<PAGE>
NWNL NORTHSTAR SERIES, TRUST
SEMI-ANNUAL REPORT,
APRIL 30, 1995
[PHOTO]
[LOGO]
Dear Shareholders:
We are pleased to provide you with the semi-annual report for the NWNL Northstar
Series Trust for the six month period ending April 30, 1995. Since inception on
November 8, 1993, the Trust has attracted over $325 million in assets. We are
gratified with your decision to entrust your assets to the Northstar Funds and
are confident that we can assist you in reaching your financial objectives. Our
goal is to provide you with consistent, superior, investment results through
fundamental research, analysis, and traditional investment principles. Following
this letter is a summary of the results of the Funds comprising the Trust by
their respective portfolio manager. We hope you will find it informative.
Throughout this past semi-annual period, the U.S. equity and fixed income
markets began to recover from the challenging financial markets of 1994. As you
will recall, 1994 saw one of the worst bond markets in history as prices dropped
throughout the year in response to the continued tightening of monetary policy
by the Federal Reserve. After falling in November, the bond market began to
recover as concerns over rising inflation and accelerated growth in the economy
abated. The prevailing opinion of a "soft landing", i.e., modest growth with
restrained inflation, plus the belief that the Fed had concluded its tightening
policies, added new life to both the stock and bond markets throughout most of
this year. Your Funds were beneficiaries of these buoyant financial markets as
can be seen in the following reports.
Additional events have occurred since our last report to you which we
believe will provide long term positive benefits to the Northstar fund complex
and to you as shareholders.
Most recently, Northstar Investment Management Corporation became adviser to
the former Advest Advantage Family of Funds. Accordingly, these six taxable
mutual funds, with over $500 million in assets, have been added to our existing
family of Funds, which will be referred to collectively as the "Northstar
Advantage Funds." We are pleased to be able to offer these additional funds to
you by purchase or exchange and hope that you take advantage of this opportunity
to diversify your current Northstar holdings with these complementary investment
products.
Additionally, as we reported to you previously, in an effort to provide more
comprehensive and cost effective service, the Trust retained the services of The
Shareholder Services Group as its transfer agent on December 5, 1995, and on
April 1, 1995 as its fund accounting agent. TSSG, a subsidiary of First Data
Corp., is one of the largest mutual fund servicing agents in the world today.
In closing, we are pleased with the progress we have made during the first
few months of the year and remain constructive and encouraged for the financial
markets and your Fund for the remainder of 1995 and the longer term.
Sincerely,
[SIG]
Mark L. Lipson
President
1
<PAGE>
NWNL NORTHSTAR
INCOME AND GROWTH FUND
[PHOTO]
[PHOTO]
Dear Shareholders:
We are pleased to report to you on the semi-annual period
from November 1, 1994 through April 30, 1995 for the NWNL
Northstar Income and Growth Fund.
Portfolio Data as of:
10/31/94 4/30/95
--------- ---------
Net Assets (Millions): $114.81 $162.01
Net Asset Value/Share: $ 10.00 $ 10.07
INVESTMENT CLIMATE AND PERFORMANCE RESULTS
During the last six months, both the US stock market and the US bond market
ended their downward trends and began to recover. After falling in November, the
bond market started to rise following nine months of a very severe decline which
had produced the worst bond market in nearly 25 years. This pronounced fall was
due to the dramatic tightening of monetary policy by the Federal Reserve Board.
Even though the US economy was growing substantially with very little inflation,
the Federal Reserve chose to raise short term interest rates by 2 percentage
points in order to slow economic growth and prevent inflation from beginning to
increase. The Fed's policy can be likened to slowing a car from 60 MPH to 40 MPH
in order to reduce wear and tear and allow it to last longer. It is becoming
clear that this strategy has been successful. Clearly, economic growth has
slowed to a moderate 2% rate of growth with inflation still at a restrained 3%
rate.
Meanwhile, most stocks experienced weakness from November through January as
investors reacted fearfully to the November increase in the federal funds rate.
Numerous stock market strategists forecast several more interest rate increases,
a very weak economy and a severe slowdown in corporate profits. As shareholders,
you may recall our outlook last November was just the opposite. Fortunately our
expectations proved correct. US economic growth has slowed only moderately,
inflation remains well controlled and corporate profits have been nothing short
of spectacular. In the last three months, the major stock market indices have
risen significantly, confounding the so-called experts.
In the last six months, the Fund rose 2.4% compared to 6.2% for the Lipper
Balanced Fund Index. Our under-performance was due to weak stock results which
rose only 2 1/2% versus over 9% for Standard and Poors 500 stock indices. The
bond performance showed a gain of approximately 7% and was in line with the
results from intermediate term investment grade bonds. Although stock holdings
have outperformed the indices since February, earlier results were diminished by
the Fund's 5% holdings in Mexico last December when the Mexican peso was
devalued by over 50%. In addition, most cyclical stocks such as papers,
chemicals, steels, autos and retailers performed poorly in December and January
due to worries about slow economic growth and falling corporate profits. While
these types of companies totaled only 23% of the fund six months ago, they
proved to be a substantial depressant overall despite strong results from the
remainder of the portfolio. In recent months, these cyclical issues are enjoying
a resurgence as investors begin to recognize their depressed valuations and take
note of their continued excellent earnings reports.
INVESTMENT OUTLOOK
We have been and continue to be constructive on the outlook for common
stocks. We reiterate our expectation for moderate, i.e. 2% to 3%, economic
growth lasting through next year. We would not expect a recession before 1997 at
the earliest. Long term interest rates have fallen sharply from over 8% last
November to under 7% in May while inflation remains low. Both interest rates and
inflation may rise slightly by the end of this year but a substantial reversal
is not a likely prospect, in our opinion. Most importantly, corporate profits
have been exceptionally strong and we see no reason for profits to fall for
several more years. In our opinion, too many strategists and investors have
treated US corporate earnings as a "flash in the pan" experience driven by a
quick unsustainable boom in the economy which would quickly lead to a bust. By
following our philosophy of fundamental analysis of individual stocks,
comparative valuation and avoidance of short term trading, we still find many
individual companies whose
2
<PAGE>
[LOGO]
internal improvements should allow for excellent worldwide competitive
advantages and further rises in profit margins. American industry is one of the
most productive and is the international low cost leader in several major
sectors and technologies. Many US companies are enjoying rising earnings and
exceptional growth in cash flow. Balance sheets are the strongest in decades.
These strengths are allowing many US companies to announce large increases in
dividends and huge buybacks of their own stocks. Included in our largest
holdings are the following companies which have announced dividend increases of
at least 15% and/or stock buybacks of $1 billion or more: Citicorp, Xerox,
General Motors, Texas Instruments, Dow Chemical, International Paper, Philip
Morris, Mellon Bank, Georgia Pacific, IBM, BankAmerica and DuPont. We also note
that current actions in the Republican controlled congress should lead to less
growth in Federal spending, a reduction in the capital gains tax rate and
expanded IRA-type savings programs. Thus we look for a sustained rise in stocks
with most increases coming from a broad list of technology, basic materials,
capital goods and consumer cyclical stocks, rather than a limited number of
defensive stocks in the consumer staples area which lead the market earlier this
year.
We took advantage of the opportunity to add to bonds in November and
December and currently have 32% in bonds versus 19% at the end of October, 1994.
However, we have retained 65% of assets in stocks and securities convertible
into stocks versus 71% in October and reduced cash equivalents to 3% from 10%.
Meanwhile the yield on the portfolio has been kept quite high at 3.8% which is
more than 1% over the yield on common stocks alone.
We thank you for your commitment to our conservative value-driven approach
and welcome any opportunity for further discussions with you.
Sincerely,
[SIG]
Ernest Mysogland
Vice President and Portfolio Manager
[SIG]
Geoffrey Wadsworth
Vice President and Portfolio Manager
3
<PAGE>
NWNL NORTHSTAR INCOME AND GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
<TABLE>
<CAPTION>
Industry $ Value % of Fund Portfolio
- - ----------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace & Defense............................. $2,007,500 .............. 1.24%
Automotive...................................... 5,474,125 .............. 3.38
Banking......................................... 8,571,250 .............. 5.29
Chemicals....................................... 5,536,688 .............. 3.42
Computers....................................... 1,753,500 .............. 1.08
Electrical Equipment............................ 3,937,375 .............. 2.43
Electronics..................................... 3,735,000 .............. 2.31
Energy.......................................... 14,065,841 .............. 8.68
Entertainment/Broadcasting...................... 8,134,555 .............. 5.02
Financial Services.............................. 1,348,000 .............. 0.83
Gaming.......................................... 2,483,775 .............. 1.53
Healthcare...................................... 9,945,125 .............. 6.14
Insurance....................................... 4,378,417 .............. 2.70
Leisure......................................... 1,527,415 .............. 0.94
Lodging & Restaurants........................... 1,224,000 .............. 0.76
Office Equipment................................ 4,260,125 .............. 2.63
Paper & Forest Products......................... 5,843,300 .............. 3.61
Real Estate Investment Trust.................... 5,621,500 .............. 3.47
Retail.......................................... 1,591,875 .............. 0.98
Steel........................................... 3,690,000 .............. 2.28
Technology...................................... 14,951,200 .............. 9.23
Telecommunications.............................. 5,266,055 .............. 3.25
Tobacco......................................... 3,798,079 .............. 2.34
Transportation.................................. 1,359,244 .............. 0.84
Utility......................................... 1,015,000 .............. 0.63
U.S. Government & Agencies...................... 35,782,781 .............. 22.09
Repurchase Agreements........................... 2,937,446 .............. 1.81
Other assets less liabilities................... 1,769,468 .............. 1.09
------------ ---------
Net Assets...................................... $162,008,639 .............. 100.00%
------------ ---------
------------ ---------
</TABLE>
4
<PAGE>
NWNL NORTHSTAR
MULTI-SECTOR BOND FUND
[PHOTO]
[LOGO]
Dear Shareholders:
We are pleased to report to you the results of the NWNL Northstar Multi-Sector
Bond Fund for the six months ended April 30, 1995. The investment objective of
the Fund is to maximize current income by investing in U. S. Government Bonds,
Investment Grade Bonds, Foreign Bonds and High Yield Bonds.
Portfolio Data as of:
10/31/94 4/30/95
-------- -------
Net Assets (Millions): $35.89 $42.34
Net Asset Value/Share: $ 4.37 $ 4.45
High Yield Securities: 40% 46%
Investment Grade Securities: 25 17
US Government Securities: 12 17
Foreign Government and
Corporate Bonds 16 10
Cash 7 10
INVESTMENT CLIMATE AND PERFORMANCE RESULTS
During the first half of your Fund's fiscal year, there was a major
turnaround in fixed income investments from last year, which saw the worst bond
market in 25 years. The improvement occurred despite continued economic growth
and a very weak US Dollar. Between 11/01/94 and 4/30/95, the yield of the
30-year US Treasury Bond ranged from a peak of 8.16% to a low of 7.31%; it
started at 8.06% and ended at 7.34%. As interest rates declined, total returns
increased due to rises in the prices of bonds. The strong rebound in bond
returns between 11/01/94 and 4/30/95 was based on widely-held expectations of
lower inflation. Those expectations arose for three reasons: 1) the Federal
Reserve Board (the "Fed") convinced bond investors that it could and would keep
inflation at a low level; 2) the economy slowed down from a 5.0% growth rate to
a 2.8% growth rate in response to the Fed's prior interest rate increases, so
the demand for money slowed down too; and 3) a sell-off in emerging markets debt
and equity caused an increase in the demand for the bonds issued by public and
private entities in the USA. Lower Treasury yields caused investment-grade bond
yields to fall too, so their prices and total returns also increased. Foreign
bonds followed two paths: 1) investment grade bond returns rose in value due to
declines in interest rates and large foreign exchange gains; 2) emerging market
bonds declined a lot as investors sold them to avoid economic and political
risks, especially in Latin America. U.S. equity markets improved. Corporate
costs fell due to productivity gains and lower interest rates, while sales
volumes grew based on strong domestic and foreign economic growth. Together
those factors produced excellent earnings growth. Higher stock prices helped set
a better tone for the domestic bond markets by providing a bigger cushion below
debt investments and by signaling economic growth that would support the
creditworthiness of bond issuers.
Based on the economic and financial trends described above, investors
increasingly believed that our rapidly growing economy would experience a "soft"
landing (moderate, sustainable growth with low inflation). Therefore, prices of
bonds of all types increased, resulting in significant positive total returns in
almost all bond sectors. As measured by Lehman Bros. indices from 11/01/94
through 4/30/95, government securities with maturities comparable to your Fund's
had an average total return of 5.24%, high-grade corporate bonds of similar
maturities had a total return of 6.93%, high-yield bonds comparable to those in
your Fund had a total return of 7.28%, while emerging market debt lost 8.73%.
Your Multi-Sector Fund had a total return of 6.52% in the first half. Like
almost all bond fund portfolios, ours benefited from lower interest rates and
strong cash inflows into fixed-income securities. Three types of factors caused
the total returns of specific securities in our portfolio to increase. Several
of the gaming and telecommunication issues that were undervalued by the market
last year achieved key performance or investment goals that boosted investor
confidence (e.g. Capital Gaming, Dial Call and PRT Funding). Many higher-rated
bonds were attractive to investors for defensive credit purposes or as unusually
high-return/low-risk investments (e.g., Federated Dept. Stores, Healthtrust,
MTEL and
5
<PAGE>
Sherritt, Inc.). Other companies were actively sought by investors because of
their extraordinary growth potential and/or their access to equity (e.g.,
Adelphia, California Energy, Canandaigua Wine, Guess Inc., Heartland Wireless,
Sinclair Broadcasting, Star Markets and Thermoscan). Since our portfolio had
many securities that benefited from such trends, your Fund rose to the top
decile of general bond funds (as compiled by Lipper Analytical) through the
first four months of 1995.
INVESTMENT OUTLOOK AND STRATEGY
We foresee strong fundamentals (high coupons, stronger cash flows leading to
credit upgrades, and potential capital gains) and better technical supply/demand
factors. That should produce superior total returns for bonds in general in
1995, and for high yield and emerging market bonds in particular. Those trends
should also be especially favorable for the investments we have placed in the
portfolio. We therefore believe that your Fund is positioned to perform very
well in 1995. The Fed's commitment to keep inflation down has already begun to
result in a trend toward more stable and lower interest rates, and equity prices
are expected to remain strong. Both of those things will support bond prices in
general.
Taken as a whole, high yield debt securities performed better than other
classes of fixed income securities during the last 6 months. We continue to
believe that the high yield sector will continue to outperform other fixed
income sectors as growth slows to non-inflationary levels. The high yield market
will also be bolstered by what we believe will be additional demand from pension
asset allocations. Therefore, we will continue to have a very high allocation to
this sector. Until market conditions cause an increase in the currently very low
spreads of investment-grade bond rates over rates on treasuries, we will
continue to underweight that sector. Government debt, with its lower yields,
will constitute the same portion in the stable interest-rate environment that we
foresee.
The dollar is now expected to strengthen due to progress on our trade and
budget deficits, lower German and Japanese interest rates and more inflows of
foreign cash into US bond and stock markets. That will increase demand for
dollars and help keep interest rates down, which will keep international capital
inflows up, creating a virtuous cycle. It will also favor US$ denominated debt,
which we will therefore continue to overweight, as we did last year. Resuming a
trend begun in 1994, fixed-income investors are again looking to emerging market
bonds as a normal part of their investment universe. Despite the price declines
that occurred in the 1st quarter of 1995, confidence in high-quality issuers and
their bonds has started to return. This confidence is based on the strong
support given to fiscal, financial, economic and monetary reforms in key
emerging markets by those countries, by developed countries and by international
organizations. Therefore, both the yields and creditworthiness of emerging
market issues have increased. The Fund has begun to make some investments in
that sector in order to ensure proper diversification of risk and prudent
participation in a sector that is likely to have high total returns.
Finally, we expect to maintain at least the current distribution rate of
3.75 cents per share for the foreseeable future.
Sincerely,
[SIG]
Thomas Ole Dial
Vice President & Senior Portfolio Manager
6
<PAGE>
NWNL NORTHSTAR MULTI-SECTOR BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
[LOGO]
<TABLE>
<CAPTION>
INDUSTRY $ VALUE % OF FUND PORTFOLIO
- - ------------------------------------------------------------------------------------------------
<S> <C> <C>
Aerospace............................................. $ 455,000 ............... 1.07%
Banking............................................... 906,250 ............... 2.14
Broadcasting/Cable.................................... 2,668,747 ............... 6.31
Building Products..................................... 482,625 ............... 1.14
Conglomerates......................................... 1,518,000 ............... 3.59
Consumer Products..................................... 2,181,875 ............... 5.15
Container............................................. 543,125 ............... 1.28
Entertainment......................................... 1,326,445 ............... 3.13
Finance............................................... 800,000 ............... 1.89
Food/Beverage......................................... 1,185,800 ............... 2.80
Food Service.......................................... 1,063,750 ............... 2.51
Foreign Government Bonds.............................. 2,646,519 ............... 6.25
Grocery............................................... 1,086,250 ............... 2.57
Healthcare............................................ 563,750 ............... 1.33
Hotels & Gaming....................................... 2,035,867 ............... 4.81
Insurance............................................. 1,462,500 ............... 3.45
Oil & Gas............................................. 1,097,375 ............... 2.59
Printing/Publishing................................... 477,475 ............... 1.13
Rail & Shipping....................................... 466,040 ............... 1.10
Retail................................................ 1,445,125 ............... 3.41
Steel................................................. 500,625 ............... 1.18
Telecommunications.................................... 2,711,875 ............... 6.41
Textile............................................... 985,000 ............... 2.33
Transportation........................................ 1,095,674 ............... 2.59
Utility............................................... 1,106,000 ............... 2.61
U.S. Government & Agencies............................ 7,254,876 ............... 17.14
Repurchase Agreements................................. 3,792,117 ............... 8.96
Other assets less liabilities......................... 477,713 ............... 1.13
----------- ---------
Net Assets............................................ $42,336,398 ............... 100.00%
----------- ---------
----------- ---------
</TABLE>
7
<PAGE>
NWNL NORTHSTAR
HIGH YIELD BOND FUND
[PHOTO]
Dear Shareholders
We are pleased to report to you the results of the NWNL Northstar High Yield
Bond Fund for the six months ended April 30, 1995. The investment objective of
the Fund is to seek high income by investing in at least 65% of its assets in
higher-yielding, lower-rated U.S. dollar-denominated debt securities.
Portfolio Data as of:
10/31/94 4/30/95
-------- -------
Net Assets (Millions): $79.01 $120.40
Net Asset Value/Share: $ 4.41 $ 4.45
INVESTMENT CLIMATE AND PERFORMANCE RESULTS
During the first half of your Fund's fiscal year there was a major
turnaround in total returns on bond investments from last year, which saw the
worst bond market in 25 years. The improvement occurred despite continued
economic growth and a very weak US dollar. The strong rebound in bond returns
between 11/1/94 and 4/30/95 was based on widely-held expectations of lower
inflation, which caused the yield of the 30-year US Treasury Bond to decline
from 8.06% to 7.34%. Those expectations arose for three reasons: 1) the Federal
Reserve Board (the "Fed") convinced bond investors that it could and would keep
inflation at a low level; 2) the economy slowed down from a 5% growth rate to a
2.8% growth rate in response to the Fed's prior interest rate increases; and 3)
a sell-off in emerging markets debt and equity caused an increase in the demand
for the bonds issued by public and private entities in the USA. Equity markets
in the USA also improved. Corporate costs fell due to productivity gains and
lower interest rates, while sales volumes grew based on strong domestic and
foreign economic growth. Together those factors produced excellent earnings
growth. Higher stock prices helped set a better tone for the domestic bond
markets by providing a bigger cushion below debt investments and by signaling
economic growth that would support the creditworthiness of bond issuers.
Based on the economic and financial trends described above, investors
increasingly believed that our rapidly growing economy would experience a "soft"
landing (moderate, sustainable growth with low inflation). Therefore, prices of
bonds of all types increased, resulting in significant positive total returns in
almost all bond sectors. As measured by Lehman Bros. indices from 11/1/94
through 4/30/95, government securities with maturities comparable to your Fund's
had an average total return of 5.24%, high-grade corporate bonds of similar
maturities had a total return of 6.93%, while emerging market debt lost 8.73%.
High-yield bonds comparable to those in your Fund had a total return of 7.28%
during that period.
Your High Yield Fund had a total return of 6.66% in the first half. Like
almost all high yield portfolios, ours benefited from lower interest rates and
strong cash inflows into this fixed-income sector. Three types of factors caused
the total returns of specific securities in our portfolio to increase. Several
of the gaming and telecommunication issues that were undervalued by the market
last year achieved key performance or investment goals that boosted investor
confidence (e.g. Capital Gaming, Dial Call, Nextel, PanAmSat and PRT Funding).
Many higher-rated bonds were attractive to investors for defensive credit
purposes or as unusually high-return/low-risk investments (e.g., Canandaigua
Wine, Int'l Semi-Tech, MTEL and Sherritt, Inc.). Other companies were actively
sought by investors because of their extraordinary growth potential and/or their
access to equity (e.g., Adelphia, California Energy, Guess Inc., Heartland
Wireless, Sinclair Broadcasting, Star Markets and Thermoscan). Since our
portfolio had many securities that benefited from such trends, your Fund rose to
the top decile of high yield funds through the first four months of 1995.
INVESTMENT OUTLOOK AND STRATEGY
We foresee strong fundamentals (high coupons, stronger cash flows leading to
credit upgrades, and potential capital gains) and better technical supply/demand
factors for high yield investments. That combination should produce superior
total returns for high yield bonds in 1995. Those trends should also be
particularly favorable for the investments we have
8
<PAGE>
[LOGO]
placed in the portfolio. We therefore believe that your Fund is positioned to
perform very well in 1995. The Fed's commitment to keep inflation down has
already begun to result in a trend toward more stable and lower interest rates,
which will support bond prices in general. We expect high yield to do better
than other fixed income sectors in 1995. Taken as a whole, high yield debt
securities performed better than other classes of fixed income securities during
the last 6 months. We continue to believe that the high yield sector will
continue to outperform other fixed income sectors as growth slows to non-
inflationary levels. The high yield market will also be bolstered by what we
believe will be additional demand from pension asset allocations. The dollar is
now expected to strengthen due to progress on our trade and budget deficits,
lower German and Japanese interest rates and more inflows of foreign cash into
US bond and stock markets. That will increase demand for dollars and help keep
interest rates down, which will keep international capital inflows up, creating
a virtuous cycle. Resuming a trend begun in 1994, high yield investors are again
looking to emerging market bonds as a normal part of their investment universe.
Despite the price declines that occurred in the 1st quarter of 1995, confidence
in high-quality issuers and their bonds has started to return. This confidence
is based on the strong support given to fiscal, financial, economic and monetary
reforms in key emerging markets by those countries, by developed countries and
by international organizations. Therefore, both the yields and creditworthiness
of emerging market issues have increased. The Fund has begun to make some
investments in that sector in order to ensure proper diversification of risk and
prudent participation in a sector that is likely to have high total returns. In
addition, we believe that equity markets will continue to benefit from low costs
and growing revenues. Therefore, high yield bonds will continue to reap the
benefits noted above from strong equity prices.
Finally, as a result of the Fund's substantial growth in assets and the
opportunity to invest at high rates in 1994, we were able to increase the Fund's
distribution rate three times last year to its current 4.0 cents per share. We
expect to maintain at least this distribution rate for the foreseeable future.
Sincerely,
[SIG]
Thomas Ole Dial
Vice President & Senior Portfolio Manager
9
<PAGE>
NWNL NORTHSTAR INCOME AND GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
Security Shares Value
- - -------------------------------------------------------------------------
COMMON STOCK - 52.42%
AEROSPACE & DEFENSE - 1.24%
Boeing Co. 36,500 $ 2,007,500
---------
AUTOMOTIVE - 3.38%
Echlin, Inc. 35,000 1,277,500
General Motors Corp. 93,000 4,196,625
---------
5,474,125
---------
BANKING - 5.29%
BankAmerica Corp. 36,000 1,782,000
Citicorp 88,000 4,081,000
Mellon Bank Corp. (1) 69,000 2,708,250
---------
8,571,250
---------
CHEMICALS - 2.85%
Dow Chemical Co. 45,000 3,127,500
Du Pont (E.I.) De Nemours & Co. 22,500 1,482,188
---------
4,609,688
---------
ELECTRICAL EQUIPMENT - 2.43%
AMP, Inc. 63,000 2,693,250
Emerson Electric Co. 18,500 1,244,125
---------
3,937,375
---------
ENERGY - 5.64%
Chevron Corp. 18,000 852,750
El Paso Natural Gas Co. 46,000 1,345,500
Halliburton Co. 31,000 1,189,625
Mobil Corp. (1) 23,700 2,248,537
Sonat, Inc. (1) 52,000 1,579,500
Texaco, Inc. 28,200 1,928,175
---------
9,144,087
----------
ENTERTAINMENT/BROADCASTING - 2.22%
British Sky Broadcasting (2) 101,000 2,424,000
Time Warner Entertainment LP 32,000 1,172,000
---------
3,596,000
---------
FINANCIAL SERVICES - 0.83%
H&R Block, Inc. 32,000 1,348,000
---------
10
<PAGE>
NWNL NORTHSTAR INCOME AND GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
[LOGO]
Security Shares Value
- - -------------------------------------------------------------------------
HEALTHCARE - 4.84%
Lilly (Eli) & Co. 19,000 $ 1,420,250
Merck & Co., Inc. 55,000 2,358,125
Mylan Labs, Inc. 75,000 2,306,250
U.S. Healthcare, Inc. 66,000 1,765,500
---------
7,850,125
---------
INSURANCE - 0.63%
USF & G Corp. (1) 69,437 1,024,196
---------
LEISURE - 0.32%
Carnival Corp. 21,000 522,375
---------
LODGING & RESTAURANTS - 0.76%
Marriott International, Inc. 34,000 1,224,000
----------
OFFICE EQUIPMENT - 2.63%
Xerox Corp. (1) 34,600 4,260,125
---------
PAPER & FOREST PRODUCTS - 3.61%
Georgia Pacific Corp. (1) 32,000 2,540,000
International Paper Co. 42,900 3,303,300
---------
5,843,300
---------
REAL ESTATE INVESTMENT TRUST - 2.78%
DeBartolo Realty Corp. 50,000 693,750
General Growth Properties, Inc. 70,000 1,417,500
Highwoods Properties, Inc. 52,000 1,144,000
OMEGA Healthcare Investors, Inc. 30,000 716,250
Security Capital Pacific Trust 30,000 525,000
---------
4,496,500
---------
TECHNOLOGY - 9.23%
Avnet, Inc. 21,000 934,500
Computer Associates International, Inc. 40,000 2,575,000
Intel Corp. 10,000 1,023,750
International Business Machines Corp. 20,800 1,970,800
Motorola, Inc. 70,000 3,981,250
Tektronix, Inc. 25,000 1,137,500
Texas Instruments, Inc. 31,400 3,328,400
----------
14,951,200
----------
TELECOMMUNICATIONS - 2.28%
A T & T Corp. 40,000 2,030,000
GTE Corp. 49,000 1,672,125
----------
3,702,125
----------
11
<PAGE>
NWNL NORTHSTAR INCOME AND GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
Security Shares Value
- - -------------------------------------------------------------------------
TOBACCO - 1.46%
Philip Morris, Inc. (1) 35,000 $ 2,371,250
----------
TOTAL COMMON STOCKS
(cost $79,564,368) 84,933,221
----------
CONVERTIBLE PREFERRED STOCKS - 7.01%
COMPUTERS - 1.08%
General Motors Corp.
$3.25 Class E 28,000 1,753,500
----------
ELECTRONICS - 2.31%
National Semiconductor Series A 45,000 3,735,000
----------
INSURANCE - 0.65%
Allstate Corp 6.76%, Exchangeable Notes, 4/15/98 29,000 1,047,625
----------
REAL ESTATE - 0.69%
Securitiy Capital Pacific Trust
$1.75 Series A 50,000 1,125,000
----------
STEEL - 2.28%
AK Steel Holdings 100,000 2,850,000
WHX Corp., Series B 20,000 840,000
----------
3,690,000
----------
TOTAL CONVERTIBLE PREFERRED STOCKS
(cost $10,778,889) 11,351,125
----------
Principal Amount
----------------
CONVERTIBLE BONDS - 5.53%
CHEMICALS - 0.57%
Altantic Richfield Co.
9.00%, Notes, 9/15/97 (3) $ 36,000 927,000
----------
ENERGY - 1.48%
Amoco Canada Petroleum
7.375%, Debentures, 9/01/13 1,900,000 2,393,544
----------
ENTERTAINMENT - 1.52%
Time Warner, Inc.
8.75%, Sr. Notes, 1/10/15 2,450,000 2,468,375
----------
GAMING - 1.53%
Argosy Gaming Co.
12.00%, Subordinated Notes, 6/01/01 2,490,000 2,483,775
----------
12
<PAGE>
NWNL NORTHSTAR INCOME AND GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
[LOGO]
Security Principal Amount Value
- - -------------------------------------------------------------------------
INSURANCE - 0.43%
Old Republic International Corp.
5.75%, Subordinated Debentures, 8/15/02 $ 650,000 $ 694,096
----------
TOTAL CONVERTIBLE BONDS
(cost $8,767,700) 8,966,790
----------
CORPORATE BONDS & NOTES - 10.04%
ENERGY - 1.56%
Coastal Corp.
8.125%, Sr. Notes, 9/15/02 1,000,000 1,004,240
Occidental Petoleum Corp.
8.50%, Notes, 9/15/04 1,500,000 1,523,970
----------
2,528,210
----------
ENTERTAINMENT/BROADCASTING - 1.28%
News America Holdings, Inc.
8.625%, Sr. Notes, 2/01/03 2,000,000 2,070,180
----------
HEALTHCARE - 1.29%
Healthtrust, Inc.
8.75%, Subordinated Debentures, 3/15/05 2,000,000 2,095,000
----------
INSURANCE - 1.00%
Leucadia National Corp.
10.375%, Sr. Subordinated Notes, 6/15/02 1,500,000 1,612,500
----------
LEISURE - 0.62%
Royal Caribbean Cruises LTD
8.25%, Sr. Notes, 4/01/05 1,000,000 1,005,040
----------
RETAIL - 0.98%
Federated Department Stores, Inc.
10.00%, Sr. Notes, 2/15/01 1,500,000 1,591,875
----------
TELECOMMUNICATIONS - 0.96%
GTE South, Inc.
9.00%, 1st Mortgage Notes, 9/15/29 1,500,000 1,563,930
----------
TOBACCO - 0.88%
RJR Nabisco, Inc.
8.625%, Sr. Notes, 12/01/02 1,450,000 1,426,829
----------
Transportation - 0.84%
Delta Air Lines, Inc.
8.95%, Debentures, 1/12/12 1,399,090 1,359,244
----------
13
<PAGE>
NWNL NORTHSTAR INCOME AND GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
Security Principal Amount Value
- - -------------------------------------------------------------------------
UTILITY - 0.63%
CTC Mansfield Funding
11.125%, Debentures, 9/30/16 $ 1,000,000 $1,015,000
----------
TOTAL CORPORATE BONDS & NOTES
(cost $16,438,580) 16,267,808
----------
U.S. GOVERNMENT & AGENCIES - 22.09%
Government National Mortgage Association
8.50% 4/15/05 5,880,000 6,012,241
8.00% 1/15/23 2,940,000 2,939,970
U.S. Treasury Notes
7.25%, 5/15/04 4,000,000 4,047,800
7.375% 11/15/97 7,000,000 7,110,250
7.50% 2/15/05 4,000,000 4,123,840
7.875% 8/15/01 - 11/15/04 11,000,000 11,548,680
----------
TOTAL U.S. GOVERNMENT & AGENCIES
(cost $35,005,810) 35,782,781
----------
TOTAL INVESTMENT SECURITIES - 97.09%
(Cost $150,555,347) 157,301,725
-----------
REPURCHASE AGREEMENTS - 1.82%
Agreement with Bear Stearns bearing interest at 5.83%
dated 4/30/95, to be repurchased 5/01/95 in the
amount of $2,938,873 and collateralized by $1,045,000
U.S. Treasury Notes 6.25% due 8/31/96, $500,000 U.S.
Treasury Notes 7.50% due 12/31/96 and $3,635,000 U.S.
Treasury Strips due 2/15/08 (Cost $2,937,446) 2,937,446
OTHER ASSETS LESS LIABILITIES - 1.09% 1,769,468
------------
NET ASSETS - 100.00% $162,008,639
------------
------------
(1) Includes rights to purchase additional stock on the occurrence of certain
events specified in the indenture.
(2) American Depository Receipts
(3) Exchangeable Notes for Lyondell Petrochemical Co.
See accompanying notes to financial statements.
14
<PAGE>
[LOGO]
THIS PAGE INTENTIONALLY LEFT BLANK.
15
<PAGE>
NWNL NORTHSTAR MULTI-SECTOR BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1994
<TABLE>
<CAPTION>
Security Principal Amount Value
- - -------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT GRADE SECURITIES - 21.02%
DOMESTIC BONDS - 15.09%
BROADCASTING/CABLE - 1.97%
Turner Broadcasting Systems, Inc.
8.40%, Sr. Notes, 2/01/24 $ 1,000,000 $ 834,310
-----------
CONTAINER - 1.28%
Owens-Illinois, Inc.
11.00%, Sr. Debentures, 12/01/03 500,000 543,125
-----------
ENTERTAINMENT - 1.09%
Time Warner Entertainment LP
8.375%, Sr. Debentures, 3/15/23 500,000 461,445
-----------
HEALTHCARE - 1.33%
Healthtrust, Inc.
10.25%, Sr. Notes, 4/15/04 500,000 563,750
-----------
INSURANCE - 2.92%
Leucadia National Corp.
10.375%, Sr. Subordinated Notes, 6/15/02 1,150,000 1,236,250
-----------
PRINTING/PUBLISHING - 1.13%
News America Holdings, Inc.
8.25%, Sr. Debentures, 8/10/18 500,000 477,475
-----------
RAIL & SHIPPING - 1.10%
American President Cos.
7.125%, Sr. Notes, 11/15/03 500,000 466,040
-----------
RETAIL - 2.26%
Federated Department Stores, Inc.
10.00%, Sr. Notes, 2/15/01 900,000 955,125
-----------
TRANSPORTATION - 2.01%
Delta Air Lines, Inc.
9.45%, Equipment Trust Certificates, 12/01/97 851,000 853,459
-----------
TOTAL DOMESTIC BONDS 6,390,979
-----------
FOREIGN BONDS - 5.93%
BROADCASTING/CABLE - 1.11%
Rogers Cablesystems, Ltd. (Canada)
9.65%, Debentures, 1/15/04 750,000 467,543
-----------
</TABLE>
16
<PAGE>
NWNL NORTHSTAR MULTI-SECTOR BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1994
[LOGO]
<TABLE>
<CAPTION>
Principal Amount/
Security Units Value
- - -------------------------------------------------------------------------------------------
<S> <C> <C>
FOREIGN GOVERNMENT - 4.82%
Canadian Government Note
6.50%, Sr. Notes, 6/01/04 $ 1,500,000 $ 974,219
Republic of Columbia
7.25%, Unsecured, 2/23/04 1,250,000 1,067,300
-----------
2,041,519
-----------
TOTAL FOREIGN BONDS 2,509,062
-----------
TOTAL INVESTMENT GRADE SECURITIES
(cost $9,400,716) 8,900,041
-----------
HIGH YIELD SECURITIES - 48.12%
DOMESTIC BONDS - 44.21%
AEROSPACE - 1.06%
Sabreliner Corp.
12.50%, Sr. Notes, 4/15/03 500,000 450,000
-----------
BROADCASTING/CABLE - 3.23%
Adelphia Communications Corp.
9.50%, Sr. Notes, 2/15/04 (1) 785,625 620,644
Sinclair Broadcasting Group, Inc.
10.00%, Sr. Subordinated Notes, 12/15/03 750,000 746,250
-----------
1,366,894
-----------
BUILDING PRODUCTS - 1.14%
Schuller International Group
10.875%, Sr. Notes, 12/15/04 450,000 482,625
-----------
CONGLOMERATE - 3.59%
Sherritt, Inc.
9.75%, Sr. Notes, 4/01/03 900,000 904,500
Walter Industries
Sr. Notes, 3/15/00 (2) 600,000 613,500
-----------
1,518,000
-----------
CONSUMER PRODUCTS - 5.15%
Chattem, Inc.
12.75%, Sr. Subordinated Notes, 6/15/04 500,000 460,000
Revlon Consumer Products
9.50%, Sr. Notes, 6/01/99 1,000,000 977,500
Thermoscan, Inc.
13.4375%, Units, 5/15/95 (3)(4)(5) 700 742,000
-----------
2,179,500
-----------
</TABLE>
17
<PAGE>
NWNL NORTHSTAR MULTI-SECTOR BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1994
<TABLE>
<CAPTION>
Security Principal Amount Value
- - -------------------------------------------------------------------------------------------
<S> <C> <C>
ENTERTAINMENT - 2.04%
Kloster Cruise LTD
13.00% Sr. Notes, 5/01/03 $ 1,000,000 $ 865,000
-----------
FINANCE - 1.89%
GPA Delaware, Inc.
8.75%, Sr. Notes, 12/15/98 1,000,000 800,000
-----------
FOOD/BEVERAGE - 2.80%
Canandaigua Wine
8.75%, Sr. Subordinated Notes, 12/15/03 1,210,000 1,185,800
-----------
FOOD SERVICE - 2.51%
American Restaurant Group, Inc.
12.00%, Sr. Notes, 9/15/98 1,000,000 910,000
Caterair International
16.50%, Sr. Subordinated Debentures, 8/31/01
(6)(7)(8) 250,000 153,750
-----------
1,063,750
-----------
GROCERY - 2.56%
Dairy Mart Convenience Stores, Inc.
10.25%, Sr. Subordinated Notes, 3/15/04 750,000 607,500
Farm Fresh, Inc.
12.25%, Sr. Notes, 10/01/00 500,000 478,750
-----------
1,086,250
-----------
HOTELS & GAMING - 4.59%
Capital Gaming International, Inc.
11.50%, Sr. Notes, 2/01/01 750,000 607,500
Hemmeter Enterprises, Inc.
11.50%, Sr. Notes, 12/15/00 (1) 860,740 701,503
PRT Funding Corp.
11.625%, Sr. Notes, 4/15/04 750,000 633,750
-----------
1,942,753
-----------
RETAIL - 1.16%
Wherehouse Entertainment, Inc.
13.00%, Sr. Subordinated Notes, 8/01/02 1,000,000 490,000
-----------
STEEL - 1.15%
Sheffield Steel Corp.
12.00%, Sr. Secured Notes, 11/01/01 500,000 485,000
-----------
</TABLE>
18
<PAGE>
NWNL NORTHSTAR MULTI-SECTOR BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1994 [LOGO]
<TABLE>
<CAPTION>
Security Principal Amount Value
- - -------------------------------------------------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS - 6.40%
Dial Call Communications
0/10.25%, Sr. Discount Notes, 12/15/05 (9) $ 1,000,000 $ 475,000
Mobile Telecommunications Technologies Corp.
13.50%, Sr. Notes, 12/15/02 1,000,000 1,077,500
Viacom International, Inc.
8.00%, Subordinated Debentures, 7/07/06 1,250,000 1,159,375
-----------
2,711,875
-----------
TEXTILE - 2.33%
P.T. Polysindo Eka Perkasa
13.00%, Sr. Notes, 6/15/01 1,000,000 985,000
-----------
UTILITY - 2.61%
California Energy
0/10.25%, Sr. Discount Notes, 1/15/04 (9) 1,400,000 1,106,000
-----------
TOTAL DOMESTIC BONDS 18,718,447
-----------
FOREIGN CORPORATE BONDS - 2.48%
BANKING - .41%
Banco Rio de La Plata
8.75%, Notes, 12/15/03 250,000 171,250
-----------
OIL & GAS - 1.51%
Sodigas
10.50%, Notes, 7/06/99 500,000 435,000
Transportadora de Gas del Sur SA
7.75%, Medium Term Notes, 12/23/98 (3)(7) 250,000 205,625
-----------
640,625
-----------
TRANSPORTATION - .56%
MCTTR - TRIPS 11.00%, Debentures, 5/19/02 (3) 486,154 238,215
-----------
TOTAL FOREIGN CORPORATE BONDS 1,050,090
-----------
FOREIGN GOVERNMENT BONDS - 1.43%
Republic of Argentina
7.3125%, FRB, 9/29/95 (4) 1,000,000 605,000
-----------
TOTAL FOREIGN GOVERNMENT BONDS 605,000
-----------
TOTAL HIGH YIELD SECURITIES
(cost $21,808,224) 20,373,537
-----------
</TABLE>
19
<PAGE>
NWNL NORTHSTAR MULTI-SECTOR BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1994
<TABLE>
<CAPTION>
Security Shares Value
- - -------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK - 0.15%
HOTELS & GAMING - 0.15%
Capital Gaming International, Inc.
(cost $103,128) 14,702 $ 62,484
-----------
TOTAL COMMON STOCK 62,484
-----------
PREFERRED STOCK - 3.35%
BANKING - 1.74%
First Nationwide Bank $11.50 7,000 735,000
-----------
INSURANCE - .53%
ARM Financial Group $2.38 10,000 226,250
-----------
OIL & GAS - 1.08%
Enron Capital Resources, Series A 18,000 456,750
-----------
TOTAL PREFERRED STOCK
(cost $1,376,375) 1,418,000
-----------
WARRANTS - 0.13% (6)
AEROSPACE - 0.01%
Sabreliner Corp. (expires 12/15/00) (3) 500 5,000
-----------
CONSUMER PRODUCTS - 0.00%
Chattem, Inc. (expires 6/17/99) (3) 500 2,375
-----------
HOTELS & GAMING - 0.07%
Capital Gaming International, Inc. (expires
2/01/99) 11,138 30,630
-----------
STEEL - 0.04%
Sheffield Steel Corp. (expires 11/01/01) 2,500 15,625
-----------
TRANSPORTATION - 0.01%
CHC Helicopter (expires 10/29/98) 4,000 4,000
-----------
TOTAL WARRANTS
(cost $28,246) 57,630
-----------
<CAPTION>
Principal Amount
----------------------
<S> <C> <C>
U.S. GOVERNMENT & AGENCIES - 17.14%
GNMA II ARM #8359, 5.50%, 1/20/24 $ 1,867,160 1,854,874
Resolution Trust Corp., 8.00%, 6/25/26 440,481 413,602
US Treasury Notes, 6.75%, 5/31/99 5,000,000 4,986,400
-----------
TOTAL U.S. GOVERNMENT & AGENCIES
(cost $7,129,245) 7,254,876
-----------
TOTAL INVESTMENTS SECURITIES - 89.91%
(Cost $39,845,934) 38,066,568
-----------
</TABLE>
20
<PAGE>
NWNL NORTHSTAR MULTI-SECTOR BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1994
<TABLE>
<CAPTION>
Security Value
- - -------------------------------------------------------------------------------------------
<S> <C>
REPURCHASE AGREEMENTS - 8.96%
Agreement with Bear Stearns bearing interest at
5.83% dated 4/30/95, to be repurchased 5/01/95 in
the amount of $3,793,959 and collateralized by
$3,525,000 U.S. Treasury Strips due 5/15/12,
$3,455,000 U.S. Treasury Strips due 11/15/06 and
$8,240,000 U.S. Treasury Strips due 11/15/18 (Cost
$3,792,117) $ 3,792,117
OTHER ASSETS LESS LIABILITIES - 1.13% 477,713
-----------
NET ASSETS - 100.00% $42,336,398
-----------
-----------
<FN>
(1) Payment-in-Kind Security.
(2) When Issued Security
(3) Sale restricted to qualified institutional investors.
(4) Adjustable rate security, date reflects next reset date
(5) A unit consists of 1,000 par value Adjustable Rate, Sr. Subordinated Notes,
8/15/01 and 13 Shares Class B common stock
(6) Non-income producing securities.
(7) Private Placement.
(8) Defaulted Security.
(9) Step Bond.
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
NWNL NORTHSTAR HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
[LOGO]
Security Principal Amount/Units Value
- - ------------------------------------------------------------------------------
CORPORATE BONDS & NOTES - 74.16%
AEROSPACE - 0.93%
Sabreliner Corp.
12.50%, Sr. Notes, 4/15/03 $ 1,250,000 $ 1,125,000
-----------
BROADCASTING/CABLE - 4.98%
ACT III Broadcasting, Inc.
9.625%, Sr. Subordinated Notes, 12/15/03 425,000 423,937
Adelphia Communications Corp.
9.50%, Sr. Notes, 2/15/04 (1) 2,874,513 2,270,865
Echostar Communications Corp.
0/12.875%, Units, 6/01/04 (2)(3) 2,000 1,060,000
Sinclair Broadcasting Group, Inc.
10.00%, Sr. Subordinated Notes, 12/15/03 2,150,000 2,139,250
Spectravision, Inc.
11.65%, Sr. Subordinated Notes, 12/01/02 (1) 847,000 105,875
-----------
5,999,927
-----------
CHEMICALS - 1.71%
GI Holdings
0%, Sr. Notes, 10/01/98 3,000,000 2,055,000
-----------
CONGLOMERATE - 2.30%
Sherritt, Inc.
9.75%, Sr. Notes, 4/01/03 2,750,000 2,763,750
-----------
CONSTRUCTION - 1.43%
Waxman Industries, Inc.
0/12.75%, Units, 6/01/04 (4) 2,000 1,720,000
-----------
CONSUMER PRODUCTS - 8.94%
Chattem, Inc.
12.75%, Sr. Subordinated Notes, 6/15/04 1,300,000 1,196,000
Guess, Inc.
9.50%, Sr. Subordinated Notes, 8/15/03 2,500,000 2,450,000
International Semi-Tech Corp.
0/11.50%, Sr. Secured Notes, 8/15/03 (2) 5,900,000 2,832,000
Revlon Consumer Products
9.50%, Sr. Notes, 6/01/99 2,000,000 1,955,000
Thermoscan, Inc.
13.4375%, Units, 5/15/95 (5)(6)(7) 2,200 2,332,000
-----------
10,765,000
-----------
22
<PAGE>
NWNL NORTHSTAR HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
[LOGO]
Security Principal Amount Value
- - ------------------------------------------------------------------------------
ENTERTAINMENT - 1.00%
Kloster Cruise LTD
13.00%, Sr. Notes, 5/01/03 $ 1,000,000 $ 865,000
Sam Houston Race Park
11.75%, Notes, 7/15/99 (5)(8) 1,500,000 337,500
-----------
1,202,500
-----------
FINANCE - 2.58%
GPA Delaware, Inc.
9.50%, Medium Term Notes, 12/15/01 (5) 250,000 165,000
GPA Holland
9.75%, Sr. Medium Term Notes, 12/10/01 (5) 2,000,000 1,340,000
GPA Holland
10.20%, Sr. Medium Term Notes, 8/05/98 (5) 2,000,000 1,600,000
-----------
3,105,000
-----------
FOOD/BEVERAGE - 1.73%
Beatrice Foods
12.00%, Sr. Subordinated Notes, 12/01/01 2,250,000 2,081,250
-----------
FOOD SERVICE - 2.39%
American Restaurant Group, Inc.
12.00%, Sr. Notes, 9/15/98 3,000,000 2,730,000
Caterair International
16.50%, Sr. Subordinated Debentures, 8/31/01
(8)(9)(10) 250,000 153,750
-----------
2,883,750
-----------
FOOD WHOLESALER - 2.48%
Di Giorgio Corp.
12.00%, Sr. Notes, 2/15/03 2,450,000 2,113,125
White Rose Foods
0%, Sr. Discount Debentures, 11/01/98 2,000,000 870,000
-----------
2,983,125
-----------
GROCERY - 6.06%
Dairy Mart Convenience Stores, Inc.
10.25%, Sr. Subordinated Notes, 3/15/04 2,500,000 2,025,000
Farm Fresh, Inc.
12.25%, Sr. Notes, 10/01/00 2,500,000 2,393,750
Star Markets Co.
13.00%, Sr. Subordinated Notes, 11/01/04 2,700,000 2,875,500
-----------
7,294,250
-----------
23
<PAGE>
NWNL NORTHSTAR HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
[LOGO]
Security Principal Amount/Units Value
- - ------------------------------------------------------------------------------
HOTELS & GAMING - 8.33%
Capital Gaming International, Inc.
11.50%, Sr. Notes, 2/01/01 $ 2,100,000 $ 1,701,000
Hemmeter Enterprises, Inc.
12.00%, Sr. Notes, 12/15/00 (1)(5) 3,832,220 3,123,259
PRT Funding Corp.
11.625%, Sr. Notes, 4/15/04 2,950,000 2,492,750
Players International, Inc.
10.875%, Sr. Notes, 4/15/05 (5) 1,425,000 1,442,813
Trump Castle Funding
11.75%, 1st Mortgage Notes, 11/15/03 2,000,000 1,250,000
Trump Taj Mahal
11.35%, Debentures, 11/15/99 19,750 14,121
-----------
10,023,943
-----------
INSURANCE - 2.60%
Americo Life, Inc.
9.25%, Sr. Subordinated Notes, 6/01/05 3,500,000 3,132,500
-----------
OFFICE/BUSINESS EQUIPMENT - 1.62%
United Stationers Supply, Inc.
12.75%, Sr. Subordinated Notes, 5/01/05 (5) 1,925,000 1,949,063
-----------
OIL & GAS - 1.68%
WRT Energy Corp.
13.875%, Units, 3/01/02 (11) 2,000 2,025,000
-----------
PRINTING/PUBLISHING - 1.34%
Affiliated Newspapers Investments, Inc.
0/13.25%, Sr. Discount Notes, 7/01/06 (2) 2,900,000 1,609,500
-----------
RETAIL - 4.03%
Central Rents, Inc.
12.875%, Sr. Notes, 12/15/03 1,400,000 1,277,500
Duane Reade Corp.
12.00%, Sr. Notes, 9/15/02 2,425,000 2,109,750
Wherehouse Entertainment, Inc.
13.00%, Sr. Subordinated Notes, 8/01/02 3,000,000 1,470,000
-----------
4,857,250
-----------
24
<PAGE>
NWNL NORTHSTAR HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
[LOGO]
Security Principal Amount/Units Value
- - ------------------------------------------------------------------------------
STEEL - 5.66%
Carbide/Graphite Group, Inc.
11.50%, Sr. Notes, 9/01/03 $ 2,200,000 $ 2,332,000
Gulf States Steel Acquisition Corp.
13.50%, Units, 4/15/03 (5)(12) 2,000 2,055,000
Sheffield Steel Corp.
12.00%, Sr. Secured Notes, 11/01/01 2,500,000 2,425,000
-----------
6,812,000
-----------
TELECOMMUNICATIONS - 8.42%
Dial Call Communications
0/10.25%, Sr. Discount Notes, 12/15/05 (2) 4,000,000 1,900,000
Dial Call Communications
0/12.25%, Sr. Discount Notes, 4/15/04 (2) 2,000,000 990,000
Heartland Wireless Communications, Inc.
13.00%, Units, 4/15/03 (5)(13) 2,425,000 2,509,875
Mobile Telecommunication Technologies Corp.
13.50%, Sr. Notes, 12/15/02 3,000,000 3,232,500
Nextel Communications, Inc.
0/9.75%, Sr. Discount Notes, 8/15/04 (2) 3,000,000 1,500,000
-----------
10,132,375
-----------
TRANSPORTATION - 1.49%
Burlington Motor Holdings
11.50%, Sr. Subordinated Notes, 11/01/03 2,000,000 1,800,000
-----------
UTILITY - 2.46%
California Energy
0/10.25%, Sr. Discount Notes, 1/15/04 (2) 3,750,000 2,962,500
-----------
TOTAL CORPORATE BONDS & NOTES
(cost $93,703,970) 89,282,683
-----------
FOREIGN BONDS & NOTES - 15.78%
BANKING - 1.95%
Banamex SA
9.125%, Debentures, 4/06/00 2,000,000 1,660,000
Banco de Galicia
9.00%, Notes, 11/01/03 1,000,000 685,000
-----------
2,345,000
-----------
25
<PAGE>
NWNL NORTHSTAR HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
[LOGO]
Security Principal Amount/Units Value
- - ------------------------------------------------------------------------------
BROADCASTING/CABLE - 4.43%
Grupo Televisa SA de CV
9.5625%, Debentures, 4/07/96 (6) $ 1,000,000 $ 952,500
Panamsat Corp.
0/11.375%, Sr. Subordinated Notes, 8/01/03 (2) 4,000,000 2,780,000
Spanish Broadcasting Systems, Inc.
7.50/12.50%, Sr. Notes, 6/15/02 (2) 1,750,000 1,601,250
-----------
5,333,750
-----------
FOOD/BEVERAGE - 2.12%
Gruma SA
9.75%, Sr. Notes, 3/09/98 3,000,000 2,550,000
-----------
FOREIGN GOVERNMENT - 1.00%
Republic of Argentina
7.3125%, FRB, 9/29/95 (6) 2,000,000 1,210,000
-----------
OIL & GAS - 4.23%
Invergas SA
12.50%, Sr. Notes, 12/16/99 1,925,000 1,713,250
Sodigas
10.50%, Sr. Notes, 7/06/99 (5) 2,000,000 1,740,000
Transportadora de Gas del Sur SA
7.75%, Sr. Debentures, 12/23/98 (5)(9) 2,000,000 1,645,000
-----------
5,098,250
-----------
TEXTILES - 2.05%
P.T. Polysindo Eka Perkasa
13.00%, Sr. Notes, 6/15/01 2,500,000 2,462,500
-----------
TOTAL FOREIGN BONDS & NOTES
(cost $18,997,505) 18,999,500
-----------
Shares
-----------
COMMON STOCK - 0.22% (8)
GAMING - 0.09%
Capital Gaming International, Inc. 26,835 114,049
-----------
PRINTING/PUBLISHING - 0.06%
Affiliated Newspapers Investments, Inc. 2,900 72,500
-----------
RETAIL - 0.07%
Thrifty Payless Holdings, Inc. 19,000 80,750
-----------
TOTAL COMMON STOCK
(cost $207,251) 267,299
-----------
26
<PAGE>
NWNL NORTHSTAR HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
[LOGO]
Security Shares Value
- - ------------------------------------------------------------------------------
PREFERRED STOCK - 3.92%
BANKING - 1.48%
First Nationwide Bank $11.50 17,000 $ 1,785,000
-----------
HEALTHCARE - 2.16%
Foxmeyer Health Corp $4.20 (1) 75,429 2,602,313
-----------
RETAIL - 0.28%
Color Tile 14.50%, Series A (5) 20,000 330,000
-----------
TOTAL PREFERRED STOCK
(cost $4,716,711) 4,717,313
-----------
WARRANTS - 0.41% (8)
AEROSPACE - 0.01%
Sabreliner Corp. (expires 9/01/99) (5) 1,250 12,500
-----------
BROADCASTING/CABLE - 0.20%
Spanish Broadcasting Systems, Inc. 1,750 245,000
-----------
CONSUMER PRODUCTS - 0.01%
Chattem, Inc. (expires 6/17/99) (5) 1,300 6,175
-----------
ENTERTAINMENT - 0.00%
Sam Houston Race Park (expires 7/15/99) (8)(10) 6,000 0
-----------
FINANCE - 0.05%
Olympic Financial LTD (expires 9/01/99) 8,000 60,000
-----------
GAMING - 0.05%
Capital Gaming International, Inc. (expires
2/01/99) 20,250 55,687
-----------
RETAIL - 0.03%
Central Rents, Inc. (expiration pending) 1,400 35,000
-----------
STEEL - 0.06%
Sheffield Steel Corp. (expires 11/01/01) 12,500 78,125
-----------
TRANSPORTATION - 0.00%
CHC Helicopter (expires 10/29/98) 2,000 2,000
-----------
TOTAL WARRANTS
(cost $407,289) 494,487
-----------
TOTAL INVESTMENT SECURITIES - 94.49%
(Cost $118,032,726) 113,761,282
-----------
27
<PAGE>
NWNL NORTHSTAR HIGH YIELD BOND FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1995
[LOGO]
Security Value
- - ------------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 4.86%
Agreement with Bear Stearns bearing interest at
5.83% dated 4/30/95, to be repurchased 5/01/95 in
the amount of $5,851,665 and collateralized by
$6,610,000 U.S. Treasury Stripped TINT due 2/15/08
and $7,785,000 U.S. Treasury Strips due 11/15/06
(Cost $5,848,824) $ 5,848,824
OTHER ASSETS LESS LIABILITIES - 0.65% 788,922
------------
NET ASSETS - 100.00% $120,399,028
------------
------------
(1) Payment-in-kind security
(2) Step bond
(3) A unit consists of 1,000 par value 0/12.875%, Sr. Secured Discount Notes,
6/01/04 and 6 warrants.
(4) A unit consists of 1,000 par value 0/12.75%, Sr. Notes, 6/01/04 and 59
warrants.
(5) Sale restricted to qualified institutional investors.
(6) Adjustable rate security, date reflects next reset date.
(7) A unit consists of 1,000 par value Adjustable Rate, Sr. Subordinated Notes,
8/15/01 and 13 shares Class B common stock.
(8) Non-income producing securities.
(9) Private placement
(10) Defaulted security
(11) A unit consists of 1,000 par value 13.875%, Sr. Notes, 3/01/02 and 8
warrants.
(12) A unit consists of 1,000 par value 13.50, 1st Mortgage Notes, 4/15/03 and 1
warrant.
(13) A unit consists of 1,000 par value 13.00%, Sr. Notes, 4/15/03 and 6
warrants.
See accompanying notes to financial statements.
28
<PAGE>
[LOGO]
THIS PAGE INTENTIONALLY LEFT BLANK.
29
<PAGE>
NWNL NORTHSTAR SERIES TRUST
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 1995
<TABLE>
<CAPTION>
NWNL NWNL NWNL
Northstar Northstar Northstar
Income and Multi-Sector High Yield
Growth Fund Bond Fund Bond Fund
---------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments in securities, at value (cost $150,555,347,
$39,845,934 and $118,032,726, respectively) $157,301,725 $38,066,568 $113,761,282
Repurchase agreements 2,937,446 3,792,117 5,848,824
Cash 272,974 105,609 420,880
Dividends and interest receivable 1,429,157 1,037,234 2,792,883
Receivable for shares of beneficial interest sold 432,542 276,013 2,494,227
Receivable for investments sold 0 764,479 14,144,993
Prepaid expenses 44,042 37,152 41,282
-----------------------------------------------------
Total Assets 162,417,886 44,079,172 139,504,371
-----------------------------------------------------
LIABILITIES:
Payable for investments purchased 0 1,678,274 18,637,797
Payable for shares of beneficial interest reacquired 179,090 4,726 288,188
Investment advisory fee payable 97,112 25,515 70,135
Distribution fee payable 88,212 18,525 57,381
Administrative services fee payable 12,948 3,401 9,351
Accounting fee payable 12,078 3,349 8,983
Accrued expenses 19,807 6,424 25,909
Dividend payable 0 2,560 7,599
-----------------------------------------------------
Total Liabilities 409,247 1,742,774 19,105,343
-----------------------------------------------------
NET ASSETS $162,008,639 $42,336,398 $120,399,028
-----------------------------------------------------
NET ASSETS WERE COMPOSED OF:
Shares of beneficial interest, $.01 par value outstanding
(unlimited shares authorized), $161,910,466 $46,600,501 $128,212,750
Undistributed (overdistributed) net investment income 443,312 (10,846) 65,618
Accumulated net realized loss on investments (7,091,517) (2,473,891) (3,607,896)
Net unrealized appreciation (depreciation) of investments 6,746,378 (1,779,366) (4,271,444)
-----------------------------------------------------
Net assets $162,008,639 $42,336,398 $120,399,028
-----------------------------------------------------
Class A:
Net Assets $ 72,046,723 $27,310,338 $ 64,707,544
-----------------------------------------------------
Shares outstanding 7,155,524 6,132,942 14,554,082
-----------------------------------------------------
Net asset value and redemption value per share
(net assets/shares outstanding) $10.07 $4.45 $4.45
-----------------------------------------------------
Maximum offering price per share (net asset value
plus sales charge of 4.75% of offering price) $10.57 $4.67 $4.67
-----------------------------------------------------
Class B:
Net Assets $ 48,679,241 $14,446,082 $ 51,498,510
-----------------------------------------------------
Shares outstanding 4,840,545 3,245,608 11,590,008
-----------------------------------------------------
Net asset value and offering price per share $10.06 $4.45 $4.44
-----------------------------------------------------
Class C:
Net Assets $ 41,282,675 $ 579,978 $ 4,192,974
-----------------------------------------------------
Shares outstanding 4,111,392 130,159 940,224
-----------------------------------------------------
Net asset value and offering price per share $10.04 $4.46 $4.46
-----------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
30
<PAGE>
NWNL NORTHSTAR SERIES TRUST
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 1995
[LOGO]
<TABLE>
<CAPTION>
NWNL NWNL NWNL
Northstar Northstar Northstar
Income and Multi-Sector High Yield
Growth Fund Bond Fund Bond Fund
------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $1,473,256 $87,054 $100,438
Interest 1,830,943 1,771,136 5,476,679
------------------------------------------------------
Total investment income 3,304,199 1,858,190 5,577,117
------------------------------------------------------
EXPENSES:
Investment advisory and management fees 470,915 137,941 342,653
Distribution fees
Class A 106,212 36,125 80,602
Class B 207,121 61,464 174,130
Class C 66,726 2,042 14,068
Transfer agent fees and expenses
Class A 42,523 16,266 36,851
Class B 25,055 10,096 23,931
Class C 8,439 1,971 1,863
Administrative services fees 62,789 18,392 45,687
Fund accounting fees 31,394 9,196 22,844
Printing and postage expenses 23,575 18,172 20,390
Registration fees 16,880 10,531 15,729
Custodian fees and expenses 12,558 5,812 13,706
Miscellaneous expenses 28,080 17,256 23,646
------------------------------------------------------
1,102,267 345,264 816,100
Less expenses reimbursed by management company 0 24,250 0
------------------------------------------------------
Total expenses 1,102,267 321,014 816,100
------------------------------------------------------
NET INVESTMENT INCOME 2,201,932 1,537,176 4,761,017
------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments (6,665,184) (793,638) (1,761,594)
Net change in unrealized appreciation of
investments 8,613,272 1,592,290 3,506,057
------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 1,948,088 798,652 1,744,463
------------------------------------------------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,150,020 $2,335,828 $6,505,480
------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
31
<PAGE>
NWNL NORTHSTAR SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 1995
<TABLE>
<CAPTION>
NWNL NWNL NWNL
Northstar Northstar Northstar
Income and Multi-Sector High Yield
Growth Fund Bond Fund Bond Fund
------------------------------------------------------
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 2,201,932 $1,537,176 $ 4,761,017
Net realized loss on investments (6,665,184) (793,638) (1,761,594)
Net change in unrealized appreciation of investments 8,613,272 1,592,290 3,506,057
------------------------------------------------------
Increase in net assets resulting from operations 4,150,020 2,335,828 6,505,480
FROM DIVIDENDS TO SHAREHOLDERS:
Net investment income
Class A (1,211,847) (1,071,153) (2,929,023)
Class B (579,808) (501,229) (1,778,251)
Class C (280,739) (16,507) (145,353)
------------------------------------------------------
(2,072,394) (1,588,889) (4,852,627)
------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 54,193,332 8,056,011 45,609,802
Net asset value of shares issued to
shareholders in reinvestment of dividends 1,314,124 450,053 1,980,861
------------------------------------------------------
55,507,456 8,506,064 47,590,663
Cost of shares redeemed (10,389,293) (2,810,522) (7,850,625)
------------------------------------------------------
Net Increase in net assets derived from capital
share transactions 45,118,163 5,695,542 39,740,038
------------------------------------------------------
Net increase in net assets 47,195,789 6,442,481 41,392,891
NET ASSETS:
Beginning of period 114,812,850 35,893,917 79,006,137
------------------------------------------------------
End of period (including undistributed
(overdistributed) net investment
income: $443,312, $(10,846) and $65,618,
respectively) $162,008,639 $42,336,398 $120,399,028
------------------------------------------------------
</TABLE>
See accompanying notes to financial statement
32
<PAGE>
NWNL NORTHSTAR SERIES TRUST
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD NOVEMBER 8, 1993 (COMMENCEMENT OF OPERATIONS)
THROUGH OCTOBER 31, 1994
[LOGO]
<TABLE>
<CAPTION>
NWNL NWNL NWNL
Northstar Northstar Northstar
Income and Multi-Sector High Yield
Growth Fund Bond Fund Bond Fund
-------------------------------------------
<S> <C> <C> <C>
FROM OPERATIONS:
Net investment income $2,239,551 $2,294,630 $5,080,521
Net realized loss on investments (426,333) (1,680,253) (1,846,302)
Net change in unrealized depreciation of
investments (1,866,894) (3,371,656) (7,777,501)
------------------------------------------------------
Increase in net assets resulting from operations (53,676) (2,757,279) (4,543,282)
FROM DIVIDENDS TO SHAREHOLDERS:
Net investment income
Class A (1,480,853) (1,811,675) (3,850,899)
Class B (389,115) (432,554) (989,495)
Class C (55,809) (9,534) (82,899)
------------------------------------------------------
(1,925,777) (2,253,763) (4,923,293)
------------------------------------------------------
FROM CAPITAL SHARE TRANSACTIONS:
Net proceeds from sale of shares 124,617,812 47,003,510 102,945,785
Net asset value of shares issued to
shareholders in reinvestment of dividends 1,227,407 695,601 2,042,914
------------------------------------------------------
125,845,219 47,699,111 104,988,699
Cost of shares redeemed (9,132,916) (6,804,152) (16,525,987)
------------------------------------------------------
Net Increase in net assets derived from capital
share transactions 116,712,303 40,894,959 88,462,712
------------------------------------------------------
Net increase in net assets 114,732,850 35,883,917 78,996,137
NET ASSETS:
Beginning of period 80,000 10,000 10,000
------------------------------------------------------
End of period (including undistributed net
investment income: $313,774, $40,867 and
$157,228, respectively) $114,812,850 $35,893,917 $79,006,137
------------------------------------------------------
</TABLE>
See accompanying notes to financial statement
33
<PAGE>
NWNL NORTHSTAR SERIES TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT
EACH PERIOD
<TABLE>
<CAPTION>
Ratio Ratio of Ratio of
Net Net Dividends of expense net
Asset realized declared Net Net expenses reimbursement investment
Value, unrealized Total from Asset Assets, to to income to
beginning Net gain from net Value, end of average average average
Period of investment (loss) on investment investment end of Total period net net net Portfolio
ended period income investments operations income period Return (000's) assets(1) assets(1) assets(1) turnover
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- - -----------------------------------------------------------------------------------------------------------------------------------
Income and Growth Fund, Class A
- - -----------------------------------------------------------------------------------------------------------------------------------
11/08/93-
10/31/94 $10.00 $0.30 $(0.05) $0.25 $(0.25) $10.00 2.48% $72,223 1.50% 0.06% 3.73% 26%
4/30/95 10.00 0.10 0.13 0.23 (0.16) 10.07 2.42 72,047 1.45 -- 3.90 44
Income and Growth Fund, Class B
-------------------------------
2/09/94-
10/31/94 10.64 0.20 (0.65) (0.45) (0.20) 9.99 (4.20) 37,767 2.20 0.16 3.00 26
4/30/95 9.99 0.07 0.14 0.21 (0.14) 10.06 2.11 48,679 2.15 -- 3.20 44
Income and Growth Fund, Class C
-------------------------------
3/21/94-
10/31/94 10.37 0.20 (0.38) (0.18) (0.20) 9.99 (1.75) 4,823 2.20 0.47 2.87 26
4/30/95 9.99 0.05 0.15 0.20 (0.15) 10.04 2.06 41,283 2.16 -- 3.19 44
Multi-Sector Fund, Class A
-------------------------------
11/08/93-
10/31/94 5.00 0.34 (0.64) (0.30) (0.33) 4.37 (6.18) 23,976 1.50 0.25 8.30 106
4/30/95 4.37 0.18 0.10 0.28 (0.20) 4.45 6.52 27,310 1.50 0.11 8.77 37
Multi-Sector Fund, Class B
-------------------------------
2/09/94-
10/31/94 5.10 0.26 (0.73) (0.47) (0.26) 4.37 (9.61) 11,585 2.20 0.20 7.57 106
4/30/95 4.37 0.16 0.10 0.26 (0.18) 4.45 6.12 14,446 2.20 0.14 8.07 37
Multi-Sector Fund, Class C
-------------------------------
3/21/94-
10/31/94 4.94 0.21 (0.57) (0.36) (0.21) 4.37 (7.29) 333 2.20 6.61 7.73 106
4/30/95 4.37 0.16 0.11 0.27 (0.18) 4.46 6.36 580 2.20 0.94 8.07 37
High Yield Fund, Class A
-------------------------------
11/08/93-
10/31/94 5.00 0.41 (0.60) (0.19) (0.40) 4.41 (4.11) 50,797 1.50 0.11 10.09 163
4/30/95 4.41 0.23 0.05 0.28 (0.24) 4.45 6.66 64,708 1.50 -- 10.76 74
High Yield Fund, Class B
-------------------------------
2/09/94-
10/31/94 5.20 0.33 (0.80) (0.47) (0.32) 4.41 (9.30) 25,880 2.20 0.20 9.72 163
4/30/95 4.41 0.21 0.04 0.25 (0.22) 4.44 6.03 51,499 2.20 -- 10.06 74
High Yield Fund, Class C
-------------------------------
3/21/94-
10/31/94 5.06 0.26 (0.65) (0.39) (0.26) 4.41 (7.21) 2,330 2.20 0.99 9.46 163
4/30/95 4.41 0.21 0.06 0.27 (0.22) 4.46 6.50 4,193 2.19 -- 10.06 74
</TABLE>
(1) annualized
See accompanying notes to financial statement
34
<PAGE>
NWNL NORTHSTAR SERIES TRUST
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 1995 (UNAUDITED)
[LOGO]
NOTE 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION - The NWNL Northstar Series Trust, a business trust, was
organized under the laws of the Commonwealth of Massachusetts on August 18,
1993, and is registered under the Investment Company Act of 1940 as a
diversified open-end management investment company. The names of each of the
three investment series which comprise the Trust (the "Funds") and their
respective investment objectives are set forth below. Each Fund commenced its
public offering of Class A shares on November 8, 1993. The Class B and Class C
share offerings commenced on February 9, 1994 and March 21, 1994, respectively.
NWNL NORTHSTAR INCOME AND GROWTH FUND ("Income and Growth Fund") is a
diversified portfolio with the investment objective of current income
balanced with the objective of achieving capital appreciation. The Fund
seeks to achieve its objective through investments in a diversified group of
securities selected for their prospects of current yield and capital
appreciation.
NWNL NORTHSTAR MULTI-SECTOR BOND FUND ("Multi-Sector Fund") is a
diversified portfolio whose investment objective is to maximize current
income. The Fund seeks to achieve its objective by investing in U.S. and
Foreign Government Bonds, Investment Grade Bonds and High Yield Bonds, each
as defined in the Prospectus for the Trust.
NWNL NORTHSTAR HIGH YIELD BOND FUND ("High Yield Fund") is a diversified
portfolio whose investment objective is to seek high income. The Fund
invests primarily in a diversified group of fixed income securities which
are selected for high income, including lower rated fixed income securities,
convertible securities, securities issued by U.S. companies in foreign
currencies, and securities issued by foreign governments and companies.
SECURITY VALUATION - Equity securities are valued at the closing sale prices
reported on recognized securities exchanges or lacking any sales, at the last
available bid price. Prices of long-term debt securities are valued on the basis
of last reported sales price, or if no sales are reported, the value is
determined based upon the mean of representative quoted bid or asked prices for
such securities, or, if such prices are not available, at prices provided by
market makers, or at prices for securities of comparable maturity, quality and
type. Short-term debt instruments with remaining maturities of less than 60 days
are valued at amortized cost, unless the Trustees determine that amortized cost
does not reflect the fair value of such obligations. Securities for which market
quotations are not readily available are valued at fair value determined in good
faith by or under direction of the Trustees of the Trust. The books and records
of the Funds are maintained in U.S. dollars. Securities quoted in foreign
currencies are translated into in U.S. dollars based on the prevailing exchange
rates on that day. The Adviser uses independent pricing services to price the
Funds' securities.
SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS TO
SHAREHOLDERS - Security transactions are recorded on the trade date. Realized
gains or losses on sales of investments are calculated on the identified cost
basis. Interest income is recorded on the accrual basis except when collection
is not expected; discounts are accrued, and premiums amortized to par at
maturity; dividend income is recorded on the ex-dividend dates. Income, expenses
(except class specific expenses), and realized/unrealized gains/losses, are
allocated proportionately to each class of shares based upon the relative net
asset value of outstanding shares. Dividends from net investment income are
declared and paid monthly by the High Yield and Multi-Sector Funds, and declared
and paid quarterly by the Income and Growth Fund. Distributions of net realized
capital gains, if any, are declared annually; however, to the extent that a net
realized capital gain can be reduced by a capital loss carryover, such gain will
not be distributed.
35
<PAGE>
NWNL NORTHSTAR SERIES TRUST
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 1995 (UNAUDITED)
REPURCHASE AGREEMENTS - The Funds' Custodian takes possession of collateral
pledged for investments in repurchase agreements. The underlying collateral is
valued daily on a marked-to-market basis to assure that the value, including
accrued interest, is at least equal to the repurchase price. In the event of
default of the obligation to repurchase, the Funds have the right to liquidate
the collateral and apply the proceeds in satisfaction of the obligation. If the
seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Funds may be delayed or limited.
FEDERAL INCOME TAXES - The Trust intends to comply with the special
provisions of the Internal Revenue Code available to investment companies and to
distribute all of the taxable net income to their respective shareholders.
Therefore, no Federal income tax provision or excise tax provision is required.
ORGANIZATION COSTS - Costs incurred by the Trust in connection with its
organization of each Fund have been deferred and are being amortized over a
period of five years from the date the Funds commenced operations. Each Fund
offers three classes of shares.
NOTE 2. INVESTMENT ADVISER, ADMINISTRATOR AND DISTRIBUTOR
NWNL Northstar, Inc. and its wholly owned operating subsidiaries; Northstar
Investment Management Corp., NWNL Northstar Distributors, Inc. and Northstar
Administrators Corp. is an 80% owned subsidiary of Reliastar Financial Corp.
Reliastar Financial Corp. is a shareholder with a 43% interest in the
Multi-Sector Bond Fund as of April 30, 1995.
Northstar Investment Management Corporation (the "Adviser") serves as each
Fund's investment adviser. Each Fund pays the Adviser an investment advisory fee
calculated at an annual rate of .75% of each Fund's average daily net assets.
For the six months ended April 30, 1995, the Adviser earned $951,509 in
investment advisory fees. Northstar Administrators Corporation (the
"Administrator"), an affiliate of the Adviser, serves as each Fund's
administrator. The Funds pay the Administrator a fee calculated at an annual
rate of .10% of each Fund's average daily net assets, and an annual shareholder
account servicing fee of $5.00 (the collection of which has been waived for
1995), payable semi-annually, for each account of beneficial owners of shares.
For the six months ended April 30, 1995, the Administrator earned $126,868 in
administrative fees. The Adviser agreed that, through April 30, 1995, if the
Multi-Sector Fund total operating expenses exceeded 1.50% for Class A
shareholders, and 2.20% for Class B and Class C shareholders, on an annualized
basis, the Adviser would reimburse the Fund for amounts in excess of such
limits, up to the total amount of fees received during the period. The expense
cap was exceeded, so the Adviser reimbursed the Fund $24,250.
NWNL Northstar Distributors, Inc. (the "Distributor"), an affiliate of the
Adviser and the Administrator, is the distributor of each Fund's shares. Under
separate Plans of Distribution pertaining to Class A, Class B, and Class C
shares, the Trust pays the Distributor monthly service fees at an annual rate of
.25% of the average daily net assets in the case of Class A, Class B and Class C
shares, and monthly distribution fees at the annual rate of .05% of the average
daily net assets of Class A shares, and .75% of the average daily net assets of
Class B and Class C shares. At April 30, 1995 the Trust owed the Distributor
$164,118 in service and distribution fees. The Distributor also receives the
proceeds of the initial sales charges paid by shareholders upon the purchase of
Class A shares, and the contingent deferred sales charge paid by shareholders
upon certain redemptions of Class A, Class B and Class C shares. For the six
months ended April 30, 1995,
36
<PAGE>
NWNL NORTHSTAR SERIES TRUST
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 1995 (UNAUDITED)
[LOGO]
the Distributor earned the following amounts in sales charges:
CLASS A CLASS B CLASS C
SHARES SHARES SHARES
--------- --------- -------
Initial Sales Charges $118,698 N/A N/A
Contingent Deferred Sales Charges $ 10,548 $153,476 $3,058
NOTE 3. PURCHASES AND SALES OF INVESTMENT SECURITIES
The aggregate cost of purchases and proceeds from sales of investments
(excluding short-term investments) for the six months ended April 30, 1995, were
as follows:
INCOME AND MULTI-SECTOR HIGH YIELD
GROWTH FUND FUND FUND
------------ ----------- ------------
Aggregate Purchases $114,029,071 $17,561,755 $105,252,130
Aggregate Sales $ 54,329,799 $13,252,482 $ 66,572,811
NOTE 4. PORTFOLIO SECURITIES (TAX BASIS)
The cost of securities for federal income tax purposes and the aggregate
appreciation and depreciation of securities at April 30, 1995 were as follows:
INCOME AND MULTI-SECTOR HIGH YIELD
GROWTH FUND FUND FUND
------------ ----------- ------------
Cost (tax basis) $150,555,347 $39,845,934 $118,032,726
------------ ----------- ------------
Appreciated Securities 9,366,403 813,766 2,440,627
------------ ----------- ------------
Depreciated Securities (2,620,025) (2,593,132) (6,712,071)
------------ ----------- ------------
Net Unrealized
appreciation/
depreciation $6,746,378 $(1,779,366) $(4,271,444)
------------ ----------- ------------
NOTE 5. CAPITAL SHARE TRANSACTIONS
Transactions in capital shares of each class of shares of each Fund for the six
months ended April 30, 1995, were as follows:
INCOME AND MULTI-SECTOR HIGH YIELD
GROWTH FUND FUND FUND
------------ ----------- ------------
I. CLASS A
Shares sold 598,998 956,907 4,085,653
Reinvested
dividends 73,185 57,402 313,924
Shares
redeemed (740,367) (362,932) (1,351,044)
---------- --------- -----------
Net increase (decrease) (68,184) 651,377 3,048,533
---------- --------- -----------
II. CLASS B
Shares sold 1,303,612 828,148 6,008,961
Reinvested
dividends 34,562 44,611 127,427
Shares
redeemed (278,457) (276,920) (410,771)
----------- ---------- -----------
Net increase 1,059,717 595,839 5,725,617
----------- ---------- -----------
III. CLASS C
Shares sold 3,639,728 66,071 427,940
Reinvested
dividends 27,993 2,093 17,352
Shares
redeemed (39,251) (14,073) (32,923)
----------- ----------- ----------
Net increase 3,628,470 54,091 412,369
----------- ----------- ----------
37
<PAGE>
NWNL NORTHSTAR SERIES TRUST
NOTES TO FINANCIAL STATEMENTS - APRIL 30, 1995 (UNAUDITED)
NOTE 6. CREDIT RISK AND DEFAULTED SECURITIES
Although the Funds have a diversified portfolio, the High Yield Bond Fund had
89.94% of its portfolio invested in lower rated and comparable quality unrated
high yield securities and the Multi-Sector Bond Fund had 48.12% of its portfolio
invested in such securities, as of April 30, 1995. Investments in higher yield
securities are accompanied by a greater degree of credit risk and such lower
rated securities tend to be more sensitive to economic conditions than higher
rated securities. The risk of loss due to default by the issuer may be
significantly greater for the holder of high yielding securities, are generally
unsecured and are often subordinated to other creditors of the issuer. At April
30, 1995 the High Yield Bond Fund and the Multi-Sector Bond Fund each held
Caterair International, and the High Yield Bond Fund held Sam Houston Race Park,
securities in default. (Please note that Caterair International was sold by both
funds subsequent to this reporting period with accrued interest.) The aggregate
value of the securities represented $491,250 or 0.41% of the High Yield Bond
Fund's assets, and $153,750 or 0.36 % of Multi-Sector Bond Fund's assets.
For financial reporting purposes, it is each Fund's accounting practice to
discontinue accrual of income and provide an estimate for probable losses due to
unpaid interest income on defaulted bonds for the current reporting period.
38
<PAGE>
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TRUSTEES
Paul S. Doherty Robert B. Goode, Jr. David W. Wallace
John H. Flittie Mark L. Lipson Marjory Williams
John G. Turner
PRINCIPAL OFFICERS
John G. Turner - Chairman Geoffrey Wadsworth - Vice President
Mark L. Lipson - President Lisa Hurley - Vice President & Secretary
Thomas Ole Dial - Vice President Agnes Mullady - Vice President & Treasurer
Ernest N. Mysogland - Vice President
INVESTMENT ADVISER ADMINISTRATOR
NORTHSTAR INVESTMENT NORTHSTAR ADMINISTRATORS CORPORATION
MANAGEMENT CORPORATION Two Pickwick Plaza
Two Pickwick Plaza Greenwich, CT 06830
Greenwich, CT 06830
DISTRIBUTOR TRANSFER AGENT
NWNL NORTHSTAR DISTRIBUTORS, INC. THE SHAREHOLDER SERVICES GROUP, INC.
Two Pickwick Plaza One Exchange Place
Greenwich, CT 06830 Boston, MA 02109
CUSTODIAN
CUSTODIAL TRUST COMPANY
101 Carnegie Center
Princeton, NJ 08540-6231
39
<PAGE>
N W N L N O R T H S T A R S E R I E S T R U S T
<PAGE>
NWNL NORTHSTAR SERIES TRUST
*
INCOME AND GROWTH FUND
MULTI-SECTOR BOND FUND
HIGH YIELD BOND FUND
This report is submitted for the information of the shareholders of NWNL
Northstar Series Trust. It is not authorized for distribution to
prospective investors unless accompanied or preceded by an effective
Prospectus for the Trust which contains information concerning the Funds'
investment policies and expenses as well as other pertinent information.
The financial information included herein is taken from the records
of the Trust without examination by independent accountants who do
not express an opinion thereon.
[LOGO]
[LOGO]
SEMI-ANNUAL REPORT
APRIL 30, 1995
