------------- ------------- -------------
Net decrease in net assets
from distributions (7,802,347) (15,277,012) (6,585,262) (12,844,247)
------------- ------------- ------------- -------------
SHARE TRANSACTIONS (NOTE 2):
Proceeds from sales of shares 14,531,181 30,018,648 29,697,976 57,021,977
Reinvested dividends 5,164,475 10,217,950 2,732,905 5,439,657
Cost of shares redeemed (10,982,594) (20,365,500) (26,398,288) (34,193,286)
------------- ------------- ------------- -------------
Net increase in net assets
from share transactions 8,713,062 19,871,098 6,032,593 28,268,348
------------- ------------- ------------- -------------
Total increase in net assets 258,022 9,294,769 1,643,372 22,639,704
NET ASSETS:
Beginning of period 232,296,135 223,001,366 223,452,167 200,812,463
------------- ------------- ------------- -------------
End of period* $ 232,554,157 $ 232,296,135 $ 225,095,539 $ 223,452,167
============= ============= ============= =============
*Includes (over) undistributed
net investment income of $ (103,231) $ (102,903) $ 107,640 $ 106,973
</TABLE>
The accompanying notes are an integral part of the financial statements.
22 -------------------------------------------------------------------------
<PAGE> 42
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
TENNESSEE TAX-FREE
PORTFOLIO
------------------------------------
For the Six Months For the Year
Ended December 31, Ended June 30,
1999 (Unaudited) 1999
------------------ -------------
<S> <C> <C>
OPERATIONS:
Net investment income $ 4,887,466 $ 9,464,899
Net realized gain (loss) on investments (241,029) 352,760
Change in net unrealized
appreciation/depreciation (4,416,847) (4,927,848)
------------- -------------
Net increase in net assets
from operations 229,590 4,889,811
------------- -------------
DISTRIBUTIONS:
From net investment income:
Class I (4,289,981) (8,303,485)
Class II (275,318) (496,265)
Class III (320,869) (665,149)
Class IV (1,043) 0
From net realized gain:
Class I (245,870) (513,687)
Class II (15,221) (31,953)
Class III (18,938) (44,141)
Class IV (141) 0
------------- -------------
Net decrease in net assets
from distributions (5,167,381) (10,054,680)
------------- -------------
SHARE TRANSACTIONS (NOTE 2):
Proceeds from sales of shares 16,991,019 60,438,058
Reinvested dividends 570,608 1,088,193
Cost of shares redeemed (23,903,879) (35,438,573)
------------- -------------
Net increase (decrease) in net assets
from share transactions (6,342,252) 26,087,678
------------- -------------
Total increase (decrease) in net assets (11,280,043) 20,922,809
NET ASSETS:
Beginning of period 216,049,961 195,127,152
------------- -------------
End of period* $ 204,769,918 $ 216,049,961
============= =============
*Includes undistributed
net investment income of $ 32,314 $ 32,059
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------- 23
<PAGE> 43
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. TREASURY MONEY U.S. GOVERNMENT MONEY
MARKET PORTFOLIO MARKET PORTFOLIO
-------------------------------------------------------------------------------
For the Six Months For the Year For the Six Months For the Year
Ended December 31, Ended June 30, Ended December 31, Ended June 30,
1999 (Unaudited) 1999 1999 (Unaudited) 1999
------------------ -------------- ------------------ --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 285,486 $ 2,429,867 $ 2,393,653 $ 4,405,001
Net realized gain (loss) on
investments 8,581 2,940 (6,987) (1,107)
------------- ------------- ------------- -------------
Net increase in net assets from
operations 294,067 2,432,807 2,386,666 4,403,894
------------- ------------- ------------- -------------
DISTRIBUTIONS:
From net investment income
Class I (221,551) (666,882) (2,301,913) (4,289,430)
Class III (63,473) (1,762,992) (91,740) (115,571)
Class IV (462) 0 -- --
------------- ------------- ------------- -------------
Net decrease in net assets from
distributions (285,486) (2,429,874) (2,393,653) (4,405,001)
------------- ------------- ------------- -------------
SHARE TRANSACTIONS AT NET ASSET VALUE
OF $1.00 PER SHARE (NOTE 2):
Proceeds from sales of shares 32,541,390 158,496,952 117,546,513 148,976,160
Reinvested dividends 63,097 478,573 91,238 114,515
Cost of shares redeemed (34,308,295) (208,610,939) (100,196,223) (144,105,292)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
from share transactions (1,703,808) (49,635,414) 17,441,528 4,985,383
------------- ------------- ------------- -------------
Total increase (decrease) in
net assets (1,695,227) (49,632,481) 17,434,541 4,984,276
NET ASSETS:
Beginning of period 11,969,533 61,602,014 95,752,800 90,768,524
------------- ------------- ------------- -------------
End of period* $ 10,274,306 $ 11,969,533 $ 113,187,341 $ 95,752,800
============= ============= ============= =============
*Includes undistributed net
investment income of $ 73 $ 73 $ 331 $ 331
</TABLE>
The accompanying notes are an integral part of the financial statements.
24 -------------------------------------------------------------------------
<PAGE> 44
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
MUNICIPAL MONEY CASH RESERVE
MARKET PORTFOLIO PORTFOLIO
--------------------------------------------------------------------------------
For the Six Months For the Year For the Six Months For the Year
Ended December 31, Ended June 30, Ended December 31, Ended June 30,
1999 (Unaudited) 1999 1999 (Unaudited) 1999
------------------ -------------- ------------------ --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income $ 865,378 $ 1,408,437 $ 2,558,478 $ 4,464,245
Net realized gain on
investments 1 0 0 3,447
------------- ------------- ------------- -------------
Net increase in net assets from
operations 865,379 1,408,437 2,558,478 4,467,692
------------- ------------- ------------- -------------
DISTRIBUTIONS:
From net investment income
Class I (788,146) (1,297,153) (812,295) (1,682,792)
Class III (77,589) (111,284) (1,747,571) (2,781,453)
------------- ------------- ------------- -------------
Net decrease in net assets from
distributions (865,735) (1,408,437) (2,559,866) (4,464,245)
------------- ------------- ------------- -------------
SHARE TRANSACTIONS AT NET ASSET VALUE
OF $1.00 PER SHARE (NOTE 2):
Proceeds from sales of shares 45,959,224 107,473,646 94,874,864 187,659,183
Reinvested dividends 77,287 111,074 1,735,271 2,753,796
Cost of shares redeemed (50,828,220) (86,022,985) (73,598,332) (196,589,773)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
from share transactions (4,791,709) 21,561,735 23,011,803 (6,176,794)
------------- ------------- ------------- -------------
Total increase (decrease)
in net assets (4,792,065) 21,561,735 23,010,415 (6,173,347)
NET ASSETS:
Beginning of period 61,770,706 40,208,971 92,311,823 98,485,170
------------- ------------- ------------- -------------
End of period* $ 56,978,641 $ 61,770,706 $ 115,322,238 $ 92,311,823
============= ============= ============= =============
*Includes (over) undistributed net
investment income of $ (357) $ 0 $ (1,366) $ 22
</TABLE>
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------- 25
<PAGE> 45
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
GROWTH & INCOME PORTFOLIO
<TABLE>
<CAPTION>
CLASS I
---------------------------------------------------------------------------
For the Six Months
Ended December 31, For the Year
(Unaudited) Ended June 30,
---------------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 26.26 $ 21.56 $ 17.03 $ 14.12 $ 12.22 $ 10.53
-------- -------- -------- -------- -------- --------
Income from investment
operations:
Net investment income 0.07 0.13 0.17 0.18 0.19 0.23
Net realized and unrealized gain on investments 1.54 5.30 5.25 3.75 2.58 2.21
-------- -------- -------- -------- -------- --------
Total from investment operations 1.61 5.43 5.42 3.93 2.77 2.44
-------- -------- -------- -------- -------- --------
Distributions:
Net investment income (0.07) (0.12) (0.17) (0.18) (0.19) (0.23)
Net realized gain (2.83) (0.61) (0.72) (0.84) (0.68) (0.52)
-------- -------- -------- -------- -------- --------
Total distributions (2.90) (0.73) (0.89) (1.02) (0.87) (0.75)
-------- -------- -------- -------- -------- --------
Net asset value, end of period $ 24.97 $ 26.26 $ 21.56 $ 17.03 $ 14.12 $ 12.22
======== ======== ======== ======== ======== ========
TOTAL RETURN+ 6.53%# 25.69% 2.55% 28.83% 23.54% 24.20%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $792,785 $790,985 $651,363 $221,136 $159,146 $114,000
Ratio of expenses to average daily net assets(1) 0.79%* 0.80% 0.82% 0.83% 0.76% 0.47%
Ratio of net investment income to average net assets 0.54%* 0.57% 0.78% 1.19% 1.40% 2.12%
Portfolio turnover rate 17%* 21% 7% 25% 41% 33%
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 0.93%* 0.95% 0.97% 0.98% 1.00% 0.99%
</TABLE>
<TABLE>
<CAPTION>
CLASS II
---------------------------------------------------------------
For the Six Months
Ended December 31, For the Year
(Unaudited) Ended June 30,
---------------------------------------------------------------
1999 1999 1998 1997 1996**
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 26.30 $ 21.58 $ 17.05 $ 14.12 $ 13.05
-------- -------- -------- -------- --------
Income from investment
operations:
Net investment income 0.03 0.06 0.10 0.13 0.09
Net realized and unrealized gain on investments 1.54 5.31 5.27 3.76 1.74
-------- -------- -------- -------- --------
Total from investment operations 1.57 5.37 5.37 3.89 1.83
-------- -------- -------- -------- --------
Distributions:
Net investment income (0.05) (0.04) (0.12) (0.12) (0.08)
Net realized gain (2.83) (0.61) (0.72) (0.84) (0.68)
-------- -------- -------- -------- --------
Total distributions (2.88) (0.65) (0.84) (0.96) (0.76)
-------- -------- -------- -------- --------
Net asset value, end of period $ 24.99 $ 26.30 $ 21.58 $ 17.05 $ 14.12
======== ======== ======== ======== ========
TOTAL RETURN+*** 6.35%# 25.33% 32.17% 28.48% 14.71%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $101,902 $ 82,896 $ 46,863 $ 16,514 $ 1,918
Ratio of expenses to average daily net assets(1) 1.07%* 1.10% 1.13% 1.14% 1.06%*
Ratio of net investment income to average net assets 0.26%* 0.28% 0.47% 0.88% 1.10%*
Portfolio turnover rate 17%* 21% 7% 25% 41%
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 1.22%* 1.25% 1.28% 1.29% 1.30%*
</TABLE>
* Annualized.
** Class II commenced operations on December 20, 1995.
*** Class II total return does not include the one time front-end sales charge.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
26 -------------------------------------------------------------------------
<PAGE> 46
- -------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
GROWTH & INCOME PORTFOLIO (CONTINUED)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS III
For the Six Months
Ended December 31, For the Year
(Unaudited) Ended June 30,
---------------------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ----
SELECTED PER-SHARE DATA
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $26.00 $21.47 $16.99 $14.11 $12.23 $10.51
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income (loss) (0.04) (0.11) (0.04) 0.02 0.03 0.06
Net realized and unrealized gain on
investments 1.49 5.25 5.24 3.74 2.60 2.24
------ ------ ------ ------ ------ ------
Total from investment operations 1.45 5.14 5.20 3.76 2.63 2.30
------ ------ ------ ------ ------ ------
Distributions:
Net investment income -- -- -- (0.04) (0.07) (0.06)
Net realized gain (2.83) (0.61) (0.72) (0.84) (0.68) (0.52)
------ ------- ------ ------ ------ ------
Total distributions (2.83) (0.61) (0.72) (0.88) (0.75) (0.58)
------ ------- ------ ------ ------ ------
Net asset value, end of period $24.62 $26.00 21.47 $16.99 $ 14.11 $12.23
====== ======= ====== ====== ====== ======
TOTAL RETURN+ 5.94%# 24.35% 31.16% 27.44% 22.19% 22.61%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $102,581 $95,528 $79,360 $50,178 $36,892 $19,363
Ratio of expenses to average daily net assets(1) 1.82%* 1.88% 1.87% 1.94% 1.87% 1.72%
Ratio of net investment income to average net assets (0.50)%* (0.50)% (0.28)% 0.08% 0.29% 0.87%
Portfolio turnover rate 17%* 21% 7% 25% 41% 33%
(1) During the period, various fees were waived
The ratio of expenses to average net assets had
such waivers not occurred is as follows 1.97%* 2.03% 2.02% 2.09% 2.11% 2.26%
</TABLE>
<TABLE>
<CAPTION>
Class IV
----------------------
For the Period Ended
December 31,
(Unaudited)
----------------------
1999**
------
SELECTED PER-SHARE DATA
<S> <C>
Net asset value, beginning of period $25.83
------
Income from investment operations:
Net investment loss (0.02)
Net realized and unrealized gain on
investments 1.91
------
Total from investment operations 1.89
------
Distributions:
Net investment income -
Net realized gain (2.83)
------
Total distributions (2.83)
------
Net asset value, end of period $24.89
======
TOTAL RETURN+ 7.68%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $2,364
Ratio of expenses to average daily net assets(1) 1.81%*
Ratio of net investment income to average net assets (0.48)%*
Portfolio turnover rate 17%*
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 1.96%*
</TABLE>
* Annualized
** Class IV commenced operations on August 3, 1999.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
- -------------------------------------------------------------------------- 27
<PAGE> 47
- -------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
CAPITAL APPRECIATION PORTFOLIO
<TABLE>
<CAPTION>
CLASS I
------------------------------------------------------------------------------
For the Six Months
Ended December 31, For the Year For the Period
(Unaudited) Ended June 30, Ended June 30,
------------------------------------------------------------------------------
1999## 1999## 1998**
------ ------ ------
SELECTED PER-SHARE DATA
<S> <C> <C> <C>
Net asset value, beginning of period $10.25 $10.74 $10.00
------ ------ ------
Income from investment operations:
Net investment loss (0.04) (0.09) (0.03)
Net realized and unrealized gain (loss) on
investments 2.33 (0.16) 0.77
------ ------ ------
Total from investment operations 2.29 (0.25) 0.74
Distributions: ------ ------ ------
Net realized gain -- (0.24) --
------ ------ ------
Net asset value, end of period $12.54 $10.25 $10.74
====== ====== ======
Total Return+ 22.10%# (2.16)% 7.40%#
Ratios and Supplemental Data
Net assets, end of period (thousands) $40,827 $33,803 $37,014
Ratio of expenses to average daily net assets(1) 1.17%* 1.29% 1.16%*
Ratio of net investment loss to average net assets (0.83)%* (1.00)% (0.54)%*
Portfolio turnover rate 148%* 47% 44%*
(1) During the period, various fees were waived
The ratio of expenses to average net assets had
such waivers not occurred is as follows 1.32%* 1.44% 1.36%*
</TABLE>
<TABLE>
<CAPTION>
CLASS II
--------------------------------------------------------------------------
For the Six Months
Ended December 31, For the Year For the Period
(Unaudited) Ended June 30, Ended June 30,
--------------------------------------------------------------------------
1999## 1999## 1998**
------ ------ ------
Selected Per-Share Data
<S> <C> <C> <C>
Net asset value, beginning of period $10.20 $10.71 $10.51
------ ------ ------
Income from investment operations:
Net investment loss (0.06) (0.13) (0.05)
Net realized and unrealized gain (loss) on
investments 2.31 (0.14) 0.25
------ ------ ------
Total from investment operations 2.25 (0.27) 0.20
Distributions: ------ ------ ------
Net realized gain -- (0.24) --
------ ------ ------
Net asset value, end of period $12.45 $10.20 $10.71
====== ====== ======
Total Return+*** 21.82%# (2.35)% 1.90%#
Ratios and Supplemental Data
Net assets, end of period (thousands) $2,775 $2,051 $1,400
Ratio of expenses to average daily net assets(1) 1.57%* 1.66% 1.52%*
Ratio of net investment loss to average net assets (1.23)%* (1.37)% (0.90)%*
Portfolio turnover rate 148%* 47% 44%*
(1) During the period, various fees were waived
The ratio of expenses to average net assets had
such waivers not occurred is as follows 1.72%* 1.81% 1.72%*
</TABLE>
* Annualized.
** Classes I and II commenced operations on September 2, 1997 and October 2,
1997, respectively.
*** Class II total return does not include the one time sales charge.
+ Total return would have been lower had various fees not been
waived during the period.
# Total return for periods of less than one year are
not annualized.
## Per share amounts calculated based on the average shares outstanding during
the period.
The accompanying notes are an integral part of financial statements.
28 -----------------------------------------------------------------------------
<PAGE> 48
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
CAPITAL APPRECIATION PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
CLASS III
---------------------------------------------------------
For the Six Months
Ended December 31, For the Year For the Period
(Unaudited) Ended June 30, Ended June 30,
------------------ -------------- --------------
1999## 1999## 1998**
---------- ---------- ----------
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.04 $ 10.64 $ 10.51
---------- ---------- ----------
Income from investment operations:
Net investment loss (0.10) (0.19) (0.10)
Net realized and unrealized gain (loss) on
investments 2.26 (0.17) 0.23
---------- ---------- ----------
Total from investment operations 2.16 (0.36) 0.13
---------- ---------- ----------
Distributions:
Net realized gain -- (0.24) --
---------- ---------- ----------
Net asset value, end of period $ 12.20 $ 10.04 $ 10.64
========== ========== ==========
TOTAL RETURN+ 21.27%# (3.22)% 1.24%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $ 539 $ 392 $ 590
Ratio of expenses to average daily net assets(1) 2.40%* 2.44% 2.28%*
Ratio of net investment loss to average net assets (2.06)% (2.15)% (1.65)%*
Portfolio turnover rate 148%* 47% 44%*
(1) During the period, various fees were waived
The ratio of expenses to average net assets had
such waivers not occurred is as follows 2.55%* 2.59% 2.47%*
</TABLE>
<TABLE>
<CAPTION>
CLASS IV
------------------
For the Period
Ended December 31,
(Unaudited)
------------------
1999**##
----------
<S> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.06
----------
Income from investment operations:
Net investment loss (0.06)
Net realized and unrealized gain on
investments 2.55
----------
Total from investment operations 2.49
----------
Distributions: --
----------
Net asset value, end of period $ 12.55
==========
TOTAL RETURN+ 24.75%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $ 3
Ratio of expenses to average daily net assets(1) 2.09%*
Ratio of net investment loss to average net assets (1.75)%*
Portfolio turnover rate 148%*
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 2.24%*
</TABLE>
* Annualized
** Class III and IV commenced operations on October 2, 1997 and August 3, 1999,
respectively.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
## Per share amounts calculated based on the average shares outstanding during
the period.
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------ 29
<PAGE> 49
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
BOND PORTFOLIO
<TABLE>
<CAPTION>
CLASS I
---------------------------------------------------------------------------
For the Six
Months Ended
December 31, For the Year
(Unaudited) Ended June 30,
------------ -------------------------------------------------------------
1999 1999 1998 1997 1996 1995
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 9.83 $ 10.29 $ 9.84 $ 9.73 $ 9.91 $ 9.41
--------- --------- --------- --------- --------- ---------
Income from investment operations:
Net investment income 0.29 0.59 0.61 0.61 0.60 0.57
Net realized and unrealized gain (loss) on
investments (0.32) (0.37) 0.45 0.11 (0.18) 0.50
--------- --------- --------- --------- --------- ---------
Total from investment operations (0.03) 0.22 1.06 0.72 0.42 1.07
--------- --------- --------- --------- --------- ---------
Distributions:
Net investment income (0.29) (0.59) (0.61) (0.61) (0.60) (0.57)
Net realized gain (0.03) (0.09) -- -- -- --
--------- --------- --------- --------- --------- ---------
Total distributions (0.32) (0.68) (0.61) (0.61) (0.60) (0.57)
--------- --------- --------- --------- --------- ---------
Net asset value, end of period $ 9.48 $ 9.83 $ 10.29 $ 9.84 $ 9.73 $ 9.91
========= ========= ========= ========= ========= =========
TOTAL RETURN+ (0.26)%# 2.04% 11.02% 7.58% 4.23% 11.87%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $ 224,537 $ 224,467 $ 219,088 $ 123,184 $ 107,832 $ 90,574
Ratio of expenses to average daily net assets (1) 0.45%* 0.48% 0.49% 0.49% 0.41% 0.35%
Ratio of net investment income to average net assets 6.01%* 5.73% 5.98% 6.20% 5.99% 6.07%
Portfolio turnover rate 12%* 22% 26% 56% 56% 23%
(1) During the period, various fees were waived
The ratio of expenses to average net assets had
such waivers not occurred is as follows 0.85%* 0.88% 0.89% 0.89% 0.91% 0.91%
</TABLE>
<TABLE>
<CAPTION>
CLASS II
---------------------------------------------------------------------------
For the Six
Months Ended
December 31, For the Year
(Unaudited) Ended June 30,
---------------------------------------------------------------------------
1999 1999 1998 1997 1996
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 9.81 $ 10.26 $ 9.81 $ 9.71 $ 10.18
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income 0.27 0.55 0.57 0.57 0.29
Net realized and unrealized gain (loss) on
investments (0.31) (0.35) 0.46 0.10 (0.47)
--------- --------- --------- --------- ---------
Total from investment operations (0.04) 0.20 1.03 0.67 (0.18)
Distributions: --------- --------- --------- --------- ---------
Net investment income (0.28) (0.56) (0.58) (0.57) (0.29)
Net realized gain (0.03) (0.09) -- -- --
--------- --------- --------- --------- ---------
Total distributions (0.31) (0.65) (0.58) (0.57) (0.29)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 9.46 $ 9.81 $ 10.26 $ 9.81 $ 9.71
========= ========= ========= ========= =========
TOTAL RETURN+*** (0.41)%# 1.86% 10.72% 7.12% (1.75)%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $ 5,586 $ 5,172 $ 1,801 $ 841 $ 67
Ratio of expenses to average daily net assets(1) 0.76%* 0.81% 0.84% 0.90% 0.80%*
Ratio of net investment income to average net assets 5.70%* 5.40% 5.63% 5.79% 5.61%*
Portfolio turnover rate 12%* 22% 26% 56% 56%
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 1.16%* 1.21% 1.24% 1.30% 1.30%*
</TABLE>
* Annualized.
** Class II commenced operations on December 20, 1995.
*** Class II total return does not include the one time sales charge.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
30 ------------------------------------------------------------------------
<PAGE> 50
- -------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
BOND PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
CLASS III
--------------------------------------------------------------------------------
For the Six Months
Ended December 31, For the Year
(Unaudited) Ended June 30,
--------------------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $9.81 $10.27 $9.82 $9.71 $9.89 $9.40
--------------------------------------------------------------------------------
Income from investment operations:
Net investment income 0.25 0.47 0.48 0.49 0.49 0.43
Net realized and unrealized gain (loss) on
investments (0.29) (0.36) 0.46 0.11 (0.18) 0.49
--------------------------------------------------------------------------------
Total from investment operations (0.04) 0.11 0.94 0.60 0.31 0.92
--------------------------------------------------------------------------------
Distributions:
Net investment income (0.25) (0.48) (0.49) (0.49) (0.49) (0.43)
Net realized gain (0.03) (0.09) -- -- -- --
--------------------------------------------------------------------------------
Total distributions (0.28) (0.57) (0.49) (0.49) (0.49) (0.43)
--------------------------------------------------------------------------------
Net asset value, end of period $9.49 $9.81 $10.27 $9.82 $9.71 $9.89
================================================================================
TOTAL RETURN+ (0.39)%# 0.94% 9.72% 6.37% 3.11% 10.12%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $2,432 $2,656 $2,113 $2,553 $3,445 $1,916
Ratio of expenses to average daily net assets (1) 1.32%* 1.55% 1.67% 1.63% 1.49% 1.84%
Ratio of net investment income to average net assets 5.14%* 4.66% 4.80% 5.07% 4.92% 4.58%
Portfolio turnover rate 12%* 22% 26% 56% 56% 23%
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 1.97%* 2.12% 2.07% 2.03% 1.99% 3.35%
</TABLE>
* Annualized
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------- 31
<PAGE> 51
- -------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
INTERMEDIATE BOND PORTFOLIO
<TABLE>
<CAPTION>
CLASS I
----------------------------------------------------------
For the Six Months
Ended December 31, For the Year For the Period
(Unaudited) Ended June 30, Ended June 30,
----------------------------------------------------------
1999 1999 1998**
---- ---- ------
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $9.78 $10.02 $10.00
----------------------------------------------------------
Income from investment operations:
Net investment income 0.29 0.58 0.19
Net realized and unrealized gain (loss)
on investments (0.20) (0.22) 0.02
----------------------------------------------------------
Total from investment operations 0.09 0.36 0.21
----------------------------------------------------------
Distributions:
Net investment income (0.29) (0.58) (0.19)
Net realized gain -- (0.02) --
----------------------------------------------------------
Total distributions (0.29) (0.60) (0.19)
----------------------------------------------------------
Net asset value, end of period $9.58 $9.78 $10.02
==========================================================
TOTAL RETURN+ 0.90%# 3.60% 2.17%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $217,711 $219,298 $199,872
Ratio of expenses to average daily net assets (1) 0.31%* 0.36% 0.37%*
Ratio of net investment income to average net assets 5.88%* 5.76% 5.87%*
Portfolio turnover rate 24%* 48% 9%*
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 0.81%* 0.86% 0.87%*
</TABLE>
<TABLE>
<CAPTION>
CLASS II
-----------------------------------------------------------
For the Six Months
Ended December 31, For the Year For the Period
(Unaudited) Ended June 30, Ended June 30,
-----------------------------------------------------------
1999 1999 1998**
---- ---- ------
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $9.78 $10.02 $9.99
-----------------------------------------------------------
Income from investment operations:
Net investment income 0.27 0.55 0.18
Net realized and unrealized gain (loss)
on investments (0.20) (0.22) 0.03
-----------------------------------------------------------
Total from investment operations 0.07 0.33 0.21
-----------------------------------------------------------
Distributions:
Net investment income (0.27) (0.55) (0.18)
Net realized gain -- (0.02) --
-----------------------------------------------------------
Total distributions (0.27) (0.57) (0.18)
Net asset value, end of period $9.58 $9.78 $10.02
===========================================================
TOTAL RETURN+*** 0.75%# 3.32% 2.07%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $6,404 $3,057 $923
Ratio of expenses to average daily net assets (1) 0.60%* 0.68% 0.65%*
Ratio of net investment income to average net assets 5.59%* 5.43% 5.59%*
Portfolio turnover rate 24%* 48% 9%*
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 1.10%* 1.19% 1.16%*
</TABLE>
* Annualized.
** Classes I and II commenced operations on March 2, 1998 and March 9, 1998,
respectively.
***Class II total return does not include the one time sales charge.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
32 ----------------------------------------------------------------------------
<PAGE> 52
- -------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
INTERMEDIATE BOND PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
CLASS III
-----------------------------------------------------------
For the Six Months
Ended December 31, For the Year For the Period
(Unaudited) Ended June 30, Ended June 30,
-----------------------------------------------------------
1999 1999 1998**
---- ---- ------
<S> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $9.77 $10.02 $9.99
-----------------------------------------------------------
Income from investment operations:
Net investment income 0.25 0.49 0.06
Net realized and unrealized gain (loss)
on investments (0.19) (0.23) 0.03
-----------------------------------------------------------
Total from investment operations 0.06 0.26 0.09
-----------------------------------------------------------
Distributions:
Net investment income (0.25) (0.49) (0.06)
Net realized gain -- (0.02) --
-----------------------------------------------------------
Total distributions (0.25) (0.51) (0.06)
-----------------------------------------------------------
Net asset value, end of period $9.58 $9.77 $10.02
===========================================================
TOTAL RETURN+ 0.57%# 2.58% 0.92%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $981 $1,097 $17
Ratio of expenses to average daily net assets (1) 1.18%* 1.22% 1.35%*
Ratio of net investment income to average net assets 5.01%* 4.90% 4.89%*
Portfolio turnover rate 24%* 48% 9%*
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 1.93%* 1.92% 1.86%*
</TABLE>
* Annualized.
**Class III commenced operations on May 19, 1998.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
- ---------------------------------------------------------------------------- 33
<PAGE> 53
- -------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
TENNESSEE TAX-FREE PORTFOLIO
<TABLE>
<CAPTION>
CLASS I
-------------------------------------------------------------------------------------
For the Six Months
Ended December 31, For the Year
(Unaudited) Ended June 30,
-------------------------------------------------------------------------------------
1999 1999 1998 1997 1996**
---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $10.08 $10.31 $9.99 $9.71 $10.00
------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.23 0.46 0.48 0.50 0.23
Net realized and unrealized gain (loss) on
investments (0.21) (0.20) 0.32 0.28 (0.29)
------- ------- ------- ------- -------
Total from investment operations 0.02 0.26 0.80 0.78 (0.06)
------- ------- ------- ------- -------
Distributions:
Net investment income (0.23) (0.46) (0.48) (0.50) (0.23)
Net realized gain (0.01) (0.03) -- -- --
------- ------- ------- ------- -------
Total distributions (0.24) (0.49) (0.48) (0.50) (0.23)
------- ------- ------- ------- -------
Net asset value, end of period $9.85 $10.08 $10.31 $9.99 $9.71
======= ======= ======= ======= =======
TOTAL RETURN+ 0.16%# 2.54% 8.16% 8.26% (0.65)%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $180,064 $185,445 $176,884 $8,935 $5,925
Ratio of expenses to average daily net assets (1) 0.34%* 0.36% 0.31% 0.07% 0.50%*
Ratio of net investment income to average net assets 4.62%* 4.49% 4.71% 5.09% 4.31%*
Portfolio turnover rate 5%* 31% 15% 122% 8%*
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 0.84%* 0.86% 0.85% 1.14% 1.42%*
</TABLE>
<TABLE>
<CAPTION>
CLASS II
-------------------------------------------------------------------------------------
For the Six Months
Ended December 31, For the Year
(Unaudited) Ended June 30,
-------------------------------------------------------------------------------------
1999 1999 1998 1997 1996**
---- ---- ---- ---- ------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $10.11 $10.34 $10.01 $9.73 $10.06
------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.23 0.46 0.48 0.51 0.21
Net realized and unrealized gain (loss) on
investments (0.23) (0.20) 0.33 0.28 (0.33)
------- ------- ------- ------- -------
Total from investment operations 0.00 0.26 0.81 0.79 (0.12)
------- ------- ------- ------- -------
Distributions:
Net investment income (0.23) (0.46) (0.48) (0.51) (0.21)
Net realized gain (0.01) (0.03) -- -- --
------- ------- ------- ------- -------
Total distributions (0.24) (0.49) (0.48) (0.51) (0.21)
------- ------- ------- ------- -------
Net asset value, end of period $9.87 $10.11 $10.34 $10.01 $9.73
======= ======= ======= ======= =======
TOTAL RETURN+*** 0.00%# 2.46% 8.22% 8.37% (1.25)%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $11,225 $13,227 $8,973 $5,941 $1,875
Ratio of expenses to average daily
net assets (1) 0.46%* 0.44% 0.37% 0.12% 0.49%*
Ratio of net investment income to average net assets 4.51%* 4.41% 4.65% 5.03% 4.32%*
Portfolio turnover rate 5%* 31% 15% 122% 8%*
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 0.96%* 0.94% 0.91% 1.14% 1.42%*
</TABLE>
* Annualized.
** Classes I and II commenced operations on December 15, 1995 and December 29,
1995, respectively.
***Class II total return does not include the one time sales charge.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
34 ----------------------------------------------------------------------------
<PAGE> 54
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
TENNESSEE TAX-FREE PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
CLASS III
--------------------------------------------------------------------------------
For the Six Months
Ended December 31, For the Year
(Unaudited) Ended June 30,
--------------------------------------------------------------------------------
1999 1999 1998 1997 1996**
--------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.09 $ 10.32 $ 10.00 $ 9.72 $ 10.00
--------- --------- --------- -------- --------
Income from investment operations:
Net investment income 0.21 0.42 0.45 0.50 0.19
Net realized and unrealized gain (loss) on
investments (0.22) (0.20) 0.32 0.28 (0.28)
--------- --------- --------- -------- --------
Total from investment operations (0.01) 0.22 0.77 0.78 (0.09)
--------- --------- --------- -------- --------
Distributions:
Net investment income (0.21) (0.42) (0.45) (0.50) (0.19)
Net realized gain (0.01) (0.03) -- -- --
--------- --------- --------- -------- --------
Total distributions (0.22) (0.45) (0.45) (0.50) (0.19)
--------- --------- --------- -------- --------
Net asset value, end of period $ 9.86 $ 10.09 $ 10.32 $ 10.00 $ 9.72
========= ========= ========= ======== ========
TOTAL RETURN+ (0.08)%# 2.13% 7.86% 8.20% (0.87)%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $ 13,378 $ 17,378 $ 9,270 $ 5,750 $ 896
Ratio of expenses to average daily
net assets (1) 0.82%* 0.75% 0.61% 0.23% 0.98%*
Ratio of net investment income to average net assets 4.15%* 4.10% 4.41% 4.93% 3.83%*
Portfolio turnover rate 5%* 31% 15% 122% 8%*
(1) During the period, various fees were waived
The ratio of expenses to average net assets had
such waivers not occurred is as follows 1.60%* 1.65% 1.65% 1.91% 1.91%*
</TABLE>
<TABLE>
<CAPTION>
CLASS IV
--------------------
For the Period
Ended December 31,
(Unaudited)
--------------------
1999**
------
<S> <C>
SELECTED PER-SHARE DATA
Net asset value, beginning of period $10.09
------
Income from investment operations:
Net investment income 0.19
Net realized and unrealized loss on
investments (0.23)
------
Total from investment operations (0.04)
------
Distributions:
Net investment income (0.19)
Net realized gain (0.01)
------
Total distributions (0.20)
------
Net asset value, end of period $ 9.85
======
TOTAL RETURN+ (0.84)%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $104
Ratio of expenses to average daily
net assets (1) 1.05%*
Ratio of net investment income to average net assets 3.91%*
Portfolio turnover rate 5%*
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 1.55%*
</TABLE>
* Annualized.
** Class III and IV commenced operations on December 15, 1995
and August 3, 1999, respectively.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year
are not annualized.
The accompanying notes are an integral part of the financial statements.
- ------------------------------------------------------------------------ 35
<PAGE> 55
- ------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
U.S. Treasury Money Market Portfolio
<TABLE>
<CAPTION>
CLASS I
---------------------------------------------------------------------------------
For the Six Months
Ended December 31, For the Year
(Unaudited) Ended June 30,
---------------------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
--------- --------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER - SHARE DATA
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- -------- --------
Income from investment operations:
Net investment income 0.024 0.044 0.051 0.050 0.052 0.050
--------- --------- --------- --------- -------- --------
Distributions:
Net investment income (0.024) (0.044) (0.051) (0.050) (0.052) (0.050)
--------- --------- --------- --------- -------- --------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $1.00 $1.00 $1.00
========= ========= ========= ========= ======== ========
TOTAL RETURN+ 2.39%# 4.51% 5.19% 5.09% 5.30% 5.10%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $ 8,371 $ 7,309 $ 19,314 $ 6,141 $ 75,703 $ 67,377
Ratio of expenses to average net assets (1) 0.48%* 0.51% 0.45% 0.37% 0.36% 0.36%
Ratio of net investment income to average net assets 4.71%* 4.57% 5.09% 5.01% 5.19% 5.00%
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 0.78%* 0.69% 0.63% 0.55% 0.56% 0.63%
</TABLE>
<TABLE>
<CAPTION>
CLASS III
---------------------------------------------------------------------------------
For the Six Months
Ended December 31, For the Year
(Unaudited) Ended June 30,
----------------------------------------------------------------------------------
1999 1999 1998 1997 1996**
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
SELECTED PER - SHARE DATA
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income 0.022 0.042 0.049 0.047 0.044
--------- --------- --------- --------- ---------
Distributions:
Net investment income (0.022) (0.042) (0.049) (0.047) (0.044)
--------- --------- --------- --------- ---------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
TOTAL RETURN+ 2.17%# 4.27% 5.03% 4.84% 4.47%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $ 1,903 $ 4,661 $ 42,288 $ 61,135 $ 3,528
Ratio of expenses to average net assets (1) 0.89%* 0.73% 0.62% 0.62% 0.62%*
Ratio of net investment income to average net assets 4.31%* 4.35% 4.92% 4.76% 4.93%*
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 1.18%* 0.91% 0.80% 0.80% 0.82%*
</TABLE>
* Annualized.
** Class III commenced operations on August 8, 1995.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
36 -----------------------------------------------------------------------------
<PAGE> 56
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
U.S. TREASURY MONEY MARKET PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
CLASS IV
------------------
FOR THE PERIOD
ENDED DECEMBER 31,
(UNAUDITED)
------------------
<S> <C>
1999**
-------
SELECTED PER - SHARE DATA
Net asset value, beginning of period $ 1.00
-------
Income from investment
operations:
Net investment income 0.005
-------
Distributions:
Net investment income (0.005)
-------
Net asset value, end of period $ 1.00
=======
TOTAL RETURN+ 0.47%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $ 0
Ratio of expenses to average net assets (1) 1.25%*
Ratio of net investment income to average net assets 3.95%*
(1) During the period, various fees were waived
The ratio of expenses to average net assets had
such waivers not occurred is as follows 1.54%*
</TABLE>
* Annualized.
** Class IV commenced operations on December 2, 1999.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
- -------------------------------------------------------------------------- 37
<PAGE> 57
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
CLASS I
-----------------------------------------------------------------------
For the Six Months
Ended December 31, For the Year
(Unaudited) Ended June 30,
-----------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER - SHARE DATA
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income 0.025 0.047 0.052 0.051 0.053 0.053
-------- ------- ------- ------- ------- -------
Distributions:
Net investment income (0.025) (0.047) (0.052) (0.051) (0.053) (0.053)
-------- ------- ------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======= ======= =======
TOTAL RETURN+ 2.52%# 4.81% 5.37% 5.23% 5.37% 5.39%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $109,060 $94,079 $88,255 $94,541 $88,111 $88,057
Ratio of expenses to average net assets (1) 0.31%* 0.39% 0.35% 0.35% 0.33% 0.31%
Ratio of net investment income to average net assets 4.95%* 4.71% 5.24% 5.11% 5.28% 5.27%
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 0.48%* 0.56% 0.52% 0.53% 0.53% 0.58%
</TABLE>
<TABLE>
<CAPTION>
CLASS III
------------------------------------------------------------
For the Six Months
Ended December 31, For the Year
(Unaudited) Ended June 30,
------------------------------------------------------------
1999 1999 1998 1997 1996**
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
SELECTED PER - SHARE DATA
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- ------- -------
Income from investment
operations:
Net investment income 0.023 0.043 0.049 0.048 0.044
-------- ------- ------- ------- -------
Distributions:
Net investment income (0.023) (0.043) (0.049) (0.048) (0.044)
-------- ------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======= =======
TOTAL RETURN+ 2.35%# 4.42% 5.05% 4.91% 4.49%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $ 4,127 $ 1,674 $ 2,513 $ 3,486 $ 228
Ratio of expenses to average net assets (1) 0.64%* 0.73% 0.65% 0.65% 0.65%*
Ratio of net investment income to average net assets 4.62%* 4.37% 4.94% 4.81% 4.96%*
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 0.81%* 0.90% 0.82% 0.83% 0.85%*
</TABLE>
* Annualized.
** Class III commenced operations on August 8, 1995.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
38 --------------------------------------------------------------------------
<PAGE> 58
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
MUNICIPAL MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
CLASS I
-----------------------------------------------------------------------
FOR THE SIX MONTHS
ENDED DECEMBER 31, FOR THE YEAR
(UNAUDITED) ENDED JUNE 30,
-----------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER - SHARE DATA
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income 0.016 0.029 0.033 0.033 0.035 0.034
-------- ------- ------- ------- ------- -------
Distributions:
Net investment income (0.016) (0.029) (0.033) (0.033) (0.035) (0.034)
-------- ------- ------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======= ======= =======
TOTAL RETURN+ 1.64%# 2.92% 3.33% 3.32% 3.52% 3.48%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $ 51,131 $56,438 $36,279 $45,988 $71,665 $94,078
Ratio of expenses to average net assets (1) 0.27%* 0.33% 0.38% 0.35% 0.32% 0.30%
Ratio of net investment income to average net assets 3.23%* 2.87% 3.28% 3.25% 3.50% 3.44%
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 0.45%* 0.50% 0.56% 0.53% 0.52% 0.57%
</TABLE>
<TABLE>
<CAPTION>
CLASS III
-------------------------------------------------------------
FOR THE SIX MONTHS
ENDED DECEMBER 31, FOR THE YEAR
(UNAUDITED) ENDED JUNE 30,
-------------------------------------------------------------
1999 1999 1998 1997 1996**
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
SELECTED PER - SHARE DATA
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- ------- -------
Income from investment
operations:
Net investment income 0.015 0.025 0.030 0.030 0.030
-------- ------- ------- ------- -------
Distributions:
Net investment income (0.015) (0.025) (0.030) (0.030) (0.030)
-------- ------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======= =======
TOTAL RETURN+ 1.48%# 2.56% 3.06% 3.03% 3.03%#
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $ 5,848 $ 5,333 $ 3,929 $12,886 $ 2,905
Ratio of expenses to average net assets (1) 0.61%* 0.68% 0.63% 0.62% 0.58%*
Ratio of net investment income to average net assets 2.90%* 2.52% 3.03% 2.98% 3.24%*
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 0.78%* 0.86% 0.81% 0.79% 0.78%*
</TABLE>
* Annualized.
** Class III commenced operations on July 28, 1995.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
- -------------------------------------------------------------------------- 39
<PAGE> 59
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
CASH RESERVE PORTFOLIO
<TABLE>
<CAPTION>
CLASS I
-----------------------------------------------------------------------
FOR THE SIX MONTHS
ENDED DECEMBER 31, FOR THE YEAR
(UNAUDITED) ENDED JUNE 30,
-----------------------------------------------------------------------
1999 1999 1998 1997 1996 1995
-------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER - SHARE DATA
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- ------- ------- -------
Income from investment
operations:
Net investment income 0.026 0.048 0.053 0.051 0.053 0.042
-------- ------- ------- ------- ------- -------
Distributions:
Net investment income (0.026) (0.048) (0.053) (0.051) (0.053) (0.042)
-------- ------- ------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======= ======= =======
TOTAL RETURN+ 2.60%# 4.94% 5.46% 5.23% 5.39% 4.27%#
-------- ------- ------- ------- ------- -------
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $34,040 $29,351 $40,242 $14,241 $16,369 $15,460
-------- ------- ------- ------- ------- -------
Ratio of expenses to average net assets (1) 0.32%* 0.39% 0.36% 0.40% 0.42% 0.43%*
-------- ------- ------- ------- ------- -------
Ratio of net investment income to average net assets 5.12%* 4.84% 5.33% 5.13% 5.22% 5.48%*
-------- ------- ------- ------- ------- -------
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 0.50%* 0.56% 0.54% 0.57% 0.61% 0.70%*
-------- ------- ------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
CLASS III
-------------------------------------------------------------
FOR THE SIX MONTHS
ENDED DECEMBER 31, FOR THE YEAR
(UNAUDITED) ENDED JUNE 30,
-------------------------------------------------------------
1999 1999 1998 1997 1996**
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
SELECTED PER - SHARE DATA
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
-------- ------- ------- ------- -------
Income from investment
operations:
Net investment income 0.025 0.046 0.051 0.049 0.047
-------- ------- ------- ------- -------
Distributions:
Net investment income (0.025) (0.046) (0.051) (0.049) (0.047)
-------- ------- ------- ------- -------
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======= =======
TOTAL RETURN+ 2.48%# 4.67% 5.21% 5.00% 4.78%#
-------- ------- ------- ------- -------
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (thousands) $81,282 $62,961 $58,243 $35,592 $24,190
-------- ------- ------- ------- -------
Ratio of expenses to average net assets (1) 0.57%* 0.66% 0.60% 0.64% 0.62%*
-------- ------- ------- ------- -------
Ratio of net investment income to average net assets 4.88%* 4.58% 5.09% 4.88% 5.02%*
-------- ------- ------- ------- -------
(1) During the period, various fees were waived.
The ratio of expenses to average net assets had
such waivers not occurred is as follows. 0.74%* 0.83% 0.77% 0.82% 0.81%*
-------- ------- ------- ------- -------
</TABLE>
* Annualized.
** Classes I and III commenced operations on September 26, 1994 and
July 28, 1995, respectively.
+ Total return would have been lower had various fees not been waived during
the period.
# Total return for periods of less than one year are not annualized.
The accompanying notes are an integral part of the financial statements.
40 --------------------------------------------------------------------------
<PAGE> 60
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING AND OPERATING POLICIES
First Funds (the Trust) is registered under the Investment Company Act of 1940,
as amended (the 1940 Act), as an open-ended management investment company
organized as a Massachusetts business trust by a Declaration of Trust dated
March 6, 1992, as amended and restated on September 4, 1992.
The Trust currently has nine active investment portfolios (each referred to as a
"Portfolio"). The Trust's financial statements are prepared in accordance with
generally accepted accounting principles. This requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these estimates.
The following summarizes the significant accounting policies for the Trust.
The Bond, Intermediate Bond, U.S. Government Money Market, Municipal Money
Market and Cash Reserve Portfolios may offer three classes of shares (Classes I,
II and III) and the Growth & Income, Capital Appreciation, Tennessee Tax-Free
and U.S. Treasury Money Market Portfolios may offer four classes of shares
(Classes I, II, III and IV). As of December 31, 1999, Class II shares have not
been issued for the Money Market Portfolios. Each class of shares has equal
rights as to earnings, assets and voting privileges except that each class bears
different distribution, shareholder service, transfer agent/fund accounting and
blue sky expenses. Each class has exclusive voting rights with respect to its
Distribution Plans and Shareholder Servicing Plans. Income, expenses (other than
expenses incurred under each Class Distribution and Service Plan and other class
specific expenses) and realized and unrealized gains or losses on investments
are allocated to each class of shares based upon their relative net assets or
dividend assets.
Security Valuation:
Growth & Income, Capital Appreciation, Bond, Intermediate Bond and Tennessee
Tax-Free Portfolios: Securities held in the Growth & Income and Capital
Appreciation Portfolios for which exchange quotations are readily available are
valued at the last sale price, or if no sale price or if traded on the
over-the-counter market, at the closing bid price. Securities held in the Bond,
Intermediate Bond and Tennessee Tax-Free Portfolios are valued based upon a
computerized matrix system and/or appraisals by a pricing service, both of which
consider market transactions and dealer-supplied valuations. Securities for
which quotations are not readily available are valued using dealer-supplied
valuations or at the fair value as determined in good faith under consistently
applied procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days are valued at amortized cost or
original cost plus accrued interest, both of which approximate current value.
Money Market Portfolios: Each of the Money Market Portfolios values securities
utilizing the amortized cost method of valuation under Rule 2a-7 of the 1940
Act, pursuant to which each Money Market Portfolio must adhere to certain
conditions. Under this method, investments are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
Repurchase Agreements: Each Portfolio, through its custodian, receives delivery
of underlying securities, whose market value, including interest, is required to
be at least equal to 102% of the resale price. The Trust's advisers are
responsible for determining that the value of these underlying securities
remains at least equal to 102% of the resale price. If the seller defaults, each
Portfolio would suffer a loss to the extent that the proceeds from the sale of
the underlying securities were less than the repurchase price.
Income Taxes: As a qualified regulated investment company under Subchapter M of
the Internal Revenue Code, each Portfolio is not subject to income taxes to the
extent that it distributes all of its taxable income for its fiscal year.
Interest Income: Interest income, which includes amortization of premium and
accretion of discount, is accrued as earned. For the Intermediate Bond,
Tennessee Tax-Free and Municipal Money Market Portfolios, accretion of market
discount represents unrealized gain until realized at the time of security
disposition or maturity. For the Intermediate Bond Portfolio, amortization of
market premium represents unrealized loss until realized at the time of security
disposition or maturity. Dividend income is recorded on the ex-dividend date.
Expenses: Most expenses of the Trust can be directly attributed to a Portfolio.
Expenses which cannot be directly attributed are apportioned among the
Portfolios based on average net assets.
Distributions to Shareholders: For the Money Market Portfolios, Bond Portfolio,
Intermediate Bond Portfolio and Tennessee Tax-Free Portfolio, distributions are
declared daily and paid monthly from net investment income. Distributions for
the Growth & Income Portfolio are declared and paid quarterly. Distributions for
the Capital Appreciation Portfolio are declared and paid annually. Any net
capital gains earned by each Portfolio are distributed at least annually to the
extent necessary to avoid federal income and excise taxes.
Income and capital gains to be distributed are determined in accordance with
income tax regulations which may differ from income and gains reported under
generally accepted accounting principles.
Other: Investment security transactions are accounted for as of trade date.
Realized gains and losses from securities transactions are determined using the
identified cost basis for both financial reporting and income tax purposes.
- -------------------------------------------------------------------------- 41
<PAGE> 61
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SHARES OF BENEFICIAL INTEREST
<TABLE>
<CAPTION>
GROWTH & INCOME PORTFOLIO CAPITAL APPRECIATION PORTFOLIO
-------------------------------------------------------------------------
For the Six Months For the Year For the Six Months For the Year
Ended December 31, Ended June 30, Ended December 31, Ended June 30,
1999 (Unaudited) 1999 1999 (Unaudited) 1999
------------------ -------------- ------------------- --------------
<S> <C> <C> <C> <C>
Dollars issued and redeemed:
Class I:
Issued $ 39,624,269 $ 72,689,105 $ 107,883 $ 777,187
Distributions reinvested 46,895,668 12,066,519 0 749,183
Redeemed (48,053,575) (86,550,330) (495,400) (2,964,048)
------------ ------------ ------------ ------------
Net increase (decrease) $ 38,466,362 $ (1,794,706) $ (387,517) $ (1,437,678)
============ ============ ============ ============
Class II:
Issued $ 19,955,463 $ 29,534,834 $ 484,459 $ 1,187,706
Distributions reinvested 10,163,779 1,674,476 0 36,490
Redeemed (6,628,525) (8,928,871) (261,766) (598,870)
------------ ------------ ------------ ------------
Net increase $ 23,490,717 $ 22,280,439 $ 222,693 $ 625,326
============ ============ ============ ============
Class III:
Issued $ 7,994,978 $ 14,053,684 $ 93,091 $ 182,467
Distributions reinvested 10,188,982 2,143,511 0 10,549
Redeemed (6,342,743) (16,400,616) (34,767) (350,156)
------------ ------------ ------------ ------------
Net increase (decrease) $ 11,841,217 $ (203,421) $ 58,324 $ (157,140)
============ ============ ============ ============
Class IV:*
Issued $ 2,354,696 0 $ 2,865 0
Distributions reinvested 168,693 0 0 0
Redeemed (80,363) 0 0 0
------------ ------------ ------------ ------------
Net increase $ 2,443,026 0 $ 2,865 0
============ ============ ============ ============
Shares issued and redeemed:
Class I:
Issued 1,526,630 3,214,783 9,980 88,649
Distributions reinvested 1,941,947 525,597 0 79,956
Redeemed (1,833,607) (3,825,520) (50,449) (318,412)
------------ ------------ ------------ ------------
Net increase (decrease) 1,634,970 (85,140) (40,469) (149,807)
============ ============ ============ ============
Class II:
Issued 760,367 1,308,316 47,864 131,289
Distributions reinvested 420,632 73,080 0 3,911
Redeemed (255,072) (400,544) (26,081) (64,816)
------------ ------------ ------------ ------------
Net increase 925,927 980,852 21,783 70,384
============ ============ ============ ============
Class III:
Issued 310,546 630,641 8,685 18,065
Distributions reinvested 428,108 94,055 0 1,143
Redeemed (246,575) (746,627) (3,559) (35,623)
------------ ------------ ------------ ------------
Net increase (decrease) 492,079 (21,931) 5,126 (16,415)
============ ============ ============ ============
Class IV:*
Issued 90,954 0 263 0
Distributions reinvested 7,011 0 0 0
Redeemed (2,983) 0 0 0
------------ ------------ ------------ ------------
Net increase 94,982 0 263 0
============ ============ ============ ============
</TABLE>
*Class IV of the Growth &Income and Capital Appreciation Portfolios commenced
operations on August 3, 1999.
42 --------------------------------------------------------------------------
<PAGE> 62
- -------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SHARES OF BENEFICIAL INTEREST (CONTINUED)
<TABLE>
<CAPTION>
BOND INTERMEDIATE BOND TENNESSEE TAX-FREE
PORTFOLIO PORTFOLIO PORTFOLIO
----------------------------------------------------------------------------------------------
For the For the For the For the For the For the
Six Months Ended Year Ended Six Months Ended Year Ended Six Months Ended Year Ended
December 31, June 30, December 31, June 30, December 31, June 30,
1999 (Unaudited) 1999 1999 (Unaudited) 1999 1999 (Unaudited) 1999
---------------- ------------ ---------------- ------------ ---------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Dollars issued and redeemed:
Class I:
Issued $ 12,988,104 $ 24,844,510 $ 23,010,102 $ 52,943,178 $ 14,460,113 $ 38,017,179
Distributions reinvested 4,933,148 9,867,882 2,603,684 5,283,672 56,076 71,799
Redeemed (9,676,317) (19,100,552) (22,923,947) (33,299,042) (15,604,771) (25,180,888)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) $ 8,244,935 $ 15,611,840 $ 2,689,839 $ 24,927,808 $ (1,088,582) $ 12,908,090
============ ============ ============ ============ ============ ============
Class II:
Issued $ 1,499,742 $ 3,985,687 $ 6,564,121 $ 2,490,231 $ 464,620 $ 5,523,897
Distributions reinvested 166,867 218,438 111,732 134,814 236,326 423,324
Redeemed (1,056,938) (623,882) (3,237,084) (392,578) (2,415,645) (1,371,416)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease)$ 609,671 $ 3,580,243 $ 3,438,769 $ 2,232,467 $ (1,714,699) $ 4,575,805
============ ============ ============ ============ ============ ============
Class III:
Issued $ 43,335 $ 1,188,451 $ 123,753 $ 1,588,568 $ 1,961,186 $ 16,896,982
Distributions reinvested 64,460 131,630 17,489 21,171 278,205 593,070
Redeemed (249,339) (641,066) (237,257) (501,666) (5,883,463) (8,886,269)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) $ (141,544) $ 679,015 $ (96,015) $ 1,108,073 $ (3,644,072) $ 8,603,783
============ ============ ============ ============ ============ ============
Class IV:*
Issued 0 0 0 0 $ 105,100 0
Distributions reinvested 0 0 0 0 1 0
Redeemed 0 0 0 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
Net increase 0 0 0 0 $ 105,101 0
============ ============ ============ ============ ============ ============
Shares issued and redeemed:
Class I:
Issued 1,337,217 2,432,923 2,377,454 5,277,980 1,448,206 3,663,984
Distributions reinvested 512,070 962,005 268,968 526,173 5,641 6,934
Redeemed (999,989) (1,863,613) (2,361,014) (3,324,360) (1,564,073) (2,430,886)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 849,298 1,531,315 285,408 2,479,793 (110,226) 1,240,032
============ ============ ============ ============ ============ ============
Class II:
Issued 154,042 391,682 676,669 246,281 46,318 532,449
Distributions reinvested 17,374 21,314 11,550 13,437 23,678 40,794
Redeemed (108,466) (60,985) (332,759) (39,189) (241,838) (132,428)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) 62,950 352,011 355,460 220,529 (171,842) 440,815
============ ============ ============ ============ ============ ============
Class III:
Issued 4,441 114,645 12,753 158,359 195,797 1,625,294
Distributions reinvested 6,689 12,867 1,807 2,116 27,895 57,195
Redeemed (25,620) (62,631) (24,394) (49,941) (588,459) (858,698)
------------ ------------ ------------ ------------ ------------ ------------
Net increase (decrease) (14,490) 64,881 (9,834) 110,534 (364,767) 823,791
============ ============ ============ ============ ============ ============
Class IV:*
Issued 0 0 0 0 10,517 0
Distributions reinvested 0 0 0 0 0 0
Redeemed 0 0 0 0 0 0
------------ ------------ ------------ ------------ ------------ ------------
Net increase 0 0 0 0 10,517 0
============ ============ ============ ============ ============ ============
</TABLE>
*Class IV of the Tennessee Tax-Free Portfolio commenced operations on
August 3, 1999.
- -------------------------------------------------------------------------- 43
<PAGE> 63
- -------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
2. SHARES OF BENEFICIAL INTEREST (CONTINUED)
<TABLE>
<CAPTION>
U.S. TREASURY MONEY MARKET PORTFOLIO U.S. GOVERNMENT MONEY MARKET PORTFOLIO
------------------------------------------------------------------------------
For the Six Months For the Year For the Six Months For the Year
Ended December 31, Ended June 30, Ended December 31, Ended June 30,
1999 (Unaudited) 1999 1999 (Unaudited) 1999
------------------ -------------- ------------------ ---------------
<S> <C> <C> <C> <C>
Shares/Dollars issued and redeemed:
Class I:
Issued $ 19,853,818 $ 18,590,020 $ 68,400,217 $ 114,177,832
Distributions reinvested 721 1,131 10 13
Redeemed (18,798,396) (30,598,349) (53,412,167) (108,353,060)
------------- ------------- ------------- -------------
Net increase (decrease) $ 1,056,143 $ (12,007,198) $ 14,988,060 $ 5,824,785
============= ============= ============= =============
Class III:
Issued $ 12,190,867 $ 139,906,932 $ 49,146,296 $ 34,798,328
Distributions reinvested 62,376 477,442 91,228 114,502
Redeemed (15,013,294) (178,012,590) (46,784,056) (35,752,232)
------------- ------------- ------------- -------------
Net increase (decrease) $ (2,760,051) $ (37,628,216) $ 2,453,468 $ (839,402)
============= ============= ============= =============
Class IV:*
Issued $ 496,705 0 0 0
Distributions reinvested 0 0 0 0
Redeemed (496,605) 0 0 0
------------- ------------- ------------- -------------
Net increase $ 100 0 0 0
============= ============= ============= =============
</TABLE>
<TABLE>
<CAPTION>
MUNICIPAL MONEY MARKET PORTFOLIO CASH RESERVE PORTFOLIO
---------------------------------------------------------------------------
For the Six Months For the Year For the Six Months For the Year
Ended December 31, Ended June 30, Ended December 31, Ended June 30,
1999 (Unaudited) 1999 1999 (Unaudited) 1999
------------------ -------------- ------------------ --------------
<S> <C> <C> <C> <C>
Shares/Dollars issued and redeemed:
Class I:
Issued $ 39,199,737 $ 84,302,797 $ 28,384,541 $ 47,673,460
Distributions reinvested 15 23 3 1
Redeemed (44,506,220) (64,144,557) (23,695,232) (58,566,116)
------------- ------------- ------------- -------------
Net increase (decrease) $ (5,306,468) $ 20,158,263 $ 4,689,312 $ (10,892,655)
============= ============= ============= =============
Class III:
Issued $ 6,759,487 $ 23,170,849 $ 66,490,323 $ 139,985,723
Distributions reinvested 77,272 111,051 1,735,268 2,753,795
Redeemed (6,322,000) (21,878,428) (49,903,100) (138,023,657)
------------- ------------- ------------- -------------
Net increase $ 514,759 $ 1,403,472 $ 18,322,491 $ 4,715,861
============= ============= ============= =============
</TABLE>
* Class IV of the U.S. Treasury Money Market Portfolio commenced operations on
December 2, 1999.
3. INVESTMENT ADVISORY AND MANAGEMENT AND SUB-ADVISORY AGREEMENTS
For managing its investment and business affairs, the Growth & Income Portfolio,
Bond Portfolio, Intermediate Bond Portfolio and Tennessee Tax-Free Portfolio
each pay First Tennessee Bank National Association ("First Tennessee"), a
monthly management fee at the annual rate of .65%, .55%, .50% and .50%
respectively, of its average net assets. For managing its investment and
business affairs, each of the Money Market Portfolios pays First Tennessee its
pro-rated portion of a monthly management fee at the annual rate of .25% of
aggregate average monthly net assets of all Money Market Portfolios of the Trust
managed by First Tennessee through $1 billion, and .22% on amounts greater than
$1 billion. Under the Investment Advisory and Management Agreement, First
Tennessee is authorized, at its own expense, to hire sub-advisers to provide
investment advice to it and to each Portfolio.
First Tennessee and Investment Advisers, Inc. ("IAI") serve as co-advisers of
the Capital Appreciation Portfolio pursuant to the authority granted to them
under their respective Co-Advisory Agreements with the Portfolio. The Capital
Appreciation Portfolio is obligated to pay First Tennessee monthly management
fees at the annual rate of .15% of its average net assets. The Capital
Appreciation Portfolio is obligated to pay IAI monthly management fees at the
annual rate of .70% for the first $50 million of the Portfolio's average net
assets and .65% on average net assets of the Portfolio in excess of $50 million.
44 --------------------------------------------------------------------------
<PAGE> 64
- --------------------------------------------------------------------------------
FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. INVESTMENT ADVISORY AND MANAGEMENT AND SUB-ADVISORY AGREEMENTS (CONTINUED)
For the Growth & Income and Bond Portfolios, Highland Capital Management Corp.
("Highland") serves as the sub-adviser of each Portfolio pursuant to the
authority granted to it under its Sub-Advisory Agreement with First Tennessee.
Highland is an affiliate of First Tennessee and is a wholly-owned subsidiary of
First Tennessee National Corporation. Highland is paid by First Tennessee a
monthly sub-advisory fee at the annual rate of .38% of Growth & Income
Portfolio's average net assets and .33% of Bond Portfolio's average net assets.
For the Intermediate Bond and Tennessee Tax-Free Portfolios, Martin & Company,
Inc. ("Martin") serves as sub-adviser of each Portfolio pursuant to the
authority granted to it under its Sub-Advisory Agreement with First Tennessee.
Martin is an affiliate of First Tennessee and is a wholly-owned subsidiary of
First Tennessee National Corporation. Martin is paid by First Tennessee a
monthly sub-advisory fee at the annual rate of .30% of each Portfolio's average
net assets.
For the Money Market Portfolios, BlackRock Institutional Management Corporation
("BlackRock") (formerly PNC Institutional Management Corporation) serves as the
sub-adviser of each Portfolio pursuant to the authority granted to it under its
Sub-Advisory Agreement with First Tennessee. BlackRock is a wholly-owned
subsidiary of PNCBank National Association. BlackRock is paid by First Tennessee
a monthly sub-advisory fee at the annual rate of .08% of each Portfolio's
average net assets through $500 million, .06% of the next $500 million, and .05%
of net assets greater than $1 billion.
4. ADMINISTRATOR, CO-ADMINISTRATOR AND DISTRIBUTOR
ALPS Mutual Funds Services, Inc. serves as Administrator and Distributor for the
Trust under separate Administration and General Distribution Agreements. ALPS'
duties include distribution services, providing office space and various legal
and accounting services in connection with the regulatory requirements
applicable to each Portfolio. ALPS is entitled to receive administration fees
from each of the Money Market Portfolios at the annual rate of .075% of average
net assets and, from the Growth & Income, Capital Appreciation, Bond,
Intermediate Bond and Tennessee Tax-Free Portfolios, at the annual rate of .15%
of average net assets.
First Tennessee serves as the Co-Administrator for each Portfolio. As the
Co-Administrator, First Tennessee assists in each Portfolio's operation,
including but not limited to, providing non-investment related research and
statistical data and various operational and administrative services. First
Tennessee is entitled to receive co-administration fees from each Portfolio at
the annual rate of .05% of average net assets.
The Trustees have adopted a Distribution Plan on behalf of Class III of each
Portfolio and Class IV of the Growth & Income, Capital Appreciation, Tennessee
Tax-Free and U.S. Treasury Money Market Portfolios, pursuant to Rule 12b-1 under
the Investment Company Act of 1940, as amended. Each Class III Distribution Plan
provides for payment of a fee to ALPS at the annual rate of up to .75% of the
average net assets of Class III of the Growth & Income, Capital Appreciation,
Bond, Intermediate Bond and Tennessee Tax-Free Portfolios, and .25% of the
average net assets of Class III of each of the Money Market Portfolios. Each
Class IV Distribution Plan provides for payment of a fee to ALPS at the annual
rate of up to 1.00% of the average net assets of Class IV of the Growth & Income
and Capital Appreciation Portfolios, .70% of the average net assets of Class IV
of the Tennessee Tax-Free Portfolio and .65% of the average net assets of Class
IV of the U.S. Treasury Money Market Portfolio. The Trustees have also adopted
Shareholder Servicing Plans on behalf of Class II and III of the Growth &
Income, Capital Appreciation, Bond, Intermediate Bond and Tennessee Tax-Free
Portfolios under which broker/dealers, advisers or other financial institutions
are paid at the annual rate of up to .25% of each class' average net assets for
shareholder services and account maintenance.
5. WAIVER OF FEES
Growth & Income, Capital Appreciation, Bond and Intermediate Bond Portfolios:
For the six months ended December 31, 1999, First Tennessee voluntarily agreed
to waive its management fee for the Growth & Income, Capital Appreciation, Bond
and Intermediate Bond Portfolios to .50%, .00%, .15% and .00% of average net
assets, respectively. Pursuant to the voluntary waiver agreement, for the six
months ended December 31, 1999, First Tennessee waived management fees of
$732,636, $27,072, $468,030 and $559,609 for the Growth & Income, Capital
Appreciation, Bond and Intermediate Bond Portfolios, respectively.
For the six months ended December 31, 1999, the 12b-1 fee charged by Class III
of the Bond and Intermediate Bond Portfolios was waived to .50% of average net
assets. Pursuant to this waiver, 12b-1 fees were waived in the amount of $3,231
and $1,314 for the Bond and Intermediate Bond Portfolios, respectively.
Tennessee Tax-Free Portfolio:
Since the Portfolio's inception, First Tennessee, as Investment Adviser, has
voluntarily agreed to waive its entire management fee.
For the six months ended December 31, 1999, the 12b-1 fee charged by Class III
of the Tennessee Tax-Free Portfolio was waived to .50% of average net assets.
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FIRST FUNDS SEMI-ANNUAL REPORT
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. WAIVER OF FEES (CONTINUED)
For the period July 1, 1999 through August 31, 1999, ALPS agreed to voluntarily
reimburse Class III of the Tennessee Tax-Free Portfolio for .10% of the .50%
12b-1 fee charged by that class. After August 31, 1999, ALPS eliminated its
voluntary reimbursement of the 12b-1 fee charged by Class III of the Tennessee
Tax-Free Portfolio.
Pursuant to the voluntary waiver and reimbursement agreements, for the six
months ended December 31, 1999, fees were waived and reimbursed for the
Tennessee Tax-Free Portfolio as follows:
<TABLE>
<S> <C>
Management fees waived $ 531,862
Reimbursement by administrator $ 2,860
12b-1 fees waived $ 19,428
</TABLE>
Money Market Portfolios:
For the six months ended December 31, 1999, First Tennessee voluntarily agreed
to waive its management and co-administration fees for the U.S. Treasury Money
Market Portfolio to .08% and .00% of average net assets, respectively.
Additionally, for the six months ended December 31, 1999, ALPS agreed to waive
its entire administration fee for the U.S. Treasury Money Market Portfolio.
For the six months ended December 31, 1999, First Tennessee voluntarily agreed
to waive a portion of its management and co-administration fees payable by the
U.S. Government Money Market, Municipal Money Market and Cash Reserve Portfolios
to .10% and .025% of average net assets, respectively.
For the six months ended December 31, 1999, the expense waivers were as follows:
<TABLE>
<CAPTION>
Management Fee Co-Administration Fee Administration Fee
-------------- --------------------- ------------------
<S> <C> <C> <C>
U.S. Treasury Money Market $10,469 $ 3,121 $ 4,682
U.S. Government Money Market $72,526 $12,115 $ 0
Municipal Money Market $40,706 $ 6,761 $ 0
Cash Reserve $76,634 $12,913 $ 0
</TABLE>
For the period ended December 31, 1999, the 12b-1 fee charged by Class IV of the
U.S. Treasury Money Market Portfolio was waived to 0.60% of average net assets.
Pursuant to this waiver, 12b-1 fees were waived in the amount of $5.
6. CONVERSION OF COMMON TRUST FUNDS AND COLLECTIVE INVESTMENT POOLS
On March 2, 1998, the Growth & Income Portfolio issued shares in a tax-free
conversion to acquire the net assets of the Common Stock - Total Return Fund,
the Common Stock - Stable Value Fund and the Common Trust Fund 1 of First
Tennessee Bank. The following is a summary of shares issued, net assets
acquired, net asset value per share and unrealized appreciation as of the date
acquired.
<TABLE>
<S> <C>
Shares issued 11,062,850
Net assets acquired $ 227,230,934
Net asset value $ 20.54
Unrealized appreciation $ 83,270,056
</TABLE>
On March 2, 1998, the Growth & Income Portfolio issued shares in a taxable
conversion to acquire the net assets of the Pooled Equity Fund and the Common
Trust Fund 3 of First Tennessee Bank. The following is a summary of shares
issued, net assets acquired and net asset value per share. Because the
conversion was taxable, no unrealized appreciation was acquired.
<TABLE>
<S> <C>
Shares issued 5,341,465
Net assets acquired $ 109,713,703
Net asset value $ 20.54
</TABLE>
On March 2, 1998, the Bond Portfolio issued shares in a tax-free conversion to
acquire the net assets of the Common Fixed Income - Total Return Fund of First
Tennessee Bank. The following is a summary of shares issued, net assets
acquired, net asset value per share and unrealized appreciation as of the date
acquired.
<TABLE>
<S> <C>
Shares issued 4,782,121
Net assets acquired $ 48,681,990
Net asset value $ 10.18
Unrealized appreciation $ 2,173,653
</TABLE>
On March 2, 1998, the Intermediate Bond Portfolio issued shares in a tax-free
conversion to acquire the net assets of the Common Fixed Income - Stable Value
Fund, the Pooled Intermediate Bond Fund, the Common Trust Fund 2 and the Common
Trust Fund 4 of First Tennessee Bank. The following is a summary of shares
issued, net assets acquired, net asset value per share and unrealized
appreciation as of the date acquired.
46 --------------------------------------------------------------------------
<PAGE> 66
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FIRST FUNDS SEMI-ANNUAL REPORT
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. CONVERSION OF COMMON TRUST FUNDS AND COLLECTIVE INVESTMENT POOLS (CONTINUED)
<TABLE>
<S> <C>
Shares issued 18,490,489
Net assets acquired $ 184,904,888
Net asset value $ 10.00
Unrealized appreciation $ 1,914,289
</TABLE>
On March 2, 1998, the Tennessee Tax-Free Portfolio issued shares in a tax-free
conversion to acquire the net assets of the Common Tax-Exempt - Total Return
Fund, the Common Tax-Exempt - Stable Value Fund and the Common Trust Fund 5 of
First Tennessee Bank. The following is a summary of shares issued, net assets
acquired, net asset value per share and unrealized appreciation as of the date
acquired.
<TABLE>
<S> <C>
Shares issued 14,429,355
Net assets acquired $ 148,766,645
Net asset value $ 10.31
Unrealized appreciation $ 5,930,274
</TABLE>
7. OTHER
As of December 31, 1999, one shareholder (a related party) owned 13% of the
Growth & Income Portfolio, 84% of the Capital Appreciation Portfolio and 40% of
the Bond Portfolio. Additionally, as of December 31, 1999, one shareholder owned
16% of the U.S. Treasury Money Market Portfolio, 12% of the U.S. Government
Money Market Portfolio and 53% of the Cash Reserve Portfolio.
The Trustees of the Trust receive an annual Trustees fee of $6,000 and an
additional fee for each Trustees' meeting attended.
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[FIRST FUNDS LOGO] 370 Seventeenth Street
Suite 3100
Denver, Colorado 80202
1-800-442-1941
www.firstfunds.com
<TABLE>
<S> <C>
INVESTMENT ADVISER - All Porfolios except TRANSFER AND SHAREHOLDER SERVICING
Capital Appreciation Portfolio AGENT
First Tennessee Bank National Association Boston Financial Data Services
Memphis, Tennessee Boston, Massachusetts
CO-INVESTMENT ADVISERS - Capital Appreciation CUSTODIAN
Portfolio
State Street Bank & Trust Company
First Tennessee Bank National Association Boston, Massachusetts
Memphis, Tennessee
OFFICERS
Investment Advisers, Inc.
Minneapolis, Minnesota Richard C. Rantzow, President
Russell Burk, Secretary
SUB-ADVISER - Money Market Portfolios Jeremy May, Treasurer
BlackRock Institutional Management Corporation TRUSTEES
Wilmington, Delaware
Thomas M. Batchelor
SUB-ADVISER - Growth & Income and Bond John A. DeCell
Portfolios L.R. Jalenak, Jr.
George P. Lewis
Highland Capital Management Corporation Larry W. Papasan
Memphis, Tennessee Richard C. Rantzow
SUB-ADVISER - Intermediate Bond and Tennessee
Tax-free Portfolios
Martin & Company, Inc.
Knoxville, Tennessee
ADMINISTRATOR AND DISTRIBUTOR
ALPS Mutual Funds Services, Inc.
Denver, Colorado This report has been prepared for First Funds
shareholders and may be distributed to others
CO-ADMINISTRATOR only if preceded or accompanied by a prospectus.
First Tennessee Bank National Association
Memphis, Tennessee
</TABLE>
NOT FDIC INSURED [FIRST TENNESSEE LOGO] [ALPS MUTUAL FUNDS SERVICES LOGO]
