<PAGE>
September 30, 1999
STAGECOACH FUNDS-Registered Trademark-
Annual Report
ALLOCATION Funds
Asset Allocation Fund
Index Allocation Fund
September 30, 1999
Allocation Funds
<PAGE>
Allocation Funds TABLE OF CONTENTS
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LETTER TO SHAREHOLDERS................................1
PERFORMANCE AT A GLANCE AND INVESTMENT ADVISOR COMMENTARY
Asset Allocation Fund.............................3
Index Allocation Fund.............................9
PORTFOLIOS OF INVESTMENTS
Asset Allocation Fund............................15
Index Allocation Fund............................38
ALLOCATION FUNDS
Statement of Assets and Liabilities..............59
Statements of Operations.........................60
Statements of Changes in Net Assets..............62
Financial Highlights.............................64
Notes to Financial Statements....................72
INDEPENDENT AUDITORS' REPORT.........................82
NOTICE TO SHAREHOLDERS (UNAUDITED)...................83
SHAREHOLDERS' MEETING AND PROXY VOTING RESULTS
(UNAUDITED).........................................84
LIST OF ABBREVIATIONS................................85
NOT FDIC INSURED - NO BANK GUARANTEE - MAY LOSE VALUE
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<PAGE>
LETTER TO SHAREHOLDERS Allocation Funds
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TO OUR SHAREHOLDERS
Thank you for investing in the Stagecoach Funds.
It's a pleasure to provide you with the annual report for the period ended
September 30, 1999. This special report reflects a change in the Funds' fiscal
year-end to September 30 from February 28. We have made this change to improve
our reporting process, and it will not impact the performance or objective of
your investment. The report includes information about your investment over the
seven-month period, including economic and market trends, a performance summary,
a portfolio review and a strategic outlook.
Several noteworthy events happened during the period, including the Dow Jones
Industrial Average (DJIA) surpassing 10,000 points for the first time in its
104-year history in March, and the Federal Reserve Board (the "Fed") raising
short-term interest rates twice between March 1, 1999, and September 30, 1999.
Despite the two interest rate increases during the period, the nation's
economy remained strong. Earnings for U.S. companies were robust, we had a
budget surplus, inflation and unemployment remained low, and Americans seemed
confident about the future. We were also in the midst of a prolonged bull
market, which made U.S. capital markets attractive to investors both at home and
abroad. By the end of the period, however, stocks suffered a setback, hurt by
worries over the Fed tightening and higher interest rates early in the period,
and by a weaker dollar and rising commodity prices in September 1999. By late
September, both the DJIA and the S&P 500 Index were off from their summer peaks.
Investors can expect some potential volatility toward the end of the year due to
Y2K concerns. While U.S. companies generally have been preparing for the Year
2000, the effects of the Year 2000 cannot be predicted.
The interest rate increases were good news for the bond markets, which had
discounted the Fed tightening in response to a strong economy before the rate
increases. Although the DJIA reached record highs
1
<PAGE>
Allocation Funds LETTER TO SHAREHOLDERS
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during the period, stocks have not outperformed bonds since the May-June period.
The increases helped restore order to the bond market, which had seen prices
tumble and yields rise above 6% on the benchmark 30-year U.S. Treasury bond. The
higher the bond yields move, the more likely investors will be to switch from
stocks to the safety of bonds.
As you read through this report and review the performance of the Funds within
your portfolio, we encourage you to keep long-term goals in mind when making
investment decisions. We recommend that you continually review your investment
portfolio with your financial consultant to determine an appropriate mix of
investments to meet your ongoing needs. At the close of business November 5,
1999, the Stagecoach Funds were reorganized into the Wells Fargo Funds. The next
annual or semi-annual report you receive will reflect the Wells Fargo Funds.
Thank you again for your continued investment with the Stagecoach Funds.
Sincerely,
/s/ Michael J. Hogan
Michael J. Hogan
Executive Vice President,
Mutual Fund Group
Wells Fargo Bank, N.A.
/s/ R. Greg Feltus
R. Greg Feltus
Chairman and President
Stagecoach Funds, Inc.
2
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PERFORMANCE AT A GLANCE Asset Allocation Fund
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ASSET ALLOCATION FUND
AVERAGE ANNUAL RETURNS (%) (as of September 30, 1999)(1)
- --------------------------------------------------
EXCLUDING SALES CHARGE
- ---------------------------------------------
<TABLE>
<CAPTION>
7-MONTH 1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C> <C>
CLASS A 2.10 18.26 17.92 13.75
CLASS B 1.68 17.36 17.16 13.14
CLASS C 1.69 17.39 17.16 13.14
</TABLE>
INCLUDING SALES CHARGE(2)
- ---------------------------------------------
<TABLE>
<CAPTION>
7-MONTH 1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C> <C>
CLASS A (3.75) 11.47 16.53 13.08
CLASS B (3.34) 12.36 16.96 13.14
CLASS C 0.69 16.39 17.16 13.14
</TABLE>
GROWTH OF A $10,000 INVESTMENT(3)
- ---------------------------------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Stagecoach Asset
Allocation Fund Lehman Brothers IBC Taxable
Class A Shares U.S. Treasury Bond Index(5) Money Fund Average(6) S&P 500 Index(4)
Sep-89 $9,425 $10,000 $10,000 $10,000
Oct-89 $9,483 $10,403 $10,068 $9,768
Nov-89 $9,569 $10,498 $10,135 $9,967
Dec-89 $9,663 $10,479 $10,202 $10,206
Jan-90 $9,576 $10,102 $10,268 $9,521
Feb-90 $9,634 $10,072 $10,334 $9,644
Mar-90 $9,691 $10,031 $10,400 $9,899
Apr-90 $9,691 $9,791 $10,466 $9,652
May-90 $9,943 $10,246 $10,533 $10,593
Jun-90 $10,001 $10,481 $10,601 $10,522
Jul-90 $10,059 $10,581 $10,668 $10,488
Aug-90 $9,893 $10,134 $10,735 $9,540
Sep-90 $9,864 $10,252 $10,801 $9,076
Oct-90 $9,972 $10,487 $10,868 $9,037
Nov-90 $10,260 $10,924 $10,935 $9,621
Dec-90 $10,404 $11,140 $11,001 $9,889
Jan-91 $10,678 $11,272 $11,064 $10,320
Feb-91 $10,901 $11,321 $11,123 $11,058
Mar-91 $10,995 $11,366 $11,179 $11,326
Apr-91 $11,095 $11,511 $11,234 $11,353
May-91 $11,225 $11,500 $11,286 $11,843
Jun-91 $10,980 $11,415 $11,338 $11,300
Jul-91 $11,254 $11,585 $11,389 $11,827
Aug-91 $11,614 $11,985 $11,440 $12,107
Sep-91 $11,844 $12,363 $11,490 $11,904
Oct-91 $11,880 $12,390 $11,538 $12,064
Nov-91 $11,794 $12,459 $11,584 $11,578
Dec-91 $12,708 $13,202 $11,628 $12,902
Jan-92 $12,334 $12,787 $11,668 $12,662
Feb-92 $12,406 $12,863 $11,705 $12,826
Mar-92 $12,243 $12,721 $11,742 $12,577
Apr-92 $12,337 $12,709 $11,777 $12,946
May-92 $12,578 $13,062 $11,812 $13,009
Jun-92 $12,633 $13,251 $11,846 $12,816
Jul-92 $13,172 $13,802 $11,878 $13,339
Aug-92 $13,128 $13,898 $11,908 $13,066
Sep-92 $13,307 $14,117 $11,937 $13,220
Oct-92 $13,120 $13,821 $11,965 $13,265
Nov-92 $13,292 $13,873 $11,992 $13,717
Dec-92 $13,598 $14,253 $12,020 $13,885
Jan-93 $13,880 $14,660 $12,049 $14,001
Feb-93 $14,267 $15,149 $12,076 $14,192
Mar-93 $14,366 $15,187 $12,103 $14,492
Apr-93 $14,297 $15,304 $12,130 $14,141
May-93 $14,481 $15,355 $12,156 $14,520
Jun-93 $14,857 $16,004 $12,183 $14,562
Jul-93 $14,989 $16,262 $12,209 $14,504
Aug-93 $15,579 $16,916 $12,236 $15,054
Sep-93 $15,516 $16,975 $12,263 $14,939
Oct-93 $15,743 $17,097 $12,291 $15,248
Nov-93 $15,500 $16,659 $12,318 $15,102
Dec-93 $15,630 $16,713 $12,346 $15,285
Jan-94 $16,104 $17,114 $12,374 $15,805
Feb-94 $15,580 $16,412 $12,402 $15,376
Mar-94 $14,970 $15,692 $12,432 $14,705
Apr-94 $14,928 $15,506 $12,463 $14,894
May-94 $14,987 $15,404 $12,498 $15,138
Jun-94 $14,726 $15,258 $12,536 $14,767
Jul-94 $15,201 $15,775 $12,575 $15,252
Aug-94 $15,447 $15,658 $12,617 $15,877
Sep-94 $14,999 $15,165 $12,661 $15,489
Oct-94 $15,119 $15,112 $12,706 $15,837
Nov-94 $14,956 $15,201 $12,755 $15,260
Dec-94 $15,189 $15,435 $12,809 $15,487
Jan-95 $15,579 $15,831 $12,864 $15,888
Feb-95 $16,069 $16,280 $12,923 $16,507
Mar-95 $16,356 $16,421 $12,982 $16,993
Apr-95 $16,714 $16,713 $13,042 $17,493
May-95 $17,578 $17,996 $13,102 $18,191
Jun-95 $17,850 $18,205 $13,162 $18,613
Jul-95 $18,082 $17,915 $13,221 $19,230
Aug-95 $18,202 $18,312 $13,279 $19,278
Sep-95 $18,676 $18,649 $13,337 $20,091
Oct-95 $18,769 $19,170 $13,395 $20,019
Nov-95 $19,303 $19,650 $13,453 $20,897
Dec-95 $19,622 $20,172 $13,511 $21,300
Jan-96 $19,971 $20,172 $13,568 $22,024
Feb-96 $19,867 $19,198 $13,624 $22,229
Mar-96 $19,909 $18,816 $13,678 $22,442
Apr-96 $19,929 $18,502 $13,733 $22,772
May-96 $20,100 $18,405 $13,788 $23,358
Jun-96 $20,325 $18,798 $13,843 $23,446
Jul-96 $19,874 $18,805 $13,898 $22,410
Aug-96 $19,855 $18,570 $13,954 $22,883
Sep-96 $20,629 $19,083 $14,010 $24,169
Oct-96 $21,338 $19,832 $14,066 $24,836
Nov-96 $22,475 $20,495 $14,122 $26,711
Dec-96 $21,908 $19,993 $14,179 $26,182
Jan-97 $22,351 $19,851 $14,235 $27,816
Feb-97 $22,404 $19,859 $14,292 $28,036
Mar-97 $21,648 $19,350 $14,349 $26,886
Apr-97 $22,490 $19,817 $14,408 $28,489
May-97 $23,247 $20,039 $14,467 $30,229
Jun-97 $23,913 $20,425 $14,528 $31,574
Jul-97 $25,592 $21,624 $14,589 $34,085
Aug-97 $24,462 $21,023 $14,650 $32,176
Sep-97 $25,464 $21,601 $14,712 $33,936
Oct-97 $25,432 $22,329 $14,774 $32,802
Nov-97 $26,257 $22,626 $14,836 $34,321
Dec-97 $26,730 $23,006 $14,898 $34,912
Jan-98 $27,129 $23,473 $14,961 $35,296
Feb-98 $28,420 $23,304 $15,023 $37,840
Mar-98 $29,458 $23,353 $15,087 $39,778
Apr-98 $29,658 $23,440 $15,148 $40,184
May-98 $29,517 $23,887 $15,212 $39,492
Jun-98 $30,614 $24,442 $15,274 $41,096
Jul-98 $30,306 $24,339 $15,339 $40,660
Aug-98 $27,368 $25,437 $15,403 $34,785
Sep-98 $28,916 $26,368 $15,466 $37,014
Oct-98 $30,618 $25,970 $15,528 $40,020
Nov-98 $32,130 $26,169 $15,587 $42,445
Dec-98 $33,568 $26,115 $15,648 $44,941
Jan-99 $34,743 $26,350 $15,707 $46,820
Feb-99 $33,490 $25,053 $15,759 $48,276
Mar-99 $34,442 $24,996 $15,817 $50,207
Apr-99 $35,438 $25,031 $15,874 $52,150
May-99 $34,704 $24,638 $15,931 $50,919
Jun-99 $35,677 $24,376 $15,987 $53,689
Jul-99 $34,887 $24,259 $16,048 $52,013
Aug-99 $34,689 $24,165 $16,111 $51,755
Sep-99 $34,195 $24,344 $16,173 $50,337
</TABLE>
3
<PAGE>
Asset Allocation Fund INVESTMENT ADVISOR COMMENTARY
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ASSET ALLOCATION FUND
The Asset Allocation Fund (the "Fund") seeks to earn a high level of total
return over the long-term, including net realized and unrealized capital gains,
and net investment income, consistent with reasonable risk.
The Fund is a professionally managed portfolio, advised by Wells Fargo Bank,
N.A. Barclays Global Fund Advisors serves as the Fund's investment sub-advisor.
The Fund can invest in stocks, bonds and cash. The proprietary investment model
used to manage the Fund's assets constantly monitors expected levels of risk and
return to determine the best mix of investments among the different asset
classes. This process diversifies investments across asset classes while
managing investors' exposure to risk. The Fund invests in a changing mix of
S&P 500 stocks, long-term U.S. Treasury bonds, and money market instruments. The
Fund attempts to improve on the market's long-term risk-and-return tradeoff by
shifting its investments among asset classes in response to changes in the
investment environment.
PORTFOLIO DATA (as of September 30, 1999)
- ---------------------------------------------------------
<TABLE>
<S> <C>
WEIGHTED AVERAGE COUPON OF BOND
PORTFOLIO 6.96%
ESTIMATED WEIGHTED AVERAGE MATURITY OF
BOND PORTFOLIO 23.89 years
ESTIMATED DURATION OF BOND PORTFOLIO 11.95 years
</TABLE>
FUND DATA (as of September 30, 1999)
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
TOTAL NET ASSETS
($MM) 1,310.9 491.3 20.2
NET ASSET VALUE $25.84 $15.63 $15.68
</TABLE>
PERFORMANCE SUMMARY
As of September 30, 1999, the Fund's Class A share net asset value (NAV)
increased from $25.65 on February 28, 1999 to $25.84 on September 30, 1999.
During the seven-month period ended September 30, 1999, the Fund's Class A
shares reported a cumulative total return of 2.10%, excluding sales charges. The
Fund's Class A shares distributed $0.36 per share in dividend income
4
<PAGE>
INVESTMENT ADVISOR COMMENTARY Asset Allocation Fund
- ------------------------------------------------------------------------
and no capital gains during the period. The Fund remained mostly competitive in
comparison to its three benchmarks, based on the Fund's predominant allocation
in S&P 500 Index securities. The S&P 500 Index(4) gained 4.38%, the Lehman
Brothers U.S. Treasury Bond Index(5) returned 0.17%, and the IBC All Taxable
Money Fund Average(6) posted a 4.48% return over the seven-month period.
The Fund's significant equity investment has allowed investors to capture the
gains of a strong equity market. Gradually, decreasing its investment in this
market locked in those gains and placed the Fund in a more secure position
should speculation about a stock market drop become a reality. The positioning
of the Fund during the period was clear: bonds were becoming an attractive
investment relative to stocks, and the Fund's allocations in stocks were
decreased during the period.
MODEL ALLOCATION CHANGES (during seven-month reporting period)
- ---------------------------------------------------------
<TABLE>
<CAPTION>
DATE STOCKS BONDS CASH
---- ------ ----- ----
<S> <C> <C> <C>
MARCH 1999 75% 25% 0%
APRIL 1999 70% 30% 0%
MAY 1999 65% 35% 0%
JUNE 1999 60% 40% 0%
JULY 1999 60% 40% 0%
AUGUST 1999 60% 40% 0%
SEPTEMBER 1999 60% 40% 0%
</TABLE>
PORTFOLIO REVIEW
Every day the Fund's proprietary investment model analyzes extensive financial
data from numerous sources to determine an appropriate asset allocation and
recommends shifts in the Fund's investments based on changing economic
conditions. As opportunities arise among the three asset classes, the investment
model will shift Fund assets accordingly in 5 percent increments.
At the end of the last reporting period, the Fund was overweighted in
equities: approximately 80 percent of its assets were invested in large-cap
stocks and approximately 20 percent were invested in long-term govern-
5
<PAGE>
Asset Allocation Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
ment bonds. The Fund decreased its equity allocation by 5 percent in each of the
first four months of the period, returning to its "normal" allocation of
60 percent stocks and 40 percent bonds by the end of June, and maintained that
position throughout the rest of the period. This is not a "target" allocation,
but a measure of the level of risk tolerance for the Fund. Positive reports on
jobs, manufacturing and housing during the period indicated an extremely healthy
U.S. economy. These reports buoyed an already strong stock market, but started
the bond market on the slow but steady downward trend that defined its
performance during the first part of the period. Even the brief rally after the
Federal Reserve Board announced the first of two interest rate increases on
June 30 could not improve bond market performance. The Fed's second interest
rate increase of the period came in August. Fortunately, the performance of the
Fund's stock investments made up for the performance of its bond investments
during the period. Stocks, however, suffered a setback during the third quarter
of 1999, hurt by worries over the Federal Reserve Board tightening and higher
interest rates earlier in the period, and by a weaker dollar and rising
commodity prices in September. By late September, both the Dow Jones Industrial
Average and the S&P 500 Index were down from their summer peaks. For the equity
market, the tendency has been to grow complacent with positive returns. Adding
some historical perspective, third quarter of 1998 and third quarter of 1999
mark the worst two quarters for the S&P 500 Index in nine years. In fact with
one minor exception, those quarters are the only quarters with negative
performance in the last five years. Third quarter of 1999 was the only three
month period since August-October 1990 that the S&P 500 posted consecutive
monthly losses.
PORTFOLIO ALLOCATION(7)
(as of September 30, 1999)
- ----------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Bonds 40%
Stocks 60%
</TABLE>
6
<PAGE>
INVESTMENT ADVISOR COMMENTARY Asset Allocation Fund
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TOP 10 EQUITY HOLDINGS(8) (as of September 30, 1999)
- ---------------------------------------------------------
<TABLE>
<CAPTION>
NAME % OF PORTFOLIO
<S> <C>
MICROSOFT CORPORATION 2.6%
GENERAL ELECTRIC COMPANY 2.2%
INTEL CORPORATION 1.4%
CISCO SYSTEMS INCORPORATED 1.2%
IBM CORPORATION 1.2%
WALMART STORES INCORPORATED 1.2%
LUCENT TECHNOLOGIES INCORPORATED 1.1%
EXXON CORPORATION 1.0%
MERCK & COMPANY INCORPORATED 0.8%
CITIGROUP INCORPORATED 0.8%
</TABLE>
STRATEGIC OUTLOOK
Despite the interest rate increases during the period, the stock market
continued to be strong. Interest rate pressures are expected to persist due to
ongoing signs of a strong economy. The primary impact of higher, short-term
interest rates should be to slow corporate earnings growth, which may limit the
rise in the stock market. The interest rate increases during the period helped
restore order to the bond market. However, the Federal Reserve Board's move to a
tightening bias reintroduced uncertainty among bond investors. The higher the
bond yields move, the more likely investors will be to switch from stocks to the
safety of bonds.
The Fund will continue to apply its quantitative strategies to allocate assets
among stocks, bonds, and cash, taking into consideration news and events that
affect the economy and companies in general. Overall, we feel that the Fund is
well positioned for the upcoming months and we expect it to produce solid
long-term performance.
1 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. Figures quoted represent past performance, which is no
guarantee of future results.
The Fund's manager has voluntarily waived all or a portion of its management
fees or assumed responsibility for other expenses,
7
<PAGE>
Asset Allocation Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
which increases total return to shareholders. Without these waivers and
reimbursements, the Fund's returns would have been lower. There is no
guarantee such reductions will continue.
Performance shown for Class A shares of the Stagecoach Asset Allocation Fund
for periods prior to January 2, 1992, reflects performance of the shares of
the Asset Allocation Fund for the Wells Fargo Investment Trust for Retirement
Programs, a predecessor portfolio with the same investment objective and
policies as the Stagecoach Asset Allocation Fund. Performance shown or
advertised for Class B shares of the Stagecoach Fund for periods prior to
January 1, 1995, reflects performance of the Class A shares of the Stagecoach
Fund, adjusted to reflect Class B share sales charges and expenses; for
periods prior to January 2, 1992, Class B share performance reflects
performance of the predecessor portfolio, adjusted to reflect Class B sales
charges and expenses. Performance shown or advertised for the Class C shares
of the Stagecoach Asset Allocation Fund for periods prior to April 1998,
reflects performance of the Class B shares, adjusted for Class C share sales
charges and expenses.
2 For Class A shares, the maximum front-end sales charge is 5.75%. The maximum
contingent deferred sales charge for Class B shares is 5.00%. The maximum
contingent deferred sales charge for Class C shares is 1.00%.
3 The returns for Class B and Class C shares of the Fund will vary from the
results shown due to different expenses and load structures.
The accompanying chart compares the performance of the Stagecoach Asset
Allocation Fund Class A shares since inception of the predecessor portfolio
with the S&P 500 Index, the Lehman Brothers U.S. Treasury Bond Index and the
IBC Taxable Money Fund Average. The chart assumes a hypothetical $10,000
initial investment in Class A shares and reflects all operating expenses and
assumes the maximum initial sales charge of 5.75%. The Fund is a
professionally managed mutual fund.
4 The S&P 500 Index is a trademark of Standard & Poor's Corporation. The
S&P 500 Index is an unmanaged index of 500 widely held common stocks
representing, among others, industrial, financial, utility and transportation
companies listed or traded on national exchanges or over-the-counter markets.
5 The Lehman Brothers U.S. Treasury Bond Index is an unmanaged index comprised
of U.S. Treasury bonds with 20-year or longer maturities.
6 The IBC All Taxable Money Fund Average is an average of money market funds
whose returns are subject to federal, state and local income taxes. The yields
are higher than those of tax-free funds because of the kinds of instruments in
which taxable funds can invest. The average is not available directly for
investment.
7 Represents recommended asset mix. Actual portfolio allocation may differ
depending on current market activity.
8 The Top Ten Equity holdings is calculated based on the securities market value
divided by total market value of the portfolio.
8
<PAGE>
PERFORMANCE AT A GLANCE Index Allocation Fund
- ------------------------------------------------------------------------
INDEX ALLOCATION FUND
AVERAGE ANNUAL RETURNS (%) (as of September 30, 1999)(1)
- --------------------------------------------------
EXCLUDING SALES CHARGE
- ---------------------------------------------
<TABLE>
<CAPTION>
7-MONTH 1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C> <C>
CLASS A 3.68 26.22 21.25 15.22
CLASS B 3.18 25.27 20.34 14.42
CLASS C 3.23 25.31 20.36 14.44
</TABLE>
INCLUDING SALES CHARGE(2)
- ---------------------------------------------
<TABLE>
<CAPTION>
7-MONTH 1-YEAR 5-YEAR 10-YEAR
<S> <C> <C> <C> <C>
CLASS A (2.27) 18.96 19.81 14.54
CLASS B (1.82) 20.27 20.14 14.42
CLASS C 2.23 24.31 20.36 14.44
</TABLE>
GROWTH OF A $10,000 INVESTMENT(3)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Stagecoach Index
Allocation Fund Lehman Brothers IBC Taxable
Class A Shares U.S. Treasury Bond Index(5) Money Fund Average(6) S&P 500 Index(4)
Sep-89 $9,425 $10,000 $10,000 $10,000
Oct-89 $9,434 $10,403 $10,068 $9,768
Nov-89 $9,516 $10,498 $10,135 $9,967
Dec-89 $9,597 $10,479 $10,202 $10,206
Jan-90 $9,506 $10,102 $10,268 $9,521
Feb-90 $9,552 $10,072 $10,334 $9,644
Mar-90 $9,635 $10,031 $10,400 $9,899
Apr-90 $9,592 $9,791 $10,466 $9,652
May-90 $9,864 $10,246 $10,533 $10,593
Jun-90 $9,911 $10,481 $10,601 $10,522
Jul-90 $9,956 $10,581 $10,668 $10,488
Aug-90 $9,795 $10,134 $10,735 $9,540
Sep-90 $9,766 $10,252 $10,801 $9,076
Oct-90 $9,862 $10,487 $10,868 $9,037
Nov-90 $10,142 $10,924 $10,935 $9,621
Dec-90 $10,277 $11,140 $11,001 $9,889
Jan-91 $10,524 $11,272 $11,064 $10,320
Feb-91 $10,723 $11,321 $11,123 $11,058
Mar-91 $10,813 $11,366 $11,179 $11,326
Apr-91 $10,910 $11,511 $11,234 $11,353
May-91 $11,032 $11,500 $11,286 $11,843
Jun-91 $10,789 $11,415 $11,338 $11,300
Jul-91 $11,053 $11,585 $11,389 $11,827
Aug-91 $11,411 $11,985 $11,440 $12,107
Sep-91 $11,555 $12,363 $11,490 $11,904
Oct-91 $11,635 $12,390 $11,538 $12,064
Nov-91 $11,458 $12,459 $11,584 $11,578
Dec-91 $12,403 $13,202 $11,628 $12,902
Jan-92 $12,062 $12,787 $11,668 $12,662
Feb-92 $12,136 $12,863 $11,705 $12,826
Mar-92 $11,961 $12,721 $11,742 $12,577
Apr-92 $12,089 $12,709 $11,777 $12,946
May-92 $12,293 $13,062 $11,812 $13,009
Jun-92 $12,311 $13,251 $11,846 $12,816
Jul-92 $12,809 $13,802 $11,878 $13,339
Aug-92 $12,733 $13,898 $11,908 $13,066
Sep-92 $12,907 $14,117 $11,937 $13,220
Oct-92 $12,819 $13,821 $11,965 $13,265
Nov-92 $13,104 $13,873 $11,992 $13,717
Dec-92 $13,325 $14,253 $12,020 $13,885
Jan-93 $13,546 $14,660 $12,049 $14,001
Feb-93 $13,895 $15,149 $12,076 $14,192
Mar-93 $14,103 $15,187 $12,103 $14,492
Apr-93 $13,868 $15,304 $12,130 $14,141
May-93 $14,126 $15,355 $12,156 $14,520
Jun-93 $14,306 $16,004 $12,183 $14,562
Jul-93 $14,330 $16,262 $12,209 $14,504
Aug-93 $14,838 $16,916 $12,236 $15,054
Sep-93 $14,715 $16,975 $12,263 $14,939
Oct-93 $14,988 $17,097 $12,291 $15,248
Nov-93 $14,834 $16,659 $12,318 $15,102
Dec-93 $14,996 $16,713 $12,346 $15,285
Jan-94 $15,474 $17,114 $12,374 $15,805
Feb-94 $15,046 $16,412 $12,402 $15,376
Mar-94 $14,452 $15,692 $12,432 $14,705
Apr-94 $14,541 $15,506 $12,463 $14,894
May-94 $14,680 $15,404 $12,498 $15,138
Jun-94 $14,361 $15,258 $12,536 $14,767
Jul-94 $14,806 $15,775 $12,575 $15,252
Aug-94 $15,239 $15,658 $12,617 $15,877
Sep-94 $14,828 $15,165 $12,661 $15,489
Oct-94 $14,969 $15,112 $12,706 $15,837
Nov-94 $14,674 $15,201 $12,755 $15,260
Dec-94 $14,893 $15,435 $12,809 $15,487
Jan-95 $15,256 $15,831 $12,864 $15,888
Feb-95 $15,772 $16,280 $12,923 $16,507
Mar-95 $16,121 $16,421 $12,982 $16,993
Apr-95 $16,515 $16,713 $13,042 $17,493
May-95 $17,274 $17,996 $13,102 $18,191
Jun-95 $17,670 $18,205 $13,162 $18,613
Jul-95 $18,222 $17,915 $13,221 $19,230
Aug-95 $18,250 $18,312 $13,279 $19,278
Sep-95 $18,985 $18,649 $13,337 $20,091
Oct-95 $18,900 $19,170 $13,395 $20,019
Nov-95 $19,694 $19,650 $13,453 $20,897
Dec-95 $20,062 $20,172 $13,511 $21,300
Jan-96 $20,674 $20,172 $13,568 $22,024
Feb-96 $20,835 $19,198 $13,624 $22,229
Mar-96 $21,017 $18,816 $13,678 $22,442
Apr-96 $21,222 $18,502 $13,733 $22,772
May-96 $21,514 $18,405 $13,788 $23,358
Jun-96 $21,668 $18,798 $13,843 $23,446
Jul-96 $20,992 $18,805 $13,898 $22,410
Aug-96 $21,124 $18,570 $13,954 $22,883
Sep-96 $22,034 $19,083 $14,010 $24,169
Oct-96 $22,700 $19,832 $14,066 $24,836
Nov-96 $24,016 $20,495 $14,122 $26,711
Dec-96 $23,481 $19,993 $14,179 $26,182
Jan-97 $24,522 $19,851 $14,235 $27,816
Feb-97 $24,623 $19,859 $14,292 $28,036
Mar-97 $23,756 $19,350 $14,349 $26,886
Apr-97 $24,769 $19,817 $14,408 $28,489
May-97 $25,749 $20,039 $14,467 $30,229
Jun-97 $26,655 $20,425 $14,528 $31,574
Jul-97 $28,591 $21,624 $14,589 $34,085
Aug-97 $27,181 $21,023 $14,650 $32,176
Sep-97 $28,449 $21,601 $14,712 $33,936
Oct-97 $27,732 $22,329 $14,774 $32,802
Nov-97 $28,926 $22,626 $14,836 $34,321
Dec-97 $29,393 $23,006 $14,898 $34,912
Jan-98 $29,678 $23,473 $14,961 $35,296
Feb-98 $31,743 $23,304 $15,023 $37,840
Mar-98 $33,282 $23,353 $15,087 $39,778
Apr-98 $33,566 $23,440 $15,148 $40,184
May-98 $32,960 $23,887 $15,212 $39,492
Jun-98 $34,251 $24,442 $15,274 $41,096
Jul-98 $33,871 $24,339 $15,339 $40,660
Aug-98 $28,975 $25,437 $15,403 $34,785
Sep-98 $30,783 $26,368 $15,466 $37,014
Oct-98 $33,271 $25,970 $15,528 $40,020
Nov-98 $35,246 $26,169 $15,587 $42,445
Dec-98 $37,201 $26,115 $15,648 $44,941
Jan-99 $38,697 $26,350 $15,707 $46,820
Feb-99 $37,477 $25,053 $15,759 $48,276
Mar-99 $38,925 $24,996 $15,817 $50,207
Apr-99 $40,401 $25,031 $15,874 $52,150
May-99 $39,417 $24,638 $15,931 $50,919
Jun-99 $41,539 $24,376 $15,987 $53,689
Jul-99 $40,219 $24,259 $16,048 $52,013
Aug-99 $39,983 $24,165 $16,111 $51,755
Sep-99 $38,855 $24,344 $16,173 $50,337
</TABLE>
9
<PAGE>
Index Allocation Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
INDEX ALLOCATION FUND
The Index Allocation Fund (the "Fund") seeks to earn over the long-term a high
level of total return, that is, income and capital appreciation combined,
consistent with the assumption of reasonable risk, by pursuing an asset
allocation strategy whereby its investments are allocated, based on changes in
market conditions, among three asset classes: common stocks in the S&P 500
Index, U.S. Treasury bonds in the Lehman Brothers U.S. Treasury Bond Index, and
money market instruments.
The Fund is a professionally managed portfolio, advised by Wells Fargo Bank,
N.A. Barclays Global Fund Advisors serves as the Fund's investment sub-advisor.
FUND DATA (as of September 30, 1999)
- ---------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
<S> <C> <C> <C>
TOTAL NET ASSETS
($MM) 94.7 19.4 77.5
NET ASSET VALUE $19.72 $24.30 $24.32
</TABLE>
PERFORMANCE SUMMARY
As of September 30, 1999, the Fund's Class A share net asset value (NAV) was
$19.72, increasing $0.68 during the seven-month reporting period from $19.04 on
February 28, 1999. The Fund's Class A shares distributed $0.02 per share in
dividend income and no capital gains during this period.
During the seven-month reporting period ended September 30, 1999, the Fund's
Class A shares reported a cumulative total return of 3.68%, excluding sales
charges. The Fund remained competitive in comparison to its three benchmarks,
based on the Fund's predominant allocation in S&P 500 Index securities. The
S&P 500 Index(4) gained 4.38%, the Lehman Brothers U.S. Treasury Bond Index(5)
returned 0.17%, and the IBC All Taxable Money Fund Average(6) posted a 4.48%
return over the seven-month period.
The large-cap U.S. equity market was off to an exciting start at the beginning
of the period. The Dow Jones Industrial Average broke 10,000 in March. High U.S.
10
<PAGE>
INVESTMENT ADVISOR COMMENTARY Index Allocation Fund
- ------------------------------------------------------------------------
equity market returns could be traced to the health of the U.S. economy, the
solid performance of many Internet or "dot-com" stocks, and the new role of the
individual investor.
With low unemployment, economic expansion and the lessening global financial
turmoil, investors moved away from bonds into equities early in the period,
causing the bond market to tumble. Even the brief rally after the Federal
Reserve Board announced the first of two interest rate increases on June 30
could not improve the overall bond market performance. The Fed's second interest
rate increase of the period came in August.
We believe stocks continue to be a more attractive investment than bonds in
the current economic environment, and have weighted the portfolio accordingly.
PORTFOLIO REVIEW
Every day the Fund's proprietary investment model analyzes extensive financial
data from numerous sources to determine an appropriate asset allocation and to
recommend shifts in the Fund's investments based on changing economic
conditions. As opportunities arise among the three asset classes, the investment
model will shift Fund assets accordingly in 5% increments.
We manage the allocation of investments in the Fund's portfolio based on the
assumption that the Fund's "normal" allocation is 100% stocks and no bonds. This
is not a "target" allocation, but a measure of the level of risk tolerance for
the Fund.
During the period ended September 30, 1999, the Fund maintained an asset
allocation of 95% stocks and 5% cash. The Fund's portfolio is comprised
predominately of stocks that make up the S&P 500 Index, including some of the
biggest corporations in the U.S. Investors tend to favor the relatively
consistent earnings that these stocks traditionally offer in comparison to
small-capitalization stocks.
Given the strong performance of U.S. markets and renewed faith in the U.S.
economy, stocks continued to be viewed as attractive investments for the Fund as
of September 30, 1999. Although stocks suffered a setback in the third quarter
of 1999, hurt by worries over the
11
<PAGE>
Index Allocation Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
Federal Reserve Board tightening and higher interest rates early in the period,
and by a weaker dollar and rising commodity prices in September. By late
September, both the Dow Jones Industrial Average and the S&P 500 Index were off
from their summer peaks. For the equity market, the tendency has been to grow
complacent with positive returns. Adding some historical perspective, third
quarter of 1998 and third quarter of 1999 mark the worst two quarters for the
S&P 500 Index in nine years. In fact with one minor exception, those quarters
are the only quarters with negative performance in the last five years. Third
quarter of 1999 was the only three month period since August-October 1990 that
the S&P 500 posted consecutive monthly losses. We will continue to evaluate
expected returns and economic conditions through our quantitative investment
model to provide an optimal asset mix.
PORTFOLIO ALLOCATION(7)
(as of September 30, 1999)
- ----------------------
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
Cash 5%
Stocks 95%
</TABLE>
TOP 10 EQUITY HOLDINGS(8) (as of September 30, 1999)
- ---------------------------------------------------------
<TABLE>
<CAPTION>
NAME % OF PORTFOLIO
<S> <C>
MICROSOFT CORPORATION 4.2%
GENERAL ELECTRIC COMPANY 3.5%
INTEL CORPORATION 2.2%
CISCO SYSTEMS INCORPORATED 2.0%
IBM CORPORATION 2.0%
WALMART STORES INCORPORATED 1.9%
LUCENT TECHNOLOGIES INCORPORATED 1.8%
EXXON CORPORATION 1.7%
MERCK & COMPANY 1.4%
CITIGROUP INCORPORATED 1.3%
</TABLE>
STRATEGIC OUTLOOK
Despite the interest rate increases during the period, the stock market
continued to be strong. Interest rate pressures are expected to persist due to
ongoing signs of a strong economy. The primary impact of higher, short-term
interest rates should be to slow corporate earnings growth, which may limit the
rise in the stock market. The interest rate increases during the period helped
restore order to the bond market. However, the Federal
12
<PAGE>
INVESTMENT ADVISOR COMMENTARY Index Allocation Fund
- ------------------------------------------------------------------------
Reserve Board's move to a tightening bias reintroduced uncertainty among bond
investors. The higher the bond yields move, the more likely investors will be to
switch from stocks to the safety of bonds.
The Fund will continue to apply its quantitative strategies to allocate assets
among stocks, bonds and cash. In addition, news and events that affect the
economy and companies in general are all components that comprise the model.
Overall, we feel that the Fund is well positioned for the upcoming months and we
expect it to produce solid long-term performance.
1 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. Figures quoted represent past performance, which is no
guarantee of future results.
The Fund's manager has voluntarily waived all or a portion of its management
fees or assumed responsibility for other expenses, which reduces operating
expenses and increases total return to shareholders. Without these waivers and
reimbursements, the Fund's returns would have been lower. There is no
guarantee such reductions will continue.
Performance shown for Class A shares of the Stagecoach Index Allocation Fund,
reflects performance of the Class A shares of the Overland Express Index
Allocation Fund (the accounting suvivor of a merger of the Funds on
December 12, 1997). Performance shown or advertised for Class B and Class C
shares of the Stagecoach Fund for periods prior to December 12, 1997, reflects
performance of the Class A shares of the Overland Fund adjusted to reflect
sales charges and expenses of the Class B and Class C shares, respectively.
For periods prior to July 1, 1993, Class B and Class C share performance of
the Stagecoach Fund reflects performance of the Class A shares of the Overland
Fund adjusted to reflect the shares charges and expenses of the Class B and
Class C shares, respectively.
2 For Class A shares, the maximum front-end sales charge is 5.75%. The maximum
contingent deferred sales charge for Class B shares is 5.00%. The maximum
contingent deferred sales charge for Class C shares is 1.00%.
3 The returns for Class B and Class C shares of the Fund will vary from the
results shown due to different expenses and load structures.
The accompanying chart compares the performance of the Stagecoach Index
Allocation Fund Class A shares since inception of the predecessor portfolio
with the S&P 500 Index, the Lehman Brothers U.S. Treasury Bond Index and the
IBC Taxable Money Fund Average. The chart assumes a hypothetical $10,000
initial
13
<PAGE>
Index Allocation Fund INVESTMENT ADVISOR COMMENTARY
- ------------------------------------------------------------------------
investment in Class A shares and reflects all operating expenses and assumes
the maximum initial sales charge of 5.75%. The Fund is a professionally
managed mutual fund.
4 The S&P 500 Index is a trademark of Standard & Poor's Corporation. The
S&P 500 Index is an unmanaged index of 500 widely held common stocks
representing, among others, industrial, financial, utility and transportation
companies listed or traded on national exchanges or over-the-counter markets.
5 The Lehman Brothers U.S. Treasury Bond Index is an unmanaged index comprised
of U.S. Treasury bonds with 20-year or longer maturities.
6 The IBC All Taxable Money Fund Average is an average of money market funds
whose returns are subject to federal, state and local income taxes. The yields
are higher than those of tax-free funds because of the kinds of instruments in
which taxable funds can invest. The average is not available directly for
investment.
7 Represents recommended asset mix. Actual portfolio allocation may differ
depending on current market activity.
8 The Top Ten Equity holdings is calculated based on the securities market value
divided by total market value of the portfolio.
14
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Asset Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS - 58.71%
AGRICULTURAL PRODUCTION - CROP - 0.05%
24,509 Pioneer Hi-Bred International Incorporated $ 827,022 $ 975,765
AMUSEMENT & RECREATION SERVICES - 0.02%
12,196 Harrah's Entertainment Incorporated+ $ 244,549 $ 338,439
APPAREL & ACCESSORY STORES - 0.28%
87,296 Gap Incorporated $ 1,560,270 $ 2,793,440
16,328 Kohl's Corporation+ 916,371 1,079,689
21,747 Limited Incorporated 503,645 831,823
14,761 Nordstrom Incorporated 426,846 398,547
------------- --------------
$ 3,407,132 $ 5,103,499
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS - 0.03%
6,668 Liz Claiborne Incorporated $ 303,254 $ 206,708
12,292 V.F. Corporation 544,839 381,052
------------- --------------
$ 848,093 $ 587,760
AUTOMOTIVE DEALERS & GASOLINE - 0.02%
15,586 Autozone Incorporated+ $ 451,793 $ 437,382
AUTOMOTIVE REPAIR, SERVICES & PARKING - 0.01%
7,523 Ryder Systems Incorporated $ 242,756 $ 153,281
BUILDING CONSTRUCTION - GENERAL - 0.02%
6,233 Centex Corporation $ 185,041 $ 184,263
4,158 Kaufman & Broad Home Corporation 89,520 85,759
4,591 Pulte Corporation 98,393 99,854
------------- --------------
$ 372,954 $ 369,876
</TABLE>
15
<PAGE>
Asset Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY &
MOBILE HOME DEALERS - 0.69%
150,330 Home Depot Incorporated $ 4,993,285 $ 10,316,395
37,586 Lowes Companies 1,042,044 1,832,318
17,633 Sherwin Williams Company 517,969 369,190
------------- --------------
$ 6,553,298 $ 12,517,903
BUSINESS SERVICES - 5.39%
36,638 3Com Corporation+ $ 1,376,302 $ 1,053,343
8,100 Adaptec Incorporated 319,953 317,925
6,287 Adobe Systems Incorporated 250,594 713,575
111,241 America Online Incorporated+ 9,548,379 11,569,064
5,374 Autodesk Incorporated 192,666 117,555
62,714 Automatic Data Processing Incorporated 1,809,912 2,798,612
23,670 BMC Software Incorporated+ 1,377,508 1,693,884
16,119 Cabletron Systems Incorporated+ 336,693 252,867
73,359 Cendant Corporation 1,804,101 1,302,122
14,686 Ceridian Corporation+ 331,970 365,314
54,605 Computer Associates International Incorporated 2,432,401 3,344,555
16,250 Computer Sciences Corporation+ 726,460 1,142,578
36,702 Compuware Corporation+ 1,392,722 956,545
8,079 De Luxe Corporation 266,742 274,685
13,310 Ecolab Incorporated 343,025 454,204
50,169 Electronic Data Systems Corporation 2,039,137 2,655,820
14,897 Equifax Incorporated 502,017 418,978
43,756 First Data Corporation 1,404,122 1,919,795
32,410 IMS Health Incorporated 636,419 739,353
28,234 Interpublic Group Companies Incorporated 709,788 1,161,123
516,605 Microsoft Corporation+ 20,614,562 46,785,040
34,560 Novell Incorporated+ 321,100 714,960
18,047 Omnicom Group Incorporated 793,254 1,429,097
146,008 Oracle Corporation+ 2,748,279 6,643,364
26,966 Parametric Technology Corporation+ 584,799 364,040
23,803 PeopleSoft Incorporated+ 773,901 403,163
</TABLE>
16
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Asset Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
2,718 Shared Medical Systems Corporation $ 160,295 $ 127,067
78,506 Sun Microsystems Incorporated+ 1,634,076 7,301,058
28,735 Unisys Corporation+ 616,446 1,296,667
------------- --------------
$ 56,047,623 $ 98,316,353
CHEMICALS & ALLIED PRODUCTS - 6.17%
154,372 Abbott Laboratories $ 5,321,081 $ 5,673,170
23,499 Air Products and Chemicals Incorporated 907,315 682,940
5,748 Alberto-Culver Company 162,686 132,923
9,963 ALZA Corporation+ 351,220 426,540
132,562 American Home Products Corporation 5,528,550 5,501,323
51,732 Amgen Incorporated+ 1,482,575 4,216,158
11,675 Avery-Dennison Corporation 540,248 615,855
26,828 Avon Products Incorporated 946,062 665,670
201,176 Bristol-Myers Squibb Company 9,487,794 13,579,380
23,746 Clorox Company 1,001,532 908,285
59,308 Colgate-Palmolive Company 2,188,871 2,713,340
22,369 Dow Chemical Company 2,026,331 2,541,678
98,826 Du Pont EI De Nemours Company 6,103,277 6,016,030
8,117 Eastman Chemical Company 479,777 324,680
110,236 Gillette Company 5,394,021 3,741,134
6,115 Great Lakes Chemical Corporation 265,755 232,752
10,906 International Flavors & Fragrances Incorporated 503,487 376,257
237,536 Merck & Company Incorporated 12,569,043 15,395,302
63,947 Monsanto Company 2,925,507 2,282,109
35,458 Occidental Petroleum Corporation 903,884 819,965
392,583 Pfizer Incorporated 10,409,202 14,108,452
51,620 Pharmacia & Upjohn Incorporated 1,952,767 2,561,643
17,790 PPG Industries Incorporated 1,053,363 1,067,400
16,174 Praxair Incorporated 758,851 744,004
134,604 Procter & Gamble Company 10,361,638 12,619,125
21,797 Rohm & Haas Company 741,142 787,417
148,922 Schering-Plough Corporation 4,931,700 6,496,722
10,428 Sigma Aldrich Corporation 352,252 331,089
</TABLE>
17
<PAGE>
Asset Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
13,173 Union Carbide Corporation $ 611,527 $ 748,390
7,447 W.R. Grace & Company+ 114,465 119,617
86,469 Warner-Lambert Company 4,436,032 5,739,380
9,316 Watson Pharmaceuticals Incorporated+ 406,549 284,720
------------- --------------
$ 95,218,504 $ 112,453,450
COMMUNICATIONS - 5.55%
29,498 Alltel Corporation $ 1,291,981 $ 2,075,922
111,542 Ameritech Corporation 4,341,846 7,494,228
323,450 AT & T Corporation 10,844,889 14,070,075
157,327 Bell Atlantic Corporation 6,518,533 10,590,074
191,159 BellSouth Corporation 5,295,649 8,602,155
71,615 CBS Corporation+ 2,019,563 3,312,194
13,747 CenturyTel Incorporated 622,047 558,472
33,577 Clear Channel Communications Incorporated 1,701,852 2,681,963
75,283 Comcast Corporation 1,156,103 3,001,910
98,814 GTE Corporation 4,818,301 7,596,325
189,157 MCI WorldCom Incorporated+ 7,442,836 13,595,659
61,604 Media One Group Incorporated+ 1,859,072 4,208,323
32,240 Nextel Communications Incorporated+ 1,130,295 2,186,275
199,414 SBC Communications Incorporated 7,136,673 10,182,577
88,049 Sprint Corporation (FON Group) 2,370,102 4,776,658
44,499 Sprint Corporation (PCS Group)+ 845,605 3,317,957
51,256 US West Incorporated 2,272,892 2,924,795
------------- --------------
$ 61,668,239 $ 101,175,562
DOMESTIC DEPOSITORY INSTITUTIONS - 4.31%
17,219 AmSouth BanCorporation $ 553,752 $ 403,570
175,045 Bank of America Corporation 11,221,710 9,747,819
74,809 Bank of New York Company Incorporated 1,948,305 2,501,425
119,120 Bank One Corporation 5,693,646 4,146,865
30,155 BankBoston Corporation 1,292,571 1,307,973
31,524 BB & T Corporation 1,021,167 1,020,590
84,470 Chase Manhattan Corporation 4,915,487 6,366,925
</TABLE>
18
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Asset Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
342,064 Citigroup Incorporated $ 11,509,516 $ 15,050,815
15,960 Comerica Incorporated 872,763 807,975
27,144 Fifth Third Bancorp 1,371,498 1,651,544
97,226 First Union Corporation 4,886,918 3,457,600
100,285 Firstar Corporation 2,921,628 2,569,804
57,905 Fleet Financial Group Incorporated 2,065,565 2,120,770
5,699 Golden West Financial Corporation 483,089 559,927
23,713 Huntington Bancshares Incorporated 661,916 629,874
45,462 KeyCorp 1,437,662 1,173,488
52,463 Mellon Bank Corporation 1,452,561 1,770,625
63,118 National City Corporation 2,153,474 1,684,462
11,324 Northern Trust Corporation 775,098 945,554
30,694 PNC Bank Corporation 1,492,789 1,617,190
22,380 Regions Financial Corporation 794,738 671,400
10,840 Republic New York Corporation 589,085 665,983
16,539 SouthTrust Corporation 657,164 593,337
16,486 State Street Corporation 928,475 1,065,408
17,675 Summit Bancorp 834,389 573,333
32,475 Suntrust Banks Incorporated 2,346,420 2,135,230
27,198 Synovus Financial Corporation 583,980 508,263
14,166 Union Planters Corporation 700,920 577,265
74,014 U.S. Bancorp 2,590,006 2,234,298
20,632 Wachovia Corporation 1,614,514 1,622,190
59,181 Washington Mutual Incorporated 2,334,878 1,731,044
167,224 Wells Fargo & Company# 5,305,577 6,626,250
------------- --------------
$ 78,011,261 $ 78,538,796
EATING & DRINKING PLACES - 0.39%
13,977 Darden Restaurants Incorporated $ 176,111 $ 273,425
137,471 McDonald's Corporation 3,607,427 5,911,253
15,639 Tricon Global Restaurants Incorporated+ 485,930 640,222
12,873 Wendy's International Incorporated 295,276 339,525
------------- --------------
$ 4,564,744 $ 7,164,425
</TABLE>
19
<PAGE>
Asset Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
ELECTRIC, GAS & SANITARY SERVICES - 1.52%
19,164 AES Corporation+ $ 717,596 $ 1,130,675
13,200 Allied Waste Industries Incorporated+ 237,006 154,275
14,090 Ameren Corporation 565,203 532,778
19,705 American Electric Power Company+ 906,245 672,433
15,504 Carolina Power & Light Company 592,099 548,454
21,918 Central & Southwest Corporation 537,874 463,018
16,375 Cinergy Corporation 559,002 463,617
11,506 CMS Energy Corporation 507,950 390,485
8,580 Columbia Energy Group 420,043 475,118
22,708 Consolidated Edison Company 870,767 942,382
9,809 Consolidated Natural Gas Company 532,222 611,835
15,517 Constellation Energy Group 451,055 436,415
19,670 Dominion Resources Incorporated 771,321 887,609
14,894 DTE Energy Company 514,875 538,045
36,905 Duke Energy Corporation 1,950,391 2,034,388
2,045 Eastern Enterprises 77,953 94,965
35,634 Edison International 940,574 866,352
25,313 Entergy Corporation 688,368 732,495
24,109 FirstEnergy Corporation 649,948 614,780
9,500 Florida Progress Corporation 401,605 439,375
18,481 FPL Group Incorporated 1,017,472 930,980
13,024 GPU Incorporated 485,818 424,908
11,455 New Century Energies Incorporated 553,621 383,027
19,502 Niagara Mohawk Holdings Incorporated+ 249,955 301,062
4,986 Nicor Incorporated 187,938 185,417
15,815 Northern States Power Company 415,353 341,010
3,353 Oneok Incorporated 115,876 101,638
39,046 Pacific Gas & Electric Company 1,056,857 1,010,315
30,524 PacifiCorp 687,096 614,296
19,281 PECO Energy Company 495,262 723,038
3,783 People's Energy Corporation 136,488 133,114
15,663 PP&L Resources Incorporated 351,067 423,880
22,510 Public Service Enterprise Group Incorporated 673,667 869,449
29,563 Reliant Energy Incorporated 723,174 800,049
</TABLE>
20
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Asset Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
24,586 Sempra Energy $ 664,430 $ 511,696
11,324 Sonat Incorporated 461,456 449,421
69,753 Southern Company 1,719,034 1,796,140
28,160 Texas Utilities Company 1,104,327 1,050,720
22,300 Unicom Corporation 664,174 823,706
61,799 Waste Management Incorporated+ 3,116,234 1,189,631
43,654 Williams Companies Incorporated 1,227,780 1,634,297
------------- --------------
$ 28,999,176 $ 27,727,288
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT - 6.67%
11,200 ADC Telecommunications Incorporated+ $ 498,400 $ 469,700
14,515 Advanced Micro Devices Incorporated+ 350,742 249,477
8,770 Andrew Corporation+ 199,949 152,379
44,223 Emerson Electric Company 2,508,795 2,794,341
331,994 General Electric Company 24,588,679 39,362,039
17,137 General Instrument Corporation+ 353,779 824,718
73,691 Global Crossing Limited 1,430,833 1,952,804
334,913 Intel Corporation 12,818,416 24,888,222
14,677 LSI Logic Corporation+ 363,391 755,866
309,088 Lucent Technologies Incorporated 8,363,424 20,052,084
9,123 Maytag Corporation 330,941 303,910
25,046 Micron Technology Incorporated+ 912,340 1,667,124
61,296 Motorola Incorporated 3,728,437 5,394,048
17,116 National Semiconductor Corporation+ 425,385 522,038
4,388 National Service Industries Incorporated 202,192 138,222
7,000 Network Appliance Incorporated+ 368,899 501,375
134,546 Nortel Networks Corporation 3,314,589 6,861,846
15,700 QUALCOMM Incorporated+ 2,491,758 2,970,244
34,244 Raytheon Company 1,782,075 1,699,359
7,851 Scientific-Atlanta Incorporated 152,620 389,115
39,605 Tellabs Incorporated+ 1,108,937 2,255,010
79,632 Texas Instruments Incorporated 2,015,808 6,549,732
</TABLE>
21
<PAGE>
Asset Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
5,935 Thomas & Betts Corporation $ 289,153 $ 302,685
7,729 Whirlpool Corporation 431,438 504,800
------------- --------------
$ 69,030,980 $ 121,561,138
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED SERVICES - 0.20%
16,829 Dun & Bradstreet Corporation $ 447,877 $ 502,766
4,703 EG & G Incorporated 103,510 187,238
7,852 Fluor Corporation 361,874 316,043
44,921 Halliburton Company 1,883,378 1,841,761
25,346 Paychex Incorporated 870,508 864,932
------------- --------------
$ 3,667,147 $ 3,712,740
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 0.35%
3,168 Ball Corporation $ 108,410 $ 139,590
9,754 Cooper Industries Incorporated 498,758 456,000
7,246 Crane Company 206,401 162,582
12,622 Crown Cork & Seal Company Incorporated 604,232 306,084
17,218 Fortune Brands Incorporated 589,991 555,281
25,517 Illinois Tool Works Incorporated 1,367,867 1,902,611
40,059 Lockheed Martin Corporation 1,968,902 1,309,429
41,581 Masco Corporation 1,041,994 1,289,011
6,146 Snap-On Incorporated 244,276 199,745
------------- --------------
$ 6,630,831 $ 6,320,333
FOOD & KINDRED PRODUCTS - 2.09%
3,801 Adolph Coors Company $ 129,088 $ 205,729
47,539 Anheuser-Busch Companies 2,105,997 3,330,701
63,364 Archer Daniels Midland Company 1,182,399 772,249
28,554 Bestfoods Incorporated 1,416,346 1,384,869
44,311 Campbell Soup Company 2,260,441 1,733,668
250,194 Coca Cola Company 16,931,349 12,024,949
42,735 Coca Cola Enterprises Incorporated 1,265,951 964,208
</TABLE>
22
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Asset Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
49,975 ConAgra Incorporated $ 1,552,220 $ 1,127,561
15,638 General Mills Incorporated 1,054,243 1,268,633
36,630 Heinz (H.J.) Company 1,817,479 1,575,090
9,823 Hercules Incorporated 446,415 281,183
14,339 Hershey Foods Corporation 866,450 698,130
41,352 Kellogg Company 1,725,691 1,548,116
148,501 PepsiCo Incorporated 5,389,364 4,492,155
13,750 Quaker Oats Company 688,972 850,781
32,603 Ralston-Ralston Purina Group 970,913 906,771
92,093 Sara Lee Corporation 2,342,927 2,158,430
43,322 Seagrams Company Limited 1,596,539 1,971,151
11,920 William Wrigley Jr. Company 917,407 820,245
------------- --------------
$ 44,660,191 $ 38,114,619
FOOD STORES - 0.33%
42,850 Albertson's Incorporated $ 1,772,970 $ 1,695,253
4,016 Great Atlantic & Pacific Tea Company 114,947 121,735
83,910 Kroger Company+ 1,719,143 1,851,264
50,298 Safeway Incorporated+ 2,760,512 1,914,468
15,285 Winn-Dixie Stores Incorporated 611,019 453,773
------------- --------------
$ 6,978,591 $ 6,036,493
FURNITURE & FIXTURES - 0.08%
8,713 Johnson Controls Incorporated $ 407,023 $ 577,781
28,810 Newell Rubbermaid Incorporated 1,103,048 822,886
------------- --------------
$ 1,510,071 $ 1,400,667
GENERAL MERCHANDISE STORES - 1.72%
11,311 Consolidated Stores Corporation+ $ 454,398 $ 249,549
44,941 Dayton Hudson Corporation 1,571,229 2,699,269
11,048 Dillards Incorporated 384,293 224,413
22,760 Dollar General Corporation 635,777 702,715
20,937 Federated Department Stores Incorporated+ 917,471 914,685
</TABLE>
23
<PAGE>
Asset Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
7,354 Harcourt General Incorporated $ 373,936 $ 306,110
26,540 J.C. Penney Company Incorporated 1,537,931 912,313
50,592 K Mart Corporation+ 641,919 591,294
34,204 May Department Stores Company 1,261,386 1,246,308
38,871 Sears, Roebuck & Company 1,942,920 1,219,578
32,684 TJX Companies Incorporated 576,095 917,195
450,625 Wal-Mart Stores Incorporated 9,948,199 21,432,852
------------- --------------
$ 20,245,554 $ 31,416,281
HEALTH SERVICES - 0.12%
57,840 Columbia HCA Healthcare Corporation $ 1,640,814 $ 1,225,485
11,125 HCR Manor Care Incorporated+ 365,602 191,211
42,886 HealthSouth Corporation+ 1,098,434 259,996
31,778 Tenet Healthcare Corporation+ 959,255 558,101
------------- --------------
$ 4,064,105 $ 2,234,793
HEAVY CONSTRUCTION OTHER THAN BUILDING
CONSTRUCTION - CONTRACTORS - 0.01%
4,279 Foster Wheeler Corporation $ 131,909 $ 51,615
6,072 McDermott International Incorporated 176,267 122,958
------------- --------------
$ 308,176 $ 174,573
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 0.17%
20,600 Best Buy Company Incorporated+ $ 1,360,125 $ 1,278,488
20,660 Circuit City Stores Incorporated 392,616 871,594
19,884 Tandy Corporation 386,910 1,027,754
------------- --------------
$ 2,139,651 $ 3,177,836
</TABLE>
24
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Asset Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGING
PLACES - 0.07%
25,357 Hilton Hotels Corporation $ 487,233 $ 250,400
24,934 Marriott International 766,843 815,030
19,110 Mirage Resorts Incorporated+ 444,265 268,734
------------- --------------
$ 1,698,341 $ 1,334,164
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER
EQUIPMENT - 5.61%
15,756 Apple Computer Incorporated+ $ 407,523 $ 997,552
37,692 Applied Materials Incorporated+ 1,220,004 2,935,265
32,885 Baker Hughes Incorporated 1,024,508 953,665
8,987 Black & Decker Corporation 394,741 410,594
2,462 Briggs & Stratton Corporation 115,314 143,719
7,648 Case Corporation 416,574 380,966
36,252 Caterpillar Incorporated 1,857,639 1,987,063
4,196 Cincinnati Milacron Incorporated 104,216 74,479
328,090 Cisco Systems Incorporated+ 7,448,195 22,494,671
172,518 Compaq Computer Corporation 4,961,205 3,957,132
3,990 Cummins Engine Company Incorporated 237,201 198,752
4,547 Data General Corporation+ 89,018 95,771
23,772 Deere & Company 1,202,828 919,679
257,447 Dell Computer Corporation+ 3,726,531 10,764,503
21,489 Dover Corporation 705,531 878,363
102,788 EMC Corporation+ 1,683,705 7,342,918
31,926 Gateway Incorporated+ 876,251 1,418,712
8,266 Harris Corporation 348,303 228,348
102,719 Hewlett-Packard Company 6,119,802 9,450,148
183,183 IBM Corporation 9,746,010 22,233,837
16,910 Ingersoll-Rand Company 698,555 928,993
11,800 Lexmark International Group Incorporated+ 793,576 949,900
40,885 Minnesota Mining and Manufacturing Company 3,569,592 3,927,515
12,820 Pall Corporation 281,744 297,264
11,179 Parker-Hannifin Corporation 449,243 500,959
</TABLE>
25
<PAGE>
Asset Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
27,306 Pitney Bowes Incorporated $ 1,173,331 $ 1,663,959
22,874 Seagate Technology Incorporated+ 606,863 704,805
19,472 Silicon Graphics Incorporated+ 280,083 212,975
25,876 Solectron Corporation+ 1,231,442 1,858,220
9,181 Stanley Works 391,807 231,246
6,579 Timken Company 204,181 106,086
48,923 United Technologies Corporation 2,010,983 2,901,745
------------- --------------
$ 54,376,499 $ 102,149,804
INSURANCE AGENTS, BROKERS & SERVICE - 0.15%
26,168 Aon Corporation $ 995,880 $ 773,592
17,207 Humana Incorporated+ 402,232 118,298
26,646 Marsh & McLennan Companies Incorporated 1,353,765 1,825,251
------------- --------------
$ 2,751,877 $ 2,717,141
INSURANCE CARRIERS - 1.70%
14,399 Aetna Incorporated $ 1,204,258 $ 709,151
26,850 AFLAC Incorporated 1,313,069 1,124,344
81,388 Allstate Corporation 3,360,445 2,029,613
25,429 American General Corporation 1,435,926 1,606,795
156,806 American International Group Incorporated 8,868,568 13,631,800
16,690 Chubb Corporation 1,158,860 831,371
20,368 CIGNA Corporation 1,220,763 1,583,612
17,029 Cincinnati Financial Corporation 723,992 639,121
32,348 Conseco Incorporated 1,300,616 624,721
23,234 Hartford Financial Services Group 1,047,515 949,690
10,852 Jefferson-Pilot Corporation 559,831 685,711
20,554 Lincoln National Corporation 771,962 772,060
11,124 Loews Corporation 1,089,212 780,766
10,198 MBIA Incorporated 648,259 475,482
11,212 MGIC Investment Corporation 616,814 535,373
7,365 Progressive Corporation 832,539 601,628
13,882 Safeco Corporation 642,769 388,696
23,246 St. Paul Companies Incorporated 905,102 639,265
</TABLE>
26
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Asset Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
13,860 Torchmark Corporation $ 472,712 $ 358,628
17,723 United Healthcare Corporation 910,760 862,889
24,322 UnumProvident Corporation 1,187,934 715,979
6,628 Wellpoint Health Networks Incorporated+ 573,819 377,796
------------- --------------
$ 30,845,725 $ 30,924,491
LOCAL & SUBURBAN TRANSIT & INTERURBAN HIGHWAY & PASSENGER TRANSPORTATION - 0.01%
33,978 Laidlaw Incorporated $ 439,794 $ 229,352
LUMBER & WOOD PRODUCTS, EXCEPT FURNITURE - 0.01%
11,306 Louisiana-Pacific Corporation $ 237,489 $ 176,656
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 1.57%
6,811 Allergan Incorporated $ 250,411 $ 749,210
5,829 Bausch & Lomb Incorporated 247,479 384,350
29,437 Baxter International Incorporated 1,556,875 1,773,579
25,293 Becton, Dickinson & Company 734,464 709,785
11,515 Biomet Incorporated 284,123 302,988
40,169 Boston Scientific Corporation+ 1,181,997 991,672
5,378 C.R. Bard Incorporated 177,452 253,102
13,495 Danaher Corporation 612,149 711,018
32,225 Eastman Kodak Company 2,228,987 2,430,973
7,277 Eaton Corporation 615,115 628,096
110,778 Eli Lilly & Company 7,026,695 7,089,792
30,841 Guidant Corporation+ 882,351 1,653,849
12,846 Honeywell Incorporated 933,742 1,429,920
8,932 KLA-Tencor Corporation+ 419,782 580,580
7,486 Mallinckrodt Incorporated 257,473 225,984
118,612 Medtronic Incorporated 3,411,491 4,210,726
4,663 Millipore Corporation 166,173 175,154
10,356 PE Corporation - PE Biosystems Group 313,444 748,221
4,757 Polaroid Corporation 209,150 123,682
8,771 St. Jude Medical Incorporated+ 291,020 276,287
</TABLE>
27
<PAGE>
Asset Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
4,998 Tektronix Incorporated $ 178,925 $ 167,433
15,780 Thermo Electron Corporation+ 522,790 212,044
67,132 Xerox Corporation 2,749,772 2,815,348
------------- --------------
$ 25,251,860 $ 28,643,793
METAL MINING - 0.18%
4,052 ASARCO Incorporated $ 103,191 $ 108,644
38,838 Barrick Gold Corporation 771,889 844,727
9,551 Cyprus Amax Minerals 178,028 187,438
17,063 Freeport-McMoran Copper & Gold Incorporated+ 370,941 265,543
24,271 Homestake Mining Company 230,921 222,990
18,546 Inco Limited Company 364,197 396,421
16,450 Newmont Mining Corporation 515,882 425,644
6,055 Phelps Dodge Corporation 415,410 333,403
31,614 Placer Dome Incorporated 423,752 470,258
------------- --------------
$ 3,374,211 $ 3,255,068
MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT
FUELS - 0.02%
8,100 Vulcan Materials Company $ 390,963 $ 296,663
MISCELLANEOUS MANUFACTURING INDUSTRIES - 0.56%
4,186 Armstrong World Industries Incorporated $ 284,706 $ 188,108
20,163 Hasbro Incorporated 427,233 432,244
3,872 Jostens Incorporated 91,772 74,052
41,739 Mattel Incorporated 1,396,638 793,041
874 NACCO Industries Incorporated 83,604 61,071
83,806 Tyco International Limited 4,277,634 8,653,588
------------- --------------
$ 6,561,587 $ 10,202,104
</TABLE>
28
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Asset Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
MISCELLANEOUS RETAIL - 0.46%
10,800 Bed, Bath & Beyond Incorporated $ 376,793 $ 375,975
22,067 Costco Wholesale Corporation+ 947,570 1,588,824
39,838 CVS Corporation 1,338,108 1,625,888
4,074 Longs Drug Stores Incorporated 111,928 121,711
37,300 Office Depot Incorporated+ 841,966 379,994
26,417 Rite Aid Corporation 825,082 364,885
46,782 Staples Incorporated+ 891,154 1,020,432
25,824 Toys R Us Incorporated+ 743,008 387,360
101,756 Walgreen Company 1,660,915 2,582,059
------------- --------------
$ 7,736,524 $ 8,447,128
MOTION PICTURES - 0.74%
7,440 King World Productions Incorporated+ $ 177,696 $ 279,000
129,374 Time Warner Incorporated 4,563,635 7,859,471
209,271 Walt Disney Company 6,319,819 5,414,887
------------- --------------
$ 11,061,150 $ 13,553,358
NONDEPOSITORY CREDIT INSTITUTIONS - 1.42%
45,610 American Express Company $ 3,907,914 $ 6,140,246
73,752 Associates First Capital Corporation 2,402,355 2,655,072
20,054 Capital One Financial Corporation 801,618 782,106
11,435 Countrywide Credit Industries Incorporated 444,417 368,779
70,547 Federal Home Loan Mortgage Corporation 2,800,344 3,668,444
103,976 Federal National Mortgage Association 5,486,453 6,517,996
48,844 Household International Incorporated 1,815,128 1,959,866
81,208 MBNA Corporation 1,542,013 1,852,558
14,453 Providian Financial Corporation 454,964 1,144,497
16,657 SLM Holding Corporation 788,656 716,251
------------- --------------
$ 20,443,862 $ 25,805,815
</TABLE>
29
<PAGE>
Asset Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
OIL & GAS EXTRACTION - 0.75%
12,275 Anadarko Petroleum Corporation $ 396,842 $ 375,155
10,899 Apache Corporation 368,565 470,701
32,780 Atlantic Richfield Company 2,383,532 2,905,128
18,208 Burlington Resources Incorporated 759,235 669,144
71,638 Enron Corporation 1,614,417 2,955,068
5,278 Helmerich & Payne Incorporated 150,853 133,599
8,868 Kerr-McGee Corporation 526,920 488,294
33,218 Nabisco Group Holdings Corporation 590,231 498,270
8,822 Rowan Companies Incorporated+ 229,280 143,358
55,609 Schlumberger Limited 3,790,837 3,465,136
11,600 Tosco Corporation 308,331 292,900
26,085 Union Pacific Resources Group Incorporated 565,899 418,990
30,942 USX-Marathon Group Incorporated 977,699 905,054
------------- --------------
$ 12,662,641 $ 13,720,797
PAPER & ALLIED PRODUCTS - 0.56%
5,544 Bemis Incorporated $ 224,411 $ 187,803
5,959 Boise Cascade Corporation 200,271 217,131
9,811 Champion International Corporation 481,996 504,040
22,431 Fort James Corporation 865,503 598,627
17,592 Georgia-Pacific Corporation 515,854 712,476
13,934 IKON Office Solutions Incorporated 324,722 148,920
41,848 International Paper Company 1,848,315 2,011,127
54,242 Kimberly-Clark Corporation 2,597,163 2,847,705
10,503 Mead Corporation 322,842 361,041
3,030 Potlatch Corporation 130,970 124,798
5,769 Temple-Inland Incorporated 324,153 349,025
17,605 Tenneco Incorporated 734,335 299,285
10,442 Westvaco Corporation 315,506 267,576
20,356 Weyerhaeuser Company 995,549 1,173,015
11,399 Willamette Industries Incorporated 369,289 491,582
------------- --------------
$ 10,250,879 $ 10,294,151
</TABLE>
30
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Asset Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
PERSONAL SERVICES - 0.04%
10,047 H & R Block Incorporated $ 399,262 $ 436,417
26,746 Service Corporation International 907,381 282,505
------------- --------------
$ 1,306,643 $ 718,922
PETROLEUM REFINING & RELATED INDUSTRIES - 3.00%
9,285 Amerada Hess Corporation $ 502,955 $ 568,706
7,648 Ashland Incorporated 372,078 257,164
66,514 Chevron Corporation 5,168,007 5,903,118
21,891 Coastal Corporation 635,543 896,163
64,072 Conoco Incorporated 1,341,108 1,753,967
245,887 Exxon Corporation 15,528,199 18,672,044
79,363 Mobil Corporation 5,658,058 7,995,822
25,794 Phillips Petroleum Company 1,181,091 1,257,458
217,235 Royal Dutch Petroleum Company 11,170,085 12,830,442
9,489 Sunoco Incorporated 365,655 259,761
54,402 Texaco Incorporated 3,031,784 3,434,126
24,817 Unocal Corporation 930,095 919,780
------------- --------------
$ 45,884,658 $ 54,748,551
PRIMARY METAL INDUSTRIES - 0.27%
23,150 Alcan Aluminum Limited $ 671,697 $ 723,438
37,353 Alcoa Incorporated 1,318,836 2,318,221
19,984 Allegheny Teledyne Incorporated 489,714 337,230
11,290 Bethlehem Steel Corporation+ 114,379 83,264
13,068 Engelhard Corporation 251,169 237,674
8,976 Nucor Corporation 449,877 427,482
6,602 Reynolds Metals Company 394,514 398,596
9,136 USX-U.S. Steel Group Incorporated 289,964 235,252
9,776 Worthington Industries Incorporated 173,184 166,192
------------- --------------
$ 4,153,334 $ 4,927,349
</TABLE>
31
<PAGE>
Asset Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
PRINTING, PUBLISHING & ALLIED INDUSTRIES - 0.55%
7,179 American Greetings Company $ 274,070 $ 184,859
9,391 Dow Jones & Company Incorporated 453,829 501,245
28,539 Gannet Company Incorporated 1,606,178 1,974,542
8,015 Knight-Ridder Incorporated 407,697 439,823
20,225 McGraw-Hill Incorporated 702,031 978,384
5,543 Meredith Corporation 185,791 201,280
18,010 New York Times Company 534,912 675,375
13,471 R.R. Donnelley & Sons Company 512,872 388,975
7,440 Times Mirror Company 432,272 489,645
24,258 Tribune Company 701,709 1,206,836
70,371 Viacom Incorporated+ 1,494,122 2,973,175
------------- --------------
$ 7,305,483 $ 10,014,139
RAILROAD TRANSPORTATION - 0.27%
47,593 Burlington Northern Santa Fe Corporation $ 1,493,421 $ 1,308,808
22,252 CSX Corporation 1,125,508 942,929
10,909 Kansas City Southern Industries Incorporated 615,385 506,587
38,763 Norfolk Southern Corporation 1,238,267 949,694
25,331 Union Pacific Corporation 1,480,062 1,217,471
------------- --------------
$ 5,952,643 $ 4,925,489
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS - 0.17%
8,044 Cooper Tire & Rubber Company $ 176,451 $ 141,776
16,019 Goodyear Tire & Rubber Company 969,906 770,914
28,749 Nike Incorporated 1,354,059 1,635,099
5,512 Reebok International Limited+ 182,648 58,910
8,606 Sealed Air Corporation+ 498,920 441,595
6,153 Tupperware Corporation 175,182 124,598
------------- --------------
$ 3,357,166 $ 3,172,892
</TABLE>
32
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Asset Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 0.82%
11,519 Bear Stearns Companies Incorporated $ 596,292 $ 442,762
82,934 Charles Schwab Corporation 977,285 2,793,839
25,842 Franklin Resources Incorporated 1,295,624 794,642
17,900 J.P. Morgan & Company Incorporated 2,009,274 2,045,075
11,704 Lehman Brothers Holdings Incorporated 683,079 682,490
37,266 Merrill Lynch & Company Incorporated 2,665,880 2,503,809
57,880 Morgan Stanley Dean Witter & Company 3,394,270 5,162,173
14,487 Paine Webber Group Incorporated 614,880 525,154
------------- --------------
$ 12,236,584 $ 14,949,944
STONE, CLAY, GLASS & CONCRETE PRODUCTS - 0.12%
24,563 Corning Incorporated $ 1,050,276 $ 1,684,101
5,672 Owens Corning 214,857 123,012
15,340 Owens-Illinois Incorporated+ 564,198 303,924
------------- --------------
$ 1,829,331 $ 2,111,037
TEXTILE MILL PRODUCTS - 0.01%
3,915 Russell Corporation $ 114,213 $ 55,544
1,972 Springs Industries Incorporated 93,438 66,925
------------- --------------
$ 207,651 $ 122,469
TOBACCO PRODUCTS - 0.48%
242,331 Philip Morris Incorporated $ 10,235,423 $ 8,284,691
18,123 UST Incorporated 530,781 547,088
------------- --------------
$ 10,766,204 $ 8,831,779
</TABLE>
33
<PAGE>
Asset Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
TRANSPORTATION BY AIR - 0.20%
15,550 AMR Corporation+ $ 962,737 $ 847,475
14,444 Delta Air Lines Incorporated 774,454 700,534
30,226 FDX Corporation+ 901,913 1,171,258
51,733 Southwest Airlines Company 551,060 785,695
7,740 US Airways Group Incorporated+ 492,625 203,175
------------- --------------
$ 3,682,789 $ 3,708,137
TRANSPORTATION EQUIPMENT - 1.43%
55,955 Allied Signal Incorporated $ 2,181,745 $ 3,353,803
97,569 Boeing Company 4,510,373 4,158,879
9,697 Brunswick Corporation 266,490 241,213
17,042 Dana Corporation 745,619 632,684
56,623 Delphi Automotive Systems Corporation 864,390 909,507
3,682 Fleetwood Enterprises Incorporated 126,329 74,330
3,386 FMC Corporation+ 240,481 163,375
122,716 Ford Motor Company 4,374,613 6,158,809
18,653 General Dynamics Corporation 927,622 1,164,647
65,425 General Motors Corporation 3,324,142 4,117,686
18,441 Genuine Parts Company 611,572 489,839
8,617 Goodrich (B. F.) Company 363,298 249,893
9,211 ITT Industries Incorporated 291,195 293,025
6,866 Navistar International Corporation+ 158,483 319,269
7,068 Northrop Grumman Corporation 722,512 449,260
7,999 PACCAR Incorporated 383,615 406,949
19,433 Rockwell International Corporation 779,795 1,020,233
15,383 Textron Incorporated 993,085 1,190,260
12,255 TRW Incorporated 670,593 609,686
------------- --------------
$ 22,535,952 $ 26,003,347
WATER TRANSPORTATION - 0.15%
62,108 Carnival Corporation $ 2,696,021 $ 2,701,698
</TABLE>
34
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Asset Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCKS (CONTINUED)
WHOLESALE TRADE-DURABLE GOODS - 0.72%
9,633 Grainger (W. W.) Incorporated $ 441,419 $ 462,986
136,186 Johnson & Johnson 8,845,213 12,512,089
5,845 Pep Boys - Manny, Moe & Jack 139,174 86,944
------------- --------------
$ 9,425,806 $ 13,062,019
WHOLESALE TRADE-NONDURABLE GOODS - 0.45%
7,068 Brown-Forman Corporation $ 380,405 $ 440,867
27,503 Cardinal Health Incorporated 1,747,071 1,498,914
27,701 McKesson HBOC Incorporated 2,076,522 803,329
12,440 Supervalu Incorporated 246,949 271,348
33,923 Sysco Corporation 712,105 1,189,425
58,042 Unilever Nv 3,951,249 3,954,111
------------- --------------
$ 9,114,301 $ 8,157,994
TOTAL COMMON STOCKS $ 825,230,409 $1,069,915,503
</TABLE>
35
<PAGE>
Asset Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
U.S. TREASURY SECURITIES - 40.76%
U.S. TREASURY BILLS - 0.72%
$13,151,000 U.S. Treasury Bills 4.44%- 11/04/99 $ 13,095,371
U.S. TREASURY BONDS - 40.04%
$21,700,000 U.S. Treasury Bonds 7.25% 08/15/22 $ 23,828,119
66,250,000 U.S. Treasury Bonds 8.00 11/15/21 78,299,550
20,450,000 U.S. Treasury Bonds 6.38 08/15/27 20,474,949
23,350,000 U.S. Treasury Bonds 5.25 02/15/29 20,407,667
27,675,000 U.S. Treasury Bonds 6.00 02/15/26 26,388,943
43,950,000 U.S. Treasury Bonds 6.13 11/15/27 42,685,559
21,000,000 U.S. Treasury Bonds 6.13 08/15/29 21,201,390
45,875,000 U.S. Treasury Bonds 6.25 08/15/23 45,115,769
20,650,000 U.S. Treasury Bonds 6.63 02/15/27 21,340,330
20,050,000 U.S. Treasury Bonds 6.75 08/15/26 20,982,927
23,150,000 U.S. Treasury Bonds 6.88 08/15/25 24,575,346
38,825,000 U.S. Treasury Bonds 7.13 02/15/23 42,135,996
22,775,000 U.S. Treasury Bonds 7.50 11/15/24 25,899,502
25,900,000 U.S. Treasury Bonds 7.63 02/15/25 29,907,765
21,600,000 U.S. Treasury Bonds 7.88 02/15/21 25,127,064
27,475,000 U.S. Treasury Bonds 8.13 05/15/21 32,780,972
28,000,000 U.S. Treasury Bonds 8.13 08/15/21 33,436,200
21,500,000 U.S. Treasury Bonds 5.50 08/15/28 19,236,050
20,475,000 U.S. Treasury Bonds 7.63 11/15/22 23,411,320
23,400,000 U.S. Treasury Bonds 6.50 11/15/26 23,773,230
21,700,000 U.S. Treasury Bonds 5.25 11/15/28 18,790,898
21,950,000 U.S. Treasury Bonds 8.75 05/15/20 27,617,270
46,950,000 U.S. Treasury Bonds 8.75 08/15/20 59,142,446
18,850,000 U.S. Treasury Bonds 8.50 02/15/20 23,158,168
--------------
$ 729,717,430
TOTAL U.S. TREASURY SECURITIES $ 742,812,801
(Cost $765,141,790)
</TABLE>
36
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Asset Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<C> <S> <C> <C> <C> <C>
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $1,590,372,199) * (Notes 1 and 3) 99.47% $1,812,728,304
Other Assets and Liabilities, Net 0.53 9,709,132
------ --------------
TOTAL NET ASSETS 100.00% $1,822,437,436
====== ==============
- -------------------------------------------------------------------------------------------------------
</TABLE>
# SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $5,305,577.
+ NON-INCOME EARNING SECURITIES.
- YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS $1,590,854,816 AND NET
UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $300,875,241
Gross Unrealized Depreciation (79,001,753)
-----------
NET UNREALIZED APPRECIATION $221,873,488
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
37
<PAGE>
Index Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK - 95.60%
AGRICULTURAL PRODUCTION - CROP - 0.09%
4,202 Pioneer Hi-Bred International Incorporated $ 125,219 $ 167,292
AMUSEMENT & RECREATION SERVICES - 0.03%
2,185 Harrah's Entertainment Incorporated+ $ 45,937 $ 60,634
APPAREL & ACCESSORY STORES - 0.45%
14,884 Gap Incorporated $ 208,636 $ 476,288
2,799 Kohl's Corporation+ 162,599 185,084
3,676 Limited Incorporated 79,384 140,607
2,452 Nordstrom Incorporated 64,771 66,204
------------- ------------
$ 515,390 $ 868,183
APPAREL & OTHER FINISHED PRODUCTS MADE FROM FABRICS & SIMILAR MATERIALS - 0.05%
1,149 Liz Claiborne Incorporated $ 50,440 $ 35,619
2,085 V. F. Corporation 82,767 64,635
------------- ------------
$ 133,207 $ 100,254
AUTOMOTIVE DEALERS & GASOLINE - 0.04%
2,625 Autozone Incorporated+ $ 75,314 $ 73,664
AUTOMOTIVE REPAIR, SERVICES & PARKING - 0.01%
1,288 Ryder Systems Incorporated $ 40,166 $ 26,243
BUILDING CONSTRUCTION - GENERAL - 0.03%
1,046 Centex Corporation $ 26,564 $ 30,922
846 Kaufman & Broad Home Corporation 17,073 17,449
804 Pulte Corporation 13,230 17,487
------------- ------------
$ 56,867 $ 65,858
</TABLE>
38
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Index Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
BUILDING MATERIALS, HARDWARE, GARDEN SUPPLY & MOBILE HOME DEALERS - 1.12%
25,747 Home Depot Incorporated $ 729,664 $ 1,766,888
6,430 Lowes Companies 154,732 313,463
3,052 Sherwin Williams Company 86,271 63,900
------------- ------------
$ 970,667 $ 2,144,251
BUSINESS SERVICES - 8.78%
6,296 3Com Corporation+ $ 295,791 $ 181,010
1,400 Adaptec Incorporated 55,300 55,563
1,084 Adobe Systems Incorporated 48,657 123,034
19,126 America Online Incorporated+ 1,642,131 1,989,104
1,068 Autodesk Incorporated 41,420 23,363
10,696 Automatic Data Processing Incorporated 268,102 477,309
4,067 BMC Software Incorporated+ 233,964 291,045
2,885 Cabletron Systems Incorporated+ 84,183 45,258
12,511 Cendant Corporation 337,430 222,070
2,472 Ceridian Corporation+ 55,592 61,490
9,299 Computer Associates International Incorporated 383,710 569,564
2,776 Computer Sciences Corporation+ 113,413 195,188
6,232 Compuware Corporation+ 237,729 162,422
1,320 De Luxe Corporation 43,385 44,880
2,246 Ecolab Incorporated 51,485 76,645
8,548 Electronic Data Systems Corporation 354,309 452,510
2,543 Equifax Incorporated 81,991 71,522
7,507 First Data Corporation 274,922 329,370
5,500 IMS Health Incorporated 94,769 125,469
4,874 Interpublic Group Company Incorporated 115,758 200,443
88,432 Microsoft Corporation+ 2,972,111 8,008,623
5,891 Novell Incorporated+ 74,222 121,870
3,092 Omnicom Group Incorporated 135,660 244,848
24,944 Oracle Corporation+ 516,489 1,134,952
4,602 Parametric Technology Corporation+ 102,911 62,127
4,132 Peoplesoft Incorporated+ 128,801 69,985
</TABLE>
39
<PAGE>
Index Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
431 Shared Medical Systems Corporation $ 23,957 $ 20,149
13,458 Sun Micro Systems Incorporated+ 271,160 1,251,594
4,923 Unisys Corporation+ 85,653 222,150
------------- ------------
$ 9,125,005 $ 16,833,557
CHEMICALS & ALLIED PRODUCTS - 10.04%
26,456 Abbott Laboratories $ 829,065 $ 972,258
3,978 Air Products & Chemicals Incorporated 146,472 115,610
1,023 Alberto-Culver Company 27,090 23,657
1,716 ALZA Corporation+ 53,753 73,465
22,660 American Home Products Corporation 839,150 940,390
8,852 Amgen Incorporated+ 258,522 721,438
2,018 Avery Dennison Corporation 82,848 106,450
4,550 Avon Products Incorporated 143,745 112,897
34,488 Bristol-Myers Squibb Company 1,334,225 2,327,940
4,008 Clorox Company 144,820 153,305
10,080 Colgate-Palmolive Company 310,560 461,160
3,860 Dow Chemical Company 333,474 438,593
16,912 Dupont E I De Nemours Company 1,033,096 1,029,518
1,416 Eastman Chemical Company 81,894 56,640
18,811 Gillette Company 862,096 638,398
1,083 Great Lakes Chemical Corporation 49,405 41,222
1,853 International Flavors & Fragrances Incorporated 87,606 63,929
40,626 Merck & Company Incorporated 1,943,448 2,633,073
11,036 Monsanto Company 429,867 393,847
5,992 Occidental Petroleum Corporation 149,376 138,565
67,178 Pfizer Incorporated 1,412,766 2,414,209
8,780 Pharmacia & Upjohn Incorporated 333,299 435,708
3,033 PPG Industries Incorporated 167,414 181,980
2,716 Praxair Incorporated 127,121 124,935
23,006 Procter & Gamble Company 1,549,299 2,156,813
3,732 Rohm & Haas Company 118,865 134,819
25,510 Schering-Plough Corporation 665,216 1,112,874
1,774 Sigma Aldrich Corporation 56,783 56,325
</TABLE>
40
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Index Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
2,294 Union Carbide Corporation $ 103,286 $ 130,328
1,218 W.R. Grace & Company+ 17,587 19,564
14,859 Warner-Lambert Company 596,528 986,265
1,700 Watson Pharmaceuticals Incorporated+ 74,430 51,955
------------- ------------
$ 14,363,106 $ 19,248,130
COMMUNICATIONS - 9.05%
5,139 Alltel Corporation $ 214,141 $ 361,657
19,113 Ameritech Corporation 666,324 1,284,155
55,415 AT & T Corporation 1,667,282 2,410,553
26,978 Bell Atlantic Corporation 1,020,913 1,815,957
32,688 BellSouth Corporation 810,284 1,470,960
12,275 CBS Corporation+ 314,358 567,719
2,433 CenturyTel Incorporated 109,331 98,840
5,807 Clear Channel Communications Incorporated 276,925 463,834
12,858 Comcast Corporation 175,003 512,713
16,931 GTE Corporation 796,752 1,301,570
32,430 MCI WorldCom Incorporated+ 1,210,266 2,330,905
10,511 Media One Group Incorporated+ 255,912 718,033
5,543 Nextel Communications Incorporated+ 203,307 375,885
34,175 SBC Communications Incorporated 1,096,563 1,745,060
15,032 Sprint Corporation (FON Group) 375,378 815,485
7,679 Sprint Corporation (PCS Group)+ 127,752 572,565
8,768 US West Incorporated 337,379 500,324
------------- ------------
$ 9,657,870 $ 17,346,215
DOMESTIC DEPOSITORY INSTITUTIONS - 7.02%
3,150 AmSouth BanCorporation $ 102,701 $ 73,828
29,934 Bank of America Corporation 1,673,109 1,666,950
12,748 Bank of New York Company Incorporated 289,020 426,260
20,330 Bank One Corporation 918,928 707,738
5,163 BankBoston Corporation 198,665 223,945
5,451 BB & T Corporation 181,528 176,475
14,462 Chase Manhattan Corporation 751,541 1,090,073
</TABLE>
41
<PAGE>
Index Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
58,516 Citigroup Incorporated $ 1,749,744 $ 2,574,704
2,758 Comerica Incorporated 136,068 139,624
4,711 Fifth Third Bancorp 200,650 286,635
16,655 First Union Corporation 739,052 592,293
17,142 Firstar Corporation 504,284 439,264
9,873 Fleet Financial Group Incorporated 321,616 361,599
945 Golden West Financial Corporation 74,057 92,845
4,067 Huntington Bancshares Incorporated 117,681 108,030
7,830 KeyCorp 222,630 202,112
8,946 Mellon Bank Corporation 211,274 301,928
10,818 National City Corporation 339,399 288,705
1,938 Northern Trust Corporation 136,270 161,823
5,276 PNC Bank Corporation 229,632 277,979
3,839 Regions Financial Corporation 136,621 115,170
1,880 Republic New York Corporation 92,809 115,503
2,900 SouthTrust Corporation 115,431 104,038
2,849 State Street Corporation 156,887 184,117
2,976 Summit Bancorp 147,378 96,534
5,546 Suntrust Banks Incorporated 348,005 364,650
4,731 Synovus Financial Corporation 103,223 88,410
2,455 Union Planters Corporation 119,962 100,040
12,669 U.S. Bancorp 362,245 382,445
3,552 Wachovia Corporation 247,401 279,275
10,103 Washington Mutual Incorporated 375,936 295,513
28,667 Wells Fargo & Company# 800,786 1,135,930
------------- ------------
$ 12,104,533 $ 13,454,435
EATING & DRINKING PLACES - 0.64%
2,409 Darden Restaurants Incorporated $ 26,046 $ 47,125
23,560 McDonald's Corporation 593,223 1,013,080
2,626 Tricon Global Restaurants Incorporated+ 78,667 107,502
2,161 Wendy's International Incorporated 48,441 56,995
------------- ------------
$ 746,377 $ 1,224,702
</TABLE>
42
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Index Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
ELECTRIC, GAS & SANITARY SERVICES 2.47%
3,286 AES Corporation+ $ 122,945 $ 193,874
2,300 Allied Waste Industries Incorporated+ 41,297 26,880
2,442 Ameren Corporation 96,818 92,338
3,368 American Electric Power Company+ 147,033 114,933
2,607 Carolina Power & Light Company 93,232 92,223
3,698 Central & Southwest Corporation 90,328 78,120
2,729 Cinergy Corporation 89,361 77,265
2,100 CMS Energy Corporation 92,309 71,269
1,484 Columbia Energy Group 68,273 82,177
3,858 Consolidated Edison Company 133,902 160,107
1,669 Consolidated Natural Gas Company 91,803 104,104
2,656 Constellation Energy Group 73,128 74,700
3,335 Dominion Resources Incorporated 127,887 150,492
2,504 DTE Energy Company 79,384 90,457
6,385 Duke Energy Corporation 304,917 351,973
405 Eastern Enterprises 15,978 18,807
6,139 Edison International 143,825 149,254
4,283 Entergy Corporation 112,635 123,939
4,131 FirstEnergy Corporation 103,563 105,340
1,700 Florida Progress Corporation 71,874 78,625
3,093 FPL Group Incorporated 148,706 155,810
2,208 GPU Incorporated 79,252 72,035
1,991 New Century Energies Incorporated 95,443 66,574
3,177 Niagara Mohawk Holdings Incorporated+ 38,278 49,045
888 Nicor Incorporated 33,046 33,023
2,633 Northern States Power Company 66,765 56,774
530 Oneok Incorporated 17,592 16,065
6,630 Pacific Gas & Electric Company 172,294 171,550
5,102 PacifiCorp 109,142 102,678
3,298 PECO Energy Company 82,702 123,675
598 People's Energy Corporation 20,518 21,042
2,707 PP & L Resources Incorporated 62,455 73,258
3,857 Public Service Enterprise Group Incorporated 109,248 148,977
5,092 Reliant Energy Incorporated 117,753 137,802
4,179 Sempra Energy 104,838 86,975
</TABLE>
43
<PAGE>
Index Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
1,917 Sonat Incorporated $ 87,201 $ 76,081
11,929 Southern Company 275,417 307,172
4,862 Texas Utilities Company 189,089 181,413
3,796 Unicom Corporation 102,007 140,215
10,587 Waste Management Incorporated+ 523,738 203,800
7,478 Williams Companies Incorporated 189,977 279,958
------------- ------------
$ 4,725,953 $ 4,740,799
ELECTRONIC & OTHER ELECTRICAL EQUIPMENT & COMPONENTS, EXCEPT COMPUTER EQUIPMENT- 10.87%
2,000 ADC Telecommunications Incorporated+ $ 89,000 $ 83,875
2,504 Advanced Micro Devices Incorporated+ 67,558 43,038
1,417 Andrew Corporation+ 40,147 24,620
7,581 Emerson Electric Company 399,971 479,024
56,857 General Electric Company 3,639,552 6,741,108
2,977 General Instrument Corporation+ 60,283 143,268
12,701 Global Crossing Limited 245,128 336,583
57,322 Intel Corporation 2,114,469 4,259,741
2,445 LSI Logic Corporation+ 73,555 125,918
52,970 Lucent Technologies Incorporated 1,228,570 3,436,429
1,587 Maytag Corporation 46,774 52,867
4,380 Micron Technology Incorporated+ 190,244 291,544
10,504 Motorola Incorporated 670,037 924,352
2,911 National Semiconductor Corporation+ 80,858 88,786
690 National Service Industries Incorporated 28,110 21,735
1,200 Network Appliance Incorporated+ 63,064 85,950
23,018 Nortel Networks Corporation 519,800 1,173,918
2,700 QUALCOMM Incorporated+ 426,128 510,806
5,835 Raytheon Company 308,602 289,562
1,347 Scientific-Atlanta Incorporated 27,117 66,761
6,826 Tellabs Incorporated+ 185,111 388,655
13,676 Texas Instruments Incorporated 318,975 1,124,851
1,007 Thomas & Betts Corporation 50,385 51,357
1,362 Whirlpool Corporation 73,227 88,956
------------- ------------
$ 10,946,665 $ 20,833,704
</TABLE>
44
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Index Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
ENGINEERING, ACCOUNTING, RESEARCH, MANAGEMENT & RELATED SERVICES - 0.33%
2,851 Dun & Bradstreet Corporation $ 70,230 $ 85,174
751 EG & G Incorporated 14,294 29,899
1,360 Fluor Corporation 76,066 54,740
7,674 Halliburton Company 302,826 314,634
4,312 Paychex Incorporated 146,535 147,147
------------- ------------
$ 609,951 $ 631,594
FABRICATED METAL PRODUCTS, EXCEPT MACHINERY & TRANSPORTATION EQUIPMENT - 0.56%
518 Ball Corporation $ 15,352 $ 22,824
1,602 Cooper Industries Incorporated 81,628 74,894
1,228 Crane Company 30,459 27,553
2,116 Crown Cork & Seal Company Incorporated 104,554 51,313
2,936 Fortune Brands Incorporated 103,233 94,686
4,400 Illinois Tool Works Incorporated 212,608 328,075
6,846 Lockheed Martin Corporation 312,564 223,779
7,112 Masco Corporation 164,288 220,472
1,172 Snap-On Incorporated 44,299 38,090
------------- ------------
$ 1,068,985 $ 1,081,686
FOOD & KINDRED PRODUCTS - 3.40%
610 Adolph Coors Company $ 16,278 $ 33,016
8,154 Anheuser-Busch Companies 349,028 571,290
10,731 Archer Daniels Midland Company 198,040 130,784
4,826 Bestfoods Incorporated 207,713 234,061
7,576 Campbell Soup Company 329,107 296,411
42,813 Coca Cola Company 2,516,842 2,057,700
7,362 Coca Cola Enterprises Incorporated 219,963 166,105
8,490 ConAgra Incorporated 243,762 191,556
2,631 General Mills Incorporated 173,723 213,440
6,287 Heinz (H.J.) Company 277,055 270,341
1,755 Hercules Incorporated 83,960 50,237
2,456 Hershey Foods Corporation 128,178 119,577
</TABLE>
45
<PAGE>
Index Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
7,076 Kellogg Company $ 284,781 $ 264,908
25,386 PepsiCo Incorporated 841,476 767,927
2,356 Quaker Oats Company 104,806 145,778
5,668 Ralston-Ralston Purina Group 152,340 157,641
15,766 Sara Lee Corporation 352,373 369,515
7,421 Seagrams Company Limited 285,835 337,656
2,023 William Wrigley Jr. Company 131,814 139,208
------------- ------------
$ 6,897,074 $ 6,517,151
FOOD STORES - 0.54%
7,362 Albertson's Incorporated $ 274,621 $ 291,259
730 Great Atlantic & Pacific Tea Company 21,030 22,128
14,192 Kroger Company+ 264,138 313,111
8,624 Safeway Incorporated+ 472,719 328,250
2,637 Winn-Dixie Stores Incorporated 97,920 78,286
------------- ------------
$ 1,130,428 $ 1,033,034
FURNITURE & FIXTURES - 0.12%
1,500 Johnson Controls Incorporated $ 67,505 $ 99,469
4,851 Newell Rubbermaid Incorporated 170,898 138,557
------------- ------------
$ 238,403 $ 238,026
GENERAL MERCHANDISE STORES - 2.80%
1,904 Consolidated Stores Corporation+ $ 79,747 $ 42,007
7,667 Dayton Hudson Corporation 215,988 460,499
1,868 Dillards Incorporated 60,965 37,944
3,833 Dollar General Corporation 110,997 118,344
3,592 Federated Department Stores Incorporated+ 137,945 156,926
1,268 Harcourt General Incorporated 61,257 52,781
4,602 J.C. Penney Company Incorporated 252,345 158,194
8,565 K Mart Corporation+ 111,573 100,103
5,856 May Department Stores Company 197,894 213,378
6,637 Sears, Roebuck & Company 328,008 208,236
</TABLE>
46
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Index Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
5,534 TJX Companies Incorporated $ 78,639 $ 155,298
77,188 Wal-Mart Stores Incorporated 1,457,106 3,671,254
------------- ------------
$ 3,092,464 $ 5,374,964
HEALTH SERVICES - 0.20%
9,977 Columbia HCA Healthcare Corporation $ 317,262 $ 211,388
1,942 HCR Manor Care Incorporated+ 59,412 33,621
7,293 HealthSouth Corporation+ 176,891 44,214
5,329 Tenet Healthcare Corporation+ 150,630 93,591
------------- ------------
$ 704,195 $ 382,814
HEAVY CONSTRUCTION OTHER THAN BUILDING CONSTRUCTION-CONTRACTORS - 0.02%
696 Foster Wheeler Corporation $ 25,498 $ 8,396
1,088 McDermott International Incorporated 31,632 22,032
------------- ------------
$ 57,130 $ 30,428
HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 0.28%
3,600 Best Buy Company Incorporated+ $ 237,692 $ 223,425
3,482 Circuit City Stores Incorporated 62,438 146,897
3,392 Tandy Corporation 53,958 175,324
------------- ------------
$ 354,088 $ 545,646
HOTELS, ROOMING HOUSES, CAMPS & OTHER LODGING PLACES - 0.12%
4,412 Hilton Hotels Corporation $ 81,805 $ 43,569
4,344 Marriott International 123,104 141,995
3,404 Mirage Resorts Incorporated+ 85,929 47,869
------------- ------------
$ 290,838 $ 233,433
</TABLE>
47
<PAGE>
Index Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
INDUSTRIAL & COMMERCIAL MACHINERY & COMPUTER
EQUIPMENT - 9.13%
2,705 Apple Computer Incorporated+ $ 77,128 $ 171,260
6,411 Applied Materials Incorporated+ 205,439 499,257
5,675 Baker Hughes Incorporated 170,365 164,575
1,557 Black & Decker Corporation 61,412 71,135
377 Briggs & Stratton Corporation 17,365 22,007
1,298 Case Corporation 70,614 64,657
6,221 Caterpillar Incorporated 292,343 340,989
652 Cincinnati Milacron Incorporated 15,601 11,573
56,210 Cisco Systems Incorporated+ 1,157,247 3,853,898
29,537 Compaq Computer Corporation 724,828 677,505
783 Cummins Engine Company Incorporated 44,618 39,003
824 Data General Corporation+ 19,160 17,356
4,026 Deere & Company 195,252 155,756
44,052 Dell Computer Corporation+ 443,522 1,841,924
3,642 Dover Corporation 114,072 148,867
17,588 EMC Corporation+ 262,362 1,256,443
5,470 Gateway Incorporated+ 161,905 243,073
1,416 Harris Corporation 54,374 39,117
17,622 Hewlett-Packard Company 1,045,375 1,621,224
31,368 IBM Corporation 1,529,620 3,807,291
2,923 Ingersoll-Rand Company 112,839 160,582
2,100 Lexmark International Group Incorporated+ 141,973 169,050
7,020 Minnesota Mining and Manufacturing Company 601,437 674,359
2,165 Pall Corporation 49,923 50,201
1,907 Parker-Hannifin Corporation 69,022 85,457
4,674 Pitney Bowes Incorporated 182,354 284,822
3,963 Seagate Technology Incorporated+ 137,742 122,110
3,213 Silicon Graphics Incorporated+ 66,741 35,142
4,492 Solectron Corporation+ 212,651 322,582
1,575 Stanley Works 58,085 39,670
</TABLE>
48
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Index Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
1,021 Timken Company $ 30,895 $ 16,464
8,338 United Technologies Corporation 334,785 494,548
------------- ------------
$ 8,661,049 $ 17,501,897
INSURANCE AGENTS, BROKERS & SERVICE - 0.24%
4,483 Aon Corporation $ 153,166 $ 132,529
2,784 Humana Incorporated+ 63,767 19,140
4,536 Marsh & McLennan Companies Incorporated 212,034 310,716
------------- ------------
$ 428,967 $ 462,385
INSURANCE CARRIERS - 2.76%
2,465 Aetna Incorporated $ 210,587 $ 121,401
4,600 AFLAC Incorporated 237,175 192,625
13,951 Allstate Corporation 495,163 347,903
4,367 American General Corporation 208,834 275,940
26,823 American International Group Incorporated 1,340,273 2,331,925
2,796 Chubb Corporation 175,050 139,276
3,515 CIGNA Corporation 192,647 273,291
2,858 Cincinnati Financial Corporation 129,949 107,264
5,578 Conseco Incorporated 224,412 107,725
3,962 Hartford Financial Services Group 157,404 161,947
1,857 Jefferson-Pilot Corporation 84,511 117,339
3,544 Lincoln National Corporation 114,995 133,122
1,881 Loews Corporation 183,503 132,023
1,740 MBIA Incorporated 104,632 81,128
1,907 MGIC Investment Corporation 88,719 91,059
1,299 Progressive Corporation 150,597 106,112
2,351 Safeco Corporation 106,178 65,828
4,004 St. Paul Companies Incorporated 144,391 110,110
2,321 Torchmark Corporation 68,892 60,056
2,985 United Healthcare Corporation 153,455 145,332
4,091 UnumProvident Corporation 182,812 120,429
1,200 Wellpoint Health Networks Incorporated+ 103,293 68,400
------------- ------------
$ 4,857,472 $ 5,290,235
</TABLE>
49
<PAGE>
Index Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
LOCAL & SUBURBAN TRANSIT & INTERURBAN HIGHWAY PASSENGER TRANSPORTATION - 0.02%
5,626 Laidlaw Incorporated $ 72,894 $ 37,976
LUMBER & WOOD PRODUCTS, EXCEPT FURNITURE - 0.02%
1,897 Louisiana-Pacific Corporation $ 44,531 $ 29,641
MEASURING, ANALYZING, & CONTROLLING INSTRUMENTS; PHOTOGRAPHIC, MEDICAL & OPTICAL GOODS - 2.56%
1,195 Allergan Incorporated $ 47,319 $ 131,450
1,019 Bausch & Lomb Incorporated 46,163 67,190
5,076 Baxter International Incorporated 256,062 305,829
4,392 Becton, Dickinson & Company 103,881 123,251
1,961 Biomet Incorporated 43,220 51,599
6,804 Boston Scientific Corporation+ 196,769 167,974
892 C.R. Bard Incorporated 29,581 41,980
2,316 Danaher Corporation 105,572 122,024
5,554 Eastman Kodak Company 387,944 418,980
1,245 Eaton Corporation 98,951 107,459
18,956 Eli Lilly & Company 992,356 1,213,184
5,182 Guidant Corporation+ 124,086 277,885
2,184 Honeywell Incorporated 150,926 243,107
1,544 KLA-Tencor Corporation+ 98,680 100,360
1,289 Mallinckrodt Incorporated 49,355 38,912
20,330 Medtronic Incorporated 509,295 721,715
819 Millipore Corporation 32,652 30,764
1,780 PE Corporation - PE Biosystems Group 56,273 128,605
807 Polaroid Corporation 33,984 20,982
1,476 St. Jude Medical Incorporated+ 52,162 46,494
850 Tektronix Incorporated 31,925 28,475
2,745 Thermo Electron Corporation+ 105,454 36,886
11,536 Xerox Corporation 404,315 483,791
------------- ------------
$ 3,956,925 $ 4,908,896
</TABLE>
50
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Index Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
METAL MINING - 0.29%
667 ASARCO Incorporated $ 18,159 $ 17,884
6,780 Barrick Gold Corporation 154,612 147,465
1,471 Cyprus Amax Minerals 33,862 28,868
2,769 Freeport-McMoran Copper & Gold Incorporated+ 75,106 43,093
4,435 Homestake Mining Company 53,577 40,747
3,254 Inco Limited Company 85,682 69,554
2,885 Newmont Mining Corporation 102,103 74,649
967 Phelps Dodge Corporation 67,902 53,245
5,569 Placer Dome Incorporated 95,384 82,839
------------- ------------
$ 686,387 $ 558,344
MINING & QUARRYING OF NONMETALLIC MINERALS, EXCEPT
FUELS - 0.03%
1,400 Vulcan Materials Company $ 67,574 $ 51,275
MISCELLANEOUS MANUFACTURING INDUSTRIES - 0.91%
732 Armstrong World Industries Incorporated $ 48,483 $ 32,894
3,406 Hasbro Incorporated 68,012 73,016
673 Jostens Incorporated 15,584 12,871
7,266 Mattel Incorporated 226,189 138,054
129 NACCO Industries Incorporated 8,392 9,014
14,383 Tyco International Limited 706,264 1,485,045
------------- ------------
$ 1,072,924 $ 1,750,894
MISCELLANEOUS RETAIL - 0.76%
1,900 Bed, Bath & Beyond Incorporated $ 66,288 $ 66,381
3,775 Costco Wholesale Corporation+ 136,516 271,800
6,808 CVS Corporation 207,663 277,852
652 Longs Drug Stores Incorporated 18,077 19,479
6,500 Office Depot Incorporated+ 146,780 66,219
4,572 Rite Aid Corporation 120,172 63,151
8,029 Staples Incorporated+ 155,507 175,133
</TABLE>
51
<PAGE>
Index Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
4,433 Toys R Us Incorporated+ $ 139,640 $ 66,495
17,412 Walgreen Company 234,272 441,830
------------- ------------
$ 1,224,915 $ 1,448,340
MOTION PICTURES - 1.21%
1,221 King World Productions Incorporated+ $ 27,474 $ 45,788
22,157 Time Warner Incorporated 708,968 1,346,038
35,821 Walt Disney Company 985,584 926,868
------------- ------------
$ 1,722,026 $ 2,318,694
NONDEPOSITORY CREDIT INSTITUTIONS - 2.31%
7,821 American Express Company $ 553,513 $ 1,052,902
12,639 Associates First Capital Corporation 371,167 455,004
3,483 Capital One Financial Corporation 147,323 135,837
1,940 Countrywide Credit Industries Incorporated 69,752 62,565
12,098 Federal Home Loan Mortgage Corporation 431,439 629,096
17,819 Federal National Mortgage Association 828,049 1,117,029
8,374 Household International Incorporated 271,100 336,007
13,932 MBNA Corporation 230,311 317,824
2,444 Providian Financial Corporation 72,212 193,534
2,844 SLM Holding Corporation 138,029 122,292
------------- ------------
$ 3,112,895 $ 4,422,090
OIL & GAS EXTRACTION - 1.23%
2,190 Anadarko Petroleum Corporation $ 73,112 $ 66,932
1,930 Apache Corporation 68,640 83,352
5,600 Atlantic Richfield Company 402,235 496,300
3,137 Burlington Resources Incorporated 137,010 115,285
12,332 Enron Corporation 281,068 508,695
834 Helmerich & Payne Incorporated 25,433 21,111
1,475 Kerr-McGee Corporation 91,068 81,217
5,650 Nabisco Group Holdings Corporation 100,186 84,750
1,423 Rowan Companies Incorporated+ 36,233 23,124
9,521 Schlumberger Limited 592,958 593,277
</TABLE>
52
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Index Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
2,000 Tosco Corporation $ 53,160 $ 50,500
4,289 Union Pacific Resources Group Incorporated 112,360 68,892
5,392 USX-Marathon Group Incorporated 150,286 157,716
------------- ------------
$ 2,123,749 $ 2,351,151
PAPER & ALLIED PRODUCTS - 0.92%
964 Bemis Incorporated $ 38,134 $ 32,656
1,041 Boise Cascade Corporation 37,784 37,931
1,688 Champion International Corporation 84,258 86,721
3,802 Fort James Corporation 154,721 101,466
3,018 Georgia-Pacific Corporation 94,290 122,229
2,489 IKON Office Solutions Incorporated 76,379 26,601
7,187 International Paper Company 320,769 345,425
9,238 Kimberly-Clark Corporation 448,629 484,995
1,802 Mead Corporation 55,745 61,944
472 Potlatch Corporation 21,490 19,441
1,017 Temple-Inland Incorporated 60,752 61,529
3,001 Tenneco Incorporated 128,421 51,017
1,758 Westvaco Corporation 54,143 45,049
3,494 Weyerhaeuser Company 177,910 201,342
1,944 Willamette Industries Incorporated 69,030 83,835
------------- ------------
$ 1,822,455 $ 1,762,181
PERSONAL SERVICES - 0.07%
1,735 H & R Block Incorporated $ 65,888 $ 75,364
4,669 Service Corporation International 145,156 49,316
------------- ------------
$ 211,044 $ 124,680
PETROLEUM REFINING & RELATED INDUSTRIES - 4.89%
1,603 Amerada Hess Corporation $ 89,636 $ 98,184
1,270 Ashland Incorporated 59,804 42,704
11,347 Chevron Corporation 833,235 1,007,046
3,670 Coastal Corporation 94,555 150,241
10,918 Conoco Incorporated 154,918 298,880
</TABLE>
53
<PAGE>
Index Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
42,139 Exxon Corporation $ 2,414,278 $ 3,199,930
13,574 Mobil Corporation 937,274 1,367,581
4,414 Phillips Petroleum Company 196,105 215,183
37,204 Royal Dutch Petroleum Company 1,784,271 2,197,361
1,639 Sunoco Incorporated 57,600 45,073
9,317 Texaco Incorporated 493,431 588,136
4,199 Unocal Corporation 158,879 155,625
------------- ------------
$ 7,273,986 $ 9,365,944
PRIMARY METAL INDUSTRIES - 0.44%
3,947 Alcan Aluminum Limited $ 128,950 $ 123,344
6,372 Alcoa Incorporated 225,518 395,462
3,443 Allegheny Teledyne Incorporated 88,432 58,101
2,145 Bethlehem Steel Corporation+ 24,279 15,819
2,172 Engelhard Corporation 44,967 39,503
1,555 Nucor Corporation 82,624 74,057
1,140 Reynolds Metals Company 72,857 68,828
1,571 USX-U.S. Steel Group Incorporated 50,649 40,453
1,527 Worthington Industries Incorporated 28,933 25,959
------------- ------------
$ 747,209 $ 841,526
PRINTING, PUBLISHING & ALLIED INDUSTRIES - 0.89%
1,172 American Greetings Company $ 37,558 $ 30,179
1,557 Dow Jones & Company Incorporated 68,221 83,105
4,857 Gannet Company Incorporated 242,337 336,044
1,402 Knight-Ridder Incorporated 66,330 76,935
3,390 McGraw-Hill Incorporated 104,076 163,991
932 Meredith Corporation 25,752 33,843
3,100 New York Times Company 79,298 116,250
2,230 R.R. Donnelley & Sons Company 81,778 64,391
1,287 Times Mirror Company 67,858 84,701
4,134 Tribune Company 97,614 205,667
12,012 Viacom Incorporated+ 248,244 507,507
------------- ------------
$ 1,119,066 $ 1,702,613
</TABLE>
54
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Index Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
RAILROAD TRANSPORTATION - 0.44%
8,159 Burlington Northern Santa Fe Corporation $ 245,551 $ 224,373
3,797 CSX Corporation 190,983 160,898
1,900 Kansas City Southern Industries
Incorporated 108,938 88,230
6,575 Norfolk Southern Corporation 203,778 161,088
4,272 Union Pacific Corporation 252,844 205,323
------------- ------------
$ 1,002,094 $ 839,912
RUBBER & MISCELLANEOUS PLASTICS PRODUCTS - 0.28%
1,339 Cooper Tire & Rubber Company $ 30,606 $ 23,600
2,681 Goodyear Tire & Rubber Company 152,246 129,023
4,932 Nike Incorporated 243,128 280,508
929 Reebok International Limited+ 35,070 9,929
1,493 Sealed Air Corporation+ 87,525 76,610
1,039 Tupperware Corporation 37,853 21,040
------------- ------------
$ 586,428 $ 540,710
SECURITY & COMMODITY BROKERS, DEALERS, EXCHANGES & SERVICES - 1.34%
1,962 Bear Stearns Companies Incorporated $ 105,140 $ 75,414
14,256 Charles Schwab Corporation 181,117 480,249
4,389 Franklin Resources Incorporated 232,090 134,962
3,085 J.P. Morgan & Company Incorporated 321,684 352,460
2,024 Lehman Brothers Holdings Incorporated 111,737 118,025
6,450 Merrill Lynch & Company Incorporated 382,135 433,359
9,933 Morgan Stanley Dean Witter & Company 498,759 885,899
2,500 Paine Webber Group Incorporated 107,407 90,625
------------- ------------
$ 1,940,069 $ 2,570,993
</TABLE>
55
<PAGE>
Index Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
STONE, CLAY, GLASS & CONCRETE PRODUCTS - 0.19%
4,226 Corning Incorporated $ 181,985 $ 289,745
961 Owens Corning 37,290 20,842
2,757 Owens-Illinois Incorporated+ 101,202 54,623
------------- ------------
$ 320,477 $ 365,210
TEXTILE MILL PRODUCTS - 0.01%
683 Russell Corporation $ 19,089 $ 9,690
286 Springs Industries Incorporated 14,789 9,706
------------- ------------
$ 33,878 $ 19,396
TOBACCO PRODUCTS - 0.79%
41,517 Philip Morris Incorporated $ 1,632,367 $ 1,419,362
3,082 UST Incorporated 94,433 93,038
------------- ------------
$ 1,726,800 $ 1,512,400
TRANSPORTATION BY AIR - 0.33%
2,688 AMR Corporation+ $ 145,649 $ 146,496
2,452 Delta Air Lines Incorporated 116,934 118,922
5,164 FDX Corporation+ 147,452 200,105
8,808 Southwest Airlines Company 83,503 133,772
1,309 US Airways Group Incorporated+ 68,022 34,361
------------- ------------
$ 561,560 $ 633,656
TRANSPORTATION EQUIPMENT - 2.32%
9,551 Allied Signal Incorporated $ 362,700 $ 572,463
16,685 Boeing Company 812,199 711,198
1,601 Brunswick Corporation 45,437 39,825
2,936 Dana Corporation 116,777 108,999
9,809 Delphi Automotive Systems Corporation 149,188 157,557
642 Fleetwood Enterprises Incorporated 21,435 12,960
552 FMC Corporation+ 43,352 26,634
20,976 Ford Motor Company 621,682 1,052,733
3,199 General Dynamics Corporation 151,017 199,738
</TABLE>
56
<PAGE>
PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999 Index Allocation Fund
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES SECURITY NAME COST VALUE
<C> <S> <C> <C> <C> <C>
COMMON STOCK (CONTINUED)
11,216 General Motors Corporation $ 559,023 $ 705,907
3,170 Genuine Parts Company 100,440 84,203
1,537 Goodrich (B. F.) Company 63,758 44,573
1,518 ITT Industries Incorporated 44,078 48,290
1,191 Navistar International Corporation+ 27,417 55,382
1,240 Northrop Grummman Corporation 115,279 78,818
1,399 PACCAR Incorporated 62,957 71,174
3,349 Rockwell International Corporation 139,985 175,823
2,621 Textron Incorporated 161,810 202,800
2,083 TRW Incorporated 108,990 103,629
------------- ------------
$ 3,707,524 $ 4,452,706
WATER TRANSPORTATION - 0.24%
10,700 Carnival Corporation $ 465,053 $ 465,450
WHOLESALE TRADE-DURABLE GOODS - 1.17%
1,676 Grainger (W. W.) Incorporated $ 71,380 $ 80,553
23,301 Johnson & Johnson 1,382,740 2,140,779
878 Pep Boys - Manny, Moe & Jack 27,228 13,060
------------- ------------
$ 1,481,348 $ 2,234,392
WHOLESALE TRADE-NONDURABLE GOODS - 0.73%
1,214 Brown-Forman Corporation $ 59,250 $ 75,723
4,700 Cardinal Health Incorporated 265,034 256,150
4,806 McKesson HBOC Incorporated 341,469 139,374
2,075 Supervalu Incorporated 37,677 45,260
5,826 Sysco Corporation 110,732 204,274
9,881 Unilever NV 567,747 673,143
------------- ------------
$ 1,381,909 $ 1,393,924
TOTAL COMMON STOCKS $ 130,489,040 $183,214,208
</TABLE>
57
<PAGE>
Index Allocation Fund PORTFOLIO OF INVESTMENTS - SEPTEMBER 30, 1999
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INTEREST MATURITY
PRINCIPAL SECURITY NAME RATE DATE VALUE
<C> <S> <C> <C> <C> <C>
U.S. TREASURY BILLS - 4.32%
$ 450,000 U.S. Treasury Bills 4.71%- 12/23/99 $ 445,113
7,859,000 U.S. Treasury Bills 4.42- 11/04/99 7,825,408
------------
TOTAL U.S. TREASURY BILLS $ 8,270,521
(Cost $8,270,990)
TOTAL INVESTMENTS IN SECURITIES
</TABLE>
<TABLE>
<C> <S> <C> <C>
(Cost $138,760,030)* (Notes 1 and 3) 99.92% $191,484,729
Other Assets and Liabilities, Net 0.08 151,518
------ ------------
TOTAL NET ASSETS 100.00% $191,636,247
====== ============
- ------------------------------------------------------------------------------------------------------
</TABLE>
# SECURITY OF AN AFFILIATE OF THE FUND WITH A COST OF $800,786.
+ NON-INCOME EARNING SECURITIES.
- YIELD TO MATURITY.
* COST FOR FEDERAL INCOME TAX PURPOSES IS $138,774,747 AND NET
UNREALIZED APPRECIATION CONSISTS OF:
<TABLE>
<S> <C>
Gross Unrealized Appreciation $60,407,573
Gross Unrealized Depreciation (7,697,591)
-----------
NET UNREALIZED APPRECIATION $52,709,982
===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
58
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES - SEPTEMBER 30, 1999 Allocation Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET INDEX
ALLOCATION ALLOCATION
FUND FUND
<S> <C> <C>
ASSETS
INVESTMENTS:
In securities, at market value (see cost below) $1,812,728,304 $191,484,729
Cash 20,231 5,712
RECEIVABLES:
Dividends and interest 11,831,759 204,441
Fund shares sold 4,178,983 482,141
Investment securities sold 1,629,422 306,783
Variation margin on futures contract 68,625 100,650
Organization expenses, net of amortization 143 0
Prepaid expenses 0 13,651
TOTAL ASSETS 1,830,457,467 192,598,107
LIABILITIES
Payables:
Investment securities purchased 1,703,066 310,042
Distribution to shareholders 262,830 8,501
Fund shares redeemed 3,102,014 210,344
Due to distributor (Note 2) 1,156,534 67,230
Due to adviser (Note 2) 1,298,512 202,973
Other payables 39,887 0
Accrued expenses 457,188 162,770
TOTAL LIABILITIES 8,020,031 961,860
TOTAL NET ASSETS
$1,822,437,436 $191,636,247
NET ASSETS CONSIST OF:
Paid-in capital $1,345,307,703 $132,637,847
Undistributed net investment income (loss) (283) 0
Undistributed net realized gain (loss) on
investments 255,065,661 6,650,851
Net unrealized appreciation (depreciation) of
investments 222,356,105 52,724,699
Net unrealized appreciation (depreciation) of
futures (291,750) (377,150)
TOTAL NET ASSETS $1,822,437,436 $191,636,247
COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE PER SHARE
Net assets - Class A $1,310,934,924 $ 94,675,658
Shares outstanding - Class A 50,731,283 4,800,343
Net asset value per share - Class A $ 25.84 $ 19.72
Maximum offering price per share - Class A(1) $ 27.42 $ 20.92
Net Assets - Class B $ 491,284,400 $ 19,430,696
Shares outstanding - Class B 31,424,629 799,520
Net asset value and offering price per share -
Class B $ 15.63 $ 24.30
Net Assets - Class C $ 20,218,112 $ 77,529,893
Shares outstanding - Class C 1,289,065 3,188,164
Net asset value and offering price per share -
Class C $ 15.68 $ 24.32
INVESTMENT AT COST (NOTE 3) $1,590,372,199 $138,760,030
- ------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<C> <S>
(1) MAXIMUM OFFERING PRICE IS COMPUTED AS 100/94.25 OF NET ASSET
VALUE. ON INVESTMENTS OF $50,000 OR MORE THE OFFERING PRICE
IS REDUCED.
The accompanying notes are an integral part of these financial
statements.
</TABLE>
59
<PAGE>
Allocation Funds STATEMENTS OF OPERATIONS
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
--------------------------------------------
FOR THE SEVEN FOR THE ELEVEN
MONTHS ENDED MONTHS ENDED
SEPTEMBER 30, 1999 FEBRUARY 28, 1999
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 9,707,050 $ 16,351,828
Interest 23,462,643 22,227,037
TOTAL INVESTMENT INCOME 33,169,693 38,578,865
EXPENSES (NOTE 2)
Advisory fees 3,717,689 5,217,515
Administration fees 1,350,337 1,057,283
Shareholder servicing fees 3,273,203 4,529,595
Portfolio accounting fees 254,587 358,355
Transfer agency fees 1,430,384 2,114,566
Distribution fees 1,976,473 2,163,298
Organization costs 780 1,371
Legal and audit fees 136,513 110,720
Registration fees 74,186 126,021
Directors' fees 613 2,317
Shareholder reports 237,879 271,637
Other 71,400 72,531
TOTAL EXPENSES 12,524,044 16,025,209
Less:
Waived fees and reimbursed expenses (245,985) (44,800)
Net Expenses 12,278,059 15,980,409
NET INVESTMENT INCOME (LOSS) 20,891,634 22,598,456
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments and futures 236,424,412 142,835,083
Net change in unrealized appreciation
(depreciation) of investment (221,676,896) 44,504,574
Net unrealized appreciation
(depreciation) of futures (291,750) 0
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS 14,455,766 187,339,657
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 35,347,400 $ 209,938,113
- --------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
60
<PAGE>
STATEMENTS OF OPERATIONS Allocation Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDEX ALLOCATION FUND
--------------------------------------------
FOR THE SEVEN FOR THE ELEVEN
MONTHS ENDED MONTHS ENDED
SEPTEMBER 30, 1999 FEBRUARY 28, 1999
<S> <C> <C>
INVESTMENT INCOME
Dividends $ 1,489,518 $ 2,060,542
Interest 102,609 79,573
TOTAL INVESTMENT INCOME 1,592,127 2,140,115
EXPENSES (NOTE 2)
Advisory fees 785,748 1,008,438
Administration fees 139,594 100,844
Shareholder servicing fees 162,117 152,329
Portfolio accounting fees 58,506 85,087
Transfer agency fees 125,880 201,687
Distribution fees 528,455 664,814
Organization costs 0 0
Legal and audit fees 4,903 32,749
Registration fees 4,945 31,981
Directors' fees 1,070 2,591
Shareholder reports 26,807 40,474
Other 2,215 27,281
TOTAL EXPENSES 1,840,240 2,348,275
Less:
Waived fees and reimbursed expenses (8,485) (24,758)
Net Expenses 1,831,755 2,323,517
NET INVESTMENT INCOME (LOSS) (239,628) (183,402)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net realized gain (loss) on sale of
investments and futures 2,237,462 8,684,372
Net change in unrealized appreciation
(depreciation) of investment 3,845,296 9,193,064
Net unrealized appreciation
(depreciation) of futures (377,150) 0
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS 5,705,608 17,877,436
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 5,465,980 $ 17,694,034
- -----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
61
<PAGE>
Allocation Funds STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
-------------------------------------------------------------
FOR THE SEVEN FOR THE ELEVEN FOR THE
MONTHS ENDED MONTHS ENDED YEAR ENDED
SEPT. 30, 1999 FEBRUARY 28, 1999 MARCH 31, 1998
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ 20,891,634 $ 22,598,456 $ 38,685,284
Net realized gain (loss) on sale of
investments and futures 236,424,412 142,835,083 107,023,056
Net change in unrealized appreciation
(depreciation) of investments (221,676,896) 44,504,574 266,073,223
Net unrealized appreciation
(depreciation) of futures (291,750) 0 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 35,347,400 209,938,113 411,781,563
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (18,297,226) (17,033,688) (35,147,512)
CLASS B (5,507,711) (2,432,608) (3,537,772)
CLASS C (203,506) (15,634)(1) N/A
From net realized gain on sale of
investments
CLASS A 0 (114,145,484) (82,707,854)
CLASS B 0 (31,172,331) (13,021,038)
CLASS C 0 (540,952)(1) N/A
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 62,139,392 101,471,242 124,090,392
Reinvestment of dividends - Class A 17,993,300 135,550,735 120,926,511
Cost of shares redeemed - Class A (144,669,816) (216,463,258) (224,954,049)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A (64,537,124) 20,558,719 20,062,854
Proceeds from shares sold - Class B 118,452,976 141,646,232 147,505,581
Reinvestment of dividends - Class B 5,319,893 33,599,069 16,241,731
Cost of shares redeemed - Class B (34,633,257) (47,391,618) (19,143,117)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 89,139,612 127,853,683 144,604,195
Proceeds from shares sold - Class C 12,297,723 10,142,395(1) N/A
Reinvestment of dividends - Class C 160,631 527,615(1) N/A
Cost of shares redeemed - Class C (1,995,418) (555,033)(1) N/A
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS C 10,462,936 10,114,977(1) N/A
INCREASE (DECREASE) IN NET ASSETS 46,404,381 203,124,795 442,034,436
NET ASSETS:
Beginning net assets 1,776,033,055 1,572,908,260 1,130,873,824
ENDING NET ASSETS $1,822,437,436 $1,776,033,055 $1,572,908,260
ENDING BALANCE OF UNDISTRIBUTED NET
INVESTMENT INCOME $ (283) $ 3,116,526 $ 0
- -------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This class of shares commenced operations on April 1, 1998.
(2) This class of shares commenced operations December 15, 1997.
The accompanying notes are an integral part of these financial statements.
62
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS Allocation Funds
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDEX ALLOCATION FUND
-------------------------------------------------------------------------------------
FOR THE SEVEN FOR THE ELEVEN FOR THE THREE FOR THE
MONTHS ENDED MONTHS ENDED MONTHS ENDED YEAR ENDED
SEPT. 30, 1999 FEBRUARY 28, 1999 MARCH 31, 1998 DECEMBER 31, 1997
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income (loss) $ (239,628) $ (183,402) $ 6,593 $ 1,656,589
Net realized gain (loss) on sale of
investments and futures 2,237,462 8,684,372 (5,156) 12,775,977
Net change in unrealized appreciation
(depreciation) of investments 3,845,296 9,193,064 17,255,641 8,758,372
Net unrealized appreciation
(depreciation) of futures (377,150) 0 0 0
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 5,465,980 17,694,034 17,257,078 23,190,938
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income
CLASS A (100,729) (148,741) (63,008) (1,312,200)
CLASS B 0 0 0 0(2)
CLASS C 0 0 0 (344,406)
From net realized gain on sale of
investments
CLASS A 0 (3,122,516) 0 (8,070,952)
CLASS B 0 (343,110) 0 0(2)
CLASS C 0 (2,072,172) 0 (4,429,345)
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold - Class A 6,212,605 10,094,262 3,920,461 13,097,927
Reinvestment of dividends - Class A 76,972 2,652,183 141,708 7,755,142
Cost of shares redeemed - Class A (7,604,914) (20,080,414) (2,572,600) (7,305,205)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS A (1,315,337) (7,333,969) 1,489,569 13,547,864
Proceeds from shares sold - Class B 7,441,227 9,165,489 2,711,120 349,731(2)
Reinvestment of dividends - Class B 0 325,031 0 0(2)
Cost of shares redeemed - Class B (751,607) (1,079,572) 0 0(2)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS B 6,689,620 8,410,948 2,711,120 349,731(2)
Proceeds from shares sold - Class C 14,408,434 19,392,127 5,805,673 20,805,099
Reinvestment of dividends - Class C 360 1,486,208 10,699 3,210,184
Cost of shares redeemed - Class C (6,098,596) (13,595,784) (1,944,342) (5,001,988)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS - CLASS C 8,310,198 7,282,551 3,872,030 19,013,295
INCREASE (DECREASE) IN NET ASSETS 19,049,732 20,367,025 25,266,789 41,944,925
NET ASSETS:
Beginning net assets 172,586,515 152,219,490 126,952,701 85,007,776
ENDING NET ASSETS $191,636,247 $172,586,515 $152,219,490 $126,952,701
ENDING BALANCE OF UNDISTRIBUTED NET
INVESTMENT INCOME $ 0 $ (388,558) $ (56,415) $ 0
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) This class of shares commenced operations on April 1, 1998.
(2) This class of shares commenced operations December 15, 1997.
The accompanying notes are an integral part of these financial statements.
63
<PAGE>
Allocation Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
CLASS A
-------------------------------------------
SEVEN MONTHS ELEVEN MONTHS
ENDED ENDED YEAR ENDED
SEPT. 30, FEBRUARY 28, MARCH 31,
1999 (1) 1999 (2) 1998
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $25.65 $24.99 $20.30
---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.36 0.38 0.69
Net realized and unrealized gain (loss) on
investments 0.19 2.92 6.37
---------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 0.55 3.30 7.06
LESS DISTRIBUTIONS:
Dividends from net investment income (0.36) (0.33) (0.69)
Distributions from net realized gain 0.00 (2.31) (1.68)
---------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (0.36) (2.64) (2.37)
---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $25.84 $25.65 $24.99
========== ========== ==========
TOTAL RETURN (NOT ANNUALIZED)* 2.10% 13.69% 36.08%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $1,310,935 $1,362,966 $1,305,848
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 0.95% 0.92% 0.95%(5)
Ratio of net investment income to average net
assets 2.08% 1.65% 2.99%(5)
Portfolio turnover 29% 31% 51%(5)
- ----------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses 0.96% N/A N/A
Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses 2.07% N/A N/A
- ----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM FEBRUARY 28 TO
SEPTEMBER 30.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO FEBRUARY 28.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO
SEPTEMBER 30.
(5) THIS RATIO INCLUDES ACTIVITY OF THE MASTER PORTFOLIO PRIOR TO
DECEMBER 15, 1997.
(6) THE PORTFOLIO TURNOVER FOR THE ASSET ALLOCATION MASTER PORTFOLIO FROM
ITS INCEPTION ON APRIL 28, 1996 TO SEPTEMBER 30, 1996, WAS 28%. THE
INFORMATION SHOWN REFLECTS THE STAND-ALONE PERIOD ONLY.
The accompanying notes are an integral part of these financial statements.
64
<PAGE>
FINANCIAL HIGHLIGHTS Allocation Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND (CONT.)
CLASS A (CONT.) CLASS B
-------------------------------------------------------- ----------------------------
SIX MONTHS NINE MONTHS SEVEN MONTHS ELEVEN MONTHS
ENDED ENDED YEAR ENDED YEAR ENDED ENDED ENDED
MARCH 31, SEPT. 30, DEC. 31, DEC. 31, SEPT. 30, FEBRUARY 28,
1997 (3) 1996 (4) 1995 1994 1999 (6) 1999 (2)
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $21.24 $20.74 $16.73 $18.80 $15.55 $15.16
-------------- --------------- ---------- ---------- -------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.41 0.57 0.74 0.77 0.18 0.13
Net realized and
unrealized gain (loss)
on investments 0.65 0.50 4.07 (1.31) 0.08 1.77
-------------- --------------- ---------- ---------- -------- --------
TOTAL FROM INVESTMENT
OPERATIONS 1.06 1.07 4.81 (0.54) 0.26 1.90
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.41) (0.57) (0.74) (0.77) (0.18) (0.11)
Distributions from net
realized gain (1.59) 0.00 (0.06) (0.76) 0.00 (1.40)
-------------- --------------- ---------- ---------- -------- --------
TOTAL FROM DISTRIBUTIONS (2.00) (0.57) (0.80) (1.53) (0.18) (1.51)
-------------- --------------- ---------- ---------- -------- --------
NET ASSET VALUE, END OF
PERIOD $20.30 $21.24 $20.74 $16.73 $15.63 $15.55
============== =============== ========== ========== ======== ========
TOTAL RETURN (NOT
ANNUALIZED)* 4.94% 5.14% 29.18% (2.82)% 1.68% 12.98%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $1,041,622 $1,057,346 $1,077,935 $896,943 $491,284 $402,991
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 0.92%(5) 0.90%(5) 0.84% 0.84% 1.63% 1.62%
Ratio of net investment
income to average net
assets 3.91%(5) 3.53%(5) 3.81% 4.30% 1.42% 0.91%
Portfolio turnover 5%(5) 1%(6) 15% 49% 29% 31%
- -------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses N/A N/A N/A N/A 1.68% 1.63%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses N/A N/A N/A N/A 1.37% 0.90%
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM FEBRUARY 28 TO
SEPTEMBER 30.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO FEBRUARY 28.
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO
SEPTEMBER 30.
(5) THIS RATIO INCLUDES ACTIVITY OF THE MASTER PORTFOLIO PRIOR TO
DECEMBER 15, 1997.
(6) THE PORTFOLIO TURNOVER FOR THE ASSET ALLOCATION MASTER PORTFOLIO FROM
ITS INCEPTION ON APRIL 28, 1996 TO SEPTEMBER 30, 1996, WAS 28%. THE
INFORMATION SHOWN REFLECTS THE STAND-ALONE PERIOD ONLY.
The accompanying notes are an integral part of these financial statements.
65
<PAGE>
Allocation Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND (CONT.)
CLASS B (CONT.)
----------------------------------------
SIX MONTHS NINE MONTHS
YEAR ENDED ENDED ENDED
MARCH 31, MARCH 31, SEPT. 30,
1998 1997 (1) 1996 (2)
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $12.29 $12.84 $12.50
----------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.29 0.19 0.28
Net realized and unrealized gain (loss) on
investments 3.89 0.41 0.34
----------- ---------- ----------
TOTAL FROM INVESTMENT OPERATIONS 4.18 0.60 0.62
LESS DISTRIBUTIONS:
Dividends from net investment income (0.29) (0.19) (0.28)
Distributions from net realized gain (1.02) (0.96) 0.00
----------- ---------- ----------
TOTAL FROM DISTRIBUTIONS (1.31) (1.15) (0.28)
----------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $15.16 $12.29 $12.84
=========== ========== ==========
TOTAL RETURN (NOT ANNUALIZED)* 35.16% 4.62% 4.96%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $267,060 $89,252 $63,443
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.60%(7) 1.53%(7) 1.14%(7)
Ratio of net investment income to average net
assets 2.15%(7) 3.30%(7) 3.37%(7)
Portfolio turnover 51%(7) 5%(7) 1%(8)
- ----------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior
to waived fees and reimbursed expenses N/A 1.58%(7) 1.56%(7)
Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses N/A 3.25%(7) 2.95%(7)
- ----------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO
SEPTEMBER 30.
(3) THIS CLASS OF SHARES COMMENCED OPERATIONS ON JANUARY 1, 1995.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM FEBRUARY 28 TO
SEPTEMBER 30.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON APRIL 1, 1998.
(6) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO FEBRUARY 28.
(7) THIS RATIO INCLUDES ACTIVITY OF THE MASTER PORTFOLIO PRIOR TO
DECEMBER 15, 1997.
(8) THE PORTFOLIO TURNOVER FOR THE ASSET ALLOCATION MASTER PORTFOLIO FROM
ITS INCEPTION ON APRIL 28, 1996 TO SEPTEMBER 30, 1996, WAS 28%. THE
INFORMATION SHOWN REFLECTS THE STAND-ALONE PERIOD ONLY.
The accompanying notes are an integral part of these financial statements.
66
<PAGE>
FINANCIAL HIGHLIGHTS Allocation Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND (CONT.)
CLASS B INDEX ALLOCATION FUND
(CONT.) CLASS C CLASS A
----------- ---------------------------- ----------------------------
SEVEN MONTHS ELEVEN MONTHS SEVEN MONTHS ELEVEN MONTHS
YEAR ENDED ENDED ENDED ENDED ENDED
DEC. 31, SEPT. 30, FEBRUARY 28, SEPT. 30, FEBRUARY 28,
1995 (3) 1999 (4) 1999 (5) 1999 (4) 1999 (6)
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $10.00 $15.59 $15.16 $19.04 $17.55
------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.22 0.18 0.08 0.02 0.03
Net realized and
unrealized gain (loss)
on investments 2.53 0.09 1.82 0.68 2.14
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS 2.75 0.27 1.90 0.70 2.17
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.22) (0.18) (0.07) (0.02) (0.03)
Distributions from net
realized gain (0.03) 0.00 (1.40) 0.00 (0.65)
------- ------- ------- ------- -------
TOTAL FROM DISTRIBUTIONS (0.25) (0.18) (1.47) (0.02) (0.68)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD $12.50 $15.68 $15.59 $19.72 $19.04
======= ======= ======= ======= =======
TOTAL RETURN (NOT
ANNUALIZED)* 27.72% 1.69% 12.97% 3.68% 12.60%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $26,271 $20,218 $10,076 $94,676 $92,655
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.53% 1.64% 1.64% 1.26% 1.29%
Ratio of net investment
income to average net
assets 2.71% 1.46% 0.69% 0.15% 0.19%
Portfolio turnover 15% 29% 31% 3% 12%
- ---------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.76% 1.70% 1.85% 1.26% N/A
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 2.48% 1.40% 0.48% 0.15% N/A
- ---------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM SEPTEMBER 30 TO MARCH 31.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO
SEPTEMBER 30.
(3) THIS CLASS OF SHARES COMMENCED OPERATIONS ON JANUARY 1, 1995.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM FEBRUARY 28 TO
SEPTEMBER 30.
(5) THIS CLASS OF SHARES COMMENCED OPERATIONS ON APRIL 1, 1998.
(6) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO FEBRUARY 28.
(7) THIS RATIO INCLUDES ACTIVITY OF THE MASTER PORTFOLIO PRIOR TO
DECEMBER 15, 1997.
(8) THE PORTFOLIO TURNOVER FOR THE ASSET ALLOCATION MASTER PORTFOLIO FROM
ITS INCEPTION ON APRIL 28, 1996 TO SEPTEMBER 30, 1996, WAS 28%. THE
INFORMATION SHOWN REFLECTS THE STAND-ALONE PERIOD ONLY.
The accompanying notes are an integral part of these financial statements.
67
<PAGE>
Allocation Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
INDEX ALLOCATION FUND
(CONT.)
CLASS A (CONT.)
--------------------------
THREE MONTHS
ENDED YEAR ENDED
MARCH 31, DEC. 31,
1998 (1) 1997
<S> <C> <C>
- ----------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $15.51 $13.99
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) 0.01 0.28
Net realized and unrealized gain (loss) on investments 2.04 3.23
------- -------
TOTAL FROM INVESTMENT OPERATIONS 2.05 3.51
LESS DISTRIBUTIONS:
Dividends from net investment income (0.01) (0.28)
Distributions from net realized gain 0.00 (1.71)
------- -------
TOTAL FROM DISTRIBUTIONS (0.01) (1.99)
------- -------
NET ASSET VALUE, END OF PERIOD $17.55 $15.51
======= =======
TOTAL RETURN (NOT ANNUALIZED)* 13.23% 25.18%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $92,733 $80,512
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 1.31% 1.26%
Ratio of net investment income to average net assets 0.30% 1.82%
Portfolio turnover 0% 80%
- ----------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to waived fees
and reimbursed expenses 1.32% 1.29%
Ratio of net investment income to average net assets prior
to waived fees and reimbursed expenses 0.29% 1.79%
- ----------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO MARCH 31
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM FEBRUARY 28 TO SEPTEMBER 30
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO FEBRUARY 28.
The accompanying notes are an integral part of these financial statements.
68
<PAGE>
FINANCIAL HIGHLIGHTS Allocation Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
INDEX ALLOCATION FUND (CONT.)
CLASS A (CONT.) CLASS B
----------------------------------- ----------------------------
SEVEN MONTHS ELEVEN MONTHS
YEAR ENDED YEAR ENDED YEAR ENDED ENDED ENDED
DEC. 31, DEC. 31, DEC. 31, SEPT. 30, FEBRUARY 28,
1996 1995 1994 1999 (2) 1999 (3)
<S> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $13.76 $10.67 $11.90 $23.55 $21.81
------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) 0.29 0.28 0.31 (0.05) (0.07)
Net realized and
unrealized gain (loss)
on investments 2.02 3.42 (0.39) 0.80 2.61
------- ------- ------- ------- -------
TOTAL FROM INVESTMENT
OPERATIONS 2.31 3.70 (0.08) 0.75 2.54
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.29) (0.28) (0.31) 0.00 0.00
Distributions from net
realized gain (1.79) (0.33) (0.84) 0.00 (0.80)
------- ------- ------- ------- -------
TOTAL FROM DISTRIBUTIONS (2.08) (0.61) (1.15) 0.00 (0.80)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF
PERIOD $13.99 $13.76 $10.67 $24.30 $23.55
======= ======= ======= ======= =======
TOTAL RETURN (NOT
ANNUALIZED)* 17.04% 34.71% (0.68)% 3.18% 11.88%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $60,353 $52,007 $40,308 $19,431 $12,568
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 1.31% 1.30% 1.30% 2.03% 2.04%
Ratio of net investment
income to average net
assets 2.06% 2.07% 2.41% (0.61)% (0.57)%
Portfolio turnover 67% 47% 50% 3% 12%
- ----------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 1.44% 1.35% 1.38% 2.07% 2.26%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses 1.93% 2.02% 2.33% (0.65)% (0.79)%
- ----------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES
(1) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO MARCH 31
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM FEBRUARY 28 TO SEPTEMBER 30
(3) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO FEBRUARY 28.
The accompanying notes are an integral part of these financial statements.
69
<PAGE>
Allocation Funds FINANCIAL HIGHLIGHTS
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
INDEX ALLOCATION FUND (CONT.)
CLASS B (CONT.) CLASS C (1)
----------------------------- -------------
THREE MONTHS SEVEN MONTHS
ENDED PERIOD ENDED ENDED
MARCH 31, DEC. 31, SEPT. 30,
1998 (2) 1997 (3) 1999 (4)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $19.31 $18.99 $23.56
------ -------------- ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (0.01) 0.00 (0.07)
Net realized and unrealized gain (loss) on
investments 2.51 0.32 0.83
------ -------------- ------
TOTAL FROM INVESTMENT OPERATIONS 2.50 0.32 0.76
LESS DISTRIBUTIONS:
Dividends from net investment income 0.00 0.00 0.00
Distributions from net realized gain 0.00 0.00 0.00
------ -------------- ------
TOTAL FROM DISTRIBUTIONS 0.00 0.00 0.00
------ -------------- ------
NET ASSET VALUE, END OF PERIOD $21.81 $19.31 $24.32
====== ============== ======
TOTAL RETURN (NOT ANNUALIZED)* 12.95% 1.69% 3.23%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s) $3,322 $356 $77,530
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED):
Ratio of expenses to average net assets 2.06% 2.05% 2.01%
Ratio of net investment income to average net
assets (0.43)% (0.17)% (0.60)%
Portfolio turnover 0% 80% 3%
- ------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets prior to
waived fees and reimbursed expenses 4.03% 15.17% 2.02%
Ratio of net investment income to average net
assets prior to waived fees and reimbursed
expenses (2.40)% (13.29)% (0.61)%
- ------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES
(1) THIS CLASS OF SHARES COMMENCED OPERATIONS AS CLASS D SHARES ON
JULY 1, 1993. THESE SHARES WERE RENAMED AS CLASS C SHARES IN
CONJUNCTION WITH THE CONSOLIDATION OF OVERLAND EXPRESS FUNDS, INC.
AND STAGECOACH FUNDS, INC. ON DECEMBER 15, 1997.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO MARCH 31
(3) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM FEBRUARY 28 TO
SEPTEMBER 30.
(5) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO FEBRUARY 28.
The accompanying notes are an integral part of these financial statements.
70
<PAGE>
FINANCIAL HIGHLIGHTS Allocation Funds
- ------------------------------------------------------------------------
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<TABLE>
<CAPTION>
INDEX ALLOCATION FUND (CONT.)
CLASS C (1) (CONT.)
------------------------------------------------------------------------
ELEVEN MONTHS THREE MONTHS
ENDED ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
FEBRUARY 28, MARCH 31, DEC. 31, DEC. 31, DEC. 31, DEC. 31,
1999 (5) 1998 (2) 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF PERIOD $21.82 $19.32 $17.42 $17.10 $13.26 $14.75
------- ------- ------- ------- ------- ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income
(loss) (0.10) (0.02) 0.20 0.22 0.20 0.25
Net realized and
unrealized gain (loss)
on investments 2.64 2.52 4.00 2.54 4.24 (0.45)
------- ------- ------- ------- ------- ------
TOTAL FROM INVESTMENT
OPERATIONS 2.54 2.50 4.20 2.76 4.44 (0.20)
LESS DISTRIBUTIONS:
Dividends from net
investment income 0.00 0.00 (0.20) (0.22) (0.20) (0.25)
Distributions from net
realized gain (0.80) 0.00 (2.10) (2.22) (0.40) (1.04)
------- ------- ------- ------- ------- ------
TOTAL FROM DISTRIBUTIONS (0.80) 0.00 (2.30) (2.44) (0.60) (1.29)
------- ------- ------- ------- ------- ------
NET ASSET VALUE, END OF
PERIOD $23.56 $21.82 $19.32 $17.42 $17.10 $13.26
======= ======= ======= ======= ======= ======
TOTAL RETURN (NOT
ANNUALIZED)* 11.88% 13.00% 24.07% 16.37% 33.72% (1.38)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s) $67,364 $56,164 $46,084 $24,655 $16,075 $9,798
RATIOS TO AVERAGE NET ASSETS
(ANNUALIZED):
Ratio of expenses to
average net assets 2.05% 2.05% 2.02% 2.05% 2.05% 2.01%
Ratio of net investment
income to average net
assets (0.56)% (0.44)% 1.00% 1.35% 1.30% 1.75%
Portfolio turnover 12% 0% 80% 67% 47% 50%
- ------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets prior to waived
fees and reimbursed
expenses 2.06% 2.09% 2.05% 2.20% 2.17% 2.20%
Ratio of net investment
income to average net
assets prior to waived
fees and reimbursed
expenses (0.57)% (0.48)% 0.97% 1.20% 1.18% 1.56%
- ------------------------------------------------------------------------------------------------------
</TABLE>
* TOTAL RETURNS DO NOT INCLUDE ANY SALES CHARGES
(1) THIS CLASS OF SHARES COMMENCED OPERATIONS AS CLASS D SHARES ON
JULY 1, 1993. THESE SHARES WERE RENAMED AS CLASS C SHARES IN
CONJUNCTION WITH THE CONSOLIDATION OF OVERLAND EXPRESS FUNDS, INC.
AND STAGECOACH FUNDS, INC. ON DECEMBER 15, 1997.
(2) THE FUND CHANGED ITS FISCAL YEAR-END FROM DECEMBER 31 TO MARCH 31
(3) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
(4) THE FUND CHANGED ITS FISCAL YEAR-END FROM FEBRUARY 28 TO
SEPTEMBER 30.
(5) THE FUND CHANGED ITS FISCAL YEAR-END FROM MARCH 31 TO FEBRUARY 28.
The accompanying notes are an integral part of these financial statements.
71
<PAGE>
Allocation Funds NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
Stagecoach Funds, Inc. (the "Company") is registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), as an open-end series
management investment company. The Company commenced operations on January 1,
1992, and currently offers thirty-one separate series. These financial
statements represent the Asset Allocation, and Index Allocation (each, a "Fund",
collectively, the "Funds"), each a diversified series of the Company.
Effective at the close of business on December 12, 1997, the Overland Express
Funds, Inc. were consolidated into the Company in a tax-free exchange for shares
of designated classes of the corresponding Stagecoach fund. Also, at the close
of business on December 12, 1997, funds structured as "feeder" funds in a
"master-feeder" structure were restructured to invest directly in a portfolio of
securities, rather than to invest in a portfolio of securities through a
"master" portfolio. Effective on September 6, 1996, the Pacifica Funds Trust was
consolidated into the Company in a tax-free exchange for shares of designated
classes of the corresponding Stagecoach fund.
Each Fund offers Class A Class B, and Class C shares. The separate classes of
shares differ principally in the applicable sales charges, distribution fees and
shareholder servicing fees. Shareholders of each class also bear certain
expenses that pertain to that particular class. All shareholders bear the common
expenses of the Fund and earn income from the portfolio pro rata based on the
average daily net assets of each class, without distinction between share
classes. Dividends are determined separately for each class based on income and
expenses allocable to each class. Realized gains are allocated to each class pro
rata based on the net assets of each class on the date of distribution. No class
has preferential dividend rights. Differences in per share dividend rates
generally result from the relative weightings of pro rata income and realized
gain and loss allocations and from differences in separate class expenses,
including distribution and shareholder servicing fees.
The following significant accounting policies are consistently followed by the
Company in the preparation of its financial statements, and such policies are in
conformity with generally accepted accounting principles ("GAAP") for investment
companies.
The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, disclosure of contingent assets and liabilities at
72
<PAGE>
NOTES TO FINANCIAL STATEMENTS Allocation Funds
- ------------------------------------------------------------------------
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
SECURITY VALUATION
All securities are valued at the close of each business day. Securities for
which the primary market is a national or foreign recognized securities or
commodities exchange or the National Association of Securities Dealers Automated
Quotation ("NASDAQ") National Market, are valued at the last reported sales
price on the day of valuation. Debt securities are generally traded in the
over-the-counter market and are valued at a price deemed best to reflect fair
value as quoted by dealers who make markets in those securities or by an
independent pricing source. U.S. Government obligations are valued at the last
reported bid price. In the absence of any sale of such securities on the
valuation date and in the case of other securities, excluding money market
instruments maturing in 60 days or less, the valuations are based on latest
quoted bid prices. Debt securities maturing in 60 days or less are valued at
amortized cost. The amortized cost method, which approximates market value,
involves valuing a security at its cost, plus accretion of discount or minus
amortization of premium over the period until maturity, which approximates
market value. Securities for which quotations are not readily available are
valued at fair value as determined by policies set by the Company's Board of
Directors.
SECURITY TRANSACTIONS AND INCOME RECOGNITION
Securities transactions are recorded on a trade date basis. Interest and
dividend income are accrued daily. Realized gains or losses are reported on the
basis of identified cost of securities delivered. Bond discounts are accreted
and premiums are amortized under provisions of the Internal Revenue Code of
1986, as amended (the "Code").
FUTURES CONTRACTS
The Funds have purchased futures contracts to gain exposure to market changes.
This procedure may be more efficient or cost effective than actually buying the
securities. A futures contract is an agreement between parties to buy or sell a
security at a set price on a future date. Upon entering into such a contract, a
Fund is required to pledge to the broker an amount of cash, U.S. Government
obligations or other high-quality debt securities equal to the minimum "initial
margin" requirements of the exchange on which the futures contract is traded.
Pursuant to the contract, the Fund agrees to receive from or pay to the broker
an amount of cash equal to the daily fluctuation in the value of the contract.
Such receipts or payments are known as "variation margin" and are recorded by
the Fund as unrealized gains or losses. When the contract is closed, the Fund
records a realized gain or loss equal to the difference between the value
73
<PAGE>
Allocation Funds NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
of the contract at the time it was opened and the value at the time it was
closed. Pursuant to regulations and/or published positions of the Securities and
Exchange Commission ("SEC"), the Fund is required to segregate highly liquid
securities as permitted by the SEC in connection with futures transactions in an
amount generally equal to the entire value of the underlying contracts. Risks of
entering into futures contracts include the possibility that there may be an
illiquid market and that a change in the value of the contract may not correlate
with changes in the value of the underlying securities. On September 30, 1999,
the Funds held the following long futures contracts:
<TABLE>
<CAPTION>
NET
UNREALIZED
NOTIONAL APPRECIATION/
CONTRACTS TYPE EXPIRATION DATE CONTRACT VALUE (DEPRECIATION)
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
Asset Allocation 15 S&P 500 Index December 1999 $4,868,250 $(291,750)
Index Allocation 22 S&P 500 Index December 1999 $7,140,100 $(377,150)
</TABLE>
The Asset Allocation Fund has pledged to brokers U.S. Treasury bills for
initial margin requirements with a par value of $400,000. The Index Allocation
Fund has pledged to brokers U.S. Treasury bills for initial margin requirements
with a par value of $450,000.
DISTRIBUTIONS TO SHAREHOLDERS
Dividends to shareholders from net investment income of the Funds, if any, are
declared and distributed quarterly. Any distributions to shareholders from net
realized capital gains are declared and distributed at least annually.
FEDERAL INCOME TAXES
Each Fund is treated as a separate entity for federal income tax purposes. It
is the policy of each Fund of the Company to continue to qualify as a regulated
investment company by complying with the provisions applicable to regulated
investment companies, as defined in the Code, and to make distributions of
substantially all of its investment company taxable income and any net realized
capital gains (after reduction for capital loss carryforwards) sufficient to
relieve it from all, or substantially all, federal income taxes. Accordingly, no
provision for federal income taxes was required.
Due to the timing of dividend distributions and the differences in accounting
for income and realized gains (losses) for financial statement and federal
income tax purposes, the fiscal year in which amounts are distributed may differ
from the year in which the income and realized gains (losses) were recorded by a
Fund. The differences between the income or gains distributed on a book versus
tax basis are shown as excess distributions of net investment income and net
realized gain on sales of investments in the accompanying Statements of Changes
in Net
74
<PAGE>
NOTES TO FINANCIAL STATEMENTS Allocation Funds
- ------------------------------------------------------------------------
Assets. The amount of distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax regulations,
which may differ from GAAP. These "book/tax" differences are either considered
temporary or permanent in nature. To the extent that these differences are
permanent in nature, such amounts are reclassified within the capital accounts
based on their federal tax-basis treatment; temporary differences do not require
reclassifications.
DEFERRED ORGANIZATION COSTS
Certain costs incurred in connection with the organization of the Funds and
their initial registration with the SEC and with the various states prior to
June 30, 1998, are amortized on a straight-line basis over 60 months from the
date each Fund commenced operations. Cost incurred after June 30, 1998, are
expensed as incurred.
2. AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Company has entered into an advisory contract on behalf of the Funds with
Wells Fargo Bank, N.A. ("WFB"). Pursuant to the contract, WFB has agreed to
provide the Funds with daily portfolio management. Under the contract with the
Asset Allocation Fund, WFB is entitled to be paid a monthly advisory fee at an
annual rate of 0.50% of the Fund's average daily net assets up to $250 million,
0.40% of the next $250 million, and 0.30% of the Fund's average daily net assets
in excess of $500 million. Under the contract with the Index Allocation Fund,
WFB is entitled to be paid a monthly advisory fee at the annual rate of 0.70% of
the Fund's average daily net assets up to $500 million, and 0.60% of the Fund's
average daily net assets in excess of $500 million.
Barclays Global Fund Advisors ("BGFA"), a wholly-owned subsidiary of Barclays
Global Investors, N.A. ("BGI") and indirect subsidiary of Barclays Bank PLC,
acts as sub-advisor to the Funds. BGFA is entitled to receive from WFB, as
compensation for its sub-advisory services to the Funds, a monthly fee at the
annual rate of 0.15% of each Fund's average daily net assets up to $900 million
and 0.10% of the average daily net assets in excess of $900 million.
BGI, a wholly-owned subsidiary of Barclays Global Investors Holdings Inc.,
acts as custodian to the Funds. BGI will not be entitled to receive compensation
for its services as custodian to the Funds so long as BGFA is entitled to
receive fees for providing investment sub-advisory services to the Funds.
The Company has entered into contracts on behalf of each Fund with WFB,
whereby WFB is responsible for providing portfolio accounting services for the
Funds. Pursuant to the contracts WFB is entitled to a monthly base fee from each
Fund of $2,000 plus an annual fee of 0.07% of the first $50 million of each
Fund's average daily net assets, 0.045% of the next $50 million, and 0.02% of
each Fund's average daily net assets in excess of $100 million. On June 3, 1999,
75
<PAGE>
Allocation Funds NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
WFB and Forum Accounting Services ("Forum") entered into an agreement, whereby
WFB desires that Forum performs certain fund accounting services for WFB with
respect to each Fund and Class thereof. A fixed monthly fee, and a basis point
fee of 0.0025% of the average annual daily net assets of each Fund will also be
charged. The Company, on behalf of the applicable Fund, reimburses Forum for all
out-of-pocket and ancillary expenses reasonably incurred in providing the
services described in the Sub Fund Accounting Agreement. On August 2, 1999,
Forum began providing services for the Asset Allocation Fund.
On July 17, 1999, Boston Financial Data Services ("BFDS") replaced WFB as the
transfer agent for the Company. Under the transfer agency contract, BFDS is
entitled to receive, on a monthly basis, transfer agency fees based on the
number of accounts and transactions of each Fund. WFB will continue to provide
sub-transfer agency services to the Funds. Prior to July 17, 1999 the Company
had entered into a contract on behalf of the Funds with WFB, whereby WFB
provided transfer agency services for the Funds. Under the transfer agency
contract, WFB was entitled to receive transfer agency fees at an annual rate of
0.14% of the average daily net assets of the Funds.
Transfer agent fees paid on behalf of the Funds for the seven months ended
September 30, 1999 were as follows:
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS C
<S> <C> <C> <C>
- ---------------------------------------------------------------------------
Asset Allocation Fund 1,043,093 375,748 11,543
Index Allocation Fund 62,093 14,935 48,852
</TABLE>
The Company has entered into contracts on behalf of the Funds with WFB,
whereby WFB has agreed to provide shareholder services for the Funds. Pursuant
to the contracts, WFB is entitled to receive shareholder servicing fees at an
annual rate of 0.30% of the average daily net assets of the Class A and Class B
shares of the Asset Allocation Fund and 0.25% of the average daily net assets of
the Class B shares of the Index Allocation Fund and Class C shares of the Asset
Allocation and Index Allocation Funds.
Shareholder servicing fees paid on behalf of the Funds for the seven months
ended September 30, 1999 were as follows:
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS C
<S> <C> <C> <C>
- ---------------------------------------------------------------------------
Asset Allocation Fund $2,432,941 $816,471 $23,791
Index Allocation Fund 25,466 24,839 111,812
</TABLE>
The Company has adopted a Shareholder Administrative Servicing Plan (the
"Administrative Servicing Plan") on behalf of the Class A shares of the Index
Allocation Fund. Pursuant to the Administrative Servicing Plan, the Fund may
enter into administrative servicing agreements with administrative servicing
agents who are dealers/holders of record, or that otherwise have a servicing
relationship with the beneficial owners of the Fund's Class A shares.
76
<PAGE>
NOTES TO FINANCIAL STATEMENTS Allocation Funds
- ------------------------------------------------------------------------
Administrative servicing agents are entitled to receive a fee which will not
exceed 0.25%, on an annualized basis, of the average daily net assets of the
Class A shares of the Fund. In no case will a shareholder be charged both 12b-1
and Administrative Servicing fees.
On March 25, 1999, the Company entered into an Administration Agreement with
WFB on behalf of the Funds. Under the Administration Agreement, WFB acts as sole
Administrator of the Funds and is entitled to receive monthly fees at an annual
rate of 0.15% of the average daily net assets of the Funds. Prior to March 25,
1999, the Company had entered into administration agreements on behalf of the
Funds whereby WFB serves as administrator and Stephens Inc. ("Stephens") as
co-administrator provided the Funds with administrative services. For these
services, WFB and Stephens were entitled to receive monthly fees at the annual
rates of 0.03% and 0.04%, respectively, of each Fund's average daily net assets.
The Company has adopted separate Distribution Plans (each, a "Plan") for
Class A, Class B and Class C shares of the Funds pursuant to Rule 12b-1 under
the 1940 Act. The Plan for Class A shares of the Asset Allocation Fund provides
that the Fund may defray all or part of the cost of preparing, printing and
distributing prospectuses and other promotional materials by paying for costs
incurred on an annual basis of up to 0.05% of the Fund's average daily net
assets attributable to the Class A shares. The Class A Plan for the Asset
Allocation Fund provides only for the reimbursement of actual expenses.
The Plan for Class A shares of the Index Allocation Fund provides that the
Fund may pay to Stephens, as compensation for distribution-related services or
as reimbursement for distribution-related expenses, up to 0.25% of its average
daily net assets attributable to the Class A shares.
Under the Plan for Class B shares and Class C shares of the Funds, each Fund
may pay to Stephens, as compensation for distribution-related services or as
reimbursement for distribution-related expenses, a monthly fee at an annual rate
of up to 0.70% of the average daily net assets attributable to the Class B
shares of the Asset Allocation Fund, and 0.75% of the average daily net assets
attributable to the Class B shares of the Index Allocation Fund and Class C
shares of the Asset Allocation and Index Allocation Funds.
Each Fund may participate in joint distribution activities with the other
Fund, in which event, expenses reimbursed out of the assets of one of the Funds
may be attributable, in part, to the distribution-related activities of another
Fund. Generally, the expenses of joint distribution activities are allocated
among the Funds in proportion to their relative net asset sizes.
77
<PAGE>
Allocation Funds NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
Distribution fees paid on behalf of the Funds for the seven months ended
September 30, 1999, were as follows:
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS C
<S> <C> <C> <C>
- --------------------------------------------------------------------------
Asset Allocation Fund $ 0 $1,905,100 $ 71,373
Index Allocation Fund 118,508 74,437 335,510
</TABLE>
The registration fees paid on behalf of the Funds for the seven months ended
September 30, 1999, were as follows:
<TABLE>
<CAPTION>
FUND CLASS A CLASS B CLASS C
<S> <C> <C> <C>
- --------------------------------------------------------------------------
Asset Allocation Fund $ 22,990 $ 46,158 $ 5,038
Index Allocation Fund 1,070 1,070 2,805
</TABLE>
WAIVED FEES AND REIMBURSED EXPENSES
All amounts shown as waived fees and reimbursed expenses on the Statement of
Operations, for the seven months ended September 30, 1999, were waived by WFB.
Waived fees and reimbursed expenses continue at the discretion of WFB and
Stephens.
Certain officers and one director of the Company are also officers of
Stephens. As of September 30, 1999, Stephens owned 142 shares of the Asset
Allocation Fund, and 250,332 shares of the Index Allocation Fund.
Stephens has retained approximately $1,619,345 as sales charges from the
proceeds of Class A shares sold, $921,704 from the proceeds of Class B shares
redeemed and $56,081 from the proceeds of Class C shares redeemed by the Company
for the seven months ended September 30, 1999. A third party financing agent has
retained approximately $837,120 from the proceeds of Class B shares redeemed by
the Company for the seven months ended September 30, 1999. Wells Fargo
Securities Inc., a subsidiary of WFB, received $1,326,665 as sales charges from
the proceeds of Class A shares sold, $59,898 from the proceeds of Class B shares
redeemed and $0 from the proceeds of Class C shares redeemed by the Company for
the seven months ended September 30, 1999.
3. INVESTMENT PORTFOLIO TRANSACTIONS
Purchases and sales of investments, exclusive of short-term securities
(securities with maturities of one year or less at purchase date), for each Fund
for the seven months ended September 30, 1999 were as follows:
AGGREGATE PURCHASES AND SALES
<TABLE>
<CAPTION>
FUND PURCHASE AT COST SALES PROCEEDS
<S> <C> <C>
- --------------------------------------------------------------------------------
Asset Allocation Fund $549,803,024 $527,505,588
Index Allocation Fund 11,486,358 4,667,975
</TABLE>
78
<PAGE>
NOTES TO FINANCIAL STATEMENTS Allocation Funds
- ------------------------------------------------------------------------
4. CAPITAL SHARE TRANSACTIONS
As of September 30, 1999, there were over 242 billion shares of $0.001 par
value capital stock authorized by the Company. As of September 30, 1999, the
Funds were each authorized to issue 500 million shares of $0.001 par value
capital stock for each class of shares.
Capital share transactions for the Funds were as follows:
<TABLE>
<CAPTION>
ASSET ALLOCATION FUND
<S> <C> <C> <C>
--------------------------------------------------
<CAPTION>
FOR THE SEVEN FOR THE ELEVEN FOR THE YEAR
MONTHS ENDED MONTHS ENDED ENDED
SEPTEMBER 30, 1999 FEBRUARY 28, 1999 MARCH 31, 1998
- -------------------------------------------------------------------------------------------------
SHARES ISSUED AND REDEEMED:
<S> <C> <C> <C>
Shares sold -- Class A 2,323,139 3,967,005 5,404,941
Shares issued in reinvestment of
dividends -- Class A 681,217 5,460,934 5,339,741
Shares redeemed -- Class A (5,416,609) (8,542,275) (9,806,181)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS A (2,412,253) 885,664 938,501
Shares sold -- Class B 7,313,188 9,161,518 10,545,390
Shares issued in reinvestment of
dividends -- Class B 335,069 2,236,282 1,176,235
Shares redeemed -- Class B (2,142,327) (3,093,434) (1,371,398)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS B 5,505,930 8,304,366 10,350,227
Shares sold -- Class C(1) 755,529 648,391 N/A
Shares issued in reinvestment of
dividends -- Class C(1) 10,113 35,062 N/A
Shares redeemed -- Class C(1) (122,839) (37,191) N/A
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING -- CLASS C(1) 642,803 646,262 N/A
</TABLE>
(1) THIS CLASS OF SHARES COMMENCED OPERATIONS ON APRIL 1, 1998.
79
<PAGE>
Allocation Funds NOTES TO FINANCIAL STATEMENTS
- ------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDEX ALLOCATION FUND
<S> <C> <C> <C> <C>
---------------------------------------------------------------------
<CAPTION>
FOR THE SEVEN FOR THE ELEVEN FOR THE THREE FOR THE
MONTHS ENDED MONTHS ENDED MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1999 FEBRUARY 28, 1999 MARCH 31, 1998 DECEMBER 31, 1997
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SHARES ISSUED AND
REDEEMED:
Shares sold -- Class A 305,236 571,737 240,942 850,777
Shares issued in
reinvestment of
dividends -- Class A 3,809 147,971 9,136 496,833
Shares redeemed --
Class A (374,373) (1,138,366) (155,356) (470,768)
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING -- CLASS A (65,328) (418,658) 94,722 876,842
Shares sold --
Class B(1) 295,420 415,134 133,842 18,462
Shares issued in
reinvestment of
dividends --
Class B(1) 0 14,619 0 0
Shares redeemed --
Class B(1) (29,564) (48,393) 0 0
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING --
CLASS B(1) 265,856 381,360 133,842 18,462
Shares sold -- Class C 571,543 860,963 283,850 1,061,333
Shares issued in
reinvestment of
dividends -- Class C 10 66,796 554 164,916
Shares redeemed --
Class C (242,752) (641,920) (96,724) (255,583)
NET INCREASE (DECREASE)
IN SHARES
OUTSTANDING -- CLASS C 328,801 285,839 187,680 970,666
</TABLE>
(1) THIS CLASS OF SHARES COMMENCED OPERATIONS ON DECEMBER 15, 1997.
80
<PAGE>
NOTES TO FINANCIAL STATEMENTS Allocation Funds
- ------------------------------------------------------------------------
5. SUBSEQUENT EVENTS
On March 25, 1999, the Board of Directors of the Company approved the
reorganization of the Funds into new portfolios of Wells Fargo Funds Trust. The
reorganization is part of a larger plan to consolidate the Company with the
Norwest Advantage Funds following last November's merger of Wells Fargo &
Company and Norwest Corporation. The Company presented the reorganization to
Company's shareholders and gained approval at a special shareholders' meeting in
August, 1999. At the close of business November 5, 1999, the Stagecoach Asset
Allocation and Stagecoach Balanced Funds were reorganized into the Wells Fargo
Asset Allocation Fund and the Stagecoach Index Allocation Fund was reorganized
into the Wells Fargo Index Allocation Fund. These financial statements are
applicable to the Wells Fargo Funds having former Stagecoach Funds as accounting
survivors. Please see your Wells Fargo Funds prospectus for details about your
Fund.
81
<PAGE>
Allocation Funds INDEPENDENT AUDITORS' REPORT
- ------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors
Stagecoach Funds, Inc.:
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of the Asset Allocation Fund and Index
Allocation Fund, (two of the funds comprising Stagecoach Funds, Inc.) as of
September 30, 1999, and the related statements of operations for the seven
months ended September 30, 1999 and the eleven months ended February 28, 1999,
the statements of changes in net assets for the Asset Allocation Fund for the
seven months ended September 30, 1999, the eleven months ended February 28, 1999
and the year ended March 31, 1998, and for the Index Allocation Fund for the
seven months ended September 30, 1999, the eleven months ended February 28,
1999, the three months ended March 31, 1998 and the year ended December 31,
1997, and financial highlights for the periods indicated herein. These financial
statements and financial highlights are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
September 30, 1999, by correspondence with the custodian and other appropriate
audit procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the aforementioned funds of Stagecoach Funds, Inc. as of September 30, 1999,
the results of their operations, the changes in their net assets, and their
financial highlights for the periods indicated herein, in conformity with
generally accepted accounting principles.
[KPMG LLP SIGNATURE]
San Francisco, California
November 8, 1999
82
<PAGE>
NOTICE TO SHAREHOLDERS
- ------------------------------------------------------------------------
NOTICE TO SHAREHOLDERS (UNAUDITED)
The Asset Allocation Fund and the Index Allocation Fund have tax year ends of
December 31 and September 30, respectively. For the tax period from January 1,
1999 through September 30, 1999, the Index Allocation Fund designated long term
capital gains with regard to distributions paid during the year as follows:
<TABLE>
<CAPTION>
(A)
LONG TERM CAPITAL (B)
GAINS ORDINARY INCOME (C) (D)
DISTRIBUTIONS DISTRIBUTIONS TOTAL DISTRIBUTIONS QUALIFYING
FUND (TAX BASIS) (TAX BASIS) (TAX BASIS) DIVIDENDS
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Index Allocation Fund 0% 100% 100% 0%
</TABLE>
* ITEMS IN COLUMNS (A) AND (B) ARE BASED ON A PERCENTAGE OF THE FUND'S TOTAL
DISTRIBUTION.
** ITEMS IN COLUMN (D) ARE BASED ON A PERCENTAGE OF ORDINARY INCOME
DISTRIBUTION OF THE PORTFOLIO.
*** IN ITEM (D), QUALIFYING DIVIDENDS REPRESENT DIVIDENDS WHICH QUALIFY FOR THE
CORPORATE DIVIDENDS RECEIVED DEDUCTION.
The information above is for the funds' tax period January 1, 1999 through
September 30, 1999 as required by federal laws. Shareholders must report
distributions on a calendar year basis for income tax purposes which may include
distributions for portions of two tax periods of the fund. The information
needed by shareholders for income tax purposes will be sent to them in early
2000. Please consult your tax advisor for proper treatment of this information.
83
<PAGE>
Allocation Funds SHAREHOLDERS' MEETING AND PROXY VOTING RESULTS
- ------------------------------------------------------------------------
SHAREHOLDERS' MEETING AND PROXY VOTING RESULTS (UNAUDITED)
The required majority of shareholders of each Fund voted to approve the
reorganization of their Fund into a Fund of the Wells Fargo Funds Trust. The
reorganization is part of a larger plan to consolidate the Stagecoach Fund
family and the Norwest Advantage Fund family after the merger of Wells Fargo &
Company and Norwest Corporation in November, 1998. Under the reorganization,
each of the Allocation Funds listed below will transfer all of its assets and
liabilities to a corresponding Wells Fargo Funds Trust Fund.
<TABLE>
<CAPTION>
FUND FOR AGAINST ABSTAIN
- ---------------------------------------------------------------------------
<S> <C> <C> <C>
Asset Allocation 41,069,374 1,777,129 3,833,086
Index Allocation 4,528,654 130,660 252,866
</TABLE>
84
<PAGE>
LIST OF ABBREVIATIONS
- ------------------------------------------------------------------------
The following is a list of common abbreviations for terms and entities which
may have appeared in this report.
<TABLE>
<S> <C> <C>
ABAG -- Association of Bay Area Governments
ADR -- American Depository Receipts
AMBAC -- American Municipal Bond Assurance Corporation
AMT -- Alternative Minimum Tax
ARM -- Adjustable Rate Mortgages
BART -- Bay Area Rapid Transit
CDA -- Community Development Authority
CDSC -- Contingent Deferred Sales Charge
CGIC -- Capital Guaranty Insurance Company
CGY -- Capital Guaranty Corporation
CMT -- Constant Maturity Treasury
COFI -- Cost of Funds Index
CONNIE LEE -- Connie Lee Insurance Company
COP -- Certificate of Participation
CP -- Commercial Paper
CTF -- Common Trust Fund
DW&P -- Department of Water & Power
DWR -- Department of Water Resources
EDFA -- Education Finance Authority
FGIC -- Financial Guaranty Insurance Corporation
FHA -- Federal Housing Authority
FHLB -- Federal Home Loan Bank
FHLMC -- Federal Home Loan Mortgage Corporation
FNMA -- Federal National Mortgage Association
FRN -- Floating Rate Notes
FSA -- Financial Security Assurance, Inc
GNMA -- Government National Mortgage Association
GO -- General Obligation
HFA -- Housing Finance Authority
HFFA -- Health Facilities Financing Authority
IDA -- Industrial Development Authority
LIBOR -- London Interbank Offered Rate
LLC -- Limited Liability Corporation
LOC -- Letter of Credit
LP -- Limited Partnership
MBIA -- Municipal Bond Insurance Association
MFHR -- Multi-Family Housing Revenue
MUD -- Municipal Utility District
MTN -- Medium Term Note
PCFA -- Pollution Control Finance Authority
PCR -- Pollution Control Revenue
PFA -- Public Finance Authority
PLC -- Private Placement
PSFG -- Public School Fund Guaranty
RAW -- Revenue Anticipation Warrants
RDA -- Redevelopment Authority
RDFA -- Redevelopment Finance Authority
R&D -- Research & Development
SFMR -- Single Family Mortgage Revenue
TBA -- To Be Announced
TRAN -- Tax Revenue Anticipation Notes
USD -- Unified School District
V/R -- Variable Rate
WEBS -- World Equity Benchmark Shares
</TABLE>
85
<PAGE>
THIS PAGE IS INTENTIONALLY LEFT BLANK --
86
<PAGE>
Wells Fargo Bank, N.A. provides investment advisory services, shareholder
services and/or certain other services for the Stagecoach Funds. Wells Capital
Management Incorporated ("WCM") provides investment sub-advisory services
for certain Stagecoach Funds. The Funds are distributed by STEPHENS INC.,
Member NYSE/SIPC. Wells Fargo Bank, N.A. and WCM are not affiliated with
Stephens Inc.
This report and the financial statements contained herein are submitted for
the general information of the shareholders of the Stagecoach Funds. If this
report is used for promotional purposes, distribution of the report must be
accompanied or preceded by a current prospectus. For a prospectus containing
more complete information, including charges and expenses, call
1-800-260-5969. Read the prospectus carefully before you invest or send
money.
-C- Stagecoach Funds
STAGECOACH FUNDS-Registered Trademark-
P.O. Box 7066
San Francisco, CA 94120-7066
DATED MATERIAL
PLEASE EXPEDITE
LOGO SC AAR (11/99)
