[ OUTSIDE FRONT COVER ]
CLASS A, B, C & Y SHARES
[ LOGO ART for ANNUAL
The MUNDER Funds ] REPORT
Investments
for all seasons JUNE 30, 1996
"Above all, we are proud of the overall performance of the funds."
The Munder Funds
Letter to Shareholders:
August 29, 1996
Dear Fellow Shareholders:
This has been an exciting twelve months for the Munder Funds. Since
the start of the fiscal year in July 1995, we made a singular commitment to
increase the overall performance of the funds without altering their
respective investment styles and while limiting portfolio volatility. I am
happy to report that we have made significant progress on these initiatives.
Above all, we are proud of the overall performance of the funds. For
the twelve month period ended June 30, 1996, all the funds posted attractive
absolute returns and competitive, if not superior relative returns. Related to
this achievement, we were particularly proud to have been recognized by
Barron's* as one of the top mutual fund families in the country. This ranking
took into consideration performance, asset size and breadth of funds.
Significant gains have also been made to the lineup of the funds
available. The Munder Mid-Cap Growth Fund was added as a complement to our
primarily large cap Munder Multi-Season Growth Fund. We also added the Munder
Value Fund to offer shareholders a value investment style which complements
our range of growth style funds. We hope to address still more of your
investment needs as we introduce the Munder International Bond Fund which will
allow shareholders to take advantage of the capital appreciation potential of
international bonds while still investing in income producing securities.
From a technological point of view, we are also making great strides.
In addition to being recognized throughout the country for being the first
mutual fund family to describe the rationale behind portfolio transactions, we
have gained attention for our registration of the Net Net Fund. The Net Net
Fund, a mutual fund which will focus on Internet-related investments will be
offered on the Internet via The Munder Funds' home page web site at
http://www.munder.com.
Although I would naturally like to see continued progress in the
coming year, I sincerely hope that you, as a shareholder of the Munder Funds,
are pleased with the results we have delivered. As always, we are pleased to
receive feedback from you, our shareholders, or your financial advisors.
Please feel free to call us or your financial advisor with questions. Or if
you'd like, send us a message from our Internet site.
Sincerely,
/s/ Lee Munder President
Lee Munder President
*February 5, 1996 issue
Table of Contents
EQUITY FUNDS OVERVIEW
ii Munder Multi-Season Growth Fund
iii Munder Real Estate Equity Investment Fund
iii Munder Accelerating Growth Fund
iii Munder Small Company Growth Fund
iv Munder Mid-Cap Growth Fund
iv Munder International Equity Fund
v Munder Index 500 Fund
v Munder Growth & Income Fund
v Munder Value Fund
vi Munder Balanced Fund
FIXED INCOME FUNDS OVERVIEW
vii Munder Bond Fund
vii Munder Intermediate Bond Fund
vii Munder U.S. Government Income Fund
viii Munder Michigan Triple Tax-Free Bond Fund
viii Munder Tax-Free Bond Fund
viii Munder Tax-Free Intermediate Bond Fund
ix Hypotheticals and Total Returns
PORTFOLIO OF INVESTMENTS--- Equity Funds:
1 Munder Multi-Season Growth Fund
4 Munder Real Estate Equity Investment Fund
5 Munder Accelerating Growth Fund
8 Munder Small Company Growth Fund
11 Munder Mid-Cap Growth Fund
13 Munder International Equity Fund
24 Munder Index 500 Fund
35 Munder Growth & Income Fund
37 Munder Value Fund
39 Munder Balanced Fund
Income Funds:
44 Munder Bond Fund
46 Munder Intermediate Bond Fund
49 Munder U.S. Government Income Fund
51 Munder Michigan Triple Tax-Free Bond Fund
54 Munder Tax-Free Bond Fund
59 Munder Tax-Free Intermediate Bond Fund
Money Market Funds:
66 Munder Money Market Fund
68 Munder Tax-Free Money Market Fund
76 Munder U.S. Treasury Money Market Fund
77 Munder Cash Investment Fund
80 Financial Statements
114 Financial Highlights
154 Notes to Financial Statements
162 Report of Ernst & Young LLP,IndependentAuditors
Mutual fund shares are not deposits or obligations of, or guaranteed or
endorsed by any bank and are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. All
mutual fund shares involve certain risks, including possible loss of
principal.
i
Management's Discussion Of Fund Performance
Equity Funds Overview
The year ended June 30, 1996 has been a rollercoaster ride for
investors. The stock market started last summer at the same fast pace it
exhibited early in 1995. The market paused in October and November when
technology and related market sectors suffered a mild correction with concerns
over these companies' ability to continue to grow their earnings. 1995 ended,
however, on an up note for the stock market, which continued until mid-May of
1996. Since May, the broad market as measured by the S&P 500 has been flat to
end the twelve month period ended June 30, 1996 with a total return of 26.00%.
Defensive areas of the market exhibited strength near the end of calendar
1995, as the technology correction took hold and investors fled to high
quality and larger capitalization equities. Small-cap stocks have been the
star performers for the six months ended June 30, 1996, with the Russell 2000
Index generating a return of 10.40% as compared to the return of the S&P 500
at 10.10%.
Interest rates remained relatively stable during most of 1995,
although fears over a stronger than expected economy have caused interest
rates to rise in 1996. While rising interest rates are seen as negative for
stocks, the stock market has continued to be boosted by strong corporate
profits and continued strong cash inflows from mutual fund shareholders.
However, the downturn in the market since mid-May has reflected continuing
concerns over the strength of the economy and the ability of corporate profits
to remain high.
The following paragraphs detail the performance of each fund
comprising The Munder Funds family of mutual funds. Each Fund offers its
shares to investors in several classes. Performance figures in the following
narrative discussion represent the performance of the Class Y shares net of
expenses. More details regarding the performance of each class of shares can be
found in the accompanying performance charts.
MUNDER MUTLI-SEASON GROWTH FUND
Fund Managers: Lee Munder, CFA and Leonard J. Barr II, CFA
The Fund generated a return of 27.85% for the year ended June
30, 1996, compared to the 22.20% average return for the Lipper universe of
growth stock mutual funds and a 26.00% return for the S&P 500. The Fund showed
above-median returns for the one, two and three year periods ended June 30,
1996 and has outperformed the S&P 500 for the quarter, year-to-date and
one-year periods ended June 30, 1996.
We believe that the Fund is an excellent choice for the
investor seeking a conservatively run core portfolio holding. We further
believe that the Fund is well positioned to generate good relative performance
in an environment of slowing earnings growth. As an example, the Fund's total
returns over the three and six month periods ended June 30, 1996 were 5.14%
and 11.87% respectively, while the broad market reflected by the S&P 500
returned 4.49% and 10.10% respectively.
This Fund adheres to Munder Capital's core style of equity
investing, focusing on companies which exhibit strong, consistent earnings
growth with above average capital and below average debt. This is a strongly
held discipline followed in the management of the Fund. For example, select
characteristics of the holdings of the Fund follow:
<TABLE>
<CAPTION>
PORTFOLIO CHARACTERISTICS (June 30, 1996)
Multi-Season
Growth Fund S&P 500
------------ -------
<S> <C> <C>
Return on Equity 21% 15%
Earnings Growth Rate(last 5 years) 17% 9%
Price/Earnings Ratio 20x 18x
Debt/Equity Ratio 34% 41%
</TABLE>
ii
As of June 30, 1996, a majority of the Fund's holdings were with
companies rated A or better by Standard & Poors Corporation. We believe that
investments in these types of companies not only provide strong long-term
return potential, but also provide quality, lower risk investments during
uncertain market cycles such as that which we are now experiencing.
MUNDER REAL ESTATE EQUITY INVESTMENT FUND
Fund Manager: Lee Munder, CFA
The Fund earned a return of 16.20% for the year ended June 30,
1996, compared to the 17.35% average return for the Lipper universe of real
estate funds. The Fund has earned an above-median return within its Lipper
universe for the three-month and one-month periods ended June 30, 1996.
We believe that the Fund is an excellent addition to an
investor's overall portfolio as a method of gaining exposure to real estate
given its income potential, relatively low volatility of returns and
high-quality exposure across available real estate sectors. As an example, the
Fund's performance over the three month period ended June 30,1996 was 3.95%,
while Lipper Real Estate Fund average returned 4.10%.
The Fund's exposure to retail-related Real Estate Investment
Trusts (REITs), coupled with an underexposure to hotel REITs, held back the
performance of the Fund in the summer of 1995. A realignment of sector
weightings has since boosted performance, and virtually all of the securities
in the Fund continue to perform well from a fundamental standpoint. The Fund's
relatively conservative approach of investing in only the highest quality
companies has not delivered the returns generated by more speculative REIT
funds, especially in 1995.
MUNDER ACCELERATING GROWTH FUND
Fund Manager: Ann J. Conrad, CFA
The Fund earned a return of 22.31% for the year ended June 30,
1996, compared to the 22.20% average return for the Lipper universe of growth
stock mutual funds. The Fund earned a first quartile return in its Lipper
universe for the three month, year-to-date, and one year periods ended June 30,
1996.
This is one of the Munder Funds' most aggressive growth funds,
investing primarily in companies that exhibit strong earnings momentum. The
Fund suffered last Fall when technology companies were particularly hard hit.
Since that time we have reduced the volatility of the Fund, especially during
uncertain markets. The Fund continues to be invested for a slow growth and low
inflation environment. There is an emphasis on interest-sensitive companies as
well as those that can sustain above-average growth in this environment. These
include companies benefiting from being consolidators in mature industries or
from being positioned in new market segments, such as networking, health
information services, and beneficiaries of growth related to the Internet.
MUNDER SMALL COMPANY GROWTH FUND
Fund Manger: Kurt R. Stalzer
The fund generated a return of 48.65% for the year ended June
30, 1996, compared to the 29.71% average return for the Lipper universe of
small company growth funds and a 23.89% return for the Russell 2000 Index. The
Fund has generated superior returns for the five year period ended June 30,
1996 and a first quartile return within its Lipper universe for the
three-month and one-year periods ended June 30, 1996.
iii
Stock selection continues to be a key factor in the strong performance
of the Fund. The Fund follows Munder Capital's core equity style of investing,
specifically applied to the small capitalization range of the market. The
Fund's technology holdings performed well, particularly in the software area.
Holdings in the computer services area, where the Fund is overweighted, also
made a significant and positive contribution to performance. Returns were also
boosted by holdings in the healthcare sector where service related companies
rose strongly while healthcare product companies tempered the gains. The
retail and apparel holdings, which performed very well during the first
quarter of 1996, retreated in performance in the second quarter of 1996. The
Fund's holdings in these sectors, however, were trimmed at the end of March.
MUNDER MID-CAP GROWTH FUND
Fund Managers: Arnold Kent Douville and Jeffrey A. Wrona, CFA
The Fund commenced operations August 14, 1995. For the year
ended June 30, 1996, the Fund earned a return of 15.80%, compared to the 17.36%
average for the Lipper universe of mid-cap funds and a 15.56% return for the
S&P 400 Mid-Cap Index.
The underperformance of the Fund over the period can be
attributed principally to timing of the Fund's commencement of operations and
timing of cash flows. This Fund adheres to Munder Capital's core growth
investment style, specifically applied to companies with a market
capitalization of between $300 million and $1 billion. Many
technology-oriented companies make up this range of the market. Therefore, at
the Fund's early stages, the market in general, and technology in particular,
were particularly hard hit in October and November 1995.
Since that time, patience with technology investments has paid
off, with nine of thirteen holdings in this sector generating double digit
returns in 1996. With the current turmoil in the markets, the Fund has
realigned its sector-weightings, with the most significant sector changes
being a moderate increase in consumer cyclicals and an increase in finance
stocks. The Fund's portfolio in constructed in three broad segments: core
holdings, "story stocks" and a trading segment. The core holdings consist of
companies which we believe exhibit long-term growth prospects consistent with
Munder Capital's basic investment philosophy. The "story stocks" holdings
consist of those high-quality companies which we believe could benefit from a
particular trend or business shift. Finally, the trading segment of the
portfolio consists of high-quality securities which we would not expect to be
long-term holdings--such as certain initial public offerings.
MUNDER INTERNATIONAL EQUITY FUND
Fund Manger: Todd Johnson
The Fund earned a return of 13.63% for the year ended June 30,
1996, compared to the 14.02% return for the FT Actuaries World ex U.S. Index
and a 15.46% average return for the Lipper universe of international stock
funds. The MSCI EAFE Index returned 13.62% for the same period. The Fund has
increased the number of international holdings to create a broad foreign
market exposure. This increase has been responsible for a reduction in the
volatility of the Fund and the methodical production of consistent returns.
The Fund seeks to create a widely diversified, broad market
core of international holdings through the use of U.S. traded ADR's and
foreign equities and enhance its returns with a quantitative equity selection
process. As a result, as of June 30, 1996, the Fund held 571 equalities in 40
countries in 39 industry categories.
iv
MUNDER INDEX 500 FUND
Fund Manager: Todd Johnson
The Fund earned a return of 25.61% for the year ended June 30,
1996, as compared to the 26.00% return for the Lipper S&P 500 universe stocks.
The Fund has generated an above-median return relative to the Lipper universe
of mutual funds with the objective of tracking the S&P 500 Index for the
one-year, two-year and three-year periods ended June 30, 1996.
The primary difference between the returns of this Fund and the
returns of the S&P 500 Index is due to the fact that all expenses are deducted
from the Fund before performance is calculated. Since the S&P 500 Index is not
an actual fund, there are no expenses charged against its return. As of June
30, 1996 the Fund held all 500 stocks in the S&P 500 universe. Its heaviest
sector weightings, like those of the S&P 500 universe, are consumer cyclicals,
finance, technology, utilities and healthcare.
MUNDER GROWTH & INCOME FUND
Fund Manager: Otto G. Hinzmann, Jr.
For the year ended June 30, 1996, the Fund earned a return of
21.26%, compared to the 22.13% average return for the Lipper universe of
equity income funds. Returns for funds seeking high dividends and growth,
such as the Fund, relative to pure growth stocks, have been volatile
as reflected by the fact that the Fund generated first quartile performance in
the last six months of 1995, and last quartile performance during the first
six months of 1996 as measured by the Lipper universe of equity income funds.
To a large degree, the same factors that led to the Fund's
strong performance in 1995 contributed to its weak performance in 1996. Since
the Fund's goal is to generate income in excess of the S&P 500, it tends to
favor higher yielding stocks. As fears of inflation heated up in early 1996,
the securities of interest sensitive companies, and those companies with
higher dividend yields (financials, utilities, etc.) were particularly hard
hit. However, we continue to believe that dividends represent a significant
portion of the potential income from a stock investment, and that over time,
adherence to a strict discipline will benefit shareholders.
Despite near-term market anticipation of a stronger economy,
conditions appear to support slower earnings growth, caution with respect to
corporate earnings and a possibility of lower interest rates later in the
year. The current strategy of holding a blend of high quality, higher yielding
securities and high quality, moderate growth stocks remains in place.
MUNDER VALUE FUND
Fund Manager: Gerald L. Seizert, CFA
The Fund commenced operations August 18, 1995, and its return
for the period ended June 30, 1996 was 16.52% as compared to 18.18% for the
Lipper growth and income fund universe average. For the year-to-date period
ended June 30, 1996, the Fund achieved a return of 8.48%, compared to the
8.57% return for the S&P/BARRA Value Index. The Fund adheres to a value style,
investing in companies that appear to be undervalued or overlooked by the
market. This value style provides an excellent complement to growth funds. The
Fund has essentially matched the market during this start-up period. Strong
performance earlier in 1996 was offset recently as signs of a strong economy
pointed to near-term uncertainty. To maintain defensive positioning, the Fund
intends to emphasize companies believed to be able to generate relatively
strong earnings.
v
Although the financial sector continues to be under some
pressure due to the rise in interest rates during the first six months of 1996
and the popular belief that the economy will remain strong for the near
future, this sector remains attractively valued and it is anticipated that
consolidation within the banking, savings and loan, and insurance industries
should prove favorable for this sector and act as a catalyst for revaluation
to higher levels. We have viewed the recent underperformance of this sector as
an excellent buying opportunity for select fundamentally undervalued financial
stocks. Despite some short term pullback during this uncertain market time in
financial stocks, the Fund remains committed to the financial sector.
MUNDER BALANCED FUND
Fund Managers: Leonard J. Barr II, CFA, Ann J. Conrad, CFA, James C. Robinson
The Fund exhibited a 17.35% return for the year ended June 30,
1996 as compared to the average return for the Lipper balanced fund universe
of 15.52%. The Fund has earned an above-median return for the two year period
ended June 30, 1996 and placed in the first quartile of the Lipper universe
for the one-year period ended June 30, 1996
The Fund had an asset allocation of 57% equities, 39% bonds and
4% cash as of June 30, 1996. Both the stock and bond portions of the Fund
generated strong relative performance during the second quarter of 1996. The
strong performance of the stocks in the Fund was largely a function of
above-average stock selection. The Fund's holdings performed very well
relative to both their sectors and to the market as a whole during the second
quarter of 1996.
vi
Fixed-Income Funds Overview
The fixed income market has performed relatively poorly
year-to-date in 1996, as compared to the double digit returns it posted in
1995. The interest rate on the 30-year Treasury bond increased by close to one
percentage point during 1996, as investors reacted to higher commodity prices
and fears of a strengthening economy. With the rise in interest rates, bond
market benchmarks showed a negative total return for the June 30, 1996
year-to-date period. Among all bond market sectors, the lower quality,
high-yield bonds (often referred to as junk bonds) were more active and showed
the greatest returns. This reflected investors' appetite for increased yield
opportunities, even at the expense of quality.
At Munder Capital, we do not believe that investors can
consistently forecast the direction and impact of interest rates. Therefore,
our fixed income investment philosophy follows a duration neutral stance which
means we do not assume any interest rate risk beyond the applicable benchmark.
We then seek to add value in the active management of the portfolio to capture
inefficiencies in the market.
MUNDER BOND FUND
Fund Manager: James C. Robinson
The Fund generated a return of 4.50% for the year ended June
30, 1996, compared to the 4.06% average return for the Lipper universe of
corporate A rated debt funds and a 4.66% return for the Lehman
Government/Corporate Bond Index. The Fund has earned an above-median return
relative to its Lipper universe for the two-year period ended June 30, 1996.
Since low quality bonds perform best, the Fund's focus in high quality bonds
impacted its return near-term. The Index includes lower rated corporate bonds
than those held by the Fund which, as of June 30, 1996, had an average rating
of AAA by Standard & Poors. In addition, the Fund's performance reflects
expenses whereas the Index includes neither transaction costs nor expenses.
MUNDER INTERMEDIATE BOND FUND
Fund Manger: Anne K. Kennedy
The Fund generated a return of 4.29% for the year ended June
30, 1996, compared to the 4.91% average return for the Lipper universe of
short investment grade debt funds. The Fund has earned an above-median return
relative to its Lipper universe for the one-year and two-year periods ended
June 30, 1996.
The recent underperformance of the Fund relative to its Lipper
universe is due to the fact that the Fund's price sensitivity to changes in
interest rates is benchmarked to the Lehman Intermediate Government/Corporate
Index. Both the Fund and its related benchmark Index have a longer duration
(greater sensitivity to interest rate changes) than the average fund in the
Lipper universe. Therefore, both the Index and the Fund will experience
underperformance relative to the Lipper universe when interest rates are
rising and bond prices falling.
MUNDER U.S. GOVERNMENT INCOME FUND
Fund Manager: Peter G. Root
The Fund earned a return of 4.58% for the year ended June 30,
1996, compared to the 3.48% average return for the Lipper universe of general
U.S. Government funds and a 4.50% return for the Lehman Government Bond Index.
The Fund has earned first quartile returns compared to its Lipper universe for
the year-to-date, one-year, two-year and five- and ten-year periods. Fund
performance was enhanced during the 1996 fiscal year by an overweighting in
corporate bonds and in government-related mortgage securities relative to the
other funds in the Lipper universe.
vii
MUNDER MICHIGAN TRIPLE TAX-FREE BOND FUND
Fund Manager: Wendy B. Harries
For the year ended June 30, 1996, the Fund generated a return
of 5.51%, compared to the 5.74% average return for the Lipper universe of
Michigan municipal debt funds.
The longer maturity structure of the Fund, which held back
performance in April and May of 1996 contributed to strong relative performance
in June. Unlike the rising interest rate environment earlier in the second
quarter of 1996, yields declined along the ten-year to thirty-year maturity
spectrum in June. Lack of yield-enhancing opportunities in the market made it
difficult to lift the Fund's yield during the second quarter of 1996.
MUNDER TAX-FREE BOND FUND
Fund Manager: Wendy B. Harries
The Fund generated a 5.38% return for the year ended June 30,
1996, compared to the 5.67% average return for the Lipper universe of general
municipal debt funds. The Fund has earned an above-median return for the
three-year period ended June 30, 1996. The relative modest underperformance of
the Fund is due to a heavy weighting in longer-term maturities. As of June 30,
1996, close to 45% of the Fund's holdings had maturities between ten and twenty
years. This longer maturity has hindered the Fund in the current, declining
market since bond prices fall as interest rates rise. We continue to look for
opportunities to enhance the yield of the Fund in this interest rate
environment.
MUNDER TAX-FREE INTERMEDIATE BOND FUND
Fund Manager: Wendy B. Harries
The Fund earned a return of 3.95% for the year ended June 30,
1996, compared to the 4.86% average return for the Lipper universe of
intermediate municipal debt funds. The Fund has generated an above-median
return relative to the Lipper universe for the year-to-date period ended June
30, 1996. Fund returns were boosted in April by the defensive nature of the
Fund but performance was held back in May by an underweighting in the one to
three-year maturity segment of the Fund. Given the uncertainty of the
tax-exempt fixed income market in June, the market was not attractively priced
thereby eliminating swap activities.
viii
Hypotheticals and Total Returns
The following graphs represent the performance of the Funds since inception,
which includes a period of time when the Funds were managed by Munder Capital
Management (approximately seventeen months) and a period of time when the
Funds were managed by the predecessor. The chart following each line graph
sets forth performance information and the growth of a hypothetical $10,000
investment for the class(es) of each Fund shown in the line graph as well as
certain other classes of shares offered by the Fund. These classes have
different sales charges and expenses than the class(es) shown in the line
graph, which affect performance.
Multi-Season Growth Fund
CLASS B & Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment--Class B
[ Performance Chart ]
<TABLE>
Class B--3.0% Lipper Growth
Back-end load S&P 500 Funds Average
------------- ------- --------------
<S> <C> <C> <C>
4/29/93 $10,000.00 $10,000.00 $10,000.00
$10,030.00 $10,000.00 $10,000.00
$10,060.00 $10,266.84 $10,374.13
$10,160.00 $10,296.81 $10,401.45
$10,110.00 $10,255.35 $10,362.34
$10,340.00 $10,643.61 $10,812.09
$10,430.00 $10,561.99 $10,925.53
$10,390.00 $10,780.33 $11,078.70
$10,310.00 $10,677.58 $10,866.70
12/31/93 $10,650.00 $10,806.67 $11,171.91
$10,930.00 $11,173.72 $11,518.92
$10,800.00 $10,870.60 $11,333.21
$10,320.00 $10,397.58 $10,796.23
$10,350.00 $10,530.79 $10,838.82
$10,360.00 $10,702.94 $10,886.49
$10,010.00 $10,441.03 $10,521.34
$10,170.00 $10,783.64 $10,796.93
$10,670.00 $11,224.74 $10,302.12
$10,430.00 $10,950.48 $11,091.27
$10,550.00 $11,196.14 $11,272.17
$10,140.00 $10,788.90 $10,855.23
12/31/94 $10,308.00 $10,948.63 $10,954.88
$10,509.00 $11,232.36 $11,029.89
$10,920.00 $11,669.67 $11,457.47
$11,161.00 $12,013.47 $11,782.95
$11,241.00 $12,366.96 $12,038.31
$11,583.00 $12,860.50 $12,397.00
6/30/95 $11,894.00 $13,158.69 $12,940.40
$12,295.00 $13,594.87 $13,577.53
$12,255.00 $13,628.81 $13,686.84
$12,777.00 $14,203.65 $14,093.60
$12,787.00 $14,152.90 $13,894.20
$13,510.00 $14,773.49 $14,384.55
$13,523.00 $15,058.07 $14,443.35
$14,082.00 $15,569.98 $14,745.61
$14,279.00 $15,714.83 $15,079.21
$14,361.00 $15,866.13 $15,211.16
$14,579.00 $16,099.83 $15,704.24
$14,848.00 $16,514.33 $16,118.24
6/30/96 $14,765.00 $16,577.29 $15,884.51
</TABLE>
A Hypothetical Illustration of a $10,000 Initial Investment--Class Y
[ Performance Chart ]
<TABLE>
<CAPTION>
MULTI-SEASON GROWTH FUND
Lipper Growth
Class Y S&P 500 Funds Average
------- ------- -------------
<S> <C> <C> <C>
8/16/93 $10,000.00 $10,000.00 $10,000.00
$10,147.00 $10,000.00 $10,000.00
$10,235.00 $ 9,923.31 $10,094.67
$10,167.00 $10,128.44 $10,236.33
$10,098.00 $10,031.90 $10,048.05
12/31/93 $10,490.00 $10,153.18 $10,331.13
$10,765.00 $10,498.03 $10,650.84
$10,647.00 $10,213.24 $10,479.47
$10,196.00 $ 9,768.82 $ 9,987.78
$10,235.00 $ 9,893.97 $10,025.38
$10,245.00 $10,055.71 $10,072.22
$ 9,912.00 $ 9,809.64 $ 9,735.81
$10,088.00 $10,131.53 $ 9,988.50
$10,588.00 $10,545.96 $10,452.12
$10,363.00 $10,288.28 $10,254.69
$10,480.00 $10,519.09 $10,419.71
$10,078.00 $10,136.47 $10,034.52
12/31/94 $10,263.00 $10,286.54 $10,126.66
$10,469.00 $10,553.12 $10,200.53
$10,883.00 $10,963.99 $10,593.28
$11,138.00 $11,287.00 $10,890.22
$11,227.00 $11,619.11 $11,126.66
$11,581.00 $12,082.80 $11,461.34
6/30/95 $11,906.00 $12,362.96 $11,949.96
$12,309.00 $12,772.76 $12,523.99
$12,290.00 $12,804.64 $12,618.59
$12,821.00 $13,344.71 $12,992.78
$12,831.00 $13,297.03 $12,809.29
$13,579.00 $13,880.09 $13,264.07
$13,607.00 $14,147.46 $13,319.24
$14,177.00 $14,628.41 $13,606.96
$14,380.00 $14,764.50 $13,910.41
$14,478.00 $14,906.65 $14,030.84
$14,712.00 $15,126.22 $14,474.25
$14,998.00 $15,515.65 $14,849.40
6/30/96 $15,222.00 $15,574.80 $14,644.04
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
One One Since Since
Class and With Without Lipper Growth Year Year Inception Inception
Inception Date Load Load S&P 500 Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ------- ------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--8/4/93 $14,313.00* $15,146.00 $16,164.52 $15,302.55 20.54%* 27.56% 13.13%* 15.36%
Class B--4/29/93 $14,765.00** $15,065.00 $16,577.29 $15,884.51 21.66%* 26.66% 13.08%** 13.80%
Class C--9/20/93 $14,794.00* $14,794.00 $15,695.22 $14,505.67 25.64%* 26.64% 15.14% 15.14%
Class Y--8/16/93 N/A $15,222.00 $15,574.80 $14,644.04 N/A 27.85% N/A 15.74%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares, of 5.00% for Class B shares, and of 1.00% for Class C Shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 3.00% back-end load.
</TABLE>
All figures cited here represent past performance and do not guarantee future
results. Investment return and principal value of an investment will fluctuate
so that an investor's shares upon redemption may be worth more or less than
original cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments assuming
reinvestment of dividends.
Figures for the S&P 500, an unmanaged index of common stock prices, include
reinvestment of dividends. The Lipper mutual fund averages were derived from a
universe of only those mutual funds that were in existence as of the inception
date of the Funds and are comprised of mutual funds which are categorized
under the Funds' respective objectives by Lipper Analytical Services, Inc.
ix
Real Estate Equity Investment Fund
CLASS B & Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment--Class B
[ Performance Chart ]
<TABLE>
<CAPTION>
Class B - 4.0%
Back-end Load NAREIT
-------------- ------
<S> <C> <C>
10/3/94 $10,000.00 $10,000.00
$ 9,710.00
$ 9,459.00
$10,210.00
$ 9,818.00
2/28/95 $ 9,901.00 $10,018.00
$ 9,948.00
$ 9,852.00
$10,186.00
6/30/95 $10,387.00 $10,553.00
$10,536.00
$10,602.00
$10,743.00
$10,470.00
$10,564.00
$11,321.00
$11,353.00
$11,500.00
$11,524.00
$11,497.00
$11,733.00
6/30/96 $11,549.00 $12,257.00
</TABLE>
A Hypothetical Illustration of a $10,000 Initial Investment--Class Y
[ Performance Chart ]
<TABLE>
<CAPTION>
Class Y NAREIT
------- ------
<S> <C> <C>
9/30/94 $10,000.00 $10,000.00
$ 9,718.00
$ 9,475.00
$10,236.00
$ 9,851.00
2/28/95 $ 9,943.00 $10,018.00
$ 9,998.00
$ 9,910.00
$10,254.00
6/30/95 $10,464.00 $10,553.00
$10,624.00
$10,699.00
$10,851.00
$10,583.00
$10,676.00
$11,462.00
$11,505.00
$11,663.00
$11,698.00
$11,679.00
$11,930.00
6/30/96 $12,159.00 $12,257.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
------------------------------------------ --------------------------------------------
One One Since Since
Class and With Without Year Year Inception Inception
Inception Date Load Load NAREIT w/load w/out load w/load w/out load
- -------------- ---- ------- ------ ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Class A--9/30/94 $11,442.00* $12,107.00 $12,162.00 9.54%* 15.92% 8.00%* 11.54%
Class B--10/3/94 $11,549.00** $11,949.00 $12,162.00 10.05%* 15.05% 8.62%* 10.76%
Class C--1/5/96 $10,508.00* $10,608.00 $12,406.00 N/A N/A 5.08%*+ 6.08%+
Class Y--10/3/94 N/A $12,159.00 $12,162.00 N/A 16.20% N/A 11.88%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares, of 5.00% for Class B shares, and of 1.00% for Class C Shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 4.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
Please refer to the preceding and following pages for additional information
on performance and index description.
x
Accelerating Growth Fund
CLASS Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
Lipper Growth
Class Y S&P 500 Funds Average
------- ------- -------------
<S> <C> <C> <C>
12/1/91 $10,000.00 $10,000.00 $10,000.00
$11,300.00 $11,141.00 $11,133.40
$11,113.00 $10,934.00 $11,179.00
2/29/92 $11,113.00 $11,075.00 $11,353.00
$10,803.00 $10,860.00 $11,013.00
$10,620.00 $11,179.00 $10,961.00
$10,710.00 $11,233.00 $11,042.00
$10,309.00 $11,066.00 $10,720.00
$10,863.00 $11,518.00 $11,105.00
$10,742.00 $11,283.00 $10,864.00
$11,084.00 $11,415.00 $10,049.00
$11,309.00 $11,455.00 $11,276.00
$12,034.00 $11,844.00 $11,849.00
$12,416.00 $11,989.00 $12,071.00
$12,598.00 $12,089.00 $12,239.00
2/28/93 $12,454.00 $12,254.00 $12,061.00
$13,145.00 $12,512.00 $12,407.00
$12,533.00 $12,210.00 $12,040.00
$13,172.00 $12,536.00 $12,479.00
$13,338.00 $12,572.00 $12,515.00
$13,400.00 $12,522.00 $12,476.00
$14,216.00 $12,996.00 $13,009.00
$14,464.00 $12,896.00 $13,136.00
$14,580.00 $13,163.00 $13,326.00
$13,878.00 $13,037.00 $13,073.00
$14,580.00 $13,195.00 $13,447.00
$14,874.00 $13,643.00 $13,869.00
2/28/94 $14,706.00 $13,273.00 $13,649.00
$13,833.00 $12,695.00 $13,013.00
$13,686.00 $12,858.00 $13,077.00
$13,308.00 $13,068.00 $13,151.00
$12,477.00 $12,748.00 $12,726.00
$12,888.00 $13,167.00 $13,061.00
$13,529.00 $13,705.00 $13,654.00
$13,319.00 $13,370.00 $13,389.00
$13,918.00 $13,670.00 $13,584.00
$13,140.00 $13,173.00 $13,077.00
$13,402.00 $13,368.00 $13,202.00
$13,251.00 $13,714.00 $13,295.00
2/28/95 $13,791.00 $14,248.00 $13,812.00
$14,255.00 $14,668.00 $14,202.00
$14,342.00 $15,100.00 $14,513.00
$14,828.00 $15,702.00 $14,944.00
6/30/95 $16,070.00 $16,067.00 $15,556.00
$17,279.00 $16,599.00 $16,289.00
$17,452.00 $16,641.00 $16,427.00
$17,862.00 $17,342.00 $16,895.00
$17,106.00 $17,280.00 $16,633.00
$17,344.00 $18,038.00 $17,233.00
$16,885.00 $18,386.00 $17,342.00
$17,406.00 $19,011.00 $17,709.00
$18,245.00 $19,188.00 $18,082.00
$18,689.00 $19,372.00 $18,257.00
$19,464.00 $19,658.00 $18,803.00
$20,227.00 $20,164.00 $19,261.00
6/30/96 $19,655.00 $20,241.00 $19,001.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
One One Since Since
Class and With Without Lipper Growth Year Year Inception Inception
Inception Date Load Load S&P 500 Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ------- ------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--11/23/92 $15,624.00* $16,534.00 $16,816.81 $15,979.76 15.32%* 22.03% 13.19%* 14.98%
Class B--4/25/94 $13,896.00** $14,196.00 $15,741.69 $14,588.91 16.05%* 21.05% 16.29%** 17.43%
Class C--9/26/95 $10,928.00* $11,022.00 $11,671.15 $11,267.77 N/A N/A 9.28%*+ 10.22%+
Class Y--12/1/91 N/A $19,655.00 $20,241.19 $19,001.51 N/A 22.31% N/A 15.90%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares, of 5.00% for Class B shares, and of 1.00% for Class C Shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 3.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
Small Company Growth Fund
CLASS Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
MUNDER SMALL COMPANY GROWTH FUND
Lipper Small Co.
Class Y Russell 2000 Growth Funds Average
------- ------------ --------------------
<S> <C> <C> <C>
12/1/91 $10,000.00 $10,000.00 $10,000.00
$10,970.00 $10,800.00 $11,110.00
$11,261.00 $11,675.90 $11,668.00
2/29/92 $11,501.00 $12,016.00 $11,897.00
$10,951.00 $11,609.00 $11,441.00
$10,755.00 $11,203.00 $10,952.00
$10,715.00 $11,351.00 $10,943.00
$10,333.00 $10,815.00 $10,461.00
$10,959.00 $11,191.00 $10,806.00
$10,969.00 $10,875.00 $10,578.00
$11,341.00 $11,126.00 $10,827.00
$11,907.00 $11,480.00 $11,257.00
$12,611.00 $12,358.00 $12,178.00
$12,922.00 $12,789.00 $12,580.00
$13,294.00 $13,222.00 $12,889.00
2/28/93 $12,782.00 $12,916.00 $12,451.00
$13,284.00 $13,335.00 $12,883.00
$12,490.00 $12,969.00 $12,470.00
$13,013.00 $13,543.00 $13,130.00
$13,083.00 $13,628.00 $13,225.00
$13,063.00 $13,816.00 $13,314.00
$13,605.00 $14,413.00 $13,965.00
$14,128.00 $14,819.00 $14,429.00
$14,249.00 $15,201.00 $14,654.00
$13,716.00 $14,700.00 $14,164.00
$14,620.00 $15,203.00 $14,766.00
$14,580.00 $15,680.00 $15,170.00
2/28/94 $14,723.00 $15,623.00 $15,163.00
$13,822.00 $14,798.00 $14,335.00
$13,976.00 $14,886.00 $14,335.00
$13,607.00 $14,719.00 $14,077.00
$12,829.00 $14,219.00 $13,587.00
$13,054.00 $14,453.00 $13,817.00
$14,088.00 $15,258.00 $14,620.00
$14,211.00 $15,207.00 $14,707.00
$14,467.00 $15,147.00 $14,905.00
$13,710.00 $14,535.00 $14,347.00
$14,251.00 $14,926.00 $14,649.00
$13,779.00 $14,738.00 $14,498.00
2/28/95 $14,282.00 $15,351.00 $15,099.00
$14,805.00 $15,615.00 $15,488.00
$14,569.00 $15,962.00 $15,696.00
$14,784.00 $16,237.00 $15,941.00
6/30/95 $15,717.00 $17,079.00 $16,871.00
$17,142.00 $18,063.00 $18,104.00
$17,173.00 $18,436.00 $18,414.00
$17,778.00 $18,766.00 $18,901.00
$17,634.00 $17,926.00 $18,320.00
$18,167.00 $18,680.00 $18,971.00
$18,528.00 $19,173.00 $19,233.00
$18,671.00 $19,152.00 $19,111.00
$19,398.00 $19,749.00 $19,889.00
$20,621.00 $20,151.00 $20,361.00
$22,538.00 $21,228.00 $21,823.00
$23,772.00 $22,065.00 $22,689.00
6/30/96 $23,364.00 $21,159.00 $21,844.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
Lipper Small One One Since Since
Class and With Without Russell Co. Growth Year Year Inception Inception
Inception Date Load Load 2000 Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ------- ------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--11/23/92 $17,732.00* $18,764.00 $17,121.22 $17,762.65 40.12%* 48.28% 17.23%* 19.09%
Class B--4/28/94 $16,199.00** $16,499.00 $14,213.70 $15,268.57 42.26%* 47.26% 24.86%** 25.92%
Class C--9/26/95 $13,097.00* $13,197.00 $11,275.27 $11,620.67 N/A N/A 30.97%*+ 31.97%+
Class Y--12/1/91 N/A $23,364.00 $21,159.44 $21,844.13 N/A 48.65% N/A 20.35%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares, of 5.00% for Class B shares, and of 1.00% for Class C Shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 3.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
All figures cited here represent past performance and do not guarantee future
results. Investment return and principal value of an investment will fluctuate
so that an investor's shares upon redemption may be worth more or less than
original cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments assuming
reinvestment of dividends. Aggregate total returns are derived by dividing the
initial investment into the value of shares held at the end of a period and
subtracting one from the result.
National Association of Real Estate Investment Trusts ("NAREIT") are equity
real estate investment trusts which are defined as those which derive more
than 75% of their income from equity investments in real estate assets. The
NAREIT equity index includes all tax qualified real estate investment trusts
listed on the New York Stock Exchange, American Stock Exchange, or the NASDAQ
National Market System. The Russell 2000 Index is a capitalization weighted
total return index which is comprised of 2,000 of the smallest capitalized
U.S. domiciled companies whose stock is traded in the United States on the New
York Stock Exchange, American Stock Exchange and the NASDAQ. Figures for the
S&P 500, an unmanaged index of common stock prices, include reinvestment of
dividends.
xi
Mid-Cap Growth Fund
CLASS Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
S&P 400 Lipper Mid-Cap
Class Y Mid-Cap Index Funds Average
------- ------------- --------------
<S> <C> <C> <C>
8/14/95 $10,000.00 $10,000.00 $10,000.00
$10,370.00 $10,186.99 $10,124.00
$10,620.00 $10,433.92 $10,391.00
$10,270.00 $10,165.46 $10,135.00
$10,480.00 $10,609.43 $10,486.00
$10,750.00 $10,583.03 $10,560.00
$10,730.00 $10,736.00 $10,623.00
$11,170.00 $11,100.00 $11,004.00
$11,270.00 $11,234.00 $11,189.00
$12,010.00 $11,577.00 $11,769.00
$12,280.00 $11,734.00 $12,106.00
6/30/96 $11,580.00 $11,558.00 $11,740.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
One One Since Since
Class and With Without S&P 400 Lipper Mid-Cap Year Year Inception Inception
Inception Date Load Load Mid-Cap Index Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ------------- -------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--12/22/95 $10,355.00* $10,957.00 $11,370.02 $11,975.03 N/A N/A 3.55%* 9.57%
Class B--1/26/96 $10,408.00* $10,908.00 $10,765.22 $11,049.31 N/A N/A 4.08%* 9.08%
Class C--11/9/95 $10,967.00* $11,067.00 $11,246.21 $11,619.84 N/A N/A 9.67%* 10.67%
Class Y--8/14/95 N/A $11,580.00 $11,558.15 $11,740.95 N/A N/A N/A 15.80%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares, of 5.00% for Class B shares, and of 1.00% for Class C Shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 4.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
International Equity Fund
CLASS Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
Lipper
FT/S&P Actuaries International
Class Y MSCI EAFE Index World Index ex U.S. Funds Average
------- --------------- ------------------ -------------
<S> <C> <C> <C> <C>
12/1/91 $10,000.00 $10,000.00 $10,000.00 $10,000.00
$10,520.00 $10,516.00 $10,468.17 $10,489.00
$10,646.00 $10,292.00 $10,212.86 $10,568.00
2/29/92 $10,776.00 $ 9,923.00 $ 9,847.48 $10,571.00
$10,486.00 $ 9,268.00 $ 9,185.01 $10,207.00
$10,736.00 $ 9,312.00 $ 9,164.46 $10,461.00
$11,187.00 $ 9,935.00 $ 9,776.53 $10,977.00
$10,766.00 $ 9,464.00 $ 9,303.71 $10,673.00
$10,416.00 $ 9,222.00 $ 9,048.41 $10,290.00
$10,175.00 $ 9,800.00 $ 9,673.08 $10,361.00
$10,195.00 $ 9,607.00 $ 9,434.35 $10,137.00
$10,365.00 $ 9,103.00 $ 8,962.20 $ 9,838.00
$10,616.00 $ 9,188.00 $ 9,072.94 $ 9,888.00
$10,656.00 $ 9,236.00 $ 9,101.46 $10,020.00
$10,522.00 $ 9,235.00 $ 9,104.77 $10,056.00
2/28/93 $10,785.00 $ 9,514.00 $ 9,413.79 $10,284.00
$11,140.00 $10,343.00 $10,247.35 $10,861.00
$11,363.00 $11,325.00 $11,196.29 $11,420.00
$11,576.00 $11,564.00 $11,509.28 $11,656.00
$11,485.00 $11,384.00 $11,227.45 $11,419.00
$11,870.00 $11,782.00 $11,728.12 $11,794.00
$12,549.00 $12,418.00 $12,279.84 $12,517.00
$12,448.00 $12,139.00 $11,949.60 $12,475.00
$13,238.00 $12,513.00 $12,269.23 $13,065.00
$12,833.00 $11,419.00 $11,226.79 $12,564.00
$14,120.00 $12,243.00 $12,029.84 $13,817.00
$14,515.00 $13,279.00 $13,043.10 $14,636.00
2/28/94 $13,867.00 $13,242.00 $13,023.21 $14,298.00
$12,823.00 $12,671.00 $12,514.59 $13,631.00
$13,127.00 $13,209.00 $13,032.49 $13,984.00
$13,238.00 $13,133.00 $12,991.38 $13,956.00
$12,691.00 $13,319.00 $13,148.54 $13,796.00
$13,279.00 $13,447.00 $13,286.47 $14,176.00
$13,644.00 $13,765.00 $13,604.77 $14,629.00
$13,248.00 $13,332.00 $13,234.08 $14,280.00
$13,563.00 $13,776.00 $13,657.16 $14,546.00
$13,076.00 $13,114.00 $12,980.11 $13,854.00
$12,942.00 $13,196.00 $13,035.81 $13,689.00
$12,328.00 $12,689.00 $12,483.42 $13,018.00
2/28/95 $12,574.00 $12,652.00 $12,385.28 $13,071.00
$12,921.00 $13,442.00 $13,157.16 $13,536.00
$13,361.00 $13,947.00 $13,684.35 $13,993.00
$13,555.00 $13,781.00 $13,503.98 $14,140.00
6/30/95 $13,749.00 $13,539.00 $13,260.61 $14,163.00
$14,403.00 $14,382.00 $14,098.14 $14,922.00
$14,097.00 $13,833.00 $13,585.54 $14,610.00
$14,475.00 $14,104.00 $13,815.65 $14,875.00
$14,383.00 $13,725.00 $13,454.91 $14,584.00
$14,465.00 $14,106.00 $13,862.07 $14,742.00
$14,757.00 $14,675.00 $14,397.88 $15,174.00
$14,911.00 $14,735.00 $14,533.82 $15,487.00
$14,932.00 $14,785.00 $14,523.21 $15,555.00
$15,149.00 $15,099.00 $14,822.28 $15,803.00
$15,623.00 $15,538.00 $15,295.76 $16,284.00
$15,540.00 $15,252.00 $15,043.77 $16,230.00
6/30/96 $15,623.00 $15,338.00 $15,117.37 $16,352.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
------------------------------------------------------------- ---------------------------------------------
FT/S&P
Actuaries Lipper One One Since Since
Class and With Without MSCI World Index Int'l Funds Year Year Inception Inception
Inception Date Load Load EAFE Index ex U.S. Average w/load w/out load w/load w/out load
- -------------- ---- ------- ---------- ----------- ----------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--11/30/92 $13,814.00* $14,618.00 $16,692.03 $16,667.15 $16,471.94 7.13%* 13.37% 9.44%* 11.18%
Class B--3/9/94 $10,927.00** $11,227.00 $11,582.74 $11,611.58 $11,379.72 7.53%* 12.53% 3.91%** 5.14%
Class C--9/29/95 $10,606.00* $10,706.00 $10,874.98 $10,945.75 $11,005.91 N/A N/A 6.06%*+ 7.06%+
Class Y--12/1/91 N/A $15,623.00 $15,338.23 $15,122.01 $16,352.57 N/A 13.63% N/A 10.23%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares, of 5.00% for Class B shares, and of 1.00% for Class C Shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 4.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
Please refer to the preceding and following pages for additional information
on performance and index description.
xii
Index 500 Fund
CLASS A, B & Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment--Class A
[ Performance Chart ]
<TABLE>
<CAPTION>
Class A--2.5% Lipper S&P 500
Front-end load S&P 500 Funds Average
-------------- ------- -------------
<S> <C> <C> <C>
12/9/92 $ 9,750.00 $10,000.00 $10,000.00
$ 9,758.00 $10,122.00 $10,120.00
$ 9,848.00 $10,207.00 $10,198.00
2/28/93 $ 9,978.00 $10,346.00 $10,335.00
$10,187.00 $10,564.00 $10,550.00
$ 9,937.00 $10,309.00 $10,288.00
$10,200.00 $10,584.00 $10,557.00
$10,226.00 $10,615.00 $10,582.00
$10,180.00 $10,572.00 $10,535.00
$10,559.00 $10,972.00 $10,927.00
$10,479.00 $10,888.00 $10,843.00
$10,696.00 $11,113.00 $11,063.00
$10,590.00 $11,007.00 $10,953.00
$10,714.00 $11,140.00 $11,082.00
$11,077.00 $11,519.00 $11,451.00
2/28/94 $10,765.00 $11,206.00 $11,132.00
$10,301.00 $10,718.00 $10,646.00
$10,422.00 $10,856.00 $10,782.00
$10,583.00 $11,033.00 $10,953.00
$10,323.00 $10,763.00 $10,682.00
$10,653.00 $11,116.00 $11,028.00
$11,078.00 $11,571.00 $11,472.00
$10,789.00 $11,288.00 $11,189.00
$11,046.00 $11,542.00 $11,438.00
$10,646.00 $11,122.00 $11,021.00
$10,793.00 $11,287.00 $11,181.00
$11,071.00 $11,579.00 $11,468.00
2/28/95 $11,498.00 $12,030.00 $11,909.00
$11,839.00 $12,384.00 $12,254.00
$12,184.00 $12,749.00 $12,609.00
$12,659.00 $13,257.00 $13,104.00
6/30/95 $12,944.00 $13,565.00 $13,402.00
$13,366.00 $14,015.00 $13,839.00
$13,394.00 $14,050.00 $13,871.00
$13,961.00 $14,642.00 $14,448.00
$13,914.00 $14,590.00 $14,396.00
$14,517.00 $15,230.00 $15,021.00
$14,800.00 $15,523.00 $15,303.00
$15,297.00 $16,051.00 $15,816.00
$15,407.00 $16,200.00 $15,955.00
$15,559.00 $16,356.00 $16,110.00
$15,789.00 $16,597.00 $16,343.00
$16,179.00 $17,024.00 $16,754.00
6/30/96 $16,247.00 $17,089.00 $16,816.00
</TABLE>
A Hypothetical Illustration of a $10,000 Initial Investment--Class B
[ Performance Chart ]
<TABLE>
<CAPTION>
Class B--3.0% Lipper S&P 500
Back-end load S&P 500 Funds Average
------------- ------- -------------
<S> <C> <C> <C>
10/31/95 $10,000.00 $10,000.00 $10,000.00
$10,434.00 $10,438.00 $10,433.00
$10,634.00 $10,639.00 $10,628.00
$10,991.00 $11,001.00 $10,984.00
$11,063.00 $11,103.00 $11,078.00
$11,173.00 $11,210.00 $11,185.00
$11,331.00 $11,375.00 $11,345.00
$11,611.00 $11,668.00 $11,629.00
6/30/96 $11,351.00 $11,713.00 $11,674.00
</TABLE>
A Hypothetical Illustration of a $10,000 Initial Investment--Class Y
[ Performance Chart ]
<TABLE>
<CAPTION>
Lipper S&P 500
Class Y S&P 500 Funds Average
------- ------- -------------
<S> <C> <C> <C>
12/1/91 $10,000.00 $10,000.00 $10,000.00
$11,110.00 $11,141.00 $11,132.00
$10,904.00 $10,934.00 $10,922.00
2/29/92 $11,044.00 $11,075.00 $11,061.00
$10,824.00 $10,860.00 $10,844.00
$11,137.00 $11,179.00 $11,156.00
$11,177.00 $11,233.00 $11,207.00
$11,016.00 $11,066.00 $11,038.00
$11,462.00 $11,518.00 $11,479.00
$11,228.00 $11,283.00 $11,241.00
$11,350.00 $11,415.00 $11,368.00
$11,385.00 $11,455.00 $11,401.00
$11,774.00 $11,844.00 $11,784.00
$11,908.00 $11,989.00 $11,925.00
$12,017.00 $12,089.00 $12,016.00
2/28/93 $12,176.00 $12,254.00 $12,178.00
$12,431.00 $12,512.00 $12,435.00
$12,126.00 $12,210.00 $12,127.00
$12,446.00 $12,536.00 $12,439.00
$12,478.00 $12,572.00 $12,471.00
$12,422.00 $12,522.00 $12,416.00
$12,884.00 $12,996.00 $12,879.00
$12,787.00 $12,896.00 $12,773.00
$13,052.00 $13,163.00 $13,032.00
$12,922.00 $13,037.00 $12,903.00
$13,073.00 $13,195.00 $13,057.00
$13,517.00 $13,643.00 $13,492.00
2/28/94 $13,147.00 $13,273.00 $13,114.00
$12,569.00 $12,695.00 $12,542.00
$12,725.00 $12,858.00 $12,700.00
$12,922.00 $13,068.00 $12,905.00
$12,604.00 $12,748.00 $12,587.00
$13,016.00 $13,167.00 $12,993.00
$13,546.00 $13,705.00 $13,517.00
$13,203.00 $13,370.00 $13,184.00
$13,513.00 $13,670.00 $13,476.00
$13,025.00 $13,173.00 $12,984.00
$13,212.00 $13,368.00 $13,173.00
$13,553.00 $13,714.00 $13,511.00
2/28/95 $14,075.00 $14,248.00 $14,031.00
$14,500.00 $14,668.00 $14,440.00
$14,923.00 $15,100.00 $14,859.00
$15,505.00 $15,702.00 $15,441.00
6/30/95 $15,861.00 $16,067.00 $15,794.00
$16,378.00 $16,599.00 $16,311.00
$16,424.00 $16,641.00 $16,348.00
$17,114.00 $17,342.00 $17,029.00
$17,056.00 $17,280.00 $16,969.00
$17,796.00 $18,038.00 $17,706.00
$18,144.00 $18,386.00 $18,035.00
$18,765.00 $19,011.00 $18,643.00
$18,899.00 $19,188.00 $18,811.00
$19,089.00 $19,372.00 $18,996.00
$19,359.00 $19,658.00 $19,267.00
$19,849.00 $20,164.00 $19,751.00
6/30/96 $19,923.00 $20,241.00 $19,828.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
One One Since Since
Class and With Without Lipper S&P 500 Year Year Inception Inception
Inception Date Load Load S&P 500 Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ------- -------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--12/9/92 $16,247.00* $16,663.00 $17,089.63 $16,816.81 22.38%* 25.51% 14.61%* 15.43%
Class B--10/31/95 $11,351.00* $11,651.00 $11,713.00 $11,674.20 N/A N/A 13.51*+ 16.51%+
Class Y--12/1/91 N/A $19,923.00 $20,241.19 $19,828.83 N/A 25.61% N/A 16.24%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 2.50% for Class A
Shares, and of 3.00% for Class B Shares.
+ Returns represent aggregate total returns since Class B has not been in
existence for a full year.
</TABLE>
All figures cited here represent past performance and do not guarantee future
results. Investment return and principal value of an investment will fluctuate
so that an investor's shares upon redemption may be worth more or less than
original cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments assuming
reinvestment of dividends. Aggregate total returns are derived by dividing the
initial investment into the value of shares held at the end of a period and
subtracting one from the result.
The Morgan Stanley (MSCI) EAFE Index is an unmanaged index used to portray the
pattern of common stock price movement in Europe, Australia, New Zealand and
countries in the Far East. The index is weighted based on the market
capitalization of those stocks in the Index and includes gross reinvestment of
dividends. The FT/S&P Actuaries World Index ex U.S. is an unmanaged index used
to portray global equity markets excluding the U.S. The Index is a weighted
based on the market capitalization of those stocks selected to represent each
country and includes gross reinvestment of dividends. The Index is a more
appropriate comparison for the International Equity Fund than the Morgan
Stanley (MSCI) EAFE Index because the Advisor believes the Index reflects a
broader market exposure and a security selection process more representative
of the Fund's process. Figures for the S&P 500 and the S&P 400 Mid-Cap
indicies, unmanaged indicies of common stock prices, include reinvestment of
dividends.
xiii
Growth & Income Fund
CLASS Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
Lipper Equity
Class Y S&P 500 Income Funds Average
------- ------- --------------------
<S> <C> <C> <C>
7/5/94 $10,000.00 $10,000.00 $10,000.00
$10,090.00 $10,328.00 $10,263.00
$10,190.00 $10,750.00 $10,597.00
$10,140.00 $10,487.00 $10,402.00
$10,167.00 $10,723.00 $10,460.00
$ 9,905.00 $10,333.00 $10,058.00
$ 9,951.00 $10,486.00 $10,124.00
$10,246.00 $10,757.00 $10,312.00
2/28/95 $10,602.00 $11,176.00 $10,649.00
$10,809.00 $11,506.00 $10,902.00
$11,066.00 $11,844.00 $11,149.00
$11,456.00 $12,317.00 $11,486.00
6/30/95 $11,523.00 $12,602.00 $11,632.00
$11,678.00 $13,020.00 $11,957.00
$11,740.00 $13,053.00 $12,090.00
$12,251.00 $13,603.00 $12,486.00
$12,272.00 $13,555.00 $12,341.00
$12,856.00 $14,149.00 $12,875.00
$13,361.00 $14,422.00 $13,189.00
$13,700.00 $14,912.00 $13,494.00
$13,657.00 $15,051.00 $13,615.00
$13,799.00 $15,195.00 $13,797.00
$13,682.00 $15,419.00 $13,959.00
$13,842.00 $15,816.00 $14,185.00
6/30/96 $13,972.00 $15,877.00 $14,200.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
Lipper One One Since Since
Class and With Without Equity Income Year Year Inception Inception
Inception Date Load Load S&P 500 Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ------- -------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--8/8/94 $13,012.00* $13,769.00 $15,372.63 $13,828.38 14.25%* 20.90 14.90%* 18.38%
Class B--8/9/94 $13,186.00** $13,586.00 $15,372.63 $13,828.38 15.09%* 20.09 15.74%** 17.58%
Class C--12/5/95 $10,457.00* $10,557.00 $11,220.98 $11,022.63 N/A N/A 4.57%*+ 5.57%+
Class Y--7/5/94 N/A $13,972.00 $15,877.07 $14,200.10 N/A 21.25% N/A 18.34%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares, of 5.00% for Class B shares, and of 1.00% for Class C Shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 4.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
Value Fund
CLASS Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
S&P/BARRA Lipper Growth &
Class Y Value Index Income Funds Average
------- ----------- --------------------
<S> <C> <C> <C>
8/18/95 $10,000.00 $10,000.00 $10,000.00
$10,080.00 $10,000.00 $10,000.00
$10,350.00 $10,347.00 $10,296.00
$10,450.00 $10,186.00 $10,161.00
$10,830.00 $10,719.00 $10,602.00
$10,741.00 $11,016.00 $10,774.00
$11,111.00 $11,346.00 $11,060.00
$11,342.00 $11,452.00 $11,210.00
$11,551.00 $11,720.00 $11,359.00
$11,662.00 $11,840.00 $11,553.00
$11,812.00 $12,018.00 $11,767.00
6/30/96 $11,652.00 $11,961.00 $11,736.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
Lipper Growth One One Since Since
Class and With Without S&P/BARRA & Income Year Year Inception Inception
Inception Date Load Load Value Index Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ----------- ------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--9/14/95 $10,579.00* $11,195.00 $11,961.57 $11,736.13 N/A N/A 5.79%* 11.95%
Class B--9/19/95 $10,609.00* $11,109.00 $11,559.78 $11,395.11 N/A N/A 6.09%* 11.09%
Class C--2/9/96 $10,090.00* $10,190.00 $10,542.30 $10,633.30 N/A N/A 0.90%* 1.90%
Class Y--8/18/95 N/A $11,652.00 $11,961.57 $11,736.13 N/A N/A N/A 16.52%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares, of 5.00% for Class B shares, and of 1.00% for Class C Shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 4.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
Please refer to the preceding and following pages for additional information
on performance and index description.
xiv
Balanced Fund
CLASS Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
Lipper Balanced
Class Y S&P 500 Funds Average
------- ------- -------------
<S> <C> <C> <C>
4/13/93 $10,000.00 $10,000.00 $10,000.00
$ 9,860.00 $ 9,758.00 $ 9,885.00
$10,000.00 $10,018.00 $10,040.00
$10,070.00 $10,047.00 $10,155.00
$10,061.00 $10,007.00 $10,177.00
$10,352.00 $10,386.00 $10,481.00
$10,403.00 $10,306.00 $10,515.00
$10,444.00 $10,519.00 $10,619.00
$10,192.00 $10,419.00 $10,479.00
$10,484.00 $10,545.00 $10,662.00
$10,663.00 $10,903.00 $10,920.00
2/28/94 $10,481.00 $10,607.00 $10,711.00
$10,026.00 $10,146.00 $10,316.00
$ 9,977.00 $10,276.00 $10,335.00
$ 9,886.00 $10,444.00 $10,384.00
$ 9,571.00 $10,188.00 $10,201.00
$ 9,773.00 $10,522.00 $10,431.00
$10,059.00 $10,953.00 $10,697.00
$ 9,946.00 $10,685.00 $10,498.00
$10,084.00 $10,925.00 $10,549.00
$ 9,797.00 $10,528.00 $10,297.00
$ 9,940.00 $10,683.00 $10,398.00
$ 9,981.00 $10,960.00 $10,536.00
2/28/95 $10,281.00 $11,387.00 $10,855.00
$10,473.00 $11,723.00 $11,048.00
$10,587.00 $12,068.00 $11,245.00
$10,930.00 $12,549.00 $11,620.00
6/30/95 $11,264.00 $12,840.00 $11,852.00
$11,609.00 $13,266.00 $12,123.00
$11,672.00 $13,299.00 $12,228.00
$11,968.00 $13,860.00 $12,506.00
$11,926.00 $13,810.00 $12,470.00
$12,274.00 $14,416.00 $12,865.00
$12,280.00 $14,694.00 $13,044.00
$12,577.00 $15,193.00 $13,286.00
$12,704.00 $15,334.00 $13,334.00
$12,786.00 $15,482.00 $13,382.00
$12,956.00 $15,710.00 $13,511.00
$13,180.00 $16,115.00 $13,679.00
6/30/96 $13,218.00 $16,176.00 $13,691.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
Lipper One One Since Since
Class and With Without Balanced Year Year Inception Inception
Inception Date Load Load S&P 500 Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ------- -------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--4/30/93 $12,591.00* $13,323.00 $16,577.29 $13,823.66 10.62%* 17.06% 7.55%* 9.48%
Class B--6/2194 $12,973.00** $13,273.00 $15,887.07 $13,434.32 11.24%* 16.24% 13.72%** 15.01%
Class C--1/24/96 $10,520.00* $10,620.00 $10,646.96 $10,317.01 N/A N/A 5.20%*+ 6.20%+
Class Y--4/13/93 N/A $13,218.00 $16,176.57 $13,691.92 N/A 17.35% N/A 9.07%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares of the Balanced Fund, of 5.00% for Class B shares of the Bond
Fund, and of 1.00% for Class C Shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 4.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
Bond Fund
CLASS Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
Lehman Govt/Corp Lipper Corp. Debt
Class Y Bond Index A Rated Funds Average
------- ---------------- ---------------------
<S> <C> <C> <C>
12/1/91 $10,000.00 $10,000.00 $10,000.00
$10,400.00 $10,337.00 $10,632.00
$10,168.00 $10,184.00 $10,194.00
2/29/92 $10,270.00 $10,238.00 $10,243.00
$10,253.00 $10,182.00 $10,191.00
$10,331.00 $10,242.00 $10,247.00
$10,513.00 $10,441.00 $10,456.00
$10,672.00 $10,594.00 $10,610.00
$10,892.00 $10,865.00 $10,894.00
$10,925.00 $10,962.00 $10,985.00
$10,576.00 $11,112.00 $11,127.00
$10,381.00 $10,942.00 $10,941.00
$10,373.00 $10,933.00 $10,939.00
$10,518.00 $11,121.00 $11,123.00
$10,727.00 $11,362.00 $11,361.00
2/28/93 $10,962.00 $11,598.00 $11,619.00
$11,049.00 $11,638.00 $11,659.00
$11,135.00 $11,727.00 $11,734.00
$11,099.00 $11,721.00 $11,739.00
$11,343.00 $11,987.00 $12,004.00
$11,404.00 $12,064.00 $12,099.00
$11,671.00 $12,341.00 $12,381.00
$11,730.00 $12,384.00 $12,417.00
$11,801.00 $12,434.00 $12,475.00
$11,659.00 $12,294.00 $12,307.00
$11,693.00 $12,347.00 $12,372.00
$11,870.00 $12,533.00 $12,560.00
2/28/94 $11,580.00 $12,261.00 $12,280.00
$11,306.00 $11,961.00 $11,950.00
$11,200.00 $11,862.00 $11,824.00
$11,190.00 $11,840.00 $11,787.00
$11,184.00 $11,812.00 $11,746.00
$11,353.00 $12,048.00 $11,956.00
$11,364.00 $12,053.00 $11,957.00
$11,212.00 $11,870.00 $11,771.00
$11,179.00 $11,857.00 $11,740.00
$11,151.00 $11,836.00 $11,719.00
$11,224.00 $11,914.00 $11,806.00
$11,416.00 $12,143.00 $12,011.00
2/28/95 $11,661.00 $12,424.00 $12,284.00
$11,727.00 $12,508.00 $12,373.00
$11,880.00 $12,682.00 $12,544.00
$12,329.00 $13,214.00 $13,056.00
6/30/95 $12,416.00 $13,319.00 $13,142.00
$12,395.00 $13,268.00 $13,086.00
$12,539.00 $13,438.00 $13,271.00
$12,667.00 $13,574.00 $13,414.00
$12,836.00 $13,774.00 $13,607.00
$13,019.00 $14,000.00 $13,820.00
$13,218.00 $14,207.00 $14,034.00
$13,297.00 $14,295.00 $14,101.00
$13,032.00 $13,992.00 $13,790.00
$12,951.00 $13,874.00 $13,682.00
$12,856.00 $13,779.00 $13,577.00
$12,828.00 $13,756.00 $13,554.00
6/30/96 $12,976.00 $13,940.00 $13,722.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
Lipper Lipper Corp. One One Since Since
Class and With Without Govt/Corp Debt A Rated Year Year Inception Inception
Inception Date Load Load Bond Index Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ---------- ------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--12/9/92 $11,882.00* $12,377.00 $12,749.43 $12,549.17 0.07%* 4.24% 4.96%* 6.17%
Class B--3/13/96 $9,530.00* $10,022.00 $9,962.65 $9,941.63 N/A N/A -4.70%*+ 0.22%+
Class C--3/25/96 $9,851.00* $9,951.00 $10,047.01 $10,021.81 N/A N/A -1.49%*+ -0.49%+
Class Y--12/1/91 N/A $12,976.00 $13,940.07 $13,722.64 N/A 4.50% N/A 5.85%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares of the Balanced Fund, of 5.00% for Class B shares of the Bond
Fund, and of 1.00% for Class C Shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 4.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
Figures for the S&P 500, an unmanaged index of common stock prices, include
reinvestment of dividends. The S&P/BARRA Value Index is an unmanaged,
capitalization-weighted index of all the stocks in the S&P 500 that have low
price-to-book ratios. The Index is designed so that approximately 50% of the
S&P 500 market capitalization is in the Value Index. The Lehman Brothers
Government/Corporate Bond Index is a weighted composite of (i) Lehman
Brothers Government Bond Index, which is comprised of all publicly issued,
non-convertible debt of the U.S. Government or any agency thereof,
quasi-federal corporations, and corporate debt guaranteed by the U.S.
Government and (ii) Lehman Brothers Corporate Bond Index, which is comprised
of all public fixed-rate, non-convertible investment-grade domestic corporate
debt, excluding collateralized mortgage obligations.
xv
Intermediate Bond Fund
CLASS Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
Lipper Short
Lehman Int. Invst.Grade
Govt/Corp Debt Funds
Class Y Bond Index Average
------- ---------- ------------
<S> <C> <C> <C>
12/1/91 $10,000.00 $10,000.00 $10,000.00
$10,180.00 $10,244.00 $10,136.00
$10,130.00 $10,151.00 $10,125.00
2/29/92 $10,172.00 $10,191.00 $10,164.00
$10,158.00 $10,151.00 $10,161.00
$10,237.00 $10,240.00 $10,234.00
$10,356.00 $10,399.00 $10,330.00
$10,498.00 $10,553.00 $10,429.00
$10,679.00 $10,763.00 $10,547.00
$10,781.00 $10,870.00 $10,622.00
$10,935.00 $11,018.00 $10,708.00
$10,814.00 $10,875.00 $10,648.00
$10,755.00 $10,837.00 $10,643.00
$10,871.00 $10,979.00 $10,724.00
$11,058.00 $11,192.00 $10,845.00
2/28/93 $11,246.00 $11,369.00 $10,950.00
$11,295.00 $11,414.00 $10,994.00
$11,377.00 $11,506.00 $11,055.00
$11,339.00 $11,480.00 $11,058.00
$11,510.00 $11,661.00 $11,147.00
$11,547.00 $11,689.00 $11,188.00
$11,730.00 $11,874.00 $11,285.00
$11,780.00 $11,924.00 $11,321.00
$11,807.00 $11,956.00 $11,357.00
$11,699.00 $11,889.00 $11,356.00
$11,747.00 $11,943.00 $11,410.00
$11,893.00 $12,076.00 $11,488.00
2/28/94 $11,670.00 $11,897.00 $11,415.00
$11,444.00 $11,701.00 $11,324.00
$11,338.00 $11,621.00 $11,277.00
$11,340.00 $11,629.00 $11,290.00
$11,332.00 $11,631.00 $11,299.00
$11,453.00 $11,798.00 $11,387.00
$11,492.00 $11,835.00 $11,427.00
$11,378.00 $11,726.00 $11,412.00
$11,368.00 $11,725.00 $11,431.00
$11,337.00 $11,672.00 $11,416.00
$11,393.00 $11,713.00 $11,393.00
$11,554.00 $11,910.00 $11,501.00
2/28/95 $11,761.00 $12,157.00 $11,636.00
$11,824.00 $12,227.00 $11,698.00
$11,948.00 $12,378.00 $11,802.00
$12,304.00 $12,752.00 $12,002.00
6/30/95 $12,363.00 $12,838.00 $12,071.00
$12,358.00 $12,839.00 $12,110.00
$12,470.00 $12,956.00 $12,188.00
$12,563.00 $13,050.00 $12,255.00
$12,697.00 $13,195.00 $12,354.00
$12,852.00 $13,369.00 $12,457.00
$12,994.00 $13,509.00 $12,551.00
$13,084.00 $13,626.00 $12,647.00
$12,930.00 $13,466.00 $12,599.00
$12,845.00 $13,396.00 $12,589.00
$12,787.00 $13,349.00 $12,602.00
$12,759.00 $13,339.00 $12,624.00
6/30/96 $12,893.00 $13,480.00 $12,711.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
Lehman Int. Lipper Short One One Since Since
Class and With Without Govt/Corp Invst. Grade Debt Year Year Inception Inception
Inception Date Load Load Bond Index Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ---------- ------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--11/24/92 $11,396.00* $11,871.00 $12,439.12 $11,934.96 -0.23%* 3.92% 3.70%* 4.88%
Class B--10/25/94 $10,776.00** $11,176.00 $11,497.41 $11,102.11 -1.67%* 3.22% 4.54%** 6.83%
Class C--4/19/96 $9,939.00* $10,039.00 $10,098.59 $10,084.78 N/A N/A -0.61%*+ 0.39%+
Class Y--12/1/91 N/A $12,893.00 $13,480.95 $12,711.08 N/A 4.29% N/A 5.70%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares, of 5.00% for Class B shares, and of 1.00% for Class C Shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 4.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
U.S. Government Income Fund
CLASS Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
Lehman Govt/Corp Lipper U.S. Govt
Class Y Bond Index Debt Funds Average
------- ---------- ------------------
<S> <C> <C> <C>
7/5/94 $10,000.00 $10,000.00 $10,000.00
$10,130.00 $10,199.00 $10,168.00
$10,128.00 $10,204.00 $10,165.00
$ 9,978.00 $10,049.00 $10,005.00
$ 9,957.00 $10,038.00 $ 9,977.00
$ 9,935.00 $10,020.00 $ 9,957.00
$10,002.00 $10,086.00 $10,030.00
$10,161.00 $10,280.00 $10,210.00
2/28/95 $10,385.00 $10,518.00 $10,440.00
$10,451.00 $10,589.00 $10,492.00
$10,577.00 $10,736.00 $10,621.00
$10,991.00 $11,186.00 $11,028.00
6/30/95 $11,075.00 $11,276.00 $11,095.00
$11,035.00 $11,232.00 $11,041.00
$11,167.00 $11,376.00 $11,178.00
$11,276.00 $11,491.00 $11,292.00
$11,430.00 $11,660.00 $11,453.00
$11,607.00 $11,852.00 $11,624.00
$11,751.00 $12,027.00 $11,795.00
$11,795.00 $12,102.00 $11,848.00
$11,578.00 $11,845.00 $11,572.00
$11,507.00 $11,746.00 $11,464.00
$11,444.00 $11,665.00 $11,372.00
$11,426.00 $11,645.00 $11,331.00
6/30/96 $11,582.00 $11,801.00 $11,462.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
Lehman Lipper U.S. One One Since Since
Class and With Without Govt/Corp Govt. Debt Year Year Inception Inception
Inception Date Load Load Bond Index Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ---------- ------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--7/28/94 $11,036.00* $11,496.00 $11,569.96 $11,268.89 0.16%* 4.34% 5.26%* 7.51%
Class B--9/6/95 $9,758.00* $10,242.00 $10,373.37 $10,270.56 N/A N/A -2.42%*+ 2.42%+
Class Y--7/5/94 N/A $11,582.00 $11,801.22 $11,462.17 N/A 4.58% N/A 7.67%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares, of 5.00% for Class B shares, and of 1.00% for Class C Shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 4.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
Please refer to the preceding and following pages for additional information
on performance and index description.
xvi
Michigan Triple Tax-Free Bond Fund
CLASS A SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
Lipper Michigan
Class A--4.0% Lehman Muni Bond Muni Debt
Front-end load 15 Yr. Index Funds Average
-------------- ---------------- ----------------
<S> <C> <C> <C>
1/31/94 $ 9,600.00 $10,000.00 $10,000.00
2/28/94 $ 9,407.00 $10,000.00 $10,000.00
$ 8,940.00 $ 9,525.00 $ 9,584.00
$ 9,010.00 $ 9,632.00 $ 9,635.00
$ 9,075.00 $ 9,732.00 $ 9,723.00
$ 9,012.00 $ 9,659.00 $ 9,661.00
$ 9,181.00 $ 9,851.00 $ 9,834.00
$ 9,206.00 $ 9,883.00 $ 9,860.00
$ 9,060.00 $ 9,716.00 $ 9,695.00
$ 8,889.00 $ 9,524.00 $ 9,490.00
$ 8,721.00 $ 9,321.00 $ 9,289.00
$ 8,883.00 $ 9,551.00 $ 9,536.00
$ 9,148.00 $ 9,873.00 $ 9,840.00
2/28/95 $ 9,392.00 $10,199.00 $10,126.00
$ 9,485.00 $10,325.00 $10,201.00
$ 9,484.00 $10,330.00 $10,199.00
$ 9,772.00 $10,688.00 $10,523.00
6/30/95 $ 9,658.00 $10,566.00 $10,384.00
$ 9,712.00 $10,668.00 $10,444.00
$ 9,838.00 $10,829.00 $10,567.00
$ 9,930.00 $10,927.00 $10,639.00
$10,086.00 $11,086.00 $10,819.00
$10,254.00 $11,283.00 $11,022.00
$10,362.00 $11,401.00 $11,145.00
$10,426.00 $11,506.00 $11,205.00
$10,298.00 $11,433.00 $11,108.00
$10,114.00 $11,264.00 $10,919.00
$10,048.00 $11,215.00 $10,872.00
$10,036.00 $11,205.00 $10,866.00
6/30/96 $10,166.00 $11,332.00 $10,986.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
Lipper Michigan One One Since Since
Class and With Without Lehman Muni Muni Debt Year Year Inception Inception
Inception Date Load Load 15 Year Index Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ------------- --------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--2/15/94 $10,166.00* $10,589.00 $11,332.92 $10,986.00 1.04%* 5.25% 0.70%* 2.44%
Class B--7/5/94 $10,724.00** $11,124.00 $11,731.98 $11,372.00 -0.54%* 4.46% 3.58%** 5.51%
Class Y--1/3/94 N/A $10,602.00 $11,136.35 $10,814.00 N/A 5.51% N/A 2.37%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares, and of 5.00% for Class B shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 4.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
Tax-Free Bond Fund
CLASS Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
Lipper Michigan
Lehman Muni Bond Muni Debt
Class Y 15 Yr. Index Funds Average
------- ---------------- ----------------
<S> <C> <C> <C>
7/21/94 $10,000.00 $10,000.00 $10,000.00
$10,070.00 $10,000.00 $10,000.00
$10,110.00 $10,031.00 $10,025.00
$ 9,992.00 $ 9,862.00 $ 9,860.00
$ 9,893.00 $ 9,667.00 $ 9,670.00
$ 9,717.00 $ 9,461.00 $ 9,465.00
$ 9,918.00 $ 9,695.00 $ 9,699.00
$10,145.00 $10,021.00 $ 9,989.00
2/28/95 $10,408.00 $10,352.00 $10,285.00
$10,522.00 $10,481.00 $10,377.00
$10,542.00 $10,485.00 $10,377.00
$10,852.00 $10,849.00 $10,700.00
6/30/95 $10,738.00 $10,725.00 $10,579.00
$10,824.00 $10,828.00 $10,648.00
$10,953.00 $10,992.00 $10,764.00
$11,015.00 $11,091.00 $10,828.00
$11,162.00 $11,252.00 $10,993.00
$11,386.00 $11,453.00 $11,206.00
$11,512.00 $11,573.00 $11,333.00
$11,577.00 $11,679.00 $11,390.00
$11,482.00 $11,604.00 $11,302.00
$11,289.00 $11,433.00 $11,123.00
$11,204.00 $11,383.00 $11,074.00
$11,194.00 $11,374.00 $11,080.00
6/30/96 $11,317.00 $11,503.00 $11,182.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
--------------------------------------------------------- --------------------------------------------
Lipper One One Since Since
Class and With Without Lehman Muni Muni Debt Year Year Inception Inception
Inception Date Load Load 15 Year Index Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ------------- --------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--10/9/95 $9,780.00* $10,187.00 $10,371.35 $10,326.35 N/A N/A -2.20%*+ 1.87%+
Class B--12/6/94 $10,906.00** $11,306.00 $12,158.46 $11,818.74 -0.64%* 4.36% 5.69%** 8.15%
Class Y--7/21/94 N/A $11,317.00 $11,503.30 $11,182.88 N/A 5.38% N/A 6.57%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 5.50% for Class A
Shares, and of 5.00% for Class B shares.
** Based upon the declining CDSC schedule as defined in the prospectus,
figures reflect the deduction of a 4.00% back-end load.
+ Returns represent aggregate total returns since Class C has not been in
existence for a full year.
</TABLE>
All figures cited here represent past performance and do not guarantee future
results. Investment return and principal value of an investment will fluctuate
so that an investor's shares upon redemption may be worth more or less than
original cost.
Average annual total returns are historical in nature and measure net
investment income and capital gain or loss from portfolio investments
assuming reinvestment of dividends. Aggregate total returns are derived by
dividing the initial investment into the value of shares held at the end of a
period and subtracting one from the result.
The Lehman Brothers Government/Corporate Bond Index is a weighted composite of
(i) Lehman Brothers Government Bond Index, which is comprised of all
publicly issued, non-convertible debt of the U.S. Government or
any agency thereof, quasi-federal corporations, and corporate debt guaranteed
by the U.S. Government and (ii) Lehman Brothers Corporate Bond Index, which
is comprised of all public fixed-rate, non-convertible investment-grade
domestic corporate debt, excluding collateralized mortgage obligations. The
Lehman Brothers Intermediate Government/Corporate Bond Index is a weighted
composite of (i) Lehman Brothers Intermediate Government Bond Index, which
is comprised of all publicly issued, non-convertible debt of the U.S.
Government or any agency thereof, quasi-federal corporations, and corporate
debt guaranteed by the U.S. Government with a maturity of between one and ten
years and (ii) Lehman Brothers Corporate Bond Index. The Lehman 15-year
Municipal Bond Index is a performance benchmark for the long-term
investment-grade tax-exempt bond market.
xvii
Tax-Free Intermediate Bond Fund
CLASS Y SHARE HYPOTHETICAL
A Hypothetical Illustration of a $10,000 Initial Investment
[ Performance Chart ]
<TABLE>
<CAPTION>
Lehman Lipper Lipper Muni
Muni Bond Short Muni Debt Funds
Class Y 10 Yr. Index Debt Funds Average Average
------- ------------ ------------------ -----------
<S> <C> <C> <C> <C>
12/17/92 $10,000.00 $10,000.00 $10,000.00 $10,000.00
$10,038.00 $10,000.00 $10,000.00 $10,000.00
$10,115.00 $10,168.00 $10,054.00 $10,113.00
2/28/93 $10,368.00 $10,540.00 $10,156.00 $10,514.00
$10,266.00 $10,386.00 $10,143.00 $10,389.00
$10,311.00 $10,485.00 $10,193.00 $10,505.00
$10,334.00 $10,522.00 $10,219.00 $10,565.00
$10,447.00 $10,729.00 $10,271.00 $10,749.00
$10,451.00 $10,756.00 $10,279.00 $10,747.00
$10,581.00 $10,979.00 $10,350.00 $10,988.00
$10,647.00 $11,114.00 $10,392.00 $11,120.00
$10,661.00 $11,132.00 $10,417.00 $11,143.00
$10,624.00 $11,041.00 $10,427.00 $11,025.00
$10,747.00 $11,277.00 $10,494.00 $11,248.00
$10,840.00 $11,415.00 $10,543.00 $11,375.00
2/28/94 $10,642.00 $11,103.00 $10,495.00 $11,078.00
$10,402.00 $10,679.00 $10,425.00 $10,591.00
$10,488.00 $10,813.00 $10,449.00 $10,628.00
$10,548.00 $10,882.00 $10,487.00 $10,726.00
$10,505.00 $10,835.00 $10,495.00 $10,653.00
$10,609.00 $11,017.00 $10,550.00 $10,846.00
$10,657.00 $11,060.00 $10,577.00 $10,874.00
$10,572.00 $10,911.00 $10,575.00 $10,694.00
$10,476.00 $10,752.00 $10,557.00 $10,486.00
$10,339.00 $10,549.00 $10,516.00 $10,265.00
$10,494.00 $10,739.00 $10,553.00 $10,524.00
$10,664.00 $11,017.00 $10,627.00 $10,841.00
2/28/95 $10,891.00 $11,328.00 $10,718.00 $11,166.00
$10,985.00 $11,482.00 $10,781.00 $11,268.00
$11,013.00 $11,495.00 $10,812.00 $11,268.00
$11,268.00 $11,860.00 $10,907.00 $11,617.00
6/30/95 $11,265.00 $11,786.00 $10,943.00 $11,489.00
$11,382.00 $11,959.00 $11,010.00 $11,565.00
$11,478.00 $12,122.00 $11,064.00 $11,691.00
$11,482.00 $12,199.00 $11,091.00 $11,761.00
$11,553.00 $12,340.00 $11,142.00 $11,944.00
$11,660.00 $12,506.00 $11,206.00 $12,176.00
$11,723.00 $12,582.00 $11,250.00 $12,317.00
$11,830.00 $12,710.00 $11,317.00 $12,379.00
$11,781.00 $12,657.00 $11,332.00 $12,286.00
$11,676.00 $12,500.00 $11,319.00 $12,096.00
$11,661.00 $12,456.00 $11,331.00 $12,042.00
$11,645.00 $12,421.00 $11,359.00 $12,052.00
6/30/96 $11,709.00 $12,539.00 $11,401.00 $12,165.00
</TABLE>
<TABLE>
<CAPTION>
GROWTH OF A $10,000 INVESTMENT AVERAGE ANNUAL TOTAL RETURNS
------------------------------------------------------------------- -----------------------------------------
Lipper Short Lipper One One Since Since
Class and With Without Lehman Muni Muni Debt Muni Debt Year Year Inception Inception
Inception Date Load Load 10 Year Index Funds Average Funds Average w/load w/out load w/load w/out load
- -------------- ---- ------- ------------- ------------- ------------- ------ ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class A--11/30/92 $11,193.00* $11,660.00 $12,685.49 $11,462.14 $12,316.57 -0.36%* 3.79% 3.20%* 4.38%
Class B--5/16/96 $9,540.00* $10,039.00 $10,095.10 $10,034.46 $10,096.12 N/A N/A -4.60%*+ 0.39%+
Class Y--12/17/92 N/A $11,709.00 $12,539.43 $11,401.52 $12,165.58 N/A 3.95% N/A 4.56%
<FN>
- ---------
* Reflects the deduction of the maximum sales charge of 4.00% for Class A
Shares, and of 5.00% for Class B Shares.
+ Returns represent aggregate total returns since Class B has not been in
existence for a full year.
</TABLE>
Please refer to the preceding and following pages for additional information
on performance and index description.
The Lehman 10-year Municipal Bond Index is a performance benchmark for the
intermediate term investment grade tax-exempt bond market.
xviii
