[GRAPHIC OMITTED - ALLEGHANY FUNDS]
Annual
Report
ALLEGHANY/MONTAG & CALDWELL GROWTH FUND
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ALLEGHANY/CHICAGO TRUST GROWTH & INCOME FUND
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ALLEGHANY/CHICAGO TRUST TALON FUND
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ALLEGHANY/CHICAGO TRUST SMALL CAP VALUE FUND
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ALLEGHANY/VEREDUS AGGRESSIVE GROWTH FUND
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ALLEGHANY/VEREDUS SCITECH FUND
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ALLEGHANY/BLAIRLOGIE INTERNATIONAL DEVELOPED FUND
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ALLEGHANY/BLAIRLOGIE EMERGING MARKETS FUND
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ALLEGHANY/MONTAG & CALDWELL BALANCED FUND
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ALLEGHANY/CHICAGO TRUST BALANCED FUND
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ALLEGHANY/CHICAGO TRUST BOND FUND
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ALLEGHANY/CHICAGO TRUST MUNICIPAL BOND FUND
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ALLEGHANY/CHICAGO TRUST MONEY MARKET FUND
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OCTOBER 31, 2000
<PAGE>
[LOGO OMITTED - ALLEGHANY FUNDS]
Dear Fellow Shareholder,
As the fiscal year came to a close, the U.S. economy slowed, and investor
preferences shifted from growth to value, from the New Economy to the Old
Economy and from stocks to bonds. Unlike the past several years, double-digit
stock market returns did not occur, while a focus on fundamental valuations
overtook the go-go investment climate of 1999 and early 2000. As stocks weakened
throughout the period, bonds came on strong as interest rates began to moderate.
Even though it was a very volatile period, I am pleased to report that many of
our funds outperformed their benchmarks during the fiscal year ended October 31,
2000. Those outperformers include the Alleghany/Chicago Trust Growth & Income
Fund, Alleghany/Chicago Trust Balanced Fund, Alleghany/Chicago Trust Talon Fund,
and Alleghany/Veredus Aggressive Growth Fund. Congratulations to our portfolio
managers, who have continued to manage their funds with discipline and strict
adherence to their investment process.
On June 1, 2000, we introduced the Alleghany/Veredus SciTech Fund, which
concentrates primarily on companies with novel technologies in such fields as
the Internet, wireless communications and biotechnology. We are also pleased to
announce two new funds -- Alleghany/TAMRO Large Cap Value Fund and
Alleghany/TAMRO Small Cap Fund -- that officially opened on November 30, 2000
and are managed by our newest investment advisory firm, TAMRO Capital Partners
LLC. TAMRO Capital Partners, a value-oriented equity firm based in Alexandria,
Virginia, identifies companies that they believe are well positioned for growth
and fundamentally strong but are overlooked in the current market. We are
continuing to expand our range of investment products and believe that these new
funds are a perfect complement to our current roster of funds.
On the following pages, you'll find a detailed description of each Fund's
performance, along with a portfolio manager Q&A. After that, each Fund's
portfolio holdings are listed as of October 31, 2000. I think you'll find the
information included very informative.
Thank you for entrusting us with your investment needs.
Sincerely,
/S/ SIGNATURE - KENNETH ANDERSON
Kenneth Anderson
President
ALLEGHANY FUNDS ARE NO-LOAD MUTUAL FUNDS DISTRIBUTED BY PROVIDENT DISTRIBUTORS,
INC., KING OF PRUSSIA, PA 19406. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION
OF AN OFFER TO BUY SHARES OF ANY OF THE FUNDS DESCRIBED. INVESTMENT RETURN AND
PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE SO THAT AN INVESTOR'S SHARES,
WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS
INFORMATION MUST BE ACCOMPANIED OR PRECEDED BY A PROSPECTUS.
Shareholder Services 800 992-8151 www.AlleghanyFunds.com
THE CHICAGO TRUST COMPANY (BULLET) MONTAG & CALDWELL, INC (BULLET) VEREDUS ASSET
MANAGEMENT LLC (BULLET) BLAIRLOGIE CAPITAL MANAGEMENT
<PAGE>
Table of Contents
SUMMARY INFORMATION 2
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PORTFOLIO MANAGER COMMENTARIES:
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ALLEGHANY/MONTAG & CALDWELL GROWTH FUND 6
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ALLEGHANY/CHICAGO TRUST GROWTH & INCOME FUND 7
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ALLEGHANY/CHICAGO TRUST TALON FUND 8
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ALLEGHANY/CHICAGO TRUST SMALL CAP VALUE FUND 9
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ALLEGHANY/VEREDUS AGGRESSIVE GROWTH FUND 10
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ALLEGHANY/VEREDUS SCITECH FUND 11
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ALLEGHANY/BLAIRLOGIE INTERNATIONAL DEVELOPED FUND 12
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ALLEGHANY/BLAIRLOGIE EMERGING MARKETS FUND 13
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ALLEGHANY/MONTAG & CALDWELL BALANCED FUND 14
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ALLEGHANY/CHICAGO TRUST BALANCED FUND 15
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ALLEGHANY/CHICAGO TRUST BOND FUND 16
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ALLEGHANY/CHICAGO TRUST MUNICIPAL BOND FUND 17
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ALLEGHANY/CHICAGO TRUST MONEY MARKET FUND 18
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SCHEDULE OF INVESTMENTS:
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ALLEGHANY/MONTAG & CALDWELL GROWTH FUND 19
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ALLEGHANY/CHICAGO TRUST GROWTH & INCOME FUND 20
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ALLEGHANY/CHICAGO TRUST TALON FUND 21
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ALLEGHANY/CHICAGO TRUST SMALL CAP VALUE FUND 22
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ALLEGHANY/VEREDUS AGGRESSIVE GROWTH FUND 23
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ALLEGHANY/VEREDUS SCITECH FUND 25
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ALLEGHANY/BLAIRLOGIE INTERNATIONAL DEVELOPED FUND 26
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ALLEGHANY/BLAIRLOGIE EMERGING MARKETS FUND 29
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ALLEGHANY/MONTAG & CALDWELL BALANCED FUND 32
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ALLEGHANY/CHICAGO TRUST BALANCED FUND 35
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ALLEGHANY/CHICAGO TRUST BOND FUND 39
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ALLEGHANY/CHICAGO TRUST MUNICIPAL BOND FUND 42
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ALLEGHANY/CHICAGO TRUST MONEY MARKET FUND 45
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STATEMENT OF ASSETS AND LIABILITIES 48
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STATEMENT OF OPERATIONS 52
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STATEMENT OF CHANGES IN NET ASSETS 56
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FINANCIAL HIGHLIGHTS 62
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NOTES TO FINANCIAL STATEMENTS 78
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INDEPENDENT AUDITORS' REPORT 84
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[BEGIN SIDEBAR]
THE CHICAGO TRUST COMPANY
With roots going back to 1887, Chicago Trust manages portfolios for mutual fund,
institutional and high net worth clients.The firm also provides investment,
trustee and administrative services for pension, profit sharing and 401(k)
plans.
MONTAG & CALDWELL, INC.
Founded in 1945 in Atlanta, Montag & Caldwell is one of the oldest and most
well-respected investment counseling firms in the Southeast. The firm manages
investments for institutions and retirement plans, as well as for individual
clients.
VEREDUS ASSET MANAGEMENT LLC
A specialist in small company growth stocks, Veredus manages institutional
accounts, individual client accounts and mutual funds and is based in
Louisville, Kentucky. The firm was founded by B. Anthony Weber, a former
principal with Fred Alger & Co., a well-known New York-based growth stock
research and investment firm.
BLAIRLOGIE CAPITAL MANAGEMENT
Based in Edinburgh, Scotland, Blairlogie specializes in managing international
and emerging market portfolios for institutions and mutual funds. The firm is a
registered investment advisor in the United States and the United Kingdom.
[END SIDEBAR]
<PAGE>
ALLEGHANY FUNDS
---------------------
PERFORMANCE FOR THE YEAR ENDED OCTOBER 31, 2000
SUMMARY INFORMATION
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALLEGHANY/MONTAG & CALDWELL ALLEGHANY/ CHICAGO TRUST
GROWTH FUND GROWTH & INCOME FUND
CLASS N CLASS I CLASS N CLASS I
<S> <C> <C> <C> <C>
TOTAL RETURNS:
One Year ................ (0.96)% (0.70)% 19.62% N/A
Three Year
Average Annual ....... 14.73% 15.07% 24.21% N/A
Five Year
Average Annual ....... 21.30% N/A 24.95% N/A
Average Annual
Since Inception ...... 23.02% 20.48% 22.25% N/A
Inception Date .......... 11/02/94 06/28/96 12/13/93 07/31/00
</TABLE>
TOP TEN HOLDINGS
as of October 31, 2000
COMPANY AND % OF TOTAL NET ASSETS
Coca-Cola Co. ................................ 6.75%
Pfizer, Inc. ................................. 5.79%
Electronic Data Systems Corp. ................ 5.00%
Citigroup, Inc. .............................. 4.76%
Johnson & Johnson ............................ 4.46%
Gillette Co. ................................. 4.16%
Bristol-Myers Squibb Co. ..................... 4.09%
McDonald's Corp. ............................. 3.99%
Hewlett-Packard Co. .......................... 3.59%
Procter & Gamble Co. ......................... 3.33%
as of October 31, 2000
COMPANY AND % OF TOTAL NET ASSETS
EMC Corp. .................................... 4.51%
Sysco Corp. .................................. 4.50%
Cardinal Health, Inc. ........................ 3.99%
AES Corp. .................................... 3.63%
Nokia Corp., SP ADR .......................... 3.60%
Federal Home Loan Mortgage Corp. ............. 3.50%
Harley-Davidson, Inc. ........................ 3.46%
American International Group, Inc. ........... 3.45%
Cisco Systems, Inc. .......................... 3.37%
Walgreen Co. ................................. 3.32%
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ALLEGHANY/CHICAGO TRUST ALLEGHANY/CHICAGO TRUST
TALON FUND SMALL CAP VALUE FUND
TOTAL RETURNS:
One Year ................. 39.07% 18.88%
Three Year
Average Annual ........ 8.38% N/A
Five Year
Average Annual ........ 16.54% N/A
Average Annual
Since Inception ....... 17.06% 4.60%
Inception Date ........... 09/19/94 11/10/98
TOP TEN HOLDINGS
as of October 31, 2000
COMPANY AND % OF TOTAL NET ASSETS
Houghton Mifflin Co. ......................... 5.12%
Unisys Corp. ................................. 5.07%
CNF Transportation, Inc. ..................... 4.75%
Mattel, Inc. ................................. 4.51%
Belo (A.H.) Corp., Class A ................... 4.00%
Alcatel SA, ADR .............................. 3.83%
ACNielsen Corp. .............................. 3.81%
Sensormatic Electronics Corp. ................ 3.80%
Harris Corp. ................................. 3.72%
Dean Foods Co. ............................... 3.64%
as of October 31, 2000
COMPANY AND % OF TOTAL NET ASSETS
Pier 1 Imports, Inc. ......................... 4.09%
Prosperity Bancshares, Inc. .................. 3.67%
Carter-Wallace, Inc. ......................... 3.45%
Valero Energy Corp. .......................... 3.25%
Hibernia Corp., Class A ...................... 3.15%
Raymond James Financial, Inc. ................ 3.09%
Peoples Energy Corp. ......................... 3.05%
Wilmington Trust Corp. ....................... 2.98%
First Financial Holdings, Inc. ............... 2.91%
Pioneer Natural Resources Co. ................ 2.79%
2
<PAGE>
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ALLEGHANY/VEREDUS ALLEGHANY/VEREDUS
AGGRESSIVE GROWTH FUND SCITECH FUND
TOTAL RETURNS:
One Year ..................... 53.35% N/A
Three Year
Average Annual ............ N/A N/A
Five Year
Average Annual ............ N/A N/A
Average Annual
Since Inception ........... 49.27%(a) N/A
Inception Date ............... 06/30/98(a) 06/30/00
TOP TEN HOLDINGS
as of October 31, 2000
COMPANY AND % OF TOTAL NET ASSETS
Oxford Health Plans, Inc. .................... 4.38%
HEALTHSOUTH Corp. ............................ 4.31%
Genesco, Inc. ................................ 3.72%
Humana, Inc. ................................. 3.36%
Cytyc Corp. .................................. 2.96%
FileNET Corp. ................................ 2.85%
Marine Drilling Cos., Inc. ................... 2.78%
Frontier Airlines, Inc. ...................... 2.64%
Community Health Systems ..................... 2.41%
First Health Group Corp. ..................... 2.18%
as of October 31, 2000
COMPANY AND % OF TOTAL NET ASSETS
Physiometrix, Inc. ........................... 3.88%
Cytyc Corp. .................................. 3.52%
CIENA Corp. .................................. 3.51%
Cadence Design Systems, Inc. ................. 3.43%
Cell Therapeutics, Inc. ...................... 2.98%
Novoste Corp. ................................ 2.81%
Polycom, Inc. ................................ 2.65%
Biomet, Inc. ................................. 2.41%
DaVita, Inc. ................................. 2.34%
Biosource International, Inc. ................ 2.22%
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<TABLE>
<CAPTION>
ALLEGHANY/ BLAIRLOGIE ALLEGHANY/BLAIRLOGIE
INTERNATIONAL DEVELOPED FUND EMERGING MARKETS FUND
CLASS N CLASS I CLASS N CLASS I
TOTAL RETURNS:
<S> <C> <C> <C> <C>
One Year ................... (6.58)% (6.28)% (8.25)% (8.18)%
Three Year
Average Annual .......... 7.50%(b) 7.86%(b) (4.23)%(c) (4.01)%(c)
Five Year
Average Annual .......... 7.18%(b) 7.50%(b) (2.50)%(c) (2.28)%(c)
Average Annual
Since Inception ......... 7.69%(b) 8.17%(b) (7.66)%(c) 1.32%(c)
Inception Date ............. 11/30/94(b) 06/08/93(b) 10/20/94(c) 06/01/93(c)
</TABLE>
TOP TEN HOLDINGS
as of October 31, 2000
COMPANY AND % OF TOTAL NET ASSETS
Nokia Oyj .................................... 4.63%
Vodafone AirTouch Plc ........................ 2.83%
Sweden OPALS ................................. 2.79%
Nippon Telegraph & Telephone Corp. ........... 1.91%
Deutsche Telekom AG .......................... 1.84%
Telefonica SA ................................ 1.60%
Fanuc, Ltd. .................................. 1.58%
Matsushita Electric Industrial Co., Ltd. ..... 1.58%
Bank of Tokyo-Mitsubishi, Ltd. ............... 1.55%
Toyota Motor Corp. ........................... 1.54%
as of October 31, 2000
COMPANY AND % OF TOTAL NET ASSETS
Telefonos de Mexico SA, SP ADR ............... 3.02%
Samsung Electronics .......................... 2.81%
China Mobile (Honk Kong) Ltd. ................ 2.68%
Taiwan Fund, Inc. ............................ 2.58%
Telecomunicacoes Brasileiras SA,
Pfd Block, SP ADR ......................... 2.57%
OAO Lukoil Holding, SP ADR ................... 2.14%
Taiwan Semiconductor Manufacturing Co., Ltd. . 2.13%
MSCI Taiwan OPALS ............................ 2.08%
Turkiye Is Bankasi, Class C .................. 1.90%
Petroleo Brasleiro SA ........................ 1.83%
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(a) Prior to December 7, 1998, the inception date and performance figures
reflected are those of a predecessor fund, Veredus Growth Fund.
(b) Prior to May 1, 1999, the inception date and performance figures reflected
are those of a predecessor fund, PIMCO International Developed Fund.
(c) Prior to May 1, 1999, the inception date and performance figures reflected
are those of a predecessor fund, PIMCO Emerging Markets Fund.
3
<PAGE>
ALLEGHANY FUNDS
---------------------
PERFORMANCE FOR THE YEAR ENDED OCTOBER 31, 2000
SUMMARY INFORMATION - CONTINUED
--------------------------------------------------------------------------------
ALLEGHANY/MONTAG & CALDWELL ALLEGHANY/CHICAGO TRUST
BALANCED FUND BALANCED FUND
CLASS N CLASS I
TOTAL RETURNS:
One Year .............. 2.05% 2.31% 14.82%
Three Year
Average Annual ..... 11.23% N/A 16.85%
Five Year
Average Annual ..... 15.53% N/A 17.57%
Average Annual
Since Inception .... 16.88% 5.05% 17.40%
Inception Date ........ 11/02/94 12/31/98 09/21/95
TOP TEN HOLDINGS
as of October 31, 2000
COMPANY AND % OF TOTAL NET ASSETS
Coca-Cola Co. ................................ 4.13%
Pfizer, Inc. ................................. 3.52%
Electronic Data Systems Corp. ................ 3.29%
Citigroup, Inc. .............................. 3.12%
Johnson & Johnson ............................ 3.11%
McDonald's Corp. ............................. 2.64%
Gillette Co. ................................. 2.61%
U.S. Treasury Bond, 8.125%, 08/15/19 ......... 2.56%
Bristol-Myers Squibb Co. ..................... 2.47%
Hewlett-Packard Co. .......................... 2.38%
as of October 31, 2000
COMPANY AND % OF TOTAL NET ASSETS
Sysco Corp. .................................. 3.25%
EMC Corp. .................................... 2.91%
AES Corp. .................................... 2.36%
Federal Home Loan Mortgage Corp. ............. 2.35%
American International Group, Inc. ........... 2.29%
Walgreen Co. ................................. 2.27%
Harley-Davidson, Inc. ........................ 2.27%
Cardinal Health, Inc. ........................ 2.21%
Nokia Corp., SP ADR .......................... 2.21%
Intel Corp. .................................. 2.07%
--------------------------------------------------------------------------------
ALLEGHANY/CHICAGO TRUST
BOND FUND
CLASS N CLASS I
TOTAL RETURNS:
One Year ................ 6.98% N/A
Three Year
Average Annual ....... 5.18% N/A
Five Year
Average Annual ....... 6.02% N/A
Average Annual
Since Inception ...... 5.96% N/A
Inception Date .......... 12/13/93 07/31/00
TOP TEN HOLDINGS
as of October 31, 2000
COMPANY AND % OF TOTAL NET ASSETS
Government National Mortgage Association
7.000%, 09/15/28, Pool #458926 ............ 3.14%
Federal National Mortgage Association
7.500%, 02/01/30, Pool #529028 ............ 2.74%
Federal Home Loan Mortgage Corporation
8.000%, 02/01/30, Pool #C00922 ............ 2.61%
U.S. Treasury Bond 6.250%, 08/15/2023 ........ 2.47%
U.S. Treasury Bond 6.000%, 02/15/2026 ........ 2.18%
Waste Management, Inc. Subordinated Notes
4.000%, 02/01/2002 ........................ 2.13%
Ford Motor Credit Co., Inc.,
7.500%, 03/15/2005 ........................ 1.95%
Federal Home Loan Mortgage Corporation
7.500%, 11/01/29, Gold Pool #C32468 ....... 1.84%
U.S. Treasury Bond 7.125%, 02/15/2023 ........ 1.84%
Federal Home Loan Bank
6.500%,11/15/06, Series PX02 .............. 1.74%
4
<PAGE>
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ALLEGHANY/CHICAGO TRUST
MUNICIPAL BOND FUND
TOTAL RETURNS:
One Year ............... 7.30%
Three Year
Average Annual ...... 3.82%
Five Year
Average Annual ...... 4.03%
Average Annual
Since Inception ..... 3.96%
Inception Date ......... 12/13/93
TOP TEN HOLDINGS
as of October 31, 2000
COMPANY AND % OF TOTAL NET ASSETS
District of Columbia, Smithsonian Institute
Series A, 5.375%, 11/01/2015 .............. 3.42%
Cartersville Developed Authority,
Water & Wastewater Facilities Revenue
Series A, 7.375%, 05/01/2009 .............. 3.05%
Indianapolis Public Improvement Revenue,
Series B, 6.000% 01/10/20 ................. 2.83%
Chicago Public Building
Commerce Building Revenue
5.750%, 12/01/2018 ........................ 2.78%
Texas Municipal Power Agency Revenue,
5.500%, 09/01/10, Series E ................ 2.78%
Omaha Public Power District Electric Revenue,
5.400%, 02/01/2008, Series C .............. 2.76%
Grand Forks Refunding and Improvement,
5.000%, 12/01/2004, Series A .............. 2.74%
Evanston, G.O., Prerefunded 12/01/02,
6.100%, 12/01/09 .......................... 2.73%
Phoenix Civic Improvement Corp., Water
System Revenue, Junior Lien
6.000%, 07/01/02 .......................... 2.71%
Pennsylvania Intergovernmental Cooperative
Authority, Special Tax Revenue, City of
Philadelphia Funding Program,
6.000%, 06/15/02 .......................... 2.69%
5
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/MONTAG & CALDWELL GROWTH FUND
PORTFOLIO MANAGER COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - RONALD E. CANAKARIS]
Ronald E. Canakaris, CFA
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A Alleghany/Montag & Caldwell Growth Fund, Class N and Class I, produced
total returns of -0.96% and -0.70%, respectively. In comparison, the Fund's
benchmark, the Standard & Poor's 500 Index ("S&P(REGISTRATION MARK) 500
Index"), returned 6.08% while the Fund's peer group, as measured by the
Lipper Large-Cap Core Fund Index, returned 9.64%. To better reflect the
Fund's strategy, the peer group of the Fund is being revised from the
Lipper Large-Cap Growth Index to the Lipper Large-Cap Core Index.
Q How would you describe the investment
------
environment?
A The growth style of investing was the clear favorite during the first third
of the fiscal year. By March, however, investors became concerned about the
soaring U.S. economy and the need for the Federal Reserve Board (the "Fed")
to continue raising interest rates to slow it down. Rising interest rates,
concerns about inflation and rising energy prices and the possibility of a
"hard" rather than "soft" landing led investors to abandon high flying
technology stocks and turn to value investing. As a result, much of the
remainder of the period saw investors clamor for old economy stocks in such
defensive areas as energy, financial services and health care.
Q What factors affected your performance?
------
A When compared with the S&P(REGISTRATION MARK) 500 Index, our portfolio
remains underweighted in technology, yet our portfolio suffered from the
severe pressure on selected issues in this sector. Following our trimming
of Hewlett-Packard Co. (3.6% of net assets) to an average position, the
stock declined on news regarding a proposed merger (since called off) with
PricewaterhouseCoopers consulting division and concerns of weak demand
currently affecting others in the industry. Tellabs, Inc. (1.6%) fell
victim to the concerns about reduced spending by telecommunications
companies, and an announcement by Intel (1.2%) of an earnings shortfall due
to slowing demand in Europe caused us to trim this issue. Stock price
reaction has grown more volatile when negative news is released by a
company due to the high level of investor expectations resulting from many
years of strong market gains.
Q What stocks looked attractive as the
------
period came to a close?
A Price weakness in Electronic Data Systems Corp. (5.0%), which we believe
was an overreaction to a temporary delay in their accelerating revenue
growth, provided a buying opportunity during the latter part of the fiscal
year. The active pipeline of new proposals for Electronic Data Systems'
business, as well as its record backlog supports the expectations for an
acceleration of growth in the period ahead. Concerns regarding slowing
consumer demand led to attractive valuations and led us to re-establish
positions in Walt Disney Co. (2.5%) and Procter & Gamble Co. (3.3%), two
high-quality consumer companies whose earnings momentum has now become
visible given management's strategies to improve results. On the other
hand, the consumer sectors remained weak as the depressed euro continued
its slide, affecting the earnings outlook for many multinational companies.
During the period, we trimmed our holdings in Gillette (4.2%) and
McDonald's Corp. (4.0%) based upon the outlook of a more moderate level of
earnings momentum.
Q What is your outlook?
------
A Although the fiscal year was difficult, we plan to remain true to our
investment process of identifying attractively priced high-quality
companies with visible earnings momentum. We feel confident about the
prospects for the companies in our portfolio and plan to continue our focus
on some of the best investments for our shareholders.
[BEGIN SIDEBAR]
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
OTHER COMMON STOCKS 18%
PHARMACEUTICALS 15%
FINANCE 14%
TECHNOLOGY 14%
FOOD AND BEVERAGE 10%
CONSUMER CYCLICALS 9%
CASH AND OTHER NET ASSETS 6%
RETAIL 5%
MEDICAL SUPPLIES 5%
HEALTH CARE SERVICES 4%
ALLEGHANY/MONTAG & CALDWELL
GROWTH FUND--CLASS N
GROWTH OF $10,000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
ALLEGHANY/MONTAG &
S&P(REGISTRATION LIPPER LARGE-CAP LIPPER LARGE-CAP CALDWELL GROWTH FUND
MARK) 500 INDEX GROWTH FUND INDEX CORE FUND INDEX CLASS N SHARES
11/94 10000 10000 10000 10000
10/95 12641 12691 12226 13187
10/96 15685 15207 14857 17131
10/97 20720 19441 19177 22925
10/98 25277 23176 22228 27027
10/99 31761 31787 27824 34958
10/00 33692 34597 30414 34623
THIS CHART COMPARES A $10,000 INVESTMENT MADE IN CLASS N SHARES OF THE FUND
ON ITS INCEPTION DATE TO $10,000 INVESTMENTS MADE IN THE INDICES
(S&P(REGISTRATION MARK) 500 INDEX, LIPPER LARGE-CAP GROWTH INDEX AND LIPPER
LARGE-CAP CORE FUND INDEX) ON THAT DATE. ALL DIVIDENDS AND CAPITAL GAINS ARE
REINVESTED. FURTHER INFORMATION RELATING TO THE FUND'S PERFORMANCE, INCLUDING
EXPENSE REIMBURSEMENTS, IS CONTAINED IN THE PROSPECTUS AND ELSEWHERE IN THIS
REPORT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. INDICES ARE
UNMANAGED AND INVESTORS CANNOT INVEST IN THEM.
6
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST GROWTH & INCOME FUND
PORTFOLIO MANAGERS COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - BERNARD F. MYSZKOWSKI]
[PHOTO OMITTED - RICHARD S. DRAKE]
Bernard F. Myszkowski, CFA Richard S. Drake, CFA
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A Alleghany/Chicago Trust Growth & Income Fund significantly outperformed its
benchmark and peer group, producing a total return of 19.62% (Class N
shares). In comparison, the benchmark S&P(REGISTRATION MARK) 500 Index
returned 6.08%, while its peer group, the Lipper Large-Cap Growth Fund
Index, returned 8.84%.
Q What factors affected your performance?
------
A As the fiscal year drew to a close, the environment was characterized by
stable short-term interest rates, a slowdown in the U.S. economy and the
shift by investors to more defensive stocks. Indeed, although our focus is
bottom-up stock selection, the Fund's top performers shifted from
technology stocks, that did so well early in the period, to non-bank
financial services companies. Among the best performers were Associates
First Capital Corp. (1.5% of net assets), which is being acquired by
Citigroup and AFLAC, Inc. (2.5%), which specializes in supplemental health
and life insurance. Our best performer for the year proved to be Cardinal
Health, Inc. (4.0%), a leading drug and medical/surgical supply
distribution company, which was up 118% this year.
Another excellent performer was AES Corp. (3.6%), an acquisition-minded
electric utility that has been able to achieve economies of scale.
Utilities also benefit from moderating interest rates as well as a
potential shortage of power this winter. Underperforming stocks were
bellwether technology names such as Dell Computer Corp. (2.8%) and Intel
Corp. (3.2%), which are facing a slowdown in the demand for personal
computers. Of course, Dell and Intel have produced phenomenal returns for
investors over the past several years.
Q What stocks looked attractive as the
------
period came to a close?
A Late in the period, we added shares of Home Depot, Inc. (1.5%), a stock
that had been beaten up in previous months because of concerns about the
retail sector. The company, which is the world's largest home improvement
retailer, recently added high-end remodeling stores that we believe will be
very successful. Stocks that were dropped from the portfolio include
Computer Associates International, Inc. which is very dependent on the
shrinking market for large mainframe computers, Proctor & Gamble Co., which
was dropped because of concerns about long-term growth and Carnival Corp.,
which operates Carnival Cruise Lines, an industry facing an oversupply of
cruise ships. October was a very turbulent month for technology stocks,
with the NASDAQ falling about 8%. However, a number of technology stocks in
the portfolio, including Microsoft Corp. (2.7%) and Electronic Data Systems
Corp. (3.1%), produced good performance to end the fiscal year.
Q What is your outlook?
------
A As we approach 2001, we plan to continue to search for high-quality
companies with strong revenue and earnings growth that make sense in all
kinds of markets. We believe that our bottom-up approach and analysis of
individual stocks across a wide array of sectors should provide value to
shareholders.
[BEGIN SIDEBAR]
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
OTHER COMMON STOCKS 25%
TECHNOLOGY 23%
FINANCE 17%
CONSUMER DURABLES 7%
TELECOMMUNICATIONS EQUIPMENT 7%
RETAIL 7%
CASH AND OTHER NET ASSETS 6%
FOOD AND BEVERAGE 4%
HEALTH CARE SERVICES 4%
ALLEGHANY/CHICAGO TRUST
GROWTH & INCOME FUND--CLASS N
GROWTH OF $10,000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
S&P(REGISTRATION LIPPER LARGE-CAP ALLEGHANY/CHICAGO TRUST
MARK) 500 INDEX GROWTH INDEX GROWTH & INCOME FUND
DEC-93 10000 10000 10000
OCT-94 10360 10535 10173
OCT-95 13096 13371 13088
OCT-96 16250 16021 16619
OCT-97 21466 20482 20801
OCT-98 26185 24417 26090
OCT-99 32902 33489 33321
OCT-00 34902 36449 39858
THIS CHART COMPARES A $10,000 INVESTMENT MADE IN CLASS N SHARES OF THE FUND ON
ITS INCEPTION DATE TO $10,000 INVESTMENTS MADE IN THE INDICES (S&P(REGISTRATION
MARK) 500 INDEX AND LIPPER LARGE-CAP GROWTH FUND INDEX) ON THAT DATE. ALL
DIVIDENDS AND CAPITAL GAINS ARE REINVESTED. FURTHER INFORMATION RELATING TO THE
FUND'S PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IS CONTAINED IN THE
PROSPECTUS AND ELSEWHERE IN THIS REPORT. PAST PERFORMANCE IS NOT INDICATIVE OF
FUTURE PERFORMANCE. INDICES ARE UNMANAGED AND INVESTORS CANNOT INVEST IN THEM.
[END SIDEBAR]
7
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST TALON FUND
PORTFOLIO MANAGERS COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - TERRY D. DIAMOND]
[PHOTO OMITTED - THYRA E. ZERHUSEN]
Terry D. Diamond Thyra E. Zerhusen
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A Alleghany/Chicago Trust Talon Fund produced a total return of 39.07%,
outperforming its benchmark, the S&P(REGISTRATION MARK) 400 MidCap Index,
which returned 31.65%. Meanwhile, the Lipper Mid-Cap Value Index returned
18.73%. Indeed, the mid-cap segment of the market was among the top
performing areas during the fiscal year. In comparison, the
S&P(REGISTRATION MARK) 500 Index, a measure of large-cap stocks, rose just
6.08%.
Q What factors affected your performance?
------
A The primary reason for the Fund's superior performance was its rigorous
attention to bottom-up stock selection in a variety of industries including
capital goods and consumer cyclicals. As to technology, we maintained
roughly the same percentage of holdings versus our benchmark. Our
technology investments were out-of-favor or misunderstood securities
selling at highly attractive multiples, like Unisys Corp. (5.1% of net
assets) and Mentor Graphics Corp. (3.0%). While these stocks may have
hindered performance earlier in the year, the market's shift to value
helped these holdings considerably.
Q What stocks looked particularly
------
attractive as the fiscal year came to a close?
A American Power Conversion Corp. (2.7%) is an excellent example of an
attractive buying opportunity. The company, which has a leading market
share in products that protect computers and data networks from the
damaging effects of electric power failures, is selling at a price-earnings
multiple that is half of its expected long-term growth rate. Other
attractive holdings included CNF Transportation, Inc. (4.8%), IMS Health,
Inc. (3.0%), Mattel, Inc. (4.5%) and Southwest Airlines Co. (3.1%).
Q How would you describe the investment
------
environment?
A The market evolved from one that rewards indexing and momentum style
investing to one that favors stock picking based on valuation and
fundamental analysis. The recent volatility in the market resulting from
disappointing earnings reports, tax loss selling and fear of a slowing
economy has created some very attractive buying opportunities.
Q What is your outlook?
------
A The announcements of revenue and earnings shortfalls by several large
companies and subsequent severe stock declines have encouraged investors to
be more conscious of risk-reward relationships. In our opinion, this has
resulted in an increased focus on both value and mid-cap sector stocks. The
Fund is at the confluence of these two emerging trends. The portfolio
currently has an average P/E multiple of just 14 times earnings, but an
earnings growth rate of greater than 16% which positions the Fund well for
the future. At the present time there are several stocks in the Fund that,
despite very good long term growth characteristics, are selling at
discounts of up to 50% of their growth rates. This gives us confidence that
the Fund is an attractive investment at this time.
[BEGIN SIDEBAR]
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
OTHER COMMON STOCKS 17%
PRINTING AND PUBLISHING 13%
TECHNOLOGY 12%
BUSINESS SERVICES 11%
TELECOMMUNICATIONS EQUIPMENT 9%
ELECTRONICS 9%
HEALTH CARE SERVICES 8%
TRANSPORTATION 8%
RETAIL 7%
CASH AND OTHER NET ASSETS 6%
ALLEGHANY/CHICAGO TRUST
TALON FUND
GROWTH OF $10,000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
S&P(REGISTRATION ALLEGHANY/CHICAGO LIPPER MID-CAP
MARK) 400 MID-CAP INDEX TRUST TALON FUND VALUE FUND
09-94 10000 10000 10000
10-94 9921 10250 9968
10-95 12025 12189 11451
10-96 14111 15420 13733
10-97 18721 20582 17579
10-98 19974 18413 16281
10-99 24180 18840 17782
10-00 31833 26201 21113
THIS CHART COMPARES A $10,000 INVESTMENT MADE IN THE FUND ON ITS INCEPTION DATE
TO $10,000 INVESTMENTS MADE IN THE INDICES (S&P(REGISTRATION MARK) 400 MID-CAP
INDEX AND LIPPER MID-CAP VALUE INDEX) ON THAT DATE. ALL DIVIDENDS AND CAPITAL
GAINS ARE REINVESTED. FURTHER INFORMATION RELATING TO THE FUND'S PERFORMANCE,
INCLUDING EXPENSE REIMBURSEMENTS, IS CONTAINED IN THE PROSPECTUS AND ELSEWHERE
IN THIS REPORT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE.
INDICES ARE UNMANAGED AND INVESTORS CANNOT INVEST IN THEM.
[END SIDEBAR]
8
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST SMALL CAP VALUE FUND
PORTFOLIO MANAGER COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - PATRICIA A. FALKOWSKI]
Patricia A. Falkowski
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A Alleghany/Chicago Trust Small Cap Value Fund produced a total return of
18.88%, outperforming its unmanaged benchmark, the Russell 2000 Index,
which returned 17.41%. Meanwhile, the Lipper Small-Cap Value Index, a
measure of its peer group, returned 19.04%. Indeed, the small-cap value
segment of the market was among the top performing areas during the
12-month period. In comparison, the S&P(REGISTRATION MARK) 500 Index, a
measure of large-cap stocks, rose just 6.08%.
Q How would you describe the investment
------
environment?
A During the first half of the fiscal year, value was out of favor as
technology and biotechnology stocks surged until early March when these
high-flying sectors collapsed and old economy industries such as energy and
financial services came back into vogue. By mid-summer, the stock market as
a whole weakened substantially, allowing defensive stocks with low
valuations and good dividend yields to shine. Some sectors, technology in
particular, were still priced to perfection. But earnings became less
assured and some high profile technology companies pre-announced slower
earnings outlooks causing confidence to erode quickly. In October, the
market ran for cover, hitting such sectors as science & technology, gold
and emerging markets. Suddenly, the prices of stocks mattered. The
portfolio was well positioned to take advantage of this shift in sentiment.
Q Where did you see the best performance?
------
A For much of the first half of the fiscal year, the portfolio saw strong
performance in energy and health care stocks. The surging price of oil and
natural gas benefited companies engaged in exploration and production. In
health care, the hospital industry, as well as its suppliers, began to
benefit from more generous government reimbursement, as investors reasoned
that both major presidential candidates were campaigning to strengthen
Medicare. By the second half of the fiscal year, another area of strength
was financial services, a beneficiary of the easing interest-rate
environment late in the period. In addition, a number of companies in the
portfolio were involved in mergers, acquisitions and going-private
transactions that generated significant gains for the portfolio. On the
negative side, some of the basic materials companies continued to suffer
from overcapacity and margin pressure as energy prices soared.
Q What stocks looked particularly
------
attractive as the fiscal year came to a close?
A Some of our best stocks were among our "cheapest," namely Republic Security
Financial Corp. (2.8% of net assets), which just announced that Wachovia
had made a bid for it, Applebee's International, Inc. (1.8%), a much
maligned consumer cyclical that we bought at a depressed price, Newport
News Shipbuilding, Inc. (2.1%), a play on the defense industry which is
inherently anti-cylical and Carter -Wallace, Inc. (3.4%), a personal care
company which announced that they had hired an investment banking firm to
evaluate strategic options.
Q What is your outlook?
------
A Investors are increasingly focused on high-quality companies as corporate
profits decelerate and valuations of lower-quality companies continue to
come down. This is a good development for quality-minded investors such as
us. We believe that our investments in low-priced stocks will continue to
provide healthy returns as investors turn away from higher risk, highly
valued growth stocks.
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
OTHER COMMON STOCKS 24%
BANKS 18%
INDUSTRIAL 10%
OIL AND GAS EXTRACTION 9%
REAL ESTATE INVESTMENT TRUST 9%
RETAIL 8%
UTILITIES 6%
PHARMACEUTICALS 6%
CASH AND OTHER NET ASSETS 5%
SAVINGS AND LOANS 5%
ALLEGHANY/CHICAGO TRUST
SMALL CAP VALUE FUND
GROWTH OF $10,000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
ALLEGHANY/CHICAGO TRUST LIPPER SMALL
RUSSELL 2000 INDEX SMALL-CAP VALUE FUND CAP VALUE INDEX
11-98 10000 10000 10000
04-99 11517 9854 10499
10-99 11487 9193 10223
04-00 13637 10144 11271
10-00 13487 10929 12169
THIS CHART COMPARES A $10,000 INVESTMENT MADE IN THE FUND ON ITS INCEPTION DATE
TO $10,000 INVESTMENTS MADE IN THE INDICES (RUSSELL 2000 INDEX AND LIPPER
SMALL-CAP GROWTH INDEX) ON THAT DATE. ALL DIVIDENDS AND CAPITAL GAINS ARE
REINVESTED. FURTHER INFORMATION RELATING TO THE FUND'S PERFORMANCE, INCLUDING
EXPENSE REIMBURSEMENTS, IS CONTAINED IN THE PROSPECTUS AND ELSEWHERE IN THIS
REPORT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. INDICES ARE
UNMANAGED AND INVESTORS CANNOT INVEST IN THEM.
9
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/VEREDUS AGGRESSIVE GROWTH FUND
PORTFOLIO MANAGERS COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - B. ANTHONY WEBER]
[PHOTO OMITTED - CHARLES P. MCCURDY, JR.]
B. Anthony Weber Charles P. McCurdy, Jr.
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A Alleghany/Veredus Aggressive Growth Fund produced a total return of 53.35%,
significantly outperforming its benchmark, the Russell 2000 Index, which
returned 17.41%, and the Lipper Small-Cap Growth Index, a measure of its
peer group, which returned 37.48%.
Q How would you describe the investment
------
environment?
A The U.S. economy has clearly slowed, thanks in part to the efforts of the
Fed, which raised short-term interest rates a total of 1.75 percentage
points since mid-1999. A slowing economy would normally be a good sign for
stocks, because inflation expectations would be reduced along with
moderating interest rates. However, corporate profits have also been
revised downward. Third quarter earnings disappointments from high profile
technology companies sparked this recent correction, although companies in
many sectors of the economy have reported similar shortfalls. Generally
speaking, such news is not a one-quarter phenomenon, and we would expect to
see more disappointments in the fourth quarter.
Q What factors affected the Fund's
------
performance?
A Most of the returns were garnered in the first half of the fiscal year,
driven by the Fund's technology holdings during that part of the year. We
cautioned in our semi-annual letter that favorable conditions for
technology stocks might not continue, and that turned out to be the case.
Indeed, we have seen a large number of companies (none of which are part of
the Fund's portfolio), such as Apple Computer, Inc., Dell Computer Corp.,
and Intel Corp. among others, pre-announce lower than expected results for
the third quarter. The large-cap stocks are now experiencing what we in the
small-cap sector have known for years: if you miss your numbers, you pay
the price. Fortunately, there were some strong performers in other sectors
such as health care, particularly biotechnology stocks, which are
benefiting somewhat from the sell-off in technology. In addition, the
surging price of oil has helped the energy sector, where demand is still
very strong while production in the U.S. is near historic lows.
Q How has the portfolio shifted during
------
the fiscal year?
A We have reduced our exposure to technology and telecommunications to less
than 7% of the portfolio. In contrast, our emphasis has been on health care
and energy, as these two sectors now account for 37% and 17%, respectively.
In October, six of the Fund's top ten performers were health care stocks,
which operate in one of the few industries where pricing power actually
exists. Despite the recent sell-off in technology, we are not compelled to
do much buying within the technology sector.
Q What is your outlook?
------
A It has always been our experience that the groups or asset classes that
outperform during a correction or bear market will lead to the upside once
the market gets back on track. We feel that health care and biotechnology
should continue to provide this leadership as well as energy service and
drilling companies. In addition, the Russell 2000 Index has outperformed
the S&P(REGISTRATION MARK) 500 Index during the fiscal year ended October
31, 2000. Although the past several months have been gloomy, we are still
quite positive on the small-cap growth sector over the long term.
[BEGIN SIDEBAR]
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
HEALTH CARE SERVICES 25%
OIL AND GAS EXTRACTION 17%
OTHER COMMON STOCKS 15%
RETAIL 13%
CASH AND OTHER NET ASSETS 8%
MEDICAL PRODUCTS AND SUPPLIES 7%
COMPUTER SOFTWARE 4%
AIRLINES 4%
RESTAURANTS 4%
INSURANCE 3%
ALLEGHANY/VEREDUS
AGGRESSIVE GROWTH FUND
GROWTH OF $10,000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
ALLEGHANY/VEREDUS LIPPER SMALL-CAP
RUSSELL 2000 INDEX AGGRESSIVE GROWTH FUND GROWTH INDEX
06-98 10000 10000 10000
10-98 8311 8620 7915
04-99 9571 12710 9466
10-99 9547 16630 11215
04-00 11334 26511 15682
10-00 11209 25502 15418
THIS CHART COMPARES A $10,000 INVESTMENT MADE IN THE FUND ON ITS INCEPTION DATE
TO $10,000 INVESTMENTS MADE IN THE INDICES (RUSSELL 2000 INDEX AND LIPPER
SMALL-CAP GROWTH INDEX) ON THAT DATE. ALL DIVIDENDS AND CAPITAL GAINS ARE
REINVESTED. FURTHER INFORMATION RELATING TO THE FUND'S PERFORMANCE, INCLUDING
EXPENSE REIMBURSEMENTS, IS CONTAINED IN THE PROSPECTUS AND ELSEWHERE IN THIS
REPORT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. INDICES ARE
UNMANAGED AND INVESTORS CANNOT INVEST IN THEM.
[END SIDEBAR]
10
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/VEREDUS SCITECH FUND
PORTFOLIO MANAGERS COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - B. ANTHONY WEBER]
[PHOTO OMITTED - CHARLES P. MCCURDY, JR.]
B. Anthony Weber Charles P. McCurdy, Jr.
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A Between its date of inception on June 30, 2000 and the end of the fiscal
year, Alleghany/Veredus SciTech Fund returned -10.61% versus -11.79% for
the Fund's benchmark, the Pacific Stock Exchange ("PSE") Technology Index.
Q What is the mission of Alleghany/Veredus SciTech Fund?
A The Fund concentrates primarily on companies with novel technologies,
including Internet, wireless communications and semiconductor equipment as
well as health care, biotechnology, medical devices and pharmaceuticals. By
building internal models and coming up with our own earnings expectations,
we seek to identify companies where we believe that Wall Street earnings
estimates are understated. Companies that can translate their superior
technology into commercial success will generate the strongest earnings,
thus driving stock prices higher.
Q How would you describe the investment
------
environment?
A Key concerns for technology stocks since the market peak in March include
continued compression of valuations in the Internet sector, slowing growth
in personal computers, extremely high expectations for growth in wireless
services and mounting concerns with regard to telecommunications spending.
The freewheeling days of bringing questionable IPOs to market and watching
stocks triple on the first day of trading appear to be over. We find it
interesting that only after the massive declines of many stocks in the
Internet space are investors questioning the viability of many `new
economy' business plans. As bullish as we have been on the semiconductor
sector over the last few years, we recognize that business conditions go to
extremes, and we are currently in the midst of an `inventory correction' in
the semiconductor industry. Semiconductors are growth cyclicals, and as
such, expectations and valuations tend to get stretched, only to snap back
to their senses. We welcome the return of more rational thinking in
technology.
Q What factors affected your performance?
------
A While managing the technology side of our portfolio has been virtual
hand-to-hand combat, our health care holdings have performed relatively
well. While biotechnology saw a blow-off move in the spring that was fueled
by stocks in the genomics area, there are quite a few investment
opportunities in health care and biotechnology where commercial realization
is not quite as far out in the future as it is in gene mapping. However,
investors shifted their attention away from technology and toward more
defensive areas such as energy and financial services.
Q What is your outlook?
------
A Long term, we are extremely bullish on the prospects for technology,
biotechnology and healthcare stocks. Proliferation of wireless
communications and data services, burgeoning data and video traffic over
networks, and a broader realization of the Internet's true commercial
potential are only a few of the drivers which have drawn our focus as
technology investors. But again, a more realistic view of expectations and
the timing of our entry points in this treacherous technology environment
are paramount in the short run. On the health care side, aging populations,
the demand for lower cost and more effective treatment alternatives and
technological advances should create many opportunities over the
foreseeable future.
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
U.S. TREASURY BILL 37%
MEDICAL PRODUCTS AND SUPPLIES 17%
CASH AND OTHER NET ASSETS 15%
COMPUTER SOFTWARE 9%
TELECOMMUNICATIONS 9%
OTHER COMMON STOCKS 8%
PHARMACEUTICALS 5%
ALLEGHANY/VEREDUS
SCITECH FUND
GROWTH OF $10,000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
PACIFIC STOCK EXCHANGE ALLEGHANY/VEREDUS
TECHNOLOGY INDEX SCITECH FUND
06-00 10000 10000
10-00 8821 8939
THIS CHART COMPARES A $10,000 INVESTMENT MADE IN THE FUND ON ITS INCEPTION DATE
TO A $10,000 INVESTMENT MADE IN THE INDEX (PSETECHNOLOGY INDEX) ON THAT DATE.
ALL DIVIDENDS AND CAPITAL GAINS ARE REINVESTED. FURTHER INFORMATION RELATING TO
THE FUND'S PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IS CONTAINED IN THE
PROSPECTUS AND ELSEWHERE IN THIS REPORT. PAST PERFORMANCE IS NOT INDICATIVE OF
FUTURE PERFORMANCE. INDICES ARE UNMANAGED AND INVESTORS CANNOT INVEST IN THEM.
[END SIDEBAR]
11
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/BLAIRLOGIE INTERNATIONAL DEVELOPED FUND
PORTFOLIO MANAGER COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - JAMES G. S. SMITH]
James G. S. Smith
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A Alleghany/Blairlogie International Fund, Class N and Class I, produced
total returns of -6.58% and -6.28%, respectively. In comparison, the MSCI
EAFE Index, the Fund's benchmark, returned -2.66%. The negative returns
were primarily caused by a weak euro and rising oil prices.
Q Why has the weakness in the euro
------
continued?
A The fall of the euro continued a trend that has been in place for some
time, although the rate of decline seems to have been checked by recent
intervention from the world's central banks. There is a combination of
reasons for the euro's weakness. First, the U.S. economy remains stronger
than Europe's in terms of productivity, deregulation, capital flows and
overall economic performance. Second, there is political ambivalence about
the euro. Denmark decisively voted against joining the euro, which
reinforced sentiment in Britain against joining the currency. Polls in
Germany indicate a majority would prefer to return to the deutsche mark and
there is not the groundswell of public confidence in the currency to
support it. Europe's performance has also been plagued by a sell-off in
technology and telecommunications stocks, which had previously buoyed the
market.
Q What areas of the developed world
------
looked attractive as the fiscal year came to a close?
A We reduced our position in Switzerland and invested the proceeds in the
United Kingdom. In Finland, we added to our position in Nokia Oyj, a stock
that appeared to be oversold.
On the other hand, Japan, Australia and New Zealand remained unattractive
as continuing weakness in their currencies against the U.S. dollar weakened
their returns. In Japan, the market has seen heavy selling by foreign
investors as doubts about the strength and durability of the nascent
economic recovery have intensified.
Q How does Germany's new tax law
------
promote investment in that country?
A Chancellor Gerhard Schroeder cut business and personal tax rates, removing
a barrier to corporate mergers and boosting momentum for further economic
restructuring. Effective in 2002, the 50% capital gains tax that was levied
on companies selling shares in other companies will be removed. This will
encourage mergers, acquisitions and other transactions, making Germany a
more attractive place for investment. In January 2001, the federal
corporate income tax rate will fall from 40% to 25%, creating a lower rate
than those in France, Italy, Japan and the U.S. The cut will reduce tax
bills for U.S. companies doing business in Germany, making it more likely
for them to reinvest the funds locally. For individuals, the top personal
income tax will fall from 51% currently to 42% by 2005. The new tax rates
do not solve all of Germany's economic problems, most notably its high
labor costs, but it is certainly a big step in the right direction.
[BEGIN SIDEBAR]
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
FINANCE 25%
OTHER COMMON STOCKS 22%
INDUSTRIAL 15%
TELECOMMUNICATIONS 16%
OIL AND GAS EXTRACTION 5%
FOOD AND BEVERAGE 5%
AUTOMOBILES 4%
UTILITIES 4%
FOREIGN INDEX SECURITY 3%
PREFERRED STOCKS 1%
ALLEGHANY/BLAIRLOGIE
INTERNATIONAL DEVELOPED FUND--CLASS I
GROWTH OF $1,000,000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
ALLEGHANY/BLAIRLOGIE
INTERNATIONAL DEVELOPED LIPPER INTERNATIONAL
FUND CLASS I SHARES MSCI EAFE INDEX FUND INDEX
06-93 1,000,000 1,000,000 1,000,000
10-93 1,074,050 1,082,040 1,127,420
10-94 1,199,760 1,191,260 1,257,130
10-95 1,245,270 1,186,830 1,251,260
10-96 1,373,450 1,311,100 1,409,240
10-97 1,424,990 1,371,800 1,597,600
10-98 1,628,810 1,504,120 1,671,820
10-99 1,907,650 1,850,570 2,057,130
10-00 1,787,880 1,801,340 2,128,100
THIS CHART COMPARES A $1,000,000 INVESTMENT MADE IN CLASS I SHARES OF THE FUND
ON ITS INCEPTION DATE TO $1,000,000 INVESTMENTS MADE IN THE INDICES (MSCI EAFE
INDEX AND LIPPER INTERNATIONAL FUND INDEX) ON THAT DATE. ALL DIVIDENDS AND
CAPITAL GAINS ARE REINVESTED. FURTHER INFORMATION RELATING TO THE FUND'S
PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IS CONTAINED IN THE PROSPECTUS
AND ELSEWHERE IN THIS REPORT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE
PERFORMANCE. INDICES ARE UNMANAGED AND INVESTORS CANNOT INVEST IN THEM.
[END SIDEBAR]
12
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/BLAIRLOGIE EMERGING MARKETS FUND
PORTFOLIO MANAGER COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - JAMES G. S. SMITH]
James G. S. Smith
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A Alleghany/Blairlogie Emerging Markets Fund, Class N and Class I, produced
total returns of -8.25% and -8.18%, respectively, during the fiscal year.
In comparison, the MSCI Emerging Market Free ("EMF") Index, the Fund's
benchmark, returned -8.81%. The period was characterized by bearish
sentiment during much of the period, particularly in Asia ex-Japan, which
suffered along with the global correction in telecommunications and
technology stocks.
Q What factors affected the Fund's
------
performance?
A Certainly a rising interest rate environment for much of the fiscal year
created a negative environment for emerging market stocks. These countries
are extremely sensitive to changes in global liquidity brought about
indirectly by the Fed, which raised short-term interest rates by 1.25
percentage points. Emerging market performance also correlates with the
NADAQ technology index in the U.S., which also had a difficult year. NASDAQ
stocks are perceived to carry a similar degree of risk as emerging market
equities.
Q What emerging market areas looked
------
attractive as the fiscal year came to a close?
A ASIA. During October, we increased our overweight position in Taiwan, an
area of the market that we believe was oversold following local political
uncertainty and a large sell-off of semiconductor stocks worldwide. LATIN
AMERICA. On the flip side, we decreased our position in Brazil to a neutral
weighting because the stock market values no longer seem compelling there
although Latin America generally benefited from rising energy prices.
Because of the recent slowdown in U.S. economic growth, we are cautious
regarding Mexico. Its economy is strong so perhaps a slight cooling in the
U.S. will not do much harm, but we prefer more clarity as to the softness
of the landing before committing more cash. EASTERN EUROPE. In Turkey,
there was investor concern regarding the speed and effectiveness of
government reforms, causing the market to sell off sharply. However, we are
encouraged that inflation has been reduced and privatization efforts are
proceeding smoothly. We remain strategically optimistic about the region
because of its convergence towards the European Unit ("EU"). Whether these
countries join the EU or not, the process of getting their economies in
line with the EU is economically beneficial. MIDDLE EAST. Despite the
recent Mideast turmoil, Israel's technology sector was relatively resilient
to the fall of NASDAQ despite the fact that many of its stocks are listed
there.
Q What is your outlook?
------
A Many investment managers, analysts and brokers question whether they should
fold their tents and give up completely on emerging markets. Such
widespread capitulation often heralds the time for long-term accumulation
of an asset class. In the meantime, emerging market valuations are
relatively modest by historical standards. The U.S. Fed has completed its
monetary tightening program, and has apparently been successful in slowing
the U.S. economy. The current interest rate environment should take some
pressure off more risky asset classes. In addition, U.S. investors may look
to emerging markets for growth opportunities as they realize that the
S&P(REGISTRATION MARK) 500 Index is not likely to produce 20% annual
returns in 2000. Blairlogie remains committed and we are beginning to see
increased inquiries from potential emerging market investors.
[BEGIN SIDEBAR]
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
OTHER COMMON STOCKS 22%
TELECOMMUNICATIONS 17%
FINANCE 13%
INDUSTRIAL 9%
PREFERRED STOCKS 9%
BASIC MATERIALS 8%
TECHNOLOGY 7%
CASH AND CASH EQUIVALENTS 7%
UTILITIES 6%
FOREIGN INDEX SECURITY 2%
ALLEGHANY/BLAIRLOGIE
EMERGING MARKETS FUND--CLASS I
GROWTH OF $1,000,000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
ALLEGHANY/BLAIRLOGIE EMERGING MSCI EMERGING MARKETS
MARKETS FUND CLASS I SHARES FREE INDEX
06-93 1,000,000 1,000,000
10-93 1,255,220 1,294,600
10-94 1,711,690 1,674,680
10-95 1,237,060 1,349,320
10-96 1,286,280 1,436,830
10-97 1,246,550 1,314,950
10-98 902,252 907,486
10-99 1,200,610 1,312,390
10-00 1,102,439 1,196,771
THIS CHART COMPARES A $1,000,000 INVESTMENT MADE IN CLASS I SHARES OF THE FUND
ON ITS INCEPTION DATE TO A $1,000,000 INVESTMENT MADE IN THE INDEX (MSCI
EMERGING MARKETS FREE INDEX) ON THAT DATE. ALL DIVIDENDS AND CAPITAL GAINS ARE
REINVESTED. FURTHER INFORMATION RELATING TO THE FUND'S PERFORMANCE, INCLUDING
EXPENSE REIMBURSEMENTS, IS CONTAINED IN THE PROSPECTUS AND ELSEWHERE IN THIS
REPORT. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE. INDICES ARE
UNMANAGED AND INVESTORS CANNOT INVEST IN THEM.
[END SIDEBAR]
13
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/MONTAG & CALDWELL BALANCED FUND
PORTFOLIO MANAGER COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - RONALD E. CANAKARIS]
Ronald E. Canakaris, CFA
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A Alleghany/Montag & Caldwell Balanced Fund, Class N and Class I, produced
total returns of 2.05% and 2.31%, respectively. In comparison, its
benchmark, a 60%/40% blend of the S&P(REGISTRATION MARK) 500 Index and
Lehman Brothers Government Credit Bond Index, returned 6.78% while the
Lipper Balanced Fund Index, a measure of its peer group, returned 7.88%.
Q How would you describe the investment
------
environment?
A The growth style of investing was the clear favorite during the first third
of the fiscal year. By March, however, investors became concerned about the
soaring U.S. economy and about the need for the Fed to continue raising
interest rates to slow it down. Rising interest rates, concerns about
inflation, rising energy prices and the possibility of a "hard" rather than
"soft" landing led investors to abandon high flying technology stocks and
turn to value investing. As a result, much of the remainder of the period
saw investors clamor for old economy stocks in such defensive areas as
energy, financial services and health care. Meanwhile, the bond market
performed well as the Fed was successful in slowing the U.S. economy,
calming fears of inflation and, ultimately, bringing long-term interest
rates down.
Q What factors affected the Fund's
------
performance?
A Although the fixed-income portion of the portfolio performed in line with
the benchmark, the equity portion underperformed. When compared with the
S&P(REGISTRATION MARK) 500 Index, our portfolio remains underweighted in
technology, yet our portfolio suffered from the severe pressure on selected
issues in this sector. Following our trimming of Hewlett-Packard (2.4% of
net assets) to an average position, the stock declined on news regarding a
proposed merger (since called off) with PricewaterhouseCoopers' consulting
division, and concerns of weak demand currently affecting others in the
industry. Tellabs (1.0%) fell victim to the concerns about reduced spending
by telecommunications companies, and an announcement by Intel (0.8%) of an
earnings shortfall due to slowing in Europe caused us to trim this issue.
Stock price reaction has grown more volatile when negative news is released
by a company due to the high level of investor expectations resulting from
many years of strong market gains.
Q What is your outlook?
------
A It is our belief that the Fed will remain vigilant in containing inflation
and will ultimately be successful in engineering a soft landing. Therefore,
we anticipate taking advantage of any near-term increases in yields to
extend the duration of the portfolio. On the equity side, we plan to remain
true to our investment process of identifying attractively priced
high-quality companies with visible earnings momentum. We feel confident
about the prospects for the companies in our portfolio and plan to continue
our focus on some of the best investments for our shareholders.
[BEGIN SIDEBAR]
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMMON STOCKS 62%
U.S GOVERNMENT AND AGENY OBLIGATIONS 17%
CORPORATE NOTES AND BONDS 13%
CASH AND OTHER NET ASSETS 5%
ASSET-BACKED SECURITIES 3%
ALLEGHANY/MONTAG &CALDWELL
BALANCED FUND--CLASS N
GROWTH OF $10,000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
40% LEHMAN BROTHERS ALLEGHANY/MONTAG & CALDWELL
LIPPER BALANCED GOVERNMENT CORPORATE BALANCED FUND
FUND INDEX INDEX/60% S&P 500 INDEX CLASS N SHARES
11-94 10000 10000 10000
10-95 11759 12229 12375
10-96 13462 14238 14895
10-97 16168 17469 18509
10-98 17887 20519 21185
10-99 20132 23537 24962
10-00 21718 25133 25472
THIS CHART COMPARES A $10,000 INVESTMENT MADE IN CLASS N SHARES OF THE FUND ON
ITS INCEPTION DATE TO $10,000 INVESTMENTS MADE IN THE INDICES (60% S&P 500
INDEX/40% LEHMAN BROTHERS GOVERNMENT CREDIT BOND INDEX AND LIPPER BALANCED FUND
INDEX) ON THAT DATE. ALL DIVIDENDS AND CAPITAL GAINS ARE REINVESTED. FURTHER
INFORMATION RELATING TO THE FUND'S PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS
IS CONTAINED IN THE PROSPECTUS AND ELSEWHERE IN THIS REPORT. PAST PERFORMANCE IS
NOT INDICATIVE OF FUTURE PERFORMANCE. INDICES ARE UNMANAGED AND INVESTORS CANNOT
INVEST IN THEM.
[END SIDEBAR]
14
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST BALANCED FUND
PORTFOLIO MANAGERS COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - BERNARD F. MYSZKOWSKI]
[PHOTO OMITTED - THOMAS J. MARTHALER]
Bernard F. Myszkowski, CFA Thomas J. Marthaler, CFA
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A Alleghany/Chicago Trust Balanced Fund produced a total return of 14.82%,
significantly outperforming its benchmark and peer group. The Fund's
benchmark, a 60%/40% blend of the S&P(REGISTRATION MARK) 500 Index and the
Lehman Brothers Aggregate Bond Index, returned 6.85% while the Fund's peer
group, the Lipper Balanced Fund Index, returned 7.88%.
Q How would you describe the investment
------
environment?
A For most of the fiscal year, the U.S. economy grew at a blistering pace,
putting upward pressure on interest rates. U.S. economic growth reached
7.3% during the fourth quarter of 1999 and 5.4% during the first quarter of
2000. Meanwhile, the Fed raised short-term interest rates from 5.25% to
6.50% in an effort to slow the economy. While this was occurring, the U.S.
government, flush with a federal budget surplus, announced plans to retire
Treasury debt, which exerted downward pressure on Treasury bond and note
yields. By mid-summer, evidence of an economic slowdown took place, which
reduced inflation expectations. Treasury bond prices stabilized as
politicians promised to spend the surplus on new programs or a tax cut.
However, disappointing corporate profits spooked the corporate bond market.
Q Which bond sectors performed the
------
best? Which performed the worst?
A U.S. Treasury bonds performed well for much of the period, as the federal
government's buyback program buoyed prices. Mortgage-backed and
asset-backed securities, which offer higher yields to compensate investors
for refinancing risk, also performed well because there was relatively
little refinancing activity during the year. However, investors shunned
high-yield bonds because of fears over a slowing economy and its impact on
corporate profits and the ability to repay debt. To a lesser extent, the
same was true of investment-grade corporate bonds.
Q What stock sectors performed the best?
------
Which performed the worst?
A Among the best performers were energy, financial services and health care -
energy because of rising oil prices, financial services due to easing
interest rates and health care because of an improving pricing environment.
Technology was strong during the first four months of the fiscal year, but
sold off sharply as the year 2000 unfolded.
Q What strategies did you employ as the
------
fiscal year came to a close?
A Late in September, we exploited weakness in the U.S. Treasury sector to
modestly add to our positions. We have kept our mortgage-backed securities
position at about one-third of the fixed income portion of the portfolio.
We're always on the lookout for value in intermediate corporate bonds,
which continue to offer significant yield premiums over Treasury bonds.
However, we have become more selective, especially in looking for long-term
corporate bonds, recognizing their increased volatility in the near-term
economic and political environment. During the quarter, we added shares of
Home Depot, Inc. (1.0% of net assets), a stock that had been beaten up in
previous months because of concerns about the retail sector. The company,
which is the world's largest home improvement retailer, recently added
high-end remodeling stores that should be very successful. As we approach
year-end, we plan to continue to search for high-quality companies with
strong revenue and earnings growth that make sense in all kinds of markets.
[BEGIN SIDEBAR]
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMMON STOCKS 62%
U.S GOVERNMENT AND AGENY OBLIGATIONS 20%
CORPORATE NOTES AND BONDS 12%
CASH AND OTHER NET ASSETS 4%
YANKEE BONDS 1%
NON-AGENCY/CMO MORTGAGE SECURITIES 1%
ALLEGHANY/CHICAGO TRUST
BALANCED FUND
GROWTH OF $10,000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
40% LEHMAN BROTHERS
AGGREGATE BOND INDEX/ LIPPER BALANCED ALLEGHANY/CHICAGO
60% S&P 500 INDEX FUND INDEX TRUST BALANCED FUND
09-95 10000 10000 10000
10-96 11625 11420 11847
10-97 14237 13715 14229
10-98 17368 15511 16862
10-99 20016 17458 19772
10-00 21387 18834 22701
THIS CHART COMPARES A $10,000 INVESTMENT MADE IN OF THE FUND ON ITS INCEPTION
DATE TO $10,000 INVESTMENTS MADE IN THE INDICES (60% S&P 500 INDEX/40% LEHMAN
BROTHERS AGGREGATE BOND INDEX AND LIPPER BALANCED FUND INDEX) ON THAT DATE. ALL
DIVIDENDS AND CAPITAL GAINS ARE REINVESTED. FURTHER INFORMATION RELATING TO THE
FUND'S PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS IS CONTAINED IN THE
PROSPECTUS AND ELSEWHERE IN THIS REPORT. PAST PERFORMANCE IS NOT INDICATIVE OF
FUTURE PERFORMANCE. INDICES ARE UNMANAGED AND INVESTORS CANNOT INVEST IN THEM.
[END SIDEBAR]
15
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST BOND FUND
PORTFOLIO MANAGER COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - THOMAS J. MARTHALER]
Thomas J. Marthaler, CFA
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A The Fund's performance was very competitive, outperforming the average
intermediate bond fund, while slightly underperforming its unmanaged
benchmark. For the 12-month period, Alleghany/Chicago Trust Bond Fund's
total return was 6.98%. In comparison, the Lehman Brothers Aggregate Bond
Index, which includes no expenses, reflected a return of 7.30% for the same
period, while the Fund's peer group, the Lipper Intermediate Investment
Grade Index, returned 6.33%.
Q How would you describe the investment
------
environment?
A For most of the fiscal year, the U.S. economy grew at a blistering pace,
putting upward pressure on interest rates. U.S. economic growth reached
7.3% during the fourth quarter of 1999 and 5.4% during the first quarter of
2000. Meanwhile, the Fed raised short-term interest rates from 5.25% to
6.50% in an effort to slow the economy. While this was occurring, the U.S.
government, flush with a federal budget surplus, announced plans to retire
Treasury debt, which exerted downward pressure on Treasury bond and note
yields. By mid-summer, evidence of an economic slowdown took place, which
reduced inflation expectations. Treasury bond prices stabilized as
politicians promised to spend the surplus on new programs or a tax cut.
However, disappointing corporate profits spooked the corporate bond market.
Q Which bond sectors performed the
------
best? Which performed the worst?
A U.S. Treasury bonds performed well for much of the period, as the federal
government's buyback program buoyed prices. Mortgage-backed and
asset-backed securities, which offer higher yields to compensate investors
for refinancing risk, also performed well because there was relatively
little refinancing activity during the year. However, investors shunned
high-yield bonds because of fears over a slowing economy and its impact on
corporate profits and the ability to repay debt. To a lesser extent, the
same was true of investment-grade corporate bonds.
Q What strategies did you employ as the
------
fiscal year came to a close?
A Late in September, we exploited weakness in the U.S. Treasury sector to
modestly add to our positions. We have kept our mortgage-backed securities
position at about one-third of the portfolio. We're always on the lookout
for value in intermediate corporate bonds, which continue to offer
significant yield premiums over Treasury bonds. However, we have become
more selective, especially in looking for long-term corporate bonds,
recognizing their increased volatility in the near-term economic and
political environment. As of October 31, 2000, the portfolio was comprised
as follows: corporates, 44%, mortgages, 36%, U.S. governments, 11% and
cash, 9%. The portfolio's average credit quality was AA3, its effective
duration was 4.7 years and its 30-day SEC yield was 7.10%.
Q What is your outlook?
------
A We believe that the Fed will be constrained from easing -- which it would
normally commence at this point in the economic cycle -- by high energy
prices and tight labor markets. The Fed's fear of inflation offsets its
confidence in the sustainability of productivity gains, inferring a steady
policy for the coming few quarters. In the meantime, corporate bonds and
mortgage-backed securities offer very attractive yields.
[BEGIN SIDEBAR]
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
U.S GOVERNMENT AND AGENY OBLIGATIONS 45%
CORPORATE NOTES AND BONDS 41%
CASH AND OTHER NET ASSETS 9%
YANKEE BONDS 3%
NON-AGENCY/CMO MORTGAGE SECURITIES 2%
ALLEGHANY/CHICAGO TRUST
BOND FUND--CLASS N
GROWTH OF $10,000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
LEHMAN BROTHERS LIPPER INTERMEDIATE ALLEGHANY/CHICAGO
AGGREGATE BOND INDEX INVESTMENT GRADE INDEX TRUST BOND FUND
12-93 10000 10000 10000
10-94 9535 9537 9677
10-95 11026 10885 11117
10-96 11671 11465 11758
10-97 12709 12388 12797
10-98 13895 13378 13778
10-99 13969 13416 13919
10-00 14989 14265 14891
THIS CHART COMPARES A $10,000 INVESTMENT MADE IN CLASS N SHARES OF THE FUND ON
ITS INCEPTION DATE TO $10,000 INVESTMENTS MADE IN THE INDICES (LEHMAN BROTHERS
AGGREGATE BOND INDEX AND LIPPER INTERMEDIATE INVESTMENT GRADE INDEX) ON THAT
DATE. ALL DIVIDENDS AND CAPITAL GAINS ARE REINVESTED. FURTHER INFORMATION
RELATING TO THE FUND'S PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IS
CONTAINED IN THE PROSPECTUS AND ELSEWHERE IN THIS REPORT. PAST PERFORMANCE IS
NOT INDICATIVE OF FUTURE PERFORMANCE. INDICES ARE UNMANAGED AND INVESTORS CANNOT
INVEST IN THEM.
LEHMAN BROTHERS AGGREGATE
BOND INDEX RETURNS
10/31/99-10/31/00
---------------------------------------------------------
U.S. Government ............................. 8.04%
Corporate ................................... 5.38%
High Yield .................................. -1.61%
Mortgage-Backed ............................. 7.57%
Asset-Backed ................................ 7.10%
Emerging Markets ............................ 17.65%
[END SIDEBAR]
16
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST MUNICIPAL BOND FUND
PORTFOLIO MANAGER COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - DAWN DAGGY-MANGERSON]
Dawn Daggy-Mangerson
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A For the 12-month period, Alleghany/Chicago Trust Municipal Bond Fund
provided a total return of 7.30%, outperforming the benchmark Lehman
Brothers Municipal Five-Year General Obligation Bond Index, which returned
5.77%, while its peer group, the Lipper Intermediate Municipal Fund Index,
returned 6.44%. For taxpayers in the top federal tax bracket, these results
equate to a taxable equivalent of more than 10%. It is very difficult to
find fixed-income securities offering such high returns unless credit
quality is suspect. Yet municipal bond credit quality is extremely strong.
Q How would you describe the investment
------
environment?
A During the fiscal year, the Fed raised short-term interest rates four
times. The impact of this Fed action was a slowing economy, easing
inflation worries and causing long-term interest rates to moderate, thus
providing a more positive environment for fixed-income securities of all
types. According to the major municipal rating agencies, long-term credit
stability of municipalities in general has improved significantly due to
economic development and sound fiscal management. This has been achieved
through the concerted efforts of municipal officials in broadening their
tax base by attracting and retaining manufacturing, trade and service
companies. Their efforts have produced better economic diversification and
greater overall fiscal health. As a result of this improvement in
government coffers, new municipal bond issuance has been spotty while
retail demand is still relatively strong.
Q What is your current strategy?
------
A We continue to look for opportunities in the municipal market to purchase
high-quality, high-coupon, non-callable bonds. The Fund's average credit
quality remains high at AA. It has not been beneficial to reduce credit
quality because the marginal pickup in yield would not adequately
compensate bondholders for the additional credit risk associated with lower
rated securities. Focusing on high-coupon bonds allows the Fund to pay an
attractive yield while providing a competitive total return. Purchasing
non-callable bonds protects the portfolio against falling interest rates
when the issuer would call bonds and refinance at lower rates.
Q What is your outlook?
------
A The recent slowdown in the economy has improved the inflation picture,
strengthening the case for municipal bonds, which currently offer an
excellent tax-exempt return in the midst of strong retail demand. Over the
next few months, we expect to see some seasonal selling prior to year-end,
while demand surges in January as investors re-deploy interest payments as
well as reinvest proceeds from maturing bonds. The shortage of supply
during this time causes short-term yields to fall sharply. By staying fully
invested, we hope to avoid purchasing bonds at low yields during this
so-called "January effect".
[BEGIN SIDEBAR]
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
AAA 49%
AA 30%
A 10%
BAA 7%
NOT RATED 4%
ALLEGHANY/CHICAGO TRUST
MUNICIPAL BOND FUND
GROWTH OF $10,000
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
LEHMAN BROTHERS FIVE-YEAR ALLEGHANY/CHICAGO TRUST LIPPER INTERMEDIATE
GENERAL OBLIGATIONS INDEX MUNICIPAL BOND FUND MUNICIPAL FUNDS INDEX
12-93 10000 10000 10000
10-94 9838 9808 9808
10-95 10855 10719 10880
10-96 11368 11103 11369
10-97 12107 11673 12155
10-98 12897 12393 12983
10-99 13040 12173 12823
10-00 13792 13062 13649
THIS CHART COMPARES A $10,000 INVESTMENT MADE IN THE FUND ON ITS INCEPTION DATE
TO $10,000 INVESTMENTS MADE IN THE INDICES (LEHMAN BROTHERS FIVE-YEAR GENERAL
OBLIGATIONS BOND INDEX AND LIPPER INTERMEDIATE MUNICIPAL FUND INDEX) ON THAT
DATE. ALL DIVIDENDS AND CAPITAL GAINS ARE REINVESTED. FURTHER INFORMATION
RELATING TO THE FUND'S PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IS
CONTAINED IN THE PROSPECTUS AND ELSEWHERE IN THIS REPORT. PAST PERFORMANCE IS
NOT INDICATIVE OF FUTURE PERFORMANCE. INDICES ARE UNMANAGED AND INVESTORS CANNOT
INVEST IN THEM.
[END SIDEBAR]
17
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST MONEY MARKET FUND
PORTFOLIO MANAGER COMMENTARY
--------------------------------------------------------------------------------
[PHOTO OMITTED - FRED H. SENFT, JR.]
Fred H. Senft, Jr., CFA
Q How did the Fund perform during the
------
fiscal year ended October 31, 2000?
A As of October 31, 2000, Alleghany/ Chicago Trust Money Market Fund's 7-day
and 30-day average yields were 6.14% and 6.13%, respectively, outperforming
its benchmark, iMoneyNet First Tier Index, which yielded 5.91% and 5.89%.
To better reflect the Fund's strategy, the peer group of the Fund is being
revised from the Donoghue's First Tier Index to the iMoneyNet First Tier
Index. The Fund's performance benefited from high credit quality,
lower-than-average expenses and a short maturity posture.
Q What factors affected your performance?
------
A At fiscal year end, the Fund's average maturity was 15 days, significantly
below the Index maturity of 57 days. During much of the period, it was
still advantageous to have a lower average maturity because short-term
interest rates were still on the rise, despite inactivity on the part of
the Fed. In a rising interest-rate environment, a short-maturity position
is extremely advantageous because cash can be reinvested more quickly.
Q How would you describe the investment
------
environment?
A The Fed raised short-term interest rates by a total of 1.25 percentage
points during the fiscal year in an effort to slow the economy and prevent
a recurrence of inflation. Despite the Fed's efforts, Gross Domestic
Product ("GDP") rose at a 7.3% annual rate during the fourth quarter of
1999 and a 5.4% rate during the first quarter of 2000. By the third
quarter, however, the economy began to slow, with GDP growth at a
relatively moderate 2.7%. As a result, the Fed is on hold because these
policies have been effective. Based on comparatively low yields on
longer-term securities, it appears as though investors are confident that
inflation is under control. Compared to alternative asset classes, money
market funds were particularly attractive during the fiscal year. The stock
market was weak, as investors became concerned about corporate profits.
Intermediate and long-term bonds did not produce significantly greater
total returns than money market funds, particularly when additional credit
and market risk factors are considered. In addition, money market funds
continued to offer safety and liquidity.
Q How would describe the portfolio as of
------
October 31, 2000?
A About 95% of the fund's assets was invested in commercial paper--
short-term debt issued by blue chip corporations. Examples include John
Deere Capital Corp. (5.4% of net assets), American Express Corp. (5.3%),
General Electric Capital Corp. (5.1%) and General Motors Acceptance Corp.
(5.1%).
Q What is your outlook?
------
A Because we believe that the Fed is unlikely to raise interest rates in the
near future, our goal is to lengthen the Fund's maturity to lock in higher
yields. In addition, as the U.S. economy slows, our continued emphasis on
high-quality companies will remain in place. We continue to believe that
money market funds currently provide an attractive yield relative to
inflation.
[BEGIN SIDEBAR]
OCTOBER 31, 2000
PORTFOLIO ALLOCATION BY MARKET SECTOR
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
COMMERCIAL PAPER 95%
GIC WITHIN FUNDING AGREEMENT 3%
CASH AND OTHER NET ASSETS 2%
[END SIDEBAR]
18
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/MONTAG & CALDWELL GROWTH FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
COMMON STOCKS - 93.93%
ADVERTISING - 2.60%
1,633,300 Interpublic Group
of Companies, Inc. ........ $ 70,129,819
--------------
CONSUMER CYCLICALS - 9.28%
821,100 Colgate-Palmolive Co. ........ 48,247,836
3,200,000 Gillette Co. ................. 111,600,000
1,250,000 Procter & Gamble Co. ......... 89,296,875
--------------
249,144,711
--------------
ELECTRICAL - 0.82%
400,000 General Electric Co. ......... 21,925,000
--------------
ENTERTAINMENT AND LEISURE - 2.49%
1,865,500 The Walt Disney Co. .......... 66,808,219
--------------
FINANCE - 14.17%
900,000 American Express Co. ......... 54,000,000
850,000 American International
Group, Inc. ............... 83,300,000
2,427,600 Citigroup, Inc. .............. 127,752,450
208,600 Marsh & McLennan Cos., Inc. .. 27,274,450
1,900,000 Wells Fargo & Co. ............ 87,993,750
--------------
380,320,650
--------------
FOOD AND BEVERAGE - 10.06%
3,000,000 Coca-Cola Co. ................ 181,125,000
1,837,500 PepsiCo, Inc. ................ 89,003,906
--------------
270,128,906
--------------
HEALTH CARE SERVICES - 4.46%
1,300,000 Johnson & Johnson ............ 119,762,500
--------------
LODGING - 2.87%
1,900,000 Marriott International, Inc.,
Class A ................... 76,950,000
--------------
MEDICAL PRODUCTS AND
SUPPLIES - 5.05%
3,400,000 Boston Scientific Corp.* ..... 54,187,500
1,500,000 Medtronic, Inc. .............. 81,468,750
--------------
135,656,250
--------------
PHARMACEUTICALS - 15.46%
1,800,000 Bristol-Myers Squibb Co. ..... 109,687,500
3,600,000 Pfizer, Inc. ................. 155,475,000
1,501,400 Pharmacia Corp. .............. 82,577,000
1,300,000 Schering-Plough Corp. ........ 67,193,750
--------------
414,933,250
--------------
RESTAURANTS - 3.99%
3,452,700 McDonald's Corp. ............. 107,033,700
--------------
MARKET
SHARES VALUE
------- --------
RETAIL - 5.39%
2,036,200 Costco Wholesale Corp.* ...... $ 74,639,456
1,628,400 Home Depot, Inc. ............. 70,021,200
--------------
144,660,656
--------------
TECHNOLOGY - 14.06%
767,000 Electronic Arts, Inc.* ....... 38,326,031
2,860,200 Electronic Data Systems Corp. 134,250,637
2,076,200 Hewlett-Packard Co. .......... 96,413,538
700,000 Intel Corp. .................. 31,456,250
1,747,400 Solectron Corp.* ............. 76,885,600
--------------
377,332,056
--------------
TELECOMMUNICATIONS
EQUIPMENT - 3.23%
1,034,700 Nokia Corp., SP ADR .......... 44,233,425
850,000 Tellabs, Inc.* ............... 42,473,438
--------------
86,706,863
--------------
TOTAL COMMON STOCKS .......... 2,521,492,580
--------------
(Cost $2,213,004,363)
INVESTMENT COMPANIES - 5.04%
135,011,778 Deutsche Institutional
Cash Management Fund ...... 135,011,778
233,883 Deutsche Institutional
Treasury Money Fund ....... 233,883
--------------
TOTAL INVESTMENT COMPANIES ... 135,245,661
--------------
(Cost $135,245,661)
PAR VALUE
----------
REPURCHASE AGREEMENT - 2.13%
$57,225,000 Deutsche Bank 6.350% dated 10/31/00
to be repurchased on 11/01/00
at $57,235,094 (Collateralized by
U.S. Treasury Bills 6.125%
due 4/12/01 and 04/26/01;
Total Par $60,154,000) .... 57,225,000
--------------
TOTAL REPURCHASE AGREEMENT ... 57,225,000
--------------
(Cost $57,225,000)
TOTAL INVESTMENTS - 101.10% ................ 2,713,963,241
--------------
(Cost $2,405,475,024)**
LIABILITIES NET OF CASH
AND OTHER ASSETS - (1.10)% ............. (29,551,864)
--------------
NET ASSETS - 100.00% ....................... $2,684,411,377
==============
--------------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $2,405,475,024.
Gross unrealized appreciation ... $ 418,418,752
Gross unrealized depreciation ... (109,930,535)
--------------
Net unrealized appreciation ..... $ 308,488,217
==============
SP ADR Sponsored American Depositary Receipt
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST GROWTH & INCOME FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
COMMON STOCKS - 94.39%
ADVERTISING - 2.41%
154,737 Omnicom Group, Inc. .......... $ 14,274,488
--------------
CAPITAL GOODS - 1.51%
302,000 Pitney Bowes, Inc. ........... 8,965,625
--------------
CHEMICALS - 1.22%
194,527 Praxair, Inc. ................ 7,246,131
--------------
COMMERCIAL SERVICES - 2.27%
344,147 Ecolab, Inc. ................. 13,486,261
--------------
CONSUMER DURABLES - 7.34%
426,190 Harley-Davidson, Inc. ........ 20,537,031
198,948 Illinois Tool Works, Inc. .... 11,054,048
200,316 Johnson Controls, Inc. ....... 11,943,841
--------------
43,534,920
--------------
CONSUMER CYCLICALS - 2.61%
334,233 Cintas Corp. ................. 15,489,611
--------------
ELECTRICAL - 2.96%
320,439 General Electric Co. ......... 17,564,063
--------------
FINANCE - 16.83%
203,368 AFLAC, Inc. .................. 14,858,574
208,831 American International
Group, Inc. ............... 20,465,438
235,200 Associates First Capital Corp.,
Class A ................... 8,731,800
345,811 Federal Home Loan
Mortgage Corp. ............ 20,748,660
100,000 Marsh & McLennan Cos., Inc. .. 13,075,000
272,276 MBNA Corp. ................... 10,227,367
332,581 Schwab (Charles) Corp. ....... 11,681,908
--------------
99,788,747
--------------
FOOD AND BEVERAGE - 4.50%
511,073 Sysco Corp. .................. 26,671,622
--------------
HEALTH CARE SERVICES - 3.99%
249,895 Cardinal Health, Inc. ........ 23,677,551
--------------
MEDICAL PRODUCTS AND
SUPPLIES - 1.98%
474,242 Sybron International Corp.* .. 11,737,489
--------------
OIL AND GAS EXTRACTION - 2.66%
182,601 Schlumberger, Ltd. ........... 13,900,501
35,351 Transocean Sedco Forex, Inc. . 1,873,603
--------------
15,774,104
--------------
PHARMACEUTICALS - 3.30%
98,502 Merck & Co., Inc. ............ 8,859,024
248,287 Pfizer, Inc. ................. 10,722,895
--------------
19,581,919
--------------
MARKET
SHARES VALUE
------- -------
RETAIL - 6.92%
207,000 Home Depot, Inc. ............. $ 8,901,000
229,896 Kohl's Corp.* ................ 12,457,490
431,495 Walgreen Co. ................. 19,686,959
--------------
41,045,449
--------------
TECHNOLOGY - 23.28%
163,580 Computer Sciences Corp.* ..... 10,305,540
557,512 Dell Computer Corp.* ......... 16,429,182
390,000 Electronic Data Systems Corp. 18,305,625
300,000 EMC Corp.* ................... 26,718,750
420,000 Intel Corp. .................. 18,873,750
234,594 Microsoft Corp.* ............. 16,164,993
353,686 Solectron Corp.* ............. 15,562,184
141,568 Sun Microsystems, Inc.* ...... 15,691,928
--------------
138,051,952
--------------
TELECOMMUNICATIONS
EQUIPMENT - 6.98%
371,206 Cisco Systems, Inc.* ......... 19,998,723
500,000 Nokia Corp., SP ADR .......... 21,375,000
--------------
41,373,723
--------------
UTILITY - 3.63%
380,886 AES Corp.* ................... 21,520,058
--------------
TOTAL COMMON STOCKS .......... 559,783,713
--------------
(Cost $328,086,959)
PAR VALUE
----------
REPURCHASE AGREEMENT - 5.43%
$32,189,000 Bank One 6.570% dated 10/31/00
to be repurchased on 11/01/00
at $32,194,874 (Collateralized by
U.S. Government Agency
Obligation 6.407% due 12/27/00;
Total Par $33,175,000) .... 32,189,000
--------------
TOTAL REPURCHASE AGREEMENT ... 32,189,000
--------------
(Cost $32,189,000)
TOTAL INVESTMENTS - 99.82% ................. 591,972,713
--------------
(Cost $360,275,959)**
NET OTHER ASSETS AND LIABILITIES - 0.18% ... 1,039,990
--------------
NET ASSETS - 100.00% ....................... $ 593,012,703
==============
-------------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $360,275,959.
Gross unrealized appreciation ... $ 261,260,233
Gross unrealized depreciation ... (29,563,479)
--------------
Net unrealized appreciation ..... $ 231,696,754
==============
SP ADR Sponsored American Depositary Receipt
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST TALON FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
COMMON STOCKS - 94.40%
AIRLINES - 3.13%
29,000 Southwest Airlines Co. ....... $ 826,500
--------------
AUTOMOTIVE - 3.40%
20,000 Magna International, Inc.,
Class A ................... 897,500
--------------
BUSINESS SERVICES - 10.70%
42,000 ACNielsen Corp.* ............. 1,005,375
105,000 Unisys Corp. * ............... 1,338,750
33,000 Wallace Computer Services, Inc. 478,500
--------------
2,822,625
--------------
CHEMICALS - 2.03%
15,000 Sigma-Aldrich Corp. .......... 536,719
--------------
COMPUTER SOFTWARE - 0.03%
1,700 SYNAVANT Inc. * .............. 7,783
--------------
CONSUMER CYCLICALS - 1.81%
28,000 Ingram Micro, Inc., Class A* . 477,750
--------------
CONSUMER NON-DURABLES - 4.51%
92,000 Mattel, Inc. ................. 1,190,250
--------------
ELECTRICAL - 1.55%
27,000 Thomas & Betts Corp. ......... 408,375
--------------
ELECTRONICS - 8.64%
16,000 CTS Corp. .................... 687,000
55,700 Sensormatic Electronics Corp.* 1,002,600
13,000 Symbol Technologies, Inc. .... 590,687
--------------
2,280,287
--------------
FOOD AND BEVERAGE - 3.64%
30,000 Dean Foods Co. ............... 960,000
--------------
HEALTH CARE SERVICES - 8.42%
45,000 Edwards Lifesciences Corp. * . 604,688
34,000 IMS Health, Inc. ............. 803,250
29,000 McKesson HBOC, Inc. .......... 813,812
--------------
2,221,750
--------------
MEDICAL PRODUCTS AND
SUPPLIES - 1.39%
23,000 Boston Scientific Corp.* ..... 366,562
--------------
PRINTING AND PUBLISHING - 12.80%
55,000 Belo (A.H.) Corp., Class A ... 1,055,312
36,700 Houghton Mifflin Co. ......... 1,351,019
21,000 New York Times Co., Class A .. 771,750
2,500 Scholastic Corp.* ............ 199,687
--------------
3,377,768
--------------
MARKET
SHARES VALUE
------- -------
RETAIL - 6.52%
58,000 Borders Group, Inc.* ......... $ 804,750
90,000 Saks, Inc.* .................. 916,875
--------------
1,721,625
--------------
TECHNOLOGY - 11.73%
55,000 American Power Conversion Corp.* 709,844
26,000 Diebold, Inc. ................ 676,000
65,000 Legato Systems, Inc.* ........ 579,922
34,000 Mentor Graphics Corp.* ....... 796,875
8,000 Tech Data Corp.* ............. 333,250
--------------
3,095,891
--------------
TELECOMMUNICATIONS
EQUIPMENT - 9.34%
16,200 Alcatel SA, ADR .............. 1,010,475
18,000 Andrew Corp.* ................ 473,063
31,000 Harris Corp. ................. 982,313
--------------
2,465,851
--------------
TRANSPORTATION - 4.75%
47,000 CNF Transportation, Inc. ..... 1,254,313
--------------
TOTAL COMMON STOCKS .......... 24,911,549
--------------
(Cost $22,240,094)
INVESTMENT COMPANIES - 4.96%
1,290,675 Deutsche Institutional
Cash Management Fund ...... 1,290,675
19,526 Deutsche Institutional
Treasury Money Fund ....... 19,526
--------------
TOTAL INVESTMENT COMPANIES ... 1,310,201
--------------
(Cost $1,310,201)
TOTAL INVESTMENTS - 99.36% ................. 26,221,750
--------------
(Cost $23,550,295)**
NET OTHER ASSETS AND LIABILITIES - 0.64% ... 167,599
--------------
NET ASSETS - 100.00% ....................... $ 26,389,349
==============
--------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $23,575,808.
Gross unrealized appreciation ...... $ 3,987,781
Gross unrealized depreciation ...... (1,341,839)
--------------
Net unrealized appreciation ........ $ 2,645,942
==============
ADR American Depositary Receipt
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
21
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST SMALL CAP VALUE FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
COMMON STOCKS - 94.60%
AEROSPACE AND DEFENSE - 2.20%
12,200 Alliant Techsystems, Inc.* ... $ 1,097,237
--------------
BANKS - 17.87%
62,100 Century South Banks, Inc. .... 1,162,434
124,000 Fidelity National Corp. ...... 879,625
18,000 GBC Bancorp .................. 573,750
130,400 Hibernia Corp., Class A ...... 1,556,650
96,800 Prosperity Bancshares, Inc. .. 1,815,000
201,200 Republic Security Financial Corp. 1,367,531
28,000 Wilmington Trust Corp. ....... 1,473,500
--------------
8,828,490
--------------
BUILDING AND CONSTRUCTION - 2.03%
27,535 D.R. Horton, Inc. ............ 509,397
47,100 Washington Group
International, Inc.* ...... 494,550
--------------
1,003,947
--------------
CHEMICALS - 1.06%
15,100 Cytec Industries, Inc.* ...... 522,837
--------------
CONSUMER CYCLICALS - 4.31%
46,300 Hughes Supply, Inc. .......... 868,125
56,600 WMS Industries, Inc.* ........ 1,259,350
--------------
2,127,475
--------------
FINANCIAL SERVICES - 3.09%
45,100 Raymond James Financial, Inc. 1,524,944
--------------
FOOD AND BEVERAGE - 2.03%
31,400 Dean Foods Co. ............... 1,004,800
--------------
INDUSTRIAL - 10.46%
44,700 AMETEK, Inc. ................. 972,225
26,500 Ball Corp. ................... 930,812
81,500 Milacron, Inc. ............... 1,298,906
21,300 Newport News Shipbuilding, Inc. 1,047,694
35,900 Snap-On, Inc. ................ 917,694
--------------
5,167,331
--------------
INSURANCE - 1.02%
30,000 Horace Mann Educators Corp. .. 504,375
--------------
OIL AND GAS EXTRACTION - 8.51%
32,400 Callon Petroleum Co.* ........ 494,100
129,000 Chesapeake Energy Corp.* ..... 725,625
105,400 Pioneer Natural Resources Co.* 1,376,788
48,600 Valero Energy Corp. .......... 1,606,838
--------------
4,203,351
--------------
PHARMACEUTICALS - 5.50%
62,100 Carter-Wallace, Inc. ......... 1,703,869
57,800 Omnicare, Inc. ............... 1,011,500
--------------
2,715,369
--------------
PRINTING AND PUBLISHING - 1.08%
14,500 Houghton Mifflin Co. ......... 533,781
--------------
MARKET
SHARES VALUE
------- -------
REAL ESTATE INVESTMENT TRUST
(REIT) - 8.67%
59,300 AMLI Residential Properties
Trust ..................... $ 1,371,313
41,200 CBL & Associates Properties,
Inc. ...................... 952,750
36,450 Cousins Properties, Inc. ..... 947,700
37,700 SL Green Realty Corp. ........ 1,010,831
--------------
4,282,594
--------------
RESTAURANTS - 3.04%
30,100 Applebee's International, Inc. 909,114
70,700 Ryan's Family Steakhouses, Inc.* 592,113
--------------
1,501,227
--------------
RETAIL - 7.74%
57,000 Gadzooks, Inc. * ............. 1,036,688
152,400 Pier 1 Imports, Inc. ......... 2,019,300
89,900 Trans World
Entertainment Corp.* ...... 766,959
--------------
3,822,947
--------------
SAVINGS AND LOANS - 4.99%
85,700 First Financial Holdings, Inc. 1,435,475
43,000 MAF Bancorp, Inc. ............ 1,032,000
--------------
2,467,475
--------------
TECHNOLOGY - 1.23%
43,300 Electroglas, Inc.* ........... 607,553
--------------
TRANSPORTATION - 3.37%
28,800 Arkansas Best Corp.* ......... 460,800
45,100 CNF Transportation, Inc. ..... 1,203,606
--------------
1,664,406
--------------
UTILITIES - 6.40%
72,500 El Paso Electric Co.* ........ 869,275
43,900 Peoples Energy Corp. ......... 1,509,063
36,700 Western Resources, Inc. ...... 784,463
--------------
3,162,801
--------------
TOTAL COMMON STOCKS .......... 46,742,940
--------------
(Cost $44,108,415)
PAR VALUE
----------
REPURCHASE AGREEMENT - 3.60%
$ 1,778,000 Banc One 6.570%, dated 10/31/00
to be repurchased on 11/01/00
at $1,778,324 (Collateralized by
U.S. Government Agency
Obligation 6.450% due 12/27/00;
Total Par $1,835,000) ..... 1,778,000
--------------
TOTAL REPURCHASE AGREEMENT ... 1,778,000
--------------
(Cost $1,778,000)
TOTAL INVESTMENTS - 98.20% ................. 48,520,940
--------------
(Cost $45,886,415)**
NET OTHER ASSETS AND LIABILITIES - 1.80% ... 890,339
--------------
NET ASSETS - 100.00% ....................... $ 49,411,279
==============
----------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $45,879,094.
Gross unrealized appreciation .......... $ 4,630,401
Gross unrealized depreciation .......... (1,988,555)
--------------
Net unrealized appreciation ............ $ 2,641,846
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
22
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/VEREDUS AGGRESSIVE GROWTH FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
COMMON STOCKS - 91.71%
AIRLINES - 3.96%
548,300 AirTran Holdings, Inc.* ...... $ 2,415,947
205,700 Frontier Airlines, Inc.* ..... 4,827,522
--------------
7,243,469
--------------
BIOTECHNOLOGY - 1.84%
33,000 Aksys, Ltd.* ................. 515,625
75,150 Eden Bioscience Corp.* ....... 2,846,306
--------------
3,361,931
--------------
COMMERCIAL SERVICES - 0.45%
49,000 Trico Marine Services, Inc. .. 814,625
--------------
COMMUNICATION SERVICES - 0.55%
72,900 Insight Communications Co.,
Inc.* ..................... 1,004,653
--------------
COMPUTER SOFTWARE - 4.23%
29,800 Documentum, Inc.* ............ 2,533,000
195,200 FileNET Corp.* ............... 5,203,300
--------------
7,736,300
--------------
ELECTRONICS - 1.69%
100,350 Varian, Inc.* ................ 3,095,170
--------------
FINANCE - 1.18%
73,700 Heller Financial, Inc. ....... 2,155,725
--------------
FOOD AND BEVERAGES - 1.37%
62,900 Hain Celestial Group, Inc.* .. 2,496,344
--------------
HEALTH CARE SERVICES - 25.18%
85,500 Apria Healthcare Group, Inc.* 1,710,000
156,600 Community Health Systems * ... 4,414,163
143,100 Coventry Health Care, Inc.* .. 2,602,631
329,100 DaVita, Inc.* ................ 3,702,375
102,200 First Health Group Corp.* .... 3,985,800
656,100 HEALTHSOUTH Corp.* ........... 7,873,200
506,400 Humana, Inc.* ................ 6,140,100
237,600 Oxford Health Plans, Inc.* ... 8,011,575
88,100 Province Healthcare Co.* ..... 3,711,212
54,100 Trigon Healthcare, Inc.* ..... 3,878,294
--------------
46,029,350
--------------
INSURANCE - 3.26%
94,800 Berkley (WR) Corp. ........... 3,229,125
110,050 Leucadia National Corp. ...... 2,737,494
--------------
5,966,619
--------------
MARKET
SHARES VALUE
------- -------
MEDICAL PRODUCTS AND
SUPPLIES - 7.38%
96,800 Biosource International, Inc.* $ 2,069,100
91,200 Cytyc Corp.* ................. 5,412,150
126,600 Novoste Corp.* ............... 3,200,606
43,300 Physiometrix, Inc.* .......... 1,027,022
119,000 STERIS Corp.* ................ 1,785,000
--------------
13,493,878
--------------
MEDICAL TECHNOLOGIES - 0.98%
189,800 Isolyser Co., Inc.* .......... 323,252
50,300 Kensey Nash Corp.* ........... 569,019
302,900 LaserSight, Inc.* ............ 899,234
--------------
1,791,505
--------------
OIL AND GAS EXTRACTION - 17.35%
14,000 CAL Dive International, Inc.** 696,500
494,100 Chesapeake Energy Corp.* ..... 2,779,313
50,300 Dril-Quip, Inc. * ............ 1,659,900
48,900 Kinder Morgan, Inc. .......... 1,885,706
212,900 Marine Drilling Cos., Inc.* .. 5,082,988
135,300 Patterson Energy, Inc.* ...... 3,792,628
281,500 Parker Drilling Co.* ......... 1,689,000
141,100 R & B Falcon Corp.* .......... 3,527,500
125,000 Rowan Cos., Inc.* ............ 3,148,438
50,300 Smith International, Inc.* ... 3,546,150
84,700 Tidewater, Inc. .............. 3,912,081
--------------
31,720,204
--------------
PHARMACEUTICALS - 1.23%
31,650 Cell Therapeutics, Inc.* ..... 2,117,088
3,500 Neopharm, Inc.* .............. 126,875
--------------
2,243,963
--------------
RESTAURANTS - 3.51%
85,700 Brinker International, Inc. .. 3,363,725
74,200 P.F. Chang's China Bistro, Inc.* 3,044,519
--------------
6,408,244
--------------
RETAIL - 12.64%
68,450 Charlotte Russe Holding, Inc.* 808,566
552,000 Charming Shoppes, Inc.* ...... 3,346,500
98,250 Christopher & Banks Corp.* ... 3,260,672
106,100 Dress Barn (The), Inc.* ...... 2,659,131
382,900 Genesco, Inc.* ............... 6,796,475
91,500 K-Swiss, Inc., Class A ....... 2,516,250
128,000 Men's Wearhouse (The), Inc.* . 3,728,000
--------------
23,115,594
--------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
23
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/VEREDUS AGGRESSIVE GROWTH FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
SAVINGS AND LOANS - 1.97%
37,200 Richmond County Financial Corp. $ 874,200
98,400 Roslyn Bancorp, Inc. ......... 2,134,050
60,900 Waypoint Financial Corp. ..... 586,162
--------------
3,594,412
--------------
SEMICONDUCTORS - 0.85%
157,000 MEMC Electronic Materials, Inc.* 1,560,188
--------------
TECHNOLOGY - 0.15%
86,700 3DO Company (The)* ........... 268,228
--------------
TELECOMMUNICATIONS - 1.28%
25,500 JNI Corp.* 2,271,094
11,850 Triton Network Systems, Inc.* 74,063
--------------
2,345,157
--------------
WASTE DISPOSAL - 0.66%
37,500 Stericycle, Inc.* ............ 1,214,063
--------------
TOTAL COMMON STOCKS 167,659,622
--------------
(Cost $151,156,573)
PAR VALUE
----------
REPURCHASE AGREEMENT - 13.75%
$25,135,409 Morgan Stanley 6.300%, dated 10/31/00
to be repurchased on 11/01/00
at $25,139,807 (Collateralized by
U.S. Treasury Note 5.625% due
09/30/01; Total
Par $25,806,059) .......... 25,135,409
--------------
TOTAL REPURCHASE AGREEMENT ... 25,135,409
--------------
(Cost $25,135,409)
TOTAL INVESTMENTS - 105.46% ................ 192,795,031
--------------
(Cost $176,291,982)**
LIABILITIES NET OF CASH
AND OTHER ASSETS - (5.46)% ............ (9,989,270)
--------------
NET ASSETS - 100.00% ....................... $ 182,805,761
==============
------------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $176,291,982.
Gross unrealized appreciation .......... $ 25,153,300
Gross unrealized depreciation .......... (8,650,251)
--------------
Net unrealized appreciation ............ $ 16,503,049
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
24
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/VEREDUS SCITECH FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
COMMON STOCKS - 47.42%
BIOTECHNOLOGY - 2.36%
800 Aclara Biosciences, Inc.* .... $ 14,375
500 Aksys Ltd.* .................. 7,813
1,100 Eden Bioscience Corp.* ....... 41,662
--------------
63,850
--------------
COMPUTER SOFTWARE - 8.85%
3,600 Cadence Design Systems, Inc.* 92,475
450 Documentum, Inc.* ............ 38,229
2,200 FileNET Corp.* ............... 58,644
1,200 Wind River Systems, Inc.* .... 49,312
--------------
238,660
--------------
ELECTRONICS - 1.72%
1,500 Varian, Inc.* ................ 46,266
--------------
HEALTH CARE SERVICES - 2.34%
5,600 DaVita, Inc.* ................ 63,000
--------------
MEDICAL PRODUCTS AND
SUPPLIES - 16.85%
1,800 Biomet, Inc. ................. 65,081
2,800 Biosource International, Inc.* 59,850
1,600 Cytyc Corp.* ................. 94,950
3,000 Novoste Corp.* ............... 75,844
4,400 Physiometrix, Inc.* .......... 104,494
3,600 STERIS Corp.* ................ 54,000
--------------
454,219
--------------
PHARMACEUTICALS - 5.13%
1,200 Cell Therapeutics, Inc.* ..... 80,269
1,300 Noven Pharmaceuticals, Inc.* . 57,931
--------------
138,200
--------------
SEMICONDUCTORS - 0.85%
2,300 MEMC Electronic Materials, Inc.* 22,856
--------------
TELECOMMUNICATIONS - 8.60%
900 CIENA Corp.* ................. 94,584
3,500 Glenayre Technologies, Inc.* . 28,930
400 JNI Corp.* ................... 35,750
1,100 Polycom, Inc.* ............... 71,466
200 Triton Network Systems, Inc.* 1,250
--------------
231,980
--------------
WASTE DISPOSAL - 0.72%
600 Stericycle, Inc.* ............ 19,425
--------------
TOTAL COMMON STOCKS .......... 1,278,456
--------------
(Cost $1,334,872)
MARKET
PAR VALUE VALUE
--------- -------
U.S. GOVERNMENT OBLIGATION - 36.95%
U.S. TREASURY BILL - 36.95%
$ 1,000,000 6.160%, 11/24/00 ............. $ 996,179
--------------
TOTAL U.S. GOVERNMENT
OBLIGATION ................... 996,179
--------------
(Cost $996,179)
REPURCHASE AGREEMENT - 19.80%
533,795 Morgan Stanley 6.300%, dated 10/31/00
to be repurchased on 11/01/00
at $533,888 (Collateralized by
U.S. Government Agency Obligation
6.300% due 11/01/00;
Total Par $548,038) ....... 533,795
--------------
TOTAL REPURCHASE AGREEMENT ... 533,795
--------------
(Cost $533,795)
TOTAL INVESTMENTS - 104.17% ................ 2,808,430
--------------
(Cost $2,864,846)**
LIABILITIES NET OF CASH
AND OTHER ASSETS - (4.17)% ............. (112,535)
--------------
NET ASSETS - 100.00% ....................... $ 2,695,895
==============
----------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $2,864,846.
Gross unrealized appreciation .......... $ 110,011
Gross unrealized depreciation .......... (166,427)
--------------
Net unrealized depreciation ............ $ (56,416)
==============
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
25
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/BLAIRLOGIE INTERNATIONAL DEVELOPED FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
COMMON STOCKS - 96.00%
FINLAND - 5.74%
15,300 JOT Automation Group Oyj ..... $ 53,173
49,724 Nokia Oyj .................... 2,043,770
3,028 Okobank, Class A ............. 34,907
2,030 Oyj Hartwall Abp ............. 35,103
8,080 Sanoma WSOY Oyj, Class B ..... 110,268
5,300 Sonera Group Oyj ............. 116,626
6,890 Talentum ..................... 55,483
729 Viking Line Oyj .............. 14,521
7,250 YIT-Yhtyma Oyj ............... 74,913
--------------
2,538,764
--------------
FRANCE - 9.87%
5,510 Alcatel ...................... 335,810
1,935 Axa .......................... 255,870
3,930 BNP Paribas SA ............... 338,454
910 Cap Gemini SA ................ 145,015
1,964 Carrefour SA ................. 131,684
3,266 France Telecom SA ............ 341,068
1,630 Hermes International ......... 219,684
1,640 L'OREAL ...................... 125,112
2,436 Lafarge SA ................... 179,643
1,200 Legrand ...................... 193,263
3,840 Pechiney SA, Class A ......... 143,218
2,740 Renault SA ................... 136,101
2,600 Schneider Electric SA ........ 169,147
3,450 Societe BIC SA ............... 119,461
1,170 Sodexho Alliance SA .......... 182,977
790 Suez Lyonnaise des Eaux SA ... 120,401
3,958 Total Fina SA, Class B ....... 565,649
3,696 Vinci ........................ 185,624
5,141 Vivendi ...................... 369,101
2,800 Vivendi, Warrants
expiring 05/02/01* ........ 7,334
7,750 Wanadoo* ..................... 98,539
--------------
4,363,155
--------------
GERMANY - 10.98%
1,397 Allianz AG ................... 474,256
8,271 Bayer AG ..................... 358,255
7,010 Bayerische Motoren Werke
(BMW) AG .................. 232,035
6,600 Commerzbank AG ............... 186,016
4,474 DaimlerChrysler AG ........... 206,115
6,080 Deutsche Bank AG ............. 499,907
21,770 Deutsche Telekom AG .......... 812,864
10,253 Dresdner Bank AG ............. 425,419
8,600 MAN AG ....................... 226,711
1,915 Muenchener Rueckversicherungs-
Gesellschaft AG ........... 603,845
4,686 Siemens AG ................... 595,809
4,584 Veba AG ...................... 232,747
--------------
4,853,979
--------------
MARKET
SHARES VALUE
------- --------
HONG KONG - 1.58%
15,000 Cheung Kong (Holdings) Ltd. .. $ 165,890
4,700 Hang Seng Bank Ltd. .......... 55,293
13,000 Hutchison Whampoa Ltd. ....... 161,274
71,000 New World Development Co., Ltd. 84,211
70,840 Pacific Century CyberWorks Ltd. * 54,500
11,000 Sun Hung Kai Properties Ltd. . 90,975
7,000 Swire Pacific Ltd., Class A .. 43,173
21,000 The Wharf (Holdings) Ltd. .... 42,814
--------------
698,130
--------------
IRELAND - 1.57%
17,290 Allied Irish Banks Plc ....... 175,869
4,340 Bank of Ireland .............. 33,403
8,400 CRH Plc ...................... 127,309
48,260 eircom Plc ................... 133,767
7,569 Irish Life & Permanent Plc ... 75,771
5,600 Kerry Group Plc, Class A ..... 69,826
5,160 Ryanair Holdings Plc* ....... 40,458
19,700 Smurfit (Jefferson) Group Plc 35,067
--------------
691,470
--------------
ITALY - 2.74%
3,677 Assicurazioni Generali ....... 120,776
10,938 Banca Intesa SpA ............. 45,338
7,500 Banca Popolare di Milano ..... 47,044
17,760 Benetton Group SpA ........... 32,216
20,700 Enel SpA ..................... 76,677
30,235 ENI SpA ...................... 163,510
2,435 Fiat SpA ..................... 56,554
10,700 Olivetti SpA ................. 32,379
4,900 Riunione Adriatica di
Sicurta SpA (RAS) ........ 64,254
3,910 San Paolo-IMI SpA ............ 63,303
21,610 Telecom Italia Mobile SpA .... 183,542
13,580 Telecom Italia SpA ........... 157,125
7,900 Telecom Italia SpA-RNC ....... 42,924
24,500 UniCredito Italiano SpA ...... 124,604
--------------
1,210,246
--------------
JAPAN - 28.14%
70,000 Asahi Chemical Industry Co., Ltd. 433,388
57,000 Bank of Tokyo-Mitsubishi, Ltd. 683,355
21,000 Bridgestone Corp. ............ 208,103
10,000 Canon, Inc. .................. 396,570
27,000 Dai Nippon Printing Co., Ltd. 422,855
7,800 Fanuc, Ltd. .................. 700,088
17,000 Fuji Photo Film .............. 630,574
18,000 Fujisawa Pharmaceutical Co., Ltd. 565,456
28,000 Hitachi, Ltd. ................ 300,038
11,000 Honda Motor Co., Ltd. ........ 379,810
5,000 Ito-Yokado Co., Ltd. ......... 225,761
37,000 Kirin Brewery Co., Ltd. ...... 385,634
24,000 Matsushita Electric Industrial
Co., Ltd. ................. 696,791
48,000 Mitsubishi Estate Co., Ltd. .. 509,954
92,000 Mitsubishi Heavy Industries, Ltd. 357,261
4,500 Murata Manufacturing Co., Ltd. 538,254
14,000 NEC Corp. .................... 266,700
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
26
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/BLAIRLOGIE INTERNATIONAL DEVELOPED FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
JAPAN (CONTINUED)
172,000 Nippon Steel Corp. ........... $ 278,826
93 Nippon Telegraph &
Telephone Corp. ........... 845,793
20,000 Nomura Securities Co., Ltd. .. 424,046
7,000 Secom Co., Ltd. .............. 498,781
37,000 Sharp Corp. .................. 471,030
7,000 SONY Corp. ................... 559,045
46,000 Sumitomo Bank, Ltd. .......... 558,220
17,300 Tokyo Electric Power Co. ..... 419,879
17,000 Toyota Motor Corp. ........... 678,840
--------------
12,435,052
--------------
NETHERLANDS - 4.16%
5,599 ABN AMRO Holding NV .......... 129,565
4,260 AEGON NV ..................... 168,993
754 Akzo Nobel NV ................ 34,289
15,220 Fortis, Class B .............. 465,731
870 Heineken NV .................. 47,197
3,111 ING Groep NV ................. 213,388
4,904 Koninklijke (Royal) Philips
Electronics NV ............ 192,504
1,800 Koninklijke Ahold NV ......... 52,227
1,886 KPN NV ....................... 38,160
5,947 Royal Dutch Petroleum Co. .... 352,311
2,047 Unilever NV .................. 102,546
899 VNU NV ....................... 42,293
--------------
1,839,204
--------------
NORWAY - 2.28%
19,480 Christiana Bank Og Kreditkasse 101,378
27,330 DNB Holding ASA .............. 118,428
5,130 Merkantildata ASA ............ 24,160
8,230 Norsk Hydro ASA .............. 326,538
1,700 Norske Skogindustrier ASA .... 45,698
7,050 Orkla ASA, Class B ........... 126,973
4,670 Petroleum Geo-Services* ...... 64,274
13,440 Storebrand ASA ............... 93,934
2,660 Tomra Systems ASA ............ 106,684
--------------
1,008,067
--------------
SINGAPORE - 1.64%
24,000 City Developments Ltd. ....... 110,740
11,000 DBS Group Holdings Ltd. ...... 129,710
53,000 DBS Land Ltd. ................ 80,611
25,000 Overseas Union Bank Ltd. ..... 121,051
10,000 Singapore Press Holdings Ltd. 142,982
86,000 Singapore Technologies
Engineering Ltd. .......... 138,642
--------------
723,736
--------------
MARKET
SHARES VALUE
------- -------
SPAIN - 4.51%
28,724 Banco Bilbao Vizcaya
Argentaria SA ............. $ 382,259
33,020 Banco Santander Central
Hispano SA ................ 319,637
11,780 Endesa SA .................... 191,717
5,300 Fomento de Construcciones y
Contratas SA .............. 97,263
1,440 Gas Natural SDG SA ........... 24,656
7,100 Iberdrola SA ................. 86,723
8,800 Repsol-YPF SA ................ 139,637
37,040 Telefonica SA* ............... 705,485
2,500 Union Electrica Fenosa SA .... 46,175
--------------
1,993,552
--------------
SWITZERLAND - 3.08%
889 ABB AG ....................... 78,983
691 Credit Suisse Group .......... 129,508
27 Holderbank Financiere Glarus AG 28,365
103 Nestle SA .................... 213,379
194 Novartis AG .................. 294,222
26 Roche Holding AG ............. 237,430
30 Schindler Holding AG ......... 45,565
200 Swisscom AG .................. 50,776
1,403 UBS AG ....................... 194,288
180 Zurich Financial Services AG . 87,092
--------------
1,359,608
--------------
UNITED KINGDOM - 19.71%
16,122 Abbey National Plc ........... 222,636
15,000 Arm Holdings Plc* ............ 148,114
16,900 Barclays Plc ................. 483,938
17,600 Berkeley Group Plc (The) ..... 164,203
38,055 BG Group Plc ................. 152,517
78,806 BP Amoco Plc ................. 668,868
11,932 British Aerospace Plc ........ 67,833
23,400 British American Tobacco Plc . 164,119
6,100 British Sky Broadcasting
Group Plc* ................ 88,135
39,300 British Telecommunications Plc 461,106
15,800 Cadbury Schweppes Plc ........ 97,738
66,000 Centrica Plc ................. 227,137
11,734 CGU Plc ...................... 157,099
26,300 Diageo Plc ................... 248,427
18,815 Glaxo Wellcome Plc ........... 542,054
6,716 Granada Compass Plc* ......... 57,929
19,900 Hays Plc ..................... 108,724
40,416 HSBC Holdings Plc ............ 576,317
7,600 HSBC Holdings Plc
(HK Registered) ........... 105,734
38,055 Lattice Group Plc* ........... 81,232
66,800 Legal & General Group Plc .... 166,355
12,600 Marconi Plc .................. 159,179
5,500 National Grid Group Plc ...... 47,720
12,600 Next Plc ..................... 125,788
3,563 Pearson Plc .................. 95,664
7,000 Railtrack Group Plc .......... 108,356
8,300 Reuters Group Plc ............ 161,744
11,600 Rio Tinto Plc ................ 187,815
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
27
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/BLAIRLOGIE INTERNATIONAL DEVELOPED FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
UNITED KINGDOM (CONTINUED)
15,500 Royal Bank of Scotland Group
Plc ....................... $ 348,192
5,800 Royal Bank of Scotland Group Plc,
Value Shares* ............. 6,864
17,900 Sage Group Plc (The) ......... 130,743
23,600 Scottish & Newcastle Plc ..... 161,153
39,400 Shell Transport & Trading Co. Plc 317,245
25,252 SmithKline Beecham Plc ....... 326,349
50,845 Tesco Plc .................... 193,994
900 3i Group Plc ................. 20,453
11,007 Unilever Plc ................. 74,522
300,520 Vodafone AirTouch Plc ........ 1,251,334
--------------
8,707,330
--------------
TOTAL COMMON STOCKS .......... 42,422,293
--------------
(Cost $43,038,498)
FOREIGN INDEX SECURITY - 2.79%
4,300 Sweden OPALS ................. 1,232,487
--------------
TOTAL FOREIGN INDEX SECURITY . 1,232,487
--------------
(Cost $1,155,572)
PREFERRED STOCKS - 1.25%
GERMANY - 1.24%
2,705 SAP AG ....................... 546,851
--------------
UNITED KINGDOM - 0.01%
2,695 British Aerospace Plc* ....... 3,913
--------------
TOTAL PREFERRED STOCKS ....... 550,764
--------------
(Cost $444,690)
MARKET
PAR VALUE VALUE
--------- -------
FOREIGN NOTES AND BONDS - 0.03%
UNITED KINGDOM - 0.03%
BG Transco Holdings Plc
$ 3,000 7.057%, 12/14/09 ............. $ 4,407
3,000 4.188%, 12/14/22 ............. 4,398
3,000 7.000%, 12/16/24 ............. 4,275
--------------
TOTAL FOREIGN NOTES AND BONDS 13,080
--------------
(Cost $14,640)
TOTAL INVESTMENTS - 100.07% ................ 44,218,624
--------------
(Cost $44,653,400)**
LIABILITIES NET OF CASH
AND OTHER ASSETS - (0.07)% ............. (30,586)
--------------
NET ASSETS - 100.00% ....................... $ 44,188,038
==============
--------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $44,855,556.
Gross unrealized appreciation ..... $ 4,143,382
Gross unrealized depreciation ..... (4,780,314)
--------------
Net unrealized depreciation ....... $ (636,932)
==============
OPALS Optimised Portfolio As Listed Security
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
28
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/BLAIRLOGIE EMERGING MARKETS FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
COMMON STOCKS - 82.22%
BRAZIL - 0.46%
1,765,700 Companhia Siderurgica Nacional $ 49,027
588 Tele Norte Leste Participacoes SA,
ADR ....................... 13,009
109 Telesp Celular Participacoes SA 1
--------------
62,037
--------------
CHILE - 4.93%
4,700 Banco Santander Chile, SP ADR 63,156
2,230 Compania Cervecerias Unidas SA,
SP ADR .................... 43,067
9,271 Compania Telecomunicaciones
de Chile SA, SP ADR ....... 141,383
2,670 Distribucion y Servicio D&S SA,
ADR ....................... 47,726
4,000 Embotelladora Andina SA,
ADR, Series A ............. 48,000
9,072 Empresa Nacional de
Electricidad SA, SP ADR .. 95,256
5,202 Enersis SA, SP ADR* .......... 92,335
2,088 Enersis SA, SP ADR, Rights* .. --
5,088 Gener SA, SP ADR ............. 61,692
2,677 Madeco SA, SP ADR* ........... 13,552
1,790 Maderas y Sinteticos SA, SP ADR 23,494
1,030 Sociedad Quimica y Minera
de Chile SA, SP ADR, Class A 19,055
410 Vina Concha Y Toro SA, SP ADR 15,734
--------------
664,450
--------------
CZECH REPUBLIC - 1.60%
7,460 Ceska Sporitelena AS* ........ 42,363
30,990 Ceske Energeticke Zavody AS* . 75,447
7,340 Cesky Telecom AS* ............ 97,601
--------------
215,411
--------------
GREECE - 0.28%
5,000 Cosmote SA* .................. 37,556
--------------
HONG KONG - 4.62%
56,000 China Mobile (Honk Kong) Ltd.* 360,823
16,000 China Unicom Ltd.* ........... 32,107
29,000 Citic Pacific, Ltd. .......... 116,389
60,000 Cosco Pacific, Ltd. .......... 45,007
81,000 Legend Holdings Ltd. ......... 68,549
--------------
622,875
--------------
HUNGARY - 3.28%
1,210 Danubius Hotel and Spa, Rights 17,919
770 Gedeon Richter, Rights ....... 37,407
50,150 Magyar Tavkozlesi, Rights .... 222,803
5,730 MOL Magyar Olaj-es
Gazipari, Rights .......... 88,453
1,645 OTP Bank, Rights ............. 76,208
--------------
442,790
--------------
MARKET
SHARES VALUE
------- -------
INDIA - 4.54%
1,500 Bajaj Auto Ltd., SP GDR ...... $ 9,150
5,300 BSES Ltd., GDR ............... 59,890
1,267 Grasim Industries Ltd.,
SP GDR .................... 6,652
3,600 Gujarat Ambuja Cement Ltd.,
SP GDR .................... 9,990
2,810 Hindalco Industries Ltd., SP GDR 42,290
3,530 Indian Hotels Co., Ltd, SP GDR 15,002
4,225 Indian Rayon & Industries Ltd.,
SP GDR .................... 5,704
4,100 ITC Ltd., GDR ................ 74,005
8,380 Larsen & Tourbo Ltd., GDR .... 52,480
17,600 Mahanagar Telephone
Nigam Ltd., GDR ........... 103,840
1,900 Reliance Industries Ltd., GDR (A) 25,032
4,200 Reliance Industries Ltd.,
SP GDR (A) ................ 53,970
10,100 State Bank of India, GDR ..... 68,680
4,124 Tata Engineering & Locomotive
Co., Ltd., SP GDR ......... 6,701
10,600 Videsh Sanchar Nigam Ltd., ADR 78,175
--------------
611,561
--------------
INDONESIA - 0.19%
305,000 PT Indofood Sukses Makmur Tbk* 25,255
--------------
ISRAEL - 3.85%
19,220 Bank Hapoalim ................ 48,632
13,500 Bank Leumi Le-Israel ......... 26,524
7,500 Bezeq Israeli Telecommunications
Corp. Ltd. ................ 37,537
1,520 Blue Square Chain Investments
and Properties Ltd. ....... 17,864
1,285 Check Point Software
Technolgies Ltd.* ......... 203,512
625 ECI Telecom Ltd. ............. 14,766
290 Elite Industries Ltd. ........ 12,910
160 Koor Industries Ltd. ......... 11,716
7,200 Makhteshim-Agan Industries Ltd.* 14,286
305 NICE Systems Ltd., SP ADR* ... 14,259
5,070 Supersol Ltd. ................ 16,749
900 Taro Pharmaceutical
Industries Ltd.* .......... 21,825
1,300 Teva Pharmaceuticals
Industries Ltd. ........... 78,574
--------------
519,154
--------------
MALAYSIA - 4.31%
13,000 Commerce Asset-Holdings Berhad 33,014
36,000 Malayan Banking Berhad ....... 144,005
41,000 Malaysia International Shipping
Corp. Berhad .............. 72,292
57,000 Public Bank Berhad ........... 48,902
11,000 Resorts World Berhad ......... 19,251
30,000 RHB Capital Berhad ........... 24,159
25,000 Telekom Malaysia Berhad ...... 76,976
50,000 Tenaga Nasional Berhad ....... 161,847
--------------
580,446
--------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
29
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/BLAIRLOGIE EMERGING MARKETS FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
MEXICO - 9.14%
16,600 Alfa SA de CV, Class A ....... $ 32,818
4,104 Cemex SA de CV, SP ADR ....... 86,697
46,400 Desc SA de CV, Series B ...... 20,121
1,530 Fomento Economico Mexicano
SA de CV, SP ADR .......... 58,427
15,500 Grupo Carso SA de CV, Series A1* 48,750
49,800 Grupo Financiero Banamex
Accival SA de CV, Series O* 77,326
41,473 Grupo Industrial Bimbo SA
de CV, Series A ........... 57,203
37,000 Grupo Modelo SA de CV, Series C 98,587
1,382 Grupo Televisa SA, SP GDR* ... 74,801
5,200 Industrias Penoles SA ........ 6,086
15,700 Kimberley-Clark de Mexico SA,
Class A ................... 40,110
17,710 Nueva Grupo Mexico SA, Series B* 64,769
5,163 Savia SA de CV* .............. 23,683
7,547 Telefonos de Mexico SA, SP ADR 407,066
56,237 Wal-Mart de Mexico SA de CV,
Series V* ................. 135,448
--------------
1,231,892
--------------
PHILIPPINES - 0.02%
21,800 Ayala Land, Inc. ............. 1,705
2,200 Manila Electric Co., Class B . 1,806
--------------
3,511
--------------
POLAND - 1.35%
490 Agora SA* .................... 8,964
1,110 Bank Polska Kasa Opieki
Grupa Pekao SA* ........... 11,180
1,350 Bank Polska Kasa Opieki SA,
ADR (A) ................... 14,145
302 Bank Slaski SA w Katowicach .. 12,057
290 BRE Bank SA .................. 6,553
1,441 Elektrim Spolka Akcyjna SA* .. 11,413
5,262 Polski Koncern Naftowy SA, GDR 40,780
420 Prokom ....................... 16,542
11,950 Telekomunikacja Polska SA, GDR 60,049
--------------
181,683
--------------
RUSSIA - 5.22%
5,400 AO Mosenergo, SP ADR ......... 17,280
1,812 Mobile Telesystems, SP ADR* .. 50,056
5,400 OAO Lukoil Holding, SP ADR ... 288,360
9,800 RAO Unified Energy Systems, GDR 122,112
3,300 Rostelecom, SP ADR ........... 28,875
15,300 Surgutneftegaz, SP ADR ....... 196,605
--------------
703,288
--------------
SOUTH AFRICA - 8.70%
5,780 ABSA Group Ltd. .............. 19,653
3,440 Anglo American Platinum
Corp. Ltd. ................ 134,259
910 Anglo American Plc ........... 49,482
MARKET
SHARES VALUE
------- -------
SOUTH AFRICA (CONTINUED)
1,100 AngloGold Ltd. ............... $ 31,289
8,670 Barloworld Ltd. .............. 45,309
4,720 De Beers ..................... 129,888
4,100 Dimension Data Holdings Plc* . 35,367
83,400 FirstRand Ltd. ............... 75,031
5,100 Gold Fields Ltd. ............. 15,182
1,120 Impala Platinum Holdings Ltd. 48,009
2,902 Imperial Holdings Ltd.* ...... 20,310
5,000 Johnnic Holdings Ltd. ........ 56,890
5,520 Liberty Group Ltd. ........... 42,138
1,841 Liberty International Plc .... 13,347
15,463 Nampak Ltd. .................. 22,503
5,700 Naspers Ltd., Class N ........ 42,381
4,800 Nedcor Ltd. .................. 90,177
10,240 Rembrandt Group Ltd. ......... 28,382
10,240 Remgro Ltd.* ................. 62,658
40,900 Sanlam Ltd. .................. 42,477
7,800 Sasol Ltd. ................... 59,750
14,180 South African Breweries Plc .. 84,984
3,700 Standard Bank Investment
Corp. Ltd. ................ 12,972
1,525 Tigers Brands Ltd. ........... 10,592
--------------
1,173,030
--------------
SOUTH KOREA - 12.23%
8,500 Hyundai Motor Co. Ltd. ....... 97,146
11,900 Kookmin Bank ................. 136,005
10,000 Korea Electric Power Corp. ... 223,304
2,500 Korea Telecom Corp. .......... 147,258
8,683 L.G. Chemical Ltd. ........... 85,497
3,100 Pohang Iron & Steel Ltd.,
SP ADR .................... 49,019
3,400 Samsung Electro-Mechanics Co. 108,804
3,019 Samsung Electronics .......... 378,217
15,000 Samsung Heavy Industries Co.,
Ltd.* ..................... 46,683
1,500 Samsung SDI Co. Ltd. ......... 58,420
8,700 Shinhan Bank ................. 87,194
6,600 SK Corp. ..................... 79,493
710 SK Telecom Co. Ltd. .......... 151,368
--------------
1,648,408
--------------
TAIWAN - 8.76%
11,645 Advanced Semicondutor
Engineering, Inc.,
Series E., ADR* ........... 70,598
20,958 Asia Cement Corp., SP GDR* ... 106,362
27,336 Asustek Computer, Inc., GDR .. 149,665
14,254 China Steel Corp., SP GDR .... 163,921
15,746 Evergreen Marine Corp.,
SP GDR* ................... 101,562
1,867 Standard Foods Taiwan Ltd., GDR* 3,547
95,000 Taiwan Semiconductor
Manufacturing Co., Ltd.* .. 287,702
6,272 Taiwan Semiconductor
Manufacturing Co., Ltd.,
SP ADR* ................... 142,296
16,043 Winbond Electronic Corp., GDR* 156,018
--------------
1,181,671
--------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
30
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/BLAIRLOGIE EMERGING MARKETS FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
THAILAND - 1.55%
4,300 Advanced Info Service Public
Co. Ltd.* ................. $ 35,391
28,500 Bangkok Bank Public Co. Ltd.* 24,299
3,000 BEC World Public Co. Ltd. .... 14,324
8,900 Electricity Generating Public
Co. Ltd. .................. 8,448
17,600 PTT Exploration and Production
Public Co. Ltd. ........... 42,816
2,000 Siam Cement Public Co. Ltd.* . 18,825
55,000 TelecomAsia Corp. Public Co.
Ltd.* ..................... 33,137
61,000 Thai Farmers Bank Public Co.
Ltd.* ..................... 31,552
--------------
208,792
--------------
TURKEY - 7.19%
1,985,600 Adana Cimento Sanayii Turk
Anomin Sirketi, Class A ... 23,555
1,076,481 Anadolu Efes Biracilik ve
Malt Sanayii AS* .......... 63,062
853,500 Arcelik AS ................... 27,500
772,000 Aygaz AS ..................... 33,919
496,000 Brisa Bridgestone Sabanci
Lastik San. ve Tic AS ..... 26,151
1,602,000 Eregli Demir ve Celik
Fabrikalari TAS* .......... 50,443
2,593,800 Haci Omer Sabanci Holding AS . 26,211
469,000 Koc Holdings AS .............. 29,879
214,600 Migros Turk TAS .............. 29,543
300,600 Netas Northern Electric
Telekomunikasyon AS ....... 38,301
2,665,550 Trakya Cam Sanayii AS ........ 29,669
1,489,000 Turkcell Iletisim Hizmetleri AS* 65,421
9,671,000 Turkiye Garanti Bankasi AS ... 99,144
13,471,800 Turkiye Is Bankasi, Class C .. 256,489
237,000 Vestel Elektronik Sanayi
ve Ticaret AS* ............ 48,593
14,060,431 Yapi ve Kredi Bankasi SA* .... 121,493
--------------
969,373
--------------
TOTAL COMMON STOCKS .......... 11,083,183
--------------
(Cost $12,430,954)
PREFERRED STOCKS - 9.24%
BRAZIL - 9.24%
23,400 Aracruz Celulose SA, Class B . 34,577
10,130,994 Banco Bradesco SA ............ 64,500
948,600 Banco Itau SA ................ 73,814
10,994,693 Bradespar SA* ................ 6,452
8,857,620 Centrais Electricas Brasileiras
SA, Class B ............... 157,342
1,167,700 Companhia Brasileira de
Distribuicao Grupo Pao
de Acucar ................. 41,613
299,500 Companhia de Bebidas
das Americas .............. 66,857
MARKET
SHARES VALUE
------- -------
BRAZIL (CONTINUED)
3,999,255 Companhia Energetica de
Minas Geraus .............. $ 60,730
6,262 Companhia Vale do Rio Doce,
Class A ................... 144,376
9,290 Petroleo Brasleiro SA ........ 246,366
109,365 Tele Norte Leste Participacoes SA 2,389
4,730 Telecomunicacoes Brasileiras
SA, Pfd Block, SP ADR ..... 346,472
--------------
TOTAL PREFERRED STOCKS ....... 1,245,488
--------------
(Cost $1,073,363)
INVESTMENT COMPANIES - 3.79%
14,800 Korea Fund * ................. 162,948
27,000 Taiwan Fund, Inc.* ........... 347,625
--------------
TOTAL INVESTMENT COMPANIES ... 510,573
--------------
(Cost $485,806)
FOREIGN INDEX SECURITY - 2.08%
3,000 MSCI Taiwan OPALS ............ 280,890
--------------
TOTAL FOREIGN INDEX SECURITY . 280,890
--------------
(Cost $394,500)
PAR VALUE
----------
TIME DEPOSIT - 3.77%
$ 508,000 Eurodollar Time Deposit
3.000%, 11/01/00 .......... 508,000
--------------
TOTAL TIME DEPOSIT ........... 508,000
--------------
(Cost $508,000)
TOTAL INVESTMENTS - 101.10% ................ 13,628,134
--------------
(Cost $14,892,623)**
LIABILITIES NET OF CASH
AND OTHER ASSETS - (1.10)% ............. (148,513)
--------------
NET ASSETS - 100.00% ....................... $ 13,479,621
==============
------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $14,957,368.
Gross unrealized appreciation .............. $ 1,654,594
Gross unrealized depreciation .............. (2,983,828)
--------------
Net unrealized depreciation ................ $ (1,329,234)
==============
(A) Securities exempt from registration under Rule 144A of the Securities
Act of 1933. These securities are purchased in accordance with
guidelines approved by the Fund's Board of Trustees and may only be
resold, in transactions exempt from registration, to qualified
institutional buyers. At October 31, 2000, these securities amounted to
$93,147 or 0.69% of net assets.
ADR American Depositary Receipt
GDR Global Depositary Receipt
OPAL Optimised Portolio As Listed Security
SP ADR Sponsored American Depositary Receipt
SP GDR Sponsored Global Depositary Receipt
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/MONTAG & CALDWELL BALANCED FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
COMMON STOCKS - 61.50%
ADVERTISING - 1.62%
127,930 Interpublic Group
of Companies, Inc. ........ $ 5,492,994
--------------
CONSUMER CYCLICALS - 5.90%
67,650 Colgate-Palmolive Co. ........ 3,975,114
253,000 Gillette Co. ................. 8,823,375
99,770 Procter & Gamble Co. ......... 7,127,319
--------------
19,925,808
--------------
ELECTRICAL - 0.73%
44,990 General Electric Co. ......... 2,466,014
--------------
ENTERTAINMENT AND LEISURE - 1.62%
153,340 The Walt Disney Co. ......... 5,491,489
--------------
FINANCE - 9.55%
95,370 American Express Co. ......... 5,722,200
66,900 American International
Group, Inc. ............... 6,556,200
200,200 Citigroup, Inc. .............. 10,535,538
16,400 Marsh & McLennan Cos., Inc. .. 2,144,300
157,190 Wells Fargo & Co. ............ 7,279,862
--------------
32,238,100
--------------
FOOD AND BEVERAGE - 6.13%
231,000 Coca-Cola Co. ................ 13,946,625
139,370 PepsiCo, Inc. ................ 6,750,734
--------------
20,697,359
--------------
HEALTH CARE SERVICES - 3.11%
113,960 Johnson & Johnson ............ 10,498,565
--------------
LODGING - 1.83%
152,460 Marriott International, Inc.,
Class A ................... 6,174,630
--------------
MEDICAL PRODUCTS AND
SUPPLIES - 3.38%
304,920 Boston Scientific Corp.* ..... 4,859,662
120,780 Medtronic, Inc. .............. 6,559,864
--------------
11,419,526
--------------
PHARMACEUTICALS - 9.64%
136,950 Bristol-Myers Squibb Co. ..... 8,345,391
275,000 Pfizer, Inc. ................. 11,876,562
123,750 Pharmacia Corp. .............. 6,806,250
106,920 Schering-Plough Corp. ........ 5,526,427
--------------
32,554,630
--------------
RESTAURANTS - 2.64%
287,540 McDonald's Corp. ............. 8,913,740
--------------
MARKET
SHARES VALUE
------- --------
RETAIL - 3.24%
150,590 Costco Wholesale Corp.* ...... $ 5,520,065
125,840 Home Depot, Inc. ............. 5,411,120
--------------
10,931,185
--------------
TECHNOLOGY - 10.04%
55,300 Electronic Arts, Inc.* ....... 2,763,272
236,500 Electronic Data Systems Corp. 11,100,719
172,920 Hewlett-Packard Co. .......... 8,029,972
62,000 Intel Corp. .................. 2,786,125
50,600 Microsoft Corp.* ............. 3,486,656
130,200 Solectron Corp.* ............. 5,728,800
--------------
33,895,544
--------------
TELECOMMUNICATIONS
EQUIPMENT - 2.07%
86,130 Nokia Corp., SP ADR .......... 3,682,057
66,000 Tellabs, Inc.* ............... 3,297,937
--------------
6,979,994
--------------
TOTAL COMMON STOCKS .......... 207,679,578
--------------
(Cost $184,793,368)
PAR VALUE
----------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 17.46%
FEDERAL HOME LOAN BANK - 0.28%
$ 1,000,000 5.890%, 06/30/08,
Series GJ08 ............... 955,893
--------------
FEDERAL HOME LOAN MORTGAGE
CORPORATION - 2.48%
4,400,000 6.250%, 10/15/02 ............. 4,385,806
750,000 6.400%, 12/13/06,
Debenture ................. 743,881
1,750,000 6.700%, 01/05/07 ............. 1,762,134
600,000 7.500%, 03/15/07, CMO,
Class J ................... 604,898
159,580 6.000%, 04/15/08, CMO,
Class K ................... 157,950
322,320 6.500%, 07/15/20, CMO,
Class F ................... 319,999
400,000 6.500%, 11/15/20, CMO,
Class H ................... 395,032
--------------
8,369,700
--------------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 4.01%
5,500,000 5.750%, 04/15/03 ............. 5,418,171
6,000,000 7.000%, 07/15/05 ............. 6,114,912
2,000,000 7.250%, 01/17/21,
CMO, REMIC, Class P ....... 2,003,480
--------------
13,536,563
--------------
SEE ACCOMPANYING NOTES TOFINANCIAL STATEMENTS.
32
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/MONTAG & CALDWELL BALANCED FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
PAR VALUE VALUE
---------- -------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - 0.00%
$ 545 8.500%, 06/15/01 ............. $ 562
1,474 9.000%, 09/15/08 ............. 1,526
--------------
2,088
--------------
U.S. TREASURY BONDS - 8.30%
4,625,000 7.250%, 05/15/16 ............. 5,205,881
7,000,000 8.125%, 08/15/19 ............. 8,649,396
4,350,000 8.000%, 11/15/21 ............. 5,377,692
5,500,000 6.250%, 08/15/23 ............. 5,675,191
2,800,000 6.875%, 08/15/25 ............. 3,119,553
--------------
28,027,713
--------------
U.S. TREASURY NOTES - 2.39%
3,200,000 6.625%, 04/30/02 ............. 3,224,787
3,800,000 5.750%, 08/15/03 ............. 3,786,939
1,000,000 7.875%, 11/15/04 ............. 1,070,855
--------------
8,082,581
--------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS ........... 58,974,538
--------------
(Cost $58,444,631)
CORPORATE NOTES AND BONDS - 12.61%
CONSUMER NON-DURABLES - 1.84%
4,250,000 Daimlerchrysler NA
7.400%, 01/20/05 .......... 4,270,689
2,000,000 NIKE, Inc.
6.375%, 12/01/03 .......... 1,954,812
--------------
6,225,501
--------------
FINANCE - 4.24%
3,000,000 American Express Co., Senior Notes
6.750%, 06/23/04 .......... 2,979,828
3,000,000 Ford Motor Credit Co., Inc.
Senior Notes
7.000%, 09/25/01 .......... 3,005,400
1,350,000 Household Finance Corp., MTN
7.300%, 07/30/12 .......... 1,283,020
4,300,000 National Rural Utilities,
Collateral Trust
6.200%, 02/01/08 .......... 4,048,231
2,500,000 NationsBank Corp.,
Subordinated Notes
6.875%, 02/15/05 .......... 2,480,885
500,000 Salomon, Inc., Senior Notes
7.300%, 05/15/02 .......... 503,623
--------------
14,300,987
--------------
MARKET
PAR VALUE VALUE
---------- -------
INDUSTRIAL - 0.92%
$ 3,000,000 Honeywell International, Inc.
7.500%, 03/01/10 .......... $ 3,098,922
--------------
OIL AND GAS EXTRACTION - 1.14%
4,000,000 Conoco Inc., Senior Notes
5.900%, 04/15/04 .......... 3,859,864
--------------
PHARMACEUTICALS - 1.33%
2,100,000 Amgen, Inc.
6.500%, 12/01/07 .......... 2,032,227
2,500,000 Warner-Lambert Co.
5.750%, 01/15/03 .......... 2,457,168
--------------
4,489,395
--------------
RETAIL - 1.83%
500,000 Penney (J.C.) Company, Inc.,
Debentures
9.750%, 06/15/21 .......... 329,512
2,750,000 Sears Roebuck Acceptance Corp.
6.700%, 11/15/06 .......... 2,567,161
3,300,000 Wal-Mart Stores, Inc., Senior Notes
6.875%, 08/10/09 .......... 3,285,711
--------------
6,182,384
--------------
UTILITY - 1.31%
4,300,000 BellSouth Capital Funding Corp.
7.750%, 02/15/10 .......... 4,415,477
--------------
TOTAL CORPORATE NOTES AND BONDS 42,572,530
--------------
(Cost $43,664,293)
ASSET-BACKED SECURITIES - 3.08%
5,000,000 Discover Card Master Trust 1,
Series 1998-7, Class A
5.600%, 05/16/06 .......... 4,845,656
1,750,000 First USA Credit Card Master
Trust, Series 1997-6, Class A
6.420%, 03/17/05 .......... 1,742,493
4,000,000 PECO Energy Transition Trust,
Series 1999-A, Class A-6
6.050%, 03/01/09 .......... 3,826,640
--------------
TOTAL ASSET-BACKED SECURITIES 10,414,789
--------------
(Cost $10,454,868)
REPURCHASE AGREEMENT - 4.96%
16,757,000 Deutsche Bank 6.350% dated
10/31/00 to be repurchased
on 11/01/00 at $16,759,956.
Collateralized by U.S.
Treasury Bill 6.359% due
04/26/01; Total Par
$17,631,000 ............... 16,757,000
--------------
TOTAL REPURCHASE AGREEMENT ... 16,757,000
--------------
(Cost $16,757,000)
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/MONTAG & CALDWELL BALANCED FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- --------
INVESTMENT COMPANIES - 0.01%
9,213 Deutsche Institutional
Cash Management Fund ...... $ 9,213
7,096 Deutsche Institutional
Treasury Money Fund ....... 7,096
--------------
TOTAL INVESTMENT COMPANIES ... 16,309
--------------
(Cost $16,309)
TOTAL INVESTMENTS - 99.62% ................. 336,414,744
--------------
(Cost $314,130,469)**
NET OTHER ASSETS AND LIABILITIES - 0.38% ... 1,275,991
--------------
NET ASSETS - 100.00% ....................... $ 337,690,735
==============
-------------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $314,505,037.
Gross unrealized appreciation ..... $ 29,658,399
Gross unrealized depreciation ..... (7,748,692)
--------------
Net unrealized appreciation ....... $ 21,909,707
==============
CMO Collateralized Mortgage Obligation
MTN Medium Term Note
REMIC Real Estate Mortgage Investment Conduit
PORTFOLIO COMPOSITION (MOODY'S RATINGS)
Common Stocks .............................. 62%
Repurchase Agreement ....................... 5%
U.S. Government Obligations ................ 11%
U.S. Government Agency Obligations ......... 7%
Corporate Notes and Bonds:
Aaa ........................................ 4%
Aa ......................................... 4%
A .......................................... 7%
-----
100%
=====
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST BALANCED FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
MARKET
SHARES VALUE
------- -------
COMMON STOCKS - 62.51%
ADVERTISING - 1.42%
50,000 Omnicom Group, Inc. .......... $ 4,612,500
--------------
CAPITAL GOODS - 0.69%
75,000 Pitney Bowes, Inc. ........... 2,226,562
--------------
CHEMICALS - 0.70%
60,000 Praxair, Inc. ................ 2,235,000
--------------
COMMERCIAL SERVICES - 1.53%
125,000 Ecolab, Inc. ................. 4,898,437
--------------
CONSUMER CYCLICALS - 1.52%
105,000 Cintas Corp. ................. 4,866,094
--------------
CONSUMER DURABLES - 4.69%
151,000 Harley-Davidson, Inc. ........ 7,276,312
65,000 Illinois Tool Works, Inc. .... 3,611,562
70,000 Johnson Controls, Inc. ....... 4,173,750
--------------
15,061,624
--------------
ELECTRICAL - 1.95%
114,000 General Electric Co. ......... 6,248,625
--------------
FINANCE - 12.04%
80,000 AFLAC, Inc. .................. 5,845,000
75,000 American International
Group, Inc. ............... 7,350,000
100,000 Associates First Capital Corp.,
Class A ................... 3,712,500
126,000 Federal Home Loan
Mortgage Corp. ............ 7,560,000
41,000 Marsh & McLennan Cos., Inc. .. 5,360,750
95,000 MBNA Corp. ................... 3,568,437
150,000 Schwab (Charles) Corp. ....... 5,268,750
--------------
38,665,437
--------------
FOOD AND BEVERAGE - 3.25%
200,000 Sysco Corp. .................. 10,437,500
--------------
HEALTH CARE SERVICES - 2.21%
75,000 Cardinal Health, Inc. ........ 7,106,250
--------------
MEDICAL PRODUCTS AND
SUPPLIES - 1.54%
200,000 Sybron International Corp.* .. 4,950,000
--------------
OIL AND GAS EXTRACTION - 2.02%
75,000 Schlumberger, Ltd. 5,709,375
14,520 Transocean Sedco Forex, Inc. . 769,560
--------------
6,478,935
--------------
PHARMACEUTICALS - 2.35%
36,000 Merck & Co., Inc. ............ 3,237,750
100,000 Pfizer, Inc. ................. 4,318,750
--------------
7,556,500
--------------
MARKET
SHARES VALUE
------- -------
RETAIL - 4.92%
72,000 Home Depot, Inc. ............. $ 3,096,000
100,000 Kohl's Corp.* ................ 5,418,750
160,000 Walgreen Co. ................. 7,300,000
--------------
15,814,750
--------------
TECHNOLOGY - 15.10%
50,000 Computer Sciences Corp.* ..... 3,150,000
197,887 Dell Computer Corp.* ......... 5,831,483
138,000 Electronic Data Systems Corp. 6,477,375
105,000 EMC Corp.* ................... 9,351,611
148,000 Intel Corp. .................. 6,650,750
79,000 Microsoft Corp.* ............. 5,443,594
140,000 Solectron Corp.* ............. 6,160,000
49,000 Sun Microsystems, Inc.* ...... 5,431,344
--------------
48,496,157
--------------
TELECOMMUNICATIONS
EQUIPMENT - 4.22%
120,000 Cisco Systems, Inc.* ......... 6,465,000
166,000 Nokia Corp., SP ADR .......... 7,096,500
--------------
13,561,500
--------------
UTILITY - 2.36%
134,000 AES Corp.* ................... 7,571,000
--------------
TOTAL COMMON STOCKS .......... 200,786,871
--------------
(Cost $110,703,957)
PAR VALUE
----------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 19.63%
FEDERAL HOME LOAN BANK - 1.67%
$ 3,115,000 6.000%, 08/15/02 ............. 3,092,074
2,300,000 6.500%, 11/15/06, Series PX02 2,292,573
--------------
5,384,647
--------------
FEDERAL HOME LOAN MORTGAGE
CORPORATION - 2.47%
2,250,000 5.750%, 07/15/03, Debentures . 2,212,951
1,000,000 5.850%, 02/21/06, Series TD06 969,284
483,344 7.500%, 04/01/08,
Gold Pool #E46250 ......... 487,271
507,992 6.500%, 06/01/09,
Gold Pool #E59122 ......... 497,833
3,074,763 6.000%, 10/15/11, CMO, IO
Series 2101, Class TY 423,257
1,213,145 6.500%, 06/01/29,
Gold Pool #C00785 ......... 1,167,652
2,183,734 7.500%, 11/01/29,
Gold Pool #C32468 ......... 2,183,734
--------------
7,941,982
--------------
SEE ACCOMPANYING NOTES TOFINANCIAL STATEMENTS.
35
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST BALANCED FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
PAR VALUE VALUE
---------- -------
FEDERAL NATIONAL MORTGAGE ASSOCIATION - 5.99%
$ 1,250,000 5.625%, 03/15/01 $ 1,245,229
828,727 7.000%, 01/01/13, Pool #313966 824,583
638,536 7.000%, 03/01/13, Pool #251572 635,343
1,316,098 6.000%, 08/01/13, Pool #323250 1,267,978
523,969 7.500%, 02/01/23, Pool #050706 523,478
143,025 9.000%, 05/01/25, Pool #250239 147,495
1,185,734 6.500%, 12/01/27, Pool #402846 1,140,527
541,894 6.500%, 02/01/28, Pool #398205 521,234
2,008,016 7.000%, 08/01/28, Pool #437140 1,969,738
1,063,767 6.500%, 09/01/28, Pool #430877 1,023,211
1,394,958 6.500%, 03/01/29, Pool #489367 1,341,775
2,241,988 6.000%, 06/01/29, Pool #190302 2,103,965
1,058,233 6.500%, 06/01/29, Pool #501319 1,017,888
1,053,686 6.500%, 07/01/29, Pool #503280 1,013,515
2,237,759 7.500%, 04/01/30, Pool #536618 2,235,661
2,239,683 7.500%, 05/01/30, Pool #536420 2,237,584
--------------
19,249,204
--------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - 4.18%
1,463,786 7.000%, 12/15/11, Pool #781011 1,466,073
443,768 8.000%, 06/15/17, Pool #191897 451,257
946,421 7.000%, 09/15/23, Pool #361807 934,000
484,064 7.000%, 10/15/23, Pool #345894 477,711
651,851 7.000%, 10/15/23, Pool #370850 643,295
2,561,337 7.500%, 07/15/25, Pool #409561 2,572,543
1,035,408 6.500%, 03/15/26, Pool #422527 1,000,463
240,999 7.500%, 06/15/27, Pool #446811 242,053
1,129,696 7.500%, 06/15/27, Pool #447652 1,134,639
719,320 6.500%, 08/15/27, Pool #780615 695,492
362,871 7.500%, 07/15/28, Pool #464709 364,459
1,797,062 6.000%, 01/15/29, Pool #457858 1,694,854
1,758,857 7.000%, 03/15/29, Pool #505567 1,735,772
--------------
13,412,611
--------------
U.S. TREASURY BONDS - 2.79%
1,500,000 7.125%, 02/15/23 ............. 1,706,689
2,750,000 6.250%, 08/15/23 ............. 2,837,596
2,750,000 6.000%, 02/15/26 ............. 2,756,977
1,825,000 5.250%, 11/15/28 ............. 1,659,664
--------------
8,960,926
--------------
U.S. TREASURY NOTES - 2.53%
2,100,000 6.375%, 08/15/02 ............. 2,113,623
2,400,000 5.875%, 02/15/04 ............. 2,400,178
3,500,000 6.500%, 08/15/05 ............. 3,598,084
--------------
8,111,885
--------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS ........... 63,061,255
--------------
(Cost $63,462,353)
MARKET
PAR VALUE VALUE
---------- -------
CORPORATE NOTES AND BONDS - 12.53%
CABLE TELEVISION - 0.75%
CSC Holdings, Inc., Senior Notes
$ 1,500,000 7.875%, 12/15/07 ............. $ 1,454,460
1,070,000 7.250%, 07/15/08 ............. 994,552
--------------
2,449,012
--------------
CAPITAL GOODS - 0.28%
1,210,000 Owens Illinois, Inc., Senior Notes
7.850%, 05/15/04 .......... 913,550
--------------
ENERGY - 0.32%
1,100,000 CMS Energy Corp., Senior Notes
7.625%, 11/15/04 .......... 1,030,434
--------------
FINANCE - 4.44%
1,500,000 Advanta Corp., MTN
7.000%, 05/01/01 .......... 1,439,709
1,250,000 Chelsea GCA Realty
Partnership, REIT
7.250%, 10/21/07 .......... 1,155,796
1,625,000 Duke Capital Corp., Senior Notes
7.250%, 10/01/04 .......... 1,639,466
1,000,000 DVI, Inc., Senior Notes
9.875%, 02/01/04 .......... 910,000
2,000,000 Ford Motor Credit Co., Inc.
7.500%, 03/15/05 .......... 2,007,066
1,000,000 Household Finance Corp.
7.875%, 03/01/07 .......... 1,012,191
2,000,000 HSBC America Capital Trust II
8.380%, 05/15/27 (A) ...... 1,833,236
2,000,000 Metropolitan Life Insurance Co.
6.300%, 11/01/03 (A) ...... 1,959,388
1,800,000 Pacific Mutual Life Insurance Co.
7.900%, 12/30/23 (A) ...... 1,764,893
550,000 Prudential Insurance Co.
of America
8.300%, 07/01/25 (A) ...... 552,431
--------------
14,274,176
--------------
FOOD AND BEVERAGE - 0.64%
Nabisco, Inc.
1,000,000 6.700%, 06/15/02 ............. 979,672
1,125,000 6.850%, 06/15/05 ............. 1,073,721
--------------
2,053,393
--------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
36
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST BALANCED FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
PAR VALUE VALUE
---------- -------
HEALTH CARE SERVICES - 1.38%
$ 1,500,000 HEALTHSOUTH Corp.,
Senior Notes
6.875%, 06/15/05 .......... $ 1,331,362
3,000,000 Omnicare, Inc.
5.000%, 12/01/07 .......... 2,253,750
1,000,000 Tenet Healthcare Corp.,
Subordinated Notes
6.000%, 12/01/05 .......... 835,000
--------------
4,420,112
--------------
METALS AND MINING - 0.52%
1,800,000 Lukens, Inc.
7.625%, 08/01/04 .......... 1,657,723
--------------
OIL AND GAS EXTRACTION - 0.47%
1,625,000 Conoco, Inc., Senior Notes
6.950%, 04/15/29 .......... 1,515,225
--------------
PRINTING AND PUBLISHING - 0.57%
2,000,000 News America Holdings, Inc.,
Debentures
7.750%, 02/01/24 .......... 1,821,488
--------------
RETAIL - 0.67%
2,000,000 Kmart Corp., Debentures
7.950%, 02/01/23 .......... 1,266,426
1,450,000 Pep Boys - Manny, Moe & Jack,
Subordinated Debentures
3.031%, 09/20/11 (B) ...... 880,425
--------------
2,146,851
--------------
TELECOMMUNICATIONS - 0.85%
2,000,000 AT&T Corp.
6.000%, 03/15/09 .......... 1,758,052
1,000,000 WorldCom, Inc., Senior Notes
6.400%, 08/15/05 .......... 962,649
--------------
2,720,701
--------------
TRANSPORTATION - 0.52%
1,304,415 American Airlines, Inc.,
Series 1999-1
6.855%, 10/15/10 .......... 1,291,502
367,068 Delta Air Lines Equipment Trust,
Series 1992-A
8.540%, 01/02/07 .......... 376,766
--------------
1,668,268
--------------
MARKET
PAR VALUE VALUE
---------- -------
UTILITIES - 0.83%
$ 1,000,000 Gulf States Utilities,
First Mortgage, Series A
8.250%, 04/01/04 .......... $ 1,032,117
2,000,000 Niagara Mohawk Power Corp.,
Series H, Senior Notes,
Step Coupon
8.500%, 07/01/10 .......... 1,622,500
--------------
2,654,617
--------------
WASTE DISPOSAL - 0.29%
1,000,000 Waste Management, Inc.,
Subordinated Notes
4.000%, 02/01/02 .......... 937,500
--------------
TOTAL CORPORATE NOTES
AND BONDS .................... 40,263,050
--------------
(Cost $41,818,840)
YANKEE BONDS - 0.92%
1,000,000 Petroliam Nasional Berhad
7.625%, 10/15/26 (A) ...... 863,589
848,167 Province of Mendoza,
Collateral Oil Royalty Note
10.000%, 07/25/02 (A) ..... 848,167
1,250,000 Skandinaviska Enskilda,
Subordinated Notes
6.625%, 03/29/49 (A) ...... 1,226,563
--------------
TOTAL YANKEE BONDS 2,938,319
--------------
(Cost $2,700,488)
NON-AGENCY/CMO MORTGAGE SECURITIES - 0.73%
600,000 Midland Realty Acceptance Corp.,
CMO, Series 1996-C1, Class A2
7.475%, 08/25/28 (C) ...... 604,688
1,000,000 Morgan (J.P.) Commercial
Mortgage Finance Corp., CMO,
Series 1999-C7, Class A2
6.507%, 10/15/35 (C) ...... 963,750
805,328 Nomura Asset Securities Corp.,
Series 1998-D6, Class A1A
6.280%, 03/17/28 .......... 788,890
--------------
TOTAL NON-AGENCY/CMO
MORTGAGE SECURITIES .......... 2,357,328
--------------
(Cost $2,406,940)
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
37
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST BALANCED FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
PAR VALUE VALUE
---------- -------
REPURCHASE AGREEMENT - 3.12%
$10,005,000 Bank One 6.570%, dated 10/31/00
to be repurchased on 11/01/00
at $10,006,826 (Collateralized by
U.S. Government Agency Obligation
6.407% due 12/27/00;
Total Par $10,315,000) .... $ 10,005,000
--------------
TOTAL REPURCHASE AGREEMENT ... 10,005,000
--------------
(Cost $10,005,000)
TOTAL INVESTMENTS - 99.44% ................. 319,411,823
--------------
(Cost $231,097,578)**
NET OTHER ASSETS AND LIABILITIES - 0.56% ... 1,814,379
--------------
NET ASSETS - 100.00% ....................... $ 321,226,202
==============
--------------------------
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $231,097,578.
Gross unrealized appreciation ..... $ 100,258,001
Gross unrealized depreciation ..... (11,943,756)
--------------
Net unrealized appreciation ....... $ 88,314,245
==============
(A) Securities exempt from registration under Rule 144A of the Securities
Act of 1933. These Securities are purchased in accordance with
guidelines approved by the Fund's Board of Trustees and may only be
resold, in transactions exempt from registration, to qualified
institutional buyers. At October 31, 2000, these securities amounted to
$9,048,267 or 2.82% of net assets.
(B) Zero Coupon Bond. Rate shown reflects effective yield to maturity at
time of purchase.
(C) Standard & Poor's (S&P) credit ratings are used in the absence of a
rating by Moody's Investors, Inc.
CMO Collateralized Mortgage Obligation
IO Interest Only security
MTN Medium Term Note
REIT Real Estate Investment Trust
SP ADR Sponsored American Depositary Receipt
PORTFOLIO COMPOSITION (MOODY'S RATINGS)
Common Stocks .............................. 63%
Repurchase Agreement ....................... 3%
U.S. Government Obligations ................ 5%
U.S. Government Agency Obligations ......... 14%
Corporate Notes and Bonds:
Aaa ........................................ 1%
Aa ......................................... 1%
A .......................................... 5%
Baa ........................................ 3%
Ba ......................................... 3%
B .......................................... 1%
NR ......................................... 1%
-----
100%
=====
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
38
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST BOND FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
MARKET
PAR VALUE VALUE
---------- -------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 45.10%
FEDERAL HOME LOAN BANK - 3.35%
$ 2,500,000 6.000%, 08/15/02 ............. $ 2,481,600
2,700,000 6.500%, 11/15/06, Series PX02 2,691,282
--------------
5,172,882
--------------
FEDERAL HOME LOAN
MORTGAGE CORPORATION - 8.46%
2,500,000 5.750%, 07/15/03, Debentures . 2,458,835
2,500,000 5.850%, 02/21/06, Series TD06 2,423,210
4,378,806 6.000%, 11/15/10, CMO, IO
Pool #002115 .............. 407,776
910,188 6.500%, 01/01/11, Gold
Pool #E00413 .............. 891,985
2,848,349 7.500%, 11/01/29, Gold
Pool #C32468 .............. 2,848,349
3,980,715 8.000%, 02/01/30, Pool #C00922 4,036,693
--------------
13,066,848
--------------
FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 15.73%
2,000,000 5.625%, 03/15/01 ............. 1,992,366
1,381,211 7.000%, 01/01/13, Pool #313966 1,374,305
1,085,511 7.000%, 03/01/13, Pool #251572 1,080,083
2,367,572 6.000%, 06/01/13, Pool #429584 2,281,008
1,007,833 7.500%, 07/01/23, Pool #226065 1,006,888
1,702,027 6.500%, 09/01/28, Pool #430877 1,637,138
2,632,887 6.500%, 10/01/28, Pool #442329 2,532,508
2,588,687 6.000%, 06/01/29, Pool #190302 2,429,321
1,679,359 6.500%, 06/01/29, Pool #501319 1,615,333
1,695,061 6.500%, 07/01/29, Pool #503280 1,630,437
2,478,268 7.500%, 11/01/29, Pool #252874 2,475,944
4,227,102 7.500%, 02/01/30, Pool #529028 4,223,139
--------------
24,278,470
--------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - 9.74%
847,112 7.000%, 10/15/23, Pool #345894 835,993
1,035,408 6.500%, 03/15/26, Pool #422527 1,000,463
963,826 7.000%, 06/15/27, Pool #780584 951,779
1,471,896 6.500%, 09/20/27, Pool #002482 1,415,320
943,465 7.500%, 07/15/28, Pool #464709 947,593
4,911,731 7.000%, 09/15/28, Pool #458926 4,847,264
2,068,027 6.000%, 01/15/29, Pool #457858 1,950,408
1,758,857 7.000%, 03/15/29, Pool #505567 1,735,772
1,343,469 8.000%, 08/20/30, Pool #002958 1,359,002
--------------
15,043,594
--------------
MARKET
PAR VALUE VALUE
---------- -------
U.S. TREASURY BONDS - 7.82%
$ 2,500,000 7.125%, 02/15/23 ............. $ 2,844,482
3,700,000 6.250%, 08/15/23 ............. 3,817,856
3,350,000 6.000%, 02/15/26 ............. 3,358,499
2,250,000 5.250%, 11/15/28 ............. 2,046,161
--------------
12,066,998
--------------
TOTAL U.S. GOVERNMENT AND
AGENCY OBLIGATIONS ........... 69,628,792
--------------
(Cost $69,937,873)
CORPORATE NOTES AND BONDS - 41.20%
CABLE TELEVISION - 2.04%
CSC Holdings, Inc., Senior Notes
2,000,000 7.875%, 12/15/07 ............. 1,939,280
1,300,000 7.250%, 07/15/08 ............. 1,208,334
--------------
3,147,614
--------------
CAPITAL GOODS - 0.73%
1,485,000 Owens Illinois, Inc., Senior Notes
7.850%, 05/15/04 .......... 1,121,175
--------------
ENERGY - 1.90%
1,500,000 CMS Energy Corp., Senior Notes,
Series B
6.750%, 01/15/04 .......... 1,384,095
1,655,000 CMS Energy Corp., Senior Notes
7.625%, 11/15/04 .......... 1,550,334
--------------
2,934,429
--------------
FINANCE - 13.26%
2,500,000 Advanta Corp., MTN
7.000%, 05/01/01 .......... 2,399,515
1,700,000 Chelsea GCA Realty
Partnership, REIT
7.250%, 10/21/07 .......... 1,571,883
1,000,000 Continental Corp. (The)
7.250%, 03/01/03 .......... 980,627
1,250,000 Duke Capital Corp., Senior Notes
7.250%, 10/01/04 .......... 1,261,128
1,350,000 DVI, Inc., Senior Notes
9.875%, 02/01/04 .......... 1,228,500
3,000,000 Ford Motor Credit Co., Inc.
7.500%, 03/15/05 .......... 3,010,599
1,500,000 Household Finance Corp.
7.875%, 03/01/07 .......... 1,518,287
1,145,000 HSBC America Capital Trust I
7.808%, 12/15/26 (A) ...... 999,587
2,800,000 HSBC America Capital Trust II
8.380%, 05/15/27 (A) ...... 2,566,530
1,500,000 Metropolitan Life Insurance Co.
6.300%, 11/01/03 (A) ...... 1,469,541
2,000,000 Pacific Mutual Life Insurance Co.
7.900%, 12/30/23 (A) ...... 1,960,992
1,500,000 Prudential Insurance Co.
of America
8.300%, 07/01/25 (A) ...... 1,506,630
--------------
20,473,819
--------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
39
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST BOND FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
PAR VALUE VALUE
---------- -------
FOOD AND BEVERAGE - 1.39%
$ 2,250,000 Nabisco, Inc.
6.850%, 06/15/05 .......... $ 2,147,443
--------------
HEALTH CARE SERVICES - 6.98%
Columbia/HCA Healthcare Corp.
1,200,000 6.125%, 12/15/00 ............. 1,196,282
2,276,000 MTN, 8.850%, 01/01/07 ........ 2,303,956
HEALTHSOUTH Corp.
1,375,000 3.250%, 04/01/03 .......... 1,165,313
2,000,000 Senior Notes
6.875%, 06/15/05 .......... 1,775,150
3,000,000 Omnicare, Inc.
5.000%, 12/01/07 .......... 2,253,750
2,500,000 Tenet Healthcare Corp.,
Subordinated Notes
6.000%, 12/01/05 .......... 2,087,500
--------------
10,781,951
--------------
METALS AND MINING - 1.64%
2,750,000 Lukens, Inc.
7.625%, 08/01/04 .......... 2,532,632
--------------
OIL AND GAS EXTRACTION - 1.51%
2,500,000 Conoco, Inc., Senior Notes
6.950%, 04/15/29 .......... 2,331,115
--------------
PRINTING AND PUBLISHING - 1.48%
News America Holdings, Inc.,
Debentures
2,000,000 7.750%, 01/20/24 ............. 1,821,570
500,000 7.750%, 02/01/24 ............. 455,372
--------------
2,276,942
--------------
RETAIL - 1.76%
2,375,000 Kmart Corp., Debentures
7.950%, 02/01/23 .......... 1,503,881
2,000,000 Pep Boys - Manny, Moe & Jack,
Subordinated Debentures
3.031%, 09/20/11 (B) ...... 1,214,380
--------------
2,718,261
--------------
TELECOMMUNICATIONS - 2.64%
3,000,000 AT&T Corp.
6.000%, 03/15/09 .......... 2,637,078
1,500,000 WorldCom, Inc., Senior Notes
6.400%, 08/15/05 .......... 1,443,974
--------------
4,081,052
--------------
MARKET
PAR VALUE VALUE
---------- -------
TRANSPORTATION - 1.00%
$ 1,557,511 American Airlines, Inc.,
Series 1999-1
6.855%, 10/15/10 .......... $ 1,542,092
--------------
UTILITIES - 2.75%
1,750,000 Gulf States Utilities,
First Mortgage, Series A
8.250%, 04/01/04 .......... 1,806,205
3,000,000 Niagara Mohawk Power Corp.,
Series H, Senior Notes,
Step Coupon
8.500%, 07/01/10 .......... 2,433,750
--------------
4,239,955
--------------
WASTE DISPOSAL - 2.13%
3,500,000 Waste Management, Inc.,
Subordinated Notes
4.000%, 02/01/02 .......... 3,281,250
--------------
TOTAL CORPORATE NOTES
AND BONDS .................... 63,609,730
--------------
(Cost $65,131,401)
YANKEE BONDS - 2.78%
1,250,000 Petroliam Nasional Berhad
7.625%, 10/15/26 (A) ...... 1,079,486
1,740,084 Province of Mendoza,
Collateral Oil Royalty Note
10.000%, 07/25/02 (A) ..... 1,740,084
1,500,000 Skandinaviska Enskilda,
Subordinated Notes
6.625%, 03/29/49 (A) ...... 1,471,875
--------------
TOTAL YANKEE BONDS 4,291,445
--------------
(Cost $4,031,637)
NON-AGENCY/CMO MORTGAGE SECURITIES - 1.99%
1,000,000 First Union-Lehman Bros.,
CMO Series 1997-C2, Class A2
6.600%, 05/18/07 .......... 986,585
875,000 Midland Realty Acceptance Corp.,
CMO, Series 1996-C1, Class A2
7.475%, 08/25/28 (C) ...... 881,836
1,250,000 Morgan (J.P.) Commercial
Mortgage Finance Corp., CMO,
Series 1999-C7, Class A2
6.507%, 10/15/35 (C) ...... 1,204,688
--------------
TOTAL NON-AGENCY/CMO
MORTGAGE SECURITIES .......... 3,073,109
--------------
(Cost $3,135,281)
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
40
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST BOND FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
PAR VALUE VALUE
---------- -------
REPURCHASE AGREEMENT - 7.52%
$11,617,000 Bank One 6.570%, dated 10/31/00
to be repurchased on 11/01/00
at $11,619,120 (Collateralized by
U.S. Government Agency Obligation
6.407% due on 12/27/00;
Total Par $11,975,000) .... $ 11,617,000
--------------
TOTAL REPURCHASE AGREEMENT ... 11,617,000
--------------
(Cost $11,617,000)
TOTAL INVESTMENTS - 98.59% ................. 152,220,076
--------------
(Cost $153,853,192)*
NET OTHER ASSETS AND LIABILITIES - 1.41% ... 2,172,437
--------------
NET ASSETS - 100.00% ....................... $ 154,392,513
==============
---------------------
* Aggregate cost for Federal income tax purposes is $153,919,849.
Gross unrealized appreciation ...... $ 1,607,988
Gross unrealized depreciation ...... (3,307,761)
--------------
Net unrealized depreciation ........ $ (1,699,773)
==============
(A) Securities exempt from registration under Rule 144A of the Securities
Act of 1933. These securities are purchased in accordance with
guidelines approved by the Fund's Board of Trustees and may only be
resold, in transactions exempt from registration, to qualified
institutional buyers. At October 31, 2000, these securities amounted to
$13,043,308 or 8.45% of net assets.
(B) Zero Coupon Bond. Rate shown reflects effective yield to maturity at
time of purchase.
(C) Standard & Poor's (S&P) credit ratings are used in the absence of a
rating by Moody's Investors, Inc.
CMO Collateralized Mortgage Obligation
IO Interest Only security
MTN Medium Term Note
REIT Real Estate Investment Trust
PORTFOLIO COMPOSITION (MOODY'S RATINGS)
Repurchase Agreement ....................... 8%
U.S. Government Obligations ................ 11%
U.S. Government Agency Obligations ......... 34%
Corporate Notes and Bonds (C):
Aaa ........................................ 2%
Aa ......................................... 1%
A .......................................... 15%
Baa ........................................ 9%
Ba ......................................... 14%
B .......................................... 4%
NR ......................................... 2%
-----
100%
=====
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
41
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST MUNICIPAL BOND FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS
--------------------------------------------------------------------------------
MARKET
PAR VALUE VALUE
---------- -------
MUNICIPAL SECURITIES - 97.49%
ARIZONA - 6.28%
$ 500,000 Phoenix Civic Improvement Corp.,
Water System Revenue,
Junior Lien
6.000%, 07/01/02 .......... $ 512,805
450,000 Salt River Project, Agricultural
Improvement and Power District
Electric System Revenue
Refunding, Series A
5.500%, 01/01/05 .......... 466,699
200,000 Tucson, Arizona Water Revenue
5.400%, 07/01/05 .......... 206,970
--------------
1,186,474
--------------
CALIFORNIA - 1.96%
350,000 San Francisco City and
County Airports Revenue,
Series-23A
5.500%, 05/01/10,
Insured: FGIC ............. 370,146
--------------
CONNECTICUT - 1.06%
200,000 Connecticut State Health &
Educational Facilities,
Yale University, Series U
4.150%, 07/01/33 VRDO ..... 200,000
--------------
DISTRICT OF COLUMBIA - 3.42%
640,000 District of Columbia,
Smithsonian Institute, Series A
5.375%, 11/01/15 .......... 647,149
--------------
GEORGIA - 8.32%
500,000 Burke County Development
Authority, Pollution
Control Revenue
4.530%, 09/01/30 .......... 500,675
500,000 Cartersville Development Authority,
Water & Wastewater Facilities
Revenue, Series A
7.375%, 05/01/09 .......... 577,255
250,000 State of Georgia, Series A, G.O.
6.100%, 03/01/05 .......... 265,652
200,000 State of Georgia, Series D, G.O.
6.700%, 08/01/09 .......... 228,238
--------------
1,571,820
--------------
MARKET
PAR VALUE VALUE
---------- -------
ILLINOIS - 17.91%
$ 500,000 Chicago Board of Education,
School Reform Board,
Series A, G.O.
5.250%, 12/01/21,
Insured: FGIC ............. $ 482,075
Chicago Public Building,
Commerce Building Revenue
250,000 5.250%, 12/01/18 244,847
500,000 5.750%, 12/01/18,
Insured: MBIA ............. 526,330
250,000 Chicago Skyway Toll Bridge
Revenue, Prerefunded 01/01/04,
6.750%, 01/01/14 .......... 270,340
475,000 Du Page County G.O. Alternative
Revenue, Jail Project,
Prefunded 01/01/02,
6.550%, 01/01/21 .......... 495,268
500,000 Evanston, G.O.,
Prerefunded 12/01/02,
6.100%, 12/01/09 (C) ...... 516,380
265,000 Illinois State Civic Center
Special State Obligation
5.250%, 12/15/09 .......... 273,313
500,000 Metropolitan Pier & Expansion
Authority, Dedicated State Tax
Revenue, Refunding, Series A
5.514%, 12/15/11,
Insured: MBIA (B) ......... 282,265
625,000 Northern Illinois University
Revenue, Auxilary Facilitiess
System Revenue
5.703%, 10/01/14,
Insured: FGIC (B) ......... 295,419
--------------
3,386,237
--------------
INDIANA - 4.86%
1,000,000 Indiana Transportation Finance
Authority Highway Revenue
5.901%, 12/01/17,
Insured: AMBAC (B) ........ 384,240
500,000 Indianapolis Public Improvement
Revenue, Series B
6.000%, 01/10/20 .......... 534,900
--------------
919,140
--------------
KENTUCKY - 3.78%
350,000 Jefferson County, Series C, G.O.
5.375%, 05/15/03 .......... 356,412
350,000 Kentucky State Turnpike Authority
Economic Development
Revenue, Revitalization Projects
5.700%, 01/01/03 .......... 358,172
--------------
714,584
--------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
42
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST MUNICIPAL BOND FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
PAR VALUE VALUE
---------- -------
MASSACHUSETTS - 2.63%
$ 500,000 Massachusetts State,
Series C, G.O.
5.250%, 08/01/17 .......... $ 497,755
--------------
MICHIGAN - 1.36%
250,000 Michigan State Trunk Line
Revenue, Series A
5.500%, 11/01/16 .......... 257,252
--------------
MISSISSIPPI - 1.98%
350,000 State of Mississippi, Capital
Improvements Issue,
Series I, G.O.
5.750%, 11/01/09 (C) ...... 374,846
--------------
NEBRASKA - 3.74%
200,000 American Public Energy Agency
Revenue, Nebraska Public Gas
Agency Project, Series A
4.250%, 06/01/06,
Insured: AMBAC ............ 186,270
500,000 Omaha Public Power District
Electric Revenue, Series C
5.400%, 02/01/08 .......... 520,930
--------------
707,200
--------------
NEVADA - 2.00%
350,000 Clark County, Nevada School
District, G.O.,
Prerefunded 12/15/04,
6.400%, 06/15/06,
Insured: FGIC ............. 377,219
--------------
NEW HAMPSHIRE - 1.31%
250,000 New Hampshire State Housing
Financial Authority Single
Family Revenue, Series B
4.850%, 07/01/08 .......... 247,465
--------------
NEW YORK - 3.89%
250,000 New York State, Commissioner
General Services Executive
Dept., Certificate Participation
4.250%, 09/01/01 .......... 249,558
480,000 New York State Dormitory
Authority Revenue, Series C
5.100%, 05/15/03 .......... 486,586
--------------
736,144
--------------
NORTH DAKOTA - 2.75%
510,000 Grand Forks Refunding and
Improvement, Series A
5.000%, 12/01/04,
Insured: MBIA ............. 518,813
--------------
MARKET
PAR VALUE VALUE
---------- -------
OKLAHOMA - 3.98%
$ 240,000 Oklahoma City, G.O.
5.550%, 08/01/11 .......... $ 252,686
500,000 Oklahoma Housing Development
Authority Revenue Obligation
Lease Purchase Program -
Series A
5.100%, 11/01/05 .......... 500,000
--------------
752,686
--------------
PENNSYLVANIA - 3.98%
250,000 Beaver County Industrial
Development Authority, PCR,
Cleveland Electric Project
4.600%, 10/01/03 (A) ...... 244,995
500,000 Pennsylvania Intergovernmental
Cooperative Authority, Special
Tax Revenue, City of Philadelphia
Funding Program, Escrowed
to Maturity 6.000%, 06/15/02,
Insured: FGIC ............. 507,905
--------------
752,900
--------------
PUERTO RICO - 0.80%
150,000 University of Puerto Rico,
University Revenues, Series N
4.750%, 06/01/01,
Insured: MBIA ............. 150,803
--------------
SOUTH CAROLINA - 1.63%
285,000 Anderson County School District
No. 002, Series B
7.125%, 03/01/04 .......... 307,766
--------------
TEXAS - 7.70%
500,000 Brazos River Authority
5.500%, 06/19/01 .......... 502,105
200,000 Humble Independent School
District Refunding,
Series II, G.O.
5.500%, 02/15/10 .......... 210,066
210,000 Tarrant County Health Facilities
Development Corp., Health
System Revenue, Series A
5.500%, 02/15/05,
Insured: MBIA ............. 216,269
500,000 Texas Municipal Power Agency
Revenue, Series E
5.500%, 09/01/10,
Insured: MBIA ............. 526,330
--------------
1,454,770
--------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
43
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST MUNICIPAL BOND FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
MARKET
PAR VALUE VALUE
---------- -------
UTAH - 5.28%
$ 300,000 Intermountain Power Agency,
Power Supply Revenue,
Series E
6.250%, 07/01/07,
Insured: FSA .............. $ 326,130
350,000 Tooele County, Utah Hazardous
Waste Treatment Revenue,
Union Pacific Project
5.700%, 11/01/26 .......... 309,705
350,000 Utah State Building Ownership
Authority Lease Revenue,
Series A State Facilities Master
Lease PG-C
5.500%, 05/15/11,
Insured: FSA .............. 363,027
--------------
998,862
--------------
VIRGINIA - 1.32%
250,000 Virginia State Housing Develop-
ment Revenue Authority
Commonwealth Mortage,
Series H
4.750%, 07/01/07 .......... 250,268
--------------
WASHINGTON - 2.61%
475,000 King County, Series A, G.O.
5.800%, 01/01/04 (C) ...... 492,689
--------------
WISCONSIN - 2.94%
250,000 State of Wisconsin,
Series A, G.O.
5.750%, 05/01/04 .......... 259,919
300,000 Wisconsin Housing and Economic
Development Authority, Home
Ownership Revenue, Series A
5.375%, 09/01/17 .......... 295,569
--------------
555,488
--------------
TOTAL MUNICIPAL BONDS ........ 18,428,476
--------------
(Cost $18,218,911)
MARKET
SHARES VALUE
------ -------
INVESTMENT COMPANIES - 3.74%
7,000 Goldman Sachs Tax Exempt Fund $ 7,000
699,212 Provident Money Market Fund .. 699,212
--------------
TOTAL INVESTMENT COMPANIES ... 706,212
--------------
(Cost $706,212)
TOTAL INVESTMENTS - 101.23% ................ 19,134,688
--------------
(Cost $18,925,123)*
LIABILITIES NET OF CASH
AND OTHER ASSETS - (1.23)% ............. (232,023)
--------------
NET ASSETS - 100.00% ....................... $ 18,902,665
==============
----------------------
* Aggregate cost for Federal income tax purposes is $18,925,123.
Gross unrealized appreciation ..... $ 292,947
Gross unrealized depreciation ..... (83,382)
--------------
Net unrealized appreciation ....... $ 209,565
==============
(A) Variable rate bond. The interest rate shown reflects the rate in effect
at October 31, 2000.
(B) Zero coupon bond. Rate shown reflects effective yield to maturity at
time of purchase.
(C) Standard & Poors' (S&P) credit ratings are used in the absence of a
rating by Moody's Investors, Inc.
AMBAC American Municipal Board Assurance Corp.
FGIC Federal Guaranty Insurance Corp.
FSA Fund Service Associates
G.O. General Obligation
MBIA Municipal Bond Insurance Corp.
PCR Pollution Control Revenue
VRDO Variable Rate Demand Obligation
PORTFOLIO COMPOSITION (MOODY'S RATINGS)
Investment Companies ....................... 4%
Corporate Notes and Bonds (C):
Aaa ........................................ 49%
Aa ......................................... 30%
A .......................................... 10%
Baa ........................................ 7%
-----
100%
=====
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
44
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST MONEY MARKET FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
AMORTIZED
PAR VALUE COST
---------- -----
COMMERCIAL PAPER - 94.99%
$ 5,800,000 Daimler Chrysler North
American Holdings
6.540%, 11/01/00 .......... $ 5,800,000
6,000,000 Prudential Funding Corp.
6.503%, 11/01/00 .......... 6,000,000
5,000,000 United Technology Corp. (A)
6.480%, 11/01/00 .......... 5,000,000
5,200,000 General Motors Acceptance Corp.
6.526%, 11/02/00 .......... 5,200,000
8,900,000 Hertz Corp.
6.515%, 11/02/00 .......... 8,900,000
6,700,000 Albertson's, Inc. (A)
6.563%, 11/03/00 .......... 6,697,562
2,600,000 AON Corp. (A)
6.530%, 11/03/00 .......... 2,599,057
7,000,000 General Electric Capital Corp.
6.506%, 11/03/00 .......... 7,000,000
5,000,000 Albertson's, Inc. (A)
6.550%, 11/06/00 .......... 4,995,451
5,000,000 Goldman Sachs & Co., Inc. (A)
6.500%, 11/06/00 .......... 4,995,486
5,800,000 Household Finance Corp.
6.518%, 11/06/00 .......... 5,800,000
5,000,000 Eaton Corp. (A)
6.520%, 11/07/00 .......... 4,994,567
5,000,000 Goldman Sachs & Co., Inc. (A)
6.500%, 11/07/00 .......... 4,994,583
8,000,000 Transamerica Financial Group,
Inc. 6.490%, 11/07/00 (A) . 7,991,347
7,000,000 Ford Motor Credit Corp.
6.521%, 11/08/00 .......... 7,000,000
6,000,000 IBM Corp.
6.503%, 11/08/00 .......... 6,000,000
5,000,000 Prudential Funding Corp.
6.519%, 11/08/00 .......... 5,000,000
American General Finance Corp.
8,700,000 6.522%, 11/09/00 .......... 8,700,000
9,700,000 6.530%, 11/09/00 .......... 9,700,000
7,200,000 American Express Credit Corp.
6.523%, 11/10/00 .......... 7,200,000
3,500,000 Ford Motor Credit Corp.
6.517%, 11/10/00 .......... 3,500,000
3,700,000 Household Finance Corp.
6.531%, 11/10/00 .......... 3,700,000
7,800,000 AON Corp. (A)
6.520%, 11/13/00 .......... 7,783,048
5,000,000 Heller Financial, Inc.
6.624%, 11/13/00 .......... 5,000,000
4,500,000 Household Finance Corp.
6.530%, 11/13/00 .......... 4,500,000
9,000,000 AON Corp. (A)
6.530%, 11/14/00 .......... 8,978,777
7,900,000 Duke Capital Corp. (A)
6.520%, 11/14/00 .......... 7,881,400
4,000,000 American Express Credit Corp.
6.519%, 11/15/00 .......... 4,000,000
AMORTIZED
PAR VALUE COST
---------- -----
$10,000,000 John Deere Capital Corp.
6.522%, 11/15/00 .......... $ 10,000,000
5,000,000 Albertson's, Inc. (A)
6.570%, 11/16/00 .......... 4,986,312
8,000,000 Duke Capital Corp. (A)
6.520%, 11/16/00 .......... 7,978,267
8,600,000 Goldman Sachs & Co., Inc. (A)
6.500%, 11/16/00 .......... 8,576,708
8,000,000 American Express Credit Corp.
6.516%, 11/17/00 .......... 8,000,000
2,685,000 Duke Capital Corp. (A)
6.530%, 11/17/00 .......... 2,677,208
7,000,000 Texaco, Inc.
6.503%, 11/17/00 .......... 7,000,000
2,500,000 General Motors Acceptance Corp.
6.528%, 11/20/00 .......... 2,500,000
7,000,000 Texaco, Inc.
6.506%, 11/20/00 .......... 7,000,000
5,900,000 Wells Fargo Financial, Inc.
6.531%, 11/20/00 .......... 5,900,000
8,000,000 CIT Group Holdings
6.521%, 11/21/00 .......... 8,000,000
5,600,000 Hertz Corp.
6.530%, 11/21/00 .......... 5,600,000
8,000,000 CIT Group Holdings
6.522%, 11/22/00 .......... 8,000,000
2,000,000 Heller Financial, Inc.
6.575%, 11/22/00 .......... 2,000,000
5,000,000 Household Finance Corp.
6.509%, 11/22/00 .......... 5,000,000
5,000,000 IBM Corp.
6.511%, 11/27/00 .......... 5,000,000
4,300,000 John Deere Capital Corp.
6.511%, 11/27/00 .......... 4,300,000
7,000,000 Citicorp, Inc.
6.534%, 11/28/00 .......... 7,000,000
5,000,000 John Deere Capital Corp.
6.512%, 11/28/00 .......... 5,000,000
5,000,000 Ford Motor Credit Corp.
6.520%, 11/29/00 .......... 5,000,000
5,000,000 IBM Corp.
6.513%, 11/29/00 .......... 5,000,000
6,300,000 Consolidated Natural Gas (A)
6.550%, 11/30/00 .......... 6,266,759
4,200,000 Heller Financial, Inc.
6.602%, 11/30/00 .......... 4,200,000
7,300,000 Consolidated Natural Gas (A)
6.550%, 12/01/00 .......... 7,260,154
6,000,000 General Motors Acceptance Corp.
6.531%, 12/01/00 .......... 6,000,000
7,400,000 Heller Financial, Inc.
6.608%, 12/04/00 .......... 7,400,000
General Electric Capital Corp.
5,000,000 6.531%, 12/05/00 .......... 5,000,000
6,300,000 6.532%, 12/06/00 .......... 6,300,000
4,600,000 General Motors Acceptance Corp.
6.544%, 12/06/00 .......... 4,600,000
--------------
TOTAL COMMERCIAL PAPER ....... 341,456,686
--------------
(Cost $341,456,686)
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
45
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST MONEY MARKET FUND OCTOBER 31, 2000
SCHEDULE OF INVESTMENTS - CONTINUED
--------------------------------------------------------------------------------
AMORTIZED
PAR VALUE COST
---------- -----
GIC WITHIN FUNDING AGREEMENT - 2.78%
$10,000,000 Allstate Life Funding Agreement
GIC 6.692%, 11/01/00 ...... $ 10,000,000
--------------
TOTAL GIC WITHIN FUNDING
AGREEMENT .................... 10,000,000
--------------
(Cost $10,000,000)
REPURCHASE AGREEMENT - 2.55%
9,164,000 Bank One 6.450%, dated 10/31/00
to be repurchased on 11/01/00
at $9,165,642 (Collateralized by
U.S. Government Agency Obligation
7.000% due on 07/15/06;
Total Par $8,690,000) ..... 9,164,000
--------------
TOTAL REPURCHASE AGREEMENT ... 9,164,000
--------------
(Cost $9,164,000)
TOTAL INVESTMENTS - 100.32% ................ 360,620,686
--------------
(Cost $360,620,686)*
LIABILITIES NET OF CASH
AND OTHER ASSETS - (0.32)% ............. (1,138,073)
--------------
NET ASSETS - 100.00% ....................... $ 359,482,613
==============
-----------------------
* At October 31, 2000, cost is identical for book and Federal income tax
purposes.
(A) Annualized yield at time of purchase.
SEE ACCOMPANYING NOTES TOFINANCIAL STATEMENTS.
46
<PAGE>
This page intentionally left blank.
<PAGE>
ALLEGHANY FUNDS
---------------------
OCTOBER 31, 2000
STATEMENT OF ASSETS AND LIABILITIES
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALLEGHANY/MONTAG ALLEGHANY/CHICAGO ALLEGHANY/CHICAGO
& CALDWELL GROWTH TRUST GROWTH & ALLEGHANY/CHICAGO TRUST SMALL CAP
FUND INCOME FUND TRUST TALON FUND VALUE FUND
------------------ ------------------ ----------------- ------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Investments at cost ........................ $ 2,348,250,024 $ 328,086,959 $ 23,550,295 $ 44,108,415
Repurchase agreements ...................... 57,225,000 32,189,000 -- 1,778,000
Net unrealized appreciation (depreciation) . 308,488,217 231,696,754 2,671,455 2,634,525
------------------ ------------------ ----------------- ------------------
Total investments at value ............... 2,713,963,241 591,972,713 26,221,750 48,520,940
Cash ............................................ -- -- -- 495,786
Foreign currency (cost $744,431 and $300,956) ... -- -- -- --
Receivables:
Dividends and interest ..................... 2,428,590 71,162 2,806 19,021
Dividends reclaim .......................... -- -- -- --
Fund shares sold ........................... 3,035,122 2,346,687 275,941 886,062
Investments and foreign currency sold ...... -- -- 848,599 219,590
Due from Adviser, net ...................... -- -- -- --
Deferred organization costs ..................... -- -- -- --
Other assets .................................... 6,340 6,845 146 3,452
------------------ ------------------ ----------------- ------------------
Total assets ............................. 2,719,433,293 594,397,407 27,349,242 50,144,851
------------------ ------------------ ----------------- ------------------
LIABILITIES:
Payables:
Bank overdraft ............................. 1,637 9,293 254 --
Investments and foreign currency purchased . 6,783,680 -- 922,820 609,550
Fund shares redeemed ....................... 26,211,135 936,932 742 69,103
Due to Adviser, net ........................ 1,481,236 334,085 14,348 37,221
Distribution fee ........................... 17,935 7,125 349 646
Trustees fees .............................. 28,446 6,351 297 534
Accrued expenses and other payables ............. 497,847 90,918 21,083 16,518
------------------ ------------------ ----------------- ------------------
Total liabilities ........................ 35,021,916 1,384,704 959,893 733,572
------------------ ------------------ ----------------- ------------------
NET ASSETS ...................................... $ 2,684,411,377 $ 593,012,703 $ 26,389,349 $ 49,411,279
================== ================== ================= ==================
NET ASSETS CONSIST OF:
Capital paid-in ................................ $ 2,038,026,939 $ 301,465,588 $ 19,003,320 $ 44,598,688
Accumulated undistributed net investment
income (loss) ............................... 180,218 -- -- 70,773
Accumulated net realized gain (loss) on
investments and foreign currency transactions 337,716,003 59,850,361 4,714,574 2,107,293
Net unrealized appreciation (depreciation) on
investments and translation of assets
and liabilities in foreign currency ......... 308,488,217 231,696,754 2,671,455 2,634,525
------------------ ------------------ ----------------- ------------------
TOTAL NET ASSETS ........................... $ 2,684,411,377 $ 593,012,703 $ 26,389,349 $ 49,411,279
================== ================== ================= ==================
CLASS N:
Net assets ..................................... $ 1,349,760,357 $ 542,436,016 $ 26,389,349 $ 49,411,279
Shares of beneficial interest outstanding ...... 43,120,710 17,575,386 1,426,835 4,558,476
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) ............ $ 31.30 $ 30.86 $ 18.50 $ 10.84
================== ================== ================= ==================
CLASS I:
Net Assets ..................................... $ 1,334,651,020 $ 50,576,687 N/A N/A
Shares of beneficial interest outstanding ...... 42,098,145 1,637,513 N/A N/A
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) ............ $ 31.70 $ 30.89 N/A N/A
================== ================== ================= ==================
</TABLE>
<TABLE>
<CAPTION>
ALLEGHANY/VEREDUS ALLEGHANY/BLAIRLOGIE ALLEGHANY/BLAIRLOGIE
AGGRESSIVE GROWTH ALLEGHANY/VEREDUS INTERNATIONAL EMERGING MARKETS
FUND SCITECH FUND DEVELOPED FUND FUND
----------------- ------------------ ------------------ ------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments:
Investments at cost ........................ $ 151,156,573 $ 2,331,051 $ 44,653,400 $ 14,892,623
Repurchase agreements ...................... 25,135,409 533,795 -- --
Net unrealized appreciation (depreciation) . 16,503,049 (56,416) (434,776) (1,264,489)
----------------- ------------------ ------------------ ------------------
Total investments at value ............... 192,795,031 2,808,430 44,218,624 13,628,134
Cash ............................................ 2,445 -- -- --
Foreign currency (cost $744,431 and $300,956) ... -- -- 745,182 300,064
Receivables:
Dividends and interest ..................... 13,033 223 62,421 23,421
Dividends reclaim .......................... -- -- 72,386 276
Fund shares sold ........................... 2,343,199 -- 1,701 4,040
Investments and foreign currency sold ...... 8,588,585 82,834 19,718 87,082
Due from Adviser, net ...................... -- 11,555 -- --
Deferred organization costs ..................... 12,807 -- -- --
Other assets .................................... 1,501 402 789 243
----------------- ------------------ ------------------ ------------------
Total assets ............................. 203,756,601 2,903,444 45,120,821 14,043,260
----------------- ------------------ ------------------ ------------------
LIABILITIES:
Payables:
Bank overdraft ............................. -- 42,563 253,866 110,562
Investments and foreign currency purchased . 20,436,463 152,678 589,808 398,034
Fund shares redeemed ....................... 281,840 -- 1,892 --
Due to Adviser, net ........................ 145,504 -- 23,797 3,716
Distribution fee ........................... 2,403 38 81 24
Trustees fees .............................. 2,201 37 383 140
Accrued expenses and other payables ............. 82,429 12,233 62,956 51,163
----------------- ------------------ ------------------ ------------------
Total liabilities ........................ 20,950,840 207,549 932,783 563,639
----------------- ------------------ ------------------ ------------------
NET ASSETS ...................................... $ 182,805,761 $ 2,695,895 $ 44,188,038 $ 13,479,621
================= ================== ================== ==================
NETASSETS CONSIST OF:
Capital paid-in ................................ $ 141,408,807 $ 2,993,214 $ 29,766,576 $ 30,676,058
Accumulated undistributed net investment
income (loss) ............................... (428) 12,746 -- 61,491
Accumulated net realized gain (loss) on
investments and foreign currency transactions 24,894,333 (253,649) 14,869,088 (15,995,358)
Net unrealized appreciation (depreciation) on
investments and translation of assets
and liabilities in foreign currency ......... 16,503,049 (56,416) (447,626) (1,262,570)
----------------- ------------------ ------------------ ------------------
TOTAL NET ASSETS ........................... $ 182,805,761 $ 2,695,895 $ 44,188,038 $ 13,479,621
================= ================== ================== ==================
CLASS N:
Net assets ..................................... $ 182,805,761 $ 2,695,895 $ 6,018,916 $ 1,794,819
Shares of beneficial interest outstanding ...... 8,122,695 302,035 526,511 182,118
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) ............ $ 22.51 $ 8.93 $ 11.43 $ 9.86
================= ================== ================== ==================
CLASS I:
Net Assets ..................................... N/A N/A $ 38,169,122 $ 11,684,802
Shares of beneficial interest outstanding ...... N/A N/A 3,329,159 1,183,399
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) ............ N/A N/A $ 11.47 $ 9.87
================= ================== ================== ==================
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
48-49
<PAGE>
ALLEGHANY FUNDS
---------------------
OCTOBER 31, 2000
STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALLEGHANY/MONTAG ALLEGHANY/
& CALDWELL BALANCED CHICAGO TRUST ALLEGHANY/CHICAGO
FUND BALANCED FUND TRUST BOND FUND
------------------ ----------------- ------------------
<S> <C> <C> <C>
ASSETS:
Investments:
Investments at cost ....................................... $ 297,373,469 $ 221,092,578 $ 142,236,192
Repurchase agreements ..................................... 16,757,000 10,005,000 11,617,000
Net unrealized appreciation (depreciation) ................ 22,284,275 88,314,245 (1,633,116)
------------------ ----------------- ------------------
Total investments at value .............................. 336,414,744 319,411,823 152,220,076
Cash .............................................................. -- 125,886 94,589
Receivables:
Dividends and interest .................................... 1,946,734 1,529,975 2,066,506
Fund shares sold .......................................... 300,299 707,982 372,882
Investments sold .......................................... -- -- --
Due from Adviser, net ..................................... -- -- --
Other assets ...................................................... 580 599 1,261
------------------ ----------------- ------------------
Total assets ............................................ 338,662,357 321,776,265 154,755,314
------------------ ----------------- ------------------
LIABILITIES:
Payables:
Bank overdraft ............................................ 10,275 -- --
Dividend distribution ..................................... -- -- --
Investments purchased ..................................... -- 118,348 142,835
Fund shares redeemed ...................................... 646,622 185,572 149,018
Due to Adviser, net ....................................... 211,543 185,566 42,728
Distribution fee .......................................... 2,179 4,292 1,434
Trustees fees ............................................. 3,814 3,511 1,739
Accrued expenses and other payables ............................... 97,189 52,774 25,047
------------------ ----------------- ------------------
Total liabilities ....................................... 971,622 550,063 362,801
------------------ ----------------- ------------------
NET ASSETS ........................................................ $ 337,690,735 $ 321,226,202 $ 154,392,513
================== ================= ==================
NET ASSETS CONSIST OF:
Capital paid-in ............................................... $ 303,680,599 $ 209,441,858 $ 157,955,053
Accumulated undistributed net investment income ............... 1,007,748 822,040 547,324
Accumulated net realized gain (loss) on investments ........... 10,718,113 22,648,059 (2,476,748)
Net unrealized appreciation (depreciation) on investments ..... 22,284,275 88,314,245 (1,633,116)
------------------ ----------------- ------------------
TOTAL NET ASSETS .......................................... $ 337,690,735 $ 321,226,202 $ 154,392,513
================== ================= ==================
CLASS N:
Net assets .................................................... $ 162,896,052 $ 321,226,202 $ 104,960,213
Shares of beneficial interest outstanding ..................... 8,751,582 22,568,941 10,790,243
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) ........................... $ 18.61 $ 14.23 $ 9.73
================== ================= ==================
CLASS I:
Net Assets .................................................... $ 174,794,683 N/A $ 49,432,300
Shares of beneficial interest outstanding ..................... 9,388,916 N/A 5,081,420
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) ........................... $ 18.62 N/A $ 9.73
================== ================= ==================
</TABLE>
<TABLE>
<CAPTION>
ALLEGHANY/CHICAGO ALLEGHANY/CHICAGO
TRUST MUNICIPAL TRUST MONEY
BOND FUND MARKET FUND
----------------- ------------------
<S> <C> <C>
ASSETS:
Investments:
Investments at cost ....................................... $ 18,925,123 $ 351,456,686
Repurchase agreements ..................................... -- 9,164,000
Net unrealized appreciation (depreciation) ................ 209,565 --
----------------- ------------------
Total investments at value .............................. 19,134,688 360,620,686
Cash .............................................................. 325 6,066
Receivables:
Dividends and interest .................................... 301,938 768,190
Fund shares sold .......................................... 14,953 235,614
Investments sold .......................................... 315,942 --
Due from Adviser, net ..................................... 6,946 --
Other assets ...................................................... 35 1,051
----------------- ------------------
Total assets ............................................ 19,774,827 361,631,607
----------------- ------------------
LIABILITIES:
Payables:
Bank overdraft ............................................ -- --
Dividend distribution ..................................... 79,454 1,945,615
Investments purchased ..................................... 774,416 --
Fund shares redeemed ...................................... -- --
Due to Adviser, net ....................................... -- 128,042
Distribution fee .......................................... 103 --
Trustees fees ............................................. 207 4,111
Accrued expenses and other payables ............................... 17,982 71,226
----------------- ------------------
Total liabilities ....................................... 872,162 2,148,994
----------------- ------------------
NET ASSETS ........................................................ $ 18,902,665 $ 359,482,613
================= ==================
NET ASSETS CONSIST OF:
Capital paid-in ............................................... $ 19,152,894 $ 359,482,613
Accumulated undistributed net investment income ............... -- --
Accumulated net realized gain (loss) on investments ........... (459,794) --
Net unrealized appreciation (depreciation) on investments ..... 209,565 --
----------------- ------------------
TOTAL NET ASSETS .......................................... $ 18,902,665 $ 359,482,613
================= ==================
CLASS N:
Net assets .................................................... $ 18,902,665 $ 359,482,613
Shares of beneficial interest outstanding ..................... 1,905,044 359,482,613
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) ........................... $ 9.92 $ 1.00
================= ==================
CLASS I:
Net Assets .................................................... N/A N/A
Shares of beneficial interest outstanding ..................... N/A N/A
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) ........................... N/A N/A
================= ==================
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
50-51
<PAGE>
ALLEGHANY FUNDS
---------------------
FOR THE YEAR ENDED OCTOBER 31, 2000
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALLEGHANY/MONTAG ALLEGHANY/CHICAGO ALLEGHANY/CHICAGO
& CALDWELL GROWTH TRUST GROWTH & ALLEGHANY/CHICAGO TRUST SMALL CAP
FUND INCOME FUND TRUST TALON FUND VALUE FUND
----------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ..................................... $ 26,828,974 $ 3,182,638 $ 211,029 $ 814,311
Less foreign taxes ............................ -- -- (3,240) --
Interest ...................................... 758,453 1,684,583 4,523 98,402
----------------- ----------------- ---------------- ----------------
Total investment income ...................... 27,587,427 4,867,221 212,312 912,713
----------------- ----------------- ---------------- ----------------
EXPENSES:
Investment advisory fees ...................... 20,110,532 3,822,871 175,902 464,754
Distribution expenses ......................... 3,971,131 1,334,149 54,969 116,193
Transfer agent fees ........................... 1,071,104 224,093 32,478 25,536
Administration fees ........................... 1,672,936 297,648 13,738 27,513
Registration expenses ......................... 39,731 35,771 13,180 17,368
Custodian fees ................................ 23,341 22,186 12,675 14,274
Amortization of organization costs ............ -- -- -- --
Professional fees ............................. 74,645 28,508 16,114 15,317
Reports to shareholder expense ................ 208,426 42,605 3,976 4,020
Trustees fees ................................. 105,731 19,674 803 1,631
Other expenses ................................ 129,632 8,579 1,502 522
----------------- ----------------- ---------------- ----------------
Total operating expenses ..................... 27,407,209 5,836,084 325,337 687,128
----------------- ----------------- ---------------- ----------------
Expenses waived/reimbursed ................... -- -- (39,493) (36,464)
----------------- ----------------- ---------------- ----------------
Net operating expenses ....................... 27,407,209 5,836,084 285,844 650,664
----------------- ----------------- ---------------- ----------------
Bank charges .................................. -- -- -- --
----------------- ----------------- ---------------- ----------------
Net expenses ................................. 27,407,209 5,836,084 285,844 650,664
----------------- ----------------- ---------------- ----------------
NET INVESTMENT INCOME (LOSS) ....................... 180,218 (968,863) (73,532) 262,049
----------------- ----------------- ---------------- ----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS :
Net realized gain (loss) on investments ....... 337,718,133 59,850,744 4,788,271 3,348,077
Net realized loss on futures contracts ........ -- -- -- --
Net realized loss on foreign
currency transactions ........................ -- -- -- --
Net change in unrealized appreciation
(depreciation) on investments ................ (364,014,769) 37,953,905 1,216,411 4,482,289
Net change in unrealized depreciation
on translation of assets and liabilities
denominated in foreign currency .............. -- -- -- --
----------------- ----------------- ---------------- ----------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS ........................ (26,296,636) 97,804,649 6,004,682 7,830,366
----------------- ----------------- ---------------- ----------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS ................... $ (26,116,418) $ 96,835,786 $ 5,931,150 $ 8,092,415
================= ================= ================ ================
</TABLE>
<TABLE>
<CAPTION>
ALLEGHANY/VEREDUS ALLEGHANY/BLAIRLOGIE
AGGRESSIVE GROWTH ALLEGHANY/VEREDUS INTERNATIONAL
FUND SCITECH FUND(A) DEVELOPED FUND
---------------- ---------------- ----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends ..................................... $ 97,143 $ -- $ 1,009,325
Less foreign taxes ............................ -- -- (112,816)
Interest ...................................... 813,135 31,446 123,768
---------------- ---------------- ----------------
Total investment income ...................... 910,278 31,446 1,020,277
---------------- ---------------- ----------------
EXPENSES:
Investment advisory fees ...................... 1,478,512 8,668 654,332
Distribution expenses ......................... 369,628 2,168 17,290
Transfer agent fees ........................... 103,290 6,299 22,736
Administration fees ........................... 82,947 860 70,445
Registration expenses ......................... 35,553 16,904 23,673
Custodian fees ................................ 22,040 3,859 104,039
Amortization of organization costs ............ 4,828 -- --
Professional fees ............................. 17,472 13,077 16,553
Reports to shareholder expense ................ 19,895 141 7,698
Trustees fees ................................. 5,227 50 2,586
Other expenses ................................ 21,550 1,427 6,159
---------------- ---------------- ----------------
Total operating expenses ..................... 2,160,942 53,453 925,511
---------------- ---------------- ----------------
Expenses waived/reimbursed ................... (91,005) (40,452) (61,420)
---------------- ---------------- ----------------
Net operating expenses ....................... 2,069,937 13,001 864,091
---------------- ---------------- ----------------
Bank charges .................................. -- -- 60,543
---------------- ---------------- ----------------
Net expenses ................................. 2,069,937 13,001 924,634
---------------- ---------------- ----------------
NET INVESTMENT INCOME (LOSS) ....................... (1,159,659) 18,445 95,643
---------------- ---------------- ----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS :
Net realized gain (loss) on investments ....... 26,859,085 (253,649) 15,410,330
Net realized loss on futures contracts ........ -- -- (41,285)
Net realized loss on foreign
currency transactions ........................ -- -- (501,642)
Net change in unrealized appreciation
(depreciation) on investments ................ 6,057,746 (56,416) (14,752,985)
Net change in unrealized depreciation
on translation of assets and liabilities
denominated in foreign currency .............. -- -- (16,466)
---------------- ---------------- ----------------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS ........................ 32,916,831 (310,065) 97,952
---------------- ---------------- ----------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS ................... $ 31,757,172 $ (291,620) $ 193,595
================ ================ ================
</TABLE>
--------------------------------------------------------------------------------
(a) Alleghany/Veredus SciTech Fund commenced operations on June 30, 2000.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
52-53
<PAGE>
ALLEGHANY FUNDS
---------------------
FOR THE YEAR ENDED OCTOBER 31, 2000
STATEMENT OF OPERATIONS - CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALLEGHANY/BLAIRLOGIE ALLEGHANY/MONTAG
EMERGING MARKETS CALDWELL BALANCED ALLEGHANY/CHICAGO
FUND FUND TRUST BALANCED FUND
----------------- ---------------- ----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ 373,312 $ 1,397,442 $ 1,140,606
Less foreign taxes (36,174) -- --
Interest 31,430 8,570,960 8,690,611
----------------- ---------------- ----------------
Total investment income 368,568 9,968,402 9,831,217
----------------- ---------------- ----------------
EXPENSES:
Investment advisory fees 157,847 2,441,000 2,139,983
Distribution expenses 5,637 414,476 764,280
Transfer agent fees 12,869 94,007 29,798
Administration fees 36,774 183,095 178,014
Registration expenses 23,230 53,450 16,689
Custodian fees 67,356 23,842 21,169
Professional fees 17,029 23,517 22,111
Amortization of organization costs -- -- 1,232
Reports to shareholder expense 1,857 11,803 25,371
Trustees fees 624 11,295 10,878
Other expenses 2,826 24,327 499
----------------- ---------------- ----------------
Total operating expenses 326,049 3,280,812 3,210,024
----------------- ---------------- ----------------
Expenses waived/reimbursed (69,709) -- --
----------------- ---------------- ----------------
Net operating expenses 256,340 3,280,812 3,210,024
----------------- ---------------- ----------------
Bank charges 4,051 -- --
----------------- ---------------- ----------------
Net expenses 260,391 3,280,812 3,210,024
----------------- ---------------- ----------------
NET INVESTMENT INCOME 108,177 6,687,590 6,621,193
----------------- ---------------- ----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS :
Net realized gain (loss) on investments 1,550,743 10,862,039 22,637,439
Net realized loss on foreign currency
transactions (37,679) -- --
Net change in unrealized appreciation
(depreciation) on investments (2,225,362) (10,774,845) 12,662,153
Net change in unrealized appreciation
on translation of assets and liabilities
denominated in foreign currency 13,643 -- --
----------------- ---------------- ----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS (698,655) 87,194 35,299,592
----------------- ---------------- ----------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS $ (590,478) $ 6,774,784 $ 41,920,785
================= ================ ================
</TABLE>
<TABLE>
<CAPTION>
ALLEGHANY/CHICAGO ALLEGHANY/CHICAGO
ALLEGHANY/CHICAGO TRUST MUNICIPAL TRUST MONEY MARKET
TRUST BOND FUND BOND FUND FUND
---------------- ---------------- ----------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends $ -- $ -- $ --
Less foreign taxes -- -- --
Interest 10,505,021 838,992 24,465,063
---------------- ---------------- ----------------
Total investment income 10,505,021 838,992 24,465,063
---------------- ---------------- ----------------
EXPENSES:
Investment advisory fees 773,197 100,946 1,573,389
Distribution expenses 319,737 16,825 --
Transfer agent fees 33,188 18,936 62,761
Administration fees 85,456 15,895 213,556
Registration expenses 22,425 12,937 20,324
Custodian fees 19,448 11,011 18,291
Professional fees 20,102 16,614 23,432
Amortization of organization costs -- -- --
Reports to shareholder expense 12,030 1,603 32,015
Trustees fees 5,160 612 14,145
Other expenses 8,956 688 21,974
---------------- ---------------- ----------------
Total operating expenses 1,299,699 196,067 1,979,887
---------------- ---------------- ----------------
Expenses waived/reimbursed (267,750) (179,242) --
---------------- ---------------- ----------------
Net operating expenses 1,031,949 16,825 1,979,887
---------------- ---------------- ----------------
Bank charges -- -- --
---------------- ---------------- ----------------
Net expenses 1,031,949 16,825 1,979,887
---------------- ---------------- ----------------
NET INVESTMENT INCOME 9,473,072 822,167 22,485,176
---------------- ---------------- ----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS :
Net realized gain (loss) on investments (2,022,183) (449,564) --
Net realized loss on foreign currency
transactions -- -- --
Net change in unrealized appreciation
(depreciation) on investments 2,276,122 807,634 --
Net change in unrealized appreciation
on translation of assets and liabilities
denominated in foreign currency -- -- --
---------------- ---------------- ----------------
NET REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS 253,939 358,070 --
---------------- ---------------- ----------------
NET INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS $ 9,727,011 $ 1,180,237 $ 22,485,176
================ ================ ================
</TABLE>
--------------------------------------------------------------------------------
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
52-53
<PAGE>
ALLEGHANY FUNDS
---------------------
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
<TABLE>
ALLEGHANY/MONTAG ALLEGHANY/CHICAGO
& CALDWELL GROWTH TRUST GROWTH &
FUND INCOME FUND
-------------------------------- -----------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
2000 1999 2000 1999
--------------- -------------- ------------- -------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD ................... $ 2,982,468,577 $1,742,778,507 $ 490,188,782 $ 367,666,442
--------------- -------------- ------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) .................... 180,218 (639,463) (968,863) (1,141,812)
Net realized gain (loss) on investments sold .... 337,718,133 148,878,688 59,850,744 36,048,190
Net change in unrealized appreciation (depreciation)
on investments and assets and liabilities .... (364,014,769) 416,154,751 37,953,905 69,358,356
--------------- -------------- ------------- -------------
Net increase (decrease) in
net assets from operations ................... (26,116,418) 564,393,976 96,835,786 104,264,734
--------------- -------------- ------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class N ...................................... -- -- -- --
Net realized gain on investments:
Class N ...................................... (79,026,102) (35,583,495) (36,048,318) (23,278,710)
Class I ...................................... (69,733,403) (28,418,102) -- --
--------------- -------------- ------------- -------------
Total distributions .......................... (148,759,505) (64,001,597) (36,048,318) (23,278,710)
--------------- -------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Class N ...................................... 845,153,869 1,051,011,357 176,778,621 184,622,120
Class I ...................................... 673,460,519 953,960,617 49,108,046 --
Issued to shareholders in
reinvestment of distributions:
Class N ...................................... 72,385,785 33,017,124 35,118,050 22,904,776
Class I ...................................... 63,293,452 25,234,975 -- --
Cost of shares repurchased:
Class N ...................................... (1,090,341,499) (751,465,775) (216,690,023) (165,990,580)
Class I ...................................... (687,133,403) (572,460,607) (2,278,241) --
--------------- -------------- ------------- -------------
Net increase (decrease) from capital
share transactions .................... (123,181,277) 739,297,691 42,036,453 41,536,316
--------------- -------------- ------------- -------------
Total increase (decrease) in net assets ... (298,057,200) 1,239,690,070 102,823,921 122,522,340
--------------- -------------- ------------- -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ...... $ 2,684,411,377 $2,982,468,577 $ 593,012,703 $ 490,188,782
=============== ============== ============= =============
(A)Undistributed (overdistributed) net
investment income ............................ $ 180,218 $ -- $ -- $ --
=============== ============== ============= =============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Class N:
Sold ......................................... 25,596,000 33,562,499 6,124,572 7,050,057
Issued to shareholders in reinvestment
of distributions .......................... 2,140,542 1,195,841 1,299,232 1,005,045
Repurchased .................................. (33,273,816) (24,010,343) (7,536,041) (6,314,269)
Class I:
Sold ......................................... 19,998,395 30,617,406 1,712,047 --
Issued to shareholders in reinvestment
of distributions .......................... 1,836,069 903,059 -- --
Repurchased .................................. (20,672,126) (18,295,778) (74,534) --
--------------- -------------- ------------- -------------
Net increase (decrease)
in shares outstanding ................. (4,374,936) 23,972,684 1,525,276 1,740,833
=============== ============== ============= =============
</TABLE>
<TABLE>
ALLEGHANY/CHICAGO
ALLEGHANY/CHICAGO TRUST SMALLCAP
TRUST TALON FUND VALUE FUND
-------------------------- --------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
2000 1999 2000 1999(A)
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD ................... $ 17,586,038 $22,727,692 $ 42,478,264 $ 10
------------ ----------- ------------ -----------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) .................... (73,532) (61,638) 262,049 182,607
Net realized gain (loss) on investments sold .... 4,788,271 567,265 3,348,077 (1,284,384)
Net change in unrealized appreciation (depreciation)
on investments and assets and liabilities .... 1,216,411 187,313 4,482,289 (1,847,764)
------------ ----------- ------------ -----------
Net increase (decrease) in
net assets from operations ................... 5,931,150 692,940 8,092,415 (2,949,541)
------------ ----------- ------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class N ...................................... -- (8,361) (294,216) (36,178)
Net realized gain on investments:
Class N ...................................... (195,413) -- -- --
Class I ...................................... -- -- -- --
------------ ----------- ------------ -----------
Total distributions .......................... (195,413) (8,361) (294,216) (36,178)
------------ ----------- ------------ -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Class N ...................................... 17,741,640 2,333,613 13,560,525 52,641,474
Class I ...................................... -- -- -- --
Issued to shareholders in
reinvestment of distributions:
Class N ...................................... 190,895 8,053 275,944 36,171
Class I ...................................... -- -- -- --
Cost of shares repurchased:
Class N ...................................... (14,864,961) (8,167,899) (14,701,653) (7,213,672)
Class I ...................................... -- -- -- --
------------ ----------- ------------ -----------
Net increase (decrease) from capital
share transactions .................... 3,067,574 (5,826,233) (865,184) 45,463,973
------------ ----------- ------------ -----------
Total increase (decrease) in net assets ... 8,803,311 (5,141,654) 6,933,015 42,478,254
------------ ----------- ------------ -----------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ...... $ 26,389,349 $17,586,038 $ 49,411,279 $42,478,264
============ =========== ============ ===========
(A)Undistributed (overdistributed) net
investment income ............................ $ -- $ -- $ 70,773 $ 146,540
============ =========== ============ ===========
OTHER INFORMATION:
SHARE TRANSACTIONS:
Class N:
Sold ......................................... 959,918 166,866 1,391,079 5,361,902
Issued to shareholders in reinvestment
of distributions .......................... 13,351 603 28,659 3,661
Repurchased .................................. (853,475) (587,080) (1,486,175) (740,651)
Class I:
Sold ......................................... -- -- -- --
Issued to shareholders in reinvestment
of distributions .......................... -- -- -- --
Repurchased .................................. -- -- -- --
------------ ----------- ------------ -----------
Net increase (decrease)
in shares outstanding ................. 119,794 (419,611) (66,437) 4,624,912
============ =========== ============ ===========
</TABLE>
<TABLE>
ALLEGHANY/VEREDUS
AGGRESSIVE GROWTH FUND
--------------------------
YEARS ENDED OCTOBER 31,
2000 1999
------------ -----------
<S> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD ................... $ 57,281,574 $12,673,539
------------ -----------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) .................... (1,159,659) (270,497)
Net realized gain (loss) on investments sold .... 26,859,085 9,807,382
Net change in unrealized appreciation (depreciation)
on investments and assets and liabilities .... 6,057,746 10,248,334
------------ -----------
Net increase (decrease) in
net assets from operations ................... 31,757,172 19,785,219
------------ -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class N ...................................... -- --
Net realized gain on investments:
Class N ...................................... (8,782,878) --
Class I ...................................... -- --
------------ -----------
Total distributions .......................... (8,782,878) --
------------ -----------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Class N ...................................... 179,463,335 34,532,762
Class I ...................................... -- --
Issued to shareholders in
reinvestment of distributions:
Class N ...................................... 8,589,707 --
Class I ...................................... -- --
Cost of shares repurchased:
Class N ...................................... (85,503,149) (9,709,946)
Class I ...................................... -- --
------------ -----------
Net increase (decrease) from capital
share transactions .................... 102,549,893 24,822,816
------------ -----------
Total increase (decrease) in net assets ... 125,524,187 44,608,035
------------ -----------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ...... $182,805,761 $57,281,574
============ ===========
(A)Undistributed (overdistributed) net
investment income ............................ $ (428) $ --
============ ===========
OTHER INFORMATION:
SHARE TRANSACTIONS:
Class N:
Sold ......................................... 7,871,582 2,693,561
Issued to shareholders in reinvestment
of distributions .......................... 483,664 --
Repurchased .................................. (3,682,466) (713,478)
Class I:
Sold ......................................... -- --
Issued to shareholders in reinvestment
of distributions .......................... -- --
Repurchased .................................. -- --
------------ -----------
Net increase (decrease)
in shares outstanding ................. 4,672,780 1,980,083
============ ===========
</TABLE>
------------------------
(a) Alleghany/Chicago Trust Small Cap Value Fund commenced operations on
November 10, 1998.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
56-57
<PAGE>
ALLEGHANY FUNDS
---------------------
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALLEGHANY/VEREDUS ALLEGHANY/BLAIRLOGIE INTERNATIONAL
SCITECH FUND DEVELOPED FUND
--------------- -----------------------------------------------
PERIOD ENDED YEAR ENDED SIX MONTHS TEN MONTHS
OCTOBER 31, OCTOBER 31, ENDED OCTOBER 31, ENDED APRIL 30,
2000(A) 2000 1999 1999(B)
--------------- ------------ --------------- ---------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD $ -- $104,583,366 $ 106,362,307 $ 138,750,570
--------------- ------------ --------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) ........................ 18,445 95,643 640,627 (53,423)
Net realized gain (loss) on investments sold
and foreign currency translations ................ (253,649) 14,867,403 8,646,046 13,206,377
Net change in unrealized appreciation (depreciation)
on investments and translation of assets and
liabilities denominated in foreign currency ...... (56,416) (14,769,451) (3,656,254) (9,261,285)
--------------- ------------ --------------- ---------------
Net increase (decrease) in net assets from operations (291,620) 193,595 5,630,419 3,891,669
--------------- ------------ --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class N .......................................... (5,699) (40,326) -- --
Class I .......................................... -- (684,209) -- (461,778)
Net realized gain on investments:
Class N .......................................... -- (580,772) -- (948,765)
Class I .......................................... -- (8,051,198) -- (12,721,855)
Return of Capital
Class N .......................................... -- -- -- --
Class I .......................................... -- -- -- --
--------------- ------------ --------------- ---------------
Total distributions .............................. (5,699) (9,356,505) -- (14,132,398)
--------------- ------------ --------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Class N .......................................... 3,196,369 1,287,383 4,019,607 112,028,851
Class I .......................................... -- 31,994,950 59,579,527 88,175,722
Issued to shareholders in reinvestment of distributions:
Class N .......................................... 5,650 542,653 -- 808,014
Class I .......................................... -- 8,671,276 -- 12,916,908
Cost of shares repurchased:
Class N .......................................... (208,805) (2,327,895) (2,225,372) (123,609,614)
Class I .......................................... -- (91,400,785) (68,783,122) (112,467,415)
--------------- ------------ --------------- ---------------
Net increase (decrease) from capital
share transactions ........................ 2,993,214 (51,232,418) (7,409,360) (22,147,534)
--------------- ------------ --------------- ---------------
Total increase (decrease) in net assets ....... 2,695,895 (60,395,328) (1,778,941) (32,388,263)
--------------- ------------ --------------- ---------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) .......... $ 2,695,895 $ 44,188,038 $ 104,583,366 $ 106,362,307
=============== ============ =============== ===============
(A)Undistributed (overdistributed) net
investment income (loss) ......................... $ 12,746 $ -- $ 717,458 $ (4,476)
=============== ============ =============== ===============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Class N:
Sold ............................................. 322,300 99,345 322,638 8,379,342
Issued to shareholders in
reinvestment of distributions .................. 586 41,968 -- 62,711
Repurchased ...................................... (20,851) (176,820) (176,179) (9,182,886)
Class I:
Sold ............................................. -- 2,478,202 4,694,010 6,455,344
Issued to shareholders in
reinvestment of distributions .................. -- 670,114 -- 1,009,365
Repurchased ...................................... -- (7,062,090) (5,409,299) (8,037,843)
--------------- ------------ --------------- ---------------
Net increase (decrease) in shares outstanding . 302,035 (3,949,281) (568,830) (1,313,967)
=============== ============ =============== ===============
</TABLE>
<TABLE>
<CAPTION>
ALLEGHANY/BLAIRLOGIE
EMERGING MARKETS FUND
---------------------------------------------------
YEAR ENDED SIX MONTHS ENDED TEN MONTHS ENDED
OCTOBER 31, OCTOBER 31, APRIL 30,
2000 1999 1999(B)
--------------- -------------- ---------------
<S> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD $ 18,308,172 $ 19,004,118 $ 27,569,318
--------------- -------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) ........................ 108,177 101,678 153,762
Net realized gain (loss) on investments sold
and foreign currency translations ................ 1,513,064 375,008 (4,788,570)
Net change in unrealized appreciation (depreciation)
on investments and translation of assets and
liabilities denominated in foreign currency ...... (2,211,719) 80,954 3,735,165
--------------- -------------- ---------------
Net increase (decrease) in net assets from operations (590,478) 557,640 (899,643)
--------------- -------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class N .......................................... (2,599) -- (1,704)
Class I .......................................... (51,540) -- (81,016)
Net realized gain on investments:
Class N .......................................... -- -- --
Class I .......................................... -- -- --
Return of Capital
Class N .......................................... -- -- (549)
Class I .......................................... -- -- (26,128)
--------------- -------------- ---------------
Total distributions .............................. (54,139) -- (109,397)
--------------- -------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Class N .......................................... 3,762,087 1,167,427 4,825,690
Class I .......................................... 7,304,860 4,964,104 23,834,837
Issued to shareholders in reinvestment of distributions:
Class N .......................................... 2,333 -- 4,501
Class I .......................................... 49,584 -- 93,520
Cost of shares repurchased:
Class N .......................................... (3,386,003) (421,986) (6,805,094)
Class I .......................................... (11,916,795) (6,963,131) (29,509,614)
--------------- -------------- ---------------
Net increase (decrease) from capital
share transactions ........................ (4,183,934) (1,253,586) (7,556,160)
--------------- -------------- ---------------
Total increase (decrease) in net assets ....... (4,828,551) (695,946) (8,565,200)
--------------- -------------- ---------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) .......... $ 13,479,621 $ 18,308,172 $ 19,004,118
=============== ============== ===============
(A)Undistributed (overdistributed) net
investment income (loss) ......................... $ 61,491 $ 45,132 $ (1,001)
=============== ============== ===============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Class N:
Sold ............................................. 267,933 108,246 561,023
Issued to shareholders in
reinvestment of distributions .................. 185 -- 159
Repurchased ...................................... (246,832) (39,603) (795,208)
Class I:
Sold ............................................. 571,869 454,687 2,801,577
Issued to shareholders in
reinvestment of distributions .................. 3,923 -- 10,113
Repurchased ...................................... (929,269) (647,362) (3,463,865)
--------------- -------------- ---------------
Net increase (decrease) in shares outstanding . (332,191) (124,032) (886,201)
=============== ============== ===============
</TABLE>
<TABLE>
<CAPTION>
ALLEGHANY/MONTAG & CALDWELL
BALANCED FUND
----------------------------
YEARS ENDED OCTOBER 31,
2000 1999(C)
------------ -------------
<S> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD $251,192,049 $ 158,398,348
------------ -------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) ........................ 6,687,590 3,379,975
Net realized gain (loss) on investments sold
and foreign currency translations ................ 10,862,039 12,323,201
Net change in unrealized appreciation (depreciation)
on investments and translation of assets and
liabilities denominated in foreign currency ...... (10,774,845) 15,541,127
------------ -------------
Net increase (decrease) in net assets from operations 6,774,784 31,244,303
------------ -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class N .......................................... (2,991,137) (2,253,523)
Class I .......................................... (3,353,338) (817,375)
Net realized gain on investments:
Class N .......................................... (7,228,902) (8,904,043)
Class I .......................................... (4,863,092) --
Return of Capital
Class N .......................................... -- --
Class I .......................................... -- --
------------ -------------
Total distributions .............................. (18,436,469) (11,974,941)
------------ -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Class N .......................................... 54,472,989 76,418,226
Class I .......................................... 136,488,459 97,458,628
Issued to shareholders in reinvestment of distributions:
Class N .......................................... 10,046,917 11,005,944
Class I .......................................... 7,418,065 817,440
Cost of shares repurchased:
Class N .......................................... (54,615,985) (101,572,790)
Class I .......................................... (55,650,074) (10,603,109)
------------ -------------
Net increase (decrease) from capital
share transactions ........................ 98,160,371 73,524,339
------------ -------------
Total increase (decrease) in net assets ....... 86,498,686 92,793,701
------------ -------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) .......... $337,690,735 $ 251,192,049
============ =============
(A)Undistributed (overdistributed) net
investment income (loss) ......................... $ 1,007,748 $ 660,478
============ =============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Class N:
Sold ............................................. 2,852,176 4,064,233
Issued to shareholders in
reinvestment of distributions .................. 521,656 621,725
Repurchased ...................................... (2,879,104) (5,426,672)
Class I:
Sold ............................................. 7,257,599 5,199,224
Issued to shareholders in
reinvestment of distributions .................. 387,498 43,055
Repurchased ...................................... (2,937,423) (561,037)
------------ -------------
Net increase (decrease) in shares outstanding . 5,202,402 3,940,528
============ =============
</TABLE>
--------------------------------------------------------------------------------
(a) Alleghany/Veredus SciTech Fund commenced operations on June 30, 2000.
(b) Alleghany/Blairlogie International Developed Fund and Alleghany/Blairlogie
Emerging Markets Fund audits for the period July 1, 1998 through April 30,
1999. Share transactions restated to reflect share conversion on April 30,
1999. (See Note A)
(c) Montag & Caldwell Balanced Fund-Class I commenced investment operations on
December 31, 1998.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
58-59
<PAGE>
ALLEGHANY FUNDS
---------------------
STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ALLEGHANY/ ALLEGHANY/
CHICAGO TRUST CHICAGO TRUST
BALANCED FUND BOND FUND
--------------------------- ---------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD $294,426,017 $219,361,542 $133,408,155 $160,561,220
------------ ------------ ------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ................................ 6,621,193 5,674,652 9,473,072 9,236,090
Net realized gain (loss) on investments sold ......... 22,637,439 8,203,023 (2,022,183) (446,987)
Net change in unrealized appreciation (depreciation)
on investments and assets and liabilities ......... 12,662,153 25,535,665 2,276,122 (7,370,531)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from operations 41,920,785 39,413,340 9,727,011 1,418,572
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class N ........................................... (6,763,325) (5,364,029) (8,490,906) (9,226,493)
Class I ........................................... -- -- (864,678) --
Net realized gain on investments:
Class N ........................................... (8,216,573) (13,010,618) -- (708,779)
Class I ........................................... -- -- -- --
------------ ------------ ------------ ------------
Total distributions ............................... (14,979,898) (18,374,647) (9,355,584) (9,935,272)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares:
Class N ........................................... 56,001,793 100,719,712 52,505,198 46,629,918
Class I ........................................... -- -- 50,791,637 --
Issued to shareholders in reinvestment of distributions:
Class N ........................................... 14,964,263 18,361,299 7,417,523 8,833,465
Class I ........................................... -- -- 466,492 --
Cost of shares repurchased:
Class N ........................................... (71,106,758) (65,055,229) (88,309,407) (74,099,748)
Class I ........................................... -- -- (2,258,512) --
------------ ------------ ------------ ------------
Net increase (decrease) from capital
share transactions ......................... (140,702) 54,025,782 20,612,931 (18,636,365)
------------ ------------ ------------ ------------
Total increase (decrease) in net assets ........ 26,800,185 75,064,475 20,984,358 (27,153,065)
------------ ------------ ------------ ------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ........... $321,226,202 $294,426,017 $154,392,513 $133,408,155
============ ============ ============ ============
(A) Undistributed net investment income . $ 822,040 $ 976,162 $ 547,324 $ 426,916
============ ============ ============ ============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Class N:
Sold .............................................. 4,168,717 7,946,222 5,445,754 4,672,863
Issued to shareholders in reinvestment
of distributions ............................... 1,141,960 1,540,005 771,172 869,864
Repurchased ....................................... (5,322,337) (5,135,906) (9,163,498) (7,442,578)
Class I:
Sold .............................................. -- -- 5,265,548 --
Issued to shareholders in reinvestment
of distributions ............................... -- -- 48,141 --
Repurchased ....................................... -- -- (232,269) --
------------ ------------ ------------ ------------
Net increase (decrease) in shares outstanding .. (11,660) 4,350,321 2,134,848 (1,899,851)
============ ============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
ALLEGHANY/ ALLEGHANY/
CHICAGO TRUST CHICAGO TRUST
MUNICIPAL BOND FUND MONEY MARKET FUND
------------------------ ---------------------------------
YEARS ENDED OCTOBER 31, YEARS ENDED OCTOBER 31,
2000 1999 2000 1999
----------- ----------- --------------- ---------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD $17,219,295 $13,209,908 $ 335,140,215 $ 281,389,294
----------- ----------- --------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income ................................ 822,167 722,732 22,485,176 14,080,829
Net realized gain (loss) on investments sold ......... (449,564) 24,495 -- --
Net change in unrealized appreciation (depreciation)
on investments and assets and liabilities ......... 807,634 (1,093,220) -- --
----------- ----------- --------------- ---------------
Net increase (decrease) in net assets from operations 1,180,237 (345,993) 22,485,176 14,080,829
----------- ----------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Class N ........................................... (860,093) (711,409) (22,485,176) (14,080,829)
Class I ........................................... -- -- -- --
Net realized gain on investments:
Class N ........................................... -- -- -- --
Class I ........................................... -- -- -- --
----------- ----------- --------------- ---------------
Total distributions ............................... (860,093) (711,409) (22,485,176) (14,080,829)
----------- ----------- --------------- ---------------
CAPITAL SHARE TRANSACTIONS: Net proceeds from sales of shares:
Class N ........................................... 3,995,141 7,470,973 1,605,653,266 1,295,225,039
Class I ........................................... -- -- -- --
Issued to shareholders in reinvestment of distributions:
Class N ........................................... 152,350 126,534 3,126,098 1,813,603
Class I ........................................... -- -- -- --
Cost of shares repurchased:
Class N ........................................... (2,784,265) (2,530,718) (1,584,436,966) (1,243,287,721)
Class I ........................................... -- -- -- --
----------- ----------- --------------- ---------------
Net increase (decrease) from capital
share transactions ......................... 1,363,226 5,066,789 24,342,398 53,750,921
----------- ----------- --------------- ---------------
Total increase (decrease) in net assets ........ 1,683,370 4,009,387 24,342,398 53,750,921
----------- ----------- --------------- ---------------
NET ASSETS AT END OF PERIOD (INCLUDING LINE A) ........... $18,902,665 $17,219,295 $ 359,482,613 $ 335,140,215
=========== =========== =============== ===============
(A) Undistributed net investment income . $ -- $ 37,926 $ -- $ --
=========== =========== =============== ===============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Class N:
Sold .............................................. 405,518 731,430 1,605,653,266 1,295,225,039
Issued to shareholders in reinvestment
of distributions ............................... 15,603 12,464 3,126,098 1,813,603
Repurchased ....................................... (285,679) (249,136) (1,584,436,966) (1,243,287,721)
Class I:
Sold .............................................. -- -- -- --
Issued to shareholders in reinvestment
of distributions ............................... -- -- -- --
Repurchased ....................................... -- -- -- --
----------- ----------- --------------- ---------------
Net increase (decrease) in shares outstanding .. 135,442 494,758 24,342,398 53,750,921
=========== =========== =============== ===============
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
60-61
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/MONTAG & CALDWELL GROWTH FUND - CLASS N OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/MONTAG & CALDWELL GROWTH FUND - CLASS N
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
------------ ------------ ---------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period. ........... $ 33.15 $ 26.49 $ 22.68 $ 17.08 $ 13.16
------------ ------------ ---------- ----------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ........................ (0.05) (0.04) (0.05) (0.05) --
Net realized and unrealized
gain (loss) on investments .............. (0.15) 7.64 4.07 5.79 3.93
------------ ------------ ---------- ----------- ---------
Total from investment operations ........ (0.20) 7.60 4.02 5.74 3.93
------------ ------------ ---------- ----------- ---------
LESS DISTRIBUTIONS:
Distributions from and in excess
of net investment income ................ -- -- -- -- (0.01)
Distributions from net realized
gain on investments ..................... (1.65) (0.94) (0.21) (0.14) --
------------ ------------ ---------- ----------- ---------
Total distributions ..................... (1.65) (0.94) (0.21) (0.14) (0.01)
------------ ------------ ---------- ----------- ---------
Net increase (decrease) in net asset value ...... (1.85) 6.66 3.81 5.60 3.92
------------ ------------ ---------- ----------- ---------
Net Asset Value, End of Period .................. $ 31.30 $ 33.15 $ 26.49 $ 22.68 $ 17.08
============ ============ ========== =========== =========
TOTAL RETURN .................................... (0.96)% 29.34% 17.90% 33.82% 29.91%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) ......... $ 1,349,760 $ 1,612,796 $1,004,356 $ 479,557 $ 166,243
Ratios of expenses to average net assets:
Before reimbursement of expenses
by Adviser .............................. 1.03% 1.05% 1.12% 1.24% 1.32%
After reimbursement of expenses
by Adviser .............................. 1.03% 1.05% 1.12% 1.23% 1.28%
Ratios of net investment income
(loss) to average net assets:
Before reimbursement of expenses
by Adviser .............................. (0.14)% (0.16)% (0.22)% (0.38)% (0.10)%
After reimbursement of expenses
by Adviser .............................. (0.14)% (0.16)% (0.22)% (0.37)% (0.06)%
Portfolio Turnover ........................... 66.71% 31.59% 29.81% 18.65% 26.36%
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
62
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/MONTAG & CALDWELL GROWTH FUND - CLASS I OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/MONTAG &CALDWELL GROWTH FUND - CLASS I
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96(A)
------------- ------------ ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period. ........... $ 33.46 $ 26.65 $ 22.75 $ 17.08 $ 15.59
------------- ------------ ---------- ---------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ...................... 0.05 0.04 0.01 --(b) 0.02
Net realized and unrealized gain (loss)
on investments .......................... (0.16) 7.71 4.10 5.81 1.49
------------- ------------ ---------- ---------- ---------
Total from investment operations ........ (0.11) 7.75 4.11 5.81 1.51
------------- ------------ ---------- ---------- ---------
LESS DISTRIBUTIONS:
Distributions from and in excess of net
investment income ....................... -- -- -- -- (0.02)
Distributions from net realized
gain on investments ..................... (1.65) (0.94) (0.21) (0.14) --
------------- ------------ ---------- ---------- ---------
Total distributions ..................... (1.65) (0.94) (0.21) (0.14) (0.02)
------------- ------------ ---------- ---------- ---------
Net increase in net asset value ................. (1.76) 6.81 3.90 5.67 1.49
------------- ------------ ---------- ---------- ---------
Net Asset Value, End of Period .................. $ 31.70 $ 33.46 $ 26.65 $ 22.75 $ 17.08
============= ============ ========== ========== =========
TOTAL RETURN(1) (0.70)% 29.78% 18.24% 34.26% 9.67%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) $ 1,334,651 $ 1,369,673 $ 738,423 $ 268,861 $ 52,407
Ratios of expenses to average net assets:
Before reimbursement of expenses
by Adviser(2) ........................... 0.74% 0.76% 0.85% 0.93% 0.98%
After reimbursement of expenses
by Adviser(2) ........................... 0.74% 0.76% 0.85% 0.93% 0.98%
Ratios of net investment income
(loss) to average net assets:
Before reimbursement of expenses
by Adviser(2) ........................... 0.15% 0.14% 0.05% (0.07)% 0.17%
After reimbursement of expenses
by Adviser(2) ........................... 0.15% 0.14% 0.05% (0.06)% 0.17%
Portfolio Turnover(1) ........................ 66.71% 31.59% 29.81% 18.65% 26.36%
</TABLE>
--------------------------------------------------------------------------------
(1) Not Annualized.
(2) Annualized.
(a) Montag & Caldwell Growth Fund - Class I commenced investment operations on
June 28, 1996.
(b) Represents less than $.01 per share.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
63
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST GROWTH & INCOME FUND OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/CHICAGO TRUST GROWTH & INCOME FUND
<TABLE>
<CAPTION>
CLASS N CLASS I
------------------------------------------------------------ ----------
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96 10/31/00(A)
---------- --------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period. ........... $ 27.71 $ 23.06 $ 19.73 $ 16.17 $ 12.90 $ 28.60
---------- --------- ---------- --------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ............... (0.06) (0.06) (0.02) 0.08 0.11 --
Net realized and unrealized gain
on investments .......................... 5.21 6.14 4.73 3.91 3.34 2.29
---------- --------- ---------- --------- ---------- ----------
Total from investment operations ........ 5.15 6.08 4.71 3.99 3.45 2.29
---------- --------- ---------- --------- ---------- ----------
LESS DISTRIBUTIONS:
Distributions from and in excess
of net investment income ................ -- -- (0.01) (0.09) (0.11) --
Distributions from net realized
gain on investments ..................... (2.00) (1.43) (1.37) (0.34) (0.07) --
---------- --------- ---------- --------- ---------- ----------
Total distributions ..................... (2.00) (1.43) (1.38) (0.43) (0.18) --
---------- --------- ---------- --------- ---------- ----------
Net increase in net asset value ................. 3.15 4.65 3.33 3.56 3.27 2.29
---------- --------- ---------- --------- ---------- ----------
Net Asset Value, End of Period .................. $ 30.86 $ 27.71 $ 23.06 $ 19.73 $ 16.17 $ 30.89
========== ========= ========== ========= ========== ==========
TOTAL RETURN(1) ................................. 19.62% 27.71% 25.43% 25.16% 26.98% 8.01%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) ......... $ 542,436 $ 490,189 $ 367,666 $ 274,608 $ 205,133 $ 50,577
Ratios of expenses to average net assets:
Before reimbursement of expenses
by Adviser(2) ........................... 1.07% 1.06% 1.08% 1.12% 1.15% 0.83%
After reimbursement of expenses
by Adviser(2) ........................... 1.07% 1.06% 1.08% 1.07%(3) 1.00% 0.83%
Ratios of net investment income
(loss) to average net assets:
Before reimbursement of expenses
by Adviser(2) ........................... (0.18)% (0.25)% (0.11)% 0.36% 0.62% 0.06%
After reimbursement of expenses
by Adviser(2) ........................... (0.18)% (0.25)% (0.11)% 0.41% 0.77% 0.06%
Portfolio Turnover(1) ........................ 25.73% 28.93% 34.21% 30.58% 25.48% 25.73%
</TABLE>
-----------------------
(1) Not Annualized.
(2) Annualized.
(3) The Adviser's expense reimbursement level, which affects the net expense
ratio, changed from 1.00% to 1.10% on February 28, 1997.
(a) Alleghany/Chicago Trust Growth & Income Fund -- Class I commenced investment
operations on July 31, 2000.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
64
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST TALON FUND OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/CHICAGO TRUST TALON FUND
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
--------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period. ........... $ 13.45 $ 13.16 $ 17.60 $ 14.39 $ 12.07
--------- ---------- ---------- ---------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) ............... (0.05) (0.05) 0.07 0.11 0.04
Net realized and unrealized gain
(loss) on investments ................... 5.25 0.34 (1.59) 4.38 3.01
--------- ---------- ---------- ---------- ---------
Total from investment operations ........ 5.20 0.29 (1.52) 4.49 3.05
--------- ---------- ---------- ---------- ---------
LESS DISTRIBUTIONS:
Distributions from and in excess
of net investment income ................ -- --(a) (0.09) (0.09) (0.03)
Distributions from net realized
gain on investments ..................... (0.15) -- (2.83) (1.19) (0.70)
--------- ---------- ---------- ---------- ---------
Total distributions ..................... (0.15) -- (2.92) (1.28) (0.73)
--------- ---------- ---------- ---------- ---------
Net increase (decrease) in net asset value ...... 5.05 0.29 (4.44) 3.21 2.32
--------- ---------- ---------- ---------- ---------
Net Asset Value, End of Period .................. $ 18.50 $ 13.45 $ 13.16 $ 17.60 $ 14.39
========= ========== ========== ========== =========
TOTAL RETURN .................................... 39.07% 2.32% (10.54)% 33.47% 26.51%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) ......... $ 26,389 $ 17,586 $ 22,728 $ 28,460 $ 17,418
Ratios of expenses to average net assets:
Before reimbursement of expenses
by Adviser .............................. 1.48% 1.50% 1.46% 1.67% 1.98%
After reimbursement of expenses
by Adviser .............................. 1.30% 1.30% 1.30% 1.30% 1.30%
Ratios of net investment income
(loss) to average net assets:
Before reimbursement of expenses
by Adviser .............................. (0.51)% (0.50)% 0.30% 0.34% (0.38)%
After reimbursement of expenses
by Adviser .............................. (0.33)% (0.30)% 0.46% 0.71% 0.30%
Portfolio Turnover ........................... 108.61% 101.44% 78.33% 112.72% 126.83%
</TABLE>
---------------------------
(a) Represents less than $.01 per share.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
65
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST SMALL CAP VALUE FUND OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/CHICAGO TRUST SMALL CAP VALUE FUND
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
10/31/00 10/31/99(A)
--------- ---------
<S> <C> <C>
Net Asset Value, Beginning of Period. .......................................... $ 9.18 $ 10.00
--------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................................................... 0.06 0.04
Net realized and unrealized gain (loss) on investments .................... 1.66 (0.85)
--------- ---------
Total from investment operations ....................................... 1.72 (0.81)
--------- ---------
LESS DISTRIBUTIONS:
Distributions from and in excess of net investment income ................. (0.06) (0.01)
Distributions from net realized gain on invetments ........................ -- --
--------- ---------
Total distributions .................................................... (0.06) (0.01)
--------- ---------
Net increase (decrease) in net asset value ..................................... 1.66 (0.82)
--------- ---------
Net Asset Value, End of Period ................................................. $ 10.84 $ 9.18
========= =========
TOTAL RETURN(1) ................................................................ 18.88% (8.07)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) ........................................ $ 49,411 $ 42,478
Ratios of expenses to average net assets:
Before reimbursement of expenses by Adviser(2) ............................ 1.48% 1.55%
After reimbursement of expenses by Adviser(2) ............................. 1.40% 1.40%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Adviser(2) ............................ 0.48% 0.36%
After reimbursement of expenses by Adviser(2) ............................. 0.56% 0.51%
Portfolio Turnover(1) ....................................................... 210.50% 156.55%
</TABLE>
--------------------------------------------------------------------------------
(1) Not Annualized.
(2) Annualized.
(a) Alleghany/Chicago Trust Small Cap Value Fund commenced investment operations
on November 10, 1998.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
66
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/VEREDUS AGGRESSIVE GROWTH FUND OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/VEREDUS AGGRESSIVE GROWTH FUND
<TABLE>
<CAPTION>
YEAR YEAR PERIOD
ENDED ENDED ENDED
10/31/00 10/31/99 10/31/98(A)
---------- ---------- --------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period. .......................................... $ 16.60 $ 8.62 $ 10.00
---------- ---------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment loss ....................................................... (0.14) (0.08) --(b)
Net realized and unrealized gain (loss) on investments .................... 8.42 8.06 (1.38)
---------- ---------- --------
Total from investment operations ....................................... 8.28 7.98 (1.38)
---------- ---------- --------
LESS DISTRIBUTIONS:
Distributions from net realized gain on investments ....................... (2.37) -- --
---------- ---------- --------
Total distributions .................................................... (2.37) -- --
---------- ---------- --------
Net increase (decrease) in net asset value ..................................... 5.91 7.98 (1.38)
---------- ---------- --------
Net Asset Value, End of Period ................................................. $ 22.51 $ 16.60 $ 8.62
========== ========== ========
TOTAL RETURN(1) ................................................................ 53.35% 92.92% (13.80)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) ........................................ $ 182,806 $ 57,282 $ 12,674
Ratios of expenses to average net assets:
Before reimbursement of expenses by Adviser(2) ............................ 1.46% 1.58% 1.54%
After reimbursement of expenses by Adviser(2) ............................. 1.40% 1.41%(3) 1.50%
Ratios of net investment income (loss) to average net assets:
Before reimbursement of expenses by Adviser(2) ............................ (0.84)% (1.05)% (0.06)%
After reimbursement of expenses by Adviser(2) ............................. (0.78)% (0.88)% (0.02)%
Portfolio Turnover(1) ....................................................... 192.23% 204.26% 111.52%
</TABLE>
------------------------------
(1) Not Annualized.
(2) Annualized.
(3) The Adviser fee, which affects the net expense ratio, changed from 1.50% to
1.00% on December 4, 1998.
(a) Alleghany/Veredus Aggressive Growth Fund commenced investment operations on
June 30, 1998.
(b) Represents less than $0.01 per share.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
67
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/VEREDUS SCITECH FUND OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/VEREDUS SCITECH FUND
PERIOD
ENDED
10/31/00(A)
-------
Net Asset Value, Beginning of Period. ........................... $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ...................................... 0.06
Net realized and unrealized loss on investments ............ (1.11)
-------
Total from investment operations ........................ (1.05)
-------
LESS DISTRIBUTIONS:
Distributions from and in excess of net investment income .. (0.02)
Distributions from net realized gain on invetments ......... --
-------
Total distributions ..................................... (0.02)
-------
Net decrease in net asset value ................................. (1.07)
-------
Net Asset Value, End of Period .................................. $ 8.93
=======
TOTAL RETURN(1) ................................................. (10.61)%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) ......................... $ 2,696
Ratios of expenses to average net assets:
Before reimbursement of expenses by Adviser(2) ............. 6.17%
After reimbursement of expenses by Adviser(2) .............. 1.50%
Ratios of net investment income to average net assets:
Before reimbursement of expenses by Adviser(2) ............. (2.54)%
After reimbursement of expenses by Adviser(2) .............. 2.13%
Portfolio Turnover(1) ........................................ 85.98%
---------------------------------
(1) Not Annualized.
(2) Annualized.
(a) Alleghany/Veredus SciTech Fund commenced investment operations on
June 30, 2000.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
68
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/BLAIRLOGIE INTERNATIONAL DEVELOPED FUND - CLASS N OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/BLAIRLOGIE INTERNATIONAL DEVELOPED FUND - CLASS N
<TABLE>
<CAPTION>
SIX TEN EIGHT
YEAR MONTHS MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 04/30/99 06/30/98 06/30/97 06/30/96
---------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period ...................... $ 13.37 $ 12.70 $ 14.30 $ 13.05 $ 12.51 $ 11.73
-------- ------- -------- -------- -------- --------
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income (loss) ........... -- 0.06 (0.02) 0.17 0.06 0.69
Net realized and unrealized
gain (loss) on investments .......... (0.73) 0.61 0.16 1.69 1.09 0.72
-------- ------- -------- -------- -------- --------
Total from investment
operations ....................... (0.73) 0.67 0.14 1.86 1.15 1.41
-------- ------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Distributions from and
in excess of net
investment income ................... (0.08) -- -- (0.03) -- (0.42)
Distributions from net
realized gain on
investments ......................... (1.13) -- (1.74) (0.58) (0.61) (0.21)
-------- ------- -------- -------- -------- --------
Total distributions ................. (1.21) -- (1.74) (0.61) (0.61) (0.63)
-------- ------- -------- -------- -------- --------
Net increase (decrease)
in net asset value ....................... (1.94) 0.67 (1.60) 1.25 0.54 0.78
-------- ------- -------- -------- -------- --------
Net Asset Value, End of Period .............. $ 11.43 $ 13.37 $ 12.70 $ 14.30 $ 13.05 $ 12.51
======== ======= ======== ======== ======== ========
TOTAL RETURN(1) ............................. (6.58)% 5.35% 1.05% 15.33% 9.77% 12.33%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(in 000's) ............................. $ 6,019 $ 7,516 $ 5,278(3) $ 6,299 $ 2,302 $ 5,624
Ratios of expenses to
average net assets:
Before reimbursement of
expenses by Adviser(2) .............. 1.43% 1.41% 1.41% 1.36% 1.38% 1.35%
After reimbursement of
expenses by Adviser(2) .............. 1.35% 1.35% 1.41% 1.36% 1.38% 1.35%
Ratios of net investment
income (loss) to average
net assets:
Before reimbursement of
expenses by Adviser(2) .............. (0.12)% 0.95% (0.21)% 1.31% 0.52% 1.04%
After reimbursement of
expenses by Adviser(2) .............. (0.04)% 1.01% (0.21)% 1.31% 0.52% 1.04%
Portfolio Turnover(1) .................... 50.86% 28.91% 36.00% 60.00% 77.00% 60.00%
</TABLE>
----------------------------------------
(1) Not Annualized.
(2) Annualized.
(3) Net assets at end of period do not reflect Class A, B, or C net assets prior
to April 30, 1999.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
69
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/BLAIRLOGIE INTERNATIONAL DEVELOPED FUND - CLASS I OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/BLAIRLOGIE INTERNATIONAL DEVELOPED FUND - CLASS I
<TABLE>
<CAPTION>
SIX TEN EIGHT
YEAR MONTHS MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 04/30/99 06/30/98 06/30/97 06/30/96
--------- --------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period. ..................... $ 13.40 $ 12.70 $ 14.32 $ 13.12 $ 12.54 $ 11.74
--------- --------- ----------- ---------- --------- ---------
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income .................. 0.05 0.08 -- 0.16 0.10 0.72
Net realized and unrealized
gain (loss) on investments .......... (0.75) 0.62 0.17 1.73 1.09 0.72
--------- --------- ----------- ---------- --------- ---------
Total from investment
operations ........................ (0.70) 0.70 0.17 1.89 1.19 1.44
--------- --------- ----------- ---------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from and
in excess of net
investment income ................... (0.10) -- (0.05) (0.11) -- (0.43)
Distributions from net
realized gain on
investments ......................... (1.13) -- (1.74) (0.58) (0.61) (0.21)
--------- --------- ----------- ---------- --------- ---------
Total distributions ................. (1.23) -- (1.79) (0.69) (0.61) (0.64)
--------- --------- ----------- ---------- --------- ---------
Net increase (decrease)
in net asset value ....................... (1.93) 0.70 (1.62) 1.20 0.58 0.80
--------- --------- ----------- ---------- --------- ---------
Net Asset Value, End of Period .............. $ 11.47 $ 13.40 $ 12.70 $ 14.32 $ 13.12 $ 12.54
========= ========= =========== ========== ========= =========
TOTAL RETURN(1) ............................. (6.28)% 5.51% 1.31% 15.69% 10.07% 12.54%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(in 000's) ............................. $ 38,169 $ 97,067 $ 101,084 $ 122,126 $ 94,044 $ 70,207
Ratios of expenses to
average net assets:
Before reimbursement of
expenses by Adviser(2) .............. 1.18% 1.16% 1.16% 1.11% 1.13% 1.10%
After reimbursement of
expenses by Adviser(2) .............. 1.10% 1.10% 1.16% 1.11% 1.13% 1.10%
Ratios of net investment
income (loss) to average net assets:
Before reimbursement of
expenses by Adviser(2) .............. 0.13% 1.20% 0.04% 1.20% 0.85% 0.81%
After reimbursement of
expenses by Adviser(2) .............. 0.21% 1.26% 0.04% 1.20% 0.85% 0.81%
Portfolio Turnover(1) .................... 50.86% 28.91% 36.00% 60.00% 77.00% 60.00%
</TABLE>
--------------------------------------
(1) Not Annualized.
(2) Annualized.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
70
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/BLAIRLOGIE EMERGING MARKETS FUND - CLASS N OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/BLAIRLOGIE EMERGING MARKETS FUND - CLASS N
<TABLE>
<CAPTION>
SIX TEN EIGHT
YEAR MONTHS MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 04/30/99 06/30/98 06/30/97 06/30/96
---------- --------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period. ..................... $ 10.75 $ 10.42 $ 10.14 $ 13.95 $ 12.63 $ 11.24
-------- ------- -------- -------- -------- --------
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income .................. 0.05 0.05 0.05 0.09 -- 0.02
Net realized and unrealized
gain (loss) on investments .......... (0.92) 0.28 0.23 (3.90) 1.32 1.40
-------- ------- -------- -------- -------- --------
Total from investment
operations ....................... (0.87) 0.33 0.28 (3.81) 1.32 1.42
-------- ------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Distributions from and
in excess of net
investment income ................... (0.02) -- -- -- -- (0.03)
Distributions from net
realized gain on
investments ......................... -- -- -- -- -- --
-------- ------- -------- -------- -------- --------
Total distributions ................. (0.02) -- -- -- -- (0.03)
-------- ------- -------- -------- -------- --------
Net increase (decrease)
in net asset value ....................... (0.89) 0.33 0.28 (3.81) 1.32 1.39
-------- ------- -------- -------- -------- --------
Net Asset Value, End of Period .............. $ 9.86 $ 10.75 $ 10.42 $ 10.14 $ 13.95 $ 12.63
======== ======= ======== ======== ======== ========
TOTAL RETURN(1) ............................. (8.25)% 3.26% 2.76% (27.31)% 10.45% 12.70%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(in 000's) ............................. $ 1,795 $ 1,729 $ 961(3) $ 1,339 $ 117 $ 368
Ratios of expenses to
average net assets:
Before reimbursement of
expenses by Adviser(2) .............. 1.97% 2.07% 1.68% 1.65% 1.69% 1.61%
After reimbursement of
expenses by Adviser(2) .............. 1.60% 1.60% 1.68% 1.65% 1.69% 1.61%
Ratios of net investment
income (loss) to average
net assets:
Before reimbursement of
expenses by Adviser(2) .............. (0.01)% 0.41% 0.69% 0.81% 0.02% 0.18%
After reimbursement of
expenses by Adviser(2) .............. 0.36% 0.88% 0.69% 0.81% 0.02% 0.18%
Portfolio Turnover(1) .................... 42.02% 46.93% 38.00% 52.00% 74.00% 74.00%
</TABLE>
--------------------------------
(1) Not Annualized.
(2) Annualized.
(3) Net assets at end of period do not reflect Class A, B, or C net assets prior
to April 30, 1999.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
71
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/BLAIRLOGIE EMERGING MARKETS FUND - CLASS I OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/BLAIRLOGIE EMERGING MARKETS FUND - CLASS I
<TABLE>
<CAPTION>
SIX TEN EIGHT
YEAR MONTHS MONTHS YEAR YEAR MONTHS
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 04/30/99 06/30/98 06/30/97 06/30/96
--------- --------- ----------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period. ..................... $ 10.79 $ 10.43 $ 10.18 $ 13.96 $ 12.66 $ 11.27
--------- --------- --------- --------- --------- ---------
INCOME FROM
INVESTMENT OPERATIONS:
Net investment income .................. 0.09 0.06 0.06 0.06 0.06 0.03
Net realized and unrealized
gain (loss) ......................... (0.97) 0.30 0.23 (3.84) 1.30 1.40
--------- --------- --------- --------- --------- ---------
Total from investment
operations ....................... (0.88) 0.36 0.29 (3.78) 1.36 1.43
--------- --------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Distributions from and in excess
of net investment income ............ (0.04) -- (0.03) -- (0.06) (0.04)
Distributions from net realized
gain on investments ................. -- -- -- -- -- --
Return of capital distributions ........ -- -- (0.01) -- -- --
--------- --------- --------- --------- --------- ---------
Total distributions ................. (0.04) -- (0.04) -- (0.06) (0.04)
--------- --------- --------- --------- --------- ---------
Net increase (decrease)
in net asset value ....................... (0.92) 0.36 0.25 (3.78) 1.30 1.39
--------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period .............. $ 9.87 $ 10.79 $ 10.43 $ 10.18 $ 13.96 $ 12.66
========= ========= ========= ========= ========= =========
TOTAL RETURN(1) ............................. (8.18)% 3.45% 2.98% (27.08)% 10.85% 12.70%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period
(in 000's) ............................. $ 11,685 $ 16,579 $ 18,043 $ 24,251 $ 52,703 $ 80,545
Ratios of expenses to
average net assets:
Before reimbursement of
expenses by Adviser(2) .............. 1.72% 1.82% 1.43% 1.39% 1.45% 1.35%
After reimbursement of
expenses by Adviser(2) .............. 1.35% 1.35% 1.43% 1.39% 1.45% 1.35%
Ratios of net investment
income to average net assets:
Before reimbursement of
expenses by Adviser(2) .............. 0.24% 0.66% 0.94% 0.52% 0.45% 0.84%
After reimbursement of
expenses by Adviser(2) .............. 0.61% 1.13% 0.94% 0.52% 0.45% 0.84%
Portfolio Turnover(1) .................... 42.02% 46.93% 38.00% 52.00% 74.00% 74.00%
</TABLE>
-------------------------------
(1) Not Annualized.
(2) Annualized.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
72
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/MONTAG & CALDWELL BALANCED FUND OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/MONTAG & CALDWELL BALANCED FUND
<TABLE>
<CAPTION>
CLASS N CLASS I
------------------------------------------------------ ---------------------
YEAR YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96 10/31/00 10/31/99(A)
---------- ---------- --------- --------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period. ....... $ 19.41 $ 17.60 $ 16.01 $ 14.29 $ 12.12 $ 19.42 $ 18.36
---------- ---------- --------- --------- -------- ---------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................. 0.37 0.29 0.27 0.25 0.27 0.39 0.25
Net realized and unrealized gain
on investments ...................... 0.06 2.73 1.97 2.93 2.17 0.09 1.03
---------- ---------- --------- --------- -------- ---------- ---------
Total from investment operations .... 0.43 3.02 2.24 3.18 2.44 0.48 1.28
---------- ---------- --------- --------- -------- ---------- ---------
LESS DISTRIBUTIONS:
Distributions from and in excess
of net investment income ............ (0.35) (0.27) (0.27) (0.25) (0.27) (0.40) (0.22)
Distributions from net realized
gain on investments ................. (0.88) (0.94) (0.38) (1.21) -- (0.88) --
---------- ---------- --------- --------- -------- ---------- ---------
Total distributions ................. (1.23) (1.21) (0.65) (1.46) (0.27) (1.28) (0.22)
---------- ---------- --------- --------- -------- ---------- ---------
Net increase (decrease)in net asset value ... (0.80) 1.81 1.59 1.72 2.17 (0.80) 1.06
---------- ---------- --------- --------- -------- ---------- ---------
Net Asset Value, End of Period .............. $ 18.61 $ 19.41 $ 17.60 $ 16.01 $ 14.29 $ 18.62 $ 19.42
========== ========== ========= ========= ======== ========== =========
TOTAL RETURN(1) ............................. 2.05% 17.83% 14.46% 24.26% 20.37% 2.31% 6.98%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) ..... $ 162,896 $ 160,286 $ 158,398 $ 82,719 $ 31,473 $ 174,795 $ 90,906
Ratios of expenses to average net assets:
Before reimbursement of expenses
by Adviser(2) ....................... 1.13% 1.14% 1.18% 1.33% 1.58% 0.88% 0.91%
After reimbursement of expenses
by Adviser(2) ....................... 1.13% 1.14% 1.18% 1.25% 1.25% 0.88% 0.91%
Ratios of net investment income
to average net assets:
Before reimbursement of expenses
by Adviser(2) ....................... 1.93% 1.54% 1.67% 1.70% 1.83% 2.19% 1.77%
After reimbursement of expenses
by Adviser(2) ....................... 1.93% 1.54% 1.67% 1.78% 2.16% 2.19% 1.77%
Portfolio Turnover(1) .................... 54.51% 34.79% 59.02% 28.13% 43.58% 54.51% 34.79%
</TABLE>
------------------------------------
(1) Not Annualized.
(2) Annualized.
(a) Montag & Caldwell Balanced Fund -- Class I commenced investment operations
on December 31, 1998.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
73
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST BALANCED FUND OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/CHICAGO TRUST BALANCED FUND
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
----------- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period. ............. $ 13.04 $ 12.03 $ 11.06 $ 9.60 $ 8.43
----------- ----------- ---------- ---------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ........................ 0.29 0.27 0.27 0.28 0.27
Net realized and unrealized gain
on investments ............................ 1.57 1.71 1.65 1.60 1.16
----------- ----------- ---------- ---------- ---------
Total from investment operations .......... 1.86 1.98 1.92 1.88 1.43
----------- ----------- ---------- ---------- ---------
LESS DISTRIBUTIONS:
Distributions from and in excess
of net investment income .................. (0.30) (0.26) (0.27) (0.28) (0.26)
Distributions from net realized
gain on investments ....................... (0.37) (0.71) (0.68) (0.14) --
----------- ----------- ---------- ---------- ---------
Total distributions ....................... (0.67) (0.97) (0.95) (0.42) (0.26)
----------- ----------- ---------- ---------- ---------
Net increase in net asset value ................... 1.19 1.01 0.97 1.46 1.17
----------- ----------- ---------- ---------- ---------
Net Asset Value, End of Period .................... $ 14.23 $ 13.04 $ 12.03 $ 11.06 $ 9.60
=========== =========== ========== ========== =========
TOTAL RETURN(1) ................................... 14.82% 17.26% 18.50% 20.10% 17.21%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) ........... $ 321,226 $ 294,426 $ 219,362 $ 187,993 $ 156,703
Ratios of expenses to average net assets:
Before reimbursement of expenses
by Adviser ................................ 1.05% 1.06% 1.08% 1.13% 1.17%
After reimbursement of expenses
by Adviser ................................ 1.05% 1.06% 1.08% 1.07%(2) 1.00%
Ratios of net investment income
to average net assets:
Before reimbursement of expenses
by Adviser ................................ 2.17% 2.13% 2.30% 2.70% 2.79%
After reimbursement of expenses
by Adviser ................................ 2.17% 2.13% 2.30% 2.76% 2.96%
Portfolio Turnover(1) .......................... 29.00% 25.05% 40.28% 34.69% 34.29%
</TABLE>
--------------------------------
(1) Not Annualized.
(2) The Adviser's expense reimbursement level, which affects the net expense
ratio, changed from 1.00% to 1.10% on February 28, 1997.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
74
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST BOND FUND OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/CHICAGO TRUST BOND FUND
<TABLE>
<CAPTION>
CLASS N CLASS I
------------------------------------------------------------ ----------
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96 10/31/00(A)
---------- --------- ---------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period. ............ $ 9.71 $ 10.27 $ 10.13 $ 9.89 $ 9.94 $ 9.64
---------- --------- ---------- --------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.66 0.61 0.60 0.61 0.60 0.17
Net realized and unrealized gain
(loss) on investments .................... -- (0.51) 0.15 0.23 (0.05) 0.09
---------- --------- ---------- --------- ---------- ----------
Total from investment operations ......... 0.66 0.10 0.75 0.84 0.55 0.26
---------- --------- ---------- --------- ---------- ----------
LESS DISTRIBUTIONS:
Distributions from and in excess
of net investment income ................. (0.64) (0.61) (0.61) (0.60) (0.60) (0.17)
Distributions from net realized
gain on investments ...................... -- (0.05) -- -- -- --
---------- --------- ---------- --------- ---------- ----------
Total distributions ...................... (0.64) (0.66) (0.61) (0.60) (0.60) (0.17)
---------- --------- ---------- --------- ---------- ----------
Net increase (decrease) in net asset value ....... 0.02 (0.56) 0.14 0.24 (0.05) 0.09
---------- --------- ---------- --------- ---------- ----------
Net Asset Value, End of Period ................... $ 9.73 $ 9.71 $ 10.27 $ 10.13 $ 9.89 $ 9.73
========== ========= ========== ========= ========== ==========
TOTAL RETURN(1) .................................. 6.98% 1.02% 7.66% 8.84% 5.76% 2.70%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) .......... $ 104,960 $ 133,408 $ 160,561 $ 120,532 $ 79,211 $ 49,432
Ratios of expenses to average net assets:
Before reimbursement of expenses
by Adviser(2) ............................ 0.95% 0.93% 0.96% 1.02% 1.10% 0.70%
After reimbursement of expenses
by Adviser(2) ............................ 0.76%(3) 0.80% 0.80% 0.80% 0.80% 0.51%(4)
Ratios of net investment income
to average net assets:
Before reimbursement of expenses
by Adviser(2) ............................ 6.53% 5.91% 5.79% 6.02% 5.89% 6.78%
After reimbursement of expenses
by Adviser(2) ............................ 6.72% 6.04% 5.95% 6.24% 6.19% 6.97%
Portfolio Turnover(1) ......................... 39.27% 49.83% 45.29% 17.76% 41.75% 39.27%
</TABLE>
---------------------
(1) Not Annualized.
(2) Annualized.
(3) The Adviser's expense Reimbursement Level, which affects the net expense
ratio, changed from 0.80% to 0.74% on February 15, 2000.
(4) If Class I had been in existence for the entire year, the net expense ratio
would have been 0.49%.
(a) Alleghany/Chicago Trust Bond Fund -- Class I commenced investment operations
on July 31, 2000.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
75
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST MUNICIPAL BOND FUND OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/CHICAGO TRUST MUNICIPAL BOND FUND
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
----------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period. ............ $ 9.73 $ 10.36 $ 10.19 $ 10.06 $ 10.08
----------- ---------- ---------- ---------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.48 0.46 0.44 0.38 0.38
Net realized and unrealized gain
(loss) on investments .................... 0.21 (0.63) 0.17 0.12 (0.02)
----------- ---------- ---------- ---------- ---------
Total from investment operations ......... 0.69 (0.17) 0.61 0.50 0.36
----------- ---------- ---------- ---------- ---------
LESS DISTRIBUTIONS:
Distributions from and in excess
of net investment income ................. (0.50) (0.46) (0.44) (0.37) (0.38)
----------- ---------- ---------- ---------- ---------
Total distributions ...................... (0.50) (0.46) (0.44) (0.37) (0.38)
----------- ---------- ---------- ---------- ---------
Net increase (decrease) in net asset value ....... 0.19 (0.63) 0.17 0.13 (0.02)
----------- ---------- ---------- ---------- ---------
Net Asset Value, End of Period ................... $ 9.92 $ 9.73 $ 10.36 $ 10.19 $ 10.06
=========== ========== ========== ========== =========
TOTAL RETURN ..................................... 7.30% (1.77)% 6.17% 5.13% 3.59%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) .......... $ 18,903 $ 17,219 $ 13,210 $ 12,379 $ 11,186
Ratios of expenses to average net assets:
Before reimbursement of expenses
by Adviser ............................... 1.17% 1.20% 1.41% 1.64% 1.53%
After reimbursement of expenses
by Adviser ............................... 0.10% 0.10% 0.35%(1) 0.90% 0.90%
Ratios of net investment income
to average net assets:
Before reimbursement of expenses
by Adviser ............................... 3.82% 3.45% 3.22% 3.00% 3.11%
After reimbursement of expenses
by Adviser ............................... 4.89% 4.55% 4.28% 3.74% 3.74%
Portfolio Turnover ............................ 91.58% 22.83% 34.33% 16.19% 27.47%
</TABLE>
--------------------------------------
(1) The Advisor's expense reimbursement level, which affects the net expense
ratio, changed from 0.90% to 0.10% on February 27, 1998.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
76
<PAGE>
ALLEGHANY FUNDS
---------------------
ALLEGHANY/CHICAGO TRUST MONEY MARKET FUND OCTOBER 31, 2000
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
ALLEGHANY/CHICAGO TRUST MONEY MARKET FUND
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED
10/31/00 10/31/99 10/31/98 10/31/97 10/31/96
----------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period. ............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ---------- ---------- ---------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ....................... 0.06 0.05 0.05 0.05 0.05
----------- ---------- ---------- ---------- ---------
Less distributions from
net investment income .................... (0.06) (0.05) (0.05) (0.05) (0.05)
----------- ---------- ---------- ---------- ---------
Net Asset Value, End of Period ................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ========== ========== ========== =========
TOTAL RETURN ..................................... 5.90% 4.76% 5.24% 5.15% 5.14%
RATIOS/SUPPLEMENTAL DATA:
Net Assets, End of Period (in 000's) .......... $ 359,483 $ 335,140 $ 281,389 $ 238,551 $ 225,536
Ratios of expenses to average net assets:
Before reimbursement of expenses
by Adviser ............................... 0.50% 0.51% 0.52% 0.56% 0.59%
After reimbursement of expenses
by Adviser ............................... 0.50% 0.51% 0.51%(1) 0.50% 0.50%
Ratios of net investment income
to average net assets:
Before reimbursement of expenses
by Adviser ............................... 5.72% 4.63% 5.13% 5.00% 4.93%
After reimbursement of expenses
by Adviser ............................... 5.72% 4.63% 5.14% 5.06% 5.02%
</TABLE>
------------------------------------
(1) As of February 27, 1998, the Adviser no longer waived fees or reimbursed
expenses.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
77
<PAGE>
ALLEGHANY FUNDS
---------------------
OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
NOTE (A) SIGNIFICANT ACCOUNTING POLICIES: Alleghany Funds (the "Company")
operates as a series company; thirteen series are covered by these financial
statements: Alleghany/Montag & Caldwell Growth Fund (the "Growth Fund"),
Alleghany/Chicago Trust Growth & Income Fund (the "Growth & Income Fund"),
Alleghany/Chicago Trust Talon Fund (the "Talon Fund"), Alleghany/Chicago Trust
Small Cap Value Fund (the "Small Cap Value Fund"), Alleghany/Veredus Aggressive
Growth Fund (the "Aggressive Growth Fund"), Alleghany/Veredus SciTech Fund (the
"SciTech Fund"), Alleghany/Blairlogie International Developed Fund (the
"International Developed Fund"), Alleghany/Blairlogie Emerging Markets Fund (the
"Emerging Markets Fund"), Alleghany/Montag & Caldwell Balanced Fund (the "M&C
Balanced Fund"), Alleghany/Chicago Trust Balanced Fund (the "CT Balanced Fund"),
Alleghany/Chicago Trust Bond Fund (the "Bond Fund"), Alleghany/Chicago Trust
Municipal Bond Fund (the "Municipal Bond Fund") and Alleghany/Chicago Trust
Money Market Fund (the "Money Market Fund") (each a "Fund" and collectively, the
"Funds"). The Company is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "Act") and was
organized as a Delaware business trust on September 10, 1993.
After the close of business on April 30, 1999, pursuant to an agreement and plan
of reorganization in a tax-free business combination, the assets and liabilities
of PIMCO Emerging Markets Fund and PIMCO International Developed Fund (the
"Acquired Funds") were transferred to the newly formed series of the Company,
Alleghany/Blairlogie Emerging Markets Fund and Alleghany/Blairlogie
International Developed Fund (the "Acquiring Funds"), in exchange for shares of
the Acquiring Funds. Holders of the Institutional class of shares of the
Acquired Funds received Class I Shares of the corresponding Acquiring Fund and
holders of the Administrative Class of the Acquired Fund received Class N Shares
of the corresponding Acquiring Fund. In addition, at the date of transfer for
Alleghany/Blairlogie Emerging Markets Fund, 39,668 Class A Shares, 21,554 Class
B Shares and 31,837 Class C Shares converted to 39,559, 21,149 and 31,255 Class
N Shares of the Acquiring Fund at conversion rates of 0.99724, 0.98121 and
0.98170, respectively. At the date of transfer for Alleghany/Blairlogie
International Developed Fund 75,505 Class A Shares, 122,227 Class B Shares and
221,270 Class C Shares converted to 75,200, 119,741 and 216,942 Class N Shares
of the Acquiring Fund at conversion rates of 0.99597, 0.97966, 0.98044,
respectively. Prior year share information has been restated to reflect the
share conversions at April 30, 1999.
The Growth Fund seeks long-term capital appreciation consistent with investments
primarily in a combination of equity and convertible securities. Capital
appreciation is emphasized, and generation of income is secondary. Montag &
Caldwell, Inc. ("Montag & Caldwell") is the Adviser for the Fund, which
commenced investment operations on November 2, 1994. The Fund offers two classes
of shares: Class I (Institutional) Shares and Class N (Retail) Shares.
The Growth & Income Fund seeks long-term total return through a combination of
capital appreciation and current income. In seeking to achieve its investment
objective, the Fund invests primarily in common stocks, preferred stocks and
convertible securities. The Chicago Trust Company ("Chicago Trust") is the
Adviser for the Fund, which commenced investment operations on December 13, 1993
and Chicago Capital Management, Inc. ("CCM") is the Sub-Adviser. Effective July
31, 2000, the Fund offers two classes of shares: Class I (Institutional) Shares
and Class N (Retail) Shares.
The Talon Fund seeks long-term total return through capital appreciation. The
Fund invests primarily in stocks of companies believed by Talon Asset
Management, Inc. ("Talon") to have prospects for long-term growth. The Fund,
which commenced investment operations on September 19, 1994, may also invest in
preferred stock and debt securities, including those which may be convertible
into common stock. Chicago Trust is the Adviser for the Fund and Talon is the
Sub-Adviser.
The Small Cap Value Fund seeks long-term total return by investing primarily in
common stocks of small U.S. companies and/or real estate investment trusts
(REITs). Chicago Trust is the Adviser for the Fund, which commenced investment
operations on November 10, 1998. CCM is the Sub-Adviser.
The Aggressive Growth Fund seeks to provide capital appreciation by investing
primarily in equity securities of companies with accelerating earnings. Veredus
Asset Management LLC ("Veredus") is the Adviser for the Fund, which commenced
investment operations on June 30, 1998.
The SciTech Fund seeks long-term capital appreciation by investing primarily in
equity securities of science and technology companies. Veredus is the Adviser
for the Fund, which commenced investment operations on June 30, 2000.
The International Developed Fund seeks long-term growth of capital through
investment primarily in a diversified portfolio of international equity
securities. Blairlogie Capital Management ("Blairlogie") is the Adviser for the
Fund, which commenced investment operations on June 8, 1993. The Fund offers two
classes of shares: Class I (Institutional) Shares and Class N (Retail) Shares.
The Emerging Markets Fund seeks long-term growth of capital with investments
primarily in common stocks of companies
78
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ALLEGHANY FUNDS
---------------------
OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------
located in emerging market countries. Blairlogie is the Adviser for the Fund,
which commenced investment operations on June 1, 1993. The Fund offers two
classes of shares: Class I (Institutional) Shares and Class N (Retail) Shares.
The M&C Balanced Fund seeks long-term total return through investment primarily
in a combination of equity, fixed income and short-term securities. The
allocation between asset classes may vary in accordance with the expected rates
of return of each asset class; however, primary emphasis is placed upon
selection of particular investments as opposed to allocation of assets. Montag &
Caldwell is the Adviser for the Fund, which commenced investment operations on
November 2, 1994. The Fund offers two classes of shares: Class I (Institutional)
Shares and Class N (Retail) Shares.
The CT Balanced Fund seeks growth of capital with current income. The Fund seeks
to achieve this objective by holding a combination of equity and fixed income
securities, including common stocks (both dividend and non-dividend paying),
preferred stocks, convertible preferred stocks, fixed income securities,
including bonds and bonds convertible into common stocks, and short-term
interest-bearing obligations. Chicago Trust is the Adviser for the Fund, which
commenced investment operations on September 21, 1995. CCM is the Sub-Adviser.
The Bond Fund seeks high current income consistent with prudent risk of capital.
The Fund primarily invests in a broad range of bonds and other fixed income
securities (bonds and debentures) with an average weighted portfolio maturity
between three and ten years. Chicago Trust is the Adviser for the Fund, which
commenced investment operations on December 13, 1993. Effective July 31, 2000,
the Fund offers two classes of shares: Class I (Institutional) Shares and Class
N (Retail) Shares. CCM is the Sub-Adviser.
The Municipal Bond Fund seeks a high level of current interest income exempt
from federal income taxes consistent with the conservation of capital. The Fund
seeks to achieve its objective by investing substantially all of its assets in a
diversified portfolio of municipal debt obligations. Chicago Trust is the
Adviser for the Fund, which commenced investment operations on December 13,
1993. CCM is the Sub-Adviser.
The Money Market Fund seeks to provide as high a level of current interest
income as is consistent with maintaining liquidity and stability of principal.
The Fund seeks to achieve its objective by investing in short-term, high
quality, U.S. dollar-denominated money market instruments. Chicago Trust is the
Adviser for the Fund, which commenced investment operations on December 14,
1993. CCM is the Sub-Adviser.
The following is a summary of the significant accounting policies consistently
followed by each Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
(1) SECURITY VALUATION: For the Growth Fund, the Growth & Income Fund, the Talon
Fund, the Small Cap Value Fund, the Aggressive Growth Fund, the SciTech Fund,
the International Developed Fund, the Emerging Markets Fund, the M&C Balanced
Fund and the CT Balanced Fund, equity securities and index options traded on a
national exchange and over-the-counter securities listed on the NASDAQ National
Market System are valued at the last reported sales price at the close of the
respective exchange. Securities for which there have been no sales on the
valuation date are valued at the mean of the last reported bid and asked prices
on their principal exchange. Over-the-counter securities not listed on the
NASDAQ National Market System are valued at the mean of the last quoted bid and
asked prices. For the M&C Balanced Fund, the CT Balanced Fund, the Bond Fund and
the Municipal Bond Fund, fixed income securities, except short-term investments,
are valued on the basis of prices provided by a pricing service when such prices
are believed by the Adviser to reflect the fair market value of such securities
in accordance with guidelines adopted. When fair market value quotations are not
readily available, securities and other assets are valued at fair value by or
under the direction of the Board of Trustees. For all Funds, short-term
investments, that is, those with a remaining maturity of 60 days or less, are
valued at amortized cost, which approximates market value. Foreign securities
are converted to United States dollars using exchange rates at the time the net
asset value ("NAV") is computed. For the Money Market Fund, all securities are
valued at amortized cost, which approximates market value. Under the amortized
cost method, discounts and premiums are accreted and amortized ratably to
maturity and are included in interest income.
(2) REPURCHASE AGREEMENTS: Each Fund may enter into repurchase agreements with
financial institutions deemed to be creditworthy by the Fund's Adviser, subject
to the seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Fund's custodian and, pursuant to
the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Fund has the right to sell the underlying securities at market
value and may claim any resulting loss against the seller.
79
<PAGE>
ALLEGHANY FUNDS
---------------------
OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------
(3) DERIVATIVE FINANCIAL INSTRUMENTS: The Growth Fund, the Growth & Income Fund,
the Talon Fund, the Aggressive Growth Fund, the SciTech Fund, the International
Developed Fund, the Emerging Markets Fund, the M&C Balanced Fund, the CT
Balanced Fund, the Bond Fund and the Municipal Bond Fund are authorized to
utilize derivative financial instruments. A derivative financial instrument in
very general terms refers to a security whose value is "derived" from the value
of an underlying asset, reference rate or index. A Fund has a variety of reasons
to use derivative instruments, such as to attempt to protect the Fund against
possible changes in the market value of its portfolio and to manage the
portfolio's effective yield, maturity and duration. All of a Fund's portfolio
holdings, including derivative instruments, are marked to market each day with
the change in value reflected in the unrealized appreciation/depreciation on
investments. Upon disposition, a realized gain or loss is recognized
accordingly, except for exercised option contracts where the recognition of gain
or loss is postponed until the disposal of the security underlying the option
contract. Summarized in (4) and (5) below are specific derivative instruments
used by the Funds listed above.
(4) FUTURES AND OPTIONS: A Fund may use futures contracts to manage its exposure
to the markets or to movements in interest rates and currency values. The
primary risks associated with the use of futures contracts and options are an
imperfect correlation between the change in market value of the securities held
by a Fund and the prices of futures contracts and options, the possibility of an
illiquid market and the inability of the counterparty to meet the terms of the
contract. Futures contracts and purchased options are valued based upon their
quoted daily settlement prices. The premium received for a written option is
recorded as an asset with an equal liability which is marked to market based on
the option's quoted daily settlement price. Fluctuations in the value of such
instruments are recorded as unrealized appreciation (depreciation) until
terminated, at which time realized gains and losses are recognized.
Transactions in purchased options for the Aggressive Growth Fund for the year
ended October 31, 2000 were as follows:
CONTRACTS PREMIUM
-------------- -----------------
Outstanding at October 31, 1999 ....... -- $ --
Options purchased (Net) ............... 6,162 (5,047,149)
Options exercised or terminated in
closing transactions ................ (6,162) 5,047,149
Options expired (Net) ................. -- --
-------------- -----------------
Outstanding at October 31, 2000 ....... -- --
-------------- -----------------
-------------- -----------------
(5) FORWARD CURRENCY TRANSACTIONS: Forward foreign exchange contracts are used
to hedge against foreign exchange risk arising from the Fund's investment or
anticipated investment in securities denominated in foreign currencies. A Fund
may also enter into these contracts for purposes of increasing exposure to a
foreign currency or to shift exposure to foreign currency fluctuations from one
country to another. All commitments are marked to market daily at the applicable
translation rates and any resulting unrealized gains or losses are recorded.
Realized gains or losses are recorded at the time the forward contract matures
or by delivery of the currency. Risks may arise upon entering these contracts
from the potential inability of counterparties to meet the terms of their
contracts and from unanticipated movements in the value of a foreign currency
relative to the U.S. dollar.
(6) MORTGAGE-BACKED SECURITIES: The Growth & Income Fund, the International
Developed Fund, the Emerging Markets Fund, the M&C Balanced Fund, the CT
Balanced Fund, the Bond Fund and the Municipal Bond Fund may invest in
mortgage-backed securities (MBS), representing interests in pools of mortgage
loans. These securities provide shareholders with payments consisting of both
principal and interest as the mortgages in the underlying mortgage pools are
paid. Most of the securities are guaranteed by federally sponsored agencies such
as Government National Mortgage Association (GNMA), Federal National Mortgage
Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC). However,
some securities may be issued by private, non-government corporations. MBS
issued by private agencies are not government securities and are not directly
guaranteed by any government agency. They are secured by the underlying
collateral of the private issuer. Yields on privately issued MBS tend to be
higher than those of government backed issues. However, risk of loss due to
default and sensitivity to interest rate fluctuations are also higher.
The Growth & Income Fund, the International Developed Fund, the Emerging Markets
Fund, the M&C Balanced Fund, the CT Balanced Fund, the Bond Fund and the
Municipal Bond Fund may also invest in collateralized mortgage obligations
(CMOs) and real estate mortgage investment conduits (REMICs). A CMO is a bond
which is collateralized by a pool of MBS, and a REMIC is similar in form to a
CMO. These MBS pools are divided into classes with each class having its own
characteristics. The different classes are retired in sequence as the underlying
mortgages are repaid. A planned amortization class (PAC) is a specific class of
mortgages, which over its life will generally have the most stable cash flows
and the lowest prepayment risk. Prepayment may shorten the stated maturity of
the CMO and can result in a loss of premium, if any has been paid.
The CT Balanced Fund and the Bond Fund may utilize interest only (IO) securities
to increase the diversification of the portfolio and manage risk. An IO security
is a class of MBS representing ownership in the cash flows of the interest
payments made from a specified pool of MBS. The cash flow on this instrument
decreases as the mortgage principal balance is repaid by the borrower.
80
<PAGE>
ALLEGHANY FUNDS
---------------------
OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------
(7) INVESTMENT INCOME AND SECURITIES TRANSACTIONS: Dividend income is recorded
on the ex-dividend date, except for certain dividends from foreign securities
where the ex-dividend date may have passed, which are recorded as soon as a Fund
is informed of the ex-dividend date. Interest income is accrued daily.
Securities transactions are accounted for on the date securities are purchased
or sold. The cost of securities sold is generally determined using the first-in,
first-out method.
(8) FOREIGN CURRENCY: Foreign currencies, investments and other assets and
liabilities are translated into U.S. dollars at the exchange rates prevailing at
the end of the period. Fluctuations in the value of these assets and liabilities
resulting from changes in exchange rates are recorded as unrealized foreign
currency gains (losses). Realized gains (losses) and unrealized appreciation
(depreciation) on investment securities and income and expenses are translated
on the respective dates of such transactions. The effect of changes in foreign
currency exchange rates on investments in securities are not segregated in the
statement of operations from the effects of changes in market prices of those
securities, but are included with the net realized and unrealized gain or loss
on investment securities.
(9) FEDERAL INCOME TAXES: The Funds have elected to be treated as "regulated
investment companies" under Subchapter M of the Internal Revenue Code and to
distribute substantially all of their respective net taxable income.
Accordingly, no provisions for federal income taxes have been made in the
accompanying financial statements. The Funds intend to utilize provisions of the
federal income tax laws which allow them to carry a realized capital loss
forward for eight years following the year of the loss and offset such losses
against any future realized capital gains. At October 31, 2000, the losses
amounted to $79,204 for the Aggresive Growth Fund, which will expire on October
31, 2005, $253,649 for the SciTech Fund, which will expire on October 31, 2008,
$16,004,888 for the Emerging Markets Fund, which will expire between October 31,
2003 and October 31, 2006, $2,410,091 for the Bond Fund,which will expire
between October 31, 2007 and October 31, 2008,and $459,794 for the Municipal
Bond Fund which will expire between October 31, 2003 and October 31, 2008.
Net realized gains or losses may differ for financial and tax reporting purposes
for the Small Cap Value Fund, the Aggressive Growth Fund, the Talon Fund, the
International Developed Fund, the Emerging Markets Fund, the M&C Balanced Fund
and the Bond Fund, primarily as a result of losses from wash sales which are not
recognized for tax purposes until the corresponding shares are sold and
adjustments from investments in real estate investment trusts.
(10) DIVIDENDS AND DISTRIBUTIONS: Dividends and distributions to shareholders
are recorded on the ex-dividend date.
(11) MULTI-CLASS OPERATIONS: With respect to the Growth Fund, the Growth &
Income Fund, the International Developed Fund, the Emerging Markets Fund, the
M&C Balanced Fund and the Bond Fund, each class offered by these Funds has equal
rights as to assets. Income, non-class specific expenses and realized and
unrealized capital gains and losses are allocated to each class of shares based
on the relative net assets of each class.
(12) ORGANIZATION COSTS: The Funds have reimbursed the Advisers for certain
costs incurred in connection with the Funds' and the Company's organization. The
costs were being amortized on a straight-line basis over five years, commencing
on June 30, 1998 for the Aggressive Growth Fund.
(13) 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 and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
NOTE (B) DIVIDENDS FROM NET INVESTMENT INCOME AND DISTRIBUTIONS OF CAPITAL
GAINS: With respect to the Growth Fund, the Growth & Income Fund, the Talon
Fund, the Small Cap Value Fund, the Aggressive Growth Fund, the SciTech Fund,
the M&C Balanced Fund and the CT Balanced Fund, dividends from net investment
income are distributed quarterly and net realized gains from investment
transactions, if any, are distributed to shareholders at least annually. With
respect to the International Developed Fund and the Emerging Markets Fund,
dividends from net investment income and net realized gains from investment
transactions, if any, are distributed to shareholders at least annually. The
Bond Fund distributes net investment income to shareholders monthly and capital
gains, if any, are distributed at least annually. Prior to April 14, 2000, the
Municipal Bond Fund declared and distributed its net investment income monthly.
Effective April 14, 2000, the Municipal Bond Fund declares dividends daily and
pays net investment income monthly and net realized gains, if any, at least
annually. The Money Market Fund declares dividends daily from its net investment
income. The Money Market Fund and Municipal Bond Fund's dividends are payable
monthly and are automatically reinvested in additional Fund shares, at the
month-end net asset value, for those shareholders that have elected the
reinvestment option. Differences in dividends per share between classes of the
Growth Fund, the Growth & Income Fund, the International Developed Fund, the
Emerging Markets Fund, the M&C Balanced Fund and the Bond Fund are due to
different class expenses.
81
<PAGE>
ALLEGHANY FUNDS
---------------------
OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------
Net investment income and realized gains and losses for federal income tax
purposes may differ from that reported on the financial statements because of
permanent book and tax basis differences. Permanent book and tax differences of
$4,155, $11.990 and $2,920 were reclassified at October 31, 2000 between
accumulated net realized gain on investments and undistributed net investment
income in the M&C Balanced Fund, the CT Balanced Fund and the Bond Fund,
respectively, due to gains and losses on paydown adjustments from
mortgage-backed securities. Also, in the Small Cap Value Fund, permanent book
and tax differences relating to the sale of real estate investment trusts
totaling $43,600 were reclassified from undistributed net investment income to
accumulated net investment gain. For the International Developed Fund and the
Emerging Markets Fund, permanent book and tax differences relating to net
currency gains and losses totaling $547,732 and $37,679, respectively, were
reclassified between accumulated net realized gain and undistributed net
investment income. Also, for the International Developed Fund, permanent book
and tax differences relating to corporate actions in the amount of $6,533 were
reclassified from accumulated net realized gain to undistributed net investment
income.
The Growth & Income Fund has net operating losses for tax purposes, net of
short-term capital gains of $968,863, for the year ended October 31, 2000 which
were reclassified from undistributed net investment income to capital paid-in as
permanent differences. The Talon Fund, the Aggressive Growth Fund and the
International Developed Fund had net operating losses for tax purposes of
$73,532, $1,159,231 and $452,633, respectively, which were entirely offset by
short-term capital gains, therefore these amounts were reclassified from
undistributed net investment income to accumulated net realized gain.
Distributions from net realized gains for book purposes may include short-term
capital gains, which are included as ordinary income for tax purposes.
For the year ended October 31, 2000, 100.00% of the income distributions made by
the Municipal Bond Fund were exempt from federal income taxes. Additionally
during the period, the Growth Fund, the Growth & Income Fund, the Talon Fund,
the Aggresive Growth Fund, the International Developed Fund, the M&C Balanced
Fund and the CT Balanced Fund paid long-term capital gain distributions of
$148,759,505, $36,048,318, $181,097, $257,413, $8,147,948, $12,091,994 and
$7,972,769, respectively. In January 2001, the Funds will provide tax
information to shareholders of the 2000 calendar year.
All of the income dividends paid by each fund were for ordinary income tax
purposes. The percentage of income dividends that were qualifying dividends for
the corporate dividends received were 9.65%, 17.82%, 100.00% and 99.17% for the
M&C Balanced Fund, the CT Balanced Fund, the Small Cap Value Fund and the Talon
Fund respectively.
NOTE (C) SHARES OF BENEFICIAL INTEREST: Each Fund is authorized to issue an
unlimited number of shares of beneficial interest with no par value. At October
31, 2000, Alleghany Asset Management, Inc. owned one share of the SciTech Fund
NOTE (D) INVESTMENT TRANSACTIONS: Aggregate purchases and proceeds from sales of
investment securities (other than short-term investments) for the year ended
October 31, 2000 were:
<TABLE>
<CAPTION>
AGGREGATE PURCHASES PROCEEDS FROM SALES
U.S. GOVERNMENT OTHER U.S. GOVERNMENT OTHER
--------------- -------------- --------------- --------------
<S> <C> <C> <C> <C>
Growth Fund ........... $ -- $1,965,205,320 $ -- $2,235,826,517
Growth & Income Fund .. -- 144,028,371 -- 133,496,206
Talon Fund ............ -- 25,971,037 -- 23,137,900
Small Cap Value Fund .. -- 94,008,581 -- 96,838,306
Aggressive Growth Fund -- 341,978,609 -- 262,199,556
SciTech Fund .......... -- 2,732,241 -- 1,143,721
International Developed
Fund .............. -- 36,552,998 -- 92,635,339
Emerging Markets Fund . -- 7,331,259 -- 10,503,689
M&C Balanced Fund ..... 28,950,429 205,856,078 25,438,025 133,254,746
CT Balanced Fund ...... 22,800,593 62,847,554 15,313,212 72,941,706
Bond Fund ............. 30,546,095 34,640,987 33,389,033 18,965,726
Municipal Bond Fund ... -- 16,200,331 -- 14,770,619
</TABLE>
NOTE (E) ADVISORY, ADMINISTRATION AND DISTRIBUTION SERVICES AGREEMENTS: Under
various Advisory Agreements with the Funds, each Adviser provides investment
advisory services to the Funds. The Funds will pay advisory fees at the
following annual percentage rates of the average daily net assets of each Fund:
0.80% on the first $800,000,000 of average daily net assets and 0.60% of average
daily net assets over $800,000,000 for the Growth Fund; 0.70% for the Growth &
Income Fund; 0.80% for the Talon Fund; 1.00% for the Small Cap Value Fund; 1.00%
for the Aggressive Growth Fund; 1.00% for the SciTech Fund; 0.85% for the
International Developed Fund; 0.85% for the Emerging Markets Fund; 0.75% for the
M&C Balanced Fund; 0.70% for the CT Balanced Fund; 0.55% for the Bond Fund;
0.60% for the Municipal Bond Fund; and 0.40% for the Money Market Fund. These
fees are accrued daily and paid monthly.
For the one year period ending December 31, 2000, the Advisers have
contractually undertaken to reimburse the Talon Fund, the Small Cap Value Fund,
the Aggressive Growth Fund, the SciTech Fund the International Developed Fund
(Class I and Class N), the Emerging Markets Fund (Class I and Class N), and the
Bond Fund (Class I and Class N), for operating expenses which cause total
expenses to exceed 1.30%, 1.40%, 1.40%, 1.50%, 1.10%, 1.35%, 1.35%, 1.60%,
0.49%, and 0.74%, respectively. With respect to the Bond Fund, prior to February
15, 2000, total
82
<PAGE>
ALLEGHANY FUNDS
---------------------
OCTOBER 31, 2000
NOTES TO FINANCIAL STATEMENTS - CONTINUED
--------------------------------------------------------------------------------
expenses were capped at 0.80%. The Advisers have voluntarily undertaken to
reimburse the Growth Fund (Class I and Class N), the Growth & Income Fund (Class
I and Class N), the M&C Balanced Fund (Class I and Class N), the CT Balanced
Fund and the Municipal Bond Fund for operating expenses which cause total
expenses to exceed 0.98%, 1.30%, 0.85%, 1.10%, 1.00%, 1.25%, 1.10%, and 0.10%
respectively. The voluntary expense reimbursements may be terminated at the
discretion of the Advisers.
For the year ended October 31, 2000, the Advisers waived/ reimbursed expenses of
$39,493 for the Talon Fund, $36,464 for the Small Cap Value Fund, $91,005 for
the Aggressive Growth Fund, $40,452 for the SciTech Fund, $61,420 for the
International Developed Fund, $69,709 for the Emerging Markets Fund, $267,750
for the Bond Fund and $179,242 for the Municipal Bond Fund.
Alleghany Investment Services, Inc. ("AIS") serves as Administrator of the
Funds. For services provided, AIS receives the following fees:
<TABLE>
<CAPTION>
ADMINISTRATION FEES CUSTODY LIAISON FEES
------------------- --------------------
AVERAGE
-------
FEE (% OF FUNDS' AGGREGATE DAILY NET ANNUAL FEE AVERAGE DAILY NET ASSETS
-------------------------- --------- ---------- ------------------------
DAILY NET ASSETS) ASSETS (PER FUND) (PER FUND)
----------------- ------ ---------- ----------
<S> <C> <C>
0.060 up to $2 billion $ 10,000 up to $100 million
0.050 $2 billion to $7 billion $ 15,000 $100 million to $500 million
0.045 over $7 billion $ 20,000 over $500 million
</TABLE>
PFPC Inc. ("PFPC"), formerly First Data Investor Services Group, Inc., serves as
Sub-Administrator of the Funds and receives fees, which are paid to PFPC by the
Administrator. Effective April 1, 2000, fees are based upon the following
schedule:
SUB-ADMINISTRATION FEES CUSTODY LIAISON FEES
----------------------- --------------------
FEE (% OF FUNDS' AGGREGATE AVERAGE DAILY ANNUAL FEE
-------------------------- ------------- ----------
DAILY NET ASSETS) NET ASSETS (PER FUND)
----------------- ---------- ----------
0.045 up to $2 billion $10,000
0.040 $2 billion to $3 billion
0.030 $3 billion to $8 billion
0.025 $8 billion to $12 billion
0.020 over $12 billion
Prior to April 1, 2000, PFPC received fees as follows:
SUB-ADMINISTRATION FEES CUSTODY LIAISON FEES
----------------------- --------------------
FEE (% OF FUNDS' AVERAGE
---------------- -------
AGGREGATE DAILY NET ANNUAL FEE AVERAGE DAILY NET ASSETS
--------- --------- ---------- ------------------------
DAILY NET ASSETS) ASSETS (PER FUND) (PER FUND)
----------------- ------ ---------- ----------
0.060 up to $2 billion $10,000 up to $100 million
0.045 $2 billion to $3.5 billion $15,000 $100 million to $500 million
0.040 over $3.5 billion $20,000 over $500 million
Provident Distributors, Inc. serves as principal underwriter and distributor of
the Funds' shares. Pursuant to a Rule 12b-1 distribution plan (the "Plan")
adopted by the Funds with respect to Class N Shares, the Growth Fund, the Growth
& Income Fund, the Talon Fund, the Small Cap Value Fund, the Aggressive Growth
Fund, the SciTech Fund, the International Developed Fund, the Emerging Markets
Fund, the M&C Balanced Fund, the CT Balanced Fund, the Bond Fund and the
Municipal Bond Fund pay certain expenses associated with the distribution of
their shares. Under the Plan, each Fund may pay actual expenses not exceeding,
on an annual basis, 0.25% of each participating Fund's average daily net assets.
The Class I Shares of the Growth Fund, the Growth & Income Fund, the
International Developed Fund, the Emerging Markets Fund, the M&C Balanced Fund,
the Bond Fund and the Class N Shares of the Money Market Fund do not have
distribution plans.
For the year ended October 31, 2000, the class specific expenses were:
REPORTS TO
TRANSFER AGENT FEES SHAREHOLDER EXPENSE
------------------- -------------------
CLASS N CLASS I CLASS N CLASS I
-------- ------- -------- -------
Growth Fund ................ $460,271 $ -- $134,399 $74,027
Growth & Income Fund ...... 42,486 -- 40,112 2,493
International Developed Fund -- -- 692 7,006
Emerging Markets Fund ...... -- -- 225 1,632
M&C Balanced Fund .......... 7,794 -- 7,310 4,493
Bond Fund .................. 2,022 -- 10,761 1,269
Certain officers and Trustees of the Company are also officers and directors of
Chicago Trust. The Company does not compensate its officers or affiliated
Trustees. Effective January 1, 2000, the Company pays each unaffiliated Trustee
$3,500 per Board of Trustees' meeting attended and an annual retainer of $3,500
and reimburses each unaffiliated Trustee for out-of-pocket expenses.
NOTE (F) SUBSEQUENT EVENTS (UNAUDITED): (1) Alleghany/ TAMRO Large Cap Value
Fund and Alleghany/TAMRO Small Cap Fund commenced operations on November 30,
2000.
(2) On October 18, 2000, ABNAMRO Bank N.V. ("ABN AMRO") and Alleghany
Corporation announced that they had entered into a definitive agreement where by
a direct or indirect subsidiary of ABNAMROwill be merged with and into Alleghany
Asset Management, Inc., which is the parent company of the Trust's Advisers--
The Chicago Trust Company, Montag &Caldwell, Inc., Blairlogie Capital
Management, Veredus Asset Management LLCand TAMROCapital Partners LLC-- and to
Chicago Capital Management, Inc., a Subadviser to certain of the Funds.
Alleghany Asset Management, Inc. is also the parent of the Trust's
Administrator, Alleghany Investment Services, Inc.
83
<PAGE>
ALLEGHANY FUNDS
---------------------
INDEPENDENT AUDITORS' REPORT
--------------------------------------------------------------------------------
The Board of Trustees and Shareowners of Alleghany Funds:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Alleghany Funds (comprising, respectively,
Alleghany/Montag & Caldwell Growth Fund, Alleghany/Chicago Trust Growth & Income
Fund, Alleghany/Chicago Trust Talon Fund, Alleghany/Chicago Trust Small Cap
Value Fund, Alleghany/Veredus Aggressive Growth Fund, Alleghany/Montag &
Caldwell Balanced Fund, Alleghany/Chicago Trust Balanced Fund, Alleghany/Chicago
Trust Bond Fund, Alleghany/Chicago Trust Municipal Bond Fund, and
Alleghany/Chicago Trust Money Market Fund) as of October 31, 2000, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the years presented in the two-year period
then ended, and the financial highlights for each of the periods presented in
the five-year period then ended. We have also audited the accompanying statement
of assets and liabilities, including the schedule of investments, of the
Alleghany/Veredus SciTech Fund of the Alleghany Funds as of October 31, 2000,
and the related statement of operations, statement of changes in net assets and
financial highlights for the four-month period then ended. We have also audited
the accompanying statements of assets and liabilities, including the schedules
of investments, of Alleghany/Blairlogie International Developed Fund and
Alleghany/Blairlogie Emerging Markets Fund of Alleghany Funds as of October 31,
2000, and the related statements of operations for the year then ended and the
statements of changes in net assets and financial highlights for each of the
periods in the two-year period then ended. These financial statements and
financial highlights are the responsibility of Alleghany Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The accompanying Alleghany/Blairlogie
International Developed Fund and Alleghany/Blairlogie Emerging Markets Fund
financial highlights for the three years ended June 30, 1998 were audited by
other auditors whose report thereon dated August 17, 1998, expressed an
unqualified opinion.
We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of October 31, 2000, by correspondence with the custodian
and brokers and by the application of alternative auditing procedures where
broker replies were not received. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective Funds constituting the Alleghany Funds as of October 31, 2000,
the results of their operations for each of the periods presented in the year
then ended, the changes in their net assets for each of the periods presented in
the two-year period then ended, and the financial highlights for each of the
periods presented, as noted above, in conformity with generally accepted
accounting principles in the United States of America.
/S/ SIGNATURE OMITTED - KPMG LLP
Chicago, Illinois
December 18, 2000
84
<PAGE>
Guide to Shareholder Benefits
We're delighted to offer all Alleghany Funds shareholders a variety of services
and convenient options. To receive more information about any of these benefits,
simply call a Shareholder Services Representative Monday through Friday, 9 a.m.
- 7 p.m. ET.
THE EASY WAY TO GROW YOUR ACCOUNT: START AN AUTOMATIC INVESTMENT PLAN1
Systematic investing is an easy, effortless way to help reach any investment
goal. Just choose a fixed amount, and we'll automatically deduct it from your
checking or savings account on a regular schedule and invest it in your
Alleghany Funds account. The service is free, and the minimum initial investment
is $50.
COMPOUND YOUR EARNINGS WITH AUTOMATIC DIVIDEND REINVESTMENT
By automatically reinvesting dividends into your Alleghany Funds account, your
profits can mount. Monthly and quarterly dividends and annual capital gain
distributions are reinvested at no charge.
FREE, FLEXIBLE EXCHANGE PRIVILEGES
As your personal needs change, so can your Alleghany Funds investment. Transfers
between our funds are free of charge, and it only takes a telephone call.
LOW MINIMUM INITIAL INVESTMENTS
The minimum initial investment for all Alleghany Funds is just $2,500 ($500 for
IRAs). And subsequent investments can be as low as $50.
FREE CHECK WRITING SERVICES AVAILABLE
If you are an investor in Alleghany/Chicago Trust Money Market Fund, you can
take advantage of free check writing privileges. Checks must be written for $500
or more.
ACCESS INFORMATION AND MAKE TRANSACTIONS ONLINE AT OUR WEB SITE
You can access account balances, obtain fund information and make transactions
online 24 hours a day, 7 days a week -- in complete security. Alleghany Funds
was among the first mutual fund companies to provide these capabilities.
1Periodic investment plans involve continuous investments in securities
regardless of price. You should consider your financial ability to continue to
purchase shares through periods of both high and low price levels. This plan
does not assure a profit and does not protect against loss in declining markets.
www.AlleghanyFunds.com
[BEGIN SIDEBAR]
Shareholder Services Representatives are available to assist you Monday - Friday
9 a.m. to 7 p.m., ET. Or, call any time, day or night, for automated account
information to make exchanges or check fund performance.
[END SIDEBAR]
Our Shareholder Services Line
Is at Your Service 24 Hours a Day
---------------------------------
800 992-8151
<PAGE>
TRUSTEES
------------------------------
Leonard F. Amari*
Stuart D. Bilton, Chairman
Dorothea C. Gilliam
Robert Kushner*
Gregory T. Mutz*
Robert Scherer*
Nathan Shapiro*
Denis Springer*
*UNAFFILIATED TRUSTEE
ADVISERS
------------------------------
The Chicago Trust Company
171 North Clark Street
Chicago, IL 60601
Montag & Caldwell, Inc.
3455 Peachtree Road, NE, Suite 1200
Atlanta, GA 30326
Veredus Asset Management LLC
One Paragon Centre
6060 Dutchmans Lane, Suite 320
Louisville, KY 40205
Blairlogie Capital Management
125 Princes Street
Edinburgh EH2 4AD
Scotland
SHAREHOLDER SERVICES
------------------------------
PFPC Inc.
4400 Computer Drive
Westborough, MA 01581
DISTRIBUTOR
------------------------------
Provident Distributors, Inc.
3200 Horizon Drive
King of Prussia, PA 19406
OFFICERS
------------------------------
Kenneth C. Anderson, President
Gerald F. Dillenburg, Vice President,
Secretary and Treasurer
Debra Bunde Reams, Vice President
Laura M. Hlade, Assistant Treasurer
CUSTODIAN
------------------------------
Bankers Trust
One Bankers Trust Place
New York, NY 10001
State Street Bank and Trust
801 Pennsylvania Avenue
Kansas City, MO 64105
LEGAL COUNSEL
------------------------------
Vedder, Price, Kaufman & Kammholz
222 N. LaSalle Street
Chicago, IL 60601
AUDITOR
------------------------------
KPMG LLP
303 East Wacker Drive
Chicago, IL 60601
THIS REPORT IS SUBMITTED FOR GENERAL INFORMATION TO THE SHAREHOLDERS OF THE
FUNDS. IT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE
FUNDS UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS WHICH INCLUDES
DETAILS REGARDING THE FUNDS' OBJECTIVES, POLICIES, EXPENSES AND OTHER
INFORMATION.
AGAR-OO 10/31/00
