[FRONT COVER]
SEMI-ANNUAL REPORT
June 30, 2000
[COVER GRAPHICS: ACORN, COLUMN, GRADUATION CAP, HANDSHAKE]
GALAXY VARIABLE ANNUITY
GALAXY VIP FUNDS
[Galaxy Funds Logo]
<PAGE>
CHAIRMAN'S MESSAGE
Dear Variable Annuity Policyholder:
Enclosed is the semi-annual report for The Galaxy VIP Fund for the six
months ended June 30, 2000. The report includes a Market Overview that explains
the different economic and market factors influenc-ing investment returns during
this period. Following the Market Overview are individual portfolio reviews that
describe how Fleet Investment Advisors Inc. and Columbia Management Co. managed
each of the portfolios in this climate. Financial statements and a list of
individual portfolio holdings for each of the portfolios as of June 30, 2000,
appear at the end of the report.
With continuing economic recovery abroad, and relatively low interest
rates and inflation at home, U.S. growth remained strong in the past six months.
This benefited firms in many stock sectors early in the reporting period, and
the major market indices performed well by historic standards. The prices of
many stocks fell later on, however, as investors became increasingly concerned
about the high prices of technology shares, as well as attempts by the Federal
Reserve (the "Fed") to keep inflation in check with higher interest rates. With
interest rates on the rise, bond prices became more volatile, too.
Of course, market volatility, while unsettling, is part of the normal ups
and downs that occur with most investments. This is important to remember with
all the talk about the effect of "new economy" industries, like technology, on
the market behavior of both bonds and stocks. Although the stock market has
recently been caught up in "momentum investing," in which the prices for many
technology shares have outstripped their fundamentals, most analysts believe,
that there will always be demand for investments in the "old economy" sectors
represented by industrial and retail firms, as well as other asset classes.
For most investors, then, it makes sense to stick with the portfolio
strategies you've set to meet your long-term investment goals. With The Galaxy
VIP Fund, a long-term approach also lets you make the most of tax-deferred
returns. In the meantime, there are several steps you can take to minimize the
effect of market fluctuations on your returns. One approach that has served
investors well over time is diversification. Each of the broadly diversified
portfolios of The Galaxy VIP Fund can help you reduce the impact of fluctuations
by any single security on your overall return.
You may also be able to stabilize returns by diversifying across a range
of market sectors and asset classes. Because individual sectors and classes
often move in different directions, such diversification improves the chance
that some of your investments will perform well within a given period. Your
financial professional can help you choose a blend of Galaxy VIP Fund portfolios
that suits your particular investment goals and make sure that your asset
allocations remain in place through any major market changes.
If you have any questions about the information in this report, please
contact the Galaxy Information Center toll-free at 1-877-BUY-GALAXY
(1-877-289-4252). You can also visit one of our investment professionals located
at Fleet Bank branches.
Sincerely,
/s/ SIGNATURE DWIGHT E. VICKS, JR.
Dwight E. Vicks, Jr.
Chairman of the Board of Trustees
THIS REPORT RELATES TO THE SUB-ACCOUNTS OF AMERICAN SKANDIA LIFE ASSURANCE
CORPORATION VARIABLE ACCOUNT E. THE UNDERLYING MUTUAL FUND PORTFOLIOS IN WHICH
THE SUB-ACCOUNTS INVEST INCLUDE THE FOLLOWING PORTFOLIOS OF THE GALAXY VIP FUND:
MONEY MARKET FUND, EQUITY FUND, GROWTH AND INCOME FUND, SMALL COMPANY GROWTH
FUND, COLUMBIA REAL ESTATE EQUITY FUND II, ASSET ALLOCATION FUND, HIGH QUALITY
BOND FUND AND COLUMBIA HIGH YIELD FUND II. THIS REPORT RELATED TO THE GALAXY VIP
FUND ONLY.
[BEGIN SIDEBAR]
MUTUAL FUNDS:
(BULLET) ARE NOT BANK DEPOSITS
(BULLET) ARE NOT FDIC INSURED
(BULLET) ARE NOT OBLIGATIONS OF FLEETBANK
(BULLET) ARE NOT GUARANTEED BY FLEETBANK
(BULLET) ARE SUBJECT TO INVESTMENT RISK INCLUDING POSSIBLE LOSS OF PRINCIPAL
AMOUNT INVESTED
[END SIDEBAR]
<PAGE>
MARKET OVERVIEW
MARKET OVERVIEW
BY FLEET INVESTMENT ADVISORS INC.
Prices for stocks and bonds remained volatile over the past six months, as
a tug-of-war continued between robust economic growth and efforts by the Fed to
curb growth and inflation through higher interest rates.
Stock prices were mixed in this environment. Shares of larger companies
represented in the Standard & Poor's 500 Index (the "S&P 500 Index") showed a
total return of -0.43% for the period, while shares of smaller companies
represented in the Russell 2000 Index (the "Russell 2000") earned a total return
of 3.04%. Growth stocks continued to outperform value stocks during the
reporting period, albeit with extreme volatility.
With higher inflation and three hikes in short-term interest rates that
raised rates a total of 100 basis points (1.00%), there was potential for
downward pressure on bond prices for much of the period. That was offset,
however, by increased demand for long-term Treasury issues, as a rising federal
budget surplus accelerated a government bond buyback program. The result was a
positive total return of 4.18% for the Lehman Brothers Government/Corporate Bond
Index.
A SHIFT IN ECONOMIC OUTLOOK
When the reporting period began, the economy was still growing strongly.
During the first quarter of 2000, the Gross Domestic Product ("GDP"), which
measures the output of U.S. goods and services, improved at an annualized rate
of 5.5% after growing at a rate of 7.3% in the fourth quarter of 1999. On a
year-over-year basis, growth stood at 5%, the highest level in more than 15
years. The exceptional strength in the economy, after several rate hikes by the
Fed in 1999, may have been due in part to the "wealth effect" created by
continued stock market gains that fed consumer demand.
After remaining moderate for some time, inflation began to edge higher, as
energy prices rose. From an annualized rate of 2.6% at the end of 1999,
"headline" inflation rose to 3.7% by March of 2000. Because sustained economic
strength had the potential to push inflation even higher, the Fed raised
short-term interest rates by 25 basis points each in February and again in
March. As a result, short-term interest rates reached their highest levels since
April 1991.
After rising through the middle of January, long-term bond yields began to
decline, however, as the Treasury Department started its program to buy back
government debt and announced that it would issue less long-term debt in the
future. This created an imbalance in demand and supply that pushed down the
yield for 30-year Treasuries. Yields for long-term agency and corporate bonds
remained high, however, in sympathy with increased volatility in the stock
market and a possible turn in the credit cycle as economic growth slowed.
While stock prices as a whole advanced sharply for much of the first
quarter, the market became increasingly volatile as investors finally began to
question the very high valuations in the technology sector. While market
leadership remained relatively narrow, investors did start to venture beyond the
consumer-oriented Internet stocks that had dominated for several quarters into a
more diverse group of technology, media, and telecommunications issues.
When economic growth showed little sign of slowing in April, investors
looked for another hike in interest rates. Concerns that this might cause growth
and corporate profits to slow, along with a deep drop in technology stocks,
caused the major stock market indices to decline sharply. After earning a total
return of 2.3% in the first quarter, the S&P 500 Index lost 3.01% in the month
that followed. The Russell 2000 fared somewhat better, losing 6.02% after
earning a total return of 7.08% in the first quarter. Bond yields edged higher
into May, when the Fed imposed a rate hike of 50 basis points.
Shortly after the increase in interest rates, more signs of slowing
economic growth began to appear. As investors looked forward to an end in Fed
rate hikes, stock and bond prices began to improve, but not enough to erase the
losses stock market indices experienced earlier in the quarter. This left the
S&P 500 Index and the Russell 2000 with total returns for the second quarter of
-2.66% and -3.78%, respectively. During the quarter, the Lehman Brothers
Government /Corporate Bond Index earned a total return of 1.45%.
[BEGIN SIDEBAR]
"DURING THE FIRST QUARTER OF 2000, THE GROSS DOMESTIC PRODUCT ("GDP"), WHICH
MEASURES THE OUTPUT OF U.S. GOODS AND SERVICES, IMPROVED AT AN ANNUALIZED RATE
OF 5.5% AFTER GROWING AT A RATE OF 7.3% IN THE FOURTH QUARTER OF 1999."
[END SIDEBAR]
2
<PAGE>
MAKING THE MOST OF MARKET FLUCTUATIONS
As in the past, we traded holdings in The Galaxy VIP Fund portfolios that
had performed well for positions that offered better price appreciation
potential. In the equity portfolios, we used profits from the sale of selected
energy and technology stocks to buy other stocks that we felt were more
attractive. These included shares of technology firms that were hit especially
hard by the sector's selloff in April and May. We also found new investment
opportunities in stocks of consumer, health, and financial firms.
In the bond portfolios, we maintained sizable holdings of Treasury issues
to take advantage of the positive balance of supply and demand in that sector,
while emphasizing high-quality investments from other groups.
NEARING A PEAK IN SHORT-TERM RATES
If the economy continues to show signs of cooling, the Fed may not
implement additional rate hikes. However, if growth appears strong, the Fed
could raise rates again. While bond prices could remain volatile in such an
uncertain environment, we would not expect any further widening in the spreads
between yields of Treasuries and other issues except in the unlikely event of
more substantial economic weakness.
We would expect stock prices to remain volatile, too, in coming months, as
investors weigh the benefit of stable interest rates against the potential
deterioration of company profits. There is evidence, however, that the pendulum
may be swinging away from overvalued "momentum" stocks and toward issues that
have experienced a "stealth bear market." As of June 30, 2000, more than 60% of
stocks in the S&P 500 Index had declined more than 20% from their 52-week highs.
We believe these and other stocks whose prices are especially attractive would
perform strongly once investors see that the Fed has achieved the "soft landing"
for the economy that it has sought for the past year.
[BEGIN SIDEBAR]
"IF THE ECONOMY CONTINUES TO SHOW SIGNS OF COOLING, THE FED MAY NOT IMPLEMENT
ADDITIONAL RATE HIKES."
[END SIDEBAR
3
<PAGE>
PERFORMANCE AT-A-GLANCE
GALAXY VIP FUNDS PERFORMANCE AT-A-GLANCE -- AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
AS OF JUNE 30, 2000 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS LIFE OF FUND
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Money Market Fund
(INCEPTION DATE 2/2/93) 2.95% 5.59% 5.19% 5.12% 4.71%
................................................................................................
Equity Fund
(INCEPTION DATE 1/11/93) 5.77 18.87 21.68 22.99 18.37
................................................................................................
Growth and Income Fund
(INCEPTION DATE 3/4/98) 1.62 -3.90 N/A N/A 5.47
................................................................................................
Small Company Growth Fund
(INCEPTION DATE 4/17/98) 8.31 65.63 N/A N/A 24.49
................................................................................................
Columbia Real Estate Equity Fund II
(INCEPTION DATE 3/3/98) 13.91 4.58 N/A N/A -0.54
................................................................................................
Asset Allocation Fund
(INCEPTION DATE 2/6/93) 5.82 9.77 12.78 14.88 12.75
................................................................................................
High Quality Bond Fund
(INCEPTION DATE 1/21/93) 4.81 4.29 5.67 5.71 5.71
................................................................................................
Columbia High Yield Fund II
(INCEPTION DATE 3/3/98) 0.89 1.32 N/A N/A 4.67
------------------------------------------------------------------------------------------------
</TABLE>
* Not Annualized
GALAXY VIP FUNDS PRODUCT PERFORMANCE AT-A-GLANCE -- AVERAGE ANNUAL TOTAL RETURNS
(VARIABLE ACCOUNT E INCEPTION 1/8/93)
<TABLE>
AS OF JUNE 30, 2000 6 MONTHS* 1 YEAR 3 YEARS 5 YEARS LIFE OF FUND
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Money Market Fund 2.66% 5.01% 4.58% 4.52% 4.12%
................................................................................................
Equity Fund 5.48 18.21 21.01 22.31 17.71
................................................................................................
Asset Allocation Fund 5.53 9.16 12.16 14.25 12.12
................................................................................................
High Quality Bond Fund 4.53 3.71 5.08 5.12 5.12
------------------------------------------------------------------------------------------------
</TABLE>
* Not Annualized
THESE RESULTS REFLECT THE EXPERIENCE OF THE SUB-ACCOUNTS OF VARIABLE ACCOUNT E
OF AMERICAN SKANDIA LIFE ASSURANCE CORPORATION AND INCLUDE ALL MANAGEMENT FEES
AND EXPENSES AND INSURANCE COSTS AND ACCORDINGLY WILL BE DIFFERENT FROM THE
PERFORMANCE OF THE CORRESPONDING GALAXY VIP FUND. THE VARIABLE ACCOUNT E
SUB-ACCOUNTS PURCHASE SHARES OF THE GALAXY VIP FUND. THE SUB-ACCOUNTS ARE GAL
MONEY MARKET, GAL EQUITY, GAL ASSET ALLOCATION, AND GAL HIGH QUALITY BOND. THE
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND THE INVESTMENT RETURN
AND PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE
ADVISOR AND THE ADMINISTRATOR ARE PRESENTLY WAIVING OR REIMBURSING FEES FOR THE
GALAXY VIP MONEY MARKET FUND , EQUITY FUND, ASSET ALLOCATION FUND AND HIGH
QUALITY BOND FUND. WITHOUT SUCH WAIVERS OR REIMBURSEMENTS, PERFORMANCE WOULD BE
LOWER. AN INVESTMENT IN THE GALAXY VIP MONEY MARKET FUND IS NEITHER INSURED NOR
GUARANTEED BY THE FDIC OR U.S. GOVERNMENT. ALTHOUGH THE FUND SEEKS TO PRESERVE
THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY
INVESTING IN THIS FUND.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. INVESTMENT RETURNS AND
PRINCIPAL VALUES WILL VARY WITH MARKET CONDITIONS SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THE
INVESTMENT ADVISOR AND ADMINISTRATOR ARE PRESENTLY WAIVING FEES AND/OR
REIMBURSING EXPENSES AND MAY REVISE OR DISCONTINUE SUCH PRACTICE AT ANY TIME.
WITHOUT SUCH WAIVERS AND/OR REIMBURSEMENTS, PERFORMANCE WOULD BE LOWER. TOTAL
RETURN FIGURES IN THIS REPORT INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS DISTRIBUTIONS AND INCLUDE THE DEDUCTION OF ANY SALES
CHARGES, WHERE APPLICABLE, UNLESS OTHERWISE INDICATED. AN INVESTMENT IN THE
GALAXY VIP MONEYMARKET FUND IS NEITHER INSURED NOR GUARANTEED BY THE FDIC OR
U.S. GOVERNMENT. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE OF YOUR
INVESTMENT AT $1.00 PER SHARE, YOU COULD LOSE MONEY BY INVESTING IN THIS FUND.
4
<PAGE>
PORTFOLIO REVIEWS
[PHOTO OMITTED - KAREN ARNEIL]
[BEGIN SIDEBAR]
KAREN ARNEIL HAS MANAGED THE GALAXY VIP MONEY MARKET FUND SINCE SEPTEMBER 1996.
SHE HAS MANAGED MONEY MARKET INVESTMENTS SINCE 1993.
[END SIDEBAR]
GALAXY VIP MONEY MARKET FUND
INVESTMENT MANAGER
KAREN ARNEIL
The Galaxy VIP Money Market Fund seeks as high a level of current income
as is consistent with liquidity and stability of principal.
As stronger-than-expected economic news and concerns about rising
inflation pushed money market yields higher over the past six months, we
continued to focus the Fund's investments in securities with good liquidity and
superior credit quality, while taking advantage of yield opportunities in
individual market sectors. With these strategies the Fund earned a total return
of 2.95% for the six months ended June 30, 2000.
Over the same period, the average money market fund tracked by Lipper
Analytical Services earned a total return of 2.66%. On June 30, 2000, the Fund
had an average maturity of 40 days, a 7-day Securities and Exchange Commission
("SEC") effective yield of 6.38%, and a 30-day SEC effective yield of 6.31%.
TAKING ADVANTAGE OF RISING YIELDS
Early in the period, we used a "barbelled" maturity structure, investing
the portfolio in one-year securities and issues with less than one month to
maturity. This strategy proved beneficial as growing concerns about higher
inflation caused interest rates and money market yields to rise. Of further help
to shareholders was our strategy to maintain an average-weighted maturity that
was slightly lower than that of our competitors throughout much of the period.
As in previous periods, we bought investments that matured near the dates of Fed
meetings so the fund benefited from increases by the Fed immediately.
MANAGING FUTURE RATE UNCERTAINTY
Although there have been recent signs of a cooling in the economy that may
discourage the Fed from raising interest rates, we believe another rate hike is
possible if signs of economic strength reemerge. With continued uncertainty
about where rates might head, we plan to alter the maturities of the Fund's
investments as needed. If it seems that rates have peaked, we expect to increase
investments in longer maturities to lock in higher yields.
GALAXY VIP MONEY MARKET FUND
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DISTRIBUTION OF TOTAL NET ASSETS AS OF JUNE 30, 2000
REPURCHASE AGREEMENT &
NET OTHER ASSETS AND LIABILITIES 12%
CORPORATE NOTES 10%
COMMERCIAL PAPER 78%
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP MONEY MARKET FUND
7-DAY AVERAGE YIELDS
Date 7 Day Average
07/31/1999 4.66
08/31/1999 4.88
09/30/1999 4.98
10/31/1999 5.07
11/30/1999 5.44
12/31/1999 5.72
01/31/2000 5.70
02/29/2000 5.71
03/31/2000 5.83
04/30/2000 5.80
05/31/2000 6.12
06/30/2000 6.19
AN INVESTMENT IN THE GALAXY VIP MONEY MARKET FUND IS NEITHER INSURED NOR
GUARANTEED BY THE FDIC OR U.S. GOVERNMENT. ALTHOUGH THE FUND SEEKS TO PRESERVE
THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY
INVESTING IN THIS FUND.
5
<PAGE>
PORTFOLIO REVIEWS
[PHOTO OMITTED - ROBERT G. ARMKNECHT]
[BEGIN SIDEBAR]
ROBERT G. ARMKNECHT BECAME MANAGER OF THE GALAXY VIP EQUITY FUND IN 1998. HE HAS
MANAGED EQUITY PORTFOLIOS FOR FLEET INVESTMENT ADVISORS INC. SINCE 1988.
[END SIDEBAR]
GALAXY VIP EQUITY FUND
INVESTMENT MANAGER
ROBERT G. ARMKNECHT
The Galaxy VIP Equity Fund seeks long-term growth by investing in stocks
of companies that Fleet Investment Advisors believes have the potential for
above-average earnings growth.
A well-diversified portfolio, with overweightings in key industry sectors,
plus strong stock selection within those sectors, helped the Fund outperform
both its market benchmark and other funds with similar investment objectives for
the six months ended June 30, 2000. During that time the Fund earned a total
return of 5.77%, versus -0.43% for the S&P 500 Index and 1.27% for the average
large-cap core fund tracked by Lipper Analytical Services.
OVERWEIGHTINGS IN ENERGY AND HEALTH SHARES
For most of the reporting period, investors favored leading companies in
industries with a strong potential for earnings growth -- such as technology,
energy, and health care. In this environment, the Fund benefited particularly
from an overweighting in energy stocks, which maximized a substantial
outperformance by individual positions in energy-service firms like Cooper
Cameron and Transocean Sedeco Forex, Inc., as oil prices rose.
Of further help was an overweighting in outperforming health care stocks
like Elan and American Home Products and strong returns from individual holdings
in the technology, consumer staples, financial, and communications groups (where
the Fund had neutral weightings). Such positive contributions offset the effect
of disappointing returns from some of the consumer staples group and a lesser
weighting in the better-performing food sector.
Early in the period we traded shares of energy and technology stocks that
had performed well for positions in retail and drug stocks that were available
at attractive prices. We also increased the Fund's cash reserves at that time.
We were able to use these reserves later in the quarter to increase technology
positions that had become more attractive.
CONTINUED FOCUS ON HIGH-GROWTH GROUPS
As long as it looks like growth is slowing, investors will probably remain
concerned about company earnings. Although such an environment could benefit the
growth-oriented sectors that the Fund invests in, we believe investors will
become increasingly selective. For this reason, we expect to remain focused on
areas with particularly strong growth potential--including energy, health care,
technology, finance, and communications stocks--and emphasize the industry
leaders within those groups. The Fund should also benefit as we continue to move
assets from stocks that have become overpriced into issues of quality businesses
with better price potential.
GALAXY VIP EQUITY FUND
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
DISTRIBUTION OF TOTAL NET ASSETS AS OF JUNE 30, 2000
OTHER COMMON STOCKS, REPURCHASE AGREEMENT &
NET OTHER ASSETS AND LIABILITIES 3%
CONSUMER STAPLES 18%
UTILITIES 7%
ENERGY 11%
TECHNOLOGY 33%
INDUSTRIAL 8%
FINANCE 9%
CONSUMER CYCLICAL 11%
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP EQUITY FUND
GROWTH OF $10,000 INVESTMENT*
S&P 500 GALAXY VIP
INDEX EQUITY FUND
01/01/1993 10000 10000
12/31/1993 11009 10450
12/31/1994 11151 10813
12/31/1995 15336 13706
12/31/1996 20762 16595
12/31/1997 27686 21198
12/31/1998 35648 26184
12/31/1999 43145 33299
06/30/2000 42959 35220
*SINCE INCEPTION ON 1/11/93. THE S&P 500 INDEX IS AN UNMANAGED INDEX OF 500
LEADING STOCKS. RESULTS FOR THE INDEX DO NOT REFLECT INVESTMENT MANAGEMENT FEES
AND OTHER EXPENSES INCURRED BY THE FUND.
6
<PAGE>
PORTFOLIO REVIEWS
[PHOTO OMITTED - GREGORY M. MILLER]
[BEGIN SIDEBAR]
GREGORY M. MILLER BECAME MANAGER OF THE GALAXY VIP GROWTH AND INCOME FUND IN
1998. HE HAS MANAGED EQUITY PORTFOLIOS SINCE 1988.
[END SIDEBAR]
GALAXY VIP GROWTH AND INCOME FUND
INVESTMENT MANAGER
GREGORY M. MILLER
The Galaxy VIP Growth and Income Fund seeks to provide a relatively high
total return through long-term capital appreciation and current income. The Fund
invests in a diversified portfolio consisting primarily of common stocks
selected through traditional research techniques. The Fund's modest income
orientation is intended to both enhance total returns and dampen share price
volatility.
As market leadership broadened over the six months ended June 30, 2000,
the Fund benefited from a diverse mix of reasonably priced investments. During
that time the Fund earned a total return of 1.62%, versus -0.43% for its market
benchmark, the S&P 500 Index, and -0.47% for the average multi-cap value fund
tracked by Lipper Analytical Services.
STRONG STOCK SELECTION ALSO HELPS TOTAL RETURNS
By remaining well diversified, the Fund was able to benefit from
outperformances in several areas during the reporting period. These included an
overweighted position in the energy sector, which advanced strongly as oil
prices rose. Of further help were outperformances by individual energy issues
like Schlumberger and Baker Hughes. Good stock selection in the health care
group also enhanced total returns, with outperformances by holdings in American
Home Products, Elan, and Pharmacia.
Feeling that the prices for technology stocks had far outstripped their
historic relationship with company earnings and were inappropriate for our
value-oriented investment strategy, we remained underweighted in technology
stocks (versus the Fund's benchmark) during the period. While this reduced total
returns when technology stocks rallied, it buffered total returns during the
times when the sector was weak.
To maintain our emphasis on value, we took profits in certain energy,
health care, technology, and financial stocks that had performed well and added
to holdings that we felt had better price potential. These included consumer
cyclical and technology stocks that had become especially attractive. We also
made several opportunistic trades within the basic materials sector.
CONTINUED FOCUS ON EARNINGS
It appears that investors may have started to embrace the more traditional
methodologies for stock valuation. It is unclear whether the greater attention
to value will continue, however. At the same time, higher interest rates have
historically been particularly harmful to the better-yielding stocks that make
up a significant portion of the value-oriented universe. Value stocks also tend
to underperform when the economic outlook is deteriorating and investors are
becoming more nervous about earnings.
Expecting the prices for value-oriented shares to remain volatile, we plan
to look for new investment opportunities that can outperform when investor
interest in value strengthens. In the meantime, we plan to give even more
attention to the earnings prospects of individual firms.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP GROWTH AND INCOME FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF JUNE 30, 2000
BASIC MATERIALS 6%
REPURCHASE AGREEMENT 5%
CONSUMER STAPLES 17%
OTHER COMMON STOCKS, CONVERTIBLE PREFERRED STOCK &
NET OTHER ASSETS AND LIABILITIES 16%
FINANCE 15%
CONSUMER CYCLICAL 8%
TECHNOLOGY 23%
ENERGY 10%
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP GROWTH AND INCOME FUND
GROWTH OF $10,000 INVESTMENT*
GALAXY VIP
S&P 500 GROWTH AND
INDEX INCOME FUND
03/04/1998 10000 10000
12/31/1998 11864 10372
06/30/1999 13333 11777
12/31/1999 14359 11136
06/30/2000 14297 11317
*SINCE INCEPTION ON 3/4/98. THE S&P 500 INDEX IS AN UNMANAGED INDEX OF 500
LEADING STOCKS. RESULTS FOR THE INDEX DO NOT REFLECT INVESTMENT MANAGEMENT FEES
AND OTHER EXPENSES INCURRED BY THE FUND.
7
<PAGE>
PORTFOLIO REVIEWS
[PHOTO OMITTED - STEPHEN D. BARBARO]
[BEGIN SIDEBAR]
STEPHEN D. BARBARO HAS MANAGED THE GALAXY VIP SMALL COMPANY GROWTH FUND SINCE
ITS INCEPTION. HE HAS MANAGED SMALL COMPANY PORTFOLIOS FOR FLEET INVESTMENT
ADVISORS INC., AND ITS PREDECESSORS, SINCE 1976.
[END SIDEBAR]
GALAXY VIP SMALL COMPANY
GROWTH FUND
INVESTMENT MANAGER
STEPHEN D. BARBARO
The Galaxy VIP Small Company Growth Fund seeks to provide capital
appreciation by investing primarily in the securities of companies with market
capitalizations of $1.5 billion or less.
As concerns about earnings and a sell-off in the technology sector made
stock prices more volatile in the first half of 2000, a well-diversified
portfolio and strong performances by many individual holdings helped the Fund
outperform its market benchmark and other funds with similar investment
objectives. For the six months ended June 30, 2000, the Fund earned a total
return of 8.31%. That compares to a total return of 3.04% for the Russell 2000
and 9.45% for the average small-cap growth funds tracked by Lipper Analytical
Services.
DIVERSIFICATION BOOSTS RETURNS
Early in the reporting period, when technology stocks were advancing, the
Fund benefited from both an overweighting in the sector versus its benchmark and
the exceptional performance of holdings in the communications group. These
positives, plus an underweighting in the poorly performing financial group,
offset the impact of an underweighting in the strongly performing biotech
sector.
Although the Fund's overweighting in technology stocks reduced returns
when the sector corrected later in the period, shareholders benefited from an
underweighting in Internet stocks, which suffered the largest losses during the
selloff. Of further help was an overweighting in energy stocks, which performed
well as oil prices continued to rise, and a strong performance by the Fund's
health care positions, which investors favored as the economy seemed to cool.
During the period we traded technology stocks that had performed well for
those that offered better price potential but trimmed the sector as a whole. We
added to holdings in the energy sector, as well as stocks of consumer,
financial, transportation, and health care firms.
CONTINUED FOCUS ON HIGH-GROWTH SECTORS
Once economic growth ebbs enough for interest rates to stabilize,
small-cap stocks could perform relatively well. When growth slows, smaller firms
are often able to maintain a relatively strong pace of earnings improvement. In
such an environment, the Fund should benefit from overweightings in high-growth
areas like technology and energy, as well as from profitable positions in health
care firms. While the pace of technology gains will probably be much slower than
it has been in recent years, we believe the sector still offers many
opportunities for growth investors. As always, we plan to take full advantage of
new investment opportunities that further market fluctuations may bring in
technology stocks as well as other groups.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP SMALL COMPANY GROWTH FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF JUNE 30, 2000
INDUSTRIAL 14%
ENERGY 10%
OTHER COMMON STOCKS &
NET OTHER ASSETS AND LIABILITIES 6%
CONSUMER STAPLES 16%
REPURCHASE AGREEMENT 7%
CONSUMER CYCLICAL 13%
TECHNOLOGY 34%
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP SMALL COMPANY GROWTH FUND
GROWTH OF $10,000 INVESTMENT*
GALAXY VIP
RUSSELL SMALL COMPANY
2000 GROWTH FUND
04/17/1998 10000 10000
12/31/1998 8806 8932
06/30/1999 9623 9783
12/31/2000 10678 14959
06/30/2000 11003 16203
*SINCE INCEPTION ON 4/17/98. THE RUSSELL 2000 IS AN UNMANAGED INDEX OF 2000
SMALL COMPANY STOCKS. RESULTS FOR THE INDEX DO NOT REFLECT INVESTMENT
MANAGEMENT FEES AND OTHER EXPENSES INCURRED BY THE FUND.
8
<PAGE>
PORTFOLIO REVIEWS
[PHOTO OMITTED - DAVID W. JELLISON]
[BEGIN SIDEBAR]
DAVID W. JELLISON HAS MANAGED THE GALAXY VIP COLUMBIA REAL ESTATE EQUITY FUND II
SINCE ITS INCEPTION IN MARCH 1998. A VICE PRESIDENT WITH COLUMBIA MANAGEMENT
CO., HE HAS SERVED AS A FINANCIAL ANALYST AND PORTFOLIO MANAGER THERE SINCE
1992.
[END SIDEBAR]
GALAXY VIP COLUMBIA
REAL ESTATE EQUITY FUND II
INVESTMENT MANAGER
DAVID W. JELLISON
The Galaxy VIP Columbia Real Estate Equity Fund II seeks, with equal
emphasis, capital appreciation and above-average current income. The Fund
invests primarily in the equity securities of real estate companies, including
real estate investment trusts ("REITs").
With a new rally in the real estate market that began in March, the Fund
earned a total return of 13.91% for the six months ended June 30, 2000. Over the
same period the National Association of Real Estate Investment Trusts ("NAREIT")
Index earned a total return of 13.18%, and the average real estate stock fund
tracked by Lipper Analytical Services earned a total return of 12.71%.
A BETTER BALANCE OF SUPPLY AND DEMAND
REITs appeared to emerge from a two-and-a-half-year-long bear market
during the first half of 2000, as a balance of supply and demand helped forward
growth rates stabilize in the high single-digit range. Unlike prior cycles, the
broader financial markets restricted the flow of capital into real estate, which
raised the cost of capital and restrained supply. Meanwhile, healthy economic
growth spurred strong demand for lodging, office, industrial, and apartment
space. In this environment, the Fund benefited from an overweighting in such
sectors, which outperformed for the reporting period.
Of further help was a powerful performance by individual holdings in
high-quality firms with large capitalizations. These included firms like
Starwood Hotels & Resorts, Spieker Properties, and Boston Properties, which
could take advantage of the heightened demand for hotel and office properties,
respectively. The strong total returns from these holdings offset disappointing
total returns from stocks like Simon Property Group, which is primarily involved
in retail and was hurt by concerns over consumer spending, and Mack-Cali Realty,
whose recent announcement of a merger with Prentiss Properties was poorly
received by the market.
During the period we sold one retail-oriented holding, which modestly
reduced the Fund's weighting in that sector. Additions to existing positions in
the lodging sector increased the Fund's weighting there.
STABLE EARNINGS GROWTH AHEAD
The valuations for REITs remain attractive versus other equities. If the
forward earnings growth rates for REITs remain stable, we believe the Fund will
continue to provide compelling total returns. With 31 holdings and an average
market capitalization of $2.8 billion, the Fund will continue to focus on larger
REITs that have strong, experienced management teams and the best prospects for
future growth.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP COLUMBIA REAL ESTATE EQUITY FUND II
DISTRIBUTION OF TOTAL NET ASSETS AS OF JUNE 30, 2000
INVESTMENT COMPANY &
NET OTHER ASSETS AND LIABILITIES 2%
REAL ESTATE 98%
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP COLUMBIA REAL ESTATE EQUITY FUND II
GROWTH OF $10,000 INVESTMENT*
GALAXY VIP COLUMBIA
REAL ESTATE EQUITY
NAREIT FUND II
03/03/1998 10000 10000
12/31/1998 8482 9043
06/30/1999 8887 9442
12/31/2000 8090 8669
06/30/2000 9156 9875
*SINCE INCEPTION ON 3/3/98. THE NAREIT INDEX IS AN UNMANAGED INDEX OF ALL TAX
QUALIFIED REITS LISTED ON THE NEW YORK STOCK EXCHANGE, THE AMERICAN STOCK
EXCHANGE AND THE NASDAQ, WHICH HAVE 75% OR MORE OF THEIR GROSS INVESTED BOOK
ASSETS INVESTED DIRECTLY OR INDIRECTLY IN THE EQUITY OWNERSHIP OF REAL ESTATE.
ONLY COMMON SHARES ISSUED BY A REIT ARE INCLUDED IN THIS MARKET WEIGHTED INDEX,
WHICH INCLUDES DIVIDENDS IN THE MONTH BASED UPON THEIR PAYMENT DATE. RESULTS
FOR THE NAREIT INDEX DO NOT REFLECT THE INVESTMENT MANAGEMENT FEES AND OTHER
EXPENSES INCURRED BY THE FUND.
9
<PAGE>
PORTFOLIO REVIEWS
[PHOTO OMITTED - DON JONES]
[BEGIN SIDEBAR]
DON JONES HAS MANAGED THE GALAXY VIP ASSET ALLOCATION FUND SINCE ITS INCEPTION.
HE HAS MANAGED INVESTMENT PORTFOLIOS FOR FLEET INVESTMENT ADVISORS INC., AND ITS
PREDECESSORS, SINCE 1977.
[END SIDEBAR]
GALAXY VIP ASSET ALLOCATION FUND
INVESTMENT MANAGER
DON JONES
The Galaxy VIP Asset Allocation Fund seeks a high total return by
providing both current income that is greater than income for popular stock
market averages, and long-term growth in the value of its assets. The Fund
invests in a diversified portfolio of equity, bond, and short-term obligations.
As stock market volatility increased over the past six months, the Fund
benefited from a sizable investment in bonds. Although rising interest rates
drove bond prices lower in the early and middle parts of the period, the price
decline was not as large as it was for stocks. Of further benefit was a
well-diversified stock portfolio, which helped the Fund weather market
fluctuations relatively well.
For the six months ended June 30, 2000, the Fund earned a total return of
5.82%. That compares to a total return of 1.95% for the average flexible
portfolio fund tracked by Lipper Analytical Services. The S&P 500 Index, which
tracks the performance of stocks only, earned a total return of -0.43% during
the same time.
DIVERSITY AND QUALITY AT A REASONABLE PRICE
When technology stocks rallied at the start of the period, the Fund
enjoyed strong performances from many holdings in the sector that offset
disappointing total returns from drug and financial positions. At this time we
continued to add selectively to the technology sector, while also increasing
positions in biotech firms. We paid for these purchases with cash reserves and
proceeds from the sale of certain food and drug stocks. We also made
opportunistic trades within the financial sector.
Many of the Fund's technology positions continued to outperform when the
sector slumped later in the period. Continued disappointments from the financial
sector were further offset by a strong performance from energy positions that
benefited from rising oil prices. With profits from the energy sector, we added
stocks of biotech, electronic, and telephone utility firms whose prices had
become attractive.
Throughout the period, we kept about 40% of the Fund's assets in bonds. As
the prices for corporate bonds improved, we added investments there, emphasizing
high-quality industrial bonds over the debt of financial firms.
BONDS COULD FURTHER ENHANCE RETURNS
The Fund's bond investments could continue to enhance total returns if
slower growth allows interest rates to peak and bond prices rally. Should stock
prices deteriorate further, we may shift assets from bonds to stocks to maximize
new investment opportunities in that market. In the meantime, we plan to
continue looking for opportunities in corporate bonds.
In the stock portfolio, the Fund should benefit from additions of biotech
stocks, which offer promising growth potential, and from a broadening into more
reasonably priced technology areas like telecommunications, storage and
connection devices.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP ASSET ALLOCATION FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF JUNE 30, 2000
REPURCHASE AGREEMENT 6%
CORPORATE NOTES AND BONDS 13%
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES,
FOREIGN BONDS & NET OTHER ASSETS AND LIABILITIES 3%
COMMON STOCKS 56%
U.S. GOVERNMENT AND AGENCY OBLIGATIONS 22%
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP ASSET ALLOCATION FUND
GROWTH OF $10,000 INVESTMENT*
S&P 500 GALAXY VIP ASSET
INDEX ALLOCATION FUND
02/06/1993 10000 10000
12/31/1993 10900 10530
12/31/1994 11041 10304
12/31/1995 15185 13367
12/31/1996 20558 15328
12/31/1997 27414 18245
12/31/1998 35298 21440
12/31/1999 42721 22955
06/30/2000 42537 24290
*SINCE INCEPTION ON 2/6/93. THE S&P 500 INDEX IS AN UNMANAGED INDEX OF 500
LEADING STOCKS. RESULTS FOR THE INDEX DO NOT REFLECT INVESTMENT MANAGEMENT FEES
AND OTHER EXPENSES INCURRED BY THE FUND.
10
<PAGE>
PORTFOLIO REVIEWS
[PHOTO OMITTED - MARIE SCHOFIELD]
[BEGIN SIDEBAR]
MARIE SCHOFIELD HAS MANAGED THE GALAXY VIP HIGH QUALITY BOND FUND SINCE MARCH
1996. SHE HAS MANAGED FIXED-INCOME ASSETS SINCE 1975.
[END SIDEBAR]
GALAXY VIP HIGH QUALITY
BOND FUND
INVESTMENT MANAGER
MARIE SCHOFIELD
The Galaxy VIP High Quality Bond Fund seeks a high level of current income
consistent with the prudent risk of capital. The Fund invests primarily in U.S.
government securities and corporate issues rated in the four highest
credit-rating categories by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Ratings Group ("S&P"), with at least 65% of total assets
invested in issues rated in the two highest rating categories or unrated issues
of comparable quality.
In a climate where economic uncertainty and reduced supplies of Treasury
bonds helped Treasuries and other higher-quality issues outperform, the Fund
maintained a relatively large weighting in government securities and emphasized
corporate debt with better credit quality. This strategy, combined with
adjustments in the Fund's maturity structure to maximize fluctuations in yields,
helped the Fund earn a total return of 4.81% for the six months ended June 30,
2000. That compares to total returns of 4.18% for the Lehman Brothers
Government/Corporate Bond Index and 3.01% for the average A-rated corporate bond
fund tracked by Lipper Analytical Services. On June 30, 2000, the Fund had a
30-day SEC yield of 6.44%.
ADJUSTING TO SHIFTS IN YIELDS
When the yield curve inverted during the first quarter of 2000, we
extended the average duration of the Fund's investments by purchasing Treasury
issues with maturities of 20 to 25 years that were yielding close to 7%. This
gave the Fund a duration that was about one year longer than that of the Fund's
benchmark and enhanced our "barbelled" maturity structure, which concentrates
investments at the short and long ends of the yield curve.
As the scramble to buy long-term Treasuries gained momentum, causing
Treasury yields to fall dramatically, we began to take profits in longer-term
issues and increased investments in shorter maturities and cash. This resulted
in a yield pickup due to the inversion of the yield curve, and left the Fund's
duration just slightly longer than that of the Fund's benchmark.
In June, as corporate bonds became especially attractive, we traded
Treasuries and mortgage-backed securities for high-quality corporates. In making
these purchases, we focused on new issues and debt of media, telecommunications,
industrial, and consumer staples firms.
FURTHER CORPORATE PURCHASES LIKELY
Once it appears that economic growth is slowing, we expect to lock in the
income opportunities that exist with longer maturities. In the meantime, we plan
to continue adding selected high-quality corporate bonds that offer attractive
prices and yields.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP HIGH QUALITY BOND FUND
DISTRIBUTION OF TOTAL NET ASSETS AS OF JUNE 30, 2000
MORTGAGE-BACKED SECURITIES 17%
ASSET-BACKED SECURITIES 11%
FOREIGN BONDS &
NET OTHER ASSETS AND LIABILITIES 3%
U.S. GOVERNMENT AND AGENCY OBLIGATIONS 38%
CORPORATE NOTES AND BONDS 31%
GALAXY VIP HIGH QUALITY BOND FUND
GROWTH OF $10,000 INVESTMENT*
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
LEHMAN BROTHERS GALAXY VIP
GOVERNMENT/CORPORATE HIGH QUALITY
BOND FUND BOND FUND
01/21/1993 10000 10000
12/31/1993 10604 10867
12/31/1994 9984 10486
12/31/1995 12294 12094
12/31/1996 12443 12487
12/31/1997 13657 13656
12/31/1998 14950 14981
12/31/1999 14629 14415
06/30/2000 15240 15109
*SINCE INCEPTION ON 1/21/93. THE LEHMAN BROTHERS GOVERNMENT/ CORPORATE BOND
INDEX IS AN UNMANAGED INDEX OF U.S. TREASURY OBLIGATIONS AND THE DEBT OF U.S.
GOVERNMENT AGENCIES AS WELL AS ALL PUBLICLY ISSUED, FIXED RATE, NON-CONVERTIBLE
INVESTMENT GRADE DOLLAR-DENOMINATED, SEC-REGISTERED CORPORATE DEBT. RESULTS FOR
THE INDEX DO NOT REFLECT INVESTMENT MANAGEMENT FEES AND OTHER EXPENSES INCURRED
BY THE FUND.
11
<PAGE>
PORTFOLIO REVIEWS
[PHOTO OMITTED - JEFFREY L. RIPPEY]
[BEGIN SIDEBAR]
JEFFREY L. RIPPEY HAS MANAGED THE GALAXY VIP COLUMBIA HIGH YIELD FUND II SINCE
1998. A VICE PRESIDENT OF COLUMBIA MANAGEMENT COMPANY, MR. RIPPEY HAS MANAGED
FIXED INCOME PORTFOLIOS SINCE 1981.
[END SIDEBAR]
GALAXY VIP
COLUMBIA HIGH YIELD FUND II
INVESTMENT MANAGER
JEFFREY L. RIPPEY
The Galaxy VIP Columbia High Yield Fund II seeks high current income with
a secondary objective of capital appreciation. The Fund invests primarily in
high-yielding corporate bonds rated Ba or lower by Moody's ("junk bonds"), with
no more than 10% of its assets in bonds rated below B.
During the six months ended June 30, 2000, the Fund had a total return of
0.89%. That compares to total returns of 3.99% for the Lehman Brothers Aggregate
Bond Index and -1.66% for the average high-yield bond fund tracked by Lipper
Analytical Services. On June 30, the Fund had a 30-day SEC yield of 8.38%.
IMPROVING CREDIT QUALITY
The recent rise in short-term rates was particularly hard on the
high-yield sector in the first half of 2000, as investors worried that slower
growth might hurt the credit quality of bond issuers. Of further harm was a
tightening in the availability of bank credit, a relatively high default rate
among issuers, reduced liquidity due to decreasing capital commitments by
dealers, and lower demand among mutual fund investors.
In this difficult market environment, we upgraded the credit quality of
the portfolio, focusing on industries that we expect to respond well in an
uncertain economic climate. This included the cable sector, where cash flow
should continue to grow as companies expand their digital products.
As oil prices continued to rise, the Fund also benefited from the strong
total returns of its energy holdings, which included several outperformances by
debt of individual issuers such as Santa Fe Snyder. Of further help was a
limited exposure to issuers in the steel and finance industries, which struggled
during the period.
These positives offset disappointing performance from holdings in firms
like Del Webb, a retirement community builder that was hurt by rising mortgage
rates and Westpoint Stevens, whose bonds traded down in response to a proposed
leveraged management buyout.
CONTINUED EMPHASIS ON QUALITY
We believe that the key to an improving market environment for high-yield
issues is the ability of the Fed to engineer a "soft landing" for the economy
that would provide an environment of moderate growth. As investors see that the
Fed's tightening policy may be close to an end, with perhaps one more interest
rate increase on the horizon, the demand for high-yield issues should improve.
Once we find that this is the case, we may look at opportunities to pick up more
yield in issues with somewhat lower credit ratings. In the meantime, we expect
to maintain a relatively high-quality portfolio.
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP COLUMBIA HIGH YIELD FUND II
DISTRIBUTION OF TOTAL NET ASSETS AS OF JUNE 30, 2000
INVESTMENT COMPANY &
NET OTHER ASSETS AND LIABILITIES 3%
U.S. GOVERNMENT OBLIGATION 3%
CORPORATE NOTES AND BONDS 94%
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
GALAXY VIP COLUMBIA HIGH YIELD FUND II
GROWTH OF $10,000 INVESTMENT*
GALAXY VIP LEHMAN BROTHERS
COLUMBIA HIGH AGGREGATE BOND
YIELD FUND INDEX
03/03/1998 10000 10000
12/31/1998 10739 10961
06/30/1999 10592 10975
12/31/2000 11022 10651
06/30/2000 11120 11076
*SINCE INCEPTION ON 3/3/98. THE LEHMAN BROTHERS AGGREGATE BOND INDEX IS AN
INDEX COMPOSED OF TREASURY ISSUES, AGENCY ISSUES, CORPORATE BOND ISSUES AND
MORTGAGE-BACKED SECURITIES. RESULTS FOR THE INDEX DO NOT REFLECT INVESTMENT
MANAGEMENT FEES AND OTHER EXPENSES INCURRED BY THE FUND.
12
<PAGE>
MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
COMMERCIAL PAPER (A) - 77.84%
FINANCE - 45.10%
$ 700,000 American Express Credit Corp.
6.58%, 07/06/00.................. $ 699,360
700,000 Associates Corp. of North America
6.52%, 07/24/00.................. 697,084
700,000 Bellsouth Capital Funding Corp.
6.60%, 07/17/00 (B).............. 697,947
700,000 BMW US Capital Corp.
6.53%, 07/12/00.................. 698,603
700,000 CDC Commercial Paper Corp.
6.52%, 08/17/00 (B).............. 694,041
700,000 Ford Motor Credit Co.
6.54%, 07/07/00.................. 699,237
700,000 General Electric Capital Corp.
6.51%, 07/10/00.................. 698,861
700,000 General Motors Acceptance Corp.
6.56%, 08/22/00.................. 693,367
700,000 IBM Credit Corp.
6.50%, 07/05/00.................. 699,494
700,000 International Lease Finance Corp.
6.49%, 07/07/00.................. 699,243
700,000 USAA Capital Corp.
6.52%, 07/21/00.................. 697,464
------------
7,674,701
------------
CONSUMER STAPLES - 12.27%
700,000 Coca-Cola Co.
6.35%, 07/28/00.................. 696,572
700,000 Daimler Chrysler NA Holding Corp.
6.54%, 08/14/00.................. 694,405
700,000 Johnson & Johnson
6.51%, 08/01/00 (B).............. 696,076
------------
2,087,053
------------
BASIC MATERIALS - 8.18%
700,000 du Pont (E.I.) deNemours & Co.
6.52%, 07/11/00.................. 698,732
700,000 Minnesota Mining & Manufacturing Co.
6.53%, 08/28/00.................. 692,636
------------
1,391,368
------------
PAR VALUE VALUE
----------- ------------
CONSUMER CYCLICAL - 4.10%
$ 700,000 Wal-Mart Stores, Inc.
6.62%, 07/18/00 (B).............. $ 697,812
------------
UTILITIES - 4.10%
700,000 AT&T Corp.
6.52%, 07/24/00.................. 697,084
------------
TECHNOLOGY - 4.09%
700,000 Motorola, Inc.
6.57%, 07/27/00.................. 696,679
------------
TOTAL COMMERCIAL PAPER .......... 13,244,697
------------
(Cost $13,244,697)
CORPORATE NOTES - 9.69%
750,000 Key Bank N.A., Bank Note
6.50%, 01/29/01.................. 749,752
900,000 Sara Lee Corp., MTN, Series D
6.68%, 02/14/01.................. 899,680
------------
TOTAL CORPORATE NOTES............ 1,649,432
------------
(Cost $1,649,432)
REPURCHASE AGREEMENT - 12.84%
2,185,000 State Street Bank
6.40%, 07/03/00, dated 06/30/00
Repurchase Price $2,186,165
(Collateralized by U.S. Treasury
Bond 7.25%, due 05/15/16;
Total Par $2,005,000
Market Value $2,233,069) ........ 2,185,000
------------
TOTAL REPURCHASE AGREEMENT ...... 2,185,000
------------
(Cost $2,185,000)
TOTAL INVESTMENTS - 100.37%...................... 17,079,129
------------
(Cost $17,079,129)
NET OTHER ASSETS AND LIABILITIES - (0.37)%....... (63,643)
------------
NET ASSETS - 100.00%............................. $ 17,015,486
=============
---------------------------------------------------------
(A) Discount yield at time of purchase.
(B) Securities exempt from registration under Section 4(2) of the Securities
Act of 1933, as amended. These securities may only be resold, in
transactions exempt from registration, to qualified buyers. At June 30,
2000, these securities amounted to $2,785,876 or 16.37% of net assets.
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
EQUITY FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
----------- ------------
COMMON STOCKS - 98.49%
TECHNOLOGY - 33.39%
20,000 America Online, Inc.*............ $ 1,055,000
40,400 American Tower Corp., Class A.... 1,684,175
23,500 Applied Materials, Inc.*......... 2,129,687
10,000 AT&T Wireless Group*............. 278,750
42,500 Automatic Data Processing, Inc... 2,276,406
40,000 Cisco Systems, Inc.*............. 2,542,500
20,000 CMGI, Inc.*...................... 916,250
15,000 Conexant Systems, Inc.*.......... 729,375
40,000 Dell Computer Corp.*............. 1,972,500
7,500 E-Tek Dynamics, Inc.*............ 1,978,594
20,000 EchoStar Communications Corp.,
Class A*......................... 662,188
30,000 EMC Corp.*....................... 2,308,125
20,000 Flextronics International, Ltd.*. 1,373,750
5,000 Genentech, Inc.*................. 860,000
12,500 Intel Corp....................... 1,671,094
15,000 International Business Machines
Corp. ........................... 1,643,438
15,000 Liberate Technologies, Inc.*..... 439,688
45,000 Loral Space & Communications
Corp., Ltd.*..................... 312,188
15,000 Lucent Technologies, Inc......... 888,750
32,500 Maxim Integrated Products, Inc.*. 2,207,969
30,000 Microsoft Corp.*................. 2,400,000
35,000 Nokia Oyj, ADR................... 1,747,813
30,000 Nortel Networks Corp............. 2,047,500
20,000 Oracle Corp.*.................... 1,681,250
15,000 Sun Microsystems, Inc.*.......... 1,364,063
22,500 Tellabs, Inc.*................... 1,539,844
22,500 Teradyne, Inc.*.................. 1,653,750
17,000 Texas Instruments, Inc........... 1,167,688
30,000 United Technologies Corp......... 1,766,250
------------
43,298,585
------------
CONSUMER STAPLES - 18.09%
30,000 American Home Products Corp...... 1,762,500
25,000 Baxter International, Inc........ 1,757,812
25,000 Bristol-Myers Squibb Co.......... 1,456,250
100,000 Cendant Corp.*................... 1,400,000
5,000 Edwards Lifesciences Corp.*...... 92,500
45,000 Elan Corp. Plc, ADR*............. 2,179,687
20,000 Forest Laboratories, Inc.,
Class A* ........................ 2,020,000
20,000 Johnson & Johnson Co............. 2,037,500
22,500 Lilly (Eli) & Co................. 2,247,187
22,500 Merck & Co., Inc................. 1,724,062
30,000 PepsiCo, Inc..................... 1,333,125
55,000 Pfizer, Inc...................... 2,640,000
35,000 Pharmacia Corp................... 1,809,062
17,500 Procter & Gamble Co.............. 1,001,875
------------
23,461,560
------------
SHARES VALUE
----------- ------------
CONSUMER CYCLICAL - 11.31%
60,000 AT&T Corp. - Liberty Media Group,
Class A*......................... $ 1,455,000
52,500 CVS Corp......................... 2,100,000
20,000 Ford Motor Co.................... 860,000
20,000 Harley-Davidson, Inc............. 770,000
40,000 Home Depot, Inc.................. 1,997,500
40,000 Infinity Broadcasting Corp.,
Class A* ........................ 1,457,500
35,000 McDonald's Corp.................. 1,152,812
27,500 RadioShack Corp.................. 1,302,812
75,000 Staples, Inc.*................... 1,153,125
19,000 Target Corp...................... 1,102,000
70,000 TJX Cos., Inc.................... 1,312,500
------------
14,663,249
------------
ENERGY - 10.59%
40,000 Anadarko Petroleum Corp.......... 1,972,500
52,500 Baker Hughes, Inc................ 1,680,000
43,000 BP Amoco Plc, ADR................ 2,432,187
35,000 Burlington Resources, Inc........ 1,338,750
50,000 Conoco, Inc., Class B............ 1,228,125
22,500 Cooper Cameron Corp.*............ 1,485,000
25,000 Schlumberger, Ltd................ 1,865,625
32,500 Transocean Sedco Forex, Inc...... 1,736,719
------------
13,738,906
------------
FINANCE - 9.36%
20,000 American International Group, Inc. 2,350,000
67,500 Associates First Capital Corp.,
Class A ......................... 1,506,094
45,000 Chase Manhattan Corp............. 2,072,812
37,500 Citigroup, Inc................... 2,259,375
30,000 Fannie Mae....................... 1,565,625
15,000 Goldman Sachs Group, Inc......... 1,423,125
25,000 Wells Fargo & Co................. 968,750
------------
12,145,781
------------
INDUSTRIAL - 7.69%
70,000 General Electric Co.............. 3,710,000
50,000 Honeywell International, Inc..... 1,684,375
35,000 Solectron Corp.*................. 1,465,625
65,000 Tyco International, Ltd.......... 3,079,375
2,619 Visteon Corp.*................... 31,751
------------
9,971,126
------------
UTILITIES - 6.88%
38,000 AES Corp.*....................... 1,733,750
50,000 Nextlink Communications, Inc.*... 1,896,875
35,000 SBC Communications, Inc.......... 1,513,750
20,000 US West, Inc..................... 1,715,000
45,000 WorldCom, Inc.*.................. 2,064,375
------------
8,923,750
------------
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
EQUITY FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
----------- ------------
COMMON STOCKS
BASIC MATERIALS - 1.18%
20,000 du Pont (E.I.) deNemours & Co.... $ 875,000
25,000 Georgia-Pacific Group............ 656,250
------------
1,531,250
------------
TOTAL COMMON STOCKS ............. 127,734,207
------------
(Cost $93,253,035)
PAR VALUE
-----------
REPURCHASE AGREEMENT - 1.66%
$ 2,150,000 State Street Bank
6.40%, 07/03/00, dated 06/30/00
Repurchase Price $2,151,147
(Collateralized by U.S. Treasury
Bond 7.50%, due 11/15/16;
Total Par $1,930,000
Market Value $2,197,788)......... 2,150,000
------------
TOTAL REPURCHASE AGREEMENT ...... 2,150,000
------------
(Cost $2,150,000)
TOTAL INVESTMENTS - 100.15%...................... 129,884,207
------------
(Cost $95,403,035)
NET OTHER ASSETS AND LIABILITIES - (0.15)%....... (195,062)
------------
NET ASSETS - 100.00%............................. $129,689,145
============
---------------------------------------------------
* Non-income producing security.
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
----------- ------------
COMMON STOCKS - 94.34%
TECHNOLOGY - 22.62%
4,000 Avnet, Inc....................... $ 237,000
3,300 BMC Software, Inc.*.............. 120,398
5,000 Cisco Systems, Inc.*............. 317,813
8,000 Compaq Computer Corp............. 204,500
2,500 Computer Sciences Corp.*......... 186,719
3,500 Electronic Data Systems Corp..... 144,375
3,500 Genzyme Corp.*................... 208,031
8,000 Harris Corp...................... 262,000
1,900 Hewlett-Packard Co............... 237,263
2,500 International Business Machines
Corp. ........................... 273,906
6,750 Motorola, Inc.................... 196,172
6,000 Texas Instruments, Inc........... 412,125
2,350 United Technologies Corp......... 138,356
------------
2,938,658
------------
CONSUMER STAPLES - 17.29%
3,800 American Home Products Corp...... 223,250
2,500 Anheuser-Busch Cos., Inc......... 186,719
2,500 Bestfoods........................ 173,125
8,800 Elan Corp. Plc, ADR*............. 426,250
2,500 Forest Laboratories, Inc.,
Class A* ........................ 252,500
30,000 HEALTHSOUTH Corp.*............... 215,625
2,700 International Flavors &
Fragrances, Inc. ................ 81,506
1,600 Johnson & Johnson Co............. 163,000
2,400 Merck & Co., Inc................. 183,900
3,500 PepsiCo, Inc..................... 155,531
3,570 Pharmacia Corp................... 184,524
------------
2,245,930
------------
FINANCE - 15.26%
3,500 Bank America Corp................ 150,500
5,500 Bank One Corp.................... 146,094
2,850 Chase Manhattan Corp............. 131,278
2,200 Chubb Corp....................... 135,300
1,550 CIGNA Corp....................... 144,925
4,000 Citigroup, Inc................... 241,000
5,000 Countrywide Credit Industries,
Inc. ............................ 151,563
2,700 Hartford Financial Services Group,
Inc. ............................ 151,031
3,000 Lincoln National Corp............ 108,375
900 Morgan (J.P.) & Co............... 99,113
2,000 Standard & Poor's Depository
Receipts ........................ 290,563
6,000 Wells Fargo & Co................. 232,500
------------
1,982,242
------------
SHARES VALUE
----------- ------------
ENERGY - 9.67%
6,500 Baker Hughes, Inc................ $ 208,000
5,000 BP Amoco Plc, ADR................ 282,813
2,000 Exxon Mobil Corp................. 157,000
4,400 Halliburton Co................... 207,625
3,500 Kerr-McGee Corp.................. 206,281
2,300 Schlumberger, Ltd................ 171,638
445 Transocean Sedco Forex, Inc...... 23,780
------------
1,257,137
------------
CONSUMER CYCLICAL - 7.76%
4,500 Circuit City Stores-
Circuit City Group .............. 149,344
8,600 Cooper Tire & Rubber Co.......... 95,675
1,600 Eastman Kodak Co................. 95,200
4,500 Lowe's Cos., Inc................. 184,781
3,300 McDonald's Corp.................. 108,694
12,000 Office Depot, Inc.*.............. 75,000
6,700 Penny (J.C.) Co., Inc............ 123,531
8,300 Sherwin-Williams Co.............. 175,856
------------
1,008,081
------------
BASIC MATERIALS - 6.35%
5,000 Goodrich (B.F.) Co............... 170,312
1,900 Minnesota Mining & Manufacturing Co. 156,750
6,500 Pall Corp........................ 120,250
3,500 Praxair, Inc..................... 131,031
3,500 Sigma Aldrich Corp............... 102,375
10,500 Solutia, Inc..................... 144,375
------------
825,093
------------
UTILITIES - 5.28%
3,000 AT&T Corp........................ 94,875
3,500 CenturyTel, Inc.................. 100,625
1,700 GTE Corp......................... 105,825
3,600 SBC Communications, Inc.......... 155,700
5,000 WorldCom, Inc.*.................. 229,375
------------
686,400
------------
INDUSTRIAL - 4.40%
724 Agilent Technologies, Inc.*...... 53,395
3,000 General Electric Co.............. 159,000
2,937 Honeywell International, Inc..... 98,940
5,500 Tyco International, Ltd.......... 260,562
------------
571,897
------------
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
GROWTH AND INCOME FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
----------- ------------
CAPITAL GOODS - 3.75%
3,600 Boeing Co........................ $ 150,525
3,500 Hubbell, Inc., Class A........... 90,562
700 Hubbell, Inc., Class B........... 17,850
12,000 Waste Management, Inc............ 228,000
------------
486,937
------------
TRANSPORTATION - 1.96%
2,400 British Airways Plc, ADR......... 138,000
5,100 Burlington Northern Santa Fe Corp. 116,981
------------
254,981
------------
TOTAL COMMON STOCKS ............. 12,257,356
------------
(Cost $11,129,404)
CONVERTIBLE PREFERRED STOCK - 0.31%
2,000 Loral Space and
Communications, Ltd., 6.00% (A).. 40,000
------------
TOTAL CONVERTIBLE PREFERRED STOCK 40,000
------------
(Cost $123,318)
PAR VALUE
-----------
REPURCHASE AGREEMENT - 5.26%
$ 683,000 State Street Bank
6.40%, 07/03/00, dated 06/30/00
Repurchase Price $683,364
(Collateralized by U.S. Treasury
Bond 7.25%, due 05/15/16;
Total Par $630,000
Market Value $701,663)........... 683,000
------------
TOTAL REPURCHASE AGREEMENT ...... 683,000
------------
(Cost $683,000)
TOTAL INVESTMENTS - 99.91%....................... 12,980,356
------------
(Cost $11,935,722)
NET OTHER ASSETS AND LIABILITIES - 0.09%......... 12,159
------------
NET ASSETS - 100.00%............................. $ 12,992,515
============
----------------------------------------------------
* Non-income producing security.
(A) Security exempt from registration pursuant to Rule 144A under the
Securities Act of 1933, as amended. This security may only be resold, in
a transaction exempt from registration, to qualified institutional
buyers. At June 30, 2000, this security amounted to $40,000 or 0.31% of
net assets.
ADR American Depositary Receipt
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
----------- ------------
COMMON STOCKS - 92.18%
TECHNOLOGY - 34.08%
730 Advanced Fibre Communications,
Inc.* ........................... $ 33,078
840 Aeroflex, Inc.*.................. 41,737
380 Airgate Pcs, Inc................. 19,974
310 American Xtal Technology, Inc.*.. 13,408
380 Ancor Communications, Inc.*...... 13,591
570 Apex, Inc.*...................... 24,938
160 Arguss Holdings, Inc.*........... 3,020
380 Bluestone Software, Inc.*........ 9,761
510 Braun Consulting, Inc.*.......... 10,774
1,050 Brio Technology, Inc.*........... 22,247
380 Broadbase Software, Inc.*........ 11,638
600 Concord Communications, Inc.*.... 23,925
230 Cree Research, Inc.*............. 30,705
310 Crossroads Systems, Inc.*........ 7,828
565 Cybex Computer Products Corp.*... 24,295
500 Cysive, Inc.*.................... 11,938
760 Documentum, Inc.*................ 67,925
380 DuPont Photomasks, Inc.*......... 26,030
200 EMCORE Corp.*.................... 24,000
150 Emulex Corp.*.................... 9,853
1,580 Exchange Applications, Inc.*..... 42,068
650 FactSet Research Systems, Inc.... 18,363
480 Gadzoox Networks, Inc.*.......... 6,570
650 Galileo Technology, Ltd.*........ 13,975
290 Great Plains Software, Inc.*..... 5,691
1,360 Healthgate Data Corp.*........... 2,210
260 HEICO Corp....................... 3,705
1,130 HEICO Corp., Class A............. 13,842
890 Hyperion Solutions Corp.*........ 28,869
610 ICG Communications, Inc.*........ 13,458
890 IMRglobal Corp.*................. 11,626
490 Interact Commerce Corp.*......... 5,788
1,000 International Fibercom, Inc.*.... 25,500
1,577 Internet Pictures Corp.*......... 23,852
360 internet.com Corp.*.............. 7,088
1,120 IntraNet Solutions, Inc.*........ 42,980
1,000 iXL Enterprises, Inc.*........... 14,500
880 Kopin Corp.*..................... 60,940
930 Lightbridge, Inc................. 22,204
760 LTX Corp.*....................... 26,553
300 MasTec, Inc.*.................... 11,456
1,720 Mercator Software, Inc.*......... 118,250
840 Metro Information Services, Inc.* 8,400
310 MMC Networks, Inc.*.............. 16,566
940 National Instruments Corp.*...... 41,008
760 Netegrity, Inc.*................. 57,238
1,100 Netsilicon, Inc.*................ 36,025
25 New Focus, Inc.*................. 2,053
25 Oni Systems Corp................. 2,930
1,566 Per-Se Technologies, Inc.*....... 14,681
700 Photronics, Inc.*................ 19,862
1,700 Pioneer Standard Electronics, Inc. 25,075
950 PLATO Learning, Inc.*............ 13,063
200 Powertel, Inc.*.................. 14,188
1,040 Price Communications Corp.*...... 24,505
SHARES VALUE
----------- ------------
TECHNOLOGY (CONTINUED)
500 Primus Knowledge Solutions, Inc.* $ 22,500
20 ProBusiness Services, Inc.*...... 531
220 Proxim, Inc.*.................... 21,773
963 Psinet, Inc.*.................... 24,195
60 Qlogic Corp.*.................... 3,964
760 RSA Security, Inc.*.............. 52,630
890 SeaChange International, Inc.*... 25,699
1,910 Secure Computing Corp.*.......... 35,932
1,360 Showcase Corp.*.................. 7,905
940 Spectralink Corp.*............... 13,748
650 SPSS, Inc.*...................... 18,931
810 Sykes Enterprises, Inc.*......... 10,429
490 Tanning Technology Corp.*........ 9,433
1,060 Tekelec, Inc.*................... 51,079
520 Terayon Communication Systems,
Inc.* ........................... 33,402
390 Tollgrade Communcations, Inc.*... 51,675
477 TranSwitch Corp.*................ 36,818
1,500 United Shipping & Technology,
Inc.* ........................... 12,000
490 US Interactive, Inc.*............ 6,339
570 Varian Semiconductor Equipment*.. 35,803
530 Viant Corp....................... 15,701
550 Visual Networks, Inc.*........... 15,675
875 WinStar Communications, Inc.*.... 29,641
------------
1,761,550
------------
CONSUMER STAPLES - 15.81%
650 Accredo Health, Inc.*............ 22,466
800 ASI Solutions, Inc.*............. 6,700
2,320 ATS Medical, Inc.*............... 33,930
1,050 Bright Horizon Family Solutions,
Inc.* ........................... 22,444
1,100 Charles River Associates, Inc.*.. 19,387
270 CV Therapeutics, Inc.*........... 18,714
920 Education Management Corp.*...... 16,617
690 FirstService Corp.*.............. 8,280
1,130 Forrester Research, Inc.*........ 82,278
680 Fusion Medical Technologies, Inc.* 10,837
1,050 HeadHunter.NET, Inc.*............ 10,631
3,240 Hooper Holmes, Inc............... 25,920
1,000 ICT Group, Inc.*................. 9,562
930 Isis Pharmaceuticals, Inc.*...... 13,485
1,780 kForce.com, Inc.*................ 12,349
1,593 King Pharmaceuticals, Inc.*...... 69,893
1,690 Labor Ready, Inc.*............... 11,196
650 LifePoint Hospitals, Inc.*....... 14,462
720 Luminex Corp.*................... 29,970
630 Management Network Group, Inc.*.. 22,050
1,440 META Group, Inc.*................ 27,720
1,680 Modis Professional Services, Inc.* 12,810
260 Natrol, Inc.*.................... 845
820 On Assignment, Inc.*............. 25,010
1,250 Orthodontic Centers of America,
Inc.* ........................... 28,281
850 Osteotech, Inc.*................. 8,925
600 Pre-Paid Legal Services, Inc.*... 17,925
1,820 ProsoftTraining.com*............. 30,599
450 Province Healthcare Co.*......... 16,256
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
----------- ------------
CONSUMER STAPLES (CONTINUED)
180 Quanta Services, Inc.*........... $ 9,900
895 Renal Care Group, Inc.*.......... 21,886
1,210 Source Information Management Co.* 18,452
1,700 Steiner Leisure, Ltd.*........... 38,462
740 TeleTech Holdings, Inc.*......... 22,986
2,040 Thoratec Laboratories Corp.*..... 33,022
2,630 Trico Marine Services, Inc.*..... 33,533
240 Varian Medical Systems, Inc.*.... 9,390
------------
817,173
------------
INDUSTRIAL - 14.23%
760 Artesyn Technologies, Inc.*...... 21,138
870 Astec Industries, Inc.*.......... 22,076
1,030 Asyst Technologies, Inc.*........ 35,278
1,180 Atlas Air, Inc.*................. 42,333
1,120 Audiovox Corp.*.................. 24,710
200 August Technology Corp.*......... 3,287
780 Axsys International, Inc.*....... 12,773
440 Belden, Inc...................... 11,275
580 Brooks Automation, Inc.*......... 37,084
1,670 Casella Waste Systems, Inc.,
Class A* ........................ 17,952
950 Cidco*........................... 3,206
490 Cognex Corp.*.................... 25,358
250 Cohu, Inc........................ 6,742
895 CUNO, Inc.*...................... 20,697
365 Dycom Industries, Inc.*.......... 16,790
695 Dynamex, Inc.*................... 695
970 Gentex Corp.*.................... 24,371
840 Helix Technology Corp............ 32,760
1,740 Hexcel Corp.*.................... 16,530
570 Kent Electronics Corp.*.......... 16,993
600 Koala Corp.*..................... 8,475
1,050 Maverick Tube Corp.*............. 30,581
760 Methode Electronics, Inc.,
Class A ......................... 29,355
180 Millipore Corp................... 13,568
490 Nanometrics, Inc.*............... 20,182
2,370 NS Group, Inc.*.................. 49,622
1,960 PCD, Inc.*....................... 15,221
1,320 Presstek, Inc.*.................. 21,532
200 PRI Automation, Inc.*............ 13,078
980 TetraTech, Inc.*................. 22,418
800 TRC Cos. Inc.*................... 9,200
800 Veeco Instruments, Inc.*......... 58,600
570 Zygo Corp.*...................... 51,763
------------
735,643
------------
CONSUMER CYCLICAL - 13.22%
1,250 America West Holdings Corp.*..... 21,406
1,840 American Classic Voyages Co.*.... 37,950
760 Applebee's International, Inc.... 23,037
1,360 Bally Total Fitness Holding Corp.* 34,510
1,600 Bombay Co., Inc. (The)*.......... 4,700
510 Borg-Warner, Inc................. 17,914
1,840 Brass Eagle, Inc.*............... 9,200
1,730 Callaway Golf Co................. 28,221
SHARES VALUE
----------- ------------
CONSUMER CYCLICAL (CONTINUED)
2,420 Cash America International, Inc.. $ 17,847
600 CBRL Group, Inc.................. 8,812
1,490 CEC Entertainment, Inc.*......... 38,181
900 Cooper Tire & Rubber Co.......... 10,012
1,135 Cost Plus, Inc.*................. 32,560
930 D.R. Horton, Inc................. 12,613
440 Damark International, Inc.,
Class A* ........................ 9,460
2,040 Dura Automotive Systems, Inc.*... 22,057
500 Emmis Communications Corp.,
Class A* ........................ 20,687
420 Hispanic Broadcasting Corp.*..... 13,912
550 International Game Technology*... 14,575
1,960 InterTAN, Inc.*.................. 23,030
1,030 Midwest Express Holdings, Inc.*.. 22,145
480 Mobile Mini, Inc.*............... 10,590
1,080 Nu Skin Enterprises, Inc.*....... 6,210
700 Pacific Sunwear of California,
Inc.* ........................... 13,125
1,415 Pegasus Systems, Inc.*........... 15,388
2,240 Pier 1 Imports, Inc.............. 21,840
1,150 Pinnacle Entertainment, Inc.*.... 22,353
550 Polaris Industries, Inc.......... 17,600
2,200 Prime Hospitality Corp.*......... 20,763
2,030 Radio Unica Communications Corp.* 14,210
520 Rare Hospitality International,
Inc.* ........................... 14,690
450 SAGA Communications, Inc., Class A 9,900
720 Sonic Corp.*..................... 21,150
2,500 Tower Automotive, Inc.*.......... 31,250
930 Travis Boats & Motors, Inc.*..... 5,115
910 Vans, Inc.*...................... 13,309
1,370 Wabash National Corp............. 16,354
540 Watsco, Inc...................... 6,750
------------
683,426
------------
ENERGY - 9.58%
300 Berkley Petroleum Corp.*......... 1,895
1,390 Cabot Oil & Gas Corp., Class A... 29,451
2,030 Callon Petroleum Co.*............ 30,196
1,000 Cross Timbers Oil Co............. 22,125
610 Devon Energy Corp................ 34,274
570 Evergreen Resources, Inc.*....... 16,886
610 Global Industries, Ltd.*......... 11,514
2,400 Key Energy Group*................ 23,100
200 Lone Star Technologies, Inc.*.... 9,250
1,170 Marine Drilling Cos., Inc.*...... 32,760
840 Newfield Exploration Co.*........ 32,865
2,340 Newpark Resources, Inc.*......... 22,084
460 Noble Affiliates, Inc............ 17,135
300 Paramount Resources, Ltd.*....... 3,071
760 Pioneer Natural Resources Co.*... 9,690
1,150 Pride International, Inc.*....... 28,462
300 Remington Oil & Gas Corp.*....... 2,250
1,910 Santa Fe Snyder Corp.*........... 21,726
440 Stone Energy Corp.*.............. 26,290
1,520 Swift Energy Co.*................ 43,130
1,500 3TEC Energy Corp.*............... 15,000
770 Tidewater, Inc................... 27,720
1,520 Vintage Petroleum, Inc........... 34,295
------------
495,169
------------
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
SMALL COMPANY GROWTH FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
----------- ------------
FINANCE - 4.08%
1,240 Annuity and Life Reassurance
Holdings ........................ $ 30,380
300 Commerce Bancorp, Inc............ 13,800
1,720 Fidelity National Financial, Inc. 31,498
1,280 Hibernia Corp., Class A.......... 13,920
760 MFC Bancorp, Ltd.*............... 5,700
1,000 Mutual Risk Management, Ltd...... 17,313
380 Pinnacle Holdings, Inc.*......... 20,520
2,030 Riggs National Corp.............. 25,629
1,150 Southwest Bancorp of Texas, Inc.* 23,863
1,080 Westamerica Bancorp.............. 28,215
------------
210,838
------------
BASIC MATERIALS - 0.94%
1,320 RTI International Metals, Inc.*.. 15,015
3,510 Titanium Metals Corp............. 16,453
1,550 Uniroyal Technology Corp......... 17,147
------------
48,615
------------
UTILITIES - 0.24%
410 Intermedia Communications, Inc.*. 12,198
------------
TOTAL COMMON STOCKS ............. 4,764,612
------------
(Cost $4,319,357)
PAR VALUE
-----------
REPURCHASE AGREEMENT - 6.89%
$ 356,000 State Street Bank
6.40%, 07/03/00, dated 06/30/00
Repurchase Price $356,190
(Collateralized by U.S. Treasury
Bond 7.25%, due 05/15/16;
Total Par $330,000,
Market Value $367,538)........... 356,000
------------
TOTAL REPURCHASE AGREEMENT ...... 356,000
------------
(Cost $356,000)
TOTAL INVESTMENTS - 99.07%....................... 5,120,612
------------
(Cost $4,675,357)
NET OTHER ASSETS AND LIABILITIES - 0.93%......... 48,246
------------
NET ASSETS - 100.00%............................. $ 5,168,858
============
----------------------------------------------------------------
* Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
COLUMBIA REAL ESTATE FUND II
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
----------- ------------
COMMON STOCKS - 98.04%
REAL ESTATE - 98.04%
600 Alexandria Real Estate Equities,
Inc. ............................ $ 20,587
900 AMB Property Corp................ 20,531
700 Apartment Investment &
Management Co.................... 30,275
1,100 Archstone Communities Trust...... 23,169
1,207 AvalonBay Communities, Inc....... 50,392
500 Boston Properties, Inc........... 19,312
700 Cabot Industrial Trust........... 13,781
1,200 Catellus Development Corp.*...... 18,000
300 CenterPoint Properties Corp...... 12,225
1,300 Cousins Properties, Inc.......... 50,050
1,700 Equity Office Properties Trust... 46,856
800 Equity Residential Properties
Trust ........................... 36,800
700 First Industrial Realty Trust.... 20,650
1,500 General Growth Properties........ 47,625
3,300 Host Marriott Corp............... 30,937
735 iStar Financial, Inc............. 15,389
700 Kimco Realty Corp................ 28,700
1,000 Liberty Property Trust........... 25,938
500 Mack-Cali Realty Corp............ 12,844
600 Nationwide Health Properties, Inc. 8,363
300 Pan Pacific Retail Properties, Inc. 6,038
500 Post Properties, Inc............. 22,000
1,200 Prentiss Properties Trust........ 28,800
3,100 ProLogis Trust................... 66,069
2,100 Public Storage, Inc.............. 49,219
1,500 Reckson Associates Realty Corp... 35,625
2,000 Simon Property Group, Inc........ 44,375
1,000 Spieker Properties, Inc.......... 46,000
1,900 Starwood Hotels & Resorts
Worldwide, Inc................... 61,394
2,600 TrizecHahn Corp.................. 46,475
1,700 Vornado Realty Trust............. 59,075
------------
TOTAL COMMON STOCKS ............. 997,494
------------
(Cost $967,642)
SHARES VALUE
----------- ------------
INVESTMENT COMPANY - 2.57%
26,089 Vista U.S. Government Money Market $ 26,089
------------
TOTAL INVESTMENT COMPANY ........ 26,089
------------
(Cost $26,089)
TOTAL INVESTMENTS - 100.61%...................... 1,023,583
------------
(Cost $993,731)
NET OTHER ASSETS AND LIABILITIES - (0.61)%....... (6,167)
------------
NET ASSETS - 100.00%............................. $ 1,017,416
============
----------------------------------------------------------------
* Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
SHARES VALUE
----------- ------------
COMMON STOCKS - 55.62%
TECHNOLOGY - 23.11%
30,000 America Online, Inc.*............ $ 1,582,500
20,000 Amgen, Inc.*..................... 1,405,000
21,000 Automatic Data Processing, Inc... 1,124,812
53,000 Cisco Systems, Inc.*............. 3,368,812
1,000 Corning, Inc..................... 269,875
21,000 Dell Computer Corp.*............. 1,035,562
50,000 EMC Corp.*....................... 3,846,875
17,000 Genzyme Corp.*................... 1,010,437
12,000 Hewlett-Packard Co............... 1,498,500
18,000 Intel Corp....................... 2,406,375
17,000 JDS Uniphase Corp.*.............. 2,037,875
20,000 Lucent Technologies, Inc......... 1,185,000
21,000 Microsoft Corp.*................. 1,680,000
27,000 Qwest Communications
International, Inc.*............. 1,341,562
16,000 Sun Microsystems, Inc.*.......... 1,455,000
------------
25,248,185
------------
CONSUMER STAPLES - 8.37%
30,000 Boston Scientific Corp.*......... 658,125
42,000 Elan Corp. Plc, ADR*............. 2,034,375
10,000 Forest Laboratories, Inc.,
Class A* ........................ 1,010,000
11,000 Gillette Co...................... 384,312
15,000 Merck & Co., Inc................. 1,149,375
20,000 PepsiCo, Inc..................... 888,750
57,000 Pfizer, Inc...................... 2,736,000
5,000 Procter & Gamble Co.............. 286,250
------------
9,147,187
------------
FINANCE - 6.77%
20,000 American International Group, Inc. 2,350,000
1 Associates First Capital Corp.,
Class A ......................... 22
19,500 Chase Manhattan Corp............. 898,219
40,000 Citigroup, Inc................... 2,410,000
15,000 Fannie Mae....................... 782,812
18,000 Firstar Corp..................... 379,125
15,000 Wells Fargo & Co................. 581,250
------------
7,401,428
------------
CONSUMER CYCLICAL - 6.74%
26,000 Comcast Corp., Class A*.......... 1,053,000
30,000 CVS Corp......................... 1,200,000
35,000 Home Depot, Inc.................. 1,747,812
8,000 Interpublic Group of Cos., Inc... 344,000
24,000 McDonald's Corp.................. 790,500
62,000 Southwest Airlines Co............ 1,174,125
11,000 Target Corp...................... 638,000
13,000 Walgreen Co...................... 418,437
------------
7,365,874
------------
SHARES VALUE
----------- ------------
INDUSTRIAL - 4.43%
9,000 Agilent Technologies, Inc.*...... $ 663,750
38,000 General Electric Co.............. 2,014,000
15,000 Honeywell International, Inc..... 505,312
35,000 Tyco International, Ltd.......... 1,658,125
------------
4,841,187
------------
ENERGY - 3.68%
13,201 Exxon Mobil Corp................. 1,036,278
13,000 Halliburton Co................... 613,437
20,000 Schlumberger, Ltd................ 1,492,500
21,000 Williams Cos., Inc............... 875,437
------------
4,017,652
------------
UTILITIES - 2.52%
16,000 SBC Communications, Inc.......... 692,000
45,000 WorldCom, Inc.*.................. 2,064,375
------------
2,756,375
------------
TOTAL COMMON STOCKS ............. 60,777,888
------------
(Cost $38,837,104)
PAR VALUE
-----------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 22.17%
U.S. TREASURY BONDS - 7.67%
$ 355,000 12.00%, 08/15/13................. 479,804
615,000 8.75%, 05/15/17.................. 773,166
690,000 8.88%, 08/15/17.................. 877,804
350,000 8.88%, 02/15/19.................. 449,638
1,200,000 8.75%, 05/15/20.................. 1,537,500
100,000 7.88%, 02/15/21.................. 118,781
300,000 8.13%, 08/15/21.................. 365,904
800,000 7.63%, 11/15/22.................. 934,496
400,000 7.13%, 02/15/23.................. 443,872
875,000 6.38%, 08/15/27.................. 900,156
1,190,000 6.13%, 11/15/27.................. 1,186,644
350,000 5.25%, 11/15/28.................. 309,858
------------
8,377,623
------------
U.S. TREASURY NOTES - 6.64%
450,000 5.25%, 05/31/01.................. 445,216
500,000 5.88%, 10/31/01.................. 496,090
640,000 6.13%, 12/31/01.................. 636,595
100,000 5.88%, 09/30/02.................. 98,875
1,225,000 7.25%, 05/15/04.................. 1,263,281
390,000 7.25%, 08/15/04.................. 403,162
165,000 5.88%, 11/15/04.................. 162,528
540,000 6.75%, 05/15/05.................. 552,825
800,000 5.63%, 02/15/06.................. 776,000
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
U.S. TREASURY NOTES - (CONTINUED)
$ 900,000 6.50%, 10/15/06.................. $ 910,035
60,000 6.63%, 05/15/07.................. 61,256
300,000 6.13%, 08/15/07.................. 298,311
710,000 5.63%, 05/15/08.................. 684,923
455,000 6.50%, 02/15/10.................. 470,060
------------
7,259,157
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 2.91%
1,250,000 6.25%, 07/15/04.................. 1,217,187
395,000 6.88%, 01/15/05.................. 392,942
1,200,000 6.63%, 09/15/09.................. 1,159,500
166,822 7.00%, 04/01/29, Pool #C00756,
Gold ............................ 161,295
249,406 7.50%, 01/01/30, Pool #C35185,
Gold ............................ 246,054
------------
3,176,978
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 2.12%
381,189 6.50%, 05/15/13, Pool #473566.... 370,348
41,238 7.00%, 11/15/13, Pool #780921.... 40,748
33,792 9.00%, 12/15/17, Pool #780201.... 35,302
217,841 6.50%, 05/15/24, Pool #780168.... 208,038
389,331 6.00%, 03/15/29, Pool #476986.... 358,547
438,721 6.50%, 04/15/29, Pool #474844.... 416,373
264,711 6.50%, 05/15/29, Pool #487199.... 251,226
640,038 7.50%, 09/15/29, Pool #466164.... 635,436
------------
2,316,018
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 1.64%
520,000 6.38%, 06/15/09.................. 493,605
249,031 7.50%, 02/01/30, Pool #531745.... 245,450
341,431 8.00%, 04/01/30, Pool #534220.... 342,817
55,825 8.00%, 04/01/30, Pool #536553.... 56,051
656,346 8.00%, 05/01/30, Pool #534205.... 659,011
------------
1,796,934
------------
FEDERAL HOME LOAN BANK - 0.73%
410,000 6.75%, 02/01/02.................. 408,975
385,000 7.25%, 05/15/03.................. 387,887
------------
796,862
------------
U.S. GOVERNMENT-BACKED BOND - 0.46%
500,000 A.I.D. Israel, Series 8-C
6.63%, 08/15/03.................. 498,405
------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS .............. 24,221,977
------------
(Cost $24,559,181)
PAR VALUE VALUE
----------- ------------
CORPORATE NOTES AND BONDS - 13.00%
$ 455,000 American Express Credit Corp.
8.50%, 08/15/01.................. $ 461,256
250,000 Associates Corp. of North America
7.88%, 09/30/01.................. 251,250
500,000 AT&T Corp.
6.50%, 03/15/29.................. 420,000
100,000 Bank One Wisconsin, Bank Note
6.35%, 03/19/01.................. 99,500
250,000 Becton Dickinson & Co.
7.15%, 10/01/09.................. 245,937
100,000 Becton Dickinson & Co., Debenture
7.00%, 08/01/27.................. 91,250
200,000 Burlington Northern Santa Fe Corp.
Debenture
6.88%, 02/15/16.................. 180,000
500,000 Caterpillar Financial Services Corp.
Series F, MTN
6.00%, 05/23/02.................. 488,125
300,000 Chase Manhattan Corp.
5.50%, 02/15/01.................. 297,000
250,000 Coca-Cola Enterprises, Inc.
6.38%, 08/01/01.................. 248,437
300,000 Colgate Palmolive Co.,
Series C, MTN
5.27%, 12/01/03.................. 281,880
200,000 Conoco, Inc., Senior Notes
6.95%, 04/15/29.................. 182,750
500,000 Daimler Chrysler N.A. Holding Corp.
7.13%, 04/10/03.................. 498,125
750,000 Diageo Capital Plc
6.00%, 03/27/03.................. 720,863
100,000 Diageo Capital Plc, Yankee
6.13%, 08/15/05.................. 94,875
250,000 Ford Motor Credit Co.
7.25%, 01/15/03.................. 247,813
400,000 Ford Motor Credit Co.
6.70%, 07/16/04.................. 386,500
250,000 Ford Motor Credit Co.
6.38%, 12/15/05.................. 236,563
250,000 General Electric Capital Corp.,
Series A, MTN
5.96%, 05/14/01.................. 247,780
250,000 General Electric Capital Corp.
7.50%, 06/05/03.................. 251,875
200,000 Illinois Tool Works
5.75%, 03/01/09.................. 182,000
100,000 IBM Corp., Debenture
6.22%, 08/01/27.................. 96,375
125,000 International Paper Co.
8.13%, 07/08/05 (A).............. 126,250
250,000 Lockheed Martin Corp.
8.20%, 12/01/09.................. 252,813
100,000 May Department Stores Co.
7.45%, 10/15/16.................. 96,250
SEE NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
CORPORATE NOTES AND BONDS (CONTINUED)
$ 250,000 McDonald's Corp., Series E, MTN
5.95%, 01/15/08.................. $ 234,688
250,000 MCI Worldcom, Inc.
6.13%, 04/15/02.................. 244,375
500,000 Mead Corp.
6.60%, 03/01/02.................. 495,625
250,000 Minnesota Mining & Manufacturing Co.,
Debenture
6.38%, 02/15/28.................. 220,313
250,000 National Rural Utilities Cooperative
Finance Corp.
7.38%, 02/10/03.................. 250,625
100,000 NationsBank Corp.
7.00%, 05/15/03.................. 98,875
300,000 Northern Telecom, Ltd., Yankee
6.00%, 09/01/03.................. 288,000
250,000 Norwest Corp., Series H, MTN
5.63%, 02/05/01.................. 248,125
400,000 Norwest Financial, Inc., Senior Note
7.75%, 08/15/01.................. 401,500
100,000 PACCAR Financial Corp., Series H,
Senior MTN
5.86%, 03/15/01.................. 99,125
100,000 Parker Hannifin Corp.
7.30%, 05/15/11.................. 98,875
150,000 Pepsi Bottling Holdings, Inc.
5.38%, 02/17/04 (A).............. 141,750
250,000 PepsiCo, Inc., MTN
5.75%, 01/15/08.................. 226,875
25,000 Phillips Petroleum Co.
8.75%, 05/25/10.................. 26,500
200,000 Phillips Petroleum Co., Debenture
9.38%, 02/15/11.................. 217,500
250,000 Pitney Bowes Credit Corp.
6.63%, 06/01/02.................. 247,188
155,000 Pitney Bowes, Inc.
5.95%, 02/01/05.................. 148,606
250,000 Potomac Electric Power Co.,
First Mortgage
6.50%, 09/15/05.................. 241,563
250,000 Potomac Electric Power Co.,
First Mortgage
6.25%, 10/15/07.................. 238,750
250,000 Sherwin-Williams Co., Senior Note
6.50%, 02/01/02.................. 248,438
150,000 Sprint Capital Corp.
5.88%, 05/01/04.................. 141,375
60,000 SunTrust Bank of Central Florida, MTN
6.90%, 07/01/07.................. 57,075
250,000 Sysco Corp.
7.25%, 04/15/07.................. 252,188
75,000 Sysco Corp., Debenture
6.50%, 08/01/28.................. 65,813
400,000 Tele-Communication, Inc., Senior Note
7.25%, 08/01/05.................. 399,000
PAR VALUE VALUE
----------- ------------
CORPORATE NOTES AND BONDS (CONTINUED)
$ 150,000 Time Warner, Inc., Company
Guaranteed
6.63%, 05/15/29.................. $ 126,563
100,000 Union Oil Co. of California, MTN
6.70%, 10/15/07.................. 93,750
300,000 US West Communications
7.63%, 06/09/03 (A).............. 299,625
250,000 Wachovia Bank, N.A.
6.30%, 03/15/01.................. 248,438
250,000 Wal-Mart Stores, Inc.
7.55%, 02/15/30.................. 256,250
250,000 Wal-Mart Stores, Inc., Senior Note
6.75%, 05/15/02.................. 249,063
75,000 Wal-Mart Stores, Inc., Senior Note
6.88%, 08/10/09.................. 73,594
500,000 Walt Disney Co., Senior Note
6.38%, 03/30/01.................. 498,750
250,000 Worldcom, Inc.
6.13%, 08/15/01.................. 246,875
100,000 Xerox Corp.
7.20%, 04/01/16.................. 89,500
------------
TOTAL CORPORATE NOTES AND BONDS . 14,200,622
------------
(Cost $14,645,765)
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES - 2.10%
725,000 America Express Credit Account
Master Trust
Series 1999-1, Class A
5.60%, 11/15/06.................. 687,612
250,000 Citibank Credit Card Master Trust I
Series 1999-7, Class A
6.65%, 11/15/06.................. 244,765
200,000 Daimler-Benz Vehicle Trust
Series 1998-A, Class A4
5.22%, 12/20/03.................. 195,124
190,000 Daimler Chrysler Auto Trust
Series 2000-A, Class A3
7.09%, 12/06/03.................. 190,118
250,000 Discover Card Master Trust I
Series 1999-1, Class A
5.30%, 08/15/04.................. 242,578
50,000 Ford Credit Auto Owner Trust
Series 1999-D, Class A4
6.40%, 10/15/02.................. 49,563
25,000 Green Tree Financial Corp.
Series 1999-5, Class A2
6.77%, 04/01/31.................. 24,695
200,000 MBNA Master Credit Card Trust
Series 1999-I, Class A
6.40%, 01/18/05.................. 197,312
250,000 MBNA Master Credit Card Trust
Series 1999-M, Class A
6.60%, 04/16/07.................. 244,799
SEE NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
ASSET ALLOCATION FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
ASSET-BACKED AND MORTGAGE-BACKED SECURITIES (CONTINUED)
$ 170,000 Premier Auto Trust
Series 1999-3, Class A4
6.43%, 03/08/04.................. $ 167,396
48,036 Rural Housing Trust
Series 1987-1, Class 1-D, CMO
6.33%, 04/01/26.................. 46,187
------------
TOTAL ASSET-BACKED AND
MORTGAGE-BACKED SECURITIES ...... 2,290,149
------------
(Cost $2,310,135)
FOREIGN BONDS (B) - 0.79%
100,000 Deutsche Telekom
International Finance,
BV, Company Guaranteed
7.75%, 06/15/05.................. 100,804
200,000 Deutsche Telekom
International Finance,
BV, Company Guaranteed
8.25%, 06/15/30.................. 203,798
350,000 Province of Quebec
5.75%, 02/15/09.................. 313,408
250,000 Province of Quebec
7.50%, 09/15/29.................. 245,938
------------
TOTAL FOREIGN BONDS ............. 863,948
------------
(Cost $877,482)
REPURCHASE AGREEMENT - 5.93%
6,486,000 State Street Bank
6.40%, 07/03/00, dated 06/30/00
Repurchase Price $6,489,459
(Collateralized by U.S. Treasury
Bond 7.25%, due 05/15/16;
Total Par $5,945,000
Market Value $6,621,244)......... 6,486,000
------------
TOTAL REPURCHASE AGREEMENT ...... 6,486,000
------------
(Cost $6,486,000)
TOTAL INVESTMENTS - 99.61%....................... 108,840,584
(Cost $87,715,667)
------------
NET OTHER ASSETS AND LIABILITIES - 0.39%......... 422,780
------------
NET ASSETS - 100.00%............................. $109,263,364
============
----------------------------------------------------------------
* Non-income producing security.
(A) Securities exempt from registration under Rule 144A of the Securities Act
of 1933, as amended. These securities may only be resold, in transactions
exempt from registration, to qualified buyers. At June 30, 2000 these
securities amounted to $567,625 or 0.52% of net assets.
(B) U.S. Dollar-Denominated
ADR American Depositary Receipt
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
HIGH QUALITY BOND FUND
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 37.88%
U.S. TREASURY BONDS - 18.45%
$ 150,000 12.00%, 08/15/13................. $ 202,734
75,000 11.25%, 02/15/15................. 110,413
90,000 7.50%, 11/15/16.................. 101,390
200,000 8.88%, 08/15/17.................. 254,436
400,000 9.00%, 11/15/18.................. 518,624
775,000 8.75%, 05/15/20.................. 992,969
325,000 7.88%, 02/15/21.................. 386,038
200,000 8.13%, 08/15/21.................. 243,936
120,000 7.13%, 02/15/23.................. 133,162
595,000 6.38%, 08/15/27.................. 612,106
290,000 6.13%, 11/15/27.................. 289,182
100,000 5.50%, 08/15/28.................. 91,750
240,000 5.25%, 11/15/28.................. 212,474
------------
4,149,214
------------
U.S. TREASURY NOTES - 8.13%
525,000 6.63%, 06/30/01.................. 525,982
200,000 5.50%, 07/31/01.................. 198,000
50,000 5.88%, 09/30/02.................. 49,437
100,000 5.88%, 02/15/04.................. 98,656
400,000 6.00%, 08/15/04.................. 396,372
250,000 5.88%, 11/15/04.................. 246,255
305,000 6.50%, 02/15/10.................. 315,096
------------
1,829,798
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 4.91%
300,000 7.13%, 02/15/05.................. 301,329
250,000 6.38%, 06/15/09.................. 237,310
300,000 7.25%, 01/15/10.................. 302,964
262,000 7.13%, 01/15/30.................. 263,454
------------
1,105,057
------------
U.S. GOVERNMENT-BACKED BONDS - 2.82%
150,000 A.I.D. Israel, Series 8-C
6.63%, 08/15/03.................. 149,521
200,000 Private Export Funding Corp.,
Series B
6.49%, 07/15/07.................. 193,750
300,000 Tennessee Valley Authority
Power Board
Class 1993, Series C
6.13%, 07/15/03.................. 290,625
------------
633,896
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 1.95%
100,000 7.00%, 02/15/03.................. 100,125
150,000 6.25%, 07/15/04.................. 146,062
200,000 6.63%, 09/15/09.................. 193,250
------------
439,437
------------
PAR VALUE VALUE
----------- ------------
U.S. TREASURY STRIPS (A) - 1.62%
$ 500,000 4.86%, 05/15/08, Interest only (B) $ 309,285
140,000 7.03%, 08/15/15, Interest only (B) 54,810
------------
364,095
------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS .............. 8,521,497
------------
(Cost $8,661,968)
CORPORATE NOTES AND BONDS - 31.18%
UTILITIES - 8.29%
100,000 AT&T Corp.
6.50%, 03/15/29.................. 84,000
250,000 Baltimore Gas and Electric
First Mortgage
6.50%, 02/15/03.................. 244,375
400,000 GTE Florida, Inc.,
Series A, Debenture
6.31%, 12/15/02.................. 391,000
250,000 MCI Worldcom, Inc.
6.13%, 04/15/02.................. 244,375
500,000 Pacificorp, Series H, MTN
6.38%, 05/15/08.................. 457,500
150,000 Potomac Electric Power Co.,
First Mortgage
6.25%, 10/15/07.................. 143,250
225,000 Sprint Capital Corp.
6.90%, 05/01/19.................. 200,250
100,000 US West Communications
7.63%, 06/09/03 (D).............. 99,875
------------
1,864,625
------------
FINANCE - 6.93%
500,000 Bank One Wisconsin, Bank Note
6.35%, 03/19/01.................. 497,500
250,000 Ford Motor Credit Co.
6.70%, 07/16/04.................. 241,563
500,000 National Rural Utilities
Cooperative Finance Corp.
6.38%, 10/15/04.................. 483,750
100,000 National Rural Utilities
Cooperative Finance Corp.
6.20%, 02/01/08.................. 91,375
250,000 SunTrust Bank Atlanta
Subordinated Note, MTN
7.25%, 09/15/06.................. 244,375
------------
1,558,563
------------
CONSUMER STAPLES - 5.24%
400,000 Abbott Laboratories
6.40%, 12/01/06.................. 391,500
365,000 Hershey Foods Corp., Debenture
7.20%, 08/15/27.................. 344,925
SEE NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
HIGH QUALITY BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
CONSUMER STAPLES (CONTINUED)
$ 100,000 PepsiCo, Inc., MTN
5.75%, 01/15/08.................. $ 90,750
400,000 Sysco Corp., Debenture
6.50%, 08/01/28.................. 351,000
------------
1,178,175
------------
TECHNOLOGY - 3.49%
175,000 IBM Corp., MTN
5.95%, 06/02/03.................. 169,750
100,000 IBM Corp., Debenture
6.22%, 08/01/27.................. 96,375
50,000 Lockheed Martin Corp.
8.20%, 12/01/09.................. 50,563
135,000 Pitney Bowes, Inc.
5.95%, 02/01/05.................. 129,431
350,000 Telecom De Puerto Rico Co.,
Senior Note
6.15%, 05/15/02.................. 340,268
------------
786,387
------------
INDUSTRIAL - 2.58%
150,000 Burlington Northern Santa Fe Corp.,
Debenture
7.00%, 12/15/25.................. 131,438
300,000 Illinois Tool Works
5.75%, 03/01/09.................. 273,000
200,000 Minnesota Mining &
Manufacturing Co.,
Debenture
6.38%, 02/15/28.................. 176,250
------------
580,688
------------
CONSUMER CYCLICAL - 2.35%
200,000 McDonald's Corp., Series E, MTN
5.95%, 01/15/08.................. 187,750
100,000 Time Warner, Inc.,
Company Guaranteed
6.63%, 05/15/29.................. 84,375
250,000 Wal-Mart Stores, Inc.
7.55%, 02/15/30.................. 256,250
------------
528,375
------------
ENERGY - 1.18%
250,000 Phillips Petroleum Co.
8.75%, 05/25/10.................. 265,000
------------
BASIC MATERIALS - 1.12%
250,000 International Paper Co.
8.13%, 07/08/05 (D).............. 252,500
------------
TOTAL CORPORATE NOTES AND BONDS . 7,014,313
------------
(Cost $7,353,671)
PAR VALUE VALUE
----------- ------------
MORTGAGE-BACKED SECURITIES - 17.00%
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION - 9.73%
$ 212,891 6.50%, 10/15/13, Pool #446759.... $ 206,771
247,342 6.75%, 07/20/22, Pool #008022(C). 248,655
194,968 7.50%, 10/15/27, Pool #455324.... 193,689
233,260 7.00%, 01/15/29, Pool #499333.... 226,699
227,825 7.00%, 02/15/29, Pool #486937.... 221,416
234,239 6.00%, 03/15/29, Pool #464632.... 215,718
162,346 7.50%, 09/15/29, Pool #508805.... 161,179
734,409 7.00%, 09/15/29, Pool #510394.... 713,750
------------
2,187,877
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 4.00%
250,830 7.00%, 03/01/15, Pool #535200.... 246,047
297,616 8.50%, 04/01/30, Pool #535276.... 303,101
348,233 8.00%, 04/01/30, Pool #536553.... 349,646
------------
898,794
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION - 1.77%
250,000 6.00%, 04/15/22, Pool #2118QC, CMO 235,390
165,814 6.50%, 10/15/23, Pool #001990.... 161,876
------------
397,266
------------
STRUCTURED MORTGAGE PRODUCT - 1.50%
108,452 Prudential Home Mortgage Securities
Series 1996-7, Class A-1, CMO
6.75%, 06/25/11.................. 107,910
240,180 Rural Housing Trust
Series 1987-1, Class 1-D, CMO
6.33%, 04/01/26.................. 230,933
------------
338,843
------------
TOTAL MORTGAGE-BACKED SECURITIES 3,822,780
------------
(Cost $3,881,734)
ASSET-BACKED SECURITIES - 11.30%
300,000 American Express Credit Account
Master Trust
Series 1999-1, Class A
5.60%, 11/15/06.................. 284,529
100,000 Capital Auto Receivables Asset Trust
Series 1999-1, Class A2
5.58%, 06/15/02.................. 98,968
400,000 Citibank Credit Card Master Trust I
Series 1998-6
5.85%, 04/10/03.................. 396,372
500,000 Daimler Chrysler Auto Trust
Series 2000-A, Class A3
7.09%, 12/06/03.................. 500,310
SEE NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
HIGH QUALITY BOND FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
ASSET-BACKED SECURITIES (CONTINUED)
$ 100,000 Daimler-Benz Vehicle Trust
Series 1998-A, Class A4
5.22%, 12/20/03.................. $ 97,562
500,000 Ford Credit Auto Owner Trust
Series 1999-D, Class A4
6.40%, 10/15/02.................. 495,625
500,000 MBNA Master Credit Card Trust
Series 1998-J, Class A
5.25%, 02/15/06.................. 473,125
200,000 MBNA Master Credit Card Trust
Series 1999-M, Class A
6.60%, 04/16/07.................. 195,839
------------
TOTAL ASSET-BACKED SECURITIES ... 2,542,330
------------
(Cost $2,566,081)
FOREIGN BONDS - 1.78%
300,000 Heinz (H.J.) Co.
5.75%, 02/03/03 (E).............. 287,970
125,000 Province of Quebec
5.75%, 02/15/09 (F).............. 112,031
------------
TOTAL FOREIGN BONDS ............. 400,001
------------
(Cost $413,072)
TOTAL INVESTMENTS - 99.14%....................... 22,300,921
------------
(Cost $22,876,526)
NET OTHER ASSETS AND LIABILITIES - 0.86%......... 192,883
------------
NET ASSETS - 100.00%............................. $ 22,493,804
=============
----------------------------------------------------------------
(A) Discount yield at time of purchase.
(B) Stripped securities represent the splitting of cash flows into interest
and principal. Holders, as indicated, are entitled to that portion of the
payment representing interest only or principal only.
(C) Floating rate note. Rate shown reflects the rate in effect at
June 30, 2000.
(D) Securities exempt from registration under Rule 144A of the Securities Act
of 1933, as amended. These securities may only be resold, in transactions
exempt from registration, to qualified institutional buyers. At June 30,
2000, these securities amounted to $352,375 or 1.57% of net assets.
(E) Euro-Dollar Bond
(F) U.S. Dollar-Denominated
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
SEE NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
COLUMBIA HIGH YIELD FUND II
PORTFOLIO OF INVESTMENTS
JUNE 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
CORPORATE NOTES AND BONDS - 93.89%
CONSUMER CYCLICAL - 29.68%
$ 50,000 American Axle and Manufacturing,
Inc., Company Guaranteed
9.75%, 03/01/09.................. $ 46,875
25,000 Delta Air Lines, Inc., MTN
6.65%, 03/15/04.................. 23,312
50,000 Harrahs Operating Co., Inc.
7.88%, 12/15/05.................. 47,125
35,000 Hayes Wheels International, Inc.,
Series B
9.13%, 07/15/07.................. 31,500
50,000 International Game Technology,
Senior Notes
7.88%, 05/15/04.................. 48,250
50,000 Lear Corp., Series B
7.96%, 05/15/05.................. 47,063
100,000 Outdoor Systems, Inc.,
Senior Subordinated Notes
9.38%, 10/15/06.................. 103,500
50,000 Park Place Entertainment,
Senior Subordinated Notes
9.38%, 02/15/07 (A).............. 50,125
75,000 Station Casinos, Inc.,
Senior Subordinated Notes
9.75%, 04/15/07.................. 75,375
50,000 Tricon Global Restaurant,
Senior Notes
7.45%, 05/15/05.................. 46,938
100,000 United Stationers Supply,
Senior Subordinated Notes
8.38%, 04/15/08.................. 92,000
100,000 Zale Corp., Senior Notes, Series B
8.50%, 10/01/07.................. 94,500
------------
706,563
------------
MEDIA - 16.89%
140,000 Century Communications, Senior Notes
8.64%, 03/15/03 (B).............. 103,775
50,000 Charter Communications Holdings
Senior Notes
10.00%, 04/01/09................. 48,500
75,000 CSC Holdings, Inc.,
Series B, Debentures
8.13%, 08/15/09.................. 73,125
25,000 Fox Sports Networks LLC,
Senior Notes
8.88%, 08/15/07.................. 24,937
25,000 Jones Intercable, Inc., Senior Notes
8.88%, 04/01/07.................. 25,437
50,000 Lamar Media Corp.
9.63%, 12/01/06.................. 50,500
50,000 Lenfest Communications, Senior Notes
8.38%, 11/01/05.................. 51,125
PAR VALUE VALUE
----------- ------------
MEDIA (CONTINUED)
$ 25,000 Rogers Communications,
Yankee Notes
8.88%, 07/15/07.................. $ 24,625
------------
402,024
------------
TECHNOLOGY - 9.19%
25,000 Crown Castle International Corp.,
Senior Notes
10.75%, 08/01/11................. 25,469
100,000 Level 3 Communications, Inc.,
Senior Notes
9.13%, 05/01/08.................. 90,250
50,000 Metromedia Fiber Network, Series B,
Senior Notes
10.00%, 11/15/08................. 49,500
50,000 Unisys Corp., Senior Notes
11.75%, 10/15/04................. 53,500
------------
218,719
------------
CAPITAL GOODS - 8.91%
50,000 Ball Corp., Senior Notes
8.25%, 08/01/08.................. 47,250
35,000 Silgan Holdings, Inc.,
Senior Subordinated Debentures
9.00%, 06/01/09.................. 32,462
50,000 Waste Management, Inc.
6.13%, 07/15/01.................. 48,438
100,000 Westpoint Stevens, Inc., Senior Notes
7.88%, 06/15/05.................. 84,000
------------
212,150
------------
HEALTH CARE - 7.25%
40,000 Conmed Corp., Senior Notes
9.00%, 03/15/08.................. 36,700
50,000 Health Care Properties, REIT
6.88%, 06/08/05.................. 44,688
35,000 HEALTHSOUTH Corp.,
Senior Subordinated Notes
9.50%, 04/01/01.................. 35,175
10,000 Tenet Healthcare Corp.,
Senior Notes
8.63%, 12/01/03.................. 9,900
50,000 Tenet Healthcare Corp., Series B
Senior Subordinated Notes
8.13%, 12/01/08.................. 46,000
------------
172,463
------------
SEE NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
COLUMBIA HIGH YIELD FUND II
PORTFOLIO OF INVESTMENTS (CONTINUED)
JUNE 30, 2000 (UNAUDITED)
PAR VALUE VALUE
----------- ------------
ENERGY - 6.84%
$ 100,000 Newpark Resources, Inc.,
Series B
8.63%, 12/15/07.................. $ 87,750
25,000 Pride International, Inc.,
Senior Notes
10.00%, 06/01/09................. 25,875
50,000 Santa Fe Snyder Corp.,
Senior Notes
8.05%, 06/15/04.................. 49,063
------------
162,688
------------
BASIC MATERIALS - 6.59%
25,000 Buckeye Technologies, Inc.,
Senior Subordinated Notes
8.50%, 12/15/05.................. 24,187
75,000 Precision Castparts Corp.,
Senior Notes
8.75%, 03/15/05.................. 75,844
50,000 Scotts Co.,
Senior Subordinated Notes
8.63%, 01/15/09 (A).............. 48,250
10,000 Webb (Del E.),
Senior Subordinated Debentures
9.00%, 02/15/06.................. 8,675
------------
156,956
------------
CONSUMER STAPLES - 5.70%
100,000 Flag, Ltd., Yankee Notes
8.25%, 01/30/08.................. 89,500
50,000 United Rentals, Inc., Series B
9.50%, 06/01/08.................. 46,250
------------
135,750
------------
UTILITIES - 1.87%
15,000 CMS Energy Corp.
Coupon Pass-Through Certificates
7.00%, 01/15/05.................. 13,819
50,000 Nextlink Communications,
Senior Discount Note
9.45%, 04/15/08.................. 30,750
------------
44,569
------------
TRANSPORTATION - 0.97%
25,000 Teekay Shipping Corp.,
Yankee Notes
8.32%, 02/01/08.................. 23,125
------------
TOTAL CORPORATE NOTES AND BONDS . 2,235,007
------------
(Cost $2,334,214)
PAR VALUE VALUE
----------- ------------
U.S. GOVERNMENT OBLIGATION - 2.94%
U.S. TREASURY BILL - 2.94%
$ 70,000 5.03%, 07/06/00 (C).............. $ 69,951
------------
TOTAL U.S. GOVERNMENT OBLIGATION 69,951
------------
(Cost $69,951)
SHARES
-----------
INVESTMENT COMPANY - 1.11%
26,302 Vista U.S. Government Money Market 26,302
------------
TOTAL INVESTMENT COMPANY ........ 26,302
(Cost $26,302)
------------
TOTAL INVESTMENTS - 97.94%....................... 2,331,260
------------
(Cost $2,430,467)
NET OTHER ASSETS AND LIABILITIES - 2.06%......... 49,137
------------
NET ASSETS - 100.00%............................. $ 2,380,397
============
----------------------------------------------------------------
(A) Securities exempt from registration under Rule 144A of the Securities Act
of 1933, as amended. These securities may only be resold, in transactions
exempt from registration, to qualified institutional buyers. At June 30,
2000, these securities amounted to $98,375 or 4.13% of net assets.
(B) Zero Coupon Bond. Rate shown reflects effective yield to maturity at time
of purchase.
(C) Discounted yield at time of purchase.
MTN Medium Term Note
REIT Real Estate Investment Trust
SEE NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
This page intentionally left blank.
<PAGE>
THE GALAXY VIP FUND
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2000 (UNAUDITED)
<TABLE>
MONEY MARKET EQUITY GROWTH AND SMALL COMPANY
FUND FUND INCOME FUND GROWTH FUND
------------ ----------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost .......................... $14,894,129 $93,253,035 $11,252,722 $4,319,357
Repurchase Agreement ......................... 2,185,000 2,150,000 683,000 356,000
Net unrealized appreciation (depreciation) ... -- 34,481,172 1,044,634 445,255
----------- ----------- ----------- ----------
Total investments at value ................. 17,079,129 29,884,207 12,980,356 5,120,612
Cash ........................................... 90 509 956 664
Receivable for investments sold ................ -- 1,174,423 -- 66,406
Receivable for shares sold ..................... -- 13,707 9,823 --
Interest and dividend receivable ............... 43,759 25,926 22,275 171
Receivable from Investment Advisor (Note 4) .... -- -- -- 12,982
Deferred organizational expense (Note 2) ....... -- -- 5,883 6,148
----------- ----------- ----------- ----------
Total Assets ................................. 17,122,978 31,098,772 13,019,293 5,206,983
----------- ----------- ----------- ----------
LIABILITIES:
Dividends Payable .............................. 83,510 10,327 200 1,740
Payable for investments purchased .............. -- 1,252,154 -- 27,397
Payable for shares repurchased ................. 10,754 -- -- 421
Advisory fee payable (Notes 3 & 4) ............. 2,040 79,191 8,171 --
Payable to Administrator (Notes 3 & 4) ......... 303 11,886 3,604 3,106
Trustees' fees and expenses payable (Note 3) ... 403 3,906 244 86
Accrued expenses and other payables ............ 10,482 52,163 14,559 5,375
----------- ----------- ----------- ----------
Total Liabilities ............................ 107,492 1,409,627 26,778 38,125
----------- ----------- ----------- ----------
NET ASSETS ........................................ $17,015,486 $29,689,145 $12,992,515 $5,168,858
=========== =========== =========== ==========
NET ASSETS CONSIST OF:
Par value (Note 5) ............................. $ 17,015 $ 5,642 $ 1,178 $ 347
Paid-in capital in excess of par value ......... 16,998,261 85,292,267 12,043,495 4,359,471
Undistributed (overdistributed)
net investment income ........................ 263 (90,290) 1,669 (19,894)
Accumulated net realized gain (loss)
on investments sold .......................... (53) 10,000,354 (98,461) 383,679
Net unrealized appreciation (depreciation)
of investments ............................... -- 34,481,172 1,044,634 445,255
----------- ----------- ----------- ----------
TOTAL NET ASSETS .................................. $17,015,486 $29,689,145 $12,992,515 $5,168,858
=========== =========== =========== ==========
SHARES OF BENEFICIAL INTEREST OUTSTANDING ......... 17,015,276 5,641,776 1,178,334 347,355
NET ASSET VALUE:
offering and redemption price per share
(Net Assets / Shares Outstanding) .............. $ 1.00 $ 22.99 $ 11.03 $ 14.88
=========== =========== =========== ==========
</TABLE>
<TABLE>
COLUMBIA REAL ESTATE ASSET ALLOCATION HIGH QUALITY COLUMBIA HIGH
EQUITY FUND II FUND BOND FUND YIELD FUND II
-------------------- ---------------- ------------ -------------
<S> <C> <C> <C> <C>
ASSETS:
Investments (Note 2):
Investments at cost .......................... $ 993,731 $ 81,229,667 $22,876,526 $2,430,467
Repurchase Agreement ......................... -- 6,486,000 -- --
Net unrealized appreciation (depreciation) ... 29,852 21,124,917 (575,605) (99,207)
---------- ------------ ----------- ----------
Total investments at value ................. 1,023,583 108,840,584 22,300,921 2,331,260
Cash ........................................... -- 351 33,771 --
Receivable for investments sold ................ 35,740 695,072 -- 46,850
Receivable for shares sold ..................... -- -- -- --
Interest and dividend receivable ............... 6,383 675,476 312,206 42,828
Receivable from Investment Advisor (Note 4) .... 6,061 -- -- 3,982
Deferred organizational expense (Note 2) ....... 5,877 -- -- 5,877
---------- ------------ ----------- ----------
Total Assets ................................. 1,077,644 110,211,483 22,646,898 2,430,797
---------- ------------ ----------- ----------
LIABILITIES:
Dividends Payable .............................. 2,872 4,126 112,756 16,070
Payable for investments purchased .............. 49,283 677,408 -- 25,521
Payable for shares repurchased ................. 141 133,366 10,347 224
Advisory fee payable (Notes 3 & 4) ............. -- 67,038 7,394 --
Payable to Administrator (Notes 3 & 4) ......... 2,142 9,714 2,083 2,228
Trustees' fees and expenses payable (Note 3) ... 21 2,625 911 59
Accrued expenses and other payables ............ 5,769 53,842 19,603 6,298
---------- ------------ ----------- ----------
Total Liabilities ............................ 60,228 948,119 153,094 50,400
---------- ------------ ----------- ----------
NET ASSETS ........................................ $1,017,416 $ 109,263,364 $22,493,804 $2,380,397
========== ============= =========== ==========
NET ASSETS CONSIST OF:
Par value (Note 5) ............................. $ 113 $ 6,151 $ 2,277 $ 252
Paid-in capital in excess of par value ......... 1,058,857 87,910,197 23,620,120 2,535,465
Undistributed (overdistributed)
net investment income ........................ 3,976 146,552 12,474 4,176
Accumulated net realized gain (loss)
on investments sold .......................... (75,382) 75,547 (565,462) (60,289)
Net unrealized appreciation (depreciation)
of investments ............................... 29,852 21,124,917 (575,605) (99,207)
---------- ------------ ----------- ----------
TOTAL NET ASSETS .................................. $1,017,416 $ 109,263,364 $22,493,804 $2,380,397
========== ============= =========== ==========
SHARES OF BENEFICIAL INTEREST OUTSTANDING ......... 112,754 6,150,612 2,276,827 252,204
NET ASSET VALUE:
offering and redemption price per share
(Net Assets / Shares Outstanding) .............. $ 9.02 $ 17.76 $ 9.88 $ 9.44
========== ============= =========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
32-33
<PAGE>
THE GALAXY VIP FUND
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2000 (UNAUDITED)
<TABLE>
MONEY MARKET EQUITY GROWTH AND SMALL COMPANY
FUND FUND INCOME FUND GROWTH FUND
------------ ------ ----------- -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ............................. $560,874 $ 84,318 $ 18,415 $ 9,835
Dividends (Note 2) ............................. -- 418,395 90,936 1,715
-------- ----------- -------- ---------
Total investment income ..................... 560,874 502,713 109,351 11,550
-------- ----------- -------- ---------
EXPENSES:
Investment advisory fees (Note 3) .............. 36,458 465,509 47,518 14,709
Administration fees (Note 3) ................... 7,747 52,758 5,386 1,667
Custody fees ................................... 5,426 9,547 8,090 22,221
Fund accounting fees (Note 3) .................. 9,569 19,103 14,640 17,841
Professional fees .............................. 4,154 23,401 8,283 4,416
Trustees' fees (Note 3) ........................ -- 839 223 84
Amortization of organization costs (Note 2) .... -- -- 1,096 1,096
Reports to shareholders ........................ 2,825 18,308 2,662 881
Miscellaneous .................................. 93 2,354 701 505
-------- ----------- -------- ---------
Total expenses before
reimbursement/waiver ..................... 66,272 591,819 88,599 63,420
Less: reimbursement/waiver (Note 4) ......... (37,846) -- -- (31,995)
-------- ----------- -------- ---------
Total expenses net of
reimbursement/waiver ..................... 28,426 591,819 88,599 31,425
-------- ----------- -------- ---------
NET INVESTMENT INCOME (LOSS) ...................... 532,448 (89,106) 20,752 (19,875)
-------- ----------- -------- ---------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Net realized gain (loss) on investments sold ... 50 10,244,116 17,917 387,135
Net change in unrealized
appreciation (depreciation) of investments ..... -- (3,059,295) 151,984 (230,855)
-------- ----------- -------- ---------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS ........................ 50 7,184,821 169,901 156,280
-------- ----------- -------- ---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ......................... $532,498 $ 7,095,715 $190,653 $ 136,405
======== =========== ======== =========
</TABLE>
<TABLE>
COLUMBIA REAL ESTATE ASSET ALLOCATION HIGH QUALITY COLUMBIA HIGH
EQUITY FUND II FUND BOND FUND YIELD FUND II
-------------------- ---------------- ------------ -------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) ............................. $ 273 $1,624,441 $ 747,047 $104,350
Dividends (Note 2) ............................. 28,539 166,259 -- 1,033
-------- ---------- ---------- --------
Total investment income ..................... 28,812 1,790,700 747,047 105,383
-------- ---------- ---------- --------
EXPENSES:
Investment advisory fees (Note 3) .............. 3,644 398,341 61,470 7,132
Administration fees (Note 3) ................... 413 45,145 9,500 1,010
Custody fees ................................... 3,733 12,638 9,590 3,605
Fund accounting fees (Note 3) .................. 13,182 24,035 17,668 14,901
Professional fees .............................. 5,154 17,920 6,616 4,937
Trustees' fees (Note 3) ........................ 13 1,296 71 33
Amortization of organization costs (Note 2) .... 1,096 -- -- 1,096
Reports to shareholders ........................ 125 19,752 3,218 353
Miscellaneous .................................. 562 2,987 400 1,326
-------- ---------- ---------- --------
Total expenses before
reimbursement/waiver ..................... 27,922 522,114 108,533 34,393
Less: reimbursement/waiver (Note 4) ......... (19,648) -- (31,603) (15,340)
-------- ---------- ---------- --------
Total expenses net of
reimbursement/waiver ..................... 8,274 522,114 76,930 19,053
-------- ---------- ---------- --------
NET INVESTMENT INCOME (LOSS) ...................... 20,538 1,268,586 670,117 86,330
-------- ---------- ---------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (NOTE 2):
Net realized gain (loss) on investments sold ... (34,549) 399,806 (205,966) (18,619)
Net change in unrealized
appreciation (depreciation) of investments ..... 143,201 4,472,638 582,315 (47,052)
-------- ---------- ---------- --------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS ........................ 108,652 4,872,444 376,349 (65,671)
-------- ---------- ---------- --------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ......................... $129,190 $6,141,030 $1,046,466 $ 20,659
======== ========== ========== ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
34-35
<PAGE>
THE GALAXY VIP FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
MONEY MARKET FUND EQUITY FUND GROWTH AND INCOME FUND
------------------------- ------------------------ -------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED JUNE 30, ENDED ENDED JUNE 30, ENDED ENDED JUNE 30, ENDED
2000 DECEMBER 31, 2000 DECEMBER 31, 2000 DECEMBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999 (UNAUDITED) 1999
------------ ------------ ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD........... $ 21,817,005 $ 16,821,240 $119,798,886 $ 92,619,906 $12,423,805 $ 7,636,750
------------ ------------ ------------ ------------ ----------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS:
Net investment income (loss)............. 532,448 892,890 (89,106) (110,636) 20,752 41,968
Net realized gain (loss) on investments sold 50 -- 10,244,116 11,475,406 17,917 79,800
Net change in unrealized appreciation
(depreciation) of investments............ -- -- (3,059,295) 14,108,713 151,984 481,482
------------ ------------ ------------ ------------ ----------- -----------
Net increase (decrease) in net assets
resulting from operations.......... 532,498 892,890 7,095,715 25,473,483 190,653 603,250
------------ ------------ ------------ ------------ ----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................... (532,448) (892,890) -- -- (18,966) (41,968)
In excess of net investment income....... -- -- -- -- -- (3,331)
Net realized gain on investments......... -- -- (2,737,317) (10,040,586) -- (79,800)
In excess of net realized gain on
investments .......................... -- -- -- -- -- (88,502)
------------ ------------ ------------ ------------ ----------- -----------
Total Dividends....................... (532,448) (892,890) (2,737,317) (10,040,586) (18,966) (213,601)
------------ ------------ ------------ ------------ ----------- -----------
SHARE TRANSACTIONS:
Net proceeds from sale of shares......... 4,716,867 17,450,873 6,177,616 11,000,562 1,189,600 5,127,064
Issued to shareholders in reinvestment
of dividends.......................... 462,294 791,253 2,734,462 10,033,114 19,852 212,515
Cost of shares repurchased............... (9,980,730) (13,246,361) (3,380,217) (9,287,593) (812,429) (942,173)
------------ ------------ ------------ ------------ ----------- -----------
Net increase (decrease)
from share transactions .......... (4,801,569) 4,995,765 5,531,861 11,746,083 397,023 4,397,406
------------ ------------ ------------ ------------ ----------- -----------
Net increase (decrease) in net assets. (4,801,519) 4,995,765 9,890,259 27,178,980 568,710 4,787,055
------------ ------------ ------------ ------------ ----------- -----------
NET ASSETS AT END OF PERIOD
(INCLUDING LINE A) ...................... $ 17,015,486 $ 21,817,005 $129,689,145 $119,798,886 $12,992,515 $12,423,805
============ ============ ============ ============ =========== ===========
(A) Undistributed (overdistributed)
net investment income................. $ 263 $ 263 $ (90,290)$ (1,184) $ 1,669 $ (117)
============ ============ ============ ============ =========== ===========
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold..................................... 4,716,867 17,450,873 276,192 529,795 108,306 471,583
Issued to shareholders in reinvestment
of dividends.......................... 462,294 791,253 119,552 487,786 2,228 20,316
Repurchased.............................. (9,980,730) (13,246,361) (148,702) (446,526) (75,271) (87,665)
------------ ------------ ----------- ----------- ----------- -----------
Net increase (decrease) in
shares outstanding ................ (4,801,569) 4,995,765 247,042 571,055 35,263 404,234
============ ============ =========== =========== =========== ===========
</TABLE>
<TABLE>
SMALL COMPANY COLUMBIA REAL ESTATE ASSET ALLOCATION
GROWTH FUND EQUITY FUNDII FUND
------------------------- ------------------------ -------------------------
SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR
ENDED JUNE 30, ENDED ENDED JUNE 30, ENDED ENDED JUNE 30, ENDED
2000 DECEMBER 31, 2000 DECEMBER 31, 2000 DECEMBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999 (UNAUDITED) 1999
------------ ------------ ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD........... $2,304,909 $1,142,673 $ 982,905 $ 784,016 $106,869,048 $ 78,586,004
----------- ---------- ---------- --------- ------------ ------------
INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS:
Net investment income (loss)............. (19,875) (17,037) 20,538 45,046 1,268,586 2,311,642
Net realized gain (loss) on investments sold 387,135 361,486 (34,549) (48,332) 399,806 865,351
Net change in unrealized appreciation
(depreciation) of investments............ (230,855) 614,996 143,201 (33,881) 4,472,638 3,331,615
----------- ---------- ---------- --------- ------------ ------------
Net increase (decrease) in net assets
resulting from operations.......... 136,405 959,445 129,190 (37,167) 6,141,030 6,508,608
----------- ---------- ---------- --------- ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income.................... -- -- (19,376) (38,564) (1,122,090) (2,311,642)
In excess of net investment income....... -- -- -- -- -- (7,365)
Net realized gain on investments......... (187,075) (90,900) -- -- -- (865,351)
In excess of net realized gain on
investments .......................... -- -- -- -- -- (63,437)
----------- ---------- ---------- --------- ------------ ------------
Total Dividends....................... (187,075) (90,900) (19,376) (38,564) (1,122,090) (3,247,795)
----------- ---------- ---------- --------- ------------ ------------
SHARE TRANSACTIONS:
Net proceeds from sale of shares......... 2,767,841 376,912 64,955 352,248 2,520,053 25,773,603
Issued to shareholders in reinvestment
of dividends.......................... 185,335 90,900 16,504 38,564 1,119,548 3,246,211
Cost of shares repurchased............... (38,557) (174,121) (156,762) (116,192) (6,264,225) (3,997,583)
----------- ---------- ---------- --------- ------------ ------------
Net increase (decrease)
from share transactions .......... 2,914,619 293,691 (75,303) 274,620 (2,624,624) 25,022,231
----------- ---------- ---------- --------- ------------ ------------
Net increase (decrease) in net assets. 2,863,949 1,162,236 34,511 198,889 2,394,316 28,283,044
----------- ---------- ---------- --------- ------------ ------------
NET ASSETS AT END OF PERIOD
(INCLUDING LINE A) ...................... $5,168,858 $2,304,909 $1,017,416 $ 982,905 $109,263,364 $106,869,048
=========== ========== ========== ========= ============ ============
(A) Undistributed (overdistributed)
net investment income................. $ (19,894) $ (19) $ 3,976 $ 2,814 $ 146,552 $ 56
========== ========== ========== ========= ============ ============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold..................................... 175,711 42,846 7,794 41,231 147,821 1,550,356
Issued to shareholders in reinvestment
of dividends.......................... 12,870 7,020 1,979 4,671 65,116 195,975
Repurchased.............................. (2,533) (16,592) (18,654) (13,512) (365,323) (243,190)
----------- ---------- ---------- --------- ------------ ------------
Net increase (decrease) in
shares outstanding ................ 186,048 33,274 (8,881) 32,390 (152,386) 1,503,141
=========== ========== ========== ========= ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
36-37
<PAGE>
THE GALAXY VIP FUND
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
HIGH QUALITY COLUMBIA HIGH
BOND FUND YIELD FUND II
----------------------------- -----------------------------
SIX MONTHS YEAR SIX MONTHS YEAR
ENDED JUNE 30, ENDED ENDED JUNE 30, ENDED
2000 DECEMBER 31, 2000 DECEMBER 31,
(UNAUDITED) 1999 (UNAUDITED) 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD............................... $22,752,655 $23,288,822 $2,402,558 $ 2,453,694
----------- ----------- ---------- -----------
INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income........................................ 670,117 1,332,209 86,330 166,457
Net realized loss on investments sold........................ (205,966) (333,729) (18,619) (41,541)
Net change in unrealized appreciation
(depreciation) of investments ............................ 582,315 (1,922,292) (47,052) (110,950)
----------- ----------- ---------- -----------
Net increase (decrease) in net assets
resulting from operations 1,046,466 (923,812) 20,659 13,966
----------- ----------- ---------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income........................................ (670,117) (1,332,289) (86,330) (166,461)
Net realized gain on investments............................. -- (34,729) -- (3,083)
----------- ----------- ---------- -----------
Total Dividends........................................... (670,117) (1,367,018) (86,330) (169,544)
----------- ----------- ---------- -----------
SHARE TRANSACTIONS:
Net proceeds from sale of shares............................. 679,581 4,544,252 155,070 970,833
Issued to shareholders in reinvestment of dividends.......... 671,549 1,248,673 85,965 153,839
Cost of shares repurchased................................... (1,986,330) (4,038,262) (197,525) (1,020,230)
----------- ----------- ---------- -----------
Net increase (decrease) from share transactions........... (635,200) 1,754,663 43,510 104,442
----------- ----------- ---------- -----------
Net decrease in net assets................................ (258,851) (536,167) (22,161) (51,136)
----------- ----------- ---------- -----------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A).................. $22,493,804 $22,752,655 $2,380,397 $ 2,402,558
=========== =========== ========== ===========
(A) Undistributed net investment income......................... $ 12,474 $ 12,474 $ 4,176 $ 4,176
=========== =========== ========== ===========
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold......................................................... 69,364 446,990 16,252 96,186
Issued to shareholders in reinvestment of dividends.......... 68,752 123,241 9,113 15,321
Repurchased.................................................. (204,096) (403,290) (20,799) (100,707)
----------- ----------- ---------- -----------
Net increase (decrease) in shares outstanding............. (65,980) 166,941 4,566 10,800
=========== =========== ========== ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS ENDED
JUNE 30, 2000 YEARS ENDED DECEMBER 31,
-----------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
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 (A) ................ 0.03 0.05 0.05 0.05 0.05 0.05
------- ------- ------- ------- ------- -------
Total from Investment Operations ....... 0.03 0.05 0.05 0.05 0.05 0.05
------- ------- ------- ------- ------- -------
Less Dividends:
Dividends from net
investment income ...................... (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
------- ------- ------- ------- ------- -------
Total Dividends ........................ (0.03) (0.05) (0.05) (0.05) (0.05) (0.05)
------- ------- ------- ------- ------- -------
Net increase (decrease) in
net asset value ........................ -- -- -- -- -- --
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period .............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= =======
Total Return ................................ 2.95%** 4.86% 5.16% 4.99% 4.91% 5.38%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) ........... $17,015 $21,817 $16,821 $15,330 $16,295 $17,925
Ratios to average net assets:
Net investment income including
reimbursement/waiver ................... 5.84%* 4.78% 4.95% 4.88% 4.80% 5.25%
Operating expenses including
reimbursement/waiver ................... 0.31%* 0.41% 0.55% 0.67% 0.60% 0.63%
Operating expenses excluding
reimbursement/waiver ................... 0.73%* 0.82% 0.98% 1.12% 1.02% 1.11%
</TABLE>
---------------------------------------------------------------
* Annualized
** Not Annualized
(A) Net investment income per share before reimbursement/waiver of fees by
the Investment Advisor and/or Administrator for the six months ended June
30, 2000 (unaudited) and the years ended December 31, 1999, 1998, 1997,
1996 and 1995 was $0.03, $0.04, $0.05, $0.05, $0.05 and $0.05,
respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
EQUITY FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS ENDED
JUNE 30, 2000 YEARS ENDED DECEMBER 31,
------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 22.21 $ 19.20 $ 19.68 $ 15.58 $ 12.99 $ 10.40
-------- -------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income (loss) (A) ............ (0.02) (0.02) 0.13 0.21 0.19 0.18
Net realized and unrealized
gain on investments ....................... 1.30 5.05 4.25 4.10 2.59 2.59
-------- -------- ------- ------- ------- -------
Total from Investment Operations .......... 1.28 5.03 4.38 4.31 2.78 2.77
-------- -------- ------- ------- ------- -------
Less Dividends:
Dividends from net
investment income ......................... -- -- (0.13) (0.21) (0.19) (0.18)
Dividends from net realized
capital gains ............................. (0.50) (2.02) (4.73) -- -- --
-------- -------- ------- ------- ------- -------
Total Dividends ........................... (0.50) (2.02) (4.86) (0.21) (0.19) (0.18)
-------- -------- ------- ------- ------- -------
Net increase (decrease) in
net asset value ........................... 0.78 3.01 (0.48) 4.10 2.59 2.59
-------- -------- ------- ------- ------- -------
Net Asset Value, End of Period ................. $ 22.99 $ 22.21 $ 19.20 $ 19.68 $ 15.58 $ 12.99
======== ======== ======= ======= ======= =======
Total Return ................................... 5.77%** 27.18% 23.52% 27.74% 21.49% 26.76%
Ratios/Supplemental Data:
Net Assets, End of Period (000's) .............. $129,689 $119,799 $92,620 $69,863 $46,242 $30,826
Ratios to average net assets:
Net investment income (loss) including
reimbursement/waiver ...................... (0.14)%* (0.11)% 0.61% 1.20% 1.34% 1.55%
Operating expenses including
reimbursement/waiver ...................... 0.95%* 0.96% 1.05% 1.08% 1.10% 1.21%
Operating expenses excluding
reimbursement/waiver ...................... 0.95%* 0.96% 1.05% 1.08% 1.10% 1.24%
Portfolio Turnover Rate ........................ 26%** 60% 75% 1% 8% 3%
</TABLE>
---------------------------------------------------
* Annualized
** Not Annualized
(A) Net investment income (loss) per share before reimbursement/waiver of
fees by the Investment Advisor and/or Administrator for the six months
ended June 30, 2000 (unaudited) and the years ended December 31, 1999,
1998, 1997, 1996 and 1995 was $(0.02), $(0.02), $0.13, $0.21, $0.19, and
$0.18, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
GROWTH AND INCOME FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 2000 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1999 1998(1)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 10.87 $ 10.34 $10.00
------- ------- ------
Income from Investment Operations:
Net investment income (A)................................ 0.02 0.05 0.05
Net realized and unrealized gain on investments.......... 0.16 0.68 0.34
------- ------- ------
Total from Investment Operations....................... 0.18 0.73 0.39
------- ------- ------
Less Dividends:
Dividends from net investment income..................... (0.02) (0.05) (0.05)
Dividends in excess of net investment income............. -- --(2) --(2)
Dividends from net realized capital gains................ -- (0.07) --
Dividends in excess of net realized capital gains........ -- (0.08) --
------- ------- ------
Total Dividends........................................ (0.02) (0.20) (0.05)
------- ------- ------
Net increase in net asset value............................. 0.16 0.53 0.34
------- ------- ------
Net Asset Value, End of Period.............................. $ 11.03 $ 10.87 $10.34
======= ======= ======
Total Return ............................................... 1.62%** 7.10% 3.72%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)........................... $12,993 $12,424 $7,637
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................... 0.33%* 0.42% 0.69%*
Operating expenses including
reimbursement/waiver................................... 1.40%* 1.49% 1.50%*
Operating expenses excluding
reimbursement/waiver................................... 1.40%* 1.49% 2.58%*
Portfolio Turnover Rate..................................... 3%** 17% 30%**
</TABLE>
---------------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on March 4, 1998.
(2) Amount is less than $0.005 per share.
(A) Net investment income (loss) per share before reimbursement/waiver of
fees by the Investment Advisor and/or Administrator for the six months
ended June 30, 2000 (unaudited), the year ended December 31, 1999 and the
period ended December 31, 1998 was $0.02, $0.05 and $(0.03),
respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
41
<PAGE>
SMALL COMPANY GROWTH FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 2000 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1999 1998(1)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $14.29 $ 8.92 $ 10.00
------ ------ -------
Income from Investment Operations:
Net investment loss (A).................................. (0.06) (0.11) (0.02)
Net realized and unrealized gain (loss) on investments... 1.23 6.07 (1.05)
------ ------ -------
Total from Investment Operations....................... 1.17 5.96 (1.07)
------ ------ -------
Less Dividends:
Dividends in excess of net investment income............. -- -- (0.01)
Dividends from net realized capital gains................ (0.58) (0.59) --
------ ------ -------
Total Dividends........................................ (0.58) (0.59) (0.01)
------ ------ -------
Net increase (decrease) in net asset value.................. 0.59 5.37 (1.08)
------ ------ -------
Net Asset Value, End of Period.............................. $14.88 $14.29 $ 8.92
====== ====== =======
Total Return ............................................... 8.31%** 67.49% (10.68)%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)........................... $5,169 $2,305 $ 1,143
Ratios to average net assets:
Net investment loss including
reimbursement/waiver................................... (1.02)%* (1.14)% (0.65)%*
Operating expenses including
reimbursement/waiver................................... 1.61%* 1.60% 1.60%*
Operating expenses excluding
reimbursement/waiver................................... 3.24%* 5.97% 12.86%*
Portfolio Turnover Rate..................................... 47%** 134% 87%**
</TABLE>
---------------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on April 17, 1998.
(A) Net investment loss per share before reimbursement/waiver of fees by the
Investment Advisor and/or Administrator for the six months ended June 30,
2000 (unaudited), the year ended December 31, 1999 and the period ended
December 31, 1998 was $(0.16), (0.54) and $(0.36), respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
42
<PAGE>
COLUMBIA REAL ESTATE EQUITY FUND II
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 2000 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1999 1998(1)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 8.08 $ 8.78 $ 10.00
------ ------- -------
Income from Investment Operations:
Net investment income (A)................................ 0.18 0.38 0.28
Net realized and unrealized gain (loss) on investments... 0.93 (0.74) (1.24)
------ ------- -------
Total from Investment Operations....................... 1.11 (0.36) (0.96)
------ ------- -------
Less Dividends:
Dividends from net investment income..................... (0.17) (0.34) (0.26)
------ ------- -------
Total Dividends........................................ (0.17) (0.34) (0.26)
------ ------- -------
Net increase (decrease) in net asset value.................. 0.94 (0.70) (1.22)
------ ------- -------
Net Asset Value, End of Period.............................. $ 9.02 $ 8.08 $ 8.78
====== ======= =======
Total Return ............................................... 13.91%** (4.13)% (9.57)%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)........................... $1,017 $ 983 $ 784
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................... 4.22%* 4.84% 4.62%*
Operating expenses including
reimbursement/waiver................................... 1.70%* 1.70% 1.70%*
Operating expenses excluding
reimbursement/waiver................................... 5.74%* 5.91% 10.49%*
Portfolio Turnover Rate..................................... 12%** 33% 3%**
</TABLE>
---------------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on March 3, 1998.
(A) Net investment income (loss) per share before reimbursement/waiver of
fees by the Investment Advisor and/or Administrator for the six months
ended June 30, 2000 (unaudited), the year ended December 31, 1999 and the
period ended December 31, 1998 was $0.01, $0.05 and $(0.26),
respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
43
<PAGE>
ASSET ALLOCATION FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS ENDED
JUNE 30, 2000 YEARS ENDED DECEMBER 31,
------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 16.96 $ 16.37 $ 14.54 $ 13.37 $ 12.38 $ 9.80
-------- -------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income (A)........ 0.20 0.40 0.33 0.40 0.30 0.28
Net realized and unrealized
gain on investments............ 0.78 0.74 2.17 2.11 1.53 2.58
-------- -------- ------- ------- ------- -------
Total from Investment Operations 0.98 1.14 2.50 2.51 1.83 2.86
-------- -------- ------- ------- ------- -------
Less Dividends:
Dividends from net
investment income.............. (0.18) (0.40) (0.39) (0.40) (0.30) (0.28)
Dividends in excess of net
investment income.............. -- --(1) --(1) -- -- --
Dividends from net realized
capital gains.................. -- (0.14) (0.22) (0.94) (0.54) --
Dividends in excess of net realized
capital gains.................. -- (0.01) (0.06) -- -- --
-------- -------- ------- ------- ------- -------
Total Dividends................ (0.18) (0.55) (0.67) (1.34) (0.84) (0.28)
-------- -------- ------- ------- ------- -------
Net increase in net asset value..... 0.80 0.59 1.83 1.17 0.99 2.58
-------- -------- ------- ------- ------- -------
Net Asset Value, End of Period...... $ 17.76 $ 16.96 $ 16.37 $ 14.54 $ 13.37 $ 12.38
======== ======== ======= ======= ======= =======
Total Return ....................... 5.82%** 7.06% 17.51% 19.03% 14.64% 29.42%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)... $109,263 $106,869 $78,586 $42,535 $24,114 $17,246
Ratios to average net assets:
Net investment income including
reimbursement/waiver........... 2.39%* 2.45% 2.69% 2.90% 2.31% 2.54%
Operating expenses including
reimbursement/waiver........... 0.98%* 1.02% 1.07% 1.19% 1.33% 1.37%
Operating expenses excluding
reimbursement/waiver........... 0.98%* 1.02% 1.07% 1.25% 1.33% 1.54%
Portfolio Turnover Rate............. 35%** 111% 88% 74% 45% 46%
</TABLE>
------------------------------------------------------------
* Annualized
** Not Annualized
(1) Amount is less than $0.005.
(A) Net investment income per share before reimbursement/waiver of fees by
the Investment Advisor and/or Administrator for the six months ended June
30, 2000 (unaudited) and the years ended December 31, 1999, 1998, 1997,
1996 and 1995 was $0.20, $0.40, $0.33, $0.39, $0.30, and $0.26,
respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
44
<PAGE>
HIGH QUALITY BOND FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS ENDED
JUNE 30, 2000 YEARS ENDED DECEMBER 31,
------------------------------------------------------------
(UNAUDITED) 1999 1998 1997 1996 1995
----------- -------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $ 9.71 $ 10.70 $ 10.31 $ 9.99 $ 10.37 $ 8.97
------- ------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income (A)........ 0.29 0.58 0.58 0.58 0.58 0.57
Net realized and unrealized
gain (loss) on investments..... 0.17 (0.98) 0.39 0.32 (0.38) 1.40
------- ------- ------- ------- ------- -------
Total from Investment Operations 0.46 (0.40) 0.97 0.90 0.20 1.97
------- ------- ------- ------- ------- -------
Less Dividends:
Dividends from net
investment income.............. (0.29) (0.58) (0.58) (0.58) (0.58) (0.57)
Dividends from net realized
capital gains.................. -- (0.01) -- -- -- --
------- ------- ------- ------- ------- -------
Total Dividends................ (0.29) (0.59) (0.58) (0.58) (0.58) (0.57)
------- ------- ------- ------- ------- -------
Net increase (decrease) in
net asset value................ 0.17 (0.99) 0.39 0.32 (0.38) 1.40
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period...... $ 9.88 $ 9.71 $ 10.70 $ 10.31 $ 9.99 $ 10.37
======= ======= ======= ======= ======= =======
Total Return ....................... 4.81%** (3.78)% 9.70% 9.36% 1.57% 22.55%
Ratios/Supplemental Data:
Net Assets, End of Period (000's)... $22,494 $22,753 $23,289 $14,457 $11,814 $11,067
Ratios to average net assets:
Net investment income including
reimbursement/waiver........... 5.99%* 5.69% 5.55% 5.82% 5.78% 5.86%
Operating expenses including
reimbursement/waiver........... 0.69%* 0.64% 0.54% 0.77% 0.72% 0.80%
Operating expenses excluding
reimbursement/waiver........... 0.97%* 1.03% 1.10% 1.44% 1.38% 1.57%
Portfolio Turnover Rate............. 46%** 197% 194% 160% 132% 21%
</TABLE>
-------------------------------------------------------------
* Annualized
** Not Annualized
(A) Net investment income per share before reimbursement/waiver of fees by
the Investment Advisor and/or Administrator for the six months ended June
30, 2000 (unaudited) and the years ended December 31, 1999, 1998, 1997,
1996 and 1995 was $0.26, $0.54, $0.52, $0.51, $0.51, and $0.50,
respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
45
<PAGE>
COLUMBIA HIGH YIELD FUND II
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
SIX MONTHS ENDED YEAR ENDED PERIOD ENDED
JUNE 30, 2000 DECEMBER 31, DECEMBER 31,
(UNAUDITED) 1999 1998(1)
------------- ------------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........................ $ 9.70 $10.36 $10.00
------ ------ ------
Income from Investment Operations:
Net investment income (A)................................ 0.34 0.70 0.49
Net realized and unrealized gain (loss) on investments... (0.26) (0.65) 0.45
------ ------ ------
Total from Investment Operations....................... 0.08 0.05 0.94
------ ------ ------
Less Dividends:
Dividends from net investment income..................... (0.34) (0.70) (0.49)
Dividends from net realized capital gains................ -- (0.01) (0.09)
------ ------ ------
Total Dividends........................................ (0.34) (0.71) (0.58)
------ ------ ------
Net increase (decrease) in net asset value.................. (0.26) (0.66) 0.36
------ ------ ------
Net Asset Value, End of Period.............................. $ 9.44 $ 9.70 $10.36
====== ====== ======
Total Return ............................................... 0.89%** 0.56% 9.61%**
Ratios/Supplemental Data:
Net Assets, End of Period (000's)........................... $2,380 $2,403 $2,454
Ratios to average net assets:
Net investment income including
reimbursement/waiver................................... 7.26%* 7.00% 6.18%*
Operating expenses including
reimbursement/waiver................................... 1.60%* 1.60% 1.60%*
Operating expenses excluding
reimbursement/waiver................................... 2.89%* 2.89% 4.25%*
Portfolio Turnover Rate..................................... 21%** 35% 89%**
</TABLE>
-----------------------------------------------------------
* Annualized
** Not Annualized
(1) The Fund commenced operations on March 3, 1998.
(A) Net investment income per share before reimbursement/waiver of fees by
the Investment Advisor and/or Administrator for the six months ended June
30, 2000 (unaudited), the year ended December 31, 1999 and the period
ended December 31, 1998 was $0.28, $0.57 and $0.28, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
46
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION
The Galaxy VIP Fund, a Massachusetts business trust (the "Trust"), is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as a diversified open-end, management investment company, for the purpose
of providing a vehicle for the investment of assets of various separate accounts
established to fund variable annuity contracts and variable life insurance
policies. The accompanying financial statements and financial highlights are
those of the Money Market Fund, Equity Fund, Growth and Income Fund, Small
Company Growth Fund, Columbia Real Estate Equity Fund II, Asset Allocation Fund,
High Quality Bond Fund and Columbia High Yield Fund II (individually a
"Fund,"collectively, the "Funds"), the eight managed investment portfolios
offered by the Trust as of the date of this report.
2. SIGNIFICANT ACCOUNTING POLICIES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of income and expenses during the
reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies in conformity with
generally accepted accounting principles consistently followed by the Trust in
the preparation of its financial statements.
PORTFOLIO VALUATION: Investments in securities which are traded on a
recognized stock exchange are valued at the last sale price on the securities
exchange on which such securities are primarily traded, or at the last sale
price on the national securities market. Securities traded on over-the-counter
markets are valued at the last sales price. Short-term obligations that mature
in 60 days or less are valued at amortized cost, which approximates fair value.
Corporate debt securities and debt securities of U.S. issuers (other than
short-term investments), including municipal securities, are valued by an
independent pricing service approved by the Board of Trustees. When, in the
judgment of the service, quoted bid prices for securities are readily available
and are representative of the bid side of the market, these investments are
valued at the mean between quoted bid prices and asked prices. Investments with
prices that cannot be readily obtained, if any, are carried at fair value as
determined by the service based on methods which include consideration of yields
or prices of bonds of comparable quality, coupon maturity and type, indications
as to values from dealers, and general market conditions. All other securities
and assets are appraised at their fair value as determined in good faith under
consistently applied procedures established by and under the general supervision
of the Board of Trustees. The investments of the Money Market Fund are valued
utilizing the amortized cost valuation method permitted in accordance with Rule
2a-7 under the 1940 Act. This method involves valuing a portfolio security
initially at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Net realized gains and losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Dividends from net investment
income are declared daily and paid monthly with respect to the Money Market
Fund, High Quality Bond Fund and Columbia High Yield Fund II, and declared and
paid quarterly with respect to the Equity Fund, Growth and Income Fund, Small
CompanyGrowth Fund, Columbia Real Estate Equity Fund II, and Asset Allocation
Fund. Net realized capital gains, if any, are distributed at least annually.
Income dividends and capital gains distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles.
REPURCHASE AGREEMENTS: Each Fund may engage in repurchase agreement
transactions with institutions that the Fund's investment advisor has determined
are credit-worthy. Each repurchase agreement transaction is recorded at cost
plus accrued interest. Each Fund requires that the securities collateralizing a
repurchase agreement transaction be transferred to the Trust's custodian in a
manner that is intended to enable the Fund to obtain those securities in the
event of a counterparty default. The value of the collateral securities is
monitored daily to ensure that the value of the collateral, including accrued
interest, equals or exceeds the repurchase price. Repurchase agreement
transactions involve certain risks in the event of default or insolvency of the
counterparty, including possible delays or restrictions upon a Fund's ability to
dispose of the underlying securities, and a possible decline in the value of the
underlying securities during the period while the Fund seeks to assert its
rights.
FEDERAL INCOME TAXES: The Trust treats each Fund as a separate entity for
federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code.
By so qualifying, each Fund will not be subject to federal income taxes to the
extent it distributes substantially all of its taxable or tax-exempt income, if
any, for the tax year ending December 31. In addition, by distributing during
each calendar year substantially all of its net investment income, capital gains
and certain other amounts, if any, each Fund will not be subject to a federal
excise tax. Therefore, no federal income tax provision is recorded.
47
<PAGE>
NOTES TO FINANCIAL STATEMENTS
EXPENSES: The Trust accounts separately for the assets, liabilities and
operations of each Fund. Expenses directly attributable to a particular Fund are
charged to the Fund, while expenses which are attributable to more than one Fund
of the Trust are allocated among the respective Funds.
ORGANIZATION COSTS: Each Fund bears all costs in connection with its
organization, including the fees and expenses of registering and qualifying its
shares for distribution under federal securities laws. All such costs are being
amortized using the straight-line method over a period of five years beginning
with the commencement of each Fund's operation.
3. INVESTMENT ADVISORY, ADMINISTRATION AND OTHER
RELATED PARTY TRANSACTIONS
The Trust has entered into separate investment advisory agreements with Fleet
Investment Advisors Inc. ("Fleet") and Columbia Management Co. ("Columbia").
Fleet and Columbia (the "Investment Advisors") are indirect wholly-owned
subsidiaries of FleetBoston Financial Corporation. Under the terms of its
agreement with the Trust, Fleet provides services for a fee, computed daily and
paid monthly, at an annual rate based upon the following percentages of average
daily net asset value: 0.40% for the Money Market Fund, 0.75% for the Equity,
Growth and Income, Small Company Growth and Asset Allocation Funds and 0.55% for
the High Quality Bond Fund. Under the terms of its agreement with the Trust,
Columbia provides services for a fee, computed daily and paid monthly, at an
annual rate based upon the following percentages of average daily net asset
value: 0.75% for the Columbia Real Estate Equity Fund II and 0.60% for the
Columbia High Yield Fund II (see Note 4).
The Trust and PFPC Inc. (formerly known as First Data Investor Services
Group, Inc.), a member of PNC Financial Services Group (formerly known as PNC
Bank Corp.), are parties to an administration agreement under which PFPC Inc.
(the "Administrator") provides services for a fee, computed daily and paid
monthly, at the annual rate of 0.085% of the first $1 billion of the combined
average daily net assets of the Funds, plus 0.078% of the next $1.5 billion of
the combined average daily net assets of the Funds, plus 0.073% of the combined
average daily net assets of the Funds in excess of $2.5 billion. The minimum
aggregate annual fee payable for administration of the Funds is $100,000. In
addition, PFPC Inc. also provides certain fund accounting and custody
administration services pursuant to certain fee arrangements. Pursuant to these
fee arrangements, PFPC Inc. compensates the Trust's custodian bank, The Chase
Manhattan Bank, for its services. Prior to December 1, 1999, the services
described above were provided by First Data Investor Services Group, Inc., a
wholly-owned subsidiary of First Data Corp. On that date, PFPC Trust Co., a
wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned
subsidiary of PNC Bank Corp., acquired all of the outstanding stock of First
Data Investor Services Group Inc. As part of that transaction, PFPC Inc., also
an indirect wholly-owned subsidiary of PNC Bank Corp., was merged into First
Data Investor Services Group, Inc., which then changed its name to PFPC Inc.
Provident Distributors, Inc. (the "Distributor"), acts as the exclusive
distributor of the Trust's shares. Prior to December 1, 1999, First Data
Distributors, Inc., a wholly-owned subsidiary of First Data Investor Services
Group, Inc., acted as the exclusive distributor of the Trust's shares.
Certain officers of the Trust may be officers of the Administrator. Such
officers receive no compensation from the Trust for serving in their respective
roles. No officer, director or employee of the Investment Advisors serves as an
officer, trustee or employee of the Trust. Each Trustee is entitled to receive
for services as a trustee of the Trust, The Galaxy Fund ("Galaxy") and Galaxy
Fund II ("Galaxy II") an aggregate fee of $45,000 per annum plus certain other
fees for attending or participating in meetings as well as reimbursement for
expenses incurred in attending meetings. The Chairman of the Boards of Trustees
and the President and Treasurer of the Trust, Galaxy and Galaxy II are also
entitled to additional fees for their services in these capacities. These fees
are allocated among the funds of the Trust, Galaxy and Galaxy II, based on their
relative net assets.
Each Trustee is eligible to participate in The Galaxy Fund/The Galaxy VIP
Fund/Galaxy Fund II Deferred Compensation Plan (the "Plan"), an unfunded,
non-qualified deferred compensation plan. The Plan allows each Trustee to defer
receipt of all or a percentage of fees which otherwise would be payable for
services performed.
Expenses for the six months ended June 30, 2000 include legal fees paid to
Drinker Biddle & Reath LLP. A partner of that firm is Secretary to the Trust.
Pursuant to procedures adopted by the Board of Trustees and in accordance
with the 1940 Act, certain Funds placed a portion of their portfolio
transactions with Quick & Reilly Institutional Trading, a division of Fleet
Securities, Inc., an affiliate of the Funds' Investment Advisors'. The
commissions paid to Quick &
48
<PAGE>
NOTES TO FINANCIAL STATEMENTS
Reilly Institutional Trading for the period January 1, 2000 through June 30,
2000 were as follows:
FUND COMMISSIONS
------ -----------
Equity $ 714,610
Growth and Income 28
Asset Allocation 15,757
4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Investment Advisors and Administrator may voluntarily waive all or a
portion of the fees payable to them by the Funds. The Investment Advisors and
Administrator may, at their discretion, revise or discontinue the voluntary fee
waivers at any time.
For the six months ended June 30, 2000 Fleet and the Administrator
voluntarily waived advisory, fund accounting and custody fees as follows:
FEES WAIVED BY FEES WAIVED BY
FUND FLEET ADMINISTRATOR
----- -------------- --------------
Money Market $ 22,786 $ 15,060
High Quality Bond 16,765 14,838
The Investment Advisors may, from time to time agree to reimburse a Fund for
expenses above a specified percentage of average net assets. For the six months
ended June 30, 2000, the Investment Advisors agreed to reimburse the Small
Company Growth Fund, the Columbia Real Estate Equity Fund II and the Columbia
High Yield Fund II in the amounts of $31,995, $19,648 and $15,340, respectively.
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of shares of beneficial interest, each with a par value of
$0.001. Shares of the Trust are currently classified into eight classes of
shares. Each share represents an equal proportionate interest in the respective
Fund, bears the same fees and expenses and is entitled to such dividends and
distributions of income earned as are declared at the discretion of the Trust's
Board of Trustees. Shareholders are entitled to one vote for each full share
held and will vote in the aggregate and not by class, except as otherwise
expressly required by law or when the Board of Trustees determines that the
matter to be voted on affects only the interests of shareholders of a particular
class.
6. PURCHASES AND SALES OF SECURITIES
The costs of purchases and proceeds from sales of securities, excluding
short-term investments, for the six months ended June 30, 2000 were as follows:
<TABLE>
PURCHASES SALES
--------- -----
FUND OTHER GOVERNMENT OTHER GOVERNMENT
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Equity $35,641,334 $ -- $32,437,181 $ --
Growth and Income 908,489 -- 405,139 --
Small Company Growth 4,147,629 -- 1,682,637 --
Columbia Real Estate Equity II 115,558 -- 190,374 --
Asset Allocation 18,512,543 17,442,144 16,256,038 17,636,158
High Quality Bond 2,303,430 7,949,370 2,434,810 8,092,020
Columbia High Yield II 565,728 -- 446,733 --
</TABLE>
The aggregate gross unrealized appreciation (depreciation), net unrealized
appreciation (depreciation) and cost for all securities, as computed on a
federal income tax basis, at June 30, 2000 for each Fund is as follows:
<TABLE>
FUND APPRECIATION (DEPRECIATION) NET COST
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Money Market $ -- $ -- $ -- $17,079,129
Equity 42,225,702 (7,744,530) 34,481,172 95,403,035
Growth and Income 2,460,766 (1,416,132) 1,044,634 11,935,722
Small Company Growth 1,062,714 (617,459) 445,255 4,675,357
Columbia Real Estate Equity II 72,034 (42,182) 29,852 993,731
Asset Allocation 23,647,476 (2,522,559) 21,124,917 87,715,667
High Quality Bond 126,949 (702,554) (575,605) 22,876,526
Columbia High Yield II 5,024 (104,231) (99,207) 2,430,467
</TABLE>
49
<PAGE>
NOTES TO FINANCIAL STATEMENTS
7. LINE OF CREDIT
Each Fund (except the Money Market Fund) and other affiliated funds
participate in a $150 million unsecured line of credit pursuant to a credit
agreement dated as of December 29, 1999. Borrowings may be made under the credit
agreement only for temporary or emergency purposes, such as repurchase or
redemption of shares of the Funds. Interest is charged to each Fund based on its
borrowings. In addition, a commitment fee, based on the average daily unused
portion of the line of credit, is allocated among the Funds and the other
participating funds at the end of each calendar quarter.
8. FEDERAL TAX INFORMATION
At December 31, 1999 the Funds had capital loss carry- forwards as follows:
FUND AMOUNT EXPIRATION
---- ------ ----------
Money Market $ 74 2002
29 2003
Columbia Real Estate
Equity II 1,400 2006
34,400 2007
High Quality Bond 300,153 2007
Columbia High Yield II 33,837 2007
50
<PAGE>
GALAXY VIP FUND INFORMATION
[BEGIN SIDEBAR]
TRUSTEES
AND OFFICERS
Dwight E. Vicks, Jr.
CHAIRMAN AND TRUSTEE
John T. O'Neill
PRESIDENT, TREASURER
AND TRUSTEE
Louis DeThomasis,
F.S.C., Ph.D.
TRUSTEE
Donald B. Miller
TRUSTEE
James M. Seed
TRUSTEE
Bradford S. Wellman
TRUSTEE
W. Bruce
McConnel, III, Esq.
SECRETARY
William Greilich
VICE PRESIDENT
INVESTMENT ADVISORS
Fleet Investment
Advisors Inc.
75 State Street
Boston, MA
02109
Columbia Management Co.
1300 S.W. Sixth Avenue
P.O. Box 1530
Portland, OR
97207-1350
DISTRIBUTOR
Provident Distributors, Inc.
3200 Horizon Drive
King of Prussia,
Pennsylvania 19406
ADMINISTRATOR
PFPC Inc.
4400 Computer Drive
Westborough,
Massachusetts 01581-5108
[END SIDEBAR]
This report is submitted for the general information of shareholders of The
Galaxy VIP Fund. It is not authorized for distribution to prospective investors
unless accompanied or preceded by an effective prospectus for The Galaxy VIP
Fund, which contains more information concerning investment policies, fees and
expenses and other pertinent information. Read the prospectus carefully before
you invest.
SHARES OF THE FUNDS ARE NOT BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, FLEETBOSTON FINANCIAL CORPORATION OR ANY OF ITS AFFILIATES, FLEET
INVESTMENT ADVISORS INC., COLUMBIA MANAGEMENT CO., OR ANY FLEETBANK. SHARES OF
THE FUNDS ARE NOT FEDERALLY INSURED BY, GUARANTEED BY, OBLIGATIONS OF OR
OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENTAL AGENCY.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL VARY AS A RESULT OF MARKET CONDITIONS
OR OTHER FACTORS SO THAT SHARES OF THE FUNDS, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST. AN INVESTMENT IN THE FUNDS INVOLVES INVESTMENT
RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.
[GRAPHIC OMITTED - RECYCLE SYMBOL]
This report was printed on recycled paper.
51
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<PAGE>
[GRAPHIC OMITTED]
GALAXY
FUNDS
4400 COMPUTER DRIVE
P.O. BOX 5108
WESTBOROUGH, MA 01581-5108
(6/00) DATE OF FIRST USE: SEPTEMBER 1, 2000
GVAVIPESAR
-------------------
STANDARD RATE
U.S. POSTAGE PAID
PERMIT NO. 105
NORTH READING, MA
-------------------
