<PAGE>
THE SARATOGA
ADVANTAGE TRUST
[Logo]
SARATOGA
---------
CAPITAL MANAGEMENT
<PAGE>
THE SARATOGA ADVANTAGE TRUST
ANNUAL REPORT
AS OF
AUGUST 31, 1995
TABLE OF CONTENTS
President's Letter................................................... Page 1
Investment Review.................................................... Page 3
Schedules of Investments............................................. Page 16
Statements of Assets and Liabilities................................. Page 32
Statements of Operations............................................. Page 33
Statements of Changes in Net Assets.................................. Page 34
Notes to Financial Statements........................................ Page 35
Financial Highlights................................................. Page 37
Independent Auditor's Report......................................... Page 38
Tax Information...................................................... Page 39
THIS REPORT IS AUTHORIZED FOR DISTRIBUTION ONLY TO SHAREHOLDERS
AND TO OTHERS WHO HAVE RECEIVED A COPY OF THE PROSPECTUS.
<PAGE>
TRUSTEES AND OFFICERS
Joseph M. La Motta Trustee, Chairman
Bruce E. Ventimiglia Trustee, President
Lacy B. Herrmann Trustee
George Loft Trustee
Patrick H. McCollough Trustee
Scott C. Kane Vice President
Stephen Ventimiglia Vice President
Sheldon Siegel Treasurer
Deborah Kaback Secretary
Leslie Klein Assistant Treasurer
Thomas E. Duggan Assistant Secretary
INVESTMENT MANAGER DISTRIBUTOR
Saratoga Capital Management Quest for Value Distributors
33 Maiden Lane Two World Financial Center
New York, NY 10038-4578 New York, NY 10080-6116
TRANSFER AND SHAREHOLDER SERVICING AGENT CUSTODIAN
State Street Bank and Trust Company State Street Bank and Trust Company
P.O. Box 8505 P.O. Box 351
Boston, MA 02266 Boston, MA 02101
<PAGE>
THE SARATOGA ADVANTAGE TRUST
Annual Report to Shareholders
October 25, 1995
Dear Shareholder:
We are pleased to provide you with this annual report on the investment
strategies and performance of the portfolios in The Saratoga Advantage Trust.
This report covers the twelve months from the Trust's inception through August
31, 1995, a period of very positive domestic stock and bond investment returns.
During this period of time, U.S. stocks provided a total return of 21.44%, as
measured by the Standard & Poor's 500 Index, while the total return for bonds
was 9.46%, as gauged by the Lehman Intermediate Government/Corporate Bond Index.
International stocks produced a nearly flat return, gaining only 0.49% as
reported by the Morgan Stanley Europe, Australia and Far East (EAFE) Index for
the twelve months ended August 31, 1995.
We are proud to be able to offer you the ability to access multiple investment
asset classes through the Trust's portfolios. These portfolios are managed by
some of the world's leading institutional investment advisory firms. Each of
the advisors has been selected on the basis of their: investment philosophy,
research capabilities, long-term investment performance, organizational
stability and other key factors. This diversity of portfolio structure is
designed to give you the opportunity to efficiently implement your asset
allocation strategy to create a balanced portfolio in accordance with your
investment goals and objectives. As the financial markets go through their
cycles over time, Saratoga Advantage Trust investors will have the opportunity
to adjust to changing economic (and personal) circumstances through the Trust's
diversified asset class portfolios.
Following you will find specific information on the investment strategy and
performance of each of the portfolios. As always, we encourage you to speak
with your financial advisor if you have any questions about your investment in
the Trust or your allocation of assets among the portfolios.
We remain dedicated to serving your investment needs and to earning your
continued confidence. Thank you for investing with us.
Sincerely,
/s/ Bruce E. Ventimiglia
Bruce E. Ventimiglia
President and Chief Executive Officer
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK.
2
<PAGE>
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
Advised by:
Sterling Capital Management
Charlotte, North Carolina
OBJECTIVE: SEEKS MAXIMUM CURRENT INCOME, CONSISTENT WITH THE MAINTENANCE OF
LIQUIDITY AND THE PRESERVATION OF CAPITAL. THE PORTFOLIO INVESTS EXCLUSIVELY IN
SHORT-TERM SECURITIES AND RELATED REPURCHASE AGREEMENTS ISSUED BY THE UNITED
STATES GOVERNMENT, ITS AGENCIES AND INSTRUMENTALITIES.
7-Day U.S. Government 90 Day T-Bills
Compound Yield Money Market Average Discount
Portfolio Yield
- ---------------- --------------- ----------------
8/31/95 4.70% 5.34%
By taking advantage of changes in short-term interest rates and utilizing a
variety of sectors within the short-term government market, Sterling Capital
Management seeks to maximize the Portfolio's yield while maintaining a constant
net asset value of $1.00 per share.
The Portfolio was invested entirely in U.S. Government Agency Notes as of August
31, 1995, due to the higher yields versus Treasury Bills. The average dollar-
weighted portfolio maturity was 65 days, compared with a maximum allowable
average maturity of 90 days.
Since inception on September 1, 1994, Sterling Capital has maintained a shorter
average maturity in the portfolio which allowed greater flexibility to reinvest
assets at higher yields in the rising interest rate environment. In the last
quarter, the average maturity was lengthened due to Sterling Capital's belief
that the Federal Reserve will hold interest rates steady or possibly move to
lower the Fed Funds rate.
SHARES OF THE U.S. GOVERNMENT MONEY MARKET PORTFOLIO ARE NOT GUARANTEED OR
INSURED BY THE U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE U.S.
GOVERNMENT MONEY MARKET PORTFOLIO WILL BE ABLE TO MAINTAIN A CONSTANT NET ASSET
VALUE OF $1.00 PER SHARE.
3
<PAGE>
INVESTMENT QUALITY BOND PORTFOLIO
Advised by:
Fox Asset Management, Inc.
Little Silver, New Jersey
OBJECTIVE: SEEKS CURRENT INCOME AND REASONABLE STABILITY OF PRINCIPAL THROUGH
INVESTMENT IN A DIVERSIFIED PORTFOLIO OF INVESTMENT QUALITY, ACTIVELY MANAGED
FIXED INCOME SECURITIES.
Lehman
Intermediate
Government/
Total Aggregate Investment Quality Corporate Bond
Return Bond Portfolio Index
- ------------------- ------------------ -----------------
9/1/94 - 8/31/95 7.1% 9.5%
3/1/95 - 8/31/95 5.3% 7.3%
The portfolio seeks to provide high income by investing primarily in investment
grade bonds with maturities between 2 and 10 years. In the annual period ended
August 31, 1995, the Portfolio distributed dividends of $.603 per share.
Investments are normally divided approximately evenly between U.S. Government
and corporate securities. Due to the current phenomenon of tight supply and
only a slight yield advantage available in corporate securities, there is
greater emphasis on U.S. Government holdings at this time.
Fox Asset Management's goal is to provide superior returns with low risk. Fox
will continue to focus on those instruments that offer improving credit quality,
liquidity, and the highest possible total return. Due to the challenge of
trying to preserve principal in the current volatile market environment, Fox is
maintaining a conservative investment posture with an average maturity of 3.4
years, and an average duration of 2.9 years in the Portfolio.
Other portfolio statistics as of August 31, 1995 are as follows: Average yield-
to-maturity was 6.1%, average coupon was 6.72%, and the average Moody's Rating
was Aa1 with 10 fixed income issues held.
4
<PAGE>
INVESTMENT QUALITY BOND PORTFOLIO
Advised by:
Fox Asset Management, Inc.
Little Silver, New Jersey
SARATOGA ADVANTAGE TRUST
INVESTMENT QUALITY BOND PORTFOLIO
VERSUS INDEX
EDGAR REPRESENTATION OF DATA POINTS
USED IN PRINTED GRAPHIC
Investment Lehman Int.
Qual. Bond Gov't/Corp.
---------- -----------
1-Sep-94 $10,000 $10,000
31-Aug-95 $10,712 $10,946
1. The Lehman Intermediate Government/Corporate Bond Index is composed of the
bonds in the Lehman Government/Corporate Bond Index that have maturities between
1 and 9.99 years. The Lehman Government/Corporate Bond Index consists of
approximately 5,400 issues. The securities must be investment grade (BAA or
higher) with amounts outstanding in excess of $1 million and have at least one
year to maturity. Total return comprises price appreciation/depreciation and
income as a percentage of the original investment. The indexes are rebalanced
monthly by market capitalization.
5
<PAGE>
MUNICIPAL BOND PORTFOLIO
Advised by:
Quest for Value Advisors
New York, New York
OBJECTIVE: SEEKS A HIGH LEVEL OF INTEREST INCOME EXEMPT FROM FEDERAL INCOME
TAXATION, CONSISTENT WITH PRUDENT INVESTMENT MANAGEMENT AND THE PRESERVATION OF
CAPITAL.
Total Aggregate Municipal Bond Lehman Municipal
Return Portfolio Bond Index
- -------------------- ------------------- -------------------
9/1/94 - 8/31/95 4.7% 8.9%
3/1/95 - 8/31/95 4.0% 5.9%
Since the end of 1994, the fixed income markets have performed extremely well as
a result of perceived moderate economic growth accompanied by benign inflation.
Long-term U.S. Treasury yields are now almost one percentage point lower than
they were on September 1, 1994 and 130 basis points (1.3 percentage points)
lower than they were at the end of 1994. As a result, the prices of municipal
securities have generally risen, though not to the same degree as taxable fixed
income securities. Tax reform proposals which eliminate or reduce the tax
advantages of municipal bonds have caused longer term municipals to underperform
their taxable counterparts. The favorable supply imbalance during the past year
has helped to stabilize the market when tax reform fears have been the most
pronounced.
The Portfolio is invested in a diversified group of municipals with an average
weighted maturity of 18 years. As of August 31, 1995, 98% of the Portfolio's
investment were rated A or higher by Standard & Poor's or Moody's indicating the
high quality of the Portfolio. The four largest sectors represented in the
Portfolio were: pollution control 16.8%, general obligations 15.6%, power 11.3%,
and water/sewer 10.5%. The largest holdings by state include: New York 17.0%,
California 11.4%, and Florida 10.9%.
6
<PAGE>
MUNICIPAL BOND PORTFOLIO
Advised by:
Quest for Value Advisors
New York, New York
SARATOGA ADVANTAGE TRUST
MUNICIPAL BOND PORTFOLIO
VERSUS INDEX
EDGAR REPRESENTATION OF DATA POINTS
USED IN PRINTED GRAPHIC
Municipal Lehman
Bond Muni. Bond
----------- ------------
1-Sep-94 $10,000 $10,000
31-Aug-95 $10,465 $10,890
1. The Lehman Brothers Municipal Bond Index consists of approximately 25,000
municipal bonds which are selected to be representative of the long-term,
investment grade tax-exempt bond market. The bonds selected for the index have
the following characteristics: a minimum credit rating of at least Baa; an
original issue of at least $50 million; at least $3 million of the issue
outstanding; issued within the last five years; and a maturity of at least one
year.
7
<PAGE>
LARGE CAPITALIZATION VALUE PORTFOLIO
Advised by:
Quest for Value Advisors
New York, New York
OBJECTIVE: SEEKS TOTAL RETURN CONSISTING OF CAPITAL APPRECIATION AND DIVIDEND
INCOME BY INVESTING IN A DIVERSIFIED PORTFOLIO OF COMMON STOCKS THAT ARE
BELIEVED TO BE UNDERVALUED IN THE MARKET AND OFFER ABOVE-AVERAGE PRICE
APPRECIATION POTENTIAL.
Total Aggregate Large Capitalization S & P 500 S & P/Barra Value
Return Value Portfolio Index(1) Index(2)
- ----------------- ----------------------- --------------- -------------------
9/1/94 - 8/31/95 23.6% 21.4% 19.1%
3/1/95 - 8/31/95 17.1% 16.8% 16.5%
For the Portfolio's fiscal year ending August 31, 1995, the Portfolio
outperformed the S&P 500 and the S&P/Barra Value Index as a result of favorable
stock selection. Strong performers in the Portfolio included McDonnell Douglas,
Intel, Exel Ltd., Citicorp and Hercules.
The Portfolio invests in stocks that are believed to be mispriced in the market.
Companies are evaluated from a merchant banking approach - as if the company as
a whole is a purchase candidate. In this way, Quest for Value Advisors seeks to
identify undervalued businesses that produce high returns on equity, generate
large free cash flows, hold strong competitive positions, are sound financially
and have managements that are devoted to the interests of shareholders.
The Portfolio's superior investment performance was achieved without the benefit
(or risk) of a large technology position which generated much of the stock
market gain during the year ending August 31, 1995. Quest For Value Advisors
did not alter its disciplined approach to maximizing return and controlling risk
in the portfolio, and they believe that this discipline will continue to serve
our shareholders well in the future.
The Portfolio owned the common stock of 34 companies as of August 31, 1995. The
five largest holdings were Exel Ltd., a strongly capitalized specialty insurance
company; Federal Home Loan Mortgage Corp. (Freddie Mac), which maintains a
secondary market in residential mortgages primarily by securitizing and
guaranteeing such loans; Temple-Inland, Inc., which is involved in the
production of paper and containerboard; Sprint Corp., which operates the second
largest independent telephone system in the U.S.; and Becton, Dickinson & Co., a
manufacturer of a broad line of medical, surgical, laboratory and diagnostic
products.
8
<PAGE>
LARGE CAPITALIZATION VALUE PORTFOLIO
Advised by:
Quest for Value Advisors
New York, New York
SARATOGA ADVANTAGE TRUST
LARGE CAPITALIZATION VALUE PORTFOLIO
VERSUS INDICES
EDGAR REPRESENTATION OF DATA POINTS
USED IN PRINTED GRAPHIC
Large Cap
Value S&P 500 S&P/Barra
---------- ----------- -----------
1-Sep-94 $10,000 $10,000 $10,000
31-Aug-95 $12,360 $12,140 $11,910
1. The Standard & Poor's 500 is a capital weighted index representing the
aggregate market value of the common equity of 500 stocks primarily traded on
the NYSE. These 500 stocks are composed of 400 industrial, 40 utility, 40
financial, and 20 transportation companies. The weight of each stock in the
index is proportional to its price times its shares outstanding. The Standard &
Poor's 500 is an unmanaged index and includes the reinvestment of all dividends.
2. The S&P/Barra Value Index is constructed by dividing the stocks in the S&P
500 Index according to price-to-book ratios. This unmanaged Index contains
stocks with lower price-to-book ratios and is market capitalization weighted.
9
<PAGE>
LARGE CAPITALIZATION GROWTH PORTFOLIO
Advised by:
Harris Bretall Sullivan & Smith, Inc.
San Francisco, California
OBJECTIVE: SEEKS CAPITAL APPRECIATION BY INVESTING IN A DIVERSIFIED PORTFOLIO OF
COMMON STOCKS THAT, IN THE ADVISOR'S OPINION, HAVE FASTER EARNINGS GROWTH
POTENTIAL THAN THE STANDARD & POOR'S 500.
Total Aggregate Large Capitalization S & P 500 S & P/Barra Growth
Return Growth Portfolio Index(1) Index(2)
- ------------------ --------------------- ------------- ---------------------
9/1/94 - 8/31/95 28.8% 21.4% 23.7%
3/1/95 - 8/31/95 21.7% 16.8% 17.1%
Harris Bretall Sullivan & Smith analyzes a universe of approximately 300
established, high-quality, growth-oriented companies and ranks them based on
present value, trends in current earnings and price performance. The Portfolio
is invested in stocks that rank in the top one-fifth of this universe.
All investment decisions are made through a team approach. The Harris Bretall
Strategy Team, which meets four times a week, sets the firm's economic framework
and reviews specific holdings, recent news announcements and company data.
At the end of August, the Portfolio was invested in 43 stocks. Technology is a
major investment theme of the Portfolio. The advisor believes that technology
is revolutionizing industry and creating exceptional opportunities for astute
managements. The Portfolio is invested not only in companies that are
developing new technologies, but also in those that are using technology to gain
market share.
As of August 31, 1995, approximately one-quarter of the Portfolio was invested
in technology developers, including: Microsoft Corp., Motorola, Inc., Intel
Corp. and Hewlett-Packard Co. Additionally, Portfolio holdings that are using
technology to competitive advantage included: Home Depot, Inc., which is
benefiting from a sophisticated inventory management system; Charles Schwab
Corp., which is providing on-line services to clients; and The Walt Disney
Company, which is a major beneficiary of innovations in animation technology.
10
<PAGE>
LARGE CAPITALIZATION GROWTH PORTFOLIO
Advised by:
Harris Bretall Sullivan & Smith, Inc.
San Francisco, California
SARATOGA ADVANTAGE TRUST
LARGE CAPITALIZATION GROWTH PORTFOLIO
VERSUS INDICES
EDGAR REPRESENTATION OF DATA POINTS
USED IN PRINTED GRAPHIC
Large Cap
Growth S&P 500 S&P/Barra
----------- --------- -----------
1-Sep-94 $10,000 $10,000 $10,000
31-Aug-95 $12,877 $12,140 $12,368
1. The Standard & Poor's 500 is a capital weighted index representing the
aggregate market value of the common equity of 500 stocks primarily traded on
the NYSE. These 500 stocks are composed of 400 industrial, 40 utility, 40
financial, and 20 transportation companies. The weight of each stock in the
index is proportional to its price times its shares outstanding. The Standard &
Poor's 500 is an unmanaged index and includes the reinvestment of all dividends.
2. The S&P/Barra Growth Index is constructed by dividing the stocks in the S&P
500 Index according to price-to-book ratios. This unmanaged Index contains
stocks with higher price-to-book ratios and is market capitalization weighted.
11
<PAGE>
SMALL CAPITALIZATION PORTFOLIO
Advised by:
Axe-Houghton Associates, Inc.
Rye Brook, New York
OBJECTIVE: SEEKS MAXIMUM CAPITAL APPRECIATION BY INVESTING IN A DIVERSIFIED
PORTFOLIO OF COMMON STOCKS OF SMALL CAPITALIZATION GROWTH COMPANIES.
Total Aggregate Small Capitalization
Return Portfolio Russell 2000 Index(1)
- --------------------- -------------------------- ---------------------
9/1/94 - 8/31/95 26.4% 20.8%
3/1/95 - 8/31/95 25.0% 20.1%
Growth stocks, as measured by the Russell 2000 Index, have out-paced the broader
market for the last three months, rising 13.5% versus 6.1% for the S&P 500
Index. During this same three month period, your Portfolio has appreciated
20.3%. A $.0136 per share income dividend was made in December, 1994.
Axe-Houghton invests in companies with stock market capitalizations of up to $1
billion and holds existing positions up to $2 billion, at which point profits
are taken. The average capitalization of the forty three stocks in the
Portfolio on August 31, 1995 was $600 million. Your Portfolio remains nearly
fully-invested, with major commitments in technology, consumer spending, and
healthcare. No one issue represents more than 3% of the Portfolio's total
assets. Major holdings include: Wabash National Corp. (specialized truck
trailers), Thomas Nelson, Inc. (religious publishing) and Omnicare, Inc.
(medical products distribution). Each of these companies is characterized by
high rates of growth, favorable returns on equity and the potential for
continued reinvestment of earnings to expand their businesses.
Sentiment towards growth stocks improved recently as the economy slackened and
the Federal Reserve Board eased interest rates. Earnings of the companies in
your Portfolio continue to be strong virtually across-the-board, with many
exceeding consensus expectations. Axe-Houghton recognizes that the technology
sector has been very strong this year and is prepared to pare back their
weighting should circumstances so dictate. For the time being, however, we are
witnessing a widespread secular move to increased usage of computer-related
products as the technology revolution gathers steam.
12
<PAGE>
SMALL CAPITALIZATION PORTFOLIO
Advised by:
Axe-Houghton Associates, Inc.
Rye Brook, New York
SARATOGA ADVANTAGE TRUST
SMALL CAPITALIZATION PORTFOLIO
VERSUS INDEX
EDGAR REPRESENTATION OF DATA POINTS
USED IN PRINTED GRAPHIC
Small Cap Russell 2000
---------- -------------
1-Sep-94 $10,000 $10,000
31-Aug-95 $12,638 $12,080
1. The Russell 2000 Index is comprised of the 2,000 smallest U.S. domiciled
publicly traded commons stocks which are included the Russell 3000 Index. The
common stocks included in the Russell 2000 Index represent approximately 10% of
the U.S. equity market as measured by market capitalization. The Russell 3000
Index is an unmanaged index of the 3,000 largest U.S. domiciled publicly traded
common stocks by market capitalization representing approximately 98% of the
U.S. publicly traded equity market. The Russell 2000 Index is an unmanaged
index whose performance reflects reinvested dividends.
13
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
Advised by:
Ivory & Sime Inc.
Edinburgh, Scotland
OBJECTIVE: SEEKS CAPITAL APPRECIATION BY INVESTING PRIMARILY IN A DIVERSIFIED
PORTFOLIO OF SECURITIES OF COMPANIES HEADQUARTERED OUTSIDE THE UNITED STATES.
Morgan Stanley
Total Aggregate International Equity EAFE Index
Return Portfolio (U.S. Dollars)(1)
- ----------------- --------------------- ---------------------
9/1/94 - 8/31/95 (6.6%) 0.5%
3/1/95 - 8/31/95 8.2% 9.3%
Following a turbulent first six months, most major international equity markets
staged a recovery in the second half of the period under review. In relative
terms, the Japanese market has underperformed the other major markets. The
Portfolio's weighting in Japan has had an adverse impact on the Portfolio's
performance. Recently, the Portfolio has benefited from a currency hedge, which
effectively has protected the Portfolio from the strengthening of the U.S.
dollar against the Japanese yen.
Ivory & Sime focuses on areas of the world outside of the United States that are
expected to experience superior economic growth. Individual stock selection is
based on detailed fundamental analysis and a strong emphasis on visiting the
companies in which investments are made.
As of August 31, 1995, major weightings in the Portfolio were as follows: 41.4%
in Japan, 16.6% in Continental Europe, 13.0% in the United Kingdom, and 12.9% in
Asia (ex Japan). Looking forward, Ivory & Sime sees the Asian markets as having
the greatest prospects whereas the major European markets are perceived to be
fully valued at present.
Some of the Portfolio's recent acquisitions include: Repsol, a leading
integrated Spanish oil company which is currently attractively valued; and
Hoechst, a leading German chemical and pharmaceutical company, which following
the arrival of new management, has considerable scope to improve the
profitability of its pharmaceutical division and chemicals business.
14
<PAGE>
INTERNATIONAL EQUITY PORTFOLIO
Advised by:
Ivory & Sime Inc.
Edinburgh, Scotland
SARATOGA ADVANTAGE TRUST
INTERNATIONAL EQUITY PORTFOLIO
VERSUS INDEX
EDGAR REPRESENTATION OF DATA POINTS
USED IN PRINTED GRAPHIC
International
Equity MS EAFE
-------------- -------
1-Sep-94 $10,000 $10,000
31-Aug-95 $ 9,339 $10,050
1. The Europe, Australia, Far East Index (EAFE) is a widely recognized index
prepared by Morgan Stanley Capital International. This unmanaged index consists
of non-U.S. companies which are listed on one of twenty foreign markets and
assumes the reinvestment of dividends. The Gross Domestic Product (GDP) version
of the index is used above.
15
<PAGE>
The Saratoga Advantage Trust
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
Schedules of Investments
August 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- --------------
<S> <C> <C>
FEDERAL FARM CREDIT BANK-15.8%
$600,000 5.70%, 9/05/95. . . . . . . . . . . . . . . . . . $599,620
200,000 5.77%, 9/03/96 (1). . . . . . . . . . . . . . . . 200,000
------------
TOTAL FEDERAL FARM CREDIT BANK
(cost--$799,620). . . . . . . . . . . . . . . . . $799,620
------------
FEDERAL HOME LOAN BANK-12.7%
$340,000 5.67%, 9/25/95. . . . . . . . . . . . . . . . . . $338,715
300,000 7.81%, 7/17/96. . . . . . . . . . . . . . . . . . 304,605
------------
Total Federal Home Loan Bank
(cost--$643,320). . . . . . . . . . . . . . . . . $643,320
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION-22.4%
$390,000 5.63%, 9/01/95. . . . . . . . . . . . . . . . . . $390,000
440,000 5.66%, 9/25/95. . . . . . . . . . . . . . . . . . 438,340
310,000 5.67%, 9/20/95. . . . . . . . . . . . . . . . . . 309,072
------------
TOTAL FEDERAL HOME LOAN MORTGAGE CORPORATION
(cost--$1,137,412). . . . . . . . . . . . . . . . $1,137,412
------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION-51.6%
$365,000 5.63%, 6/28/96. . . . . . . . . . . . . . . . . . $364,327
860,000 5.64%, 9/14/95. . . . . . . . . . . . . . . . . . 858,248
20,000 5.65%, 9/01/95. . . . . . . . . . . . . . . . . . 20,000
320,000 5.66%, 9/25/95. . . . . . . . . . . . . . . . . . 318,793
25,000 5.66%, 9/27/95. . . . . . . . . . . . . . . . . . 24,898
630,000 5.67%, 9/08/95. . . . . . . . . . . . . . . . . . 629,305
340,000 5.67%, 9/13/95. . . . . . . . . . . . . . . . . . 339,357
25,000 5.67%, 9/18/95. . . . . . . . . . . . . . . . . . 24,933
40,000 5.68%, 9/18/95. . . . . . . . . . . . . . . . . . 39,893
------------
TOTAL FEDERAL NATIONAL MORTGAGE ASSOCIATION
(cost--$2,619,754). . . . . . . . . . . . . . . . $2,619,754
------------
Total Investments
(cost--$5,200,106) . . . . . . . . . . . . . . 102.5% $5,200,106
Other Liabilities in Excess of
Other Assets . . . . . . . . . . . . . . . . . (2.5) (128,080)
------ ------------
TOTAL NET ASSETS . . . . . . . . . . . . . . . . 100.0% $5,072,026
------ ------------
------ ------------
</TABLE>
- ---------------
(1) Represents a floating interest rate note subject to change on quarterly
coupon dates, based on the current 90 day U.S. Treasury Bill rate plus 20
basis points. Rate shown reflects the rate in effect at 8/31/95.
16
<PAGE>
The Saratoga Advantage Trust
INVESTMENT QUALITY BOND PORTFOLIO
Schedules of Investments
August 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- --------------
<S> <C> <C>
CORPORATE NOTES & BONDS - 16.6%
AUTOMOTIVE - 4.0%
$25,000 Ford Motor Credit Corp.
7.75%, 10/01/99 . . . . . . . . . . . . . . . . . $25,994
150,000 General Motors Acceptance Corp.
7.75%, 1/15/99 . . . . . . . . . . . . . . . . . . 154,632
------------
180,626
------------
DRUGS & MEDICAL PRODUCTS - 4.6%
American Home Products Corp.
200,000 7.70%, 2/15/00. . . . . . . . . . . . . . . . . . 209,162
------------
MISCELLANEOUS FINANCIAL SERVICES - 4.7%
150,000 Bear Stearns & Co.
7.625%, 9/15/99 . . . . . . . . . . . . . . . . . 154,728
50,000 Lehman Brothers, Inc.
9.875%, 10/15/00 . . . . . . . . . . . . . . . . 54,711
------------
209,439
------------
OIL/GAS- 3.3%
10,000 Amoco Canada Petroleum Co.
7.25%, 12/01/02 . . . . . . . . . . . . . . . . . 10,389
125,000 E.I. Dupont De Nemours & Co.
8.50%, 2/15/03 . . . . . . . . . . . . . . . . . . 135,863
------------
146,252
------------
Total Corporate Notes & Bonds
(cost -- $739,531). . . . . . . . . . . . . . . . $745,479
------------
U.S. TREASURY NOTES - 78.2%
$430,000 4.75%, 10/31/98 . . . . . . . . . . . . . . . . . $414,881
850,000 6.50%, 11/30/96 . . . . . . . . . . . . . . . . . 857,174
2,200,000 6.75%, 5/31/99 . . . . . . . . . . . . . . . . . 2,250,864
------------
Total U.S. Treasury Notes
(cost -- $3,482,065). . . . . . . . . . . . . . . $3,522,919
------------
Total Investments
(cost--$4,221,596) . . . . . . . . . . . . . . 94.8% $4,268,398
Other Assets in Excess of
Other Liabilities. . . . . . . . . . . . . . . 5.2 234,436
------ ------------
Total Net Assets . . . . . . . . . . . . . . . . 100.0% $4,502,834
------ ------------
------ ------------
</TABLE>
17
<PAGE>
The Saratoga Advantage Trust
MUNICIPAL BOND PORTFOLIO
Schedules of Investments
August 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- --------------
<S> <C> <C>
MUNICIPAL NOTES & BONDS - 90.8%
ALABAMA - 1.4%
POLLUTION CONTROL - 0.7%
$10,000 Alabama Water Pollution Control Authority
Revolving Fund Loan
6.25%, 8/15/14 (AMBAC insured). . . . . . . . . . $10,148
------------
WATER/SEWER - 0.7%
10,000 Montgomery, Alabama Waterworks &
Sanitary Sewer Board
Water & Sewer Systems Revenue
6.30%, 9/01/10. . . . . . . . . . . . . . . . . . 10,396
------------
20,544
------------
CALIFORNIA - 11.4%
EDUCATION - 4.0%
California State Public Works Board Lease Revenue
50,000 California State University Projects
6.00%, 9/01/15. . . . . . . . . . . . . . . . . . 48,639
10,000 Community College Projects
6.00%, 12/01/12 (AMBAC insured) . . . . . . . . . 10,119
------------
58,758
------------
POLLUTION CONTROL - 6.7%
100,000 California Pollution Control Financing Authority
Pollution Control Revenue Southern
California Edison
3.45%, 2/28/08 (1). . . . . . . . . . . . . . . . 100,000
------------
WATER/SEWER - 0.7%
10,000 San Francisco, California City &
County Public Utilities
Community Water Revenue (Series A)
6.00%, 11/01/15 . . . . . . . . . . . . . . . . . 10,028
------------
168,786
------------
CONNECTICUT - 1.4%
HOUSING
20,000 Connecticut State Housing Finance Authority
Housing Mortgage Financing Program
6.50%, 5/15/18. . . . . . . . . . . . . . . . . . 20,462
------------
FLORIDA - 10.9%
CONVENTION CENTERS/STADIUMS - 3.3%
50,000 St. Petersburg, Florida Professional
Sports Facilities
Sales Tax Revenue
5.60%, 10/01/15 (MBIA insured). . . . . . . . . . 48,474
------------
EDUCATION - 2.4%
35,000 Dade County, Florida School Board
Certificates of Participation (Series A)
5.75%, 5/01/12 (MBIA insured) . . . . . . . . . . 35,274
------------
GENERAL OBLIGATION - 2.4%
35,000 Florida State Board of Education Capital Outlay
6.00%, 6/01/19. . . . . . . . . . . . . . . . . . 35,021
------------
POWER/UTILITY - 1.6%
25,000 Jacksonville, Florida Electric Authority Revenue
St. John's River Power
5.50%, 10/01/14 . . . . . . . . . . . . . . . . . 23,973
------------
18
<PAGE>
The Saratoga Advantage Trust
MUNICIPAL BOND PORTFOLIO
Schedules of Investments (continued)
August 31, 1995
<CAPTION>
Principal
Amount Value
- ----------- --------------
<S> <C> <C>
FLORIDA (cont'd)
TURNPIKE/TOLL - 1.2%
$20,000 Orlando & Orange County Expressway Authority
Florida Expressway Revenue
5.00%, 7/01/17 (FGIC insured) . . . . . . . . . . $17,760
------------
160,502
------------
ILLINOIS - 0.6%
HEALTH/HOSPITAL
10,000 Illinois Health Facilities Authority Revenue
Lutheran Health System (Series B)
6.00%, 4/01/18 . . . . . . . . . . . . . . . . . 9,400
------------
IOWA - 3.6%
WATER/SEWER
50,000 West Des Moines, Iowa Water Revenue
6.80%, 12/01/13 (AMBAC insured) . . . . . . . . . 53,254
------------
MASSACHUSETTS - 9.8%
GENERAL OBLIGATION - 4.2%
10,000 Boston, Massachusetts General Obligation Bonds
(Series B)
5.875%, 8/01/12 (AMBAC insured) . . . . . . . . . 10,108
50,000 Lowell, Massachusetts General Obligation Bonds
6.05%, 4/01/11. . . . . . . . . . . . . . . . . . 51,083
------------
61,191
------------
HOUSING - 0.7%
10,000 Massachusetts State Housing Finance Agency
Single Family Housing Revenue
6.35%, 6/01/17 . . . . . . . . . . . . . . . . . 10,119
------------
TRANSPORTATION - 3.3%
50,000 Massachusetts Bay Transportation Authority
General Transportation System
5.90%, 3/01/24 . . . . . . . . . . . . . . . . . 49,053
------------
WATER/SEWER - 1.6%
Massachusetts State Water Resources Authority
15,000 5.50%, 11/01/15 (Series B). . . . . . . . . . . . 14,145
10,000 5.75%, 8/01/10 (Series A) . . . . . . . . . . . . 10,096
------------
24,241
------------
144,604
------------
MISSOURI - 3.2%
HOUSING
45,000 Missouri State Housing Development Community
Single Family Mortgage Revenue
6.90%, 7/01/18. . . . . . . . . . . . . . . . . . 47,409
------------
NEBRASKA - 2.6%
POWER/UTILITY
40,000 Omaha Public Power Distribution
5.50%, 2/01/14. . . . . . . . . . . . . . . . . . 38,388
------------
NEVADA - 3.4%
GENERAL OBLIGATION
50,000 Clark County, Nevada General Obligation Bonds
6.00%, 6/01/16 (AMBAC insured). . . . . . . . . . 49,643
------------
19
<PAGE>
The Saratoga Advantage Trust
MUNICIPAL BOND PORTFOLIO
Schedules of Investments (continued)
August 31, 1995
<CAPTION>
Principal
Amount Value
- ----------- --------------
<S> <C> <C>
NEW HAMPSHIRE - 2.0%
TURNPIKE/TOLL
$30,000 New Hampshire State Turnpike Systems
6.00%, 4/01/13. . . . . . . . . . . . . . . . . . $30,038
------------
NEW JERSEY - 0.7%
WATER/SEWER
10,000 Gloucester County, New Jersey
Utilities Authority Sewer Revenue
6.125%, 1/01/13 . . . . . . . . . . . . . . . . . 10,257
------------
NEW YORK - 17.0%
EDUCATION - 2.1%
30,000 New York State Dormitory Authority Revenue
Sarah Lawrence College
6.00%, 7/01/15 . . . . . . . . . . . . . . . . . 30,301
------------
GENERAL OBLIGATION - 1.4%
20,000 New York City General Obligation Bonds (Series B)
7.00%, 10/01/19 . . . . . . . . . . . . . . . . . 20,388
------------
HEALTH/HOSPITAL - 0.7%
10,000 New York State Medical Care Facilities
Finance Agency Revenue
Mental Health Services (Series F)
6.25%, 2/15/10 . . . . . . . . . . . . . . . . . 10,126
------------
HOUSING - 1.3%
20,000 New York State Mortgage Agency (Series A)
6.875%, 4/01/17 . . . . . . . . . . . . . . . . . 20,633
------------
POLLUTION CONTROL - 9.4%
100,000 New York State Energy Research &
Developement Authority
Pollution Control Revenue
3.30%, 10/01/29 (1) . . . . . . . . . . . . . . . 100,000
------------
40,000 New York State Environmental Facilities Corp.
Pollution Control Revenue
5.875%, 6/15/14 . . . . . . . . . . . . . . . . . 39,838
------------
139,838
------------
SALES TAX - 0.7%
10,000 New York State Local Government Assistance Corp.
6.25%, 4/01/18. . . . . . . . . . . . . . . . . . 10,098
------------
TURNPIKE/TOLL - 1.4%
10,000 New York State Thruway Authority Service
Contract Revenue
Local Highway & Bridge
6.00%, 4/01/10 . . . . . . . . . . . . . . . . . 9,942
10,000 Triborough Bridge & Tunnel Authority
Special Obligation
6.00%, 1/01/15 (AMBAC insured). . . . . . . . . . 10,077
------------
20,019
------------
251,403
------------
OHIO - 4.0%
HEALTH/HOSPITAL
50,000 Lorain County, Ohio Hospital Revenue
7.75%, 11/01/13 (AMBAC insured) . . . . . . . . . 58,940
------------
20
<PAGE>
The Saratoga Advantage Trust
MUNICIPAL BOND PORTFOLIO
Schedules of Investments (continued)
August 31, 1995
<CAPTION>
Principal
Amount Value
- ----------- --------------
<S> <C> <C>
PENNSYLVANIA - 3.2%
WATER/SEWER
$50,000 Pittsburgh, Pennsylvania Water & Sewer Authority
Water & Sewer Systems Revenue
5.60%, 9/15/15. . . . . . . . . . . . . . . . . . $47,857
------------
PUERTO RICO - 0.7%
POWER/UTILITY
10,000 Puerto Rico Electric Power Authority
Power Revenue (Series R)
6.25%, 7/01/17. . . . . . . . . . . . . . . . . . 10,134
------------
TEXAS - 10.0%
CORRECTIONAL FACILITIES - 0.7%
10,000 East Texas Criminal Justice Facilities Financing Corp.
Mortgage Revenue City of Henderson Project
6.125%, 11/01/14 (AMBAC insured). . . . . . . . . 10,131
------------
EDUCATION - 1.8%
10,000 University of Texas Permanent University Funding
(Series A) 6.25%, 7/01/13 . . . . . . . . . . . . 10,227
15,000 University of Texas Revenue Bonds (Series B)
6.75%, 8/15/13. . . . . . . . . . . . . . . . . . 16,197
------------
26,424
------------
GENERAL OBLIGATION - 4.2%
25,000 San Antonio, Texas General Obligation Bonds
6.625%, 8/01/14 . . . . . . . . . . . . . . . . . 26,223
35,000 Texas State General Obligation Bonds
6.00%, 8/01/12. . . . . . . . . . . . . . . . . . 35,816
------------
62,039
------------
POWER/UTILITY - 3.3%
50,000 Brazos River Authority Texas Revenue
Houston Light & Power Company
5.80%, 8/01/15 (MBIA insured) . . . . . . . . . . 49,014
------------
147,608
------------
WASHINGTON - 3.1%
POWER/UTILITY
35,000 Seattle, Washington Municipal Light & Power Revenue
5.75%, 8/01/11. . . . . . . . . . . . . . . . . . 35,094
10,000 Washington State Public Power Supply Systems
Nuclear Project Revenue
7.25%, 7/01/12 (FGIC insured) . . . . . . . . . . 11,012
------------
46,106
------------
WYOMING - 1.8%
HOUSING
25,000 Wyoming Community Development
Authority Housing Revenue
6.65%, 12/01/06 . . . . . . . . . . . . . . . . . 26,692
------------
Total Investments
(cost--$1,319,182) . . . . . . . . . . . . . . 90.8% $1,342,027
Other Assets in Excess of
Other Liabilities. . . . . . . . . . . . . . . 9.2 135,397
------ ------------
TOTAL NET ASSETS . . . . . . . . . . . . . . . . 100.0% $1,477,424
------ ------------
------ ------------
</TABLE>
- ---------------
(1) Represents a variable rate demand note subject to change daily and payable
on demand. Rate shown reflects the rate in effect on 8/31/95.
21
<PAGE>
The Saratoga Advantage Trust
LARGE CAPITALIZATION VALUE PORTFOLIO
Schedules of Investments
August 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- --------------
<S> <C> <C>
SHORT-TERM CORPORATE NOTES - 20.3%
MISCELLANEOUS FINANCIAL SERVICES
$640,000 Federal Home Loan Mortgage Corp.
5.66%, 9/05/95. . . . . . . . . . . . . . . . . . $639,597
480,000 Federal National Mortgage Association
5.66%, 9/14/95. . . . . . . . . . . . . . . . . . 479,019
------------
Total Short-Term Corporate Notes
(cost-$1,118,616) . . . . . . . . . . . . . . . . $1,118,616
------------
<CAPTION>
Shares
- -----------
<S> <C> <C>
COMMON STOCKS - 82.5%
AEROSPACE - 5.7%
1,820 AlliedSignal, Inc. . . . . . . . . . . . . . . . . $80,763
6,300 Coltec Industries, Inc.* . . . . . . . . . . . . . 94,500
1,700 McDonnell Douglas Corp. . . . . . . . . . . . . . . 136,425
------------
311,688
------------
BANKING - 2.8%
2,300 Citicorp. . . . . . . . . . . . . . . . . . . . . . 152,662
------------
CHEMICALS - 3.6%
1,780 Hercules, Inc. . . . . . . . . . . . . . . . . . . 99,013
1,050 Monsanto Co. . . . . . . . . . . . . . . . . . . . 99,619
------------
198,632
------------
CONGLOMERATES - 4.3%
2,200 General Electric Co. . . . . . . . . . . . . . . . 129,525
6,500 Canadian Pacific Ltd. . . . . . . . . . . . . . . . 109,688
------------
239,213
------------
CONSUMER PRODUCTS - 2.3%
3,600 Reebok International Ltd. . . . . . . . . . . . . . 127,800
------------
CONTAINERS - 3.6%
3,800 Temple-Inland, Inc. . . . . . . . . . . . . . . . . 196,650
------------
DRUGS & MEDICAL PRODUCTS - 3.5%
3,440 Becton, Dickinson & Co. . . . . . . . . . . . . . . 193,930
------------
ELECTRONICS - 2.0%
2,080 Arrow Electronics, Inc.* . . . . . . . . . . . . . 112,840
------------
HEALTH/HOSPITAL - 5.0%
2,800 Columbia/HCA Healthcare Corp. . . . . . . . . . . . 131,600
9,000 Tenet Healthcare Corp.* . . . . . . . . . . . . . . 142,875
------------
274,475
------------
INSURANCE - 15.6%
4,000 Ace Ltd. . . . . . . . . . . . . . . . . . . . . . 123,000
3,000 AFLAC, Inc. . . . . . . . . . . . . . . . . . . . . 122,625
1,650 American International Group, Inc. . . . . . . . . 133,031
4,710 EXEL Ltd. . . . . . . . . . . . . . . . . . . . . . 259,050
250 General Reinsurance Corp. . . . . . . . . . . . . . 37,156
4,180 Progressive Corp., Ohio . . . . . . . . . . . . . . 185,487
------------
860,349
------------
METALS/MINING - 2.5%
Freeport McMoRan, Copper & Gold
3,000 (Class A) . . . . . . . . . . . . . . . . . . . . 70,125
3,000 (Class B) . . . . . . . . . . . . . . . . . . . . 70,125
------------
140,250
------------
22
<PAGE>
The Saratoga Advantage Trust
LARGE CAPITALIZATION VALUE PORTFOLIO
Schedules of Investments (continued)
August 31, 1995
<CAPTION>
Shares Value
- ----------- --------------
<S> <C> <C>
MISCELLANEOUS FINANCIAL SERVICES - 9.0%
5,200 Countrywide Credit Industries, Inc. . . . . . . . . $114,400
3,250 Federal Home Loan Mortgage Corp. . . . . . . . . . 208,812
1,800 Federal National Mortgage Corp. . . . . . . . . . . 171,675
------------
494,887
------------
PAPER PRODUCTS - 2.7%
2,600 Champion International Corp. . . . . . . . . . . . 147,225
------------
RETAIL - 5.6%
1,100 J.C. Penney Co. . . . . . . . . . . . . . . . . . . 49,775
4,450 May Department Stores Co. . . . . . . . . . . . . . 188,569
1,500 Mercantile Stores Co., Inc. . . . . . . . . . . . . 68,813
------------
307,157
------------
TELECOMMUNICATIONS - 3.5%
5,500 Sprint Corp. . . . . . . . . . . . . . . . . . . . 195,250
------------
TEXTILES - 2.7%
10,000 Shaw Industries, Inc. . . . . . . . . . . . . . . . 150,000
------------
TOBACCO/BEVERAGES/FOOD PRODUCTS - 0.5%
980 Sara Lee Corp. . . . . . . . . . . . . . . . . . . 27,195
------------
TOYS/GAMES/HOBBY - 2.1%
4,000 Mattel, Inc. . . . . . . . . . . . . . . . . . . . 116,000
------------
TRANSPORTATION - 5.5%
1,900 CSX Corp. . . . . . . . . . . . . . . . . . . . . . 156,750
2,100 Norfolk Southern Corp. . . . . . . . . . . . . . . 148,575
------------
305,325
------------
Total Common Stocks
(cost--$4,016,882). . . . . . . . . . . . . . . . $4,551,528
------------
Total Investments
(cost--$5,135,498) . . . . . . . . . . . . . . 102.8% $5,670,144
Other Liabilities in Excess of
Other Assets . . . . . . . . . . . . . . . . . (2.8) (155,454)
------ ------------
Total Net Assets . . . . . . . . . . . . . . . . 100.0% $5,514,690
------ ------------
------ ------------
</TABLE>
- ---------------
* Non - income producing security.
23
<PAGE>
The Saratoga Advantage Trust
LARGE CAPITALIZATION GROWTH PORTFOLIO
Schedules of Investments
August 31, 1995
<TABLE>
<CAPTION>
Shares Value
- ----------- --------------
<S> <C> <C>
COMMON STOCKS - 95.6%
BANKING - 6.6%
4,300 BankAmerica Corp. . . . . . . . . . . . . . . . . . $242,950
3,960 NationsBank Corp. . . . . . . . . . . . . . . . . . 243,045
8,230 Norwest Corp. . . . . . . . . . . . . . . . . . . . 247,929
------------
733,924
------------
CHEMICALS - 4.4%
3,705 Great Lakes Chemical Corp. . . . . . . . . . . . . 244,993
7,580 Morton International, Inc. . . . . . . . . . . . . 246,350
------------
491,343
------------
COMPUTERS - 6.8%
5,800 Apple Computer, Inc. . . . . . . . . . . . . . . . 249,400
4,770 Cabletron Systems, Inc.*. . . . . . . . . . . . . . 252,214
5,940 Silicon Graphics, Inc.* . . . . . . . . . . . . . . 250,965
------------
752,579
------------
COMPUTER SERVICES - 11.2%
4,960 Adobe Systems, Inc. . . . . . . . . . . . . . . . . 252,960
5,290 Autodesk, Inc. . . . . . . . . . . . . . . . . . . 244,001
3,810 Automatic Data Processing, Inc. . . . . . . . . . . 247,650
3,910 Cisco Systems, Inc.*. . . . . . . . . . . . . . . . 256,594
7,760 Sybase, Inc.* . . . . . . . . . . . . . . . . . . . 249,290
------------
1,250,495
------------
COMPUTER SOFTWARE - 4.7%
6,790 Electronic Arts, Inc.*. . . . . . . . . . . . . . . 258,020
2,825 Microsoft Corp.*. . . . . . . . . . . . . . . . . . 261,312
------------
519,332
------------
CONGLOMERATE - 2.2%
4,190 General Electric Co. . . . . . . . . . . . . . . . 246,686
------------
DRUGS/MEDICAL PRODUCTS - 8.7%
5,070 Amgen, Inc.*. . . . . . . . . . . . . . . . . . . . 242,726
4,215 Genzyme Corp. . . . . . . . . . . . . . . . . . . . 235,513
5,030 Merck & Co., Inc. . . . . . . . . . . . . . . . . . 250,871
10,200 Mylan Laboratories, Inc. . . . . . . . . . . . . . 233,325
------------
962,435
------------
ELECTRONICS - 8.9%
14,625 American Power Conversion Corp.*. . . . . . . . . . 244,969
2,180 Applied Materials, Inc. . . . . . . . . . . . . . . 226,720
3,195 Hewlett - Packard Co. . . . . . . . . . . . . . . . 255,600
4,220 Intel Corp. . . . . . . . . . . . . . . . . . . . . 259,003
------------
986,292
------------
ENTERTAINMENT - 2.3%
4,475 The Walt Disney Co. . . . . . . . . . . . . . . . . 251,159
------------
FOOD SERVICES - 1.9%
12,950 Brinker International, Inc.*. . . . . . . . . . . . 216,913
------------
INSURANCE - 4.5%
3,092 American International Group, Inc. . . . . . . . . 249,293
5,880 United Healthcare Corp. . . . . . . . . . . . . . . 248,430
------------
497,723
------------
MEDIA/BROADCASTING - 2.3%
2,190 Capital Cities/ABC, Inc. . . . . . . . . . . . . . 251,850
------------
24
<PAGE>
The Saratoga Advantage Trust
LARGE CAPITALIZATION GROWTH PORTFOLIO
Schedules of Investments (continued)
August 31, 1995
<CAPTION>
Shares Value
- ----------- --------------
<S> <C> <C>
MISCELLANEOUS FINANCIAL SERVICES - 6.9%
4,915 Dean Witter, Discover and Co. . . . . . . . . . . . $250,665
2,930 First Financial Management Corp. . . . . . . . . . 264,066
5,395 Charles Schwab Corp. . . . . . . . . . . . . . . . 250,868
------------
765,599
------------
PRINTING/PUBLISHING - 2.2%
3,660 Tribune Co. . . . . . . . . . . . . . . . . . . . . 245,220
------------
RETAIL - 13.4%
7,685 Albertson's, Inc. . . . . . . . . . . . . . . . . . 244,959
7,400 Circuit City Stores, Inc. . . . . . . . . . . . . . 255,300
6,110 Home Depot, Inc. . . . . . . . . . . . . . . . . . 243,636
7,955 Office Depot, Inc.* . . . . . . . . . . . . . . . . 247,599
9,838 Staples, Inc.*. . . . . . . . . . . . . . . . . . . 252,099
9,550 Toys "R" Us, Inc.*. . . . . . . . . . . . . . . . . 248,300
------------
1,491,893
------------
SECURITY/INVESTIGATION - 2.0%
10,435 Sensormatic Electronics Corp. . . . . . . . . . . . 219,135
------------
TELECOMMUNICATIONS - 4.4%
3,200 Motorola, Inc. . . . . . . . . . . . . . . . . . . 239,200
5,100 Qualcomm, Inc.* . . . . . . . . . . . . . . . . . . 248,625
------------
487,825
------------
TOYS/GAMES/HOBBY - 2.2%
4,200 Tyco International Ltd . . . . . . . . . . . . . . 248,325
------------
Total Investments
(cost--$9,420,199) . . . . . . . . . . . . . . 95.6% $10,618,728
Other Assets in Excess of
Other Liabilities. . . . . . . . . . . . . . . 4.4 488,523
------ ------------
Total Net Assets . . . . . . . . . . . . . . . . 100.0% $11,107,251
------ ------------
------ ------------
</TABLE>
- ---------------
* Non - income producing security.
25
<PAGE>
The Saratoga Advanage Trust
SMALL CAPITALIZATION PORTFOLIO
Schedules of Investments
August 31, 1995
<TABLE>
<CAPTION>
Principal
Amount Value
- ----------- --------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY - 6.1%
$930,000 Federal Home Loan Bank
5.70%, 9/01/95
(cost -- $930,000). . . . . . . . . . . . . . . . $930,000
------------
<CAPTION>
Shares
- -----------
<S> <C> <C>
COMMON STOCKS - 95.2%
AIRLINES - 2.3%
13,500 Comair Holdings, Inc. . . . . . . . . . . . . . . . $340,875
------------
AUTOMOTIVE - 2.4%
10,000 Wabash National Corp. . . . . . . . . . . . . . . . 365,000
------------
BUILDING & CONSTRUCTION - 4.2%
22,500 Cavalier Homes, Inc. . . . . . . . . . . . . . . . 309,375
23,500 Southern Energy Homes, Inc. * . . . . . . . . . . . 323,125
------------
632,500
CASINOS/GAMING - 2.4%
17,000 Players International, Inc. * . . . . . . . . . . . 359,125
------------
COMPUTERS - 8.1%
8,000 Cognex Corp. *. . . . . . . . . . . . . . . . . . . 399,000
13,000 Digital Link Corp. *. . . . . . . . . . . . . . . . 305,500
5,000 Micros Systems, Inc. *. . . . . . . . . . . . . . . 170,625
9,000 Norand Corp. *. . . . . . . . . . . . . . . . . . . 346,500
------------
1,221,625
------------
COMPUTER SERVICES - 1.9%
15,500 American Business Information, Inc. * . . . . . . . 294,500
------------
COMPUTER SOFTWARE - 9.0%
16,000 Cheyene Software, Inc. *. . . . . . . . . . . . . . 330,000
10,000 Electronic Arts, Inc. * . . . . . . . . . . . . . . 380,000
15,000 Mercury Interactive Corp. * . . . . . . . . . . . . 339,375
9,000 Remedy Corp. *. . . . . . . . . . . . . . . . . . . 308,250
------------
1,357,625
------------
CONSUMER PRODUCTS - 1.8%
16,500 Inbrand Corp. * . . . . . . . . . . . . . . . . . . 268,125
------------
DRUGS & MEDICAL PRODUCTS - 7.1%
12,500 Omnicare, Inc. . . . . . . . . . . . . . . . . . . 415,625
15,500 Gelman Sciences, Inc. * . . . . . . . . . . . . . . 292,563
20,500 Respironics, Inc. * . . . . . . . . . . . . . . . . 363,875
------------
1,072,063
------------
ELECTRONICS - 4.2%
15,000 Methode Electronics, Inc. (Class A) . . . . . . . . 352,500
9,000 SDL, Inc. * . . . . . . . . . . . . . . . . . . . . 285,750
------------
638,250
------------
FOOD SERVICES - 2.8%
10,500 Lone Star Steakhouse & Saloon*. . . . . . . . . . . 421,313
------------
HEALTHCARE SERVICES - 2.2%
12,000 MedPartners, Inc. * . . . . . . . . . . . . . . . . 333,000
------------
HOUSEHOLD PRODUCTS - 2.3%
8,000 Department 56, Inc. * . . . . . . . . . . . . . . . 354,000
------------
26
<PAGE>
The Saratoga Advanage Trust
SMALL CAPITALIZATION PORTFOLIO
Schedules of Investments (continued)
August 31, 1995
<CAPTION>
Shares Value
- ----------- --------------
<S> <C> <C>
LEISURE - 2.4%
9,500 Coleman Company, Inc. * . . . . . . . . . . . . . . $358,625
------------
LODGING - 2.5%
12,500 La Quinta Inns, Inc. . . . . . . . . . . . . . . . 375,000
------------
MANUFACTURING - 4.6%
5,000 Novellus Systems, Inc. *. . . . . . . . . . . . . . 368,437
18,000 Special Devices, Inc. * . . . . . . . . . . . . . . 319,500
------------
687,937
------------
MISCELLANEOUS FINANCIAL SERVICES - 1.3%
13,500 Jayhawk Acceptance Corp. *. . . . . . . . . . . . . 197,437
------------
PRINTING & PUBLISHING - 5.3%
6,000 Scholastic Corp. *. . . . . . . . . . . . . . . . . 367,500
17,000 Thomas Nelson, Inc. . . . . . . . . . . . . . . . . 433,500
------------
801,000
------------
RETAIL - 8.9%
9,000 Barnes & Noble, Inc. *. . . . . . . . . . . . . . . 352,125
12,000 Dollar Tree Stores, Inc. *. . . . . . . . . . . . . 357,000
8,000 Sunglass Hut International, Inc. *. . . . . . . . . 340,000
9,500 The Men's Wearhouse, Inc. * . . . . . . . . . . . . 298,062
------------
1,347,187
------------
TELECOMMUNICATIONS - 14.9%
7,000 Applied Innovation, Inc. *. . . . . . . . . . . . . 341,250
12,000 Century Telephone Enterprises . . . . . . . . . . . 334,500
18,500 Harmonic Lightwaves, Inc. * . . . . . . . . . . . . 279,813
13,500 Midcom Communications, Inc. * . . . . . . . . . . . 212,625
6,500 Picturetel Corp. *. . . . . . . . . . . . . . . . . 365,625
8,000 Spectrian Corp. * . . . . . . . . . . . . . . . . . 370,000
15,000 Teltrend, Inc. *. . . . . . . . . . . . . . . . . . 352,500
------------
2,256,313
------------
TRANSPORTATION - 2.2%
13,500 Rural/Metro Corp. * . . . . . . . . . . . . . . . . 327,375
------------
OTHER - 2.4%
16,000 RTW, Inc. * . . . . . . . . . . . . . . . . . . . . 368,000
------------
TOTAL COMMON STOCKS
(cost--$12,068,146) . . . . . . . . . . . . . . . $14,376,875
------------
Total Investments
(cost--$12,998,146). . . . . . . . . . . . . . 101.3% $15,306,875
Other Liabilities in Excess of
Other Assets . . . . . . . . . . . . . . . . . (1.3) (203,484)
------ ------------
Total Net Assets . . . . . . . . . . . . . . . . 100.0% $15,103,391
------ ------------
------ ------------
</TABLE>
- ---------------
* Non-income producing security.
27
<PAGE>
The Saratoga Advantage Trust
INTERNATIONAL EQUITY PORTFOLIO
Schedules of Investments
August 31, 1995
<TABLE>
<CAPTION>
Shares Value
- ----------- --------------
<S> <C> <C>
COMMON STOCKS - 85.0%
AUSTRALIA - 1.4%
METALS/MINING
1,500 Western Mining Corp. Holdings Ltd. ADR. . . . . . . $40,313
------------
FINLAND - 1.3%
TELECOMMUNICATIONS
530 Nokia Corp. ADR . . . . . . . . . . . . . . . . . . 36,769
------------
FRANCE - 3.8%
AUTOMOTIVE - 1.6%
1,000 Valeo SA Sponsored ADR. . . . . . . . . . . . . . . 47,737
------------
OIL/GAS - 0.8%
604 Elf Aquitaine, Inc. ADR . . . . . . . . . . . . . . 22,122
------------
TOBACCO/BEVERAGES/FOOD PRODUCTS - 1.4%
1,100 LVMH Moet Hennessy Louis Vuitton ADR. . . . . . . . 39,875
------------
109,734
------------
GERMANY - 4.4%
CHEMICALS - 2.2%
1,200 Bayer AG. . . . . . . . . . . . . . . . . . . . . . 31,950
300 Hoechst AG ADR. . . . . . . . . . . . . . . . . . . 32,175
------------
64,125
------------
MACHINERY/ENGINEERING - 2.2%
200 Mannesmann AG ADR . . . . . . . . . . . . . . . . . 63,045
------------
127,170
------------
HONG KONG - 8.2%
BANKING - 1.4%
300 HSBC Holdings Plc. ADR. . . . . . . . . . . . . . . 40,306
------------
CONGLOMERATE - 1.2%
1,500 Hutchison Whampoa Ltd. ADR. . . . . . . . . . . . . 36,140
------------
REAL ESTATE - 4.2%
10,000 Cheung Kong Holdings Ltd. ADR . . . . . . . . . . . 49,607
9,000 Hopewell Holdings Ltd. Sponsored ADR. . . . . . . . 31,500
5,500 Sun Hung Kai Properties Ltd. ADR. . . . . . . . . . 39,966
------------
121,073
------------
TRANSPORTATION - 1.4%
5,300 Swire Pacific Ltd. Sponsored ADR. . . . . . . . . . 39,711
------------
237,230
------------
INDONESIA - 1.0%
TELECOMMUNICATIONS
800 Indonesian Satellite ADR. . . . . . . . . . . . . . 28,100
------------
ITALY - 2.3%
FURNITURE - 0.7%
584 Industrie Natuzzi Spa. ADR. . . . . . . . . . . . . 20,440
------------
TELECOMMUNICATIONS - 1.6%
1,500 Stet Societa Finanziaria Telefonica Sponsored
ADR . . . . . . . . . . . . . . . . . . . . . . . . 46,041
------------
66,481
------------
JAPAN - 41.1%
AUTOMOTIVE - 1.4%
1,000 Toyota Motor Corp. ADR. . . . . . . . . . . . . . . 39,375
------------
28
<PAGE>
The Saratoga Advantage Trust
INTERNATIONAL EQUITY PORTFOLIO
Schedules of Investments (continued)
August 31, 1995
<CAPTION>
Shares Value
- ----------- --------------
<S> <C> <C>
JAPAN (cont'd)
BANKING - 6.4%
400 Mitsubishi Trust & Banking Corp. ADR. . . . . . . . $66,567
600 Sakura Bank Ltd. ADR. . . . . . . . . . . . . . . . 63,708
300 Sumitomo Bank Ltd. Japan ADR. . . . . . . . . . . . 55,438
------------
185,713
------------
BUILDING & CONSTRUCTION - 4.0%
600 Asahi Glass ADR . . . . . . . . . . . . . . . . . . 67,996
700 Taisei Construction Ltd. ADR. . . . . . . . . . . . 47,168
------------
115,164
------------
CHEMICALS - 1.8%
800 Asahi Chemical Industries Ltd. ADR. . . . . . . . . 53,090
------------
CONGLOMERATE - 2.0%
2,600 Mitsbushi Corp. Sponsored ADR . . . . . . . . . . . 57,337
------------
DRUGS/MEDICAL PRODUCTS - 1.7%
300 Eisai Ltd. ADR. . . . . . . . . . . . . . . . . . . 48,394
------------
ELECTRONICS - 8.2%
300 Kyocera Corp. ADR . . . . . . . . . . . . . . . . . 53,475
500 Secom Ltd. ADR. . . . . . . . . . . . . . . . . . . 65,648
450 Sharp Corp. ADR . . . . . . . . . . . . . . . . . . 63,861
1,000 Sony Corp. ADR. . . . . . . . . . . . . . . . . . . 55,125
------------
238,109
------------
MANUFACTURING - 1.8%
350 Bridgestone Corp. ADR . . . . . . . . . . . . . . . 51,456
------------
METALS & MINING - 2.1%
1,800 Kawasaki Steel Corp. Sponsored ADR. . . . . . . . . 61,564
------------
MISCELLANEOUS FINANCIAL SERVICES - 2.0%
300 Nomura Securities Ltd. ADR. . . . . . . . . . . . . 58,807
------------
PAPER PRODUCTS - 1.2%
400 OJI Paper Ltd. ADR. . . . . . . . . . . . . . . . . 36,019
------------
PHOTOGRAPHY - 2.3%
750 Canon, Inc. ADR . . . . . . . . . . . . . . . . . . 67,594
------------
REAL ESTATE - 1.4%
349 Mitsubishi Estate Co. Ltd. ADR. . . . . . . . . . . 40,976
------------
RETAIL - 2.5%
350 Ito-Yokado Co. Ltd. ADR . . . . . . . . . . . . . . 74,025
------------
TELECOMMUNICATIONS - 2.3%
1,500 Nippon Telegraph & Telephone Corp. ADR. . . . . . . 68,250
------------
1,195,873
------------
MALAYSIA - 1.0%
ENTERTAINMENT
3,500 Genting Berhad SH Malay ADR . . . . . . . . . . . . 31,005
------------
NETHERLANDS - 1.4%
PRINTING/ PUBLISHING
476 Wolters Kluwer NV Sponsored ADR . . . . . . . . . . 41,965
------------
29
<PAGE>
The Saratoga Advantage Trust
INTERNATIONAL EQUITY PORTFOLIO
Schedules of Investments (continued)
August 31, 1995
<CAPTION>
Shares Value
- ----------- --------------
<S> <C> <C>
PHILIPPINES - 2.7%
TELECOMMUNICATIONS - 1.8%
850 Philippine Long Distance Telephone Co. ADR. . . . . $53,444
------------
TOBACCO/BEVERAGES/FOOD PRODUCTS - 0.9%
700 San Miguel Corp. ADR (Class B). . . . . . . . . . . 24,441
------------
77,885
------------
SPAIN - 1.6%
OIL/GAS
1,500 Repsol SA Sponsored ADR . . . . . . . . . . . . . . 47,437
------------
SWITZERLAND - 1.8%
DRUGS & MEDICAL PRODUCTS
800 Roche Holdings Ltd. Sponsored ADR . . . . . . . . . 53,600
------------
UNITED KINGDOM - 13.0%
Banking - 1.0%
685 Barclays Plc. ADR . . . . . . . . . . . . . . . . . 30,568
------------
CONGLOMERATES - 1.9%
3,550 BET Plc. ADR. . . . . . . . . . . . . . . . . . . . 29,288
1,820 Rank Organisation Plc. Sponsored ADR. . . . . . . . 25,025
------------
54,313
------------
DRUGS & MEDICAL PRODUCTS - 1.1%
1,400 Glaxo Wellcome Plc. ADR . . . . . . . . . . . . . . 33,250
------------
MANUFACTURING - 0.9%
1,700 Tomkins Plc. ADR. . . . . . . . . . . . . . . . . . 26,350
------------
MEDIA/BROADCASTING - 0.9%
800 Carlton Communications Plc. ADR . . . . . . . . . . 26,000
------------
OIL/GAS - 0.6%
250 Shell Transport & Trading Plc. ADR. . . . . . . . . 17,344
------------
PRINTING/PUBLISHING - 0.7%
3,300 Rexam Plc. ADR. . . . . . . . . . . . . . . . . . . 21,450
------------
RETAIL - 1.6%
9,000 Tesco Plc. Sponsored ADR. . . . . . . . . . . . . . 45,520
------------
TELECOMMUNICATIONS - 1.0%
1,400 Cable & Wireless Plc. ADR . . . . . . . . . . . . . 27,475
------------
TEXTILES/APPAREL - 1.4%
4,200 Coats Viyella Plc. Sponsored ADR *. . . . . . . . . 40,794
------------
TOBACCO/BEVERAGES/FOOD PRODUCTS - 1.9%
1,368 Bass Plc. Sponsored ADR . . . . . . . . . . . . . . 27,873
1,750 BAT Industries Plc. ADR . . . . . . . . . . . . . . 27,563
------------
55,436
------------
378,500
------------
Total Common Stocks
(cost--$2,491,724). . . . . . . . . . . . . . . . $2,472,062
------------
30
<PAGE>
The Saratoga Advantage Trust
INTERNATIONAL EQUITY PORTFOLIO
Schedules of Investments (continued)
August 31, 1995
<CAPTION>
Contracts Value
- ----------- --------------
<S> <C> <C>
PURCHASED PUT OPTION ON CURRENCY
OUTSTANDING - 2.1%
16 Philadelphia Stock Exchange Japanese Yen Put
expiring Dec. '95, @109.00
(cost - $36,745). . . . . . . . . . . . . . . . . $59,600
------------
Total Investments
(cost--$2,528,469) . . . . . . . . . . . . . . 87.1% $2,531,662
Other Assets in Excess of
Other Liabilities. . . . . . . . . . . . . . . 12.9 375,093
------ ------------
Total Net Assets . . . . . . . . . . . . . . . . 100.0% $2,906,755
------ ------------
------ ------------
</TABLE>
- ---------------
* Non-income producing security.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
31
<PAGE>
AUGUST 31, 1995
STATEMENTS OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
U.S. Large
Government Investment Municipal Capitalization
Money Market Quality Bond Bond Value
Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C>
ASSETS
Investments, at value (cost--$5,200,106,
$4,221,596, $1,319,182 and $5,135,498,
respectively) . . . . . . . . . . . . . . $5,200,106 $4,268,398 $1,342,027 $5,670,144
Cash . . . . . . . . . . . . . . . . . . . 1,065 78,056 80,498 12,693
Receivable from manager. . . . . . . . . . 93,942 88,930 87,328 97,390
Deferred organization expenses . . . . . . 58,620 58,620 58,620 58,620
Receivable for shares of beneficial
interest sold . . . . . . . . . . . . . . 57,878 81,774 27,193 66,993
Receivable for investments sold. . . . . . -- -- -- --
Interest receivable. . . . . . . . . . . . 6,460 69,425 20,218 --
Dividends receivable . . . . . . . . . . . -- -- -- 6,259
Foreign tax receivable . . . . . . . . . . -- -- -- --
Prepaid expenses . . . . . . . . . . . . . 382 383 382 382
---------- ---------- ---------- ----------
Total Assets . . . . . . . . . . . . . . 5,418,453 4,645,586 1,616,266 5,912,481
---------- ---------- ---------- ----------
LIABILITIES
Deferred organization payable to
manager. . . . . . . . . . . . . . . . . 66,199 66,199 66,199 66,199
Administration fee payable . . . . . . . . 42,000 42,000 42,000 42,000
Payable for shares of beneficial
interest redeemed . . . . . . . . . . . . -- -- -- 6,450
Payable for investments purchased. . . . . 200,000 -- -- 241,642
Other payables and accrued expenses. . . . 38,228 34,553 30,643 41,500
---------- ---------- ---------- ----------
Total Liabilities. . . . . . . . . . . . 346,427 142,752 138,842 397,791
---------- ---------- ---------- ----------
NET ASSETS
Shares of beneficial interest at par
value . . . . . . . . . . . . . . . . . . 5,072 447 149 448
Paid-in-surplus. . . . . . . . . . . . . . 5,066,953 4,456,534 1,458,706 4,847,477
Accumulated undistributed net investment
income. . . . . . . . . . . . . . . . . . -- -- -- 46,159
Accumulated net realized gain(loss)
on investments. . . . . . . . . . . . . . 1 (949) (4,276) 85,960
Net unrealized appreciation on
investments . . . . . . . . . . . . . . . -- 46,802 22,845 534,646
---------- ---------- ---------- ----------
Total Net Assets . . . . . . . . . . . . $5,072,026 $4,502,834 $1,477,424 $5,514,690
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Shares of beneficial interest outstanding. . 5,072,025 446,874 148,780 448,434
---------- ---------- ---------- ----------
Net asset value and offering price per
share . . . . . . . . . . . . . . . . . . . $1.00 $10.08 $9.93 $12.30
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
<CAPTION>
Large
Capitalization Small International
Growth Capitalization Equity
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
ASSETS
Investments, at value (cost--$9,420,199,
$12,998,146 and $2,528,469,
respectively) . . . . . . . . . . . . . . $10,618,728 $15,306,875 $2,531,662
Cash . . . . . . . . . . . . . . . . . . . 682,207 2,213 307,904
Receivable from manager. . . . . . . . . . 96,120 123,458 91,865
Deferred organization expenses . . . . . . 58,620 58,620 58,620
Receivable for shares of beneficial
interest sold . . . . . . . . . . . . . . 190,703 77,432 18,586
Receivable for investments sold. . . . . . 193,445 -- 46,873
Interest receivable. . . . . . . . . . . . -- -- --
Dividends receivable . . . . . . . . . . . 9,703 1,615 3,865
Foreign tax receivable . . . . . . . . . . -- -- 814
Prepaid expenses . . . . . . . . . . . . . 383 414 382
----------- ----------- ----------
Total Assets . . . . . . . . . . . . . . 11,849,909 15,570,627 3,060,571
----------- ----------- ----------
LIABILITIES
Deferred organization payable to
manager . . . . . . . . . . . . . . . . . 66,199 66,199 66,199
Administration fee payable . . . . . . . . 42,000 42,000 42,000
Payable for shares of beneficial
interest redeemed . . . . . . . . . . . . 9,014 12,825 9,476
Payable for investments purchased. . . . . 580,192 283,052 --
Other payables and accrued expenses. . . . 45,253 63,160 36,141
----------- ----------- ----------
Total Liabilities. . . . . . . . . . . . 742,658 467,236 153,816
----------- ----------- ----------
NET ASSETS
Shares of beneficial interest at par
value . . . . . . . . . . . . . . . . . . 864 1,197 312
Paid-in-surplus. . . . . . . . . . . . . . 9,868,817 12,300,096 2,934,011
Accumulated undistributed net investment
income. . . . . . . . . . . . . . . . . . 8,991 1,294 13,971
Accumulated net realized gain(loss)
on investments. . . . . . . . . . . . . . 30,050 492,075 (44,732)
Net unrealized appreciation on
investments . . . . . . . . . . . . . . . 1,198,529 2,308,729 3,193
----------- ----------- ----------
Total Net Assets . . . . . . . . . . . . $11,107,251 $15,103,391 $2,906,755
----------- ----------- ----------
----------- ----------- ----------
Shares of beneficial interest outstanding. . 863,712 1,197,210 311,650
----------- ----------- ----------
Net asset value and offering price per
share . . . . . . . . . . . . . . . . . . . $12.86 $12.62 $9.33
----------- ----------- ----------
----------- ----------- ----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
32
<PAGE>
FOR THE PERIOD SEPTEMBER 2, 1994 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1995
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
U.S. Large
Government Investment Municipal Capitalization
Money Market Quality Bond Bond Value
Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends. . . . . . . . . . . . . . . . . $ -- $ -- $ -- $ 33,252 (1)
Interest . . . . . . . . . . . . . . . . . 109,268 98,854 28,133 28,810
-------- -------- ------- --------
Total investment income. . . . . . . . . 109,268 98,854 28,133 62,062
-------- -------- ------- --------
OPERATING EXPENSES
Management fees (note 2a). . . . . . . . . 8,979 8,751 2,994 14,958
Administration fees (note 2c). . . . . . . 42,000 42,000 42,000 42,000
Transfer and dividend disbursing agent
fees. . . . . . . . . . . . . . . . . . . 26,891 26,976 10,347 39,538
Custodian fees . . . . . . . . . . . . . . 15,881 16,034 22,032 20,445
Amortization of deferred organization
expenses (note 1c) . . . . . . . . . . . 14,604 14,604 14,604 14,604
Auditing fees. . . . . . . . . . . . . . . 7,586 7,585 8,485 8,486
Reports and notices to shareholders. . . . 5,000 5,000 5,000 5,000
Legal fees . . . . . . . . . . . . . . . . 2,002 2,002 2,002 2,002
Registration fees. . . . . . . . . . . . . 1,673 1,503 493 1,662
Miscellaneous. . . . . . . . . . . . . . . 1,766 1,766 1,766 1,766
-------- -------- ------- --------
Total operating expenses . . . . . . . . 126,382 126,221 109,723 150,461
Less: Management fees waived and
expenses assumed (note 2a) . . . . (118,876) (119,110) (107,694) (141,203)
-------- -------- ------- --------
Net operating expenses . . . . . . . . 7,506 7,111 2,029 9,258
-------- -------- ------- --------
Net investment income. . . . . . . . . 101,762 91,743 26,104 52,804
-------- -------- ------- --------
REALIZED AND UNREALIZED
GAIN(LOSS) ON INVESTMENTS-NET
Net realized gain (loss) on securities . . 1 (949) (4,276) 85,960
Net realized gain on options . . . . . . . -- -- -- --
-------- -------- ------- --------
Net realized gain (loss) on
investments . . . . . . . . . . . . . . 1 (949) (4,276) 85,960
Net unrealized appreciation on
investments . . . . . . . . . . . . . . . -- 46,802 22,845 534,646
-------- -------- ------- --------
Net realized gain (loss) and unrealized
appreciation on investments . . . . . . 1 45,853 18,569 620,606
-------- -------- ------- --------
Net increase (decrease) in net assets
resulting from operations. . . . . . . . $101,763 $137,596 $44,673 $673,410
-------- -------- ------- --------
-------- -------- ------- --------
<CAPTION>
Large
Capitalization Small International
Growth Capitalization Equity
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
INVESTMENT INCOME
Dividends. . . . . . . . . . . . . . . . . $ 28,280 $ 11,257 $ 20,661 (1)
Interest . . . . . . . . . . . . . . . . . -- 20,698 --
---------- ---------- --------
Total investment income. . . . . . . . . 28,280 31,955 20,661
---------- ---------- --------
OPERATING EXPENSES
Management fees (note 2a). . . . . . . . . 22,118 42,603 10,987
Administration fees (note 2c). . . . . . . 42,000 42,000 42,000
Transfer and dividend disbursing agent
fees. . . . . . . . . . . . . . . . . . . 43,498 84,290 30,880
Custodian fees . . . . . . . . . . . . . . 28,254 30,051 13,385
Amortization of deferred organization
expenses (note 1c) . . . . . . . . . . . 14,604 14,604 14,604
Auditing fees. . . . . . . . . . . . . . . 7,585 7,586 9,586
Reports and notices to shareholders. . . . 5,000 5,000 5,000
Legal fees . . . . . . . . . . . . . . . . 2,002 2,002 2,002
Registration fees. . . . . . . . . . . . . 3,382 4,228 1,013
Miscellaneous. . . . . . . . . . . . . . . 1,769 1,791 1,766
---------- ---------- --------
Total operating expenses . . . . . . . . 170,212 234,155 131,223
Less: Management fees waived and
expenses assumed (note 2a) . . . . (152,746) (206,628) (125,648)
---------- ---------- --------
Net operating expenses . . . . . . . . 17,466 27,527 5,575
---------- ---------- --------
Net investment income. . . . . . . . . 10,814 4,428 15,086
---------- ---------- --------
REALIZED AND UNREALIZED
GAIN(LOSS) ON INVESTMENTS-NET
Net realized gain (loss) on securities . . 30,050 492,075 (64,082)
Net realized gain on options . . . . . . . -- -- 19,350
---------- ---------- --------
Net realized gain (loss) on
investments . . . . . . . . . . . . . . 30,050 492,075 (44,732)
Net unrealized appreciation on
investments . . . . . . . . . . . . . . . 1,198,529 2,308,729 3,193
---------- ---------- --------
Net realized gain (loss) and unrealized
appreciation on investments . . . . . . 1,228,579 2,800,804 (41,539)
---------- ---------- --------
Net increase (decrease) in net assets
resulting from operations. . . . . . . . $1,239,393 $2,805,232 ($26,453)
---------- ---------- --------
---------- ---------- --------
</TABLE>
(1) Net of foreign withholding taxes of $96 and $2,934 for Large Capitalization
Value and International Equity, respectively.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
33
<PAGE>
FOR THE PERIOD SEPTEMBER 2, 1994 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1995
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
U.S. Large
Government Investment Municipal Capitalization
Money Market Quality Bond Bond Value
Portfolio Portfolio Portfolio Portfolio
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income. . . . . . . . . . . $ 101,762 $ 91,743 $ 26,104 $ 52,804
Net realized gain (loss) on investments. . 1 (949) (4,276) 85,960
Net unrealized appreciation on
investments . . . . . . . . . . . . . . . -- 46,802 22,845 534,646
---------- ---------- ---------- ----------
Net increase (decrease) in net assets
resulting from operations . . . . . . . 101,763 137,596 44,673 673,410
---------- ---------- ---------- ----------
DIVIDENDS TO SHAREHOLDERS
Net investment income. . . . . . . . . . . (101,762) (91,743) (26,104) (6,645)
---------- ---------- ---------- ----------
SHARE TRANSACTIONS OF
BENEFICIAL INTEREST
Net proceeds from sales. . . . . . . . . . 5,475,388 4,973,274 1,680,554 6,169,560
Reinvestment of dividends. . . . . . . . . 100,393 89,810 25,671 6,623
Cost of shares redeemed. . . . . . . . . . (603,756) (606,103) (247,370) (1,328,258)
---------- ---------- ---------- ----------
Net increase in net assets from share
transactions of beneficial interest . . 4,972,025 4,456,981 1,458,855 4,847,925
---------- ---------- ---------- ----------
Total increase in net assets . . . . . 4,972,026 4,502,834 1,477,424 5,514,690
NET ASSETS
Beginning of period. . . . . . . . . . . . 100,000 0 0 0
---------- ---------- ---------- ----------
End of period (including undistributed net
investment income of $0, $0, $0, $46,159,
respectively). . . . . . . . . . . . . . $5,072,026 $4,502,834 $1,477,424 $5,514,690
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
SHARES OF BENEFICIAL INTEREST
ISSUED AND REDEEMED
Issued . . . . . . . . . . . . . . . . . . 5,475,388 499,131 172,119 568,685
Issued from reinvestment of dividends. . . 100,393 9,006 2,624 669
Redeemed . . . . . . . . . . . . . . . . . (603,756) (61,263) (25,963) (120,920)
---------- ---------- ---------- ----------
Net increase . . . . . . . . . . . . . . 4,972,025 446,874 148,780 448,434
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
DIVIDENDS PER SHARE
Net investment income. . . . . . . . . . . $0.052 $0.603 $0.510 $0.047
---------- ---------- ---------- ----------
<CAPTION>
Large
Capitalization Small International
Growth Capitalization Equity
Portfolio Portfolio Portfolio
<S> <C> <C> <C>
OPERATIONS
Net investment income. . . . . . . . . . . $10,814 $4,428 $15,086
Net realized gain (loss) on investments. . 30,050 492,075 (44,732)
Net unrealized appreciation on
investments . . . . . . . . . . . . . . . 1,198,529 2,308,729 3,193
----------- ----------- ----------
Net increase (decrease) in net assets
resulting from operations . . . . . . . 1,239,393 2,805,232 (26,453)
----------- ----------- ----------
DIVIDENDS TO SHAREHOLDERS
Net investment income. . . . . . . . . . . (1,823) (3,134) (1,115)
----------- ----------- ----------
SHARE TRANSACTIONS OF
BENEFICIAL INTEREST
Net proceeds from sales. . . . . . . . . . 11,032,593 13,426,783 3,393,938
Reinvestment of dividends. . . . . . . . . 1,816 2,991 1,113
Cost of shares redeemed. . . . . . . . . . (1,164,728) (1,128,481) (460,728)
----------- ----------- ----------
Net increase in net assets from share
transactions of beneficial interest . . 9,869,681 12,301,293 2,934,323
----------- ----------- ----------
Total increase in net assets . . . . . 11,107,251 15,103,391 2,906,755
NET ASSETS
Beginning of period. . . . . . . . . . . . 0 0 0
----------- ----------- ----------
End of period (including undistributed net
investment income of $8,991, $1,294 and
$13,971, respectively) . . . . . . . . . $11,107,251 $15,103,391 $2,906,755
----------- ----------- ----------
----------- ----------- ----------
SHARES OF BENEFICIAL INTEREST
ISSUED AND REDEEMED
Issued . . . . . . . . . . . . . . . . . . 968,006 1,300,430 361,971
Issued from reinvestment of dividends. . . 182 308 118
Redeemed . . . . . . . . . . . . . . . . . (104,476) (103,528) (50,439)
----------- ----------- ----------
Net increase . . . . . . . . . . . . . . 863,712 1,197,210 311,650
----------- ----------- ----------
----------- ----------- ----------
DIVIDENDS PER SHARE
Net investment income. . . . . . . . . . . $0.013 $0.014 $0.009
----------- ----------- ----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
34
<PAGE>
AUGUST 31, 1995
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Saratoga Advantage Trust (the "Trust") was organized on April 8, 1994
as a Delaware Business Trust and is registered under the Investment Company Act
of 1940, as amended, as a diversified, open-end management investment company.
The Trust commenced investment operations on September 2, 1994. The Trust
consists of seven portfolios: the U.S. Government Money Market Portfolio; the
Investment Quality Bond Portfolio; the Municipal Bond Portfolio; the Large
Capitalization Value Portfolio; the Large Capitalization Growth Portfolio; the
Small Capitalization Portfolio and the International Equity Portfolio. Saratoga
Capital Management (the "Manager") serves as the Trusts' manager. Each of the
Portfolios are provided with discretionary advisory services of an Adviser
identified, retained, supervised and compensated by the Manager. The following
serve as Advisers (the "Advisers") to their respective portfolio(s): Quest for
Value Advisors: Municipal Bond and Large Capitalization Value; Fox Asset
Management, Inc.: Investment Quality Bond; Harris Bretall Sullivan and Smith,
Inc.: Large Capitalization Growth; Axe-Houghton Associates, Inc.: Small
Capitalization; Sterling Capital Management Co.: U.S. Government Money Market
and Ivory & Sime International, Inc.: International Equity. Quest for Value
Advisors (the "Administrator") provides the Trust with administrative services.
Quest for Value Distributors (the "Distributor") serves as the Trusts'
distributor. The Manager, Administrator and Distributor are all affiliates of
Oppenheimer Capital. On August 19, 1994, U.S. Government Money Market issued
100,000 shares to the manager for $100,000 to provide initial capital for the
Trust.
The following is a summary of significant accounting policies consistently
followed by each Portfolio in the preparation of its financial statements:
(a) VALUATION OF INVESTMENTS
Investment securities listed on a national securities exchange and
securities traded in the over-the-counter National Market System are valued at
the last reported sale price on the valuation date; if there are no such
reported sales, the securities are valued at the last quoted bid price. Other
securities traded over-the-counter and not part of the National Market System
are valued at the last quoted bid price. Investment debt securities (other than
short-term obligations) are valued each day by an independent pricing service
approved by the Board of Trustees using methods which include current market
quotations from a major market maker in the securities and trader-reviewed
"matrix" prices. Short-term debt securities having a remaining maturity of sixty
days or less are valued at amortized cost or amortized value, which approximates
market value. Any securities or other assets for which market quotations are not
readily available are valued at their fair value as determined in good faith
under procedures established by the Board of Trustees. The ability of issuers of
debt securities held by the portfolios to meet their obligations may be affected
by economic or political developments in a specific state, industry or region.
U.S. Government Money Market values all of its securities on the basis of
amortized cost which approximates market value. Investments in countries in
which International Equity may invest may involve certain considerations and
risks not typically associated with domestic investments as a result of, among
others, the possibility of future political and economic developments and the
level of governmental supervision and regulation of foreign securities markets.
(b) FEDERAL INCOME TAX
It is each Portfolio's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantally all of its taxable and tax-exempt income to
shareholders; accordingly, no federal income tax provision is required.
(c) DEFERRED ORGANIZATION EXPENSES
In connection with the Trust's organization, each Portfolio incurred
approximately $73,000 in costs. These costs have been deferred and are being
amortized to expense on a straight-line basis over sixty months from
commencement of operations.
(d) SECURITY TRANSACTIONS AND OTHER INCOME
Security transactions are accounted for on the trade date. In determining
the gain or loss from the sale of securities, the cost of securities sold is
determined on the basis of identified cost. Dividend income is recorded on the
ex-dividend date and interest income is accrued as earned. Discounts or premiums
on debt securities purchased are accreted or amortized to interest income over
the lives of the respective securities.
(e) DIVIDENDS AND DISTRIBUTIONS
The following table summarizes each Portfolio's dividend and capital gain
declaration policy:
<TABLE>
<CAPTION>
INCOME SHORT-TERM LONG-TERM
DIVIDENDS CAPITAL GAINS CAPITAL GAINS
-------------------------------------------
<S> <C> <C> <C>
U.S. Government Money Market daily * annually annually
Investment Quality Bond daily * annually annually
Municipal Bond daily * annually annually
Large Capitalization Value annually annually annually
Large Capitalization Growth annually annually annually
Small Capitalization annually annually annually
International Equity annually annually annually
* paid monthly
</TABLE>
Each Portfolio records dividends and distributions to its shareholders on
the ex-dividend date. The amount of dividends and distributions from net
investment income and net realized gains are determined in accordance with
federal income tax regulations, which may differ from generally accepted
accounting principles. These "book-tax" differences are either permanent or
temporary in nature. To the extent these differnces are permanent in nature,
such amounts are reclassified within the net asset accounts based on their
federal tax-basis treatment; temporary differences do not require
reclassification. Dividends and distributions which exceed net investment income
and net realized gains for financial reporting purposes but not for tax purposes
are reported as dividends in excess of net investment income or distributions in
excess of net realized gains, respectively. To the extent distributions exceed
current and accumulated earnings and profits for federal income tax purposes,
they are reported as distributions of paid-in-surplus or tax return of capital.
For the period September 2, 1994 (commencement of operations) to August 31,
1995, there were no permanent book-tax differences relating to shareholder
distributions. Net investment income, net realized gain(loss) and net assets
were not affected.
35
<PAGE>
AUGUST 31, 1995
NOTES TO FINANCIAL STATEMENTS
(f) PURCHASED PUT OPTION ACCOUNTING POLICY
When a Portfolio purchases a put option, it pays a premium and an amount
equal to the premium is recorded as an investment. The option is subsequently
marked-to-market to reflect it's current market value. The Portfolio, as
purchaser of an option, has control over whether the option is exercised. If an
option expires unexercised, the Portfolio realizes a loss in the amount of the
premium paid. If an option is exercised, the premium paid is an adjustment to
the proceeds from the sale in determining whether the Portfolio has realized a
gain or loss. The difference between the premium paid and the amount received on
effecting a closing sale transaction is the realized gain or loss.
The Portfolio, as a purchaser of an option, bears the risk of the potential
inability of the counter parties to meet the terms of their contracts.
(g) ALLOCATION OF EXPENSES
Expenses specifically identifiable to a particular Portfolio are borne by
that Portfolio. Other expenses are allocated to each Portfolio based on its net
assets in relation to the total net assets of all the applicable Portfolios or
another reasonable basis.
2. MANAGEMENT FEE, ADMINISTRATION FEE AND OTHER TRANSACTIONS WITH AFFILIATES
(a) The management fees, payable monthly to the Manager, are computed daily
at the following annual rates of each Portfolios' average daily net assets:
.475% for U.S. Government Money Market; .55% for Investment Quality Bond and
Municipal Bond; .65% for Large Capitalization Value, Large Capitalization Growth
and Small Capitalization and .75% for International Equity.
For the period September 2, 1994 (commencement of operations) to August 31,
1995, the Manager has voluntarily waived all management fees and assumed
$109,897, $110,359, $104,700, $126,245, $130,628, $164,025 and $114,661, in
other operating expenses for U.S. Government Money Market, Investment Quality
Bond, Municipal Bond, Large Capitalization Value, Large Capitalization Growth,
Small Capitalization and International Equity, respectively.
(b) The Manager pays a portion of its management fees to the Advisers at
the following annual rates of each Portfolios' average daily net assets: .125%
for U.S. Government Money Market; .20% for Investment Quality Bond and Municipal
Bond; .30% for Large Capitalization Value, Large Capitalization Growth and Small
Capitalization and .40% for International Equity. For the period September 2,
1994 (commencement of operations) to June 30, 1995 the Advisers waived this fee.
(c) The administration fee is accrued daily and payable monthly to the
Administrator at an annual rate of $42,000 for each Portfolio, provided that
each Portfolio's net assets do not exceed $80 million. In the event that a
Portfolio's net assets exceed $80 million, an additional fee of .05% of net
assets in excess of $80 million shall be payable by the Portfolio.
For the period September 2, 1994 (commencement of operations) to August 31,
1995 each Portfolio accrued $42,000 in administrative fees.
(d) Total brokerage commissions paid by Investment Quality Bond, Large
Capitalization Value and Small Capitalization were $567, $8,087 and $14,454,
respectively. Oppenheimer & Co., Inc., an affiliate of the Manager, received
$5,953 and $578 from Large Capitalization Value and Small Capitalization,
respectively, and Hoeing & Co., Inc. an affiliate of Axe-Houghton Associates,
Inc., received $188 and $5,860 from Investment Quality Bond and Small
Capitalization, respectively, for the period September 2, 1994 (commencement of
operations) to August 31, 1995.
3. PURCHASE AND SALES OF SECURITIES
For the period September 2, 1994 (commencement of operations) to August 31,
1995, purchases and sales of investment securities, other than short-term
securities were as follows:
PURCHASES SALES
---------- --------
Investment Quality Bond $4,498,169 $280,246
Municipal Bond 1,261,019 137,701
Large Capitalization Value 4,578,562 647,640
Large Capitalization Growth 10,191,867 801,718
Small Capitalization 19,040,439 7,464,849
International Equity 3,047,699 474,498
For the period September 2, 1994 (commencement of operations) to August 31,
1995, U.S. Government Money Market had purchases and sales/maturities of
short-term securities of $34,513,140 and $29,419,784, respectively.
4. UNREALIZED APPRECIATION (DEPRECIATION) AND COST OF INVESTMENTS FOR FEDERAL
INCOME TAX PURPOSES
At August 31, 1995, the composition of unrealized appreciation
(depreciation) of investment securities and the cost of investments for Federal
income tax purposes were as follows:
<TABLE>
<CAPTION>
APPRECIATION (DEPRECIATION) NET TAX COST
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Quality Bond $46,443 ($426) $46,017 $4,222,381
Municipal Bond 24,248 (1,403) 22,845 1,319,182
Large Capitalization Value 560,284 (25,638) 534,646 5,135,498
Large Capitalization Growth 1,354,529 (156,000) 1,198,529 9,420,199
Small Capitalization 2,444,848 (136,454) 2,308,394 12,998,481
International Equity 97,887 (119,139) (21,252) 2,552,914
</TABLE>
5. AUTHORIZED SHARES OF BENEFICIAL INTEREST AND PAR VALUE PER SHARE
Each Portfolio has unlimited shares of beneficial interest authorized with
$.001 par value per share.
6. CAPITAL LOSS CARRYFORWARD
For the period September 2, 1994 (commencement of operations) to August 31,
1995, International Equity had capital loss carryfowards of $821, which will be
available, to the extent provided by regulations, to offset future net capital
gains realized through the fiscal year ending 2003 and reduce amounts
distributable to shareholders.
36
<PAGE>
FINANCIAL HIGHLIGHTS (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
U.S. GOVERNMENT MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS
-------------------------------------------------------
NET
REALIZED
NET ASSET AND TOTAL
VALUE, NET UNREALIZED FROM
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT
OF PERIOD INCOME INVESTMENTS OPERATIONS
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 $1.000 (4) $0.052 $0.000 $0.052
<CAPTION>
DIVIDENDS
------------
DIVIDENDS TO
SHAREHOLDERS NET ASSET NET ASSETS
FROM NET VALUE, END OF
INVESTMENT END OF TOTAL PERIOD
INCOME PERIOD RETURN* (000'S)
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 ($0.052) $1.000 5.36% $5,072
<CAPTION>
RATIOS
----------------------------------------------------
RATIO OF NET RATIO OF NET
OPERATING INVESTMENT
EXPENSES INCOME PORTFOLIO
TO AVERAGE TO AVERAGE TURNOVER
NET ASSETS NET ASSETS RATE
<S> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 0.40% (1,2,5) 5.38% (1,2,5) --
</TABLE>
(1) DURING THE PERIOD PRESENTED ABOVE, SARATOGA CAPITAL MANAGEMENT HAS
VOLUNTARILY WAIVED ALL OF ITS FEES AND ASSUMED A PORTION OF THE OPERATING
EXPENSES. IF SUCH WAIVERS AND ASSUMPTIONS HAD NOT BEEN IN EFFECT, THE
ANNUALIZED RATIO OF NET OPERATING EXPENSES TO AVERAGE DAILY NET ASSETS AND
THE ANNUALIZED RATIO OF NET INVESTMENT LOSS TO AVERAGE DAILY NET ASSETS
WOULD HAVE BEEN 6.69% AND (0.91%), RESEPCTIVELY.
INVESTMENT QUALITY BOND PORTFOLIO
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS
-------------------------------------------------------
NET
REALIZED
NET ASSET AND TOTAL
VALUE, NET UNREALIZED FROM
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT
OF PERIOD INCOME INVESTMENTS OPERATIONS
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 $10.00 (4) $0.60 $0.08 $0.68
<CAPTION>
DIVIDENDS
------------
DIVIDENDS TO
SHAREHOLDERS NET ASSET NET ASSETS
FROM NET VALUE, END OF
INVESTMENT END OF TOTAL PERIOD
INCOME PERIOD RETURN* (000'S)
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 ($0.60) $10.08 7.12% $4,503
<CAPTION>
RATIOS
----------------------------------------------------
RATIO OF NET RATIO OF NET
OPERATING INVESTMENT
EXPENSES INCOME PORTFOLIO
TO AVERAGE TO AVERAGE TURNOVER
NET ASSETS NET ASSETS RATE
<S> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 0.45%( 1,2,5) 5.77% (1,2,5) 18%
</TABLE>
(1) DURING THE PERIOD PRESENTED ABOVE, SARATOGA CAPITAL MANAGEMENT HAS
VOLUNTARILY WAIVED ALL OF ITS FEES AND ASSUMED A PORTION OF THE OPERATING
EXPENSES. IF SUCH WAIVERS AND ASSUMPTIONS HAD NOT BEEN IN EFFECT, THE
ANNUALIZED RATIO OF NET OPERATING EXPENSES TO AVERAGE DAILY NET ASSETS AND
THE ANNUALIZED RATIO OF NET INVESTMENT LOSS TO AVERAGE DAILY NET ASSETS
WOULD HAVE BEEN 7.93% AND (1.71%), RESEPCTIVELY.
MUNICIPAL BOND PORTFOLIO
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS
-------------------------------------------------------
NET
REALIZED
NET ASSET AND TOTAL
VALUE, NET UNREALIZED FROM
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT
OF PERIOD INCOME INVESTMENTS OPERATIONS
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 $10.00 (4) $0.51 ($0.07) $0.44
<CAPTION>
DIVIDENDS
------------
DIVIDENDS TO
SHAREHOLDERS NET ASSET NET ASSETS
FROM NET VALUE, END OF
INVESTMENT END OF TOTAL PERIOD
INCOME PERIOD RETURN* (000'S)
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 ($0.51) $9.93 4.65% $1,477
<CAPTION>
RATIOS
----------------------------------------------------
RATIO OF NET RATIO OF NET
OPERATING INVESTMENT
EXPENSES INCOME PORTFOLIO
TO AVERAGE TO AVERAGE TURNOVER
NET ASSETS NET ASSETS RATE
<S> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 0.37% (1,2,5) 4.79% (1,2,5) 27%
</TABLE>
(1) DURING THE PERIOD PRESENTED ABOVE, SARATOGA CAPITAL MANAGEMENT HAS
VOLUNTARILY WAIVED ALL OF ITS FEES AND ASSUMED A PORTION OF THE OPERATING
EXPENSES. IF SUCH WAIVERS AND ASSUMPTIONS HAD NOT BEEN IN EFFECT, THE
ANNUALIZED RATIO OF NET OPERATING EXPENSES TO AVERAGE DAILY NET ASSETS AND
THE ANNUALIZED RATIO OF NET INVESTMENT LOSS TO AVERAGE DAILY NET ASSETS
WOULD HAVE BEEN 20.15% AND (14.99%), RESEPCTIVELY.
LARGE CAPITALIZATION VALUE PORTFOLIO
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS
-------------------------------------------------------
NET
REALIZED
NET ASSET AND TOTAL
VALUE, NET UNREALIZED FROM
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT
OF PERIOD INCOME INVESTMENTS OPERATIONS
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 $10.00 (4) $0.15 $2.20 $2.35
<CAPTION>
DIVIDENDS
------------
DIVIDENDS TO
SHAREHOLDERS NET ASSET NET ASSETS
FROM NET VALUE, END OF
INVESTMENT END OF TOTAL PERIOD
INCOME PERIOD RETURN* (000'S)
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 ($0.05) $12.30 23.60% $5,515
<CAPTION>
RATIOS
----------------------------------------------------
RATIO OF NET RATIO OF NET
OPERATING INVESTMENT
EXPENSES INCOME PORTFOLIO
TO AVERAGE TO AVERAGE TURNOVER
NET ASSETS NET ASSETS RATE
<S> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 0.40% (1,2,5) 2.29% (1,2,5) 33%
</TABLE>
(1) DURING THE PERIOD PRESENTED ABOVE, SARATOGA CAPITAL MANAGEMENT HAS
VOLUNTARILY WAIVED ALL OF ITS FEES AND ASSUMED A PORTION OF THE OPERATING
EXPENSES. IF SUCH WAIVERS AND ASSUMPTIONS HAD NOT BEEN IN EFFECT, THE
ANNUALIZED RATIO OF NET OPERATING EXPENSES TO AVERAGE DAILY NET ASSETS AND
THE ANNUALIZED RATIO OF NET INVESTMENT LOSS TO AVERAGE DAILY NET ASSETS
WOULD HAVE BEEN 6.54% AND (3.85%), RESEPCTIVELY.
LARGE CAPITALIZATION GROWTH PORTFOLIO
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS
-------------------------------------------------------
NET
REALIZED
NET ASSET AND TOTAL
VALUE, NET UNREALIZED FROM
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT
OF PERIOD INCOME INVESTMENTS OPERATIONS
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 $10.00 (4) $0.02 $2.85 $2.87
<CAPTION>
DIVIDENDS
------------
DIVIDENDS TO
SHAREHOLDERS NET ASSET NET ASSETS
FROM NET VALUE, END OF
INVESTMENT END OF TOTAL PERIOD
INCOME PERIOD RETURN* (000'S)
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 ($0.01) $12.86 28.77% $11,107
<CAPTION>
RATIOS
----------------------------------------------------
RATIO OF NET RATIO OF NET
OPERATING INVESTMENT
EXPENSES INCOME PORTFOLIO
TO AVERAGE TO AVERAGE TURNOVER
NET ASSETS NET ASSETS RATE
<S> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 0.51% (1,2,5) 0.32% (1,2,5) 23%
</TABLE>
(1) DURING THE PERIOD PRESENTED ABOVE, SARATOGA CAPITAL MANAGEMENT HAS
VOLUNTARILY WAIVED ALL OF ITS FEES AND ASSUMED A PORTION OF THE OPERATING
EXPENSES. IF SUCH WAIVERS AND ASSUMPTIONS HAD NOT BEEN IN EFFECT, THE
ANNUALIZED RATIO OF NET OPERATING EXPENSES TO AVERAGE DAILY NET ASSETS AND
THE ANNUALIZED RATIO OF NET INVESTMENT LOSS TO AVERAGE DAILY NET ASSETS
WOULD HAVE BEEN 5.00% AND (4.17%), RESEPCTIVELY.
SMALL CAPITALIZATION PORTFOLIO
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS
-------------------------------------------------------
NET
REALIZED
NET ASSET AND TOTAL
VALUE, NET UNREALIZED FROM
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT
OF PERIOD INCOME INVESTMENTS OPERATIONS
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 $10.00 (4) $0.02 $2.61 $2.63
<CAPTION>
DIVIDENDS
------------
DIVIDENDS TO
SHAREHOLDERS NET ASSET NET ASSETS
FROM NET VALUE, END OF
INVESTMENT END OF TOTAL PERIOD
INCOME PERIOD RETURN* (000'S)
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 ($0.01) $12.62 26.38% $15,103
<CAPTION>
RATIOS
----------------------------------------------------
RATIO OF NET RATIO OF NET
OPERATING INVESTMENT
EXPENSES INCOME PORTFOLIO
TO AVERAGE TO AVERAGE TURNOVER
NET ASSETS NET ASSETS RATE
<S> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 0.42% (1,2,5) 0.07% (1,2,5) 111%
</TABLE>
(1) DURING THE PERIOD PRESENTED ABOVE, SARATOGA CAPITAL MANAGEMENT HAS
VOLUNTARILY WAIVED ALL OF ITS FEES AND ASSUMED A PORTION OF THE OPERATING
EXPENSES. IF SUCH WAIVERS AND ASSUMPTIONS HAD NOT BEEN IN EFFECT, THE
ANNUALIZED RATIO OF NET OPERATING EXPENSES TO AVERAGE DAILY NET ASSETS AND
THE ANNUALIZED RATIO OF NET INVESTMENT LOSS TO AVERAGE DAILY NET ASSETS
WOULD HAVE BEEN 3.57% AND (3.08%), RESEPCTIVELY.
INTERNATIONAL EQUITY PORTFOLIO
<TABLE>
<CAPTION>
INCOME FROM
INVESTMENT OPERATIONS
-------------------------------------------------------
NET
REALIZED
NET ASSET AND TOTAL
VALUE, NET UNREALIZED FROM
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT
OF PERIOD INCOME INVESTMENTS OPERATIONS
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 $10.00 (4) $0.05 ($0.71) ($0.66)
<CAPTION>
DIVIDENDS
------------
DIVIDENDS TO
SHAREHOLDERS NET ASSET NET ASSETS
FROM NET VALUE, END OF
INVESTMENT END OF TOTAL PERIOD
INCOME PERIOD RETURN* (000'S)
<S> <C> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 ($0.01) $9.33 (6.61%) $2,907
<CAPTION>
RATIOS
----------------------------------------------------
RATIO OF NET RATIO OF NET
OPERATING INVESTMENT
EXPENSES INCOME PORTFOLIO
TO AVERAGE TO AVERAGE TURNOVER
NET ASSETS NET ASSETS RATE
<S> <C> <C> <C>
SEPTEMBER 2, 1994 (3) TO AUGUST 31, 1995 0.38% (1,2,5) 1.03% (1,2,5) 36%
</TABLE>
(1) DURING THE PERIOD PRESENTED ABOVE, SARATOGA CAPITAL MANAGEMENT HAS
VOLUNTARILY WAIVED ALL OF ITS FEES AND ASSUMED A PORTION OF THE OPERATING
EXPENSES. IF SUCH WAIVERS AND ASSUMPTIONS HAD NOT BEEN IN EFFECT, THE
ANNUALIZED RATIO OF NET OPERATING EXPENSES TO AVERAGE DAILY NET ASSETS AND
THE ANNUALIZED RATIO OF NET INVESTMENT LOSS TO AVERAGE DAILY NET ASSETS
WOULD HAVE BEEN 8.96% AND (7.55%), RESEPCTIVELY.
- ---------------
(2) AVERAGE DAILY NET ASSETS FOR THE PERIOD SEPTEMBER 2, 1994 (COMMENCEMENT OF
OPERATIONS) TO AUGUST 31, 1995 WERE $1,895,581, $1,595,477, $545,904,
$2,307,493, $3,412,058, $6,572,389 AND $1,469,003 FOR U.S. GOVERNMENT MONEY
MARKET, INVESTMENT QUALITY BOND, MUNICIPAL BOND, LARGE CAPITALIZATION
VALUE, LARGE CAPITALIZATION GROWTH, SMALL CAPITALIZATION AND INTERNATIONAL
EQUITY, RESPECTIVELY.
(3) COMMENCEMENT OF OPERATIONS.
(4) OFFERING PRICE.
(5) ANNUALIZED.
* ASSUMES REINVESTMENT OF ALL DIVIDENDS. AGGREGATE (NOT ANNUALIZED) TOTAL
RETURN IS SHOWN FOR ANY PERIOD SHORTER THAN ONE YEAR.
37
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Shareholders and Board of Trustees of
The Saratoga Advantage Trust:
We have audited the accompanying statements of assets and liabilities including
the schedules of investments of The Saratoga Advantage Trust (comprising,
respectively, the U.S. Government Money Market, Investment Quality Bond,
Municipal Bond, Large Capitalization Value, Large Capitalization Growth, Small
Capitalization and International Equity Portfolios), as of August 31, 1995, and
the related statements of operations, changes in net assets and financial
highlights for the period September 2, 1994 (commencement of operations) to
August 31, 1995. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsiblity is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1995 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting The Saratoga Advantage Trust as of
August 31, 1995, the results of their operations, the changes in their net
assets and the financial highlights for the period September 2, 1994
(commencement of operations) to August 31, 1995, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
October 13, 1995
38
<PAGE>
TAX INFORMATION
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of the Trusts' fiscal year end (August 31,
1995) as to the Federal tax status of dividends received by shareholders during
such fiscal year. Accordingly, we are advising you that during the period
September 2, 1994 (commencement of operations) to August 31, 1995, the
portfolios paid per share income dividends to shareholders as follows:
NET INVESTMENT INCOME
---------------------
U.S. Government Money Market Portfolio $0.0523
Investment Quality Bond Portfolio 0.6027
Municipal Bond Portfolio 0.5099*
Large Capitalization Value Portfolio 0.0467
Large Capitalization Growth Portfolio 0.0132
Small Capitalization Portfolio 0.0136
International Equity Portfolio 0.0093
* 100% Federally tax-exempt
Since the period ended for each portfolio is not the calendar year, another
notification will be sent in respect to calendar year 1995. In January 1996, you
will be advised on IRS Form 1099 DIV as to the Federal tax status of the
dividends received by you in calender 1995. The amounts that will be reported,
will be the amounts to use on your 1995 Federal income tax return and probably
will differ from the amounts which we are required to report for the period
September 2, 1994 (commencement of operations) to August 31, 1995 for each
portfolio. Shareholders are advised to consult with their own advisers to the
Federal, state and local tax status of each portfolios' income dividends
received.
39
