<PAGE>
Evergreen
International
and Global
Growth Funds
1997 Annual Report
(Photo appears here)
(Evergreen tree logo)
Evergreen Funds(SM)
SINCE 1932
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Letter to Shareholders ..................... 1
Evergreen Emerging Markets Growth
Fund
Fund at a Glance ........................ 2
Portfolio Manager Interview ............... 3
Evergreen Global Leaders Fund
Fund at a Glance ........................ 5
Portfolio Manager Interview ............... 6
Evergreen Global Real Estate Equity
Fund
Fund at a Glance ........................ 9
Portfolio Manager Interview ............... 10
Evergreen International Equity Fund
Fund at a Glance ........................ 13
Portfolio Manager Interview ............... 14
Evergreen Latin America Fund
Fund at a Glance ........................ 16
Portfolio Manager Interview ............... 17
<S> <C>
Financial Highlights
Evergreen Emerging Markets Growth
Fund ................................. 20
Evergreen Global Leaders Fund ............ 22
Evergreen Global Real Estate Equity Fund 24
Evergreen International Equity Fund ...... 27
Evergreen Latin America Fund ............ 29
Schedules of Investments
Evergreen Emerging Markets Growth
Fund ................................. 31
Evergreen Global Leaders Fund ............ 35
Evergreen Global Real Estate Equity Fund 39
Evergreen International Equity Fund ...... 41
Evergreen Latin America Fund ............ 46
Statements of Assets and Liabilities ......... 49
Statements of Operations ..................... 50
Statements of Changes in Net Assets -
Year-end October 31, 1997 ............... 51
Statements of Changes in Net Assets -
Year-end October 31, 1996 ............... 52
Notes to Financial Statements ............... 53
</TABLE>
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Evergreen Funds
Evergreen Funds is one of the nation's fastest growing investment companies
with more than $40 billion in assets under management.
With 65 mutual funds to choose among and acclaimed service and operations
capabilities, investors enjoy a broader range of quality investment products
and services designed to meet their needs.
The Evergreen Funds employ intensive, research-driven investment strategies
executed by over 90 research analysts and portfolio managers. The fund company
remains dedicated to meeting the needs of investors and their advisors in a
global economy. Look to the Evergreen Funds to provide a distinctive level of
service and excellence in investment management.
This brochure must be preceded or accompanied by a prospectus of an Evergreen
fund contained herein. The prospectus contains more complete information,
including fees and expenses, and should be read carefully before investing or
sending money.
----------------------------------------------------------------
Mutual Funds: ARE NOT FDIC INSURED May lose value o Are not bank guaranteed
----------------------------------------------------------------
Evergreen Funds Distributor, Inc.
International investing involves increased risk and volatility.
<PAGE>
Letter to Shareholders
----------------------
December 1997
Dear Shareholders:
It often seems that when international
investment diversification makes the most
intellectual sense, it makes the least
(Photo of emotional sense.
William M. Ennis)
Like many international and
William M. Ennis global funds, the Evergreen international and
Managing Director global funds have provided positive returns
during the past year. However, the returns for
the 12 months ended October 31, 1997, were held back by the market setbacks
during October when several Asian currencies were devalued and local stock
markets suffered severe losses. As a result of both this volatility and the
positive investment environment in the United States, most domestic equity
funds showed superior returns for the period.
It is easy to see why some mutual fund shareholders might question the value of
investing in an international fund. It just seems more comfortable to invest in
large U.S. companies, which have been the market leaders for the past three
years.
The Advantages of Diversification
The answer is simple. Over the longer term, international diversification of
part of one's investment portfolio can help enhance returns and reduce
volatility. The United States stock market has had a wonderful rally for the
past three years. However, looking at present prices, many investment
professionals see more attractive values in the international markets that have
been lagging the U.S. market. In addition, the very large American companies,
whose stocks have been the best performers, may be less able to increase their
future earnings by the restructuring programs that have been helping them.
Their ability to export also is weakened by the strong U.S. dollar. Meanwhile,
very similar restructuring and cost-cutting proposals are just beginning to
take hold among corporations in Europe and Japan. Moreover, we believe the
emerging markets still have significant long-term opportunities, despite
inevitable periods of short-term volatility.
At Evergreen Funds, we encourage you to remain focused on your long-term goals
and to remain disciplined in your personal investment strategies. No one can
confidently say whether next year's market will follow last year's pattern, or
whether trends will reverse themselves so that last year's lagging strategy
becomes next year's winning strategy. We can say, however, that the most likely
winners in the long run are those who consistently follow long-term investment
strategies.
Upcoming Developments
In the next few weeks and months, shareholders of Evergreen and Keystone funds
will begin to notice some changes. The Evergreen Keystone Funds are becoming
the Evergreen Funds. On October 31, 1997, Keystone America Funds adopted the
name of Evergreen and in early 1998 the original Keystone Fund Family will take
the Evergreen name.
We believe that by putting all the funds under the umbrella name of Evergreen
Funds we will be creating a simpler and more cohesive image. Importantly, we
expect to create substantial cost savings for shareholders as a result of
consolidating prospectuses, annual reports, legal registrations and other
materials. It also will be easier for you to find all the funds of the
Evergreen Family, to which you have exchange privileges, under one heading in
newspapers and electronic services.
What will not change will be our commitment to provide you with the finest
investment products and shareholder services possible.
If you have any questions about these changes or other issues affecting your
investments, we encourage you to consult your financial advisor or call
Evergreen Funds at 1-800-343-2898.
Sincerely,
/s/ William M. Ennis
William M. Ennis
Managing Director
1
<PAGE>
EVERGREEN
Emerging Markets Growth Fund
Fund at a Glance as of October 31, 1997
We try to take advantage of
the excellent opportunities
in emerging markets,
while being very conscious of the
risks and volatility of these
markets.
Portfolio
Management
- ----------------------------------------
(Photo of Gilman Gunn)
Gilman Gunn
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Inception Date 9/6/94 9/6/94 9/6/94 9/6/94
- --------------------------------------------------------------------------------
Average Annual Returns*
- --------------------------------------------------------------------------------
One year with sales charge 12.48% 12.40% 16.54% 18.40%
- --------------------------------------------------------------------------------
One year w/o sales charge 18.09% 17.40% 17.54% 18.40%
- --------------------------------------------------------------------------------
3 years 0.29% 0.26% 1.25% 2.17%
- --------------------------------------------------------------------------------
5 years - - - -
- --------------------------------------------------------------------------------
10 years - - - -
- --------------------------------------------------------------------------------
Since Inception -1.38% -1.43% -0.48% 0.38%
- --------------------------------------------------------------------------------
Cumulative Total Return since
inception -4.28% -4.45% -1.50% 1.22%
- --------------------------------------------------------------------------------
</TABLE>
*Adjusted for maximum applicable sales charge
- --------------------------------------------------------------------------------
LONG TERM GROWTH
(A line graph appears here with the following plot points.)
9/94 10/94 10/95 10/96 10/97
Class A Shares $9,525 9,039 7,525 8,107 $9,572
Morgan Stanley Emerging
Markets Index (MS EMI) $10,000 9,472 7,522 7,814 $6,919
Morgan Stanley EAFE
Index (MS EAFE) $10,000 9,983 9,787 10,644 $10,968
Comparison of a change in value of a $10,000 investment in Evergreen Emerging
Markets Growth Fund Class A, the Morgan Stanley Emerging Markets Index and the
Morgan Stanley EAFE Index.
Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholder
investing in different classes. The investment return and principal value will
fluctuate so that an investor's shares, when redeemed, may be worth more or
less than original cost.
- --------------------------------------------------------------------------------
INVESTMENT STYLE
Morningstar's Style Box is based on a portfolio date as
of 9/30/97.
(Graphic appears here)
The Equity Style Box placement is based on a fund's
price-to-earnings and price-to-book ratio relative to the
S&P 500, as well as the size of the companies in which it
invests, or median market capitalization.
Source: 1997 Morningstar, Inc.
2
<PAGE>
EVERGREEN
Emerging Markets Growth Fund
Portfolio Manager Interview
- --------------------------------------------------------------------------------
How did the Fund perform during the
past year?
The Fund had excellent performance, especially in light of the volatility
in emerging markets in October, at the end of the fiscal year. The
Evergreen Emerging Markets Growth Fund's Y Class had a total return of
18.4% for the 12 months that ended on October 31, 1997. For the same
period, the Morgan Stanley Capital International Emerging Markets Index,
an unmanaged index of emerging market securities, had a return of -8.5%.
The Fund's A Class had a total return of 18.1%. The B and C Classes had
total returns, respectively, of 17.4% and 17.5%. All performance figures
are before deduction of any sales charges, if applicable.
- --------------------------------------------------------------------------------
What is the current strategy of the Fund,
Gilman?
We at Keystone Investment Management Company started managing the Fund on
September 1, 1997. The Fund has had an excellent record, and it has
continued to do well since we took it over. Our philosophy and that of the
predecessor manager are very much alike. We try to take advantage of the
excellent opportunities in emerging markets, while being very conscious of
the risks and volatility of these markets. Since we took over management,
we have been very defensive, and this has worked to the Fund's advantage.
On September 1, when we assumed responsibility for the Fund, it had about
25% of its assets in Asia, including about 22% in Hong Kong and Taiwan. We
sold almost all our Asian holdings and increased cash because of our
feeling that clouds would darken over these two countries as they had in
other Asian countries. In fact, those two markets had sharp turndowns in
September and October, and we avoided that.
As a result of the sale of Asian securities and of the influx of a
significant amount of money in September, we had a large cash balance at
the end of the fiscal year, more than 40% of net assets. We think this is
appropriate in this period of volatility in the emerging markets. It makes
more sense to be more defensive than in other international equity funds
that invest in more developed markets.
- --------------------------------------------------------------------------------
What countries are you emphasizing?
Our largest weighting is in Brazil, at about 13% of net assets. Brazil is
a very volatile market, but we think the valuation levels are attractive.
We are focusing primarily on companies undergoing privatization,
including: Telebras, a telecommunications company; CEMIG, an electric
utility; Petrobras, an oil company; and CVRD, a mining and natural
resources company. These companies that have been state-owned are
extremely attractive. The government is preparing for privatization, which
usually means that they are receiving rate relief and get
ting a rate structure that is more clear.
The second largest weighting is in Mexico, at about 10.5% of net assets.
Despite the volatility, we believe Latin America remains a good opportunity
because valuation levels still are attrac tive, relative to other markets,
and govern ment macroeconomic policies are sound.
Geographical
Allocation-
Equities
--------
(As a percentage of equities)
Brazil 21.6%
- ----------------------------------------------------------
Mexico 16.9%
- ----------------------------------------------------------
Portugal 10.3%
- ----------------------------------------------------------
Turkey 9.1%
- ----------------------------------------------------------
Hungary 9.0%
- ----------------------------------------------------------
Egypt 4.0%
- ----------------------------------------------------------
Argentina 3.7%
- ----------------------------------------------------------
Russia 3.4%
- ----------------------------------------------------------
South Africa 3.1%
- ----------------------------------------------------------
Chile 3.0%
- ----------------------------------------------------------
Other 15.9%
- ----------------------------------------------------------
Equities represented 62.2% of net assets. Other investments
totaled 37.8% and included short-term investments, foreign
currency holdings and other assets and liabilities.
3
<PAGE>
EVERGREEN
Emerging Markets Growth Fund
Portfolio Manager Interview
The next largest weightings are Portugal, at about 6.4% of net assets,
Turkey at about 5.7% and Hungary at 5.6%. Europe is a region that provides
good growth, and a good balance of diversification. We also have
investments in Russia, South Africa, Israel, Egypt and Poland. At the end
of the fiscal year, only about 3% of the portfolio was invested in Asia,
with Singapore the largest weighting at 1.0% of net assets.
Sector Allocation
-----------------
(As a percentage of net assets)
Telecommunication Services and Equipment 13.6%
-------------------------------------------------------------------
Finance & Insurance 12.2%
-------------------------------------------------------------------
Healthcare Products & Services 5.4%
-------------------------------------------------------------------
Food & Beverage Products 5.0%
-------------------------------------------------------------------
Oil/Energy 4.8%
-------------------------------------------------------------------
Diversified Companies 3.7%
-------------------------------------------------------------------
Utilities - Electric 3.2%
-------------------------------------------------------------------
Metals & Mining 2.6%
-------------------------------------------------------------------
Electrical Equipment & Services 2.1%
-------------------------------------------------------------------
Building, Construction & Furnishings 1.5%
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
What sectors or industries are you
emphasizing?
Telecommunications stocks, at about 14% of net assets, represent our
largest weighting. Our largest holding is in Brazil, Telebras. Around the
world, telecommunications companies have very good attributes in emerging
markets. These companies, typically large telephone companies, are usually
in dominant positions in the country and the local stock market. They also
are very important for the country, because the telecommunications
industry is an essential ingredient for infrastructure development, which
is required for economic growth.
We also are emphasizing banking and electric utilities. All of these
industries are represented by companies that are fairly large, are fairly
stable and are well run. They are all important industries to the futures
of their countries.
Top 10 Holdings
---------------
(As a percentage of net assets)
Richter Gedeon, GDR (Hungary) 2.7%
-------------------------------------------------------------------
Telecomunicacoes Brasileiras S.A., ADR
("Telebras")(Brazil) 2.7%
-------------------------------------------------------------------
Compania Vale Do Rio Doce
Navegacao S.A. (Brazil) 2.6%
-------------------------------------------------------------------
LUKoil Oil Co., ADR (Russia) 2.1%
-------------------------------------------------------------------
Compania de Telecom de
Chile, S.A. (Chile) 1.9%
-------------------------------------------------------------------
Haci Omer Sabanci (Turkey) 1.9%
-------------------------------------------------------------------
Campofrio Alimentacion
S.A. (Spain) 1.8%
-------------------------------------------------------------------
YPF Sociedad Anonima ADR
(Argentina) 1.8%
-------------------------------------------------------------------
Portugal Telecom S.A., ADR
(Portugal) 1.5%
-------------------------------------------------------------------
Telecomunicacoes de Sao Paulo,
S.A. (Brazil) 1.5%
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
What is your outlook?
Although emerging markets have been very volatile lately, we continue to
see excellent long-term opportunities in emerging markets. The good growth
rates in many of these markets, combined with economic reforms and
liberalization, provide strong long-term potential. Our investment team
makes frequent visits to these markets, to talk to government and company
officials and to make sure we keep our ears close to the ground. We think
there is significant investment potential, especially in some of the
industries I have mentioned. We also want to manage the portfolio with a
healthy respect for risk, because emerging markets are quite volatile.
4
<PAGE>
EVERGREEN
Global Leaders Fund
Fund at a Glance as of October 31, 1997
The Fund continued its
disciplined strategy of
seeking what we believe are
the "100 best companies in
the world," based on
Evergreen's quantitative and
qualitative analysis.
Portfolio
Management
- ----------------------------------------
(Photo of Stephen A. Lieber)
Stephen A. Lieber
(Photo of Edwin D. Miska)
Edwin D. Miska
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Inception Date 6/3/96 6/3/96 6/3/96 11/1/95
- --------------------------------------------------------------------------------
Average Annual Returns*
- --------------------------------------------------------------------------------
One year with sales charge 9.43% 9.01% 13.02% 15.22%
- --------------------------------------------------------------------------------
One year w/o sales charge 14.88% 14.01% 14.02% 15.22%
- --------------------------------------------------------------------------------
5 years - - - -
- --------------------------------------------------------------------------------
10 years - - - -
- --------------------------------------------------------------------------------
Since Inception 10.69% 10.98% 13.62% 17.35%
- --------------------------------------------------------------------------------
Cumulative Total Return since
inception 15.44% 15.86% 19.78% 37.77%
- --------------------------------------------------------------------------------
12 month distribution per
share $0.01 $0.01 $0.01 $0.01
- --------------------------------------------------------------------------------
</TABLE>
*Adjusted for maximum applicable sales charge
- --------------------------------------------------------------------------------
LONG TERM GROWTH
(Line graph appears here with the following plot points.)
6/96 10/96 1/97 4/97 7/97 10/97
Class A Shares 9,525 10,031 10,487 10,554 12,282 11,544
Consumer Price
Index (CPI) 10,000 10,108 10,160 10,230 10,246 10,287
MSCI World
Index (MSCIWI) 10,000 10,184 10,664 10,873 12,629 11,725
Comparison of a change in value of a $10,000 investment in Evergreen Global
Leaders Fund Class A, the MSCI World Index and the Consumer Price Index.
Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholder
investing in different classes.
The investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than original cost.
- --------------------------------------------------------------------------------
INVESTMENT STYLE
Morningstar's Style Box is based on a portfolio date as
of 9/30/97.
(Graphic appears here)
The Equity Style Box placement is based on a fund's
price-to-earnings and price-to-book ratio relative to the
S&P 500, as well as the size of the companies in which it
invests, or median market capitalization.
Source: 1997 Morningstar, Inc.
5
<PAGE>
EVERGREEN
Global Leaders Fund
Portfolio Manager Interview
- --------------------------------------------------------------------------------
How did the Fund perform during the
year?
The Fund did well, outperforming the relevant indices. For the 12-month
period that ended on October 31, 1997, the Evergreen Global Leaders Fund's
Y Class had a total return of 15.22%. For the same period, the Morgan
Stanley Capital International World Index, which is weighted according to
the capitalization of countries, had a return of 14.76% and the Morgan
Stanley EAFE Index, a commonly used index of markets outside the United
States, had a return of 3.04%.
The Fund's Class A Shares had a return of 14.88%, while Class B Shares and
Class C Shares had returns, respectively, of 14.01% and 14.02%. All
performance figures are before deduction of any sales charges, if
applicable.
- --------------------------------------------------------------------------------
What was the investment environment
like during this fiscal period?
In general, the principal markets in which the Fund invests had strong
performance during the year, despite bouts of volatility that were
exacerbated by regional economic issues. Seventeen of the 23 nations
included in the Morgan Stanley Capital International World Index had
positive returns in U.S. dollar terms during the 12-month period. The
strongest performing markets were European, led by Finland (45.05%), Spain
(35.13%), and Italy (31.25%), while negative returns were concentrated in
countries in the Far East. The United States, which your Fund continued to
emphasize, had a strong 30.57% return during the year, as measured by the
S&P 500 Index.
- --------------------------------------------------------------------------------
What was your investment strategy
during the year?
The Fund continued its disciplined strategy of seeking what we believe are
the "100 best companies in the world," based on Evergreen's quantitative
and qualitative analysis. Investing in an environment that was generally
positive toward equity investing, the Fund focused on companies whose
financial performance and products and services distinguished them as
leaders within their markets. Our investment discipline continued to
concentrate on building a portfolio of companies which have been
consistently profitable, exhibit a strong pattern of sustained earnings
growth and show the potential to continue this pattern. We look for
companies that have generated relatively high returns on shareholders'
equity and offer what we believe are the best relative values. In
assembling this portfolio, we examine global macroeconomic and political
factors and utilize a qualitative stock selection process using a strong
value discipline.
Sector Allocation
-----------------
(As a percentage of net assets)
Information Services & Technology 10.8%
----------------------------------------------------------------------
Retailing & Wholesaling 10.5%
----------------------------------------------------------------------
Healthcare Products & Services 9.8%
----------------------------------------------------------------------
Consumer Products & Services 6.9%
----------------------------------------------------------------------
Chemical & Agricultural Products 6.5%
----------------------------------------------------------------------
Industrial Specialty Products & Services 5.8%
----------------------------------------------------------------------
Food & Beverage Products 5.5%
----------------------------------------------------------------------
Finance & Insurance 5.4%
----------------------------------------------------------------------
Publishing, Broadcasting & Entertainment 5.3%
----------------------------------------------------------------------
Textile & Apparel 5.2%
----------------------------------------------------------------------
- --------------------------------------------------------------------------------
Where did you have your greatest
emphasis?
The Fund had its greatest emphasis in the United States, with a 34.5%
asset allocation at the end of the fiscal year, up from the 31.9% at the
end of the previous fiscal year. The equity market in the U.S. was very
strong during the year, aided by moderate economic growth, relatively low
and declining interest rates, low inflation, strengthening consumer demand
and low unemployment. In this environment, many large, blue-chip companies
continued to post strong earnings growth, and
6
<PAGE>
EVERGREEN
Global Leaders Fund
Portfolio Manager Interview
were favored by institutional and individual investors. This investor
sentiment was reflected in the strong performance of the U.S. dollar
versus other currencies. The Fund's U.S. portfolio segment had a return of
42.7% for the year.
The top-performing U.S. companies in the portfolio included major names
which have shown an ability to achieve consistently outstanding results.
These companies represented a number of diverse industries. For example,
the greatest performer during the year was Schwab (Charles) & Co., from
the financial services sector, with a 108.4% gain. Other strong performers
in the financial services sector included: SLM Holding Corp. (Sallie Mae),
MBNA Corp., and Norwest Corp. Major contributors from the technology
sector included Microsoft Corp., with a 92.9% gain, and Compaq Computer
Corp., with a 75.7% gain. Schering-Plough Corp. had the highest return
among U.S. pharmaceutical companies, with a 74.1% total return during the
year. Other strong performers included two retailers, Gap Inc. and Home
Depot Inc., with returns of 83.0% and 52.2% respectively, and cruise
operator Carnival Corp. whose Class A Stock had a return of 49.4%.
In all, 32 of the 36 U.S. companies in the portfolio at the end of the
year had positive performance, with 22 companies having returns greater
than 25% during the 12-month fiscal period.
- --------------------------------------------------------------------------------
How did the Fund's foreign investments
perform?
The Fund's foreign holdings returned lower absolute results than the U.S.
holdings, reflecting the more difficult conditions in some regions and the
challenge of international investing during a period when the U.S. dollar
was strengthening against foreign currencies.
Overall, the Fund's foreign holdings had a return of 5.48%. While this was
less than the performance of the U.S. portfolio, it was superior to the
benchmark Morgan Stanley Capital International EAFE Index, with its return
of 3.04% for the 12 months ended October 31, 1997. The non-U.S. portion of
the portfolio accounted for 65% of Fund assets at the end of the fiscal
year.
Two major factors contributed to the results that were less than those
achieved in the U.S.: the weakness of most foreign currencies versus the
U.S. dollar and the volatility of markets in the Far East. The dollar rose
in value versus most currencies, thus eroding at least part of the returns
realized in local currency terms. Your Fund did not engage in active
currency management, or hedging strategies, during the year. In the Far
East, the regional economic instability that began during the year in the
emerging market economies of Thailand, Indonesia and Korea spilled into
the neighboring markets of Hong Kong, China, Japan and Malaysia near the
end of the fiscal year. This regional instability spread throughout the
world, causing at least some volatility in virtually every market. The
negative impact on the Fund was limited, however, by the relatively light
allocation to the Far East.
- --------------------------------------------------------------------------------
How did the Fund do with individual
countries in major foreign markets?
In general, the Fund had positive returns from the major non-U.S. markets.
In fact, the Fund's investments in Japan had a positive return of 9.9%,
despite over all weakness in the Japanese market, which was down 18.7%, as
measured by the MSCI Japan Country Index, and a depreciation of the Yen
versus the dollar. Among the successful investments in Japan were
Seven-Eleven Japan Co., Ltd. and Nintendo Co., Ltd., up 22.1% and 19.6%
respectively.
Geographical
Allocation
----------
(As a percentage of net assets)
Europe 47.0%
- ---------------------------------------------------
North America 40.8%
- ---------------------------------------------------
Japan 6.8%
- ---------------------------------------------------
Far East 5.4%
- ---------------------------------------------------
7
<PAGE>
EVERGREEN
Global Leaders Fund
Portfolio Manager Interview
In other countries, the Fund had strong performance in Belgium, up 30.7%
for the year; Germany, up 25.3%; Great Britain, up 19.8%; Norway, up
16.7%; and Canada, up 12.3%. The weakest performers, as one might expect,
were in the Far East, with investments in Malaysia posting a -52.4% return
and Hong Kong a -21.2% return. The Fund's investments in France had a
-12.6% return and Italy had a -4.5% return.
Among individual issues, the top-performing stock in the entire portfolio
was SAP AG, the German industrial process software giant, with a 132.1%
gain. Other strong foreign contributors to performance included several
British companies, including Lloyd's TSB Group, a banking company, with a
98.0% return; Legal and General Group PLC, an insurance company, with a
56.5% return; the pharmaceutical company, SmithKline Beecham PLC, up
54.7%; and Vodafone Group Plc, a mobile phone operator with a 40.2%
return. Outside the United Kingdom, strong performers included UCB SA, the
Belgian pharmaceutical and chemical company with a 76.9% return; Hennes &
Mauritz, a Swedish clothing retailer that had a return of 59.3%; Getronics
NV, a Dutch systems integrator with a 31.1% return; and Benetton Group
SpA, the Italian clothing retailer, with a return of 30.2% for the
portfolio.
Top 10 Holdings
---------------
(As a percentage of net assets)
Seven Eleven Japan Co., Ltd (Japan) 3.9%
-----------------------------------------------------------------------
RWE AG (Germany) 3.0%
-----------------------------------------------------------------------
Nintendo Co., Ltd. (Japan) 2.6%
-----------------------------------------------------------------------
Ems-Chemie Holding AG (Switzerland) 2.3%
-----------------------------------------------------------------------
SAP AG (Germany) 2.0%
-----------------------------------------------------------------------
Bombardier, Inc., Cl. B (Canada) 1.8%
-----------------------------------------------------------------------
General Electric Co. (U.S.) 1.8%
-----------------------------------------------------------------------
Wal-Mart Stores, Inc. (U.S.) 1.7%
-----------------------------------------------------------------------
Hugo Boss AG (Germany) 1.6%
-----------------------------------------------------------------------
Du Pont (E.I.) De Nemours & Co. (U.S.) 1.6%
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
What is your outlook?
We retain a positive outlook for the near future. We continue to believe
that superior performance can be achieved by companies which consistently
demonstrate sustained and visible growth in any economic environment. We
will continue to be vigilant to identify such companies, and we will be
pro-active in managing the portfolio in light of changing global
macro-economic, political and social conditions.
8
<PAGE>
EVERGREEN
Global Real Estate Equity Fund
Fund at a Glance as of October 31, 1997
We'll continue with a
balanced strategy, looking
both for attractively priced
growth companies and
undervalued real estate
opportunities in the world's
stock markets.
Portfolio
Management
----------------------------------------
(Photo of Samuel A. Lieber)
Samuel A. Lieber
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Inception Date 2/10/95 2/8/95 2/9/95 2/1/89
- --------------------------------------------------------------------------------
Average Annual Returns*
- --------------------------------------------------------------------------------
One year with sales charge 0.37% -0.47% 3.61% 5.54%
- --------------------------------------------------------------------------------
One year w/o sales charge 5.37% 4.53% 4.61% 5.54%
- --------------------------------------------------------------------------------
3 years - - - 0.41%
- --------------------------------------------------------------------------------
5 years - - - 9.08%
- --------------------------------------------------------------------------------
10 years - - - -
- --------------------------------------------------------------------------------
Since Inception 2.71% 2.83% 3.94% 4.24%
- --------------------------------------------------------------------------------
Cumulative Total Return since
inception 7.55% 7.93% 11.11% 43.86%
- --------------------------------------------------------------------------------
12 month distribution per
share - - - $0.02
- --------------------------------------------------------------------------------
</TABLE>
*Adjusted for maximum applicable sales charge
- --------------------------------------------------------------------------------
LONG TERM GROWTH
(A line graph appears here with the following plot points.)
2/95 10/95 10/96 10/97
Class A Shares 9,525 9,964 10,566 10,755
MSCI Global Real Estate
Index (MSCIGRE) 10,000 10,186 10,491 10,677
MSCI World
Index (MSCIWI) 10,000 12,128 15,048 20,565
Comparison of a change in value of a $10,000 investment in Evergreen Global
Real Estate Equity Fund Class A, the MSCI Global Real Estate Index, and the
MSCI World Index.
Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholder
investing in different classes. The investment return and principal value will
fluctuate so that an investor's shares, when
redeemed, may be worth more or less than original cost.
- --------------------------------------------------------------------------------
INVESTMENT STYLE
Morningstar's Style Box is based on a portfolio date as
of 9/30/97.
(Graphic appears here)
The Equity Style Box placement is based on a fund's
price-to-earnings and price-to-book ratio relative to the
S&P 500, as well as the size of the companies in which it
invests, or median market capitalization.
Source: 1997 Morningstar, Inc.
9
<PAGE>
EVERGREEN
Global Real Estate Equity Fund
Portfolio Manager Interview
- --------------------------------------------------------------------------------
How did the Fund do during the fiscal
year?
The Fund outperformed its benchmark, the Morgan Stanley Global Real Estate
Index, for both the six month and 12 month periods under review. For the
12 month period that ended on October 31, 1997, the Fund's Class Y shares
had a positive total return of 5.54%. In contrast, the Morgan Stanley
Global Real Estate Index had a negative return of -15.4%. During the same
period, Class A shares had a total return of 5.37%, Class B shares had a
total return of 4.53%, and Class C shares had a total return of 4.61%. The
Fund's performance was especially strong in the final six months of the
year. Class Y shares had a positive total return of 13.97% for the
six-month period, even as the benchmark Morgan Stanley Global Real Estate
Index produced a loss of -15.5%.
- --------------------------------------------------------------------------------
What was the investment environment
like during the fiscal year?
Speaking broadly, this has been a period of declining interest rates and
moderate economic growth in many regions of the world. This was positive
for both real estate and stock markets. However, the situation varied
dramatically from region to region. The so-called "Asian Contagion"
started slowly in Thailand before spreading throughout the "Asian Tigers"
and threatening other larger markets.
- --------------------------------------------------------------------------------
What factors created such major regional
variations in performance?
In general, local property supply and demand situations combined with the
overall economic climate to influence performance. In the U.S., we did
have a brief rise in interest rates in April, as the Federal Reserve
raised short-term rates to thwart any increase in inflationary pressure.
This had a short-term effect in the stock markets in the United States and
in Asia, but markets bounced back as inflation worries receded and
interest rates resumed their downward trend. Over the full year, the
economy was very positive for the entire real estate industry in the
United States, especially in the homebuilding sector, where the Fund had a
major emphasis.
Great Britain is also well into its business cycle, and has enjoyed a
strong market for real estate. In Europe, expanding economic growth in its
southern and northern countries has helped real estate, while the central
countries, Germany and France, continue to be bogged down by tight
domestic monetary policy and high unemployment as they prepare to join the
European Economic Union. Eastern Europe appears to be cooling off a bit,
as well.
- --------------------------------------------------------------------------------
GEOGRAPHICAL ALLOCATION
As of 10/31/96
Asia 34.9%
Europe 33.1%
North and South America 28.6%
Other 3.4%
As of 10/31/97
Asia 16.1%
Europe 45.5%
North and South America 38.4%
In Asia, the economic environment worsened, especially after June. We
witnessed the continuation of a sluggish economy in Japan, with the
exception of its export-oriented companies. While the office sector has
improved, residential and retail properties are soft. Japan's economic
problems are being exacerbated by the problems in Southeast Asia. In the
afflicted Asian countries, the combination of both currency and liquidity
constraints created a rapidly destabilizing domino effect. Such a shock to
the system can devastate weak companies while creating opportunities for
the survivors.
We believe the Asian problems were a reaction to the strength of the U.S.
dollar. Those economies closely linked to the U.S. currency experienced an
erosion of their competitiveness relative to countries such as China and
India. Thus, Indonesia, Malaysia, South Korea, and
10
<PAGE>
EVERGREEN
Global Real Estate Equity Fund
Portfolio Manager Interview
the Philippines became less competitive and their export growth slowed. As
a result, more attention was focused on capital flows and the amount of
foreign capital that had financed each country's expansion. Short-term
debt became more expensive as the local currencies declined against the
U.S. dollar. For the 12 month period, the Thai Baht declined 35% against
the dollar. The Indonesian Rupiah lost 34%, the Malaysian Ringgit lost
28%, and the South Korean and Philippine currencies each lost 25% against
the dollar, by the end of October. The short-term impact is exceptionally
expensive capital and vastly reduced liquidity.
- --------------------------------------------------------------------------------
In light of these changing conditions, what was your investment strategy,
and what type of asset allocation changes did you make during the year?
The best performing markets were in North America and Great Britain. In
Great Britain, the property share indices increased by 33%, and in Canada
they increased by 54%. Real Estate Investment Trust (REITs) in the United
States were up 33.5% for the year, and homebuilders increased by 74%. The
Fund's investment strategy was to reduce exposure to weaker market sectors
and countries in Asia, while adding to the Fund's holdings in relatively
stable countries with positive real estate fundamentals and undemanding
share valuations.
During the period, we increased the Fund's investments in the United
States from 21.2% to 25.2% with a sizable portion going to the stocks of
homebuilders. By the fiscal year-end, two of the Fund's largest holdings
were Continental Homes and U.S. Home Corp., which gained 87% and 152%,
respectively, during the year.
The Fund's allocation to Canada was dramatically increased from 0.9% to
4.4% during the fiscal year, with the total allocation to both North and
South America increased from 28.6% to 38.4%.
In Europe, the Fund's holdings increased from 33.1% to 45.5%. The most
notable changes were in two of the strongest real estate markets: Spain,
which increased from 3.3% to 5.2%; and Sweden, where new investments
raised the Fund's exposure from zero to 4.7%. The total investment in
Scandinavian countries stood at 14.2% of net assets at the end of the
year. While the northern and southern regions of Europe were the best
performers, the Fund also benefited from several long-term investments in
France and Germany, most notably, Societe du Louvre, owner of prime
Parisian hotels, which rose by 112% in local currency as it continues to
fight a hostile takeover bid.
In Asia, the Fund's allocation to Japan changed from 14.2% to 8.9%, while
the allocation to Southeast Asia went from 20.7% to 7.2% during the year.
The reduction in Southeast Asia was the result both of deliberate cutbacks
in that region's allocation to 10.7% by June 30, and then a combination of
sales and price erosion during the summer's currency-induced market
collapses. However, in October we took advantage of buying opportunities
in Hong Kong, effectively doubling the Fund's Southeast Asian holdings in
the final days of the fiscal period.
Top 10 Holdings
---------------
(As a percentage of net assets)
Continental Homes Holding Corp. (U.S.) 8.0%
-----------------------------------------------------------------------
Societe du Louvre (France) 7.3%
-----------------------------------------------------------------------
Thorkild Kristensen (Denmark) 5.8%
-----------------------------------------------------------------------
Alexander's, Inc. REIT (U.S.) 5.6%
-----------------------------------------------------------------------
Grupo Posadas, SA de CV,
Class L & Class A Shares (Mexico) 4.4%
-----------------------------------------------------------------------
Inversiones y Representaciones SA (Argentina) 4.0%
-----------------------------------------------------------------------
European City Estates NV (Netherlands) 3.7%
-----------------------------------------------------------------------
U.S. Home Corp., Warrants Expiring
6/22/98 @ $20.00 3.6%
-----------------------------------------------------------------------
Societe de Immeubles (France) 3.3%
-----------------------------------------------------------------------
Steen & Strom ASA (Norway) 3.2%
-----------------------------------------------------------------------
11
<PAGE>
EVERGREEN
Global Real Estate Equity Fund
Portfolio Manager Interview
- --------------------------------------------------------------------------------
Given the recent turmoil, what is your
outlook for Asia?
It is still unclear as to how long it will take the Asian real estate
market to emerge from the downturn. South Korea and Thailand may
experience an extended period of slow growth, even stagnation, as their
financial systems are restructured. There is greater underlying strength
and more economic diversity in Singapore and the Philippines so we are
more optimistic for medium-term recovery. Hong Kong is still questionable,
depending on what happens in China, although we believe that much of its
price bubble has been removed from share prices. We will still be sifting
through these markets, looking for a few gems as the opportunity may exist
for once-in-a-generation-type total returns over the next few years. The
situation in Japan is largely dependent on the government's ability to
help financial institutions re-capitalize and a renewal of domestic
consumption.
- --------------------------------------------------------------------------------
What about Europe?
At this point in the economic cycle, real estate in Continental Europe has
finally begun to do well. While Britain's property markets have already
recovered strongly, prospects are still positive. Scandinavia is a year or
two behind England, but it is recovering quickly. We see opportunity for
continued moderate acceleration in the Benelux countries and France.
Germany still faces a glut of property and a slow domestic economy, so we
remain cautious. On the other hand, Spain, Italy, and Portugal should
continue to benefit from the prospect of European union.
- --------------------------------------------------------------------------------
What is your current view of the market
in North America?
The U.S. homebuilding industry had another exceptional year, and the Fund
benefited from major holdings in that sector. We expect a continued upward
re-rating of these stocks. The Fund's investments in U.S. office building
and hotel property companies also helped performance as fundamentals of
supply and demand remain positive. Even though the easy money has been
made, selective opportunities exist. Canada is following the U.S. and has
finally recovered momentum. While U.S. real estate markets remain
favorable, the economic cycle is more mature and I expect that real estate
stocks in the U.S. may not be the leading performer as they have been over
the past three years. Thus, the Fund's weighting in the U.S. may decrease
in 1998.
- --------------------------------------------------------------------------------
What is your overall outlook?
The greatest opportunities will arise from growing demand for quality
modern property in Europe, which should propel both rents and capital for
new construction where the economics permit. We'll continue to monitor the
situation in Asia to see how and when liquidity returns to the region. We
think that the surviving companies will offer the opportunity for
tremendous appreciation potential over the next three to five years. In
North America, and particularly the U.S., we will focus on the benefits of
low interest rates and a high employment economy which are both very
positive for the domestic side of the economy. In summary, we'll continue
with a balanced strategy, looking both for attractively priced growth
companies and undervalued real estate opportunities in the world's stock
markets.
12
<PAGE>
EVERGREEN
International Equity Fund
Fund at a Glance as of October 31, 1997
Our long-term strategy
remains unchanged. We are
looking to identify the most
promising securities in
international markets,
companies with good long-
term earnings prospects that
are selling at attractive
valuations.
Portfolio
Management
- ----------------------------------------
(Photo of Richard K. Wagoner)
Richard K. Wagoner
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS
<TABLE>
<CAPTION>
Class A Class B Class C Class Y
<S> <C> <C> <C> <C>
Inception Date 9/2/94 9/2/94 9/2/94 9/2/94
- --------------------------------------------------------------------------------
Average Annual Returns*
- --------------------------------------------------------------------------------
One year with sales charge 2.51% 1.79% 5.76% 7.92%
- --------------------------------------------------------------------------------
One year w/o sales charge 7.62% 6.79% 6.76% 7.92%
- --------------------------------------------------------------------------------
3 years 2.62% 2.63% 3.60% 4.57%
- --------------------------------------------------------------------------------
5 years - - - -
- --------------------------------------------------------------------------------
10 years - - - -
- --------------------------------------------------------------------------------
Since Inception 2.48% 2.49% 3.40% 4.33%
- --------------------------------------------------------------------------------
Cumulative Total Return since
inception 8.07% 8.09% 11.18% 14.36%
- --------------------------------------------------------------------------------
12 month distribution per
share $0.15 $0.06 $0.06 $0.17
- --------------------------------------------------------------------------------
</TABLE>
*Adjusted for maximum sales charge
- --------------------------------------------------------------------------------
LONG TERM GROWTH
(A line graph appears here with the following plot points.)
9/94 10/94 10/95 10/96 10/97
Class A Shares 9,525 9,525 9,136 10,042 10,807
Consumer Price
Index (CPI) 10,000 10,007 10,289 10,596 10,805
Morgan Stanley EAFE
Index (MS EAFE) 10,000 9,983 9,787 10,644 10,968
Comparison of a change in value of a $10,000 investment in Evergreen
International Equity Fund Class A, the Morgan Stanley EAFE Index and the
Consumer Price Index.
Past performance is no guarantee of future results. The performance of each
class may vary based on differences in loads and fees paid by the shareholder
investing in different classes.
The investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than original cost.
- --------------------------------------------------------------------------------
INVESTMENT STYLE
Morningstar's Style Box is based on a portfolio date as
of 9/30/97.
(Graphic appears here)
The Equity Style Box placement is based on a fund's
price-to-earnings and price-to-book ratio relative to the
S&P 500, as well as the size of the companies in which it
invests, or median market capitalization.
Source: 1997 Morningstar, Inc.
13
<PAGE>
EVERGREEN
International Equity Fund
Portfolio Manager Interview
- --------------------------------------------------------------------------------
How has the Fund performed over the
past 12 months?
The Fund outperformed its benchmark index, the Morgan Stanley Capital
International Europe, Australasia and Far East ("EAFE") Index, by
approximately 50 basis points over the 12 months ended October 31, 1997.
Much of that outperformance can be attributed to strong gains in the first
half of the fiscal period. The Fund's relative performance trailed that of
its benchmark over the latter part of the period, largely reflecting its
exposure to beleaguered Asian markets.
- --------------------------------------------------------------------------------
What were some of the factors in the
Fund's solid performance?
Particularly strong performance for the Fund came from its holdings in
France, Germany and Spain, as well as its holdings in the Nordic region
collectively. These companies benefited from a strong fundamental backdrop
of falling interest rates, increasing optimism toward monetary union, and
an improving economic and earnings outlook. Specific companies, notably in
Germany, also benefited from restructuring efforts and a general increase
in emphasis towards shareholder value, a concept long familiar to
Americans, but still new in Europe.
- --------------------------------------------------------------------------------
How did the foreign markets perform
during the fiscal period?
The performance of foreign markets during the fiscal period varied by
region. European stock markets showed universal strength, supported by
falling interest rates, optimism regarding the prospects for European
Monetary Union, and an improved earnings outlook for many companies. Latin
American markets also performed strongly, as investors responded favorably
to the region's progress on the economy, fiscal and political fronts.
Asian-Pacific markets performed poorly, with the bulk of that poor
performance coming at the end of the fiscal period.
Top 10 Holdings
---------------
(As a percentage of net assets)
Philips Electronics N.V.
(Netherlands) 2.5%
-----------------------------------------------------------------------
YPF Sociedad Anonima, ADR
(Argentina) 1.7%
-----------------------------------------------------------------------
Electrolux AB, Series B (Sweden) 1.6%
-----------------------------------------------------------------------
Williams Holdings PLC (U.K.) 1.5%
-----------------------------------------------------------------------
Orange PLC (U.K.) 1.5%
-----------------------------------------------------------------------
AXA-UAP (France) 1.4%
-----------------------------------------------------------------------
Fresenius Medical Care AG
(Germany) 1.4%
-----------------------------------------------------------------------
Cimpor-Cimentos de Portugal SA
(Portugal) 1.3%
-----------------------------------------------------------------------
Orix Corp. (Japan) 1.3%
-----------------------------------------------------------------------
Rhone-Poulenc SA (France) 1.3%
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
What caused the volatility in foreign (especially emerging) markets during
October 1997?
The global volatility that came to a head in October traces its origins
back to July 2, 1997, when Thailand devalued its currency, leading to a
sell-off in the Thai stock market. What was originally confined to
Thailand subsequently spread to other Southeast Asian countries, as
investors, with some justification, drew analogies between the situation
in Thailand - a troubled banking system, an overheating property market,
and swelling current-account and trade deficits - and those in other
regional markets. In fairly short order, monetary authorities in Malaysia,
the Philippines, Singapore and Indonesia, facing speculative attacks from
currency traders, devalued their currencies, triggering sell-offs in their
respective stock markets.
- --------------------------------------------------------------------------------
How far did this "Asian flu" spread?
The contagion from this spread north and, ultimately, throughout Asia,
with currency and economic concerns leading to sharp pullbacks in the
stock markets of Taiwan, South Korea and, most recently, Hong Kong. Nor
14
<PAGE>
EVERGREEN
International Equity Fund
Portfolio Manager Interview
did it stop here; worries over emerging market instability triggered
sell-offs in the previously strong-performing Latin American markets and
in the markets in Eastern Europe. Virtually no emerging market escaped
unscathed.
Asia's economic troubles also weighed on more-developed markets e.g., the
U.S. and markets in Europe. Particularly hard hit were shares of
export-oriented firms with exposure to Asia, since the likely slowdown in
Asian economic growth will translate into lower sales for these companies.
Japan has been impacted perhaps most directly, since much of its exports
are to Asia. Japan's banks also have exposure to Asian economies,
rendering them vulnerable to an economic slowdown.
- --------------------------------------------------------------------------------
What countries did you favor during the
fiscal period?
Country exposure in the Fund is a reflection of our ability to find
attractively priced securities. Our process is primarily a "bottom-up"
one, where stock selection, rather than general macroeconomic analysis, is
the driving force. That said, we remained broadly diversified by country
through the fiscal period, with a slight over-weighting in Asian markets
(though, it should be noted, we had relatively limited exposure to
Southeast Asia). Our largest country weighting in Asia through the period
was Japan, where strong stock selection allowed us to substantially
outperform popular Japanese stock-market averages. We focused primarily on
the so-called "Nifties," which are large, blue-chip, export-oriented,
Japanese companies that have benefited from successful restructuring
efforts and also benefited, through the period, from the weakness of the
Yen vs. the U.S. dollar.
Geographical
Allocation
----------
(As a percentage of net assets)
Europe 42.7%
- --------------------------------------------------
Americas 18.8%
- --------------------------------------------------
Japan 18.5%
- --------------------------------------------------
Far East 11.3%
- --------------------------------------------------
Australasia 7.9%
- --------------------------------------------------
Middle East/Africa 0.8%
- --------------------------------------------------
The general emphasis on Asia reflected our view that there were a large
number of companies selling at very attractive valuations relative to their
growth prospects. We maintain that view, though, in light of recent events,
we have adjusted our positions slightly, focusing almost exclusively on
blue-chip firms with healthy balance sheets, strong cash flows and little
dollar-denominated debt. These should, we believe, weather any further
near-term volatility in Asia quite well and have considerable upside over a
more extended time period i.e., 12 to 18 months.
- --------------------------------------------------------------------------------
What is your strategy going forward?
Our long-term strategy remains unchanged. We are looking to identify the
most promising securities in international markets, companies with good
long-term earnings prospects that are selling at attractive valuations. We
believe that a carefully chosen portfolio of such stocks stands to provide
very attractive rates of return over time, notwithstanding the potential
for short-term volatility.
Near term, we continue to find good opportunity in Europe, and will likely
increase our weighting in European markets further in the coming months.
In Asia, our stock selection will remain highly focused and centered on
companies with the above-cited attributes i.e., little dollar-denominated
debt, and strong balance sheets and cash flows. We are refraining, at
present, from aggressively buying in Asia, given the still-unsettled,
top-down environment, but we may look to increase the Fund's exposure when
the dust finally settles and it becomes easier to assess the prospects for
specific companies.
15
<PAGE>
EVERGREEN
Latin America Fund
Fund at a Glance as of October 31, 1997
We are seeing extremely
attractive valuation levels
and it is our belief that
fundamentally the Latin
American region offers very
good investment
opportunities.
Portfolio
Management
- ----------------------------------------
(Photo of Francis Claro)
Francis Claro
(Photo of Antonio Docal)
Antonio Docal
- --------------------------------------------------------------------------------
PERFORMANCE AND RETURNS
<TABLE>
<CAPTION>
Class A Class B Class C
<S> <C> <C> <C>
Inception Date 11/1/93 11/1/93 11/1/93
- --------------------------------------------------------------------------------
Average Annual Returns*
- --------------------------------------------------------------------------------
One year with sales charge 13.52% 13.40% 17.38%
- --------------------------------------------------------------------------------
One year w/o sales charge 19.18% 18.40% 18.38%
- --------------------------------------------------------------------------------
3 years 8.60% 8.76% 9.59%
- --------------------------------------------------------------------------------
5 years - - -
- --------------------------------------------------------------------------------
10 years - - -
- --------------------------------------------------------------------------------
Since Inception 8.25% 8.41% 8.82%
- --------------------------------------------------------------------------------
Cumulative Total Return since
inception 37.32% 38.17% 40.27%
- --------------------------------------------------------------------------------
12 month distribution per share $0.10 $0.08 $0.08
- --------------------------------------------------------------------------------
</TABLE>
*Adjusted for maximum applicable sales charge
- --------------------------------------------------------------------------------
LONG TERM GROWTH
(A line graph appears here with the following plot points.)
11/93 10/94 10/95 10/96 10/97
Class A Shares 9,525 10,212 9,870 11,522 13,732
MSCI World
Index (MSCIWI) 10,000 16,709 17,984 20,588 23,704
Standard & Poor's 500
Index (S&P 500) 10,000 22,086 27,962 34,694 45,832
Comparison of a change in value of a $10,000 investment in Evergreen Latin
America Fund Class A, the MSCI World Index and the Standard & Poor's 500 Index.
Past performance is no guarantee of future results. The performance of each
class may vary based on difference in loads and fees paid by the shareholder
investing in different classes.
The investment return and principal value will fluctuate so that an investor's
shares, when redeemed, may be worth more or less than original cost.
- --------------------------------------------------------------------------------
INVESTMENT STYLE
Morningstar's Style Box is based on a portfolio date as
of 9/30/97.
(Graphic appears here)
The Equity Style Box placement is based on a fund's
price-to-earnings and price-to-book ratio relative to the
S&P 500, as well as the size of the companies in which it
invests, or median market capitalization.
Source: 1997 Morningstar, Inc.
16
<PAGE>
EVERGREEN
Latin America Fund
Portfolio Manager Interview
- --------------------------------------------------------------------------------
What was the Fund's performance?
Performance was good. The Evergreen Latin America Fund's Class A had a
total return of 19.2% for the 12-month period that ended on October 31,
1997. The total returns of the Fund's B and C classes each were 18.4% for
the same period. These returns are without deduction of any sales charges,
if applicable. We believe these returns reflected the very positive
economic fundamentals and investment environment for the period, even
despite the volatility in emerging markets that adversely affected Latin
American investments during the last two weeks of October, at the end of
the fiscal year.
- --------------------------------------------------------------------------------
What was the investment environment
like during the year?
Let's talk first about the first 50 weeks of the year. The investment
environment in Latin America was as strong as it had been in the previous
four to five years. This environment was marked by attractive valuations
of the stocks of Latin American companies, strong economic growth and
sound macro-economic policies throughout the region, and strong stock
performance. This environment had attracted many international investors
in search of diversification, and this had greatly improved the liquidity
of the markets.
- --------------------------------------------------------------------------------
What caused the correction in the market at the end of October, and does
this correction signal fundamental problems in the Latin American region?
No. The volatility we saw in Latin America was primarily in response to
the devaluation of currencies in Southeast Asia. Ever since the Mexican
devaluation in December 1994, emerging market investors have been very
carefully monitoring the levels of current account deficits and balance of
trade deficits, to gauge currency risk. Speculators frequently have
attacked currencies of countries with high current account deficits, and
that's what happened in Asia. They succeeded.
The devaluations in Asia had the short-term effect of jolting investor
confidence in emerging markets overall, and in particular those with
negative current accounts, such as Brazil. The first reaction of many
global investors was simply to leave emerging markets. Latin America was
affected because of its heavy weighting in emerging market indices.
Sector Allocation
-----------------
(As a percentage of net assets)
Telecommunication Services & Equipment 21.0%
-------------------------------------------------------------------
Utilities 11.6%
-------------------------------------------------------------------
Diversified Companies 7.7%
-------------------------------------------------------------------
Finance & Insurance 7.5%
-------------------------------------------------------------------
Food & Beverage Products 6.6%
-------------------------------------------------------------------
Oil/Energy 6.3%
-------------------------------------------------------------------
Iron & Steel 4.9%
-------------------------------------------------------------------
Building, Construction & Furnishings 4.5%
-------------------------------------------------------------------
Metals & Mining 4.3%
-------------------------------------------------------------------
Paper & Packaging 1.9%
-------------------------------------------------------------------
- --------------------------------------------------------------------------------
How have investment opportunities in
Latin America been affected?
After a significant market correction, we are seeing extremely attractive
valuation levels and it is our belief that fundamentally the Latin
American region offers very good investment opportunities. Basically, all
the reasons that made this region a good opportunity for most of the past
year still apply, but the values are better.
Let's look first at stock valuations. Latin American stocks are very
attractively priced, compared to other markets. Even before the market
correction in late October, Latin American stocks still were a relative
value compared to other markets. After the correction, the price/earnings
ratio of the average Latin American stock was about 11,
17
<PAGE>
EVERGREEN
Latin America Fund
Portfolio Manager Interview
based on 1998 earnings. On top of that, you had an average 20% earnings
growth. In the United States, by comparison, the price/earnings ratio is
about 19 to 20, with only 6% growth.
The macro-economic picture also is very good. The privatization momentum
is very strong. Credit rating agencies have been upgrading Latin American
economies, reflecting the decreasing country risk. The overall pace of
economic growth has been accelerating, but at a sustainable rate without
overheating. In addition, interest rates are coming down, which has been
favoring the equity markets. Inflation is under control, at record lows in
most countries.
Another favorable factor is the increased political stability. For
example, in both Argentina and Mexico during the past year, the ruling
political parties have lost mid-term elections, but the opposition
candidates supported the existing macro-economic policies. This stability
has been a source of encouragement to the financial markets.
This very favorable economic environment contributed to record inflows of
capital to the region during the past year, with top multi-national
corporations actively investing throughout Latin America.
- --------------------------------------------------------------------------------
The Fund has its largest weighting in Brazil, but you indicate its
currency is over-valued. Why are you confident about Brazil?
Although there may be a slight over-valuation of the Brazilian currency,
we believe low levels of inflation and healthy increases in productivity
are correcting this issue. Interestingly, after the market correction in
October, the Brazilian government imposed a tough austerity package,
including increases in taxes and reductions in public employment, to
control the trade and budget deficits that have concerned international
investors. This is indicative of the increased discipline of Latin
American governments in general. They have shown a renewed commitment to
continue substantive economic reforms, but at a quicker pace. This should
be a source of encouragement to investors in the region.
- --------------------------------------------------------------------------------
What is your current country strategy?
In general, we are over-weighting Brazil and Mexico. These are the
countries that are most representative of the opportunities in the region.
They are the most liquid markets, they have attractive valuations, and they
are implementing substantive reforms. The positive features throughout the
region are crystal clear in these two countries.
We also have invest ments of about 5% of fund assets in Venezuela, which
is a fairly significant weighting. We have found very attractive values in
Venezuela, supported by eco nomic reforms by the Venezuelan govern ment.
Venezuela is the world's top oil exporter to the Equities represented 84.7%
of net United States, surassets. Other investments totaled 15.3% and
included short-term passing even Saudi investments, foreign currency
holdings and other assets and Arabia, and countries liabilities. all over
the world are investing in exploration and production in Venezuela.
Geographical
Allocation-
Equities
--------
(As a percentage of equities)
Brazil 45.5%
- ---------------------------------------------------------
Mexico 35.5%
- ---------------------------------------------------------
Argentina 6.7%
- ---------------------------------------------------------
Venezuela 6.3%
- ---------------------------------------------------------
Chile 2.8%
- ---------------------------------------------------------
Peru 1.8%
- ---------------------------------------------------------
Colombia 1.4%
- ---------------------------------------------------------
18
<PAGE>
EVERGREEN
Latin America Fund
Portfolio Manager Interview
- --------------------------------------------------------------------------------
What investment themes are you
emphasizing?
We are continuing with the privatization theme across industries and
countries. About 50% of the fund is in companies that either are scheduled
to be privatized or have been privatized. Before a government privatizes a
company it owns, it tends to reform the sector to add value to the company
it intends to privatize. An example would be telecommunications.
Governments typically increase phone rates when planning privatization,
and a company that formerly had been subsidized would become profitable
and its market value would increase. Once a company does become
privatized, the new private sector managers typically will take a number
of steps to maximize profits and increase productivity. In general, the
telecommunications sector exemplifies this trend. In telecommunications,
companies are benefiting from economic growth, pent-up demand and limited
competition. The Fund's largest holding at the end of the fiscal year was
Telebras, a Brazilian telecommunications company, and the second largest
holding was Telmex, a Mexican telecommunications company.
Other major holdings that illustrate the privatization trend include YPF,
an Argentine oil company; and CVRD (Vale de Rio Doce S.A.), a Brazilian
corporation that is one of the world's largest mining companies.
- --------------------------------------------------------------------------------
Are there any examples of non-privatized
companies that you like?
One very attractive company is FEMSA, a Mexican soft drink bottler, beer
brewer, packaging company and convenience store operator. This company has
Coca-Cola bottling franchises in Mexico and Argentina. It brews half the
beer in Mexico, with Dos Equis its best known brand in the United States.
In addition, it is involved in convenience stores throughout Mexico.
Interestingly, this company has formed alliances with dominant global
companies to help develop its own franchises.
Top 10 Holdings
---------------
(As a percentage of net assets)
Telecomunicacoes Brasileiras S.A.
("Telebras") ADR (Brazil) 5.8%
-----------------------------------------------------------------------
Telefonos de Mexico S.A., ADR
(Mexico) 4.2%
-----------------------------------------------------------------------
Vale do Rio Doce Navegacao S.A.
(Brazil) 3.7%
-----------------------------------------------------------------------
Eletrobras S.A. (Brazil) 3.6%
-----------------------------------------------------------------------
Petroleo Brasileiro S.A. (Brazil) 3.1%
-----------------------------------------------------------------------
Companhia Riograndense de
Telecomunicacoes (Brazil) 2.4%
-----------------------------------------------------------------------
YPF Sociedad Anonima, ADR
(Argentina) 2.2%
-----------------------------------------------------------------------
Desc S.A. de C.V., ADR (Mexico) 2.2%
-----------------------------------------------------------------------
Grupo Carso S.A. de C.V. (Mexico) 2.1%
-----------------------------------------------------------------------
Banco Provincial S.A. (Venezuela) 2.1%
-----------------------------------------------------------------------
- --------------------------------------------------------------------------------
What is your outlook?
Latin America is a very attractive market. As we have indicated, we are
seeing very good valuations and positive economic trends throughout the
region. We continue to be focused on stock selection. We are visiting and
meeting personally with many Latin American companies. We are seeing lots
of great investment stories, and their valuations are much more attractive
than they were a few weeks ago.
19
<PAGE>
EVERGREEN
Emerging Markets Growth Fund
Financial Highlights
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
Year Ended October 31,
1997** 1996** 1995#
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Net asset value beginning of year $ 8.46 $ 7.90 $ 8.17
======= ========= ============
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) 0 (0.01) 0.05
- -----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 1.53 0.62 (0.32)
---------- --------- ------------
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.53 0.61 (0.27)
---------- --------- ------------
- -----------------------------------------------------------------------------------------------------------------------
Less distributions from
Net investment income 0 (0.05) 0
---------- --------- ------------
- -----------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 9.99 $ 8.46 $ 7.90
========== ========= ============
- -----------------------------------------------------------------------------------------------------------------------
Total Return+ 18.1% 7.7% (3.3%)
- -----------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.75% 1.74% 1.73%++
- -----------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 1.74% N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 2.26% 3.58% 3.97%++
- -----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.02%) (0.09%) 0.76%++
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 157% 107% 65%
- -----------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0019 $ .0103 N/A
- -----------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 2,777 $ 1,645 $ 1,117
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended
December 31,
1994*
<S> <C>
- --------------------------------------------------------------------------------------------
CLASS A SHARES
Net asset value beginning of year $ 10.00
============
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- --------------------------------------------------------------------------------------------
Net investment income (loss) 0
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions (1.83)
------------
- --------------------------------------------------------------------------------------------
Total from investment operations (1.83)
------------
- --------------------------------------------------------------------------------------------
Less distributions from
Net investment income 0
------------
- --------------------------------------------------------------------------------------------
Net asset value end of year $ 8.17
============
- --------------------------------------------------------------------------------------------
Total Return+ (18.3%)
- --------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.78%++
- --------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A
- --------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 3.96%++
- --------------------------------------------------------------------------------------------
Net investment income (loss) (0.12%)++
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 17%
- --------------------------------------------------------------------------------------------
Average commission rate per share N/A
- --------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 867
- --------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31,
1997** 1996** 1995#
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Net asset value beginning of year $ 8.39 $ 7.85 $ 8.16
========= ========= ============
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (0.08) (0.08) 0.01
- -----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 1.54 0.62 (0.32)
--------- --------- ------------
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.46 0.54 (0.31)
--------- --------- ------------
- -----------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 9.85 $ 8.39 $ 7.85
========= ========= ============
- -----------------------------------------------------------------------------------------------------------------------
Total Return+ 17.4% 6.9% (3.8%)
- -----------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.50% 2.50% 2.48%++
- -----------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 2.49% N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 3.00% 4.34% 4.72%++
- -----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.79%) (0.87%) 0.03%++
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 157% 107% 65%
- -----------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0019 $ .0103 N/A
- -----------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 4,020 $ 2,881 $ 1,940
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended
December 31,
1994*
<S> <C>
- --------------------------------------------------------------------------------------------
CLASS B SHARES
Net asset value beginning of year $ 10.00
============
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- --------------------------------------------------------------------------------------------
Net investment income (loss) (0.02)
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions (1.82)
------------
- --------------------------------------------------------------------------------------------
Total from investment operations (1.84)
------------
- --------------------------------------------------------------------------------------------
Net asset value end of year $ 8.16
============
- --------------------------------------------------------------------------------------------
Total Return+ (18.4%)
- --------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.53%++
- --------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A
- --------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 4.71%++
- --------------------------------------------------------------------------------------------
Net investment income (loss) (0.84%)++
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 17%
- --------------------------------------------------------------------------------------------
Average commission rate per share N/A
- --------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 1,589
- --------------------------------------------------------------------------------------------
</TABLE>
* For the period from September 6, 1994 (commencement of operations) to
December 31, 1994.
** Net investment income is based on average monthly shares outstanding for the
periods indicated.
# The Fund changed its year end from December 31 to October 31, effective
October 31, 1995.
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
See Combined Notes to Financial Statements
20
<PAGE>
EVERGREEN
Emerging Markets Growth Fund
Financial Highlights
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
Year Ended October 31,
1997** 1996** 1995#
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Net asset value beginning of year $ 8.38 $ 7.84 $ 8.16
========= ========= ============
- -----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (0.06) (0.08) 0.02
- -----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 1.53 0.62 (0.34)
--------- --------- ------------
- -----------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.47 0.54 (0.32)
--------- --------- ------------
- -----------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 9.85 $ 8.38 $ 7.84
========= ========= ============
- -----------------------------------------------------------------------------------------------------------------------
Total Return+ 17.5% 6.9% (3.9%)
- -----------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.50% 2.51% 2.50%++
- -----------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 2.49% N/A N/A
- -----------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 3.01% 4.31% 4.74%++
- -----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.61%) (0.91%) 0.72%++
- -----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 157% 107% 65%
- -----------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0019 $ .0103 N/A
- -----------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 1,282 $ 85 $ 56
- -----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended
December 31,
1994*
<S> <C>
- --------------------------------------------------------------------------------------------
CLASS C SHARES
Net asset value beginning of year $ 10.00
============
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
Net investment income (loss) (0.02)
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions (1.82)
------------
- --------------------------------------------------------------------------------------------
Total from investment operations (1.84)
------------
- --------------------------------------------------------------------------------------------
Net asset value end of year $ 8.16
============
- --------------------------------------------------------------------------------------------
Total Return+ (18.4%)
- --------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.53%++
- --------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A
- --------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 4.71%++
- --------------------------------------------------------------------------------------------
Net investment income (loss) (0.82%)++
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 17%
- --------------------------------------------------------------------------------------------
Average commission rate per share N/A
- --------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 89
- --------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31,
1997** 1996** 1995#
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
CLASS Y SHARES
Net asset value beginning of year $ 8.48 $ 7.92 $ 8.17
========= ========== ============
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 0.03 0.01 0.05
- ----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 1.53 0.62 (0.30)
--------- ---------- ------------
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.56 0.63 (0.25)
--------- ---------- ------------
- ----------------------------------------------------------------------------------------------------------------------
Less distributions from
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 0 (0.07) 0
--------- ---------- ------------
- ----------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 10.04 $ 8.48 $ 7.92
========= ========== ============
- ----------------------------------------------------------------------------------------------------------------------
Total Return+ 18.4% 7.9% (3.1%)
- ----------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.50% 1.50% 1.48%++
- ----------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 1.49% N/A N/A
- ----------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 2.01% 3.27% 3.72%++
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 0.25% 0.11% 0.94%++
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 157% 107% 65%
- ----------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0019 $ .0103 N/A
- ----------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 61,142 $ 28,959 $ 9,355
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended
December 31,
1994*
<S> <C>
- --------------------------------------------------------------------------------------------
CLASS Y SHARES
Net asset value beginning of year $ 10.00
=============
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- --------------------------------------------------------------------------------------------
Net investment income 0.01
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions (1.84)
-------------
- --------------------------------------------------------------------------------------------
Total from investment operations (1.83)
-------------
- --------------------------------------------------------------------------------------------
Less distributions from
- --------------------------------------------------------------------------------------------
Net investment income 0
-------------
- --------------------------------------------------------------------------------------------
Net asset value end of year $ 8.17
=============
- --------------------------------------------------------------------------------------------
Total Return+ (18.3%)
- --------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.53%++
- --------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A
- --------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 3.71%++
- --------------------------------------------------------------------------------------------
Net investment income 0.43%++
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 17%
- --------------------------------------------------------------------------------------------
Average commission rate per share N/A
- --------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 5,878
- --------------------------------------------------------------------------------------------
</TABLE>
* For the periods from September 6, 1994 (commencement of operations) to
December 31, 1994.
** Net investment income is based on average monthly shares outstanding for the
periods indicated.
# The Fund changed its year end from December 31 to October 31, effective
October 31, 1995.
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
See Combined Notes to Financial Statements
21
<PAGE>
EVERGREEN
Global Leaders Fund
Financial Highlights
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
Year Ended October 31,
1997 1996*
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
CLASS A SHARES
Net asset value beginning of year $ 11.91 $ 11.29
========== ============
- --------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations: **
- --------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ( 0.01) 0
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency related transactions 1.78 0.62
---------- ------------
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.77 0.62
---------- ------------
- --------------------------------------------------------------------------------------------------------------------------
Less distributions from
- --------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments ( 0.01) 0
---------- ------------
- --------------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 13.67 $ 11.91
========== ============
- --------------------------------------------------------------------------------------------------------------------------
Total Return+ 14.9% 5.5%
- --------------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.91% 1.75%++
- --------------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 1.90% N/A
- --------------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 1.98% 2.16%++
- --------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.05%) 0.10%++
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 20%
- --------------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0418 $ .0659
- --------------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 38,604 $ 12,975
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31,
1997 1996*
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
CLASS B SHARES
Net asset value beginning of year $ 11.87 $ 11.29
========== ===========
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations: **
- -------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.11) (0.02)
- -------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency related transactions 1.77 0.60
---------- -----------
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.66 0.58
---------- -----------
- -------------------------------------------------------------------------------------------------------------------------
Less distributions from
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (0.01) 0
---------- -----------
- -------------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 13.52 $ 11.87
========== ===========
- -------------------------------------------------------------------------------------------------------------------------
Total Return+ 14.0% 5.1%
- -------------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.66% 2.50%++
- -------------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 2.66% N/A
- -------------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 2.74% 2.93%++
- -------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.83%) (0.68%)++
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 20%
- -------------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0418 $ .0659
- -------------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 134,375 $ 41,948
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period from June 3, 1996 (commencement of operations) to October 31,
1996.
** Net investment income is based on average monthly shares outstanding for the
periods indicated.
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
See Combined Notes to Financial Statements
22
<PAGE>
EVERGREEN
Global Leaders Fund
Financial Highlights
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
Year Ended October 31,
1997 1996*
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
CLASS C SHARES
Net asset value beginning of year $ 11.86 $ 11.29
========== ===========
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations: **
- -------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) ( 0.11) (0.02)
- -------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency related transactions 1.77 0.59
---------- -----------
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.66 0.57
---------- -----------
- -------------------------------------------------------------------------------------------------------------------------
Less distributions from
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments ( 0.01) 0
---------- -----------
- -------------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 13.51 $ 11.86
========== ===========
- -------------------------------------------------------------------------------------------------------------------------
Total Return+ 14.0% 5.0%
- -------------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.65% 2.50%++
- -------------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 2.65% N/A
- -------------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 2.73% 2.93%++
- -------------------------------------------------------------------------------------------------------------------------
Net investment loss (0.80%) (0.67%)++
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 20%
- -------------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0418 $ .0659
- -------------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 2,386 $ 554
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31,
1997 1996
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
CLASS Y SHARES
Net asset value beginning of year $ 11.91 $ 10.00
========== ============
- -------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations: **
- -------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.03 0.07
- -------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain on investments and foreign currency related transactions 1.78 1.88
---------- ------------
- -------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.81 1.95
---------- ------------
- -------------------------------------------------------------------------------------------------------------------------
Less distributions from
- -------------------------------------------------------------------------------------------------------------------------
Net investment income 0 (0.04)
- -------------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (0.01) 0
---------- ------------
- -------------------------------------------------------------------------------------------------------------------------
Total distributions (0.01) (0.04)
---------- ------------
- -------------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 13.71 $ 11.91
========== =============
- -------------------------------------------------------------------------------------------------------------------------
Total Return+ 15.2% 19.6%
- -------------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.64% 1.47%++
- -------------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 1.64% N/A
- -------------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 1.72% 2.51%++
- -------------------------------------------------------------------------------------------------------------------------
Net investment income 0.23% 0.62%++
- -------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 29% 20%
- -------------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0418 $ .0659
- -------------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 35,461 $ 18,607
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period from June 3, 1996 (commencement of operations) to October 31,
1996.
** Net investment income is based on average monthly shares outstanding for the
periods indicated.
+ Initial sale charge or contingent deferred sales charge is not reflected.
++ Annualized.
See Combined Notes to Financial Statements
23
<PAGE>
EVERGREEN
Global Real Estate Equity Fund
Financial Highlights
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
Year Ended October 31,
1997 1996 1995#
<S> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of year $ 12.28 $ 11.58 $ 12.12
========== ============ ============
- ---------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations: **
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.06) 0.06 (0.01)
- ---------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 0.72 0.64 (0.53)
---------- ------------ ------------
- ---------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.66 0.70 (0.54)
---------- ------------ ------------
- ---------------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 12.94 $ 12.28 $ 11.58
========== ============ ============
- ---------------------------------------------------------------------------------------------------------------------------
Total Return+ 5.4% 6.0% (4.5%)
- ---------------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.10% 1.79% 1.73%++
- ---------------------------------------------------------------------------------------------------------------------------
Interest expense 0.03% 0.03% 0.03%++
- ---------------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 2.10% N/A N/A
- ---------------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 2.19% 2.97% 46.90%++
- ---------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.47%) 0.40% (1.26%)++
- ---------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 25% 1%
- ---------------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0039 $ .0037 N/A
- ---------------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 336 $ 721 $ 74
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended
September 30,
1995*
<S> <C>
CLASS A SHARES
Net asset value beginning of year $ 11.46
=============
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations: **
- --------------------------------------------------------------------------------------------
Net investment income (loss) 0.07
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 0.59
-------------
- --------------------------------------------------------------------------------------------
Total from investment operations 0.66
-------------
- --------------------------------------------------------------------------------------------
Net asset value end of year $ 12.12
=============
- --------------------------------------------------------------------------------------------
Total Return+ 5.8%
- --------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.61%++
- --------------------------------------------------------------------------------------------
Interest expense 0.01%++
- --------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A
- --------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 21.59%++
- --------------------------------------------------------------------------------------------
Net investment income (loss) 0.98%++
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 28%
- --------------------------------------------------------------------------------------------
Average commission rate per share N/A
- --------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 66
- --------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31,
1997 1996 1995#
<S> <C> <C> <C>
CLASS B SHARES
Net asset value beginning of year $ 12.14 $ 11.53 $ 12.08
========== ========== ============
- --------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations: **
- --------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.15) (0.13) (0.02)
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 0.70 0.74 (0.53)
---------- ---------- ------------
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.55 0.61 (0.55)
---------- ---------- ------------
- --------------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 12.69 $ 12.14 $ 11.53
========== ========== ============
- --------------------------------------------------------------------------------------------------------------------------
Total Return+ 4.5% 5.3% (4.6%)
- --------------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.82% 2.56% 2.44%++
- --------------------------------------------------------------------------------------------------------------------------
Interest expense 0.03% 0.03% 0.03%++
- --------------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 2.81% N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 2.90% 14.45% 31.39%++
- --------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.23%) (1.03%) (1.98%)++
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 25% 1%
- --------------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0039 $ .0037 N/A
- --------------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 213 $ 134 $ 100
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended
September 30,
1995*
<S> <C>
CLASS B SHARES
Net asset value beginning of year $ 11.44
=============
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations: **
- --------------------------------------------------------------------------------------------
Net investment income (loss) 0.08
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 0.56
-------------
- --------------------------------------------------------------------------------------------
Total from investment operations 0.64
-------------
- --------------------------------------------------------------------------------------------
Net asset value end of year $ 12.08
=============
- --------------------------------------------------------------------------------------------
Total Return+ 5.6%
- --------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.42%++
- --------------------------------------------------------------------------------------------
Interest expense 0.03%++
- --------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A
- --------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 82.74%++
- --------------------------------------------------------------------------------------------
Net investment income (loss) 1.38%++
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 28%
- --------------------------------------------------------------------------------------------
Average commission rate per share N/A
- --------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 128
- --------------------------------------------------------------------------------------------
</TABLE>
* For the periods from February 10, 1995 for Class A and February 8, 1995 for
Class B, respectively (commencement of operations) to
September 30, 1995.
** Net investment income is based on average monthly shares outstanding.
# The Fund changed its year end from September 30 to October 31, effective
October 31, 1995.
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
See Combined Notes to Financial Statements
24
<PAGE>
EVERGREEN
Global Real Estate Equity Fund
Financial Highlights
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
Year Ended October 31,
1997 1996 1995#
<S> <C> <C> <C>
CLASS C SHARES
Net asset value beginning of year $ 12.14 $ 11.53 $ 12.08
========== ========== ============
- --------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations: **
- --------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.14) (0.13) (0.02)
- --------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 0.70 0.74 (0.53)
---------- ---------- ------------
- --------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.56 0.61 (0.55)
---------- ---------- ------------
- --------------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 12.70 $ 12.14 $ 11.53
========== ========== ============
- --------------------------------------------------------------------------------------------------------------------------
Total Return+ 4.6% 5.3% (4.6%)
- --------------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.83% 2.54% 2.37%++
- --------------------------------------------------------------------------------------------------------------------------
Interest expense 0.03% 0.03% 0.02%++
- --------------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 2.83% N/A N/A
- --------------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 2.91% 118.64% 570.26%++
- --------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.15%) (1.06%) (1.94%)++
- --------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 44% 25% 1%
- --------------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0039 $ .0037 N/A
- --------------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 106 $ 8 $ 4
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended
September 30,
1995*
<S> <C>
CLASS C SHARES
Net asset value beginning of year $ 11.43
=============
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations: **
- --------------------------------------------------------------------------------------------
Net investment income (loss) 0.06
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 0.59
-------------
- --------------------------------------------------------------------------------------------
Total from investment operations 0.65
-------------
- --------------------------------------------------------------------------------------------
Net asset value end of year $ 12.08
=============
- --------------------------------------------------------------------------------------------
Total Return+ 5.7%
- --------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.54%++
- --------------------------------------------------------------------------------------------
Interest expense 0.01%++
- --------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A
- --------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 269.60%++
- --------------------------------------------------------------------------------------------
Net investment income (loss) .86%++
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 28%
- --------------------------------------------------------------------------------------------
Average commission rate per share N/A
- --------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 7
- --------------------------------------------------------------------------------------------
</TABLE>
* For the period from February 9, 1995 (commencement of operations) to
September 30, 1995.
** Net investment income is based on average monthly shares outstanding for the
periods indicated.
# The Fund changed its year end from September 30 to October 31, effective
October 31, 1995.
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
See Combined Notes to Financial Statements
25
<PAGE>
EVERGREEN
Global Real Estate Equity Fund
Financial Highlights
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
Year Ended October 31, 1997
<S> <C>
CLASS Y SHARES
Net asset value beginning of year $ 12.31
==========
- -------------------------------------------------------------------------------------------------
Income (loss) from investment operations: *
- -------------------------------------------------------------------------------------------------
Net investment income (loss) (0.03)
- -------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency related 0.71
transactions ----------
- -------------------------------------------------------------------------------------------------
Total from investment operations 0.68
----------
- -------------------------------------------------------------------------------------------------
Less distributions from
- -------------------------------------------------------------------------------------------------
Net investment income (0.02)
----------
- -------------------------------------------------------------------------------------------------
Net asset value end of year $ 12.97
==========
- -------------------------------------------------------------------------------------------------
Total Return+ 5.5%
- -------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.82%
- -------------------------------------------------------------------------------------------------
Interest expense 0.03%
- -------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 1.82%
- -------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 1.90%
- -------------------------------------------------------------------------------------------------
Net investment income (loss) (0.21%)
- -------------------------------------------------------------------------------------------------
Portfolio turnover rate 44%
- -------------------------------------------------------------------------------------------------
Average commission rate per share $ .0039
- -------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 35,234
- -------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended October 31,
1996 1995#
<S> <C> <C>
CLASS Y SHARES
Net asset value beginning of year $ 11.59 $ 12.13
============ ============
- -------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations: *
- -------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.01 (0.01)
- -------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency related 0.71 (0.53)
transactions ------------ ------------
- -------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.72 (0.54)
------------ ------------
- -------------------------------------------------------------------------------------------------------------------
Less distributions from
- -------------------------------------------------------------------------------------------------------------------
Net investment income 0 0
------------ ------------
- -------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 12.31 $ 11.59
============ ============
- -------------------------------------------------------------------------------------------------------------------
Total Return+ 6.2% (4.5%)
- -------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.62% 1.62%++
- -------------------------------------------------------------------------------------------------------------------
Interest expense 0.03% 0.03%++
- -------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A N/A
- -------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 1.67% N/A
- -------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.11% (1.14%)++
- -------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 25% 1%
- -------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0037 N/A
- -------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 47,502 $ 61,418
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended September 30,
1995 1994##
<S> <C> <C>
CLASS Y SHARES
Net asset value beginning of year $ 13.81 $ 14.75
=========== =============
- --------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations: *
- --------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.11 0.07
- --------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency related (1.17) (1.01)
transactions ----------- -------------
- --------------------------------------------------------------------------------------------------------------------
Total from investment operations (1.06) (0.94)
----------- -------------
- --------------------------------------------------------------------------------------------------------------------
Less distributions from
- --------------------------------------------------------------------------------------------------------------------
Net investment income (0.10) 0
- --------------------------------------------------------------------------------------------------------------------
Net realized gain on investments (0.52) 0
----------- -------------
- --------------------------------------------------------------------------------------------------------------------
Total distributions (0.62) 0
----------- -------------
- --------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 12.13 $ 13.81
=========== =============
- --------------------------------------------------------------------------------------------------------------------
Total Return+ (7.7%) (6.4%)
- --------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.54% 1.46%++
- --------------------------------------------------------------------------------------------------------------------
Interest expense 0.05% 0.08%++
- --------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A N/A
- --------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements N/A N/A
- --------------------------------------------------------------------------------------------------------------------
Net investment income 0.92% 0.56%++
- --------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 28% 63%
- --------------------------------------------------------------------------------------------------------------------
Average commission rate per share N/A N/A
- --------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 67,645 $ 132,294
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended
December 31,
1993
<S> <C>
CLASS Y SHARES
Net asset value beginning of year $ 9.86
=========
- ------------------------------------------------------------------------------------------------
Income (loss) from investment operations: *
- ------------------------------------------------------------------------------------------------
Net investment income (loss) 0
- ------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency related 5.07
transactions ---------
- ------------------------------------------------------------------------------------------------
Total from investment operations 5.07
---------
- ------------------------------------------------------------------------------------------------
Less distributions from
- ------------------------------------------------------------------------------------------------
Net investment income 0
- ------------------------------------------------------------------------------------------------
Net realized gain on investments (0.18)
---------
- ------------------------------------------------------------------------------------------------
Total distributions (0.18)
---------
- ------------------------------------------------------------------------------------------------
Net asset value end of year $ 14.75
=========
- ------------------------------------------------------------------------------------------------
Total Return+ 51.4%
- ------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.56%
- ------------------------------------------------------------------------------------------------
Interest expense N/A
- ------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A
- ------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 1.64%
- ------------------------------------------------------------------------------------------------
Net investment income 0.03%
- ------------------------------------------------------------------------------------------------
Portfolio turnover rate 88%
- ------------------------------------------------------------------------------------------------
Average commission rate per share N/A
- ------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 146,173
- ------------------------------------------------------------------------------------------------
</TABLE>
* Net investment income is based on average monthly shares outstanding for the
periods indicated.
# The Fund changed its year end from September 30 to October 31, effective
October 31, 1995.
## The Fund changed its year end from December 31 to September 30, effective
September 30, 1994.
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
See Combined Notes to Financial Statements
26
<PAGE>
EVERGREEN
International Equity Fund
Financial Highlights
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
Year Ended October 31,
1997** 1996** 1995#
<S> <C> <C> <C>
CLASS A SHARES
Net asset value beginning of year $ 10.43 $ 9.58 $ 9.50
========== ========== ============
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 0.07 0.17 0.09
- ----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 0.72 0.78 0
---------- ---------- ------------
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.79 0.95 0.09
---------- ---------- ------------
- ----------------------------------------------------------------------------------------------------------------------
Less distributions from
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (0.15) (0.10) (0.01)
---------- ---------- ------------
- ----------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 11.07 $ 10.43 $ 9.58
========== ========== ============
- ----------------------------------------------------------------------------------------------------------------------
Total Return+ 7.6% 9.9% 1.1%
- ----------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.25% 1.24% 1.19%++
- ----------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 1.24% N/A N/A
- ----------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 1.36% 1.66% 1.84%++
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 0.70% 1.65% 1.38%++
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 86% 113% 4%
- ----------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0187 $ .0068 N/A
- ----------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 9,270 $ 7,234 $ 3,594
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended
December 31,
1994*
<S> <C>
CLASS A SHARES
Net asset value beginning of year $ 10.00
=============
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- --------------------------------------------------------------------------------------------
Net investment income 0.02
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions (0.52)
-------------
- --------------------------------------------------------------------------------------------
Total from investment operations (0.50)
-------------
- --------------------------------------------------------------------------------------------
Less distributions from
- --------------------------------------------------------------------------------------------
Net investment income 0
-------------
- --------------------------------------------------------------------------------------------
Net asset value end of year $ 9.50
=============
- --------------------------------------------------------------------------------------------
Total Return+ (5.1%)
- --------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.26%++
- --------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A
- --------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 2.09%++
- --------------------------------------------------------------------------------------------
Net investment income 0.91%++
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 1%
- --------------------------------------------------------------------------------------------
Average commission rate per share N/A
- --------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 2,545
- --------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31,
1997** 1996** 1995#
<S> <C> <C> <C>
CLASS B SHARES
Net asset value beginning of year $ 10.37 $ 9.53 $ 9.50
========== ========== ============
- ------------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- ------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0 0.11 0.06
- ------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 0.70 0.76 (0.03)
---------- ---------- ------------
- ------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.70 0.87 0.03
---------- ---------- ------------
- ------------------------------------------------------------------------------------------------------------------------
Less distributions from
- ------------------------------------------------------------------------------------------------------------------------
Net investment income (0.08) (0.03) 0
---------- ---------- ------------
- ------------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 10.99 $ 10.37 $ 9.53
========== ========== ============
- ------------------------------------------------------------------------------------------------------------------------
Total Return+ 6.8% 9.2% 0.5%
- ------------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.00% 2.00% 1.94%++
- ------------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 2.00% N/A N/A
- ------------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 2.11% 2.42% 2.59%++
- ------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.05%) 1.05% 0.66%++
- ------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 86% 113% 4%
- ------------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0187 $ .0068 N/A
- ------------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 22,164 $ 14,110 $ 7,278
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended
December 31,
1994*
<S> <C>
CLASS B SHARES
Net asset value beginning of year $ 10.00
=============
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- --------------------------------------------------------------------------------------------
Net investment income (loss) 0
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions (0.50)
-------------
- --------------------------------------------------------------------------------------------
Total from investment operations (0.50)
-------------
- --------------------------------------------------------------------------------------------
Less distributions from
- --------------------------------------------------------------------------------------------
Net investment income 0
-------------
- --------------------------------------------------------------------------------------------
Net asset value end of year $ 9.50
=============
- --------------------------------------------------------------------------------------------
Total Return+ (5.2%)
- --------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.02%++
- --------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A
- --------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 2.85%++
- --------------------------------------------------------------------------------------------
Net investment income (loss) 0.10%++
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 1%
- --------------------------------------------------------------------------------------------
Average commission rate per share N/A
- --------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 5,602
- --------------------------------------------------------------------------------------------
</TABLE>
* For the period from September 2, 1994 (commencement of operations) to
December 31, 1994.
** Net investment income is based on average monthly shares outstanding for the
periods indicated.
# The Fund changed its year end from December 31 to October 31, effective
October 31, 1995.
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
See Combined Notes to Financial Statements
27
<PAGE>
EVERGREEN
International Equity Fund
Financial Highlights
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
Year Ended October 31,
1997** 1996**
<S> <C> <C>
CLASS C SHARES
Net asset value beginning of year $ 10.41 $ 9.53
========== ==========
- ---------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- ---------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.01) 0.12
- ---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 0.71 0.76
---------- ----------
- ---------------------------------------------------------------------------------------------------------
Total from investment operations 0.70 0.88
---------- ----------
- ---------------------------------------------------------------------------------------------------------
Less distributions from
- ---------------------------------------------------------------------------------------------------------
Net investment income (0.06) (0.00) (a)
---------- ----------
- ---------------------------------------------------------------------------------------------------------
Net asset value end of year $ 11.05 $ 10.41
========== ==========
- ---------------------------------------------------------------------------------------------------------
Total Return+ 6.8% 9.3%
- ---------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.00% 1.99%
- ---------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 1.99% N/A
- ---------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 2.11% 2.43%
- ---------------------------------------------------------------------------------------------------------
Net investment income (0.06%) 1.16%
- ---------------------------------------------------------------------------------------------------------
Portfolio turnover rate 86% 113%
- ---------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0187 $ .0068
- ---------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 429 $ 188
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended Year Ended
October 31, December 31,
1995# 1994*
<S> <C> <C>
CLASS C SHARES
Net asset value beginning of year $ 9.49 $ 10.00
============ =============
- -----------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- -----------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.08 0.30
- -----------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions (0.04) (0.54)
------------ -------------
- -----------------------------------------------------------------------------------------------------------------
Total from investment operations 0.04 (0.51)
------------ -------------
- -----------------------------------------------------------------------------------------------------------------
Less distributions from
- -----------------------------------------------------------------------------------------------------------------
Net investment income 0 0
------------ -------------
- -----------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 9.53 $ 9.49
============ =============
- -----------------------------------------------------------------------------------------------------------------
Total Return+ 0.5% (5.2%)
- -----------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.94%++ 2.01%++
- -----------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A N/A
- -----------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 2.59%++ 2.84%++
- -----------------------------------------------------------------------------------------------------------------
Net investment income 0.79%++ 0.85%++
- -----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 4% 1%
- -----------------------------------------------------------------------------------------------------------------
Average commission rate per share N/A N/A
- -----------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 196 $ 163
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31,
1997** 1996** 1995#
<S> <C> <C> <C>
CLASS Y SHARES
Net asset value beginning of year $ 10.46 $ 9.60 $ 9.50
========== ========= ============
- ----------------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 0.10 0.20 0.08
- ----------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions 0.72 0.78 0.03
---------- --------- ------------
- ----------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.82 0.98 0.11
---------- --------- ------------
- ----------------------------------------------------------------------------------------------------------------------
Less distributions from
- ----------------------------------------------------------------------------------------------------------------------
Net investment income (0.17) (0.12) (0.01)
---------- --------- ------------
- ----------------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 11.11 $ 10.46 $ 9.60
========== ========= ============
- ----------------------------------------------------------------------------------------------------------------------
Total Return+ 7.9% 10.3% 1.3%
- ----------------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 0.99% 0.99% 0.94%++
- ----------------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 0.99% N/A N/A
- ----------------------------------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 1.11% 1.41% 1.59%++
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 0.96% 1.95% 1.58%++
- ----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 86% 113% 4%
- ----------------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0187 $ .0068 N/A
- ----------------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 233,906 $ 124,695 $ 49,575
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended
December 31,
1994*
<S> <C>
CLASS Y SHARES
Net asset value beginning of year $ 10.00
=============
- --------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- --------------------------------------------------------------------------------------------
Net investment income 0.02
- --------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency
related transactions (0.51)
-------------
- --------------------------------------------------------------------------------------------
Total from investment operations (0.49)
-------------
- --------------------------------------------------------------------------------------------
Less distributions from
- --------------------------------------------------------------------------------------------
Net investment income (0.01)
-------------
- --------------------------------------------------------------------------------------------
Net asset value end of year $ 9.50
=============
- --------------------------------------------------------------------------------------------
Total Return+ (5.0%)
- --------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.06%++
- --------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses N/A
- --------------------------------------------------------------------------------------------
Expenses, excluding fee waivers & expense reimbursements 1.89%++
- --------------------------------------------------------------------------------------------
Net investment income 1.03%++
- --------------------------------------------------------------------------------------------
Portfolio turnover rate 1%
- --------------------------------------------------------------------------------------------
Average commission rate per share N/A
- --------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 23,830
- --------------------------------------------------------------------------------------------
</TABLE>
* For the period from September 2, 1994 (commencement of operations) to
December 31, 1994.
** Net investment income is based on average monthly shares outstanding for
the periods indicated.
# The Fund changed its year end from December 31 to October 31, effective
October 31, 1995.
+ Initial sales charge or contingent deferred sales charge is not reflected.
++ Annualized.
(a) Less than one cent per share.
See Combined Notes to Financial Statements
28
<PAGE>
EVERGREEN
Latin America Fund
Financial Highlights
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
Year Ended October 31,
1997 1996
<S> <C> <C>
CLASS A SHARES
Net asset value beginning of year $ 11.13 $ 9.86
========= ========
- -----------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- -----------------------------------------------------------------------------------------------------------
Net investment income 0.02 0.39
- -----------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency related
transactions 2.10 1.24
--------- --------
- -----------------------------------------------------------------------------------------------------------
Total from investment operations 2.12 1.63
--------- --------
- -----------------------------------------------------------------------------------------------------------
Less distributions from
- -----------------------------------------------------------------------------------------------------------
Net investment income (0.10) ( 0.31)
- -----------------------------------------------------------------------------------------------------------
In excess of net investment income 0 ( 0.05)
- -----------------------------------------------------------------------------------------------------------
Net realized gain on investments 0 0
--------- --------
- -----------------------------------------------------------------------------------------------------------
Total distributions (0.10) ( 0.36)
--------- --------
- -----------------------------------------------------------------------------------------------------------
Net asset value end of year $ 13.15 $11.13
========= ========
- -----------------------------------------------------------------------------------------------------------
Total Return+ 19.2% 16.7%
- -----------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.69% 1.83%
- -----------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 1.68% 1.81%
- -----------------------------------------------------------------------------------------------------------
Net investment income 0.20% 3.05%
- -----------------------------------------------------------------------------------------------------------
Portfolio turnover rate 105% 112%
- -----------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0002 $ .0005
- -----------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 13,621 $ 11,021
- -----------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended October 31,
1995 1994
<S> <C> <C>
CLASS A SHARES
Net asset value beginning of year $ 10.55 $ 10.00
========== ==========
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- --------------------------------------------------------------------------------------------------------------
Net investment income 0.44 0.21
- --------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency related
transactions (0.81) 0.50
---------- ----------
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (0.37) 0.71
---------- ----------
- --------------------------------------------------------------------------------------------------------------
Less distributions from
- --------------------------------------------------------------------------------------------------------------
Net investment income (0.30) (0.10)
- --------------------------------------------------------------------------------------------------------------
In excess of net investment income 0 (0.01)
- --------------------------------------------------------------------------------------------------------------
Net realized gain on investments (0.02) (0.05)
---------- ----------
- --------------------------------------------------------------------------------------------------------------
Total distributions (0.32) (0.16)
---------- ----------
- --------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 9.86 $ 10.55
========== ==========
- --------------------------------------------------------------------------------------------------------------
Total Return+ (3.4%) 7.2%
- --------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 1.86% 1.79%
- --------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 1.84% N/A
- --------------------------------------------------------------------------------------------------------------
Net investment income 4.02% 2.45%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 57% 104%
- --------------------------------------------------------------------------------------------------------------
Average commission rate per share N/A N/A
- --------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 14,333 $ 23,880
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31,
1997 1996
<S> <C> <C>
CLASS B SHARES
Net asset value beginning of year $ 10.98 $ 9.76
========= ========
- -------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.08) 0.23
- --------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency related
transactions 2.09 1.30
--------- --------
- --------------------------------------------------------------------------------------------------------------
Total from investment operations 2.01 1.53
--------- --------
- --------------------------------------------------------------------------------------------------------------
Less distributions from
- --------------------------------------------------------------------------------------------------------------
Net investment income (0.02) ( 0.27)
- --------------------------------------------------------------------------------------------------------------
In excess of net investment income (0.06) ( 0.04)
- --------------------------------------------------------------------------------------------------------------
Net realized gain on investments 0 0
--------- --------
- --------------------------------------------------------------------------------------------------------------
Total distributions (0.08) ( 0.31)
--------- --------
- --------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 12.91 $10.98
========= ========
- --------------------------------------------------------------------------------------------------------------
Total Return+ 18.4% 15.8%
- --------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.50% 2.59%
- --------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 2.49% 2.58%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.51%) 2.30%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 105% 112%
- --------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0002 $ .0005
- --------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 75,271 $ 79,026
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
1995 1994
<S> <C> <C>
CLASS B SHARES
Net asset value beginning of year $ 10.49 $ 10.00
========== =========
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.32 0.14
- --------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency related
transactions (0.75) 0.50
---------- ---------
- --------------------------------------------------------------------------------------------------------------
Total from investment operations (0.43) 0.64
---------- ---------
- --------------------------------------------------------------------------------------------------------------
Less distributions from
- --------------------------------------------------------------------------------------------------------------
Net investment income (0.28) (0.09)
- --------------------------------------------------------------------------------------------------------------
In excess of net investment income 0 (0.01)
- --------------------------------------------------------------------------------------------------------------
Net realized gain on investments (0.02) (0.05)
---------- ---------
- --------------------------------------------------------------------------------------------------------------
Total distributions (0.30) (0.15)
---------- ---------
- --------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 9.76 $ 10.49
========== =========
- --------------------------------------------------------------------------------------------------------------
Total Return+ (4.0%) 6.5%
- --------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.61% 2.54%
- --------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 2.59% N/A
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.27% 1.70%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 57% 104%
- --------------------------------------------------------------------------------------------------------------
Average commission rate per share N/A N/A
- --------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 97,165 $ 148,769
- --------------------------------------------------------------------------------------------------------------
</TABLE>
+ Initial sales charge or contingent deferred sales charge is not reflected.
See Combined Notes to Financial Statements
29
<PAGE>
EVERGREEN
Latin America Fund
Financial Highlights
(For a share outstanding throughout each year)
<TABLE>
<CAPTION>
Year Ended October 31,
1997 1996
<S> <C> <C>
CLASS C SHARES
Net asset value beginning of year $ 10.99 $ 9.77
========= ========
- --------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.07) 0.23
- --------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments
and foreign currency related transactions 2.08 1.30
--------- --------
- --------------------------------------------------------------------------------------------------------------
Total from investment operations 2.01 1.53
--------- --------
- --------------------------------------------------------------------------------------------------------------
Less distributions from
- --------------------------------------------------------------------------------------------------------------
Net investment income 0 (0.27)
- --------------------------------------------------------------------------------------------------------------
In excess of net investment income (0.08) (0.04)
- --------------------------------------------------------------------------------------------------------------
Net realized gain on investments 0 0
--------- --------
- --------------------------------------------------------------------------------------------------------------
Total distributions (0.08) (0.31)
--------- --------
- --------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 12.92 $10.99
========= ========
- --------------------------------------------------------------------------------------------------------------
Total Return+ 18.4% 15.8%
- --------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.47% 2.59%
- --------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 2.46% 2.58%
- --------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.52%) 2.26%
- --------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 105% 112%
- --------------------------------------------------------------------------------------------------------------
Average commission rate per share $ .0002 $ .0005
- --------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $10,961 $ 8,791
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
1995 1994
CLASS C SHARES
Net asset value beginning of year $ 10.50 $ 10.00
========== ==========
- ---------------------------------------------------------------------------------------------------------------
Income (loss) from investment operations:
- ---------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.32 0.14
- ---------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency related
transactions (0.75) 0.51
---------- ----------
- ---------------------------------------------------------------------------------------------------------------
Total from investment operations (0.43) 0.65
---------- ----------
- ---------------------------------------------------------------------------------------------------------------
Less distributions from
- ---------------------------------------------------------------------------------------------------------------
Net investment income (0.28) (0.09)
- ---------------------------------------------------------------------------------------------------------------
In excess of net investment income 0 (0.01)
- ---------------------------------------------------------------------------------------------------------------
Net realized gain on investments (0.02) (0.05)
---------- ----------
- ---------------------------------------------------------------------------------------------------------------
Total distributions (0.30) (0.15)
---------- ----------
- ---------------------------------------------------------------------------------------------------------------
Net asset value end of year $ 9.77 $ 10.50
========== ==========
- ---------------------------------------------------------------------------------------------------------------
Total Return+ (4.0%) 6.6%
- ---------------------------------------------------------------------------------------------------------------
Ratios & Supplemental Data:
Ratios to average net assets:
Expenses 2.61% 2.54%
- ---------------------------------------------------------------------------------------------------------------
Expenses, excluding indirectly paid expenses 2.59% N/A
- ---------------------------------------------------------------------------------------------------------------
Net investment income (loss) 3.27% 1.74%
- ---------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 57% 104%
- ---------------------------------------------------------------------------------------------------------------
Average commission rate per share N/A N/A
- ---------------------------------------------------------------------------------------------------------------
Net assets end of year (thousands) $ 11,242 $ 17,740
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
+ Initial sales charge or contingent deferred sales charge is not reflected.
See Combined Notes to Financial Statements
30
<PAGE>
EVERGREEN
Emerging Markets Growth Fund
Schedule of Investments
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 53.6%
Argentina - 2.3%
Iron & Steel - 0.5%
134,500 Siderca SA ...... $ 329,724
----------
Oil / Energy - 1.8%
39,000 YPF Sociedad
Anonima ADR... 1,248,000
----------
Total Argentina ... 1,577,724
==========
Brazil - 4.8%
Electrical Equipment
& Services - 1.1%
19,600 Companhia Energetica
de Minas
Gerais, ADR ("CEMIG")... 782,434
----------
Utilities - Electric
- 1.0%
1,660,000 Eletrobras SA ... 670,053
----------
Telecommunication
Services &
Equipment - 2.7%
18,550 Telecomunicacoes
Brasileiras SA, ADR
("Telebras") ...... 1,882,825
Total Brazil ...... 3,335,312
==========
Chile - 1.9%
Telecommunication
Services &
Equipment - 1.9%
47,300 Compania de Telecom
de Chile, SA,
ADR ............... 1,312,575
==========
Egypt - 2.5%
Building,
Construction &
Furnishings - 0.1%
3,700 Arabian International
Construction....... 96,782
----------
Consumer Products &
Services - 0.1%
3,700 * Eastern Tobacco Co... 92,704
----------
Food & Beverage
Products - 1.0%
22,100 * Al-Ahram Beverage
Company S.A.E....... 607,750
3,600 International Food
Company........... 87,818
----------
695,568
----------
Healthcare Products &
Services - 1.0%
9,350 Egyptian
International
Pharmaceutical
Industries Co ... 676,003
----------
Real Estate - 0.3%
2,575 Nasr City For House &
Reconstruction ...... 177,839
----------
Total Egypt ...... 1,738,896
==========
Hong Kong - 0.9%
Diversified Companies
- 0.2%
118,000 Li & Fung ......... 118,282
----------
Finance & Insurance -
0.7%
120 Bank of East Asia
Ltd................. 269
20,400 HSBC Holdings Plc 461,747
----------
462,016
----------
Total Hong Kong ... 580,298
==========
Hungary - 5.6%
Building,
Construction &
Furnishings - 0.4%
5,200 Zalakeramia ...... 244,379
----------
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Hungary - continued
Chemical &
Agricultural
Products - 1.3%
4,875 Pannonplast RT ... $ 268,183
32,600 Tiszai Vegyi
Kombinat RT... 663,784
----------
931,967
----------
Finance & Insurance -
0.4%
9,700 Otp Bank ......... 309,227
----------
Healthcare Products &
Services - 3.5%
10,400 EGIS Gyogyszergya.... 488,757
20,650 Richter Gedeon, GDR... 1,900,584
----------
2,389,341
----------
Total Hungary ... 3,874,914
==========
India - 0.4%
Healthcare Products &
Services - 0.3%
8,200 Ranbaxy Laboratories
Ltd., GDR, 144A** ... 186,960
==========
Leisure & Tourism -
0.1%
7,400 * East India Hotels
Ltd., GDR, 144A**.... 113,960
----------
Total India ......... 300,920
==========
Indonesia - 0.0%
Finance & Insurance -
0.0%
8 Bank International
Indonesia............. 2
==========
Israel - 1.1%
Telecommunication
Services &
Equipment - 1.1%
28,300 ECI
Telecommunications,
Ltd.................. 781,788
==========
Korea - 0.2%
Metal Products & Services - 0.2%
7,400 Pohang Iron &
Steel Ltd., ADR....... 120,250
==========
Luxembourg - 0.9%
Telecommunication
Services &
Equipment - 0.9%
14,430 * Millicom
International Cellular
SA, GDR............... 606,060
==========
Mexico - 10.5%
Automotive Equipment
& Manufacturing - 0.7%
64,000 Sanluis Corp SA de
CV ................ 494,598
----------
Diversified Companies
- 3.5%
52,000 Alfa SA de CV ... 379,535
25,900 Desc SA de CV, ADR.... 877,362
100,000 Grupo Carso SA de CV... 633,274
23,100 Grupo Imsa SA de CV,
ADR ............... 550,069
----------
2,440,240
----------
Finance & Insurance -
2.0%
113,700 Fomento Economico
Mexicano,............. 800,036
1,307,000 Grupo Financiero
Bancomer SA
de CV, Class B ....... 615,700
----------
1,415,736
----------
</TABLE>
31
<PAGE>
EVERGREEN
Emerging Markets Growth Fund
Schedule of Investments (continued)
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Mexico - continued
Healthcare Products &
Services - 0.6%
90,000 Kimberly Clark Corp. de Mexico SA de
CV, Class A .............................. $ 394,991
----------
Leisure & Tourism - 1.0%
1,195,000 Grupo Posadas SA de CV Class A
Shares ................................. 712,582
----------
Metal Products & Services - 0.4%
13,300 Tubos de Acero de Mexico SA, ADR ......... 268,494
----------
Publishing, Broadcasting &
Entertainment - 0.1%
2,200 * Grupo Televisa SA, ADR .................. 68,200
----------
Retailing & Wholesale - 0.8%
402,000 Grupo Elektra SA de CV .................. 546,547
----------
Telecommunication Services &
Equipment - 1.4%
21,800 Telefonos de Mexico SA, ADR ............ 942,850
----------
Total Mexico ........................... 7,284,238
==========
Peru - 0.3%
Telecommunication Services &
Equipment - 0.3%
11,800 Telefonica del Peru SA, ADR ............ 233,050
==========
Poland - 0.6%
Building, Construction &
Furnishings - 0.2%
30,000 Polifarb Cieszyn ........................ 144,620
----------
Business Equipment &
Services - 0.2%
8,000 * ComputerLand Poland SA .................. 135,437
----------
Retailing & Wholesale - 0.2%
7,600 * Amica Wronki SA ........................ 142,841
----------
Total Poland ........................... 422,898
==========
Portugal - 6.4%
Building, Construction &
Furnishings - 0.8%
21,600 Cimpor Cimentos de Portugal SA ......... 546,602
----------
Finance & Insurance - 2.7%
43,400 Banco Comercial Portugues, ADR ......... 868,000
26,600 Banco Espirito Santo e Comercial
de Lisboa SA ........................... 771,453
6,000 Sonae Investimentos SA .................. 224,168
----------
1,863,621
----------
Telecommunication Services &
Equipment - 1.5%
25,400 Portugal Telecom SA, ADR ............... 1,047,750
----------
Utilities - Electric - 1.4%
55,200 Electricidade de Portugal, SA ............ 969,963
----------
Total Portugal ........................... 4,427,936
==========
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Singapore - 1.0%
Telecommunication Services &
Equipment - 1.0%
308,000 Datacraft Asia Ltd. ..................... $ 702,240
==========
South Africa - 2.0%
Finance & Insurance - 1.3%
35,800 Liberty Life Association of Africa, Ltd... 892,675
----------
Publishing, Broadcasting &
Entertainment - 0.3%
22,500 Nasionale Pers Beperk .................. 215,065
----------
Retailing & Wholesale - 0.4%
187,050 New Clicks Holdings ..................... 244,866
----------
Total South Africa ..................... 1,352,606
==========
Spain - 1.8%
Food & Beverage Products - 1.8%
25,965 Campofrio Alimentacion SA ............... 1,253,003
==========
Switzerland - 0.6%
Finance & Insurance - 0.6%
37,500 Richemont Securities AG .................. 441,818
==========
Taiwan - 0.9%
Business Equipment &
Services - 0.2%
120,000 * Acer Inc. .............................. 164,394
----------
Food & Beverage Products - 0.7%
55,000 * President Enterprises .................. 63,086
34,706 President Enterprises Corp.,
GDR,144A** .............................. 390,447
----------
453,533
----------
Total Taiwan ........................... 617,927
==========
Turkey - 5.7%
Finance & Insurance - 2.9%
10,136,000 Akbank Turk Anonim Sirket ............... 690,162
22,227,000 * Haci Omer Sabanci ........................ 1,295,506
----------
1,985,668
----------
Food & Beverage Products - 1.5%
4,363,000 Erciyas Biracilik Ve Malt ............... 617,921
5,890,000 Guney Biracilik .......................... 433,136
----------
1,051,057
----------
Household Products &
Services - 1.0%
8,200,000 Turk Sise ve Cam Fabrikalari AS ......... 703,508
----------
Manufacturing - Distributing - 0.3%
1,546,000 Arcelik AS .............................. 172,638
----------
Total Turkey ........................... 3,912,871
==========
Russia - 2.1%
Oil / Energy - 2.1%
16,800 LUKoil Oil Co., ADR ..................... 1,467,846
=========
</TABLE>
32
<PAGE>
EVERGREEN
Emerging Markets Growth Fund
Schedule of Investments (continued)
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Venezuela - 1.1%
Finance & Insurance - 0.5%
150,000 Banco Provincial SA .................. $ 299,242
-----------
Telecommunication Services &
Equipment - 0.6%
9,900 Compania Anonima Nacional Telefonos
de Venezuela ........................ 433,125
-----------
Total Venezuela ..................... 732,367
===========
Total Common Stocks
(Cost - $36,538,187).................. 37,077,539
===========
PREFERRED STOCKS - 8.6%
Brazil - 8.6%
Electrical Equipment &
Services - 1.0%
17,500,000 Companhia Energetica de Minas Gerais
("CEMIG") ........................... 698,444
-----------
Finance & Insurance - 1.1%
100,000,000 Banco Bradesco SA .................. 743,798
-----------
Metals & Mining - 2.6%
94,000 Compania Vale Do Rio Doce Navegacao
SA ("CVRD") ........................ 1,816,137
-----------
Oil/Energy - 0.9%
3,373,700 Petroleo Brasileiro SA ("Petrobras") ... 627,338
-----------
Telecommunication Services &
Equipment - 2.2%
610,000 Compania Riograndense de
Telecomunica ........................ 470,316
3,985,000 * Telecomunicaoes de Sao Paulo SA ...... 1,041,028
95,467 * Telesponsora Telefonos de Sao Paulo,
Rights .............................. 46
-----------
1,511,390
===========
Shares Value
<S> <C> <C>
PREFERRED STOCKS - continued
Brazil - continued
Utilities - Electric - 0.8%
1,274,900 * Electrobras SA, Class B Shares ...... $ 551,614
Total Brazil ........................ 5,948,721
===========
Total Preferred Stocks
(Cost - $6,941,150) .................. 5,948,721
===========
PUT OPTION PURCHASED - 0.0%
Brazil - 0.0%
4,000 * Brazilian Real Strike price 1.2, expires
12/1/97 .............................. 24,673
-----------
Total Put Option Purchased
(Cost - $23,557) ..................... 24,673
===========
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 44.3%
United States - 44.3%
Government Agency Notes &
Bonds - 44.3%
$30,680,000 Federal Home Loan Bank Discount
Notes, 5.55%, 11/3/97 ......... 30,670,540
----------
Total Short-Term Investments
(Cost - $30,670,540)............ 30,670,540
==========
Total Investments
(Cost $74,173,434) 106.5% 73,721,473
Other Assets And
Liabilities - Net ( 6.5%) (4,500,549)
===== ----------
Net Assets ......... 100% $ 69,220,924
===== ===========
</TABLE>
* Non-income producing securities
** Securities that may be resold to "qualified institutional buyers" under Rule
144A of the Securities Act of 1933. These securities have been determined
to be liquid under guidelines established by the Board of Directors.
Legend of Portfolio Abbreviations:
ADR American Depository Receipts
GDR Global Depository Receipts
33
<PAGE>
[GRAPHIC OMITTED]
EVERGREEN
Emerging Markets Growth Fund
[GRAPHIC OMITTED]
Schedule of Investments (continued)
October 31, 1997
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
Forward Foreign Currency Exchange Contracts to Buy:
Unrealized
U.S. $ Value at In Exchange Appreciation
Exchange Date Contracts to Receive October 31, 1997 for U.S. $ (Depreciation)
- --------------- -------------------------------- ------------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
11/5/97 98,961 Argentine Peso $ 99,021 $ 98,963 $ 57
10/31/97 26,031 Brazilian Real 23,612 23,558 54
11/3/97 80,039 Brazilian Real 72,601 72,585 16
11/3/97 353,508 Brazilian Real 320,657 320,875 (218)
11/5/97 856,361 Brazilian Real 776,780 774,988 1,792
11/2/97 18,187 Egyptian Pound 5,345 5,350 (5)
11/5/97 1,427,143 Egyptian Pound 419,439 419,562 (123)
11/6/97 186,572,485 Hungarian Forint 959,316 957,101 2,215
11/4/97 6,183,437 Mexican Peso 737,440 744,992 (7,552)
11/4/97 1,038,482 Polish Zloty 297,986 298,200 (214)
11/4/97 34,939,285 Spanish Peseta 240,182 241,377 (1,195)
Forward Foreign Currency Exchange Contracts to Sell:
Contracts to Deliver
-------------------------------
10/30/97 426,880 Brazilian Real $387,210 $387,791 $ 581
10/31/97 456,127 Brazilian Real 413,740 413,609 (131)
11/1/97 136,995,200 South Korean Won 141,964 141,744 (220)
</TABLE>
See combined notes to financial statements.
34
<PAGE>
EVERGREEN
Global Leaders Fund
Schedule of Investments
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 99.4%
Belgium - 2.4%
Healthcare Products &
Services - 0.8%
500 UCB SA ........................ $ 1,727,682
------------
Industrial Specialty Products &
Services - 0.7%
7,500 * Barco NV ..................... 1,446,776
------------
Retailing & Wholesale - 0.9%
3,500 Colruyt SA ..................... 1,877,640
------------
Total Belgium .................. 5,052,098
============
Canada - 6.1%
Automotive Equipment &
Manufacturing - 1.4%
44,600 Magna International, Inc. ...... 2,938,025
------------
Chemical & Agricultural
Products - 1.4%
120,000 DuPont Canada, Inc. Cl. A ...... 2,894,952
------------
Energy - 1.5%
110,000 * Canadian Natural Resources, Ltd... 3,200,057
------------
Industrial Specialty Products &
Services - 1.8%
200,000 Bombardier, Inc., Cl. B ...... 3,831,553
------------
Total Canada .................. 12,864,587
============
Denmark - 1.1%
Healthcare Products &
Services - 1.1%
30,000 Coloplast AS .................. 2,220,018
============
France - 6.5%
Automotive Equipment &
Manufacturing - 0.9%
30,000 BERTRAND FAURE ............... 1,809,908
Building, Construction &
Furnishings - 1.7%
25,000 LAPEYRE SA ..................... 1,460,582
19,320 Societe Technip ............... 2,043,115
------------
3,503,697
============
Food & Beverage Products - 0.8%
3,500 Sodexho Alliance ............... 1,745,677
------------
Healthcare Products &
Services - 0.9%
17,000 Synthelabo ..................... 2,001,127
------------
Retailing & Wholesale - 1.3%
3,800 Carrefour SA .................. 1,982,923
8,050 Castorama Dubois Investisse ... 838,738
------------
2,821,661
------------
Textile & Apparel - 0.9%
27,000 Hermes International ......... 1,820,829
------------
Total France .................. 13,702,899
=============
Germany - 10.2%
Electrical Equipment &
Services - 0.7%
4,468 VEW AG ........................ 1,503,330
------------
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Germany - continued
Food & Beverage Products - 1.1%
5,000 Suedzucker AG .................. $ 2,407,472
------------
Healthcare Products &
Services - 0.9%
25,000 Altana AG ..................... 1,817,206
------------
Information Services &
Technology - 2.0%
15,000 SAP AG ........................ 4,302,994
------------
Textile & Apparel - 2.9%
18,000 Adidas AG ..................... 2,605,291
2,700 Hugo Boss AG .................. 3,445,875
------------
Utilities - Electric - 2.6%
126,300 RWE AG ........................ 5,480,473
------------
6,051,166
------------
Total Germany .................. 21,562,641
============
Hong Kong - 4.3%
Diversified Companies - 0.6%
2,120,000 First Pacific Ltd. ............ 1,336,739
------------
Finance & Insurance - 0.5%
1,135,000 National Mutual Asia Ltd. ...... 1,027,614
------------
Real Estate - 1.2%
176,000 Cheung Kong Holdings, Ltd. ... 1,223,566
152,400 Henderson China Holdings, Ltd. 163,606
200,000 Henderson Land Development Co.,
Ltd. ........................... 1,107,159
------------
2,494,331
------------
Retailing & Wholesale - 0.3%
1,500,000 Giordano International, Ltd. ... 552,933
------------
Telecommunication Services &
Equipment - 1.0%
106,000 Hong Kong Telecommunications, Ltd.
ADS .............................. 2,033,875
------------
Utilities - 0.7%
850,000 Hongkong & China Gas ......... 1,605,122
------------
Total Hong Kong ............... 9,050,614
============
Italy - 3.7%
Consumer Products &
Services - 1.1%
100,000 Industrie Natuzzi SpA ADS ...... 2,237,500
------------
Healthcare Products &
Services - 1.2%
40,500 Luxottica Group SpA ADS .......... 2,586,937
------------
Textile & Apparel - 1.4%
99,100 Benetton Group SpA ADS ......... 2,873,900
------------
Total Italy .................. 7,698,337
============
Japan - 6.8%
Consumer Products &
Services - 2.6%
63,000 Nintendo Co., Ltd. ............ 5,444,121
------------
</TABLE>
35
<PAGE>
EVERGREEN
Global Leaders Fund
Schedule of Investments (continued)
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Japan - continued
Publishing, Broadcasting &
Entertainment - 0.1%
50,000 Kyodo Printing Co. .................. $ 270,046
------------
Retailing & Wholesale - 3.9%
110,400 Seven-Eleven Japan Co., Ltd. ...... 8,255,920
------------
Transportation - 0.2%
100,000 Keisei Electric Railway ............ 378,064
------------
Total Japan ........................ 14,348,151
============
Malaysia - 1.1%
Automotive Equipment &
Manufacturing - 0.1%
134,000 Perusahaan Otomobil Nasional Berhad... 321,584
------------
.
Banks - 0.4%
240,000 Commerce Asset Holding Berhad ...... 187,191
115,000 Malayan Banking Berhad ............ 445,028
155,000 RHB Capital Berhad .................. 130,193
------------
762,412
------------
Building, Construction &
Furnishings - 0.2%
157,000 United Engineers Ltd. Berhad ...... 372,071
------------
Chemical & Agricultural
Products - 0.1%
92,000 Malaysian Oxygen Berhad ............ 289,786
------------
Finance & Insurance - 0.1%
101,000 AMMB Holdings Berhad ............... 165,127
------------
Food & Beverage Products - 0.2%
81,000 Nestle Malaysia Berhad ............ 410,649
------------
Total Malaysia ..................... 2,321,629
============
Netherlands - 5.2%
Energy - 0.6%
20,000 IHC Caland NV ..................... 1,229,977
------------
Food & Beverage Products - 1.3%
20,000 CSM NV, Certificates ............... 912,697
15,000 CSM NV, Ordinary Shares ............ 684,522
42,500 Nutricia Verenigde Bedrijven NV ... 1,214,911
------------
2,812,130
------------
Information Services &
Technology - 0.8%
49,200 Getronics NV ........................ 1,624,373
------------
Publishing, Broadcasting &
Entertainment - 2.5%
14,000 Elsevier NV ........................ 219,933
55,000 Elsevier NV ADS ..................... 1,718,750
70,000 VNU ................................. 1,658,511
14,550 Wolters Kluwer NV .................. 1,786,619
------------
5,383,813
------------
Total Netherlands .................. 11,050,293
============
Norway - 2.7%
Food & Beverage Products - 1.6%
35,000 Orkla ASA ........................... 3,225,413
------------
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Norway - continued
Publishing, Broadcasting &
Entertainment - 1.1%
125,000 Schibsted ASA ..................... $ 2,346,863
------------
Total Norway ........................ 5,572,276
============
Spain - 1.8%
Industrial Specialty Products &
Services - 0.6%
115,000 Prosegur, CIA de Seguridad SA ...... 1,288,582
------------
Utilities - Electric - 1.2%
130,000 Empresa Nacional de Electricidad ADS 2,421,250
------------
Total Spain ........................ 3,709,832
============
Sweden - 2.1%
Healthcare Products &
Services - 1.3%
6,933 Astra AB ........................... 112,003
168,000 Astra AB ADS ........................ 2,677,500
------------
2,789,503
------------
Retailing & Wholesale - 0.8%
41,000 Hennes & Mauritz Cl. B ............ 1,677,793
------------
Total Sweden ........................ 4,467,296
============
Switzerland - 2.3%
Chemical & Agricultural
Products - 2.3%
1,000 * Ems-Chemie Holdings AG ............ 4,924,121
------------
United Kingdom - 8.6%
Banks - 0.6%
110,000 Lloyds TSB Group Plc ............... 1,374,917
------------
Building, Construction &
Furnishings - 0.5%
125,800 Wolseley Plc ........................ 1,048,446
------------
Chemical & Agricultural
Products - 0.4%
50,000 Burmah Castrol Plc .................. 859,847
------------
Consumer Products &
Services - 0.6%
80,000 Reckitt & Colman Plc ............... 1,227,443
------------
Finance & Insurance - 0.4%
92,750 Legal & General Group Plc ......... 770,276
------------
Healthcare Products &
Services - 1.3%
56,200 SmithKline Beecham Plc - ADR ...... 2,676,525
------------
Industrial Specialty Products &
Services - 1.9%
100,000 Morgan Crucible Company Plc ......... 813,709
230,200 Rentokil Initial Plc ............... 926,924
50,000 Smiths Industries Plc ............... 725,628
95,000 TI Group Plc ........................ 872,640
------------
100,000 Williams Holdings Plc ............... 600,635
------------
3,939,536
------------
Publishing, Broadcasting &
Entertainment - 1.6%
35,000 Carlton Communications Plc, ADS ... 1,474,375
95,400 Granada Group Plc .................. 1,315,672
</TABLE>
36
<PAGE>
[GRAPHIC OMITTED]
EVERGREEN
Global Leaders Fund
[GRAPHIC OMITTED]
Schedule of Investments (continued)
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
United Kingdom - continued
47,700 United News & Media Plc ...... $ 600,216
------------
3,390,263
------------
Retailing & Wholesale - 0.9%
79,560 Argos Plc ..................... 847,610
90,000 Next Plc ..................... 1,072,083
------------
1,919,693
------------
Telecommunication Services &
Equipment - 0.4%
17,500 Vodafone Group Plc, ADR ...... 960,312
------------
Total United Kingdom ......... 18,167,258
------------
United States - 34.5%
Advertising & Related
Services - 0.9%
35,800 Gannett Co., Inc. ............ 1,881,737
------------
Banks - 0.7%
44,000 Norwest Corp. .................. 1,410,750
------------
Building, Construction &
Furnishings - 1.2%
45,000 Home Depot, Inc. (The) ......... 2,503,125
------------
Capital Goods - 0.8%
34,800 Deere & Co. .................. 1,831,350
------------
Chemical & Agricultural
Products - 2.3%
57,800 Du Pont (E. I.) De Nemours & Co. 3,287,375
37,500 Nalco Chemical Company ......... 1,500,000
------------
4,787,375
------------
Consumer Products &
Services - 2.6%
18,500 Avon Products, Inc. ............ 1,211,750
45,900 Callaway Golf Co. ............ 1,480,275
43,250 * CUC International, Inc. ...... 1,275,875
37,700 Mattel, Inc. .................. 1,465,587
------------
5,433,487
------------
Diversified Companies - 0.9%
50,900 AlliedSignal, Inc. ............ 1,832,400
------------
Electrical Equipment &
Services - 3.2%
59,000 General Electric Co. ......... 3,809,187
52,300 Sundstrand Corp. ............... 2,843,813
------------
6,653,000
------------
Energy - 0.8%
40,000 Dresser Industries Inc. ...... 1,685,000
------------
Finance & Insurance - 4.4%
43,000 Fannie Mae ..................... 2,082,812
11,400 Marsh & McLennan Co., Inc. ... 809,400
74,850 MBNA Corp. ..................... 1,969,491
37,500 Schwab (Charles) & Co., Inc. ... 1,279,688
10,000 SLM Holding Corp. ............ 1,403,750
50,000 SunAmerica, Inc. ............... 1,796,875
------------
9,342,016
------------
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
United States - continued
Food & Beverage Products - 0.5%
18,400 Coca Cola Co. (The) ............ $ 1,039,600
------------
Healthcare Products &
Services - 2.3%
34,000 Merck & Co., Inc. ............ 3,034,500
34,000 Schering-Plough Corp. ......... 1,906,125
------------
4,940,625
------------
Industrial Specialty Products &
Services - 0.5%
15,000 Dover Corp. .................. 1,012,500
------------
Information Services &
Technology - 8.0%
32,500 * Cisco Systems, Inc. ............ 2,666,016
40,000 Compaq Computer Corp. ......... 2,550,000
30,000 Computer Associates International,
Inc. ........................... 2,236,875
31,200 Intel Corp. .................. 2,402,400
23,500 * Microsoft Corp. ............... 3,055,000
60,000 * Oracle Systems Corp. ......... 2,146,875
43,000 * Parametric Technology Corp. ... 1,897,375
------------
16,954,541
------------
Leisure & Tourism - 3.0%
40,000 Carnival, Corp. Cl. A ......... 1,940,000
24,300 Disney Walt Co. (The) ......... 1,998,675
34,300 Marriott International, Inc. ... 2,392,425
------------
6,331,100
------------
Retailing & Wholesale - 2.4%
30,000 Gap, Inc. ..................... 1,595,625
101,200 Wal-Mart Stores, Inc. ......... 3,554,650
------------
5,150,275
------------
Total United States ............ 72,788,881
============
Total Common Stocks
(Cost - $190,656,262)............ 209,500,931
============
PREFERRED STOCKS - 0.4%
Germany - 0.4%
Utilities-Electric - 0.4%
25,000 RWE AG ........................ 902,077
------------
Total Preferred Stocks
(Cost - $966,606)............... 902,077
============
WARRANTS - 0.0%
Malaysia - 0.0%
Banks - 0.0%
25,000 * Commerce Asset Holding, Warrants @
7.45 MYR expire 3/16/2002 ...... 4,050
------------
Total Warrants
(Cost - $15,235) ............... 4,050
============
</TABLE>
37
<PAGE>
EVERGREEN
Global Leaders Fund
Schedule of Investments (continued)
October 31, 1997
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS - 0.0%
United States - 0.0%
$80,000 Federal National Mortgage
Association
Discount Notes, 5.45%, 11/6/97 $ 79,939
------------
Total Short-Term Investments
(Cost - $79,939) ............ 79,939
============
Total Investments -
(Cost $191,718,042) 99.8% 210,486,997
Other Assets And
Liabilities - Net ... 0.2% 338,436
---- ------------
Net Assets ......... 100% $210,825,433
==== =============
</TABLE>
* Non-income producing securities
Legend of Portfolio Abbreviations:
ADR American Depository Receipts
ADS American Depository Shares
See combined notes to financial statements.
38
<PAGE>
EVERGREEN
Global Real Estate Equity Fund
Schedule of Investments
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 99.6%
Argentina - 4.0%
281,313 Inversiones y Representaciones SA ... $ 945,784
14,668 Inversiones y Representaciones
SA, GDR ........................ 495,045
----------
Total Argentina .................. 1,440,829
==========
Belgium - 1.0%
7,342 Bernheim-Comofi .................. 351,490
==========
Canada - 4.4%
25,000 Bentall Corp ..................... 354,774
30,000 * Burcon Properties Ltd. ......... 319,296
35,000 Canadian Hotel Income Properties... 238,408
100,000 * Gentra, Inc. ..................... 350,516
40,000 Monarch Development Corp. ...... 305,105
----------
Total Canada .................. 1,568,099
==========
Denmark - 6.3%
12,600 * Nordicom AS ..................... 157,644
20,525 Thorkild Kristensen ............ 1,675,447
5,131 * Thorkild Kristensen, New Shares... 418,841
----------
Total Denmark .................. 2,251,932
==========
France - 14.2%
6,576 Simco Registered Shares ......... 477,674
20,000 Societe de Immeubles ............ 1,192,736
51,078 Societe du Louvre ............... 2,612,232
8,450 Unibail ........................ 805,704
----------
Total France ..................... 5,088,346
==========
Germany - 2.5%
29,871 Kampa Haus AG .................. 911,483
==========
Hong Kong - 3.1%
1,000,000 China Resources Beijing ......... 407,424
200,000 New World Develelopment Co., Ltd.... 703,615
----------
Total Hong Kong .................. 1,111,039
==========
Japan - 8.9%
220 Chubu Sekiwa Real Estate, Ltd. ... 1,736
52,000 Daibiru Corp. .................. 557,374
190,000 Diamond City Co., Ltd. ......... 757,790
146,410 Kansai Sekiwa Real Estate Co.,
Ltd. ........................... 727,488
47,000 Tachihi Enterprise Co., Ltd ...... 1,140,341
----------
Total Japan ..................... 3,184,729
==========
Malaysia - 0.3%
39,200 IOI Properties Berhad
Warrants expiring 5/18/98 @ 2.75
MYR .............................. 8,349
108,300 IOI Properties Berhad ............ 85,769
----------
Total Malaysia .................. 94,118
==========
Mexico - 4.4%
930,000 * Grupo Posadas, SA de CV, Class A
Shares ........................... 554,562
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Mexico - continued
1,930,000 * Grupo Posadas, SA de CV, Class L
Shares ........................... $1,035,778
----------
Total Mexico ..................... 1,590,340
==========
Netherlands - 3.7%
90,500 European City Estates NV ......... 1,342,467
==========
Norway - 3.2%
65,000 * Steen & Strom ASA ............... 1,164,474
==========
Philippines - 1.7%
3,000,000 * Filinvest Land, Inc. ............ 270,804
1,000,000 * Robinson's Land Corp. Class B ... 41,749
12,825,000 * SM Development Corp. ............ 285,804
----------
Total Philippines ............... 598,357
==========
Spain - 5.2%
40,000 * Inmobiliaria Urbis SA ............ 340,964
239,993 * Sotogrande SA .................. 494,933
40,000 Vallehermoso SA .................. 1,017,392
----------
Total Spain ..................... 1,853,289
==========
Sweden - 4.7%
49,800 * Dioes (Anders) AB ............... 295,878
100,000 * Castellum AB ..................... 934,592
62,000 * NK Cityfastigheter AB ............ 463,558
----------
Total Sweden ..................... 1,694,028
==========
Thailand - 2.1%
9,000 Dusit Thani Public Co., Ltd. ... 6,362
123,700 Hemaraj Land & Development Public
Co., Ltd. ........................ 165,838
400,000 Saha Pathana Inter-Holding Co. ... 567,946
125,500 Sammakorn Public Co., Ltd. ...... 25,697
----------
Total Thailand .................. 765,843
==========
United Kingdom - 4.7%
275,000 Greycoat Plc ..................... 942,371
1,000,000 Hemingway Properties Plc ......... 754,988
----------
Total United Kingdom ............ 1,697,359
==========
United States - 25.2%
22,900 * Alexander's, Inc. REIT ......... 2,003,750
95,600 Continental Homes Holding Corp. 2,879,950
10,000 Crescent Real Estate Equities, Inc... 360,000
20,000 * Crossmann Communities, Inc. ...... 435,000
10,000 Equity Office Properties Trust REIT 305,625
9,800 Forest City Enterprises, Inc. ... 565,950
46,516 Horizon Group, Inc. REIT ......... 619,244
258,100 * Presley Companies (The), Cl. A ... 274,231
81,000 US Home Corp.,
*Warrants expiring 6/22/98 @ $20 .... 1,275,750
39,000 * Washington Homes, Inc. ......... 180,375
</TABLE>
39
<PAGE>
EVERGREEN
Global Real Estate Equity Fund
Schedule of Investments (continued)
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C> <C>
COMMON STOCKS - continued
United States - continued
10,000 Western Investment Real Estate
Trust
REIT ........................ $ 139,375
-----------
Total United States ......... 9,039,250
===========
Total Investments -
(cost $35,691,976)... 99.6% 35,747,472
Other Assets and
Liabilities - net ... 0.4% 143,128
----- -----------
Net Assets - ...... 100.0% $35,890,600
===== ===========
</TABLE>
* Non-income producing securities
Legend of Portfolio Abbreviations:
GDR Global Depository Receipts
REIT Real Estate Investment Trust
See combined notes to financial statements.
40
<PAGE>
EVERGREEN
International Equity Fund
Schedule of Investments
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 84.4%
Argentina - 2.5%
Energy - 1.7%
4,000 YPF Sociedad
Anonima,........ $ 127,277
138,400 YPF Sociedad
Anonima, ADR .... 4,428,800
-----------
4,556,077
-----------
Telecommunication
Services
& Equipment -
0.8%
75,200 Telefonica de
Argentina, ADR.... 2,115,000
-----------
Total Argentina... 6,671,077
===========
Australia - 4.4%
Building,
Construction &
Furnishings -
0.2%
241,500 Boral Ltd. ... 635,183
-----------
Finance &
Insurance - 1.1%
202,500 National
Australia Bank
Ltd............ 2,769,839
-----------
Food & Beverage
Products - 1.7%
2,467,840 Burns Philp &
Co., Ltd......... 1,301,632
244,596 Foodland
Associated Ltd..... 1,823,329
440,900 Woolworths Ltd.... 1,423,189
-----------
4,548,150
-----------
Metals & Mining
- 0.6%
733,700 Orogen Minerals
Ltd.......... 1,599,521
-----------
Publishing,
Broadcasting &
Entertainment -
0.2%
124,500 News Corp., Ltd.... 596,247
-----------
Transportation -
0.6%
862,200 Qantas Airways
Ltd. ........... 1,546,173
-----------
Total Australia ... 11,695,113
===========
Austria - 1.8%
Engineering -
0.4%
10,100 VAE
Eisenbahnsysteme
AG............. 990,563
-----------
Information
Services &
Technology -
1.2%
18,500 VA Technologie AG.. 3,282,688
-----------
Metal Products &
Services - 0.2%
8,920 Boehler-Uddeholm
AG................. 639,585
-----------
Total Austria ... 4,912,836
===========
Brazil - 1.5%
Food & Beverage
Products - 0.7%
65,600 Panamerican
Beverages, Inc.
ADR, ......... 2,033,600
-----------
Telecommunicatio
Services &
Equipment - 0.5%
13,000 Telecomunicacoes
Brasileiras SA
("Telebras") ADR.... 1,319,500
-----------
Utilities - 0.3%
3,844,900 Compania de
Saneamento
Basico
do Estado
("SABESP")...... 711,470
-----------
Total Brazil .... 4,064,570
===========
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
China - 0.8%
Transportation -
0.8%
6,733,800 * Guangshen
Railway Co.,
Ltd........... $ 2,090,296
===========
Denmark - 1.2%
Consumer
Products &
Services - 0.6%
53,500 ISS
International
Service
System AS,
Series B....... 1,624,428
----------
Transportation -
0.6%
96,700 SAS Danmark AS... 1,667,241
-----------
Total Denmark... 3,291,669
===========
Finland - 2.1%
Diversified
Companies - 1.0%
67,716 Huhtamaki Group ... 2,788,094
-----------
Forest Products
- 0.6%
69,300 UPM-Kymmene
Corp.......... 1,541,861
-----------
Machinery -
Diversified -
0.5%
67,666 Rauma OY ... 1,268,758
-----------
Total Finland ... 5,598,713
===========
France - 8.2%
Automotive
Equipment &
Manufacturing -
0.8%
33,850 BERTRAND FAURE .... 2,042,179
-----------
Diversified
Companies - 0.4%
8,000 Eaux Cie
Generale ........ 933,386
400 Marine-Wendel SA ... 46,045
-----------
979,431
===========
Finance &
Insurance - 3.8%
52,650 AXA-UAP ...... 3,605,383
13,000 * Banque Nationale
de Paris......... 574,698
20,800 Societe Generale... 2,848,698
123,600 * Societe Generale
d'Enterprises SA.. 3,167,005
-----------
10,195,784
===========
Healthcare
Products &
Services - 1.2%
76,550 Rhone-Poulenc SA... 3,337,637
-----------
Industrial
Specialty
Products &
Services - 1.8%
96,900 Bouygues Offshore
SA, ADR......... 2,349,825
16,970 Compagnie de
Saint Gobain ..... 2,435,949
-----------
4,785,774
===========
Oil / Energy -
0.2%
4,760 Total SA ... 528,132
-----------
Total France..... 21,868,937
===========
Germany - 4.0%
Automotive
Equipment &
Manufacturing -
0.6%
1,963 Bayer Motoren
Werk AG ("BMW")..... 1,420,038
-----------
Finance &
Insurance - 0.5%
21,300 Deutsche
Bank AG ......... 1,393,804
-----------
</TABLE>
41
<PAGE>
EVERGREEN
International Equity Fund
Schedule of Investments (continued)
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Germany - continued
Healthcare Products &
Services - 2.6%
51,000 * Fresenius Medical Care AG ............ $ 3,594,675
86,300 Hoechst AG ........................... 3,284,186
-----------
6,878,861
-----------
Retailing & Wholesale - 0.3%
3,200 AVA Allgemeine Handelsgesellschaft
der Verbraucher AG .................. 816,800
-----------
Total Germany ........................ 10,509,503
===========
Hong Kong - 2.3%
Diversified Companies - 2.0%
109,000 Cheung Kong (Holdings) Ltd. ......... 757,777
3,930,793 First Pacific Company Ltd. ......... 2,478,512
310,600 * Jardine Matheson
Holdings Ltd. ........................ 1,987,840
-----------
5,224,129
-----------
Finance & Insurance - 0.3%
275,000 Wing Hang Bank Ltd .................. 707,818
-----------
Real Estate - 0.0%
41,170 Hongkong Land Holdings Ltd., ADR ... 93,868
9,800 * Hysan Development Co. ............... 329
-----------
94,197
-----------
Total Hong Kong ..................... 6,026,144
===========
India - 2.2%
Automotive Equipment &
Manufacturing - 1.2%
289,997 Tata Engineering & Locomotive
Co.,Ltd., GDR ........................ 3,015,969
-----------
Finance & Insurance - 0.6%
91,200 State Bank of India, GDR ............ 1,678,080
-----------
Metal Products & Services - 0.4%
38,025 Hindalco Industries Ltd., GDR ...... 1,098,922
-----------
Total India ........................ 5,792,971
===========
Indonesia - 1.3%
Building, Construction &
Furnishings - 0.6%
1,536,000 PT Semen Gresik ..................... 1,491,262
-----------
Finance & Insurance - 0.7%
1,033,500 PT Hanjaya Mandala Sampoerna ......... 1,798,950
25,500 PT Indosat ........................... 57,472
-----------
1,856,422
-----------
Total Indonesia ..................... 3,347,684
===========
Ireland - 0.8%
Food & Beverage Products - 0.8%
185,575 Kerry Group PLC ..................... 2,246,644
===========
Israel - 0.4%
Telecommunication Services &
Equipment - 0.4%
41,500 * ECI Telecommunications Ltd. ......... 1,146,437
===========
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Italy - 2.9%
Diversified Companies - 0.0%
12,200 * Grassetto SpA ........................ $ 732
-----------
Energy - 1.0%
476,600 ENI SpA .............................. 2,679,995
-----------
Finance & Insurance - 0.5%
891,200 Parmalat Finanziara SpA ............ 1,237,047
-----------
Other - 0.6%
77,000 Assicruz Generali .................. 1,721,471
-----------
Telecommunication Services &
Equipment - 0.8%
328,000 Telecom Italia SpA .................. 2,055,570
-----------
Total Italy ........................ 7,694,815
===========
Japan - 18.5%
Automotive Equipment &
Manufacturing - 0.2%
200,000 Isuzu Motors Ltd. .................. 468,633
-----------
Business Equipment &
Services - 1.0%
235,000 Fujitsu Ltd. ........................ 2,577,482
-----------
Chemical & Agricultural
Products - 0.5%
250,000 Toray Industries, Inc. ............... 1,391,774
-----------
Communication Systems &
Services - 0.8%
6,000 Nippon Television Network ............ 2,133,776
-----------
Electrical Equipment &
Services - 4.9%
300,000 Fujikura Ltd. ........................ 2,056,502
309,000 Matsushita Electric Works Ltd. ...... 2,798,587
227,000 NEC Corp. ........................... 2,489,738
29,000 Rohm Co. Ltd. ........................ 2,867,470
52,000 Tokyo Electron Ltd. .................. 2,592,439
25,000 Yokogawa Electric Corp. ............ 158,911
-----------
12,963,647
-----------
Finance & Insurance - 4.7%
230,000 Fuji Bank Ltd. ..................... 1,987,536
80,000 Japan Asia Investment Co., Ltd. ...... 245,949
156,000 Nomura Securities International Inc... 1,814,707
50,100 Orix Corp. ........................... 3,421,870
9,500 Shohkoh Fund & Co. Ltd. ............ 2,762,775
210,000 Sumitomo Bank Ltd. .................. 2,233,486
-----------
12,466,323
-----------
Food & Beverage
Products - 0.2%
55,000 Mycal Corp. ........................ 525,550
-----------
Healthcare Products &
Services - 2.0%
75,000 Sankyo Co. Ltd. .................... 2,474,034
115,000 Yamanouchi Pharmaceutical Co. Ltd..... 2,828,417
-----------
5,302,451
-----------
Manufacturing - Distributing - 0.2%
40,400 Fujitsu Denso ......................... 631,093
-----------
</TABLE>
42
<PAGE>
EVERGREEN
International Equity Fund
Schedule of Investments (continued)
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Japan - continued
Real Estate - 0.7%
45,000 Hankyu Realty Co. ............... $ 292,023
45,500 Meiwa Estate Co., Ltd. ............ 536,851
48,000 Mitsubishi Estate Co., Ltd. ...... 606,232
43,000 Mitsui Fudosan Co. ............... 485,916
-----------
1,921,022
-----------
Retailing & Wholesale - 2.8%
53,000 Jusco Co. Ltd. .................. 1,184,628
210,000 Kao Corp. ........................ 2,931,450
40,000 Sony Corp. ........................ 3,320,316
-----------
7,436,394
-----------
Telecommunication Services &
Equipment - 0.5%
150 * DDI Corp. ........................ 501,039
70,000 Sumitomo Electric Industries ...... 924,802
-----------
1,425,841
-----------
Total Japan ..................... 49,243,986
===========
Korea - 1.2%
Building, Construction &
Furnishings - 0.2%
42,200 LG Construction Co ............... 371,710
-----------
Electrical Equipment &
Services - 0.0%
2,600 Samsung Electronic ............... 102,114
-----------
Finance & Insurance - 0.2%
50,800 Housing & Commercial Bank, Korea.... 438,404
625 Kookmin Bank ..................... 5,052
21,900 Ssangyong Investment &
Securities Co. Ltd. ............... 121,414
-----------
564,870
-----------
Oil / Energy - 0.8%
152,400 Yukong Ltd. ..................... 2,053,057
-----------
Total Korea ..................... 3,091,751
=-----------
Mexico - 0.8%
Diversified Companies - 0.8%
277,220 Alfa SA de CV ..................... 2,023,359
-----------
Netherlands - 3.4%
Electrical Equipment &
Services - 3.4%
30,900 * ASM Lithography Holding N.V. ...... 2,263,425
85,550 Philips Electronics N.V. ......... 6,697,708
-----------
8,961,133
-----------
Total Netherlands ............... 8,961,133
===========
New Zealand - 3.2%
Building, Construction &
Furnishings - 0.8%
743,800 Fletcher Challenge Building, ADR 2,246,166
-----------
Diversified Companies - 1.0%
2,683,090 Fletcher Challenge Forests ...... 2,589,470
-----------
Finance & Insurance - 1.1%
3,711,700 Brierley Investments Ltd. ......... 2,865,751
-----------
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
New Zealand - continued
Forest Products - 0.3%
345,350 Carter Holt Harvey Ltd. ......... $ 602,090
132,850 Fletcher Challenge Paper ......... 218,378
-----------
820,468
-----------
Total New Zealand ............... 8,521,855
===========
Norway - 1.7%
Energy - 1.2%
111,800 Smedvig ASA ..................... 3,300,771
2,300 Smedvig ASA, ADR .................. 66,988
-----------
3,367,759
-----------
Transportation - 0.5%
73,500 SAS Norge ASA ..................... 1,243,013
-----------
Total Norway ..................... 4,610,772
===========
Pakistan - 0.0%
Energy - 0.0%
38,000 * Hub Power Co., Ltd. ............... 50,775
29,925 * Sui Southern Gas Co., Ltd ......... 20,128
-----------
70,903
-----------
Telecommunication Services &
Equipment - 0.0%
44,500 * Pakistan Telecommunications Corp. ... 37,466
-----------
Total Pakistan .................. 108,369
===========
Philippines - 0.4%
Telecommunication Services &
Equipment - 0.4%
22,500 * Millicom International Cellular
SA,GDR ........................... 945,000
-----------
Portugal - 1.9%
Building, Construction &
Furnishings - 1.9%
139,800 Cimpor-Cimentos de Portugal SA ... 3,537,731
82,100 Mota e Companhia S.A. ............ 1,377,282
-----------
4,915,013
-----------
Total Portugal .................. 4,915,013
===========
Singapore - 1.6%
Finance & Insurance - 1.3%
304,300 Development Bank of Singapore
Ltd................................ 2,840,133
320,000 Keppel Bank ..................... 522,159
-----------
3,362,292
-----------
Real Estate - 0.3%
525,600 DBS Land Ltd. ..................... 894,354
-----------
Total Singapore .................. 4,256,646
===========
South Africa - 0.4%
Diversified Companies - 0.4%
48,600 De Beers Centenary ............... 1,159,331
-----------
</TABLE>
43
<PAGE>
EVERGREEN
International Equity Fund
Schedule of Investments (continued)
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Sweden - 2.4%
Electrical
Equipment &
Services -
2.4%
196,900 AAB, Series B... $ 2,273,976
49,900 Electrolux
AB, Series B ... 4,130,629
------------
6,404,605
------------
Total Sweden 6,404,605
============
Switzerland - 2.8%
Diversified
Companies -
1.0%
21,000 * Oerlikon Buhrle
Holding AG 2,684,521
------------
Finance &
Insurance -
1.2%
2,205 Julius Baer
Holding AG..... 3,291,162
------------
Retailing &
Wholesale -
0.6%
11,404 * Tag Heuer
International
SA........ 1,303,081
12,600 * Tag Heuer
International SA,
ADR....... 144,900
------------
1,447,981
------------
Total
Switzerland..... 7,423,664
============
Thailand - 0.3%
Building,
Construction &
Furnishings - 0.1%
30,900 Siam Cement
Public Co.,
Ltd............. 257,594
------------
Finance &
Insurance -
0.2%
2,700 Bangkok Bank
Public Co.,
Ltd........... 7,174
657,400 IND Finance
Thailand .... 544,829
154,200 Thai Military
Bank Public
Co., Ltd........ 60,139
------------
612,142
------------
Manufacturing -
Distributing - 0.0%
1,420 * One Holding
Public Co., Ltd. 0
------------
Real Estate - 0.0%
3,941 Land & House
Public Co.,
Ltd.
Foreign
Shares....... 3,362
------------
Telecommunication
Services &
Equipment - 0.0%
9,400 Jasmine
International
Public Co.,Ltd.... 4,926
------------
Total Thailand.. 878,024
============
United
Kingdom - 9.4
Automotive
Equipment &
Manufacturing - 0.9%
692,600 Rolls-Royce PLC... 2,486,702
------------
Building,
Construction &
Furnishings - 1.4%
327,775 * Hanson PLC... 1,677,271
804,400 Pilkington PLC ... 2,024,374
------------
3,701,645
------------
Chemical &
Agricultural
Products - 1.3%
225,500 Imperial
Chemical
Industries PLC... 3,329,329
------------
Diversified
Companies - 1.2%
823,400 Cookson Group
PLC............ 3,315,505
------------
Healthcare
Products &
Services - 1.0%
32,800 *
Biocompatible
International
PLC ........... 313,673
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
United Kingdom - continued
652,800 Medeva PLC ... $ 2,267,138
------------
2,580,811
------------
Leisure &
Tourism - 0.6%
616,992 Thistle
Hotels PLC... 1,573,442
============
Other - 1.5%
672,491 Williams
Holdings PLC.. 4,039,215
Telecommunication
Services &
Equipment - 1.5%
1,008,800 * Orange PLC..... 3,854,703
------------
Total United
Kingdom......... 24,881,352
============
Total Common
Stocks (Cost
$231,622,099)... 224,382,269
============
PREFERRED STOCKS - 0.3%
Australia - 0.3%
Publishing,
Broadcasting &
Entertainment - 0.3%
148,050 News Corp. Ltd.... 656,973
------------
Total
Preferred
Stocks (Cost
$699,357)....... 656,973
============
WARRANTS - 0.0%
France - 0.0%
Diversified
Companies - 0.0%
25,300 Eaux
Cie Generale .... 13,377
------------
Healthcare
Products &
Services - 0.0%
32,000 Rhone-
Poulenc SA .... 104,018
------------
Total France... 117,395
============
Total Warrants
(Cost $5,391)... 117,395
============
CALL OPTION PURCHASED - 0.0%
Singapore - 0.3%
Finance &
Insurance - 0.0%
387 * DBS 50 Index,
expires
2/26/98.............. 0
------------
Total Call
Option
Purchased
(Cost $17,000)....... 0
==========
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS - 1.2%
China - 0.5%
Automotive Equipment &
Manufacturing - 0.5%
$1,166,000 Qingling Motors Co., 3.50%,
1/22/2002 ............... 1,171,830
---------
Korea - 0.4%
Electrical Equipment &
Services - 0.4%
1,160,000 Samsung Electronics, .25%,
12/31/2006 ............ 1,102,000
---------
</TABLE>
44
<PAGE>
EVERGREEN
International Equity Fund
Schedule of Investments (continued)
October 31, 1997
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C>
CONVERTIBLE CORPORATE BONDS - continued
Thailand - 0.3%
Finance & Insurance - 0.3%
$1,580,000 Bangkok Bank Public Co.,
Ltd.,
3.25%, 3/3/2004 ......... $ 845,300
------------
Total Corporate Bonds
(Cost $3,927,050)......... 3,119,130
============
Principal
Amount Value
<S> <C> <C>
REPURCHASE AGREEMENT - 14.0%
United States - 14.0%
Repurchase Agreement - 14.0%
$37,179,000 State Street Bank & Trust
Co.,
purchased 10/31/97, 5.55%,
maturing 11/3/97, maturity
value
$37,184,732 (a) (cost,
$37,179,000)........... $ 37,179,000
------------
Total Short-Term Investments
(Cost - $37,179,000)...... 37,179,000
=============
Total Investments -
(Cost $273,449,897)...99.9% 265,454,767
Other Assets and
Liabilities - Net... 0.1% 313,326
----- ------------
Net Assets ......... 100% $265,768,093
===== ==============
</TABLE>
* Non-income producing securities
** Securities that may be resold to "qualified institutional buyers"under Rule
144A of the Securities Act of 1933. These securities have been determined
to be liquid under guidelines established by the Board of Directors.
(a) Repurchase agreements are fully collaterallized by U.S. government and/or
agency obligations based on market prices plus accrued interest at October
31, 1997.
Legend of Portfolio Abbreviations:
ADR American Depository Receipts
GDR Global Depository Receipts
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
Forward Foreign Currency Exchange Contracts to Buy:
Unrealized
U.S. $ Value at In Exchange Appreciation
Exchange Date Contracts to Receive October 31, 1997 for U.S. $ (Depreciation)
- --------------- ---------------------------------------- ------------------ ------------- ---------------
<S> <C> <C> <C> <C> <C>
11/3/97 1,767 Australian Dollar $ 1,243 $ 1,233 $ 10
11/5/97 26,691 Australian Dollar 18,771 18,831 (60)
11/6/97 49,948 Australian Dollar 35,126 35,029 97
11/3/97 161,785 British Pound Sterling 271,434 271,426 8
11/5/97 48,434 British Pound Sterling 81,261 80,808 453
11/5/97 803,126 British Pound Sterling 1,347,446 1,344,915 2,531
11/4/97 2,205,286 Finnish Markka 426,287 425,723 564
11/28/97 4,561,896 French Franc 790,863 790,856 7
11/4/97 8,416,000 French Franc 1,459,021 1,409,243 49,778
11/28/97 795,765 French Franc 137,956 138,766 (810)
12/12/97 41,500,000 French Franc 7,212,675 7,128,772 83,903
11/4/97 288,979 German Marks 167,641 167,515 126
11/3/97 1,913,696 Hong Kong Dollar 247,519 247,439 80
11/6/97 274,293,016 Indonesian Rupiah 76,087 76,193 (106)
11/4/97 399,748 Irish Pound 601,181 594,985 6,196
11/4/97 2,307,200,000 Italian Lira 1,362,788 1,367,635 (4,847)
Forward Foreign Currency Exchange Contracts to Sell:
Contracts to Deliver
---------------------------------------
11/4/97 110,129 British Pound Sterling $ 184,769 $ 183,486 $ (1,283)
11/28/97 12,088,909 French Franc 2,095,767 2,077,275 (18,492)
12/12/97 41,500,000 French Franc 7,212,675 6,772,083 (440,592)
11/5/97 131,292,334 Japanese Yen 1,090,921 1,091,374 453
11/28/97 4,071,510,000 Japanese Yen 33,966,366 35,159,844 1,193,478
11/28/97 593,440,000 Japanese Yen 4,950,743 5,046,859 96,116
11/28/97 341,000,000 Japanese Yen 2,844,775 2,897,565 52,790
10/31/97 76,401,078 South Korean Won 79,172 79,106 (66)
</TABLE>
See combined notes to financial statements.
45
<PAGE>
[GRAPHIC OMITTED]
EVERGREEN
Latin America Fund
[GRAPHIC OMITTED]
Schedule of Investments
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - 62.9%
Argentina - 5.7%
Diversified
Companies - 0.6%
146,483 * CEI Citicorp
Holdings S.A.,
Class B....... $ 586,287
-----------
Finance & Insurance
- 0.8%
51,440 * Banco Bansud
S.A., Class B....... 458,093
13,400 Banco de Galicia y
Buenos Aires
S.A. de C.V., ADR .... 325,369
-----------
783,462
------------
Iron & Steel - 0.7%
314,535 Siderca S.A. ... 771,077
-----------
Oil/Energy - 3.2%
158,079 * Perez Compancia
S.A., Class B...... 990,173
68,925 YPF Sociedad
Anonima, ADR ...... 2,205,600
-------------
3,195,773
------------
Telecommunication
Services &
Equipment - 0.4%
15,200 Telecom Argentina
S.A., ADR ......... 384,750
------------
Total Argentina..... 5,721,349
=============
Brazil - 16.8%
Food & Beverage
Products - 0.7%
21,600 Panamerican Beverages,
Inc., ADR...... 669,600
-----------
Telecommunication
Services &
Equipment - 9.0%
110,700 * Compania
Riograndense de
Telecommunica,
Receipts**...... 85,351
9,668,700 Telecomunicacoes
Brasileiras S.A.
("Telebras") ... 859,391
56,950 Telecomunicacoes
Brasileiras S.A.
("Telebras") ADR .... 5,780,425
1,421,700 Telecomunicacoes de
Parana S.A....... 747,945
69,344 Telecomunicacoes de
Parana S.A.,
Rights ......... 0
7,083,567 * Telecomunicacoes de
Sao Paulo S.A........ 1,509,944
264,483 Telesponsora
Telefonos de Sao
Paulo, Rights ... 240
-----------
8,983,296
-----------
Utilities - 7.1%
6,000,000 * Companhia de
Eletricidade do
Estado
da Bahia ("COELBA") ..... 326,545
3,432,100 Companhia de
Saneamento Basico do
Estado ("SABESP")... 635,084
50,000,000 Companhia
Paranaense de
Energia-Copel ... 585,061
34,000 Companhia
Paranaense de
Energia-Copel, ADR .... 405,875
5,300,000 Companhia Paulista
de Forca e Luz 776,359
8,948,400 Eletrobras S.A..... 3,611,990
2,859,500 Light Participacoes
S.A. ............ 731,443
-----------
7,072,357
------------
Total Brazil ... 16,725,253
===========
Chile - 2.3%
Chemical &
Agricultural
Products - 0.5%
10,600 Sociedad Quimica y
Minera de Chile
S.A., ADR ...... 549,875
-----------
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Chile - continued
Industrial
Specialty Products &
Services - 0.3%
159,968 Madeco S.A. ... $ 333,622
-----------
Paper & Packaging -
0.3%
33,918 Empresas CMPC S.A. 341,632
-----------
Retailing &
Wholesale - 0.4%
19,200 Santa Isabel
S.A., ADR ............ 355,200
-----------
Telecommunication
Services &
Equipment - 0.6%
20,200 Compania de Telecom
de Chile S.A........ 560,550
-----------
Utilities - 0.2%
502,462 Chilgener S.A..... 198,865
------------
Total Chile ... 2,339,744
===========
Colombia - 1.2%
Food & Beverage
Products - 1.2%
110,952 Bavaria ......... 1,172,013
===========
Mexico - 30.1%
Building,
Construction &
Furnishings - 3.8%
119,300 * Bufete Industrial ... 583,339
314,100 Cemex S.A. de C.V. ... 1,378,519
71,700 * Corp. Geo S.A. de
C.V., Series B...... 386,504
58,600 Empresas ICA
Sociedad
Controladora
S.A. de C.V., ADR..... 780,113
34,400 * Tubos de Accro de
Mexico
S.A., ADR. ...... 694,450
------------
3,822,925
------------
Diversified
Companies - 6.4%
138,900 ALFA S.A. de C.V. ...... 1,013,796
74,416 Cifra S.A. de C.V.,
Class A .............. 136,496
233,663 Cifra S.A. de C.V.,
Class B................. 464,818
287,000 Cifra S.A. de C.V.,
Class C ..... 496,303
64,356 Desc S.A. de C.V.,
ADR ............ 2,180,060
327,500 Grupo Carso S.A.
de C.V........... 2,073,971
-----------
6,365,444
-----------
Finance & Insurance - 2.6%
601,000 Grupo Finance
Banamex Accival
S.A. de C.V.,
Series B............. 1,189,815
1,440,000 Grupo Financiero
Bancomer S.A. de
C.V., Class B ... 678,354
499,750 Grupo Financiero
Banorte S.A. de
C.V., Class B ... 685,406
-----------
2,553,575
------------
Food & Beverage
Products - 4.5%
214,700 Fomento Economico
Mexicano, ("FEMSA")
Series B ...... 1,510,710
234,130 GPO Industries
Bimbo................ 1,761,908
769,300 Grupo Industrial
Maseca, Class B....... 743,152
219,421 Tablex S.A. de C.V..... 473,646
-----------
4,489,416
------------
Healthcare Products
& Services - 0.5%
90,000 Grupo Casa Autrey
S.A. de C.V. ............ 161,002
</TABLE>
46
<PAGE>
EVERGREEN
Latin America Fund
Schedule of Investments (continued)
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
COMMON STOCKS - continued
Mexico - continued
18,800 Grupo Casa Autrey
S.A. de C.V., A..... $ 321,950
-----------
482,952
------------
Industrial Specialty
Products &
Services - 1.2%
190,700 Hylsamex S.A. de
C.V., Series B..... 1,228,122
-----------
Metals & Mining - 1.6%
243,000 Industrias Penoles
S.A. de C.V.......... 963,596
88,000 Sanluis Corp
S.A. de C.V..... 680,071
------------
1,643,667
-------------
Machinery -
Diversified - 0.3%
50,000 * Industrias CH S.A.,
Class B...... 256,410
--------------
Manufacturing -
Distributing -
1.1%
1,496,000 * Empaques Ponderosa
S.A. de C.V.,
Class B ......... 1,124,007
-----------
Paper & Packaging -
1.5%
352,000 Kimberly-Clark de
Mexico S.A. de
C.V., Class A ... 1,544,854
-------------
Publishing,
Broadcasting &
Entertainment - 0.7%
23,000 * Grupo Televisa S.A.,
ADR ....... 713,000
-----------
Retailing &
Wholesale - 1.0%
290,000 Organiz Soriana.... 964,937
-------------
Telecommunication
Services &
Equipment - 4.2%
96,750 Telefonos de Mexico
S.A., ("Telmex")
ADR ............ 4,184,437
------------
Utilities - 0.7%
34,700 Empresa Nacional de
Electric, ADR ..... 698,338
------------
Total Mexico...... 30,072,084
=============
Peru - 1.5%
Metals & Mining -
1.5%
172,742 Minas Buenaventura.... 1,501,551
==============
Venezuela - 5.3%
Building,
Construction &
Furnishings - 0.6%
218,153 Corporacion
Venezolana De
Cementos,
Series 1 ......... 441,327
101,579 Corporacion
Venezolana De
Cementos,
Series 2 ......... 203,663
------------
644,990
------------
Diversified
Companies - 0.7%
3,643,814 Mavesa S.A. ...... 657,517
------------
Finance & Insurance
- 2.1%
1,030,900 Banco Provincial
S.A. .... 2,056,591
------------
Utilities - 1.9%
1,480,266 Electricidad
Caracas de......... 1,943,970
-------------
Total Venezuela 5,303,068
=============
Total Common Stocks
(Cost - $63,497,912) 62,835,062
==============
Shares Value
<S> <C> <C>
PREFERRED STOCKS - 21.8%
Brazil - 21.8%
Aerospace & Defense
- 1.0%
75,207,347 * Empresa Brasileira
de Aeronautica..... $ 1,016,454
------------
Automotive
Equipment &
Manufacturing - 0.7%
58,000 * Companhia
Fabricadora de Pecas... 368,271
5,530,000 * Freios Varga S.A. .... 310,998
------------
679,269
------------
Chemical &
Agricultural
Products - 0.1%
3,480,000 Manah S.A. ...... 85,228
------------
Finance &
Insurance - 2.1%
107,473,500 Banco Bradesco S.A. ... 799,386
1,320,000 Banco Itau S.A. .... 532,813
30,600,000 Uniao de Bancos
Brasileiros S.A. .... 776,623
-----------
2,108,822
-----------
Food & Beverage
Products - 0.3%
409,600 Sadia Concordia ... 297,229
-----------
Iron & Steel - 4.1%
291,100,000 Companhia de Acos
Especiais Itabir ... 435,680
190,500 Vale do Rio Doce
Navegacao S.A. ... 3,680,575
------------
4,116,255
------------
Metals &
Mining - 1.2%
24,460,000 * Caemi Mineracao E
Metalurgia S.A. .... 1,187,002
-------------
Machinery -
Diversified - 0.7%
373,700,000 * Inepar S.A.
Industria e
Construcoes ..... 633,878
--------------
Oil / Energy - 3.1%
16,588,800 * Petroleo Brasileiro
S.A. .... 3,084,679
---------------
Telecommunication
Services &
Equipment - 6.9%
3,110,200 Companhia
Riograndense de
Telecomunicacoes ... 2,397,995
13,900,000 * Ericsson Telecom S.A ... 409,769
5,681,500 Telecomunicacoes de
Minas Gerais .... 711,186
150,226 Telecomunicacoes de
Minas Gerais,
Rights ......... 13,627
380,684 Telecomunicacoes de
Parana S.A. ... 198,548
40,317 Telecomunicacoes de
Parana S.A., Rights .... 0
12,332,921 Telecomunicacoes de
Rio de Janeiro S.A...... 1,174,617
478,196 Telecomunicacoes de
Rio de Janiero
S.A., Rights ... 6,506
7,550,860 * Telecomunicacoes de
Sao Paulo .... 1,972,559
233,256 Telesponsora Telefonos
de Sao Paulo,
Rights ...... 212
-----------
6,885,019
------------
Utilities - 1.6%
121,000,000 * Companhia Energetica
Ceara .... 439,022
29,690,700 Companhia Energetica
de Minas Gerais ... 1,184,989
19,176 Companhia Paulista
De Forca e Luz .... 2,696
--------------
1,626,707
--------------
Total Brazil ... 21,720,542
===============
Total Preferred
Stocks
(Cost - $26,813,252) ... 21,720,542
=================
</TABLE>
47
<PAGE>
[GRAPHIC OMITTED]
EVERGREEN
Latin America Fund
[GRAPHIC OMITTED]
Schedule of Investments (continued)
October 31, 1997
<TABLE>
<CAPTION>
Shares Value
<S> <C> <C>
CONVERTIBLE DEBENTURES - 0.0%
Brazil - 0.0%
Iron & Steel - 0.0%
207,800 * Vale do Rio Doce
Navagacao S.A. ** ... $ 19
-----------
Total Convertible
Debentures
(Cost - $0) ...... 19
===========
CORPORATE BONDS - 0.0%
Brazil - 0.0%
Diversified
Companies - 0.0%
200,000 * Mesbla S.A 13.25%,
11/1/96** (b) .... 31,700
-----------
Total Corporate Bonds
(Cost - $214,460) 31,700
===========
PUT OPTION PURCHASED - 0.2%
Brazil - 0.2%
Options - 0.2%
33,000,000 Brazilian Real,
strike price 1.2,
expires 12/1/97 ... 196,656
----------
Total Put Option
Purchased
(Cost - $196,300) ... 196,656
===========
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount Value
<S> <C> <C> <C>
REPURCHASE AGREEMENT - 16.0%
United States - 16.0%
Repurchase Agreement - 16.0%
$15,975,000 Keystone Joint Repurchase
Agreement, Investments in repurchase
agreements, in a joint trading
account purchased 10/31/97, 5.73%,
maturity value $15,982,524 (a) (cost,
$15,975,000)..................... $ 15,975,000
-------------
Total Repurchase Agreement
(Cost - $15,975,000) ............ 15,975,000
==============
Total Investments -
(Cost $106,696,924)... 100.9% 100,758,979
Other Assets And
Liabilities - Net ... ( 0.9%) (906,144)
-------- --------------
Net Assets ......... 100% $ 99,852,835
======== ===============
</TABLE>
* Non-income producing securities
** Illiquid securities. The total market value of these illiquid securities at
October 31, 1997 is $117,070 (0.12% of the Fund's net assets).
(a) The repurchase agreements are fully collateralized by U.S. government
and/or agency obligations based on market prices plus accrued interest at
October 31, 1997.
(b) Securities which have defaulted on payment of interest and/or principal.
The Fund has stopped accruing income on those so identified. At October 31,
1997, the fair value of this security is $31,700 (0.03% of the Fund's net
assets).
Legend of Portfolio Abbreviations:
ADR American Depository Receipts
GDR Global Depository Receipts
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
<TABLE>
<CAPTION>
Forward Foreign Currency Exchange Contracts to Buy:
Unrealized
U.S. $ Value at In Exchange Appreciation
Exchange Date Contracts to Receive October 31, 1997 for U.S. $ (Depreciation)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11/3/97 472,317 Brazilian Real $428,425 $428,328 $ 97
11/3/97 1,014,016 Brazilian Real 919,784 919,575 209
11/3/97 820,442 Brazilian Real 744,198 744,706 (508)
10/31/97 169,204 Brazilian Real 153,480 153,125 355
Forward Foreign Currency Exchange Contracts to Sell:
Contracts to Deliver
- -----------------------------------------------------------------------------------------------------
10/31/97 1,048,844 Brazilian Real $951,376 $951,074 $ (302)
10/30/97 659,018 Brazilian Real 597,776 598,672 896
10/30/97 515,992 Brazilian Real 468,041 468,743 702
10/30/97 502,038 Brazilian Real 455,383 456,066 683
10/31/97 438,680 Brazilian Real 397,914 397,788 (126)
10/30/97 326,408 Brazilian Real 296,075 296,519 444
10/30/97 323,113 Brazilian Real 293,087 293,526 439
10/30/97 287,455 Brazilian Real 260,742 261,133 391
10/30/97 280,341 Brazilian Real 254,289 254,670 381
10/30/97 209,469 Brazilian Real 190,003 190,288 285
10/30/97 82,552 Brazilian Real 74,880 74,992 112
10/30/97 61,786 Brazilian Real 56,045 56,129 84
11/3/97 89,276 Brazilian Real 80,980 80,962 (18)
11/3/97 675,974 Brazilian Real 613,156 613,017 (139)
10/30/97 423,944,488 Columbian Peso 330,497 333,355 2,858
</TABLE>
See combined notes to financial statements.
48
<PAGE>
[GRAPHIC OMITTED]
EVERGREEN
International & Global Growth Funds
[GRAPHIC OMITTED]
Statements of Assets and Liabilities
October 31, 1997
<TABLE>
<CAPTION>
Evergreen Evergreen
Emerging Markets Global Leaders
Growth Fund Fund
- -------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Investments at cost ........................... $74,173,434 $191,718,042
Unrealized appreciation (depreciation) ......... (451,961) 18,768,955
- -------------------------------------------------------------------------------------
Investments at value ........................... 73,721,473 210,486,997
Foreign currency, at value (identified
cost - $31,576, $32,610, $52,967,
$2,553,654, and $556,465, respectively)......... 29,156 33,150
Cash .......................................... 6,484 0
Receivable for investments sold ............... 1,037,224 1,684,389
Receivable for Fund shares sold ............... 13,271 878,962
Dividends and interest receivable ............... 52,850 276,558
Unrealized appreciation on open forward
foreign currency exchange contracts ............ 4,715 0
Foreign tax reclaim receivable .................. 0 69,921
Unamortized organization expenses ............... 18,796 23,763
Prepaid expenses and other assets ............... 14,918 61,453
- -------------------------------------------------------------------------------------
Total assets ................................. 74,898,887 213,515,193
- -------------------------------------------------------------------------------------
Liabilities
Due to custodian bank ........................... 0 1,834,548
Payable for investments purchased ............... 5,425,941 197,829
Payable for Fund shares repurchased ............ 62,866 161,670
Distribution fee payable ........................ 11,197 144,000
Due to related parties ........................ 104,197 123,505
Unrealized depreciation on open forward
foreign currency exchange contracts ............ 9,658 0
Foreign taxes payable ........................... 220 16,276
Accrued expenses and other liabilities ......... 63,884 211,932
- -------------------------------------------------------------------------------------
Total liabilities ........................... 5,677,963 2,689,760
- -------------------------------------------------------------------------------------
Net assets ....................................... $69,220,924 $210,825,433
=====================================================================================
Net assets represented by
Paid-in capital ................................. $68,352,883 $191,174,678
Undistributed (distributions in excess of) net
investment income (loss) ..................... 66,746 (9,878)
Accumulated undistributed net realized gain
(loss) on investments and foreign currency
related transactions ........................... 1,257,422 888,333
Net unrealized appreciation (depreciation) on
investments and foreign currency related
transactions ................................. (456,127) 18,772,300
- -------------------------------------------------------------------------------------
Total net assets .............................. $69,220,924 $210,825,433
=====================================================================================
Net assets consists of
Class A ....................................... $ 2,776,796 $ 38,603,853
Class B ....................................... 4,020,156 134,375,411
Class C ....................................... 1,282,132 2,385,594
Class Y ....................................... 61,141,840 35,460,575
- -------------------------------------------------------------------------------------
$69,220,924 $210,825,433
=====================================================================================
Shares outstanding
Class A ....................................... 277,892 2,823,790
Class B ....................................... 407,935 9,936,877
Class C ....................................... 130,192 176,636
Class Y ....................................... 6,086,862 2,586,664
- -------------------------------------------------------------------------------------
Net asset value per share
Class A ....................................... $ 9.99 $ 13.67
=====================================================================================
Class A - Offering price (based on sales
charge of 4.75%) .............................. $ 10.49 $ 14.35
=====================================================================================
Class B ....................................... $ 9.85 $ 13.52
=====================================================================================
Class C ....................................... $ 9.85 $ 13.51
=====================================================================================
Class Y ....................................... $ 10.04 $ 13.71
=====================================================================================
<CAPTION>
Evergreen Evergreen Evergreen
Global Real Estate International Equity Latin America
Equity Fund Fund Fund
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments at cost ........................... $ 35,691,976 $273,449,897 $106,696,924
Unrealized appreciation (depreciation) ......... 55,496 (7,995,130) (5,937,945)
- --------------------------------------------------------------------------------------------------------------
Investments at value ........................... 35,747,472 265,454,767 100,758,979
Foreign currency, at value (identified
cost - $31,576, $32,610, $52,967,
$2,553,654, and $556,465, respectively)......... 33,673 2,547,272 551,040
Cash .......................................... 1,742 100,752 11,361
Receivable for investments sold ............... 868,593 9,207,451 6,378,840
Receivable for Fund shares sold ............... 0 664,577 330,313
Dividends and interest receivable ............... 19,879 521,879 96,939
Unrealized appreciation on open forward
foreign currency exchange contracts ............ 0 1,486,590 7,936
Foreign tax reclaim receivable .................. 55,387 107,965 645
Unamortized organization expenses ............... 0 13,640 13,160
Prepaid expenses and other assets ............... 46,321 43,711 26,631
- ------------------------------------------------------------------------------------------------------------
Total assets ................................. 36,773,067 280,148,604 108,175,844
- ------------------------------------------------------------------------------------------------------------
Liabilities
Due to custodian bank ........................... 775,000 2,821,600 0
Payable for investments purchased ............... 0 10,572,869 7,538,910
Payable for Fund shares repurchased ............ 5,884 42,872 545,825
Distribution fee payable ........................ 519 23,288 110,517
Due to related parties ........................ 22,244 290,019 83,964
Unrealized depreciation on open forward
foreign currency exchange contracts ............ 0 466,256 1,093
Foreign taxes payable ........................... 7,341 43,970 834
Accrued expenses and other liabilities ......... 71,479 119,637 41,866
- ------------------------------------------------------------------------------------------------------------
Total liabilities ........................... 882,467 14,380,511 8,323,009
- ------------------------------------------------------------------------------------------------------------
Net assets ....................................... $ 35,890,600 $265,768,093 $ 99,852,835
============================================================================================================
Net assets represented by
Paid-in capital ................................. $ 40,990,537 $256,692,907 $ 84,700,295
Undistributed (distributions in excess of) net
investment income (loss) ..................... (18,581) 5,226,484 (2,760)
Accumulated undistributed net realized gain
(loss) on investments and foreign currency
related transactions ........................... (5,117,558) 10,933,681 21,101,621
Net unrealized appreciation (depreciation) on
investments and foreign currency related
transactions ................................. 36,202 (7,084,979) (5,946,321)
- ------------------------------------------------------------------------------------------------------------
Total net assets .............................. $ 35,890,600 $265,768,093 $ 99,852,835
============================================================================================================
Net assets consists of
Class A ....................................... $ 336,486 $ 9,269,541 $ 13,620,780
Class B ....................................... 213,340 22,163,817 75,270,852
Class C ....................................... 106,425 428,949 10,961,203
Class Y ....................................... 35,234,349 233,905,786 0
- ------------------------------------------------------------------------------------------------------------
$ 35,890,600 $265,768,093 $ 99,852,835
============================================================================================================
Shares outstanding
Class A ....................................... 26,001 837,704 1,035,649
Class B ....................................... 16,810 2,017,142 5,830,798
Class C ....................................... 8,378 38,810 848,711
Class Y ....................................... 2,715,847 21,061,667 0
- ------------------------------------------------------------------------------------------------------------
Net asset value per share
Class A ....................................... $ 12.94 $ 11.07 $ 13.15
============================================================================================================
Class A - Offering price (based on sales
charge of 4.75%) .............................. $ 13.59 $ 11.62 $ 13.81
============================================================================================================
Class B ....................................... $ 12.69 $ 10.99 $ 12.91
============================================================================================================
Class C ....................................... $ 12.70 $ 11.05 $ 12.92
============================================================================================================
Class Y ....................................... $ 12.97 $ 11.11
============================================================================================================
</TABLE>
See Combined Notes to Financial Statements.
49
<PAGE>
[GRAPHIC OMITTED]
EVERGREEN
International & Global Growth Funds
[GRAPHIC OMITTED]
Statements of Operations
For the year ended October 31, 1997
<TABLE>
<CAPTION>
Evergreen Evergreen
Emerging Markets Global Leaders
Growth Fund Fund
- ---------------------------------------------------------------------------------
<S> <C> <C>
Investment income
Dividends (net of foreign withholding
taxes of $69,506, $224,188, $68,486,
$395,692 and $77,690, respectively) ...... $ 555,608 $ 2,451,826
Interest ................................. 262,933 255,722
- ------------------------------------------------------------------------------
Total income .............................. 818,541 2,707,548
Expenses
Management fee ........................... 703,822 1,398,605
Distribution Plan expenses ............... 49,907 981,969
Transfer agent fees ........................ 39,083 579,048
Trustees' fees ........................... 889 11,510
Custodian fees ........................... 99,902 154,416
Administrative and services fees ......... 17,363 53,874
Professional fees ........................ 20,990 25,044
Printing ................................. 10,832 206,881
Registration fees ........................ 28,873 94,596
Amortization of organization expenses ...... 10,180 7,891
Other .................................... 12,704 10,611
- ------------------------------------------------------------------------------
Total expenses ........................... 994,545 3,524,445
Less: Indirectly paid expenses ............ (3,592) (4,192)
Fee waivers and/or reimbursement
from Investment Adviser ............ (240,240) (113,024)
- ------------------------------------------------------------------------------
Net expenses .............................. 750,713 3,407,229
- ------------------------------------------------------------------------------
Net investment income (loss) ............... 67,828 (699,681)
==============================================================================
Net realized and unrealized gain (loss) on
investments and foreign currency
related transactions
Net realized gain (loss) from
Investments .............................. 3,347,991 1,610,743
Foreign currency related transactions ... (244,302) (6,682)
- ------------------------------------------------------------------------------
Net realized gain on investments and
foreign currency related transactions ... 3,103,689 1,604,061
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency related transactions ... (419,272) 15,243,876
- ------------------------------------------------------------------------------
Net realized and unrealized gain on
investments and foreign currency
related transactions ..................... 2,684,417 16,847,937
- ------------------------------------------------------------------------------
Net increase in net assets
resulting from operations ............... $2,752,245 $16,148,256
==============================================================================
<CAPTION>
Evergreen Evergreen Evergreen
Global Real Estate International Latin America
Equity Fund Equity Fund Fund
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment income
Dividends (net of foreign withholding
taxes of $69,506, $224,188, $68,486,
$395,692 and $77,690, respectively) ...... $ 650,377 $ 3,054,824 $ 2,204,642
Interest ................................. 9,487 905,617 37,954
- -------------------------------------------------------------------------------------------------
Total income .............................. 659,864 3,960,441 2,242,596
Expenses
Management fee ........................... 410,740 1,543,621 869,691
Distribution Plan expenses ............... 4,404 215,948 1,049,546
Transfer agent fees ........................ 99,937 139,289 408,628
Trustees' fees ........................... 25,753 7,176 14,808
Custodian fees ........................... 95,926 306,800 255,426
Administrative and services fees ......... 0 75,362 22,183
Professional fees ........................ 27,008 35,615 19,161
Printing ................................. 27,880 55,474 64,109
Registration fees ........................ 56,612 61,341 17,144
Amortization of organization expenses ...... 0 14,560 8,563
Other .................................... 37,107 14,543 7,015
- -------------------------------------------------------------------------------------------------
Total expenses ........................... 785,367 2,469,729 2,736,274
Less: Indirectly paid expenses ............ (864) (8,748) (10,003)
Fee waivers and/or reimbursement
from Investment Adviser ............ (33,874) (232,680) 0
- -------------------------------------------------------------------------------------------------
Net expenses .............................. 750,629 2,228,301 2,726,271
- -------------------------------------------------------------------------------------------------
Net investment income (loss) ............... (90,765) 1,732,140 (483,675)
=================================================================================================
Net realized and unrealized gain (loss) on
investments and foreign currency
related transactions
Net realized gain (loss) from
Investments .............................. 1,982,501 12,954,712 39,731,573
Foreign currency related transactions ... (41,372) 3,015,387 (3,644,273)
- -------------------------------------------------------------------------------------------------
Net realized gain on investments and
foreign currency related transactions ... 1,941,129 15,970,099 36,087,300
Net change in unrealized appreciation
(depreciation) of investments and
foreign currency related transactions ... 302,113 (13,032,715) (17,271,713)
- -------------------------------------------------------------------------------------------------
Net realized and unrealized gain on
investments and foreign currency
related transactions ..................... 2,243,242 2,937,384 18,815,587
- -------------------------------------------------------------------------------------------------
Net increase in net assets
resulting from operations ............... $2,152,477 $ 4,669,524 $ 18,331,912
=================================================================================================
</TABLE>
See Combined Notes to Financial Statements.
50
<PAGE>
[GRAPHIC OMITTED]
EVERGREEN
International & Global Growth Funds
[GRAPHIC OMITTED]
Statements of Changes in Net Assets
For the year ended October 31, 1997
<TABLE>
<CAPTION>
Evergreen Evergreen
Emerging Markets Global Leaders
Growth Fund Fund
- -----------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income (loss) ............... $ 67,828 $ (699,681)
Net realized gain on investments and
foreign currency related transactions ...... 3,103,689 1,604,061
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency related transactions ...... (419,272) 15,243,876
- ---------------------------------------------------------------------------------
Net increase in net assets resulting
from operations ........................... 2,752,245 16,148,256
- ---------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income:
Class A .................................... 0 0
Class B .................................... 0 0
Class C .................................... 0 0
Class Y .................................... 0 0
In excess of net investment income:
Class B .................................... 0 0
Class C .................................... 0 0
Net realized gain on investments:
Class A .................................... 0 (15,146)
Class B .................................... 0 (48,643)
Class C .................................... 0 (735)
Class Y .................................... 0 (19,126)
- ---------------------------------------------------------------------------------
Total distributions to shareholders ......... 0 (83,650)
- ---------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold .................. 44,864,733 135,313,747
Payment for shares redeemed .................. (11,964,860) (14,708,624)
Net asset value of shares issued in
reinvestment of distributions ............... 0 72,520
- ---------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from capital share
transactions .............................. 32,899,873 120,677,643
- ---------------------------------------------------------------------------------
Total increase (decrease) in net
assets .................................... 35,652,118 136,742,249
Net assets
Beginning of year ........................... 33,568,806 74,083,184
- ---------------------------------------------------------------------------------
End of year ................................. $ 69,220,924 $ 210,825,433
=================================================================================
Undistributed (distributions in excess of) net
investment income ........................... $ 66,746 $ (9,878)
=================================================================================
<CAPTION>
Evergreen Evergreen Evergreen
Global Real Estate International Latin America
Equity Fund Equity Fund Fund
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Net investment income (loss) ............... $ (90,765) $ 1,732,140 $ (483,675)
Net realized gain on investments and
foreign currency related transactions ...... 1,941,129 15,970,099 36,087,300
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency related transactions ...... 302,113 (13,032,715) (17,271,713)
- -----------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations ........................... 2,152,477 4,669,524 18,331,912
- -----------------------------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income:
Class A .................................... 0 (107,348) (91,845)
Class B .................................... 0 (116,095) (139,227)
Class C .................................... 0 (1,194) 0
Class Y .................................... (76,344) (2,176,422) 0
In excess of net investment income:
Class B .................................... 0 0 (430,575)
Class C .................................... 0 0 (62,177)
Net realized gain on investments:
Class A .................................... 0 0 0
Class B .................................... 0 0 0
Class C .................................... 0 0 0
Class Y .................................... 0 0 0
- ------------------------------------------------------------------------------------------------------
Total distributions to shareholders ......... (76,344) (2,401,059) (723,824)
- ------------------------------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold .................. 1,779,852 164,093,117 35,265,301
Payment for shares redeemed .................. (16,374,343) (48,052,334) (52,499,496)
Net asset value of shares issued in
reinvestment of distributions ............... 43,582 1,232,582 639,781
- ----------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from capital share
transactions .............................. (14,550,909) 117,273,365 (16,594,414)
- -----------------------------------------------------------------------------------------------------
Total increase (decrease) in net
assets .................................... (12,474,776) 119,541,830 1,013,674
Net assets
Beginning of year ........................... 48,365,376 146,226,263 98,839,161
- ------------------------------------------------------------------------------------------------------
End of year ................................. $ 35,890,600 $265,768,093 $ 99,852,835
=======================================================================================================
Undistributed (distributions in excess of) net
investment income ........................... $ (18,581) $ 5,226,484 $ (2,760)
======================================================================================================
</TABLE>
See Combined Notes to Financial Statements.
51
<PAGE>
[GRAPHIC OMITTED]
EVERGREEN
International & Global Growth Funds
[GRAPHIC OMITTED]
Statements of Changes in Net Assets
For the year ended October 31, 1996
<TABLE>
<CAPTION>
Evergreen Evergreen
Emerging Markets Global Leaders
Growth Fund Fund
- -----------------------------------------------------------------------------------
<S> <C> <C>
Operations
Net investment income (loss) ............... $ (4,321) $ 2,343
Net realized gain (loss) on investments
and foreign currency related
transactions .............................. (96,636) 77,271
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency related transactions ...... (38,536) 3,528,424
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .................. (139,493) 3,608,038
- --------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income:
Class A .................................... (6,742) 0
Class B .................................... 0 0
Class C .................................... 0 0
Class Y .................................... (81,928) (2,343)
In excess of net investment income:
Class A .................................... 0 0
Class B .................................... 0 0
Class C .................................... 0 0
Class Y .................................... 0 (17,247)
- --------------------------------------------------------------------------------
Total distributions to shareholders ...... (88,670) (19,590)
- --------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold .................. 24,970,951 72,602,018
Proceeds from shares issued from
acquisition of FFB Diversified
International Growth Fund .................. 0 0
Payment for shares redeemed .................. (3,663,950) (2,122,493)
Net asset value of shares issued in
reinvestment of distributions ............... 22,693 14,211
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from capital share
transactions .............................. 21,329,694 70,493,736
- --------------------------------------------------------------------------------
Total increase (decrease) in net
assets .................................... 21,101,531 74,082,184
Net assets
Beginning of year ........................... 12,467,275 1,000
- --------------------------------------------------------------------------------
End of year ................................. $ 33,568,806 $ 74,083,184
================================================================================
Undistributed (distributions in excess of) net
investment income ........................... $ (328) $ (2,299)
================================================================================
<CAPTION>
Evergreen
Evergreen International Evergreen
Global Real Estate Equity Latin America
Equity Fund Fund Fund
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Net investment income (loss) ............... $ 66,648 $ 2,119,654 $ 2,640,542
Net realized gain (loss) on investments
and foreign currency related
transactions .............................. 495,328 (823,687) 5,955,109
Net change in unrealized appreciation
(depreciation) on investments and
foreign currency related transactions ...... 3,504,138 5,669,016 7,956,482
- --------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations .................. 4,066,114 6,964,983 16,552,133
- --------------------------------------------------------------------------------------------------
Distributions to shareholders from
Net investment income:
Class A .................................... 0 (39,834) (361,523)
Class B .................................... 0 (23,543) (2,175,018)
Class C .................................... 0 (59) (231,347)
Class Y .................................... 0 (645,172) 0
In excess of net investment income:
Class A .................................... 0 0 (61,278)
Class B .................................... 0 0 (368,664)
Class C .................................... 0 0 (39,213)
Class Y .................................... 0 0 0
- --------------------------------------------------------------------------------------------------
Total distributions to shareholders ...... - (708,608) (3,237,043)
- --------------------------------------------------------------------------------------------------
Capital share transactions
Proceeds from shares sold .................. 16,042,743 63,370,539 10,584,948
Proceeds from shares issued from
acquisition of FFB Diversified
International Growth Fund .................. 0 29,658,717 0
Payment for shares redeemed .................. (33,339,082) (14,067,718) (50,668,403)
Net asset value of shares issued in
reinvestment of distributions ............... 0 365,798 2,867,537
- --------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from capital share
transactions .............................. (17,296,339) 79,327,336 (37,215,918)
- --------------------------------------------------------------------------------------------------
Total increase (decrease) in net
assets .................................... (13,230,225) 85,583,711 (23,900,828)
Net assets
Beginning of year ........................... 61,595,601 60,642,552 122,739,989
- --------------------------------------------------------------------------------------------------
End of year ................................. $ 48,365,376 $146,226,263 $ 98,839,161
==================================================================================================
Undistributed (distributions in excess of) net
investment income ........................... $ 32,553 $ 1,837,370 $ 993,649
==================================================================================================
</TABLE>
See Combined Notes to Financial Statements.
52
<PAGE>
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Combined Notes to Financial Statements
1. ORGANIZATION
The Evergreen International & Global Growth Funds consist of Evergreen Emerging
Markets Growth Fund ("Emerging Markets"), Evergreen Global Leaders Fund
("Global Leaders"), Evergreen Global Real Estate Equity Fund ("Global Real
Estate"), Evergreen International Equity Fund ("International") and Evergreen
Latin America Fund ("Latin America"), (formerly Keystone Fund of the Americas),
each of which are registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as diversified, open-end management investment
companies. Global Leaders and Global Real Estate are separate series of the
Evergreen Equity Trust (formerly Evergreen Real Estate Equity Trust), a
Massachusetts business trust organized in 1988. Emerging Markets and
International are separate series of Evergreen Investment Trust (formerly First
Union Funds), a Massachusetts business trust organized in 1984. Latin America
is a Massachusetts business trust organized in 1993. Emerging Markets, Global
Leaders, Global Real Estate, International and Latin America are collectively
referred to herein as the "Funds".
The Funds offer Class A, Class B, Class C and Class Y shares with the exception
of Latin America which offers Class A, Class B, and Class C shares. Class A
shares are sold with a maximum front-end sales charge of 4.75%. Class B and
Class C shares are sold without a front end sales charge, but pay a higher
ongoing distribution fee than Class A shares. Class B shares are sold subject
to a contingent deferred sales charge that is payable upon redemption and
decreases depending on how long the shares have been held. Class B shares
purchased after January 1, 1997 will automatically convert to Class A shares
after seven years. Class B shares purchased prior to January 1, 1997 retain
their existing conversion rights. Class C shares are sold subject to a
contingent deferred sales charge payable on shares redeemed within one year
after the month of purchase. Class Y shares are sold at net asset value and are
not subject to contingent deferred sales charges or distribution fees. Class Y
shares are sold only to investment advisory clients of First Union Corporation
("First Union") and its affiliates, certain institutional investors or Class Y
shareholders of record of certain other funds managed by First Union and its
affiliates as of December 30, 1994.
2. ACQUISITION INFORMATION
Effective January 1, 1996, First Fidelity Bancorporation ("First Fidelity")
merged with First Union. Effective at the close of business on January 19,
1996, International acquired substantially all of the net assets of FFB
Diversified International Growth Fund, an open-end management investment
company managed by a subsidiary of First Fidelity registered under the Act,
valued at $29,658,717. The net assets were exchanged through a non-taxable
transaction for 2,898,154 Class Y Shares of International valued at $10.23 per
share. The acquired net assets consisted primarily of portfolio securities with
unrealized appreciation of $1,835,426. The aggregate net assets of
International after the acquisition were $104,471,175.
3. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Funds in the preparation of their financial statements. The
policies are in conformity with generally accepted accounting principles, which
require management to make estimates and assumptions that affect amounts
reported herein. Actual results could differ from these estimates.
A. Valuation of Securities
The Funds value investments traded on an established exchange on the basis of
the last sales price on the exchange where primarily traded. The Funds value
securities traded in the over-the counter market at the mean between the bid
and asked prices. Securities for which market quotations are not available from
an independent pricing service, are valued at fair value as determined in good
faith according to procedures approved by the Board of Trustees. Short-term
investments with remaining maturities of 60 days or less are carried at
amortized cost, which approximates market value.
B. Repurchase Agreements
Each Fund may invest in repurchase agreements. Securities pledged as collateral
for repurchase agreements are held by the custodian on the Fund's behalf. Each
Fund monitors the adequacy of the collateral daily and will require the seller
to provide additional collateral in the event the market value of the
securities pledged falls below the carrying value of the repurchase agreement,
including accrued interest. Each Fund will only enter into repurchase
agreements with banks and other financial institutions which are deemed by the
investment adviser to be creditworthy pursuant to guidelines established by the
Board of Trustees.
Pursuant to an exemptive order issued by the Securities and Exchange
Commission, Latin America, along with certain other funds managed by Keystone
Investment Management Company ("Keystone"), may transfer uninvested cash
balances into a joint trading account. These balances are invested in one or
more repurchase agreements that are fully collateralized by U.S. Treasury
and/or federal agency obligations.
53
<PAGE>
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Combined Notes to Financial Statements (continued)
C. Foreign Currency
The books and records of the Funds are maintained in United States (U.S.)
dollars. Foreign currency amounts are translated into United States dollars as
follows: market value of investments, other assets and liabilities at the daily
rate of exchange; purchases and sales of investments, income and expenses at
the rate of exchange prevailing on the respective dates of such transactions.
Net unrealized foreign exchange gain (loss) resulting from changes in foreign
currency exchange rates is a component of net unrealized appreciation
(depreciation) on investments and foreign currency related transactions. Net
realized foreign currency gains and losses resulting from changes in exchange
rates include foreign currency gains and losses between trade date and
settlement date on investment securities transactions, foreign currency related
transactions and the difference between the amounts of interest and dividends
recorded on the books of the Fund and the amounts that are actually received
and are included in realized gain (loss) on foreign currency related
transactions. The portion of foreign currency gains and losses related to
fluctuations in exchange rates between the initial purchase trade date and
subsequent sale trade date is included in realized gain (loss) on foreign
currency related transactions.
D. Futures Contracts
In order to gain exposure to or protect against changes in security values, the
Funds may buy and sell futures contracts.
The initial margin deposited with a broker when entering into a futures
transaction is subsequently adjusted by daily payments or receipts as the value
of the contract changes. Such changes are recorded as unrealized gains or
losses. Realized gains or losses are recognized on closing the contract.
Risks of entering into futures contracts include (i) the possibility of an
illiquid market for the contract, (ii) the possibility that a change in the
value of the contract may not correlate with changes in the value of the
underlying instrument or index, and (iii) the credit risk that the other party
will not fulfill their obligations under the contract. Futures contracts also
involve elements of market risk in excess of the amount reflected in the
statement of assets and liabilities.
E. Forward Foreign Currency Exchange Contracts
The Funds may enter into forward foreign currency exchange contracts ("forward
contracts") to settle portfolio purchases and sales of securities denominated
in a foreign currency and to hedge certain foreign currency assets or
liabilities. Forward contracts are recorded at the forward rate and
marked-to-market daily. Realized gains and losses arising from such
transactions are included in net realized gain (loss) on foreign currency
related transactions. The Fund bears the risk of an unfavorable change in the
foreign currency exchange rate underlying the forward contract and is subject
to the credit risk that the other party will not fulfill their obligations
under the contract. Forward contracts involve elements of market risk in excess
of the amount reflected in the statement of assets and liabilities.
F. Security Transactions and Investment Income
Securities transactions are accounted for no later than one business day after
the trade date. Realized gains and losses are computed on the identified cost
basis. Interest income is recorded on the accrual basis and includes accretion
of discounts and amortization of premiums. Dividend income is recorded on the
ex-dividend date, or in the case of some foreign securities, on the date
thereafter when the Fund is made aware of the dividend. Foreign income may be
subject to foreign withholding taxes which are accrued as applicable. Capital
gains realized on some foreign securities are subject to foreign taxes and are
accrued as applicable.
G. Federal Taxes
The Funds have qualified and intend to continue to qualify as regulated
investment companies under the Internal Revenue Code of 1986, as amended (the
"Code"). Thus, the Funds will not incur any federal income tax liability since
they are expected to distribute all of their net investment company taxable
income and net capital gains, if any, to their shareholders. The Funds also
intend to avoid excise tax liability by making the required distributions under
the Code. Accordingly, no provision for federal taxes is required. To the
extent that realized capital gains can be offset by capital loss carryforwards,
it is each Fund's policy not to distribute such gains.
H. Distributions
Distributions from net investment income for the Funds are declared and paid
annually. Distributions from net realized capital gains, if any, are paid at
least annually. Distributions to shareholders are recorded at the close of
business on the ex-dividend date.
Income and capital gains distributions to shareholders are determined in
accordance with income tax regulations, which may differ from generally
accepted accounting principles. The significant differences between financial
statement amounts available for distributions and distributions made in
accordance with income tax regulations are primarily due to differing treatment
for net operating losses and certain distributions received from passive
foreign investment companies.
54
<PAGE>
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Combined Notes to Financial Statements (continued)
I. Class Allocations
Income, expenses (other than class specific expenses) and realized and
unrealized gains and losses are prorated among the classes based on the
relative net assets of each class. Currently, class specific expenses are
limited to expenses incurred under the Distribution Plans for each class.
J. Organization Expenses
Organization expenses are amortized to operations over a five-year period on a
straight-line basis. In the event any of the initial shares of the Funds are
redeemed by any holder during the five-year amortization period, redemption
proceeds will be reduced by any unamortized organization expenses in the same
proportion as the number of initial shares being redeemed bears to the number
of initial shares outstanding at the time of the redemption.
4. CAPITAL SHARE TRANSACTIONS
Latin America has an unlimited number of shares of beneficial interest with no
par value authorized. Emerging Markets, Global Leaders, Global Real Estate and
International have an unlimited number of shares of beneficial interest with a
par value of $0.0001 authorized. Shares of beneficial interest of the Funds are
currently divided into Class A, Class B, Class C and Class Y with the exception
of Latin America which does not offer Class Y shares. Transactions in shares of
the Funds were as follows:
- --------------------------------------------------------------------------------
EMERGING MARKETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1997 October 31, 1996
----------------------------- -----------------------------
Shares Amount Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold ......................................................... 373,278 $ 3,938,592 108,210 $ 958,874
Shares redeemed ................................................... (289,832) (3,032,756) (55,942) (493,377)
Shares issued on reinvestment of distributions ..................... 0 0 817 6,713
- -------------------------------------------------------------------------------------------------------------------------------
Net increase ...................................................... 83,446 905,836 53,085 472,210
- -------------------------------------------------------------------------------------------------------------------------------
Class B
Shares sold ......................................................... 164,864 1,717,956 147,629 1,317,529
Shares redeemed ................................................... (100,251) (1,000,964) (51,462) (443,501)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase ...................................................... 64,613 716,992 96,167 874,028
- -------------------------------------------------------------------------------------------------------------------------------
Class C
Shares sold ......................................................... 128,876 1,301,468 8,040 72,696
Shares redeemed ................................................... (8,773) (93,284) (5,067) (43,102)
- -------------------------------------------------------------------------------------------------------------------------------
Net increase ...................................................... 120,103 1,208,184 2,973 29,594
- -------------------------------------------------------------------------------------------------------------------------------
Class Y
Shares sold ......................................................... 3,444,422 37,906,717 2,531,857 22,621,852
Shares redeemed ................................................... (770,870) (7,837,856) (301,830) (2,683,970)
Shares issued on reinvestment of distributions ..................... 0 0 1,942 15,980
- -------------------------------------------------------------------------------------------------------------------------------
Net increase ...................................................... 2,673,552 30,068,861 2,231,969 19,953,862
- -------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 2,941,714 $ 32,899,873 2,384,194 $ 21,329,694
===============================================================================================================================
</TABLE>
55
<PAGE>
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Combined Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
GLOBAL LEADERS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1997 October 31, 1996
----------------------------- --------------------------
Shares Amount Shares Amount
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A
Shares sold ......................................................... 2,037,338 $ 26,561,220 1,128,476 $ 12,914,033
Shares redeemed ................................................... (304,314) (4,039,813) (38,955) (450,952)
Shares issued on reinvestment of distributions ..................... 1,245 15,030 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Net increase ...................................................... 1,734,269 22,536,437 1,089,521 12,463,081
- -------------------------------------------------------------------------------------------------------------------------------
Class B
Shares sold ......................................................... 6,953,600 90,590,909 3,561,481 40,763,569
Shares redeemed ................................................... (555,510) (7,324,691) (26,709) (307,417)
Shares issued on reinvestment of distributions ..................... 4,015 48,220 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Net increase ...................................................... 6,402,105 83,314,438 3,534,772 40,456,152
- -------------------------------------------------------------------------------------------------------------------------------
Class C
Shares sold ......................................................... 173,061 2,249,794 48,546 557,221
Shares redeemed ................................................... (43,171) (592,995) (1,852) (21,683)
Shares issued on reinvestment of distributions ..................... 52 629 0 0
- -------------------------------------------------------------------------------------------------------------------------------
Net increase ...................................................... 129,942 1,657,428 46,694 535,538
- -------------------------------------------------------------------------------------------------------------------------------
Class Y
Shares sold ......................................................... 1,227,611 15,911,824 1,680,883 18,367,195
Shares redeemed ................................................... (203,730) (2,751,116) (120,293) (1,342,441)
Shares issued on reinvestment of distributions ..................... 715 8,632 1,378 14,211
- -------------------------------------------------------------------------------------------------------------------------------
Net increase ...................................................... 1,024,596 13,169,340 1,561,968 17,038,965
- -------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions 9,290,912 $120,677,643 6,232,955 $ 70,493,736
===============================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
GLOBAL REAL ESTATE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
October 31, 1997
--------------------------------
Shares Amount
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A
Shares sold ......................................................... 40,811 $ 505,405
Shares redeemed ................................................... (73,533) (893,699)
- ----------------------------------------------------------------------------------------------------
Net increase ...................................................... (32,722) (388,294)
- ----------------------------------------------------------------------------------------------------
Class B
Shares sold ......................................................... 14,681 182,292
Shares redeemed ................................................... (8,946) (109,808)
- ----------------------------------------------------------------------------------------------------
Net increase ...................................................... 5,735 72,484
- ----------------------------------------------------------------------------------------------------
Class C
Shares sold ......................................................... 8,782 109,223
Shares redeemed ................................................... (1,080) (13,742)
- ----------------------------------------------------------------------------------------------------
Net increase ...................................................... 7,702 95,481
- ----------------------------------------------------------------------------------------------------
Class Y
Shares sold ......................................................... 79,254 982,932
Shares redeemed ................................................... (1,226,663) (15,357,094)
Shares issued on reinvestment of distributions ..................... 3,475 43,582
- ----------------------------------------------------------------------------------------------------
Net decrease ...................................................... (1,143,934) (14,330,580)
- ----------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from capital share transactions (1,163,219) $ (14,550,909)
====================================================================================================
<CAPTION>
Year Ended
October 31, 1996
---------------------------------
Shares Amount
- ------------------------------------------------------------------------------------- -----------------
<S> <C> <C>
Class A
Shares sold ......................................................... 208,609 $ 2,645,216
Shares redeemed ................................................... (156,309) (2,008,136)
- ----------------------------------------------------------------------------------------------------
Net increase ...................................................... 52,300 637,080
- ----------------------------------------------------------------------------------------------------
Class B
Shares sold ......................................................... 7,284 91,539
Shares redeemed ................................................... (4,878) (59,333)
- ------------------------------------------------------------------------------------------------------
Net increase ...................................................... 2,406 32,206
- ----------------------------------------------------------------------------------------------------
Class C
Shares sold ......................................................... 2,142 27,504
Shares redeemed ................................................... (1,782) (22,492)
- ----------------------------------------------------------------------------------------------------
Net increase ...................................................... 360 5,012
- ----------------------------------------------------------------------------------------------------
Class Y
Shares sold ......................................................... 1,060,595 13,278,484
Shares redeemed ................................................... (2,500,751) (31,249,121)
Shares issued on reinvestment of distributions ..................... 0 0
- ----------------------------------------------------------------------------------------------------
Net decrease ...................................................... (1,440,156) (17,970,637)
- ----------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from capital share transactions (1,385,090) $ (17,296,339)
====================================================================================================
</TABLE>
56
<PAGE>
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Combined Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITY
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
October 31, 1997
--------------------------------
Shares Amount
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A
Shares sold ............................................................... 1,195,960 $ 14,003,449
Shares redeemed ............................................................ (1,061,687) (12,445,598)
Shares issued on reinvestment of distributions ........................... 9,990 105,895
- -----------------------------------------------------------------------------------------------------------
Net increase ............................................................... 144,263 1,663,746
- -----------------------------------------------------------------------------------------------------------
Class B
Shares sold ............................................................... 883,172 10,152,518
Shares redeemed ............................................................ (237,081) (2,706,025)
Shares issued on reinvestment of distributions ........................... 10,629 112,666
- -----------------------------------------------------------------------------------------------------------
Net increase ............................................................... 656,720 7,559,159
- -----------------------------------------------------------------------------------------------------------
Class C
Shares sold ............................................................... 28,287 332,705
Shares redeemed ............................................................ (7,619) (84,799)
Shares issued on reinvestment of distributions ........................... 103 1,096
- -----------------------------------------------------------------------------------------------------------
Net increase (decrease) ................................................... 20,771 249,002
- -----------------------------------------------------------------------------------------------------------
Class Y
Shares sold ............................................................... 11,916,116 139,604,445
Shares issued from acquisition of FFB Diversified International Growth Fund 0 0
Shares redeemed ............................................................ (2,865,928) (32,815,912)
Shares issued on reinvestment of distributions ........................... 95,469 1,012,925
- -----------------------------------------------------------------------------------------------------------
Net increase ............................................................... 9,145,657 107,801,458
- -----------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions ...... 9,967,411 $ 117,273,365
===========================================================================================================
<CAPTION>
Year Ended
October 31, 1996
------------------------------
Shares Amount
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A
Shares sold ............................................................... 459,233 $ 4,772,348
Shares redeemed ............................................................ (144,771) (1,513,977)
Shares issued on reinvestment of distributions ........................... 3,882 39,171
- --------------------------------------------------------------------------------------------------------
Net increase ............................................................... 318,344 3,297,542
- --------------------------------------------------------------------------------------------------------
Class B
Shares sold ............................................................... 802,691 8,346,658
Shares redeemed ............................................................ (208,561) (2,169,847)
Shares issued on reinvestment of distributions ........................... 2,297 23,175
- --------------------------------------------------------------------------------------------------------
Net increase ............................................................... 596,427 6,199,986
- --------------------------------------------------------------------------------------------------------
Class C
Shares sold ............................................................... 11,595 120,774
Shares redeemed ............................................................ (14,095) (148,202)
Shares issued on reinvestment of distributions ........................... 5 55
- --------------------------------------------------------------------------------------------------------
Net increase (decrease) ................................................... (2,495) (27,373)
- --------------------------------------------------------------------------------------------------------
Class Y
Shares sold ............................................................... 4,796,183 50,130,759
Shares issued from acquisition of FFB Diversified International Growth Fund 2,898,154 29,658,717
Shares redeemed ............................................................ (972,043) (10,235,692)
Shares issued on reinvestment of distributions ........................... 30,069 303,397
- --------------------------------------------------------------------------------------------------------
Net increase ............................................................... 6,752,363 69,857,181
- --------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from capital share transactions ...... 7,664,639 $ 79,327,336
========================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
LATIN AMERICA
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
October 31, 1997
--------------------------------
Shares Amount
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A
Shares sold ......................................................... 793,746 $ 12,013,304
Shares redeemed ................................................... (755,902) (10,989,824)
Shares issued on reinvestment of distributions ..................... 7,159 82,042
- ----------------------------------------------------------------------------------------------------
Net increase (decrease) ............................................. 45,003 1,105,522
- ----------------------------------------------------------------------------------------------------
Class B ............................................................
Shares sold ......................................................... 1,353,616 18,851,845
Shares redeemed ................................................... (2,761,745) (37,765,324)
Shares issued on reinvestment of distributions ..................... 44,425 502,887
- ----------------------------------------------------------------------------------------------------
Net decrease ...................................................... (1,363,704) (18,410,592)
- ----------------------------------------------------------------------------------------------------
Class C
Shares sold ......................................................... 305,017 4,400,152
Shares redeemed ................................................... (261,244) (3,744,348)
Shares issued on reinvestment of distributions ..................... 4,841 54,852
- ----------------------------------------------------------------------------------------------------
Net increase (decrease) ............................................. 48,614 710,656
- ----------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from capital share transactions (1,270,087) $ (16,594,414)
====================================================================================================
<CAPTION>
Year Ended
October 31, 1996
---------------------------------
Shares Amount
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A
Shares sold ......................................................... 176,782 $ 1,884,412
Shares redeemed ................................................... (676,261) (7,167,407)
Shares issued on reinvestment of distributions ..................... 36,036 382,390
- ----------------------------------------------------------------------------------------------------
Net increase (decrease) ............................................. (463,443) (4,900,605)
- ----------------------------------------------------------------------------------------------------
Class B ............................................................
Shares sold ......................................................... 765,039 7,991,078
Shares redeemed ................................................... (3,737,221) (39,001,039)
Shares issued on reinvestment of distributions ..................... 215,054 2,248,867
- ----------------------------------------------------------------------------------------------------
Net decrease ...................................................... (2,757,128) (28,761,094)
- ----------------------------------------------------------------------------------------------------
Class C
Shares sold ......................................................... 66,448 709,458
Shares redeemed ................................................... (439,812) (4,499,957)
Shares issued on reinvestment of distributions ..................... 22,570 236,280
- ----------------------------------------------------------------------------------------------------
Net increase (decrease) ............................................. (350,794) (3,554,219)
- ----------------------------------------------------------------------------------------------------
Net decrease in net assets resulting from capital share transactions (3,571,365) $ (37,215,918)
====================================================================================================
</TABLE>
57
<PAGE>
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Combined Notes to Financial Statements (continued)
5. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of investment securities (excluding
short-term securities) were as follows for the year ended October 31, 1997:
<TABLE>
<CAPTION>
Cost of Proceeds
Purchases from Sales
----------------------------
<S> <C> <C>
Emerging Markets ......... $ 71,667,295 $ 62,939,992
Global Leaders ......... 164,558,067 41,158,707
Global Real Estate ...... 17,710,348 30,241,815
International ............ 261,456,076 160,069,736
Latin America ............ 117,791,685 150,966,605
</TABLE>
On October 31, 1997, the composition of unrealized appreciation and
depreciation of investment securities based on the aggregate cost of
investments for federal tax purposes was as follows:
<TABLE>
<CAPTION>
Gross Gross Net Unrealized
Tax Unrealized Unrealized Appreciation
Cost Appreciation Depreciation (Depreciation)
------------------------------------------------------------
<S> <C> <C> <C> <C>
Emerging Markets ... $ 74,619,420 $ 3,438,255 $ 4,336,202 $ (897,947)
Global Leaders ...... 191,718,042 28,990,107 10,221,152 18,768,955
Global Real Estate 35,839,296 7,297,219 7,389,043 (91,824)
International ...... 274,567,908 21,713,757 30,826,898 (9,113,141)
Latin America ...... 107,458,058 4,626,170 11,325,249 (6,699,079)
</TABLE>
As of October 31, 1997, Global Real Estate had a capital loss carryover for
federal income tax purposes of $4,970,238 that expires October 31, 2003.
6. DISTRIBUTION PLANS
Evergreen Distributor, Inc. (formerly, Evergreen Keystone Distributors, Inc.)
("EDI"), a wholly-owned subsidiary of The BISYS Group Inc. ("BISYS") serves as
principal underwriter to Latin America. Prior to December 11, 1996, Evergreen
Investment Services, Inc. (formerly, Evergreen Keystone Investment Services
Inc.) ("EIS"), a wholly-owned subsidiary of Keystone, served as Latin America's
principal underwriter. EDI also serves as the principal underwriter for
Emerging Markets, Global Leaders, Global Real Estate and International.
Each Fund has adopted Distribution Plans for each class of shares, except Class
Y, as allowed by Rule 12b-1 of the 1940 Act. Distribution plans permit the
Funds to reimburse its principal underwriter for costs related to selling
shares of the Funds and for various other services. These costs, which consist
primarily of commissions and service fees to broker/dealers who sell shares of
the fund, are paid by the fund through expenses called "Distribution Plan
expenses". Each class, except Class Y, currently pays a service fee equal to
0.25% of the average daily net asset value of the class. Class B and Class C
also pay distribution fees equal to 0.75% of the average daily net assets of
the Class. Distribution Plan expenses are calculated daily and paid monthly.
Emerging Markets, Global Leaders, Global Real Estate and International have
entered into Shareholder Services Agreements with First Union Brokerage
Services ("FUBS"), an affiliate of First Union, whereby the Funds will
compensate FUBS up to an annual limit of .25 of 1% of Class B and Class C's
average daily net assets, as referred to above, for certain services provided
to shareholders and/or maintenance of shareholder accounts relating to the
Funds' Class B shares and Class C shares. Emerging Markets, Global Leaders,
Global Real Estate and International paid $16,179, $228,520, $349 and $48,713
to FUBS during the year ended October 31, 1997 under the Shareholder Services
Agreement.
During the year ended October 31, 1997, amounts paid to EDI and/or EIS pursuant
to each Fund's Class A, Class B and Class C Distribution Plans were as follows
<TABLE>
<CAPTION>
Class A Class B Class C
------------------------------
<S> <C> <C> <C>
Emerging Markets ......... $ 5,656 $ 36,635 $ 7,616
Global Leaders ......... 67,888 897,836 16,245
Global Real Estate ...... 1,597 1,937 870
International ............ 21,095 191,870 2,983
Latin America ............ 33,104 899,853 116,589
</TABLE>
With respect to Class B and Class C shares, the principal underwriter may pay
distribution fees greater than the allowable annual amounts the Fund is
permitted to pay under the Distribution Plans. Latin America may reimburse the
principal underwriter for such excess amounts in later years with annual
interest at prime plus 1.00%. EDI intends to seek full payment of such
distribution costs
58
<PAGE>
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Combined Notes to Financial Statements (continued)
from Latin America at such time in the future as, and to the extent that,
payment thereof by the Class B or Class C shares would be within permitted
limits.
Each of the Distribution Plans may be terminated at any time by vote of the
Independent Trustees or by vote of a majority of the outstanding voting shares
of the respective class. However, after the termination of any Distribution
Plan for Latin America, and subject to the discretion of the Independent
Trustees payments to EIS and/or EDI may continue as compensation for services
which had been earned while the Distribution Plan was in effect.
7. INVESTMENT MANAGEMENT AGREEMENT AND OTHER AFFILIATED TRANSACTIONS
Keystone, a subsidiary of First Union, is the investment adviser for Latin
America. In return for providing investment management and administrative
services to Latin America, the Fund pays Keystone a management fee that is
calculated daily and paid monthly. The management fee is determined by applying
percentage rates starting at 0.75% and declining to 0.45% per annum as net
assets increase, to the average daily net assets of the Fund.
First Union serves as the investment adviser to Emerging Markets and
International and is paid a management fee that is computed daily and paid
monthly in accordance with the following schedules:
<TABLE>
<CAPTION>
Advisory Fee Average Daily Net Assets
-------------- --------------------------
<S> <C> <C>
Emerging Markets ...... 1.50% on the first $100 million
1.45% on the next $100 million
1.40% on the next $100 million
1.35% in excess of $300 million
</TABLE>
<TABLE>
<CAPTION>
Advisory Fee Average Daily Net Assets
-------------- --------------------------
<S> <C> <C>
International ...... .82% on the first $20 million
.79% on the next $30 million
.76% on the next $50 million
.73% in excess of $100 million
</TABLE>
Through August 31, 1997, Marvin & Palmer Associates, Inc. ("Marvin & Palmer")
was the sub-adviser for Emerging Markets. Effective September 1, 1997, Keystone
became Emerging Markets' sub-adviser.
Keystone is entitled to a sub-advisory fee from First Union calculated by
applying percentage rates, which start at .32% and decline, as net assets
increase, to .23% based on the average daily net assets of the Fund.
Warburg, Pincus Counsellors, Inc. ("Warburg") is International's sub-adviser.
Under the terms of Emerging Markets' and International's sub-advisory
agreements, Keystone and Warburg are responsible for the investment decisions
for their respective funds and are paid by First Union.
For Emerging Markets and International, First Union voluntarily waived $240,240
and $232,680, respectively, of its advisory fee for the year ended October 31,
1997.
Evergreen Asset Management Corp. ("Evergreen Asset"), a wholly-owned subsidiary
of First Union, serves as investment adviser to Global Leaders and Global Real
Estate, and is paid a management fee that is computed daily and paid monthly at
an annual rate of .95% and 1.00%, of Global Leaders and Global Real Estate's
average daily net assets, respectively. Evergreen Asset has voluntarily agreed
to reimburse Global Leaders to the extent that the Fund's operating expenses
(including the investment advisory fee and amortization of organization
expenses but excluding interest, taxes, brokerage commissions, 12b-1
distribution and shareholder servicing fees and extraordinary expenses) exceed
1.50% of its average daily net assets. Evergreen Asset waived advisory fees
aggregating $111,487 for the year ended October 31, 1997 pursuant to this
agreement. Additionally, for the year ended October 31, 1997 Evergreen Asset
reimbursed other expenses amounting to $1,537. Evergreen Asset also waived
advisory fees aggregating $33,874 for Global Real Estate for the year ended
October 31, 1997. Evergreen Asset can modify or terminate voluntary waivers at
any time.
EIS is the administrator and BISYS is the sub-administrator to the Funds. For
Emerging Markets, Global Leaders, and International, prior to March 11, 1997,
Evergreen Asset was the administrator. Furman Selz LLC ("Furman Selz") was the
sub-administrator through December 31, 1996 for Emerging Markets, Global
Leaders, Global Real Estate and International. Effective January 1, 1997, BISYS
acquired Furman Selz' mutual fund unit and accordingly, BISYS Fund Services
became sub-administrator. As sub-administrator to the Funds, BISYS Fund
Services provides the officers of the Funds. The administrator and
sub-administrator for each Fund are entitled to an annual fee based on the
average daily net assets of the funds administered by EIS for which First Union
or its investment advisory
59
<PAGE>
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Combined Notes to Financial Statements (continued)
subsidiaries are also the investment advisers. The administration fee is
calculated by applying percentage rates, which start at 0.05% and decline to
0.01% per annum as net assets increase, to the average daily net asset value of
the Fund. The sub-administration fee, for Emerging Markets, Global Leaders,
Global Real Estate and International is calculated by applying percentage
rates, which start at 0.01% and decline to .004% as net assets increase, to the
average daily net asset value of the Fund.
Lieber & Company, an affiliate of First Union, is the investment sub-adviser to
Global Leaders and Global Real Estate and also provides brokerage services with
respect to substantially all security transactions of the Fund effected on the
New York or American Stock Exchanges. For the year ended October 31, 1997,
Global Leaders and Global Real Estate incurred brokerage commissions of
$119,963 and $41,644, respectively with Lieber & Company. Lieber & Company is
reimbursed by Evergreen Asset, at no additional expense to the Fund, for its
cost of providing investment advisory services.
At October 31, 1997, Stephen A. Lieber, Chairman of Evergreen Asset owned,
directly or beneficially, 35% of the outstanding shares of Global Real Estate.
Evergreen Service Company ("ESC") (formerly, Evergreen Keystone Service
Company), a wholly-owned subsidiary of Keystone, serves as the transfer and
dividend disbursing agent for Latin America. Effective May 5, 1997, ESC also
began providing transfer and dividend disbursing agent services for Emerging
Markets, Global Leaders, Global Real Estate and International that were
formerly provided by State Street Bank and Trust Company ("State Street").
Total transfer agent fees paid by Emerging Markets, Global Leaders, Global Real
Estate, International, and Latin America to ESC for the year ended October 31,
1997, were $39,083, $579,048, $99,937, $139,289 and $408,628, respectively. For
certain accounts, First Union had been sub-contracted by ESC, and previously by
State Street to maintain shareholder sub-account records, take fund purchase
and redemption orders and answer inquiries. For each account of International,
First Union earned fees aggregating $3,578 for the year ended October 31, 1997.
Officers of the Funds and affiliated Trustees receive no compensation directly
from the Funds.
8. EXPENSE OFFSET ARRANGEMENT
The Funds have entered into an expense offset arrangement with their custodian.
The assets deposited with the custodian under this expense offset arrangement
could have been invested in income-producing assets.
9. DEFERRED INDEPENDENT TRUSTEES' FEES
Each Independent Trustee of Emerging Markets, Global Leaders, Global Real
Estate and International may defer any or all compensation related to
performance of their duties as Trustees. The Trustees' deferred balances are
allocated to deferral accounts which are included in the accrued expenses for
the Funds. The investment performance of the deferral accounts are based on the
investment performance of certain Evergreen Funds. Any gains earned or losses
incurred in the deferral accounts are reported in the Fund's Trustees' fees and
expenses. Trustees will be paid either in one lump sum or in quarterly
installments for up to ten years at their election, not earlier than either the
year in which the Trustee ceases to be a member of the Board of Trustees or
January 1, 2000. As of October 31, 1997, the value of the Trustees deferral
account was $1,412, $9,878, $18,581, $6,005 and $2,760 for Emerging Markets,
Global Leaders, Global Real Estate, International and Latin America,
respectively.
10. FINANCING AGREEMENT
On October 31, 1996, a financing agreement among all of the Evergreen Funds and
State Street, Societe Generale and ABN Amro Bank N.V. (Collectively, the
"Banks") became effective. Under this agreement, the Banks provide an unsecured
line of credit facility, in the aggregate amount of $225 million ($112.5
million committed and $112.5 million uncommitted), allocated evenly among the
Banks. Borrowings under this facility bear interest at 0.75% per annum above
the Federal Funds rate. A commitment fee of 0.10% per annum will be incurred on
the unused portion of the committed facility which would be allocated to all
participating funds. State Street acts as agent for the Banks, and as agent is
entitled to a fee of $15,000 which is allocated to all of the Evergreen Funds.
During the year ended October 31, 1997, Global Real Estate had borrowings under
this agreement outstanding for 189 days under the line of credit, and incurred
interest charges amounting to $10,449. Global Real Estate's average debt
outstanding during the year aggregated $320,892 at a weighted average interest
rate of 6.29%. Global Real Estate had an outstanding line of credit of $775,000
as of October 31, 1997.
60
<PAGE>
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
Combined Notes to Financial Statements (continued)
On October 31, 1997 a temporary financing agreement among all of the Evergreen
Funds and First Union became effective. Under this agreement, First Union
provides an unsecured line of credit facility in the aggregate amount of $300
million. Borrowings under this facility bear interest at 1.00% per annum above
the Federal Funds Rate.
Latin America is not a party to either financing agreement.
11. CONCENTRATION OF CREDIT RISK
Global Real Estate invests a substantial portion of its assets in real estate
investment trusts, therefore, it may be more affected by economic developments
in the real estate industry than would a general equity fund.
12. DISTRIBUTIONS TO SHAREHOLDERS
Distributions were declared on November 20, 1997 and payable on November 24,
1997 to shareholders of record November 20, 1997 for Emerging Markets, Global
Leaders, International and Latin America. They were comprised of the following,
on a per share basis:
<TABLE>
<CAPTION>
Long-Term Short-Term
Capital Gain Capital Gain
----------------------------
<S> <C> <C>
Emerging Markets ...... $0.250 -
Global Leaders ......... $0.032 $0.026
International ......... $0.267 $0.234
Latin America ......... $2.862 -
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Income
Class A Class B Class C Class Y
-------------------------------------
Emerging Markets ...... - - - $0.008
International ......... $0.240 $0.193 $0.193 $0.266
</TABLE>
These distributions are not reflected in the accompanying financial statements.
13. SUBSEQUENT EVENTS
EIS has entered into an agreement to sell the Evergreen Global Real Estate
Equity Fund to Mr. Samuel A. Lieber, the Fund's portfolio manager.
On September 16, 1997 the Board of Trustees of Blanchard Global Growth Fund
approved the acquisition of Blanchard Global Growth Fund by Evergreen Global
Leaders Fund. A Shareholder Meeting is scheduled to take place in February
1998.
61
<PAGE>
[GRAPHIC OMITTED]
[GRAPHIC OMITTED]
FEDERAL TAX STATUS OF DISTRIBUTIONS (UNAUDITED)
During the year ended October 31, 1997, the Funds paid the following
distributions in shares or cash:
<TABLE>
<CAPTION>
Long-term Ordinary
Total Capital Gain Income
Distributions Distributions Dividends
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Global Leaders ............ $ 83,650 - $ 83,650
Global Real Estate ...... 76,344 - 76,344
International Equity ...... 2,401,059 - 2,401,059
Latin America ............ 723,824 - 723,824
</TABLE>
Of the ordinary income distributions stated above for Global Leaders, Global
Real Estate and International Equity, 5.46%, 1.60% and 0.34%, respectively, are
eligible for the corporate dividend received deduction. The ordinary income
distribution for Latin America is not eligible for the corporate dividend
received deduction. The above figures may differ from previously reported and
those cited elsewhere in this report due to differences in the calculation of
income and capital gains for accounting (book) purposes and Internal Revenue
Service (tax) purposes. In January 1998, we will send you complete information
on the distributions paid during the calendar year 1997 to help you in
completing your federal tax return.
62
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Independent Auditors' Report
The Trustees and Shareholders
Evergreen Latin America Fund
We have audited the accompanying statement of assets and liabilities of
Evergreen Latin America Fund (formerly Keystone Fund of the Americas),
including the schedule of investments, as of October 31, 1997, and the related
statement of operations for the year then ended, statements of changes in net
assets for each of the years in the two-year period then ended and financial
highlights for each of the years in the four-year period then ended. These
financial statements and financial highlights are the responsibility of the
Fund'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 and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1997 by correspondence with the custodian
and brokers. 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
Evergreen Latin America Fund as of October 31, 1997, the results of its
operations for the year then ended, changes in its net assets for each of the
years in the two-year period then ended and financial highlights for each of
the years in the four-year period then ended in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Boston, Massachusetts
November 26, 1997
63
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Report of Independent Accountants
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF
EVERGREEN EMERGING MARKETS GROWTH FUND, EVERGREEN GLOBAL LEADERS
FUND, EVERGREEN GLOBAL REAL ESTATE EQUITY FUND AND EVERGREEN
INTERNATIONAL EQUITY FUND
In our opinion, the accompanying statements of assets and liabilities,
including the schedules of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Evergreen Emerging
Markets Growth Fund, Evergreen Global Leaders Fund, Evergreen Global Real
Estate Equity Fund and Evergreen International Equity Fund (the "Funds") at
October 31, 1997, the results of each of their operations for the year then
ended, the changes in each of their net assets for each of the two years in the
period then ended, and the financial highlights for each of the two years in
the period ended October 31, 1997 for Evergreen Emerging Markets Growth Fund,
Evergreen Global Leaders Fund and Evergreen International Equity Fund, and for
each of the periods indicated for Evergreen Global Real Estate Equity Fund, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Funds' management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits, which included confirmation of
securities at October 31, 1997 by correspondence with the custodian and the
application of alternative auditing procedures where securities purchased had
not been received, provide a reasonable basis for the opinion expressed above.
The financial highlights of Evergreen Emerging Markets Growth Fund and
Evergreen International Equity Fund for the ten month period ended October 31,
1995 and the period ended December 31, 1994 were audited by other independent
accountants, whose report dated December 8, 1995 was unqualified.
Price Waterhouse LLP
1177 Avenue of the Americas
New York, NY 10036
December 15, 1997
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541076 REV01
64156 12/97
