-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OJtJL7Mthns2DOp6RNr4FY956GXNJmQAvuAJoYJYDepPeqoVq7E2Vp/OzYBHFSgE j2gJfF70W/9/6kk7pUQcPA== 0001193125-07-170202.txt : 20070803 0001193125-07-170202.hdr.sgml : 20070803 20070803095119 ACCESSION NUMBER: 0001193125-07-170202 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070531 FILED AS OF DATE: 20070803 DATE AS OF CHANGE: 20070803 EFFECTIVENESS DATE: 20070803 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SENTINEL GROUP FUNDS INC CENTRAL INDEX KEY: 0000225843 IRS NUMBER: 220966590 STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-00214 FILM NUMBER: 071022456 BUSINESS ADDRESS: STREET 1: ONE NATIONAL LIFE DRIVE CITY: MONTPELIER STATE: VT ZIP: 05604 BUSINESS PHONE: 1-800-282-3863 MAIL ADDRESS: STREET 1: ONE NATIONAL LIFE DRIVE CITY: MONTPELIER STATE: VT ZIP: 05604 0000225843 S000009619 Sentinel Balanced Fund C000026342 Class A SEBLX C000026343 Class B SEBBX C000026344 Class C SBACX C000026345 Class D SBLDX C000052058 CLASS I 0000225843 S000009621 Sentinel Short Maturity Government Fund C000026347 Class A SSIGX C000026348 Class S SSSGX C000033892 Class C SCCSX 0000225843 S000009622 Sentinel Small Company Fund C000026349 Class A SAGWX C000026350 Class B SESBX C000026351 Class C SSCOX C000043646 CLASS I SIGWX 0000225843 S000009624 Sentinel U. S. Treasury Money Market Fund C000026353 Class A SNTXX C000026354 Class B SUBXX 0000225843 S000009625 Sentinel Conservative Allocation Fund C000026355 Class A SECMX C000026356 Class B SMKBX C000026357 Class C SMKCX 0000225843 S000009627 Sentinel Common Stock Fund C000026361 Class A SENCX C000026362 Class B SNCBX C000026363 Class C SCSCX C000043647 CLASS I SICWX 0000225843 S000009628 Sentinel Government Securities Fund C000026364 Class A SEGSX C000033893 Class C SCGGX C000043648 CLASS I SIBWX 0000225843 S000009629 Sentinel High Yield Bond Fund C000026365 Class A SEHYX C000026366 Class B SYLBX C000026367 Class C SHBCX 0000225843 S000009630 Sentinel International Equity Fund C000026368 Class A SWRLX C000026369 Class B SEWBX C000026370 Class C SWFCX C000052059 CLASS I 0000225843 S000009631 Sentinel Mid Cap Growth Fund C000026371 Class A SNTNX C000026372 Class B SMGBX C000026373 Class C SMGCX C000052060 CLASS I 0000225843 S000011366 Sentinel Capital Growth Fund C000031482 Class A BRGRX C000031483 Class C SECGX C000052061 CLASS I 0000225843 S000011367 Sentinel Growth Leaders Fund C000031484 Class A BRFOX C000031485 Class C SGLFX C000052062 CLASS I N-CSRS 1 dncsrs.txt SENTINEL GROUP FUNDS, INC UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-214 SENTINEL GROUP FUNDS, INC. National Life Drive, Montpelier, Vermont 05604 Sentinel Asset Management, Inc. National Life Drive, Montpelier, Vermont 05604 Registrant's telephone number, including area code: (802) 229-3113 Date of fiscal year end: November 30 Date of reporting period: December 1, 2006 to May 31, 2007 ITEM 1. REPORT TO SHAREHOLDERS [LOGO OF SENTINEL FUNDS] Sentinel Funds Independent thinking Since 1934 [GRAPHIC APPEARS HERE] Sentinel Funds Semi-Annual Report May 31, 2007 Sentinel Balanced Fund Sentinel Capital Growth Fund Sentinel Common Stock Fund Sentinel Conservative Allocation Fund Sentinel Government Securities Fund Sentinel Growth Leaders Fund Sentinel High Yield Bond Fund Sentinel International Equity Fund Sentinel Mid Cap Growth Fund Sentinel Short Maturity Government Fund Sentinel Small Company Fund Sentinel U.S. Treasury Money Market Fund Sentinel Funds . National Life Drive . Montpelier, VT 05604 Sentinel Group Funds, Inc. (SGF) National Life Drive, Montpelier, Vermont 05604 (800) 282-FUND (3863) Table of Contents Message to Shareholders.................................................... 2 Sentinel Balanced Fund..................................................... 4 Sentinel Capital Growth Fund............................................... 7 Sentinel Common Stock Fund................................................. 9 Sentinel Conservative Allocation Fund...................................... 11 Sentinel Government Securities Fund........................................ 14 Sentinel Growth Leaders Fund............................................... 16 Sentinel High Yield Bond Fund.............................................. 18 Sentinel International Equity Fund......................................... 21 Sentinel Mid Cap Growth Fund............................................... 23 Sentinel Short Maturity Government Fund.................................... 25 Sentinel Small Company Fund................................................ 29 Sentinel U.S. Treasury Money Market Fund................................... 31 Statement of Assets and Liabilities........................................ 32 Statement of Operations.................................................... 36 Statement of Changes in Net Assets......................................... 38 Financial Highlights....................................................... 43 Notes to Financial Statements.............................................. 53 Actual and Hypothetical Expenses for Comparison Purposes................... 63 Information and Services for Shareholders.................................. 66 Proxy Voting Results....................................................... 69 Directors and Officers..................................................... 71 1 Message to Shareholders Markets confound experts with alarming frequency. Coming into 2007, pundits cautioned that the 2006 rally was long in the tooth and undermined by souring economic news. Chief among these was the overstretched housing market, with many locales facing excess housing stock and weakening demand. In the New Year, the shock of the sub-prime lending market came to the fore. This happened because banks had extended loans to highly leveraged homeowners. As interest rates increased, the fear was that many institutions would write down the value of the loans, thus triggering rounds of defaults. Another concern was the value of the dollar and the widening trade and current account deficit, both of which persisted but were more than offset by good news in the economy. Inflation, unemployment, hiring trends and consumer spending (after removing higher gas prices from the models) all showed encouraging resilience. The economy saw annualized growth of about 3.5% in the spring. So the fears that many foresaw in January, either failed to materialize or were heavily discounted by the market. It was a rewarding period for stock investors. The Dow Jones Industrial Index/1/, reached a record high on the last day of the reporting period and has since risen to new highs and breached the psychologically important 14,000 mark. The market, as measured by this index, has risen by nearly 100% since the lows of 2002. From November 2006 to May 2007, the S&P 500/2/, a broadly watched index of large capitalization companies, rose 10.29% while the Russell 2000 index/3/ of smaller capitalization stocks, rose 8.39%. Foreign markets, as measured by the MSCI EAFE index,/4/ rose 14.47% over the same period. In credit markets, the story was not quite the same. The fear of defaults under a benign interest rate environment sent 10-year treasury rates from 4.45% to nearly 5% and reversed the steep inverse yield curve from last November. Returns to bond investors were modest, with the Lehman Aggregate Bond index/5/ returning only 0.69% and investors in the 10-year and 30-year Treasury bonds losing 1.32% and 4.88% respectively for the six months ending May 31st, 2007. This begs the question as to how the bond market, stock market and real economy interact. The answer is not always clear except that there are pervasive influences at work in the market. Let us call them the three forces: the carry trade, hedge funds and private equity. The carry-trade is nothing more complex than borrowing in one low-rate market and spending in another. It works if interest and exchange rates remain stable. It unwinds quickly and alarmingly if investors feel the bill for "free-lunch" is about to arrive. Hedge funds, superficially complex but fundamentally simple investment vehicles, borrow. And leverage in this market has quite simply, gone mad. Stories abound of banks extending credit to hedge funds on an uncollateralized basis and of funds rushing to esoteric and thinly traded markets. Finally private equity funds, the latest version of leveraged buy-outs, specialize in taking public companies private, working their alchemy and re-floating them onto the public markets. But to succeed they have to buy low and sell high and do so with debt. In recent months, with deal activity, in both value and number at record levels, the reverse seems to be at work. So, with the three forces, markets see little downside and have risen almost daily. All this is good news except that the broader economic outlooks on inflation, unemployment and growth are modest. The Fed has been cautious but seems ready to pounce if inflation reacts to a tighter labor market or higher energy prices. In this environment, Sentinel continues to apply its fundamental principles of investing. We look at companies and management. We ask tough questions on market share, new products, management tenure, margins and competition. We look closely at balance sheets, interest cover, cash flow and inventories. We remain risk averse, which means we try to protect our investors' capital, participate in the market and buy strong companies that can withstand occasional shocks and setbacks. We see generally good conditions for investors over the medium and long-term but expect some short-term setbacks from time to time as excess is filtered out of the market. We have continued to invest in our all-important management talent and resources. Our teams in Montpelier, New York and San Francisco focus on long-term results and stick to investment principles built through decades of first hand experience. Thank you for your continued investment in the Sentinel Funds. /s/ Christian W. Thwaites - ----------------------------------- Christian W. Thwaites President & Chief Executive Officer - -------- /1/ The Dow Jones Industrial Index is a group of unmanaged securities consisting of the 30 largest and most widely held public companies in the U.S. An investment cannot be made directly in an index. /2/ The S&P 500 Index is an unmanaged index considered representative of the U.S. stock market. An investment cannot be made directly in an index. /3/ The Russell 2000 Index is a group of unmanaged securities used to measure the performance of small-capitalization U.S. stocks. An Investment cannot be made directly in an Index. /4/ MSCI EAFE is an index of average unmanaged securities prices in Europe, Australia and the Far East tracked by Morgan Stanley Capital International. An investment cannot be made directly in an index. /5/ The Lehman Brothers Aggregate Bond Index is an unmanaged index made up of the Lehman Brothers Government /Corporate Bond Index, Mortgaged-Backed Securities Index, and Asset-Backed Securities Index, and includes securities that are of investment-grade quality, have at least one year to maturity, and have an outstanding par value of at least $100 million. An investment cannot be made directly in an index. 2 Sentinel Balanced Fund Fund Profile at May 31, 2007 Portfolio Weightings Asset Category Percent of Net Assets - -------------- --------------------- Common Stocks 68.7% U.S. Government Obligations 29.8% Cash and Other 1.5% Top 10 Equity Holdings* Description Percent of Net Assets - ----------- --------------------- ExxonMobil Corp. 2.1% United Technologies Corp. 1.8% Medtronic, Inc. 1.7% General Electric Co. 1.6% American Int'l. Group, Inc. 1.5% Johnson & Johnson 1.5% Bank of America Corp. 1.4% Citigroup, Inc. 1.4% Honeywell Int'l., Inc. 1.3% Schlumberger Ltd. 1.3% ---- Total of Net Assets* 15.6% ==== Top 10 Fixed Income Holdings* Maturity Percent of Description Coupon Date Net Assets - ----------- ------ ---------- ---------- FNR 06-63 VH 6.50% 03/25/23 4.1% FNR 06-66 NV 6.50% 02/25/24 2.9% FHR 2456 CJ 6.50% 06/15/32 2.7% FNR 06-88 BV 6.50% 11/25/25 2.4% GNR 02-43 Z 6.50% 06/20/32 1.9% FHR 2713 EJ 5.50% 12/15/33 1.5% FNR 03-36 OQ 5.00% 12/25/31 1.5% GNR 03-7 PE 5.50% 11/16/31 1.4% FNR 04-91 BK 4.50% 07/25/31 1.4% FHR 3181 BV 6.50% 06/15/26 1.3% ---- Total of Net Assets* 21.1% ==== Average Effective Duration (for all Fixed Income Holdings) 5.0 years** - -------- * "Top 10 Equity Holdings" and "Top 10 Fixed Income Holdings" excludes any short-term investments and money market funds. Portfolio composition and holdings are subject to change. More complete holdings follow. ** The average effective duration considers the call and put date of a security and the pre-payment risk of mortgage-backed bonds to measure the sensitivity of the Fund's price due to changes in interest rates. Investment in Securities at May 31, 2007 (Unaudited) Principal Amount Value (M=$1,000) (Note 2) ---------- ----------- U.S. Government Obligations 29.8% U.S. Government Agency Obligations 29.8% Federal Home Loan Mortgage Corporation 9.9% Collateralized Mortgage Obligations: FHR 3187 VJ 5%, 03/15/25 2,000M $ 1,891,380 FHR 3181 BV 6.5%, 06/15/26 3,996M 4,110,022 FHR 3177 KB 6%, 09/15/30 3,795M 3,832,722 FHR 2440 ZO 6.5%, 04/15/32 1,807M 1,880,437 FHR 2456 CJ 6.5%, 06/15/32 8,313M 8,516,062 FHR 2713 EJ 5.5%, 12/15/33 5,000M 4,791,550 FHR 3254 QE 6%, 11/15/36 4,000M 3,994,440 ----------- 29,016,613 ----------- Mortgage-Backed Securities: 20-Year: FHLMC P00020 6.5%, 10/01/22 590M 597,701 ----------- 30-Year: FHLMC C47315 6.5%, 08/01/29 1,268M 1,302,435 ----------- Total Federal Home Loan Mortgage Corporation 30,916,749 ----------- Federal National Mortgage Association 15.3% Collateralized Mortgage Obligations: FNR 06-63 VH 6.5%, 03/25/23 12,500M 12,822,625 FNR 06-78 BV 6.5%, 06/25/23 1,500M 1,541,400 FNR 06-66 NV 6.5%, 02/25/24 9,000M 9,177,930 FNR 06-88 BV 6.5%, 11/25/25 7,232M 7,425,731 FNR 04-91 BK 4.5%, 07/25/31 4,752M 4,385,193 FNR 03-36 OQ 5%, 12/25/31 5,000M 4,733,900 FNR 2005-112 NC 6%, 10/25/32 4,000M 4,025,320 FNR 06-90 BG 6%, 09/25/36 2,798M 2,783,227 ----------- 46,895,326 ----------- Mortgage-Backed Securities: 30-Year: FNMA 500296 6%, 04/01/29 16M 15,660 FNMA 748895 6%, 12/01/33 895M 896,479 ----------- 912,139 ----------- Total Federal National Mortgage Association 47,807,465 ----------- Government National Mortgage Corporation 4.6% Collateralized Mortgage Obligations: GNR 04-58 VB 5.5%, 04/16/28 4,000M 3,896,000 GNR 03-7 PE 5.5%, 11/16/31 4,500M 4,471,830 The accompanying notes are an integral part of the financial statements. 3 Sentinel Balanced Fund Principal Amount Value (M=$1,000) (Note 2) ---------- ----------- GNR 02-43 Z 6.5%, 06/20/32 5,824M 5,969,849 ----------- 14,337,679 ----------- Mortgage-Backed Securities: 15-Year: GNMA 514482 7.5%, 09/15/14 83M $ 86,307 ----------- 30-Year: GNMA 26446 9%, 02/15/09 4M 4,455 ----------- Total Government National Mortgage Corporation 14,428,441 ----------- Total U.S. Government Obligations (Cost $93,642,774) 93,152,655 ----------- Shares ---------- Common Stocks 68.7% Consumer Discretionary 5.0% Comcast Corp.* 110,400 3,000,672 Grupo Televisa SA ADR 40,000 1,151,200 Hilton Hotels Corp. 45,000 1,599,750 McDonald's Corp. 35,000 1,769,250 McGraw-Hill Cos., Inc. 29,600 2,081,176 Staples, Inc. 40,000 1,002,400 Time Warner, Inc. (a) 100,000 2,137,000 TJX Cos., Inc. 35,000 978,950 Walt Disney Co. 58,000 2,055,520 ----------- 15,775,918 ----------- Consumer Staples 5.9% Altria Group, Inc. 40,500 2,879,550 CVS Caremark Corp. 34,600 1,333,484 Diageo PLC ADR 20,000 1,707,800 Kellogg Co. 25,000 1,349,500 Kimberly-Clark Corp. 40,000 2,838,400 Kraft Foods, Inc. 28,026 948,400 PepsiCo, Inc. 40,000 2,733,200 Procter & Gamble Co. 50,000 3,177,500 Wal-Mart Stores, Inc. 27,500 1,309,000 ----------- 18,276,834 ----------- Energy 6.8% Chevron Corp. 35,000 2,852,150 EOG Resources, Inc. 22,500 1,730,250 ExxonMobil Corp. 78,000 6,487,260 GlobalSantaFe Corp. (a) 25,000 1,707,500 Noble Energy, Inc. 17,500 1,107,575 Pride Int'l., Inc.* 25,000 900,250 Schlumberger Ltd. 52,800 4,111,536 Weatherford Int'l., Ltd.* 40,800 2,217,072 ----------- 21,113,593 ----------- Financials 14.2% ACE Ltd. 15,000 923,550 American Express Co. 40,600 2,638,188 American Int'l. Group, Inc. 65,000 4,702,100 Ameriprise Financial, Inc. 8,120 510,342 Bank of America Corp. 86,990 4,411,263 Bank of New York Co., Inc. 42,300 1,715,688 Citigroup, Inc. 80,000 4,359,200 Goldman Sachs Group, Inc. 9,600 2,215,872 Hartford Financial Services 17,500 1,805,475 JPMorgan Chase & Co. 75,000 3,887,250 Mellon Financial Corp. (a) 50,000 2,166,500 Merrill Lynch & Co., Inc. 23,400 2,169,882 Moody's Corp. 15,000 1,044,750 Morgan Stanley 24,500 2,083,480 PartnerRe Ltd. (a) 11,800 906,240 PNC Financial Services Group, Inc. 11,800 870,840 Travelers Cos., Inc. 32,800 1,776,776 US Bancorp 60,000 2,074,800 Wachovia Corp. 33,700 1,826,202 Wells Fargo & Co. 61,000 2,201,490 ----------- 44,289,888 ----------- Health Care 11.1% Amgen, Inc.* (a) 35,000 1,971,550 Baxter Int'l., Inc. 30,000 1,705,200 Bristol-Myers Squibb Co. 45,000 1,363,950 Cigna Corp. 7,000 1,173,410 Eli Lilly & Co. 30,000 1,758,600 GlaxoSmithKline PLC ADR (a) 25,000 1,304,500 Johnson & Johnson 73,300 4,637,691 Laboratory Corp of America Holdings* 10,000 787,400 Medco Health Solutions, Inc.* 15,000 1,166,400 Medtronic, Inc. 100,000 5,317,000 Novartis AG ADR 35,500 1,994,390 Pfizer, Inc. 96,400 2,650,036 Quest Diagnostics, Inc. (a) 35,000 1,715,700 Schering-Plough Corp. 60,700 1,987,318 St. Jude Medical, Inc.* 25,000 1,067,250 Teva Pharmaceutical Industries Ltd. ADR 45,500 1,783,600 Zimmer Holdings, Inc.* 25,000 2,201,500 ----------- 34,585,495 ----------- Industrials 11.4% Boeing Co. 25,000 2,514,750 Canadian National Railway Co. 36,500 1,992,535 Deere & Co. 17,500 2,108,225 General Dynamics Corp. 23,000 1,845,520 General Electric Co. 135,000 5,073,300 Honeywell Int'l., Inc. 71,700 4,152,147 Northrop Grumman Corp. 21,000 1,587,810 Rockwell Automation, Inc. 30,000 2,041,500 Tyco Int'l. Ltd. 106,100 3,539,496 Union Pacific Corp. 20,500 2,473,940 United Technologies Corp. 77,500 5,467,625 Waste Management, Inc. 70,800 2,737,836 ----------- 35,534,684 ----------- Information Technology 9.1% Accenture Ltd. 25,000 1,023,500 Adobe Systems, Inc.* 45,000 1,983,600 Alcatel-Lucent ADR* (a) 75,000 1,029,000 Broadcom Corp.* 50,000 1,528,000 Cisco Systems, Inc.* 76,000 2,045,920 EMC Corp.* 100,000 1,689,000 Intel Corp. 96,300 2,134,971 Microchip Technology, Inc. 45,000 1,826,100 Microsoft Corp. 120,000 3,680,400 Motorola, Inc. 85,000 1,546,150 Nokia Oyj ADR 88,300 2,417,654 Oracle Corp.* 82,600 1,600,788 SAP AG ADR (a) 36,000 1,718,640 Seagate Technology (a) 87,400 1,799,566 Texas Instruments, Inc. 69,800 2,468,128 ----------- 28,491,417 ----------- Materials 2.7% EI Du Pont de Nemours & Co. 40,000 2,092,800 Freeport-McMoRan Copper & Gold, Inc. (a) 51,200 4,029,440 Praxair, Inc. 35,000 2,383,150 ----------- 8,505,390 ----------- Telecommunication Services 1.8% America Movil SA de CV ADR 30,800 1,864,940 AT&T, Inc. 38,500 1,591,590 The accompanying notes are an integral part of the financial statements. 4 Sentinel Balanced Fund Value Shares (Note 2) ------------ ------------ Verizon Communications, Inc. 50,000 2,176,500 ------------ 5,633,030 ------------ Utilities 0.7% Entergy Corp. 20,000 $ 2,258,000 ------------ Total Common Stocks (Cost $129,453,842) 214,464,249 ------------ Warrants 0.0% Lucent Technologies, Inc. * (Cost $0) 3,385 609 ------------ Money Market Funds 3.8% State Street Navigator Securities Lending Prime Portfolio (b) (Cost $11,863,368) 11,863,368 11,863,368 ------------ Principal Amount (M= $ 1,000) ------------ Corporate Short-Term Notes 1.0% American Express Credit 5.23%, 06/01/07 (Cost $3,000,000) 3,000M 3,000,000 ------------ Total Investments 103.3% (Cost $237,959,984) ** 322,480,881 Excess of Liabilities Over Other Assets (3.3)% (10,303,953) ------------ Net Assets 100.0% $312,176,928 ============ - -------- * Non-income producing ** Cost for federal income tax purposes is $237,959,984. At May 31, 2007 unrealized appreciation for federal income tax purposes aggregated $84,520,897 of which $85,863,498 related to appreciated securities and $1,342,601 related to depreciated securities. (a) All or a portion of this security was on loan at May 31, 2007. The aggregate cost and market value of securities on loan at May 31, 2007 is $9,582,273 and $11,622,361, respectively. (b) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by SSgA Funds Management, Inc., an affiliate of State Street Bank and Trust Company. This amount represents the investment of cash collateral received from securities lending activity (see Note 2). ADR - American Depository Receipt The accompanying notes are an integral part of the financial statements. 5 Sentinel Capital Growth Fund Fund Profile at May 31, 2007 Top Sectors Sector Percent of Net Assets - ------ --------------------- Industrials 17.3% Financials 15.0% Health Care 13.4% Materials 12.5% Information Technology 11.5% Consumer Staples 8.7% Consumer Discretionary 7.7% Energy 7.1% Telecommunication Services 2.1% Transportation 2.0% Utilities 1.1% Top 10 Holdings * Description Percent of Net Assets - ----------- --------------------- Walgreen Co. 4.2% Praxair, Inc. 3.2% Emerson Electric Co. 3.0% Roche Holding AG 2.7% Jacobs Engineering Group, Inc. 2.6% General Electric Co. 2.6% Stryker Corp. 2.5% BlackRock, Inc. 2.5% Schlumberger Ltd. 2.4% Gilead Sciences, Inc. 2.4% ---- Total of Net Assets 28.1% ==== - -------- * "Top 10 Holdings" excludes any short-term investments and money market funds. Portfolio composition and holdings are subject to change. More complete holdings follow. Investment in Securities at May 31, 2007 (Unaudited) Value Shares (Note 2) ------- ----------- Common Stocks 98.4% Consumer Discretionary 7.7% Coach, Inc. * 40,000 $ 2,054,400 Domino's Pizza, Inc. (a) 10,000 196,200 JC Penney Co., Inc. 50,000 4,024,000 Johnson Controls, Inc. 11,000 1,206,700 Marriott Int'l., Inc. 11,000 506,550 McDonald's Corp. 77,000 3,892,350 Staples, Inc. 10,000 250,600 Tiffany & Co. (a) 50,000 2,628,500 ----------- 14,759,300 ----------- Consumer Staples 8.7% Colgate-Palmolive Co. 36,000 2,410,560 Corn Products Int'l., Inc. 15,100 619,553 CVS Caremark Corp. 10,900 420,086 PepsiCo, Inc. 33,554 2,292,745 Procter & Gamble Co. 25,770 1,637,683 Walgreen Co. 177,786 8,023,482 Wal-Mart de Mexico SA de CV ADR * (a) 36,611 1,378,404 ----------- 16,782,513 ----------- Energy 7.1% Devon Energy Corp. 15,000 1,151,700 EOG Resources, Inc. 10,000 769,000 ExxonMobil Corp. 51,200 4,258,304 Grant Prideco, Inc. * 10,000 567,900 Noble Corp. 18,000 1,663,020 Schlumberger Ltd. 59,000 4,594,330 St. Mary Land & Exploration Co. 10,000 373,600 Weatherford Int'l., Ltd. * 6,000 326,040 ----------- 13,703,894 ----------- Financials 15.0% American Express Co. 60,800 3,950,784 Bear Stearns Cos., Inc. 15,000 2,249,400 BlackRock, Inc. (a) 31,000 4,759,740 CB Richard Ellis Group, Inc. * 54,000 2,009,880 Chicago Mercantile Exchange Holdings, Inc. 5,500 2,920,500 CIT Group, Inc. 45,000 2,696,850 Goldman Sachs Group, Inc. 15,000 3,462,300 Merrill Lynch & Co., Inc. 35,000 3,245,550 Wells Fargo & Co. 100,000 3,609,000 ----------- 28,904,004 ----------- Health Care 13.4% Abbott Laboratories 42,835 2,413,752 Gilead Sciences, Inc. * 55,200 $ 4,568,904 Kyphon, Inc. * (a) 25,000 1,187,250 Medtronic, Inc. 75,928 4,037,092 Novartis AG ADR 25,000 1,404,500 Roche Holding AG ADR 56,000 5,138,000 St. Jude Medical, Inc. * 35,000 1,494,150 Stryker Corp. 71,000 4,779,010 Zimmer Holdings, Inc. * 10,000 880,600 ----------- 25,903,258 ----------- Industrials 17.3% Boeing Co. 21,000 2,112,390 Caterpillar, Inc. 4,900 385,042 Deere & Co. 4,000 481,880 Donaldson Co., Inc. (a) 20,000 730,600 Emerson Electric Co. 120,000 5,814,000 FedEx Corp. 20,000 2,232,400 General Dynamics Corp. 6,200 497,488 General Electric Co. 135,155 5,079,125 Goodrich Corp. 15,000 892,350 Honeywell Int'l., Inc. 5,600 324,296 Illinois Tool Works, Inc. 37,000 1,950,640 Jacobs Engineering Group, Inc. * 88,000 5,099,600 Precision Castparts Corp. 18,000 2,152,080 The accompanying notes are an integral part of the financial statements. 6 Sentinel Capital Growth Fund Value Shares (Note 2) ----------- ------------ Robert Half Int'l., Inc. 95,000 $ 3,338,300 United Parcel Service, Inc. 10,000 719,700 United Technologies Corp. 21,900 1,545,045 ------------ 33,354,936 ------------ Information Technology 11.5% Ansys, Inc. * 10,000 561,600 Apple, Inc. * 9,500 1,154,820 Autodesk, Inc. * 90,000 4,090,500 Automatic Data Processing, Inc. 83,763 4,163,021 Broadcom Corp. * 45,000 1,375,200 Cisco Systems, Inc. * 161,870 4,357,540 EMC Corp. * 33,400 564,126 Fiserv, Inc. * 10,540 624,495 Google, Inc. * 800 398,200 Microsoft Corp. 68,186 2,091,265 Network Appliance, Inc. * 21,600 695,304 Paychex, Inc. 39,600 1,599,840 SAP AG ADR (a) 10,000 477,400 ------------ 22,153,311 ------------ Materials 12.5% Allegheny Technologies, Inc. 30,000 3,467,700 BHP Billiton Ltd. ADR (a) 43,000 2,263,520 Carpenter Technology Corp. (a) 27,000 3,579,390 Cia Vale do Rio Doce ADR 3,000 136,350 Commercial Metals Co. 75,100 2,639,765 Freeport-McMoRan Copper & Gold, Inc. (a) 57,050 4,489,835 Nucor Corp. 14,000 945,560 Praxair, Inc. 90,800 6,182,572 United States Steel Corp. 3,000 339,480 ------------ 24,044,172 ------------ Telecommunication Services 2.1% AT&T, Inc. 35,000 1,446,900 Verizon Communications, Inc. 60,000 2,611,800 ------------ 4,058,700 ------------ Transportation 2.0% Canadian Pacific Railway Ltd. 40,000 2,858,800 Kansas City Southern * (a) 25,000 1,026,250 ------------ 3,885,050 ------------ Utilities 1.1% Dominion Resources, Inc. 25,000 2,214,750 ------------ Total Common Stocks 189,763,888 ------------ (Cost $119,369,970) Money Market Funds 10.2% State Street Navigator Securities Lending Prime Portfolio (b) (Cost $19,776,973) 19,776,973 19,776,973 ------------ Principal Amount (M= $1,000) ----------- Corporate Short-Term Notes 1.0% Wells Fargo & Co. 5.25%, 06/04/07 (Cost $1,899,169) 1,900M 1,899,169 ------------ Total Investments 109.6% (Cost $141,046,112) ** 211,440,030 Excess of Liabilities Over Other Assets (9.6)% (18,542,354) ------------ Net Assets 100.0% $192,897,676 ============ - -------- * Non-income producing **` Cost for federal income tax purposes is $141,046,112. At May 31, 2007 unrealized appreciation for federal income tax purposes aggregated $70,393,918 of which $70,639,884 related to appreciated securities and $245,966 related to depreciated securities (a) All or a portion of this security was on loan at May 31, 2007. The aggregate cost and market value of securities on loan at May 31, 2007 is $12,988,768 and $19,709,338, respectively. (b) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by SSgA Funds Management, Inc., an affiliate of State Street Bank and Trust Company. This amount represents the investment of cash collateral received from securities lending activity (see Note 2). ADR - American Depository Receipt The accompanying notes are an integral part of the financial statements. 7 Sentinel Common Stock Fund Fund Profile at May 31, 2007 Top Sectors Sector Percent of Net Assets - ------ --------------------- Financials 19.3% Industrials 15.5% Health Care 14.5% Information Technology 12.3% Energy 11.4% Consumer Staples 9.3% Consumer Discretionary 7.7% Materials 3.9% Telecommunication Services 2.0% Utilities 1.1% Top 10 Holdings * Description Percent of Net Assets - ----------- --------------------- ExxonMobil Corp. 3.4% United Technologies Corp. 2.8% General Electric Co. 2.5% Schlumberger Ltd. 2.3% Citigroup, Inc. 2.1% Johnson & Johnson 2.1% Medtronic, Inc. 2.0% Microsoft Corp. 1.9% Bank of America Corp. 1.9% PepsiCo, Inc. 1.8% ---- Total of Net Assets 22.8% ==== - -------- * "Top 10 Holdings" excludes any short-term investments and money market funds. Portfolio composition and holdings are subject to change. More complete holdings follow. Investment in Securities at May 31, 2007 (Unaudited) Value Shares (Note 2) ------- ------------ Common Stocks 97.0% Consumer Discretionary 7.7% Comcast Corp. * 800,000 $ 21,744,000 Grupo Televisa SA ADR 225,000 6,475,500 Hilton Hotels Corp. 250,000 8,887,500 McDonald's Corp. 204,600 10,342,530 McGraw-Hill Cos., Inc. 183,800 12,922,978 Staples, Inc. 327,000 8,194,620 Time Warner, Inc. 946,100 20,218,157 TJX Cos., Inc. 200,000 5,594,000 Walt Disney Co. 462,000 16,373,280 ------------ 110,752,565 ------------ Consumer Staples 9.3% Altria Group, Inc. 291,400 20,718,540 CVS Caremark Corp. 200,000 7,708,000 Diageo PLC ADR 125,000 10,673,750 Kellogg Co. (a) 231,300 12,485,574 Kimberly-Clark Corp. 200,000 14,192,000 Kraft Foods, Inc. 176,742 5,980,950 PepsiCo, Inc. 388,000 26,512,040 Procter & Gamble Co. 391,475 24,878,236 Walgreen Co. 85,000 3,836,050 Wal-Mart Stores, Inc. 150,000 7,140,000 ------------ 134,125,140 ------------ Energy 11.4% Apache Corp. 41,000 3,310,750 Chevron Corp. 266,400 21,708,936 EOG Resources, Inc. 132,500 10,189,250 ExxonMobil Corp. 594,000 49,402,980 GlobalSantaFe Corp. (a) 175,000 11,952,500 Noble Energy, Inc. 125,000 7,911,250 Pride Int'l., Inc. * (a) 150,000 5,401,500 Schlumberger Ltd. 431,900 33,632,053 Valero Energy Corp. 45,000 3,357,900 Weatherford Int'l., Ltd. * (a) 300,000 16,302,000 ------------ 163,169,119 ------------ Financials 19.3% ACE Ltd. 100,000 6,157,000 American Express Co. 296,300 19,253,574 American Int'l. Group, Inc. 260,000 18,808,400 Ameriprise Financial, Inc. 50,660 3,183,981 Bank of America Corp. 530,172 26,885,022 Bank of New York Co., Inc. 250,000 10,140,000 Citigroup, Inc. 564,000 30,732,360 Goldman Sachs Group, Inc. 72,200 16,665,204 Hartford Financial Services 124,000 12,793,080 JPMorgan Chase & Co. 511,350 26,503,270 Mellon Financial Corp. 329,000 14,255,570 Merrill Lynch & Co., Inc. 140,000 12,982,200 Moody's Corp. 75,000 5,223,750 Morgan Stanley 154,300 13,121,672 PartnerRe Ltd. (a) 66,700 5,122,560 PNC Financial Services Group, Inc. 75,000 5,535,000 Travelers Cos., Inc. 125,000 6,771,250 US Bancorp 400,000 13,832,000 Wachovia Corp. 279,145 15,126,868 Wells Fargo & Co. 376,600 13,591,494 ------------ 276,684,255 ------------ Health Care 14.5% Amgen, Inc. * (a) 275,000 15,490,750 Baxter Int'l., Inc. 250,000 14,210,000 Bristol-Myers Squibb Co. 225,000 6,819,750 Cigna Corp. 45,100 7,560,113 Eli Lilly & Co. 184,000 10,786,080 GlaxoSmithKline PLC ADR 160,000 8,348,800 Johnson & Johnson 485,000 30,685,950 Laboratory Corp of America Holdings * 40,000 3,149,600 The accompanying notes are an integral part of the financial statements. 8 Sentinel Common Stock Fund Value Shares (Note 2) ---------- -------------- Medco Health Solutions, Inc.* 70,000 $ 5,443,200 Medtronic, Inc. 541,000 28,764,970 Novartis AG ADR 200,000 11,236,000 Pfizer, Inc. 495,900 13,632,291 Quest Diagnostics, Inc. 250,000 12,255,000 Schering-Plough Corp. 371,600 12,166,184 St. Jude Medical, Inc.* 200,000 8,538,000 Teva Pharmaceutical Industries Ltd. ADR 200,000 7,840,000 Zimmer Holdings, Inc.* 131,900 11,615,114 -------------- 208,541,802 -------------- Industrials 15.5% Boeing Co. 120,000 12,070,800 Canadian National Railway Co. 136,700 7,462,453 Caterpillar, Inc. 29,000 2,278,820 Deere & Co. 98,300 11,842,201 General Dynamics Corp. 144,800 11,618,752 General Electric Co. 964,049 36,228,961 Honeywell Int'l., Inc. 449,300 26,018,963 L-3 Communications Holdings, Inc. 34,000 3,238,840 Northrop Grumman Corp. 131,900 9,972,959 Rockwell Automation, Inc. 160,000 10,888,000 Tyco Int'l. Ltd. 623,400 20,796,624 Union Pacific Corp. 131,600 15,881,488 United Technologies Corp. 560,900 39,571,495 Waste Management, Inc. 400,000 15,468,000 -------------- 223,338,356 -------------- Information Technology 12.3% Accenture Ltd. 150,000 6,141,000 Adobe Systems, Inc.* 360,000 15,868,800 Alcatel-Lucent ADR* (a) 475,000 6,517,000 Apple, Inc.* 55,000 6,685,800 Broadcom Corp.* 300,000 9,168,000 Cisco Systems, Inc.* 569,700 15,336,324 EMC Corp.* 600,000 10,134,000 Intel Corp. 585,700 12,984,969 Microchip Technology, Inc. 240,000 9,739,200 Microsoft Corp. 909,700 27,900,499 Motorola, Inc. 441,600 8,032,704 Nokia Oyj ADR 400,000 10,952,000 Oracle Corp.* 380,000 7,364,400 SAP AG ADR (a) 250,000 11,935,000 Seagate Technology (a) 389,200 8,013,628 Texas Instruments, Inc. 270,000 9,547,200 -------------- 176,320,524 -------------- Materials 3.9% EI Du Pont de Nemours & Co. (a) 282,300 14,769,936 Freeport-McMoRan Copper & Gold, Inc. 313,700 24,688,190 Praxair, Inc. 236,000 16,069,240 -------------- 55,527,366 -------------- Telecommunication Services 2.0% America Movil SA de CV ADR 162,100 9,815,155 AT&T, Inc. 192,200 7,945,548 Verizon Communications, Inc. 261,962 11,403,206 -------------- 29,163,909 -------------- Utilities 1.1% Entergy Corp. 100,000 11,290,000 Exelon Corp 63,000 4,914,000 -------------- 16,204,000 -------------- Total Common Stocks (Cost $817,447,709) 1,393,827,036 -------------- Warrants 0.0% Lucent Technologies, Inc.* (Cost $0) 23,806 4,285 -------------- Money Market Funds 4.7% State Street Navigator Securities Lending Prime Portfolio (b) (Cost $67,389,835) 67,389,835 67,389,835 -------------- Principal Amount (M=$1,000) ---------- Corporate Short-Term Notes 1.5% Basf-ag 5.235%, 06/04/07 3,000M 2,998,691 LBC (Lasalle Bank Corp.) 5.235%, 06/04/07 4,000M 3,998,255 5.235%, 06/14/07 8,000M 7,984,877 Wells Fargo Co 5.25%, 06/12/07 6,000M 5,990,375 -------------- Total Corporate Short-Term Notes (Cost $20,972,198) 20,972,198 -------------- U.S. Government Obligations 1.5% Federal Home Loan Bank 1.5% Agency Discount Notes: 5.08%, 06/06/07 12,000M 11,991,533 5.11%, 06/08/07 10,000M 9,990,064 Total U.S. Government Obligations (Cost $21,981,597) 21,981,597 -------------- Total Investments 104.7% (Cost $927,791,339)** 1,504,174,951 Excess of Liabilities Over Other Assets (4.7)% (67,841,062) -------------- Net Assets 100.0% $1,436,333,889 ============== - -------- * Non-income producing ** Cost for federal income tax purposes is $927,791,339. At May 31, 2007 unrealized appreciation for federal income tax purposes aggregated $576,383,612 of which $579,703,248 related to appreciated securities and $3,319,636 related to depreciated securities. (a) All or a portion of this security was on loan at May 31, 2007. The aggregate cost and market value of securities on loan at May 31, 2007 is $57,620,427 and $66,277,057, respectively. (b) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by SSgA Funds Management, Inc., an affiliate of State Street Bank and Trust Company. This amount represents the investment of cash collateral received from securities lending activity (see Note 2). ADR - American Depository Receipt The accompanying notes are an integral part of the financial statements. 9 Sentinel Conservative Allocation Fund Fund Profile at May 31, 2007 Portfolio Weightings Asset Category Percent of Net Assets - -------------- --------------------- U.S. Government Obligations 46.8% Common Stocks 40.6% Bonds 9.7% Foreign Stocks 1.4% Cash and Other 1.5% Top 10 Equity Holdings * Description Percent of Net Assets - ----------- --------------------- SPDR Trust Series 1 4.8% ExxonMobil Corp. 1.2% Deere & Co. 1.0% Waste Management, Inc. 1.0% ConocoPhillips 0.9% Citigroup, Inc. 0.9% Bank of America Corp. 0.9% JPMorgan Chase & Co. 0.8% AT&T, Inc. 0.8% American Int'l. Group, Inc. 0.8% ---- Total of Net Assets * 13.1% ==== Top 10 Fixed Income Holdings * Maturity Description Coupon Date Percent of Net Assets - ----------- ------ -------- --------------------- FHR 2456 CJ 6.50% 06/15/32 5.0% FNMA 886845 5.50% 09/01/36 4.8% FNR 03-36 OQ 5.00% 12/25/31 4.1% FHR 2440 ZO 6.50% 04/15/32 3.7% GNR 02-43 Z 6.50% 06/20/32 3.4% FHR 3145 KE 5.00% 02/15/34 3.1% FNR 05-112 NC 6.00% 10/25/32 2.5% GNR 04-58 VB 5.50% 04/16/28 2.5% FHR 2713 EJ 5.50% 12/15/33 2.4% GNMA 628416X 6.00% 03/15/24 2.4% ---- Total of Net Assets * 33.9% ==== Average Effective Duration (for all Fixed Income Holdings) 5.2 years ** - -------- * "Top 10 Equity Holdings" and "Top 10 Fixed Income Holdings" excludes any short-term investments and money market funds. Portfolio composition and holdings are subject to change. More complete holdings follow. ** The average effective duration considers the call and put date of a security and the pre-payment risk of mortgage-backed bonds to measure the sensitivity of the Fund's price due to changes in interest rates. Investment in Securities at May 31, 2007 (Unaudited) Principal Amount Value (M=$1,000) (Note 2) ---------- ----------- U.S. Government Obligations 46.8% Federal Farm Credit Bank 3.0% Agency Discount Notes: 5.14%, 06/01/07 1,800M $ 1,800,000 ----------- Federal Home Loan Mortgage Corporation 19.1% Collateralized Mortgage Obligations: FHR 3181 BV 6.5%, 06/15/26 1,000M 1,028,620 FHR 2440 ZO 6.5%, 04/15/32 2,085M 2,169,735 FHR 2456 CJ 6.5%, 06/15/32 2,909M 2,980,622 FHR 2713 EJ 5.5%, 12/15/33 1,500M 1,437,465 FHR 3145 KE 5%, 02/15/34 2,000M 1,858,940 FHR 3254 QE 6%, 11/15/36 1,000M 998,610 ----------- 10,473,992 ----------- Mortgage-Backed Securities: 30-Year: FHLMC C47315 6.5%, 08/01/29 830M 852,495 ----------- Total Federal Home Loan Mortgage Corporation 11,326,487 ----------- Federal National Mortgage Association 16.4% Collateralized Mortgage Obligations: FNR 06-78 BV 6.5%, 06/25/23 1,000M 1,027,600 FNR 04-91 BK 4.5%, 07/25/31 1,000M 922,810 FNR 03-36 OQ 5%, 12/25/31 2,556M 2,419,970 FNR 05-112 NC 6%, 10/25/32 1,500M 1,509,495 FNR 06-90 BG 6%, 09/25/36 1,000M 994,720 ----------- 6,874,595 ----------- Mortgage-Backed Securities: 30-Year: FNMA 886845 5.5%, 09/01/36 2,944M 2,876,712 ----------- Total Federal National Mortgage Association 9,751,307 ----------- Government National Mortgage Corporation 8.3% Collateralized Mortgage Obligations: GNR 04-58 VB 5.5%, 04/16/28 1,500M 1,461,000 GNR 02-43 Z 6.5%, 06/20/32 1,958M 2,006,672 ----------- 3,467,672 ----------- The accompanying notes are an integral part of the financial statements. 10 Sentinel Conservative Allocation Fund Principal Amount Value (M=$1,000) (Note 2) ---------- ----------- Mortgage-Backed Securities: 30-Year: GNMA 628416X 6%, 03/15/24 1,420M $ 1,429,743 ----------- Total Government National Mortgage Corporation 4,897,415 ----------- Total U.S. Government Obligations (Cost $28,043,869) 27,775,209 ----------- Bonds 9.7% Basic Industry 0.3% Freeport-McMoRan Copper & Gold, Inc. 6.875%, 02/01/14 200M 207,250 ----------- Capital Goods 0.9% Crown Americas LLC 7.75%, 11/15/15 250M 262,500 L-3 Communications Corp. 6.375%, 10/15/15 300M 300,750 ----------- 563,250 ----------- Consumer Cyclical 1.3% Accuride Corp. 8.5%, 02/01/15 150M 154,875 GMAC LLC 6.875%, 08/28/12 250M 251,488 Visteon Corp. 8.25%, 08/01/10 (a) 100M 102,000 Warnaco, Inc. 8.875%, 06/15/13 250M 266,562 ----------- 774,925 ----------- Consumer Non-Cyclical 0.3% Elizabeth Arden, Inc. 7.75%, 01/15/14 200M 206,500 ----------- Energy 1.8% Chesapeake Energy Corp. 6.375%, 06/15/15 100M 100,500 6.875%, 01/15/16 230M 234,600 Encore Acquisition Co. 6.25%, 04/15/14 250M 234,062 PetroHawk Energy Corp. 9.125%, 07/15/13 200M 216,000 Williams Cos., Inc. 7.5%, 01/15/31 125M 135,625 8.125%, 03/15/12 150M 164,063 ----------- 1,084,850 ----------- Media 0.9% Charter Communications Holdings 10.25%, 09/15/10 250M 267,500 Mediacom LLC 9.5%, 01/15/13 250M 258,750 ----------- 526,250 ----------- Services Cyclical 1.0% Education Management LLC 8.75%, 06/01/14 100M 106,750 Isle of Capri Casinos, Inc. 7%, 03/01/14 125M 124,375 Las Vegas Sands Corp. 6.375%, 02/15/15 200M 196,500 Mandalay Resort Group 10.25%, 08/01/07 150M 151,500 ----------- 579,125 ----------- Technology 0.4% Sungard Data Systems, Inc. 9.125%, 08/15/13 200M 213,500 ----------- Telecommunications 1.9% Centennial Communications Corp. 10.125%, 06/15/13 250M 271,563 Citizens Communications Co. 6.25%, 01/15/13 275M 273,625 Qwest Capital Funding, Inc. 7%, 08/03/09 300M 304,875 Rogers Wireless, Inc. 6.375%, 03/01/14 250M 256,815 ----------- 1,106,878 ----------- Utilities 0.9% AES Corp. 7.75%, 03/01/14 (a) 225M 238,219 Orion Power Holdings, Inc. 12%, 05/01/10 150M 173,437 Tenaska Alabama Partners LP 7%, 06/30/21 (b) 95M 100,100 ----------- 511,756 ----------- Total Bonds (Cost $5,610,182) 5,774,284 ----------- Shares ---------- Common Stocks 40.6% Consumer Discretionary 1.8% Comcast Corp.* (a) 11,250 305,775 Idearc, Inc. (a) 364 12,831 Target Corp. (a) 3,459 215,945 Toyota Motor Corp. ADR 3,000 362,280 Walt Disney Co. (a) 5,573 197,507 ----------- 1,094,338 ----------- Consumer Staples 3.1% Altria Group, Inc. 3,497 248,637 Clorox Co. 2,000 134,280 Coca-Cola Co. 4,455 236,070 Colgate-Palmolive Co. 2,500 167,400 CVS Caremark Corp. 3,146 121,258 General Mills, Inc. 2,811 172,146 Kimberly-Clark Corp. (a) 4,544 322,442 Kraft Foods, Inc. 2,420 81,893 Procter & Gamble Co. 2,772 176,160 Wal-Mart Stores, Inc. 3,928 186,973 ----------- 1,847,259 ----------- Energy 4.2% BP PLC ADR 3,991 267,437 ConocoPhillips 7,088 548,824 ExxonMobil Corp. 8,245 685,736 GlobalSantaFe Corp. (a) 4,500 307,350 Hess Corp. 1,426 84,448 Occidental Petroleum Corp. 3,162 173,815 Schlumberger Ltd. 1,600 124,592 Weatherford Int'l., Ltd.* (a) 5,000 271,700 ----------- 2,463,902 ----------- Exchange Traded Funds 4.8% SPDR Trust Series 1 (a) 18,500 2,837,900 ----------- Financials 6.8% Allstate Corp. (a) 1,818 111,807 American Int'l. Group, Inc. 6,165 445,976 Bank of America Corp. 10,088 511,562 Citigroup, Inc. 10,047 547,461 Franklin Resources, Inc. 1,800 244,332 JPMorgan Chase & Co. 9,640 499,641 Merrill Lynch & Co., Inc. 3,005 278,654 Moody's Corp. (a) 4,700 327,355 PNC Financial Services Group, Inc. 5,006 369,443 Travelers Cos., Inc. 7,409 401,346 Wells Fargo & Co. 8,032 289,875 ----------- 4,027,452 ----------- Health Care 4.3% Baxter Int'l., Inc. 2,588 147,102 Bristol-Myers Squibb Co. 5,500 166,705 Eli Lilly & Co. 5,200 304,824 GlaxoSmithKline PLC ADR 5,200 271,336 Johnson & Johnson 2,406 152,228 Medtronic, Inc. (a) 5,245 278,877 Merck & Co., Inc. 4,778 250,606 Novartis AG ADR 2,400 134,832 Pfizer, Inc. 16,027 440,582 Quest Diagnostics, Inc. (a) 3,000 147,060 UnitedHealth Group, Inc. 3,000 164,310 Wyeth 1,868 108,045 ----------- 2,566,507 ----------- The accompanying notes are an integral part of the financial statements. 11 Sentinel Conservative Allocation Fund Value Shares (Note 2) --------- ----------- Industrials 6.2% Canadian National Railway Co. 7,000 $ 382,130 Deere & Co. 5,000 602,350 General Electric Co. 11,713 440,175 Honeywell Int'l., Inc. 7,300 422,743 Lockheed Martin Corp. 2,861 280,664 Rockwell Automation, Inc. (a) 5,000 340,250 Tyco Int'l. Ltd. 5,403 180,244 United Technologies Corp. (a) 6,000 423,300 Waste Management, Inc. 15,000 580,050 ----------- 3,651,906 ----------- Information Technology 3.2% Altera Corp. (a) 4,994 113,913 Ansys, Inc. * (a) 4,000 224,640 Canon, Inc. ADR 6,000 353,160 Intel Corp. 4,600 101,982 Microchip Technology, Inc. (a) 8,500 344,930 Microsoft Corp. 8,671 265,940 Motorola, Inc. 3,753 68,267 Seagate Technology (a) 8,500 175,015 Texas Instruments, Inc. 7,000 247,520 ----------- 1,895,367 ----------- Materials 2.5% Dow Chemical Co. (a) 2,354 106,824 EI Du Pont de Nemours & Co. (a) 7,000 366,240 Packaging Corp of America (a) 12,500 323,250 Praxair, Inc. 5,000 340,450 Weyerhaeuser Co. (a) 4,308 353,084 ----------- 1,489,848 ----------- Telecommunication Services 1.9% AT&T, Inc. 11,346 469,044 Chunghwa Telecom Co. Ltd. ADR 94 1,769 Sprint Nextel Corp. (a) 16,091 367,679 Verizon Communications, Inc. 7,297 317,638 ----------- 1,156,130 ----------- Utilities 1.8% DPL Inc. (a) 5,500 167,805 Energy East Corp. (a) 3,437 83,072 Entergy Corp. 1,734 195,769 FPL Group Inc. (a) 3,411 218,065 Mirant Corp. * (a) 5,464 253,530 TXU Corp. 2,181 147,108 ----------- 1,065,349 ----------- Total Common Stocks (Cost $18,749,534) 24,095,958 ----------- Foreign Stocks 1.4% Germany 0.6% Puma AG Rudolf Dassler Sport (a) 800 357,378 ----------- Japan 0.2% Nomura Holdings, Inc. 4,800 98,209 ----------- Switzerland 0.3% Nestle SA 500 194,726 ----------- United Kingdom 0.3% Diageo PLC 7,500 159,942 ----------- Total Foreign Stocks (Cost $680,359) 810,255 ----------- Money Market Funds 16.2% State Street Navigator Securities Lending Prime Portfolio (c) (Cost $9,580,234) 9,580,234 9,580,234 ----------- Total Investments 114.7% (Cost $62,664,178) ** 68,035,940 Excess of Liabilities Over Other Assets (14.7)% (8,713,921) ----------- Net Assets 100.0% 59,322,019 =========== - -------- * Non-income producing ** Cost for federal income tax purposes is $62,664,178. At May 31, 2007 unrealized appreciation for federal income tax purposes aggregated $5,371,762 of which $5,744,126 related to appreciated securities and $372,364 related to depreciated securities. (a) All or a portion of this security was on loan at May 31, 2007. The aggregate cost and market value of securities on loan at May 31, 2007 is $7,834,936 and $9,350,924, respectively. (b) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At May 31, 2007, the market value of rule 144A securities amounted to $100,100 or 0.17% of net assets. (c) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by SSgA Funds Management, Inc., an affiliate of State Street Bank and Trust Company. This amount represents the investment of cash collateral received from securities lending activity (see Note 2). ADR - American Depository Receipt SPDR - Standard & Poor's Depository Receipts The accompanying notes are an integral part of the financial statements. 12 Sentinel Government Securities Fund Fund Profile at May 31, 2007 Average Effective Duration Duration Percent of Net Assets - -------- --------------------- Less than 1 yr. 0.3% 1 yr. to 2.99 yrs. 6.4% 3 yrs. to 3.99 yrs. 34.2% 4 yrs. to 5.99 yrs. 27.9% 6 yrs. to 7.99 yrs. 19.5% 8 yrs. and over 11.8% Top 10 Holdings* Maturity Description Coupon Date Percent of Net Assets - ----------- ------ -------- --------------------- U.S. Treasury Notes 4.50% 04/30/12 5.1% GNR 03-7 PE 5.50% 11/16/31 4.4% GNR 02-29 Z 6.50% 05/16/32 4.3% FNR 05-112 NC 6.00% 10/25/32 4.0% FHR 2440 ZO 6.50% 04/15/32 3.8% FHR 2456 CJ 6.50% 06/15/32 3.8% FHRR R006 AK 5.75% 12/15/18 3.6% FNR 02-94 BZ 5.50% 01/25/33 3.6% FNR 03-131 CG 5.50% 05/25/33 3.5% FNR 06-66 NV 6.50% 02/25/24 3.3% ---- Total of Net Assets 39.4% ==== Average Effective Duration (for all Fixed Income Holdings) 5.2 years** - -------- * "Top 10 Holdings" excludes any short-term investments and money market funds. Portfolio composition and holdings are subject to change. More complete holdings below. ** The average effective duration considers the call and put date of a security and the pre-payment risk of mortgage-backed bonds to measure the sensitivity of the Fund's price due to changes in interest rates. Investment in Securities at May 31, 2007 (Unaudited) Principal Amount Value (M=$1,000) (Note 2) ---------- ------------ U.S. Government Obligations 99.5% U.S. Government Agency Obligations 89.1% Federal Home Loan Mortgage Corporation 39.8% Agency Debentures: FHLMC 4.25%, 07/15/09 (a) 2,000M $ 1,964,340 FHLMC 4.5%, 07/15/13 (a) 10,000M 9,638,300 FHLMC 4.75%, 01/19/16 9,000M 8,712,000 ------------ 20,314,640 ------------ Collateralized Mortgage Obligations: FHRR R006 AK 5.75%, 12/15/18 12,229M 12,209,958 FHR 3199 VH 6.35%, 05/15/23 9,121M 9,269,946 FHR 3187 VJ 5%, 03/15/25 6,400M 6,052,416 FHR 3181 BV 6.5%, 06/15/26 4,000M 4,114,480 FHR 3177 KB 6%, 09/15/30 10,000M 10,099,400 FHR 2687 PG 5.5%, 03/15/32 10,000M 9,846,600 FHR 2440 ZO 6.5%, 04/15/32 12,427M 12,929,131 FHR 2456 CJ 6.5%, 06/15/32 12,469M 12,774,092 FHR 3220 PC 6%, 11/15/32 11,037M 11,158,186 FHR 2713 EJ 5.5%, 12/15/33 10,000M 9,583,100 FHR 3145 KE 5%, 02/15/34 5,023M 4,669,037 FHR 3213 PE 6%, 09/15/36 4,500M 4,497,255 FHR 3254 QE 6%, 11/15/36 7,539M 7,528,915 ------------ 114,732,516 ------------ Mortgage-Backed Securities: 30-Year: FHLMC 252153 11%, 11/01/09 494 527 FHLMC 170141 11%, 09/01/15 2M 2,591 FHLMC 170147 11%, 11/01/15 2M 2,476 FHLMC 360017 11%, 11/01/17 1M 1,214 FHLMC 544457 11%, 12/01/17 4M 4,341 ------------ 11,149 ------------ Total Federal Home Loan Mortgage Corporation 135,058,305 ------------ Federal National Mortgage Association 38.4% Agency Debentures: FNMA 3.3%, 06/02/09 5,000M 4,826,500 FNMA 4.75%, 12/15/10 (a) 5,000M 4,939,450 FNMA 5.5%, 03/15/11 5,000M 5,057,000 FNMA 6.875%, 09/10/12 1,000M 1,004,200 FNMA 5%, 04/15/15 (a) 5,000M 4,943,300 ------------ 20,770,450 ------------ Collateralized Mortgage Obligations: FNR 06-63 VH 6.5%, 03/25/23 10,283M 10,548,142 FNR 06-78 BV 6.5%, 06/25/23 5,714M 5,871,706 FNR 06-22 CE 4.5%, 08/25/23 10,000M 8,963,400 The accompanying notes are an integral part of the financial statements. 13 Sentinel Government Securities Fund Principal Amount Value (M=$1,000) (Note 2) ----------- ------------ FNR 06-66 NV 6.5%, 02/25/24 11,000M $ 11,217,470 FNR 06-88 BV 6.5%, 11/25/25 10,000M 10,267,900 FNR 03-36 OQ 5%, 12/25/31 10,000M 9,467,800 FNR 05-112 NC 6%, 10/25/32 13,394M 13,479,008 FNR 02-94 BZ 5.5%, 01/25/33 12,743M 12,045,023 FNR 03-131 CG 5.5%, 05/25/33 12,000M 11,706,960 FNR 05-53 MH 5.5%, 03/25/34 10,000M 9,754,600 FNR 06-90 BG 6%, 09/25/36 3,000M 2,984,160 ------------ 106,306,169 ------------ Mortgage-Backed Securities: 10-Year: FNMA 556247 7%, 10/01/10 81M 82,598 15-Year: FNMA 346879 7%, 05/01/11 39M 40,483 20-Year: FNMA 252206 6%, 01/01/19 52M 52,114 FNMA 573745 6.5%, 08/01/20 103M 106,288 FNMA 758564 6%, 09/01/24 837M 842,421 ------------ 1,000,823 ------------ 25-Year: FNMA 251808 10%, 04/01/18 20M 21,174 30-Year: FNMA 002109 9.25%, 10/01/09 10M 10,379 FNMA 426830 8%, 11/01/24 58M 61,558 FNMA 738887 5.5%, 10/01/33 1,039M 1,017,819 FNMA 748895 6%, 12/01/33 895M 896,378 ------------ 1,986,134 ------------ Total Federal National Mortgage Association 130,207,831 ------------ Government National Mortgage Corporation 10.9% Collateralized Mortgage Obligations: GNR 04-58 VB 5.5%, 04/16/28 4,718M 4,595,300 GNR 03-7 PE 5.5%, 11/16/31 15,000M 14,906,100 GNR 02-29 Z 6.5%, 05/16/32 14,099M 14,420,370 ------------ 33,921,770 ------------ Mortgage-Backed Securities: 15-Year: GNMA II 3197 7%, 02/20/17 36M 37,135 ------------ 20-Year: GNMA 623177 6.5%, 08/15/23 430M 441,646 ------------ 25-Year: GNMA 608728 6.5%, 11/15/25 797M 817,964 ------------ 30-Year: GNMA 102852 13%, 10/15/13 45 50 GNMA 506805 6.5%, 06/15/29 357M 366,868 GNMA 606242 6%, 04/15/34 1,189M 1,196,855 1,563,773 ------------ Total Government National Mortgage Corporation 36,782,288 ------------ Total U.S. Government Agency Obligations 302,048,424 ------------ U.S. Treasury Obligations 10.4% 5%, 08/15/11 (a) 4,000M 4,027,800 4.5%, 04/30/12 (a) 17,500M 17,233,300 4.375%, 08/15/12 (a) 10,000M 9,800,000 4.75%, 05/15/14 (a) 4,000M 3,971,840 ------------ 35,032,940 ------------ Total U.S. Government Obligations (Cost $339,751,677) 337,081,364 ------------ Shares ----------- Money Market Funds 13.6% State Street Navigator Securities Lending Prime Portfolio (b) (Cost $46,198,556) 46,198,556 46,198,556 ------------ Total Investments 113.1% (Cost $385,950,233)** 383,279,920 Excess of Liabilities Over Other Assets (13.1)% (44,355,016) ------------ Net Assets 100.0% $338,924,904 ============ - -------- ** Cost for federal income tax purposes is $385,950,233. At May 31, 2007 unrealized depreciation for federal income tax purposes aggregated $2,670,313 of which $454,811 related to appreciated securities and $3,125,124 related to depreciated securities. (a) All or a portion of this security was on loan at May 31, 2007. The aggregate cost and market value of securities on loan at May 31, 2007 is $45,438,093 and $44,720,175, respectively. (b) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by SSgA Funds Management, Inc., an affiliate of State Street Bank and Trust Company. This amount represents the investment of cash collateral received from securities lending activity (see Note 2). The accompanying notes are an integral part of the financial statements. 14 Sentinel Growth Leaders Fund Fund Profile at May 31, 2007 Top Sectors Sector Percent of Net Assets - ------ --------------------- Materials 17.0% Information Technology 16.0% Industrials 13.9% Financials 12.5% Energy 10.4% Consumer Staples 8.4% Consumer Discretionary 7.9% Transportation 3.7% Health Care 3.2% Utilities 3.0% Top 10 Holdings* Description Percent of Net Assets - ----------- --------------------- Commercial Metals Co. 4.4% Freeport-McMoRan Copper & Gold, Inc. 4.3% Praxair, Inc. 4.2% McDonald's Corp. 4.2% Precision Castparts Corp. 4.1% Jacobs Engineering Group, Inc. 4.0% Allegheny Technologies, Inc. 4.0% Cisco Systems, Inc. 3.9% Ansys, Inc. 3.9% Automatic Data Processing, Inc. 3.8% ---- Total of Net Assets 40.8% ==== - -------- * "Top 10 Holdings" excludes any short-term investments and money market funds. Portfolio composition and holdings are subject to change. More complete holdings follow. Investment in Securities at May 31, 2007 (Unaudited) Value Shares (Note 2) --------- ----------- Common Stocks 96.0% Consumer Discretionary 7.9% McDonald's Corp. 12,000 $ 606,600 Yum! Brands, Inc. 8,000 541,760 ----------- 1,148,360 ----------- Consumer Staples 8.4% PepsiCo, Inc. 6,000 409,980 Walgreen Co. 8,000 361,040 Wal-Mart de Mexico SA de CV ADR* (a) 12,078 454,737 ----------- 1,225,757 ----------- Energy 10.4% Grant Prideco, Inc.* (a) 6,000 340,740 Noble Corp. 2,000 184,780 Schlumberger Ltd. (a) 7,000 545,090 Weatherford Int'l., Ltd.* (a) 8,000 434,720 ----------- 1,505,330 ----------- Financials 12.5% American Express Co. 8,000 519,840 BlackRock, Inc. (a) 3,500 537,390 CB Richard Ellis Group, Inc.* (a) 11,000 409,420 Goldman Sachs Group, Inc. 1,500 346,230 ----------- 1,812,880 ----------- Health Care 3.2% Roche Holding AG ADR 5,000 458,750 ----------- Industrials 13.9% Emerson Electric Co. 10,000 484,500 Jacobs Engineering Group, Inc.* (a) 10,000 579,500 Precision Castparts Corp. (a) 5,000 597,800 Robert Half Int'l., Inc. 10,000 351,400 ----------- 2,013,200 ----------- Information Technology 16.0% Ansys, Inc.* (a) 10,000 561,600 Autodesk, Inc.* (a) 10,000 454,500 Automatic Data Processing, Inc. (a) 11,000 546,700 Cisco Systems, Inc.* 21,000 565,320 Paychex, Inc. (a) 5,000 202,000 ----------- 2,330,120 ----------- Materials 17.0% Allegheny Technologies, Inc. (a) 5,000 577,950 Commercial Metals Co. (a) 18,300 643,245 Freeport-McMoRan Copper & Gold, Inc. (a) 8,010 630,387 Praxair, Inc. 9,000 612,810 ----------- 2,464,392 ----------- Transportation 3.7% Kansas City Southern* (a) 13,000 533,650 ----------- Utilities 3.0% Dominion Resources, Inc. (a) 5,000 442,950 ----------- Total Common Stocks (Cost $11,089,417) 13,935,389 ----------- Money Market Funds 16.6% State Street Navigator Securities Lending Prime Portfolio (b) (Cost $2,416,185) 2,416,185 2,416,185 ----------- The accompanying notes are an integral part of the financial statements. 15 Sentinel Growth Leaders Fund Principal Amount Value (M=$1,000) (Note 2) ---------- ----------- Corporate Short-Term Notes 3.5% Wells Fargo Co. 5.25%, 06/04/07 (Cost $499,781) 500M $ 499,781 ----------- Total Investments 116.1% (Cost $14,005,383)** 16,851,355 Excess of Liabilities Over Other Assets (16.1)% (2,332,271) ----------- Net Assets 100.0% $14,519,084 =========== - -------- * Non-income producing ** Cost for federal income tax purposes is $14,005,383. At May 31, 2007 unrealized appreciation for federal income tax purposes aggregated $2,845,972 of which $2,886,958 related to appreciated securities and $40,986 related to depreciated securities. (a) All or a portion of this security was on loan at May 31, 2007. The aggregate cost and market value of securities on loan at May 31, 2007 is $1,854,596 and $2,400,747, respectively. (b) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by SSgA Funds Management, Inc., an affiliate of State Street Bank and Trust Company. This amount represents the investment of cash collateral received from securities lending activity (see Note 2). ADR - American Depository Receipt The accompanying notes are an integral part of the financial statements. 16 Sentinel High Yield Bond Fund Fund Profile at May 31, 2007 Portfolio Weightings Asset Category Percent of Net Assets - -------------- --------------------- Bonds 81.3% Common Stocks 3.0% Limited Partnership 0.9% Foreign Stocks 0.1% Cash and Other 14.7% Top 10 Holdings* Maturity Percent of Description Coupon Date Net Assets - ----------- ------ -------- ---------- Amscan Holdings, Inc. 8.75% 05/01/14 2.0% Sungard Data Systems, Inc. 9.125% 08/15/13 1.6% GMAC LLC 8.00% 11/01/31 1.5% Ford Motor Credit Co. 9.875% 08/10/11 1.4% NRG Energy, Inc. 7.375% 02/01/16 1.4% Kellwood Co. 7.875% 07/15/09 1.4% Beazer Homes USA, Inc. 8.625% 05/15/11 1.4% TRW Automotive, Inc. 7.25% 03/15/17 1.3% Ford Motor Credit Co. 6.1938% 09/28/07 1.3% Universal Foods Corp. 6.50% 04/01/09 1.3% ---- Total of Net Assets 14.6% ==== Average Effective Duration (for all Fixed Income Holdings) 4.1 years** - -------- * "Top 10 Holdings" excludes any short-term investments and money market funds. Portfolio composition and holdings are subject to change. More complete holdings below. ** The average effective duration considers the call and put date of a security and the pre-payment risk of mortgage-backed bonds to measure the sensitivity of the Fund's price due to changes in interest rates. Investment in Securities at May 31, 2007 (Unaudited) Principal Amount Value (M=$1,000) (Note 2) ---------- ---------- Bonds 81.3% Basic Industry 7.3% Freeport-McMoRan Copper & Gold, Inc. 8.5644%, 04/01/15 (b) 750M $ 792,188 Ineos Group Holdings Plc 8.5%, 02/15/16 (a)(c) 250M 252,812 Massey Energy Co. 6.625%, 11/15/10 500M 497,500 Mosaic Co. 7.625%, 12/01/16 (c) 750M 800,625 NewPage Corp. 12%, 05/01/13 (a) 500M 557,500 Ryerson, Inc. 8.25%, 12/15/11 500M 518,750 Sappi Papier Holding AG 6.75%, 06/15/12 (c) 500M 497,533 Universal Foods Corp. 6.5%, 04/01/09 1,000M 999,240 Verso Paper Holdings LLC 11.375%, 08/01/16 (a)(c) 500M 537,500 ---------- 5,453,648 ========== Basic Materials 3.0% Catalyst Paper Corp. 8.625%, 06/15/11 500M 503,750 Innophos, Inc. 8.875%, 08/15/14 250M 265,000 Koppers Holdings, Inc. 0%, 11/15/14 (d) 250M 220,000 MacDermid, Inc. 9.5%, 04/15/17 (c) 250M 265,000 Noranda Aluminium Acquisition Corp. 9.3588%, 05/15/15 (c) 500M 507,500 Smurfit-Stone Container Enterprises, Inc. 8.375%, 07/01/12 500M 512,500 ---------- 2,273,750 ========== Capital Goods 4.6% Berry Plastics Holding Corp. 8.875%, 09/15/14 500M 515,000 DRS Technologies, Inc. 7.625%, 02/01/18 (a) 500M 520,625 Esco Corp. 8.625%, 12/15/13 (c) 500M 537,500 Graham Packaging Co., Inc. 9.875%, 10/15/14 (a) 500M 517,500 Hawker Beechcraft Acquisition Co LLC 9.75%, 04/01/17 (a)(c) 250M 268,125 Hexcel Corp. 6.75%, 02/01/15 500M $ 505,000 RBS Global Inc and Rexnord Corp. 11.75%, 08/01/16 (c) 500M 566,250 ---------- 3,430,000 ========== Consumer Cyclical 13.4% American Axle & Manufacturing, Inc. 7.875%, 03/01/17 (a) 500M 505,000 Ford Motor Credit Co. 6.1938%, 09/28/07 (e) 1,000M 1,000,130 9.875%, 08/10/11 (a) 1,000M 1,072,120 General Motors Corp. 7.7%, 04/15/16 (a) 1,000M 940,000 GMAC LLC 6.75%, 12/01/14 (a) 750M 748,680 8%, 11/01/31 (a) 1,000M 1,101,690 Kellwood Co. 7.875%, 07/15/09 1,000M 1,020,960 Levi Strauss & Co 9.75%, 01/15/15 775M 845,719 Tenneco, Inc. 10.25%, 07/15/13 (a) 500M 549,375 TRW Automotive, Inc. 7.25%, 03/15/17 (c) 1,000M 1,007,500 The accompanying notes are an integral part of the financial statements. 17 Sentinel High Yield Bond Fund Principal Amount Value (M=$1,000) (Note 2) ---------- ----------- Unifi, Inc. 11.5%, 05/15/14 (a) 750M $ 750,000 United Auto Group, Inc. 7.75%, 12/15/16 (c) 500M 507,500 ----------- 10,048,674 =========== Consumer Non-Cyclical 5.0% ALH Finance LLC 8.5%, 01/15/13 500M 503,750 American Greetings Corp. 7.375%, 06/01/16 700M 718,375 Amscan Holdings, Inc. 8.75%, 05/01/14 1,500M 1,522,500 Constellation Brands, Inc. 7.25%, 09/01/16 500M 506,250 Dole Food Co., Inc. 8.625%, 05/01/09 (a) 500M 512,500 ----------- 3,763,375 =========== Energy 11.7% Chesapeake Energy Corp. 6.875%, 11/15/20 900M 913,500 Clayton Williams Energy, Inc. 7.75%, 08/01/13 (a) 500M 470,000 Energy Partners Ltd. 9.75%, 04/15/14 (a)(c) 500M 509,375 MarkWest Energy Partners LP 8.5%, 07/15/16 500M 528,750 Nexus 1 Pte Ltd. 10.5%, 03/07/12 (c)(f) 500M 515,000 OPTI Canada, Inc. 8.25%, 12/15/14 (c) 250M 266,875 PetroHawk Energy Corp. 9.125%, 07/15/13 500M 540,000 PetroProd Ltd. 11.355%, 01/12/12 (c)(f) 500M 513,750 PHI, Inc. 7.125%, 04/15/13 650M 640,250 Quicksilver Resources, Inc. 7.125%, 04/01/16 500M 498,750 Regency Energy Partners LP 8.375%, 12/15/13 (c) 750M 782,813 Sabine Pass LNG LP 7.5%, 11/30/16 (c) 500M 513,750 SemGroup LP 8.75%, 11/15/15 (c) 500M 525,625 Sonat, Inc. 7%, 02/01/18 500M 522,535 TEPPCO Partners LP 7%, 06/01/67 (g) 500M 493,355 Williams Partners LP 7.25%, 02/01/17 500M 532,500 ----------- 8,766,828 =========== Media 9.0% CCH I LLC 11%, 10/01/15 400M 437,000 Charter Communications Holdings II LLC 10.25%, 09/15/10 800M 854,000 Charter Communications Operating LLC 8.375%, 04/30/14 (a)(c) 250M 263,750 CSC Holdings, Inc. 6.75%, 04/15/12 250M 248,125 7.25%, 07/15/08 750M 761,250 Dex Media, Inc. 8%, 11/15/13 (a) 500M 525,000 Echostar DBS Corp. 5.75%, 10/01/08 500M 501,250 Idearc, Inc. 8%, 11/15/16 (c) 400M 416,500 Interpublic Group of Cos, Inc. 6.25%, 11/15/14 250M 235,937 Liberty Media LLC 5.7%, 05/15/13 200M 189,860 LIN Television Corp. 6.5%, 05/15/13 (a) 500M 507,500 Mediacom LLC 7.875%, 02/15/11 500M 503,750 Quebecor World, Inc. 9.75%, 01/15/15 (c) 250M 266,250 RH Donnelley Corp. 8.875%, 01/15/16 250M 270,625 Videotron Ltee 6.375%, 12/15/15 800M 794,000 ----------- 6,774,797 =========== Services Cyclical 8.9% Beazer Homes USA, Inc. 8.375%, 04/15/12 (a) 400M 403,000 8.625%, 05/15/11 (a) 1,000M 1,012,500 CHC Helicopter Corp. 7.375%, 05/01/14 550M 543,125 Cinemark, Inc. 0%, 03/15/09 (h) 1,000M 928,750 Herbst Gaming, Inc. 7%, 11/15/14 425M 402,687 Marquee Holdings, Inc. 0%, 08/15/09 (i) 1,000M 890,000 MGM Mirage 7.5%, 06/01/16 400M 396,000 Neff Corp. 10%, 06/01/15 (c) 500M 513,750 Park Place Entertainment Corp. 7.875%, 03/15/10 500M 525,625 United Rentals North America, Inc. 7.75%, 11/15/13 500M 521,250 Wimar Opco LLC 9.625%, 12/15/14 (c) 500M 507,500 ----------- 6,644,187 =========== Services Non-Cyclical 4.3% Advanced Medical Optics, Inc. 7.5%, 05/01/17 (c) 500M 495,625 HCA, Inc. 9.25%, 11/15/16 (c) 800M 879,000 Invacare Corp. 9.75%, 02/15/15 (c) 500M 512,500 Sun Healthcare Group, Inc. 9.125%, 04/15/15 (c) 750M 791,250 Waste Services, Inc. 9.5%, 04/15/14 500M 530,625 ----------- 3,209,000 =========== Technology 3.3% Freescale Semiconductor, Inc. 8.875%, 12/15/14 (c) 750M 754,688 NXP BV/NXP Funding LLC 7.875%, 10/15/14 250M 258,750 9.5%, 10/15/15 (a) 250M 260,000 Sungard Data Systems, Inc. 9.125%, 08/15/13 1,150M 1,227,625 ----------- 2,501,063 =========== Telecommunications 7.0% Centennial Communications Corp. 10%, 01/01/13 (a) 250M 272,500 Cincinnati Bell, Inc. 8.375%, 01/15/14 (a) 500M 515,000 Citizens Communications Co. 6.25%, 01/15/13 250M 248,750 Dobson Communications Corp. 8.875%, 10/01/13 (a) 500M 528,750 Intelsat Corp. 9%, 06/15/16 300M 330,000 Intelsat Subsidiary Holding Co Ltd. 8.25%, 01/15/13 300M 313,125 Qwest Communications Int'l, Inc. 7.5%, 02/15/14 (a) 500M 518,750 Qwest Corp. 7.875%, 09/01/11 500M 531,250 Rogers Wireless, Inc. 6.375%, 03/01/14 (a) 350M 359,541 7.5%, 03/15/15 575M 627,267 US Unwired, Inc. 10%, 06/15/12 425M 460,479 Windstream Corp. 8.125%, 08/01/13 500M 540,000 ----------- 5,245,412 =========== The accompanying notes are an integral part of the financial statements. 18 Sentinel High Yield Bond Fund Principal Amount Value (M=$1,000) (Note 2) ---------- ----------- Utilities 3.8% Dynegy Holdings, Inc. 8.375%, 05/01/16 500M $ 521,875 NRG Energy, Inc. 7.375%, 02/01/16 1,000M 1,040,000 SEMCO Energy, Inc. 7.125%, 05/15/08 500M 506,080 White Pine Hydro Portfolio 7.26%, 07/20/15 800M 800,000 ----------- 2,867,955 ----------- Total Bonds (Cost $58,781,171) 60,978,689 ----------- Shares ---------- Common Stocks 3.0% Consumer Discretionary 0.8% Clear Channel Communications, Inc. (a) 5,000 192,000 Six Flags, Inc. * (a) 44,000 272,360 Trump Entertainment Resorts, Inc. * (a) 8,000 128,720 ----------- 593,080 ----------- Energy 0.9% CHC Helicopter Corp. 9,000 214,290 Energy Income and Growth Fund * (a) 5,800 163,038 Peabody Energy Corp. (a) 3,600 194,544 Quicksilver Resources, Inc. * (a) 1,500 66,735 Range Resources Corp. (a) 2,000 77,480 ----------- 716,087 ----------- Health Care 0.3% Bristol-Myers Squibb Co. (a) 7,500 227,325 ----------- Industrials 0.3% Waste Services, Inc. * (a) 20,000 204,600 ----------- Utilities 0.4% Mirant Corp. * (a) 6,000 278,400 ----------- Total Common Stocks (Cost $1,683,808) 2,019,492 ----------- Foreign Stocks 0.1% Canada 0.1% OPTI Canada, Inc. * (Cost $65,932) 4,000 90,240 Limited Partnerships 1.2% Energy 1.2% EV Energy Partner LP * (a)(j) 6,500 238,160 Shares ---------- Targa Resources Partners LP * (a) 8,000 266,000 Universal Compression Partners LP * (a)(j) 6,500 222,430 Williams Partners LP (a)(j) 4,000 194,880 ----------- Total Limited Partnerships (Cost $657,327) 921,470 ----------- Principal Amount (M=$1,000) ---------- Corporate Short-Term Notes 6.7% LBC (Lasalle Bank Corp.) 5.22%, 06/01/07 3,000M 3,000,000 Wells Fargo & Co. 5.25%, 06/05/07 2,000M 1,998,833 Total Corporate ----------- Short-Term Notes (Cost $4,998,833) 4,998,833 =========== Shares ---------- Money Market Funds 19.7% State Street Navigator Securities Lending Prime Portfolio (k) (Cost $14,743,700) 14,743,700 14,743,700 Total Investments 111.7% (Cost $80,930,772)** 83,752,424 Excess of Liabilities Over Other Assets (11.7)% (8,801,117) ----------- Net Assets 100.0% $74,951,307 =========== - -------- * Non-income producing ** Cost for federal income tax purposes is $80,930,772. At May 31, 2007 unrealized appreciation for federal income tax purposes aggregated $2,821,652 of which $2,922,676 related to appreciated securities and $101,024 related to depreciated securities. (a) All or a portion of this security was on loan at May 31, 2007. The aggregate cost and market value of securities on loan at May 31, 2007 is $13,152,856 and $14,294,246, respectively. (b) Freeport- McMoran Copper & Gold Co. has a variable interest rate that floats Semi-annually on 1st of April and October. The interest rate is based on the 6-month Libor rate plus 3.25%. (c) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At May 31, 2007, the market value of Rule 144A securities amounted to $14,775,846 or 19.71% of net assets. (d) Koppers Holdings, Inc. currently pays a 0% coupon, steps up to 9.875% beginning 11/15/2009. (e) Ford Motor Credit Co. has a variable interest rate that floats quarterly on the 28th of March, June, September, and December. The interest rate is based on the 3-month Libor rate plus 0.83%. (f) Illiquid securities. These bonds represent private placement investments that the Fund has made, and cannot be sold without prior registration unless the sale is pursuant to an exemption under the 1933 Act. At May 31, 2007, the market value of the private placement securities amounted to $1,028,750 or 1.37% of net assets. (g) As of May 31, 2007, TEPPCO Partners pays a fixed rate of 7.0%, but on 06/01/2017 the security becomes a floating rate based on the 3 month Libor rate plus 2.7775%. (h) As of May 31, 2007, Cinemark, Inc. pays a 0% coupon, which steps up to 9.75% beginning 03/15/2009. (i) As of May 31, 2007, Marquee Holdings, Inc. pays a 0% coupon, which steps up to 12% beginning 08/15/2009. (j) Return of Capital paid during the fiscal period. (k) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by SSgA Funds Management, Inc., an affiliate of State Street Bank and Trust Company. This amount represents the investment of cash collateral received from securities lending activity (see Note 2). The accompanying notes are an integral part of the financial statements. 19 Sentinel International Equity Fund Fund Profile at May 31, 2007 Sector Weightings Percent of Sector Net Assets - ------ ---------- Financials 23.3% Industrials 14.1% Consumer Discretionary 10.0% Consumer Staples 9.2% Information Technology 8.7% Materials 8.1% Energy 7.1% Health Care 7.0% Telecommunication Services 5.4% Utilities 5.1% Top Geographical Weightings Percent of Country Net Assets - ------- ---------- Japan 21.0% United Kingdom 17.1% Germany 14.5% Switzerland 9.8% France 9.3% Finland 3.7% Netherlands 3.2% Hong Kong 3.0% Australia 2.9% Norway 1.9% Top 10 Holdings* Percent of Description Net Assets - ----------- ---------- Fresenius AG 2.2% Anglo American PLC 2.1% Nestle SA 2.1% Komatsu Ltd. 2.0% Old Mutual PLC 2.0% TNT NV 2.0% RWE AG 1.9% Sumitomo Mitsui Financial Group, Inc. 1.9% Puma AG Rudolf Dassler Sport 1.8% Macquarie Infrastructure Group 1.7% ---- Total of Net Assets 19.7% ==== - -------- * "Top 10 Holdings" excludes any short-term investments and money market funds. Portfolio composition and holdings are subject to change. More complete holdings follow. Investment in Securities at May 31, 2007 (Unaudited) Value Shares (Note 2) --------- ----------- Common Stocks 98.0% Australia 2.9% Macquarie Infrastructure Group 1,025,000 $ 3,140,380 National Australia Bank Ltd. 67,000 2,360,091 ----------- 5,500,471 =========== Austria 1.1% OMV AG (a) 30,000 1,991,278 ----------- Brazil 1.5% Cia Vale do Rio Doce ADR 60,000 2,727,000 ----------- Canada 1.0% EnCana Corp. 30,000 1,837,416 ----------- China 1.2% China Mobile Ltd. ADR (a) 50,000 2,321,000 ----------- Finland 3.7% Fortum Oyj (a) 70,000 2,301,965 Nokia Oyj (a) 110,000 3,012,012 Stora Enso Oyj 89,600 1,710,763 ----------- 7,024,740 =========== France 9.3% AXA SA (a) 43,000 1,879,826 Carrefour SA (a) 26,000 1,894,748 Credit Agricole SA (a) 31,200 1,287,981 Dassault Systemes SA (a) 40,000 2,428,447 Groupe Danone (a) 15,000 2,349,934 PPR (a) 17,000 3,103,132 Publicis Groupe (a) 40,000 1,813,800 Total SA ADR (a) 37,000 2,791,650 ----------- 17,549,518 =========== Germany 14.5% Allianz SE (a) 7,000 1,550,718 BASF AG 17,500 2,165,156 Commerzbank AG (a) 50,000 2,452,936 Deutsche Postbank AG (a) 15,000 1,340,369 Fresenius AG 53,000 4,051,354 Hypo Real Estate Holding AG 25,000 1,725,667 MAN AG 17,000 2,464,252 Puma AG Rudolf Dassler Sport 7,500 3,350,417 RWE AG (a) 31,000 3,495,467 SAP AG (a) 39,000 1,858,714 SGL Carbon AG* (a) 75,000 2,830,699 ----------- 27,285,749 =========== The accompanying notes are an integral part of the financial statements. 20 Sentinel International Equity Fund Shares Value (Note 2) ---------- -------------- Hong Kong 3.0% Cheung Kong Holdings Ltd. 200,000 $ 2,589,503 HSBC Holdings PLC 81,700 1,511,907 Shun TAK Holdings Ltd. 1,150,000 1,555,238 ------------ 5,656,648 ------------ Japan 21.0% Canon, Inc. 51,000 3,000,493 Credit Saison Co Ltd. (a) 90,000 2,580,937 Daimaru, Inc. (a) 130,000 1,448,480 Daiwa House Industry Co Ltd. 128,000 1,919,474 East Japan Railway Co. 222 1,714,708 Fanuc Ltd. 12,000 1,145,768 Haseko Corp. * (a) 550,000 1,708,299 Jupiter Telecommunications Co. * 2,100 1,742,810 KDDI Corp. 225 1,922,761 Komatsu Ltd. 145,000 3,848,398 Millea Holdings, Inc. 47,000 1,869,187 Nomura Holdings, Inc. 106,000 2,168,776 Sega Sammy Holdings, Inc. 45,000 828,266 Shin-Etsu Chemical Co Ltd. 27,000 1,810,353 Sumitomo Mitsui Financial Group, Inc. (a) 360 3,490,551 Takeda Pharmaceutical Co Ltd. 38,000 2,551,027 Tokyo Gas Co Ltd. 340,000 1,676,253 Toyota Motor Corp. 35,300 2,117,420 Uni-Charm Corp. (a) 34,000 1,888,578 ------------ 39,432,539 ------------ Mexico 0.9% Fomento Economico Mexicano SA de CV ADR 41,100 1,637,424 ------------ Netherlands 3.2% ING Groep NV 49,000 2,183,005 TNT NV 85,000 3,758,253 ------------ 5,941,258 ------------ Norway 1.9% Acergy SA (a) 60,000 1,352,976 Statoil ASA (a) 80,000 2,185,321 ------------ 3,538,297 ------------ Singapore 1.2% Singapore Technologies Engineering Ltd. 1,000,000 2,275,402 ------------ South Korea 1.4% Samsung Electronics Co Ltd. 4,500 2,594,848 ------------ Spain 1.5% Telefonica SA ADR 42,000 2,874,480 ------------ Sweden 0.8% Telefonaktiebolaget LM Ericsson ADR (a) 40,000 1,519,200 ------------ Switzerland 9.8% ABB Ltd. 50,000 1,069,562 Adecco SA (a) 30,000 2,188,521 Credit Suisse Group 26,000 1,977,384 Julius Baer Holding AG 38,000 2,891,574 Nestle SA 10,000 3,894,513 Novartis AG 40,000 2,248,530 Phonak Holding AG 22,000 2,101,568 Roche Holding AG 11,500 2,110,712 ------------ 18,482,364 ------------ Taiwan 1.0% HON HAI Precision Industry Co Ltd. 255,000 1,802,216 ------------ United Kingdom 17.1% Anglo American PLC 65,000 3,911,390 BAE Systems PLC 350,000 3,099,599 BP PLC 275,000 3,073,858 Diageo PLC 124,300 2,650,782 Kingfisher PLC 365,100 1,794,685 Old Mutual PLC 1,100,000 3,772,486 Royal Bank of Scotland Group PLC 220,000 2,733,528 SABMiller PLC 45,000 1,071,036 Standard Chartered PLC 60,000 2,031,583 Tesco PLC 209,000 1,898,495 United Utilities PLC 132,000 2,016,494 Vodafone Group PLC 998,750 3,124,647 WPP Group PLC 65,000 961,438 ------------ 32,140,021 ------------ Total Common Stocks (Cost $130,561,166) 184,131,869 ------------ Money Market Funds 16.7% State Street Navigator Securities Lending Prime Portfolio (b) (Cost $31,321,461) 31,321,461 31,321,461 ------------ U.S. Government Obligations 0.5% Federal Home Loan Bank 0.5% Agency Discount Notes: 5.151%, 06/04/07 (Cost $999,571) 1,000M 999,571 ------------ Total Investments 115.2% (Cost $162,882,198)** 216,452,901 Excess of Liabilities Over Other Assets (15.2)% (28,573,192) ------------ Net Assets 100.0% $187,879,709 ============ - -------- * Non-income producing ** Cost for federal income tax purposes is $162,882,198. At May 31, 2007 unrealized appreciation for federal income tax purposes aggregated $53,570,703 of which $56,334,689 related to appreciated securities and $2,763,986 related to depreciated securities. (a) All or a portion of this security was on loan at May 31, 2007. The aggregate cost and market value of securities on loan at May 31, 2007 is $22,015,481 and $30,248,808, respectively. (b) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by SSgA Funds Management, Inc., an affiliate of State Street Bank and Trust Company. This amount represents the investment of cash collateral received from securities lending activity (see Note 2). ADR - American Depository Receipt The accompanying notes are an integral part of the financial statements. 21 Sentinel Mid Cap Growth Fund Fund Profile at May 31, 2007 Top Sectors Percent of Sector Net Assets - ------ ---------- Information Technology 22.4% Industrials 18.0% Consumer Discretionary 16.6% Health Care 13.6% Financials 10.2% Energy 9.6% Materials 5.4% Telecommunication Services 1.6% Utilities 1.2% Consumer Staples 1.0% Top 10 Holdings* Percent of Description Net Assets - ----------- ---------- MEMC Electronic Materials, Inc. 1.9% Precision Castparts Corp. 1.8% Allegheny Technologies, Inc. 1.8% Praxair, Inc. 1.7% Corrections Corp of America 1.7% Coach, Inc. 1.6% Jacobs Engineering Group, Inc. 1.6% Tempur-Pedic Int'l., Inc. 1.6% NII Holdings, Inc. 1.6% Affiliated Managers Group, Inc. 1.5% ---- Total of Net Assets 16.8% ==== - -------- * "Top 10 Holdings" excludes any short-term investments and money market funds. Portfolio composition and holdings are subject to change. More complete holdings follow. Investment in Securities at May 31, 2007 (Unaudited) Value Shares (Note 2) ------- ----------- Common Stocks 99.6% Consumer Discretionary 16.6% American Eagle Outfitters, Inc. 69,000 $ 1,863,000 Bed Bath & Beyond, Inc. * 48,000 1,951,680 Cablevision Systems Corp. 44,000 1,592,360 Chico's FAS, Inc. * (a) 71,000 1,934,040 Coach, Inc. * 54,500 2,799,120 Dick's Sporting Goods, Inc. * (a) 33,000 1,833,810 Domino's Pizza, Inc. (a) 66,000 1,294,920 Hilton Hotels Corp. 42,000 1,493,100 Lamar Advertising Co. (a) 33,000 2,161,500 Marriott Int'l., Inc. 36,500 1,680,825 PetSmart, Inc. 62,500 2,138,750 Sally Beauty Holdings, Inc. * 161,500 1,480,955 Starwood Hotels & Resorts Worldwide, Inc. 25,000 1,801,750 Tempur-Pedic Int'l., Inc. (a) 107,000 2,713,520 Wolverine World Wide, Inc. (a) 66,500 1,930,495 ----------- 28,669,825 ----------- Consumer Staples 1.0% McCormick & Co, Inc./MD 48,000 1,789,920 ----------- Energy 9.6% Cameron Int'l. Corp. * 34,500 2,446,050 GlobalSantaFe Corp. (a) 29,500 2,014,850 Grant Prideco, Inc. * (a) 43,500 2,470,365 Noble Energy, Inc. (a) 32,000 2,025,280 Range Resources Corp. (a) 48,500 1,878,890 Smith Int'l., Inc. (a) 27,500 1,526,525 Weatherford Int'l., Ltd. * 41,500 2,255,110 Williams Cos, Inc. (a) 61,000 1,937,360 ----------- 16,554,430 ----------- Financials 10.2% Affiliated Managers Group, Inc. * (a) 20,500 2,669,100 Chicago Mercantile Exchange Holdings, Inc. 4,000 2,124,000 HCC Insurance Holdings, Inc. 55,500 1,826,505 Intercontinental Exchange, Inc. * 16,000 2,319,040 Moody's Corp. 27,000 1,880,550 Nasdaq Stock Market, Inc. * (a) 53,000 1,763,840 PartnerRe Ltd. 18,000 1,382,400 Raymond James Financial, Inc. 67,500 2,248,425 T Rowe Price Group, Inc. 26,200 1,345,370 ----------- 17,559,230 ----------- Health Care 13.6% BioMarin Pharmaceuticals, Inc. * (a) 59,500 1,061,480 Brookdale Senior Living, Inc. (a) 34,700 1,638,187 Community Health Systems, Inc. * 47,000 1,791,640 Covance, Inc. * 36,500 2,429,075 Gen-Probe, Inc. * 44,000 2,379,960 Henry Schein, Inc. * 28,000 1,498,840 Hologic, Inc. * (a) 36,000 1,947,240 Hospira, Inc. * 46,000 1,832,640 Medicis Pharmaceutical Corp. (a) 64,000 2,112,000 Shire PLC ADR (a) 29,500 2,057,625 St. Jude Medical, Inc. * 57,000 2,433,330 The accompanying notes are an integral part of the financial statements. 22 Sentinel Mid Cap Growth Fund Value Shares (Note 2) ---------- ------------ VCA Antech, Inc. * 55,500 $ 2,196,690 ------------ 23,378,707 ------------ Industrials 18.0% Ametek, Inc. 59,000 2,226,660 BE Aerospace, Inc. * 66,500 2,546,285 Corrections Corp of America * (a) 44,250 2,867,400 Expeditors Int'l. Washington, Inc. 46,000 2,008,360 Goodrich Corp. 38,500 2,290,365 ITT Corp. 31,000 2,086,300 Jacobs Engineering Group, Inc. * 48,000 2,781,600 Joy Global, Inc. (a) 28,500 1,613,955 Precision Castparts Corp. 26,000 3,108,560 Republic Services, Inc. 72,450 2,193,786 Ritchie Bros Auctioneers, Inc. 30,500 1,799,195 Robert Half Int'l., Inc. (a) 24,800 871,472 Roper Industries, Inc. (a) 40,500 2,363,580 Stericycle, Inc. * (a) 24,000 2,188,080 ------------ 30,945,598 ------------ Information Technology 22.4% Activision, Inc. * 88,000 1,741,520 Adtran, Inc. (a) 58,000 1,569,480 Akamai Technologies, Inc. * (a) 45,000 1,989,450 Amphenol Corp. (a) 58,500 2,093,130 Ansys, Inc. * (a) 36,000 2,021,760 Autodesk, Inc. * 51,000 2,317,950 Business Objects SA ADR * 51,500 2,117,165 Ciena Corp. * (a) 53,800 1,846,416 Cognizant Technology Solutions Corp. * 23,500 1,846,160 Equinix, Inc. * (a) 24,000 2,097,120 Informatica Corp. * (a) 121,500 1,854,090 Kla-Tencor Corp. (a) 22,500 1,237,050 Maxim Integrated Products, Inc. 54,000 1,660,500 MEMC Electronic Materials, Inc. * 52,500 3,190,950 Novell, Inc. * (a) 267,000 2,087,940 Research In Motion Ltd. * 15,000 2,491,200 Salesforce.com, Inc. * (a) 51,500 2,433,375 Tessera Technologies, Inc. * (a) 44,000 2,000,680 Xilinx, Inc. (a) 70,000 1,993,600 ------------ 38,589,536 ------------ Materials 5.4% Allegheny Technologies, Inc. (a) 26,400 3,051,576 Carpenter Technology Corp. (a) 18,000 2,386,260 Freeport-McMoRan Copper & Gold, Inc. 12,500 983,750 Praxair, Inc. 43,500 2,961,915 ------------ 9,383,501 ------------ Telecommunication Services 1.6% NII Holdings, Inc. * 33,000 2,688,510 ------------ Utilities 1.2% AES Corp. * 85,500 2,028,915 ------------ Total Common Stocks (Cost $ 130,357,792) 171,588,172 ------------ Money Market Funds 24.7% State Street Navigator Securities Lending Prime Portfolio (b) (Cost $ 42,462,816) 42,462,816 42,462,816 ------------ Total Investments 124.3% (Cost $172,820,608)** 214,050,988 Excess of Liabilities Over Other Assets (24.3)% (41,793,809) ------------ Net Assets 100.0% $172,257,179 ============ - -------- * Non-income producing ** Cost for federal income tax purposes is $172,820,608. At May 31, 2007 unrealized appreciation for federal income tax purposes aggregated $41,230,380 of which $41,594,205 related to appreciated securities and $363,825 related to depreciated securities. (a) All or a portion of this security was on loan at May 31, 2007. The aggregate cost and market value of securities on loan at May 31, 2007 is $33,661,462 and $42,202,783, respectively. (b) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by SSgA Funds Management, Inc., an affiliate of State Street Bank and Trust Company. This amount represents the investment of cash collateral received from securities lending activity (see Note 2). ADR - American Depository Receipt The accompanying notes are an integral part of the financial statements. 23 Sentinel Short Maturity Government Fund Fund Profile at May 31, 2007 Average Effective Duration Percent of Duration Net Assets - -------- ---------- Less than 1 yr. 8.0% 1 yr. to 2.99 yrs. 80.6% 3 yrs. to 3.99 yrs. 9.6% 4 yrs. to 5.99 yrs. 1.8% Top 10 Holdings* Maturity Percent of Description Coupon Date Net Assets - ----------- ------ -------- ---------- FHRR R007 AC 5.875% 05/15/16 11.7% FHR 2388 BG 6.50% 12/15/31 9.3% GNR 02-41 TE 6.00% 07/16/31 8.3% FHR 2435 HL 6.50% 09/15/31 7.7% FHR 3176 HA 6.00% 02/15/28 5.5% FHRR R006 AK 5.75% 12/15/18 5.2% FHR 2492 PE 6.00% 01/15/22 5.0% FHLMC J05907 6.00% 08/01/19 4.9% GNMA 781109 7.00% 11/15/14 2.9% FNMA 725284 7.00% 11/01/18 2.5% ---- Total of Net Assets 63.0% ==== - -------- Average Effective Duration(for all Fixed Income Holdings) 1.9 years** * "Top 10 Holdings" excludes any short-term investments and money market funds. Portfolio composition and holdings are subject to change. More complete holdings below. ** The average effective duration considers the call and put date of a security and the pre-payment risk of mortgage-backed bonds to measure the sensitivity of the Fund's price due to changes in interest rates. Investment in Securities at May 31, 2007 (Unaudited) Principal Amount Value (M=$1,000) (Note 2) ---------- ----------- U.S. Government Obligations 99.1% U.S. Government Agency Obligations 99.1% Federal Home Loan Mortgage Corporation 60.4% Collateralized Mortgage Obligations: FHRR R007 AC 5.875%, 05/15/16 19,719M $19,763,977 FHR 2353 TD 6%, 09/15/16 319M 323,195 FHRR R006 AK 5.75%, 12/15/18 8,679M 8,665,132 FHR 2492 PE 6%, 01/15/22 8,335M 8,383,120 FHR 3176 HA 6%, 02/15/28 9,142M 9,213,845 FHR 2435 HL 6.5%, 09/15/31 12,834M 12,972,175 FHR 2388 BG 6.5%, 12/15/31 15,326M 15,647,401 ----------- 74,968,845 ----------- Mortgage-Backed Securities: 10-Year: FHLMC E88437 5.5%, 03/01/12 349M 349,944 FHLMC E88621 5.5%, 03/01/12 260M 259,541 FHLMC E89015 6.5%, 04/01/12 467M 476,307 FHLMC E89586 5.5%, 05/01/12 259M 259,156 FHLMC E89815 5.5%, 05/01/12 288M 289,166 FHLMC G11271 5.5%, 05/01/12 413M 413,489 FHLMC E93390 5.5%, 07/01/12 160M 160,056 FHLMC E91150 5.5%, 09/01/12 274M 274,284 FHLMC E91152 5.5%, 09/01/12 71M 70,875 FHLMC E91428 5.5%, 09/01/12 218M 218,860 FHLMC E91504 5.5%, 09/01/12 449M 450,520 FHLMC E94026 5.5%, 02/01/13 2,470M 2,478,709 FHLMC E94029 5.5%, 02/01/13 1,028M 1,030,252 FHLMC B10204 5.5%, 10/01/13 466M 465,661 FHLMC B10950 5.5%, 11/01/13 700M 699,979 ----------- 7,896,799 ----------- 15-Year: FHLMC E00109 8.5%, 06/01/07 8 $ 8 FHLMC E47607 8%, 02/01/08 3M 3,372 FHLMC E47837 7%, 03/01/08 17M 17,304 FHLMC E49621 7%, 07/01/08 28M 28,347 FHLMC E54549 6.5%, 09/01/08 9M 9,441 FHLMC E00292 6.5%, 04/01/09 16M 16,119 FHLMC G10330 7%, 01/01/10 66M 66,568 FHLMC E61405 7%, 08/01/10 20M 20,356 FHLMC E62686 7%, 01/01/11 156M 158,943 FHLMC E00422 7%, 03/01/11 62M 63,086 FHLMC M30120 5.5%, 05/01/11 76M 76,528 FHLMC M30121 5.5%, 05/01/11 112M 112,953 FHLMC E00436 7%, 06/01/11 29M 29,302 The accompanying notes are an integral part of the financial statements. 24 Sentinel Short Maturity Government Fund Principal Amount Value (M=$1,000) (Note 2) ---------- ------------ FHLMC E64484 7%, 06/01/11 8M $ 8,047 FHLMC M30123 6.5%, 07/01/11 99M 102,268 FHLMC E85491 6.5%, 09/01/11 160M 162,385 FHLMC F70014 7.5%, 09/01/11 130M 133,560 FHLMC E72904 8%, 11/01/11 29M 29,866 FHLMC F70015 8%, 12/01/11 117M 121,035 FHLMC G10654 7%, 02/01/12 260M 266,980 FHLMC G10705 6.5%, 08/01/12 366M 374,176 FHLMC E93347 5.5%, 12/01/12 331M 331,337 FHLMC G11228 6.5%, 12/01/12 93M 94,855 FHLMC E94628 5%, 02/01/13 1,147M 1,139,973 FHLMC M30171 5.5%, 06/01/13 66M 66,774 FHLMC E72131 6.5%, 08/01/13 227M 232,218 FHLMC G11135 6.5%, 08/01/13 308M 313,560 FHLMC E72178 6.5%, 09/01/13 121M 124,174 FHLMC G10965 7.5%, 10/01/14 67M 69,565 FHLMC E82128 7%, 03/01/15 99M 101,178 FHLMC E00843 8%, 04/01/15 39M 41,426 FHLMC E01009 6.5%, 08/01/16 1,059M 1,083,807 FHLMC G11585 7%, 02/01/17 937M 965,007 FHLMC E88357 6.5%, 03/01/17 210M 214,951 FHLMC J05907 6%, 08/01/19 8,095M 8,187,723 ------------ 14,767,192 ------------ 20-Year: FHLMC C90035 6.5%, 11/01/13 286M 293,233 FHLMC D94982 7%, 04/01/16 199M 206,142 FHLMC D94230 7.5%, 10/01/19 318M 333,850 ------------ 833,225 ------------ 30-Year: FHLMC 274386 8.25%, 07/01/07 491 492 FHLMC 140826 6.5%, 11/01/07 993 992 FHLMC 160040 8.75%, 03/01/08 1M 1,089 FHLMC 530139 7.5%, 06/01/08 910 913 FHLMC 160054 9.25%, 07/01/08 4M 3,975 FHLMC 181285 7.5%, 03/01/09 3M 2,565 FHLMC 303073 8.5%, 03/01/09 20M 20,194 FHLMC 254499 7.75%, 06/01/09 5M 4,881 FHLMC 160081 10.25%, 06/01/09 737 773 FHLMC 181586 8%, 12/01/09 3M 3,310 FHLMC 555131 8.25%, 12/01/09 4M 4,168 FHLMC 141001 7.75%, 09/01/16 4M 3,652 FHLMC 141161 7.75%, 04/01/17 11M 11,028 FHLMC 302609 8%, 08/01/17 77M 80,475 FHLMC 307583 8%, 08/01/17 3M 2,708 FHLMC G00100 8%, 02/01/23 23M 24,300 FHLMC A17291 6.5%, 11/01/33 2,949M 3,019,848 ------------ 3,185,363 ------------ Total Federal Home Loan Mortgage Corporation 101,651,424 ------------ Federal National Mortgage Association 24.1% Agency Debentures: FNMA 6.625%, 10/15/07 12,000M 12,057,960 ------------ Collateralized Mortgage Obligations: FNR 05-105 TJ 5.5%, 12/25/35 3,043M 3,014,682 ------------ Mortgage-Backed Securities: 10-Year: FNMA 251418 7%, 11/01/07 1M 1,377 FNMA 516230 8%, 08/01/09 127M 129,714 FNMA 253329 7.5%, 05/01/10 144M 146,964 FNMA 253362 7.5%, 05/01/10 152M 155,232 FNMA 253472 7.5%, 09/01/10 198M 201,701 FNMA 253507 7.5%, 09/01/10 164M 166,992 FNMA 595730 6.5%, 09/01/11 67M 67,262 FNMA 603547 6.5%, 09/01/11 104M 105,320 FNMA 254082 5.5%, 10/01/11 167M 166,834 FNMA 254076 6.5%, 10/01/11 182M 184,255 FNMA 254119 5.5%, 11/01/11 238M 236,881 FNMA 254113 6.5%, 11/01/11 146M 148,248 FNMA 254163 5.5%, 12/01/11 358M 356,975 FNMA 254226 5.5%, 02/01/12 1,355M 1,351,269 FNMA 633905 5.5%, 03/01/12 279M 278,601 FNMA 644268 5.5%, 04/01/12 156M 155,615 FNMA 254399 6.5%, 06/01/12 1,041M 1,057,916 FNMA 254427 6.5%, 07/01/12 1,711M 1,736,946 FNMA 254457 6.5%, 07/01/12 303M 308,072 FNMA 254698 6.5%, 01/01/13 446M 453,484 FNMA 254882 5%, 08/01/13 135M 133,478 FNMA 255368 5.5%, 07/01/14 692M 690,733 ------------ 8,233,869 ------------ 15-Year: FNMA 328089 7.25%, 08/01/09 23M 23,430 FNMA 511846 9%, 01/01/10 7M 7,134 FNMA 321199 7%, 09/01/10 78M 79,334 FNMA 324087 7%, 09/01/10 22M 22,188 FNMA 325432 7%, 09/01/10 34M 34,707 FNMA 313758 7%, 11/01/10 7M 7,103 FNMA 250441 6.5%, 12/01/10 59M 60,007 FNMA 303902 7%, 05/01/11 36M 36,746 FNMA 303943 6.5%, 06/01/11 168M 172,376 FNMA 250613 6.5%, 07/01/11 84M 85,496 The accompanying notes are an integral part of the financial statements. 25 Sentinel Short Maturity Government Fund Principal Amount Value (M=$1,000) (Note 2) ---------- ----------- FNMA 250781 6.5%, 12/01/11 32M $ 33,016 FNMA 367201 6.5%, 12/01/11 39M 40,608 FNMA 367202 7%, 12/01/11 66M 68,656 FNMA 370468 7%, 01/01/12 57M 59,579 FNMA 576800 8.5%, 01/01/12 46M 46,044 FNMA 390784 6%, 05/01/12 77M 78,264 FNMA 251300 7%, 08/01/12 130M 133,963 FNMA 596145 6.5%, 06/01/13 35M 35,465 FNMA 433301 6.5%, 07/01/13 654M 670,066 FNMA 512520 7%, 07/01/13 202M 205,222 FNMA 426453 5.5%, 10/01/13 313M 311,560 FNMA 446787 5.5%, 01/01/14 507M 505,287 FNMA 447881 5.5%, 01/01/14 202M 201,118 FNMA 496015 5.5%, 04/01/14 32M 31,670 FNMA 528088 5.5%, 05/01/14 317M 316,466 FNMA 536814 5.5%, 06/01/14 535M 533,228 FNMA 576789 5.5%, 06/01/14 140M 139,470 FNMA 768628 5.5%, 09/01/15 549M 547,182 FNMA 630985 7%, 09/01/15 573M 590,552 FNMA 594601 8.5%, 10/01/15 112M 118,211 FNMA 619191 6.5%, 12/01/15 725M 742,441 FNMA 535631 7%, 12/01/15 761M 784,517 FNMA 594602 9%, 01/01/16 18M 19,638 FNMA 535777 5.5%, 03/01/16 483M 480,971 FNMA 663227 6%, 03/01/16 637M 645,125 FNMA 574598 6%, 05/01/16 500M 506,123 FNMA 545298 5.5%, 11/01/16 425M 423,327 FNMA 614920 5.5%, 12/01/16 483M 480,939 FNMA 792797 5.5%, 04/01/17 953M 950,008 FNMA 671380 6%, 11/01/17 350M 353,829 FNMA 679165 5.5%, 02/01/18 402M 400,434 FNMA 725284 7%, 11/01/18 4,147M 4,275,894 ----------- 15,257,394 ----------- 20-Year: FNMA 190659 7%, 02/01/14 273M 282,133 FNMA 190697 7%, 03/01/14 453M 468,341 FNMA 251716 10.5%, 03/01/18 26M 28,067 ----------- 778,541 =========== 30-Year: FNMA 111330 7.5%, 09/01/07 479 480 FNMA 8213 8%, 01/01/08 4M 3,802 FNMA 151964 8%, 03/01/08 22 22 FNMA 13481 7.75%, 05/01/08 2M 1,808 FNMA 44045 8%, 06/01/08 4M 3,762 FNMA 176044 8.5%, 09/01/08 8M 7,949 FNMA 141789 8.25%, 02/01/09 3M 3,434 FNMA 439 9%, 06/01/09 850 873 FNMA 10134 8.75%, 08/01/09 11M 11,405 FNMA 366221 9.5%, 03/01/11 14M 14,528 FNMA 23 8.5%, 08/01/11 4M 4,114 FNMA 510095 8.5%, 09/01/11 3M 3,368 FNMA 401612 7%, 05/01/12 23M 23,126 FNMA 81692 8%, 09/01/12 8M 8,179 FNMA 124871 7%, 05/01/13 257M 264,561 FNMA 20497 8.75%, 07/01/13 10M 10,756 FNMA 44046 7.5%, 02/01/14 4M 3,536 FNMA 454727 10.5%, 01/01/16 85M 93,665 FNMA 626664 6%, 04/01/17 311M 314,967 FNMA 49584 8.25%, 09/01/17 52M 54,802 FNMA 479421 7%, 09/01/21 112M 116,158 FNMA 207530 8.25%, 04/01/22 13M 13,784 FNMA 175123 7.45%, 08/01/22 147M 153,781 ----------- 1,112,860 ----------- Total Federal National Mortgage Association 40,455,306 ----------- Government National Mortgage Corporation 14.6% Collateralized Mortgage Obligations: GNR 02-41 TE 6%, 07/16/31 13,762M 13,893,874 ----------- Mortgage-Backed Securities: 10-Year: GNMA 634538 6%, 09/15/14 686M 694,131 GNMA 634545 6.5%, 09/15/14 629M 644,206 ----------- 1,338,337 ----------- 15-Year: GNMA 342810 7%, 12/15/07 7M 6,898 GNMA 780395 7%, 12/15/07 3M 2,574 GNMA 343534 7.5%, 01/15/08 1M 1,061 GNMA 339464 8%, 01/15/08 5M 5,430 GNMA 348052 7%, 03/15/08 2M 1,656 GNMA 339490 7%, 04/15/08 2M 1,882 GNMA 342744 6.5%, 08/15/08 19M 19,399 GNMA 352121 6.5%, 08/15/08 3M 3,188 GNMA 326462 6.5%, 10/15/08 53M 53,893 GNMA 370871 6.5%, 10/15/08 18M 17,768 GNMA 364469 6%, 11/15/08 7M 6,624 GNMA 354532 6%, 01/15/09 10M 10,253 GNMA 780303 6.5%, 02/15/09 25M 24,981 GNMA 345594 6%, 03/15/09 23M 23,292 GNMA 366674 6%, 03/15/09 22M 21,793 GNMA 388287 6%, 03/15/09 35M 35,461 The accompanying notes are an integral part of the financial statements. 26 Sentinel Short Maturity Government Fund Principal Amount (M=$1,000) Value (Note 2) ---------- -------------- GNMA 355866 6%, 04/15/09 38M $ 38,092 GNMA 360238 6%, 04/15/09 24M 23,792 GNMA 366773 6%, 04/15/09 33M 32,987 GNMA 371934 6%, 04/15/09 22M 21,780 GNMA 375876 6%, 04/15/09 14M 14,350 GNMA 378884 6%, 04/15/09 16M 16,631 GNMA 385492** 6%, 04/15/09 22M 22,404 GNMA 391659 6.5%, 04/15/09 98M 99,449 GNMA 780369 7%, 09/15/09 38M 38,079 GNMA 415068 6%, 01/15/11 18M 18,191 GNMA 780659 7.5%, 08/15/12 17M 17,383 GNMA II 2542 7%, 01/20/13 53M 54,875 GNMA 462328 6.5%, 04/15/13 183M 187,900 GNMA 780759 6.5%, 04/15/13 318M 326,025 GNMA 349029 7%, 04/15/13 22M 22,648 GNMA 456869 6.5%, 05/15/13 12M 12,204 GNMA 780859 7.5%, 09/15/13 21M 21,676 GNMA 780978 6.5%, 02/15/14 2,019M 2,068,004 GNMA 781109 7%, 11/15/14 4,757M 4,910,601 GNMA 489953 6%, 12/15/16 97M 98,488 ------------ 8,281,712 ------------ 20-Year: GNMA 234073 9.25%, 12/15/07 750 776 GNMA 248682 9.75%, 06/15/10 10M 10,283 GNMA 628440 7%, 04/15/24 963M 1,007,084 ------------ 1,018,143 ------------ 30-Year: GNMA 18324 8%, 07/15/07 393 396 GNMA 91758 10%, 11/15/09 672 703 GNMA 495 10%, 02/20/16 578 637 ------------ 1,736 ------------ Total Government National Mortgage Corporation 24,533,802 ------------ Total Investments 99.1% (Cost $168,202,500)** 166,640,532 Other Assets in Excess of Liabilities 0.9% 1,567,176 ------------ Net Assets 100.0% $168,207,708 ============ - -------- ** Cost for federal income tax purposes is $168,202,500. At May 31, 2007 unrealized depreciation for federal income tax purposes aggregated $1,561,968 of which $66,907 related to appreciated securities and $1,628,875 related to depreciated securities. The accompanying notes are an integral part of the financial statements. 27 Sentinel Small Company Fund Fund Profile at May 31, 2007 Top Sectors Percent of Sector Net Assets - ------ ---------- Industrials 20.3% Information Technology 17.2% Health Care 15.2% Consumer Discretionary 12.7% Financials 12.1% Energy 7.2% Materials 3.8% Consumer Staples 3.5% Telecommunication Services 0.9% Utilities 0.7% Top 10 Holdings * Percent of Description Net Assets - ----------- ---------- Ansys, Inc. 1.9% Kronos Inc. 1.8% Micros Systems, Inc. 1.7% Superior Energy Services 1.6% Moog, Inc. 1.5% Men's Wearhouse, Inc. 1.5% Oil States Int'l. Inc 1.5% IDEX Corp. 1.5% Aptargroup, Inc. 1.4% Arthrocare Corp. 1.4% ---- Total of Net Assets 15.8% ==== - -------- * "Top 10 Holdings" excludes any short-term investments and money market funds. Portfolio composition and holdings are subject to change. More complete holdings follow. Investment in Securities at May 31, 2007 (Unaudited) Shares Value (Note 2) --------- -------------- Common Stocks 93.6% Consumer Discretionary 12.7% Bright Horizons Family Solutions, Inc. * (a) 445,000 $ 18,841,300 Coldwater Creek, Inc. * (a) 575,000 14,288,750 Dress Barn, Inc. * (a) 675,000 15,585,750 Harte-Hanks, Inc. 560,000 14,705,600 Hibbett Sports, Inc. * (a) 466,400 13,045,208 Iconix Brand Group, Inc. * (a) 20,600 458,350 LKQ Corp. * (a) 670,000 16,729,900 McCormick & Schmick's Seafood Restaurants, Inc. * 115,100 3,240,065 Men's Wearhouse, Inc. 455,000 24,269,700 Monarch Casino & Resort, Inc. * (a) 447,600 12,223,956 Pool Corp. (a) 485,000 19,860,750 Rare Hospitality Int'l. Inc * 365,000 10,599,600 Shuffle Master, Inc. * (a) 305,000 5,865,150 Sonic Corp. * (a) 645,000 15,725,100 Tractor Supply Co. * (a) 230,000 12,238,300 Wolverine World Wide, Inc. 390,000 11,321,700 ------------ 208,999,179 ------------ Consumer Staples 3.5% Casey's General Stores, Inc. (a) 435,000 11,749,350 Central Garden and Pet Co. - Class A * (a) 189,900 2,529,468 Central Garden and Pet Co. * (a) 230,000 3,300,500 Chattem, Inc. * (a) 222,300 14,153,841 Church & Dwight Co., Inc. (a) 355,000 17,753,550 Hain Celestial Group, Inc. * (a) 305,000 8,723,000 ------------ 58,209,709 ------------ Energy 7.2% Cabot Oil & Gas Corp. 255,000 9,945,000 Comstock Resources, Inc. * 570,000 17,305,200 Core Laboratories NV * 200,000 18,386,000 Oil States Int'l. Inc * 620,000 24,136,600 Superior Energy Services * 655,000 26,304,800 Tetra Technologies, Inc. * (a) 770,000 21,506,100 ------------ 117,583,700 ------------ Financials 12.1% Delphi Financial Group, Inc. 169,600 7,282,624 East West Bancorp, Inc. (a) 445,000 18,040,300 Endurance Specialty Holdings Ltd. (a) 535,000 21,309,050 First Midwest Bancorp Inc. 530,000 19,498,700 Healthcare Realty Trust, Inc. (a)(b) 370,000 12,124,900 Investment Technology Group, Inc. * 530,000 21,544,500 Lexington Realty Trust (b) 695,000 14,456,000 optionsXpress Holdings, Inc. (a) 825,000 21,021,000 Portfolio Recovery Associates, Inc. (a) 320,000 18,944,000 Selective Insurance Group (a) 730,000 19,980,100 UCBH Holdings, Inc. (a) 1,025,100 19,077,111 Westamerica Bancorporation (a) 126,800 5,870,840 ------------ 199,149,125 ------------ The accompanying notes are an integral part of the financial statements. 28 Sentinel Small Company Fund Shares Value (Note 2) ----------- ---------------- Health Care 15.2% American Medical Systems Holdings, Inc. * (a) 1,115,000 $ 20,917,400 Arthrocare Corp. * (a) 530,000 23,357,100 Bio-Rad Laboratories, Inc. * (a) 238,200 17,793,540 DJO, Inc. * (a) 451,500 17,613,015 Haemonetics Corp. * 295,100 14,648,764 HealthExtras, Inc. * 283,000 8,611,690 Healthways, Inc. * (a) 160,000 7,459,200 ICU Medical, Inc. * (a) 190,000 7,628,500 Idexx Laboratories, Inc. * 140,400 12,395,916 Immucor, Inc. * 230,000 7,263,400 Integra LifeSciences Holdings Corp. * (a) 235,000 12,060,200 inVentiv Health, Inc. * 111,600 4,202,856 Meridian Bioscience, Inc. (a) 742,500 15,681,600 Option Care, Inc. (a) 735,000 11,076,450 Psychiatric Solutions, Inc. * (a) 525,000 20,485,500 Sciele Pharmaceutical, Inc. * (a) 440,000 10,876,800 Sirona Dental Systems, Inc. (a) 343,300 11,895,345 Ventana Medical Systems, Inc. * (a) 235,000 12,093,100 West Pharmaceutical Services, Inc. (a) 266,600 13,559,276 ---------------- 249,619,652 ---------------- Industrials 20.3% Clarcor, Inc. (a) 350,000 11,697,000 CRA Int'l. Inc * (a) 415,000 21,949,350 Curtiss-Wright Corp. (a) 405,000 18,253,350 Dynamic Materials Corp. (a) 427,000 15,478,750 ESCO Technologies, Inc. * (a) 445,000 22,548,150 Forward Air Corp. (a) 565,000 19,215,650 G&K Services, Inc. 195,000 7,423,650 Genlyte Group, Inc. * 230,000 20,037,600 Healthcare Services Group (a) 340,000 9,475,800 Heartland Express, Inc. (a) 1,325,000 22,220,250 Heico Corp. 275,000 9,842,250 IDEX Corp. 637,500 24,033,750 Interline Brands, Inc. * (a) 501,300 12,271,824 Moog, Inc. * 580,000 24,974,800 NCI Building Systems, Inc. * (a) 350,000 17,993,500 Resources Connection, Inc. * (a) 245,000 7,903,700 Toro Co. 307,000 18,367,810 Wabtec Corp. (a) 490,000 19,188,400 Waste Connections, Inc. * 660,000 20,341,200 Woodward Governor Co. 200,000 11,048,000 ---------------- 334,264,784 ---------------- Information Technology 17.2% Ansys, Inc. * (a) 565,000 31,730,400 Cognex Corp. (a) 535,000 12,588,550 Daktronics, Inc. (a) 780,000 18,688,800 Diodes, Inc. * (a) 590,000 21,824,100 Flir Systems, Inc. * (a) 545,000 22,541,200 Formfactor, Inc. * (a) 530,000 21,083,400 Kronos Inc. * (a) 550,000 30,134,500 Micros Systems, Inc. * 510,000 28,299,900 Power Integrations, Inc. * (a) 525,000 14,962,500 Progress Software Corp. * 475,000 15,608,500 Rofin-Sinar Technologies, Inc. * 213,400 14,404,500 Supertex, Inc. * (a) 325,000 10,897,250 Transaction Systems Architects, Inc. * 355,000 12,087,750 Trimble Navigation Ltd. * 395,000 11,530,050 Websense, Inc. * 730,000 16,425,000 ---------------- 282,806,400 ---------------- Materials 3.8% Aptargroup, Inc. 630,000 23,662,800 Carpenter Technology Corp. (a) 130,000 17,234,100 HB Fuller Co. 14,500 395,125 RTI Int'l. Metals, Inc. * 235,000 20,856,250 ---------------- 62,148,275 ---------------- Telecommunication Services 0.9% NeuStar, Inc. * (a) 484,400 14,076,664 ---------------- Utilities 0.7% Atmos Energy Corp. 370,000 11,984,300 ---------------- Total Common Stocks (Cost $1,173,128,823) 1,538,841,788 ---------------- Money Market Funds 24.4% State Street Navigator Securities Lending Prime Portfolio (c) (Cost $400,014,436) 400,014,436 400,014,436 ---------------- Principal Amount (M=$1,000) ----------- Corporate Short-Term Notes 3.9% American General Finance 5.24%, 06/04/07 13,200M 13,194,236 Basf-ag 5.23%, 06/12/07 11,000M 10,982,421 Chevron Oil Finance Co. 5.22%, 06/12/07 3,400M 3,394,577 5.22%, 06/13/07 15,000M 14,973,900 G.E. Capital Corp. 5.23%, 06/08/07 6,500M 6,493,390 Lbc (Lasalle Bank Corp.) 5.235%, 06/06/07 7,500M 7,494,547 Wells Fargo Co. 5.25%, 06/14/07 7,500M 7,485,781 ---------------- Total Corporate Short-Term Notes (Cost $64,018,852) 64,018,852 ---------------- U.S. Government Obligations 2.5% Federal Home Loan Bank 2.5% Agency Discount Notes: 5.04%, 06/04/07 25,000M 24,989,500 5.14%, 06/07/07 16,500M 16,485,865 ---------------- Total U.S. Government Obligations (Cost $41,475,365) 41,475,365 ---------------- Total Investments 124.4% (Cost $1,678,637,476)** 2,044,350,441 Excess of Liabilities Over Other Assets (24.4)% (400,393,148) ---------------- Net Assets 100.0% $1,643,957,293 ================ - -------- * Non-income producing ** Cost for federal income tax purposes is $1,678,637,476. At May 31, 2007 unrealized appreciation for federal income tax purposes aggregated $365,712,965 of which $380,403,086 related to appreciated securities and $14,690,121 related to depreciated securities. (a) All or a portion of this security was on loan at May 31, 2007. The aggregate cost and market value of securities on loan at May 31, 2007 is $322,906,124 and $392,452,010, respectively. (b) Real Estate Investment Trusts (c) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by SSgA Funds Management, Inc., an affiliate of State Street Bank and Trust Company. This amount represents the investment of cash collateral received from securities lending activity (see Note 2). The accompanying notes are an integral part of the financial statements. 29 Sentinel U.S. Treasury Money Market Fund Investment in Securities at May 31, 2007 (Unaudited) Principal Amount Value (M=$1,000) (Note 2) ---------- ------------ U.S. Government Obligations 97.1% U.S. Government Agency Obligations 17.3% Federal Home Loan Mortgage Corporation 5.1% Agency Discount Notes: Freddie Mac Discount Notes 5.12%, 06/18/07 2,610M $ 2,603,690 Freddie Mac Discount Notes 5.12%, 06/25/07 500M 498,293 ------------ Total Federal Home Loan Mortgage Corporation 3,101,983 ------------ Federal National Mortgage Association 12.2% Agency Discount Notes: Fannie Mae Discount Notes 5.14%, 06/29/07 385M 383,461 Fannie Mae Discount Notes 5.125%, 07/13/07 2,100M 2,087,443 Fannie Mae Discount Notes 5.164%, 07/16/07 5,000M 4,967,725 ------------ Total Federal National Mortgage Association 7,438,629 ------------ Total U.S. Government Agency Obligations 10,540,612 ------------ U.S. Treasury Obligations 79.8% U.S. Treasury Bill 4.825%, 06/07/07 (a) 8,000M 7,993,567 U.S. Treasury Bill 4.77%, 06/14/07 (a) 9,900M 9,882,947 U.S. Cash Management Bill 5.06%, 06/15/07 1,300M 1,297,442 U.S. Treasury Bill 4.755%, 06/21/07 (a) 3,175M 3,166,613 U.S. Treasury Bill 4.8%, 06/28/07 (a) 5,000M 4,982,000 U.S. Treasury Bill 4.77%, 07/05/07 5,000M 4,977,475 U.S. Treasury Bill 4.71%, 07/19/07 1,175M 1,167,621 U.S. Treasury Bill 4.715%, 07/19/07 (a) 4,250M 4,223,282 U.S. Treasury Bill 4.64%, 08/16/07 3,330M 3,297,381 U.S. Treasury Bill 4.755%, 08/16/07 4,300M 4,256,835 U.S. Treasury Bill 4.745%, 08/23/07 3,450M 3,412,257 ------------ Total U.S. Treasury Obligations 48,657,420 ------------ Total U.S. Government Obligations (Cost $59,198,032) 59,198,032 ------------ Shares ---------- Money Market Funds 28.0% State Street Navigator Securities Lending Prime Portfolio (b) (Cost $17,083,126) 17,083,126 17,083,126 ------------ U.S. Treasury Institutional Funds 4.9% Blackrock Provident Institutional Funds Treasury Fund #60 285,000 285,000 Dreyfus Treasury Cash Management Institutional Shares 2,700,000 2,700,000 ------------ Total U.S. Treasury Institutional Funds (Cost $2,985,000) 2,985,000 ------------ Total Investments 130.0% (Cost $79,266,158)** 79,266,158 Excess of Liabilities Over Other Assets (30.0)% (18,301,780) ------------ Net Assets 100.0% $ 60,964,378 ============ - -------- ** Cost for federal income tax purposes is $79,266,158. (a) All or a portion of this security was on loan at May 31, 2007. The aggregate cost and market value of securities on loan at May 31, 2007 is $16,754,733 and $16,754,733, respectively. (b) Money market mutual fund registered under the Investment Company Act of 1940, as amended, and advised by SSgA Funds Management, Inc., an affiliate of State Street Bank and Trust Company. This amount represents the investment of cash collateral received from securities lending activity (see Note 2). The accompanying notes are an integral part of the financial statements. 30 Statement of Assets and Liabilities at May 31, 2007 (Unaudited)
Conservative Government Balanced Capital Growth Common Stock Allocation Securities ------------ -------------- -------------- ------------ ------------ Assets Investments at value $322,480,881 $211,440,030 $1,504,174,951 $68,035,940 $383,279,920 Cash and cash equivalents 1,571,889 595,936 836,338 410,560 91 Receivable for securities sold -- 1,144,225 -- 223,264 1,143 Receivable for fund shares sold 47,870 44,675 464,990 140,910 1,149,903 Receivable for interest 468,752 -- -- 263,442 2,204,612 Receivable for securities lending interest 6,443 2,083 31,592 588 21,385 Receivable for dividends 465,629 162,421 3,047,092 48,327 -- Receivable from fund administrator -- -- 4,356 -- -- ------------ ------------ -------------- ----------- ------------ Total Assets 325,041,464 213,389,370 1,508,559,319 69,123,031 386,657,054 ------------ ------------ -------------- ----------- ------------ Liabilities Collateral on securities loaned 11,863,368 19,776,973 67,389,835 9,580,234 46,198,556 Payable to custodian bank-line of credit -- -- -- -- 1,007,000 Payable for securities purchased 366,979 385,576 1,262,103 -- -- Payable for fund shares repurchased 161,619 75,946 1,877,696 115,334 192,846 Income dividend payable -- -- -- -- -- Accrued expenses 227,520 76,287 588,256 45,918 144,172 Management fee payable 141,060 113,493 728,962 27,554 142,893 Distribution fee payable (Class A Shares) 66,409 57,666 298,845 10,747 37,560 Distribution fee payable (Class B Shares) 17,487 -- 35,980 9,688 -- Distribution fee payable (Class C Shares) 6,460 2,202 16,969 6,001 2,247 Distribution fee payable (Class D Shares) 7,827 -- -- -- -- Distribution fee payable (Class S Shares) -- -- -- -- -- Fund accounting fee payable 5,807 3,551 26,784 5,536 6,876 ------------ ------------ -------------- ----------- ------------ Total Liabilities 12,864,536 20,491,694 72,225,430 9,801,012 47,732,150 ------------ ------------ -------------- ----------- ------------ Net Assets Applicable to All Outstanding Shares $312,176,928 $192,897,676 $1,436,333,889 $59,322,019 $338,924,904 ============ ============ ============== =========== ============ Net Asset Value and Maximum Offering Price Per Share Class A Shares* Net Assets Applicable to Class A Shares/ $260,738,512 $190,200,845 $1,179,293,100 $40,815,335 $221,450,331 ------------ ------------ -------------- ----------- ------------ Shares Outstanding 13,962,604 9,285,662 32,933,325 3,429,348 21,878,921 Net Asset Value per Share $ 18.67 $ 20.48 $ 35.81 $ 11.90 $ 10.12 Sales Charge** 0.98 1.08 1.88 0.63 0.42 ------------ ------------ -------------- ----------- ------------ Maximum Offering Price $ 19.65 $ 21.56 $ 37.69 $ 12.53 $ 10.54 ============ ============ ============== =========== ============ Class B Shares* Net Assets Applicable to Class B Shares/ $ 20,205,672 N/A $ 42,069,118 $11,369,516 N/A ------------ ------------ -------------- ----------- ------------ Shares Outstanding 1,077,982 N/A 1,200,271 958,512 N/A Net Asset Value per Share*** $ 18.74 N/A $ 35.05 $ 11.86 N/A ============ ============ ============== =========== ============ Class C Shares* Net Assets Applicable to Class C Shares/ $ 7,671,140 $ 2,696,831 $ 20,523,074 $ 7,137,168 $ 2,979,362 ------------ ------------ -------------- ----------- ------------ Shares Outstanding 410,836 134,834 588,497 600,999 294,842 Net Asset Value per Share*** $ 18.67 $ 20.00 $ 34.87 $ 11.88 $ 10.10 ============ ============ ============== =========== ============ Class D Shares* Net Assets Applicable to Class D Shares/ $ 23,561,604 N/A N/A N/A N/A ------------ ------------ -------------- ----------- ------------ Shares Outstanding 1,262,247 N/A N/A N/A N/A Net Asset Value per Share*** $ 18.67 N/A N/A N/A N/A ============ ============ ============== =========== ============ Class I Shares* Net Assets Applicable to Class I Shares/ N/A N/A $ 194,448,597 N/A $114,495,211 ------------ ------------ -------------- ----------- ------------ Shares Outstanding N/A N/A 5,428,643 N/A 11,317,140 Net Asset Value per Share*** N/A N/A $ 35.82 N/A $ 10.12 ============ ============ ============== =========== ============ Class S Shares* Net Assets Applicable to Class S Shares/ N/A N/A N/A N/A N/A ------------ ------------ -------------- ----------- ------------ Shares Outstanding N/A N/A N/A N/A N/A Net Asset Value per Share*** N/A N/A N/A N/A N/A ============ ============ ============== =========== ============
The accompanying notes are an integral part of the financial statements. 31
International Short Maturity U.S. Treasury Growth Leaders High Yield Bond Equity Mid Cap Growth Government Small Company Money Market - -------------- --------------- ------------- -------------- -------------- -------------- ------------- $16,851,355 $83,752,424 $216,452,901 $214,050,988 $166,640,532 $2,044,350,441 $79,266,158 274,703 205,415 1,354,810 878,578 997,314 1,525,285 86,695 -- 6,044,191 1,042,521 247,609 8,369 5,727,259 -- 38,287 732 105,030 89,104 53,681 2,778,893 348,306 261 1,201,483 -- -- 888,116 -- 6,327 -- 2,177 34,119 3,037 -- 69,630 3,290 10,573 -- 940,910 59,935 -- 1,030,764 -- 4,762 - -- -- -- -- -- ----------- ----------- ------------ ------------ ------------ -------------- ----------- 17,179,941 91,206,422 219,930,291 215,329,251 168,588,012 2,055,482,272 79,710,776 ----------- ----------- ------------ ------------ ------------ -------------- ----------- 2,416,185 14,743,700 31,321,461 42,462,816 -- 400,014,436 17,083,126 -- -- -- -- -- -- -- 219,720 1,316,827 - 245,147 -- 6,133,431 1,297,442 1,154 73,411 445,525 100,671 172,609 3,443,147 96,333 -- -- -- -- -- -- 204,506 7,958 47,242 107,233 104,866 81,374 489,571 41,777 10,818 44,746 111,878 100,710 73,673 818,952 22,009 4,186 9,295 42,978 37,672 44,672 327,661 -- -- 12,451 10,510 12,453 -- 115,245 -- 573 6,043 6,045 3,499 273 152,790 -- -- -- -- -- -- -- -- -- -- -- -- 4,539 -- -- 263 1,400 4,952 4,238 3,164 29,746 1,205 ----------- ----------- ------------ ------------ ------------ -------------- ----------- 2,660,857 16,255,115 32,050,582 43,072,072 380,304 411,524,979 18,746,398 ----------- ----------- ------------ ------------ ------------ -------------- ----------- $14,519,084 $74,951,307 $187,879,709 $172,257,179 $168,207,708 $1,643,957,293 $60,964,378 =========== =========== ============ ============ ============ ============== =========== $13,777,504 $53,578,338 $168,357,737 $153,816,463 $160,649,983 $1,304,888,247 $58,357,950 ----------- ----------- ------------ ------------ ------------ -------------- ----------- 1,106,555 6,486,887 7,580,852 8,081,727 17,956,627 157,229,119 58,357,950 $ 12.45 $ 8.26 $ 22.21 $ 19.03 $ 8.95 $ 8.30 $ 1.00 0.66 0.34 1.17 1.00 0.28 0.44 -- ----------- ----------- ------------ ------------ ------------ -------------- ----------- $ 13.11 $ 8.60 $ 23.38 $ 20.03 $ 9.23 $ 8.74 $ 1.00 =========== =========== ============ ============ ============ ============== =========== N/A $14,364,732 $ 12,283,286 $ 14,116,056 N/A $ 137,314,466 $ 2,606,428 ----------- ----------- ------------ ------------ ------------ -------------- ----------- N/A 1,742,811 567,384 822,947 N/A 19,850,627 2,606,428 N/A $ 8.24 $ 21.65 $ 17.15 N/A $ 6.92 $ 1.00 =========== =========== ============ ============ ============ ============== =========== $ 741,580 $ 7,008,237 $ 7,238,686 $ 4,324,660 $ 441,294 $ 184,841,364 N/A ----------- ----------- ------------ ------------ ------------ -------------- ----------- 60,788 839,590 332,882 249,052 49,359 23,802,249 N/A $ 12.20 $ 8.35 $ 21.75 $ 17.36 $ 8.94 $ 7.77 N/A =========== =========== ============ ============ ============ ============== =========== N/A N/A N/A N/A N/A N/A N/A ----------- ----------- ------------ ------------ ------------ -------------- ----------- N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A =========== =========== ============ ============ ============ ============== =========== N/A N/A N/A N/A N/A $ 16,913,216 N/A ----------- ----------- ------------ ------------ ------------ -------------- ----------- N/A N/A N/A N/A N/A 2,037,469 N/A N/A N/A N/A N/A N/A $ 8.30 N/A =========== =========== ============ ============ ============ ============== =========== N/A N/A N/A N/A $ 7,116,431 N/A N/A ----------- ----------- ------------ ------------ ------------ -------------- ----------- N/A N/A N/A N/A 794,897 N/A N/A N/A N/A N/A N/A $ 8.95 N/A N/A =========== =========== ============ ============ ============ ============== ===========
- -------- * The redemption price per share is equal to the net asset value less any applicable contingent deferred sales charge. ** For the Balanced Fund, Capital Growth Fund, Common Stock Fund, Conservative Allocation Fund, Growth Leaders Fund, International Equity Fund, Mid Cap Growth Fund and Small Company Fund the maximum offering price is 1000/950 times the net asset value per share. For the Government Securities Fund and High Yield Bond Fund, the maximum offering price is 1000/960 times the net asset value per share. For the Short Maturity Government Fund, the maximum offering price is 1000/970 times the net asset value per share. For the U.S. Treasury Money Market Fund, the maximum offering price is equal to the net asset value per share. *** The maximum offering price is equal to the net asset value. 32 Statement of Assets and Liabilities (continued) at May 31, 2007 (Unaudited)
Conservative Government Balanced Capital Growth Common Stock Allocation Securities ------------ -------------- -------------- ------------ ------------ Net Assets Represent Capital stock at par value $ 167,137 $ 94,205 $ 401,507 $ 49,889 $ 334,909 Paid-in capital 221,652,371 114,830,660 819,036,340 53,618,035 349,250,018 Accumulated undistributed (distributions in excess of) net investment income (loss) 870,910 110,494 2,301,005 169,738 (9,546) Accumulated undistributed net realized gain (loss) on investments 4,965,613 7,468,399 38,211,425 112,607 (7,980,164) Unrealized appreciation (depreciation) of investments and foreign exchange 84,520,897 70,393,918 576,383,612 5,371,750 (2,670,313) ------------ ------------ -------------- ----------- ------------ Net Assets $312,176,928 $192,897,676 $1,436,333,889 $59,322,019 $338,924,904 ============ ============ ============== =========== ============ Investments at Cost $237,959,984 $141,046,112 $ 927,791,339 $62,664,178 $385,950,233 ============ ============ ============== =========== ============
The accompanying notes are an integral part of the financial statements. 33
U.S. Treasury Growth High Yield International Mid Cap Short Maturity Money Leaders Bond Equity Growth Government Small Company Market ------- ------------ ------------- ------------ -------------- -------------- ------------- $ 11,673 $ 90,693 $ 84,811 $ 91,537 $ 188,009 $ 2,029,195 $ 609,644 11,919,332 90,257,986 126,355,071 152,078,667 197,189,026 1,212,758,275 60,354,734 (21,589) 235,997 1,037,953 (545,139) 26,405 2,305,741 -- (236,304) (18,455,799) 6,833,536 (20,598,266) (27,633,764) 61,151,117 -- 2,845,972 2,822,430 53,568,338 41,230,380 (1,561,968) 365,712,965 -- - ----------- ------------ ------------ ------------ ------------ -------------- ----------- $14,519,084 $ 74,951,307 $187,879,709 $172,257,179 $168,207,708 $1,643,957,293 $60,964,378 =========== ============ ============ ============ ============ ============== =========== $14,005,383 $ 80,930,772 $162,882,198 $172,820,608 $168,202,500 $1,678,637,476 $79,266,158 =========== ============ ============ ============ ============ ============== ===========
34 Statement of Operations For the Six Months Ended May 31, 2007 (Unaudited)
Conservative Government Balanced Capital Growth Common Stock Allocation Securities ----------- -------------- ------------ ------------ ----------- Six Months Six Months Six Months Six Months Ended Six Months Ended Ended Ended 05/31/07 Ended 05/31/07 05/31/07 05/31/07 05/31/07 ----------- -------------- ------------ ------------ ----------- Investment Income Income: Dividends $ 2,043,347 $ 951,058 $ 11,880,769 $ 272,687* $ -- Interest 2,885,627 23,959 701,946 1,037,274 6,675,445 Securities Lending 24,587 11,695 51,507 9,596 38,305 ----------- ----------- ------------ ---------- ----------- Total Income $ 4,953,561 $ 986,712 $ 12,634,222 $1,319,557 $ 6,713,750 ----------- ----------- ------------ ---------- ----------- Expenses: Management advisory fee 809,749 503,694 3,858,334 158,671 611,891 Transfer agent fees 285,162 97,672 668,703 60,255 172,005 Custodian fees 15,840 8,983 42,811 9,566 13,454 Distribution expense (Class A Shares) 378,006 214,210 1,686,465 58,816 215,057 Distribution expense (Class B Shares) 109,466 -- 222,117 58,246 -- Distribution expense (Class C Shares) 35,898 4,799 83,912 34,177 7,557 Distribution expense (Class D Shares) 45,167 -- -- -- -- Distribution expense (Class S Shares) -- -- -- -- -- Accounting and administration services 39,656 18,487 157,757 17,545 28,894 Auditing fees 17,900 3,000 44,000 5,700 14,000 Legal fees 7,300 1,000 35,000 3,400 9,850 Reports and notices to shareholders 16,950 900 32,400 5,200 14,500 Registration and filing fees 32,703 16,421 45,929 36,597 35,283 Director's and Chief Compliance Officer's fees and expenses 28,490 12,413 111,468 5,701 18,953 Other 13,161 48 34,401 4,528 16,084 ----------- ----------- ------------ ---------- ----------- Total Expenses 1,835,448 881,627 7,023,297 458,402 1,157,528 Expense Reimbursement -- -- (72,484) -- -- Expense Offset (12,740) (6,968) (21,861) (8,866) (9,919) ----------- ----------- ------------ ---------- ----------- Net Expenses 1,822,708 874,659 6,928,952 449,536 1,147,609 ----------- ----------- ------------ ---------- ----------- Net Investment Income (Loss) 3,130,853 112,053 5,705,270 870,021 5,566,141 =========== =========== ============ ========== =========== Realized and Unrealized Gain (Loss) on Investments Net realized gain (loss) from: Investments 5,617,212 7,554,199 41,016,116 274,548 466,142 Foreign currency transactions -- -- -- 191 -- ----------- ----------- ------------ ---------- ----------- Net realized gain (loss) 5,617,212 7,554,199 41,016,116 274,739 466,142 ----------- ----------- ------------ ---------- ----------- Net change in unrealized appreciation (depreciation) during the period: Investments 12,810,948 9,804,883 72,627,958 1,859,398 (4,677,408) Foreign currency transactions -- -- -- (109) -- ----------- ----------- ------------ ---------- ----------- Net change in unrealized appreciation (depreciation) 12,810,948 9,804,883 72,627,958 1,859,289 (4,677,408) ----------- ----------- ------------ ---------- ----------- Net Realized and Unrealized Gain (Loss) on Investments 18,428,160 17,359,082 113,644,074 2,134,028 (4,211,266) ----------- ----------- ------------ ---------- ----------- Net Increase in Net Assets from Operations $21,559,013 $17,471,135 $119,349,344 $3,004,049 $ 1,354,875 =========== =========== ============ ========== ===========
The accompanying notes are an integral part of the financial statements. 35
Short Maturity U.S. Treasury Growth Leaders High Yield Bond International Equity Mid Cap Growth Government Small Company Money Market - -------------- --------------- -------------------- -------------- -------------- ------------- ------------- Six Months Six Months Six Months Six Months Six Months Six Months Six Months Ended Ended Ended Ended Ended Ended Ended 05/31/07 05/31/07 05/31/07 05/31/07 05/31/07 05/31/07 05/31/07 ---------- --------------- -------------------- -------------- -------------- ------------- ------------- $ 72,736 $ 13,151 $ 2,498,185* $ 688,276 $ -- $ 9,254,629 $ 100,151 6,170 3,003,222 83,542 23,815 4,702,871 2,782,329 1,629,783 1,839 18,311 90,733 16,515 -- 282,111 8,908 ---------- ---------- ----------- ----------- ---------- ------------ ---------- $ 80,745 $3,034,684 $ 2,672,460 $ 728,606 $4,702,871 $ 12,319,069 $1,738,842 ---------- ---------- ----------- ----------- ---------- ------------ ---------- 57,760 269,134 618,847 585,468 468,105 4,666,574 137,514 21,177 99,614 202,625 244,892 142,362 1,252,959 129,741 1,920 6,469 51,065 10,460 22,940 72,418 5,718 18,403 54,400 236,826 213,084 213,546 1,845,227 -- -- 76,686 64,101 75,812 -- 684,045 -- 2,572 36,093 30,541 19,010 840 851,942 -- -- -- -- -- -- -- -- -- -- -- -- 30,166 -- -- 1,671 10,047 17,170 21,924 23,423 200,538 8,995 3,300 6,050 12,500 8,000 7,175 54,010 3,250 525 3,950 7,500 3,175 7,665 41,010 2,100 1,125 4,700 14,900 11,500 8,100 52,005 6,500 17,705 20,738 27,126 18,942 22,285 42,365 17,724 748 7,649 16,364 12,521 18,109 123,218 6,922 974 7,921 20,557 294 17,082 26,437 2,561 ---------- ---------- ----------- ----------- ---------- ------------ ---------- 127,880 603,451 1,320,122 1,225,082 981,798 9,912,748 321,025 (24,718) -- -- -- -- -- (7,217) (1,910) (6,319) (16,815) (10,085) (11,565) (28,808) (5,218) ---------- ---------- ----------- ----------- ---------- ------------ ---------- 101,252 597,132 1,303,307 1,214,997 970,233 9,883,940 308,590 ---------- ---------- ----------- ----------- ---------- ------------ ---------- (20,507) 2,437,552 1,369,153 (486,391) 3,732,638 2,435,129 1,430,252 ========== ========== =========== =========== ========== ============ ========== 33,476 1,864,664 9,055,536 9,907,010 (45,075) 61,996,657 -- -- (589) (26,960) -- -- -- -- ---------- ---------- ----------- ----------- ---------- ------------ ---------- 33,476 1,864,075 9,028,576 9,907,010 (45,075) 61,996,657 -- ---------- ---------- ----------- ----------- ---------- ------------ ---------- 1,451,018 151,897 8,428,054 9,892,716 (702,615) 85,190,111 -- -- 778 (12,314) -- -- -- -- ---------- ---------- ----------- ----------- ---------- ------------ ---------- 1,451,018 152,675 8,415,739 9,892,716 (702,615) 85,190,111 -- ---------- ---------- ----------- ----------- ---------- ------------ ---------- 1,484,494 2,016,750 17,444,315 19,799,726 (747,690) 147,186,768 -- ---------- ---------- ----------- ----------- ---------- ------------ ---------- $1,463,987 $4,454,302 $18,813,468 $19,313,335 $2,984,948 $149,621,897 $1,430,252 ========== ========== =========== =========== ========== ============ ==========
- -------- * Net of foreign tax withholding of $2,262 in the Sentinel Conservative Allocation Fund and $267,289 in the Sentinel International Equity Fund. 36 Statement of Changes in Net Assets
Balanced Capital Growth* ----------------------------- ---------------------------------------------- Six Months Ended Six Months Ended Fiscal Period 05/31/07 Year Ended 05/31/07 From 07/01/06 Year Ended (unaudited) 11/30/06 (unaudited) Through 11/30/06 06/30/06 ---------------- ------------ ---------------- ---------------- ------------ Increase (Decrease) in Net Assets from Operations Net investment income (loss) $ 3,130,853 $ 6,101,662 $ 112,053 $ (64,808) $ (860,690) Net realized gain (loss) on sales of investments 5,617,212 7,389,588 7,554,199 3,528,971 15,128,961 Net Change in unrealized appreciation (depreciation) 12,810,948 18,913,399 9,804,883 2,919,662 2,368,398 ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets from operations 21,559,013 32,404,649 17,471,135 6,383,825 16,636,669 ============ ============ ============ ============ ============ Distributions to Shareholders From net investment income Class A Shares (2,689,786) (5,313,348) -- -- -- Class B Shares (138,740) (345,344) -- -- -- Class C Shares (41,248) (86,289) -- -- --** Class D Shares (212,760) (413,016) -- -- -- Class S Shares -- -- -- -- -- Class I Shares -- -- -- -- -- From net realized gain on investments Class A Shares (5,946,206) (5,085,066) (8,420,932) -- (20,118,497) Class B Shares (544,748) (564,895) -- -- -- Class C Shares (163,913) (136,469) (18,041) -- --** Class D Shares (546,897) (462,459) -- -- -- Class S Shares -- -- -- -- -- Class I Shares -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ Total distributions to shareholders (10,284,298) (12,406,886) (8,438,973) -- (20,118,497) ------------ ------------ ------------ ------------ ------------ From Capital Share Transactions Net proceeds from sales of shares Class A Shares 17,014,937 24,234,437 3,971,983 2,193,967 9,466,358 Class B Shares 399,153 1,981,547 -- -- -- Class C Shares 1,061,366 1,871,560 127,720 63,207 178,075** Class D Shares 5,055 385,371 -- -- -- Class S Shares -- -- -- -- -- Class I Shares -- -- -- -- -- Net asset value of shares issued in Fund reorganizations (see note 7) Class A Shares -- -- 66,893,747 -- -- Class B Shares -- -- -- -- -- Class C Shares -- -- 2,315,385 -- --** Class D Shares -- -- -- -- -- Class S Shares -- -- -- -- -- Class I Shares -- -- -- -- -- Net asset value of shares in reinvestment of dividends and distributions Class A Shares 8,061,196 9,566,548 6,742,303 -- 17,641,719 Class B Shares 644,736 864,181 -- -- -- Class C Shares 196,290 213,499 6,829 -- --** Class D Shares 389,869 460,874 -- -- -- Class S Shares -- -- -- -- -- Class I Shares -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ 27,772,602 39,578,017 80,057,967 2,257,174 27,286,152 ------------ ------------ ------------ ------------ ------------ Less: Payments for shares reacquired Class A Shares (23,162,405) (40,734,365) (20,319,644) (15,912,180) (67,049,820) Class B Shares (5,007,210) (7,993,035) -- -- -- Class C Shares (1,162,658) (1,694,312) (173,774) (228) --** Class D Shares (576,884) (1,150,073) -- -- -- Class S Shares -- -- -- -- -- Class I Shares -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ Increase (decrease) in net assets from capital stock transactions (2,136,555) (11,993,768) 59,564,549 (13,665,234) (39,763,668) ------------ ------------ ------------ ------------ ------------ Total Increase (Decrease) in Net Assets for period 9,138,160 8,003,995 68,596,711 (7,271,409) $(43,245,496) Net Assets: Beginning of period $303,038,768 $295,034,773 $124,300,965 $131,572,374 174,817,870 ------------ ------------ ------------ ------------ ------------ Net Assets: End of period $312,176,928 $303,038,768 $192,897,676 $124,300,965 $131,572,374 ============ ============ ============ ============ ============ Accumulated Undistributed Net Investment Income (Loss) $ 870,910 $ 800,513 $ 110,494 $ (1,559) $ (449) ============ ============ ============ ============ ============
- -------- * The fiscal year end changed from June 30th to November 30th following the June 30, 2006 Annual Report. Information prior to March 17, 2006 is based on the predecessor Bramwell Growth Fund. ** Commenced operations March 17, 2006. The accompanying notes are an integral part of the financial statements. 37
Common Stock Conservative Allocation+ Government Securities - ------------------------------- ------------------------- ----------------------------- Six Months Six Months Ended Ended Six Months Ended 05/31/07 Year Ended 05/31/07 Year Ended 05/31/07 Year Ended (unaudited) 11/30/06 (unaudited) 11/30/06 (unaudited) 11/30/06 - -------------- -------------- ----------- ------------ ---------------- ------------ $ 5,705,270 $ 9,417,715 $ 870,021 $ 2,082,312 $ 5,566,141 $ 9,547,358 41,016,116 49,244,929 274,739 1,332,679 466,142 (2,048,398) 72,627,958 100,657,595 1,859,289 1,766,118 (4,677,408) 3,463,023 - -------------- -------------- ----------- ------------ ------------ ------------ 119,349,344 159,320,239 3,004,049 5,181,109 1,354,875 10,961,983 - -------------- -------------- ----------- ------------ ------------ ------------ (4,193,268) (10,178,550) (1,023,281) (1,651,391) (5,167,000) (9,740,425) -- (32,784) (256,399) (388,844) -- -- -- (9,538) (140,824) (209,226) (23,804) (4,086)^ -- -- -- -- -- -- -- -- -- -- -- -- --# -- -- -- (454,170)# -- (46,436,345) (47,966,923) (609,494) (869,023) -- -- (1,981,880) (2,443,954) (188,211) (237,204) -- -- (649,932) (439,067) (102,153) (148,439) -- --^ -- -- -- -- -- -- -- -- -- -- -- -- --# -- -- -- --# -- - -------------- -------------- ----------- ------------ ------------ ------------ (53,261,425) (61,070,816) (2,320,362) (3,504,127) (5,644,974) (9,744,511) - -------------- -------------- ----------- ------------ ------------ ------------ 40,679,808 60,607,050 7,948,234 6,543,677 34,217,138 49,850,057 584,608 4,002,083 227,799 978,876 -- -- 3,245,168 5,829,581 1,224,384 792,873 2,441,092 560,763^ -- -- -- -- -- -- -- -- -- -- -- -- 4,205,087# -- -- -- 2,370,912# -- 1,091,395 -- -- -- 1,931,677 -- -- -- -- -- -- -- 2,132,920 -- -- -- -- --^ -- -- -- -- -- -- -- -- -- -- -- -- 194,108,510 # -- -- -- 126,487,938# -- 43,235,768 49,577,858 1,383,492 2,104,067 4,120,887 7,770,107 1,947,306 2,438,450 387,653 552,818 -- -- 623,869 442,438 198,383 302,886 9,902 487^ -- -- -- -- -- -- -- -- -- -- -- -- --# -- -- -- 18,547# -- - -------------- -------------- ----------- ------------ ------------ ------------ 291,854,439 122,897,460 11,369,945 11,275,197 171,598,093 58,181,414 - -------------- -------------- ----------- ------------ ------------ ------------ (80,197,083) (160,694,672) (7,162,001) (27,450,793) (30,513,965) (49,324,426) (9,997,297) (16,847,777) (1,377,935) (3,905,911) -- -- (1,302,297) (2,157,923) (913,935) (4,613,630) (4,245) (1,660)^ -- -- -- -- -- -- -- -- -- -- -- -- (6,636,591 )# -- -- -- (12,805,650)# -- - -------------- -------------- ----------- ------------ ------------ ------------ 193,721,171 (56,802,912) 1,916,074 (24,695,137) 128,274,233 8,855,328 - -------------- -------------- ----------- ------------ ------------ ------------ 259,809,090 41,446,513 2,599,761 (23,018,155) 123,984,134 10,072,800 $1,176,524,799 $1,135,078,286 $56,722,258 $ 79,740,413 $214,940,770 $204,867,970 - -------------- -------------- ----------- ------------ ------------ ------------ $1,436,333,889 $1,176,524,799 $59,322,019 $ 56,722,258 $338,924,904 $214,940,770 ============== ============== =========== ============ ============ ============ $ 2,301,005 $ 789,004 $ 169,738 $ 700,883 $ (9,546) $ 14,487 ============== ============== =========== ============ ============ ============
- -------- + Name change. Formerly the Sentinel Capital Markets Income Fund prior to November 1, 2006. ^ Commenced operations June 1, 2006. # Commenced operations May 4, 2007. 38 Statement of Changes in Net Assets
Growth Leaders* High Yield Bond --------------------------------------------- --------------------------- Six Months Ended Fiscal Period Six Months 05/31/07 From 07/01/06 Year Ended Ended 05/31/07 Year Ended (unaudited) Through 11/30/06 06/30/06 (unaudited) 11/30/06 ---------------- ---------------- ----------- -------------- ------------ Increase (Decrease) in Net Assets from Operations Net investment income (loss) $ (20,507) $ 4,196 $ (46,438) $ 2,437,552 $ 5,761,867 Net realized gain (loss) on sales of investments 33,476 3,011 794,083 1,864,075 (341,062) Net Change in unrealized appreciation (depreciation) 1,451,018 638,506 349,652 152,675 1,999,932 ----------- ----------- ----------- ------------ ------------ Net increase (decrease) in net assets from operations 1,463,987 645,713 1,097,297 4,454,302 7,420,737 ----------- ----------- ----------- ------------ ------------ Distributions to Shareholders From net investment income Class A Shares (5,261) -- -- (1,769,949) (4,305,985) Class B Shares -- -- -- (428,625) (1,028,986) Class C Shares -- -- --** (202,498) (455,069) Class D Shares -- -- -- -- -- Class S Shares -- -- -- -- -- Class I Shares -- -- -- -- -- From net realized gain on investments Class A Shares -- -- -- -- -- Class B Shares -- -- -- -- -- Class C Shares -- -- --** -- -- Class D Shares -- -- -- -- -- Class S Shares -- -- -- -- -- Class I Shares -- -- -- -- -- ----------- ----------- ----------- ------------ ------------ Total distributions to shareholders (5,261) -- -- (2,401,072) (5,790,040) ----------- ----------- ----------- ------------ ------------ From Capital Share Transactions Net proceeds from sales of shares Class A Shares 2,351,125 3,267,610 3,555,971 5,835,750 9,567,716 Class B Shares -- -- -- 110,759 849,323 Class C Shares 300,158 127,191 392,015** 304,064 566,405 Class D Shares -- -- -- -- -- Class S Shares -- -- -- -- -- Class I Shares -- -- -- -- -- Net asset value of shares issued in Fund reorganizations (see note 7) Class A Shares -- -- -- -- -- Class B Shares -- -- -- -- -- Class C Shares -- -- --** -- -- Class D Shares -- -- -- -- -- Class S Shares -- -- -- -- -- Class I Shares -- -- -- -- -- Net asset value of shares in reinvestment of dividends and distributions Class A Shares 3,991 -- -- 1,085,778 2,794,611 Class B Shares -- -- -- 208,898 501,475 Class C Shares -- -- --** 147,817 327,730 Class D Shares -- -- -- -- -- Class S Shares -- -- -- -- -- Class I Shares -- -- -- -- -- ----------- ----------- ----------- ------------ ------------ 2,655,274 3,394,801 3,947,986 7,693,066 14,607,260 ----------- ----------- ----------- ------------ ------------ Less: Payments for shares reacquired Class A Shares (1,232,803) (675,205) (4,553,749) (10,292,478) (65,350,467) Class B Shares -- -- -- (2,774,406) (6,754,951) Class C Shares (57,974) (97,252) --** (1,138,967) (4,068,474) Class D Shares -- -- -- -- -- Class S Shares -- -- -- -- -- Class I Shares -- -- -- -- -- ----------- ----------- ----------- ------------ ------------ Increase (decrease) in net assets from capital stock transactions 1,364,497 2,622,344 (605,763) (6,512,785) (61,566,632) ----------- ----------- ----------- ------------ ------------ Total Increase (Decrease) in Net Assets for period 2,823,223 3,268,057 491,534 (4,459,555) (59,935,935) Net Assets: Beginning of period $11,695,861 $ 8,427,804 $ 7,936,270 $ 79,410,862 $139,346,797 ----------- ----------- ----------- ------------ ------------ Net Assets: End of period $14,519,084 $11,695,861 $ 8,427,804 $ 74,951,307 $ 79,410,862 =========== =========== =========== ============ ============ Accumulated Undistributed Net Investment Income (Loss) $ (21,589) $ 4,179 $ (17) $ 235,997 $ 199,828 =========== =========== =========== ============ ============
- -------- * The fiscal year end changed from June 30th to November 30th following the June 30, 2006 Annual Report. Information prior to March 17, 2006 is based on the predecessor Bramwell Focus Fund. ** Commenced operations March 17, 2006. The accompanying notes are an integral part of the financial statements. 39
International Equity Mid Cap Growth Short Maturity Government - ----------------------------- --------------------------- ---------------------------- Six Months Ended Six Months Six Months 05/31/07 Year Ended Ended 05/31/07 Year Ended Ended 05/31/07 Year Ended (unaudited) 11/30/06 (unaudited) 11/30/06 (unaudited) 11/30/06 - ---------------- ------------ -------------- ------------ -------------- ------------- $ 1,369,153 $ 1,104,898 $ (486,391) $ (1,377,827) $ 3,732,638 $ 9,500,701 9,028,576 15,493,251 9,907,010 10,166,239 (45,075) (2,712,447) 8,415,739 16,977,598 9,892,716 3,926,137 (702,615) 2,201,443 ------------ ------------ ------------ ------------ ------------ ------------- 18,813,468 33,575,747 19,313,335 12,714,549 2,984,948 8,989,697 ------------ ------------ ------------ ------------ ------------ ------------- (1,202,020) (1,455,355) -- -- (4,017,178) (10,384,929) -- (20,553) -- -- -- -- -- -- -- -- (2,166) (2,385)^ -- -- -- -- -- -- -- -- -- -- (166,226) (609,176) -- -- -- -- -- -- (12,858,358) (6,052,517) -- -- -- -- (1,136,332) (661,462) -- -- -- -- (458,176) (156,283) -- -- -- --^ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------- (15,654,886) (8,346,170) -- -- (4,185,570) (10,996,490) ------------ ------------ ------------ ------------ ------------ ------------- 21,022,130 33,951,795 12,197,368 16,928,543 15,486,173 48,632,019 723,166 2,428,396 106,086 1,114,043 -- -- 1,961,790 2,319,697 536,670 683,605 256,841 208,087^ -- -- -- -- -- -- -- -- -- -- 242,332 8,863,232 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --^ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 13,393,285 7,143,270 -- -- 3,256,688 8,581,163 1,100,483 660,479 -- -- -- -- 437,026 156,128 -- -- 1,006 661^ -- -- -- -- -- -- -- -- -- -- 140,924 532,418 -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------- 38,637,881 46,659,765 12,840,124 18,726,191 19,383,964 66,817,580 ------------ ------------ ------------ ------------ ------------ ------------- (18,526,333) (27,224,556) (25,423,909) (44,648,223) (42,352,813) (129,299,558) (2,723,959) (4,249,898) (4,679,253) (10,012,533) -- -- (539,360) (811,438) (649,854) (1,794,147) (22,861) (778)^ -- -- -- -- -- -- -- -- -- -- (2,243,418) (18,576,293) -- -- -- -- -- -- ------------ ------------ ------------ ------------ ------------ ------------- 16,848,228 14,373,873 (17,912,892) (37,728,712) (25,235,128) (81,059,049) ------------ ------------ ------------ ------------ ------------ ------------- 20,006,810 39,603,450 1,400,443 (25,014,163) (26,435,750) (83,065,842) $167,872,899 $128,269,449 $170,856,736 $195,870,899 $194,643,458 $ 277,709,300 ------------ ------------ ------------ ------------ ------------ ------------- $187,879,709 $167,872,899 $172,257,179 $170,856,736 $168,207,708 $ 194,643,468 ============ ============ ============ ============ ============ ============= $ 1,037,953 $ 843,860 $ (545,139) $ (58,748) $ 26,405 $ 14,817 ============ ============ ============ ============ ============ =============
- -------- ^ Commenced operations June 1, 2006. 40 Statement of Changes in Net Assets
Small Company U.S. Treasury Money Market ------------------------------ ---------------------------- Six Months Six Months Ended 05/31/07 Year Ended Ended 05/31/07 Year Ended (unaudited) 11/30/06 (unaudited) 11/30/06 -------------- -------------- -------------- ------------- Increase (Decrease) in Net Assets from Operations Net investment income $ 2,435,129 $ (6,813,873) $ 1,430,252 $ 3,006,974 Net realized gain (loss) of investments 61,996,657 185,225,726 -- -- Net Change in unrealized (depreciation) 85,190,111 34,290,665 -- -- -------------- -------------- ------------ ------------- Net increase (decrease) from operations 149,621,897 212,702,518 1,430,252 3,006,974 -------------- -------------- ------------ ------------- Distributions to Shareholders From net investment Class A Shares -- -- (1,379,680) (2,879,224) Class B Shares -- -- (50,572) (127,750) Class C Shares -- -- -- -- Class D Shares -- -- -- -- Class S Shares -- -- -- -- Class I Shares -- -- -- -- From net realized gain on Class A Shares (139,195,215) (95,814,110) -- -- Class B Shares (18,838,178) (14,748,742) -- -- Class C Shares (20,036,255) (14,284,610) -- -- Class D Shares -- -- -- -- Class S Shares -- -- -- -- Class I Shares -- -- -- -- -------------- -------------- ------------ ------------- Total distributions to (178,069,648) (124,847,462) (1,430,252) (3,006,974) -------------- -------------- ------------ ------------- From Capital Share Transactions Net proceeds from sales Class A Shares 151,486,913 247,094,937 35,066,004 83,996,137 Class B Shares 280,582 6,058,374 1,083,790 2,733,519 Class C Shares 18,692,698 25,681,571 -- -- Class D Shares -- -- -- -- Class S Shares -- -- -- -- Class I Shares 16,685,000 -- -- -- Net asset value of shares issued in Fund Class A Shares -- -- -- -- Class B Shares -- -- -- -- Class C Shares -- -- -- -- Class D Shares -- -- -- -- Class S Shares -- -- -- -- Class I Shares -- -- -- -- Net asset value of shares in reinvestment of Class A Shares 126,082,616 86,941,982 1,331,527 2,755,191 Class B Shares 17,702,605 13,955,149 41,348 107,709 Class C Shares 18,996,827 13,540,865 -- -- Class D Shares -- -- -- -- Class S Shares -- -- -- -- Class I Shares -- -- -- -- -------------- -------------- ------------ ------------- 349,927,241 393,272,878 37,522,669 89,592,556 -------------- -------------- ------------ ------------- Less: Payments for Class A Shares (181,119,165) (273,688,688) (47,205,507) (100,546,523) Class B Shares (18,015,662) (28,854,922) (1,399,373) (3,840,572) Class C Shares (15,824,550) (38,357,517) -- -- Class D Shares -- -- -- -- Class S Shares -- -- -- -- Class I Shares (102,357) -- -- -- -------------- -------------- ------------ ------------- Increase (decrease) in net assets from capital 134,865,507 52,371,751 (11,082,211) (14,794,539) -------------- -------------- ------------ ------------- Total Increase Net Assets for period 106,417,756 140,226,807 (11,082,211) (14,794,539) Net Assets: Beginning of $1,537,539,537 $1,397,312,730 $ 72,046,589 $ 86,841,128 -------------- -------------- ------------ ------------- Net Assets: End of period $1,643,957,293 $1,537,539,537 $ 60,964,378 $ 72,046,589 -------------- -------------- ------------ ------------- Accumulated Undistributed Net $ 2,305,741 $ (129,388) $ -- $ -- ============== ============== ============ =============
The accompanying notes are an integral part of the financial statements. 41 Financial Highlights Selected per share data and ratios. Selected data for a share of capital stock outstanding throughout each fiscal period.
Income From Investment Operations Less Distributions ------------------------------------------- -------------------------------------- Net gains or losses on securities Fiscal Net asset Net (both Dividends Distributions Net asset year value, investment realized Total from (from net (from value, (period beginning income and investment investment realized Total end of Fund/Share Class ended) of period (loss) unrealized) operations income) gains) distributions period - ---------------- -------- --------- ---------- ------------ ---------- ---------- ------------- ------------- --------- Balanced 11/30/02 $16.57 $ 0.32 $(1.50) $(1.18) $0.33 $0.96 $1.29 $14.10 Class A 11/30/03 14.10 0.24 1.81 2.05 0.25 - 0.25 15.90 11/30/04 15.90 0.28 1.29 1.57 0.28 0.36 0.64 16.83 11/30/05 16.83 0.32 0.86 1.18 0.34 0.82 1.16 16.85 11/30/06 16.85 0.37 1.53 1.90 0.38 0.36 0.74 18.01 05/31/07(G) 18.01 0.19 1.09 1.28 0.19 0.43 0.62 18.67 Balanced 11/30/02 16.61 0.20 (1.50) (1.30) 0.20 0.96 1.16 14.15 Class B 11/30/03 14.15 0.11 1.82 1.93 0.13 - 0.13 15.95 11/30/04 15.95 0.15 1.29 1.44 0.14 0.36 0.50 16.89 11/30/05 16.89 0.18 0.86 1.04 0.20 0.82 1.02 16.91 11/30/06 16.91 0.23 1.53 1.76 0.23 0.36 0.59 18.08 05/31/07(G) 18.08 0.11 1.09 1.20 0.11 0.43 0.54 18.74 Balanced 11/30/02 16.58 0.18 (1.49) (1.31) 0.20 0.96 1.16 14.11 Class C 11/30/03 14.11 0.08 1.82 1.90 0.09 - 0.09 15.92 11/30/04 15.92 0.13 1.29 1.42 0.14 0.36 0.50 16.84 11/30/05 16.84 0.16 0.87 1.03 0.19 0.82 1.01 16.86 11/30/06 16.86 0.21 1.52 1.73 0.22 0.36 0.58 18.01 05/31/07(G) 18.01 0.10 1.10 1.20 0.11 0.43 0.54 18.67 Balanced 11/30/02 16.51 0.15 (1.51) (1.36) 0.14 0.96 1.10 14.05 Class D 11/30/03 14.05 0.07 1.79 1.86 0.07 - 0.07 15.84 11/30/04 15.84 0.22 1.28 1.50 0.18 0.36 0.54 16.80 11/30/05 16.80 0.26 0.86 1.12 0.28 0.82 1.10 16.82 11/30/06 16.82 0.33 1.53 1.86 0.32 0.36 0.68 18.00 05/31/07(G) 18.00 0.17 1.09 1.26 0.17 0.43 0.60 18.67 Capital Growth 06/30/02 23.00 (0.16) (2.53) (2.69) -- 1.61 1.61 18.70 Class A 06/30/03 18.70 (0.15) (1.29) (1.44) -- -- -- 17.26 06/30/04 17.26 (0.17) 2.34 2.17 -- -- -- 19.43 06/30/05 19.43 (0.13) 0.49 0.36 -- 0.37 0.37 19.42 06/30/06 19.42 (0.10) 1.98 1.88 -- 2.50 2.50 18.80 11/30/06(A) 18.80 (0.01) 1.03 1.02 -- -- -- 19.82 05/31/07(G) 19.82 0.02 2.01 2.03 -- 1.36 1.36 20.48 Capital Growth 06/30/06(B) 19.45 (0.12) (0.61) (0.73) -- -- -- 18.72 Class C 11/30/06(A) 18.72 (0.13) 1.03 0.90 -- -- -- 19.62 05/31/07(G) 19.62 (0.17) 1.91 1.74 -- 1.36 1.36 20.00
The accompanying notes are an integral part of the financial statements. 42
Ratios/Supplemental Data - ---------------------------------------------------------------------------------------------------------- Ratio of net Ratio of investment Ratio of expenses to Ratio of income (loss) to expenses to average net net average net average assets before investment assets before Ratio of net assets contractual and income contractual and Net assets at expenses to before voluntary (loss) to voluntary end of average custodian expense average expense Portfolio Total return period (000 net assets fee credits reimbursements net assets reimbursements turnover rate (%)* omitted) (%) (%)** (%)*** (%) (%)*** (%) - ------------ ------------- ----------- ----------- --------------- ---------- ---------------- ------------- (7.67) $188,386 1.20 1.21 1.21 2.06 2.06 159 14.75 214,533 1.20 1.21 1.21 1.53 1.53 242 10.12 231,599 1.17 1.17 1.17 1.73 1.73 220 7.36 239,882 1.12 1.14 1.14 1.93 1.93 187 11.64 249,398 1.10 1.11 1.11 2.18 2.18 209 7.33++ 260,739 1.09+ 1.10+ 1.10+ 2.16+ 2.16+ 74++ (8.35) 36,607 1.97 1.98 1.98 1.29 1.29 159 13.74 33,652 2.06 2.07 2.07 0.68 0.68 242 9.21 30,780 1.99 1.99 1.99 0.89 0.89 220 6.42 27,012 2.02 2.03 2.03 1.03 1.03 187 10.72 23,445 1.99 2.00 2.00 1.28 1.28 209 6.82++ 20,206 1.99+ 2.00+ 2.00+ 1.26+ 1.26+ 74++ (8.47) 4,344 2.07 2.08 2.08 1.18 1.18 159 13.56 4,811 2.26 2.26 2.26 0.47 0.47 242 9.08 5,694 2.09 2.09 2.09 0.80 0.80 220 6.35 6,449 2.09 2.10 2.10 0.97 0.97 187 10.56 7,299 2.06 2.07 2.07 1.22 1.22 209 6.81++ 7,671 2.13+ 2.14+ 2.14+ 1.13+ 1.13+ 74++ (8.82) 6,644 2.50 2.51 2.51 0.78 0.78 159 13.28 8,951 2.43 2.44 2.44 0.29 0.29 242 9.69 20,689 1.50 1.51 1.51 1.42 1.42 220 6.98 21,692 1.41 1.42 1.42 1.65 1.65 187 11.41 22,897 1.37 1.38 1.38 1.92 1.92 209 7.23++ 23,562 1.33+ 1.34+ 1.34+ 1.92+ 1.92+ 74++ (11.94) 191,395 1.63 1.63 1.63 (0.84) (0.84) 66 (7.70) 229,756 1.68 1.68 1.68 (1.01) (1.01) 51 12.57 217,178 1.64 1.64 1.64 (0.81) (0.81) 47 1.85 174,818 1.69 1.69 1.69 (0.61) (0.61) 63 9.94 131,400 1.66 1.66 1.66 (0.53) (0.53) 39 5.43++ 124,054 1.26+ 1.27+ 1.27+ (0.12)+ (0.12)+ 8++ 10.85++ 190,201 1.21+ 1.22+ 1.22+ 0.17+ 0.17+ 8++ (3.75)++ 172 3.11+ 3.12+ 3.12+ (1.99)+ (1.99)+ 39++ 4.81++ 247 2.81+ 2.82+ 2.82+ (1.65)+ (1.65)+ 8++ 9.45++ 2,697 3.08+ 3.10+ 3.10+ (1.79)+ (1.79)+ 8++
43 Financial Highlights Selected per share data and ratios. Selected data for a share of capital stock outstanding throughout each fiscal period.
Income From Investment Operations Less Distributions --------------------------------------------- -------------------------------------- Net gains or losses on securities Net asset Net (both Dividends Distributions Net asset Fiscal year value, investment realized Total from (from net (from value, (period beginning income and investment investment realized Total end of Fund/Share Class ended) of period (loss) unrealized) operations income) gains) distributions period - ---------------- ----------- --------- ---------- ------------ ---------- ---------- ------------- ------------- --------- Common Stock 11/30/02 $33.18 $ 0.22 $(3.91) $(3.69) $0.18 $3.61 $3.79 $25.70 Class A 11/30/03 25.70 0.17 4.08 4.25 0.19 -- 0.19 29.76 11/30/04 29.76 0.23 3.53 3.76 0.15 2.13 2.28 31.24 11/30/05 31.24 0.25 2.79 3.04 0.28 2.80 3.08 31.20 11/30/06 31.20 0.28 4.23 4.51 0.30 1.40 1.70 34.01 05/31/07(G) 34.01 0.16 3.19 3.35 0.13 1.42 1.55 35.81 Common Stock 11/30/02 33.04 (0.05) (3.88) (3.93) -- 3.61 3.61 25.50 Class B 11/30/03 25.50 (0.08) 4.05 3.97 0.01 -- 0.01 29.46 11/30/04 29.46 (0.06) 3.49 3.43 -- 2.13 2.13 30.76 11/30/05 30.76 (0.01) 2.74 2.73 0.05 2.80 2.85 30.64 11/30/06 30.64 (0.02) 4.15 4.13 0.02 1.40 1.42 33.35 05/31/07(G) 33.35 0.00**** 3.12 3.12 -- 1.42 1.42 35.05 Common Stock 11/30/02 33.08 (0.06) (3.90) (3.96) -- 3.61 3.61 25.51 Class C 11/30/03 25.51 (0.14) 4.05 3.91 0.01 -- 0.01 29.41 11/30/04 29.41 (0.08) 3.48 3.40 -- 2.13 2.13 30.68 11/30/05 30.68 (0.07) 2.76 2.69 0.04 2.80 2.84 30.53 11/30/06 30.53 (0.05) 4.14 4.09 0.02 1.40 1.42 33.20 05/31/07(G) 33.20 (0.01) 3.10 3.09 -- 1.42 1.42 34.87 Common Stock Class I 05/31/07(F) 35.31 0.06 0.45 0.51 -- -- -- 35.82 Conservative 11/30/03(C) 10.00 0.32 1.23 1.55 0.30 -- 0.30 11.25 Allocation 11/30/04 11.25 0.40 0.65 1.05 0.48 0.00**** 0.48 11.82 Class A^ 11/30/05 11.82 0.41 (0.15) 0.26 0.43 0.23 0.66 11.42 11/30/06 11.42 0.42 0.60 1.02 0.46 0.21 0.67 11.77 05/31/07(G) 11.77 0.19 0.44 0.63 0.31 0.19 0.50 11.90 Conservative 11/30/03(C) 10.00 0.25 1.25 1.50 0.26 -- 0.26 11.24 Allocation 11/30/04 11.24 0.31 0.64 0.95 0.39 0.00**** 0.39 11.80 Class B^ 11/30/05 11.80 0.31 (0.15) 0.16 0.34 0.23 0.57 11.39 11/30/06 11.39 0.34 0.58 0.92 0.37 0.21 0.58 11.73 05/31/07(G) 11.73 0.14 0.44 0.58 0.26 0.19 0.45 11.86 Conservative 11/30/03(C) 10.00 0.27 1.25 1.52 0.27 -- 0.27 11.25 Allocation 11/30/04 11.25 0.32 0.63 0.95 0.40 0.00**** 0.40 11.80 Class C^ 11/30/05 11.80 0.33 (0.14) 0.19 0.37 0.23 0.60 11.39 11/30/06 11.39 0.31 0.59 0.90 0.34 0.21 0.55 11.74 05/31/07(G) 11.74 0.14 0.44 0.58 0.25 0.19 0.44 11.88 Government 11/30/02 10.19 0.51 0.15 0.66 0.51 -- 0.51 10.34 Securities 11/30/03 10.34 0.38 0.12 0.50 0.46 -- 0.46 10.38 Class A 11/30/04 10.38 0.39 0.10 0.49 0.45 -- 0.45 10.42 11/30/05 10.42 0.43 (0.21) 0.22 0.45 -- 0.45 10.19 11/30/06 10.19 0.47 0.06 0.53 0.48 -- 0.48 10.24 05/31/07(G) 10.24 0.24 (0.12) 0.12 0.24 -- 0.24 10.12 Government Securities 11/30/06(D) 9.96 0.17 0.29 0.46 0.18 -- 0.18 10.24 Class C 05/31/07(G) 10.24 0.12 (0.11) 0.01 0.14 -- 0.14 10.10 Government Securities Class I 05/31/07(F&G) 10.26 0.04 (0.14) (0.10) 0.04 -- 0.04 10.12
The accompanying notes are an integral part of the financial statements. 44
Ratios/Supplemental Data - ------------------------------------------------------------------------------------------------------ Ratio of net Ratio of investment Ratio of expenses to Ratio of income (loss) to expenses to average net net average net average assets before investment assets before Ratio of net assets contractual and income contractual and Net assets at expenses to before voluntary (loss) to voluntary end of average custodian expense average expense Portfolio Total return period (000 net assets fee credits reimbursements net assets reimbursements turnover (%)* omitted) (%) (%)** (%)*** (%) (%)*** rate (%) - ------------ ------------- ----------- ----------- --------------- ---------- ---------------- --------- (12.55) $ 889,066 1.02 1.02 1.02 0.76 0.76 55 16.67 979,837 1.08 1.08 1.08 0.62 0.62 76 13.19 1,042,308 1.05 1.05 1.05 0.76 0.76 57 10.51 1,071,523 1.04 1.05 1.05 0.83 0.83 26 15.18 1,114,097 1.10 1.10 1.13 0.88 0.86 13 10.22++ 1,179,293 1.10+ 1.10+ 1.12+ 0.96+ 0.98+ 8++ (13.39) 80,772 1.95 1.96 1.96 (0.18) (0.18) 55 15.57 72,163 2.03 2.03 2.03 (0.32) (0.32) 76 12.12 61,909 1.99 1.99 1.99 (0.21) (0.21) 57 9.49 53,970 1.98 1.99 1.99 (0.11) (0.11) 26 14.08 47,559 2.05 2.06 2.08 (0.08) (0.11) 13 9.70++ 42,069 2.07+ 2.08+ 2.09+ (0.02)+ 0.00+ 8++ (13.48) 5,018 2.01 2.02 2.02 (0.23) (0.23) 55 15.32 5,774 2.24 2.24 2.24 (0.54) (0.54) 76 12.03 6,530 2.06 2.06 2.06 (0.25) (0.25) 57 9.41 9,585 2.09 2.09 2.09 (0.20) (0.20) 26 14.00 14,869 2.12 2.13 2.16 (0.12) (0.15) 13 9.65++ 20,523 2.13+ 2.13+ 2.14+ (0.03)+ (0.02)+ 8++ 1.44++ 194,449 0.73+ 0.73+ 0.73+ 2.18+ 2.18+ 8++ 15.61++ 38,147 1.17+ 1.17+ 1.17+ 3.94+ 3.94+ 131++ 9.58 52,951 1.17 1.17 1.17 3.52 3.52 136 2.27 55,829 1.15 1.16 1.16 3.60 3.60 174 9.31 38,175 1.25 1.26 1.26 3.73 3.73 204 5.45++ 40,815 1.26+ 1.29+ 1.29+ 3.31+ 3.31+ 132++ 15.11++ 8,782 1.92+ 1.93+ 1.93+ 3.21+ 3.21+ 131++ 8.65 13,497 1.99 1.99 1.99 2.73 2.73 136 1.42 14,037 1.98 1.98 1.98 2.78 2.78 174 8.37 12,007 2.12 2.13 2.13 2.87 2.87 204 5.00++ 11,370 2.14+ 2.17+ 2.17+ 2.43+ 2.43+ 132++ 15.29++ 5,771 1.59+ 1.60+ 1.60+ 3.49+ 3.49+ 131++ 8.70 9,114 1.84 1.84 1.84 2.90 2.90 136 1.62 9,875 1.84 1.85 1.85 2.91 2.91 174 8.23 6,540 2.23 2.24 2.24 2.74 2.74 204 5.01++ 7,137 2.28+ 2.31+ 2.31+ 2.30+ 2.30+ 132++ 6.70 107,121 0.85 0.86 1.01 4.72 4.56 452 4.85 102,713 0.94 0.95 0.98 3.62 3.59 576 4.80 104,738 0.97 0.98 0.98 3.78 3.78 473 2.08 204,868 1.00 1.02 1.02 4.09 4.09 505 5.41 214,374 0.98 0.99 0.99 4.68 4.68 678 1.23++ 221,450 0.98+ 0.99+ 0.99+ 4.78+ 4.78+ 262++ 4.62++ 567 2.64+ 2.64+ 2.64+ 3.15+ 3.15+ 678++ 0.00++ 2,979 3.39+ 3.39+ 3.39+ 2.33+ 2.33+ 262++ (0.98)++ 114,495 0.72+ 0.72+ 0.72+ 4.42+ 4.42+ 262++
45 Financial Highlights Selected per share data and ratios. Selected data for a share of capital stock outstanding throughout each fiscal period.
Income From Investment Operations Less Distributions -------------------------------------------- -------------------------------------- Net gains or losses Net asset Net on securities Dividends Distributions Net asset Fiscal year value, investment (both Total from (from net (from value, (period beginning income realized and investment investment realized Total end of Fund/Share Class ended) of period (loss) unrealized) operations income) gains) distributions period - ---------------- ----------- --------- ---------- ------------- ---------- ---------- ------------- ------------- --------- Growth Leaders 06/30/02 $ 9.89 $(0.10) $(0.92) $(1.02) $ -- $ -- $ -- $ 8.87 Class A 06/30/03 8.87 (0.08) (0.70) (0.78) -- -- -- 8.09 06/30/04 8.09 (0.09) 1.47 1.38 -- -- -- 9.47 06/30/05 9.47 (0.08) (0.08) (0.16) -- -- -- 9.31 06/30/06 9.31 (0.06) 1.34 1.28 -- -- -- 10.59 11/30/06(A) 10.59 0.01 0.56 0.57 -- -- -- 11.16 05/31/07(G) 11.16 (0.01) 1.30 1.29 -- -- -- 12.45 Growth Leaders 06/30/06(B) 10.95 (0.04) (0.34) (0.38) -- -- -- 10.57 Class C 11/30/06(A) 10.57 (0.04) 0.55 0.51 -- -- -- 11.08 05/31/07(G) 11.08 (0.18) 1.30 1.12 -- -- -- 12.20 High Yield Bond 11/30/02 7.66 0.63 (0.18) 0.45 0.63 -- 0.63 7.48 Class A 11/30/03 7.48 0.63 0.71 1.34 0.62 -- 0.62 8.20 11/30/04 8.20 0.56 0.16# 0.72 0.57 -- 0.57 8.35 11/30/05 8.35 0.55 (0.46) 0.09 0.54 -- 0.54 7.90 11/30/06 7.90 0.51 0.14 0.65 0.51 -- 0.51 8.04 05/31/07(G) 8.04 0.27 0.22 0.49 0.27 -- 0.27 8.26 High Yield Bond 11/30/02 7.66 0.59 (0.19) 0.40 0.59 -- 0.59 7.47 Class B 11/30/03 7.47 0.57 0.72 1.29 0.57 -- 0.57 8.19 11/30/04 8.19 0.51 0.14# 0.65 0.51 -- 0.51 8.33 11/30/05 8.33 0.48 (0.46) 0.02 0.47 -- 0.47 7.88 11/30/06 7.88 0.43 0.15 0.58 0.43 -- 0.43 8.03 05/31/07(G) 8.03 0.23 0.21 0.44 0.23 -- 0.23 8.24 High Yield Bond 11/30/02 7.70 0.56 (0.19) 0.37 0.54 -- 0.54 7.53 Class C 11/30/03 7.53 0.55 0.72 1.27 0.54 -- 0.54 8.26 11/30/04 8.26 0.48 0.16# 0.64 0.48 -- 0.48 8.42 11/30/05 8.42 0.48 (0.46) 0.02 0.46 -- 0.46 7.98 11/30/06 7.98 0.44 0.14 0.58 0.43 -- 0.43 8.13 05/31/07(G) 8.13 0.23 0.22 0.45 0.23 -- 0.23 8.35 International Equity 11/30/02 13.21 0.17 (1.37) (1.20) 0.14 0.04 0.18 11.83 Class A 11/30/03 11.83 0.16 2.09 2.25 0.19 0.07 0.26 13.82 11/30/04 13.82 0.20 3.17# 3.37 0.14 -- 0.14 17.05 11/30/05 17.05 0.21 1.56 1.77 0.17 -- 0.17 18.65 11/30/06 18.65 0.17 4.42 4.59 0.24 1.00 1.24 22.00 05/31/07(G) 22.00 0.18 2.10 2.28 0.18 1.89 2.07 22.21 International Equity 11/30/02 12.94 0.02 (1.35) (1.33) -- 0.04 0.04 11.57 Class B 11/30/03 11.57 0.01 2.05 2.06 0.03 0.07 0.10 13.53 11/30/04 13.53 0.06 3.07# 3.13 -- -- -- 16.66 11/30/05 16.66 0.03 1.50 1.53 -- -- -- 18.19 11/30/06 18.19 (0.05) 4.32 4.27 0.03 1.00 1.03 21.43 05/31/07(G) 21.43 0.04 2.07 2.11 -- 1.89 1.89 21.65 International Equity 11/30/02 13.05 (0.03) (1.35) (1.38) -- 0.04 0.04 11.63 Class C 11/30/03 11.63 (0.04) 2.07 2.03 -- 0.07 0.07 13.59 11/30/04 13.59 (0.01) 3.14# 3.13 -- -- -- 16.72 11/30/05 16.72 0.01 1.52 1.53 -- -- -- 18.25 11/30/06 18.25 (0.11) 4.39 4.28 -- 1.00 1.00 21.53 05/31/07(G) 21.53 0.05 2.06 2.11 -- 1.89 1.89 21.75
The accompanying notes are an integral part of the financial statements. 46
Ratios/Supplemental Data - --------------------------------------------------------------------------------------------------- Ratio of net Ratio of investment Ratio of expenses to Ratio of income (loss) to expenses to average net net average net average assets before investment assets before Net assets Ratio of net assets contractual and income contractual and at end of expenses to before voluntary (loss) to voluntary period average custodian expense average expense Portfolio Total return (000 net assets fee credits reimbursements net assets reimbursements turnover (%)* omitted) (%) (%)** (%)*** (%) (%)*** rate (%) - ------------ ---------- ----------- ----------- --------------- ---------- ---------------- --------- (10.31) $ 6,623 1.75 1.75 3.28 (1.11) (2.64) 138 (8.79) 9,280 1.75 1.75 3.09 (1.25) (2.59) 154 17.06 10,916 1.75 1.75 2.58 (0.91) (1.74) 172 (1.69) 7,936 1.75 1.75 3.00 (0.77) (2.02) 200 13.75 8,043 1.75 1.76 3.09 (0.60) (1.94) 157 5.38++ 11,257 1.45+ 1.51+ 1.67+ 0.14+ (0.02)+ 30++ 11.61++ 13,778 1.45+ 1.48+ 1.86+ (0.19)+ 0.20+ 29++ (3.47)++ 385 2.79+ 2.81+ 3.62+ (1.16)+ (1.97)+ 157++ 4.82++ 439 2.43+ 2.49+ 2.64+ (0.87)+ (1.03)+ 30++ 10.11++ 742 4.38+ 4.41+ 4.79+ (3.18)+ (2.80)+ 29++ 6.09 40,181 1.24 1.25 1.25 8.35 8.35 111 18.71 110,431 1.18 1.19 1.19 7.85 7.85 86 9.09# 149,886 1.16 1.16 1.16 6.83 6.83 78 1.11 107,308 1.22 1.22 1.22 6.670 6.67 73 8.50 55,500 1.29 1.31 1.31 6.32 6.32 79 6.13++ 53,578 1.29+ 1.31+ 1.31+ 6.60+ 6.60+ 50++ 5.49 47,552 1.70 1.71 1.71 7.88 7.88 111 17.87 45,061 1.95 1.96 1.96 7.22 7.22 86 8.14# 31,471 2.08 2.08 2.08 5.97 5.97 78 0.18 21,510 2.13 2.14 2.14 5.75 5.75 73 7.67 16,406 2.15 2.16 2.16 5.45 5.45 79 5.53++ 14,365 2.15+ 2.17+ 2.17+ 5.74+ 5.74+ 50++ 5.00 4,208 2.27 2.27 2.27 7.20 7.20 111 17.54 13,143 2.16 2.17 2.17 6.93 6.93 86 8.03# 13,921 2.13 2.13 2.13 5.89 5.89 78 0.23 10,529 2.16 2.17 2.17 5.72 5.72 73 7.49 7,506 2.19 2.20 2.20 5.42 5.42 79 5.63++ 7,008 2.26+ 2.28+ 2.28+ 5.63+ 5.63+ 50++ (9.21) 75,951 1.29 1.30 1.30 1.26 1.26 33 19.61 86,913 1.34 1.35 1.35 1.38 1.38 28 24.58# 109,959 1.30 1.31 1.31 1.34 1.34 28 10.43 113,349 1.30 1.32 1.32 1.29 1.29 23 26.04 149,605 1.35 1.39 1.39 0.86 0.86 63 11.21++ 168,358 1.35+ 1.37+ 1.37+ 1.65+ 1.65+ 17++ (10.31) 12,668 2.43 2.44 2.44 0.16 0.16 33 18.03 11,255 2.66 2.67 2.67 0.13 0.13 28 23.13# 11,802 2.44 2.45 2.45 0.22 0.22 28 9.18 12,054 2.40 2.42 2.42 0.21 0.21 23 24.62 13,045 2.45 2.49 2.49 (0.20) (0.20) 63 10.61++ 12,283 2.48+ 2.50+ 2.50+ 0.36+ 0.36+ 17++ (10.61) 1,370 2.89 2.90 2.90 (0.25) (0.25) 33 17.64 1,856 2.95 2.96 2.96 (0.24) (0.24) 28 23.03# 3,394 2.53 2.54 2.54 0.17 0.17 28 9.15 2,867 2.47 2.49 2.49 0.18 0.18 23 24.55 5,223 2.51 2.56 2.56 (0.26) (0.26) 63 10.55++ 7,239 2.60+ 2.62+ 2.62+ 0.51+ 0.51+ 17++
47 Financial Highlights Selected per share data and ratios. Selected data for a share of capital stock outstanding throughout each fiscal period.
Income From Investment Operations Less Distributions -------------------------------------------- -------------------------------------- Net gains or losses Fiscal Net asset Net on securities Dividends Distributions year value, investment (both Total from (from net (from Net asset (period beginning income realized and investment investment realized Total value, end Fund/Share Class ended) of period (loss) unrealized) operations income) gains) distributions of period - ---------------- -------- --------- ---------- ------------- ---------- ---------- ------------- ------------- ---------- Mid Cap Growth 11/30/02 $12.63 $(0.09) $(2.22) $(2.31) $ -- $-- $ -- $10.32 Class A 11/30/03 10.32 (0.10) 3.42 3.32 -- -- -- 13.64 11/30/04 13.64 (0.12) 1.45 1.33 -- -- -- 14.97 11/30/05 14.97 (0.09) 0.93 0.84 -- -- -- 15.81 11/30/06 15.81 (0.10) 1.24 1.14 -- -- -- 16.95 05/31/07(G) 16.95 (0.04) 2.12 2.08 -- -- -- 19.03 Mid Cap Growth 11/30/02 12.07 (0.20) (2.11) (2.31) -- -- -- 9.76 Class B 11/30/03 9.76 (0.22) 3.20 2.98 -- -- -- 12.74 11/30/04 12.74 (0.24) 1.35 1.11 -- -- -- 13.85 11/30/05 13.85 (0.23) 0.85 0.62 -- -- -- 14.47 11/30/06 14.47 (0.24) 1.14 0.90 -- -- -- 15.37 05/31/07(G) 15.37 (0.12) 1.91 1.79 -- -- -- 17.15 Mid Cap Growth 11/30/02 12.40 (0.24) (2.17) (2.41) -- -- -- 9.99 Class C 11/30/03 9.99 (0.25) 3.27 3.02 -- -- -- 13.01 11/30/04 13.01 (0.30) 1.37 1.07 -- -- -- 14.08 11/30/05 14.08 (0.26) 0.86 0.60 -- -- -- 14.68 11/30/06 14.68 (0.26) 1.15 0.89 -- -- -- 15.57 05/31/07(G) 15.57 (0.14) 1.93 1.79 -- -- -- 17.36 Short Maturity 11/30/02 9.71 0.47 0.07 0.54 0.47 -- 0.47 9.78 Government 11/30/03 9.78 0.22 (0.05) 0.17 0.41 -- 0.41 9.54 Class A 11/30/04 9.54 0.29 (0.04) 0.25 0.42 -- 0.42 9.37 11/30/05 9.37 0.31 (0.21) 0.10 0.40 -- 0.40 9.07 11/30/06 9.07 0.37 (0.01) 0.36 0.42 -- 0.42 9.01 05/31/07(G) 9.01 0.19 (0.04) 0.15 0.21 -- 0.21 8.95 Short Maturity Government 11/30/06(D) 8.93 0.11 0.11 0.22 0.15 -- 0.15 9.00 Class C 05/31/07(G) 9.00 0.04 (0.02) 0.02 0.08 -- 0.08 8.94 Short Maturity 11/30/05(E) 9.28 0.21 (0.15) 0.06 0.27 -- 0.27 9.07 Government 11/30/06 9.07 0.33 (0.01) 0.32 0.38 -- 0.38 9.01 Class S 05/31/07(G) 9.01 0.17 (0.04) 0.13 0.19 -- 0.19 8.95
The accompanying notes are an integral part of the financial statements. 48
Ratios/Supplemental Data - --------------------------------------------------------------------------------------------------- Ratio of net Ratio of investment Ratio of expenses to Ratio of income (loss) to expenses to average net net average net average assets before investment assets before Net assets Ratio of net assets contractual and income contractual and at end of expenses to before voluntary (loss) to voluntary period average custodian expense average expense Portfolio Total return (000 net assets fee credits reimbursements net assets reimbursements turnover (%)* omitted) (%) (%)** (%)*** (%) (%)*** rate (%) - ------------ ---------- ----------- ----------- --------------- ---------- ---------------- --------- (18.29) $109,161 1.30 1.31 1.31 (0.80) (0.80) 230 32.17 137,019 1.31 1.31 1.31 (0.98) (0.98) 116 9.75 147,021 1.24 1.24 1.24 (0.90) (0.90) 98 5.61 166,181 1.24 1.25 1.25 (0.60) (0.60) 160 7.21 149,787 1.32 1.33 1.33 (0.61) (0.61) 83 12.27++ 153,816 1.32+ 1.33+ 1.33+ (0.45)+ (0.45)+ 34++ (19.14) 24,321 2.29 2.30 2.30 (1.79) (1.79) 230 30.53 28,615 2.46 2.47 2.47 (2.13) (2.13) 116 8.71 26,608 2.19 2.20 2.20 (1.86) (1.86) 98 4.48 24,820 2.28 2.30 2.30 (1.65) (1.65) 160 6.22 17,073 2.35 2.36 2.36 (1.63) (1.63) 83 11.58++ 14,116 2.45+ 2.46+ 2.46+ (1.56)+ (1.56)+ 34++ (19.44) 1,675 2.65 2.65 2.65 (2.15) (2.15) 230 30.23 1,951 2.71 2.72 2.72 (2.39) (2.39) 116 8.22 2,873 2.60 2.61 2.61 (2.27) (2.27) 98 4.26 4,869 2.48 2.50 2.50 (1.84) (1.84) 160 6.06 3,997 2.48 2.49 2.49 (1.76) (1.76) 83 11.50++ 4,325 2.60+ 2.61+ 2.61+ (1.74)+ (1.74)+ 34++ 5.68 257,690 0.76 0.77 1.09 3.81 3.49 74 1.79 367,541 0.81 0.81 1.06 2.24 1.99 119 2.64 322,431 0.91 0.91 1.07 3.06 2.90 136 1.09 259,386 1.05 1.06 1.09 3.39 3.36 113 4.11 185,410 1.06 1.08 1.08 4.02 4.02 90 1.70++ 160,650 1.06+ 1.07+ 1.07+ 4.19+ 4.19+ 13++ 2.53++ 209 2.57+ 3.63+ 3.63+ 2.60+ 2.60+ 90++ 0.23++ 441 4.23+ 4.41+ 4.41+ 1.01+ 1.01+ 13++ 0.58++ 18,323 1.44+ 1.45+ 1.45+ 3.21+ 3.21+ 113++ 3.64 9,025 1.48 1.48 1.48 3.60 3.60 90 1.43++ 7,116 1.50+ 1.51+ 1.51+ 3.74+ 3.74+ 13++
49 Financial Highlights Selected per share data and ratios. Selected data for a share of capital stock outstanding throughout each fiscal period.
Income From Investment Operations Less Distributions -------------------------------------------- -------------------------------------- Net gains or losses Fiscal Net asset Net on securities Dividends Net asset year value, investment (both Total from (from net Distributions value, (period beginning income realized and investment investment (fromrealized Total end of Fund/Share Class ended) of period (loss) unrealized) operations income) gains) distributions period - ---------------- -------- --------- ---------- ------------- ---------- ---------- ------------- ------------- --------- Small Company 11/30/02 $ 5.61 $ (0.02) $(0.37) $ (0.39) $ -- $ 0.05 $ 0.05 $ 5.17 Class A 11/30/03 5.17 (0.02) 1.59 1.57 -- -- -- 6.74 11/30/04 6.74 (0.02) 1.19 1.17 -- 0.09 0.09 7.82 11/30/05 7.82 (0.03) 0.74 0.71 -- 0.49 0.49 8.04 11/30/06 8.04 (0.02) 1.20 1.18 -- 0.71 0.71 8.51 05/31/07(G) 8.51 0.02 0.74 0.76 -- 0.97 0.97 8.30 Small Company 11/30/02 5.15 (0.06) (0.35) (0.41) -- 0.05 0.05 4.69 Class B 11/30/03 4.69 (0.07) 1.44 1.37 -- -- -- 6.06 11/30/04 6.06 (0.08) 1.07 0.99 -- 0.09 0.09 6.96 11/30/05 6.96 (0.08) 0.65 0.57 -- 0.49 0.49 7.04 11/30/06 7.04 (0.08) 1.03 0.95 -- 0.71 0.71 7.28 05/31/07(G) 7.28 (0.01) 0.62 0.61 -- 0.97 0.97 6.92 Small Company 11/30/02 5.58 (0.07) (0.37) (0.44) -- 0.05 0.05 5.09 Class C 11/30/03 5.09 (0.06) 1.55 1.49 -- -- -- 6.58 11/30/04 6.58 (0.08) 1.16 1.08 -- 0.09 0.09 7.57 11/30/05 7.57 (0.09) 0.71 0.62 -- 0.49 0.49 7.70 11/30/06 7.70 (0.08) 1.14 1.06 -- 0.71 0.71 8.05 05/31/07(G) 8.05 (0.01) 0.70 0.69 -- 0.97 0.97 7.77 Small Company Class I 05/31/07(F) 8.06 -- 0.24 0.24 -- -- -- 8.30 U.S. Treasury 11/30/02 1.00 0.0115 -- 0.0115 0.0115 -- 0.0115 1.00 Money Market 11/30/03 1.00 0.0032 -- 0.0032 0.0032 -- 0.0032 1.00 Class A 11/30/04 1.00 0.0038 -- 0.0038 0.0038 -- 0.0038 1.00 11/30/05 1.00 0.0198 -- 0.0198 0.0198 -- 0.0198 1.00 11/30/06 1.00 0.0381 -- 0.0381 0.0381 -- 0.0381 1.00 05/31/07(G) 1.00 0.0208 -- 0.0208 0.0208 -- 0.0208 1.00 U.S. Treasury 11/30/02 1.00 0.0089 -- 0.0089 0.0089 -- 0.0089 1.00 Money Market 11/30/03 1.00 0.0022 -- 0.0022 0.0022 -- 0.0022 1.00 Class B 11/30/04 1.00 0.0015 -- 0.0015 0.0015 -- 0.0015 1.00 11/30/05 1.00 0.0169 -- 0.0169 0.0169 -- 0.0169 1.00 11/30/06 1.00 0.0340 -- 0.0340 0.0340 -- 0.0340 1.00 05/31/07(G) 1.00 0.0189 -- 0.0189 0.0189 -- 0.0189 1.00
- -------- (A) The fiscal year end for the Sentinel Capital Growth and Sentinel Growth Leaders Funds changed from June 30th to November 30th following the June 30, 2006 Annual Report. Information for the Sentinel Growth Fund prior to March 17th, 2006 is based on the predecessor Bramwell Growth Fund, and information for the Sentinel Growth Leaders Fund prior to March 17, 2006 is based on the predecessor Bramwell Focus Fund. (B) Commenced operations March 17, 2006. (C) Commenced operations March 10, 2003. (D) Commenced operations June 1, 2006. (E) Commenced operations March 3, 2005. First public offering March 4, 2005. (F) Commenced operations May 4, 2007. (G) Unaudited. ^ Name change. Formerly the Sentinel Capital Markets Income Fund prior to November 1, 2006. * Total return is calculated assuming an initial investment made at the net asset value at the beginning of the period, reinvestment of all distributions at net asset value during the period, and a redemption on the last day of the period. Neither an initial sales charge or a CDSC is reflected in the calculation of total return. ** The ratios do not include a reduction of expenses for custodian fee credits on cash balances maintained with the custodian. *** Expense reductions are comprised of the contractual and voluntary expense reimbursements as described in Note (3). + Annualized ++ Not Annualized The accompanying notes are an integral part of the financial statements. 50
Ratios/Supplemental Data - ---------------------------------------------------------------------------------------------------------- Ratio of net Ratio of investment Ratio of expenses to income (loss) to expenses to average net average net average assets before assets before Ratio of net assets contractual and Ratio of contractual and Net assets at expenses to before voluntary net investment voluntary end of average custodian expense income (loss) expense Portfolio Total return period (000 net assets fee credits reimbursements to average net reimbursements turnover (%)* omitted) (%) (%)** (%)*** assets (%) (%)*** rate (%) - ------------ ------------- ----------- ----------- --------------- -------------- ---------------- --------- (7.03) $ 310,172 1.22 1.22 1.22 (0.27) (0.27) 54 30.37 689,720 1.19 1.20 1.20 (0.29) (0.29) 36 17.54 1,063,847 1.12 1.12 1.12 (0.31) (0.31) 53 9.67 1,092,186 1.12 1.13 1.13 (0.31) (0.31) 64 16.05 1,226,831 1.13 1.13 1.13 (0.29) (0.29) 53 10.07++ 1,304,888 1.12+ 1.12+ 1.12+ 0.49+ 0.49+ 21++ (8.06) 58,931 2.13 2.14 2.14 (1.19) (1.19) 54 29.21 102,522 2.16 2.16 2.16 (1.24) (1.24) 36 16.52 144,580 2.03 2.04 2.04 (1.23) (1.23) 53 8.79 147,266 2.01 2.01 2.01 (1.19) (1.19) 64 14.97 143,830 1.99 2.00 2.00 (1.16) (1.16) 53 9.64++ 137,314 2.00+ 2.01+ 2.01+ (0.43)+ (0.43)+ 21++ (7.97) 25,153 2.19 2.19 2.19 (1.25) (1.25) 54 29.27 90,383 2.03 2.03 2.03 (1.13) (1.13) 36 16.58 165,175 1.93 1.93 1.93 (1.12) (1.12) 53 8.75 157,861 1.94 1.94 1.94 (1.12) (1.12) 64 15.11 166,878 1.94 1.94 1.94 (1.10) (1.10) 53 9.72++ 184,841 1.94+ 1.94+ 1.94+ (0.33)+ (0.33)+ 21++ 2.98++ 16,913 0.45+ 0.45+ 0.45+ 0.64+ 0.64+ 21++ 1.15 97,136 0.72 0.73 0.73 1.16 1.16 -- 0.32 79,511 0.78 0.78 0.79 0.32 0.31 -- 0.38 79,107 0.75 0.75 0.77 0.38 0.37 -- 2.00 82,961 0.77 0.78 0.80 1.99 1.97 -- 3.88 69,166 0.82 0.83 0.83 3.80 3.80 -- 2.10++ 58,358 0.88+ 0.90+ 0.90+ 4.18+ 4.18+ -- 0.89 9,948 0.88 0.88 0.88 0.86 0.86 -- 0.22 5,946 0.87 0.87 1.09 0.24 0.02 -- 0.15 4,543 0.98 0.98 1.21 0.15 (0.09) -- 1.70 3,880 1.06 1.07 1.37 1.66 1.37 -- 3.46 2,881 1.24 1.25 1.44 3.39 3.20 -- 1.90++ 2,606 1.28+ 1.29+ 1.83+ 3.78+ 4.32+ --
- -------- **** Represents less than $0.005 or ($0.005) of average daily shares outstanding. # On July 1, 2004, the Fund Distributor was notified by the National Association of Securities Dealers, Inc. (NASD) that the NASD had made a determination that a disciplinary action be brought against the Funds' Distributor arising from alleged excessive short term trading losses for the period from October 1, 2000 to October 31, 2003. The Funds were not a party to those proceedings and bear no associated costs. The Fund Distributor reimbursed the Funds on August 26, 2004 as follows: Impact on net Impact on Reimbursements realized gains total return (%) -------------- -------------- ---------------- International Equity-A $566,981 $0.09 0.66 International Equity-B 62,699 0.08 0.59 International Equity-C 15,951 0.09 0.66 High Yield Bond-A 2,801 0.00 0.00 High Yield Bond-B 837 0.00 0.00 High Yield Bond-C 308 0.00 0.00 On October 4, 2004, the Fund Distributor entered into a Letter of Acceptance, Waiver and Consent with the NASD settling this matter. 51 Notes to Financial Statements (Unaudited) (1) Organization: Sentinel Group Funds, Inc. ("Company") is registered as an open-end investment company under the Investment Company Act of 1940, as amended. The Company consists of fourteen separate series - Sentinel Balanced Fund, Sentinel Capital Growth Fund, Sentinel Common Stock Fund, Sentinel Conservative Allocation Fund, Sentinel Georgia Municipal Bond Fund (a non-diversified series), Sentinel Government Securities Fund, Sentinel Growth Leaders Fund (a non-diversified series), Sentinel High Yield Bond Fund, Sentinel International Equity Fund, Sentinel Mid Cap Growth Fund, Sentinel Mid Cap Value Fund (a non-diversified series), Sentinel Short Maturity Government Fund, Sentinel Small Company Fund and Sentinel U.S. Treasury Money Market Fund, each individually referred to as a Fund. All Funds offer Class A shares. Class B shares are no longer available for additional purchases from any Fund, except by the exchange of Class B shares between Funds or the reinvestment of dividends and distributions paid on Class B shares. The following Funds offer Class B shares: Sentinel Balanced, Sentinel Common Stock, Sentinel Conservative Allocation, Sentinel High Yield Bond, Sentinel International Equity, Sentinel Mid Cap Growth, Sentinel Small Company and Sentinel U.S. Treasury Money Market Fund. Sentinel Balanced, Sentinel Capital Growth, Sentinel Common Stock, Sentinel Conservative Allocation, Sentinel Government Securities, Sentinel Growth Leaders, Sentinel High Yield Bond, Sentinel International Equity, Sentinel Mid Cap Growth, Sentinel Mid Cap Value, Sentinel Short Maturity Government and Sentinel Small Company Fund offer Class C shares. Sentinel Balanced Fund offers Class D shares, which are closed to additional purchases, except by the reinvestment of dividends and distributions paid on Class D shares. Sentinel Common Stock, Sentinel Georgia Municipal Bond, Sentinel Government Securities, Sentinel Mid Cap Value and Sentinel Small Company Funds offer Class I Shares. Sentinel Short Maturity Government Fund offers Class S shares. Sentinel Georgia Municipal Bond Fund and Sentinel Mid Cap Value Fund, which currently have a fiscal year end of October 31st, are not included in this report. (2) Significant Accounting Policies: The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. A. Security Valuation: Equity securities that are traded on a national or foreign securities exchange and over-the-counter securities listed in the NASDAQ National Market System are valued at the last reported sales price or official closing price on the principal exchange on which they are traded on the date of determination as of the close of business of the New York Stock Exchange ("NYSE"), normally 4:00 p.m. Eastern time, each day that the NYSE is open for business. Foreign equity securities traded on a foreign securities exchange are subject to fair value pricing when appropriate, using valuations provided by an independent pricing service. Securities for which no sale was reported on the valuation date are valued at the mean between the last reported bid and asked prices. Over-the-counter securities not listed on the NASDAQ National Market System are valued at the mean of the current bid and asked prices. Fixed income securities are valued on the basis of valuations provided by an independent pricing service. The mean between the bid and asked prices is generally used for valuation purposes. Securities for which market quotations are not readily available, or whose values have been materially affected by events occurring before the Fund's pricing time but after the close of the securities' primary markets, will be fair valued under procedures adopted by the Funds' board. The board has delegated this responsibility to a pricing committee ("Sentinel Pricing Committee"), subject to its review and supervision. Short-term securities maturing in 60 days or less are valued at cost plus accrued interest earned, which approximates market value. Money market securities are valued at amortized cost, which approximates market value, in accordance with the terms of a rule adopted by the Securities and Exchange Commission. The amortized cost method values a security at cost on the date of purchase and thereafter assumes a constant amortization to maturity of any discount or premium. In September 2006, the Financial Accounting Standards Board ("FASB") issued FASB Statement No. 157 - Fair Value Measurements, that defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. The Statement applies to fair value measurements that are already required or permitted by other accounting standards and is intended to increase consistency of those measurements. The Statement applies broadly to securities and other types of assets and liabilities. FASB 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007. Fund management has elected to adopt FASB 157 beginning with the fiscal year ended November 30, 2008. Adoption of this rule would have no significant impact on the Fund's financial statements for this semi-annual period. B. Securities Transactions and Related Investment Income: Securities transactions are accounted for on the next business day following trade date (trade date plus one). Under certain circumstances, exceptions are made so that purchases and sales are booked on trade date. These exceptions include: (1) when trades occur on a day that happens to coincide with the end of a quarterly financial reporting period; or (2) on occasion, if Sentinel Administrative Services, Inc., the Funds' administrator, believes significant price movements are deemed large enough to impact the calculation of the net asset value per share. Interest income is recorded on the accrual basis, which includes the amortization of bond premiums on fixed-income securities. Dividend income is recorded on the ex-dividend date when verified by two independent sources and adjusted daily for foreign tax withholding, reclaims and currency fluctuations, when applicable. The cost of securities sold is determined, and realized gains and losses are computed, using the identified cost method. Market discount and original issue discount are accreted to income. 52 C. Dividends and Distributions: Dividends and distributions to shareholders are recorded on the ex-dividend date. Income distributions and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for mortgage-backed securities, foreign currency transactions, and the reclassification of net investment losses to paid-in-capital. Reclassifications were made to reflect these differences as of May 31, 2007. Accumulated undistributed net realized Accumulated gain (loss) on undistributed investments net and foreign investment currency Paid-in Sentinel Fund income (loss) transactions capital - ------------- ------------- -------------- ------- Balanced.................................. $ 22,078 $ (22,078) $-- Conservative Allocation................... 19,337 (19,337) -- Government Securities..................... 54,800 (54,800) -- High Yield Bond........................... (312) 312 -- International Equity...................... 26,960 (26,960) -- Short Maturity Government................. 464,519 (464,519) -- D. Dollar Rolls: Sentinel Balanced, Sentinel Conservative Allocation, Sentinel Government Securities and Sentinel Short Maturity Government Funds may enter into dollar rolls in which the Funds sell securities for delivery in the current month, and simultaneously contract to repurchase similar (same type, coupon and maturity) securities on a specified future date. During the roll period, the Funds forego principal and interest paid on the securities. The Funds are compensated by the interest earned on the cash proceeds of the initial sale and by the lower repurchase price at the future date. The difference between the sale proceeds and the lower repurchase price is recorded as interest income. E. Federal Income Taxes: Each Fund intends to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies. Each Fund intends to distribute all of its taxable income to its shareholders, relieving it any federal excise tax or income tax liability. In June 2006, the Financial Accounting Standards Board ("FASB") issued FASB interpretation No. 48 - - Accounting for Uncertainty in Income Taxes, that requires the tax effects of certain tax positions to be recognized. These tax positions must meet a "more likely than not" standard that based on their technical merits, have a more than 50 percent likelihood of being sustained upon examination. FASB Interpretation No. 48 is effective for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. At implementation, the financial statements must be adjusted to reflect only those tax positions that are more likely than not of being sustained. The effects of implementing FASB Interpretation No. 48, if any, are currently being evaluated by Fund management and will be disclosed in the May 31, 2008 semi-annual financial statements of the Funds. F. Foreign Currency Translations: The books and records of the Funds are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the mean between the buying and selling rates on the following basis: (1) market value of investment securities, assets and liabilities at the closing daily rate of exchange; and (2) purchases and sales of investment securities, income and expenses at the rate of exchange prevailing on the respective dates of such transactions. The Funds do not isolate the portion of gains and losses on investments in securities that is due to changes in the foreign exchange rates from that due to changes in market prices of such securities. However, pursuant to United States federal income tax regulations, gains and losses from certain foreign currency transactions are treated as ordinary income for federal income tax purposes. G. Forward Foreign Currency Contracts: Sentinel Conservative Allocation, Sentinel High Yield Bond and Sentinel International Equity Funds may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a foreign currency. Forward contracts are valued at the forward rate and are marked-to-market daily. The daily change in the market value is recorded as an unrealized gain or loss. The Funds realize a gain or loss when the forward contract is closed on delivery of the currency. Risks may arise with respect to entering into forward contracts from potential inability of counterparties to meet the terms of the forward contracts and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar. A Fund's risk of loss from forward foreign currency contracts may exceed the related amounts reflected on the Statement of Assets and Liabilities. H. Repurchase Agreements: Each Fund may enter into repurchase agreements as a means of making short-term investments, of seven days or less, and in aggregate amounts of not more than 25% of the net assets of a Fund. Each Fund, through its custodian, takes possession of the securities collateralizing repurchase agreements. All repurchase agreements entered into by the Funds provide that the market value of the collateral underlying the repurchase agreement at the time of purchase, and each subsequent business day, will always be at least equal to 102% of the repurchase agreement amount including accrued interest. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited. I. Options: When a Fund writes an option, an amount equal to the premium received by the Fund is recorded as a liability and is subsequently adjusted daily to the current fair value of the option written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains from investments. The difference between the premium and the amount paid on effecting a closing purchase transaction is also treated as a realized gain, or, if the premium is less than the amount paid for the closing purchase transaction, as a realized loss. If a call option written by a Fund is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Fund has realized a gain 53 or loss. If a put option written by a Fund is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund as writer of an option bears the market risk of an unfavorable change in the price of the security underlying the written option. There were no option transactions during the period ended May 31, 2007. J. Line of Credit: The Company has obtained access to an unsecured line of credit of up to $20,000,000 from State Street Bank (SSB) for temporary borrowing purposes. Borrowings under this arrangement bear interest at the current overnight Federal Funds rate plus an additional 0.50%. In addition, a commitment fee of 0.10% of the unused balance is paid annually to the custodian bank. At May 31 2007, The Government Securities Fund had an outstanding balance of $1,007,000 against this line of credit. K. Securities Lending: Under an agreement with SSB, the Funds may lend their securities, up to 50% of each Fund's portfolio before taking into account the securities on loan, to certain approved brokers, dealers and other financial institutions. Each loan is collateralized by cash in an amount equivalent to 102% (domestic) or 105% (foreign) of the market value of the loaned securities. Any adjustments in collateral required to maintain those levels due to market value fluctuations are made the next business day. The cash collateral is invested in a registered money market fund advised by State Street Global Advisors, a subsidiary of SSB. A portion of the income generated by the investment of the collateral, net of any rebates paid by SSB to the borrowers, is remitted to SSB as lending agent, and the remainder is retained by the Fund. The Fund receives from the borrower all accrued dividend and interest amounts while the securities are out on loan. The Fund retains certain ownership rights as to the loaned securities when retaining such rights is considered to be in the Fund's best interest. Generally, in the event of borrower default, the Fund has the right to use the collateral to offset any losses incurred. In the event the Fund is delayed or prevented from exercising its right to dispose of the collateral, there may be a potential loss to the Fund. The Fund bears the risk of loss with respect to the investment of the collateral. The income earned by each Fund from securities lending is included in its Statement of Operations. At May 31, 2007 the following Funds had securities on loan: Market Value Loaned Market Value Sentinel Fund Securities Collateral - ------------- ------------ ------------ Balanced............................................ $ 11,622,361 $ 11,863,368 Capital Growth...................................... 19,709,338 19,776,973 Common Stock........................................ 66,277,057 67,389,835 Conservative Allocation.......................................... 9,350,924 9,580,234 Government Securities.......................................... 44,720,175 46,198,556 Growth Leaders...................................... 2,400,747 2,416,185 High Yield Bond..................................... 14,294,246 14,743,700 International Equity................................ 30,248,808 31,321,461 Mid Cap Growth...................................... 42,202,783 42,462,816 Small Company....................................... 392,452,010 400,014,436 U.S. Treasury Money Market........................................ 16,754,733 17,083,126 L. Other: Direct expenses of a Fund are charged to that Fund while common expenses of the Company are allocated proportionately based upon the Funds' respective average net assets or number of shareholder accounts. Expenses not charged to a specific Class of each Fund are allocated on the basis of daily net assets or number of shareholder accounts on a pro rata basis. Class specific expenses such as 12b-1 distribution fees, blue sky registration fees, certain transfer agency fees and NASDAQ listing fees are charged to the appropriate class. Investment income and realized and unrealized gains and losses are allocated pro rata based on the value of shares outstanding for each Class within a Fund. Earnings credits are received from the custodian and dividend paying agent on cash balances and are reflected in the Statement of Operations as an expense offset. The ratio of net investment income to average net assets for each Fund is calculated utilizing the average shares method. The Funds have implemented redemption fees, to be retained by the affected Funds, primarily to deter short-term trading strategies, such as market timing. Sentinel Balanced, Sentinel Capital Growth, Sentinel Common Stock, Sentinel Conservative Allocation, Sentinel Government Securities, Sentinel Growth Leaders, Sentinel Mid Cap Growth and Sentinel Short Maturity Government Funds are subject to redemption fees of 1% on shares held 15 calendar days or less. Sentinel High Yield Bond, Sentinel International Equity and Sentinel Small Company Funds are subject to redemption fees of 2% on shares held 30 calendar days or less. (3) Management Advisory Fee and Other Transactions with Affiliates: Pursuant to Investment Advisory Agreements ("Advisory Agreements"), Sentinel Asset Management, Inc. ("SAMI", a subsidiary of NLV Financial Corporation) provides general supervision of the Funds' investments. Under the Advisory Agreements, each Fund pays SAMI a monthly fee based on the annual rates shown. When determining the breakpoint for the advisory fee, assets are aggregated for the Sentinel Government Securities and Sentinel Short Maturity Government Funds. Advisory Fee Sentinel Fund Rate Average Daily Net Assets - ------------- ---------------- ------------------------- Each subject to: Balanced 0.55% First $200 million Conservative Allocation 0.50% Next $200 million 0.45% Next $600 million 0.40% Next $1 billion 0.35% In excess of $2 billion Each subject to: Capital Growth 0.70% First $500 million Common Stock 0.65% Next $300 million High Yield Bond 0.60% Next $200 million International Equity 0.50% Next $1 billion Mid Cap Growth 0.40% In excess of $2 billion Small Company Growth Leaders 0.90% First $500 million 0.85% Next $300 million 0.80% Next $200 million 0.70% Next $1 billion 0.60% In excess of $2 billion Government Securities 0.55% First $200 million Short Maturity Government 0.50% Next $200 million 0.45% Next $600 million 0.40% Next $1 billion 0.35% In excess of $2 billion U.S. Treasury Money Market 0.40% First $300 million 0.35% In excess of $300 million 54 Prior to October 27, 2006, the Sentinel Government Securities and Sentinel Short Maturity Government Funds' advisory fee breakpoints were determined by aggregating those Funds' assets with assets of the Sentinel New York Tax-Free Income and Sentinel Tax-Free Income Funds, which as of October 27, 2006 reorganized with and into certain unaffiliated mutual funds. Prior to August 14, 2006, under Advisory Agreements, the Sentinel Conservative Allocation Fund (f/k/a Sentinel Capital Markets Income Fund) paid SAMI a monthly fee based on 0.55% of all average daily net assets. Prior to February 1, 2006, under Advisory Agreements, the Funds listed below paid SAMI a monthly fee based on the annual rates shown. Advisory Average Daily Sentinel Fund Fee Rate Net Assets - ------------- -------- ------------------------- High Yield Bond 0.75% First $100 million 0.70% Next $100 million 0.65% Next $100 million In excess of $ 300 0.60% million Small Company 0.70% First $200 million 0.65% Next $100 million 0.60% Next $100 million In excess of $ 400 0.55% million For purposes of determining an advisory fee breakpoint for Sentinel Small Company Fund, the Fund's average daily net assets were aggregated together with Sentinel Balanced, Sentinel International Equity and Sentinel Mid Cap Growth Funds' average daily net assets. Prior to December 19, 2005, under Advisory Agreements, the Funds listed below paid SAMI a monthly fee based on the annual rates shown. Advisory Average Daily Sentinel Fund Fee Rate Net Assets - ------------- -------- ------------------- Balanced 0.70% First $ 200 million 0.65% Next $100 million 0.60% Next $100 million In excess of $ 400 0.55% Million Common Stock 0.55% All assets Government Securities 0.55% First $200 million 0.50% Next $200 million In excess of $ 400 0.45% Million International Equity 0.70% First $200 million 0.65% Next $100 million 0.60% Next $100 million In excess of $ 400 0.55% million Mid Cap Growth 0.70% First $200 million 0.65% Next $100 million 0.60% Next $100 million In excess of $ 400 0.55% million Short Maturity Government 0.55% First $200 million 0.50% Next $200 million In excess of $ 400 0.45% million For purposes of determining an advisory fee breakpoint for Sentinel Balanced, Sentinel International Equity and Sentinel Mid Cap Growth Funds, these Funds' average daily net assets were aggregated together and with Sentinel Small Company Fund's average daily net assets. For purposes of determining the advisory fee breakpoint for Sentinel Government Securities and Sentinel Short Maturity Government Funds, these Funds' average daily net assets were aggregated together and with the Sentinel New York Tax-Free Income and Sentinel Tax-Free Income Funds, which are no longer offered. The Class A shares of all Funds (except Sentinel U.S. Treasury Money Market Fund) have adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act. These distribution plans are herein referred to as the "A Plans". Each of the Funds that offer Class B shares (except Sentinel U.S. Treasury Money Market Fund) has also adopted a distribution plan applicable to its Class B shares. These plans are herein referred to as the "B Plans". Each of the Funds that offer Class C shares has also adopted a Class C distribution plan applicable to its Class C shares referred to as the "C Plans". Sentinel Balanced Fund has adopted a distribution plan for its Class D shares referred to as the "D Plan". Sentinel Short Maturity Government Fund has adopted a distribution plan for its Class S shares referred to as the "S Plan". Under the A Plans, each participating Fund pays to Sentinel Financial Services Company (the "Distributor", a company in which SAMI and another wholly owned subsidiary of SAMI are partners), a monthly fee at the maximum annual rate of (a) 0.30% of average daily net assets relating to Class A shares outstanding in the case of the Sentinel Balanced, Sentinel Capital Growth, Sentinel Common Stock, Sentinel Conservative Allocation, Sentinel Growth Leaders, Sentinel International Equity, Sentinel Mid Cap Growth and Sentinel Small Company Funds, (b) 0.20% of average daily net assets relating to Class A shares outstanding in the case of the Sentinel Government Securities and Sentinel High Yield Bond Funds or (c) 0.25% of average daily net assets relating to Class A shares outstanding in the case of the Sentinel Short Maturity Government Fund (was 0.35% of average daily net assets prior to June 1, 2006). Such fees are used to reimburse the Distributor for eligible expenses incurred in connection with distribution and promotion of the shares and, up to 0.25%, for the servicing of shareholders of each participating Fund. Under the Plan applicable to the Class B shares, the Class B shares of each of the Sentinel Balanced, Sentinel Common Stock, Sentinel Conservative Allocation, Sentinel High Yield Bond, Sentinel International Equity, Sentinel Mid Cap Growth and Sentinel Small Company Funds pay to the Distributor a monthly fee at an annual rate of up to a total of 1.00% of average daily net assets. Such fees are used to reimburse the Distributor for eligible expenses incurred in connection with distribution and promotion of the shares and, up to 0.25%, for the servicing of shareholders of each participating Fund, which may include recovery of the initial sales commissions paid by the Distributor at the time of sales of Class B shares, together with the cost of financing such payments. Under the Plan applicable to the Class C shares, the Class C shares of each of the Sentinel Balanced, Sentinel Capital Growth, Sentinel Common Stock, Sentinel Conservative Allocation, Sentinel Government Securities, Sentinel Growth Leaders, Sentinel High Yield Bond, Sentinel International Equity, Sentinel Mid Cap Growth, Sentinel Short Maturity Government and Sentinel Small Company Funds pay to the Distributor a monthly fee at an annual rate of up to a total of 1.00% of average daily net assets. 55 Such fees are used to reimburse the Distributor for eligible expenses incurred in connection with distribution and promotion of the shares and, up to 0.25%, for the servicing of shareholders of each participating Fund. In the first year after the purchase, this fee will be applied to recover the initial sales commission of 1.00% paid by the Distributor to the selling financial intermediary. In subsequent years, the entire 1.00% may be paid to the financial intermediary as additional commission and/or service fees. Under the Plan Applicable to Sentinel Balanced Fund Class D shares, these shares pay to the Distributor a monthly fee at an annual rate of up to a total of 0.75% of average daily net assets. Such fees are used to reimburse the Distributor for eligible expenses incurred in connection with distribution and promotion of the shares and, up to 0.25%, for the servicing of shareholders of each participating Fund. Under the Plan Applicable to Sentinel Short Maturity Government Class S shares, these shares pay to the Distributor a monthly fee at an annual rate of up to a total of 0.75% of average daily net assets. Such fees are used to reimburse the Distributor for eligible expenses incurred in connection with distribution and promotion of the shares and, up to 0.25%, for the servicing of shareholders of each participating Fund. The entire distribution fee may be paid to the selling dealer. The Funds are not assessed distribution fees on shares owned by NLV Financial Corporation and its affiliates. Where NLV Financial Corporation and its affiliates held an investment during the reporting period for this report, this results in overall distribution fees for that share class of less than the maximum limits involved. NLV Financial Corporation and its affiliates had investments for the entire reporting period in Sentinel Balanced Fund Class D, Sentinel Capital Growth Fund Class C, Sentinel Government Securities Fund Class C, Sentinel Growth Leaders Fund Class C, Sentinel Mid Cap Growth Fund Classes A and C and Sentinel Short Maturity Government Fund Class C. NLV Financial Corporation and its affiliates also had investments in Sentinel Mid Cap Growth Fund Class B during the reporting period from December 1, 2006 to April 30, 2007, and in Sentinel Small Company Class I during the reporting period from May 4, 2007 to May 30, 2007. In addition, the retirement plans of the NLV Financial Corporation and its affiliates receive a rebate from the Distributor of the 12b-1 fees paid by the plans. These asset-based fees, excepting the service fee component, are subject to aggregate limits imposed by the National Association of Securities Dealers, Inc. The Distributor will not be reimbursed for any un-reimbursed eligible expenses from any other Fund, or in any future year from any of the Plans. The Distributor also receives a sales charge added to the net asset value received by the Funds on the sale of Class A shares. This compensation is not an expense of the Funds and does not affect their operating results. The Distributor has advised the Funds that it received sales charges aggregating $2,391,786 for the period ended May 31, 2007. The Funds have been advised that the total distribution charges retained by the Distributor on the sale of shares amounted to $17,586 after allowances of $837,561 to Equity Services, Inc., a subsidiary of NLV Financial Corporation, and $1,536,639 to other investment dealers. During this same period, the Distributor advised the Funds that during the same period it received $7,400 in contingent deferred sales charges from certain redemptions of Class A shares, $248,147 in contingent deferred sales charges from redemptions of Class B shares, $11,684 in contingent deferred sales charges from redemptions of Class C shares, $17,515 in contingent deferred sales charges from redemptions of Class D shares and no contingent deferred sales charges from redemptions of Class S shares. Each Director who is not an affiliate of SAMI receives an annual fee of $25,000 plus $2,450 for each meeting attended. The Lead Independent Director is paid an additional $16,000 annual fee. Prior to April 1, 2007, each Director who is not an affiliate of SAMI received an annual fee of $20,500 plus the stated meeting fees. Prior to August 23, 2006, the Lead Independent Director was paid a $12,000 annual fee. Each member of the Audit, Compliance and Pricing Committee and Governance, Contracts and Nominating Committee is also paid $2,000 for each in-person and $500 for each telephone Committee meeting attended, and the chair of each Committee is paid an annual fee of $6,000. Directors are also reimbursed for travel and other out-of-pocket expenses incurred by them in connection with attending such meetings. Certain Directors of the Funds have chosen to have their fees deferred in accordance with the Funds' deferred compensation plan. These amounts are included in Directors' fees and expenses and deferred compensation expenses on the Statement of Operations and Statement of Assets and Liabilities, respectively. The Funds' Chief Compliance Officer also serves as Chief Compliance Officer of Sentinel Variable Products Trust, a series investment company also advised by SAMI, SAMI itself, and the separate accounts of National Life Insurance Company which fund its variable life insurance and annuity products. Pursuant to an Agreement dated December 9, 2004, the Funds and Sentinel Variable Products Trust pay 50% of the costs incurred by these Chief Compliance Officer functions, including the salary and benefits of the Funds' Chief Compliance Officer and his administrative assistant, and the other costs incurred by the Chief Compliance Officer. The Funds and Sentinel Variable Products Trust allocate their 50% share of these costs in proportion to net assets. Out-of-pocket costs which can be specifically allocated to a particular entity are so allocated. Pursuant to the Fund Services Agreement with Sentinel Administrative Services, Inc. ("SASI", a subsidiary of SAMI), the Funds receive fund accounting and financial administrative services, transfer agent services and investor services, all of which are coordinated with other services which the Funds have contracted for with outside providers. Fees paid to SASI for the period ended May 31, 2007 were $2,669,842. SAMI and/or an affiliate has contractually agreed to waive fees and/or reimburse expenses so that the total annual fund operating expenses of the Class A shares of the Common Stock Fund will be no more than 1.10% until December 19, 2007, and the Class A shares of each of the Capital Growth and Growth Leaders Funds will be no more than 1.75% until March 17, 2008. SAMI and/or its affiliates 56 have voluntarily agreed to waive fees and/or reimburse expenses so that the total annual fund operating expenses of the Class A shares of Growth Leaders Fund will not exceed 1.45%. This voluntary waiver may be modified or terminated at any time. The Class B, Class C and Class I shares of these Funds, where applicable, will benefit from these arrangements to the extent SAMI waives its advisory fees to meet these commitments. For the period ended May 31, 2007, the total amount reimbursable to Common Stock Class A was $68,215, Common Stock Class B $3,429, Common Stock Class C $840, Growth Leaders Class A $23,639 and Growth Leaders Class C $1,079. In addition, Sentinel U.S. Treasury Money Market Class B is being voluntarily reimbursed for Blue Sky registration fees that only pertain to that Class. That reimbursable amount totals $7,217 for Class B. This voluntary reimbursement may be modified or terminated at any time. As of May 31, 2007, NLV Financial Corporation and its affiliates held ownership in the Funds as follows: Appoximate Sentinel Fund % Ownership - ------------- ----------- Balanced - Class D................................................. 47.9% Capital Growth - Class C........................................... 5.7% Government Securities - Class C.................................... 3.4% Growth Leaders - Class C........................................... 7.4% Mid Cap Growth - Class A........................................... 2.9% Mid Cap Growth - Class C........................................... 3.2% Short Maturity Government - Class C................................ 22.7% U.S. Treasury Money Market - Class A............................... 3.1% (4) Investment Transactions: Purchases and sales of investment securities (excluding short term obligations) for the period ended May 31, 2007 were as follows: Purchases of Purchases of Sales of other other than U.S. U.S. than U.S. Sales of U.S. Government Government Government Government direct and direct and direct and direct and agency agency agency agency obligations obligations obligations obligations --------------- ------------ -------------- ------------- Balanced............. $ 13,437,231 $209,223,859 $ 18,542,855 $216,318,203 Capital Growth............... 12,390,687 -- 32,743,965 -- Common Stock................ 96,157,006 -- 153,685,452 -- Conservative Allocation........... 1,642,269 71,640,986 3,956,586 68,670,267 Government Securities........... -- 631,442,282 -- 605,999,057 Growth Leaders.............. 4,836,048 -- 3,564,078 -- High Yield Bond................. 36,110,796 -- 48,781,388 -- International Equity............... 30,077,048 -- 28,807,330 -- Mid Cap Growth............... 55,844,578 -- 73,777,384 -- Short Maturity Government........... -- 23,553,015 -- 48,667,939 Small Company.............. 308,847,933 -- 372,513,882 -- (The Sentinel U.S. Treasury Money Market Fund invests only in short-term obligations.) For Federal income tax purposes, the Company had capital loss carry forwards at November 30, 2006 as follows: Capital Loss Carry forwards Expiring on 11/30 -------- Sentinel Government Securities $ 2,194,029 2007 405,855 2008 3,542,404 2013 2,227,128 2014 ----------- Total $ 8,369,416 =========== Growth Leaders $ 258,400 2011 =========== Sentinel High Yield Bond $ 863,445 2007 5,502,189 2008 11,485,809 2009 2,122,093 2010 176,203 2014 ----------- Total $20,149,739 =========== Sentinel Mid Cap Growth $30,468,900 2010 =========== Sentinel Short Maturity Government $ 1,566,785 2007 748,798 2008 1,372,649 2010 9,464,512 2011 5,073,636 2012 4,694,622 2013 4,202,997 2014 ----------- Total $27,123,999 =========== During the year ended November 30, 2006, the Funds utilized capital losses as follows: Capital Losses Sentinel Fund Utilized - ------------- -------------- Growth Leaders.................................................. $ 3,011 Mid Cap Growth.................................................. 10,202,614 It is unlikely that a capital gains distribution will be paid to shareholders of the Funds until net gains have been realized in excess of such capital loss carry forwards or the carry forwards expire. The Sentinel Government Securities Fund had capital loss carry forwards expire last fiscal year in the amount of $5,868,057. 57 (5) Fund Shares: At May 31, 2007, 2.35 billion shares of one cent par value were authorized. Authorized Shares at May 31, 2007 Authorized Shares Class A Shares ------------- Balanced 40,000,000 Capital Growth 40,000,000 Common Stock 75,000,000 Conservative Allocation 20,000,000 Georgia Municipal Bond 40,000,000 Government Securities 90,000,000 Growth Leaders 20,000,000 High Yield Bond 30,000,000 International Equity 15,000,000 Mid Cap Growth 45,000,000 Mid Cap Value 40,000,000 Short Maturity Government 70,000,000 Small Company 160,000,000 U.S. Treasury Money Market 750,000,000 ------------- 1,435,000,000 ------------- Class B Shares Balanced 20,000,000 Common Stock 20,000,000 Conservative Allocation 10,000,000 High Yield Bond 20,000,000 International Equity 20,000,000 Mid Cap Growth 20,000,000 Small Company 40,000,000 U.S. Treasury Money Market 100,000,000 ------------- 250,000,000 ------------- Class C Shares Balanced 10,000,000 Capital Growth 40,000,000 Common Stock 10,000,000 Conservative Allocation 10,000,000 Government Securities 20,000,000 Growth Leaders 20,000,000 High Yield Bond 10,000,000 International Equity 10,000,000 Mid Cap Growth 30,000,000 Mid Cap Value 40,000,000 Short Maturity Government 20,000,000 Small Company 40,000,000 ------------- 260,000,000 ------------- Class D Shares Balanced 20,000,000 ------------- Class I Shares Common Stock 40,000,000 Georgia Municipal Bond 40,000,000 Government Securities 40,000,000 Mid Cap Value 40,000,000 Small Company 40,000,000 ------------- 200,000,000 ------------- Class S Shares ------------- Short Maturity Government 50,000,000 ------------- Total Allocated Shares 2,215,000,000 ============= Unallocated Shares 135,000,000 ============= 58 Proceeds from sales and payments for redemptions on Fund shares as shown in the Statement of Changes in Net Assets are represented by the following number of shares:
Shares issued in reinvestment Net increase Shares issued in of dividends (decrease) in Fund and Shares shares Shares Sold Reorganizations distributions reacquired outstanding ----------- ---------------- ------------- ----------- ------------- Six Months Ended 05/31/07 (unaudited) Balanced - A............................ 948,816 -- 454,956 1,287,395 116,377 Balanced - B............................ 22,237 -- 36,216 277,542 (219,089) Balanced - C............................ 58,797 -- 11,063 64,209 5,651 Balanced - D............................ 284 -- 22,005 32,091 (9,802) Capital Growth - A...................... 204,656 3,511,655 360,551 1,049,123 3,027,739 Capital Growth - C...................... 6,718 124,102 370 8,926 122,264 Common Stock - A........................ 1,208,021 30,899 1,304,632 2,370,876 172,676 Common Stock - B........................ 17,846 -- 59,917 303,596 (225,833) Common Stock - C........................ 160,583 61,962 19,291 39,306 140,568 Common Stock - I*....................... 118,544 5,496,611 -- 186,512 5,428,643 Conservative Allocation - A............. 678,372 -- 119,381 612,806 184,947 Conservative Allocation - B............. 19,405 -- 33,580 118,305 (65,320) Conservative Allocation - C............. 105,185 -- 17,169 78,512 43,842 Government Securities - A............... 3,346,375 188,292 404,128 2,987,430 951,365 Government Securities - C............... 238,876 -- 973 416 239,433 Government Securities - I*.............. 232,291 12,337,031 1,829 1,254,011 11,317,140 Growth Leaders - A...................... 204,029 -- 356 106,539 97,846 Growth Leaders - C...................... 26,372 -- -- 5,165 21,207 High Yield Bond - A..................... 713,975 -- 133,003 1,260,086 (413,108) High Yield Bond - B..................... 13,607 -- 25,655 340,688 (301,426) High Yield Bond - C..................... 36,727 -- 17,912 138,028 (83,389) International Equity - A................ 995,119 -- 657,178 872,510 779,787 International Equity - B................ 35,238 -- 55,107 131,644 (41,299) International Equity - C................ 94,045 -- 21,775 25,524 90,296 Mid Cap Growth - A...................... 689,807 -- -- 1,443,224 (753,417) Mid Cap Growth - B...................... 6,620 -- -- 294,790 (288,170) Mid Cap Growth - C...................... 32,910 -- -- 40,586 (7,676) Short Maturity Government - A........... 1,722,632 -- 363,035 4,710,456 (2,624,789) Short Maturity Government - C........... 28,578 -- 112 2,545 26,145 Short Maturity Government - S........... 26,967 -- 15,692 249,353 (206,694) Small Company - A....................... 19,384,453 -- 16,788,473 23,126,255 13,046,671 Small Company - B....................... 43,007 -- 2,814,405 2,761,362 96,050 Small Company - C....................... 2,550,902 -- 2,690,769 2,162,748 3,078,923 Small Company - I*...................... 2,049,876 -- -- 12,407 2,037,469 U.S. Treasury Money Market - A.......... 35,066,004 -- 1,331,527 47,205,507 (10,807,976) U.S. Treasury Money Market - B.......... 1,083,790 -- 41,348 1,399,373 (274,235) Year Ended 11/30/06 Balanced - A............................ 1,426,015 -- 573,735 2,392,921 (393,171) Balanced - B............................ 115,942 -- 51,608 467,921 (300,371) Balanced - C............................ 109,788 -- 12,792 99,960 22,620 Balanced - D............................ 22,883 -- 27,664 67,819 (17,272) Common Stock - A........................ 1,928,685 -- 1,639,530 5,153,143 (1,584,928) Common Stock - B........................ 130,114 -- 82,325 547,933 (335,494) Common Stock - C........................ 188,861 -- 14,989 69,939 133,911 Conservative Allocation** - A........... 574,548 -- 186,593 2,407,462 (1,646,321) Conservative Allocation** - B........... 86,138 -- 49,150 344,135 (208,847) Conservative Allocation** - C........... 69,680 -- 26,957 406,657 (310,020) Government Securities - A............... 4,923,365 -- 770,192 4,880,309 813,248 Government Securities - C***............ 55,526 -- 48 165 55,409 High Yield Bond - A..................... 1,210,744 -- 353,974 8,244,196 (6,679,478) High Yield Bond - B..................... 107,851 -- 63,746 856,822 (685,225) High Yield Bond - C..................... 70,783 -- 41,112 508,858 (396,963) International Equity.................... 1,698,733 -- 394,874 1,370,203 723,404 International Equity - B................ 125,707 -- 37,106 216,885 (54,072) International Equity - C................ 117,405 -- 8,722 40,598 85,529 Mid Cap Growth - A...................... 1,035,182 -- -- 2,713,784 (1,678,602) Mid Cap Growth - B...................... 73,939 -- -- 677,844 (603,905) Mid Cap Growth - C...................... 45,209 -- -- 120,142 (74,933) Short Maturity Government - A........... 5,400,494 -- 955,663 14,371,183 (8,015,026) Short Maturity Government - C........... 23,227 -- 74 87 23,214 Short Maturity Government - S***........ 986,363 -- 59,276 2,064,807 (1,019,168) Small Company - A....................... 31,468,387 -- 11,861,116 34,967,985 8,361,518 Small Company - B....................... 899,212 -- 2,208,093 4,276,602 (1,169,297) Small Company - C....................... 3,422,340 -- 1,937,177 5,124,304 235,213 U.S. Treasury Money Market - A.......... 83,996,137 -- 2,755,191 100,546,523 (13,795,195) U.S.Treasury Money Market - B........... 2,733,518 -- 107,709 3,840,571 (999,344)
- -------- * Commenced operations May 4, 2007. ** Name change. Formerly the Sentinel Capital Markets Income Fund prior to November 1, 2006. *** Commenced operations June 1, 2006. 59
Shares issued in reinvestment Net increase of dividends (decrease) in Shares and Shares shares Sentinel Fund Sold distributions reacquired outstanding - ------------- ------- ------------- ---------- ------------- For The Fiscal Period From 07/01/06 Through 11/30/06+....................................... Sentinel Capital Growth Fund - A.................. 117,340 -- 850,225 (732,885) Sentinel Capital Growth Fund - C.................. 3,387 -- 12 3,375 Sentinel Growth Leaders Fund - A.................. 315,034 -- 65,554 249,480 Sentinel Growth Leaders Fund - C.................. 12,403 -- 9,257 3,145 Year Ended 06/30/06 Sentinel Capital Growth Fund - A^................. 487,098 931,210 3,428,519 (2,010,211) Sentinel Capital Growth Fund - C^^^............... 9,195 -- 12 9,183 Sentinel Growth Leaders Fund - A^^................ 333,899 -- 426,961 (93,062) Sentinel Growth Leaders Fund - C^^^............... 36,435 -- 9,257 27,178
- -------- + The fiscal year end for the Sentinel Capital Growth and Sentinel Growth Leaders Funds changed from June 30th to November 30th following the June 30, 2006 Annual Report. ^ Information prior to March 17, 2006 is based on the predecessor Bramwell Growth Fund. ^^ Information prior to March 17, 2006 is based on the predecessor Bramwell Focus Fund. ^^^Commenced operations March 17, 2006. (6)Post Retirement Benefits: Sentinel Group Funds, Inc. provides certain health care and life insurance benefits to certain of its retirees. At May 31, 2007 the projected obligation for such benefits had been accrued. The total liability as of May 31, 2007 is as follows: Sentinel Fund - ------------- Balanced - A.......................................................... $ 47,117 Common Stock - A...................................................... 199,180 Government Securities - A............................................. 37,730 Mid Cap Growth - A.................................................... 33,382 60 (7) Reorganizations: Pursuant to a Plan of Reorganization approved by shareholders on March 16, 2007, as of the close of business on March 30, 2007, Sentinel Capital Growth Fund acquired the assets and assumed the liabilities of Sentinel Capital Opportunity Fund in a tax-free reorganization in exchange for shares of the Sentinel Capital Growth Fund. The number of shares is presented in Note (5) and the value of shares issued by the Sentinel Capital Growth Fund is presented in the Statement of Changes in Net Assets and in the schedule below. Net assets and unrealized appreciation as of the reorganization date were as follows:
Total Net Total Net Assets of Acquired Assets of Total Net Acquiring Fund Fund Acquired Assets of After Unrealized Acquiring Fund Acquired Fund Fund Acquiring Fund Acquisition Appreciation -------------- -------------------------------- ----------- -------------- -------------- ------------ Capital Growth Fund Class A Capital Opportunity Fund Class A $59,124,301 $118,303,600 $185,197,347 $10,260,826 Capital Growth Fund Class A Capital Opportunity Fund Class B 7,769,446 118,303,600 185,197,347 2,285,591 Capital Growth Fund Class C Capital Opportunity Fund Class C 2,315,385 332,459 2,647,844 598,587
Pursuant to an Agreement and Plan of Reorganization approved by shareholders on March 15, 2007, as of the close of business on May 4, 2007, (1) Sentinel Common Stock Fund acquired the assets of Synovus Large Cap Core Equity Fund and (2) Sentinel Government Securities Fund acquired the assets of Synovus Intermediate-Term Bond Fund in tax-free reorganizations in exchange for shares of Sentinel Common Stock Fund and Sentinel Government Securities Fund, respectively. The number of shares is presented in Note (5) and the value of shares issued by each of Sentinel Common Stock Fund and Sentinel Government Securities Fund is presented in the Statement of Changes in Net Assets and in the schedule below. Net assets and unrealized appreciation/(depreciation) as of the reorganization date were as follows:
Acquired Total Net Assets Fund Total Net Total Net Assets of Acquiring Unrealized Assets of of Acquiring Fund After Appreciation/ Acquiring Fund Acquired Fund Acquired Fund Fund Acquisition (Depreciation) -------------- --------------------------- ------------- ---------------- ---------------- -------------- Common Stock Fund Class A Large Cap Core Equity Fund Class B $ 1,091,395 $1,170,620,798 $1,171,712,193 $ 280,621 Common Stock Fund Class C Large Cap Core Equity Fund Class C 2,132,920 17,947,838 20,080,758 668,584 Common Stock Fund Class I Large Cap Core Equity Fund Class A 2,809,929 -- 194,108,510 1,340,856 Common Stock Fund Class I Large Cap Core Equity Fund Class I 191,298,581 -- 194,108,510 44,894,719 Government Securities Fund Intermediate-Term Bond Fund Class A Class A 1,215,917 219,265,605 221,197,282 (195,246) Government Securities Fund Intermediate-Term Bond Fund Class A Class B 715,760 219,265,605 221,197,282 (40,431) Government Securities Fund Intermediate-Term Bond Fund Class I Class I 126,487,938 -- 126,487,938 132,386
(8) Subsequent Events: On and effective June 7, 2007, the Board of Directors approved the termination of the Fund Services Agreement between the Funds and SASI and the execution of two new agreements between the Funds and SASI, an Administration Agreement and a Transfer and Dividend Disbursing Agent Agreement. The Administration Agreement has terms similar to those relating to administration in the prior Fund Services Agreement, but amends the compensation provisions to provide that the Funds pay SASI a monthly fee at an annual rate of 0.0375% of the first $4 billion of the Funds' aggregate average daily net assets; 0.035% of the next $3 billion of the Funds' aggregate average daily net assets and 0.0325% of the Funds' aggregate average daily net assets in excess of $7 billion. The Transfer and Dividend Disbursing Agent Agreement has terms similar to those relating to transfer agent services in the prior Fund Services Agreement, but also provides that the Funds may reimburse SASI for sub-transfer agency, plan agent and similar fees paid by SASI to other entities who provide services to accounts underlying an omnibus account of record in accordance with policies approved by the Board of Directors. The currently approved policy would allow such reimbursement at an annual rate of 0.17% of a Fund's average daily net assets. On June 7, 2007, the Board of Directors approved the addition of Class I shares to the Sentinel Balanced Fund, Sentinel Capital Growth Fund, Sentinel Growth Leaders Fund, Sentinel International Equity Fund and Sentinel Mid Cap Growth Fund. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer is not permitted. On June 7, 2007, the Board of Directors approved the addition of a new series, Sentinel Small-Mid Cap Fund. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer is not permitted. 61 Actual and Hypothetical Expenses for Comparison Purposes Example As a shareholder of one or more of the Sentinel Funds, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other Fund expenses. The example for each share class is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. Each example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from 12/01/06 through 05/31/07. Actual Expenses The first line of each share class in the table beginning on the next page provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid from 12/01/06 through 05/31/07" to estimate the expenses you paid on your account during this period. .. Certain Account Fees and Minimum Account Size Certain participant accounts are subject to the following recurring annual fees that are not included in the expenses shown in the table. If your account was subject to these fees, then the actual account values at the end of the period and the actual expenses for the period will be higher. Due to the expense of maintaining accounts with small balances, SASI reserves the right to charge an annual maintenance fee of up to $25 to any account that has a current value less than $1,000 and that has been open for at least 24 months. This fee will be deducted automatically from each participant account in June of each year unless it is prepaid. .. Miscellaneous Recurring Fees Retirement Custodial Accounts Annual Custodial Fee per Social Security Number $15.00 Closeout Fee per Account $15.00 Transfer of Assets per Transaction $25.00 Service Fees Express Mail Deliveries $15.00 Federal Funds Wire $20.00 Bounced check-writing checks $25.00 Bounced check received for deposit $25.00
.. Recurring Fees for Services for Employee Benefit Plans The Sentinel Destinations platform offers participant record keeping services to employer-sponsored retirement plans such as 401(k), pension or profit sharing plans. Plans using the Sentinel Destinations platform will be subject to additional fees for the services provided. Contact your financial advisor or Sentinel Administrative Services, Inc. for more information regarding Sentinel Destinations. Hypothetical Example for Comparison Purposes The second line of each share class in the table beginning on the next page provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of the share class and an assumed rate of return of 5% per year before expenses, which is not the actual return of the share class. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a specific Sentinel Fund share class to other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. As with actual account values and expenses, the hypothetical account values and expenses shown in the table do not reflect any of the recurring fees outlined above. If your account is subject to such fees, then the hypothetical account values at the end of the period shown should be decreased and the hypothetical expenses paid for the period should be increased before comparing these amounts to the corresponding amounts for other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads) or redemption fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. 62 Expenses Actual and hypothetical expenses for each Sentinel Fund share class are provided in this table. More detailed expense data is contained in the previous pages. (Unaudited)
Beginning Ending Expenses Paid Total Account Account Annualized from 12/01/06 Total Return Return Value Value Expense through Sentinel Fund Fund Class Description Percentage 12/01/06 05/31/07 Ratio 05/31/07* - ------------- ---------- ------------- ---------- --------- --------- ---------- ------------- Balanced A Shares Actual 7.33 $1,000.00 $1,073.28 1.09 $ 5.63 Hypothetical+ 1.95 1,000.00 1,019.50 1.09 5.49 B Shares Actual 6.82 1,000.00 1,068.16 1.99 10.26 Hypothetical+ 1.50 1,000.00 1,015.01 1.99 10.00 C Shares Actual 6.81 1,000.00 1,068.06 2.13 10.98 Hypothetical+ 1.43 1,000.00 1,014.31 2.13 10.70 D Shares Actual 7.23 1,000.00 1,072.33 1.33 6.87 Hypothetical+ 1.83 1,000.00 1,018.30 1.33 6.69 Capital Growth A Shares Actual 10.85 $1,000.00 1,108.53 1.21 6.36 Hypothetical+ 1.89 1,000.00 1,018.90 1.21 6.09 C Shares Actual 9.45 1,000.00 1,094.51 3.08 16.08 Hypothetical+ 0.96 1,000.00 1,009.57 3.08 15.43 Common Stock A Shares Actual 10.22 $1,000.00 1,102.25 1.10 5.77 Hypothetical+ 1.94 1,000.00 1,019.45 1.10 5.54 B Shares Actual 9.70 1,000.00 1,096.98 2.07 10.82 Hypothetical+ 1.46 1,000.00 1,014.61 2.07 10.40 C Shares Actual 9.65 1,000.00 1,096.50 2.13 11.13 Hypothetical+ 1.43 1,000.00 1,014.31 2.13 10.70 I Shares** Actual 1.44 1,000.00 1,014.44 0.73 0.54 Hypothetical+ 2.13 1,000.00 1,021.29 0.73 3.68 Conservative Allocation A Shares Actual 5.45 $1,000.00 1,054.46 1.26 6.45 Hypothetical+ 1.87 1,000.00 1,018.65 1.26 6.34 B Shares Actual 5.00 1,000.00 1,049.96 2.14 10.94 Hypothetical+ 1.43 1,000.00 1,014.26 2.14 10.75 C Shares Actual 5.01 1,000.00 1,050.08 2.28 11.65 Hypothetical+ 1.36 1,000.00 1,013.56 2.28 11.45 Government Securities A Shares Actual 1.23 $1,000.00 1,012.26 0.98 4.92 Hypothetical+ 2.00 1,000.00 1,020.04 0.98 4.94 C Shares Actual -0.00 1,000.00 999.96 3.39 16.90 Hypothetical+ 0.80 1,000.00 1,008.03 3.39 16.97 I Shares** Actual -0.98 1,000.00 990.25 0.72 0.53 Hypothetical+ 2.13 1,000.00 1,021.34 0.72 3.63 Growth Leaders A Shares Actual 11.61 $1,000.00 1,116.09 1.45 7.65 Hypothetical+ 1.77 1,000.00 1,017.70 1.45 7.29 C Shares Actual 10.11 1,000.00 1,101.08 4.38 22.94 Hypothetical+ 0.31 1,000.00 1,003.09 4.38 21.87
- -------- * Expenses are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (182)/365 (or 366), with the exception of Common Stock, Government Securities and Small Company I Shares which reflect expenses for the 27 day period on "Actual" returns from their inception date of May 4, 2007 to May 31, 2007. ** Commenced operations May 4, 2007. + Hypothetical assumes a 5.00% annual return less expenses for the period. 63 Expenses (continued) Actual and hypothetical expenses for each Sentinel Fund share class are provided in this table. More detailed expense data is contained in the previous pages. (Unaudited)
Beginning Ending Expenses Paid Total Account Account Annualized from 12/01/06 Total Return Return Value Value Expense through Sentinel Fund Fund Class Description Percentage 12/01/06 05/31/07 Ratio 05/31/07* - ------------- ---------- ------------- ---------- --------- --------- ---------- ------------- High Yield Bond A Shares Actual 6.13 $1,000.00 $1,061.29 1.29 $ 6.63 Hypothetical+ 1.85 1,000.00 1,018.50 1.29 6.49 B Shares Actual 5.53 1,000.00 1,055.34 2.15 11.02 Hypothetical+ 1.42 1,000.00 1,014.21 2.15 10.80 C Shares Actual 5.63 1,000.00 1,056.27 2.26 11.59 Hypothetical+ 1.37 1,000.00 1,013.66 2.26 11.35 International Equity A Shares Actual 11.21 $1,000.00 1,112.11 1.35 7.11 Hypothetical+ 1.82 1,000.00 1,018.20 1.35 6.79 B Shares Actual 10.61 1,000.00 1,106.05 2.48 13.02 Hypothetical+ 1.26 1,000.00 1,012.57 2.48 12.44 C Shares Actual 10.55 1,000.00 1,105.52 2.60 13.65 Hypothetical+ 1.20 1,000.00 1,011.97 2.60 13.04 Mid Cap Growth A Shares Actual 12.27 $1,000.00 1,122.71 1.32 6.99 Hypothetical+ 1.84 1,000.00 1,018.35 1.32 6.64 B Shares Actual 11.58 1,000.00 1,115.81 2.45 12.92 Hypothetical+ 1.27 1,000.00 1,012.72 2.45 12.29 C Shares Actual 11.50 1,000.00 1,114.96 2.60 13.71 Hypothetical+ 1.20 1,000.00 1,011.97 2.60 13.04 Short Maturity Government A Shares Actual 1.70 $1,000.00 1,017.05 1.06 5.33 Hypothetical+ 1.96 1,000.00 1,019.65 1.06 5.34 C Shares Actual 0.23 1,000.00 1,002.34 4.23 21.12 Hypothetical+ 0.38 1,000.00 1,003.84 4.23 21.13 S Shares Actual 1.43 1,000.00 1,014.32 1.50 7.53 Hypothetical+ 1.74 1,000.00 1,017.45 1.50 7.54 Small Company A Shares Actual 10.07 $1,000.00 1,100.65 1.12 5.87 Hypothetical+ 1.94 1,000.00 1,019.35 1.12 5.64 B Shares Actual 9.64 1,000.00 1,096.39 2.00 10.45 Hypothetical+ 1.50 1,000.00 1,014.96 2.00 10.05 C Shares Actual 9.72 1,000.00 1,097.15 1.94 10.14 Hypothetical+ 1.53 1,000.00 1,015.26 1.94 9.75 I Shares** Actual 2.98 1,000.00 1,029.78 0.45 0.34 Hypothetical+ 2.27 1,000.00 1,022.69 0.45 2.27 U.S. Treasury Money Market A Shares Actual 2.10 $1,000.00 1,020.98 0.88 4.43 Hypothetical+ 2.05 1,000.00 1,020.54 0.88 4.43 B Shares Actual 1.90 1,000.00 1,019.00 1.28 6.44 Hypothetical+ 1.85 1,000.00 1,018.55 1.28 6.44
- -------- * Expenses are equal to the annualized expense ratio for the share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (182)/365 (or 366), with the exception of Common Stock, Government Securities and Small Company I Shares which reflect expenses for the 27 day period on "Actual" returns from their inception date of May 4, 2007 to May 31, 2007. ** Commenced operations May 4, 2007. + Hypothetical assumes a 5.00% annual return less expenses for the period. 64 Information and Services for Shareholders Portfolio Proxy Voting Guidelines and Voting Record Sentinel Funds portfolio proxy voting guidelines, and information on how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30th, are available without charge on-line at www.sentinelfunds.com and at www.sec.gov, or by calling 1-800-282-FUND (3863). Availability of Quarterly Schedule of Investments Each Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds' Forms N-Q are available on the SEC's website at www.sec.gov and maybe reviewed and copied at the SEC's Public Reference Room in Washington, D.C. (Call 1-800-SEC-0330 for more information.) How to contact Sentinel By telephone. Getting in touch with Sentinel Administrative Services, Inc. ("Sentinel") is as easy as making a telephone call, or going on the internet. You can contact Sentinel 24 hours a day by calling 1-800-282-FUND (3863). During normal Eastern Time business hours you may choose to speak with an Investor services representative, or access OnCall 24, Sentinel's account interaction service. The OnCall 24 menu provides quick, easy voice response or telephone keypad access to a broad selection of Sentinel's most important information and services anytime of the day or night. Over the internet. If you prefer, you may access Sentinel service and account information on the internet at www.sentinelfunds.com. You'll find complete information about Sentinel products, services, performance and prices. By mail. Please be sure to include your name, address, account number and all other pertinent information. Mail your inquiry to the Sentinel Funds at these addresses: Postal Deliveries: Express Deliveries: ------------------ ------------------- Sentinel Funds Sentinel Funds P.O. Box 1499 One National Life Drive Montpelier, VT 05601-1499 Montpelier, VT 05601 How to invest To open a new account. Complete the application in the prospectus which also contains additional information about the Funds. To add shares. You may add shares to the same fund you own by sending a check payable to the Sentinel Funds directly to Sentinel. To invest automatically. Sentinel offers a number of ways to invest automatically. To transfer money periodically from your checking or savings account into any Sentinel Fund: . Decide how much you would like to transfer. You may open an Automatic Investment Plan account with as little as $50 as long as you reach a minimum balance of $1,000 within two years. (Sentinel Conservative Allocation Fund Automatic Investment Plan minimums: $100. Special requirements apply to S Shares of Sentinel Short Maturity Government Fund. See the prospectus.) . Decide the frequency of your investment . Shares will be purchased on or about the 5th of the month unless otherwise specified. You will receive a confirmation of your automated transactions quarterly by mail. . You can also choose to have the amount of your Automatic Investment Plan investments increase by any percentage or dollar amount you specify. Increases can occur annually, semiannually, quarterly or monthly. Changes to the Plan may be made over the phone. There is no charge for these services. To dollar cost average. When you transfer the same dollar amount through the Automatic Investment Plan on a regular basis, you "dollar cost average." This means you buy more shares when prices are low and fewer when prices are high. Assuming you continue the program over time, this can reduce your average cost per share. Dollar cost averaging does not guarantee a profit or protect against loss in a constantly declining market. If the strategy is discontinued when the value of shares is less than their cost, a loss may be incurred. That's why you should consider your ability to continue such a program through periods of declining markets. To establish a dollar cost averaging plan: . Complete the Electronic Funds Transfer section of the Application and select your frequency of investment. . Allow at least one month for your first transfer to be made. To invest by telephone. The Telephone Investment Service enables you to move money directly from your bank account to a Sentinel fund of your choice, automatically and at no charge. To have access to the Telephone Investment Service: . Complete the Telephone Investment Service section of the Application. . You may use the Telephone Investment Service to transfer any amount from $50 to $50,000. Just call Sentinel. To invest on the internet. To invest with Sentinel over the internet, simply access your account on our website at www.sentinelfunds.com and follow the easy instructions you'll find there. The Government Direct Deposit Privilege. The Government Direct Deposit Privilege enables you to purchase Fund shares automatically via direct deposit of your federal salary, Social Security or certain veterans, military or other payments from the federal government. You may choose to deposit any amount from these payments (minimum of $50.00). To enroll you must complete and return a Direct Deposit Sign-Up Form to Sentinel for each type of payment to be deposited. Contact Sentinel or the appropriate federal agency for forms. Note that death or legal incapacity will terminate 65 participation, and that should you wish to terminate participation you'll need to provide written notification to the appropriate federal agency. Payroll Savings Plan. The Payroll Savings Plan enables you to purchase Fund shares automatically on a regular basis (minimum of $50.00 per transaction). Depending upon your employer's direct deposit program, you may have part or all of your paycheck invested in your existing Sentinel account electronically through the Automated Clearing House system each pay period. To begin you'll need to file an authorization form, available from Sentinel, with your employer's payroll department. Note that you may change amounts or cancel the Plan only by written notification to your employer. How to exchange shares among Sentinel Funds To make a telephone exchange. Call Sentinel before the close of business on any day the New York Stock Exchange is open, to receive the net asset value (share price with no sales charge) at the close of that business day. . There is no charge for telephone exchanges. The minimum transaction is $1,000 unless exchanging to a Fund you already own. . No sales charge applies, except when new shares are exchanged from the U.S. Treasury Money Market Fund to another Sentinel Fund. . New assets must remain in an account for a minimum of 15 or 30 days before they can be exchanged to another fund. Refer to the Prospectus for short term trading restrictions. . Accounts must be identically registered. To exchange on the internet. To exchange shares over the internet, simply access your account on our website at www.sentinelfunds.com and follow the easy instructions you'll find there. Note that all transaction requests made after the close of business on any day the New York Stock Exchange is open will reflect prices at the close of the next business day. To make a mail exchange. Explain the exchange you would like to make in writing and mail it to Sentinel. The exchange will take place on the day your request is received in good order. To make Systematic Exchanges. You may ask to have shares liquidated in one Sentinel Fund and purchased in one or more other Sentinel Funds automatically every month. There is no charge for this service, and accounts need not be identically registered. How to make changes Registration. Call Sentinel for instructions. Address. Call Sentinel - or complete the address change section on the back of your account statement and return in the post paid return envelope. You may also change your address over the internet at www.sentinelfunds.com. The Reinstatement Privilege. If you redeem shares, or receive a dividend or capital gain distribution in cash and later want to reinvest that same amount, you may do so within 90 days at no sales charge. How to redeem shares By telephone. Call Sentinel before the close of business on any day the New York Stock Exchange is open to redeem shares at that day's closing net asset value. To redeem on the internet. To redeem shares over the internet, simply access your account on our website at www.sentinelfunds.com and follow the easy instructions you'll find there. Note that all transaction requests made in good order after the close of business on any day the New York Stock Exchange is open will reflect prices at the close of the next business day. By Systematic Withdrawal Plan. A Systematic Withdrawal Plan (SWP) allows you to specify an amount or a percentage to be mailed to you regularly or deposited directly to your bank account. Accounts must have a minimum balance of $5,000 to qualify (except in Sentinel U.S. Treasury Money Market Fund). . Note that to provide this income, the fund sells shares. If the amount of the Systematic Withdrawal Plan exceeds the fund's growth rate, withdrawals may deplete principal. Redemptions may reduce or even eventually exhaust your account. . For retirement accounts for which Sentinel is agent for the custodian, Systematic Withdrawal Plans based on a life expectancy or fixed percentage are available. By free check writing. Available on Class A shares of the Sentinel Government Securities, Sentinel High Yield Bond, Sentinel Short Maturity Government and Sentinel U.S. Treasury Money Market Funds only. . The minimum amount per check is $500 ($250 for the U.S. Treasury Money Market Fund). Shares are redeemed to cover the amount of the check on the day the check is presented for payment. . There is no maximum number of checks per month. . Note that check writing is not available on retirement plan accounts. Other services, features and information Class I Shares. Class I Shares are only available to eligible investors. In addition, not all of the account and investment options described here are available for Class I Shares. Refer to the prospectus or call Sentinel for more information about Class I Shares. Automatic reinvestment. Dividends and/or capital gains may be automatically reinvested at net asset value (share price with no sales charge) in additional shares of the same fund or in the same class of another Sentinel Fund. Distributions. You may receive distributions in cash (check), or have them deposited directly to your bank account. 66 Information and Services for Shareholders (continued) Retirement accounts. Most Sentinel funds may be used as investment vehicles for your tax-deferred retirement plan. For an application and custodial agreement, call your financial advisor or Sentinel. Sentinel as agent provides for the following types of accounts invested in the Sentinel Funds: . Individual Retirement Accounts (IRAs) . SIMPLE IRAs. 403(b)(7) Plans . Roth IRAs . Roth Conversion IRAs . Coverdell ESA . SEP IRAs Confirmations. Every time a transaction takes place in your account, you will receive a confirmation of activity. Automated transactions are confirmed quarterly. Portfolio Statements. The Portfolio Statement consolidates all accounts with the same Tax Identification Number (TIN) and ZIP code. Other shareholder accounts may be added upon request. . You will receive your Portfolio Statement quarterly . You will receive a statement in January which summarizes all account activity for the prior year. Average cost basis statements. Average cost basis statements are available for certain types of accounts. Call Sentinel for information. Calculating the value of your account. Your Portfolio Statement shows the value of your account. You may also find your account balance by multiplying your fund's net asset value (NAV) by the number of shares you own. Your Fund's NAV will be found under the Mutual Fund heading in the Financial section of most major daily newspapers. If you prefer, you can also call Sentinel for your account balance information. Get electronic delivery of Fund documents with e-Delivery. Choosing e-Delivery will enable you to receive fund documents electronically via email - and help reduce the paper usage, printing and postage costs which contribute to overall Fund expenses. You will also receive your Sentinel Fund documents earlier than you would by mail. You will be notified by email when the items you've selected for e-Delivery are available. To enroll, log onto www.sentinelfunds.com, go to "Shareholder Center," and follow the prompts. Or, call Sentinel at 1-800-282-3863. Would you like to send a confidential comment to the Sentinel Funds Chief Compliance Officer? Go to www.sentinelfunds.com, choose the "Contact Sentinel" tab near the top of the page, then the "Submit a confidential comment to Sentinel's Chief Compliance Officer" link in the left-hand column of the page, and follow the prompts. 67 Proxy Voting Results Special Meeting of Shareholders - March 16, 2007 Sentinel Capital Opportunity Fund, a series of Sentinel Group Funds, Inc. Proposal #1: To approve the reorganization of the Capital Opportunity Fund in accordance with the Plan of Reorganization and transactions it contemplates as described in the Proxy Statement/Prospectus. For Against Abstain - ------------------- ------------------- ------------------- 2,338,364 47,722 77,917 68 Directors The same 10 persons serve as Directors of Sentinel Group Funds, Inc. Their names and other information about the eight independent Directors are set forth below.
Position and Length of Time Principal Occupation(s) Name, Address, Age Served* During Past Five Years Public Directorships - ------------------ --------------------------- --------------------------------------------- ----------------------- John D. Feerick (70) Director, since 1984 Fordham University School of Law - Wyeth (a 140 West 62nd Street Professor of Law, since 1982; Dean, from pharmaceutical New York, New York 10023 1982 to 2002; NYS Ethic's Commission, since company) - Director, 2007; NYS Commission on Judicial Elections, since 1987; Group since 2003; Special Master of Family Health Incorporated - Homelessness in NYC - from 2003 to 2005; Director, since 1999 Judicial Referee on School Funding - 2004 Keniston P. Merrill (70) Director, since 1987; Retired - Formerly Advisor Chair and Chief Mary Hitchcock National Life Drive Chair, 1990-1997 Executive Officer Memorial Hospital - Montpelier, Vermont 05604 Trustee, 1995 - 2005; Dartmouth Hitchcock Alliance - Trustee, 1995-2005 Deborah G. Miller (57) Director, since 1995 Ascendent Systems (a voice and messaging Libby Glass - National Life Drive systems company) - Chief Executive Officer, Director, since 2003; Montpelier, Vermont 05604 since 2005; Enterprise Catalyst Group (a Wittenberg University management consulting firm ) - Chief - Director since 1998 Executive Officer, since 2003; iCEO LLC (an employment agency) - Chief Executive Officer 2000 to 2003 John Raisian, Ph.D. (57) Director, since 1996 Hoover Institution at Stanford University - None Hoover Institution Economist, since 1986 Stanford University Serra and Galvez Streets Stanford, CA 94305-6010 Nancy L. Rose (48) Director, since 2003 Massachusetts Institute of Technology - CRA International, National Life Drive Professor of Economics, since 1985; National Inc. (a consulting Montpelier, VT 05604 Bureau of Economic Research - Director of firm) - Director, since Industrial Organization Research Program, 2004 since 1990 Richard H. Showalter (59) Director, since 2003; Dartmouth-Hitchcock Alliance and Mary None National Life Drive Montpelier, Lead Independent Hitchcock Memorial Hospital - Senior Vice VT 05604 Director since 2005 President and Chief Financial Officer, since 1985; Dartmouth- Hitchcock Clinic - Senior Vice President and Chief Financial Officer, since 1999; Dartmouth-Hitchcock Medical Center - Treasurer, since 1995 Susan M. Sterne (61) Director, since 1990; Economic Analysis Associates, Inc. - None 5 Glen Court Audit, Compliance & President, since 1979 Greenwich, CT 06830 Pricing Committee Chair, since 2007 Angela E. Vallot (50) Director, since 1996; Vallot Consultants - President, since 2004; None 370 Riverside Drive Governance, Contracts Colgate-Palmolive Company (a consumer Apt. 15E & Nominating Chair, products company ) - Vice President - 2001 to New York, NY 10025 since 2004 2003; Texaco, Inc. (an integrated energy company ) - Director of Diversity, 1997 to 2001
- -------- * Each Director serves until his or her successor is elected and qualified, until the March meeting of the Board after the Director attains age 72, or until his or her death, resignation, or removal as provided in the Funds' bylaws, charters or by statute. 69 Directors and Officers The names of and other information relating to the two Directors who are officers and "interested persons" of the Funds as defined in the 1940 Act and to the other officers of the Funds is set forth below.
Position and Length of Principal Occupation(s) Name, Address, Age Time Served* During Past Five Years Public Directorships - ------------------ ---------------------- ----------------------------------------------- -------------------- Thomas H. MacLeay (57) Chair and Director, National Life Holding Company (a mutual Sentinel Variable National Life Drive since 2003; Chief insurance holding company) and National Life Products Trust (6) Montpelier, VT 05604 Executive Officer Insurance Company ("National Life") - 2003-2005 Chairman of the Board, President and Chief Executive Officer, since 2002; President and Chief Operating Officer, 1996 to 2001; Sentinel Variable Products Trust - Chairman, since 2004; Chief Executive Officer, 2004 to 2005. Christian W. Thwaites (49) President, Chief Advisor - President & Chief Executive None National Life Drive Executive Officer and Officer, since 2005; National Life - Executive Montpelier, VT 05604 Director since 2005 Vice President, since 2005; Sentinel Variable Products Trust - President and Chief Executive Officer, since 2005; Sentinel Financial Services Company ("SFSC") - Chief Executive Officer since 2005, President 2005 to 2006; Sentinel Administrative Services, Inc. ("SASI") - President & Chief Executive Officer since 2005; Sentinel Advisors Company ("SAC") and Sentinel Administrative Services Company ("SASC") - President & Chief Executive Officer 2005 to 2006; Skandia Global Funds - Chief Executive Officer, 1996 to 2004 Thomas P. Malone (51) Vice President and SASI- Vice President, since 2006; Sentinel N/A National Life Drive Treasurer, since 1997 Variable Products Trust - Vice President and Montpelier, VT 05604 Treasurer, since 2000; SASC - Vice President 1998 to 2006 John K. Landy (48) Vice President, since SASI - Senior Vice President, since 2006; N/A National Life Drive 2002 Sentinel Variable Products Trust - Vice Montpelier, Vermont President, since 2004; SASC - Senior Vice 05604 President 2004 to 2006; Vice President, 1997 to 2004 Scott G. Wheeler (42) Assistant Vice SASI - Vice President, since 2007; Assistant N/A National Life Drive President and Vice President, 2006 to 2007; Sentinel Montpelier, Vermont Assistant Treasurer, Variable Products Trust - Assistant Vice 05604 since 1998 President and Assistant Treasurer, since 2004; SASC - Assistant Vice President 1998 to 2006 Kerry A. Jung (34) Secretary, since 2005 National Life - Senior Counsel, since 2005; N/A National Life Drive Sentinel Variable Products Trust - Secretary, Montpelier, VT 05604 since 2005; Advisor - Counsel, since 2005; SASI - Counsel, since 2006; Equity Services, Inc. ("ESI") - Counsel, Investment Advisory Services, since 2007; ESI and SFSC - Counsel 2005 to 2007; SASC - Counsel, 2005 to 2006; Strong Financial Corporation - Managing Counsel, 2004 to 2005; Associate Counsel, 2000 to 2004 D. Russell Morgan (51) Chief Compliance Advisor; National Variable Annuity Account N/A National Life Drive Officer, since 2004; II; National Variable Life Insurance Account - Montpelier, Vermont Secretary, 1988-2005 Chief Compliance Officer, since 2004; 05604 Sentinel Variable Products Trust - Chief Compliance Officer, since 2004; Secretary, 2000 to 2005; National Life - Assistant General Counsel, 2001 to 2005; Senior Counsel, 2000 to 2001; ESI - Counsel, 1986 to 2005; Advisor, SFSC, SASC - Counsel, 1993 to 2005
- -------- * Each Director serves until his or her successor is elected and qualified, until the March meeting of the Board after the Director attains age 72, or until his or her death, resignation, or removal as provided in the Funds' bylaws, charters or by statute. Each Officer is elected by, and serves at the pleasure of, the Board of the Funds. The statement of additional information contains additional information about Fund Directors and Officers and is available without charge upon request, by calling (800) 233-4332. 70 Investment Adviser Custodian and Dividend Paying Agent Sentinel Asset Management, Inc State Street Bank & Trust Company - Kansas City Principal Underwriter Sentinel Financial Services Company Counsel Transfer Agent, Shareholder Sidley Austin LLP Servicing Agent and Administrator Sentinel Administrative Services, Inc Independent Registered Public Accounting Firm PriceWaterhouseCoopers LLP The financial information included herein is taken from the records of the Funds without examination by an independent registered public accounting firm, who did not express an opinion hereon. 71 [Graphic Appears Here] Sentinel Funds Independent thinking Since 1934 Sentinel Balanced Fund Sentinel Capital Growth Fund Sentinel Common Stock Fund Sentinel Conservative Allocation Fund Sentinel Government Securities Fund Sentinel Growth Leaders Fund Sentinel High Yield Bond Fund Sentinel International Equity Fund Sentinel Mid Cap Growth Fund Sentinel Short Maturity Government Fund Sentinel Small Company Fund Sentinel U.S. Treasury Money Market Fund Distributed by Sentinel Financial Services Company One National Life Drive Montpelier, Vermont 05604 (800) 233-4332 www.sentinelfunds.com This brochure is authorized for distribution to prospective investors only when preceded or accompanied by an effective prospectus. ITEM 2. CODE OF ETHICS Not applicable to this semi-annual report. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT Not applicable to this semi-annual report. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES Not applicable to this semi-annual report. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS The complete schedule of investments is included in Item 1 of this Form N-CSR. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. ITEM 11. CONTROLS AND PROCEDURES The Registrant's principal executive officer and principal financial officer have evaluated the Registrant's disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the Registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. There were no changes in the Registrant's internal controls over financial reporting that occurred during the Registrant's most recently completed fiscal half-year covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant's internal control over financial reporting. ITEM 12. EXHIBITS (a)(1) Not applicable. (a)(2) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are attached hereto as an exhibit. (a)(3) Not applicable. (b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are furnished herewith as an exhibit. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Sentinel Group Funds, Inc. By: /s/ Christian W. Thwaites --------------------------------- Christian W. Thwaites, President & Chief Executive Officer Date: July 31, 2007 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By: /s/ Thomas P. Malone -------------------------- Thomas P. Malone, Vice President & Treasurer Date: July 31, 2007 EX-99.(CERT) 2 dex99cert.txt CERTIFICATION PURSANT TO SECTION 302 CERTIFICATIONS PURSANT TO SECTION 302 CERTIFICATION I, Christian W. Thwaites, President and Chief Executive Officer of Sentinel Group Funds, Inc. (the "registrant"), certify that: 1. I have reviewed this report on Form N-CSR of the registrant; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and changes in net assets, of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within the registrant, particularly during the period in which this report is being prepared; (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the Audit Committee of the registrant's Board of Directors: (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 31, 2007 By: /s/ Christian W. Thwaites ----------------------------- Christian W. Thwaites President and Chief Executive Officer CERTIFICATION I, Thomas P. Malone, Vice President and Treasurer of Sentinel Group Funds, Inc. (the "registrant"), certify that: 1. I have reviewed this report on Form N-CSR of the registrant; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and changes in net assets, of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within the registrant, particularly during the period in which this report is being prepared; (b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recently completed fiscal quarter has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the Audit Committee of the registrant's Board of Directors: (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 31, 2007 By: /s/ Thomas P. Malone ----------------------------- Thomas P. Malone Vice President and Treasurer CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Name of Issuer: SENTINEL GROUP FUNDS, INC. In connection with the Report on Form N-CSR of the above-named issuer that is accompanied by this certification, the undersigned hereby certifies, to his knowledge, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all materials respects, the financial condition and results of operations of the issuer. Date: July 31, 2007 /s/ Christian W. Thwaites ------------------------------------- Christian W. Thwaites President and Chief Executive Officer EX-99.(906CT) 3 dex99906ct.txt CERTIFICATION PURSUANT TO SECTION 906 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 Name of Issuer: SENTINEL GROUP FUNDS, INC. In connection with the Report on Form N-CSR of the above-named issuer that is accompanied by this certification, the undersigned hereby certifies, to his knowledge, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all materials respects, the financial condition and results of operations of the issuer. Date: July 31, 2007 /s/ Thomas P. Malone ----------------------------- Thomas P. Malone Vice President and Treasurer -----END PRIVACY-ENHANCED MESSAGE-----