<PAGE> 1
NATIONS [GRAPHIC]
FUNDS
Investments For A Lifetime[SM]
INTERNATIONAL Nations
International
Equity Fund
STOCK Nations
International
Growth Fund
FUNDS Nations
Pacific Growth
Fund
Nations
Emerging Markets
Fund
SEMI-ANNUAL REPORT FOR THE PERIOD
ENDED SEPTEMBER 30, 1997
<PAGE> 2
This Report is submitted for
the general information of
shareholders of Nations Funds.
This material must be preceded or
accompanied by a current Nations
Funds prospectus.
Nations Funds Distributor:
Stephens Inc. Stephens Inc., which
is not affiliated with NationsBank,
N.A., is not a bank, and securities
offered by it are not guaranteed by
any bank or insured by the FDIC.
Stephens Inc., member NYSE, SIPC.
Nations Funds Investment Adviser:
NationsBanc Advisors, Inc. [GRAPHIC DEPICTING BASKETS]
Nations Funds Investment Sub-
Advisers: TradeStreet Investment
Associates, Inc., Gartmore Global
Partners and Boatmen's Capital
Management, Inc.
- ----------------------------------
NOT FDIC
INSURED
- ----------------------------------
MAY LOSE VALUE
- ----------------------------------
NO BANK GUARANTEE
- ----------------------------------
<PAGE> 3
NATIONS FUNDS
DEAR SHAREHOLDER:
We are pleased to report to you on the activities and investment results of the
Nations Funds International Equity mutual funds for the six months ending
September 30, 1997.
Over the past six months, the world's major economies have moved further out of
step with each other. In the U.S., economic growth has slowed to a more
sustainable pace but remains robust in a benign environment of continuing
productivity gains and low inflation. Japan, however, has been teetering close
to the brink of recession after its promising rebound at the end of last year.
In Continental Europe, growth has accelerated, driven largely by the strength of
exports in a low inflation, low interest-rate environment, and by ongoing
corporate restructuring. Further east, the Asian "tigers" have suffered a
setback; economic growth in Southeast Asia is slowing, although the more robust
economies in the north of the region have been largely unaffected by the
financial turmoil that plagued Thailand and Indonesia, in particular, during the
third quarter.
During this period, international investment managers have needed to be
particularly vigilant in managing their exposure to markets and companies. Apart
from conducting careful analysis of companies and discerning economic trends,
portfolio managers have had to be particularly sensitive to political
developments and significant currency movements. The yen, for example,
depreciated 12% between the end of April and mid-June against the U.S. dollar,
only to change course and end the six-month period 2.8% stronger than the
dollar. The Thai baht, charting a course for many Southeast Asian currencies,
declined 38% over the period against the U.S. dollar. On the political front,
European economic and monetary union was a major theme influencing the direction
of European bond and equity markets. In the Pacific region, public antagonism
towards foreign investors by Malaysian Prime Minister Mahathir Mohamad was a
major contributor to the downward movement of regional stock markets.
Going forward, we believe the disparity between the strength in global bonds and
the uneven performance among equity markets will provide opportunities for
international investors. While we are cautious about the valuations of some
equity markets after phenomenal rises in recent years, we believe the
longer-term prospects in a number of countries remain favorable. Investment
themes worthy of note include the increased export competitiveness of Asia's
newly industrialized economies in the wake of recent currency devaluations;
industrial production growth in Latin America, where economic fundamentals
continue to look good; and, selectively, opportunities in Europe in the form of
attractively valued, high-growth companies.
Gartmore Global Partners became investment sub-adviser to Nations International
Growth Fund in mid-July. Since then, the new manager has rapidly reduced
exposure to Southeast Asian companies vulnerable to the financial problems in
the region, and has been reconstructing that Fund in line with its bottom-up
stock picking emphasis. The Fund's objective remains the same: to seek long-term
capital growth by investing primarily in equity securities of companies
domiciled in countries outside the United States and listed on major stock
exchanges primarily in Europe and the Pacific Basin.
Sincerely,
<TABLE>
<S> <C>
/s/ A. Max Walker /s/ Mark H. Williamson
A. Max Walker Mark H. Williamson
President and Chairman of the Board President, NationsBanc Advisors, Inc.
</TABLE>
September 30, 1997
ADDENDUM
Since the date of this report, equity markets world-wide have experienced
enormous volatility sparked by events in the Pacific Rim. The combined effect of
the round of competitive devaluations in Asia and the outlook for lower growth
in the region will have some disinflationary impact for the world economy, but
will not be enough to derail growth prospects in most of the more developed
economies. The recent falls in equity prices are, however, providing good
opportunities to invest in long-term growth companies at attractive valuations.
November 26, 1997
1
<PAGE> 4
NATIONS FUNDS
Nations International Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 94.9%
ARGENTINA -- 0.8%
25,000 Banco de Galicia y Buenos
Aires SA de C.V., ADR...... $ 740,625
268,182 Dalmine Siderca SA........... 802,024
245,352 Perez Compac, ADR............ 3,953,411
80,000 Y.P.F Sociedad Anonima,
ADR........................ 2,950,000
--------------
8,446,060
--------------
AUSTRALIA -- 3.5%
600,000 Australia & New Zealand Bank
Group Ltd. ................ 4,913,231
300,000 Broken Hill Property......... 3,501,983
2,200,000 Fosters Brewing Group........ 4,647,533
2,900,000 MIM Holdings Ltd. ........... 3,557,882
300,000 National Australia Bank Ltd.
ord........................ 4,621,399
2,100,000 Quantas Airway Ltd. ......... 4,265,538
1,100,000 News Corporation Ltd. ....... 5,651,304
300,000 Rio Tinto Ltd. .............. 4,519,040
700,000 WMC Ltd. .................... 3,292,910
--------------
38,970,820
--------------
BELGIUM -- 0.8%
22,000 Generale de Banque NPV+...... 8,927,886
--------------
BRAZIL -- 2.7%
150,000 Centrais Electricas
Brasileiras, ADR........... 4,153,500
60,000 CEMIG Companhia, New, ADR.... 3,285,000
151,400 Companhia Brasileira de
Distribuicao Grupo Pao de
Acucar, ADR................ 3,406,500
250,000 Companhia Cervejaria Brahma,
ADR........................ 3,843,750
150,000 Compania Vale Do Rio Doce,
ADR........................ 3,675,000
101,500 Petroleo Brasileiros SA,
ADR........................ 2,816,625
40,000 Telebras, ADR................ 5,150,000
300,000 Usiminas Siderurgicas de
Minas Gerais SA, ADR....... 3,280,500
--------------
29,610,875
--------------
CHILE -- 1.0%
110,000 Cia de Telecomunicaciones de
Chile SA, ADR.............. 3,561,250
200,000 Enersis SA, ADR.............. 7,412,500
--------------
10,973,750
--------------
FRANCE -- 7.0%
240,000 AXA-UAP...................... 16,100,731
32,000 LVMH Moet Hennessy........... 6,801,682
21,000 Pinault-Printemps-Redoute
SA......................... 9,851,078
240,000 Schneider SA................. 15,150,059
95,000 Societe National Elf
Aquitaine.................. 12,682,359
140,000 TOTAL, "B" Shares ord........ 16,023,194
--------------
76,609,103
--------------
GERMANY -- 7.8%
250,000 Bayer AG..................... 9,955,846
17,000 Bayerische Motoren Werke
AG......................... 14,478,220
155,000 Bayerische Hypotheken-UND
Wechsel Bank............... 6,624,494
160,000 Bayerische Vereinsbank....... 9,310,803
120,000 Fresenius Medical Care+...... 8,222,807
180,000 Hoechst AG................... 7,988,452
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
GERMANY -- (CONTINUED)
17,000 Mannesmann AG................ $ 8,102,799
30,000 SGL Carbon................... 4,406,895
285,000 Veba AG...................... 16,657,468
--------------
85,747,784
--------------
GREAT BRITAIN -- 16.8%
570,000 Bass ord..................... 7,681,507
316,000 BOC Group plc................ 5,626,238
570,000 British Land Company plc
ord........................ 5,990,841
669,410 British Petroleum Company
ord........................ 10,094,883
450,000 British Telecommunications
ord........................ 2,970,515
665,000 Cable & Wireless ord......... 5,654,698
900,000 Electra Investment Trust plc
ord........................ 7,007,368
500,000 E.M.A.P. ord................. 7,133,105
550,000 Enterprise Oil ord........... 6,006,719
1,100,000 Fleming Merchantile
Investment Trust plc ord... 6,968,680
600,000 General Accident plc ord..... 10,547,323
440,000 Glaxo Wellcome plc ord....... 9,890,916
280,000 Kingfisher ord............... 3,832,049
250,000 Land Securities plc ord...... 3,951,417
910,000 Lloyds TSB Group plc......... 12,241,455
775,000 Marks & Spencer ord.......... 7,914,321
500,000 Provident Financial plc
ord........................ 5,448,563
550,000 Reuters Holdings ord......... 6,516,514
1,000,000 Shell Transport and Trading
ord........................ 7,310,425
305,000 Siebe plc.................... 6,138,379
1,045,200 Smithkline Beecham ord+...... 10,134,454
1,040,000 Southern Electric plc+....... 7,837,549
665,000 United Utilities ord......... 8,216,732
1,440,000 Vodafone Group plc ord....... 7,718,261
450,000 Wolseley ord................. 3,724,931
240,000 Zeneca Group plc ord......... 7,820,784
--------------
184,378,627
--------------
HONG KONG -- 5.8%
750,000 Beijing Enterprise Holdings H
Share+..................... 4,720,212
500,000 Cheung Kong Holdings Ltd. ... 5,621,608
1,250,000 China Light & Power.......... 6,881,623
700,000 Citic Pacific Ltd. .......... 3,971,310
1,750,000 Cosco Pacific Ltd. .......... 3,109,654
1,250,000 Dao Heng Bank Group.......... 5,637,762
450,000 Hang Seng Bank Ltd. ......... 5,539,222
1,300,000 Hong Kong
Telecommunications......... 2,940,036
800,000 Hutchison Whampoa Ltd. ...... 7,883,174
500,000 Jardine Matheson Holdings+... 4,050,000
610,000 Jardine Strategic
Holdings+.................. 2,391,200
350,000 Sun Hung Kai Properties...... 4,116,050
500,000 Swire Pacific, "A" Shares.... 3,828,509
900,000 Wharf Holdings Ltd........... 3,314,810
--------------
64,005,170
--------------
INDIA -- 0.3%
95,000 Reliance Industries Ltd.,
GDS++...................... 2,187,375
42,500 State Bank of India++........ 978,562
--------------
3,165,937
--------------
IRELAND -- 1.1%
960,000 Bank of Ireland.............. 11,923,649
--------------
ITALY -- 3.9%
70,000 ENI Spa ADR+................. 4,396,875
750,000 Ente Nazionale Idrocarburi
Spa........................ 4,722,938
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE> 5
NATIONS FUNDS
Nations International Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
ITALY -- (CONTINUED)
70,700 Gucci Group N.V. ord......... $ 3,314,062
20,300 Gucci Group N.V. ............ 938,540
1,711,110 Telecom Italia Spa+.......... 11,399,800
4,500,000 Telecom Italia Mobile........ 17,857,660
--------------
42,629,875
--------------
JAPAN -- 18.9%
120,000 Asatsu Inc. ................. 3,033,065
24,000 Autobacs Seven Company....... 1,123,726
22,000 Benesse Corporation.......... 729,262
330,000 Canon Sales Company.......... 6,508,660
350,000 Dai-ichi Kangyo Bank......... 3,973,647
125,000 Dia Kensetsu Company Ltd. ... 517,941
600,000 Fujitsu Ltd. ................ 7,508,080
500,000 Hitachi Ltd. ................ 4,350,709
175,000 Honda Motor Company.......... 6,105,494
2,000,000 Itochu Corporation........... 6,927,985
110,000 Mandom Corporation........... 929,809
280,000 Matsushita Electric
Industrial Company Ltd. ... 5,058,424
475,000 Matsushita Electric Works.... 4,959,808
125,000 Mitsuba Corporation.......... 797,630
700,000 Mitsubishi Electric
Corporation................ 2,755,449
400,000 Mitsubishi Estate Company.... 5,834,093
600,000 Mitsui Fudosan Company....... 7,309,190
90,000 Miura Company................ 1,118,754
680,000 NCR Japan Ltd. .............. 3,550,178
400,000 NEC Corporation.............. 4,872,794
60,000 Nidec Corporation+........... 2,317,063
30,000 Nichiei Company Ltd. ........ 2,859,037
1,450,000 Nippon Sanso................. 3,857,214
2,000,000 Nippon Steel................. 4,408,718
1,000 Nippon Telephone & Telegraph
Corporation................ 9,198,641
1,200,000 NSK Ltd. .................... 5,131,350
150 NTT Data Communications
Systems Company............ 6,799,536
1,400,000 OJI Paper Company (New)...... 6,265,020
50,000 People Company Ltd. ......... 1,334,217
500,000 Ricoh Company................ 7,499,793
20,000 Rohm Company................. 2,353,526
1,000,000 Sakura Bank Ltd. ............ 4,781,636
120,000 Secom Company Ltd. .......... 8,104,748
500,000 Sekisui Chemical Company
Ltd. ...................... 3,766,471
60,000 Shinkawa+.................... 1,228,143
50,000 Shinko Electric Industries... 2,208,503
210,000 Shiseido Company Ltd. ....... 3,376,150
510,000 Shizuoka Bank................ 5,452,059
145,600 Shochiku Company Ltd. ....... 1,140,234
22,400 Shohkoh Fund Company......... 6,255,739
64,000 Sony Corporation............. 6,046,242
450,000 Sumitomo Electric
Industries................. 6,451,479
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
JAPAN -- (CONTINUED)
67,000 TDK Corporation.............. $ 5,996,519
430,000 Takashimaya Company Ltd. .... 4,418,662
900,000 Teijin Ltd. ................. 2,834,176
135,000 Tokyo Broadcasting Systems
Inc. ...................... 2,382,945
225,000 Tokyo Electric Power
Company.................... 4,325,847
470,000 Toshiba Ceramics Company
Ltd. ...................... 4,673,904
270,000 Tostem Corporation........... 4,296,014
--------------
207,728,284
--------------
MALAYSIA -- 0.2%
316,666 Malaysian Resources.......... 276,232
525,000 Telekom Malaysia Berhad...... 1,593,974
--------------
1,870,206
--------------
MEXICO -- 2.4%
505,000 Alfa SA De CV, Series 'A'.... 4,744,530
500,000 Carso Global Telecom, ADR+... 4,250,000
3,000,000 Cifra SA de CV, ADR Series
'B'........................ 6,825,000
230,000 Empresas ICA SA de CV,
ADR+....................... 4,039,375
380,000 Grupo Carso SA de CV,
ADR++...................... 6,085,700
--------------
25,944,605
--------------
NETHERLANDS -- 7.2%
130,000 Aegon N.V. .................. 10,413,589
35,000 Akzo Nobel N.V. ............. 5,981,959
510,000 Elsevier N.V. ............... 7,406,905
334,347 Fortis Amev N.V. ............ 13,962,629
50,000 Heineken N.V. ............... 8,771,798
110,000 Philips Electronics N.V. .... 9,309,011
200,000 Royal Dutch Petroleum........ 11,196,543
92,816 Wolters Kluwer............... 12,519,129
--------------
79,561,563
--------------
PERU -- 0.3%
150,000 Telefonica del Peru SA, Class
B, ADR..................... 3,543,750
--------------
PORTUGAL -- 0.4%
55,000 Cimpor-Cimentos de Portugal,
SGPS, SA................... 1,486,718
70,000 Portugal Telecom SA.......... 3,036,290
--------------
4,523,008
--------------
SINGAPORE -- 1.4%
500,000 Development Bank of
Singapore, Alien Shares.... 5,099,706
875,000 Keppel Corporation........... 3,489,703
1,100,000 Keppel Land Ltd.+............ 2,776,071
290,000 Overseas Chinese Banking
Corporation, Alien
Shares..................... 2,009,807
300,000 Singapore Airlines, Alien
Shares..................... 2,216,411
--------------
15,591,698
--------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 6
NATIONS FUNDS
Nations International Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SOUTH KOREA -- 0.0%#
672 Samsung Corporation, 1/2
Non-Voting Shares, GDS++... $ 16,254
--------------
SPAIN -- 2.4%
420,000 Banco Santander SA ord+...... 13,758,960
1,000,000 Iberdrola SA................. 12,293,160
--------------
26,052,120
--------------
SWEDEN -- 2.6%
190,000 Atlas Copco AB "B"........... 6,462,841
285,000 Ericsson (L.M.) Telephone
Company, Class B........... 13,695,962
240,000 Sandvik AB "B"............... 8,337,618
--------------
28,496,421
--------------
SWITZERLAND -- 7.4%
6,500 ABB AG+...................... 9,573,020
91,000 Credit Suisse Group.......... 12,294,761
14,000 Novartis AG.................. 21,465,897
1,100 Roche Holdings AG............ 9,756,601
10,000 Schweiz Ruckversicherungs.... 14,995,875
30,000 Zurich Versicherungs Ltd. ... 13,056,931
--------------
81,143,085
--------------
TAIWAN -- 0.2%
75,000 Advanced Semi-Conductor
Engineering GDR+........... 1,758,750
--------------
TOTAL COMMON STOCKS (Cost
$894,248,462).............. 1,041,619,280
==============
<CAPTION>
PRINCIPAL
AMOUNT
--------------
<C> <S> <C>
CONVERTIBLE BONDS -- 1.2%
CAYMAN ISLANDS -- 0.4%
JPY 564,000,000 AB International Cayman,
0.500% 08/01/07............ 4,218,198
--------------
JAPAN -- 0.5%
JPY 615,000,000 MTI Capital,
0.500% 10/01/07............ 5,160,251
--------------
TAIWAN -- 0.3%
USD 875,00 United Microelectronics,
Conv., 1.250% 06/08/04..... 3,412,500
--------------
TOTAL CONVERTIBLE BONDS (Cost
$10,996,450)............... 12,790,949
==============
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
INVESTMENT FUND -- 0.4% (Cost $2,617,078)
TAIWAN -- 0.4%
207,893 Taiwan American Fund Ltd.
+.......................... $ 3,846,020
==============
PREFERRED STOCKS -- 1.0%
GERMANY -- 1.0%
40,000 SAP AG....................... 10,687,498
--------------
SOUTH KOREA -- 0.0%#
75,000 LG Electronics Inc. ......... 545,081
4,788 Samsung Electronics Ltd. .... 170,589
--------------
715,670
--------------
TOTAL PREFERRED STOCKS (Cost
$7,500,320)................ 11,403,168
==============
RIGHT -- 0.0%# (Cost $2,288)
UNITED STATES -- 0.0%#
838 Samsung Electronics 1/2 NV
144A Rts+.................. 0
==============
TOTAL INVESTMENTS (Cost
$915,364,598*)..................... 97.5% 1,069,659,417
OTHER ASSETS AND LIABILITIES (NET)... 2.5% 27,892,350
----- --------------
NET ASSETS........................... 100.0% $1,097,551,767
===== ==============
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
++ Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to
qualified institutional buyers.
# Amount represents less than 0.1%.
ABBREVIATIONS:
ADR American Depositary Receipt
Conv. Convertible
GDR Global Depositary Receipt
GDS Global Depositary Share
ord Ordinary Shares
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 7
NATIONS FUNDS
Nations International Equity Fund
- --------------------------------------------------------------------------------
SCHEDULE OF FORWARD FOREIGN EXCHANGE CONTRACTS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
CONTRACTS TO BUY
--------------------------------------------------------- NET UNREALIZED
LOCAL VALUE IN IN EXCHANGE DEPRECIATION
MATURITY DATE CURRENCY U.S. $ FOR U.S. $ OF CONTRACT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/01/97 456,270 GBP......................... $ 735,508 $ 742,534 $ (7,026)
10/01/97 9,231,104 GBP......................... 14,880,549 15,022,698 (142,149)
10/03/97 9,802,750 GBP......................... 15,802,145 15,860,850 (58,705)
----------
$ (207,880)
----------
</TABLE>
<TABLE>
<CAPTION>
CONTRACTS TO SELL NET UNREALIZED
--------------------------------------------------------- APPRECIATION/
LOCAL VALUE IN IN EXCHANGE (DEPRECIATION)
MATURITY DATE CURRENCY U.S. $ FOR U.S. $ OF CONTRACT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/01/97 246,510 GBP......................... $ 397,374 $ 401,170 $ 3,796
10/01/97 937,674,234 JPY......................... 7,770,566 7,750,655 (19,911)
10/01/97 388,775,344 JPY......................... 3,221,806 3,213,551 (8,255)
10/01/97 834,957,936 JPY......................... 6,919,350 6,887,954 (31,396)
10/02/97 623,927 GBP......................... 1,005,772 1,000,652 (5,120)
10/02/97 54,840,565 JPY......................... 454,467 454,543 76
----------
$ (60,810)
----------
Net Unrealized Depreciation of Forward Foreign Exchange Contracts...................... $ (268,690)
==========
</TABLE>
ABBREVIATIONS OF CURRENCY
THAT ISSUE IS HELD IN:
<TABLE>
<S> <C>
GBP Great Britain Pound
JPY Japanese Yen
USD United States Dollar
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 8
NATIONS FUNDS
Nations International Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 86.4%
ARGENTINA -- 0.9%
51,400 Banco Frances Del Rio De La Plata
S.A., ADR........................ $ 1,680,138
63,460 Telecom Argentina, ADR............. 1,931,564
59,550 Y.P.F Sociedad Anonima, ADR........ 2,195,906
------------
5,807,608
------------
AUSTRALIA -- 2.6%
180,000 Brambles Industries Ltd.+.......... 3,756,792
309,000 Broken Hill Property............... 3,607,043
2,070,000 MIM Holdings Ltd. ................. 2,539,592
100,000 Southern Pacific Petroleum NL+..... 248,275
565,000 News Corporation Ltd. ............. 2,902,715
1,375,000 Woolworths Ltd. ................... 4,478,840
------------
17,533,257
------------
AUSTRIA -- 1.1%
75,000 Radex Heraklith
Industriebeteiligungs AG......... 3,112,058
20,000 VA Technologie AG.................. 4,287,725
------------
7,399,783
------------
BRAZIL -- 0.7%
2,500,000 Light -- Servicos de
Eletricidade..................... 1,070,239
25,000 Telebras, ADR...................... 3,218,750
------------
4,288,989
------------
CANADA -- 1.3%
63,000 Northern Telecom Ltd. NPV.......... 6,560,703
50,000 Suncor Energy, Inc. NPV+........... 1,815,880
------------
8,376,583
------------
CHILE -- 1.3%
50,300 Banco Santiago, ADR................ 1,200,913
65,500 Chilectra S.A., ADR................ 2,068,171
55,000 Cia de Telecomunicaciones de Chile
SA, ADR.......................... 1,780,625
36,000 Embotelladora Andina, ADR, Series
A................................ 927,000
36,000 Embotelladora Andina, ADR, Series
B................................ 927,000
78,220 Empresa Nacional Electricidad
Chile, ADR....................... 1,657,286
------------
8,560,995
------------
FINLAND -- 0.6%
370,000 Enso, Series 'R' Shares............ 3,791,464
------------
FRANCE -- 7.5%
47,941 Accor SA........................... 8,856,638
61,000 Alcatel Alsthom.................... 8,112,564
15,000 L'Oreal............................ 6,004,905
20,000 LVMH Moet Hennessy................. 4,251,051
21,000 Promodes........................... 8,198,023
60,000 Societe National Elf Aquitaine..... 8,009,911
30,000 Synthelabo......................... 3,549,847
33,000 Television Francaise............... 2,853,531
------------
49,836,470
------------
GERMANY -- 5.6%
100,000 Bayer AG........................... 3,982,338
50,000 Bayerische Vereinsbank............. 2,909,626
120,000 Degussa AG+........................ 6,575,529
87,900 Deutsche Pfandbrief &
Hypothekenbank................... 5,274,348
100,000 Gehe AG............................ 5,400,357
200,000 Hoechst AG......................... 8,876,058
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
GERMANY -- (CONTINUED)
7,500 Mannesmann AG...................... $ 3,574,764
------------
36,593,020
------------
GREAT BRITAIN -- 14.6%
1,250,000 Amvescap ord+...................... 8,352,180
1,426,000 Astec (BSR) plc.................... 2,919,366
500,000 Azlan Group plc+................... 644,800
1,050,000 Bank of Scotland................... 8,666,118
325,000 BOC Group plc...................... 5,786,479
221,513 British Aerospace plc.............. 5,940,012
474,999 British-Borneo Petroleum
Syndicate plc.................... 3,579,642
405,381 Granada Group plc.................. 5,724,437
100,000 Hyder plc+......................... 1,477,399
1,085,000 Inchcape plc....................... 5,028,436
567,638 Morgan Crucible Company plc+....... 4,689,544
390,450 Reckitt & Colman plc............... 5,988,796
399,000 Reuters Holdings ord............... 4,727,435
961,500 Securicor plc...................... 4,184,835
1,119,000 Shell Transport and Trading ord.... 8,180,365
832,356 Smithkline Beecham ord+............ 8,070,679
457,512 Standard Chartered plc............. 6,250,396
1,425,000 WPP Group plc...................... 6,420,399
------------
96,631,318
------------
HONG KONG -- 4.7%
420,000 Cheung Kong Infrastructure
Holdings......................... 1,253,812
310,000 China Resources Enterprises
Ltd. ............................ 1,298,010
149,875 Guangdong Brewery Holdings Ltd.+... 39,222
1,199,000 Guangdong Investment Ltd. ......... 1,262,839
300,000 HSBC Holdings plc.................. 10,041,354
790,000 Hutchison Whampoa Ltd. ............ 7,784,634
400,000 Sun Hung Kai Properties............ 4,704,058
590,000 Swire Pacific, Class A............. 4,517,640
------------
30,901,569
------------
HUNGARY -- 0.7%
11,000 Egis+.............................. 569,910
30,000 Gedeon Richter GDR+................ 3,165,000
30,000 OTP Bank GDR....................... 977,250
------------
4,712,160
------------
INDIA -- 0.7%
36,000 BSES Ltd. GDR...................... 742,500
35,000 Hindalco, GDR...................... 1,207,500
65,300 State Bank of India, REG GDR....... 1,503,533
60,000 Videsh Sanchar Nigam Ltd., GDR+.... 1,007,250
------------
4,460,783
------------
IRELAND -- 1.0%
150,000 Bank of Ireland.................... 1,868,725
408,991 CRH plc............................ 4,649,886
------------
6,518,611
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 9
NATIONS FUNDS
Nations International Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
ITALY -- 3.0%
200,000 Edison Spa......................... $ 1,076,384
600,000 Ente Nazionale Idrocarburi Spa..... 3,778,351
50,000 Luxottica Group Spa, ADR........... 2,846,875
1,300,000 Seat Spa+.......................... 486,516
1,700,000 Telecom Italia Spa+................ 11,325,783
------------
19,513,909
------------
JAPAN -- 15.1%
229,900 Canon Sales Company................ 4,534,366
143,000 Daichi Pharmaceutical Co........... 2,109,389
545,000 Dainippon Ink & Chemicals Inc. .... 1,896,909
520,000 Fujitsu Ltd. ...................... 6,507,003
350,000 Hitachi Ltd. ...................... 3,045,496
88,000 Ito-Yokado Company Ltd. ........... 4,769,371
423,000 Kao Corporation.................... 6,134,499
300 Keyence Corporation................ 42,015
320,000 Marui Company Ltd. ................ 5,277,202
300,000 Matsushita Electric Industrial
Company Ltd. .................... 5,419,740
41,000 Nippon Comsys Corporation.......... 533,438
1,650,000 Nippon Steel....................... 3,637,192
400,000 NGK Spark Plug Company............. 3,580,012
480,000 Ricoh Company...................... 7,199,801
1,120,000 Sanyo Electric Company Ltd. ....... 3,434,159
77,000 Secom Company Ltd. ................ 5,200,547
456,000 Sharp Corporation.................. 4,156,791
225,000 Shimano Inc. ...................... 5,220,850
230,000 Shin-Etsu Chemicals Company
Ltd. ............................ 6,328,002
82,000 TDK Corporation.................... 7,339,025
500,000 Toppan Printing Company............ 6,919,698
200,000 Toyota Motor Corporation........... 6,132,427
------------
99,417,932
------------
MEXICO -- 1.5%
60,000 Cemex SA, ADR, Class B............. 706,875
115,000 Cemex Mexico, ADR.................. 1,183,063
196,000 Fomento Economico Mexicano......... 1,685,045
97,000 Grupo Carso SA de CV, ADR.......... 1,553,455
745,000 Grupo Financiero Banamex Accivl,
Series 'B' Npv................... 2,344,305
63,300 Grupo Televisa SA, ADR+............ 2,266,931
------------
9,739,674
------------
NETHERLANDS -- 6.9%
248,128 Getronics N.V. .................... 7,768,418
757 ING Groep N.V. .................... 34,770
309,086 Koninklijke Ahold N.V. ............ 8,356,614
240,000 Nutricia Verenigde Bedrijven
N.V.+............................ 7,212,423
115,760 Philips Electronics N.V. .......... 9,796,464
100,000 Randstad Holdings N.V. ............ 4,110,759
61,469 Wolters Kluwer..................... 8,291,009
------------
45,570,457
------------
NORWAY -- 0.5%
25,074 Kvaerner ASA, Class A.............. 1,478,803
28,000 Kvaerner ASA, Class B.............. 1,525,252
------------
3,004,055
------------
PAKISTAN -- 0.3%
58,000 Hub Power Company Ltd. GDR+........ 1,899,500
------------
PORTUGAL -- 0.2%
40,000 Banco Espirito Santo............... 1,110,370
------------
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
SINGAPORE -- 1.1%
375,000 City Developments Ltd.............. $ 2,427,264
290,687 Development Bank of Singapore,
Alien Shares..................... 2,964,836
1,200,000 Singapore Technologies Industrial
Corporation...................... 2,173,259
------------
7,565,359
------------
SOUTH AFRICA -- 0.1%
80,610 Barlow Ltd., ADR................... 916,939
------------
SOUTH KOREA -- 0.3%
62,600 Korea Electric Power Corporation,
ADR.............................. 860,750
1,504 Samsung Electronics Ltd. GDR....... 80,840
46,873 Samsung Corporation, 1/2
Non-Voting Shares, GDS++......... 1,133,741
------------
2,075,331
------------
SPAIN -- 3.4%
40,000 Empresa Nacional De Electricidad,
ADR.............................. 860,000
304,000 Empresa Nacional de Electricidad
(Endesa), ADR.................... 6,486,501
188,000 Gas Natural SDG SA+................ 9,899,377
125,000 Repsol SA.......................... 5,401,286
------------
22,647,164
------------
SWEDEN -- 3.2%
288,000 Atlas Copco AB "A"+................ 9,834,276
42,000 Atlas Copco AB "B"................. 1,428,629
200,000... Ericsson (L.M.) Telephone Company,
Class B.......................... 9,611,201
------------
20,874,106
------------
SWITZERLAND -- 6.8%
4,000 ABB AB+............................ 5,891,089
21,000 Adecco SA.......................... 8,446,782
3,856 Nestle SA.......................... 5,371,463
9,000 Novartis AG........................ 13,799,505
1,300 Roche Holdings AG.................. 11,530,528
------------
45,039,367
------------
TURKEY -- 0.7%
7,516,587 Arcelik A.S........................ 949,064
10,000,000 Bati Cimento....................... 1,334,366
1,233,225 Migros Turk T.A.S.................. 1,079,355
16,579,162 Trakya Cam Sanayii A.S............. 1,094,240
------------
4,457,025
------------
VENEZUELA -- 0.0%#
10,080 Corimon C.A., ADR+................. 77,490
------------
TOTAL COMMON STOCKS
(Cost $427,585,684).............. 569,321,288
============
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<C> <S> <C>
CONVERTIBLE BOND -- 0.1%
(Cost $1,064,679)
JAPAN -- 0.1%
$120,000,000 Fuji International Fin,
0.250% 02/01/02................ 931,052
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 10
NATIONS FUNDS
Nations International Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
INVESTMENT FUNDS -- 0.3%
INDIA -- 0.1%
40,000 Morgan Stanley India Investment
Fund+.......................... 452,500
------------
SOUTH KOREA -- 0.1%
64,777 Korea Fund Inc................... 769,227
------------
TAIWAN -- 0.1%
80,000 The R.O.C. Taiwan Fund........... 970,000
------------
TOTAL INVESTMENT FUNDS
(Cost $2,029,610).............. 2,191,727
============
PREFERRED STOCKS -- 3.2%
BRAZIL -- 0.5%
5,200,000 Petroleo Brasileiros NPV......... 1,480,900
2,800,000 Centrais Eletricas Brasileiras -
Eletrobras B................... 1,584,567
------------
3,065,467
------------
GERMANY -- 2.7%
10,000 GEA AG........................... 3,436,076
75,000 Henkel KGaA+..................... 4,228,581
40,000 SAP AG........................... 10,291,247
------------
17,955,904
------------
TOTAL PREFERRED STOCKS
(Cost $15,391,110)............. 21,021,371
============
WARRANT -- 0.0% #(Cost $0)
SWITZERLAND -- 0.0%#
970 Roche Holding,
Expire 05/05/98.+.............. 69,695
============
</TABLE>
<TABLE>
<CAPTION>
VALUE
(NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $446,071,083*).................. 90.0% $593,535,133
OTHER ASSETS AND LIABILITIES (NET)...... 10.0 65,768,467
----- ------------
NET ASSETS.............................. 100.0% $659,303,600
===== ============
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
++ Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to
qualified institutional buyers.
# Amount represents less than 0.1%.
ABBREVIATIONS:
ADR American Depositary Receipt
Conv. Convertible
GDR Global Depositary Receipt
GDS Global Depositary Share
ord Ordinary Shares
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 11
NATIONS FUNDS
Nations International Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF FORWARD FOREIGN EXCHANGE CONTRACTS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
CONTRACTS TO BUY
--------------------------------------------------------- NET UNREALIZED
LOCAL VALUE IN IN EXCHANGE DEPRECIATION
MATURITY DATE CURRENCY U.S. $ FOR U.S. $ OF CONTRACT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/03/97 891,435 GBP.......................... $1,437,004 $1,442,342 $ (5,338)
10/06/97 2,132,500 DEM.......................... 1,207,340 1,213,095 (5,755)
--------
$(11,093)
--------
</TABLE>
<TABLE>
<CAPTION>
CONTRACTS TO SELL NET UNREALIZED
--------------------------------------------------------- APPRECIATION/
LOCAL VALUE IN IN EXCHANGE (DEPRECIATION)
MATURITY DATE CURRENCY U.S. $ FOR U.S. $ OF CONTRACT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/01/97 41,005,915 JPY.......................... $ 339,819 $ 338,948 $ (871)
10/06/97 2,626,045 PHP.......................... 76,068 75,245 (823)
10/08/97 460,663,591 IDR.......................... 139,872 140,019 147
--------
$ (1,547)
--------
Net Unrealized Depreciation of Forward Foreign Exchange Contracts............................ $(12,640)
========
</TABLE>
ABBREVIATIONS OF CURRENCY
THAT ISSUE IS HELD IN:
<TABLE>
<S> <C>
DEM German Deutschmark
GBP Great Britain Pound
IDR Indonesian Ruppee
JPY Japanese Yen
PHP Philippine Peso
USD United States Dollar
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 12
NATIONS FUNDS
Nations Pacific Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 94.6%
AUSTRALIA -- 6.2%
489,000 Australia and New Zealand Banking
Group Ltd. ....................... $ 4,004,283
53,000 Lend Lease Corp Ltd. ............... 1,261,646
300,000 Southern Pacific Petroleum NL+...... 744,825
97,143 Woodside Petroleum Ltd. ............ 928,902
------------
6,939,656
------------
CHINA -- 3.7%
3,832,000 Beijing Datang Power+............... 2,154,200
4,800,000 Harbin Power Equipment.............. 1,234,428
2,300,000 Shanghai Petrochemical Company
Ltd. ............................. 735,655
------------
4,124,283
------------
HONG KONG -- 48.3%
183,000 Beijing Enterprises Holdings
Ltd.+............................. 1,151,732
371,000 Cheung Kong Holdings Ltd. .......... 4,171,233
610,000 China Everbright -- IHD Holdings
Ltd.+............................. 1,111,528
517,000 China Light and Power Company....... 2,846,239
518,000 China Merchants Holding Company+.... 1,198,268
980,000 Cosco Pacific Ltd. ................. 1,741,406
224,090 Dao Heng Bank Group................. 1,010,693
2,042,000 First Tractor Company+.............. 1,675,717
177,000 Hang Seng Bank Ltd. ................ 2,178,761
160,000 Henderson Land Development Company.. 1,375,032
1,110,000 Hong Kong Electric Holdings Ltd..... 4,131,300
470,000 Hong Kong Land Holdings ord......... 1,598,000
648,000 Hong Kong Telecommunications........ 1,465,495
199,000 HSBC Holdings plc................... 6,660,765
830,000 Hutchinson Whampoa Ltd. ............ 8,178,794
2,998,000 Innovative International
(Holding)......................... 891,109
3,000,000 Legend Holdings Ltd.+............... 1,386,017
900,000 Liu Chong Hing Investment........... 1,221,246
300,000 New World Development Company....... 1,814,422
277,000 Sun Hung Kai Properties............. 3,257,560
370,000 Swire Pacific, Class A.............. 2,833,096
348,000 Television Broadcasts Ltd. ......... 1,232,256
3,800,000 Tianjin Bohai Chemical+............. 869,217
------------
53,999,886
------------
INDONESIA -- 5.8%
1,090,000 Bank Negara Indonesia, Alien
Shares+........................... 298,176
608,000 Bimantara Citral.................... 619,088
1,740,000 Citra Marga Nusdhala Persada, Alien
Shares............................ 528,875
17,500 Gulf Indonesia Resoures Ltd.+....... 389,375
560,000 Indosat, Alien Shares............... 1,417,021
593,000 Jakarta+............................ 229,810
1,300,664 PT Bank Internasional Indonesia,
Alien Shares...................... 375,572
1,070,000 PT Telekomunikasi Indonesia, Series
B Shares.......................... 1,178,952
729,000 Ramayana Lestari Sentosa, Alien
Shares............................ 1,495,669
------------
6,532,538
------------
MALAYSIA -- 4.9%
219,000 Malayan Banking Berhad.............. 1,100,316
205,333 Malaysian Resources Berhad.......... 179,115
299,000 MNI Holdings Berhad................. 907,806
270,000 New Straits Time.................... 815,597
439,000 Petronas Gas Berhad................. 1,299,037
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
MALAYSIA -- (CONTINUED)
101,000 Tanjong............................. $ 216,367
240,000 Tenaga Nasional Berhad.............. 647,299
100,000 United Engineer (Malaysia) Berhad... 320,567
------------
5,486,104
------------
PHILIPPINES -- 0.8%
250,000 Ayala Corporation, Class B.......... 101,449
28,120 Philippine Long Distance Telephone
Company........................... 758,017
------------
859,466
------------
SINGAPORE -- 11.8%
203,000 Development Bank of Singapore, Alien
Shares............................ 2,070,481
510,000 Keppel Land Ltd.+................... 1,287,087
410,000 Sembawang Corporation Ltd. ......... 1,903,236
149,000 Singapore Airlines Ltd., Alien
Shares............................ 1,100,817
89,000 Singapore Press Holdings, Alien
Shares............................ 1,309,251
440,000 Sunright Ltd. ...................... 716,313
1,880,000 Thakral Corporation, Ltd.+.......... 1,598,000
99,000 United Overseas Bank, Alien
Shares............................ 731,415
1,180,000 Wong's Circuits Holdings Ltd.+...... 2,466,200
------------
13,182,800
------------
SOUTH KOREA -- 4.5%
494 Hyundai Engineering & Construction
Company........................... 9,718
6,795 Kookmin Bank........................ 75,748
18,450 Korea Electric Power Corporation,
ADR............................... 253,688
64,000 L.G. Electronics Inc. .............. 1,259,016
10,943 L.G. Information and Communication
Ltd. ............................. 1,058,421
2,580 Pohang Iron and Steel Company....... 158,466
130 SK Telecom Company Ltd. ............ 61,093
60,000 SK Telecom Company Ltd., ADR........ 540,000
1,524 Samsung Electronics Ltd. GDR, 1/2
Vtg............................... 81,915
5,700 Samsung Electronics Ltd. ........... 414,262
43,000 Samsung Electro-Mechanics
Company+.......................... 1,019,781
10,180 Shinhan Bank........................ 85,445
------------
5,017,553
------------
TAIWAN -- 6.8%
84,000 Advanced Semiconductor, GDR......... 1,969,800
24,000 China Steel, GDS.................... 483,000
50,611 Evergreen Marine Corporation, GDR... 659,208
126,200 Siliconware Precision Industries
Company, GDR...................... 2,247,622
121,200 Yageo Corporation, GDR.............. 2,242,200
------------
7,601,830
------------
THAILAND -- 1.8%
48,500 Advanced Information Service Public
Company Ltd. ..................... 324,686
123,000 PTT Exploration and Production
Public Company Ltd., Alien
Shares............................ 1,667,448
------------
1,992,134
------------
TOTAL COMMON STOCKS
(Cost $102,194,298)............... 105,736,250
============
INVESTMENT FUND -- 5.0% (Cost $4,137,218)
TAIWAN -- 5.0%
298,053 Taiwan American Fund Ltd. .......... 5,513,981
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 13
NATIONS FUNDS
Nations Pacific Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
CONVERTIBLE BOND -- 0.5% (Cost $600,000)
MALAYSIA -- 0.5%
$ 600,000 Rashid Hussain
1.500% due 06/30/07............... $ 523,500
============
U.S. TREASURY BILL -- 0.7% (Cost $734,121)
750,000 U.S. Treasury Bill,
5.150% 02/26/98##................. 734,121
============
SHARES
--------
WARRANTS -- 0.0%#
HONG KONG -- 0.0%#
299,800 Innovative International Holdings,
Expire 12/31/99+.................. 0
------------
INDONESIA -- 0.0%#
230,000 Bank Dagang Nasional,
Expire 02/17/00+.................. 13,283
------------
SINGAPORE -- 0.0%#
51,250 Keppel Land Ltd.,
Expire 12/12/00+.................. 36,523
------------
MALAYSIA -- 0.0%#
53,999 Rashid Hussain,
Expire 03/25/02+.................. 40,779
------------
TOTAL WARRANTS
(Cost $234,537)................... 90,585
============
NUMBER OF
CONTRACTS
--------
CALL OPTION PURCHASED -- 0.5% (Cost $705,000)
TAIWAN -- 0.5%
4,287 Taiwan Weighted Index Call Options,
Strike price 154.1223, Expire
02/23/98+......................... 534,589
============
</TABLE>
<TABLE>
<CAPTION>
VALUE
(NOTE 1)
- ------------------------------------------------------------
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $108,605,174*)................. 101.3% $113,133,026
OTHER ASSETS AND LIABILITIES (NET)..... (1.3) (1,395,554)
----- ------------
NET ASSETS............................. 100.0% $111,737,472
===== ============
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
# Amount represents less than 0.1%.
## Security Segregated as collateral for call options
purchased.
ABBREVIATIONS:
ADR American Depositary Receipt
GDR Global Depositary Receipt
GDS Global Depositary Share
ord Ordinary Shares
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 14
NATIONS FUNDS
Nations Pacific Growth Fund
- --------------------------------------------------------------------------------
SCHEDULE OF FORWARD FOREIGN EXCHANGE CONTRACTS SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
CONTRACTS TO BUY NET UNREALIZED
--------------------------------------------------------- APPRECIATION/
LOCAL VALUE IN IN EXCHANGE (DEPRECIATION)
MATURITY DATE CURRENCY U.S. $ FOR U.S. $ OF CONTRACT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/01/97 276,545,130 IDR.......................... $ 84,056 $ 91,420 $ (7,364)
10/01/97 1,114,217,976 IDR.......................... 338,668 368,337 (29,669)
10/01/97 1,593,126,880 IDR.......................... 484,233 526,654 (42,421)
10/02/97 952,378,863 IDR.......................... 289,466 309,214 (19,748)
10/02/97 334,268,628 IDR.......................... 101,598 108,528 (6,930)
10/02/97 522,945 HKD.......................... 67,580 67,586 (6)
10/02/97 76,723 HKD.......................... 9,915 9,916 (1)
10/02/97 1,441,112 HKD.......................... 186,217 186,243 (26)
10/02/97 1,284,740 AUD.......................... 932,495 931,565 930
----------
$ (105,235)
----------
</TABLE>
<TABLE>
<CAPTION>
CONTRACT TO SELL
--------------------------------------------------------- NET UNREALIZED
LOCAL VALUE IN IN EXCHANGE APPRECIATION
MATURITY DATE CURRENCY U.S. $ FOR U.S. $ OF CONTRACT
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/02/97 768,909 MYR.......................... $237,004 $ 244,098 $ 7,094
----------
Net Unrealized Depreciation of Forward Foreign Exchange Contracts................................. $ (98,141)
==========
</TABLE>
ABBREVIATIONS OF CURRENCY
THAT ISSUE IS HELD IN:
<TABLE>
<S> <C>
AUD Australian Dollar
HKD Hong Kong Dollars
IDR Indonesian Ruppee
MYR Malaysian Ringgit
USD United States Dollar
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 15
NATIONS FUNDS
Nations Emerging Markets Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- 73.8%
ARGENTINA -- 6.0%
600,000 Astra Cia Argentina de Petroleo
SA........................... $ 1,134,226
45,000 Banco De Galicia, ADR.......... 1,333,125
429,092 Dalmine Siderca SA............. 1,283,241
90,000 Perez Compac, ADR.............. 1,450,190
40,000 Y.P.F Sociedad Anonima, ADR.... 1,475,000
------------
6,675,782
------------
BRAZIL -- 3.5%
37,600 CEMIG Companhia, New, ADR...... 2,058,600
16,182 Companhia Brasileira de
Distribuicao Grupo Pao de
Acucar, ADR.................. 364,095
50,000 Electrobras, ADR............... 1,384,500
203,138 Telecomunicacoes de Sao Paulo
SA NPV....................... 53,030
------------
3,860,225
------------
CHILE -- 5.7%
162,118 Antofagasta Holdings ord....... 1,076,697
45,000 Banco de Edwards, ADR.......... 925,312
40,000 Cia de Telecomunicaciones de
Chile SA, ADR................ 1,295,000
45,000 Enersis SA, ADR................ 1,667,812
35,000 Santa Isabel SA, ADR........... 815,937
8,900 Sociedad Quimica Minera de
Chile, ADR................... 525,100
------------
6,305,858
------------
EGYPT -- 2.2%
50,000 Commercial International Bank,
GDR.......................... 1,211,250
50,000 Suez Cement Company, GDR+...... 1,192,500
------------
2,403,750
------------
GREECE -- 2.3%
15,217 Ergo Bank++.................... 1,019,283
30,000 Hellenic Bottling Company SA... 1,558,581
------------
2,577,864
------------
HONG KONG -- 6.9%
2,000,000 Beijing Datang Power "H"+...... 1,124,322
150,000 China Light & Power............ 825,795
130,000 Hutchinson Whampoa Ltd......... 1,281,016
500,000 Ka Wah Bank+................... 1,195,399
400,000 New World Development
Company+..................... 1,054,536
800,000 Qingling Motor Company Ltd.,
Class H...................... 506,591
3,000,000 Shanghai Petrochemical Company
Ltd., Class H................ 959,550
1,800,000 Yizheng Chemical Fibre, Class
H............................ 785,087
------------
7,732,296
------------
HUNGARY -- 1.1%
55,000 MOL Magyar Olaj-es Gazipari --
SP GDR....................... 1,197,625
------------
INDIA -- 4.5%
30,000 Hindalco, GDR.................. 1,035,000
25,000 Indian Hotels Company Ltd.,
GDR.......................... 481,875
30,000 Larsen & Toubro Ltd., GDS++.... 387,000
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
INDIA -- (CONTINUED)
50,000 Reliance Industries Ltd.,
GDS++........................ $ 1,151,250
45,000 State Bank of India, GDR++..... 1,036,125
5,000 State Bank of India, REG GDR... 115,125
45,000 Videsh Sanchar Nigam Ltd.,
GDR+......................... 755,438
------------
4,961,813
------------
INDONESIA -- 3.0%
750,000 Bank Negara Indonesia, Alien
Shares....................... 205,167
27,400 Gulf Indonesia Resources
Ltd.+........................ 609,650
668,286 PT Bank International
Indonesia.................... 192,970
40,000 PT Indonesian Satellite, ADR,
"B" Class.................... 1,050,000
350,000 Ramayana Lestari Sentosa....... 718,085
220,000 Semen Gresik, Alien Shares..... 213,982
267,500 United Tractors................ 367,914
------------
3,357,768
------------
ISRAEL -- 1.2%
40,000 ECI Telecommunications Ltd.,
ADR+......................... 1,295,000
------------
MALAYSIA -- 3.2%
450,000 Bandar Raya Developments
Berhad....................... 289,898
120,000 Malayan Banking Berhad......... 602,913
250,000 Resorts World Berhad........... 547,122
241,500 Telekom Malaysia............... 733,228
300,000 Tenaga Nasional Berhad......... 809,124
168,000 United Engineers (Malaysia)
Berhad....................... 538,553
------------
3,520,838
------------
MEXICO -- 11.8%
160,000 Alfa SA de CV.................. 1,503,218
100,000 Carso Global Telecom, ADR...... 850,000
30,000 Consorcio Ara SA, ADR+++....... 1,222,500
55,000 Empresas ICA Sociedad
Controladora SA de CV, ADR... 965,938
90,000 Grupo Carso SA de CV, ADR...... 1,441,350
1,000,000 Grupo Corvi SA+................ 797,941
30,000 Grupo Imsa SA de CV, ADR....... 909,375
130,000 Grupo Modelo SA de CV, Class
C............................ 1,229,730
30,000 Grupo Televisa SA, GDR+........ 1,074,375
300,000 Kimberly Clark de Mexico 'A'... 1,567,568
130,000 Seguros Commercial America,
Class B+..................... 485,199
20,000 Telefonos de Mexico SA, ADR.... 1,035,000
------------
13,082,194
------------
PERU -- 1.6%
30,000 CPT Telefonica del Peru, ADR... 708,750
172,000 CPT Telefonica del Peru, Class
B............................ 402,836
40,000 Southern Peru Copper
Corporation.................. 727,500
------------
1,839,086
------------
PHILIPPINES -- 0.0%#
11,250 Philippines National Bank...... 24,130
------------
POLAND -- 1.1%
85,000 Bank Handlowy Warsz+........... 1,236,750
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 16
NATIONS FUNDS
Nations Emerging Markets Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
PORTUGAL -- 2.4%
50,000 Cimpor-Cimentos de Portugal,
SGPS, SA..................... $ 1,351,562
30,000 Portugal Telecommunications,
ADR.......................... 1,303,125
------------
2,654,687
------------
RUSSIA -- 1.1%
7,500 Tatneft, ADR................... 1,188,750
------------
SOUTH AFRICA -- 7.1%
100,000 Amalag Banks of South
Africa+...................... 677,500
15,000 Anglo-American Industrial
Corporation SA............... 563,244
60,000 Barlow Ltd..................... 685,549
40,305 Barlow Ltd., ADR............... 458,469
30,000 De Beers Consolidated Mines
Ltd. ........................ 875,443
32,000 Gencor Ltd..................... 75,528
50,000 Nedcor Ltd., GDR............... 1,062,500
70,000 Rembrandt Group................ 633,838
95,000 Sasol NPV...................... 1,309,677
350,000 South Africa Iron & Steel
Industrial Corporation....... 223,045
45,000 South African Breweries........ 1,305,922
------------
7,870,715
------------
SOUTH KOREA -- 3.9%
43,548 Dong Ah Construction
Industries, EDR.............. 337,497
22,500 Housing and Commercial Bank,
GDR+......................... 447,188
40,400 LG Electronics Inc.+........... 794,754
11,000 Korea Electric Power
Corporation+................. 244,044
33,000 Korea Electric Power
Corporation, ADR............. 453,750
2,580 Pohang Iron and Steel
Company...................... 158,466
30,000 Samsung Corporation, 1/2 Non-
Voting Shares, GDS ++........ 725,625
1,520 Samsung Electronics Ltd. ...... 110,470
496 Samsung Electronics Ltd.,
GDR.......................... 26,660
53,931 The Daegu Bank................. 321,228
40,000 Yukong Ltd..................... 743,169
------------
4,362,851
------------
TAIWAN -- 4.1%
60,000 China Steel GDS................ 1,207,500
53,500 Evergreen Marine Corporation,
GDR.......................... 696,838
130 Formosa Fund, IDR.............. 1,657,500
55,000 Siliconware Precision
Industries Company, GDR...... 979,550
------------
4,541,388
------------
TURKEY -- 1.1%
51,000,000 Yapi Kredi Bankasi............. 1,273,244
------------
TOTAL COMMON STOCKS (Cost
$77,909,576)................. 81,962,614
============
PREFERRED STOCKS -- 12.4%
BRAZIL -- 12.4%
150,000,000 Banco Bradesco NPV............. 1,581,397
1,500,000 Cia Cervejaria Brahma NPV...... 1,152,846
<CAPTION>
VALUE
SHARES (NOTE 1)
------------------------------------------------------------
<C> <S> <C>
PREFERRED STOCKS -- (CONTINUED)
BRAZIL -- (CONTINUED)
30,000,000 Companhia Brasileira de
Distribuicao Grupo Pao de
Acucar....................... $ 702,387
70,000 Companhia Vale do Rio Doce,
ADR.......................... 1,715,000
8,000,000 Petroleo Brasileiros NPV....... 2,278,308
4,174,311 Telecomunicacoes de Sao Paulo
SA NPV....................... 1,272,659
33,000 Telebras, ADR.................. 4,248,750
80,000 Usiminas Siderurgicas de Minas
Gerais SA, ADR............... 874,800
------------
13,826,147
------------
TOTAL PREFERRED STOCKS (Cost
$5,600,617).................. 13,826,147
============
INVESTMENT FUNDS -- 6.9%
SUPRANATIONAL -- 3.8%
80,000 East European Development
Fund+........................ 4,160,000
------------
SAUDI ARABIA -- 1.8%
200,000 The Saudi Arabia Investment
Fund+........................ 2,050,000
------------
TAIWAN -- 1.3%
100,000 Taiwan Index Fund.............. 1,500,000
------------
TOTAL INVESTMENT FUNDS (Cost
$5,617,434).................. 7,710,000
============
<CAPTION>
PRINCIPAL
AMOUNT
- -------------
<C> <S> <C>
CONVERTIBLE BONDS -- 1.9%
CHINA -- 0.3%
USD 315,000 Qingling Motors Co. Ltd.,
3.500% 01/22/02.............. 348,862
------------
GERMANY -- 0.9%
DEM 1,500,000 Elektrim SA Conv.,
2.000% 05/30/04.............. 941,454
------------
TAIWAN -- 0.7%
USD 750,000 Far East Department Stores,
3.000% 07/06/01.............. 768,750
------------
TOTAL CONVERTIBLE BONDS (Cost
$1,980,602).................. 2,059,066
============
<CAPTION>
SHARES
- -------------
<C> <S> <C>
WARRANTS -- 0.0%#
BRAZIL -- 0.0%#
4,990 Cia Cervejaria Brahma,
Expire 04/30/03+............. 455
59,969 Cia Cervejaria Brahma,
Preferred Shares,
Expire 04/30/03+............. 9,850
------------
10,305
------------
TOTAL WARRANTS (Cost $3,285)... 10,305
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 17
NATIONS FUNDS
Nations Emerging Markets Fund
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED) SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost
$91,111,514*)........................ 95.0% 105,568,132
OTHER ASSETS AND LIABILITIES (NET)..... 5.0 5,602,993
----- ------------
NET ASSETS............................. 100.0% $111,171,125
===== ============
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Aggregate cost for Federal tax purposes.
+ Non-income producing security.
++ Security exempt from registration under Rule 144A of the
Securities Act of 1933. These securities may be resold in
transactions exempt from registration to qualified
institutional buyers.
# Amount represents less than 0.1%.
ABBREVIATIONS:
ADR American Depositary Receipt
CLOB Custody License Outside Border
Conv. Convertible
EDR European Depositary Receipt
GDR Global Depositary Receipt
GDS Global Depositary Share
IDR International Depositary Receipt
ord Ordinary Shares
USD United States Dollar
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE> 18
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS
INTERNATIONAL INTERNATIONAL PACIFIC EMERGING
EQUITY GROWTH GROWTH MARKETS
FUND FUND FUND FUND
-------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS:
Investments, at value (Note 1) See accompanying schedules...... $1,069,659,417 $593,535,133 $113,133,026 $105,568,132
Short-term investments held as collateral for loaned securities
(Note 9)..................................................... 109,300,482 53,420,875 8,225,527 13,202,464
Cash........................................................... 39,662,581 68,878,965 8,080,278 3,314,168
Dividends receivable........................................... 3,653,738 3,310,074 261,263 144,932
Interest receivable............................................ 14,501 -- 36,677 18,714
Receivable for Fund shares sold................................ 2,972,011 40,667 203,691 3,139,127
Receivable for investment securities sold...................... 25,359,457 555,955 284,952 --
Unamortized organization costs (Note 6)........................ -- -- 86,094 80,247
Prepaid expenses and other assets.............................. 303,662 503,348 2,540 7,786
-------------- ------------ ------------ ------------
Total Assets................................................. 1,250,925,849 720,245,017 130,314,048 125,475,570
-------------- ------------ ------------ ------------
LIABILITIES:
Net unrealized depreciation of forward foreign exchange
contracts.................................................... 268,690 12,640 98,141 --
Collateral on securities loaned (Note 9)....................... 109,300,482 53,420,875 8,225,527 13,202,464
Payable for Fund shares redeemed............................... 6,508,101 3,985,699 4,528,802 379,525
Payable for investment securities purchased.................... 36,068,387 2,644,150 5,498,480 534,300
Investment advisory fee payable (Note 2)....................... 812,837 465,877 88,326 96,004
Administration fee payable (Note 2)............................ 90,315 53,588 9,814 8,728
Shareholder servicing and distribution fees payable (Note 3)... 36,725 5,968 4,547 2,574
Transfer agent fees payable (Note 2)........................... 22,763 -- 6,149 13,764
Custodian fees payable (Note 2)................................ 136,670 224,961 48,406 20,031
Accrued Directors' fees and expenses (Note 2).................. 50,169 3,236 28,641 17,192
Accrued expenses and other payables............................ 78,943 124,423 39,743 29,863
-------------- ------------ ------------ ------------
Total Liabilities............................................ 153,374,082 60,941,417 18,576,576 14,304,445
-------------- ------------ ------------ ------------
NET ASSETS..................................................... $1,097,551,767 $659,303,600 $111,737,472 $111,171,125
============== ============ ============ ============
Investments, at cost........................................... $ 915,364,598 $446,071,083 $108,605,174 $ 91,111,514
============== ============ ============ ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE> 19
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED) SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS
INTERNATIONAL INTERNATIONAL PACIFIC EMERGING
EQUITY GROWTH GROWTH MARKETS
FUND FUND FUND FUND
---------------------------------------------------------------
<S> <C> <C> <C> <C>
NET ASSETS CONSIST OF:
Undistributed net investment income/(distributions in excess of
net investment income)....................................... $ (1,392,388) $ 3,217,828 $ (1,012,157) $ (791,095)
Accumulated net realized gain/(loss) on investments sold,
forward foreign exchange contracts, foreign currencies and
net other assets............................................. 24,385,951 1,734,080 (7,456,348) (2,091,207)
Net unrealized appreciation of investments, forward foreign
exchange contracts, foreign currencies and net other
assets....................................................... 154,002,017 147,425,927 4,391,080 14,454,662
Paid-in capital................................................ 920,556,187 506,925,765 115,814,897 99,598,765
-------------- ------------ ------------ ------------
$1,097,551,767 $659,303,600 $111,737,472 $111,171,125
============== ============ ============ ============
NET ASSETS:
Primary A Shares............................................... $1,042,869,057 $634,625,624 $107,895,757 $107,777,307
============== ============ ============ ============
Primary B Shares............................................... $ 3,976,642 $ -- $ 332,287 $ 274,436
============== ============ ============ ============
Investor A Shares.............................................. $ 12,719,516 $ 24,127,961 $ 1,609,864 $ 1,296,771
============== ============ ============ ============
Investor B Shares (formerly Investor N Shares)................. $ 36,803,275 $ 4,151 $ 1,806,541 $ 1,587,860
============== ============ ============ ============
Investor C Shares.............................................. $ 1,183,277 $ 545,864 $ 93,023 $ 234,751
============== ============ ============ ============
SHARES OUTSTANDING:
Primary A Shares............................................... 73,239,807 33,471,651 11,072,007 8,951,188
============== ============ ============ ============
Primary B Shares............................................... 279,839 -- 34,210 22,789
============== ============ ============ ============
Investor A Shares.............................................. 901,897 1,284,770 167,290 107,885
============== ============ ============ ============
Investor B Shares.............................................. 2,641,225 221 185,969 132,678
============== ============ ============ ============
Investor C Shares.............................................. 85,794 28,795 9,613 19,643
============== ============ ============ ============
PRIMARY A SHARES:
Net asset value, offering and redemption price per share....... $14.24 $18.96 $9.74 $12.04
====== ====== ===== ======
PRIMARY B SHARES:
Net asset value, offering and redemption price per share....... $14.21 -- $9.71 $12.04
====== ====== ===== ======
INVESTOR A SHARES:
Net asset value, offering and redemption price per share....... $14.10 $18.78 $9.62 $12.02
====== ====== ===== ======
INVESTOR B SHARES:
Net asset value, offering and redemption price per share....... $13.93 $18.78 $9.71 $11.97
====== ====== ===== ======
INVESTOR C SHARES:
Net asset value and offering price per share*.................. $13.79 $18.96 $9.68 $11.95
====== ====== ===== ======
</TABLE>
- ---------------
* Redemption price per share is equal to Net Asset Value less any applicable
contingent deferred sales charge.
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE> 20
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS
INTERNATIONAL INTERNATIONAL PACIFIC EMERGING
EQUITY GROWTH GROWTH MARKETS
FUND FUND(a) FUND FUND
------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends (Net of foreign withholding taxes of $1,619,425,
$636,661, $75,381 and $80,324, respectively).................... $12,207,888 $ 3,796,129 $ 1,348,556 $ 1,015,987
Interest (Net of foreign withholding taxes of $0, $88, $0 and $0,
respectively)................................................... 908,305 795 157,262 85,630
Security lending.................................................. 86,559 29,297 3,228 19,148
----------- ----------- ----------- -----------
Total investment income....................................... 13,202,752 3,826,221 1,509,046 1,120,765
----------- ----------- ----------- -----------
EXPENSES:
Investment advisory fee (Note 2).................................. 4,975,281 2,261,527 600,899 531,522
Administration fee (Note 2)....................................... 552,810 278,991 66,766 48,321
Transfer agent fees (Note 2)...................................... 361,157 195,991 44,985 27,902
Custodian fees (Note 2)........................................... 198,663 158,989 67,086 38,069
Legal and audit fees.............................................. 56,826 38,290 22,023 20,071
Registration and filing fees...................................... 50,353 25,083 28,515 33,621
Directors' fees and expenses (Note 2)............................. 11,417 4,325 15,006 9,329
Interest expense (Note 8)......................................... -- 5,827 -- --
Amortization of organization costs (Note 6)....................... -- -- 15,654 14,591
Other............................................................. 15,067 29,091 5,189 13,654
----------- ----------- ----------- -----------
Subtotal...................................................... 6,221,574 2,998,114 866,123 737,080
Shareholder servicing and distribution fees (Note 3):
Primary B Shares................................................ 13,084 -- 1,391 615
Investor A Shares............................................... 14,607 23,807 4,028 1,398
Investor B Shares............................................... 4,452 1,926 10,792 7,909
Investor C Shares............................................... 186,962 104 426 1,007
----------- ----------- ----------- -----------
Total expenses................................................ 6,440,679 3,023,951 882,760 748,009
----------- ----------- ----------- -----------
NET INVESTMENT INCOME............................................. 6,762,073 802,270 626,286 372,756
----------- ----------- ----------- -----------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
(NOTES 1 AND 4):
Net realized gain/(loss) from:
Security transactions......................................... 29,933,785 (523,123) (1,818,075) (1,848,727)
Forward foreign exchange contracts............................ (21,763) (7,496,278) (133,666) 34,919
Foreign currencies............................................ (823,356) (806,852) 29,638 (73,419)
----------- ----------- ----------- -----------
Net realized gain/(loss) on investments during the period......... 29,088,666 (8,826,253) (1,922,103) (1,887,227)
----------- ----------- ----------- -----------
Change in unrealized appreciation/(depreciation) of:
Securities...................................................... 58,496,733 1,935,606 (5,029,674) 6,570,707
Forward foreign exchange contracts.............................. (296,580) (12,640) (98,053) --
Foreign currencies and other net assets......................... 42,841 20,690,678 (40,387) (1,593)
----------- ----------- ----------- -----------
Net unrealized appreciation/(depreciation) of investments during
the period...................................................... 58,242,994 22,613,644 (5,168,114) 6,569,114
----------- ----------- ----------- -----------
Net realized and unrealized gain/(loss) on investments............ 87,331,660 13,787,391 (7,090,217) 4,681,887
----------- ----------- ----------- -----------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... $94,093,733 $14,589,661 $(6,463,931) $ 5,054,643
=========== =========== =========== ===========
</TABLE>
- ---------------
(a) The period for the Nations International Growth Fund reflects operations
from May 17, 1997 through September 30, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE> 21
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS
INTERNATIONAL INTERNATIONAL PACIFIC EMERGING
EQUITY GROWTH GROWTH MARKETS
FUND FUND(a) FUND FUND
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income................................... $ 6,762,073 $ 802,270 $ 626,286 $ 372,756
Net realized gain/(loss) on investments................. 29,088,666 (8,826,253) (1,922,103) (1,887,227)
Change in unrealized appreciation/(depreciation) of
investments........................................... 58,242,994 22,613,644 (5,168,114) 6,569,114
-------------- ------------ ------------ ------------
Net increase/(decrease) in net assets resulting from
operations............................................ 94,093,733 14,589,661 (6,463,931) 5,054,643
Distributions to shareholders from net investment
income:
Primary A Shares...................................... (6,831,845) -- (1,529,175) (727,867)
Primary B Shares...................................... (22,311) -- (5,042) (1,293)
Investor A Shares..................................... (56,559) -- (27,772) (6,803)
Investor B Shares..................................... -- -- -- --
Investor C Shares..................................... (4,801) -- (994) (1,349)
Net increase/(decrease) in net assets from Fund share
transactions:
Primary A Shares...................................... (16,497,573) (68,368,643) (7,072,887) 27,131,119
Primary B Shares...................................... (2,001,969) -- (253,910) (38,250)
Investor A Shares..................................... 2,212,627 (15,304,232) (898,483) 355,512
Investor B Shares..................................... (2,963,725) (468,278) (460,841) 5,333
Investor C Shares..................................... 114,161 532,393 (3,766) (2,683)
-------------- ------------ ------------ ------------
Net increase/(decrease) in net assets................... 68,041,738 (69,019,099) (16,716,801) 31,768,362
NET ASSETS:
Beginning of period..................................... 1,029,510,029 728,322,699 128,454,273 79,402,763
-------------- ------------ ------------ ------------
End of period........................................... $1,097,551,767 $659,303,600 $111,737,472 $111,171,125
============== ============ ============ ============
Undistributed net investment income/(distributions in
excess of net investment income)...................... $ (1,392,388) $ 3,217,828 $ (1,012,157) $ (791,095)
============== ============ ============ ============
</TABLE>
- ---------------
(a) The period for the Nations International Growth Fund reflects operations
from May 17, 1997 through September 30, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE> 22
NATIONS FUNDS
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED MARCH 31, 1997 AND THE
PERIOD ENDED MAY 16, 1997
<TABLE>
<CAPTION>
NATIONS NATIONS NATIONS NATIONS
INTERNATIONAL INTERNATIONAL PACIFIC EMERGING
EQUITY GROWTH GROWTH MARKETS
FUND FUND(a) FUND FUND
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Net investment income................................. $ 5,698,475 $ 2,204,108 $ 414,727 $ 63,670
Net realized gain/(loss) on investments............... 22,414,798 13,208,101 (4,963,671) 353,894
Change in unrealized appreciation/(depreciation) of
investments......................................... (15,761,745) 58,688,545 6,509,268 6,577,488
-------------- ------------ ------------ -----------
Net increase in net assets resulting from
operations.......................................... 12,351,528 74,100,754 1,960,324 6,995,052
Distributions to shareholders from net investment
income:
Primary A Shares.................................... (7,716,230) (6,573,825) (404,835) (106,255)
Primary B Shares.................................... (4,088) -- (201) (33)
Investor A Shares................................... (63,728) (224,687) (9,546) (825)
Investor B Shares................................... (126,291) (3,305) (145) --
Investor C Shares................................... (2,790) -- -- (108)
Distributions to shareholders in excess of net
investment income:
Primary A Shares.................................... -- -- (266,788) (372,176)
Primary B Shares.................................... -- -- (711) (115)
Investor A Shares................................... -- -- (5,269) (2,891)
Investor B Shares................................... -- -- -- --
Investor C Shares................................... -- -- -- (377)
Distributions to shareholders from net realized gain
on investments:
Primary A Shares.................................... (29,436,841) (12,568,191) -- (328,396)
Primary B Shares.................................... (109,412) -- -- (327)
Investor A Shares................................... (348,245) (530,391) -- (3,682)
Investor B Shares................................... (1,194,736) (8,620) -- (7,629)
Investor C Shares................................... (23,079) -- -- (1,071)
Distributions to shareholders in excess of net
realized gain on investments:
Primary A Shares.................................... (2,610,413) -- -- --
Primary B Shares.................................... (7,516) -- -- --
Investor A Shares................................... (28,257) -- -- --
Investor B Shares................................... (108,752) -- -- --
Investor C Shares................................... (2,098) -- -- --
Net increase/(decrease) in net assets from Fund share
transactions:
Primary A Shares.................................... 154,790,642 69,929,075 26,496,408 22,988,246
Primary B Shares.................................... 5,673,834 -- 620,742 285,704
Investor A Shares................................... 2,071,832 (2,070,884) 1,042,976 341,961
Investor B Shares................................... (2,414,814) 339,208 8,985 164,903
Investor C Shares................................... 354,805 -- 42,848 181,271
-------------- ------------ ------------ -----------
Net increase in net assets............................ 131,058,072 122,389,134 29,484,788 30,133,252
NET ASSETS:
Beginning of year..................................... 898,451,957 605,933,565 98,969,485 49,269,511
-------------- ------------ ------------ -----------
End of year........................................... $1,029,510,029 $728,322,699 $128,454,273 $79,402,763
============== ============ ============ ===========
Distributions in excess of net investment income...... $ 198,663 $ 2,415,558 $ 67,086 $ 38,069
============== ============ ============ ===========
</TABLE>
- ---------------
(a) Formerly the Pilot International Equity Fund. The period reflects operations
from September 1, 1996 through May 16, 1997 (Note 11).
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE> 23
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY
<TABLE>
<CAPTION>
NATIONS INTERNATIONAL EQUITY FUND
SIX MONTHS ENDED
SEPTEMBER 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997(a)
---------------------- ----------------------
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold................................... 10,122,417 $ 142,726,191 26,915,662 $ 361,667,261
Issued as reinvestment of dividends.... 138,540 2,008,836 986,163 13,366,394
Redeemed............................... (11,430,652) (161,232,600) (16,427,294) (220,243,013)
----------- ------------- ----------- -------------
Net increase/(decrease)................ (1,169,695) $ (16,497,573) 11,474,531 $ 154,790,642
=========== ============= =========== =============
PRIMARY B SHARES:
Sold................................... 35,486 $ 494,002 514,246 $ 6,923,373
Issued as reinvestment of dividends.... 1,052 15,238 5,046 68,239
Redeemed............................... (178,389) (2,511,209) (97,602) (1,317,778)
----------- ------------- ----------- -------------
Net increase/(decrease)................ (141,851) $ (2,001,969) 421,690 $ 5,673,834
=========== ============= =========== =============
INVESTOR A SHARES:
Sold................................... 1,648,188 $ 22,714,600 650,277 $ 8,611,306
Issued as reinvestment of dividends.... 3,714 53,358 29,635 394,417
Redeemed............................... (1,476,107) (20,555,331) (524,532) (6,933,891)
----------- ------------- ----------- -------------
Net increase/(decrease)................ 175,795 $ 2,212,627 155,380 $ 2,071,832
=========== ============= =========== =============
INVESTOR B SHARES:
Sold................................... 43,986 $ 606,008 140,712 $ 1,846,991
Issued as reinvestment of dividends.... 0 0 106,501 1,416,247
Redeemed............................... (262,902) (3,569,733) (433,659) (5,678,052)
----------- ------------- ----------- -------------
Net increase/(decrease)................ (218,916) $ (2,963,725) (186,446) $ (2,414,814)
=========== ============= =========== =============
INVESTOR C SHARES:
Sold................................... 34,946 $ 464,718 48,335 $ 623,770
Issued as reinvestment of dividends.... 337 4,738 2,084 26,628
Redeemed............................... (27,041) (355,295) (22,531) (295,593)
----------- ------------- ----------- -------------
Net increase........................... 8,242 $ 114,161 27,888 $ 354,805
=========== ============= =========== =============
<CAPTION>
NATIONS INTERNATIONAL GROWTH FUND
PERIOD ENDED
SEPTEMBER 30, 1997(b)(c) PERIOD ENDED
(UNAUDITED) MAY 16, 1997(d)
---------------------- -----------------------
SHARES DOLLARS SHARES DOLLARS
--------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold................................... 1,593,724 $ 48,555,735 $ 8,260,617 $142,212,076
Issued as reinvestment of dividends.... -- -- 754,676 13,089,904
Redeemed............................... (6,161,851) (116,924,378) (4,945,134) (85,372,905)
---------- ------------- ------------ ------------
Net increase/(decrease)................ (4,568,127) $ (68,368,643) $ 4,070,159 $ 69,929,075
========== ============= ============ ============
PRIMARY B SHARES:
Sold...................................
Issued as reinvestment of dividends....
Redeemed...............................
Net increase/(decrease)................
INVESTOR A SHARES:
Sold................................... 108,523 $ -- $ 32,085 $ 545,655
Issued as reinvestment of dividends.... -- -- 27,150 471,335
Redeemed............................... (287,004) (15,304,232) (177,638) (3,087,874)
---------- ------------- ------------ ------------
Net increase/(decrease)................ (178,481) $ (15,304,232) $ (118,403) $ (2,070,884)
========== ============= ============ ============
INVESTOR B SHARES:
Sold................................... 219 $ 92,769 $ 23,599 $ 404,922
Issued as reinvestment of dividends.... -- -- 663 11,467
Redeemed............................... (30,585) (561,047) (4,496) (77,181)
---------- ------------- ------------ ------------
Net increase/(decrease)................ (30,366) $ (468,278) $ 19,766 $ 339,208
========== ============= ============ ============
INVESTOR C SHARES:
Sold................................... 28,795 $ 532,393
Issued as reinvestment of dividends.... -- --
Redeemed............................... -- --
---------- -------------
Net increase........................... 28,795 $ 532,393
========== =============
</TABLE>
- ---------------
(a) Nations International Equity Fund's Primary B Shares commenced operations on
June 28, 1996.
(b) This period reflects operations from May 17, 1997 through September 30, 1997
(Note 11).
(c) Nations International Growth Fund's Investor C Shares commenced operations
on September 17, 1997.
(d) The Nations International Growth Fund's Primary A Shares (formerly the Pilot
International Equity Fund's Pilot Shares prior to May 17, 1997), Investor A
Shares (formerly the Pilot International Equity Fund's Class A Shares prior
to May 17, 1997) and Investor B Shares (formerly the Pilot International
Equity Fund's Class B Shares prior to May 17, 1997) commenced operations on
July 26, 1993, July 12, 1993 and July 1, 1996, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
21
<PAGE> 24
NATIONS FUNDS
- --------------------------------------------------------------------------------
SCHEDULE OF CAPITAL STOCK ACTIVITY (CONTINUED)
<TABLE>
<CAPTION>
NATIONS PACIFIC GROWTH FUND
SIX MONTHS ENDED
SEPTEMBER 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997(a)
-------------------- --------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold................................... 3,164,058 $ 34,536,031 5,886,080 $ 61,730,754
Issued as reinvestment of dividends.... 36,101 401,439 19,030 199,151
Redeemed............................... (3,936,770) (42,010,357) (3,392,989) (35,433,497)
---------- ------------ ---------- ------------
Net increase/(decrease)................ (736,611) $ (7,072,887) 2,512,121 $ 26,496,408
========== ============ ========== ============
PRIMARY B SHARES:
Sold................................... 11,478 $ 125,579 67,793 $ 707,717
Issued as reinvestment of dividends.... 385 4,285 56 591
Redeemed............................... (37,093) (383,774) (8,409) (87,566)
---------- ------------ ---------- ------------
Net increase/(decrease)................ (25,230) $ (253,910) 59,440 $ 620,742
========== ============ ========== ============
INVESTOR A SHARES:
Sold................................... 2,037,326 $ 21,520,628 869,893 $ 9,124,829
Issued as reinvestment of dividends.... 2,219 24,604 1,339 14,016
Redeemed............................... (2,111,284) (22,443,715) (766,685) (8,095,869)
---------- ------------ ---------- ------------
Net increase/(decrease)................ (71,739) $ (898,483) 104,547 $ 1,042,976
========== ============ ========== ============
INVESTOR B SHARES:
Sold................................... 3,646 $ 39,192 47,220 $ 485,528
Issued as reinvestment of dividends.... -- -- -- --
Redeemed............................... (47,357) (500,033) (45,803) (476,543)
---------- ------------ ---------- ------------
Net increase/(decrease)................ (43,711) $ (460,841) 1,417 $ 8,985
========== ============ ========== ============
INVESTOR C SHARES:
Sold................................... 687 $ 7,046 4,398 $ 46,738
Issued as reinvestment of dividends.... 90 993 14 145
Redeemed............................... (1,069) (11,805) (409) (4,035)
---------- ------------ ---------- ------------
Net increase/(decrease)................ (292) $ (3,766) 4,003 $ 42,848
========== ============ ========== ============
<CAPTION>
NATIONS EMERGING MARKETS FUND
SIX MONTHS ENDED
SEPTEMBER 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997(a)
------------------ --------------------
SHARES DOLLARS SHARES DOLLARS
----------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY A SHARES:
Sold................................... 2,926,747 $35,404,626 3,555,779 $ 38,563,526
Issued as reinvestment of dividends.... 17,560 217,038 34,126 355,453
Redeemed............................... (695,904) (8,490,545) (1,487,854) (15,930,733)
---------- ----------- ---------- ------------
Net increase/(decrease)................ 2,248,403 $27,131,119 2,102,051 $ 22,988,246
========== =========== ========== ============
PRIMARY B SHARES:
Sold................................... 16,486 $ 197,863 29,362 $ 317,536
Issued as reinvestment of dividends.... 66 819 29 305
Redeemed............................... (20,159) (236,932) (2,995) (32,137)
---------- ----------- ---------- ------------
Net increase/(decrease)................ (3,607) $ (38,250) 26,396 $ 285,704
========== =========== ========== ============
INVESTOR A SHARES:
Sold................................... 43,810 $ 532,650 118,447 $ 1,294,139
Issued as reinvestment of dividends.... 527 6,503 658 6,821
Redeemed............................... (14,920) (183,641) (86,867) (958,999)
---------- ----------- ---------- ------------
Net increase/(decrease)................ 29,417 $ 355,512 32,238 $ 341,961
========== =========== ========== ============
INVESTOR B SHARES:
Sold................................... 9,544 $ 115,658 37,467 $ 402,741
Issued as reinvestment of dividends.... -- -- 726 7,402
Redeemed............................... (9,364) (110,325) (23,492) (245,240)
---------- ----------- ---------- ------------
Net increase/(decrease)................ 180 $ 5,333 14,701 $ 164,903
========== =========== ========== ============
INVESTOR C SHARES:
Sold................................... 1,455 $ 17,430 17,883 $ 183,109
Issued as reinvestment of dividends.... 110 1,349 105 1,555
Redeemed............................... (1,848) (21,462) (337) (3,393)
---------- ----------- ---------- ------------
Net increase/(decrease)................ (283) $ (2,683) 17,651 $ 181,271
========== =========== ========== ============
</TABLE>
- ---------------
(a) Nations Emerging Markets Fund's Primary B Shares commenced operations on
June 28, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
22
<PAGE> 25
[THIS PAGE IS INTENTIONALLY LEFT BLANK]
23
<PAGE> 26
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS DISTRIBUTIONS
VALUE INVESTMENT AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF FROM NET
BEGINNING OF INCOME/ GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT NET INVESTMENT REALIZED
PERIOD (LOSS) INVESTMENTS FROM OPERATIONS INCOME INCOME CAPITAL GAINS
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NATIONS INTERNATIONAL
EQUITY FUND
PRIMARY A SHARES
Six months ended
09/30/1997#
(unaudited)......... $13.13 $ 0.09 $ 1.11 $ 1.20 $(0.09) -- --
Year ended
03/31/1997#......... 13.50 0.08 0.11 0.19 (0.11) $(0.00)*** $ (0.42)
Period ended
03/31/1996(a)#...... 11.75 0.07 1.80 1.87 (0.06) (0.04) (0.02)
Year ended
05/31/1995#......... 12.06 0.14 (0.20) (0.06) (0.03) -- (0.12)
Year ended
05/31/1994#......... 10.60 0.09 1.44 1.53 (0.05) -- (0.02)
Year ended
05/31/1993#......... 10.40 0.09 0.21 0.30 (0.08) -- (0.02)
Period ended
05/31/1992*......... 10.00 0.08 0.36 0.44 (0.04) -- --
PRIMARY B SHARES
Six months ended
09/30/1997#
(unaudited)......... $13.11 $ 0.05 $ 1.11 $ 1.16 $(0.06) -- --
Period ended
03/31/1997*#........ 13.65 0.01 (0.09)(c) (0.08) (0.01) $(0.00)*** $ (0.42)
INVESTOR A SHARES
Six months ended
09/30/1997#
(unaudited)......... $13.01 $ 0.07 $ 1.09 $ 1.16 $(0.07) -- --
Year ended
03/31/1997#......... 13.39 0.05 0.11 0.16 (0.09) $(0.00)*** $ (0.42)
Period ended
03/31/1996(a)#...... 11.67 0.04 1.78 1.82 (0.04) (0.04) (0.02)
Year ended
05/31/1995#......... 12.00 0.11 (0.20) (0.09) (0.02) -- (0.12)
Year ended
05/31/1994#......... 10.56 0.06 1.44 1.50 (0.04) -- (0.02)
Period ended
05/31/1993*#........ 10.38 0.07 0.21 0.28 (0.08) -- (0.02)
INVESTOR B SHARES
Six months ended
09/30/1997#
(unaudited)......... $12.83 $ 0.02 $ 1.08 $ 1.10 -- -- --
Year ended
03/31/1997#......... 13.27 (0.05) 0.10 0.05 $(0.04) $(0.00)*** $ (0.42)
Period ended
03/31/1996(a)#...... 11.56 (0.02) 1.78 1.76 -- (0.03) (0.02)
Year ended
05/31/1995#......... 11.96 0.05 (0.22) (0.17) (0.01) -- (0.12)
Period ended
05/31/1994*#........ 10.51 (0.00)*** 1.51 1.51 (0.04) -- (0.02)
INVESTOR C SHARES
Six months ended
09/30/1997#
(unaudited)......... $12.74 $ 0.03 $ 1.08 $ 1.11 $(0.06) -- --
Year ended
03/31/1997#......... 13.13 0.02 0.10 0.12 (0.06) $(0.00)*** $ (0.42)
Period ended
03/31/1996(a)#...... 11.45 (0.03) 1.75 1.72 -- (0.02) (0.02)
Year ended
05/31/1995#......... 11.86 0.02 (0.21) (0.19) -- -- (0.12)
Year ended
05/31/1994#......... 10.49 (0.03) 1.43 1.40 (0.01) -- (0.02)
Period ended
05/31/1993*#........ 10.10 0.00*** 0.48 0.48 (0.07) -- (0.02)
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Nations International Equity Fund's Primary A, Primary B, Investor A, Investor B and Investor C Shares commenced
operations on December 2, 1991, June 28, 1996, June 3, 1992, June 7, 1993 and June 17, 1992, respectively.
*** Amount represents less than $0.01 per share.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and does not reflect the deduction of any
applicable sales charges.
# Per share numbers have been calculated using the monthly average share method, which more appropriately represents the per
share data for the period, since the use of the undistributed income method did not accord with results of operations.
## Amount represents less than 0.01%.
(a) Fiscal year end changed to March 31. Prior to this, the fiscal year end was May 31.
(b) Average commission rate paid per share of securities purchased and sold by the Fund.
(c) The amount shown at this caption for each share outstanding throughout the period may not accord with the net realized and
unrealized gain/(loss) for the period because of the timing of purchases and withdrawals of shares in relation to the
fluctuating market values of the portfolio.
</TABLE>
24
<PAGE> 27
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
DISTRIBUTIONS TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT
IN EXCESS OF DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO
NET REALIZED AND END OF TOTAL PERIOD AVERAGE TO AVERAGE TURNOVER
CAPITAL GAINS DISTRIBUTIONS PERIOD RETURN++ (IN 000'S) NET ASSETS NET ASSETS RATE
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-- $ (0.09) $ 14.24 9.13% $1,042,869 1.13%+ 1.26%+ 38%
$ (0.03) (0.56) 13.13 1.32 976,855 1.16 0.62 36
-- (0.12) 13.50 16.01 849,731 1.17+ 0.65+ 26
(0.10) (0.25) 11.75 (0.46) 572,940 1.03 1.17 92
-- (0.07) 12.06 14.37 401,559 1.17 0.75 39
-- (0.10) 10.60 3.14 118,873 1.30 1.03 41
-- (0.04) 10.40 4.43+++ 83,970 1.33+ 1.81+ 11
-- $ (0.06) $ 14.21 8.81% $ 3,977 1.63%+ 0.76%+ 38%
$ (0.03) (0.46) 13.11 (0.66) 5,526 1.66+ 0.12+ 36
-- $ (0.07) $ 14.10 8.94% $ 12,720 1.38%+ 1.01%+ 38%
$ (0.03) (0.54) 13.01 1.08 9,443 1.41 0.37 36
-- (0.10) 13.39 15.66 7,643 1.42+ 0.40+ 26
(0.10) (0.24) 11.57 (0.69) 4,877 1.28 0.92 92
-- (0.06) 12.00 14.00 3,219 1.42 0.50 39
-- (0.10) 10.56 2.91 839 1.55+ 0.78+ 41
-- -- $ 13.93 8.57% $ 36,803 2.13%+ 0.26%+ 38%
$ (0.03) $ (0.49) 12.83 0.28 36,698 2.16 (0.38) 36
-- (0.05) 13.27 15.25 40,426 1.99+ (0.17)+ 26
(0.10) (0.23) 11.56 (1.30) 31,372 1.78 0.42 92
-- (0.06) 11.96 14.32 17,349 1.92+ (0.00)+## 39
-- $ (0.06) $ 13.79 8.72% $ 1,183 1.96%+ 0.43%+ 38%
$ (0.03) (0.51) 12.74 0.77 988 1.66 0.12 36
-- (0.04) 13.13 15.09 652 2.09+ (0.27)+ 26
(0.10) (0.22) 11.45 (1.56) 495 2.03 0.17 92
-- (0.03) 11.86 13.21 339 2.17 (0.25) 39
-- (0.09) 10.49 4.97 200 2.30+ 0.03+ 41
<CAPTION>
WITHOUT WAIVERS AND/OR
EXPENSE REIMBURSEMENTS
------------------------------
RATIO OF
OPERATING NET INVESTMENT
EXPENSES TO INCOME/ AVERAGE
AVERAGE NET (LOSS) PER COMMISSION
ASSETS SHARE RATE PAID(b)
- -----------------------------------------------------
<S> <C> <C>
-- -- $0.0052
-- -- 0.0279
1.18%+ $ 0.07 0.0272
1.04 0.14 --
1.18 0.08 --
1.32 0.10 --
1.43+ 0.03 --
-- -- $0.0052
-- -- 0.0279
-- -- $0.0052
-- -- 0.0279
1.43%+ $ 0.04 0.0272
1.29 0.11 --
1.43 0.05 --
1.62+ 0.07 --
-- -- $0.0052
-- -- 0.0279
2.00%+ $(0.02) 0.0272
1.79 0.05 --
1.93+ (0.00)*** --
-- -- $0.0052
-- -- 0.0279
2.10%+ $(0.03) 0.0272
2.04 0.02 --
2.18 (0.03) --
2.32+ 0.00*** --
</TABLE>
25
<PAGE> 28
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE INVESTMENT AND UNREALIZED (DECREASE) IN FROM NET FROM NET
BEGINNING OF INCOME/ GAIN ON NET ASSET VALUE INVESTMENT REALIZED
PERIOD (LOSS) INVESTMENTS FROM OPERATIONS INCOME CAPITAL GAINS
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NATIONS INTERNATIONAL
GROWTH FUND
PRIMARY A SHARES
Period ended 09/30/1997*#
(unaudited)......................... $18.43 $ 0.02 $ 0.51 $ 0.53 -- --
Period ended 05/16/1997............... 17.05 0.05 1.84 1.89 $(0.17) $(0.34)
Year ended 08/31/1996(g).............. 16.24 0.18 1.48 1.66 (0.46) (0.39)
Year ended 08/31/1995#................ 16.34 0.13 0.17 0.30 (0.11) (0.29)
Year ended 08/31/1994#................ 14.14 0.11 2.24 2.35 -- (0.15)
Period ended 08/31/1993#(f)........... 13.15 (0.01) 1.00 0.99 -- --
INVESTOR A SHARES
Period ended 09/30/1997*#
(unaudited)......................... $18.27 $ 0.00## $ 0.51 $ 0.51 -- --
Period ended 05/16/1997............... 16.90 (0.05) 1.90 1.85 $(0.14) $(0.34)
Year ended 08/31/1996(g).............. 16.14 0.04 1.57 1.61 (0.46) (0.39)
Year ended 08/31/1995#(c)............. 16.29 0.08 0.17 0.25 (0.11) (0.29)
Year ended 08/31/1994#................ 14.13 0.07 2.24 2.31 -- (0.15)
Period ended 08/31/1993#.............. 11.85 0.02 2.26 2.28 -- --
Year ended 12/31/1992#(a)(b).......... 12.29 0.04 (0.46) (0.42) (0.02) --
INVESTOR B SHARES
Period ended 09/30/1997*#
(unaudited)......................... $18.32 $(0.04) $ 0.50 $ 0.46 -- --
Period ended 05/16/1997............... 17.04 (0.05) 1.79 1.74 $(0.12) $(0.34)
Period ended 08/31/1996(g)(h)......... 17.54 -- (0.50) (0.50) -- --
INVESTOR C SHARES
Period ended 09/30/1997**#
(unaudited)......................... $18.49 $(0.01) $ 0.48 $ 0.47 -- --
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Nations International Growth Fund's Primary A, Investor A and Investor B Shares commenced operations on May 16, 1997. The
financial information for the fiscal periods through May 16, 1997 are based on the financial information for the Pilot
International Equity Fund's Pilot Shares, Class A Shares and Class B Shares, which were reorganized into the Primary A
Shares, Investor A Shares and Investor B Shares, respectively, as of the close of business on May 16, 1997.
** Nations International Growth Fund's Investor C Shares commenced operations on September 19, 1997.
(a) Prior to a tax-free reorganization into Pilot Administration Shares effective July 12, 1993, the Pilot Kleinwort Benson
International Equity Portfolio was a separate portfolio of Kleinwort Benson Investment Strategies known as Kleinwort
Benson International Equity Fund. The predecessor portfolio was advised by Kleinwort Benson International Investment
Limited and had a December 31 year end.
(b) Prior to July 12, 1993, the Pilot Administration Shares were not subject to an Administration plan.
(c) The Pilot Administrative Shares were redesignated the Class A Shares.
(d) Average commission rate paid per share of securities purchased and sold by the Fund.
(e) Excludes transfer of assets effective August 6, 1993 from a collective trust for which Boatmen's Trust Company served as
Trustee.
(f) Pilot Shares were initially issued on July 26, 1993.
(g) The Pilot Kleinwort Benson International Equity Fund was renamed the Pilot International Equity Fund effective November
30, 1995.
(h) Class B Shares were initially issued on July 1, 1996.
(i) The effect of interest expense on the operating expense ratio was less than 0.01%.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and does not reflect the deduction of any
applicable sales charges.
# Per share numbers have been calculated using the monthly average share method, which more appropriately represents the per
share data for the period, since the use of the undistributed income method did not accord with results of operations.
## Amount represents less than $0.01 per share.
</TABLE>
26
<PAGE> 29
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
TOTAL NET ASSET NET ASSETS RATIO OF RATIO OF
DIVIDENDS VALUE END OF OPERATING NET INVESTMENT PORTFOLIO
AND END OF TOTAL PERIOD EXPENSES TO INCOME TO TURNOVER
DISTRIBUTIONS PERIOD RETURN++ (IN 000'S) AVERAGE NET ASSETS AVERAGE NET ASSETS RATE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
-- $ 18.96 9.98% $634,626 1.16%+(i) 0.32%+ 6%
$ (0.51) 18.43 11.28 701,033 1.18+ 0.47+ 34
(0.85) 17.05 10.64 579,019 1.08 0.69 22
(0.40) 16.24 2.08 363,212 1.18 0.82 36
(0.15) 16.34 16.75 1.12 0.75 35
-- 14.14 7.53 195,548 1.31+ (0.56)+ 27(e)
-- $ 18.78 9.89% $ 24,128 1.41%+(i) 0.07%+ 6%
$ (0.48) 18.27 11.14 26,730 1.42+ 0.29+ 34
(0.85) 16.90 10.40 26,730 1.32 0.48 22
(0.40) 16.14 1.77 27,625 1.42 0.50 36
(0.15) 16.29 16.48 44,990 1.37 0.48 35
-- 14.13 19.24 55,816 2.17+ 0.25+ 27(e)
(0.02) 11.85 (3.42) 56,358 1.78 0.35 59
-- $ 18.78 9.27% $ 4 2.16%+(i) (0.68)%+ 6%
$ (0.46) 18.32 10.37 560 2.18+ (0.61)+ 34
-- 17.04 (2.85) 184 2.06+ (0.32)+ 22
-- $ 18.96 2.54% $ 546 1.94%+(i) (0.46)%+ 6%
<CAPTION>
AVERAGE
COMMISSION
RATE PAID(d)
- ------------------------
<S> <C>
$ 0.0032
0.0107
0.0160
--
--
$ 0.0032
0.0107
0.0160
--
--
$ 0.0032
0.0107
0.0160
$ 0.0032
</TABLE>
27
<PAGE> 30
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET ASSET NET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS
VALUE INVESTMENT AND UNREALIZED (DECREASE) IN FROM NET IN EXCESS OF
BEGINNING OF INCOME/ GAIN/(LOSS) NET ASSET VALUE INVESTMENT NET INVESTMENT
PERIOD (LOSS) ON INVESTMENTS FROM OPERATIONS INCOME INCOME
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NATIONS PACIFIC
GROWTH FUND
PRIMARY A SHARES
Six months ended 09/30/1997#
(unaudited)......................... $10.41 $ 0.05 $(0.59) $ (0.54) $(0.13) --
Year ended 03/31/1997................. 10.24 0.04 0.19 0.23 (0.03) $(0.03)
Period ended 03/31/1996**#............ 10.00 (0.02) 0.29 0.27 -- (0.03)
PRIMARY B SHARES
Six months ended 09/30/1997#
(unaudited)......................... $10.39 $ 0.03 $(0.61) $ (0.58) $(0.10) --
Year ended 03/31/1997**............... 10.34 0.01 0.07 0.08 (0.02) $(0.01)
INVESTOR A SHARES
Six months ended 09/30/1997#
(unaudited)......................... $10.37 $ 0.04 $(0.68) $ (0.64) $(0.11) --
Year ended 03/31/1997................. 10.23 0.00*** 0.19 0.19 (0.03) $(0.02)
Period ended 03/31/1996**#............ 10.00 (0.04) 0.29 0.25 -- (0.02)
INVESTOR B SHARES
Six months ended 09/30/1997#
(unaudited)......................... $10.30 $ 0.00*** $(0.59) $ (0.59) -- --
Year ended 03/31/1997................. 10.18 (0.05) 0.19 0.14 $(0.01) $(0.01)
Period ended 03/31/1996**#............ 10.00 (0.10) 0.29 0.19 -- (0.01)
INVESTOR C SHARES
Six months ended 09/30/1997#
(unaudited)......................... $10.34 $ 0.01 $(0.57) $ (0.56) $(0.10) --
Year ended 03/31/1997................. 10.20 0.00*** 0.14 0.14 -- --
Period ended 03/31/1996**#............ 10.00 (0.09) 0.29 0.20 -- --
</TABLE>
- ---------------
<TABLE>
<C> <S>
** Nations Pacific Growth Fund's Primary A, Investor A, Investor B and Investor C Shares commenced operations on June 30,
1995. Nations Pacific Growth Fund's Primary B Shares commenced operations on June 28, 1996.
*** Amount represents less than $0.01 per share.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and does not reflect the deduction of any
applicable sales charges.
# Per share numbers have been calculated using the monthly average share method, which more appropriately represents the per
share data for the period, since the use of the undistributed income method did not accord with results of operations.
(b) Average commission rate paid per share of securities purchased and sold by the Fund.
</TABLE>
28
<PAGE> 31
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT
DIVIDENDS VALUE END OF EXPENSES TO INCOME/(LOSS) PORTFOLIO AVERAGE
AND END OF TOTAL PERIOD AVERAGE TO AVERAGE TURNOVER COMMISSION
DISTRIBUTIONS PERIOD RETURN++ (IN 000'S) NET ASSETS NET ASSETS RATE RATE PAID(a)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ (0.13) $ 9.74 (5.36)% $107,896 1.30%+ 0.96%+ 55% $ 0.0014
(0.06) 10.41 2.18 122,887 1.42 0.39 78 0.0126
(0.03) 10.24 2.66 95,210 1.76+ (0.27)+ 23 0.0178
$ (0.10) $ 9.71 (5.71)% $ 332 1.80%+ 0.46%+ 55% $ 0.0014
(0.03) 10.39 0.75 618 1.92+ (0.11)+ 78 0.0126
$ (0.11) $ 9.62 (6.30)% $ 1,610 1.55%+ 0.71%+ 55% $ 0.0014
(0.05) 10.37 1.86 2,480 1.67 0.14 78 0.0126
(0.02) 10.23 2.52 1,375 2.01+ (0.52)+ 23 0.0178
-- $ 9.71 (5.73)% $ 1,807 2.30%+ (0.04)%+ 55% $ 0.0014
$ (0.02) 10.30 1.18 2,367 2.42 (0.61) 78 0.0126
(0.01) 10.18 1.88 2,324 2.76+ (1.27)+ 23 0.0178
$ (0.10) $ 9.68 (5.51)% $ 93 2.13%+ 0.13%+ 55% $ 0.0014
-- 10.34 1.57 102 1.92 (0.11) 78 0.0126
-- 10.20 2.00 60 2.65+ (1.16)+ 23 0.0178
</TABLE>
29
<PAGE> 32
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
NET INCREASE/
NET ASSET NET NET REALIZED (DECREASE) IN DIVIDENDS DISTRIBUTIONS
VALUE INVESTMENT AND UNREALIZED NET ASSET VALUE FROM NET IN EXCESS OF
BEGINNING OF INCOME/ GAIN ON FROM INVESTMENT NET INVESTMENT
PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INCOME
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NATIONS EMERGING
MARKETS FUND
PRIMARY A SHARES
Six months ended 09/30/1997#
(unaudited)......................... $11.41 $ 0.05 $ 0.67 $0.72 $(0.09) --
Year ended 03/31/1997 #............... 10.34 0.01 1.21 (0.02) (0.07) $(0.06)
Period ended 03/31/1996*#............. 10.00 (0.03) 0.37 -- 0.00*** --
PRIMARY B SHARES
Six months ended 09/30/1997#
(unaudited)......................... $11.40 $ 0.02 $ 0.68 $0.70 $(0.06) --
Period ended 03/31/1997 *#............ 10.71 (0.04) 0.82 0.78 (0.01) $(0.02)
INVESTOR A SHARES
Six months ended 09/30/1997#
(unaudited)......................... $11.39 $ 0.03 $ 0.68 $0.71 $(0.08) --
Year ended 03/31/1997 #............... 10.32 (0.01) 1.21 1.20 (0.02) $(0.05)
Period ended 03/31/1996*#............. 10.00 (0.05) 0.37 0.32 -- --
INVESTOR B SHARES
Six months ended 09/30/1997#
(unaudited)......................... $11.31 $(0.01) $ 0.67 $0.66 -- --
Year ended 03/31/1997 #............... 10.26 (0.09) 1.20 1.11 -- --
Period ended 03/31/1996*#............. 10.00 (0.11) 0.37 0.26 -- --
INVESTOR C SHARES
Six months ended 09/30/1997#
(unaudited)......................... $11.34 $ 0.00(b) $ 0.68 $0.68 $(0.07) --
Year ended 03/31/1997 #............... 10.27 (0.04) 1.20 1.16 (0.01) $(0.02)
Period ended 03/31/1996*#............. 10.00 (0.10) 0.37 0.27 -- --
</TABLE>
- ---------------
<TABLE>
<C> <S>
* Nations Emerging Markets Fund's Primary A, Investor A, Investor B and Investor C Shares commenced operations on June 30,
1995. Nations Emerging Markets Fund's Primary B Shares commenced operations on June 28, 1996.
*** Amount represents less than $0.01 per share.
+ Annualized.
++ Total return represents aggregate total return for the period indicated and does not reflect the deduction of any
applicable sales charges.
# Per share numbers have been calculated using the monthly average share method, which more appropriately represents the per
share data for the period, since the use of the undistributed income method did not accord with results of operations.
(a) Average commission rate paid per share of securities purchased and sold by the Fund.
(b) Amount represents less than $0.01 per share.
</TABLE>
30
<PAGE> 33
NATIONS FUNDS
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
RATIO OF RATIO OF
DISTRIBUTIONS TOTAL NET ASSET NET ASSETS OPERATING NET INVESTMENT
FROM NET DIVIDENDS VALUE END OF EXPENSES TO INCOME TO PORTFOLIO
REALIZED AND END OF TOTAL PERIOD AVERAGE AVERAGE TURNOVER
CAPITAL GAINS DISTRIBUTIONS PERIOD RETURN++ (IN 000'S) NET ASSETS NET ASSETS RATE
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-- $ (0.09) $ 12.04 6.32% $107,777 1.53%+ 0.79%+ 15%
$ (0.06) (0.15) 11.41 11.97 76,483 1.74 0.13 31
-- 0.00*** 10.34 3.42 47,560 2.13+ (0.38)+ 17
-- $ (0.06) $ 12.04 6.16% $ 274 2.03%+ 0.29%+ 15%
$ (0.06) (0.09) 11.40 7.34 301 2.24+ (0.37)%+ 31
-- $ (0.08) $ 12.02 6.22% $ 1,297 1.78%+ 0.54%+ 15%
$ (0.06) (0.13) 11.39 11.74 894 1.99 (0.12) 31
-- -- 10.32 3.20 477 2.38+ (0.63)+ 17
-- -- $ 11.97 5.84% $ 1,588 2.53%+ (0.21)%+ 15%
$ (0.06) $ (0.06) 11.31 10.88 1,499 2.74 (0.87) 31
-- -- 10.26 2.60 1,209 3.13+ (1.38)+ 17
-- $ (0.07) $ 11.95 5.95% $ 235 2.36%+ (0.04)%+ 15%
$ (0.06) (0.09) 11.34 11.34 226 2.24 (0.37) 31
-- -- 10.27 2.70 23 3.02+ (1.27)+ 17
<CAPTION>
AVERAGE
COMMISSION
RATE PAID (a)
--------------
<S> <C>
$0.0004
0.0003
0.0004
$0.0004
0.0003
$0.0004
0.0003
0.0004
$0.0004
0.0003
0.0004
$0.0004
0.0003
0.0004
</TABLE>
31
<PAGE> 34
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
Nations Fund, Inc. (the "Company") and Nations Fund Portfolios, Inc. ("Nations
Portfolios") are registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as open-end investment companies. As of the date of this
report, the Company offers eight separate portfolios and Nations Portfolios
offers three separate portfolios. Information presented in these financial
statements pertains only to: Nations International Equity Fund, Nations
International Growth Fund, Nations Pacific Growth Fund and Nations Emerging
Markets Fund (each a "Fund" and collectively, the "Funds"). The financial
statements for the remaining funds of the Company and Nations Portfolios are
presented under separate cover. The Funds currently offer five classes of
shares: Primary A Shares, Primary B Shares, Investor A Shares, Investor B Shares
(formerly Investor N Shares) and Investor C Shares. Shareholders of a Fund have
equal voting rights on matters affecting all shareholders of the Fund. In
addition, each class of shares of a Fund has exclusive voting rights on matters
that relate solely to its class and separate voting rights on matters in which
the interests of one class of shares differ from the interests of any other
class.
1. SIGNIFICANT ACCOUNTING POLICIES.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates. The following is a summary of the
significant accounting policies followed by the Funds in the preparation of
their financial statements.
Securities Valuation: The Funds' portfolio securities which are traded on a
recognized stock exchange are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on a national securities market. Securities traded only on
over-the-counter markets (but not including securities reported on the NASDAQ
National Market System) are valued on the basis of the closing over-the-counter
bid prices or, if no sale occurred on such day, at the mean of the current bid
and asked prices. Certain securities may be valued by one or more principal
market makers. Each security reported on the NASDAQ National Market System is
valued at the last sales price on the valuation date. The valuation of
international securities which trade on foreign exchanges are provided by an
independent pricing service approved by the Board of Directors of each Fund.
Debt obligations are valued on the basis of prices provided by an independent
pricing service. Prices provided by the pricing service may be determined
without exclusive reliance on quoted prices, and may reflect appropriate factors
such as yield, type of issue, coupon rate, maturity and general market
conditions. Securities for which market quotations are not readily available and
certain other assets are valued by the investment adviser under the supervision
of the Board of Directors. Short-term investments that mature in 60 days or less
are valued at amortized cost.
Repurchase Agreements: Each Fund may engage in repurchase agreement
transactions. Under the terms of a typical repurchase agreement, the Fund takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding period.
This arrangement results in a fixed rate of return that is not subject to market
fluctuations during the Fund's holding period. The value of the collateral must
be at least equal at all times to the total amount of the repurchase
obligations, including interest. Generally, in the event of counterparty
default, the Fund has the right to use the collateral to offset losses incurred.
There would be a potential loss to the Fund in the event the Fund is delayed or
prevented from exercising its right to dispose of the collateral securities,
including the risk of a possible decline in the value of the underlying
securities during the period while the Fund seeks to assert its right. Unless
expressly permitted by the Securities and Exchange Commission, the Fund will not
enter into repurchase agreements with the investment adviser, distributor or any
of their affiliates. The Funds' investment adviser, acting under the supervision
of the Board of Directors, monitors the value of collateral received as well as
the creditworthiness of those banks and dealers with which the Funds enter into
repurchase agreements to evaluate potential risks.
Foreign Currency: The books and records of the Funds are maintained in U.S.
dollars. Foreign currencies, investments and other assets and liabilities are
translated into U.S. dollars at the exchange rates prevailing at the end of the
period. Purchases and sales of investment securities, income and expenses are
translated on the respective dates of such transactions. Net realized foreign
currency gains and losses resulting from changes in exchange rates include
foreign currency gains and losses between trade date and settlement date of
investment securities transactions, foreign currency transactions and the
difference between the amounts of interest and dividends recorded on the books
of a Fund and the amounts actually received. The effects of changes in foreign
currency exchange rates on investments in securities are not
32
<PAGE> 35
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
segregated in the Statements of Operations from the effects of changes in market
prices of those securities, but are included with the net realized and
unrealized gain or loss on investment securities.
Forward Foreign Currency Transactions: Generally, a Fund may enter into forward
currency exchange contracts only under two circumstances: (i) when the Fund
enters into a contract for the purchase or sale of a security denominated in a
foreign currency, to "lock" in the U.S. exchange rate of the transaction, with
such period being a short-dated contract covering the period between transaction
date and settlement date; and (ii) when the investment adviser or investment
sub-adviser believes that the currency of a particular foreign country may
experience a substantial movement against the U.S. dollar. Forward foreign
currency contracts are valued at the forward rate and are marked-to-market
daily. The change in market value is recorded by the Fund as an unrealized gain
or loss. When the contract is closed, the Fund records a realized gain or loss
equal to the difference between the value of the contract at the time it was
opened and the value at the time it was closed.
Forward foreign currency contracts will be used primarily to protect the Funds
from adverse currency movements and will generally not be entered into for terms
greater than one year. The use of forward foreign currency contracts does not
eliminate fluctuations in the underlying prices of the Fund's investment
securities, however, it does establish a rate of exchange that can be achieved
in the future. The use of forward contracts involves the risk that anticipated
currency movements will not be accurately predicted. A forward contract would
limit the risk of loss due to a decline in the value of a particular currency,
however, it also would limit any potential gain that might result should the
value of the currency increase instead of decrease. These contracts may involve
market risk in excess of the unrealized gain or loss reflected in the Statements
of Assets and Liabilities. In addition, the Funds could be exposed to risks if
counterparties to the contracts are unable to meet the terms of their contracts.
The counterparty risk exposure is, therefore, closely monitored and contracts
are only executed with high credit quality financial institutions.
Securities Transactions and Investment Income: Securities transactions are
accounted for on a trade date basis. Securities purchased or sold on a
when-issued or delayed-delivery basis may be settled a month or more after the
trade date. Realized gains and losses are computed based on the specific
identification of the securities sold. Interest income, adjusted for accretion
of discounts and amortization of premiums, is earned from settlement date and is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend
date, except that certain dividends from foreign securities are recorded as soon
as the Funds are informed of the ex-dividend date. Each Fund's investment income
and realized and unrealized gains and losses are allocated among its classes
based upon the relative net assets of each class of shares. Uninvested cash
balances earn interest at a rate agreed upon by the Funds and The Bank of New
York ("BONY").
Dividends and Distributions to Shareholders: Distributions from net investment
income, if any, for the Funds are declared and paid each calendar quarter. These
distributions are recorded on ex-date. Each Fund will distribute net realized
capital gains (including net short-term capital gains) annually after the fiscal
year in which earned, unless offset by any available capital loss carryforward.
Additional distributions of net investment income and capital gains may be made
at the discretion of the Boards of Directors in order to avoid the application
of a 4% non-deductible Federal excise tax. Income distributions and capital gain
distributions on a Fund level are determined in accordance with Federal income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to timing differences and differing
characterization of distributions made by a Fund as a whole.
Federal Income Tax: It is the policy of each Fund to qualify as a regulated
investment company by complying with the requirements of the Internal Revenue
Code of 1986, as amended, applicable to regulated investment companies and by
distributing substantially all of its earnings to its shareholders. Therefore,
no Federal income nor excise tax provision is applicable. The Funds may be
subject to foreign taxes on income, gains on investments or currency
repatriation, a portion of which may be recoverable. The Funds will accrue such
taxes and recoveries as applicable, based upon their current interpretation of
tax rules and regulations that exist in the markets in which they invest.
Expenses: General expenses of the Company or Nations Portfolios are allocated
to the relevant Funds based upon relative net assets. Operating expenses
directly attributable to a Fund or a class of shares are charged to such Fund's
or class' operations. Expenses of each Fund not directly attributable to the
operations of any class of shares are prorated among the classes based on the
relative net assets of each class of shares.
33
<PAGE> 36
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED
PARTY TRANSACTIONS.
Each of the Company and Nations Portfolios has, on behalf of its Funds, entered
into an investment advisory agreement (the "Investment Advisory Agreements")
with NationsBanc Advisors, Inc. ("NBAI"), a wholly-owned subsidiary of
NationsBank, N.A. ("NationsBank"), pursuant to which NBAI provides investment
advisory services to the Funds. Under the terms of the Investment Advisory
Agreements, NBAI is entitled to receive an advisory fee calculated daily and
payable monthly based on the following annual rates multiplied by the average
daily net assets of each Fund:
<TABLE>
<CAPTION>
ANNUAL RATE
----------
<S> <C>
Nations International Equity Fund................................................ 0.90%
Nations International Growth Fund................................................ 0.90
Nations Pacific Growth Fund...................................................... 0.90
Nations Emerging Markets Fund.................................................... 1.10
</TABLE>
Each of the Company and Nations Portfolios has, on behalf of its Funds, entered
into a sub-advisory agreement (the "Sub-Advisory Agreements") with NBAI and
Gartmore Global Partners ("Gartmore"). Gartmore is a joint venture structured as
a general partnership between NB Partner Corp., a wholly-owned subsidiary of
NationsBank, and Gartmore U.S. Limited, an indirect wholly-owned subsidiary of
Gartmore Investment Management plc ("Gartmore plc"), which is a United Kingdom
("U.K.") holding company for a leading U.K. based international fund management
group of companies. National Westminster Bank plc and its affiliated entities
own 100% of the equity of Gartmore plc.
Prior to July 11, 1997, Kleinwort Benson Investment Management Americas, Inc.
("Kleinwort Benson") served as the investment manager to Nations International
Growth Fund. Kleinwort Benson was entitled to a fee at an annual rate equal to
0.40% of the Fund's average daily net assets up to $325 million and 0.25% of
such assets in excess of $325 million, less any waivers.
Under the terms of the Sub-Advisory Agreements, Gartmore is entitled to receive
a sub-advisory fee from NBAI for each Fund at the following annual rates of each
Fund's average daily net assets:
<TABLE>
<CAPTION>
ANNUAL RATE
----------
<S> <C>
Nations International Equity Fund................................................ 0.70%
Nations International Growth Fund................................................ 0.40
Nations Pacific Growth Fund...................................................... 0.70
Nations Emerging Markets Fund.................................................... 0.85
</TABLE>
Stephens Inc. ("Stephens") serves as the administrator of the Company and
Nations Portfolios pursuant to administration agreements (the "Administration
Agreements"). First Data Investor Services Group, Inc. ("First Data"), a wholly-
owned subsidiary of First Data Corporation, serves as co-administrator of the
Company and Nations Portfolios pursuant to co-administration agreements (the
"Co-Administration Agreements"). Pursuant to the Administration and Co-
Administration Agreements, Stephens and First Data are entitled to receive a
combined fee, computed daily and paid monthly, at the annual rate of 0.10% of
the average daily net assets of the Company's and Nations Portfolios' Funds.
NationsBank serves as the sub-administrator of the Company and Nations
Portfolios pursuant to a sub-administration agreement (the "Sub-Administration
Agreement") with Stephens. For the six months ended September 30, 1997, Stephens
earned $356,844 from the Funds for its administration services, of which $96,073
was paid to NationsBank for its services as sub-administrator.
The investment adviser, sub-adviser and administrator may, from time to time,
voluntarily reduce their fees payable by each Fund.
Stephens also serves as the distributor of the Funds' shares. For the six months
ended September 30, 1997, the Funds were informed that the distributor received
$8,885 in contingent deferred sales charges from shares which were subject to
such charges. A substantial portion of these fees were paid to affiliates of
NationsBank and NBAI.
No officer, director or employee of NationsBank, NBAI, Gartmore, Stephens, First
Data, or any affiliate thereof, receives any compensation from the Company or
Nations Portfolios for serving as director or officer of the Company or Nations
Portfolios. The Company and Nations Portfolios pay each unaffiliated Director an
annual fee of $1,000 ($3,000 for the Chairman of the Board), plus $500 per Fund
and an additional $1,000 for each in-person board meeting, and $500 for
34
<PAGE> 37
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
each telephonic board meeting attended. The Company and Nations Portfolios also
reimburse expenses incurred by each unaffiliated Director in attending such
meetings.
The Company's and Nations Portfolio's eligible Directors may participate in a
non-qualified deferred compensation and retirement plans which may be terminated
at any time. All benefits provided under these plans are unfunded and any
payments to plan participants are paid solely out of the Funds' assets. Income
earned on each plan participant's deferral account will be tied to the rate of
return of the eligible mutual funds selected by the participants or, if no funds
are selected, to the rate of return of Nations Treasury Fund, another Fund of
the Company. The expense for the deferred compensation plan is included in
"Directors' fees and expenses" in the Statements of Operations.
BONY acts as the custodian for the Funds. First Data serves as the transfer
agent for the Funds' shares. NationsBank of Texas, N.A. ("NationsBank of Texas")
acts as the sub-transfer agent for the Primary Shares of the Funds and, for the
six months ended September 30, 1997, earned approximately $10,110 for providing
such services. The Funds placed a portion of their portfolio transactions with
firms that could be deemed to be affiliates of Gartmore plc.
3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS.
The Company and Nations Portfolios each have adopted shareholder administration
plans (each an "Administration Plan") for Primary B Shares of each Fund;
shareholder servicing and distribution plans pursuant to Rule 12b-1 under the
1940 Act for Investor A Shares of each Fund ("Investor A Plan"); a shareholder
servicing plan ("Servicing Plan") for Investor B Shares (formerly Investor N
Shares) and Investor C Shares of each Fund; and a distribution plan
("Distribution Plan") pursuant to Rule 12b-1 for Investor B Shares (formerly
Investor N Shares) and Investor C Shares of each Fund (collectively, the
"Plans"). The Administration Plan permits the Funds to compensate institutions
for shareholder administration services provided to their customers that own
Primary B Shares. The Investor A Plan permits the Funds to compensate (i)
servicing agents and selling agents that have entered into a servicing agreement
with the Funds for services provided to their customers that own Investor A
Shares and (ii) Stephens for distribution-related expenses incurred in
connection with Investor A Shares. The Servicing Plan permits the Funds to
compensate servicing agents for services provided to their customers that own
Investor B Shares and Investor C Shares, respectively. The Distribution Plan
permits the Funds to compensate or reimburse Stephens for any activities or
expenses primarily intended to result in the sale of the Funds' Investor B
Shares or Investor C Shares, respectively. Payments under the Plans are accrued
daily and paid monthly at a rate set, from time to time, by the Funds. Fees
incurred pursuant to the Plans are charged as expenses of each Fund directly to
the Primary B Shares, Investor A Shares, Investor B Shares and Investor C
Shares, respectively.
For the six months ended September 30, 1997, the effective rates incurred by the
Funds, as a percentage of average daily net assets, pursuant to the Plans were
as follows:
<TABLE>
<CAPTION>
PRIMARY B INVESTOR B INVESTOR B INVESTOR C* INVESTOR C
ADMINISTRATION INVESTOR A DISTRIBUTION SERVICING DISTRIBUTION SERVICING
FUND PLAN PLAN PLAN PLAN PLAN PLAN
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Nations International Equity Fund... 0.50% 0.25% 0.75% 0.25% 0.58% 0.25%
Nations International Growth Fund... 0.50 0.25 0.75 0.25 0.53 0.25
Nations Pacific Growth Fund......... 0.50 0.25 0.75 0.25 0.58 0.25
Nations Emerging Markets Fund....... 0.50 0.25 0.75 0.25 0.58 0.25
</TABLE>
- ---------------
* The Investor C Distribution Plan rates changed effective August 1, 1997.
A substantial portion of the fees paid pursuant to the Plans described above are
paid to affiliates of NationsBank and NBAI.
35
<PAGE> 38
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
4. PURCHASES AND SALES OF SECURITIES.
The aggregate cost of purchases and proceeds from sales of securities, excluding
U.S. government securities and short-term securities, for the period ended
September 30, 1997, were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
-----------------------------
<S> <C> <C>
Nations International Equity Fund........................................ $398,925,056 $432,415,935
Nations International Growth Fund........................................ 33,844,208 191,736,394
Nations Pacific Growth Fund.............................................. 69,049,724 69,246,285
Nations Emerging Markets Fund............................................ 38,243,054 14,315,093
</TABLE>
At September 30, 1997, aggregate gross unrealized appreciation and unrealized
depreciation for tax purposes were as follows:
<TABLE>
<CAPTION>
TAX BASIS TAX BASIS
UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION
-----------------------------
<S> <C> <C>
Nations International Equity Fund......................................... $219,100,701 $ 64,805,882
Nations International Growth Fund......................................... 167,844,980 20,380,930
Nations Pacific Growth Fund............................................... 15,849,532 11,321,680
Nations Emerging Markets Fund............................................. 22,709,675 8,253,057
</TABLE>
5. CAPITAL STOCK.
As of September 30, 1997, 420,000,000,000 shares of $.001 par value capital
stock were authorized for the Company and 150,000,000,000 shares of $.001 par
value capital stock were authorized for Nations Portfolios. See Schedule of
Capital Stock Activity.
6. ORGANIZATION COSTS.
The Funds bear all costs in connection with their organization, including the
fees and expenses of registering and qualifying their shares for distribution
under Federal and state securities regulations. All such costs are being
amortized on a straight-line basis over a period of five years from the
commencement of operations. In the event that any of the shares issued by the
Funds to their sponsor prior to the commencement of the Funds' public offering
("initial shares") are redeemed during such amortization period by any holder
thereof, the Funds will be reimbursed by the holder for any unamortized
organization costs in the same proportion as the number of initial shares
redeemed bears to the number of initial shares outstanding at the time of the
redemption.
As of September 30, 1997, all organizational costs were fully amortized for
Nations International Equity Fund and Nations International Growth Fund.
7. FOREIGN SECURITIES.
Each Fund may invest in foreign securities. Investing in securities of foreign
companies and foreign governments involves special risks and considerations not
typically associated with investing in U.S. companies and the U.S. government.
These risks include re-valuation of currencies, less reliable information about
issuers, different securities transaction clearance and settlement practices,
and future adverse political and economic developments. These risks are
heightened for investments in emerging markets countries. Moreover, securities
of many foreign companies and foreign governments and their markets may be less
liquid and their prices more volatile than those of securities of comparable
U.S. companies and the U.S. government.
8. LINE OF CREDIT.
The Company and Nations Portfolios participate in an uncommitted line of credit
provided by BONY under a line of credit agreement dated February 28, 1997 (the
"Agreement"). Advances under the Agreement are taken primarily for temporary or
emergency purposes, including the meeting of redemption requests that otherwise
might require the untimely disposition of securities. Under the Agreement, each
Fund may borrow up to the lesser of $25 million or 25% of
36
<PAGE> 39
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
its net assets. Interest on borrowing is payable at the Federal Funds Rate plus
0.50% on an annualized basis. The Agreement requires, among other things, that
each participating Fund maintain a ratio of no less than 4 to 1 net assets (not
including funds borrowed pursuant to the Agreement) to aggregate amount of
indebtedness pursuant to the Agreement. Borrowings for the six months ended
September 30, 1997 by the Funds under the agreements are disclosed below:
<TABLE>
<CAPTION>
MAXIMUM AVERAGE AVERAGE INTEREST RATE
AMOUNT AMOUNT AVERAGE DEBT ------------- INTEREST
FUND OUTSTANDING OUTSTANDING SHARES PER SHARE HIGH LOW EXPENSE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Nations International Growth........... $ 8,950,000 $ 195,628 43,619,930 $ 0.00(a) 6.74 5.83 5,827
</TABLE>
- ---------------
(a) Amount represents less than $0.01 per share.
9. LENDING OF PORTFOLIO SECURITIES.
Under an agreement with BONY, dated July 23, 1997, the Funds have the ability to
lend their securities to approved brokers, dealers and other financial
institutions. Loans of portfolio securities are collateralized by cash, in an
amount at least equal to 102% of the market value of the securities on loan.
Generally, in the event of counterparty default, the Fund has the right to use
the collateral to offset losses incurred. There would be potential loss to the
Fund in the event the Fund is delayed or prevented from exercising its right to
dispose of the collateral.
At September 30, 1997 the following Funds had securities on loan:
<TABLE>
<CAPTION>
MARKET
FUND VALUE % OF NET ASSETS
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Nations International Equity Fund......................................... $96,147,618 8.76%
Nations International Growth Fund......................................... 51,255,969 7.77
Nations Pacific Growth Fund............................................... 7,575,340 6.78
Nations Emerging Markets Fund............................................. 12,679,550 11.41
</TABLE>
10. CAPITAL LOSS CARRYFORWARD.
As of March 31, 1997, the following Funds had available for Federal income tax
purposes the following unused capital losses expiring March 31:
<TABLE>
<CAPTION>
FUND 2004 2005
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Nations Pacific Growth Fund.................................................... $102,682 $3,784,722
</TABLE>
Under the current tax law, capital and currency losses realized after October 31
may be deferred and treated as occurring on the first day of the following
fiscal year. For the fiscal year ended March 31, 1997, the following Funds
elected to defer losses occurring between November 1, 1996 and March 31, 1997,
under these rules, as follows:
<TABLE>
<CAPTION>
POST-OCTOBER CAPITAL
SHORT-TERM
FUND LOSS DEFERRAL
- -----------------------------------------------------------------------------------------------------------
<S> <C>
Nations International Equity Fund.................................................... $3,453,751
Nations Pacific Growth Fund.......................................................... 1,540,154
Nations Emerging Markets Fund........................................................ 175,861
</TABLE>
37
<PAGE> 40
NATIONS FUNDS
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
11. REORGANIZATION.
On May 23, 1997, certain Nations Funds, as listed below (each an "Acquiring
Fund"), acquired the assets and certain liabilities of The Pilot Funds, also
listed below (each an "Acquired Fund"), in a tax-free exchange for shares of the
Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired
Fund's shareholders. Total shares issued by the Acquiring Fund, the value of the
shares issued by the Acquiring Fund, the total net assets of the Acquired Fund
and the Acquiring Fund, the total net assets of each Aquiring Fund after the
acquisition and any unrealized appreciation included in the Acquired Fund's
total net assets at the acquisition date are as follows:
<TABLE>
<CAPTION>
VALUE OF TOTAL NET
SHARES SHARES TOTAL NET TOTAL NET ASSETS OF
ISSUED BY ISSUED BY ASSETS OF ASSETS OF ACQUIRING
ACQUIRING ACQUIRED ACQUISITION ACQUIRING ACQUIRING ACQUIRED ACQUIRING FUND AFTER
FUND FUND DATE FUND FUND FUND FUND ACQUISITION
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Nations Pilot
International International
Growth Fund Equity Fund 05/23/97 39,442,496 $729,633,901 $729,633,901 -- $729,633,901
<CAPTION>
ACQUIRED
FUND
UNREALIZED
APPRECIATION
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
$125,882,121
</TABLE>
38
<PAGE> 41
[GRAPHIC DEPICTING BASKETS]
<PAGE> 42
--------------------
NATIONS BULK RATE
FUNDS U.S. POSTAGE
PAID
P.O. Box 32602 N READING, MA
Charlotte, NC 28234-4602 PERMIT NO.
Toll Free 1-800-982-2271 105
--------------------
SAR3 97495 9/97
