<PAGE>
[LOGO OF NORTHSTAR]
NORTHSTAR
TRUST
Semi-Annual Report to Shareholders
April 30, 1999
[GRAPHIC]
<PAGE>
[PHOTO]
MARK L. LIPSON
NORTHSTAR TRUST
SEMI-ANNUAL REPORT
APRIL 30, 1999
[LOGO OF NORTHSTAR]
Dear Shareholders:
We are pleased to provide you with the semi-annual report of the Northstar
Trust for the six months ended April 30, 1999. We are gratified with your de-
cision 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, long term, attractive returns achieved through fundamen-
tal research, analysis, and traditional investment disciplines. Following this
letter is a summary of the results of each Fund's portfolio by its respective
portfolio manager. We hope you will find it informative.
The past six months could be described as "the best of all worlds" for the
U.S. financial markets--our GDP growth continued to be strong, even as 60% of
the world struggled with recessionary conditions. While in more traditional
economic cycles, such strong growth might be accompanied by inflation, the
combination of slower economic growth in the rest of the world and strong im-
provements in our productivity alleviated inflation concerns. Indeed, for much
of the past six months, we have had strong economic growth with little to no
inflation. This phenomenon caused interest rates in the U.S. to continue to
fall through the early spring. The combination of strong economic growth, low
interest rates, and good earnings growth from many sectors in the U.S. caused
the markets to rebound; the most significant rebound occurred in the technol-
ogy sector, which had been hit the hardest in the correction in the fall of
1998. For the six months ended April 30, 1999, the NASDAQ increased 43.79%,
while the S&P 500 returned 22.32%, the S&P Midcap index 18.85%, and the Rus-
sell 2000 was up 15.16%.
While the overall backdrop was favorable for most asset classes during the
past six months, investors continued to be leery of increasing their risk pro-
file; thus, the bigger capitalization stocks continued to dominate the market
movement, while the asset classes perceived as riskier or more tied to eco-
nomic growth, such as small capitalization and emerging market equities and
high yield bonds, continued to lag. Traditional "growth" stocks outperformed
"value" stocks for most of this time frame, and commodity prices continued to
weaken as Asia suffered. Most notable was the steep decline in the price of
oil, which dropped from $14.42 per barrel to $10.35 per barrel by December 21,
1998. All of that began to change towards the end of March, however, as Japan
moved into its new fiscal year with a serious commitment to restructure its
banking system and revitalize its economy. As investors began to believe that
Asia was recovering from an 18 month recession (made worse by the liquidity
crisis last fall), the markets began to broaden out. International equities,
emerging market equities, smaller and mid capitalization stocks, and more tra-
ditional cyclical stocks and "value" names began to outperform the larger cap-
italization S&P 500-type issues which had been a safe haven in times of finan-
cial turmoil.
While it is too early to state that the market leadership has shifted, we do
believe that the market will continue to broaden out as investors increasingly
focus on companies with the potential to provide strong earnings growth that
sell at reasonable valuations relative to their growth rates. As the global
economy accelerates, the unusual confluence of events that conspired to keep
inflation levels perhaps artificially low will dissipate, and it is logical to
assume that inflation will return to a more normalized "pre-financial crisis"
2.5%-3.0% rate. While we do not expect inflation to accelerate much beyond
that, that move alone represents a significant increase from the 1.5%-2.0%
rate we had seen for most of 1998 and the early part of 1999. As the global
economy recovers its equilibrium, it is also logical to assume that interest
rates will recover to their "pre-crisis" levels, which would put the yield on
long-term rates in the U.S. north of 6%.
The returns for the equity market as measured by the S&P 500 over the past
several years have been significantly outside the historical range of 8-10%
and it is logical to assume that at some point we will return to this histori-
cal range. While returns of the S&P 500 over the next twelve months may be a
bit more subdued than in the recent past, the vast majority of stocks have not
been invited to "join the party" until recently; we believe that we may see
returns in those stocks improve, as we believe that is where most of the
profit improvement will be concentrated.
Pundits say that "bull markets always climb a wall of worry" and this one has
been no different. We continue to face uncertainty on the geopolitical front
with the situation in Kosovo and economic uncertainty about the impact of Y2K.
As of now, we believe that both of those issues are manageable. We do not see
the military action in Kosovo developing into a full-scale war. While it is
possible that the Y2K phenomenon may create some dislocations, this has been
an area of significant investment and focus by corporate America for some pe-
riod of time. Given the amount of time, energy and money that has been spent
to ensure that Y2K does not have a catastrophic impact on the American econo-
my, we believe the odds are high that any problems will be manageable.
Many of the positive forces that have driven the U.S. stock market to new
heights are secular, not cyclical. All throughout this decade, U.S. corpora-
tions have improved their efficiency and profitability through strategic in-
vestments in productivity-improving technology and the replacement of labor
with technology. We believe that trend will continue, if not accelerate, as we
enter the next millenium and U.S. corporations begin to exploit the power of
the Internet as a distribution channel and reap the benefits of a recovery in
Asia and the developing world.
We thank you for the trust you have placed in our firm and look forward to
continuing to serve your investment needs in the future.
Sincerely,
/s/ Mark L. Lipson
Mark L. Lipson
President
- ------------------------------------------------------------ ---------
<PAGE>
(This Page Left Blank Intentionally)
<PAGE>
[PHOTO]
LOUIS NAVELLIER
NORTHSTAR
GROWTH + VALUE FUND
[LOGO OF NORTHSTAR]
The Markets
. During the period November 1, 1998 to April 30, 1999, the market continued
a strong upward trend evidenced by the positive performance of the S&P 500
and Nasdaq Composite. Over this period, large-cap stocks continued to lead
the way. There was a burst of outperformance by small capitalization
stocks late in 1998 but that trend fizzled as quickly as it started.
. We believe the stock market is now in the midst of a substantial leader-
ship shakeup. Momentum stocks, especially Internet issues, have carried
the stock market for the past few months. However, toward the end of the
six-month period ended April 30, 1999, it appeared that value stocks began
contending for stock market leadership.
The Fund
. For the six-month period ended April 30, 1999, the Northstar Growth +
Value Fund earned a return of 56.80%, 56.27%, and 56.17% for Class A, B,
and C shares, respectively. This compared to a return of 15.16% for the
Russell 2000 Index and 25.74% for the Russell 2000 Growth Index.
. The Market has seen more volatility in the preceding six months than wit-
nessed during the Fund's lifetime (inception being November 18, 1996).
. We have seen a strong recovery from the market low in early October. This
recovery was reflected in the fund's share price which reached an all time
high of $17.07 on April 13, 1999.
. Over the period we made adjustments to the Fund's positioning with more
emphasis on the retail and technology sectors, which helped enhance re-
turns.
. Those stocks which performed the best were CMGI, Inc., VISX Inc.,
Ameritrade, Gemstar International and Best Buy. The underperformers were
Xircom, Cybex, Vanguard Cellular Systems, C.R. Bard, Inc., and Intervoice.
Current Strategy
. Small company stocks appear best positioned to appreciate in the upcoming
months. We are already beginning to see new buying pressure in the small
cap sector as institutional money has begun to take advantage of the tre-
mendous valuations that exist in this sector.
. Micro and small capitalization stocks are benefiting from a strong domes-
tic economy and the most attractive growth-to-P/E ratios in over 20 years.
Wall Street is now finally starting to pay attention to fundamental valua-
tions, rather than chasing whatever high-flying stock is making new highs.
We believe this trend will continue and that demand for smaller-cap growth
issues will increase going forward.
. With a median market capitalization of under $3-billion and a dynamic fun-
damental screening process which seeks out small growth stocks with supe-
rior fundamentals, we believe the fund is well positioned to take advan-
tage of the favorable market environment.
- --------------------------------------------------------------------------------
Fund Information (All data are as of 4/30/99) Total Net Assets $275,887,852
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Holdings
Name % Fund
<C> <S> <C>
(1) Ameritrade Holding Corp. 5.1%
(2) Macromedia, Inc. 4.5%
(3) MiniMed, Inc. 4.3%
(4) American Eagle Outfitters, Inc. 3.8%
(5) CMGI, Inc. 3.8%
(6) VISX, Inc. 3.7%
(7) Nokia Corp. 3.5%
(8) Capital One Financial Corp, 3.2%
(9) The Gap, Inc. 3.2%
(10) Mindspring Enterprises, Inc. 3.0%
-----
38.1%
=====
</TABLE>
Top 5 Industries
(by percentage of net assets)
Clothing/Shoe
Accessory Stores 11.2%
Computers Software 7.2%
Medical Specialties 7.0%
EDP Peripherals 6.2%
Biotechnology 5.7%
SEC Average Annual Rates of Return
(at maximum applicable sales charge)
<TABLE>
- ---------------------------------
<CAPTION>
Inception 5 years 1 year
- ---------------------------------
<S> <C> <C> <C>
Class A 20.69% N/A 24.96%
- ---------------------------------
Class B 21.31% N/A 25.10%
- ---------------------------------
Class C 22.20% N/A 29.02%
- ---------------------------------
</TABLE>
Cumulative Total Return
(do not reflect sales charge)
<TABLE>
- ---------------------------------
<CAPTION>
Inception 5 years 1 year
- ---------------------------------
<S> <C> <C> <C>
Class A 66.45% N/A 31.17%
- ---------------------------------
Class B 63.52% N/A 30.10%
- ---------------------------------
Class C 63.42% N/A 30.02%
- ---------------------------------
</TABLE>
- ------------------------------------------------------------ ---------
3
<PAGE>
NORTHSTAR GROWTH + VALUE FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Shares Value
- --------------------------------------------------------------
<S> <C> <C>
Common Stocks -- 92.80%
Biotechnology -- 5.70%
Amgen, Inc. @ 130,000 $ 7,986,875
MedImmune, Inc. @ 140,600 7,750,575
------------
15,737,450
------------
Cellular Telephone -- 1.67%
Vanguard Cellular Systems, Inc. @ 202,500 4,619,531
------------
Clothing/Shoe/Accessory Stores -- 11.18%
Abercrombie & Fitch Co. @ 58,200 5,536,275
American Eagle Outfitters, Inc. @ 141,300 10,562,175
AnnTaylor Stores Corp. @ 124,400 5,909,000
The Gap, Inc. 132,750 8,836,172
------------
30,843,622
------------
Computers -- 1.81%
Dell Computer Corp. @ 121,400 5,000,163
------------
Computer Software -- 7.15%
Macromedia, Inc. @ 300,600 12,456,112
Mercury Interactive Corp. @ 258,000 7,272,375
------------
19,728,487
------------
Computer/Video Chains -- 2.08%
Best Buy Co., Inc. @ 120,000 5,730,000
------------
Discount Stores -- 1.79%
Wal-Mart Stores, Inc. 107,400 4,940,400
------------
Diversified Commerical Services -- 5.09%
CMGI, Inc. @ 40,800 10,386,150
Labor Ready, Inc. @ 93,000 3,650,250
------------
14,036,400
------------
Diversified Electronic Products -- 2.85%
Gemstar International Group Ltd. @ 74,700 7,871,512
------------
EDP Peripherals -- 6.22%
Cybex Computer Products Corp. 51,700 982,300
EMC Corp. 53,400 5,817,262
Lexmark International Group, Inc. @ 50,000 6,175,000
QLogic Corp. @ 60,000 4,196,250
------------
17,170,812
------------
EDP Services -- 2.43%
CSG Systems International, Inc. @ 173,700 6,709,163
------------
Electronic Distributors -- 1.73%
Safeguard Scientifics, Inc. @ 59,000 4,779,000
------------
Electronic Production/Equipment -- 2.06%
Jabil Circuit, Inc. @ 121,900 5,675,969
------------
Finance & Banking -- 3.15%
Capital One Financial Corp. 50,000 8,684,375
------------
Food Chains -- 1.33%
Safeway, Inc. @ 67,800 3,656,963
------------
Insurance Broker/Services -- 2.46%
E.W. Blanch Holdings, Inc. 115,100 6,776,512
------------
</TABLE>
- --------------------------------------------------------------------------------
4
<PAGE>
NORTHSTAR GROWTH + VALUE FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Shares/Principal Amount Value
- -------------------------------------------------------------------------------
<S> <C> <C>
Internet Services -- 4.30%
BroadVision, Inc. @ 60,000 $ 3,483,750
Mindspring Enterprises, Inc. @ 86,500 8,385,094
------------
11,868,844
------------
Investment Bankers/Brokers/Services --
5.09%
Ameritrade Holding Corp. @ 105,200 14,050,775
------------
Medical/Dental Distributors -- 1.24%
Bindley Western Industries, Inc. 63,566 1,962,600
Priority Healthcare Corp. @ 28,477 1,443,428
------------
3,406,028
------------
Medical Electronics -- 3.73%
VISX, Inc. @ 80,000 10,300,000
------------
Medical Specialties -- 7.02%
C.R. Bard, Inc. 154,900 7,590,100
MiniMed, Inc. @ 188,200 11,762,500
------------
19,352,600
------------
Motor Vehicles -- 1.98%
Harley Davidson, Inc. 91,400 5,449,725
------------
Office/Plant Automation -- 0.65%
InterVoice, Inc. @ 180,200 1,796,369
------------
Precision Instruments -- 2.40%
Waters Corp. @ 62,900 6,612,363
------------
Savings & Loan -- 0.19%
PDS Financial Corp. @ 152,955 516,223
------------
Telecommunications Equipment -- 5.75%
Nokia Corp. ** 130,400 9,674,050
RF Micro Devices, Inc. @ 110,800 6,190,950
------------
15,865,000
------------
Telephone/Communications -- 1.75%
Century Telephone Enterprises, Inc. 120,000 4,830,000
------------
Total Common Stocks
(cost $187,760,483) 256,008,286
------------
Total Investment Securities -- 92.80%
(cost $187,760,483) 256,008,286
Repurchase Agreement -- 4.87%
Agreement with State Street Bank and
Trust bearing interest at 4.72% dated
4/30/99, to be repurchased 5/03/99 in the
amount of $13,444,286 and collateralized
by $9,225,000 U.S. Treasury Bonds, 12.00%
due 8/15/13, value $13,708,969
(cost $13,439,000) $13,439,000 13,439,000
Other assets less liabilities -- 2.33% 6,440,566
------------
Net Assets -- 100.00% $275,887,852
============
</TABLE>
@ Non-income producing security.
**American Depositary Receipts.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
5
<PAGE>
NORTHSTAR
INTERNATIONAL VALUE FUND
The Markets
. International markets put in strong performance for the six months ended
April 30, 1999. In developed markets, the Morgan Stanley Capital Interna-
tional EAFE (Europe, Australasia, Far East) Index rose 15.28% for the pe-
riod. Emerging markets staged a comeback after a long, volatile period.
The MSCI Emerging Markets Free Index more than doubled the performance of
EAFE, turning in a 34.87% return for the six months.
. In developed markets, Japan showed considerable strength, amid indications
that the Tokyo government was taking steps to address problems in that
country's banking system. The MSCI Japan Index rose 26.93% for the semi-
annual period. European stocks, on the other hand, were generally mixed,
with the MSCI Europe Index up about 10.81% for the six months.
. Much of the movement in emerging markets this period was affected in some
way by events in Brazil. In late 1998, disruption in Latin American mar-
kets was calmed by the news of the Brazilian government's approval of an
IMF loan package and related austerity measures. Then, in January of 1999,
Brazil abruptly devalued its currency, the real. This brought turmoil not
only to its domestic markets, but also to emerging markets the world over.
Beginning in March, however, emerging markets staged a rally, led by coun-
tries including Korea and Indonesia (each up over 90%), Venezuela (up
50%), Mexico and the Philippines (each up over 40%).
The Fund
. For the six-month period ended April 30, 1999, the Northstar International
Value Fund earned a return of 25.75%, 25.23%, and 25.26% for Class A, B,
and C shares, respectively. This compared to a return of 14.05% for Lipper
International Funds Index for the same period.
. This semi-annual period was characterized early on by upheaval in Latin
American financial markets, followed by a dramatic recovery in emerging
markets and non-emerging Asia. Returns in the Fund were driven by strong
performance of its holdings in Latin America and Asia. The strongest posi-
tions were in securities owned in Venezuela, Argentina, South Africa and
Singapore. Industries showing the greatest strength for the period were
telecommunications, banking, broadcasting, and metals industries.
Current Strategy
. Brandes applies a consistent bottom-up, value philosophy to make invest-
ment decisions for the Fund. We do not focus on top-down macroeconomics or
forecasts in making securities selections. Country and industry alloca-
tions are strictly a residual of the purchase of individual businesses
that meet our rigorous value criteria.
. We continue to seek stocks whose prices reflect meaningful discounts to
intrinsic value. This absolute value focus has achieved good results in
declining market environments and over long-term market cycles.
. We urge investors to focus on the long term and to view large and sudden
market moves with skepticism. We don't believe such moves accurately re-
flect actual changes in underlying values of companies in these markets.
Rather, these moves are likely due to shifts in sentiment. This is an im-
portant distinction. As value investors, we expect markets to overreact
and misprice securities on a regular basis. These mispricings allow us to
buy quality businesses at levels that offer the opportunity for profit
with a reasonable margin of safety against price declines. We believe that
over longer periods, sentiment becomes neutralized, and investors are able
to focus on fundamentals. Recent events in emerging markets may be a first
step in the process of returning calm to equity markets.
- --------------------------------------------------------------------------------
Fund Information (All data are as of 4/30/99) Total Net Assets $710,986,285
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Holdings
Name % Fund
<C> <S> <C>
(1) Hutchison Whampoa Ltd. 4.7%
(2) HSBC Holdings PLC 4.3
(3) Hitachi Ltd. 4.1
(4) Deutsche TeleKom AG 3.6
(5) Development Bank of Singapore Ltd. 3.6
(6) Telecom Italia SpA 3.5
(7) Telefonos de Mexico SA 3.3
(8) YPF Sociedad Anonima 3.3
(9) Mitsubishi Heavy Industries Ltd. 3.0
(10) De Beers Centenary AG 2.7
----
36.1%
====
</TABLE>
Top 5 Industries
(by percentage of net assets)
Telecommunications 14.5%
Banking 11.6%
Energy 10.0%
Multi-Industry 10.0%
Machinery &
Engineering 8.1%
SEC Average Annual Rates of Return
(at maximum applicable sales charge)
<TABLE>
- ----------------------------------
<CAPTION>
Inception 5 years 1 year
- ----------------------------------
<S> <C> <C> <C>
Class A 17.51% N/A 10.58%
- ----------------------------------
Class B 20.27% N/A 10.23%
- ----------------------------------
Class C 18.16% N/A 14.26%
- ----------------------------------
</TABLE>
Cumulative Total Return
(do not reflect sales charge)
<TABLE>
- ----------------------------------
<CAPTION>
Inception 5 years 1 year
- ----------------------------------
<S> <C> <C> <C>
Class A 105.16% N/A 16.07%
- ----------------------------------
Class B 48.45% N/A 15.23%
- ----------------------------------
Class C 99.86% N/A 15.26%
- ----------------------------------
</TABLE>
- --------------------------------------------------------------------------------
6
<PAGE>
NORTHSTAR INTERNATIONAL VALUE FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Country Value % of Net Assets
- -----------------------------------------------------------
<S> <C> <C>
Argentina $ 23,160,480 3.26%
Austria 3,373,010 0.47
Brazil 45,605,842 6.41
Denmark 11,603,338 1.63
France 51,842,927 7.29
Germany 37,651,844 5.30
Hong Kong 61,128,596 8.60
Italy 35,595,333 5.01
Japan 126,875,281 17.85
Korea 12,544,410 1.76
Mexico 23,522,647 3.31
Netherlands 22,531,207 3.17
Singapore 35,210,203 4.95
South Africa 23,850,020 3.35
Spain 12,185,786 1.71
Switzerland 5,432,261 0.76
United Kingdom 133,864,563 18.83
United States 21,947,000 3.09
Venezuela 15,254,250 2.15
Other assets less liabilities 7,807,287 1.10
------------ -------
Net Assets $710,986,285 100.00%
============ =======
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
7
<PAGE>
NORTHSTAR INTERNATIONAL VALUE FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Shares Value
- -------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks -- 91.20%
Automobiles -- 2.50%
Compagnie Generale des Etablissements Michelin (France) 135,000 $ 6,125,272
PSA Peugeot Citroen SA (France) 70,210 11,644,667
------------
17,769,939
------------
Banking -- 10.72%
Argentaria SA (Spain) 351,920 8,275,563
Den Danske Bank A/S (Denmark) 100,780 11,603,337
Development Bank of Singapore Ltd. (Singapore) 2,407,000 25,541,473
HSBC Holdings PLC @ (United Kingdom) 828,800 30,795,304
------------
76,215,677
------------
Beverages/Tobacco -- 4.13%
British America Tobacco PLC (United Kingdom) 976,200 8,228,963
Diageo PLC (United Kingdom) 1,542,012 17,761,343
South African Breweries PLC @ (South Africa) 401,400 3,338,435
------------
29,328,741
------------
Chemicals -- 3.54%
BASF AG (Germany) 270,000 11,822,702
BOC Group PLC (United Kingdom) 415,000 6,555,935
Imperial Chemical Industries PLC (United Kingdom) 624,800 6,784,531
------------
25,163,168
------------
Electrical & Electronics -- 8.08%
Alcatel Alsthom SA (France) 124,000 15,221,458
Hitachi Ltd. (Japan) 3,957,200 28,895,315
Matsushita Electric Industrial Co. Ltd. (Japan) 703,000 13,363,005
------------
57,479,778
------------
Energy -- 7.96%
Elf Aquitaine SA (France) 121,395 18,851,529
ENI SpA (Italy) 1,600,000 10,530,197
Nippon Oil Co. Ltd. (Japan) 906,000 4,043,695
YPF Sociedad Anonima ** (Argentina) 551,440 23,160,480
------------
56,585,901
------------
Food & Household Products -- 0.83%
Reckitt & Colman PLC (United Kingdom) 500,000 5,936,102
------------
Health/Personal Care -- 0.75%
Ono Pharmaceutical Co. Ltd. (Japan) 137,000 5,300,117
------------
Industrial Components -- 2.58%
Kyocera Corp. (Japan) 309,500 18,375,105
------------
Insurance -- 6.98%
Allied Zurich (United Kingdom) 393,000 5,209,485
ING Groep NV (Netherlands) 290,360 17,882,729
Royal & Sun Alliance PLC (United Kingdom) 952,500 8,236,040
Tokio Marine & Fire Insurance Co. (Japan) 1,573,400 18,326,909
------------
49,655,163
------------
Machinery & Engineering -- 8.09%
Canon, Inc. (Japan) 253,000 6,186,233
Invensys PLC (United Kingdom) 3,729,898 18,960,905
Komatsu (Japan) 1,913,000 11,389,575
Mitsubishi Heavy Industries Ltd. (Japan) 4,794,000 20,995,328
------------
57,532,041
------------
</TABLE>
- --------------------------------------------------------------------------------
8
<PAGE>
NORTHSTAR INTERNATIONAL VALUE FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Shares Value
- -----------------------------------------------------------------------------
<S> <C> <C>
Materials & Commodities -- 2.69%
De Beers Centenary AG (South Africa) 765,000 $ 19,109,285
------------
Merchandising -- 1.88%
Marks & Spencer PLC (United Kingdom) 1,948,700 13,362,398
------------
Metals -- Steel -- 2.65%
British Steel PLC (United Kingdom) 5,080,000 12,033,557
Iscor Ltd. (South Africa) 4,491,050 1,402,300
Pohang Iron & Steel Co. Ltd. ** (South Korea) 210,000 5,407,500
------------
18,843,357
------------
Multi -- Industry -- 9.96%
Citic Pacific Ltd. (Hong Kong) 3,395,000 9,198,168
Hutchison Whampoa Ltd. (Hong Kong) 3,755,500 33,674,010
Jardine Matheson Holdings Ltd. (Singapore) 2,269,655 9,668,730
Swire Pacific Ltd. (Hong Kong) 3,253,000 18,256,419
------------
70,797,327
------------
Telecommunications -- 14.03%
Compania Anonima Nacional Telefonos de Venezuela **
(Venezuela) 554,700 15,254,250
Deutsche Telekom AG (Germany) 655,500 25,829,142
Royal PTT Nederland NV (Netherlands) 111,400 4,648,477
Swisscom AG @ (Switzerland) 14,800 5,432,261
Telecom Italia SpA (Italy) 2,356,200 25,065,137
Telefonos de Mexico SA ** (Mexico) 310,530 23,522,647
------------
99,751,914
------------
Utilities -- Electrical & Gas -- 3.83%
Centrais Eletricas Brasileiras SA ** (Brazil) 1,342,200 12,583,125
Centrais Geradoras do Sul do Brasil SA ** @ (Brazil) 53,730 228,331
EVN Energie-Versorgung Niederoesterreich AG (Austria) 22,600 3,373,010
Korea Electric Power Corp. ** (South Korea) 432,540 7,136,910
Union Electrica Fenosa SA (Spain) 294,000 3,910,223
------------
27,231,599
------------
Total Common Stocks
(cost $544,441,585) 648,437,612
------------
</TABLE>
- --------------------------------------------------------------------------------
9
<PAGE>
NORTHSTAR INTERNATIONAL VALUE FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Shares/Principal Amount Value
- -------------------------------------------------------------------------------
<S> <C> <C>
Preferred Stocks -- 4.61%**
Banking -- 0.87%
Banco Bradesco SA (Brazil), $0.2821 1,166,000 $ 6,185,047
------------
Beverages/Tobacco -- 1.24%
Companhia Cervejaria Brahma (Brazil),
$0.1598 906,000 8,833,500
------------
Energy -- 2.02%
Petroleo Brasileiro SA (Brazil),
$0.305344 888,300 14,350,131
------------
Telecommunications -- 0.48%
Embratel Participacoes SA (Brazil),
$0.2304 39,940 649,025
Tele Celular Sul Participacoes SA
(Brazil), $0.0932 3,994 79,131
Tele Centro Oeste Celular Participacoes
SA (Brazil), $0.3139 13,313 48,260
Tele Centro Sul Participacoes SA
(Brazil), $1.02 7,988 424,362
Tele Leste Celular Participacoes SA
(Brazil), $0.6731 798 28,628
Tele Nordeste Celular Participacoes SA
(Brazil), $0.9942 1,997 43,934
Tele Norte Celular Participacoes SA
(Brazil), $0.3101 798 24,439
Tele Norte Leste Participacoes SA
(Brazil), $0.3872 39,940 676,484
Telemig Celular Participacoes SA
(Brazil), $0.3341 1,997 53,545
Telesp Celular Participacoes (Brazil),
$0.6552 15,976 399,400
Telesp Participacpoes SA (Brazil), $1.21 39,940 998,500
------------
3,425,708
------------
Total Preferred Stocks
(cost $36,868,620) 32,794,386
------------
Total Investment Securities -- 95.81%
(cost $581,310,205) 681,231,998
Repurchase Agreement -- 3.09%
Agreement with State Street Bank and
Trust bearing interest at 4.72% dated
4/30/99, to be repurchased 5/03/99 in the
amount of $21,955,632 and collateralized
by $17,275,000 U.S. Treasury Bonds,
8.125% due 8/15/21, value $22,388,124
(cost $21,947,000) $21,947,000 21,947,000
Other assets less liabilities -- 1.10% 7,807,287
------------
Net Assets -- 100.00% $710,986,285
============
</TABLE>
@ Non-income producing security.
** American Depositary Receipts.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
10
<PAGE>
NORTHSTAR
EMERGING MARKETS VALUE FUND
[LOGO OF NORTHSTAR]
The Markets
. For the six months ended April 30, 1999, the MSCI Emerging Markets Free
Index rose 34.87%. Countries leading this surge included Korea and Indone-
sia (each up over 90%), Venezuela (up 50%), Mexico and the Philippines
(each up over 40%).
. Much of the movement in emerging markets this period was affected in some
way by events in Brazil. In late 1998, disruption in Latin American mar-
kets was calmed by the news of the Brazilian government's approval of an
IMF loan package and related austerity measures. Then, in January of 1999,
Brazil abruptly devalued its currency, the real. This brought turmoil not
only to its domestic markets, but to emerging markets the world over. Be-
ginning in March, however, emerging markets staged a rally which continued
into April.
The Fund
. For the six-month period ended April 30, 1999, the Northstar Emerging Mar-
kets Value Fund earned a return of 33.00%, 32.46%, and 32.50% for Class A,
B, and C shares, respectively. This compared to a return of 29.56% for
Lipper Index of Emerging Markets Funds for the same period.
. This semi-annual period was characterized early on by upheaval in Latin
American financial markets, followed by a dramatic recovery throughout
emerging markets worldwide. Returns in the Fund were driven by strong per-
formance of its holdings in Venezuela, Mexico, Russia and China. Indus-
tries showing the greatest strength for the period were forest products,
leisure and tourism, and chemicals.
Current Strategy
. Brandes applies a consistent bottom-up, value philosophy to make invest-
ment decisions for the Fund. We do not focus on top-down macroeconomic
evaluations or forecasts in making securities selections. Country and in-
dustry allocations are strictly a residual of the purchase of individual
businesses that meet our rigorous value criteria.
. We continue to seek stocks whose values reflect meaningful discounts to
intrinsic value. This absolute value focus has achieved results in declin-
ing market environments as well as over long-term market cycles.
. In analyzing a possible recovery in emerging markets, we urge caution. The
timing and strength of any recovery is likely to vary from country to
country and from region to region. Significant political, economic, and
financial problems are yet to be overcome. Accordingly, we expect that
emerging markets could remain volatile for the foreseeable future.
. While we welcome a recovery in the emerging economies of Asia and Latin
America, we also recognize that the upheaval in these regions created op-
portunities for us to accumulate good businesses at historically underval-
ued prices. Clearly, these opportunities will not last forever. To the ex-
tent that economic storm clouds slowly dissipate from the affected re-
gions, we believe that the companies we purchase for the Fund during dif-
ficult periods will prove to be sound long-term investments.
- --------------------------------------------------------------------------------
Fund Information (All data are as of 4/30/99) Total Net Assets $15,675,523
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Holdings
Name % Fund
<C> <S> <C>
(1) JG Summit Holding, Inc. 4.0%
(2) Telefonica de Argentina SA 3.0%
(3) De Beers Centenary AG 2.9%
(4) YPF Sociedad Anonima 2.7%
(5) Arcelik AS 2.5%
(6) Pohang Iron & Steel Co. Ltd. 2.5%
(7) Shanghai Petrochemical Co. Ltd. 2.5%
(8) Telefonos de Mexico SA 2.5%
(9) Aracruz Celulose SA 2.3%
(10) First Pacific Co. Ltd. 2.3%
-----
27.2%
=====
</TABLE>
Top 5 Industries
(by percentage of net assets)
Multi-Industry 10.8%
Utilities--Electrical
& Gas 10.5%
Telecommunications 10.3%
Banking 9.4%
Energy 9.4%
SEC Average Annual Rates of Return
(at maximum applicable sales charge)
<TABLE>
- ----------------------------------
<CAPTION>
Inception 5 years 1 year
- ----------------------------------
<S> <C> <C> <C>
Class A (1.96)% N/A (7.27)%
- ----------------------------------
Class B (2.01)% N/A (8.17)%
- ----------------------------------
Class C 0.83% N/A (4.39)%
- ----------------------------------
</TABLE>
Cumulative Total Return
(do not reflect sales charge)
<TABLE>
- ----------------------------------
<CAPTION>
Inception 5 years 1 year
- ----------------------------------
<S> <C> <C> <C>
Class A 2.28% N/A (2.69)%
- ----------------------------------
Class B 1.33% N/A (3.40)%
- ----------------------------------
Class C 1.10% N/A (3.44)%
- ----------------------------------
</TABLE>
- --------------------------------------------------------------------------------
11
<PAGE>
NORTHSTAR EMERGING MARKETS VALUE FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Country Value % of Net Assets
- ----------------------------------------------------------
<S> <C> <C>
Argentina $ 1,302,305 8.31%
Brazil 2,985,926 19.05
Chile 536,700 3.42
China 1,052,534 6.71
Colombia 209,950 1.34
Czech Republic 127,138 0.81
Hong Kong 678,757 4.33
India 591,877 3.78
Israel 409,082 2.61
Korea 459,250 2.93
Malaysia 593,758 3.79
Mexico 727,210 4.64
Philippines 1,421,800 9.07
Poland 224,200 1.43
Russia 510,553 3.26
Singapore 645,578 4.12
South Africa 1,536,504 9.80
Turkey 388,453 2.48
United States 721,000 4.60
Venezuela 343,750 2.19
Other assets less liabilities 209,198 1.33
----------- -------
Net Assets $15,675,523 100.00%
=========== =======
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
12
<PAGE>
NORTHSTAR EMERGING MARKETS VALUE FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- ------------------------------------------------------------------------------
Common Stocks -- 76.57%
Appliances & Household Durables -- 2.48%
Arcelik AS (Turkey) 9,820,600 $ 388,453
------------
Automobiles -- 1.62%
Toyota South Africa Ltd. (South Africa) 99,500 253,451
------------
Banking -- 6.00%
Banco Santiago SA ** (Chile) 13,400 237,850
Bank Handlowy w Warszawie ## (Poland) 19,000 224,200
Bank Leumi Le-Israel (Israel) 81,000 138,605
Development Bank of Singapore Ltd. (Singapore) 32,000 339,562
------------
940,217
------------
Beverages/Tobacco -- 3.47%
Massalin Particulares SA (Argentina) 40,500 255,255
South African Breweries PLC @ (South Africa) 34,800 289,431
------------
544,686
------------
Building Materials & Components -- 1.94%
Southeast Asia Cement Holdings, Inc. @ (Philippines) 20,244,768 303,472
------------
Chemicals -- 4.75%
Beijing Yanhua Petrochemical Co. Ltd. (China) 2,200,000 346,278
Shanghai Petrochemical Co. Ltd. ** (China) 21,800 397,850
------------
744,128
------------
Electrical & Electronics -- 1.65%
Solid Group, Inc. (Philippines) 14,708,100 259,157
------------
Energy -- 7.30%
LUKoil Holding ** (Russia) 7,400 255,416
Petron Corp. (Philippines) 100,400 12,146
RAO Gazprom ** (Russia) 20,360 216,325
Sasol Ltd. (South Africa) 28,000 197,863
Sasol Ltd. ** (South Africa) 7,000 46,375
YPF Sociedad Anonima ** (Argentina) 9,900 415,800
------------
1,143,925
------------
Financial Services -- 2.72%
Grupo Financiero Inbursa SA de CV ** (Mexico) 20,600 333,310
Industrial Credit & Investment Corp. of India Ltd. ##
(India) 16,570 92,477
------------
425,787
------------
Food & Household Products -- 1.43%
RFM Corp. (Philippines) 1,551,900 224,469
------------
Insurance -- 1.74%
Pacific and Orient Berhad (Malaysia) 347,000 273,034
------------
Leisure & Tourism -- 4.03%
Resorts World Berhad (Malaysia) 195,000 320,724
Shangri-La Asia Ltd. (Hong Kong) 262,000 310,979
------------
631,703
------------
Machinery & Engineering -- 1.66%
Larsen & Toubro Ltd. ## (India) 29,000 261,000
------------
Materials & Commodities -- 2.85%
De Beers Centenary AG (South Africa) 17,900 447,132
------------
</TABLE>
- --------------------------------------------------------------------------------
13
<PAGE>
NORTHSTAR EMERGING MARKETS VALUE FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- -----------------------------------------------------------------------------
Merchandising -- 1.14%
Dairy Farm International Holdings Ltd. (Singapore) 121,000 $ 179,080
------------
Metals -- Steel -- 4.46%
Iscor Ltd. (South Africa) 968,000 302,251
Pohang Iron & Steel Co. Ltd. ** (South Korea) 15,400 396,550
------------
698,801
------------
Multi-Industry -- 10.78%
First Pacific Co. Ltd. @ (Hong Kong) 475,108 367,778
Indian Rayon and Industries Ltd. ## (India) 64,000 108,800
Jardine Matheson Holdings Ltd. (Singapore) 29,297 124,806
Jardine Matheson Holdings Ltd. ** (Singapore) 500 2,130
JG Summit Holding, Inc. (Philippines) 5,442,000 622,556
Koors Industries Ltd. ** (Israel) 7,700 165,550
Quinenco SA ** (Chile) 27,800 298,850
------------
1,690,470
------------
Telecommunications -- 8.60%
Bezeq Israeli Telecommunications Corp. Ltd. (Israel) 27,000 104,927
Compania Anonima Nacional Telefonos de Venezuela **
(Venezuela) 12,500 343,750
Rostelecom ** (Russia) 9,000 38,813
Telefonica de Argentina SA ** (Argentina) 12,500 467,187
Telefonos de Mexico SA ** (Mexico) 5,200 393,900
------------
1,348,577
------------
Textile/Apparel -- 0.83%
Bombay Dyeing and Manufacturing Co. Ltd. ## (India) 144,000 129,600
------------
Utilities -- Electrical & Gas -- 7.12%
Centrais Eletricas Brasileiras SA ** (Brazil) 33,900 317,813
Centrais Geradoras do Sul do Brasil SA ** @ (Brazil) 70,490 299,554
Ceske Energeticke Zavody (Czech Republic) 90,200 127,138
Korea Electric Power Corp. ** (South Korea) 3,800 62,700
Shandong Huaneng Power Co. Ltd. ** (China) 69,500 308,406
------------
1,115,611
------------
Total Common Stocks
(cost $10,662,958) 12,002,753
------------
Preferred Stocks -- 17.50%
Banking -- 3.41%
Banco Ganadero SA ** (Colombia), $0.2821 22,100 209,950
Uniao de Bancos Brasileiros SA ## (Brazil), $0.46899 13,100 325,044
------------
534,994
------------
Beverages/Tobacco -- 2.66%
Companhia Cervejaria Brahma ** (Brazil), $0.1598 26,000 253,500
Quilmes Industrial SA ** (Argentina), $0.2215 15,000 164,062
------------
417,562
------------
Chemicals -- 1.33%
Copene-Petroquimica do Nordeste SA ** (Brazil),
$0.312312 23,400 208,052
------------
Energy -- 2.06%
Petroleo Brasileiro SA ** (Brazil), $0.305344 20,000 323,092
------------
Forest & Paper Products -- 2.30%
Aracruz Celulose SA ** (Brazil), $0.1576 18,000 360,000
------------
</TABLE>
- --------------------------------------------------------------------------------
14
<PAGE>
NORTHSTAR EMERGING MARKETS VALUE FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Shares/Principal Amount Value
<S> <C> <C>
- -------------------------------------------------------------------------------
Metals -- Steel -- 0.66%
Usinas Siderurgicas de Minas Gerais SA **
(Brazil), $0.1767 36,300 $ 102,624
------------
Telecommunications -- 1.69%
Embratel Participacoes SA ** (Brazil),
$0.2304 2,900 47,125
Tele Celular Sul Participacoes SA **
(Brazil), $0.0932 290 5,746
Tele Centro Oeste Celular Participacoes
SA ** (Brazil), $0.3139 966 3,502
Tele Centro Sul Participacoes SA **
(Brazil), $1.02 580 30,812
Tele Leste Celular Participacoes SA **
(Brazil), $0.6731 58 2,081
Tele Nordeste Celular Participacoes SA **
(Brazil), $0.9942 145 3,190
Tele Norte Celular Participacoes SA **
(Brazil), $0.3101 58 1,776
Tele Norte Leste Participacoes SA **
(Brazil), $0.3872 2,900 49,119
Tele Sudeste Celular Participacoes SA **
(Brazil), $0.0504 580 16,566
Telemig Celular Participacoes SA **
(Brazil), $0.3341 145 3,888
Telesp Celular Participacoes ** (Brazil),
$0.6552 1,160 29,000
Telesp Participacpoes SA ** (Brazil),
$1.21 2,900 72,500
------------
265,305
------------
Utilities -- Electrical & Gas -- 3.39%
Centrais Eletricas de Santa Catarina SA
** (Brazil), $0.6605 6,500 301,693
Companhia Paranaense de Energia-Copel **
(Brazil), $0.3082 28,000 229,250
------------
530,943
------------
Total Preferred Stocks
(cost $2,769,592) 2,742,572
------------
Total Investment Securities -- 94.07%
(cost $13,432,550) 14,745,325
Repurchase Agreement -- 4.60%
Agreement with State Street Bank and
Trust bearing interest at 4.72% dated
4/30/99, to be repurchased 5/03/99 in the
amount of $721,284 and collateralized by
$705,000 U.S. Treasury Notes, 7.75% due
11/30/99, value $739,369
(cost $721,000) $721,000 721,000
Other assets less liabilities -- 1.33% 209,198
------------
Net Assets -- 100.00% $ 15,675,523
============
</TABLE>
** American Depositary Receipts.
## Global Depositary Receipts.
@ Non-income producing security.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
15
<PAGE>
[PHOTO]
TIMOTHY DEVLIN
[PHOTO]
JAMES WIESS
NORTHSTAR
RESEARCH ENHANCED INDEX FUND
The Markets
. Stunning headlines, including President Clinton's impeachment trial,
Brazil's currency float, and the outbreak of war in the Balkans, have not
deflected large cap U.S. stocks from their upward trajectory. Like the Dow
Jones Industrial Average, the S&P 500 has risen to record highs, closing
the month of April at 3.87% and YTD 9.05%.
. The global economy has come into the spotlight at the latter end of the
reporting period from January 1, 1999 to April 30, 1999. On the Asian
front, Japan's economy is showing signs of reaching the bottom of its pro-
tracted decline. As a result of Japan's stabilization, the rest of Asia is
beginning to improve. In Latin America, problems in Brazil have not been
as severe or as widespread as earlier expected. The growing expectation of
a recovery in the global economy has led to a major leadership change in
the U.S. equity market in April. "Megacap" growth stocks began to
underperform in mid-April in very dramatic fashion. By the end of the
month, value stocks were ahead of growth stocks by a wide margin. This is
a stark reversal from the well-established trend that we had been experi-
encing through March of this year, where the astonishing market peaks were
being achieved by the largest 50 stocks in the S&P 500. In addition,
growth stocks had been continuously trouncing value stocks, thereby creat-
ing an extremely concentrated market. It now appears that the catalyst to
broaden the market is likely to be global growth. History has shown a very
high correlation between a strong global economy and the outperformance of
value stocks over growth stocks.
The Fund
. Since inception (December 30, 1998), the Fund has returned 9.70%, 9.50%,
9.60%, and 9.80% for class A, B, C, and I shares, respectively, versus the
9.05% return of the S&P 500 Index. April was a particularly strong month
for the Research Enhanced Index Fund, outperforming the S&P by over 140
basis points and closing at 5.28%.
. The change in leadership to value stocks in April was favorable to the
fund as it benefits from being underweight many of the former market lead-
ers such as GE and Microsoft. J.P. Morgan's disciplined approach to port-
folio construction selects securities that we believe to be "undervalued"
based on our fundamental proprietary research and valuation tools. This
philosophy has allowed the Fund to capitalize on the recent move away from
the high multiple growth stocks for the more economically sensitive cycli-
cal stocks.
. Prior to the reversal, many of the top-performing large-cap stocks in the
Fund owed at least part of their performance to the internet, technology
or telecommunications. For example, strong demand for data storage by both
corporations and individuals continued to be the catalyst driving EMC
Corp.'s performance. Another top holding, MCI Worldcom, has boasted the
highest growth rate among its peers, as solid positions in the fastest
growing market segments are the key drivers to its business.
Current Strategy
. The U.S. economy remains impressively robust. Strong real income gains and
a positive wealth backdrop continue to fuel consumption and housing, while
technology spending continues to sustain capital investment. Yet, limited
pricing power and the specter of wage pressures are likely to limit corpo-
rate profit growth this year.
. Our outlook for the rest of 1999 is for a continuation of the move away
from "megacap" growth stocks. We are positioned to benefit from the change
in leadership that began in April. In addition, we feel that a recovery in
the global economy will improve the prospects of more economically sensi-
tive cyclical stocks.
- --------------------------------------------------------------------------------
Fund Information (All data are as of 4/30/99) Total Net Assets $95,482,111
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Holdings
Name % Fund
<C> <S> <C>
(1) Microsoft Corp. 2.9%
(2) General Electric Co. 2.4%
(3) Intel Corp. 2.1%
(4) International Business Machines Corp. 2.0%
(5) Cisco Systems, Inc. 1.9%
(6) Citigroup, Inc. 1.9%
(7) The Coca-Cola Co. 1.9%
(8) MCI WorldCom, Inc. 1.7%
(9) Exxon Corp. 1.5%
(10) Lucent Technologies, Inc. 1.5%
-----
19.8%
=====
</TABLE>
Top 5 Industries
(by percentage of net assets)
Technology 15.6%
Finance 11.9%
Pharmaceutical 8.8%
Telecommunications 8.2%
Multi-Industry 7.6%
SEC Average Annual Rates of Return
(at maximum applicable sales charge)
<TABLE>
- ---------------------------------
<CAPTION>
Inception 5 years 1 year
- ---------------------------------
<S> <C> <C> <C>
Class A 4.48% N/A N/A
- ---------------------------------
Class B 4.50% N/A N/A
- ---------------------------------
Class C 8.60% N/A N/A
- ---------------------------------
</TABLE>
Cumulative Total Return
(do not reflect sales charge)
<TABLE>
- ---------------------------------
<CAPTION>
Inception 5 years 1 year
- ---------------------------------
<S> <C> <C> <C>
Class A 9.70% N/A N/A
- ---------------------------------
Class B 9.50% N/A N/A
- ---------------------------------
Class C 9.60% N/A N/A
- ---------------------------------
Class I 9.80% N/A N/A
- ---------------------------------
</TABLE>
- ------------------------------------------ - ----------------
16
<PAGE>
NORTHSTAR RESEARCH ENHANCED INDEX FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- -------------------------------------------------------------------
Common Stocks -- 91.48%
Basic Industry -- 3.20%
Alcan Aluminum Ltd. 4,400 $ 139,700
Alcoa, Inc. 5,100 317,475
Allegheny Teldyne, Inc. 3,300 73,838
Bowater, Inc. 600 32,175
E.I. du Pont de Nemours and Co. 2,100 148,315
Fort James Corp. 2,500 95,000
Freeport-McMoRan Copper & Gold, Inc. (Class A) 1,600 23,300
Freeport-McMoRan Copper & Gold, Inc. (Class B) 3,700 56,656
Georgia-Pacific Corp. 900 83,250
IMC Global, Inc. 2,400 60,000
International Paper Co. 1,900 101,294
Louisiana-Pacific Corp. 1,000 20,813
Nalco Chemical Co. 700 25,594
Phelps Dodge Corp. 400 25,300
PPG Industries, Inc. 3,900 253,256
Praxair, Inc. 1,600 82,800
Reynolds Metals Co. 1,100 68,613
Rohm and Haas Co. 4,500 201,656
Smurfit-Stone Container Corp. @ 2,600 60,775
Solutia, Inc. 2,100 51,188
Temple-Inland, Inc. 600 41,400
The Dow Chemical Co. 5,000 655,937
The Mead Corp. 1,200 50,175
Union Camp Corp. 1,900 150,812
Union Carbide Corp. 3,500 181,562
USG Corp. 600 35,025
USX-U.S. Steel Group 600 18,150
------------
3,054,059
------------
Capital Goods -- 1.33%
Cooper Industries, Inc. 1,500 72,577
Deere & Co. 3,700 159,109
Dover Corp. 1,900 70,181
Eaton Corp. 1,200 110,021
Emerson Electric Co. 7,200 464,360
Hubbell, Inc. 800 38,250
Illinois Tool Works, Inc. 1,400 107,800
PACCAR, Inc. 1,000 56,000
Parker-Hannifin Corp. 1,300 61,019
Rockwell International Corp. 1,200 61,950
W.W. Grainger, Inc. 1,400 70,263
------------
1,271,530
------------
Cyclical -- 2.34%
Centex Corp. 800 29,250
Dana Corp. 2,600 122,525
Delphi Automotive Systems Corp. @ 9,000 174,937
Ford Motor Co. 8,500 543,469
General Motors Corp. 4,300 382,431
Genuine Parts Co. 2,900 87,000
Hasbro, Inc. 1,400 47,775
</TABLE>
- --------------------------------------------------------------------------------
17
<PAGE>
NORTHSTAR RESEARCH ENHANCED INDEX FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- ----------------------------------------------------
Cyclical -- continued
Johnson Controls, Inc. 1,300 $ 94,819
Jones Apparel Group, Inc. @ 1,600 52,800
Lear Corp. @ 1,000 45,875
Leggett & Platt, Inc. 3,000 69,188
Masco Corp. 5,100 149,812
Mattel, Inc. 4,600 119,042
Owens Corning 500 17,813
The Goodyear Tire & Rubber Co. 2,500 142,969
The Sherwin-Williams Co. 2,600 80,925
Whirlpool Corp. 1,100 73,012
------------
2,233,642
------------
Energy -- 5.74%
Atlantic Richfield Co. 2,600 218,237
Baker Hughes, Inc. 1,300 38,837
Chevron Corp. 5,600 558,600
Conoco, Inc. 1,400 37,975
Cooper Cameron Corp. @ 500 19,313
Diamond Offshore Drilling, Inc. 600 19,838
ENSCO International, Inc. 1,100 20,419
Exxon Corp. (1) 17,400 1,445,287
Global Marine, Inc. 1,600 23,826
Halliburton Co. 200 8,525
Mobil Corp. 11,100 1,162,725
Occidental Petroleum Corp. 2,700 54,506
Phillips Petroleum Co. 2,200 111,375
R&B Falcon Corp. @ 1,800 18,158
Royal Dutch Petroleum Co. ** 19,700 1,156,144
Schlumberger Ltd. 2,200 140,525
Smith International, Inc. 400 17,950
Texaco, Inc. 4,800 301,200
Tosco Corp. 1,400 37,450
Ultramar Diamond Shamrock Corp. 600 13,838
Unocal Corp. 1,700 70,656
------------
5,475,384
------------
Finance -- 11.89%
American Express Co. 2,900 378,994
Associated Banc-Corp. 600 21,825
Associates First Capital Corp. 7,800 345,615
Astoria Financial Corp. 600 30,075
BancWest Corp. 400 15,925
Bank of America Corp. (1) 18,700 1,346,430
Bank One Corp. 12,400 731,600
BankBoston Corp. 7,000 343,000
Bankers Trust Corp. 1,000 90,062
CCB Financial Corp. 200 11,550
Charter One Financial, Inc. 1,800 56,250
Chase Manhattan Corp. 1,200 99,300
Citigroup, Inc. 23,700 1,783,425
Commerce Bancshares, Inc. 600 24,563
Compass Bancshares, Inc. 1,100 29,975
</TABLE>
- --------------------------------------------------------------------------------
18
<PAGE>
NORTHSTAR RESEARCH ENHANCED INDEX FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- -----------------------------------------------------------
Finance -- continued
Dime Bancorp, Inc. 1,100 $ 25,369
Fannie Mae 8,200 581,687
First American Corp. 1,100 42,694
First Union Corp. 10,400 575,880
First Virginia Banks, Inc. 500 24,969
FirstMerit Corp. 900 25,031
Fleet Financial Group, Inc. 1,600 68,900
Franklin Resources, Inc. 2,600 104,000
Freddie Mac 3,500 219,625
Golden West Financial Corp. 600 60,075
GreenPoint Financial Corp. 1,200 42,000
Hibernia Corp. 1,500 19,969
Household International, Inc. 4,900 246,531
KeyCorp 4,700 145,406
Lehman Brothers Holdings, Inc. 1,200 66,675
M & T Bank Corp. 100 55,900
Marshall & Ilsley Corp. 1,100 77,000
MBNA Corp. 3,600 101,475
Mellon Bank Corp. 2,600 193,212
Mercantile Bancorp., Inc. 1,700 96,902
Mercantile Bankshares Corp. 700 25,900
Morgan Stanley Dean Witter & Co. 6,100 605,044
National City Corp. 2,900 208,075
National Commerce Bancorp. 1,100 27,500
North Fork Bancorp., Inc. 1,400 31,500
Pacific Century Financial Corp. 400 8,700
Paine Webber Group, Inc. 1,300 61,019
Peoples Heritage Financial Group, Inc. 1,000 19,375
PNC Bank Corp. 3,200 185,200
Regions Financial Corp. 2,400 90,600
Republic New York Corp. 1,100 64,625
SouthTrust Corp. 1,700 67,734
Sovereign Bancorp, Inc. 1,700 23,181
Summit Bancorp. 1,800 76,275
SunTrust Banks, Inc. 3,400 243,100
TCF Financial Corp. 800 23,200
The Bear Stearns Cos., Inc. 1,100 51,288
The CIT Group, Inc. 900 29,250
The FINOVA Group, Inc. 600 28,988
U.S. Bancorp 7,900 292,794
Union Planters Corp. 1,500 64,219
Washington Mutual, Inc. 6,300 259,087
Wells Fargo Co. 17,800 768,745
Wilmington Trust Corp. 300 18,431
------------
11,355,719
------------
Health Services -- 1.80%
Aetna, Inc. 2,000 175,375
Bausch & Lomb, Inc. 400 30,000
Boston Scientific Corp. 1,500 63,844
CIGNA Corp. 2,900 252,844
</TABLE>
- --------------------------------------------------------------------------------
19
<PAGE>
NORTHSTAR RESEARCH ENHANCED INDEX FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- ----------------------------------------------------------------
Health Services -- continued
Columbia/HCA Healthcare Corp. 8,600 $ 212,312
HCR Manor Care, Inc. @ 1,600 44,400
Health Management Associates, Inc. @ 3,400 53,125
HEALTHSOUTH Corp. @ 5,600 75,250
Humana, Inc. 2,300 31,338
Medtronic, Inc. 4,100 294,944
PacifiCare Health Systems, Inc. @ 400 31,913
Stryker Corp. 1,100 67,306
Tenet Healthcare Corp. @ 4,400 103,950
The Perkin-Elmer Corp. 700 75,687
United HealthCare Corp. 2,500 140,312
Wellpoint Health Networks, Inc. @ 900 63,225
------------
1,715,825
------------
Insurance -- 2.82%
20th Century Industries 500 8,906
Ambac Financial Group, Inc. 1,000 60,375
American General Corp. 1,400 103,600
American International Group, Inc. (1) 6,300 739,856
Aon Corp. 2,300 157,550
Cincinnati Financial Corp. 900 36,338
Lincoln National Corp. 700 67,234
Marsh & McLennan Cos., Inc. 3,600 275,625
MBIA, Inc. 1,400 94,150
Mercury General Corp. 800 28,900
Provident Cos., Inc. 2,600 102,375
SAFECO Corp. 1,800 71,550
The Allstate Corp. 11,300 411,037
The Chubb Corp. 2,200 130,350
The Equitable Cos., Inc. 1,200 80,775
The Hartford Financial Services Group, Inc. 1,300 76,619
The St. Paul Cos., Inc. 3,100 88,931
Torchmark Corp. 1,700 58,119
Travelers Property Casualty Corp. 800 27,600
UNUM Corp. 1,400 76,475
------------
2,696,365
------------
Multi-Industry -- 7.60%
AlliedSignal, Inc. 8,200 481,750
Browning-Ferris Industries, Inc. 1,400 55,825
Eastman Kodak Co. 5,000 373,125
General Electric Co. 21,700 2,289,359
Harris Corp. 1,200 41,475
Honeywell, Inc. 900 85,275
ITT Industries, Inc. 1,500 54,000
Lockheed Martin Corp. 6,100 262,681
Minnesota Mining & Manufacturing Co. 4,100 364,900
Raytheon Co. 4,900 339,019
Symbol Technologies, Inc. 900 42,975
Tenneco, Inc. 2,700 72,867
The Boeing Co. 13,800 560,625
The Seagram Co. Ltd. 7,800 447,525
</TABLE>
- --------------------------------------------------------------------------------
20
<PAGE>
NORTHSTAR RESEARCH ENHANCED INDEX FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- --------------------------------------------------------
Multi-Industry -- continued
Tyco International Ltd. 11,600 $ 942,500
Waste Management, Inc. 8,900 502,840
Xerox Corp. 5,800 340,750
------------
7,257,491
------------
Pharmaceutical -- 8.81%
Abbott Laboratories 13,000 629,687
ALZA Corp. @ 1,000 33,563
American Home Products Corp. 16,300 994,300
Amgen, Inc. @ 6,300 387,056
Bristol-Myers Squibb Co. 22,000 1,398,375
Chiron Corp. @ 2,200 44,275
Eli Lilly & Co. 13,900 1,023,342
Forest Laboratories, Inc. @ 1,400 62,300
Genzyme Corp. @ 1,000 37,750
Immunex Corp. @ 700 66,850
Johnson & Johnson 5,900 575,250
MedImmune, Inc. @ 700 38,588
Merck & Co., Inc. (1) 12,200 857,050
Monsanto Co. 7,900 357,477
Pfizer, Inc. (1) 6,300 724,894
Schering-Plough Corp. 8,300 400,994
Warner-Lambert Co. 10,800 733,692
Watson Pharmaceuticals, Inc. @ 1,200 48,603
------------
8,414,046
------------
Retail -- 5.63%
Albertson's, Inc. 800 41,200
American Stores Co. 8,800 277,750
AutoZone, Inc. @ 2,100 63,000
Circuit City Stores, Inc. 1,500 92,250
Costco Cos., Inc. 3,100 250,906
CVS Corp. 2,700 128,588
Dayton Hudson Corp. 5,700 383,681
Dillard's, Inc. 1,400 38,763
Federated Department Stores, Inc. @ 3,100 144,731
Hannaford Brothers Co. 600 26,175
J.C. Penney, Inc. 3,900 177,938
Kmart Corp. 7,100 105,613
Nordstrom, Inc. 2,100 73,894
Safeway, Inc. @ 7,400 399,137
Sears, Roebuck & Co. 5,700 262,200
The Gap, Inc. 5,100 339,356
The Home Depot, Inc. 8,500 509,469
The Kroger Co. 3,800 206,387
The May Department Stores Co. 5,000 199,062
The TJX Cos., Inc. 4,800 159,900
Tiffany & Co. 500 42,000
Toys "R" Us, Inc. @ 3,700 80,475
Wal-Mart Stores, Inc. 29,900 1,375,400
------------
5,377,875
------------
</TABLE>
- --------------------------------------------------------------------------------
21
<PAGE>
NORTHSTAR RESEARCH ENHANCED INDEX FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- --------------------------------------------------------------
Services -- 6.11%
America Online, Inc. @ 6,800 $ 970,700
AT&T Corp. -- Liberty Media Group @ 7,900 504,612
Automatic Data Processing, Inc. 6,200 275,909
Cendant Corp. @ 15,500 279,000
Comcast Corp. 5,600 367,850
Electronic Data Systems Corp. @ 200 10,750
Equifax, Inc. 2,900 104,219
Gannett Co., Inc. 4,600 325,737
Hilton Hotels Corp. 5,100 79,688
Knight Ridder, Inc. 1,500 80,719
McDonald's Corp. 11,000 466,125
MediaOne Group, Inc. @ 10,200 831,937
Mirage Resorts, Inc. @ 2,900 65,069
R.R. Donnelley & Sons Co. 2,200 77,825
Service Corp. International 4,400 91,300
Starwood Hotels & Resorts Worldwide, Inc. 3,400 124,737
The New York Times Co. 3,500 120,750
The Times Mirror Co. 1,600 93,600
The Walt Disney Co. 16,800 533,400
The Washington Post Co. 200 114,800
Time Warner, Inc. 3,300 231,000
Tribune Co. 1,000 83,438
------------
5,833,165
------------
Stable -- 6.99%
Bestfoods 3,000 150,563
Campbell Soup Co. 4,200 172,200
Colgate-Palmolive Co. 600 61,463
General Mills, Inc. 1,200 87,750
H.J. Heinz Co. 3,900 182,090
Hershey Foods Corp. 1,500 78,938
Kellogg Co. 1,800 66,600
Kimberly-Clark Corp. 5,800 355,621
Nabisco Holdings Corp. 500 18,906
PepsiCo, Inc. 15,800 583,612
Philip Morris Cos., Inc. 26,400 925,725
Ralston Purina Co. 3,500 106,750
Sara Lee Corp. 9,900 220,230
The Coca-Cola Co. 26,200 1,781,485
The Gillette Co. 1,100 57,406
The Pepsi Bottling Group, Inc. 1,600 33,700
The Procter & Gamble Co. 14,200 1,332,137
Unilever NV ** 7,000 454,593
------------
6,669,769
------------
Technology -- 15.56%
3Com Corp. @ 2,500 65,313
Adobe Systems, Inc. 600 38,025
Apple Computer, Inc. 2,400 110,400
Applied Materials, Inc. @ 3,900 209,137
BMC Software, Inc. @ 2,300 99,044
Cisco Systems, Inc. @ 16,100 1,836,406
</TABLE>
- --------------------------------------------------------------------------------
22
<PAGE>
NORTHSTAR RESEARCH ENHANCED INDEX FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- ------------------------------------------------------------
Technology -- continued
Compaq Computer Corp. 1,200 $ 26,775
Computer Associates International, Inc. 3,900 166,481
Dell Computer Corp. @ (1) 25,600 1,054,537
Electronic Arts, Inc. @ 600 30,488
EMC Corp. 5,300 577,369
First Data Corp. 4,600 195,213
Gateway 2000, Inc. @ 1,800 119,138
Hewlett-Packard Co. 2,000 157,750
Intel Corp. 33,500 2,049,844
International Business Machines Corp. 9,300 1,945,444
Lucent Technologies, Inc. 23,500 1,412,831
Microsoft Corp. @ 34,400 2,797,150
Motorola, Inc. 6,100 488,762
Oracle Corp. @ 14,500 392,419
Quantum Corp. @ 2,200 39,325
Seagate Technology, Inc. @ 2,600 72,475
Sun Microsystems, Inc. @ 8,100 484,481
Texas Instruments, Inc. 4,100 418,712
Xilinx, Inc. @ 1,400 63,875
------------
14,851,394
------------
Telecommunications -- 8.21%
Ameritech Corp. 7,800 533,834
AT&T Corp. (1) 20,400 1,030,200
Bell Atlantic Corp. 16,900 973,862
BellSouth Corp. 4,800 214,635
Frontier Corp. 3,500 193,156
GTE Corp. 10,600 709,538
Level 3 Communications, Inc. @ 4,400 396,275
MCI WorldCom, Inc. @ 19,700 1,618,981
Northern Telecom Ltd. 6,100 415,944
SBC Communications, Inc. 24,000 1,344,000
Sprint Corp. 1,200 123,075
US West, Inc. 5,500 287,719
------------
7,841,219
------------
Transportation -- 0.98%
AMR Corp. 1,900 132,644
Burlington Northern Santa Fe Corp. 4,900 179,462
CNF Transportation, Inc. 400 17,475
COMAIR Holdings, Inc. 800 17,650
Continental Airlines, Inc. @ 300 12,956
CSX Corp. 2,200 108,350
Delta Air Lines, Inc. 200 12,688
FDX Corp. 600 67,538
Norfolk Southern Corp. 3,900 127,481
Ryder System, Inc. 700 18,463
Southwest Airlines Co. 2,900 94,431
Union Pacific Corp. 2,500 150,000
------------
939,138
------------
</TABLE>
- --------------------------------------------------------------------------------
23
<PAGE>
NORTHSTAR RESEARCH ENHANCED INDEX FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Shares/Principal Amount Value
<S> <C> <C>
- -------------------------------------------------------------------------------
Utilities -- 2.47%
Allegheny Energy, Inc. 1,500 $ 51,094
Ameren Corp. 1,800 69,637
Baltimore Gas & Electric Co. 2,000 56,250
Carolina Power & Light Co. 900 36,281
Central & South West Corp. 7,600 188,695
Cinergy Corp. 2,000 59,625
CMS Energy Corp. 1,400 61,600
Columbia Energy Group 1,200 57,675
Consolidated Natural Gas Co. 1,200 71,400
Dominion Resources, Inc. 3,000 123,375
Duke Energy Corp. 3,000 168,000
Edison International 4,500 110,250
El Paso Energy Corp. 1,500 55,125
Enron Corp. 1,600 120,400
Entergy Corp. 3,600 112,481
FPL Group, Inc. 1,400 78,925
GPU, Inc. 700 26,688
New England Electric System 100 4,950
NiSource, Inc. 800 22,200
Northeast Utilities 1,800 28,800
Northern States Power Co. 2,200 53,075
PG&E Corp. 4,900 152,206
Pinnacle West Capital Corp. 1,200 46,575
PP& L Resources, Inc. 2,300 64,226
Reliant Energy, Inc. 3,300 93,431
TECO Energy, Inc. 1,900 40,494
Texas Utilities Co. 4,000 159,000
The Southern Co. 7,300 197,556
Western Resources, Inc. 200 5,438
Wisconsin Energy Corp. 1,700 45,688
------------
2,361,140
------------
Total Common Stocks
(cost $82,420,890) 87,347,761
------------
Total Investment Securities -- 91.48%
(cost $82,420,890) 87,347,761
------------
Short-Term Investment -- 0.19%
U.S. Treasury Notes (1), 5.875% due
11/15/99 $ 185,000 186,069
------------
Total Short-Term Investments
(cost $186,142) 186,069
------------
Repurchase Agreement -- 4.56%
Agreement with State Street Bank and
Trust bearing interest at 4.72% dated
4/30/99, to be repurchased 5/03/99 in the
amount of $4,353,712 and collateralized
by $3,425,000 U.S. Treasury Notes, 7.875%
due 11/15/99 and $820,000 U.S. Treasury
Notes, 5.50% due 5/31/00, value
$3,600,531 and $843,575, respectively
(cost $4,352,000) 4,352,000 4,352,000
------------
Other assets less liabilities -- 3.77% 3,596,281
------------
Net Assets -- 100.00% $ 95,482,111
============
</TABLE>
@ Non-income producing security
** American Depositary Receipts.
(1) The security or a portion thereof has been segregated as collateral for
written option contracts.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
24
<PAGE>
[PHOTO]
MARY LISANTI
NORTHSTAR
INCOME & GROWTH FUND
[LOGO OF NORTHSTAR]
The Markets
. At the end of last October, it became apparent that the world's financial
system was not going to collapse under the weight of the Russian default
and the collapse of Long Term Capital Management. Thus, the flight to
quality into U.S. Treasury Bonds reversed course, as investors snapped up
shares of growth stocks. The yield on the 30-year U.S. Treasury backed up
from 5.15% at the end of October to 5.67% by the end of April, while the
10-year Treasury yield increased from 4.61% to 5.51% over the same time
frame.
. Within the equity markets, the S&P 500 Index rose 22.32% over the last six
months. In late 1998 and early 1999, technology shares drove the equity
markets higher, but as oil prices recovered from their lowest level of the
decade and signs of global growth appeared, investors rotated into more
economically sensitive industries including energy, basic materials and
capital goods.
. The markets ignored some major economic and political events within the
U.S. and abroad, including a major devaluation in Brazil, the failed im-
peachment of President Clinton and bombings in Iraq and the Balkans.
The Fund
. For the six-month period ended April 30, 1999, the Northstar Income &
Growth Fund earned a return of 13.72%, 13.22%, and 13.05% for Class A, B,
and C shares, respectively. The Lipper average for balanced funds gained
of 12.79% during the same period.
. The restructuring of the Fund continued as the total number of stocks held
in the portfolio was increased to reduce overall volatility. The dramatic
decline in U.S. equity valuations during the fall of 1998 created remark-
able opportunities to find excellent companies at bargain valuations.
Telecommunications was one of the areas in which we added positions that
had a significant positive impact on performance. Also, as it became ap-
parent that the U.S. would continue to support the global economy, we
added to positions in the energy and consumer cyclical sectors.
. Six months ago, we began to move the Fund to a heavier weighting in equi-
ties as we felt that there was limited upside to bonds when the 30-Year
U.S. Treasury yield fell below 5%. Thus, the bond weighting was trimmed to
the minimum 25%. However, in keeping with the cyclical theme in the equity
portion of the Fund, we moved into more aggressive BBB- and A-rated cred-
its, in the belief that corporate credit spreads represented a better
risk/reward tradeoff.
Current Strategy
. We remain focused on cyclical industries such as consumer and energy
stocks as the rest of the world returns to positive economic growth. The
Fund has continued to reduce its interest rate exposure by lowering its
overweight position in the financial sector and the duration of its bond
holding as the likelihood of a Federal Reserve rate hike increases. Six
months ago, we took the opportunity to increase technology because this
sector was particularly undervalued, but we have since found more promis-
ing valuations in telecommunications sector.
. The Northstar Income & Growth Fund is very well positioned to take advan-
tage of the current economic environment. The fixed income portion of the
fund is more aggressive with credit risk and more conservative with re-
spect to inflation and a possible tightening action by the Fed. The equity
portion still provides good current income (the equity yield is 1.6% ver-
sus the S&P 500 yield of 1.2%), while also providing growth opportunities
at reasonable valuations. The P/E ratio of the Income & Growth Fund stands
at 22.7 times, significantly below that of the S&P 500, while the Fund's
"P/E to growth" or "price of growth" is 1.4, against a comparable 2.9 for
the S&P 500.
- --------------------------------------------------------------------------------
Fund Information (All data are as of 4/30/99) Total Net Assets $119,069,062
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Holdings
Name % Fund
<C> <S> <C>
(1) Halliburton Co. 3.4%
(2) Avon Products, Inc. 3.0%
(3) MCI Communications, Inc. 2.5%
(4) First Union Corp. 2.3%
(5) IES Utilities, Inc. 2.3%
(6) Fleet Financial Group, Inc. 2.2%
(7) International Business Machines Corp. 2.2%
(8) General Motors Acceptance Corp. 2.1%
(9) Delphi Automotive Systems Corp. 1.7%
(10) Federal Home Loan Mortgage Corp. 1.6%
-----
23.3%
=====
</TABLE>
Top 5 Industries
(by percentage of net assets)
Financial 18.4%
Energy 13.8%
Consumer Staples 12.8%
Consumer Cyclicals 8.9%
Communication
Services 8.8%
SEC Average Annual Rates of Return
(at maximum applicable sales charge)
<TABLE>
- --------------------------------
<CAPTION>
1
Inception 5 years year
- --------------------------------
<S> <C> <C> <C>
Class A 10.08% 11.19% 1.03%
- --------------------------------
Class B 9.54% 11.23% 0.57%
- --------------------------------
Class C 10.29% 11.48% 4.22%
- --------------------------------
</TABLE>
Cumulative Total Return
(do not reflect sales charge)
<TABLE>
- --------------------------------
<CAPTION>
1
Inception 5 years year
- --------------------------------
<S> <C> <C> <C>
Class A 77.73% 78.40% 6.10%
- --------------------------------
Class B 60.88% 72.24% 5.28%
- --------------------------------
Class C 64.98% 72.15% 5.16%
- --------------------------------
</TABLE>
- ------------------------------------------------------------ ---------
25
<PAGE>
NORTHSTAR INCOME & GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Industry Value % of Net Assets
- --------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements $ 2,049,000 1.72%
Basic Material 4,068,019 3.42
Capital Goods 8,063,131 6.77
Communication Services 10,418,506 8.75
Consumer Cyclicals 10,630,192 8.93
Consumer Staples 15,212,029 12.78
EDP Peripherals 2,258,200 1.90
EDP Services 2,233,794 1.88
Electronic Data Processing 2,665,338 2.24
Electronic Production/Equipment 1,046,400 0.88
Energy 16,392,664 13.77
Federal Agencies 1,886,280 1.58
Financial 21,949,869 18.43
Hospital/Nursing Management 1,108,469 0.93
Internet Services 601,013 0.50
Medical Specialties 2,294,700 1.93
Pharmaceuticals 5,489,217 4.61
Semiconductor 1,471,350 1.24
Telecommunications Equipment 2,459,306 2.06
Transportation 1,256,063 1.05
Utilities 9,163,054 7.69
Liabilities in excess of other assets (3,647,532) (3.06)
------------ ------
Net Assets $119,069,062 100.00%
============ ======
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
26
<PAGE>
NORTHSTAR INCOME & GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- --------------------------------------------------------
Common Stocks -- 76.47%
Basic Material -- 3.42%
Alcoa, Inc. 14,400 $ 896,400
E.I. du Pont de Nemours and Co. 24,300 1,716,188
International Paper Co. 27,300 1,455,431
------------
4,068,019
------------
Capital Goods -- 6.77%
AlliedSignal, Inc. 30,800 1,809,500
Briggs & Stratton Corp. 25,900 1,707,781
Danaher Corp. 27,300 1,813,744
Ingersoll-Rand Co. 26,700 1,847,306
PACCAR, Inc. 15,800 884,800
------------
8,063,131
------------
Communication Services -- 6.23%
Ameritech Corp. 20,300 1,389,281
AT&T Corp. 22,688 1,145,719
BellSouth Corp. 28,100 1,257,475
Frontier Corp. 18,500 1,020,969
GTE Corp. 19,900 1,332,056
MCI WorldCom, Inc. @ 15,500 1,273,906
------------
7,419,406
------------
Consumer Cyclicals -- 7.26%
Ames Department Stores, Inc. @ 39,100 1,366,056
Dana Corp. 31,600 1,489,150
Dayton Hudson Corp. 20,300 1,366,444
Ford Motor Co. 21,900 1,400,231
General Motors Corp. 15,200 1,351,850
Mirage Resorts, Inc. @ 31,000 695,562
Pep Boys -- Manny, Moe & Jack 67,900 971,819
------------
8,641,112
------------
Consumer Staples -- 9.74%
Avon Products, Inc. 30,300 1,645,669
Comcast Corp. 17,200 1,129,825
ConAgra, Inc. 42,200 1,049,725
Cox Communications, Inc. @ 18,000 1,428,750
General Mills, Inc. 16,000 1,170,000
Kimberly-Clark Corp. 26,955 1,652,678
McDonald's Corp. 28,400 1,203,450
The Clorox Co. 10,600 1,222,975
The Kroger Co. 20,200 1,097,113
------------
11,600,185
------------
EDP Peripherals -- 1.90%
EMC Corp. 12,000 1,307,250
Lexmark International Group, Inc. @ 7,700 950,950
------------
2,258,200
------------
EDP Services -- 1.88%
Electronic Data Systems Corp. @ 27,900 1,499,625
First Data Corp. 17,300 734,169
------------
2,233,794
------------
</TABLE>
- --------------------------------------------------------------------------------
27
<PAGE>
NORTHSTAR INCOME & GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- --------------------------------------------------------------------
Electronic Production/Equipment -- 0.88%
Taiwan Semiconductor Manufacturing Co. Ltd @ ** 43,600 $ 1,046,400
------------
Energy -- 10.41%
Anadarko Petroleum Corp. 31,200 1,183,650
Apache Corp. 42,700 1,310,356
Baker Hughes, Inc. 56,200 1,678,975
Chevron Corp. 15,000 1,496,250
Halliburton Co. 34,700 1,479,087
Mobil Corp. 15,500 1,623,625
Noble Drilling Corp. @ 62,200 1,220,675
Texaco, Inc. 15,200 953,800
Transocean Offshore, Inc. 48,900 1,451,719
------------
12,398,137
------------
Financial -- 11.78%
Astoria Financial Corp. 13,400 671,675
Bank of New York Co., Inc. 36,200 1,448,000
Chase Manhattan Corp. 15,800 1,307,450
Citigroup, Inc. 22,300 1,678,075
Equity Residential Properties Trust 10,600 490,250
J. P. Morgan & Co., Inc. 11,300 1,522,675
Mellon Bank Corp. 19,000 1,411,937
Morgan Stanley Dean Witter & Co. 13,700 1,358,869
Providian Financial Corp. 12,300 1,587,469
The Equitable Cos., Inc. 18,400 1,238,550
Washington Mutual, Inc. 31,900 1,311,887
------------
14,026,837
------------
Hospital/Nursing Management -- 0.93%
Columbia/HCA Healthcare Corp. 44,900 1,108,469
------------
Internet Services -- 0.50%
Mindspring Enterprises, Inc. @ 6,200 601,013
------------
Medical Specialties -- 1.93%
Bausch & Lomb, Inc. 15,700 1,177,500
C.R. Bard, Inc. 22,800 1,117,200
------------
2,294,700
------------
Pharmaceuticals -- 3.05%
Abbott Laboratories 23,200 1,123,750
American Home Products Corp. 17,400 1,061,400
Johnson & Johnson 14,900 1,452,750
------------
3,637,900
------------
Semiconductor -- 1.24%
Altera Corp. @ 9,400 679,150
LSI Logic Corp. 23,300 792,200
------------
1,471,350
------------
Telecommunications Equipment -- 2.07%
General Instrument Corp. @ 37,500 1,368,750
Nokia Corp. ** 14,700 1,090,556
------------
2,459,306
------------
Transportation -- 1.05%
Delta Air Lines, Inc. 19,800 1,256,063
------------
</TABLE>
- --------------------------------------------------------------------------------
28
<PAGE>
NORTHSTAR INCOME & GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Shares/Principal Amount Value
<S> <C> <C>
- ------------------------------------------------------------------------------
Utilities -- 5.43%
El Paso Energy Corp. 36,900 $ 1,356,075
Enron Corp. 19,900 1,497,475
Montana Power Co. 22,800 1,700,025
Texas Utilities Co. 14,600 580,350
Williams Cos., Inc. 28,200 1,332,450
------------
6,466,375
------------
Total Common Stocks
(cost $75,684,180) 91,050,397
------------
Domestic Corporate Bonds -- 23.29%
Communication Services -- 2.52%
MCI Communications, Inc.
6.50%, Sr. Notes, 4/15/10 $3,000,000 2,999,100
------------
Consumer Cyclicals -- 1.67%
Delphi Automotive Systems Corp.
6.125%, Notes, 5/01/04 2,000,000 1,989,080
------------
Consumer Staples -- 3.03%
Avon Products, Inc.
6.55%, Notes, 8/01/07 3,600,000 3,611,844
------------
Electronic Data Processing -- 2.24%
International Business Machines Corp.
6.45%, Notes, 8/01/07 2,600,000 2,665,338
------------
Energy -- 3.35%
Halliburton Co.
5.625%, Notes, 12/01/08 4,165,000 3,994,527
------------
Financial -- 6.65%
First Union Corp.
7.50%, Subordinated Notes, 7/15/06 2,600,000 2,763,358
Fleet Financial Group, Inc.
7.19%, Subordinated Notes, 10/02/12 2,600,000 2,606,552
General Motors Acceptance Corp.
6.125%, Notes, 1/22/08 2,600,000 2,553,122
------------
7,923,032
------------
Pharmaceuticals -- 1.56%
American Home Products
7.90%, Notes, 2/15/05 1,700,000 1,851,317
------------
Utilities -- 2.27%
IES Utilities, Inc.
6.625%, Sr. Debentures, 8/01/09 2,700,000 2,696,679
------------
Total Domestic Corporate Bonds
(cost $27,692,310) 27,730,917
------------
U.S. Government and Agencies -- 1.58%
Federal Home Loan Mortgage Corp., 5.125%
due 10/15/08 2,000,000 1,886,280
------------
Total U.S. Government and Agencies
(cost $1,990,700) 1,886,280
------------
Total Investment Securities -- 101.34%
(cost $105,367,190) 120,667,594
</TABLE>
- --------------------------------------------------------------------------------
29
<PAGE>
NORTHSTAR INCOME & GROWTH FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Principal Amount Value
<S> <C> <C>
- -------------------------------------------------------------------------------
Repurchase Agreement -- 1.72%
Agreement with State Street Bank and Trust
bearing interest at 4.72% dated 4/30/99, to be
repurchased 5/03/99 in the amount of $2,049,806
and collateralized by $2,035,000 U.S. Treasury
Notes, 5.50% due 5/31/00, value $2,093,506
(cost $2,049,000) $2,049,000 $ 2,049,000
Liabilities in excess of other assets --
(3.06%) (3,647,532)
------------
Net Assets -- 100.00% $119,069,062
============
</TABLE>
@ Non-income producing security.
** American Depositary Receipts.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
30
<PAGE>
[PHOTO]
THOMAS OLE DIAL
[PHOTO]
JEFFREY AURIGEMMA
NORTHSTAR
HIGH TOTAL RETURN FUND II
[LOGO OF NORTHSTAR]
The Markets
. The six months ended April 30, 1999 closed with robust equity markets and
GDP growth rates of approximately 4%. The equity markets' outstanding per-
formance was primarily due to the strength of the U.S. economy and absence
of inflation indicators. During the period, the Federal Reserve remained
neutral. However following its May meeting, the Federal Reserve became bi-
ased toward tightening. Additionally, worldwide markets stabilized, re-
bounding off their lows. Inflation continued to remain low at roughly
1.5%, as both lower commodity prices and imports kept prices in check.
Over the course of the six months, yields of 10- and 30-year Treasury
bonds had a significant backup. Their yields as of April 30, 1999 stood at
5.51% and 5.67%, up 90 bps and 52 bps, respectively, for the six months
ended April 30, 1999. The backup in interest rates was primarily due to
the continued strength of the economy, which raised concern among Fed
watchers as to the possibility that the Fed might increase rates. High
yield bonds continued to climb modestly as liquidity concerns diminished,
investor confidence in the stock market returned and the domestic economic
outlook remained robust.
. The Lehman Brothers Corporate High Yield Index returned 8.25% for the six
months ended April 30, 1999 compared to 0.70% for the Lehman Brothers U.S.
Aggregate Bond Index. As economic and financial concerns abated during the
quarter, high yield bonds continued to show signs of improvement as world-
wide markets stabilized. However, the spreads differential high yield
bonds and treasury bonds only fell modestly due to a back up in Treasury
bond yields. At the end of the period, high yield spreads still remained
historically wide to Treasuries at 525 to 650 basis points. In general,
bonds with lower credit ratings bounced off their lows and outperformed
the upper tier of the high yield market.
. The Lehman Brothers Emerging Market Bond Index rose 17.38% for the six
months ended April 30, 1999. The bounce in emerging markets was primarily
due to liquidity concerns abating and investors continuing to comb for op-
portunities from the third quarter 1998 collapse.
The Fund
. For the six month period ended April, 30 1999, the Northstar High Total
Return Fund II earned a return of 6.03%, 5.65%, and 5.64% for Class A, B,
and C shares, respectively. The Lipper average for high yield funds was
10.41%.
. Since the third quarter 1998 meltdown, high yield investors have demanded
a significant liquidity premium. This bias for more liquid issues has re-
sulted in outperformance by larger-sized issues. The Fund's allocation to
smaller-sized issues adversely affected the Fund's performance during the
period. Furthermore, during the first quarter of 1999, the Fund began a
restructuring process.
. As a result of the restructuring, distressed and under-performing assets
such as shipping, oil and gas and emerging market credits were cut back.
As of April 30, 1999, shipping, oil and gas and emerging markets repre-
sented 1.7%, 6.6% and 6.0%, respectively, of the Fund. As the Fund's expo-
sure to more commodities driven credits was lowered, weightings in the ca-
ble, gaming and telecommunications sectors were increased. These sectors
should provide both growth and stability to the Fund.
Current Strategy
. We will maintain the Fund's above-average allocation to non-cyclical in-
dustries, maintain positions in bonds that have equity kickers, and focus
on investments in undervalued bonds that have high yields and above-aver-
age potential for capital appreciation. Additionally, we will continue the
restructuring process which includes certain initiatives such as limiting
the number of securities purchased, holdings such as bonds with equity
kickers, emerging market debt, zero coupon bonds and non-rated securities.
The Fund managers believe that these initiatives should help to mitigate
volatile swings in the Fund's NAV.
. We anticipate completing the above-mentioned restructuring process no
later than the third quarter of 1999. Liquidity in the market will remain
a factor in determining whether or not we are able to successfully com-
plete the restructuring within the desired timeframe. Additionally, the
Fund will continue to follow the barbell approach, blending BB and upper
tier B credits to mitigate the downside of volatility swings associated
with big market moves.
- --------------------------------------------------------------------------------
Fund Information (All data are as of 4/30/99) Total Net Assets $262,303,758
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Holdings
Name % Fund
<C> <S> <C>
(1) Intracel Corp. 2.6%
(2) Globix Corp. 2.3%
(3) HMH Properties, Inc. 2.2%
(4) Amazon.Com, Inc. 2.1%
(5) Hard Rock Hotel, Inc. 2.0%
(6) Compass Aerospace Corp. 1.9%
(7) Nextel Communications, Inc. 1.9%
(8) Packaged Ice, Inc. 1.9%
(9) TransAmerican Refining Corp. 1.9%
(10) EchoStar Communications Corp. 1.8%
-----
20.6%
=====
</TABLE>
Top 5 Industries
(by percentage of net assets)
Telecommunications 21.3%
Cable Television 9.2%
Healthcare 7.5%
Hotel & Gaming 7.1%
Oil & Gas 6.6%
SEC Average Annual Rates of Return
(at maximum applicable sales charge)
<TABLE>
- -----------------------------------
<CAPTION>
Inception 5 years 1 year
- -----------------------------------
<S> <C> <C> <C>
Class A 5.37% N/A (10.32)%
- -----------------------------------
Class B 5.82% N/A (10.78)%
- -----------------------------------
Class C 7.01% N/A (7.38)%
- -----------------------------------
</TABLE>
Cumulative Total Return
(do not reflect sales charge)
<TABLE>
- ----------------------------------
<CAPTION>
Inception 5 years 1 year
- ----------------------------------
<S> <C> <C> <C>
Class A 18.10% N/A (5.88)%
- ----------------------------------
Class B 16.46% N/A (6.52)%
- ----------------------------------
Class C 16.46% N/A (6.53)%
- ----------------------------------
</TABLE>
- ------------------------------------------------- - ---------
31
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND II
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Principal Amount/Units Value
<S> <C> <C>
- -------------------------------------------------------------------------------
Domestic Bonds & Notes -- 74.52%
Aerospace & Defense -- 1.92%
Compass Aerospace Corp. #
10.125%, Sr. Subordinated Notes, 4/15/05 $5,210,000 $ 5,027,650
Willcox & Gibbs, Inc. *
12.25%, Company Guarantee, 12/15/03 4,000 740
------------
5,028,390
------------
Automotive Manufacturing -- 1.67%
Prestolite Electric, Inc.
9.625%, Guaranteed Sr. Notes, 2/01/08 2,000,000 1,990,000
Safelite Glass Corp. #
9.875%, Sr. Subordinated Notes, 12/15/06 2,500,000 2,393,750
------------
4,383,750
------------
Broadcasting -- 1.85%
Brill Media Company LLC $
7.50/12.00%, Sr. Notes, 12/15/07 3,000,000 2,415,000
Brill Media Company LLC $
7.50/12.00%, Sr. Subordinated Appreciation
Notes, 12/15/07 85,714 3,000
Unisite, Inc. ++
13.00%, Notes, 12/15/04 2,064,000 2,442,744
------------
4,860,744
------------
Cable Television -- 6.87%
Century Communications Corp.
0%, Sr. Discount Notes, 1/15/08 4,800,000 2,304,000
Charter Commerce Holdings LLC # $
0/9.92%, Sr. Discount Notes, 4/01/11 6,500,000 4,330,625
Diva Systems Corp. $
0/12.625%, Sr. Discount Notes, 3/01/08 7,000,000 2,590,000
EchoStar Communications Corp. #
9.25%, Sr. Notes, 2/01/06 4,500,000 4,725,000
Mediacom LLC & Mediacom Capital Corp.
8.50%, Sr. Notes, 4/15/08 2,500,000 2,581,250
TVN Entertainment Corp. (1)
14.00%, Units, 8/01/08 1,500 1,312,500
Wireless One, Inc. *
13.00%, Sr. Notes, 10/15/03 200,000 187,000
------------
18,030,375
------------
Capital Goods Manufacturing -- 1.53%
Indesco International, Inc.
9.75%, Sr. Subordinated Notes, 4/15/08 3,500,000 2,257,500
Moll Industries, Inc.
10.50%, Sr. Subordinated Notes, 7/01/08 2,000,000 1,760,000
------------
4,017,500
------------
Chemical -- 2.42%
American Eco Corp.
9.625%, Company Guarantee, 5/15/08 2,200,000 1,331,000
American Pacific Corp.
9.25%, Sr. Notes, 3/01/05 3,000,000 3,135,000
</TABLE>
- --------------------------------------------------------------------------------
32
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND II
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Principal Amount Value
<S> <C> <C>
- -------------------------------------------------------------------------------
Chemical -- continued
Laroche Industries, Inc.
9.50%, Sr. Subordinated Notes, 9/15/07 $2,500,000 $ 1,887,500
------------
6,353,500
------------
Computer/Electronics -- 1.14%
Cooperative Computing, Inc.
9.00%, Sr. Subordinated Notes, 2/01/08 3,000,000 2,670,000
Electronic Retailing Systems International, Inc.
$
0/13.25%, Sr. Discount Notes, 2/01/04 1,000,000 335,000
------------
3,005,000
------------
Consumer Products -- 3.43%
Decora Industries, Inc.
11.00%, Sr. Secured Notes, 5/01/05 4,000,000 3,900,000
Packaged Ice, Inc.
9.75%, Sr. Notes, 2/01/05 5,000,000 5,100,000
------------
9,000,000
------------
Energy -- 0.59%
Michael Petroleum Corp.
11.50%, Sr. Notes, 4/01/05 2,500,000 1,537,500
------------
Entertainment/Film -- 0.80%
Southwest Royalties, Inc.
10.50%, Company Guarantee, 10/15/04 5,000,000 2,087,500
------------
Food/Beverage/Tobacco -- 3.71%
Ameriserve Food Distribution, Inc.
8.875%, Sr. Notes, 10/15/06 5,000,000 4,662,500
Favorite Brands International, Inc. *
10.25%, Sr. Notes, 7/20/07 2,000,000 130,000
North Atlantic Trading, Inc.
11.00%, Company Guarantee, 6/15/04 3,600,000 3,690,000
Standard Commercial Tobacco Co., Inc.
8.875%, Company Guarantee, 8/01/05 350,000 306,250
Tom's Foods, Inc.
10.50%, Sr. Secured Notes, 11/01/04 1,000,000 935,000
------------
9,723,750
------------
Healthcare -- 6.65%
Health Insurance Plan of Greater New York
11.25%, Notes, 7/01/10 4,000,000 4,020,000
Intracel Corp. ++
12.00%, Escrow Notes, 8/25/03 1,317,073 1,188,658
Intracel Corp. ++
12.00%, Notes, 8/25/03 7,682,927 6,933,842
Mediq, Inc. $
0/13.00%, Debentures, 6/01/09 7,000,000 2,835,000
Packard Bioscience, Inc.
9.375%, Sr. Subordinated Notes, 3/01/07 2,500,000 2,456,250
------------
17,433,750
------------
</TABLE>
- --------------------------------------------------------------------------------
33
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND II
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Principal Amount Value
<S> <C> <C>
- -----------------------------------------------------------------------
Homebuilders/Home Construction -- 1.33%
Engle Homes, Inc.
9.25%, Sr. Notes, 2/01/08 $3,500,000 $ 3,491,250
------------
Hotel & Gaming -- 7.14%
Aladdin Gaming Holdings Corp. $
0/13.50%, Sr. Discount Notes, 3/01/10 3,000,000 1,275,000
Ameristar Casinos, Inc.
8.00%, Sr. Secured Notes, 1/02/04 1,706,960 1,544,799
Ameristar Casinos, Inc.
10.50%, Company Guarantee, 8/01/04 750,000 761,250
Hard Rock Hotel, Inc.
9.25%, Sr. Subordinated Notes, 4/01/05 5,500,000 5,362,500
HMH Properties, Inc.
7.875%, Sr. Secured Notes, 8/01/08 6,000,000 5,850,000
Venetian Casino Resort LLC.
10.00%, Sr. Subordinated Notes, 11/15/05 4,000,000 3,940,000
------------
18,733,549
------------
Insurance -- 0.57%
Superior National Insurance Group, Inc.
10.75%, Company Guarantee, 12/01/17 15,000 1,500,000
------------
Leisure -- 2.77%
Globix Corp.
13.00%, Sr. Notes, 5/01/05 6,000,000 6,030,000
Silverleaf Resorts, Inc.
10.50%, Company Guarantee, 4/01/08 500,000 427,500
Source Media, Inc.
12.00%, Sr. Notes, 11/01/04 1,000,000 805,000
------------
7,262,500
------------
Oil & Gas -- 4.53%
Corporate Express Holdings, Inc.
9.625%, Sr. Notes, 6/01/08 3,000,000 2,880,000
Forman Petroleum Corp. *
13.50%, Company Guarantee, 6/01/04 2,000,000 1,010,000
TransAmerican Refining Corp. # & *
15.00%, Sr. Notes, 12/01/03 5,000,000 4,975,000
Windsor Petroleum Transport Corp. #
7.84%, Notes, 1/15/21 4,000,000 3,020,000
------------
11,885,000
------------
Packaging -- 0.81%
Graham Packaging Holdings Co. $
0/10.75%, Sr. Discount Notes, 1/15/09 3,000,000 2,115,000
------------
Publishing/Printing -- 1.28%
Mail-Well Corp. #
8.75%, Sr. Subordinated Notes, 12/15/08 3,250,000 3,347,500
------------
Restaurants -- 1.49%
Romacorp, Inc.
12.00%, Sr. Notes, 7/01/06 4,000,000 3,900,000
------------
Services -- 4.00%
Comforce Corp. &
15.00%, Sr. Secured Debentures, 12/01/09 2,894,708 2,909,181
</TABLE>
- --------------------------------------------------------------------------------
34
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND II
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Principal Amount Value
<S> <C> <C>
- ------------------------------------------------------------------------------
Services -- continued
Mentus Media Corp. &
12.00%, Sr. Secured Notes, 2/01/03 $1,676,000 $ 1,449,740
NBC Acquisition Corp. $
0/10.75%, Sr. Discount Debenture, 2/15/09 3,000,000 1,755,000
Sabreliner Corp. #
11.00%, Sr. Notes, 6/15/08 3,000,000 2,655,000
U.S. Office Products Co.
9.75%, Sr. Subordinated Notes, 6/15/08 2,500,000 1,712,500
------------
10,481,421
------------
Shipping -- 0.70%
Simcala, Inc.
9.625%, Sr. Notes, 4/15/06 1,500,000 1,095,000
Ultralpetrol Bahamas Ltd.
10.50%, 1st Mortage Notes, 4/01/08 900,000 742,500
------------
1,837,500
------------
Specialty Retailing -- 2.47%
Amazon.Com, Inc. $
0/10.00%, Sr. Discount Notes, 5/01/08 7,500,000 5,475,000
Pamida, Inc.
11.75%, Sr. Subordinated Notes, 3/15/03 1,000,000 1,005,000
------------
6,480,000
------------
Steel -- 0.31%
Geneva Steel Co. *
9.50%, Sr. Notes, 1/15/04 3,000,000 585,000
NSM Steel Company Ltd. # *
12.00%, Company Guarantee, 2/01/06 1,500,000 232,500
------------
817,500
------------
Telecommunications -- 14.54%
Dobson/Sygnet Communications #
12.25%, Sr. Notes, 12/15/08 2,500,000 2,793,750
International Wireless Communications Holdings,
Inc. (2)
0%, Sr. Secured Discount Notes, 8/15/01 1,500,000 157,500
Iridium Capital Corp.
14.00%, Company Guarantee, 7/15/05 2,500,000 962,500
Iridium LLC Capital Corp.
13.00%, Sr. Secured Notes, 7/15/05 2,000,000 710,000
ITC Deltacom, Inc.
11.00%, Sr. Notes, 6/01/07 3,000 3,405
IXC Communications, Inc.
9.00%, Sr. Subordinated Notes, 4/15/08 3,000,000 3,022,500
Level 3 Communications, Inc.
9.125%, Sr. Notes, 5/01/08 3,000,000 3,075,000
Metromedia Fiber Network, Inc. #
10.00%, Sr. Notes, 11/15/08 4,000,000 4,340,000
Nextel Communications, Inc. $
0/9.75%, Sr. Discount Notes, 10/31/07 6,500,000 5,037,500
Nextlink Communications, Inc.
10.75%, Sr. Notes, 11/15/08 3,000,000 3,217,500
Nextlink Communications, Inc. $
0/9.45%, Sr. Discount Notes, 4/15/08 3,500,000 2,257,500
</TABLE>
- --------------------------------------------------------------------------------
35
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND II
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Principal Amount Value
<S> <C> <C>
- -----------------------------------------------------------------------------
Telecommunications -- continued
Northeast Optic Network, Inc.
12.75%, Sr. Notes, 8/15/08 $3,000,000 $ 3,180,000
Price Communication Cellular Holdings, Inc. &
11.25%, Sr. Notes, 8/15/08 1,591,406 1,639,148
Qwest Communications International, Inc. #
7.25%, Sr. Notes, 11/01/08 3,000,000 3,112,500
RCN Corp.
10.00%, Sr. Notes, 10/15/07 1,000,000 1,042,500
RCN Corp. $
0/9.80%, Sr. Notes, 2/15/08 2,500,000 1,625,000
TCI Satellite Entertainment, Inc. $
0/12.25%, Sr. Discount Notes, 2/15/07 2,000,000 1,310,000
Transtel Pass-Thru Trust SA #
12.50%, Pass-Thru Trust Certificates, 11/01/07 312,000 140,400
Winstar Equipment II Corp.
12.50%, Company Guarantee, 3/15/04 500,000 522,500
------------
38,149,203
------------
Total Domestic Bonds & Notes
(cost $210,618,504) 195,462,182
------------
Foreign Bonds & Notes -- 14.65%
Cable Television -- 2.20%
NTL Communications Corp. # $(3)
0/9.75%, Sr. Notes, 4/15/09 3,250,000 3,202,318
Star Choice Communications, Inc.
13.00%, Sr. Secured Notes, 12/15/05 2,500,000 2,575,000
------------
5,777,318
------------
Chemical -- 0.36%
Tri Polyta Finance BV
11.375%, Company Guarantee, 12/01/03 3,000,000 930,000
------------
Entertainment/Film -- 1.53%
Virgin Cinemas Group Ltd. ++ (3)
13.00%, Subordinated Notes, 6/30/09 2,500,000 4,021,750
------------
Food/Beverage/Tobacco -- 1.74%
Fage Dairy Industries SA
9.00%, Sr. Notes, 2/01/07 4,250,000 3,867,500
Grupo Azucarero Mexico SA
11.50%, Sr. Notes, 1/15/05 2,000,000 700,000
------------
4,567,500
------------
Oil & Gas -- 1.96%
Conproca SA #
12.00%, Sr. Secured Notes, 6/16/10 3,000,000 2,985,000
Hurricane Hydrocarbons #
11.75%, Sr. Notes, 11/01/04 2,750,000 783,750
Northern Offshore ASA #
10.00%, Company Guarantee, 5/15/05 3,000,000 1,365,000
------------
5,133,750
------------
Services -- 0.42%
Localiza Rent A Car
10.25%, Notes, 10/01/05 2,000,000 1,095,000
------------
</TABLE>
- --------------------------------------------------------------------------------
36
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND II
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Principal Amount/Units Value
<S> <C> <C>
- ----------------------------------------------------------------------------
Shipping -- 1.01%
Equimar Shipholdings Ltd.
9.875%, Company Guarantee, 7/01/07 $3,700,000 $ 2,497,500
Navigator Gas Transport PLC # (4)
12.00%, Units, 6/30/07 300 145,500
------------
2,643,000
------------
Telecommunications -- 4.33%
Esprit Telecom Group PLC
11.50%, Sr. Notes, 12/15/07 2,000,000 2,240,000
Microcell Telecommunications, Inc. $
0/14.00%, Sr. Discount Notes, 6/01/06 3,460,000 2,923,700
Microcell Telecommunications, Inc. $(3)
0/11.125%, Sr. Discount Notes, 10/15/07 1,400,000 638,502
Occidente Y Caribe Celular SA $
0/14.00%, Sr. Discount Notes, 3/15/04 7,000 4,935
Paging Do Brazil Holdings Co. LLC
13.50%, Sr. Notes, 6/06/05 1,000,000 490,000
Poland Telecom Finance BV
14.00%, Company Guarantee, 12/01/07 2,000,000 1,835,000
RSL Communications PLC $
0/10.125%, Company Guarantee, 3/01/08 5,000,000 3,237,500
------------
11,369,637
------------
Utilities -- 1.10%
CE Casecnan Water & Energy Co.
11.95%, Sr. Secured Notes, 11/15/10 2,000,000 1,870,000
Panda Global Energy Co.
12.50%, Company Guarantee, 4/15/04 2,250,000 1,023,750
------------
2,893,750
------------
Total Foreign Bonds & Notes
(cost $47,190,849) 38,431,705
------------
Convertible Bonds -- 0.48%
Aerospace & Defense -- 0.00%
Simula, Inc.
8.00%, Sr. Subordinated Notes, 5/01/04 4,000 3,220
------------
Food/Beverage/Tobacco -- 0.48%
International Fast Food Corp. &
11.00%, Subordinated Notes, 10/31/07 1,750,000 1,246,875
------------
Total Convertible Bonds
(cost $1,493,880) 1,250,095
------------
</TABLE>
- --------------------------------------------------------------------------------
37
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND II
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Shares/Units Value
<S> <C> <C>
- -----------------------------------------------------------------------------
Common Stocks -- 0.00% @
Food/Beverage/Tobacco -- 0.00%
International Fast Food Corp. 13,012 $ 5,465
------------
Telecommunications -- 0.00%
Jordan Telecommunications Products, Inc. 250 5,125
Paging Do Brazil Holdings Co. LLC @@ 1,000 0
------------
5,125
------------
Total Common Stocks
(cost $0) 10,590
------------
Preferred Stocks -- 3.84%
Broadcasting -- 1.20%
Paxson Communications Corp., 13.25% & 37,000 3,145,000
------------
Cable Television -- 0.02%
21St Century Telecom Group, Inc., 13.75% & 1,000 50,500
------------
Capital Goods Manufacturing -- 0.40%
Clark Material Handling Co., 13.00% & 10,645 1,051,194
------------
Entertainment/Film -- 0.04%
Virgin Entertainment Group Ltd., 13.00% ++ @@ 272,133 109,883
------------
Food/Beverage/Tobacco -- 0.57%
North Atlantic Trading, Inc., 12.00% & 65,734 1,495,448
------------
Oil & Gas -- 0.08%
TCR Holding Corp., $.053 ++ 145,000 7,685
TCR Holding Corp., $.056 ++ 55,000 3,080
TCR Holding Corp., $.060 ++ 100,000 6,000
TCR Holding Corp., $.063 ++ 300,000 18,900
TransContinental Refining Corp., $.0683 ++ 200,000 186,600
------------
222,265
------------
Supermarkets -- 0.39%
Nebco Evans Holding Co., 11.25% & 27,889 1,017,948
------------
Telecommunications -- 0.56%
Hyperion Telecommunications, Inc., 12.875% & 8,460 799,470
Jordan Telecommunication Products, Inc., 13.25% & 3,107 311,535
Viatel, Inc., 10.00% & 1,602 361,251
------------
1,472,256
------------
Textile/Apparel -- 0.20%
Anvil Holdings, Inc., 13.00% & 105,986 529,930
------------
Utilities -- 0.38%
International Utility Structures, Inc., 13.00% # & 134 12,831
International Utility Structures, Inc., 13.00% # &
(5) 10,000 975,000
------------
987,831
------------
Total Preferred Stocks
(cost $13,790,591) 10,082,255
------------
Warrants -- 1.28% @
Broadcasting -- 0.00%
Unisite, Inc. ++, (expires 12/15/04) 1,003 10
Unisite, Inc. ++, (expires 12/15/04) (6) 18 5
------------
15
------------
</TABLE>
- --------------------------------------------------------------------------------
38
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND II
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Shares/Principal Amount Value
<S> <C> <C>
- ------------------------------------------------------------------------------
Cable Television -- 0.15%
Diva Systems Corp., (expires 3/01/08) 21,000 $ 273,000
Star Choice Communications, Inc. @@,
(expires 12/15/05) 57,900 115,800
------------
388,800
------------
Computer/Electronics -- 0.00%
Electronic Retailing Systems
International, Inc., (expires 2/01/04) 1,000 5,000
------------
Consumer Products -- 0.04%
Packaged Ice, Inc., (expires 4/15/04) 1,000 100,000
Packaged Ice, Inc. #, (expires 4/15/04) 5 500
------------
100,500
------------
Food/Beverage/Tobacco -- 0.02%
North Atlantic Trading, Inc. #, (expires
6/15/07) 550 55,000
------------
Healthcare -- 0.81%
Intracel Corp. ++, (expires 08/25/03) 32,711 171,733
Intracel Corp. ++, (expires 08/25/03) 127,259 731,739
Intracel Corp. ++, (expires 08/25/03) 237,804 1,218,746
Mediq, Inc. #, (expires 6/01/09) 7,000 70
------------
2,122,288
------------
Hotel & Gaming -- 0.00%
Aladdin Gaming Enterprises, Inc. #,
(expires 3/01/10) 30,000 300
------------
Leisure -- 0.01%
Bell Technology Group Ltd., (expires
5/01/05) 3,000 30,000
------------
Oil & Gas -- 0.00%
Forman Petroleum Corp. #, (expires
6/01/04) 2,000 2
------------
Services -- 0.00%
Comforce Corp., (expires 12/01/09) 21,125 211
Mentus Media Corp., (expires 2/01/08) 4,174 2,129
------------
2,340
------------
Telecommunications -- 0.25%
Globalstar Telecommunications Ltd. #,
(expires 2/15/04) 5 226
International Wireless Communications
Holdings, Inc. #, (expires 8/15/01) 1,500 15
Iridium World Communications, Inc. #,
(expires 7/15/05) 25 375
Occidente Y Caribe Celular SA # @@,
(expires 3/15/04) 28 0
Poland Telecom Finance BV # @@, (expires
12/01/07) 2,000 70,000
UNIFI Communications, Inc. #, (expires
5/01/07) 505 5
Worldport Communications, Inc. ++,
(expires 6/23/08) 117,164 585,820
------------
656,441
------------
Total Warrants
(cost $1,763,362) 3,360,686
------------
Total Investment Securities -- 94.77%
(cost $274,857,186) 248,597,513
------------
Short Term Securities -- 1.56%
Worldport International, Inc. ++
12.4375%, Sr. Secured Notes, 6/23/99 $4,128,183 4,092,453
------------
Total Short Term Securities
(cost $4,092,453) 4,092,453
------------
</TABLE>
- --------------------------------------------------------------------------------
39
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND II
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Principal Amount Value
<S> <C> <C>
- ------------------------------------------------------------------------------
Repurchase Agreement -- 1.01%
Agreement with State Street Bank and Trust
bearing interest at 4.72% dated 4/30/99, to be
repurchased 5/03/99 in the amount of $2,641,038
and collateralized by $2,635,000 U.S. Treasury
Notes, 5.625% due 12/31/99, value $2,697,581
(cost $2,640,000) $2,640,000 $ 2,640,000
------------
Other assets less liabilities -- 2.66% 6,973,792
------------
Net Assets -- 100.00% $262,303,758
============
</TABLE>
# Sales restricted to qualified institutional investors.
* Defaulted security.
$ Step bond.
++ Private Placement.
& Payment-in-kind security.
@ Non-income producing security.
@@ Foreign security.
(1) A unit consists of $1,000 par value Sr. Notes, 14.00% due 8/01/08 and 1
warrant.
(2) Bankrupt security.
(3) The principal amount shown is shown in the respective country's currency.
(4) A unit consists of $1,000 par value Notes, 12.00% due 6/30/07 and 7.66
warrants.
(5) A unit consists of 1,000 shares of 13.00% Sr. Exchangeable Preferred Stock
and 1 warrant.
(6) Second series warrants.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
40
<PAGE>
[PHOTO]
THOMAS OLE DIAL
[PHOTO]
JEFFREY AURIGEMMA
NORTHSTAR
HIGH TOTAL RETURN FUND
[LOGO OF NORTHSTAR]
The Markets
. The six months ended April 30, 1999 closed with robust equity markets and
GDP growth rates of approximately 4%. The equity markets' outstanding per-
formance was primarily due to the strength of the U.S. economy and absence
of inflation indicators. During the period, the Federal Reserve remained
neutral. However, following its May meeting, the Federal Reserve became
biased toward tightening. Additionally, worldwide markets stabilized, re-
bounding off their lows. Inflation continued to remain low at roughly
1.5%, as both lower commodity prices and imports kept prices in check.
Over the course of the six months, yields of 10- and 30-year Treasury
bonds had a significant backup. Their yields as of April 30, 1999 stood at
5.51% and 5.67%, up 90 bps and 52 bps, respectively, for the six months
ended April 30, 1999. The backup in interest rates was primarily due to
the continued strength of the economy, which raised concern among Fed
watchers as to the possibility that the Fed might increase rates. High
yield bonds continued to climb modestly as liquidity concerns diminished,
investor confidence in the stock market returned and the domestic economic
outlook remained robust.
. The Lehman Brothers Corporate High Yield Index returned 8.25% for the six
months ended April 30, 1999 compared to 0.70% for the Lehman Brothers U.S.
Aggregate Bond Index. As economic and financial concerns abated during the
quarter, high yield bonds continued to show signs of improvement as world-
wide markets stabilized. However, the spread differential between high
yield bonds and Treasury bonds only fell modestly due to a back up in
Treasury bond yields. At the end of the period, high yield spreads still
remained historically wide to Treasuries at 525-650 basis points. In gen-
eral, bonds with lower credit ratings bounced off their lows and
outperformed the upper tier of the high yield market.
. The Lehman Brothers Emerging Market Bond Index rose 17.38% for the six
months ended April 30, 1999. The bounce in emerging markets was primarily
due to liquidity concerns abating and investors continuing to comb for op-
portunities from the third quarter 1998 collapse.
The Fund
. For the six month period ended April 30, 1999, the Northstar High Total
Return Fund earned a return of 10.58%, 9.90%, and 10.16% for Class A, B,
and C shares, respectively. The Lipper average for high yield funds was
10.41%.
. Since the third quarter 1998 meltdown, high yield investors have demanded
a significant liquidity premium. This bias for more liquid issues has re-
sulted in the outperformance by larger-sized issues. The Fund's allocation
to smaller-sized issues adversely affected the Fund's performance during
the period. Furthermore, during the first quarter of 1999, the Fund began
a restructuring process.
. As a result of the restructuring, distressed and under-performing assets
such as shipping, oil and gas, and emerging market credits were cut back.
As of April 30, 1999, shipping, oil and gas, and emerging markets repre-
sented 2.3%, 3.6% and 9.4%, respectively, of the Fund. As the Fund's expo-
sure to more commodities driven credits decreased, weightings in the ca-
ble, gaming, and telecommunications sectors were increased. These sectors
should provide both growth and stability to the Fund.
Current Strategy
. We will maintain the Fund's above-average allocation to non-cyclical in-
dustries, maintain positions in bonds that have equity kickers, and focus
on investments in undervalued bonds that have high yields and above-aver-
age potential for capital appreciation. Additionally, we will continue the
restructuring process which includes certain initiatives such as limiting
the number of securities purchased, holdings such as bonds with equity
kickers, emerging market debt, zero coupon bonds and non-rated securities.
The Fund managers believe that these initiatives should help to mitigate
volatile swings in the Fund's NAV.
. We anticipate completing the above-mentioned restructuring process no
later than the third quarter of 1999. Liquidity in the market will remain
a determining factor in determining whether we we are able to successfully
complete the restructuring within the desired timeframe.
- --------------------------------------------------------------------------------
Fund Information (All data are as of 4/30/99) Total Net Assets $637,646,087
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Top 10 Holdings
Name % Fund
<C> <S> <C>
(1) Intracel Corp. 3.1%
(2) Packaged Ice, Inc. 2.8%
(3) North Atlantic Trading, Inc. 2.4%
(4) Unisite, Inc. 2.4%
(5) Occidente Y Caribe Celular SA 2.0%
(6) Mediq, Inc. 1.8%
(7) Paxson Communication Corp. 1.8%
(8) Source Media, Inc. 1.8%
(9) CAI Wireless Systems, Inc. 1.7%
(10) EchoStar Communications Corp. 1.7%
-----
21.5%
=====
</TABLE>
Top 5 Sectors
(by percentage of net assets)
Telecommunications 19.5%
Cable Television 10.2%
Healthcare 8.3%
Broadcasting 8.2%
Leisure 7.1%
SEC Average Annual Rates of Return
(at maximum applicable sales charge)
<TABLE>
- -----------------------------------
<CAPTION>
Inception 5 years 1 year
- -----------------------------------
<S> <C> <C> <C>
Class A 5.67% 6.12% (12.46%)
- -----------------------------------
Class B 4.93% 6.09% (13.06%)
- -----------------------------------
Class C 5.49% 6.43% (9.72%)
- -----------------------------------
</TABLE>
Cumulative Total Return
(do not reflect sales charge)
<TABLE>
- ----------------------------------
<CAPTION>
Inception 5 years 1 year
- ----------------------------------
<S> <C> <C> <C>
Class A 42.08% 41.30% (8.06%)
- ----------------------------------
Class B 28.57% 35.98% (8.97%)
- ----------------------------------
Class C 31.42% 36.58% (8.90%)
- ----------------------------------
</TABLE>
- ------------------------------------------------- - ---------
41
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Principal Amount/Units Value
<S> <C> <C>
- -------------------------------------------------------------------------------
Domestic Bonds & Notes -- 54.07%
Aerospace & Defense -- 0.29%
Willcox & Gibbs, Inc. *
12.25%, Company Guarantee, 12/15/03 $10,096,000 $ 1,867,760
------------
Broadcasting -- 3.61%
Brill Media Company LLC $
7.50/12.00%, Sr. Subordinated Appreciation
Notes, 12/15/07 280,000 9,800
Brill Media Company LLC $
7.50/12.00%, Sr. Notes, 12/15/07 9,800,000 7,889,000
Unisite, Inc. ++
13.00%, Notes, 12/15/04 12,798,000 15,146,433
------------
23,045,233
------------
Cable Television -- 6.06%
21st Century Telecom Group, Inc. $
0/12.25%, Sr. Discount Notes, 2/15/08 13,500,000 6,412,500
CAI Wireless Systems, Inc.
12.25%, Sr. Notes, 10/14/04 5,806,626 2,830,730
Charter Commerce Holdings LLC # $
0/9.92%, Sr. Discount Notes, 4/01/11 10,000,000 6,662,500
Diva Systems Corp. $
0/12.625%, Sr. Discount Notes, 3/01/08 15,200,000 5,624,000
EchoStar Communications Corp. #
9.375%, Sr. Notes, 2/01/09 10,000,000 10,500,000
TVN Entertainment Corp. (1)
14.00%, Units, 8/01/08 3,500 3,062,500
Wireless One, Inc. *
13.00%, Sr. Notes, 10/15/03 3,800,000 3,553,000
------------
38,645,230
------------
Capital Goods Manufacturing -- 0.83%
Alvey Systems, Inc.
11.375%, Sr. Subordinated Notes, 1/31/03 5,112,000 5,278,140
------------
Chemical -- 0.21%
American Eco Corp.
9.625%, Company Guarantee, 5/15/08 2,200,000 1,331,000
------------
Computer/Electronics -- 1.35%
Electronic Retailing Systems
International, Inc. $
0/13.25%, Sr. Discount Notes, 2/01/04 25,750,000 8,626,250
------------
Consumer Products -- 3.78%
Decora Industries, Inc.
11.00%, Sr. Secured Notes, 5/01/05 6,750,000 6,581,250
Packaged Ice, Inc.
9.75%, Sr. Notes, 2/01/05 17,200,000 17,544,000
------------
24,125,250
------------
Containers and Packaging -- 1.22%
Packaging Resources, Inc. #
13.00%, Sr. Notes, 6/30/03 9,403,059 7,757,523
------------
Entertainment/Film -- 0.62%
Southwest Royalties, Inc.
10.50%, Company Guarantee, 10/15/04 9,500,000 3,966,250
------------
</TABLE>
- --------------------------------------------------------------------------------
42
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Principal Amount Value
<S> <C> <C>
- -----------------------------------------------------------------------------
Food/Beverage/Tobacco -- 2.07%
American Restaurant Group, Inc.
11.50%, Sr. Notes, 2/15/03 $ 3,900,000 $ 3,568,500
Ameriserve Food Distribution, Inc.
8.875%, Sr. Notes, 10/15/06 2,500,000 2,331,250
Tom's Foods, Inc.
10.50%, Sr. Secured Notes, 11/01/04 7,800,000 7,293,000
------------
13,192,750
------------
Healthcare -- 6.87%
Health Insurance Plan of Greater New York
11.25%, Notes, 7/01/10 3,000,000 3,015,000
Intracel Corp. ++
12.00%, Escrow Notes, 8/25/03 3,804,878 3,433,902
Intracel Corp. ++
12.00%, Notes, 8/25/03 22,195,122 20,031,098
Mediq, Inc. $
0/13.00%, Debentures, 6/01/09 29,000,000 11,745,000
Universal Hospital Services Inc. #
10.25%, Sr. Notes, 3/01/08 3,000,000 2,707,500
Universal Hospital Services, Inc.
10.25%, Sr. Notes, 3/01/08 3,000,000 2,865,000
------------
43,797,500
------------
Hotel & Gaming -- 4.01%
Aladdin Gaming Holdings Corp. $
0/13.50%, Sr. Discount Notes, 3/01/10 6,750,000 2,868,750
Ameristar Casinos, Inc.
8.00%, Sr. Secured Notes, 1/02/04 9,943,040 8,998,451
Hard Rock Hotel, Inc.
9.25%, Sr. Subordinated Notes, 4/01/05 5,500,000 5,362,500
Venetian Casino Resort LLC
10.00%, Sr. Subordinated Notes, 11/15/05 8,500,000 8,372,500
------------
25,602,201
------------
Insurance -- 0.16%
Americo Life, Inc.
9.25%, Sr. Subordinated Notes, 6/01/05 1,000,000 1,025,000
------------
Leisure -- 4.00%
Globix Corp.
13.00%, Sr. Notes, 5/01/05 8,991,000 9,035,955
Silverleaf Resorts, Inc.
10.50%, Company Guarantee, 4/01/08 2,500,000 2,137,500
Source Media, Inc.
12.00%, Sr. Notes, 11/01/04 7,500,000 6,037,500
U.S. Interactive LLC
12.00%, Sr. Secured Notes, 4/17/05 8,267,451 8,308,789
------------
25,519,744
------------
Manufacturing -- 1.10%
Jordan Industries, Inc. $
0/11.75%, Sr. Subordinated Debentures, 4/01/09 10,865,000 7,007,925
------------
</TABLE>
- --------------------------------------------------------------------------------
43
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Principal Amount Value
<S> <C> <C>
- ------------------------------------------------------------------------------
Oil & Gas -- 2.73%
Forman Petroleum Corp. *
13.50%, Company Guarantee, 6/01/04 $5,000,000 $ 2,525,000
TransAmerican Refining Corp. * # &
15.00%, Sr. Notes, 12/01/03 10,000,000 9,950,000
Windsor Petroleum Transport Corp. #
7.84%, Notes, 1/15/21 6,500,000 4,907,500
------------
17,382,500
------------
Services -- 3.94%
Anacomp, Inc.
10.875%, Sr. Subordinated Notes, 4/01/04 8,000,000 8,440,000
Comforce Corp. &
15.00%, Sr. Secured Debentures, 12/01/09 9,841,205 9,890,411
Mentus Media Corp. &
12.00%, Sr. Secured Notes, 2/01/03 7,822,000 6,766,030
------------
25,096,441
------------
Shipping -- 0.79%
Ultralpetrol Bahamas Ltd.
10.50%, 1st Mortage Notes, 4/01/08 6,100,000 5,032,500
------------
Specialty Retailing -- 0.85%
Pamida, Inc.
11.75%, Sr. Subordinated Notes, 3/15/03 5,400,000 5,427,000
------------
Steel -- 0.27%
Geneva Steel Co. *
9.50%, Sr. Notes, 1/15/04 7,500,000 1,462,500
NSM Steel Company Ltd. # *
12.00%, Company Guarantee, 2/01/06 1,500,000 232,500
------------
1,695,000
------------
Telecommunications -- 9.31%
Advanced Radio Telecom Corp.
14.00%, Sr. Secured Notes, 2/15/07 4,000,000 3,460,000
Arch Escrow Corp. #
13.75%, Sr. Notes, 4/15/08 6,000,000 5,730,000
ICG Holdings, Inc. $
0/13.50%, Sr. Discount Notes, 9/15/05 7,000,000 6,379,240
International Wireless Communications Holdings,
Inc. (2)
0%, Sr. Secured Discount Notes, 8/15/01 8,500,000 892,500
Iridium LLC Capital Corp.
13.00%, Sr. Secured Notes, 7/15/05 14,500,000 5,147,500
McCaw International Ltd. $
0/13.00%, Sr. Discount Notes, 4/15/07 9,500,000 6,198,750
Northeast Optic Network, Inc.
12.75%, Sr. Notes, 8/15/08 2,000,000 2,120,000
RCN Corp.
10.00%, Sr. Notes, 10/15/07 1,000,000 1,042,500
RCN Corp. $
0/11.125%, Sr. Discount Notes, 10/15/07 12,500,000 8,781,250
RCN Corp. $
0/9.80%, Sr. Notes, 2/15/08 8,100,000 5,265,000
SA Telecommunications, Inc. *
10.00%, Sr. Debentures, 8/15/06 3,800,000 0
</TABLE>
- --------------------------------------------------------------------------------
44
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Principal Amount Value
<S> <C> <C>
- -----------------------------------------------------------------------------
Telecommunications -- continued
Transtel Pass-Thru Trust SA #
12.50%, Pass-Thru Trust Certificates, 11/01/07 $ 4,688,000 $ 2,109,600
Verio, Inc.
13.50%, Sr. Notes, 6/15/04 6,900,000 8,038,500
Winstar Equipment II Corp.
12.50%, Company Guarantee, 3/15/04 4,000,000 4,180,000
------------
59,344,840
------------
Total Domestic Bonds & Notes
(cost $415,345,105) 344,766,037
------------
Foreign Bonds & Notes -- 18.00%
Cable Television -- 2.33%
Multicanal Participacoes SA
12.625%, Sr. Notes, 6/18/04 2,000,000 1,870,000
NTL Communications Corp. $ # (3)
0/9.75%, Sr. Notes, 4/15/09 9,000,000 8,867,958
Star Choice Communications, Inc.
13.00%, Sr. Secured Notes, 12/15/05 4,000,000 4,120,000
------------
14,857,958
------------
Chemical -- 0.24%
Tri Polyta Finance BV
11.375%, Company Guarantee, 12/01/03 5,000,000 1,550,000
------------
Consumer Electronics/Appliances -- 0.61%
PLD Telekom, Inc. $
0/14.00%, Company Guarantee, 6/01/04 7,000,000 3,885,000
------------
Consumer Products -- 0.02%
International Semi-Tech Corp. $
0/11.50%, Sr. Secured Discount Notes, 8/15/03 900,000 139,500
------------
Entertainment/Film -- 1.15%
TV Filme, Inc.
12.875%, Sr. Notes, 12/15/04 3,000,000 915,000
Virgin Cinemas Group Ltd ++ (3)
13.00%, Subordinated Notes, 6/30/09 4,000,000 6,434,799
------------
7,349,799
------------
Food/Beverage/Tobacco -- 0.77%
Grupo Azucarero Mexico SA
11.50%, Sr. Notes, 1/15/05 14,000,000 4,900,000
------------
Metals & Mining -- 0.79%
Echo Bay Mines Ltd.
11.00%, Jr. Subordinated Debentures, 4/01/27 9,000,000 4,995,000
------------
Oil & Gas -- 0.85%
Hurricane Hydrocarbons #
11.75%, Sr. Notes, 11/01/04 11,000,000 3,135,000
Northern Offshore ASA #
10.00%, Company Guarantee, 5/15/05 5,000,000 2,275,000
------------
5,410,000
------------
Services -- 0.79%
Localiza Rent A Car
10.25%, Notes, 10/01/05 9,150,000 5,009,625
------------
</TABLE>
- --------------------------------------------------------------------------------
45
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Principal Amount Value
<S> <C> <C>
- -----------------------------------------------------------------------
Shipping -- 1.50%
Equimar Shipholdings Ltd.
9.875%, Company Guarantee, 7/01/07 $10,000,000 $ 6,750,000
Pegasus Shipping Hellas Ltd.
11.875%, Company Guarantee, 11/15/04 4,500,000 2,812,500
------------
9,562,500
------------
Telecommunications -- 6.28%
Esprit Telecom Group (3)
11.50%, Sr. Notes, 12/15/07 11,000,000 6,654,386
Esprit Telecom Group PLC
11.50%, Sr. Notes, 12/15/07 2,000,000 2,240,000
Globo Communicacoes Participacoes SA #
10.625%, Unsubordinated Notes, 12/05/08 2,000,000 1,590,000
Microcell Telecommunications, Inc. $ (3)
0/11.125%, Sr. Discount Notes, 10/15/07 8,350,000 3,808,210
Occidente Y Caribe Celular SA $
0/14.00%, Sr. Discount Notes, 3/15/04 18,011,000 12,697,755
Paging Do Brazil Holdings Co. LLC
13.50%, Sr. Notes, 6/06/05 1,000,000 490,000
Poland Telecom Finance BV
14.00%, Company Guarantee, 12/01/07 7,000,000 6,422,500
RSL Communications PLC
10.125%, Company Guarantee, 3/01/08 9,500,000 6,151,250
------------
40,054,101
------------
Utilities -- 2.67%
CE Casecnan Water & Energy Co.
11.45%, Sr. Secured Notes, 11/15/05 3,580,000 3,347,300
CE Casecnan Water & Energy Co.
11.95%, Sr. Secured Notes, 11/15/10 8,800,000 8,228,000
Panda Global Energy Co.
12.50%, Company Guarantee, 4/15/04 12,000,000 5,460,000
------------
17,035,300
------------
Total Foreign Bonds & Notes
(cost $161,599,762) 114,748,783
------------
Convertible Bonds -- 2.87%
Aerospace & Defense -- 1.11%
Simula, Inc.
8.00%, Sr. Subordinated Notes, 5/01/04 4,496,000 3,619,280
Simula, Inc.
10.00%, Sr. Subordinated Notes, 9/15/99 4,250,000 3,443,180
------------
7,062,460
------------
Food/Beverage/Tobacco -- 1.63%
International Fast Food Corp. &
11.00%, Subordinated Notes, 10/31/07 14,650,000 10,438,125
------------
Telecommunications -- 0.13%
GST Telecommunications, Inc. $ #
0/13.875%, Sr. Notes, 12/15/05 650,000 815,750
SA Telecommunications, Inc. * #
10.00%, Notes, 8/15/06 8,500,000 0
</TABLE>
- --------------------------------------------------------------------------------
46
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Principal Amount/Shares Value
<S> <C> <C>
- ------------------------------------------------------------------------------
Telecommunications -- continued
SA Telecommunications, Inc. *
10.00%, Notes, 8/15/06 $5,000,000 $ 0
------------
815,750
------------
Total Convertible Bonds
(cost $33,743,372) 18,316,335
------------
Common Stocks -- 2.52% @
Broadcasting -- 0.06%
Pegasus Communications Corp. 9,928 407,048
------------
Cable Television -- 1.69%
CAI Wireless Systems, Inc. 372,273 10,795,917
------------
Food/Beverage/Tobacco -- 0.01%
International Fast Food Corp. 108,839 45,713
------------
Healthcare -- 0.19%
General Healthcare Group Ltd. @@ 801 0
Intracel Corp. ++ 79,537 1,212,939
------------
1,212,939
------------
Publishing/Printing -- 0.06%
Affiliated Newspaper Investments, Inc. 2,500 375,000
------------
Services -- 0.23%
Coinstar, Inc. 60,900 1,431,150
Sabreliner Corp. 2,450 0
------------
1,431,150
------------
Telecommunications -- 0.28%
AVT Corp. 63,916 1,737,716
Jordan Telecommunications Products, Inc. 2,100 43,050
Paging Do Brazil Holdings Co. LLC @@ 1,000 0
------------
1,780,766
------------
Total Common Stocks
(cost $1,374,401) 16,048,533
------------
Convertible Preferred Stocks -- 1.38%
Broadcasting -- 0.76%
Unisite, Inc., 8.50% ++ 75,600 4,886,028
------------
Healthcare -- 0.62%
Intracel Corp., 8.00% ++ 254,147 3,939,279
------------
Total Convertible Preferred Stocks
(cost $5,778,819) 8,825,307
------------
Preferred Stocks -- 8.25%
Broadcasting -- 3.35%
Capstar Broadcasting Partners Corp.,
12.00% & 83,839 9,913,962
Paxson Communications Corp., 12.50% & 127,080 11,437,200
------------
21,351,162
------------
Capital Goods Manufacturing -- 0.07%
Telos Corp., 12.00% & 129,687 453,905
------------
Consumer Products -- 0.32%
Commemorative Brands, Inc., 12.00% ++ 100,000 2,025,000
------------
</TABLE>
- --------------------------------------------------------------------------------
47
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- ------------------------------------------------------------------------------
Entertainment/Film -- 0.03%
Virgin Entertainment Group Ltd., 13.00% ++ @@ 435,414 $ 175,813
------------
Food/Beverage/Tobacco -- 2.44%
North Atlantic Trading, Inc., 12.00% & 684,574 15,574,058
------------
Oil & Gas -- 0.07%
TCR Holding Corp., $.053 ++ 290,000 15,370
TCR Holding Corp., $.056 ++ 110,000 6,160
TCR Holding Corp., $.060 ++ 200,000 12,000
TCR Holding Corp., $.063 ++ 600,000 37,800
TransContinental Refining Corp., $.0683 ++ 400,000 373,200
------------
444,530
------------
Restaurants -- 0.24%
Ameriking, Inc., 13.00% & 57,268 1,517,602
------------
Supermarkets -- 0.95%
Supermarkets General Holdings Corp., $3.52 & 165,000 6,063,750
------------
Telecommunications -- 0.49%
Jordan Telecommunication Products, Inc., 13.25% & 26,396 2,646,495
Viatel, Inc., 10.00% & 2,135 481,442
------------
3,127,937
------------
Textile/Apparel -- 0.29%
Anvil Holdings, Inc., 13.00% & 378,627 1,893,135
------------
Total Preferred Stocks
(cost $65,319,633) 52,626,892
------------
Warrants -- 6.84% @
Air Transportation -- 0.00%
CHC Helicopter Corp. @@, (expires 12/15/00) 2,000 6,000
------------
Banks & Thrifts -- 0.00%
Arcadia Financial Ltd., (expires 3/15/07) 5,000 6,250
------------
Broadcasting -- 0.39%
Spanish Broadcasting Systems, Inc., (expires 6/30/99) 5,000 2,450,000
Unisite, Inc. ++, (expires 12/15/04) 6,217 62
Unisite, Inc. ++ (4), (expires 12/15/04) 114 30
------------
2,450,092
------------
Cable Television -- 0.12%
American Telecasting, Inc., (expires 8/10/00) 4,000 0
Diva Systems Corp., (expires 3/01/08) 45,600 592,800
Heartland Wireless Communications, Inc. #, (expires
4/15/00) 46,402 464
Star Choice Communications, Inc. @@, (expires
12/15/05) 92,640 185,280
Wireless One, Inc., (expires 10/19/00) 1,500 15
------------
778,559
------------
Capital Goods Manufacturing -- 0.00%
Roller Bearing Co. America, Inc., (expires 6/15/09) 1,262 0
------------
Computer/Electronics -- 0.02%
Electronic Retailing Systems International, Inc.,
(expires 2/01/04) 25,750 128,750
------------
Consumer Products -- 0.36%
Chattem, Inc., (expires 6/17/99) 1,300 233,584
Commemorative Brands, Inc. ++, (expires 12/16/97) 19,820 198
Packaged Ice, Inc., (expires 4/15/04) 6,350 635,000
Packaged Ice, Inc. #, (expires 4/15/04) 14,350 1,435,000
------------
2,303,782
------------
</TABLE>
- --------------------------------------------------------------------------------
48
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Security Shares Value
<S> <C> <C>
- -------------------------------------------------------------------------------
Food/Beverage/Tobacco -- 0.09%
Colorado Prime Corp. #, (expires 12/31/03) 7,000 $ 0
North Atlantic Trading, Inc. #, (expires 6/15/07) 5,550 555,000
------------
555,000
------------
Healthcare -- 0.67%
Intracel Corp. ++, (expires 8/25/03) 125,347 720,745
Intracel Corp. ++, (expires 8/25/03) 686,992 3,520,834
Mediq, Inc. #, (expires 6/01/09) 29,000 290
------------
4,241,869
------------
Hotel & Gaming -- 0.00%
Aladdin Gaming Enterprises, Inc. #, (expires 3/01/10) 67,500 675
------------
Leisure -- 3.06%
Bell Technology Group Ltd., (expires 5/01/05) 6,000 60,000
Source Media, Inc., (expires 3/31/04) 500,000 7,781,000
Source Media, Inc., (expires 6/23/00) 750,000 11,671,500
U.S. Interactive LLC, (expires 3/31/05) 3,833 38
------------
19,512,538
------------
Oil & Gas -- 0.00%
Forman Petroleum Corp. #, (expires 6/01/04) 5,000 5
------------
Paper -- 0.06%
SD Warren Holdings Corp., (expires 12/15/06) 80,000 380,000
------------
Services -- 0.00%
Comforce Corp., (expires 12/01/09) 71,825 718
ICF Kaiser International, Inc., (expires 12/31/99) 24,500 245
Mentus Media Corp., (expires 2/01/08) 19,481 9,936
------------
10,899
------------
Steel -- 0.06%
Bar Technologies, Inc., (expires 4/01/01) 7,000 385,000
Gulf States Steel, Inc., (expires 4/15/03) 5,010 50
Sheffield Steel Corp., (expires 11/01/01) 12,500 0
------------
385,050
------------
Supermarkets -- 0.00%
Dairy Mart Convenience Stores, Inc., (expires 1/01/01) 23,632 9,689
------------
Telecommunications -- 2.01%
Cellnet Data Systems, Inc. #, (expires 10/01/07) 10,000 92,500
Clearnet Communications, Inc. @@, (expires 9/15/05) 38,280 325,380
Colt Telecom Group PLC # @@, (expires 12/31/06) 3,200 1,788,864
E Spire Communications, Inc., (expires 11/01/05) 14,500 1,667,500
Geotek Communications, Inc., (expires 6/20/01) 177,000 0
Globalstar Telecommunications Ltd. #, (expires
2/15/04) 4,495 203,399
Hyperion Telecommunications, Inc., (expires 4/15/01) 10,200 708,900
ICG Holdings, Inc., (expires 10/15/05) 6,600 125,400
International Wireless Communications Holdings, Inc.
#, (expires 8/15/01) 8,500 85
Iridium World Communications, Inc. #, (expires
7/15/05) 4,475 67,125
Nextel International, Inc., (expires 4/15/07) 9,500 26,125
Occidente Y Caribe Celular SA # @@, (expires 3/15/04) 72,044 0
Petersburg Long Distance, Inc., (expires 6/01/06) 7,000 1,400
PLD Telekom, Inc. @@, (expires 3/31/03) 7,000 0
Poland Telecom Finance BV # @@, (expires 12/01/07) 7,000 245,000
UNIFI Communications, Inc. #, (expires 5/01/07) 7,795 78
</TABLE>
- --------------------------------------------------------------------------------
49
<PAGE>
NORTHSTAR HIGH TOTAL RETURN FUND
PORTFOLIO OF INVESTMENTS (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Security Shares/Principal Amount Value
<S> <C> <C>
- -------------------------------------------------------------------------------
Telecommunications -- continued
Verio, Inc., (expires 6/15/04) 55,200 $ 6,704,592
Worldport Communications, Inc. ++,
(expires 6/23/08) 175,745 878,725
------------
12,835,073
------------
Total Warrants
(cost $8,662,710) 43,604,231
------------
Total Investment Securities -- 93.93%
(cost $691,823,802) 598,936,118
------------
Short Term Securities -- 0.96%
Worldport International, Inc. ++
12.4375%, Sr. Secured Notes, 6/23/99 $ 6,000,000 5,946,405
Worldport International, Inc. ++
13.8125%, Sr. Secured Notes, 6/23/99 192,275 192,275
------------
Total Short-Term Securities
(cost $6,138,680) 6,138,680
------------
Repurchase Agreement -- 2.70%
Agreement with State Street Bank and
Trust bearing interest at 4.72% dated
4/30/99, to be repurchased 5/03/99 in the
amount of $17,201,763 and collateralized
by $11,845,000 U.S. Treasury Bonds,
12.00% due 8/15/13, Value $17,545,406
(cost $17,195,000) 17,195,000 17,195,000
------------
Other assets less liabilities -- 2.41% 15,376,289
------------
Net Assets -- 100.00% $637,646,087
============
</TABLE>
* Security in default.
$ Step bond.
++ Private placement.
# Sales restricted to qualified institutional investors.
& Payment-in-kind security.
@@ Foreign security.
@ Non-income producing security.
1) A unit consists of $1,000 par value Sr. Notes, 14.00% due 8/01/08, and 1
warrant.
2) Bankrupt security.
3) The Principal amount is shown in the respective country's currency.
4) Second Series warrants.
See accompanying notes to financial statement.
- --------------------------------------------------------------------------------
50
<PAGE>
(This Page Left Blank Intentionally)
- --------------------------------------------------------------------------------
51
<PAGE>
NORTHSTAR TRUST
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
APRIL 30, 1999
<TABLE>
<CAPTION>
Northstar Northstar Northstar Northstar Northstar Northstar Northstar
Growth + International Emerging Research Enhanced Income and High Total High Total
Value Fund Value Fund Markets Fund Index Fund Growth Fund Return Fund II Return Fund
------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS:
Investments in
securities, at value
(cost $187,760,483,
$581,310,205,
$13,432,550,
$82,420,890,
$105,367,190,
$274,857,186 and
$691,823,802,
respectively) $256,008,286 $681,231,998 $14,745,325 $87,347,761 $120,667,594 $248,597,513 $598,936,118
Short-term securities,
at value (cost $0, $0,
$0, $186,142, $0,
$4,092,453 and
$6,138,680,
respectively) 0 0 0 186,069 0 4,092,453 6,138,680
Repurchase agreements 13,439,000 21,947,000 721,000 4,352,000 2,049,000 2,640,000 17,195,000
Cash 821 261 8,352 1,958 86 81 68
Foreign cash, at value
(cost $0, $1,093,968,
$34,482, $0, $0, $0
and $0, respectively) 0 1,087,446 34,520 0 0 0 0
Receivable for
investments sold 6,042,314 0 0 19,254 0 641,402 1,986,389
Receivable for shares
of beneficial interest
sold 1,999,291 6,956,715 154,493 4,974,712 150,222 341,627 820,264
Dividends and interest
receivable 45,005 3,473,439 86,895 70,275 497,834 7,609,366 17,763,674
Prepaid expenses 15,993 28,416 14,172 29,603 15,458 21,013 16,668
------------------------------------------------------------------------------------------------
Total Assets 277,550,710 714,725,275 15,764,757 96,981,632 123,380,194 263,943,455 642,856,861
------------------------------------------------------------------------------------------------
LIABILITIES:
Payable for shares of
beneficial interest
reacquired 1,107,730 2,239,957 33,824 41,620 267,730 1,079,176 4,112,529
Investment advisory
fee payable 224,282 545,227 11,624 46,221 73,868 163,835 371,352
Distribution fee
payable 192,429 382,137 7,552 39,715 72,999 197,129 438,265
Administrative
services fee payable 69,791 196,406 3,395 8,498 13,921 83,057 93,183
Transfer agent fee
payable 28,160 76,836 2,000 3,302 27,427 11,193 80,038
Tax withholding
liability 0 128,867 80 0 0 0 0
Payable for
investments purchased 0 0 0 1,274,396 3,810,716 0 0
Payable for future
variation margin 0 0 0 20,262 0 0 0
Income distribution
payable 0 0 0 0 0 12,208 7,047
Accrued expenses 40,466 169,560 30,759 65,507 44,471 93,099 108,360
------------------------------------------------------------------------------------------------
Total Liabilities 1,662,858 3,738,990 89,234 1,499,521 4,311,132 1,639,697 5,210,774
------------------------------------------------------------------------------------------------
Net Assets $275,887,852 $710,986,285 $15,675,523 $95,482,111 $119,069,062 $262,303,758 $637,646,087
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
NET ASSETS WERE
COMPOSED OF:
Capital paid in for
shares of beneficial
interest, $.01 par
value outstanding
(unlimited shares
authorized) $190,756,804 $595,440,903 $14,152,319 $90,123,053 $ 85,238,895 $301,199,978 $779,158,101
Undistributed net
investment income
(loss) (2,030,177) 1,745,999 66,423 22,141 80,749 (485,960) (2,197,243)
Accumulated net
realized gain (loss)
on investments,
foreign currency and
future contracts 18,913,422 13,891,010 143,727 419,579 18,449,014 (12,129,214) (46,378,423)
Net unrealized
appreciation
(depreciation) of
investments, foreign
currency and future
contracts 68,247,803 99,908,373 1,313,054 4,917,338 15,300,404 (26,281,046) (92,936,348)
------------------------------------------------------------------------------------------------
Net Assets $275,887,852 $710,986,285 $15,675,523 $95,482,111 $119,069,062 $262,303,758 $637,646,087
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Class A:
Net Assets $ 53,319,200 $305,797,705 $ 7,808,748 $ 8,981,405 $ 44,594,864 $ 36,121,509 $147,851,947
------------------------------------------------------------------------------------------------
Shares outstanding 3,257,751 21,831,389 777,962 818,598 3,704,036 7,502,873 37,734,736
------------------------------------------------------------------------------------------------
Net asset value and
redemption value per
share (net
assets/shares
outstanding) $16.37 $14.01 $10.04 $10.97 $12.04 $4.81 $3.92
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Maximum offering price
per share (net asset
value plus sales
charge of 4.75% of
offering price) $17.19 $14.71 $10.54 $11.52 $12.64 $5.05 $4.12
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Class B:
Net Assets $164,299,680 $198,985,485 $ 3,328,823 $34,410,583 $ 49,912,197 $175,519,955 $423,392,373
------------------------------------------------------------------------------------------------
Shares outstanding 10,220,203 14,335,942 332,901 3,141,844 4,154,182 36,427,547 108,164,252
------------------------------------------------------------------------------------------------
Net asset value and
offering price per
share* $16.08 $13.88 $10.00 $10.95 $12.01 $4.82 $3.91
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Class C:
Net Assets $ 58,268,972 $206,203,095 $ 4,537,952 $24,635,045 $ 24,562,001 $ 50,662,294 $ 66,401,767
------------------------------------------------------------------------------------------------
Shares outstanding 3,626,458 14,870,506 455,422 2,248,656 2,048,250 10,501,680 16,884,361
------------------------------------------------------------------------------------------------
Net asset value and
offering price per
share* $16.07 $13.87 $9.96 $10.96 $11.99 $4.82 $3.93
------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------
Class I:
Net Assets $27,455,078
-----------
Shares outstanding 2,500,010
-----------
Net asset value,
offering, and
redemption price per
share $10.98
===========
</TABLE>
*Redemption price varies by length of time shares held.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
52
<PAGE>
NORTHSTAR TRUST
STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED APRIL 30, 1999
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Northstar Northstar Northstar Northstar Northstar Northstar Northstar
Growth + International Emerging Markets Research Enhanced Income and High Total High Total
Value Fund Value Fund Value Fund Index Fund (1) Growth Fund Return Fund II Return Fund
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (net of
withholding tax of
$12,678, $290,578,
$12,807, $146,
$991, $0 and $0,
respectively) $ 220,499 $ 6,240,363 $ 197,576 $ 180,575 $ 655,376 $ 768,192 $ 2,991,783
Interest 325,256 584,633 15,474 61,745 1,201,625 15,043,951 37,336,737
-------------------------------------------------------------------------------------------------
Total investment
income 545,755 6,824,996 213,050 242,320 1,857,001 15,812,143 40,328,520
-------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory
and management fees 1,147,133 2,836,122 54,413 112,330 494,783 1,027,127 2,283,170
Distribution fees:
Class A 69,168 364,124 7,258 3,166 69,166 61,855 226,648
Class B 677,749 815,931 15,171 38,535 265,168 888,511 2,145,523
Class C 238,823 806,444 15,051 26,016 163,989 274,808 325,462
Transfer agent fees
and expenses:
Class A 34,348 148,599 3,683 1,253 28,777 26,007 96,354
Class B 111,175 127,187 1,891 4,031 39,566 123,089 315,359
Class C 41,536 120,986 2,230 2,609 24,518 39,945 50,783
Class I 0 0 0 2,375 0 0 0
Administrative
service fees 161,968 425,907 7,491 17,942 68,371 198,780 360,838
Custodian and fund
accounting expenses 34,659 193,180 16,653 53,059 27,881 54,229 95,272
Printing and
postage expenses 16,846 37,116 559 11,526 4,270 35,747 33,340
Audit expenses 12,474 13,381 10,261 7,056 12,155 11,539 16,132
Registration fees 11,804 55,809 13,993 21,967 16,351 9,475 16,075
Trustee expenses 6,035 7,801 4,987 13,643 5,641 7,393 9,369
Miscellaneous
expenses 12,214 26,949 1,495 1,433 11,479 10,347 51,774
-------------------------------------------------------------------------------------------------
2,575,932 5,979,536 155,136 316,941 1,232,115 2,768,852 6,026,099
Less expenses
reimbursed by
management company 0 0 25,059 96,762 0 0 0
-------------------------------------------------------------------------------------------------
Total expenses 2,575,932 5,979,536 130,077 220,179 1,232,115 2,768,852 6,026,099
-------------------------------------------------------------------------------------------------
Net investment
income (loss) (2,030,177) 845,460 82,973 22,141 624,886 13,043,291 34,302,421
-------------------------------------------------------------------------------------------------
REALIZED AND
UNREALIZED GAIN
(LOSS) ON
INVESTMENTS:
Net realized gain
(loss) on
investments 45,196,300 12,075,438 253,490 419,579 18,431,827 (12,298,557) (38,962,225)
Net realized gain
on foreign currency 0 1,951,332 4,332 0 0 169,343 340,960
Net change in
unrealized
appreciation
(depreciation) of
investments and
foreign currency 55,697,751 123,692,260 3,497,426 4,917,338 (2,213,858) 14,289,154 66,970,442
-------------------------------------------------------------------------------------------------
Net realized and
unrealized gain
on investments 100,894,051 137,719,030 3,755,248 5,336,917 16,217,969 2,159,940 28,349,177
-------------------------------------------------------------------------------------------------
Increase in net
assets resulting
from operations $ 98,863,874 $138,564,490 $3,838,221 $5,359,058 $16,842,855 $15,203,231 $62,651,598
-------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
</TABLE>
(1) Northstar Research Enhanced Index Fund commenced operations on December 30,
1998.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
53
<PAGE>
NORTHSTAR TRUST
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
Northstar Northstar
Growth + Value International Value
Fund Fund
--------------------------------- --------------------------------
For the six For the year For the six For the year
months ended ended months ended ended
April 30, 1999 October 31, 1998 April 30,1999 October 31, 1998
---------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income
(loss) $ (2,030,177) $ (2,563,828) $ 845,460 $ 3,729,388
Net realized gain (loss)
on investments 45,196,300 (26,282,879) 12,075,438 28,663,723
Net realized gain (loss)
on foreign currency 0 0 1,951,332 (957,107)
Net change in unrealized
appreciation
(depreciation) of
investments and foreign
currency 55,697,751 2,033,312 123,692,260 (25,052,571)
---------------------------------------------------------------
Increase (decrease) in
net assets resulting
from operations 98,863,874 (26,813,395) 138,564,490 6,383,433
FROM DIVIDENDS TO
SHAREHOLDERS:
Net investment income:
Class A 0 0 (1,950,705) 0
Class B 0 0 (449,080) 0
Class C 0 0 (445,929) 0
Net realized gain from
investments 0 (2,294,760) (28,295,922) (1,549,040)
---------------------------------------------------------------
Total distributions 0 (2,294,760) (31,141,636) (1,549,040)
---------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
Net proceeds from sale
of shares 119,420,693 142,517,062 315,772,147 482,660,108
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends 0 1,274,079 24,712,919 1,115,780
---------------------------------------------------------------
119,420,693 143,791,141 340,485,066 483,775,888
Cost of shares redeemed (119,268,783) (75,727,057) (231,567,118) (175,792,173)
---------------------------------------------------------------
Net increase in net
assets derived from
capital share
transactions 151,910 68,064,084 108,917,948 307,983,715
---------------------------------------------------------------
Net increase in net
assets 99,015,784 38,955,929 216,340,802 312,818,108
NET ASSETS:
Beginning of period 176,872,068 137,916,139 494,645,483 181,827,375
---------------------------------------------------------------
End of period $275,887,852 $176,872,068 $710,986,285 $494,645,483
---------------------------------------------------------------
---------------------------------------------------------------
Undistributed net
investment income (loss) $ (2,030,177) $ 0 $ 1,745,999 $ 3,746,253
---------------------------------------------------------------
---------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
54
<PAGE>
NORTHSTAR TRUST
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Northstar Northstar Northstar
Emerging Markets Value Research Enhanced Income and Growth
Fund Index Fund Fund
-------------------------------- -------------------- --------------------------------
For the six For the year For the period For the six For the year
months ended ended December 30, 1998 to months ended ended
April 30, 1999 October 31, 1998 April 30, 1999 (1) April 30, 1999 October 31, 1998
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 82,973 $ 130,079 $ 22,141 $ 624,886 $ 4,652,829
Net realized gain (loss)
on investments 253,490 (114,095) 419,579 18,431,827 12,372,668
Net realized gain on
foreign currency 4,332 1,224 0 0 0
Net change in unrealized
appreciation
(depreciation) of
investments and foreign
currency 3,497,426 (2,184,372) 4,917,338 (2,213,858) (14,833,769)
----------------------------------------------------------------------------------------------
Increase (decrease) in
net assets resulting
from operations 3,838,221 (2,167,164) 5,359,058 16,842,855 2,191,728
FROM DIVIDENDS TO
SHAREHOLDERS:
Net investment income:
Class A (68,673) 0 0 (338,599) (1,645,418)
Class B (40,034) 0 0 (194,956) (1,649,267)
Class C (39,146) 0 0 (93,416) (1,532,895)
Net realized gain from
investments 0 0 0 (12,425,832) (8,297,946)
----------------------------------------------------------------------------------------------
Total distributions (147,853) 0 0 (13,052,803) (13,125,526)
----------------------------------------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
Net proceeds from sale
of shares 5,022,503 13,039,367 91,094,945 7,143,199 23,793,209
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends 101,214 0 0 10,776,509 10,902,341
----------------------------------------------------------------------------------------------
5,123,717 13,039,367 91,094,945 17,919,708 34,695,550
Cost of shares redeemed (2,840,470) (1,170,295) (971,892) (47,077,319) (76,452,625)
----------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets derived
from capital share
transactions 2,283,247 11,869,072 90,123,053 (29,157,611) (41,757,075)
----------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets 5,973,615 9,701,908 95,482,111 (25,367,559) (52,690,873)
NET ASSETS:
Beginning of period 9,701,908 0 0 144,436,621 197,127,494
----------------------------------------------------------------------------------------------
End of period $15,675,523 $9,701,908 $95,482,111 $119,069,062 $144,436,621
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
Undistributed net
investment income $ 66,423 $ 131,303 $ 22,141 $ 80,749 $ 82,834
----------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------
</TABLE>
(1) Northstar Research Enhanced Index Fund commenced operations on December 30,
1998.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
55
<PAGE>
NORTHSTAR TRUST
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<TABLE>
<CAPTION>
Northstar Northstar
High Total Return High Total Return
Fund II Fund
-------------------------------- --------------------------------
For the six For the year For the six For the year
months ended ended months ended ended
April 30, 1999 October 31, 1998 April 30, 1999 October 31, 1998
------------------------------------------------------------
<S> <C> <C> <C> <C>
FROM OPERATIONS:
Net investment income $ 13,043,291 $ 16,225,997 $ 34,302,421 $ 77,293,831
Net realized gain (loss)
on investments (12,298,557) 239,074 (38,962,225) (7,859,695)
Net realized gain on
foreign currency 169,343 199,374 340,960 353,140
Net change in unrealized
appreciation
(depreciation) of
investments and foreign
currency 14,289,154 (40,605,250) 66,970,442 (178,347,256)
------------------------------------------------------------
Increase (decrease) in
net assets resulting
from operations 15,203,231 (23,940,805) 62,651,598 (108,559,980)
FROM DIVIDENDS TO
SHAREHOLDERS:
Net investment income:
Class A (2,150,792) (2,724,046) (9,304,952) (19,771,933)
Class B (8,703,508) (10,361,927) (24,924,286) (51,139,518)
Class C (2,674,951) (3,578,472) (3,778,437) (8,241,961)
Return of capital
Class A 0 (184,498) 0 0
Class B 0 (760,637) 0 0
Class C 0 (241,600) 0 0
Net realized gain from
investments 0 0 0 (27,484,835)
------------------------------------------------------------
Total distributions (13,529,251) (17,851,180) (38,007,675) (106,638,247)
------------------------------------------------------------
FROM CAPITAL SHARE
TRANSACTIONS:
Net proceeds from sale
of shares 46,483,646 288,856,753 73,085,735 111,204,153
Net asset value of
shares issued to
shareholders in
reinvestment of
dividends 3,900,042 5,327,944 12,753,427 37,990,952
------------------------------------------------------------
50,383,688 294,184,697 85,839,162 149,195,105
Cost of shares redeemed (53,239,622) (47,864,975) (114,529,796) (182,472,430)
------------------------------------------------------------
Net increase (decrease)
in net assets derived
from capital share
transactions (2,855,934) 246,319,722 (28,690,634) (33,277,325)
------------------------------------------------------------
Net increase (decrease)
in net assets (1,181,954) 204,527,737 (4,046,711) (248,475,552)
NET ASSETS:
Beginning of period 263,485,712 58,957,975 641,692,798 890,168,350
------------------------------------------------------------
End of period $262,303,758 $263,485,712 $637,646,087 $641,692,798
------------------------------------------------------------
------------------------------------------------------------
Undistributed
(overdistributed) net
investment income ($485,960) $ 0 ($2,197,243) $ 1,508,011
------------------------------------------------------------
------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
56
<PAGE>
(This Page Left Blank Intentionally)
- --------------------------------------------------------------------------------
57
<PAGE>
NORTHSTAR TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING THROUGHOUT EACH PERIOD
<TABLE>
<CAPTION>
Net Dividends
realized & Total declared Distributions Net
Net Asset unrealized from from net declared Net Asset Assets, Ratio of
Value, Net gain (loss) invest- invest- from net Value, end of expenses
Period beginning investment on ment ment realized end Total period to average
ended of period income (loss) investments operations income gain of period return (000's) net assets (1)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Growth + Value Fund, Class A
----------------------------
11/18/96-
10/31/97 $10.00 ($0.05) $2.20 $2.15 -- -- $12.15 21.50% $34,346 1.84%
10/31/98 12.15 (0.11) (1.42) (1.53) -- ($0.18) 10.44 (12.63) 33,425 1.72
4/30/99 10.44 (0.08) 6.01 5.93 -- -- 16.37 56.80 53,319 1.67
Growth + Value Fund, Class B
----------------------------
11/18/96-
10/31/97 10.00 (0.08) 2.16 2.08 -- -- 12.08 20.80 76,608 2.55
10/31/98 12.08 (0.16) (1.45) (1.61) -- (0.18) 10.29 (13.38) 105,991 2.45
4/30/99 10.29 (0.13) 5.92 5.79 -- -- 16.08 56.27 164,300 2.39
Growth + Value Fund, Class C
----------------------------
11/18/96-
10/31/97 10.00 (0.08) 2.16 2.08 -- -- 12.08 20.80 26,962 2.56
10/30/98 12.08 (0.16) (1.45) (1.61) -- (0.18) 10.29 (13.38) 37,456 2.46
4/30/99 10.29 (0.13) 5.91 5.78 -- -- 16.07 56.17 58,269 2.42
International Value Fund, Class A
---------------------------------
3/06/95-
10/31/95 7.64 0.09 0.37 0.46 -- -- 8.10 9.39 5,188 1.85
10/31/96 8.10 0.14 0.85 0.99 ($0.04) -- 9.05 12.15 16,777 1.85
10/31/97 9.05 (0.09) 2.30 2.21 (0.14) (0.22) 10.90 27.59 60,539 1.80
10/31/98 10.90 0.11 0.96 1.07 -- (0.09) 11.88 9.86 211,018 1.74
4/30/99 11.88 0.03 2.87 2.90 (0.10) (0.67) 14.01 25.75 305,798 1.69
International Value Fund, Class B
---------------------------------
4/17/97-
10/31/97 10.00 (0.02) 0.89 0.87 -- -- 10.87 8.70 59,185 2.50
10/31/98 10.87 0.07 0.91 0.98 -- (0.09) 11.76 9.16 145,976 2.47
4/30/99 11.76 (0.01) 2.83 2.82 (0.03) (0.67) 13.88 25.23 198,985 2.42
International Value Fund, Class C
---------------------------------
3/06/95-
10/31/95 7.61 0.06 0.38 0.44 -- -- 8.05 8.89 5,749 2.50
10/31/96 8.05 0.05 0.86 0.91 (0.03) -- 8.93 11.39 14,530 2.50
10/31/97 8.93 (0.06) 2.20 2.14 (0.04) (0.17) 10.86 25.92 62,103 2.50
10/31/98 10.86 0.06 0.92 0.98 -- (0.09) 11.75 9.07 137,651 2.47
4/30/99 11.75 (0.01) 2.83 2.82 (0.03) (0.67) 13.87 25.26 206,203 2.42
Emerging Markets Value Fund, Class A
------------------------------------
1/01/98-
10/31/98 10.00 0.12 (2.43) (2.31) -- -- 7.69 (23.10) 3,815 1.80
4/30/99 7.69 0.07 2.42 2.49 (0.14) -- 10.04 33.00 7,809 2.03
Emerging Markets Value Fund, Class B
------------------------------------
1/01/98-
10/31/99 10.00 0.09 (2.44) (2.35) -- -- 7.65 (23.50) 3,583 2.50
4/30/99 7.65 0.07 2.38 2.45 (0.10) -- $10.00 32.46 3,329 2.65
Emerging Markets Value Fund, Class C
------------------------------------
1/01/98-
10/31/98 10.00 0.09 (2.46) (2.37) -- -- 7.63 (23.70) 2,304 2.50
4/30/99 7.63 0.03 2.41 2.44 (0.11) -- 9.96 32.50 4,538 2.71
Research Enhanced Index Fund, Class A
-------------------------------------
12/30/98-
4/30/99 10.00 0.00 0.97 0.97 -- -- 10.97 9.70 8,981 1.25
Research Enhanced Index Fund, Class B
-------------------------------------
12/30/98-
4/30/99 10.00 (0.01) 0.96 0.95 -- -- 10.95 9.50 34,411 1.95
Research Enhanced Index Fund, Class C
-------------------------------------
12/30/98-
4/30/99 10.00 (0.01) 0.97 0.96 -- -- 10.96 9.60 24,635 1.95
Research Enhanced Index Fund, Class I
-------------------------------------
12/30/98-
4/30/99 10.00 0.02 0.96 0.98 -- -- 10.98 9.80 27,455 0.95
<CAPTION>
Ratio of Ratio of net
expense investment
reimbursement income
Period to average to average Portfolio
ended net assets (1) net assets (1) turnover
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Growth + Value Fund, Class A
----------------------------
11/18/96-
10/31/97 0.02% (0.94)% 144%
10/31/98 -- (0.92) 162
4/30/99 -- (1.20) 95
Growth + Value Fund, Class B
----------------------------
11/18/96-
10/31/97 0.02 (1.68) 144
10/31/98 -- (1.67) 162
4/30/99 -- (1.91) 95
Growth + Value Fund, Class C
----------------------------
11/18/96-
10/31/97 0.02 (1.70) 144
10/30/98 -- (1.69) 162
4/30/99 -- (1.94) 95
International Value Fund, Class A
---------------------------------
3/06/95-
10/31/95 6.08 1.67 0
10/31/96 0.97 1.52 74
10/31/97 0.27 0.46 26
10/31/98 -- 1.62 32
4/30/99 -- 0.72 12
International Value Fund, Class B
---------------------------------
4/17/97-
10/31/97 0.08 (0.71) 26
10/31/98 -- 0.69 32
4/30/99 -- (0.03) 12
International Value Fund, Class C
---------------------------------
3/06/95-
10/31/95 6.08 1.13 0
10/31/96 1.21 0.62 74
10/31/97 0.24 (0.23) 26
10/31/98 -- 0.68 32
4/30/99 -- 0.01 12
Emerging Markets Value Fund, Class A
------------------------------------
1/01/98-
10/31/98 2.08 3.38 7
4/30/99 0.43 1.99 16
Emerging Markets Value Fund, Class B
------------------------------------
1/01/98-
10/31/99 2.24 2.55 7
4/30/99 0.51 1.07 16
Emerging Markets Value Fund, Class C
------------------------------------
1/01/98-
10/31/98 2.37 2.60 7
4/30/99 0.46 1.24 16
Research Enhanced Index Fund, Class A
-------------------------------------
12/30/98-
4/30/99 0.74 0.18 10
Research Enhanced Index Fund, Class B
-------------------------------------
12/30/98-
4/30/99 0.76 (0.54) 10
Research Enhanced Index Fund, Class C
-------------------------------------
12/30/98-
4/30/99 0.74 (0.55) 10
Research Enhanced Index Fund, Class I
-------------------------------------
12/30/98-
4/30/99 0.47 0.65 10
</TABLE>
(1) Annualized
See accompanying notes to financial statements
- --------------------------------------------------------------------------------
58
<PAGE>
NORTHSTAR TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST
OUTSTANDING THROUGHOUT EACH PERIOD
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Net Dividends
realized & Total declared Distributions Net
Net Asset unrealized from from net declared Net Asset Assets,
Value, Net gain (loss) invest- invest- from net Distributions Value, end of
Period beginning investment on ment ment realized declared end Total period
ended of period income investments operations income gain from capital of period return (000's)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <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
10/31/95 10.00 0.35 0.84 1.19 (0.33) -- -- 10.86 13.19 76,031
10/31/96 10.86 0.32 1.29 1.61 (0.31) -- -- 12.16 14.48 85,250
10/31/97 12.16 0.38 1.53 1.91 (0.34) ($1.26) -- 12.47 17.02 53,805
10/31/98 12.47 0.37 (0.22) 0.15 (0.39) (0.53) -- 11.70 1.12 47,378
4/30/99 11.70 0.08 1.43 1.51 (0.09) (1.09) -- 12.04 13.72 44,595
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
10/31/95 9.99 0.27 0.85 1.12 (0.27) -- -- 10.84 12.31 60,347
10/31/96 10.84 0.24 1.28 1.52 (0.23) -- -- 12.13 13.60 71,123
10/31/97 12.13 0.27 1.55 1.82 (0.25) (1.26) -- 12.44 15.06 73,829
10/31/98 12.44 0.29 (0.22) 0.07 (0.30) (0.53) -- 11.68 0.44 22,873
4/30/99 11.68 0.04 1.43 1.47 (0.05) (1.09) -- 12.01 13.22 49,912
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
10/31/95 9.99 0.27 0.85 1.12 (0.28) -- -- 10.83 12.33 53,661
10/31/96 10.83 0.24 1.28 1.52 (0.23) -- -- 12.12 13.68 60,458
10/31/97 12.12 0.28 1.54 1.82 (0.26) (1.26) -- 12.42 15.04 69,494
10/31/98 12.42 0.31 (0.24) 0.07 (0.30) (0.53) -- 11.66 0.51 41,186
4/30/99 11.66 0.06 1.40 1.46 (0.04) (1.09) -- 11.99 13.05 24,562
High Total Return Fund II, Class A
----------------------------------
1/31/97-
10/31/97 5.00 0.28 0.53 0.81 (0.28) -- ($0.04) 5.49 16.53 8,548
10/31/98 5.49 0.50 (0.70) (0.20) (0.48) -- (0.03) 4.78 (4.23) 40,924
4/30/99 4.78 0.24 0.04 0.28 (0.25) -- -- 4.81 6.03 36,122
High Total Return Fund II, Class B
----------------------------------
1/31/97-
10/31/97 5.00 0.25 0.53 0.78 (0.25) -- (0.04) 5.49 15.91 38,076
10/31/99 5.49 0.47 (0.70) (0.23) (0.44) -- (0.03) 4.79 (4.90) 168,859
4/30/99 4.79 0.23 0.04 0.27 (0.24) -- -- 4.82 5.65 175,520
High Total Return Fund II, Class C
----------------------------------
1/31/97-
10/31/97 5.00 0.25 0.54 0.79 (0.25) -- (0.04) 5.50 16.12 12,334
10/31/99 5.50 0.47 (0.71) (0.24) (0.44) -- (0.03) 4.79 (4.90) 53,703
4/30/99 4.79 0.23 0.04 0.27 (0.24) -- -- 4.82 5.64 50,662
High Total Return 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
10/31/95 4.41 0.48 0.07 0.55 (0.48) -- -- 4.48 13.02 88,552
10/31/96 4.48 0.46 0.32 0.78 (0.48) -- -- 4.78 18.14 167,698
10/31/97 4.78 0.48 0.20 0.68 (0.46) -- -- 5.00 15.03 215,361
10/31/98 5.00 0.46 (1.07) (0.61) (0.47) (0.15) -- 3.77 (13.65) 148,650
4/30/99 3.77 0.22 0.17 0.39 (0.24) -- -- 3.92 10.58 147,852
High Total Return 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
10/31/95 4.41 0.45 0.06 0.51 (0.45) -- -- 4.47 11.97 96,362
10/31/96 4.47 0.43 0.32 0.75 (0.45) -- -- 4.77 17.08 346,919
10/31/97 4.77 0.44 0.22 0.66 (0.43) -- -- 5.00 14.46 577,351
10/31/98 5.00 0.43 (1.07) (0.64) (0.44) (0.15) -- 3.77 (14.28) 428,903
4/30/99 3.77 0.20 0.16 0.36 (0.22) -- -- 3.91 9.90 423,392
High Total Return 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
10/31/95 4.41 0.44 0.09 0.53 (0.45) -- -- 4.49 12.44 11,011
10/31/96 4.49 0.43 0.32 0.75 (0.45) -- -- 4.79 17.28 54,382
10/31/97 4.79 0.44 0.22 0.66 (0.43) -- -- 5.02 14.42 97,457
10/31/98 5.02 0.43 (1.08) (0.65) (0.44) (0.15) -- 3.78 (14.41) 64,141
4/30/99 3.78 0.20 0.17 0.37 (0.22) -- -- 3.93 10.16 66,402
<CAPTION>
Ratio of Ratio of net
Ratio of expense investment
expenses reimbursement income
Period to average to average to average Portfolio
ended net assets (1) net assets (1) net assets (1) turnover
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Income and Growth Fund, Class A
-------------------------------
11/08/93-
10/31/94 1.50% 0.47% 3.73% 26%
10/31/95 1.51 -- 3.39 91
10/31/96 1.52 -- 2.78 147
10/31/97 1.47 -- 2.90 56
10/31/98 1.40 -- 2.99 102
4/30/99 1.40 -- 1.41 73
Income and Growth Fund, Class B
-------------------------------
2/09/94-
10/31/94 2.20 0.16 3.00 26
10/31/95 2.23 -- 2.66 91
10/31/96 2.26 -- 2.04 147
10/31/97 2.18 -- 2.18 56
10/31/98 2.12 -- 2.28 102
4/30/99 2.12 -- 0.69 73
Income and Growth Fund, Class C
-------------------------------
3/21/94-
10/31/94 2.20 0.06 2.87 26
10/31/95 2.22 -- 2.67 91
10/31/96 2.20 -- 2.10 147
10/31/97 2.15 -- 2.21 56
10/31/98 2.09 -- 2.32 102
4/30/99 2.12 -- 0.71 73
High Total Return Fund II, Class A
----------------------------------
1/31/97-
10/31/97 1.26 3.36 5.89 164
10/31/98 1.44 0.01 8.90 150
4/30/99 1.21 -- 10.12 69
High Total Return Fund II, Class B
----------------------------------
1/31/97-
10/31/97 1.95 0.75 5.20 164
10/31/99 2.17 0.02 8.17 150
4/30/99 1.79 -- 9.42 69
High Total Return Fund II, Class C
----------------------------------
1/31/97-
10/31/97 1.95 0.78 5.17 164
10/31/99 2.17 0.01 8.16 150
4/30/99 1.81 -- 9.40 69
High Total Return Fund, Class A
-------------------------------
11/08/93-
10/31/94 1.50 0.99 10.09 163
10/31/95 1.55 -- 10.90 145
10/31/96 1.52 -- 9.86 158
10/31/97 1.42 -- 9.88 183
10/31/98 1.30 -- 9.93 123
4/30/99 1.32 -- 11.18 36
High Total Return Fund, Class B
-------------------------------
2/09/94-
10/31/94 2.20 0.20 9.72 163
10/31/95 2.25 -- 10.20 145
10/31/96 2.23 -- 9.14 158
10/31/97 2.12 -- 9.18 183
10/31/98 2.02 -- 9.20 123
4/30/99 2.04 -- 10.46 36
High Total Return Fund, Class C
-------------------------------
3/21/94-
10/31/94 2.20 0.11 9.46 163
10/31/95 2.27 -- 10.18 145
10/31/96 2.23 -- 9.14 158
10/31/97 2.13 -- 9.18 183
10/31/98 2.03 -- 9.19 123
4/30/99 2.04 -- 10.46 36
</TABLE>
(1) Annualized
See accompanying notes to financial statements
- --------------------------------------------------------------------------------
59
<PAGE>
NORTHSTAR TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 1999 (UNAUDITED)
Note 1. Organization and Significant Accounting Policies
Organization -- The Northstar Trust (the "Trust"), a business trust, was or-
ganized under the laws of the Commonwealth of Massachusetts and registered un-
der the Investment Company Act of 1940 as a diversified open-end management
investment company. The names of each of the seven investment series (collec-
tively the "Funds") which comprise the Trust and their respective investment
objectives are set forth below.
Northstar Growth + Value Fund, ("Growth + Value Fund") is a diversified
portfolio with the investment objective of capital appreciation by investing
in equity securities. The Fund seeks to achieve its objective through invest-
ments in companies the portfolio manager identifies as either growth or value
through quantitative analysis.
Northstar International Value Fund, ("International Value Fund") is a diver-
sified portfolio with the investment objective of long-term capital apprecia-
tion. The Fund invests primarily in foreign companies with a market valuation
of greater than $1 billion, but may hold up to 25% of its assets in companies
with smaller market capitalization. Portfolio managers apply the technique of
"value investing".
Northstar Emerging Markets Value Fund, ("Emerging Markets Value Fund") is a
diversified portfolio with the investment objective of long-term capital ap-
preciation. The Fund invests primarily in foreign companies located in coun-
tries with emerging markets. Portfolio managers apply the technique of "value
investing".
Northstar Research Enhanced Index Fund, ("Research Enhanced Index Fund") is
a diversified portfolio with the investment objective of capital appreciation.
The Fund seeks to achieve its objective by owning a large number of stocks
within the S&P 500 with an emphasis on those that appear undervalued or fairly
valued, and by tracking the industry weightings and other data characteristics
of the S&P 500.
Northstar Income and Growth Fund, ("Income and Growth Fund") is a diversi-
fied portfolio with the investment objective of current income balanced with
capital appreciation. The Fund seeks to achieve its objective through invest-
ments in a diversified group of securities selected for their prospects of
providing both current income and long-term growth of capital.
Northstar High Total Return Fund II, ("High Total Return Fund II") is a di-
versified portfolio with the investment objective of high income and capital
appreciation. The Fund invests primarily in a diversified group of fixed in-
come securities which are selected for high current income and the potential
for capital growth, including lower-rated fixed income securities, convertible
securities, securities issued by U.S. companies in foreign currencies, and se-
curities issued by foreign governments and companies.
Northstar High Total Return Fund, ("High Total Return Fund") is a diversi-
fied portfolio with the investment objective of high income and capital appre-
ciation. The Fund invests primarily in a diversified group of fixed income se-
curities which are selected for high current income and the potential for cap-
ital growth, including lower-rated fixed income securities, convertible secu-
rities, securities issued by U.S. companies in foreign currencies, and securi-
ties 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 and 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. Secu-
rities 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 U.S. dollars based
on the prevailing exchange rates on that day. The Adviser uses independent
pricing services to price the Funds' securities.
- -------------------------------------------------------------------------------
60
<PAGE>
NORTHSTAR TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 1999 (UNAUDITED)
[LOGO OF NORTHSTAR]
Security Transactions, Investment Income, Expenses-- Security transactions
are recorded on the trade date. Realized gains or losses on sales of invest-
ments are calculated on the identified cost basis. Interest income is recorded
on the accrual basis except when collection is not expected; discounts are ac-
creted, 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
Fund or class of shares based upon the relative daily net asset value.
Distributions to Shareholders -- Dividends from net investment income are
declared and paid monthly by the High Total Return Fund II and High Total Re-
turn Fund, and declared and paid quarterly by the Income and Growth Fund, and
declared and paid annually by the Growth + Value Fund, International Value
Fund, Emerging Markets Value Fund, and Research Enhanced Index Fund. Distribu-
tions 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.
Foreign Currency -- The Funds isolate that portion of the results of opera-
tions resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held.
Net realized gain (loss) on foreign currency transactions represents the
foreign exchange: (1) gains and losses from the sale of holdings of foreign
currencies, (2) gains and losses between trade date and settlement date on in-
vestment securities transactions and forward exchange contracts, and (3) gains
and losses from the difference between amounts of interest and dividends re-
corded and the amounts actually received. Net change in unrealized apprecia-
tion (depreciation) of investment and foreign currency arise from changes in
the value of assets and liabilities including investment in securities at fis-
cal year end, resulting from changes in the exchange rate.
Foreign Currency Forward Contracts -- The Funds may enter into foreign cur-
rency forward contracts primarily to hedge against foreign currency exchange
rate risks on their non-U.S. dollar denominated investment securities. When
entering into a currency forward contract, the Funds agree to receive or de-
liver a fixed quantity of foreign currency for an agreed-upon price on a
agreed future date. These contracts are valued daily and the Funds' net equity
therein, representing unrealized gain or loss on the contracts as measured by
the difference between the forward foreign exchange rates at the dates of en-
try into the contracts and the forward rates at the reporting date, is in-
cluded in the statement of assets and liabilities. Realized and unrealized
gains and losses are included in the statement of operations. These instru-
ments involve market and/or credit risk in excess of the amount recognized in
the statement of assets and liabilities. Risks arise from the possible inabil-
ity of counterparties to meet the terms of their contracts and from movement
in currency and securities values and interest rates.
Options -- The Funds may write (sell) and purchase put and call options. The
premium collected or paid by a Fund for the sale or purchase of a call or put
option is recorded as an investment and subsequently "marked to market" to re-
flect the current market value of the option. If an option which a Fund has
sold or purchased expires on the stipulated expiration date, the Fund realizes
a gain or loss in the amount of the premium received or paid for the option.
For written options, the Fund's obligation may be discharged in three ways:
(1) the option expires on the stipulated expiration date; (2) the option
holder exercises the right to call (buy) or put (sell) the security, or (3)
the Fund enters into a closing transaction. If the option is held until expi-
ration, the Fund recognizes a gain equal to the amount of premium received. If
the written call option is exercised by the counterparty, the premium is added
to the proceeds from the sale of the underlying security or currency in deter-
mining whether the Fund has realized a gain or loss. If the written put option
is exercised by the counterparty, the premium reduces the cost basis of the
securities purchased by the Fund. If the Fund enters into a closing transac-
tion, a gain or loss is recognized equal to the difference between the premium
received by the Fund from the counterparty and the amount paid by the Fund on
effecting a closing purchase transaction, including broker-
- -------------------------------------------------------------------------------
61
<PAGE>
NORTHSTAR TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 1999 (UNAUDITED)
age commissions. As the writer of options, the Fund bears the market risk of an
unfavorable change in the price of the security underlying the written option.
Futures contracts -- The Funds may invest in futures contracts solely for the
purpose of hedging its existing portfolio securities, or securities that the
Funds intend to purchase, against fluctuations in fair value caused by changes
in prevailing market or interest rates.
Initial margin deposits made upon entering into futures contracts are recog-
nized as assets due from the broker (the Funds' agent in acquiring the futures
position). During the period the futures contract is open, changes in the value
of the contract are recognized as unrealized gains or losses by "marking to
market" on a daily basis to reflect the daily market value of the contract.
Variation margin payments are received or made by the Funds each day, depend-
ing upon the daily fluctuations in the fair value of the underlying instrument.
The Funds recognize a gain or loss equal to the daily variation margin. When
the contract is closed, the Funds record a realized gain or loss equal to the
difference between the proceeds from (or cost of) the closing transaction and
the Funds' basis in the contract.
Should market conditions move unexpectedly, the Funds may not achieve the an-
ticipated benefits of the financial futures contracts and may realize a loss.
The use of futures transactions involves the risk of imperfect correlation in
movements in the price of futures contracts, interest rates, and the underlying
hedged assets.
Repurchase Agreements -- The Funds' Custodian takes possession of collateral
pledged for investments in repurchase agreements. The underlying collateral is
valued daily on a mark-to-market basis to assure that the value, including ac-
crued interest, is at least equal to the repurchase price. In the event of de-
fault 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 pro-
ceedings 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 provi-
sions 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.
Management's Use of Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of financial statements and the reported amounts of in-
come and expenses during the reporting period. Actual results could differ from
those estimates.
Organization Costs -- Costs incurred by the Trust in connection with its or-
ganization of each Fund have been deferred and are being amortized over a pe-
riod of five years from the date the Funds commenced operations.
Note 2. Investment Adviser, Administrator and Distributor
Northstar, Inc. (and its wholly-owned operating subsidiaries, Northstar In-
vestment Management Corp., Northstar Distributors, Inc. and Northstar Adminis-
trator Corp.) is an indirect wholly-owned subsidiary of ReliaStar Financial
Corp. Northstar Investment Management Corp. (the "Adviser") serves as each
Fund's investment adviser. The Growth + Value Fund, International Value Fund,
and Emerging Markets Value Fund pay the Adviser an investment advisory fee cal-
culated at an annual rate of 1.00% of average daily net assets. The Research
Enhanced Index Fund pays the Adviser an investment advisory fee calculated at
an annual rate of 0.70% of average daily net assets. The Income and Growth Fund
and High Total Return Fund pay the Adviser an investment advisory fee calcu-
lated at an annual rate of 0.75% on the first $250,000,000 of aggregate average
daily net assets, 0.70% on the next $250,000,000 of such assets, 0.65% on the
next $250,000,000 of such assets, 0.60% on the next $250,000,000 of such as-
sets, and 0.55% on the assets of each Fund in excess of $1 billion. The High
Total Return Fund II pays the Adviser an investment advisory fee calculated at
an annual rate of 0.75% of
- --------------------------------------------------------------------------------
62
<PAGE>
NORTHSTAR TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 1999 (UNAUDITED)
[LOGO OF NORTHSTAR]
average daily net assets. For the period ended April 30, 1999, the Adviser
earned $7,955,078 in investment advisory fees. Navellier Fund Management, Inc.
("Navellier"), a registered investment adviser, serves as subadviser to the
Growth + Value Fund pursuant to a Subadvisory Agreement dated July 31, 1996
and amended and restated on July 1, 1998, between the Adviser and Navellier.
For its services, Navellier receives from the Adviser, a fee equal to 0.50% of
the average daily net assets of the Fund. For the period ended April 30, 1999,
Navellier received $573,567 in subadvisory fees from the Adviser. Brandes In-
vestment Partners, L.P. ("Brandes"), a registered investment adviser, serves
as subadviser to the International Value Fund and Emerging Markets Value Fund
pursuant to Subadvisory Agreements dated January 23, 1997 and November 8,
1997, respectively, between the Adviser and Brandes. For its services, Brandes
receives from the Adviser an annual fee equal to 50% of the management fee
that each of the Funds it subadvises pays the Adviser (currently 0.50% of the
average daily net assets of each Fund). For the period December 1, 1998
through February 28, 1999, Brandes agreed to waive the subadvisory fee on the
Emerging Markets Value Fund. For the period ended April 30, 1999, Brandes re-
ceived $1,418,061 and $14,930 in subadvisory fees from the Adviser for the In-
ternational Value Fund and Emerging Markets Value Fund, respectively. J.P.
Morgan Investment Management Inc. ("J.P. Morgan"), a registered investment ad-
viser, serves as subadviser to the Research Enhanced Index Fund pursuant to a
Subadvisory Agreement dated December 21, 1998 between the Adviser and J.P.
Morgan. For its services, J.P. Morgan receives from the Adviser, a fee equal
to 0.20% of the average daily net assets of the Fund. For the period ended
April 30, 1999, J.P. Morgan received $32,094 in subadvisory fees from the Ad-
viser. The Adviser voluntarily undertook to limit the expenses of the Emerging
Markets Value Fund to 1.80% (Class A) and 2.50% (Class B and C) of each re-
spective class's average net assets from inception through February 28, 1999.
The Adviser has voluntarily undertaken to limit the expenses of the Research
Enhanced Index Fund to 1.25% (Class A), 1.95% (Class B and C), and 0.95%
(Class I) of each respective class's average net assets. The Adviser will re-
imburse the Funds for amounts in excess of such limits. As of April 30, 1999,
the Adviser's reimbursements totaled $25,059 and $96,762 for the Emerging Mar-
kets Value Fund and Research Enhanced Index Fund, respectively.
Northstar Administrators Corp. (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 0.10% of each Fund's average daily net
assets, and an annual shareholder account servicing fee of $5.00, payable
semi-annually, for each account of beneficial owners of shares. For the period
ended April 30, 1999, the Administrator earned $1,241,297 in administrative
and account servicing fees.
Northstar Distributors, Inc. (the "Distributor"), an affiliate of the Ad-
viser and the Administrator, is the distributor of each Fund's shares. Under
separate Distribution Plans pertaining to Class A, B, and C shares, the Trust
pays the Distributor monthly service fees at an annual rate of 0.25% of the
average daily net assets in the case of Class A, B and C shares and monthly
distribution fees at the annual rate of 0.05% of the average daily net assets
of Class A shares and 0.75% of the average daily net assets of Class B and C
shares. Class I shares do not pay distribution or service fees. As of April
30, 1999, the Trust owed the Distributor $1,330,226 in service and distribu-
tion fees.
The Distributor also receives the proceeds of initial sales charges paid by
shareholders upon the purchase of Class A shares and contingent deferred sales
charges paid by shareholders upon certain redemptions of Class A, B and C
shares. For the period ended April 30, 1999, the Distributor earned the fol-
lowing amounts in sales charges:
<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
-------- ---------- --------
<S> <C> <C> <C>
Initial sales charges $189,010 n/a n/a
Contingent deferred sales charges $150,038 $3,042,636 $126,613
</TABLE>
- -------------------------------------------------------------------------------
63
<PAGE>
NORTHSTAR TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 1999 (UNAUDITED)
Note 3. Futures Contracts
On April 30, 1999, the Research Enhanced Index Fund had $125,000 principal
amount of U.S. Treasury obligations pledged as collateral to cover margin
requirements for open future contracts.
Open futures contracts at April 30, 1999, were as follows:
<TABLE>
<CAPTION>
Number of Unrealized
Contract Contracts Month Commitment Depreciation
-------- --------- ----- ---------- ------------
<S> <C> <C> <C> <C>
S&P 500 Index 9 June Buy ($9,460)
</TABLE>
Note 4. Purchases and Sales of Investment Securities
The aggregate cost of purchases and proceeds from sales of investments (ex-
cluding short-term investments) for the period ended April 30, 1999, were as
follows:
<TABLE>
<CAPTION>
Research
Emerging Enhanced
Growth + International Market Index Income & High Total High Total
Value Fund Value Fund Value Fund Fund Growth Fund Return Fund II Return Fund
------------ ------------- ---------- ----------- ------------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Aggregate purchases $204,452,102 $140,035,932 $3,566,420 $87,066,760 $ 93,081,866 $195,348,122 $214,878,533
Aggregate sales $220,597,908 $ 68,126,855 $1,696,248 $ 4,836,988 $131,581,314 $172,001,233 $254,102,643
</TABLE>
U.S. Government Securities included above were as follows:
<TABLE>
<CAPTION>
Emerging Research
Markets Enhanced High Total
Growth + International Value Index Income & Return High Total
Value Fund Value Fund Fund Fund Growth Fund Fund II Return Fund
---------- ------------- -------- -------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Aggregate purchases $ 0 $ 0 $ 0 $815,057 $ 0 $ 0 $ 0
Aggregate sales $ 0 $ 0 $ 0 $ 28,781 $10,333,640 $ 0 $ 0
</TABLE>
Note 5. Portfolio Securities (Tax Basis)
The cost of securities for federal income tax purposes and the aggregate
unrealized appreciation and depreciation of securities at April 30, 1999 were
as follows:
<TABLE>
<CAPTION>
Emerging Research
Markets Enhanced High Total
Growth + International Value Index Income & Return High Total
Value Fund Value Fund Fund Fund Growth Fund Fund II Return Fund
------------ ------------- ----------- ----------- ------------ ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Cost (tax basis) $187,760,483 $581,310,205 $13,432,550 $82,420,890 $105,367,190 $274,857,186 $ 691,823,802
Appreciated securities 72,692,718 122,731,000 2,782,347 6,447,909 17,190,492 9,256,169 68,478,848
Depreciated securities (4,444,915) (22,809,207) (1,469,572) (1,521,038) (1,890,088) (35,515,842) (161,366,532)
------------ ------------ ----------- ----------- ------------ ------------ -------------
Net Unrealized
Appreciation
(Depreciation) $ 68,247,803 $ 99,921,793 $ 1,312,775 $ 4,926,871 $ 15,300,404 $(26,259,673) $ (92,887,684)
------------ ------------ ----------- ----------- ------------ ------------ -------------
</TABLE>
- --------------------------------------------------------------------------------
64
<PAGE>
NORTHSTAR TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 1999 (UNAUDITED)
[LOGO OF NORTHSTAR]
Note 6. Capital Share Transactions
Transactions in capital shares of each Fund for the period ended April 30,
1999, were as follows:
<TABLE>
<CAPTION>
Northstar Growth + Value Fund
------------------------------------------------------------------------------
Class A Class B Class C
-------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 6,324,463 $ 85,581,521 1,514,587 $ 20,844,398 939,352 $ 12,994,774
Reinvested dividends 0 0 0 0 0 0
Shares redeemed (6,267,831) (85,387,061) 1,593,845 (21,163,243) (953,497) (12,718,479)
----------- ------------- ---------- ------------ ---------- ------------
Net increase/decrease 56,632 $ 194,460 (79,258) $ (318,845) (14,145) $ 276,295
----------- ------------- ---------- ------------ ---------- ------------
<CAPTION>
Northstar International Value Fund
------------------------------------------------------------------------------
Class A Class B Class C
-------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 18,985,988 $ 228,934,006 2,804,932 $ 33,723,555 4,398,555 $ 53,114,586
Reinvested dividends 1,109,611 12,973,570 511,640 5,913,105 504,584 5,826,244
Shares redeemed (16,023,327) (193,574,804) (1,393,362) (16,816,624) (1,746,034) (21,175,690)
----------- ------------- ---------- ------------ ---------- ------------
Net increase 4,072,272 $ 48,332,772 1,923,210 $ 22,820,036 3,157,105 $ 37,765,140
----------- ------------- ---------- ------------ ---------- ------------
<CAPTION>
Northstar Emerging Markets Value Fund
------------------------------------------------------------------------------
Class A Class B Class C
-------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 417,519 $ 3,233,209 44,265 $ 368,540 179,156 $ 1,420,754
Reinvested dividends 4,477 33,577 4,574 34,258 4,475 33,379
Shares redeemed (140,092) (1,127,140) (184,336) (1,464,645) (30,078) (248,685)
----------- ------------- ---------- ------------ ---------- ------------
Net increase/decrease 281,904 $ 2,139,646 (135,497) $ (1,061,847) 153,553 $ 1,205,448
----------- ------------- ---------- ------------ ---------- ------------
</TABLE>
<TABLE>
<CAPTION>
Northstar Research Enhanced Index Fund
------------------------------------------------------------------------------------------
Class A Class B Class C Class I
------------------- ---------------------- ---------------------- ---------------------
Shares Amount Shares Amount Shares Amount Shares Amount
------- ---------- --------- ----------- --------- ----------- --------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Shares sold 828,198 $8,689,531 3,167,408 $33,144,785 2,305,935 $24,260,529 2,500,010 $25,000,100
Reinvested dividends 0 0 0 0 0 0 0 0
Shares redeemed (9,600) (102,577) (25,564) (266,715) (57,279) (602,600) 0 0
------- ---------- --------- ----------- --------- ----------- --------- -----------
Net increase 818,598 $8,586,954 3,141,844 $32,878,070 2,248,656 $23,657,929 2,500,010 $25,000,100
------- ---------- --------- ----------- --------- ----------- --------- -----------
</TABLE>
<TABLE>
<CAPTION>
Northstar Income and Growth Fund
----------------------------------------------------------------------------
Class A Class B Class C
------------------------ ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
---------- ------------ ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 304,261 $ 3,551,815 281,904 $ 3,261,558 31,746 $ 329,826
Reinvested dividends 378,993 4,274,253 287,530 3,238,678 290,045 3,263,578
Shares redeemed (1,028,247) (11,940,181) (1,199,768) (14,049,420) (1,804,314) (21,087,718)
---------- ------------ ---------- ------------ ---------- ------------
Net decrease (344,993) $ (4,114,113) (630,334) $ (7,549,184) (1,482,523) $(17,494,314)
---------- ------------ ---------- ------------ ---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
65
<PAGE>
NORTHSTAR TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
Northstar High Total Return Fund II
-----------------------------------------------------------------------------
Class A Class B Class C
------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount
---------- ------------ ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 1,595,143 $ 7,755,904 5,483,518 $ 26,733,376 2,465,683 $ 11,994,366
Reinvested dividends 147,525 713,262 472,343 2,283,508 186,377 903,272
Shares redeemed (2,795,319) (13,561,166) (4,800,557) (23,320,270) (3,353,876) (16,358,186)
---------- ------------ ----------- ------------ ---------- ------------
Net increase/decrease (1,052,651) $ (5,092,000) 1,155,304 $ 5,696,614 (701,816) $ (3,460,548)
---------- ------------ ----------- ------------ ---------- ------------
<CAPTION>
Northstar High Total Return Fund
-----------------------------------------------------------------------------
Class A Class B Class C
------------------------ ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount
---------- ------------ ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 5,117,751 $ 19,769,406 9,989,521 $ 38,703,508 3,758,356 $ 14,612,821
Reinvested dividends 1,088,072 4,178,227 1,903,999 7,307,501 328,848 1,267,699
Shares redeemed (7,890,361) (30,481,086) (17,554,596) (67,932,107) (4,150,797) (16,116,603)
---------- ------------ ----------- ------------ ---------- ------------
Net decrease (1,684,538) $ (6,533,453) (5,661,076) $(21,921,098) (63,593) $ (236,083)
---------- ------------ ----------- ------------ ---------- ------------
</TABLE>
Transactions in capital shares of each class of shares of each Fund for the
period ended October 31, 1998, were as follows:
<TABLE>
<CAPTION>
Northstar Growth + Value Fund
------------------------------------------------------------------------------
Class A Class B Class C
-------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 4,527,627 $ 52,348,896 5,430,943 $ 62,929,378 2,339,701 $ 27,238,788
Reinvested dividends 35,555 384,794 62,402 668,329 20,745 220,956
Shares redeemed (4,188,964) (47,906,940) (1,536,021) (17,178,931) (952,396) (10,641,186)
----------- ------------- ---------- ------------ ---------- ------------
Net increase 374,218 $ 4,826,750 3,957,324 $ 46,418,776 1,408,050 $ 16,818,558
----------- ------------- ---------- ------------ ---------- ------------
<CAPTION>
Northstar International Value Fund
------------------------------------------------------------------------------
Class A Class B Class C
-------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 23,471,551 $ 278,306,972 8,027,215 $ 96,730,318 8,950,805 $107,622,818
Reinvested dividends 36,151 393,327 31,621 342,751 35,060 379,702
Shares redeemed (11,301,948) (128,653,076) (1,093,303) (12,477,274) (2,992,118) (34,661,823)
----------- ------------- ---------- ------------ ---------- ------------
Net increase 12,205,754 $ 150,047,223 6,965,533 $ 84,595,795 5,993,747 $ 73,340,697
----------- ------------- ---------- ------------ ---------- ------------
<CAPTION>
Northstar Emerging Markets Value Fund
------------------------------------------------------------------------------
Class A Class B Class C
-------------------------- ------------------------ ------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------- ---------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 586,703 $ 5,310,769 487,684 $ 4,541,148 348,558 $ 3,187,450
Reinvested dividends 0 0 0 0 0 0
Shares redeemed (90,645) (709,667) (19,286) (143,736) (46,689) (316,892)
----------- ------------- ---------- ------------ ---------- ------------
Net increase 496,058 $ 4,601,102 468,398 $ 4,397,412 301,869 $ 2,870,558
----------- ------------- ---------- ------------ ---------- ------------
</TABLE>
- --------------------------------------------------------------------------------
66
<PAGE>
NORTHSTAR TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 1999 (UNAUDITED)
[LOGO OF NORTHSTAR]
<TABLE>
<CAPTION>
Northstar Income and Growth Fund
------------------------------------------------------------------------------
Class A Class B Class C
------------------------- ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------ ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 1,460,784 $ 17,299,976 385,541 $ 4,710,280 143,591 $ 1,782,953
Reinvested dividends 286,311 3,468,930 250,270 3,026,653 364,493 4,406,758
Shares redeemed (2,013,738) (24,214,525) (1,788,219) (21,794,555) (2,573,208) (30,443,545)
----------- ------------ ----------- ------------ ---------- ------------
Net decrease (266,643) $ (3,445,619) (1,152,408) $(14,057,622) (2,065,124) $(24,253,834)
----------- ------------ ----------- ------------ ---------- ------------
<CAPTION>
Northstar High Total Return Fund II
------------------------------------------------------------------------------
Class A Class B Class C
------------------------- ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------ ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 9,464,888 $ 52,213,452 30,726,099 $169,510,680 12,093,890 $ 67,132,621
Reinvested dividends 195,435 1,047,749 533,502 2,853,263 265,028 1,426,932
Shares redeemed (2,663,248) (14,330,427) (2,921,191) (15,435,403) (3,399,441) (18,099,145)
----------- ------------ ----------- ------------ ---------- ------------
Net increase 6,997,075 $ 38,930,774 28,338,410 $156,928,540 8,959,477 $ 50,460,408
----------- ------------ ----------- ------------ ---------- ------------
<CAPTION>
Northstar High Total Return Fund
------------------------------------------------------------------------------
Class A Class B Class C
------------------------- ------------------------- ------------------------
Shares Amount Shares Amount Shares Amount
----------- ------------ ----------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Shares sold 7,307,502 $ 33,700,237 13,631,735 $ 63,015,584 3,164,086 $ 14,488,332
Reinvested dividends 2,832,172 13,014,409 4,666,940 21,417,535 773,187 3,559,008
Shares redeemed (13,775,835) (63,140,734) (19,998,694) (90,185,269) (6,407,467) (29,146,427)
----------- ------------ ----------- ------------ ---------- ------------
Net decrease (3,636,161) $(16,426,088) (1,700,019) $ (5,752,150) (2,470,194) $(11,099,087)
----------- ------------ ----------- ------------ ---------- ------------
</TABLE>
Note 7. Credit Risk and Defaulted Securities
Although each Fund is a diversified portfolio, the High Total Return Fund II
and High Total Return Fund had 89.65% and 75.90%, respectively, of their port-
folios invested in lower-rated and comparable quality unrated high-yield secu-
rities. Investments in higher-yield securities are accompanied by a greater
degree of credit risk and such lower-rated securities tend to be more sensi-
tive to economic conditions than higher-rated securities. The risk of loss due
to default by the issuer may be significantly greater for the holders of high-
yielding securities, because such securities are generally unsecured and are
often subordinated to other creditors of the issuer. At April 30, 1999, the
High Total Return Fund II held Favorite Brands, Forman Petroleum, Geneva
Steel, NSM Steel, TransAmerican Refining, Willcox & Gibbs, Wireless One, de-
faulted securities, and International Wireless, a bankrupt security. The ag-
gregate value for these securities is $7,277,740. At April 30, 1999 the High
Total Return Fund held Forman Petroleum, Geneva Steel, NSM Steel, TransAmeri-
can Refining, Willcox & Gibbs, Wireless One, defaulted securities, Interna-
tional Wireless and SA Telecom, bankrupt securities. The aggregate value for
these securities is $20,483,260.
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.
Note 8. Security Loans
Each Fund may lend its securities to brokers, dealers and other financial
institutions in amounts up to one third of the value of its total assets. The
loans are fully collateralized at all times by cash or liquid high grade secu-
rities. As with other extensions of credit, each Fund may bear risk of delay
in recovery or even loss of rights in the collateral should the borrower of
the securities fail financially. The
- -------------------------------------------------------------------------------
67
<PAGE>
NORTHSTAR TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 1999 (UNAUDITED)
Fund receives compensation for lending their securities in the form of fees or
all or a portion of the income from investments of the collateral. The Fund
also continues to earn income on the securities loaned. At April 30, 1999, no
Fund had any securities on loan.
Note 9. Federal Income Tax--Capital Loss Carryforward
At October 31, 1998, the Growth + Value Fund, Emerging Markets Value Fund,
and High Total Return Fund had capital loss carryforwards of $26,282,878,
$114,095, and $6,107,124, respectively, expiring October 31, 2006.
Note 10. Letter of Credit
The Northstar Trust, Northstar Equity Trust, Northstar Galaxy Trust, and
Northstar Funds (collectively the "Funds") have entered into an unsecured com-
mitted revolving line of credit agreement (the "Credit Agreement") with State
Street Bank and Trust Company for an aggregate amount of $50,000,000. The pro-
ceeds may be used only to (1) temporarily finance the purchase and sale of se-
curities; (2) finance the redemption of shares of an investor in the Funds;
and (3) enable the Funds to meet other emergency expenses as defined in the
Credit Agreement. The Funds pays a commitment fee equal to 0.08% per annum on
the daily unused portion of the committed line amount payable quarterly in ar-
rears. During the period ended April, 30, 1999, the Funds did not have any
loans outstanding.
- -------------------------------------------------------------------------------
68
<PAGE>
[LOGO OF NORTHSTAR]
NORTHSTAR
TRUST
