-----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, BHCtG81H0ISLpfeiJKZHpLnp8jcLokktt+yyzWFD7aSC6/1lfdylUqM0bfxusYrW D+Y0ujPSCN8tMK14T6xzjg== 0000950124-01-504383.txt : 20020413 0000950124-01-504383.hdr.sgml : 20020413 ACCESSION NUMBER: 0000950124-01-504383 CONFORMED SUBMISSION TYPE: N-14/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20011219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARTFORD MUTUAL FUNDS INC/CT CENTRAL INDEX KEY: 0001006415 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-14/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-73146 FILM NUMBER: 1817599 BUSINESS ADDRESS: STREET 1: ITT HARTFORD GROUP NC P O BOX 2999 CITY: HARTFORD STATE: CT ZIP: 06115 BUSINESS PHONE: 8008626668 MAIL ADDRESS: STREET 1: P O BOX 2999 CITY: HARTFORD STATE: CT ZIP: 06104-2999 FORMER COMPANY: FORMER CONFORMED NAME: HARTFORD MUTUAL FUNDS INC DATE OF NAME CHANGE: 19960126 FORMER COMPANY: FORMER CONFORMED NAME: ITT HARTFORD MUTUAL FUNDS INC DATE OF NAME CHANGE: 19960226 N-14/A 1 c65873a2n-14a.txt FORM N-14/A As filed with the Securities and Exchange Commission on December 19, 2001 Registration No. 333-73146 ================================================================================ U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-14 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X] Pre-Effective Amendment No. 2 [ ] Post-Effective Amendment No. _____ (Check appropriate box or boxes) - -------------------------------------------------------------------------------- Exact name of Registrant as Specified in Charter: THE HARTFORD MUTUAL FUNDS, INC. Address of Principal Executive Offices: P.O. Box 2999 Hartford, Connecticut 06104-2999 Registrant's Telephone Number: (860) 297-6443 Name and Address of Agent for Service: Copy to: Kevin J. Carr, Esq. Kathleen L. Prudhomme, Esq. Investment Law Unit Dorsey & Whitney LLP The Hartford Financial Services Group, Inc. Suite 1500 55 Farmington Avenue 50 South Sixth Street Hartford, Connecticut 06105 Minneapolis, Minnesota 55402 Approximate Date of Proposed Public Offering: As soon as possible following the effective date of this Registration Statement. - -------------------------------------------------------------------------------- The title of the securities being registered is shares of common stock. No filing fee is required because an indefinite number of shares of the Registrant have previously been registered on Form N-1A (Registration Nos. 333-02381, 811-07589) pursuant to Rule 24f-2 under the Investment Company Act of 1940. The Registrant's Rule 24f-2 Notice for the fiscal year ended October 31, 2000 was filed on January 9, 2001. Pursuant to Rule 429 under the Securities Act of 1933, this Registration Statement relates to the shares previously registered on the aforesaid Registration Statement on Form N-1A. The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. This Registration Statement shall hereafter become effective in accordance with the provisions of Section 8(a) of the Securities Act of 1933. ================================================================================ THE FORTIS FUNDS FORTIS ASSET ALLOCATION PORTFOLIO FORTIS GLOBAL GROWTH PORTFOLIO FORTIS GROWTH & INCOME FUND FORTIS HIGH YIELD PORTFOLIO FORTIS INTERNATIONAL EQUITY PORTFOLIO FORTIS MONEY FUND (EACH A SERIES OF HARTFORD-FORTIS SERIES FUND, INC.) 500 BIELENBERG DRIVE WOODBURY, MINNESOTA 55125 MAILING ADDRESS: P.O. BOX 64284 ST. PAUL, MINNESOTA 55164 Dear Shareholder: The Board of Directors of the mutual funds listed above (each, a "Fortis Fund") is pleased to submit for your vote a proposal to reorganize each Fortis Fund into a comparable mutual fund in the Hartford fund family (each, a "Hartford Fund"). As you know, The Hartford Life and Accident Insurance Company ("Hartford Life"), an indirect wholly owned subsidiary of The Hartford Financial Services Group, Inc. ("The Hartford") acquired Fortis Advisers, Inc. and Fortis Investors, Inc., the former investment adviser and distributor of the Fortis Funds, on April 2, 2001 (the "Acquisition"). Since that time, Hartford Investment Financial Services, LLC ("HIFSCO") has been serving as investment adviser and either Hartford Investment Management Company ("HIMCO") or Wellington Management Company LLP ("Wellington Management") has been serving as sub-adviser to your Fortis Fund. HIFSCO and either HIMCO or Wellington Management also act as adviser and sub-adviser to the funds in the Hartford fund family. OUR GOAL IS TO CONSOLIDATE SIMILAR FUNDS IN THE FORTIS AND HARTFORD FUND FAMILIES INTO A SINGLE, BROADLY DIVERSIFIED FAMILY OF MUTUAL FUNDS. Those funds in the Fortis fund family that are not being reorganized will be re-named and added to the Hartford fund family. THE BOARD OF DIRECTORS BELIEVES THAT THE TRANSACTION IS IN THE BEST INTERESTS OF EACH FORTIS FUND AND ITS SHAREHOLDERS AND UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR ITS APPROVAL. The Board considered various factors in reviewing the proposed reorganization on behalf of Fortis Fund shareholders, including, but not limited to, the following: - The Board considered the fact that the Hartford Funds have investment objectives that are substantially similar and investment policies that are substantially identical to those of corresponding Fortis Funds. Since the Acquisition, corresponding Hartford and Fortis Funds have been managed by the same portfolios managers, using the same investment policies and strategies. - Because the combination will result in each reorganized Fund having a larger asset base, and because the reorganized Funds will have access to The Hartford's large distribution network which may generate additional assets, the Board believes the reorganization may provide shareholders the benefit of economies of scale. - Hartford Life or the applicable Hartford Funds will bear the customary expenses associated with the reorganization. - The combination should allow you to benefit from The Hartford's larger family of retail mutual funds, which will provide you with substantially enhanced exchange privileges. - The reorganization is expected to be tax-free; it is anticipated you will pay no federal income tax as a result of the reorganization. - The Board considered that the expense ratios after voluntary fee waivers of the Hartford Funds are within industry norms and are comparable to or slightly lower than those of the corresponding Fortis Funds in three out of six cases when comparing Class A shares. The Board determined that, in cases where Hartford Fund expenses are higher, the expected benefits of the reorganization to Fortis Fund shareholders counterbalance the increased expenses. If the proposal is approved, each Hartford Fund will acquire all of the assets of a Fortis Fund that has substantially similar investment objectives, and substantially identical investment policies and strategies, and Hartford Fund shares of the same or a similar class will be distributed pro rata to you in complete liquidation of the Fortis Fund. In order to exchange your Fortis Fund shares for Hartford Fund shares, the Board of Directors of the Fortis Funds submits for your approval an Agreement and Plan of Reorganization ("Plan") that relates to your Fortis Fund. Your vote on the transaction is critical to its success. Representatives of Hartford Administrative Services Company, Hartford Life, or a proxy solicitation firm, Georgeson Shareholder, may be contacting you to urge you to vote on this important matter. The reorganization of your Fortis Fund will occur only if approved by a majority of the votes cast in person or by proxy at the meeting. Whether or not you plan to attend the meeting, please vote your shares by toll-free telephone call, by the Internet or by mail. IF YOU ARE A SHAREHOLDER OF MORE THAN ONE FORTIS FUND INVOLVED IN THE PROPOSED REORGANIZATIONS, YOU HAVE RECEIVED MORE THAN ONE PROXY CARD WITH THIS MAILING AND WILL NEED TO VOTE YOUR SHARES OF EACH FUND. Following this letter is a Q&A summarizing the reorganization and information on how you vote your shares. Please read the entire prospectus/proxy statement carefully before you vote. Thank you for your prompt attention and participation. Sincerely, /s/ DAVID M. ZNAMIEROWSKI -------------------------------------- David M. Znamierowski President THE FORTIS FUNDS/THE HARTFORD FUNDS PROXY Q&A THE FOLLOWING IS IMPORTANT INFORMATION TO HELP YOU UNDERSTAND THE PROPOSAL ON WHICH YOU ARE BEING ASKED TO VOTE. PLEASE READ THE ENTIRE PROXY STATEMENT. WHY IS THIS REORGANIZATION BEING PROPOSED? Since the acquisition of Fortis Advisers and Fortis Investors by Hartford Life, HIFSCO has acted as the investment adviser to both the Fortis fund family and the Hartford fund family. Our goal in proposing the reorganization is to consolidate similar funds in the two fund families, creating a single, broadly diversified family of mutual funds. Your Board of Directors has determined that the reorganization is in the best interests of Fortis Fund shareholders and recommends that you vote FOR the reorganization. Benefits to Fortis Fund shareholders will include: - The potential for each reorganized fund, as a result of having a larger asset base, to benefit from economies of scale. - The opportunity to become part of a growing and competitive fund family and to benefit from The Hartford's larger family of retail mutual funds, which will provide you with substantially enhanced exchange privileges, and its large distribution network. - As explained below, the reorganization is expected to be tax free to Fortis Fund shareholders. WHEN WILL THIS REORGANIZATION BECOME EFFECTIVE? If shareholder approval is obtained, the reorganization is scheduled to be effective on or about February 19, 2002. CAN I MAKE ADDITIONAL INVESTMENTS IN MY FORTIS FUND BEFORE THE REORGANIZATION? Yes. You can continue to make investments until the effective date of the reorganization. IS THERE ANYTHING I NEED TO DO TO CONVERT MY SHARES? No. Upon shareholder approval of the reorganization, your Fortis Fund shares automatically will be exchanged for shares of the same or a similar class in the corresponding Hartford Fund. The total value of the Hartford Fund shares that you receive will be the same as the total value of the Fortis Fund shares that you hold immediately before the reorganization. WILL I INCUR TAXES AS A RESULT OF THIS REORGANIZATION? This reorganization is expected to be a tax-free event. Generally, shareholders will not incur capital gains or losses on the conversion from Fortis Fund shares into Hartford Fund shares as a result of this reorganization. Furthermore, the cost basis on each investment will remain the same. Shareholders will incur capital gains or losses if they sell their Fortis Fund shares before the reorganization becomes effective or sell/exchange their Hartford Fund shares after the reorganization becomes effective. Shareholders will also be responsible for tax obligations associated with monthly or periodic distributions that occur prior to the reorganization. The Fortis Funds will be required to distribute any realized capital gains to shareholders prior to the reorganization, and these distributions generally will be taxable to shareholders. Please note that retirement accounts are exempt from the foregoing tax consequences. WHEN SHOULD I VOTE? Please vote as soon as possible, by mail, by telephone or by the Internet. Representatives of Hartford Administrative Services Company, Hartford Life, or a proxy solicitation firm, Georgeson Shareholder, may be contacting you to urge you to vote on this important matter. WHO IS PAYING THE COST OF THE SHAREHOLDER MEETING AND OF THIS PROXY SOLICITATION? Hartford Life or the applicable Hartford Fund is paying the customary expenses associated with the reorganization. THE FORTIS FUNDS FORTIS ASSET ALLOCATION PORTFOLIO FORTIS GLOBAL GROWTH PORTFOLIO FORTIS GROWTH & INCOME FUND FORTIS HIGH YIELD PORTFOLIO FORTIS INTERNATIONAL EQUITY PORTFOLIO FORTIS MONEY FUND (EACH A SERIES OF HARTFORD-FORTIS SERIES FUND, INC.) 500 BIELENBERG DRIVE WOODBURY, MINNESOTA 55125 MAILING ADDRESS: P.O. BOX 64284 ST. PAUL, MINNESOTA 55164 NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS A Special Meeting of Shareholders of each of the Fortis Funds listed above (each a "Fortis Fund") will be held on January 31, 2002, at 10:00 a.m., Central Time at 500 Bielenberg Drive, Woodbury, Minnesota 55125 , for the following purposes: 1. TO APPROVE A PROPOSED AGREEMENT AND PLAN OF REORGANIZATION ("PLAN") BETWEEN HARTFORD-FORTIS SERIES FUND, INC. AND THE HARTFORD MUTUAL FUNDS, INC. WHEREBY ALL OF THE ASSETS OF EACH FORTIS FUND WOULD BE ACQUIRED BY A COMPARABLE MUTUAL FUND IN THE HARTFORD FUND FAMILY (EACH A "HARTFORD FUND") IN EXCHANGE FOR THE HARTFORD FUND'S SHARES, TO BE DISTRIBUTED PRO RATA BY THE FORTIS FUND TO THE HOLDERS OF ITS SHARES, IN COMPLETE LIQUIDATION OF THE FORTIS FUND. 2. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF. Dated: December , 2001 By Order of the Board of Directors, /s/ MICHAEL J. RADMER -------------------------------------- Michael J. Radmer Secretary Shareholders of record at the close of business on December 11, 2001 are entitled to vote at the meeting. Whether or not you plan to attend the meeting, please vote your shares by returning the proxy card by mail, or by voting by telephone or the internet. Your vote is important. TO SECURE THE LARGEST POSSIBLE REPRESENTATION AND TO SAVE THE EXPENSE OF FURTHER MAILINGS, PLEASE MARK YOUR PROXY CARD, SIGN IT, AND RETURN IT IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES. YOU MAY ALSO VOTE BY TELEPHONE OR THE INTERNET. YOU MAY REVOKE YOUR PROXY AT ANY TIME AT OR BEFORE THE MEETING OR VOTE IN PERSON IF YOU ATTEND THE MEETING. THE HARTFORD ADVISERS FUND THE HARTFORD GLOBAL LEADERS FUND THE HARTFORD GROWTH AND INCOME FUND THE HARTFORD HIGH YIELD FUND THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND THE HARTFORD MONEY MARKET FUND (EACH A SERIES OF THE HARTFORD MUTUAL FUNDS, INC.) 500 BIELENBERG DRIVE WOODBURY, MINNESOTA 55125 1-888-843-7824 TO ACQUIRE THE ASSETS OF: FORTIS ASSET ALLOCATION PORTFOLIO FORTIS GLOBAL GROWTH PORTFOLIO FORTIS GROWTH & INCOME FUND FORTIS HIGH YIELD PORTFOLIO FORTIS INTERNATIONAL EQUITY PORTFOLIO FORTIS MONEY FUND (EACH A SERIES OF HARTFORD-FORTIS SERIES FUND, INC.) 500 BIELENBERG DRIVE WOODBURY, MINNESOTA 55125 1-800-800-2000, EXTENSION 3012 PROSPECTUS/PROXY STATEMENT DECEMBER , 2001 This Prospectus/Proxy Statement describes a proposed Agreement and Plan of Reorganization (the "Plan") pursuant to which you would receive shares of a mutual fund in the Hartford family of funds (each a "Hartford Fund") in exchange for the shares of the Fund you currently own (each a "Fortis Fund"). Each Hartford Fund and each Fortis Fund is a diversified portfolio of securities of an open-end management investment company. If the Plan is approved with respect to your Fortis Fund, a Hartford Fund with substantially similar investment objectives and substantially identical investment policies and strategies would acquire all of the assets of your Fortis Fund, and Hartford Fund shares would be distributed pro rata by the Fortis Fund to the holders of its shares, in complete liquidation of the Fortis Fund. As a result of the Plan, each Fortis Fund shareholder would become the owner of Hartford Fund shares of the same or a similar class and having a total net asset value equal to the total net asset value of such shareholder's holdings in the Fortis Fund. For the name of the Hartford Fund into which your Fortis Fund would be reorganized, see "Summary -- About the Proposed Reorganization." For a comparison of the investment objectives of the Fortis Funds and the Hartford Funds and a summary of their investment policies and strategies, see "Summary -- Comparison of Investment Objectives, Policies, Strategies and Principal Risks of the Fortis Funds and Hartford Funds." THE BOARD OF DIRECTORS OF THE FORTIS FUNDS UNANIMOUSLY RECOMMENDS APPROVAL OF THE PLAN. You should retain this Prospectus/Proxy Statement for future reference. It sets forth concisely the information about each Hartford Fund that a prospective investor should know before investing. This Prospectus/Proxy Statement is accompanied by the Prospectus of the Hartford Fund into which your Fortis Fund would be reorganized, which is incorporated herein by reference. Statements of Additional Information for each Hartford Fund (one relating to the Hartford Fund's Prospectus and a second one relating to this Prospectus/Proxy Statement), all containing additional information, have been filed with the Securities and Exchange Commission and are incorporated herein by reference. Copies of the Statements of Additional Information may be obtained without charge by writing or calling the Hartford Funds at the address and telephone number shown above. This Prospectus/Proxy Statement was first mailed to shareholders the week of December , 2001. THE SHARES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT ARE NOT DEPOSITS OR OBLIGATIONS OF ANY BANK, ARE NOT ENDORSED OR GUARANTEED BY ANY BANK, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER GOVERNMENT AGENCY. INVESTMENT IN THESE SHARES INVOLVES INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES, OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. TABLE OF CONTENTS
PAGE ---- SUMMARY..................................................... 1 About the Proposed Reorganization......................... 1 Comparative Fee Tables.................................... 2 COMPARISON OF INVESTMENT OBJECTIVES, POLICIES, STRATEGIES AND PRINCIPAL RISKS OF THE FORTIS FUNDS AND HARTFORD FUNDS..................................................... 13 Fortis Asset Allocation Portfolio / The Hartford Advisers Fund................................................... 13 Fortis Global Growth Portfolio / The Hartford Global Leaders Fund........................................... 14 Fortis Growth & Income Fund / The Hartford Growth and Income Fund............................................ 15 Fortis High Yield Portfolio / The Hartford High Yield Fund................................................... 16 Fortis International Equity Portfolio / The Hartford International Opportunities Fund....................... 17 Fortis Money Fund / The Hartford Money Market Fund........ 17 COMPARISON OF POTENTIAL RISKS AND REWARDS: PERFORMANCE INFORMATION............................................... 19 Risk/Return Bar Charts.................................... 19 Average Annual Total Return Tables........................ 26 COMPARISON OF OPERATIONS.................................... 30 Investment Advisory Agreements............................ 30 Other Service Providers................................... 30 Sales Load, Distribution and Shareholder Servicing Arrangements........................................... 31 Purchase, Exchange and Redemption Procedures.............. 33 Dividends and Other Distributions......................... 35 Tax Consequences.......................................... 35 INFORMATION ABOUT THE REORGANIZATION........................ 35 Considerations by the Board of Directors of the Fortis Funds.................................................. 35 Description of the Plan of Reorganization................. 37 Description of Hartford Fund Shares....................... 38 Federal Income Tax Consequences........................... 38 Comparative Information on Shareholder Rights and Obligations............................................ 39 CAPITALIZATION.............................................. 40 INFORMATION ABOUT THE HARTFORD FUNDS AND THE FORTIS FUNDS... 43 Hartford Funds............................................ 43 Fortis Funds.............................................. 43 VOTING INFORMATION.......................................... 44 Outstanding Shares and Voting Requirements................ 45 Other Matters............................................. 51 Board Recommendation...................................... 51 FORM OF AGREEMENT AND PLAN OF REORGANIZATION -- APPENDIX A......................................................... A-1 HARTFORD FUND PORTFOLIO MANAGER DISCUSSIONS -- APPENDIX B... B-1 HARTFORD FUND FINANCIAL HIGHLIGHTS -- APPENDIX C............ C-1
i SUMMARY This summary is qualified in its entirety by reference to the additional information contained elsewhere in this Prospectus/Proxy Statement, the Prospectus and Statement of Additional Information of each Hartford Fund, the Prospectus and Statement of Additional Information of each Fortis Fund, and the Plan, a form of which is attached to this Prospectus/Proxy Statement as Appendix A. ABOUT THE PROPOSED REORGANIZATION The Board of Directors of the corporation of which each Fortis Fund is a series has voted to recommend approval of the Plan to shareholders of each Fortis Fund. Under the Plan, each Hartford Fund would acquire all of the assets of the corresponding Fortis Fund in exchange for the Hartford Fund's shares to be distributed pro rata by the Fortis Fund to its shareholders in complete liquidation and dissolution of the Fortis Fund (the "Reorganization"). As a result of the Reorganization, each shareholder of a Fortis Fund will become the owner of a Hartford Fund's shares of the same or a similar class having a total net asset value equal to the total net asset value of such shareholder's holdings in the Fortis Fund on the date of the Reorganization. As a condition to the Reorganization, the Hartford Fund and the Fortis Fund will receive an opinion of counsel that the Reorganization will be considered a tax-free "reorganization" under applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), so that neither the Hartford Fund nor the Fortis Fund nor the shareholders of the Fortis Fund will recognize any gain or loss. The tax basis of the Hartford Fund's shares received by Fortis Fund shareholders will be the same as the tax basis of their shares in the Fortis Fund. The following chart shows the Hartford Fund into which each Fortis Fund would be reorganized if the Reorganization is approved and the Hartford Fund share class that Fortis Fund shareholders of each class would receive. The chart is arranged alphabetically according to the name of the Fortis Fund.
FORTIS FUND/SHARE CLASS CORRESPONDING HARTFORD FUND/SHARE CLASS - ----------------------- --------------------------------------- Fortis Asset Allocation Portfolio The Hartford Advisers Fund Class A Class A Class B Class B Class H Class B Class C Class C Class Z Class A Fortis Global Growth Portfolio The Hartford Global Leaders Fund Class A Class A Class B Class B Class H Class B Class C Class C Fortis Growth & Income Fund The Hartford Growth and Income Fund Class A Class A Class B Class B Class H Class B Class C Class C Fortis High Yield Portfolio The Hartford High Yield Fund Class A Class A Class B Class B Class H Class B Class C Class C
1
FORTIS FUND/SHARE CLASS CORRESPONDING HARTFORD FUND/SHARE CLASS - ----------------------- --------------------------------------- Fortis International Equity Portfolio The Hartford International Opportunities Fund Class A Class A Class B Class B Class H Class B Class C Class C Fortis Money Fund The Hartford Money Market Fund Class A Class A Class B Class B Class H Class B Class C Class C
COMPARATIVE FEE TABLES The Fortis Funds, like all mutual funds, incur certain expenses in their operations and as a shareholder of a Fortis Fund, you pay these expenses indirectly. The expenses include management fees, Rule 12b-1 distribution and service fees, as well as the costs of maintaining accounts, administration, and other activities. The Hartford Funds incur similar expenses in their operations. The following tables compare the expenses paid by the Fortis Funds with the expenses that you will incur indirectly as a shareholder of the Hartford Fund into which your shares will be exchanged. The tables also include any shareholder fees that are paid directly from your investment. YOU WILL NOT BE CHARGED ANY SALES LOADS FOR ACQUIRING SHARES OF THE HARTFORD FUND IN EXCHANGE FOR SHARES OF THE FORTIS FUND YOU CURRENTLY OWN. IN ADDITION, YOU WILL RECEIVE CREDIT FOR THE PERIOD YOU HELD YOUR FORTIS FUND SHARES IN DETERMINING ANY CONTINGENT DEFERRED SALES CHARGE DUE UPON THE REDEMPTION OF THE HARTFORD FUND SHARES YOU RECEIVE IN THE EXCHANGE. Each table (a) compares the fees and expenses as of October 31, 2001 for a Fortis Fund and its corresponding Hartford Fund and (b) shows the estimated fees and expenses for the corresponding Hartford Fund on a pro forma basis as of that date after giving effect to the Reorganization. Transfer agent fees have been restated to reflect contractual fees currently in effect. Fee and expense tables that appear in the accompanying Hartford Fund prospectus are based on fees and expenses as of October 31, 2000 and do not reflect current transfer agency fees. For this reason, the following fee and expense tables and examples supplement and, to the extent inconsistent, replace the fee and expense tables and examples in that prospectus. 2 THE HARTFORD ADVISERS FUND / FORTIS ASSET ALLOCATION PORTFOLIO
HARTFORD HARTFORD HARTFORD FORTIS FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA CLASS A CLASS A CLASS Z(1) CLASS A(1) CLASS B CLASS B/H CLASS B -------- --------- ------------ ---------- --------- ----------- --------- SHAREHOLDER FEES Fees Paid Directly From Your Investment Maximum Sales Charge (Load) on Purchases (as a percentage of offering price).... 5.50% 4.75% None 5.50% None None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less).................................. None None None None 5.00% 4.00% 5.00% ANNUAL FUND OPERATING EXPENSES (Before Waivers) Expenses That Are Deducted From Fund Assets (as a percentage of average net assets) Management Fees.......................... 0.65% 0.87% 0.87% 0.64% 0.65% 0.87% 0.64% Distribution and/or Service (12b-1) Fees................................... 0.35% 0.45% None 0.35% 1.00% 1.00% 1.00% Other Expenses........................... 0.32% 0.08% 0.08% 0.32% 0.33% 0.08% 0.33% Fund Accounting Fees................... 0.02% -- -- 0.02% 0.02% -- 0.02% Transfer Agent Fees.................... 0.27% -- -- 0.27% 0.28% -- 0.28% Other.................................. 0.03% 0.08% 0.08% 0.03% 0.03% 0.08% 0.03% Total Annual Fund Operating Expenses..... 1.32% 1.40% 0.95% 1.31% 1.98% 1.95% 1.97% Contractual Waiver....................... 0.05% -- -- 0.05% -- -- -- Net Annual Fund Operating Expenses(2).... 1.27% 1.40% 0.95% 1.26% 1.98% 1.95% 1.97% HARTFORD HARTFORD FORTIS PRO FORMA CLASS C CLASS C CLASS C --------- --------- --------- SHAREHOLDER FEES Fees Paid Directly From Your Investment Maximum Sales Charge (Load) on Purchases (as a percentage of offering price).... 1.00% None 1.00% Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less).................................. 1.00% 1.00% 1.00% ANNUAL FUND OPERATING EXPENSES (Before Waivers) Expenses That Are Deducted From Fund Assets (as a percentage of average net assets) Management Fees.......................... 0.65% 0.87% 0.65% Distribution and/or Service (12b-1) Fees................................... 1.00% 1.00% 1.00% Other Expenses........................... 0.25% 0.08% 0.25% Fund Accounting Fees................... 0.02% -- 0.02% Transfer Agent Fees.................... 0.19% -- 0.19% Other.................................. 0.04% 0.08% 0.04% Total Annual Fund Operating Expenses..... 1.90% 1.95% 1.90% Contractual Waiver....................... -- -- -- Net Annual Fund Operating Expenses(2).... 1.90% 1.95% 1.90%
- --------------- (1) Fortis Fund Class Z shares will be exchanged for Hartford Fund Class A shares and therefore will be subject to Rule 12b-1 distribution and service fees of 0.35%, as noted above. (2) Although the Rule 12b-1 fee for The Hartford Advisers Fund Class A shares is 0.35% of average net assets, the Fund's distributor has contractually agreed to reduce the fee to 0.30% through at least February 28, 2003. This waiver may be discontinued at any time thereafter. 3 THE HARTFORD GLOBAL LEADERS FUND / FORTIS GLOBAL GROWTH PORTFOLIO
HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B --------- --------- ---------- --------- ----------- --------- SHAREHOLDER FEES Fees Paid Directly From Your Investment Maximum Sales Charge (Load) on Purchases (as a percentage of offering price).................. 5.50% 4.75% 5.50% None None None Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less)........ None None None 5.00% 4.00% 5.00% ANNUAL FUND OPERATING EXPENSES (Before Waivers) Expenses That Are Deducted From Fund Assets (as a percentage of average net assets) Management Fees.................................. 0.85% 1.00% 0.82% 0.85% 1.00% 0.82% Distribution and/or Service (12b-1) Fees......... 0.35% 0.25% 0.35% 1.00% 1.00% 1.00% Other Expenses................................... 0.36% 0.14% 0.35% 0.38% 0.16% 0.36% Fund Accounting Fees........................... 0.02% -- 0.02% 0.02% -- 0.02% Transfer Agent Fees............................ 0.27% -- 0.27% 0.28% -- 0.28% Other.......................................... 0.07% 0.14% 0.06% 0.08% 0.16% 0.06% Total Annual Fund Operating Expenses............. 1.56% 1.41% 1.52% 2.23% 2.16% 2.18% Contractual Waiver............................... 0.05% -- 0.05% -- -- -- Net Annual Fund Operating Expenses(1)............ 1.51% 1.41% 1.47% 2.23% 2.16% 2.18% HARTFORD HARTFORD FORTIS PRO FORMA CLASS C CLASS C CLASS C --------- --------- --------- SHAREHOLDER FEES Fees Paid Directly From Your Investment Maximum Sales Charge (Load) on Purchases (as a percentage of offering price).................. 1.00% None 1.00% Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less)........ 1.00% 1.00% 1.00% ANNUAL FUND OPERATING EXPENSES (Before Waivers) Expenses That Are Deducted From Fund Assets (as a percentage of average net assets) Management Fees.................................. 0.85% 1.00% 0.85% Distribution and/or Service (12b-1) Fees......... 1.00% 1.00% 1.00% Other Expenses................................... 0.28% 0.16% 0.28% Fund Accounting Fees........................... 0.02% -- 0.02% Transfer Agent Fees............................ 0.19% -- 0.19% Other.......................................... 0.07% 0.16% 0.07% Total Annual Fund Operating Expenses............. 2.13% 2.16% 2.13% Contractual Waiver............................... -- -- -- Net Annual Fund Operating Expenses(1)............ 2.13% 2.16% 2.13%
- --------------- (1) Although the Rule 12b-1 fee for The Hartford Global Leaders Fund Class A shares is 0.35% of average net assets, the Fund's distributor has contractually agreed to reduce the fee to 0.30% through at least February 28, 2003. This waiver may be discontinued at any time thereafter. 4 THE HARTFORD GROWTH AND INCOME FUND / FORTIS GROWTH AND INCOME FUND
HARTFORD HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C CLASS C CLASS C -------- ------- --------- -------- --------- --------- -------- ------- --------- SHAREHOLDER FEES Fees Paid Directly From Your Investment Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)..................... 5.50% 4.75% 5.50% None None None 1.00% None 1.00% Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less)......... None None None 5.00% 4.00% 5.00% 1.00% 1.00% 1.00% ANNUAL FUND OPERATING EXPENSES (Before Waivers) Expenses That Are Deducted From Fund Assets (as a percentage of average net assets) Management Fees.............. 0.80% 1.00% 0.80% 0.80% 1.00% 0.80% 0.80% 1.00% 0.80% Distribution and/or Service (12b-1) Fees............... 0.35% 0.25% 0.35% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Other Expenses............... 0.33% 0.21% 0.34% 0.34% 0.21% 0.34% 0.25% 0.21% 0.25% Fund Accounting Fees....... 0.02% -- 0.02% 0.02% -- 0.02% 0.02% -- 0.02% Transfer Agent Fees........ 0.27% -- 0.27% 0.28% -- 0.28% 0.19% -- 0.19% Other...................... 0.04% 0.21% 0.05% 0.04% 0.21% 0.04% 0.04% 0.21% 0.04% Total Annual Fund Operating Expenses................... 1.48% 1.46% 1.49% 2.14% 2.21% 2.14% 2.05% 2.21% 2.05% Contractual Waiver........... 0.05% -- 0.05% -- -- -- -- -- -- Net Annual Fund Operating Expenses(1)................ 1.43% 1.46% 1.44% 2.14% 2.21% 2.14% 2.05% 2.21% 2.05%
- --------------- (1) Although the Rule 12b-1 fee for The Hartford Growth and Income Fund Class A shares is 0.35% of average net assets, the Fund's distributor has contractually agreed to reduce the fee to 0.30% through at least February 28, 2003. This waiver may be discontinued at any time thereafter. 5 THE HARTFORD HIGH YIELD FUND / FORTIS HIGH YIELD PORTFOLIO
HARTFORD HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C CLASS C CLASS C -------- ------- --------- -------- --------- --------- -------- ------- --------- SHAREHOLDER FEES Fees Paid Directly From Your Investment Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)..................... 4.50% 4.50% 4.50% None None None 1.00% None 1.00% Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less)......... None None None 5.00% 4.00% 5.00% 1.00% 1.00% 1.00% ANNUAL FUND OPERATING EXPENSES (Before Waivers) Expenses That Are Deducted From Fund Assets (as a percentage of average net assets) Management Fees.............. 0.75% 0.74% 0.75% 0.75% 0.74% 0.75% 0.75% 0.74% 0.75% Distribution and/or Service (12b-1) Fees............... 0.35% 0.35% 0.35% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Other Expenses............... 0.34% 0.09% 0.33% 0.36% 0.09% 0.34% 0.29% 0.09% 0.27% Fund Accounting Fees....... 0.02% -- 0.02% 0.02% -- 0.02% 0.02% -- 0.02% Transfer Agent Fees........ 0.27% -- 0.27% 0.28% -- 0.28% 0.19% -- 0.19% Other...................... 0.05% 0.09% 0.04% 0.06% 0.09% 0.04% 0.08% 0.09% 0.06% Total Annual Fund Operating Expenses................... 1.44% 1.18% 1.43% 2.11% 1.83% 2.09% 2.04% 1.83% 2.02% Contractual Waiver........... 0.05% -- 0.05% -- -- -- -- -- -- Net Annual Fund Operating Expenses(1)................ 1.39% 1.18% 1.38% 2.11% 1.83% 2.09% 2.04% 1.83% 2.02%
- --------------- (1) Although the Rule 12b-1 fee for The Hartford High Yield Fund Class A shares is 0.35% of average net assets, the Fund's distributor has contractually agreed to reduce the fee to 0.30% through at least February 28, 2003. This waiver may be discontinued at any time thereafter. 6 THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND / FORTIS INTERNATIONAL EQUITY PORTFOLIO
HARTFORD HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C CLASS C CLASS C -------- ------- --------- -------- --------- --------- -------- ------- --------- SHAREHOLDER FEES Fees Paid Directly From Your Investment Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)..................... 5.50% 4.75% 5.50% None None None 1.00% None 1.00% Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less)......... None None None 5.00% 4.00% 5.00% 1.00% 1.00% 1.00% ANNUAL FUND OPERATING EXPENSES (Before Waivers) Expenses That Are Deducted From Fund Assets (as a percentage of average net assets) Management Fees.............. 0.85% 1.00% 0.85% 0.85% 1.00% 0.85% 0.85% 1.00% 0.85% Distribution and/or Service (12b-1) Fees............... 0.35% 0.25% 0.35% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Other Expenses............... 0.44% 0.43% 0.42% 0.44% 0.43% 0.43% 0.36% 0.43% 0.35% Fund Accounting Fees....... 0.02% -- 0.02% 0.02% -- 0.02% 0.02% -- 0.02% Transfer Agent Fees........ 0.27% -- 0.27% 0.28% -- 0.28% 0.19% -- 0.19% Other...................... 0.15% 0.43% 0.13% 0.14% 0.43% 0.13% 0.15% 0.43% 0.14% Total Annual Fund Operating Expenses................... 1.64% 1.68% 1.62% 2.29% 2.43% 2.28% 2.21% 2.43% 2.20% Contractual Waiver........... 0.05% -- 0.05% -- -- -- -- -- -- Net Annual Fund Operating Expenses(1)................ 1.59% 1.68% 1.57% 2.29% 2.43% 2.28% 2.21% 2.43% 2.20%
- --------------- (1) Although the Rule 12b-1 fee for The Hartford International Opportunities Fund Class A shares is 0.35% of average net assets, the Fund's distributor has contractually agreed to reduce the fee to 0.30% through at least February 28, 2003. This waiver may be discontinued at any time thereafter. 7 THE HARTFORD MONEY MARKET FUND / FORTIS MONEY FUND
HARTFORD HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C CLASS C CLASS C -------- ------- --------- -------- --------- --------- -------- ------- --------- SHAREHOLDER FEES Fees Paid Directly From Your Investment Maximum Sales Charge (Load) on Purchases (as a percentage of offering price)..................... None None None None None None 1.00% None 1.00% Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds, whichever is less)......... None None None 5.00% 4.00% 5.00% 1.00% 1.00% 1.00% ANNUAL FUND OPERATING EXPENSES (Before Waivers) Expenses That Are Deducted From Fund Assets (as a percentage of average net assets) Management Fees.............. 0.50% 0.40% 0.50% 0.50% 0.40% 0.50% 0.50% 0.40% 0.50% Distribution and/or Service (12b-1) Fees............... 0.35% 0.20% 0.35% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Other Expenses............... 0.34% 0.19% 0.34% 0.36% 0.19% 0.36% 0.28% 0.19% 0.28% Fund Accounting Fees....... 0.02% -- 0.02% 0.02% -- 0.02% 0.02% -- 0.02% Transfer Agent Fees........ 0.27% 0.09% 0.27% 0.28% 0.09% 0.28% 0.19% 0.09% 0.19% Other...................... 0.05% 0.10% 0.05% 0.06% 0.10% 0.06% 0.07% 0.10% 0.07% Total Annual Fund Operating Expenses................... 1.19% 0.79% 1.19% 1.86% 1.59% 1.86% 1.78% 1.59% 1.78% Contractual Waiver........... 0.19% -- 0.19% 0.16% -- 0.16% 0.08% -- 0.08% Net Annual Fund Operating Expenses(1)................ 1.00% 0.79% 1.00% 1.70% 1.59% 1.70% 1.70% 1.59% 1.70%
- --------------- (1) Although the Rule 12b-1 fee for The Hartford Money Market Fund Class A shares is 0.35% of average net assets, the Fund's distributor has contractually agreed to reduce the fee to 0.30% through at least February 28, 2003. In addition, HIFSCO has contractually agreed to limit the total operating expenses of the Class A, Class B and Class C shares of The Hartford Money Market Fund, exclusive of taxes, interest, brokerage commissions and extraordinary expenses, to 1.00%, 1.70% and 1.70%, respectively, through at least February 28, 2003. These waivers may be discontinued at any time thereafter. 8 EXAMPLES The following Examples are intended to help you compare the cost of investing in the Fortis Fund whose shares you currently own with the cost of investing in the Hartford Fund into which your Fortis Fund will be reorganized if the proposed Reorganization is approved. The Examples are based on the expense tables above, without taking into account any contractual waivers. The Examples assume that you invest $10,000 in each Fund for the time periods indicated and either (i) redeem all of your shares at the end of those periods or (ii) do not redeem your shares. Each Example assumes that your investment has a 5% return each year, that the Fund's operating expenses remain the same and that you reinvest all dividends and distributions. Although your actual costs may be higher or lower, based on these assumptions your costs would be: THE HARTFORD ADVISERS FUND/FORTIS ASSET ALLOCATION PORTFOLIO With redemption
HARTFORD HARTFORD HARTFORD FORTIS FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD CLASS A CLASS A CLASS Z CLASS A CLASS B CLASS B/H CLASS B CLASS C -------- ------- ------- --------- -------- --------- --------- -------- 1 year..................... $ 677 $ 611 $ 97 $ 676 $ 701 $ 558 $ 700 $ 391 3 years.................... $ 945 $ 897 $ 303 $ 942 $ 921 $ 882 $ 918 $ 691 5 years.................... $1,234 $1,204 $ 525 $1,229 $1,268 $1,232 $1,262 $1,116 10 years................... $2,053 $2,075 $1,166 $2,042 $2,136 $2,133 $2,125 $2,300 HARTFORD FORTIS PRO FORMA CLASS C CLASS C ------- --------- 1 year..................... $ 298 $ 391 3 years.................... $ 612 $ 691 5 years.................... $1,052 $1,116 10 years................... $2,275 $2,300
Without redemption
HARTFORD HARTFORD HARTFORD FORTIS FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD CLASS A CLASS A CLASS Z CLASS A CLASS B CLASS B/H CLASS B CLASS C -------- ------- ------- --------- -------- --------- --------- -------- 1 year..................... $ 677 $ 611 $ 97 $ 676 $ 201 $ 198 $ 200 $ 291 3 years.................... $ 945 $ 897 $ 303 $ 942 $ 621 $ 612 $ 618 $ 691 5 years.................... $1,234 $1,204 $ 525 $1,229 $1,068 $1,052 $1,062 $1,116 10 years................... $2,053 $2,075 $1,166 $2,042 $2,136 $2,133 $2,125 $2,300 HARTFORD FORTIS PRO FORMA CLASS C CLASS C ------- --------- 1 year..................... $ 198 $ 291 3 years.................... $ 612 $ 691 5 years.................... $1,052 $1,116 10 years................... $2,275 $2,300
9 THE HARTFORD GLOBAL LEADERS FUND/FORTIS GLOBAL GROWTH PORTFOLIO With redemption
HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C -------- ------- --------- -------- --------- --------- -------- 1 year............................... $ 700 $ 612 $ 696 $ 726 $ 579 $ 721 $ 414 3 years.............................. $1,016 $ 900 $1,004 $ 997 $ 946 $ 982 $ 760 5 years.............................. $1,353 $1,209 $1,333 $1,395 $1,339 $1,370 $1,233 10 years............................. $2,304 $2,086 $2,263 $2,388 $2,303 $2,339 $2,537 HARTFORD FORTIS PRO FORMA CLASS C CLASS C ------- --------- 1 year............................... $ 319 $ 414 3 years.............................. $ 676 $ 760 5 years.............................. $1,159 $1,233 10 years............................. $2,493 $2,537
Without redemption
HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C -------- ------- --------- -------- --------- --------- -------- 1 year............................... $ 700 $ 612 $ 696 $ 226 $ 219 $ 221 $ 314 3 years.............................. $1,016 $ 900 $1,004 $ 697 $ 676 $ 682 $ 760 5 years.............................. $1,353 $1,209 $1,333 $1,195 $1,159 $1,170 $1,233 10 years............................. $2,304 $2,086 $2,263 $2,388 $2,303 $2,339 $2,537 HARTFORD FORTIS PRO FORMA CLASS C CLASS C ------- --------- 1 year............................... $ 219 $ 314 3 years.............................. $ 676 $ 760 5 years.............................. $1,159 $1,233 10 years............................. $2,493 $2,537
THE HARTFORD GROWTH AND INCOME FUND/FORTIS GROWTH & INCOME FUND With redemption
HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C -------- ------- --------- -------- --------- --------- -------- 1 year............................... $ 692 $ 619 $ 693 $ 717 $ 584 $ 717 $ 406 3 years.............................. $ 992 $ 915 $ 995 $ 970 $ 961 $ 970 $ 736 5 years.............................. $1,314 $1,235 $1,318 $1,349 $1,365 $1,349 $1,192 10 years............................. $2,221 $2,138 $2,232 $2,305 $2,355 $2,305 $2,455 HARTFORD FORTIS PRO FORMA CLASS C CLASS C ------- --------- 1 year............................... $ 324 $ 406 3 years.............................. $ 691 $ 736 5 years.............................. $1,185 $1,192 10 years............................. $2,544 $2,455
Without redemption
HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C -------- ------- --------- -------- --------- --------- -------- 1 year............................... $ 692 $ 619 $ 693 $ 217 $ 224 $ 217 $ 306 3 years.............................. $ 992 $ 915 $ 995 $ 670 $ 691 $ 670 $ 736 5 years.............................. $1,314 $1,235 $1,318 $1,149 $1,185 $1,149 $1,192 10 years............................. $2,221 $2,138 $2,232 $2,305 $2,355 $2,305 $2,455 HARTFORD FORTIS PRO FORMA CLASS C CLASS C ------- --------- 1 year............................... $ 224 $ 306 3 years.............................. $ 691 $ 736 5 years.............................. $1,185 $1,192 10 years............................. $2,544 $2,455
10 THE HARTFORD HIGH YIELD FUND/FORTIS HIGH YIELD PORTFOLIO With redemption
HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C -------- ------- --------- -------- --------- --------- -------- 1 year............................... $ 590 $ 565 $ 589 $ 714 $ 546 $ 712 $ 405 3 years.............................. $ 885 $ 808 $ 882 $ 961 $ 846 $ 955 $ 733 5 years.............................. $1,201 $1,070 $1,196 $1,334 $1,170 $1,324 $1,187 10 years............................. $2,097 $1,817 $2,086 $2,271 $1,978 $2,252 $2,445 HARTFORD FORTIS PRO FORMA CLASS C CLASS C ------- --------- 1 year............................... $ 286 $ 403 3 years.............................. $ 576 $ 727 5 years.............................. $ 990 $1,177 10 years............................. $2,148 $2,425
Without redemption
HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C -------- ------- --------- -------- --------- --------- -------- 1 year............................... $ 590 $ 565 $ 589 $ 214 $ 186 $ 212 $ 305 3 years.............................. $ 885 $ 808 $ 882 $ 661 $ 576 $ 655 $ 733 5 years.............................. $1,201 $1,070 $1,196 $1,134 $ 990 $1,124 $1,187 10 years............................. $2,097 $1,817 $2,086 $2,271 $1,978 $2,252 $2,445 HARTFORD FORTIS PRO FORMA CLASS C CLASS C ------- --------- 1 year............................... $ 186 $ 303 3 years.............................. $ 576 $ 727 5 years.............................. $ 990 $1,177 10 years............................. $2,148 $2,425
THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND/FORTIS INTERNATIONAL EQUITY PORTFOLIO With redemption
HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C -------- ------- --------- -------- --------- --------- -------- 1 year............................... $ 708 $ 638 $ 706 $ 732 $ 606 $ 731 $ 422 3 years.............................. $1,039 $ 979 $1,033 $1,015 $1,028 $1,012 $ 784 5 years.............................. $1,393 $1,344 $1,383 $1,425 $1,476 $1,420 $1,273 10 years............................. $2,387 $2,368 $2,366 $2,463 $2,581 $2,450 $2,619 HARTFORD FORTIS PRO FORMA CLASS C CLASS C ------- --------- 1 year............................... $ 346 $ 421 3 years.............................. $ 758 $ 781 5 years.............................. $1,296 $1,268 10 years............................. $2,766 $2,609
Without redemption
HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C -------- ------- --------- -------- --------- --------- -------- 1 year............................... $ 708 $ 638 $ 706 $ 232 $ 246 $ 231 $ 322 3 years.............................. $1,039 $ 979 $1,033 $ 715 $ 758 $ 712 $ 784 5 years.............................. $1,393 $1,344 $1,383 $1,225 $1,296 $1,220 $1,273 10 years............................. $2,387 $2,368 $2,366 $2,463 $2,581 $2,450 $2,619 HARTFORD FORTIS PRO FORMA CLASS C CLASS C ------- --------- 1 year............................... $ 246 $ 321 3 years.............................. $ 758 $ 781 5 years.............................. $1,296 $1,268 10 years............................. $2,766 $2,609
11 THE HARTFORD MONEY MARKET FUND/FORTIS MONEY FUND With redemption
HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C -------- ------- --------- -------- --------- --------- -------- 1 year............................... $ 121 $ 81 $ 121 $ 689 $ 522 $ 689 $ 379 3 years.............................. $ 378 $ 252 $ 378 $ 885 $ 772 $ 885 $ 655 5 years.............................. $ 654 $ 439 $ 654 $1,206 $1,046 $1,206 $1,055 10 years............................. $1,443 $ 978 $1,443 $2,068 $1,674 $2,068 $2,174 HARTFORD FORTIS PRO FORMA CLASS C CLASS C ------- --------- 1 year............................... $ 262 $ 379 3 years.............................. $ 502 $ 655 5 years.............................. $ 866 $1,055 10 years............................. $1,889 $2,174
Without redemption
HARTFORD HARTFORD HARTFORD FORTIS PRO FORMA HARTFORD FORTIS PRO FORMA HARTFORD CLASS A CLASS A CLASS A CLASS B CLASS B/H CLASS B CLASS C -------- ------- --------- -------- --------- --------- -------- 1 year............................... $ 121 $ 81 $ 121 $ 189 $ 162 $ 189 $ 279 3 years.............................. $ 378 $ 252 $ 378 $ 585 $ 502 $ 585 $ 655 5 years.............................. $ 654 $ 439 $ 654 $1,006 $ 866 $1,006 $1,055 10 years............................. $1,443 $ 978 $1,443 $2,068 $1,674 $2,068 $2,174 HARTFORD FORTIS PRO FORMA CLASS C CLASS C ------- --------- 1 year............................... $ 162 $ 279 3 years.............................. $ 502 $ 655 5 years.............................. $ 866 $1,055 10 years............................. $1,889 $2,174
12 COMPARISON OF INVESTMENT OBJECTIVES, POLICIES, STRATEGIES AND PRINCIPAL RISKS OF THE FORTIS FUNDS AND HARTFORD FUNDS This section contains tables comparing the investment objectives of each Fortis Fund and the Hartford Fund into which it would be reorganized. The investment objectives of the Hartford Funds and the Fortis Funds (other than Fortis Money Fund) may be changed without shareholder approval. The investment policies and strategies and the principal risks of each Fortis Fund are substantially identical to those of its corresponding Hartford Fund and are summarized in the tables below. The tables are arranged alphabetically according to the name of the Hartford Fund. In addition to the policies and strategies set forth below, each Hartford Fund and each Fortis Fund is subject to certain additional investment policies and limitations, described in their respective Statements of Additional Information. Reference is hereby made to the Prospectus and Statement of Additional Information of each Hartford Fund, and to the Prospectus and Statement of Additional Information of each Fortis Fund, which set forth in full the investment objectives, policies, strategies and limitations of each Hartford Fund and each Fortis Fund, all of which are incorporated herein by reference thereto. FORTIS ASSET ALLOCATION PORTFOLIO / THE HARTFORD ADVISERS FUND INVESTMENT OBJECTIVE -- FORTIS ASSET ALLOCATION PORTFOLIO Maximizing total return on invested capital, mainly from capital appreciation, dividends and interest. INVESTMENT OBJECTIVE -- THE HARTFORD ADVISERS FUND Maximum long-term total return. INVESTMENT STRATEGY Fortis Asset Allocation Portfolio and The Hartford Advisers Fund use the same investment strategies. Each Fund allocates its assets among three categories: - stocks, - debt securities, and - money market instruments. The Funds favor stocks issued by high-quality companies. The debt securities (other than money market instruments) in which the Funds primarily invest include securities issued or guaranteed by the U.S. Government and its agencies or instrumentalities and securities rated investment grade (rated at least BBB by Standard & Poor's Ratings Services or Baa by Moody's Investors Service, Inc., or if unrated, securities deemed by the sub-adviser to be of comparable quality). Neither Fund is restricted to any specific maturity term. Each Fund may invest up to 20% of its total assets in securities of foreign issuers and non-dollar securities. PRINCIPAL RISKS Fortis Asset Allocation Portfolio and The Hartford Advisers Fund are subject to the same principal risks. Each Fund is subject to stock market risk, interest rate risk, credit risk, income risk, call risk, prepayment and extension risk, manager allocation risk and the risks of foreign investment. Stock market risk means the stocks held by a Fund may decline in value due to the activities and financial prospects of individual companies or to general market and economic conditions. Interest rate risk refers to the possibility that your investment may go down in value when interest rates rise. Income risk is the potential for a decline in a Fund's income due to falling interest rates. 13 Each Fund is subject to the possibility that, under certain circumstances, especially during periods of falling interest rates, a bond issuer will "call" - or repay - its bonds before their maturity date. The Fund may then be forced to invest the unanticipated proceeds at lower interest rates, resulting in a decline in the Fund's income. Because the Funds may invest significantly in mortgage-backed securities, they are subject to prepayment risk and extension risk. Similar to call risk, prepayment risk is the risk that falling interest rates could cause faster than expected prepayments of the mortgages underlying a Fund's mortgage-backed securities. These prepayments pass through to the Fund, which must reinvest them at a time when interest rates on new mortgage-backed investments are falling, reducing the Fund's income. Extension risk is the risk that the rising interest rates could cause mortgage prepayments to slow, which could increase the interest rate sensitivity of a Fund's mortgage-backed securities. Credit risk refers to the possibility that the issuing company may not be able to pay interest and principal when due. Manager allocation risk refers to the possibility that the portfolio managers could allocate assets in a manner that results in a Fund underperforming its peers. Foreign investments may be more risky than domestic investments. Investments in foreign securities may be affected by fluctuations in currency exchange rates, incomplete or inaccurate financial information on companies, social upheavals and political actions ranging from tax code changes to governmental collapse. FORTIS GLOBAL GROWTH PORTFOLIO / THE HARTFORD GLOBAL LEADERS FUND INVESTMENT OBJECTIVE -- FORTIS GLOBAL GROWTH PORTFOLIO Long-term capital appreciation. INVESTMENT OBJECTIVE -- THE HARTFORD GLOBAL LEADERS FUND Growth of capital by investing in stocks issued by companies worldwide. INVESTMENT STRATEGY Fortis Global Growth Portfolio and The Hartford Global Leaders Fund use the same investment strategies. Each Fund invests primarily in a diversified portfolio of common stocks covering a broad range of countries, industries and companies. Securities in which the Funds invest are denominated in both U.S. dollars and foreign currencies and may trade in both U.S. and foreign markets. Under normal market and economic conditions, each Fund invests at least 65% of its total assets in common stock of high-quality growth companies worldwide. Under normal market and economic conditions, each Fund will diversify its investments in securities of issuers among at least five countries, which may include the United States. There are no limits on the amount of a Fund's assets that may be invested in each country. In recent years, the Hartford Fund's annual portfolio turnover rate has exceeded 200%. Although this has not been the case for the Fortis Fund, the portfolio turnover rates for the two Funds are expected to be substantially similar going forward since the Funds are now being managed by the same sub-adviser using the same investment strategies. PRINCIPAL RISKS Fortis Global Growth Portfolio and The Hartford Global Leaders Fund are subject to the same principal risks. The value of each Fund may go down in response to overall stock market movements and trends. 14 Foreign investments may be more risky than domestic investments. Investments in foreign securities may be affected by fluctuations in currency exchange rates, incomplete or inaccurate financial information on companies, social upheavals and political actions ranging from tax code changes to government collapse. The Funds emphasize high-quality growth companies. If the sub-adviser incorrectly assesses a company's prospects for growth, or if its judgment about how other investors will value the company's growth is wrong, then the price of the company's stock may decrease, or it may not increase to the level that the sub-adviser had anticipated. The Funds' management strategy will influence their performance significantly. If a Fund invests in countries or regions that experience economic downturns, its performance could suffer. Similarly, if certain investments or industries don't perform as expected, or if the managers' stock selection strategy doesn't perform as expected, a Fund could underperform its peers or lose money. Each Fund trades securities very actively, which increases its transaction costs (thus affecting performance) and increases your taxable distributions. FORTIS GROWTH & INCOME FUND / THE HARTFORD GROWTH AND INCOME FUND INVESTMENT OBJECTIVE -- FORTIS GROWTH & INCOME FUND Capital appreciation and current income. INVESTMENT OBJECTIVE -- THE HARTFORD GROWTH AND INCOME FUND Growth of capital and current income by investing primarily in stocks with earnings growth potential and steady or rising dividends. INVESTMENT STRATEGY Fortis Growth & Income Fund and The Hartford Growth and Income Fund use the same investment strategies. Each Fund invests primarily in a diversified portfolio of common stocks that typically have steady or rising dividends and whose prospects for capital appreciation are considered favorable by the Funds' sub-adviser. Fortis Growth & Income Fund invests primarily in the common stocks of large companies. Although The Hartford Growth and Income Fund does not list investments in large companies as a principal strategy, the median market capitalization of the companies in each Fund's portfolio are similar ($54.3 billion for Fortis Growth & Income Fund and $58.4 billion for The Hartford Growth and Income Fund as of September 30, 2001). Each Fund may invest up to 20% of its total assets in securities of foreign issuers and non-dollar securities. PRINCIPAL RISKS Fortis Growth & Income Fund and The Hartford Growth and Income Fund are subject to the same principal risks. The value of each Fund may go down in response to overall stock market movements and trends. Each Fund is subject to income risk, which is the potential that the yield from the Fund's investments will not be sufficient to provide for the payment of dividends from net investment income. During the fiscal year ended August 31, 2001, Fortis Growth & Income Fund did not pay any dividends from net investment income, except on Class A shares. The Hartford Growth and Income Fund did not pay any dividends from net investment income during the fiscal year ended October 31, 2001. Foreign investments may be more risky than domestic investments. Investments in foreign securities may be affected by fluctuations in currency exchange rates, incomplete or inaccurate financial information on companies, social upheavals and political actions ranging from tax code changes to government collapse. The Funds' management strategy will influence their performance significantly. Large-capitalization stocks as a group could fall out of favor with the market, causing either Fund to underperform funds that 15 focus on small- or medium-capitalization stocks. If a Fund's stock selection strategy doesn't perform as expected, the Fund could underperform its peers or lose money. FORTIS HIGH YIELD PORTFOLIO / THE HARTFORD HIGH YIELD FUND INVESTMENT OBJECTIVE -- FORTIS HIGH YIELD PORTFOLIO To maximize total return. INVESTMENT OBJECTIVE -- THE HARTFORD HIGH YIELD FUND To seek high current income by investing in non-investment grade debt securities. Growth of capital is a secondary objective. INVESTMENT STRATEGY Fortis High Yield Portfolio and The Hartford High Yield Fund use the same investment strategies. Each Fund normally invests at least 65% and may invest up to 100% of its portfolio in non-investment grade securities (securities rated "Ba" or lower by Moody's Investors Service, Inc. ("Moody's") or "BB" or lower by Standard and Poor's Ratings Services ("S&P")), or securities which, if unrated, are determined by the sub-adviser to be of comparable quality. Debt securities rated below investment grade are commonly referred to as "high yield -- high risk securities" or "junk bonds." Neither Fund will invest more than 10% of its total assets in securities rated below B3 by Moody's or B- by S&P, or, if unrated, determined to be of comparable quality by the sub-adviser. The Funds may invest in bonds of any maturity, although each Fund tends to have an average maturity within the intermediate-term range, which is typically defined as between five to ten years. Each Fund may invest up to 15% of its total assets in preferred stocks, convertible securities, and securities carrying warrants to purchase equity securities. The Funds will not invest in common stocks directly, but may retain, for reasonable periods of time, common stocks acquired upon conversion of debt securities or upon exercise of warrants acquired with debt securities. Each Fund may invest up to 30% of its total assets in securities of foreign issuers and up to 10% of its total assets in non-dollar securities. PRINCIPAL RISKS Fortis High Yield Portfolio and The Hartford High Yield Fund are subject to the same principal risks. The performance of each Fund will be affected by interest rates. When interest rates rise, bond prices fall; generally the longer a bond's maturity, the more sensitive it is to this risk. Each fund is also subject to credit risk, which is the possibility that the issuing company may not be able to pay interest and principal when due. In general, lower-rated bonds have higher credit risk. High yield bond prices can fall on bad news about the economy, an industry or a company. Share price, yield and total return may fluctuate more than with less aggressive bond funds. Either Fund could lose money if any bonds it owns are downgraded in credit rating or go into default. If certain industries or investments don't perform as a Fund expects, it could underperform its peers or lose money. The Funds are subject to income risk, which is the potential for a decline in a Fund's income due to falling interest rates. Each Fund is subject to the possibility that, under certain circumstances, especially during periods of falling interest rates, a bond issuer will "call" - or repay - its bonds before their maturity date. The Fund may then be forced to invest the unanticipated proceeds at lower interest rates, resulting in a decline in the Fund's income. 16 Foreign investments may be more risky than domestic investments. Investments in foreign securities may be affected by fluctuations in currency exchange rates, incomplete or inaccurate financial information on companies, social upheavals and political actions ranging from tax code changes to government collapse. High yield bonds and foreign securities may make the Funds more sensitive to market or economic shifts in the U.S. and abroad. FORTIS INTERNATIONAL EQUITY PORTFOLIO / THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND INVESTMENT OBJECTIVE -- FORTIS INTERNATIONAL EQUITY PORTFOLIO Long-term capital appreciation. INVESTMENT OBJECTIVE -- THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND Growth of capital by investing primarily in stocks issued by non-U.S. companies. INVESTMENT STRATEGY Fortis International Equity Portfolio and The Hartford International Opportunities Fund use the same investment strategies. Each Fund normally invests at least 65% of its assets in stocks issued by non-U.S. companies which trade in foreign markets that are generally considered to be well established. Under normal market conditions each Fund diversifies its investments among at least three countries other than the United States. The securities in which the Funds invest are denominated in both U.S. dollars and foreign currencies and generally are traded in foreign markets. PRINCIPAL RISKS Fortis International Equity Portfolio and The Hartford International Opportunities Fund are subject to the same principal risks. The value of each Fund may go down in response to overall stock market movements and trends. Foreign investments may be more risky than domestic investments. Investments in foreign securities may be affected by fluctuations in currency exchange rates, incomplete or inaccurate financial information on companies, social upheavals and political actions ranging from tax code changes to government collapse. The Funds' management strategy will influence their performance significantly. If a Fund invests in countries or regions that experience economic downturns, its performance could suffer. Similarly, if certain investments or industries don't perform as expected, or if the sub-adviser's stock selection strategy doesn't perform as expected, a Fund could underperform its peers or lose money. Each Fund may trade securities actively, which could increase its transaction costs (thus affecting performance) and increase your taxable distributions. FORTIS MONEY FUND / THE HARTFORD MONEY MARKET FUND INVESTMENT OBJECTIVE -- FORTIS MONEY FUND To maximize current income to the extent consistent with stability of principal. INVESTMENT OBJECTIVE -- THE HARTFORD MONEY MARKET FUND Maximum current income consistent with liquidity and preservation of capital. INVESTMENT STRATEGY Fortis Money Fund and The Hartford Money Market Fund use the same investment strategies. Each Fund seeks to maintain a stable share net asset value of $1.00 per share. The Funds focus on specific short-term U.S. dollar denominated money market instruments which are rated in the first two investment tiers by at least one nationally recognized statistical rating organization, or if unrated, are determined to be of comparable quality by the sub-adviser. Money market instruments include (1) banker's acceptances; (2) obligations of governments (whether U.S. or non-U.S.) and their agencies and instrumentalities; (3) short-term corporate obligations, including commercial paper, notes and bonds; (4) other short-term 17 debt obligations; (5) obligations of U.S. banks, non-U.S. branches of U.S. banks (Eurodollars), U.S. branches and agencies of non-U.S. banks (Yankee dollars), and non-U.S. branches of non-U.S. banks; (6) asset-backed securities; and (7) repurchase agreements. PRINCIPAL RISKS Fortis Money Fund and The Hartford Money Market Fund are subject to the same principal risks. The primary risks of these Funds are interest rate risk, credit risk, income risk, inflation risk and manager risk. A rise in interest rates could cause a fall in the value of a Fund's securities. Credit risk refers to the risk that a security's credit rating could be downgraded affecting the value, and potentially the likelihood of repayment, of a Fund's securities. Income risk is the potential for a decline in a Fund's income due to falling interest rates. Inflation risk refers to the risk that, even if the principal value of an investment in a Fund remains constant, or the income from the investment remains constant or increases, their real value may be less in the future because of inflation. Thus, as inflation occurs, the purchasing power of your Fund shares may decline. Manager risk refers to the risk that if the manager does not effectively implement a Fund's investment goal and style, the Fund could underperform its peers. An investment in either Fortis Money Fund or The Hartford Money Market Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although both Funds seek to preserve the value of your investment at $1.00 per share, there is a risk that the share price of either Fund could fall below $1.00, which would make your shares worth less than the amount you paid for them. 18 COMPARISON OF POTENTIAL RISKS AND REWARDS: PERFORMANCE INFORMATION The bar charts and tables below compare the potential risks and rewards of investing in the Fortis Funds and the Hartford Funds. Each bar chart provides an indication of the risks of investing in each Fund by showing changes in the Fund's performance from year to year for the last ten years or since the Fund's inception. The tables show how each Fund's average annual total returns for one year, five years and ten years (or since inception) compare to the returns of a broad-based market index. The figures assume reinvestment of dividends and distributions. Keep in mind that past performance does not indicate future results. The performance for the Fortis Funds is for periods during which the Funds were managed by Fortis Advisers, Inc. Each Fortis Fund now has the same investment adviser, sub-adviser and portfolio managers as its corresponding Hartford Fund. RISK/RETURN BAR CHARTS The bar charts shown below show the variability of total returns on a calendar year-end basis for each Fortis Fund and its corresponding Hartford Fund. The charts are arranged alphabetically according to the name of the Hartford Fund. For both the Fortis Funds and the Hartford Funds, the total returns shown in the bar charts are those of Class A shares. These shares generally are sold subject to a sales charge (load), except in the case of Fortis Money Fund and The Hartford Money Market Fund. However, total returns displayed in the bar charts do not reflect the payment of any sales charges. If these charges had been included, the returns shown would have been lower. Remember, you will not be charged any sales charges in connection with the reorganization of your Fortis Fund into its corresponding Hartford Fund. 19 THE HARTFORD ADVISERS FUND NUMBERS ARE PERCENTAGES 1997 23.30 1998 21.09 1999 12.08 2000 0.90
The Fund's Class A share total return for the nine-month period from January 1, 2001 to September 30, 2001 was -11.13%. BEST QUARTER: 12.39% (quarter ended 6/30/99) WORST QUARTER: -4.09% (quarter ended 9/30/99)
FORTIS ASSET ALLOCATION PORTFOLIO NUMBERS ARE PERCENTAGES 1991 29.34 1992 6.29 1993 11.27 1994 -0.82 1995 22.01 1996 12.03 1997 19.17 1998 19.3 1999 18.71 2000 -1.35
The Fund's Class A share total return for the nine-month period from January 1, 2001 to September 30, 2001 was -13.85%. BEST QUARTER: 17.96% (quarter ended 12/31/99) WORST QUARTER: -7.45% (quarter ended 9/30/98)
20 THE HARTFORD GLOBAL LEADERS FUND NUMBERS ARE PERCENTAGES 1999 47.68 2000 -7.26
The Fund's Class A share total return for the nine-month period from January 1, 2001 to September 30, 2001 was -26.42%. BEST QUARTER: 31.85% (quarter ended 12/31/99) WORST QUARTER: -8.02% (quarter ended 12/31/00)
FORTIS GLOBAL GROWTH PORTFOLIO 1992 6.31 1993 19.51 1994 -4.29 1995 31.56 1996 18.37 1997 7.85 1998 10.16 1999 55.54 2000 -19.64
The Fund's Class A share total return for the nine-month period from January 1, 2001 to September 30, 2001 was -33.35%. BEST QUARTER: 40.05% (quarter ended 12/31/99) WORST QUARTER: -20.69% (quarter ended 9/30/98)
21 THE HARTFORD GROWTH AND INCOME FUND 1999 20.80 2000 -6.49
The Fund's Class A share total return for the nine-month period from January 1, 2001 to September 30, 2001 was -17.91%. BEST QUARTER: 15.26% (quarter ended 12/31/99) WORST QUARTER: -7.04% (quarter ended 12/31/00)
FORTIS GROWTH & INCOME FUND 1996 18.00 1997 22.90 1998 11.56 1999 10.70 2000 4.18
The Fund's Class A share total return for the nine-month period from January 1, 2001 to September 30, 2001 was -19.96%. BEST QUARTER: 14.06% (quarter ended 12/31/99) WORST QUARTER: -9.15% (quarter ended 9/30/98)
22 THE HARTFORD HIGH YIELD FUND 1999 3.47 2000 0.62
The Fund's Class A share total return for the nine-month period from January 1, 2001 to September 30, 2001 was -3.04%. BEST QUARTER: 2.73% (quarter ended 3/31/99) WORST QUARTER: -1.96% (quarter ended 3/31/00)
FORTIS HIGH YIELD PORTFOLIO 1991 56.46 1992 15.52 1993 21.82 1994 -3.49 1995 12.29 1996 11.34 1997 9.49 1998 -0.07 1999 2.12 2000 -7.21
The Fund's Class A share total return for the nine-month period from January 1, 2001 to September 30, 2001 was -5.60%. BEST QUARTER: 25.36% (quarter ended 3/31/91) WORST QUARTER: -5.33% (quarter ended 12/31/00)
23 THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND 1997 0.84 1998 12.53 1999 39.13 2000 -15.52
The Fund's Class A share total return for the nine-month period from January 1, 2001 to September 30, 2001 was -26.42%. BEST QUARTER: 22.28% (quarter ended 12/31/99) WORST QUARTER: -16.14% (quarter ended 9/30/98)
FORTIS INTERNATIONAL EQUITY PORTFOLIO 1999 118 2000 -25.31
The Fund's Class A share total return for the nine-month period from January 1, 2001 to September 30, 2001 was -29.82%. BEST QUARTER: 56.36% (quarter ended 12/31/99) WORST QUARTER: -15.84% (quarter ended 6/30/00)
24 THE HARTFORD MONEY MARKET FUND 1997 4.73 1998 4.69 1999 4.32 2000 5.33
The Fund's Class A share total return for the nine-month period from January 1, 2001 to September 30, 2001 was 2.88%. BEST QUARTER: 1.43% (quarter ended 12/31/00) WORST QUARTER: 0.98% (quarter ended 6/30/99)
FORTIS MONEY FUND 1991 5.59 1992 3.06 1993 2.29 1994 3.45 1995 5.17 1996 4.68 1997 4.78 1998 4.82 1999 4.49 2000 5.70
The Fund's Class A share total return for the nine-month period from January 1, 2001 to September 30, 2001 was 3.00%. BEST QUARTER: 1.56% (quarter ended 3/31/91) WORST QUARTER: 0.54% (quarter ended 9/30/93)
25 AVERAGE ANNUAL TOTAL RETURN TABLES The following tables show the Funds' average annual total returns over different periods ended December 31, 2000 and compare those returns to one or more broad-based market indexes. Returns shown for the various classes of the Hartford Funds and the Fortis Funds reflect any applicable sales charges. Total returns for the indexes shown do not reflect sales charges, expenses or other fees the Securities and Exchange Commission requires to be reflected in the Funds' performance. Indexes are unmanaged, and it is not possible to invest directly in an index. The tables are arranged alphabetically according to the name of the Hartford Fund. Please note that the average annual total return since a Fund's inception is only given for those Funds that have been in existence for less than ten calendar years. THE HARTFORD ADVISORS FUND/FORTIS ASSET ALLOCATION PORTFOLIO
SINCE INCEPTION -- FORTIS FUND SINCE ----------------------- INCEPTION-- HARTFORD CLASS B,H, 1 YEAR 5 YEARS 10 YEARS FUND(1) C(2) CLASS Z(3) ------- ------- -------- ----------- ---------- ---------- The Hartford Advisors Fund Class A........................ -4.65% N/A N/A 13.85% N/A N/A Class B........................ -4.84% N/A N/A 14.23% N/A N/A Class C(4)..................... -1.83% N/A N/A 14.23% N/A N/A Fortis Asset Allocation Portfolio Class A........................ -6.03% 12.18% 12.64% N/A N/A N/A Class B........................ -5.04% 12.44% N/A N/A 13.70% N/A Class H........................ -5.04% 12.45% N/A N/A 13.70% N/A Class C........................ -2.76% 12.65% N/A N/A 13.65% N/A Class Z........................ -0.91% N/A N/A N/A N/A 8.45% S&P 500 Index(5)................. -9.10% 18.30% 17.43% 20.69% 20.24% 0.74% Lehman Brothers Aggregate Bond Index(6)....................... 11.63% 6.46% 7.96% 7.57% 8.21% 8.81% Lehman Brothers Government/ Corporate Bond Index(7)........ 11.85% 6.24% 8.00% 7.49% 7.16% 9.61%
- --------------- (1) 7/22/96 (2) 11/14/94 (3) 7/27/99 (4) The Hartford Advisors Fund Class C shares commenced operations on July 31, 1998. Class C share performance prior to July 31, 1998 reflects Class B share performance and operating expenses less Class C share sales charges. (5) A market capitalization weighted price index composed of 500 widely-held common stocks. (6) An unmanaged index of government, corporate and mortgage-backed securities with an average maturity of approximately nine years. (7) A broad-based, unmanaged, market-value weighted index of all debt obligations of the U.S. Treasury and U.S. Government agencies (excluding mortgage-backed securities) and of all publicly issued, fixed-rate, nonconvertible, investment grade domestic corporate debt. 26 THE HARTFORD GLOBAL LEADERS FUND/FORTIS GLOBAL GROWTH PORTFOLIO
SINCE INCEPTION -- SINCE FORTIS FUND INCEPTION -- ----------------------- HARTFORD CLASS B, H 1 YEAR 5 YEARS FUND(1) CLASS A(2) AND C(3) ------- ------- ------------ ---------- ---------- The Hartford Global Leaders Fund Class A................................ -12.36% N/A 26.11% N/A N/A Class B................................ -12.93% N/A 27.44% N/A N/A Class C................................ -9.79% N/A 27.87% N/A N/A Fortis Global Growth Portfolio Class A................................ -23.46% 10.86% N/A 12.64% N/A Class B................................ -22.82% 10.88% N/A N/A 13.14% Class H................................ -22.79% 10.89% N/A N/A 13.15% Class C................................ -20.98% 11.19% N/A N/A 13.21% MSCI Index(4)............................ -13.18% 12.52% 18.80% 11.94% 13.91%
- --------------- (1) 9/30/98 (2) 7/08/91 (3) 11/14/94 (4) A broad-based, unmanaged, market capitalization weighted, total return index which measures the performance of 23 developed country global stock markets, including the United States, Canada, Europe, Australia, New Zealand and the Far East. THE HARTFORD GROWTH AND INCOME FUND/FORTIS GROWTH & INCOME FUND
SINCE INCEPTION -- SINCE INCEPTION -- 1 YEAR 5 YEARS HARTFORD FUND(1) FORTIS FUND(2) ------- ------- ------------------ ------------------ The Hartford Growth and Income Fund Class A................................. -11.63% N/A 7.90% N/A Class B................................. -12.22% N/A 8.43% N/A Class C(3).............................. -9.08% N/A 9.04% N/A Fortis Growth & Income Fund Class A................................. -0.77% 12.19% N/A 12.19% Class B................................. -0.06% 12.22% N/A 12.22% Class H................................. -0.06% 12.22% N/A 12.22% Class C................................. 2.44% 12.44% N/A 12.44% S&P 500 Index(4).......................... -9.10% 18.30% 11.76% 18.30%
- --------------- (1) 4/30/98 (2) 1/02/96 (3) The Hartford Growth and Income Fund Class C shares commenced operations on July 31, 1998. Class C share performance prior to July 31, 1998 reflects Class B share performance and operating expenses less Class C share sales charges. (4) A market capitalization weighted price index composed of 500 widely held common stocks. 27 THE HARTFORD HIGH YIELD FUND/FORTIS HIGH YIELD PORTFOLIO
SINCE INCEPTION -- SINCE INCEPTION -- HARTFORD FORTIS FUND CLASS 1 YEAR 5 YEARS 10 YEARS FUND(1) B, C, H(2) ------- ------- -------- ------------ ------------------ The Hartford High Yield Fund Class A.............................. -3.91% N/A N/A 1.21% N/A Class B.............................. -5.08% N/A N/A 1.27% N/A Class C.............................. -2.06% N/A N/A 2.13% N/A Fortis High Yield Portfolio Class A.............................. -11.39% 1.97% 10.15% N/A N/A Class B.............................. -10.95% 2.05% N/A N/A 3.36% Class H.............................. -10.81% 2.08% N/A N/A 3.36% Class C.............................. -8.73% 2.23% N/A N/A 3.34% Lehman High Yield Corporate Index(3)... -5.86% 6.62% 9.09% -0.70% 6.34%
- --------------- (1) 9/30/98 (2) 11/14/94 (3) A broad-based, market-value weighted index that tracks the total return performance of non-investment grade, fixed-rated, publicly placed, dollar denominated and nonconvertible debt registered with the SEC. THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND/FORTIS INTERNATIONAL EQUITY PORTFOLIO
SINCE INCEPTION -- SINCE INCEPTION -- 1 YEAR HARTFORD FUND(1) FORTIS FUND(2) ------- ------------------ ------------------ The Hartford International Opportunities Fund Class A.......................................... -20.17% 7.21% N/A Class B.......................................... -21.20% 7.47% N/A Class C(3)....................................... -16.20% 7.56% N/A Fortis International Equity Portfolio Class A.......................................... -28.86% N/A 20.67% Class B.......................................... -28.41% N/A 21.29% Class H.......................................... -28.43% N/A 21.24% Class C.......................................... -26.61% N/A 21.95% EAFE GDP Index(4).................................. -18.04% 10.51%(5) 8.52% MSCI EAFE Index(6)................................. -13.96% 6.25%(5) 5.14%
- --------------- (1) 7/22/96 (2) 3/02/98 (3) Class C shares commenced operation on July 31, 1998. Class C share performance prior to July 31, 1998 reflects Class B shares performance and operating expenses less Class C share sales charges. (4) The Morgan Stanley Europe, Australia, Far East GDP Index is an unmanaged index of stocks of companies representing stock markets in Europe, Australia, New Zealand and the Far East. (5) Return is from 7/31/96 to 12/31/00. (6) An unmanaged index of the stocks of Europe, Australia and the Far East. 28 THE HARTFORD MONEY MARKET FUND/FORTIS MONEY FUND
SINCE INCEPTION -- SINCE INCEPTION -- FORTIS FUND CLASS 1 YEAR 5 YEARS 10 YEARS HARTFORD FUND(1) B, H AND C(2) ------ ------- -------- ------------------ ------------------ The Hartford Money Market Fund Class A........................... 5.53% N/A N/A 4.79% N/A Class B........................... -0.20% N/A N/A 3.29% N/A Class C(3)........................ -2.74% N/A N/A 3.79% N/A Fortis Money Fund Class A........................... 5.70% 4.89% 4.40% N/A N/A Class B........................... 1.27% 3.78% N/A N/A 4.18% Class H........................... 1.25% 3.80% N/A N/A 4.18% Class C........................... 3.84% 4.38% N/A N/A 4.46% 60-Day Treasury Bill Index(4)....... 6.11% 5.27% 4.85% 5.27% 5.35%(5)
- --------------- (1) 7/22/96 (2) 11/14/94 (3) The Hartford Money Market Fund Class C shares commenced operations on July 31, 1998. Class C share performance prior to July 31, 1998 reflects Class B share performance and operating expenses less Class C share sales charges. (4) An unmanaged index of short-term treasury bills. (5) Return is from 10/31/94 to 12/31/00. 29 COMPARISON OF OPERATIONS INVESTMENT ADVISORY AGREEMENTS Hartford Investment Financial Services, LLC ("HIFSCO") serves as the investment manager of each of the Hartford Funds. HIFSCO also has acted as the investment manager of each of the Fortis Funds since the Fortis Funds' previous adviser, Fortis Advisers, Inc., was acquired by The Hartford Life and Accident Insurance Company on April 2, 2001 (the "Acquisition"). HIFSCO is a wholly-owned indirect subsidiary of The Hartford Financial Services Group, Inc. ("The Hartford"), a Connecticut financial services company with over $170.6 billion in assets as of September 30, 2001. HIFSCO had over $11.0 billion in assets under management as of September 30, 2001. HIFSCO is responsible for the management of each Hartford Fund and each Fortis Fund and supervises the activities of the investment sub-advisers described below. HIFSCO is principally located at 200 Hopmeadow Street, Simsbury, Connecticut 06070. Wellington Management Company, LLP is the investment sub-adviser to The Hartford Advisers Fund, The Hartford Global Leaders Fund, The Hartford Growth and Income Fund and The Hartford International Opportunities Fund. Since the Acquisition, Wellington Management also has acted as the investment sub-adviser to each corresponding Fortis Fund: Fortis Asset Allocation Portfolio, Fortis Global Growth Portfolio, Fortis Growth & Income Fund and Fortis International Equity Portfolio. Wellington Management, a Massachusetts limited liability partnership, is a professional investment counseling firm that provides services to investment companies, employee benefit plans, endowments, foundations and other institutions and individuals. Wellington Management and its predecessor organizations have provided investment advisory services since 1928. As of June 30, 2001, Wellington Management had investment management authority over approximately $295 billion in assets. Wellington Management is principally located at 75 State Street, Boston Massachusetts 02109. The Hartford Investment Management Company ("HIMCO(R)") is the investment sub-adviser to The Hartford High Yield Fund, The Hartford Money Market Fund and, since the Acquisition, Fortis High Yield Portfolio and Fortis Money Fund. HIMCO is a professional money management firm that provides services to investment companies, employee benefit plans and insurance companies. HIMCO is a wholly owned subsidiary of The Hartford. As of September 30, 2001, HIMCO and its wholly owned subsidiary had investment authority over approximately $73.7 billion in assets. HIMCO is principally located at 55 Farmington Avenue, Hartford, Connecticut 06105. The same individuals from either Wellington Management or HIMCO who are primarily responsible for the day-to-day management of a Hartford Fund are also responsible for the day-to-day management of the corresponding Fortis Fund. OTHER SERVICE PROVIDERS The Hartford Funds and the Fortis Funds have the same distributor, transfer agent and custodian, and different independent accountants. In all cases, the types of services provided to the Funds under these service arrangements are substantially similar.
HARTFORD FUNDS FORTIS FUNDS -------------- ------------ Distributor.................... Hartford Investment Financial Hartford Investment Financial Services Company Services Company Transfer Agent................. Hartford Administrative Services Hartford Administrative Services Company (known as Fortis Company Advisers, Inc. prior to the Acquisition) Custodian...................... State Street Bank and Trust State Street Bank and Trust Company Company Independent Accountants........ Arthur Andersen LLP KPMG LLP
30 SALES LOAD, DISTRIBUTION AND SHAREHOLDER SERVICING ARRANGEMENTS Each Hartford Fund offers Class A, Class B, Class C and Class Y Shares. Each class, other than Class Y, has adopted a Rule 12b-1 plan which allows the class to pay distribution fees for the sale and distribution of its shares and for providing services to shareholders. Each Fortis Fund offers Class A, Class B, Class H and Class C shares. In addition, Fortis Asset Allocation Portfolio offers Class Z shares. Each of these classes, other than Class Z, has also adopted a Rule 12b-1 plan. In the Reorganization, Fortis Fund shareholders will receive Hartford Fund shares of a comparable class, as set forth below:
WILL RECEIVE SHARES OF FORTIS FUND HARTFORD FUND - ----------- ---------------------- Class A Class A Class B or Class H Class B Class C Class C Class Z Class A
Hartford Fund and Fortis Fund Class A Shares. Class A shares of both the Hartford Funds and the Fortis Funds may be purchased at a public offering price equal to their net asset value per share plus a sales charge, except that Class A shares of The Hartford Money Market Fund and Fortis Money Fund are not subject to a sales charge. A comparison of front-end sales charges is set forth in the following tables. SALES CHARGES FOR EQUITY FUNDS*
HARTFORD FUNDS FORTIS FUNDS} ----------------------------------- ----------------------------------- DEALER DEALER COMMISSION COMMISSION AS A % OF AS A % OF AS A % OF AS A % OF AS A % OF AS A % OF OFFERING NET OFFERING OFFERING NET OFFERING YOUR INVESTMENT PRICE INVESTMENT PRICE PRICE INVESTMENT PRICE** - --------------- --------- ---------- ---------- --------- ---------- ---------- Less than $50,000.................. 5.50% 5.82% 4.75% 4.75% 4.99% 4.00% $50,000-$99,999.................... 4.50% 4.71% 4.00% 4.75% 4.99% 4.00% $100,000-$249,999.................. 3.50% 3.63% 3.00% 3.50% 3.63% 3.00% $250,000-$499,999.................. 2.50% 2.56% 2.00% 2.50% 2.56% 2.25% $500,000-$999,999.................. 2.00% 2.04% 1.75% 2.00% 2.04% 1.75% $1,000,000 or more***.............. 0% 0% **** 0% 0% 1.00%
- --------------- * Includes The Hartford Advisers Fund, The Hartford Global Leaders Fund, The Hartford Growth and Income Fund, The Hartford International Opportunities Fund, Fortis Asset Allocation Portfolio, Fortis Global Growth Portfolio, Fortis Growth & Income Fund, and Fortis International Equity Portfolio. ** A dealer receives additional compensation (as a percentage of the sales charge) when its annual sales of funds in the Fortis Fund family that have a sales charge exceed $10 million (2%), $25 million (4%) and $50 million (5%). *** There is a contingent deferred sales charge of 1% on Hartford Fund shares sold within 18 months of purchase and on Fortis Fund shares sold within two years of purchase. **** Up to 1.00% of the first $4 million, plus 0.50% of the next $6 million, plus 0.25% of share purchases over $10 million. 31 SALES CHARGES FOR HIGH YIELD FUNDS
THE HARTFORD HIGH YIELD FUND FORTIS HIGH YIELD PORTFOLIO ----------------------------------- ----------------------------------- DEALER DEALER COMMISSION COMMISSION AS A % OF AS A % OF AS A % OF AS A % OF AS A % OF AS A % OF OFFERING NET OFFERING OFFERING NET OFFERING YOUR INVESTMENT PRICE INVESTMENT PRICE PRICE INVESTMENT PRICE* - --------------- --------- ---------- ---------- --------- ---------- ---------- Less than $50,000............. 4.50% 4.71% 3.75% 4.50% 4.71% 4.00% $50,000-$99,999............... 4.00% 4.17% 3.50% 4.50% 4.71% 4.00% $100,000-$249,999............. 3.50% 3.63% 3.00% 3.50% 3.63% 3.00% $250,000-$499,999............. 2.50% 2.56% 2.00% 2.50% 2.56% 2.25% $500,000-$999,999............. 2.00% 2.04% 1.75% 2.00% 2.04% 1.75% $1,000,000 or more**.......... 0% 0% *** 0% 0% 1.00%
- --------------- * A dealer receives additional compensation (as a percentage of the sales charge) when its annual sales of funds in the Fortis Fund family that have a sales charge exceed $10 million (2%), $25 million (4%) and $50 million (5%). ** There is a contingent deferred sales charge of 1% on Hartford Fund shares sold within 18 months of purchase and on Fortis Fund shares sold within two years of purchase. *** Up to 1.00% of the first $4 million, plus 0.50% of the next $6 million, plus 0.25% of share purchases over $10 million. Hartford Fund Class A shares are subject to Rule 12b-1 distribution and service fees of 0.35%. The Hartford Funds' distributor has contractually agreed to reduce this fee to 0.30% through at least February 28, 2003. The waiver may be discontinued at any time thereafter. Rule 12b-1 fees for the Fortis Funds are 0.45% for Asset Allocation Portfolio, 0.35% for High Yield Portfolio, 0.25% for Global Growth Portfolio, Growth & Income Fund and International Equity Portfolio, and 0.20% for Money Fund. Hartford Fund Class B Shares; Fortis Fund Class B and Class H Shares. Class B shares of the Hartford Funds and Class B and Class H shares of the Fortis Funds are offered at their net asset value per share, without any initial sales charge. The shares are subject to a contingent deferred sales charge ("CDSC") if sold within a certain period of time, as described in the table below. Hartford Fund Class B shares and Fortis Fund Class B and Class H shares automatically convert to Class A shares after eight years.
YEARS AFTER HARTFORD FUNDS FORTIS FUNDS PURCHASE CDSC CDSC - ----------- -------------- ------------ 1st year.................................................... 5.00% 4.00% 2nd year.................................................... 4.00% 4.00% 3rd year.................................................... 3.00% 3.00% 4th year.................................................... 3.00% 3.00% 5th year.................................................... 2.00% 2.00% 6th year.................................................... 1.00% 1.00% After 6 years............................................... None None
Both Hartford Fund Class B shares and Fortis Fund Class B and Class H shares are subject to Rule 12b-1 distribution and service fees of 1.00% of a Fund's average daily net assets. Class B and Class H shares of the Fortis Funds differ only in the amount of compensation paid by the Fortis Funds' distributor to dealers who sell the shares. Hartford Fund and Fortis Fund Class C Shares. Hartford Fund Class C shares are subject to a 1.00% front-end sales charge, as well as a 1.00% CDSC if the shares are sold within one year of purchase. 32 Fortis Fund Class C shares also are subject to a 1.00% CDSC if sold within one year of purchase, but they are not subject to an initial sales charge. Both Hartford Fund and Fortis Fund Class C shares are subject to Rule 12b-1 distribution and service fees of 1.00% of a Fund's average daily net assets. There is no automatic conversion to Class A shares for either the Hartford Fund or the Fortis Fund Class C shares, so annual expenses continue at the Class C level throughout the life of an investment. Sales Charge Reductions and Waivers. Class A share sales charges for both the Hartford Funds and the Fortis Funds are subject to reductions and waivers under similar circumstances, as set forth in the Funds' prospectuses. The Hartford Funds waive payment of the Class B share and Class C share CDSC to make systematic withdrawal plan payments that are limited annually to no more than 12% of the value of the account at the time the plan is initiated. The Fortis Funds waive payment of the Class B share and Class H share CDSC (but not the Class C share CDSC) on redemptions of shares that represent, on an annual (non-cumulative) basis, up to 10% of the amount (at the time of investment) of the shareholder's purchases. The Hartford Funds and the Fortis Funds waive payment of CDSCs under certain other similar circumstances, as set forth in the Funds' prospectuses. Fortis Fund Class Z Shares. Fortis Fund Class Z shares are available only in Asset Allocation Portfolio and only for investment by: - Accounts of Fortis, Inc. or its subsidiaries, officers, directors, employees and sales representatives (and their families) which were in existence and entitled to purchase Class Z shares at the time of the acquisition of Fortis Advisers, Inc. by The Hartford Life and Accident Insurance Company ("Hartford Life") on April 2, 2001 (the "Acquisition"); - Pension, profit sharing and other retirement plans created for the benefit of Fortis Inc. or its subsidiaries which were in existence and entitled to purchase Class Z shares at the time of the Acquisition; and - Present or former officers, directors and employees (and their families) of the Fortis Funds, The Hartford, Wellington Management, the Funds' transfer agent, and their affiliates. Investors do not pay any sales charge on Fortis Fund Class Z shares, either at the time of purchase or upon redemption. In addition, Fortis Fund Class Z shares are not subject to any Rule 12b-1 distribution or service fees. Fortis Fund Class Z shares will be exchanged for Hartford Fund Class A shares which are subject to Rule 12b-1 distribution and service fees of 0.35%, as described above. PURCHASE, EXCHANGE AND REDEMPTION PROCEDURES The transfer agent and dividend disbursing agent for each of the Hartford Funds and Fortis Funds is Hartford Administrative Services Company (known as Fortis Advisers, Inc. before the Acquisition). Procedures for the purchase, exchange and redemption of each Hartford Fund's shares are similar to the procedures applicable to the purchase, exchange and redemption of the Fortis Fund shares. Reference is made to the Prospectuses of the Hartford Funds, and the Prospectuses of the Fortis Funds, each of which is incorporated herein by reference, for a complete description of the procedures applicable to purchases, exchanges and redemptions of Hartford Fund and Fortis Fund shares, respectively. Set forth below is a brief description of the significant purchase, exchange and redemption procedures applicable to the Hartford Fund shares and the Fortis Fund shares. Minimum Investments. The minimum initial investment for each Hartford Fund, which may be waived in certain circumstances, is $500 for non-retirement accounts, $250 for retirement accounts, and $25 to open an Automatic Investment Plan, with required investments of at least $25 a month. The minimum required for subsequent investments is $25. 33 The minimum initial investment in any of the Fortis Funds is $500, except that the minimum initial investment under the Systematic Investment Plan is $25 for the Pre-Authorized Check Plan and $50 for any other Systematic Investment Plan (except for telephone or wire orders). The minimum subsequent investment is $50 for investments by mail ($25 for the Pre-Authorized Check Plan), $25 for investments by telephone through the Fortis Information Line and Fortis Internet Website, and $500 for other investments by telephone or investments by wire. Investing by Telephone. Both the Hartford Funds and the Fortis Funds offer automated telephone investing and internet investing. Hartford Fund investors may add to an account by telephone or the internet if their bank or credit union is a member of the Automated Clearing House (ACH) system and they have completed the "Telephone Exchanges and Telephone Redemption" and the "Bank Account or Credit Union Information" sections on their account application. For the Fortis Funds, except for Fortis Money Fund, if an investor has a bank account authorization form on file, he or she may invest $25-$150,000 by telephone through the automated Fortis Information Line and Fortis Internet Website. Registered representatives may also make purchases on an investor's behalf by telephone. The investor's check and account application must be promptly forwarded so as to be received within three business days. Investing by Wire. An investor may make initial and subsequent purchases by wire of both Hartford Fund and Fortis Fund shares by instructing his or her bank to wire funds in the manner described in the respective Fund's prospectus. For the Fortis Funds, there is a $500 minimum for wire purchases. Before making an initial purchase of shares by wire in either the Hartford Funds or the Fortis Funds, an investor must complete an application and obtain an account number. Investing by Mail. Investors in both the Hartford Funds and the Fortis Funds may open and add to accounts by mail. Exchange Privilege. Hartford Fund shareholders may exchange shares of one Hartford Fund for shares of the same class of any other Hartford Fund. Similarly, except for Class Z shares, shareholders may exchange their Fortis Fund shares for the same class of shares in another Fortis Fund. Class Z shares of Asset Allocation Portfolio may be exchanged for Class Z shares of Fortis Growth Fund or for Class A shares of any other Fortis Fund. For both the Fortis Funds and the Hartford Funds, shareholders pay no exchange fee or additional sales charges for exchanges, except in the case of exchanges of money market fund Class A shares that have not already incurred a sales charge. A Hartford Fund shareholder may make an exchange by calling his or her financial representative or the Fund's transfer agent. A Fortis Fund shareholder may make an exchange by writing to or telephoning his or her broker-dealer, sales representative, or the applicable Fortis Fund. Redemption. Shares of both the Hartford Funds and the Fortis Funds may be redeemed by mail or by telephone. Redemptions by telephone are restricted to sales of up to $50,000 for the Fortis Funds and to sales of $50,000 in any seven day period for the Hartford Funds. Hartford Money Market Fund Class A shares and Fortis Money Fund shares also may be redeemed by check for amounts over $100. Both the Hartford Funds and the Fortis Funds offer automatic investment plans and systematic withdrawal plans. The Hartford Funds also offer a dollar cost averaging plan. For additional information concerning purchase, exchange and redemption procedures for the Hartford Funds, see the accompanying Hartford Fund prospectus under the captions "About Your Account" and "Transaction Policies." 34 DIVIDENDS AND OTHER DISTRIBUTIONS The following chart compares when each Fortis Fund and each Hartford Fund declares and pays dividends. All of the Fortis Funds and Hartford Funds declare and pay capital gain distributions, if any, at least annually.
DIVIDEND DIVIDEND FORTIS FUND DISTRIBUTIONS HARTFORD FUND DISTRIBUTIONS - ----------- ------------- ------------- ------------- Fortis Asset Declares and pays The Hartford Advisers Declares and pays Allocation Portfolio quarterly Fund quarterly Fortis Global Growth Declares and pays The Hartford Global Declares and pays Portfolio annually Leaders Fund annually Fortis Growth & Income Declares and pays The Hartford Growth and Declares and pays Fund annually Income Fund quarterly Fortis High Yield Declares daily The Hartford High Yield Declares and pays Portfolio and pays monthly Fund monthly Fortis International Declares and pays The Hartford Declares and pays Equity Portfolio annually International annually Opportunities Fund Fortis Money Fund Declares daily The Hartford Money Declares daily and and pays monthly Market Fund pays monthly
With respect to both the Hartford Funds and the Fortis Funds, unless a shareholder otherwise instructs, dividends and/or capital gain distributions will be reinvested automatically in additional shares of the same class at net asset value. TAX CONSEQUENCES As a condition to the Reorganization, each Hartford Fund and each Fortis Fund will receive an opinion of counsel that the Reorganization will be considered a tax-free "reorganization" under applicable provisions of the Code so that neither the Hartford Fund nor the Fortis Fund nor the shareholders of the Fortis Fund will recognize any gain or loss. The tax basis of the Hartford Fund's shares received by the Fortis Fund's shareholders will be the same as the tax basis of their shares in the Fortis Fund. INFORMATION ABOUT THE REORGANIZATION CONSIDERATIONS BY THE BOARD OF DIRECTORS OF THE FORTIS FUNDS The Board of Directors of the Fortis Funds believes that the proposed Reorganization is in the best interests of each Fortis Fund and its shareholders and that the interests of the Fortis Fund shareholders will not be diluted as a result of the Reorganization. The Board first considered engaging in such transactions with the Hartford Funds at an in-person meeting of the Board of Directors held on June 20, 2001. At this meeting, representatives of Hartford Life and its affiliates discussed the proposed Reorganization with the Board in general terms. These representatives also presented certain preliminary information to the Board, including comparative performance, expense and asset size information for the Hartford Funds and the Fortis Funds. In considering the proposed Reorganization, the Board was advised at all formal meetings by the Fortis Funds' outside legal counsel. The Board met again in person on August 2, 2001 to receive additional information concerning the Reorganization. At this meeting, the Board (including all of the directors who are not "interested persons," as that term is defined in the Investment Company Act of 1940, as amended ("1940 Act")) unanimously approved the Reorganization, subject to the satisfaction of certain conditions including their review and approval of the Plan. On August 10, 2001, four independent directors of the Fortis Funds met informally in person with four independent directors of the Hartford Funds. The Fortis Fund independent directors then met telephonically on August 24, 2001, to discuss the status of the conditions to their approval. The Board subsequently reviewed and unanimously approved the Reorganization and Plan at an in-person meeting (with two directors attending telephonically) held September 26, 2001, and recommended its 35 approval by Fortis Fund shareholders. In approving the Reorganization, the Board determined that participation in the Reorganization is in the best interests of each Fortis Fund and that the interests of Fortis Fund shareholders would not be diluted as a result of the Reorganization. In approving the Plan, the Board considered the following factors: - The investment objectives of the Fortis Funds and their corresponding Hartford Funds are substantially similar and their investment policies and strategies are substantially identical. In addition, corresponding Fortis Funds and Hartford Funds are managed by the same portfolio managers. Thus, the Reorganization will enable Fortis Fund shareholders to continue their current investment programs without substantial disruption. - The Reorganization will result in each surviving Fund having a larger asset base. In addition, the surviving Funds will have access to The Hartford's substantially larger distribution network which may generate additional assets for the Funds. Thus, the Reorganization may give Fortis Fund shareholders the benefit of economies of scale. - The Reorganization will allow Fortis Fund shareholders access to The Hartford's larger family of retail mutual funds. After the Reorganization, Fortis Fund shareholders will be able to exchange into shares of any other Hartford retail mutual fund without paying a sales charge (except for The Hartford MidCap Fund, which currently is not available to new investors). Thus, as a result of the Reorganization, Fortis Fund shareholders will gain access to a much broader range of funds. - Fortis Fund shareholders will not have to pay any federal income tax solely as a result of the Reorganization. - The Board noted that the Fortis Funds will be required to distribute any realized capital gains to shareholders prior to the Reorganization (except with respect to Fortis Money Fund, which would not be expected to have any capital gains or losses) and that any such distributions generally would be taxable to shareholders. - Hartford Life or the applicable Hartford Funds will be responsible for the payment of the expenses related to consummating the Reorganization. - The proposed Reorganization will be effected on the basis of the relative net asset values of the Hartford Funds and their corresponding Fortis Funds, so that Fortis Fund shareholders will receive Hartford Fund shares having a total net asset value equal to the total net asset value of their Fortis Fund shares as of the closing of the Reorganization. - The historical performance of the respective Hartford Funds generally compares favorably to that of the corresponding Fortis Funds. In addition, the expense ratios after voluntary fee waivers of the Hartford Funds are within industry norms and are comparable to or slightly lower than those of the corresponding Fortis Funds in three out of six cases. The Board noted in this regard that the after-waiver expense ratios of The Hartford Global Leaders Fund, The Hartford High Yield Fund and The Hartford Money Market Fund are higher than those of Fortis Global Growth Portfolio, Fortis High Yield Portfolio and Fortis Money Fund, respectively. In addition, for the Fortis Asset Allocation Portfolio Class Z shareholders, expenses will be higher after the Reorganization because those shares are being exchanged for Class A Hartford Fund shares. The Board also noted that HIFSCO could discontinue its fee waivers at any time after February 28, 2002 (which date was changed to February 28, 2003 subsequent to the Board meeting), which would result in increased expenses for several of the Hartford Funds. See "Summary -- Comparative Fee Tables." The Board believes that these latter factors are counterbalanced by the economies of scale that may result from the proposed Reorganization and by the other anticipated benefits of the proposed transactions to Fortis Fund shareholders. The Board did not assign relative weights to the foregoing factors or deem any one or group of them to be controlling in and of themselves. 36 Subsequent to the September 26, 2001 Board meeting, the Hartford Funds entered into transfer agency agreements with Hartford Administrative Services Company that provide for the calculation of transfer agency fees on a different basis than had previously been the case. In addition, Hartford Fund fee and expense information for the fiscal year ended October 31, 2001 became available. The Fortis Fund Board determined that it would be appropriate to reconsider the Reorganization in light of this new financial information, and did so at its regular quarterly meeting on December 13, 2001. Upon reexamining Hartford Fund expense ratios, the Board noted that expense ratios after voluntary waivers continued to be within industry norms and remained comparable to or slightly lower than those of the corresponding Fortis Funds in three out of six cases when comparing Class A shares. The Board also noted that the new transfer agency fees were within industry norms and that HIFSCO had extended its fee waivers through February 28, 2003. Based on these factors and its earlier considerations, the Board reaffirmed its determination that participation in the Reorganization is in the best interests of each Fortis Fund and that the interests of Fortis Fund shareholders will not be diluted as a result of the Reorganization. Under Maryland law and the Fortis Funds' organizational documents, the directors of each Fortis Fund are entitled to be indemnified by the applicable fund for certain liabilities they may incur in connection with their service as directors. Under the Plan, each Hartford Fund is required to assume all of the liabilities of its corresponding Fortis Fund, including any obligation of the Fortis Fund to indemnify the Fortis Fund directors. The Board of Directors of the Hartford Funds (including a majority of the Directors who are not "interested persons," as that term is defined in the 1940 Act), approved the Plan on September 26, 2001. The Board has unanimously concluded that consummation of the Reorganization is in the best interests of the Hartford Funds and the shareholders of the Hartford Funds and that the interests of Hartford Fund shareholders would not be diluted as a result of effecting the Reorganization and have unanimously voted to approve the Plan. DESCRIPTION OF THE PLAN OF REORGANIZATION The Plan provides that your Fortis Fund will transfer all its assets and liabilities to a corresponding Hartford Fund in exchange solely for the Hartford Fund's shares to be distributed pro rata by the Fortis Fund to its shareholders in complete liquidation of the Fortis Fund on or about February 19, 2002 (the "Closing Date"). The value of each Fortis Fund's assets to be acquired by the Hartford Fund shall be the value of such assets computed as of the close of regular trading on the New York Stock Exchange (normally 4:00 p.m. Eastern time) on the Closing Date (the "Closing"). Fortis Fund shareholders will become shareholders of the corresponding Hartford Fund as of the Closing, and will be entitled to the Hartford Fund's next dividend distribution thereafter. Fortis Fund shareholders will receive Hartford Fund shares of a comparable class having a total net asset value equal to the total net asset value of their Fortis Fund shares as of the Closing. Fortis Fund Class A, Class B and Class C shareholders will receive Class A, Class B or Class C shares, respectively, of the corresponding Hartford Fund. Fortis Fund Class H shareholders will receive Hartford Fund Class B shares. Fortis Asset Allocation Portfolio Class Z shareholders will receive The Hartford Advisers Fund Class A shares. On or before the Closing, each Fortis Fund will declare and pay a dividend or dividends which, together with all previous dividends, shall have the effect of distributing to its shareholders substantially all of its net investment income and realized net capital gain, if any, for all taxable years ending on or before the Closing Date. The Plan provides that no sales charges will be incurred by Fortis Fund shareholders in connection with their acquisition of Hartford Fund shares in the Reorganization. The Plan also provides that former holders of Fortis Fund shares that were subject to a contingent deferred sales charge will receive credit for the period they held such Fortis Fund shares in determining any contingent deferred sales charge due upon redemption of the Hartford Fund shares they receive in the Reorganization and in determining the date upon which any Hartford Fund Class B shares received in the Reorganization convert to Hartford Fund Class A shares. 37 Consummation of the Reorganization is subject to the conditions set forth in the Plan, including receipt of an opinion in form and substance reasonably satisfactory to the Fortis Funds and the Hartford Funds, as described under the caption "Federal Income Tax Consequences" below. The Plan may be terminated and the Reorganization may be abandoned at any time before or after approval by the Fortis Fund shareholders prior to the Closing Date by either party if it believes that consummation of the Reorganization would not be in the best interests of its shareholders. Under the Plan, Hartford Life or the applicable Hartford Funds will be responsible for the payment of the expenses related to consummating the Reorganization. Such expenses include, but are not limited to, accountants' fees, legal fees, registration fees, transfer taxes (if any), the fees of banks and transfer agents and the costs of preparing, printing, copying and mailing proxy solicitation materials to the Fortis Fund shareholders and the costs of holding the Special Meeting (as hereinafter defined). The foregoing description of the Plan entered into between the Hartford Funds and the Fortis Funds is qualified in its entirety by the terms and provisions of the Plan, the form of which is attached hereto as Appendix A and incorporated herein by reference thereto. DESCRIPTION OF HARTFORD FUND SHARES Full and fractional shares of the Hartford Funds will be issued in the Reorganization without the imposition of a sales charge or other fee to the Fortis Fund shareholders in accordance with the procedures described above. Shares of the Hartford Funds to be issued to Fortis Fund shareholders under the Plan will be fully paid and non-assessable when issued and transferable without restriction and will have no preemptive or conversion rights. Reference is hereby made to the Prospectus of the Hartford Fund into which your Fortis Fund will be reorganized, provided herewith for additional information about shares of the Hartford Fund. FEDERAL INCOME TAX CONSEQUENCES As a condition to each Reorganization, the participating Hartford Fund and Fortis Fund will receive an opinion from counsel to the effect that, on the basis of the existing provisions of the Code, current administrative rules and court decisions, for federal income tax purposes: (1) the Reorganization will qualify as a "reorganization" under section 368(a)(1) of the Code, and the Hartford Fund and the Fortis Fund involved therein each will be "a party to a reorganization" within the meaning of section 368(b) of the Code; (2) the Fortis Fund will recognize no gain or loss on the transfer of its assets to the Hartford Fund in exchange solely for the Hartford Fund's shares or on the subsequent distribution of those shares to the Fortis Fund's shareholders in exchange for their Fortis Fund shares; (3) the Hartford Fund will recognize no gain or loss on its receipt of those assets in exchange solely for its shares; (4) the Hartford Fund's basis in those assets will be the same as the Fortis Fund's basis therein immediately before the Reorganization, and the Hartford Fund's holding period for those assets will include the Fortis Fund's holding period therefor; (5) a Fortis Fund shareholder will recognize no gain or loss on the constructive exchange of the shareholder's Fortis Fund shares solely for Hartford Fund shares pursuant to the Reorganization; and (6) a Fortis Fund shareholder's aggregate basis in the Hartford Fund shares received by the shareholder in the Reorganization will be the same as the aggregate basis in the shareholder's Fortis Fund shares to be constructively surrendered in exchange for those Fortis Fund shares, and the shareholder's holding period for those Hartford Fund shares will include the shareholder's holding period for those Fortis Fund shares, provided the shareholder holds them as capital assets at the time of the Reorganization. You should recognize that an opinion of counsel is not binding on the Internal Revenue Service ("IRS") or any court. Neither the Fortis Funds nor the Hartford Funds expect to obtain a ruling from the IRS regarding the consequences of the Reorganizations. Accordingly, if the IRS sought to challenge the tax treatment of any Reorganization and was successful, neither of which is anticipated, the Reorganization would be treated as a taxable sale of assets of the participating Fortis Fund, followed by the taxable liquidation thereof. 38 Because the investment policies and practices of the Hartford Funds are substantially identical to those of their corresponding Fortis Funds, the Hartford Funds do not anticipate that taxable sales involving significant amounts of securities of the combined portfolios will have to be made after the Reorganizations. COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS AND OBLIGATIONS At a special meeting of Fortis Fund shareholders held on May 31, 2001, as adjourned to June 21, 2001, Fortis Fund shareholders approved the reorganization of each Fortis Fund as a series of a Maryland corporation. The Fortis Funds had previously been organized as Minnesota corporations or series of Minnesota corporations. The reorganization was effected as of the close of business on November 30, 2001. Because the Hartford Funds are also series of a Maryland corporation, your rights as a shareholder of a Hartford Fund will not differ from your rights as a shareholder of a Fortis Fund. 39 CAPITALIZATION The following tables set forth the unaudited capitalization of each Fortis Fund and of the Hartford Fund into which the Fortis Fund will be reorganized as of October 31, 2001:
FORTIS ASSET HARTFORD PRO THE HARTFORD ALLOCATION FORMA ADVISERS FUND PORTFOLIO COMBINED ------------- ---------------- ------------ Net Assets (in thousands)........................... $ 2,245,891 $ 224,074 $ 2,469,965 Net Asset Value Per Share Class A........................................... $ 14.38 $ 14.14 $ 14.38 Class B........................................... $ 14.24 $ 14.02 $ 14.24 Class C........................................... $ 14.37 $ 13.94 $ 14.37 Class H........................................... $ -- $ 14.00 $ -- Class Z........................................... $ -- $ 14.13 $ -- Class Y........................................... $ 14.54 -- $ 14.54 Shares Outstanding Class A........................................... 75,719,253 10,755,133 86,456,192 Class B........................................... 43,726,969 1,638,505 47,881,273 Class C........................................... 33,286,046 756,693 34,020,096 Class H........................................... -- 2,584,675 -- Class Z........................................... -- 164,162 -- Class Y........................................... 3,875,798 -- 3,875,798
THE HARTFORD FORTIS GLOBAL HARTFORD PRO GLOBAL LEADERS GROWTH FORMA FUND PORTFOLIO COMBINED -------------- ------------- ------------ Net Assets (in thousands)............................. $ 421,549 $ 110,970 $ 532,519 Net Asset Value Per Share Class A............................................. $ 12.83 $ 18.76 $ 12.83 Class B............................................. $ 12.54 $ 17.70 $ 12.54 Class C............................................. $ 12.55 $ 17.77 $ 12.55 Class H............................................. $ -- $ 17.70 $ -- Class Y............................................. $ 13.03 $ -- $ 13.03 Shares Outstanding Class A............................................. 19,262,984 4,351,471 25,625,696 Class B............................................. 5,021,010 631,687 7,075,559 Class C............................................. 8,254,026 202,464 8,540,702 Class H............................................. -- 823,909 -- Class Y............................................. 607,000 -- 607,000
40
THE HARTFORD FORTIS HARTFORD GROWTH AND GROWTH & PRO FORMA INCOME FUND INCOME FUND COMBINED ------------ ----------- ----------- Net Assets (in thousands).............................. $ 343,757 $ 33,920 $ 377,677 Net Asset Value Per Share Class A.............................................. $ 10.36 $ 12.94 $ 10.36 Class B.............................................. $ 10.10 $ 12.74 $ 10.10 Class C.............................................. $ 10.11 $ 12.74 $ 10.11 Class H.............................................. $ -- $ 12.75 $ -- Class Y.............................................. $ 10.52 $ -- $ 10.52 Shares Outstanding Class A.............................................. 23,146,033 1,553,904 25,086,913 Class B.............................................. 4,276,016 528,563 5,454,224 Class C.............................................. 5,974,996 150,502 6,164,649 Class H.............................................. -- 405,177 -- Class Y.............................................. 42,000 -- 42,000
THE HARTFORD FORTIS HIGH HARTFORD HIGH YIELD YIELD PRO FORMA FUND PORTFOLIO COMBINED ------------ ----------- ----------- Net Assets (in thousands)............................. $ 94,503 $ 102,164 $ 196,667 Net Asset Value Per Share Class A............................................. $ 8.45 $ 4.96 $ 8.45 Class B............................................. $ 8.43 $ 4.97 $ 8.43 Class C............................................. $ 8.43 $ 4.96 $ 8.43 Class H............................................. $ -- $ 4.96 $ -- Class Y............................................. $ 8.48 $ -- $ 8.48 Shares Outstanding Class A............................................. 5,418,019 12,754,174 12,904,493 Class B............................................. 2,006,998 2,147,217 6,276,866 Class C............................................. 3,273,993 583,456 3,617,284 Class H............................................. -- 5,105,508 -- Class Y............................................. 498,001 -- 498,001
41
THE HARTFORD FORTIS INTERNATIONAL INTERNATIONAL HARTFORD OPPORTUNITIES EQUITY PRO FORMA FUND PORTFOLIO COMBINED ------------- ------------- ---------- Net Assets (in thousands)............................... $ 126,739 $ 21,523 $ 148,262 Net Asset Value Per Share Class A............................................... $ 9.33 $ 13.31 $ 9.33 Class B............................................... $ 9.04 $ 13.06 $ 9.04 Class C............................................... $ 8.99 $ 13.06 $ 8.99 Class H............................................... $ -- $ 13.05 $ -- Class Y............................................... $ 9.49 $ -- $ 9.49 Shares Outstanding Class A............................................... 7,754,975 1,105,649 9,332,273 Class B............................................... 2,080,000 212,933 2,716,739 Class C............................................... 2,060,011 80,378 2,176,778 Class H............................................... -- 227,986 -- Class Y............................................... 1,800,010 -- 1,800,010
THE HARTFORD HARTFORD MONEY MARKET FORTIS MONEY PRO FORMA FUND FUND COMBINED ------------ ------------ ------------ Net Assets (in thousands).......................... $ 222,928 $ 209,701 $ 432,629 Net Asset Value Per Share Class A.......................................... $ 1.00 $ 1.00 $ 1.00 Class B.......................................... $ 1.00 $ 1.00 $ 1.00 Class C.......................................... $ 1.00 $ 1.00 $ 1.00 Class H.......................................... $ -- $ 1.00 $ -- Class Y.......................................... $ 1.00 $ -- $ 1.00 Shares Outstanding Class A.......................................... 86,748,000 202,662,473 289,410,473 Class B.......................................... 48,998,000 3,027,374 54,754,055 Class C.......................................... 53,873,000 1,281,979 55,154,979 Class H.......................................... -- 2,728,681 -- Class Y.......................................... 33,309,000 -- 33,309,000
42 INFORMATION ABOUT THE HARTFORD FUNDS AND THE FORTIS FUNDS HARTFORD FUNDS A discussion of the performance of each of the Hartford Funds (other than Hartford Money Market Fund) during the fiscal year ended October 31, 2001 is included in this Prospectus/Proxy Statement as Appendix B. Financial highlights for the Hartford Funds are included as Appendix C. Information about the Class A, Class B and Class C shares of each Hartford Fund is contained in the Hartford Fund's current Class A, Class B and Class C share Prospectus, each of which is incorporated herein by reference. A copy of the current Prospectus of the Hartford Fund for which your Fortis Fund shares will be exchanged is included with this Prospectus/Proxy Statement. Additional information about each Hartford Fund is included in that Fund's Statement of Additional Information, and the Statement of Additional Information dated December , 2001 (relating to this Prospectus/Proxy Statement), each of which is incorporated herein by reference. Copies of the Statements of Additional Information, which have been filed with the Securities and Exchange Commission (the "SEC"), may be obtained upon request and without charge by calling or writing the Hartford Funds at: The Hartford Mutual Funds, Inc. P.O. Box 64387 St. Paul, Minnesota 55164-0387 1-888-843-7824 The Hartford Funds are subject to the informational requirements of the Securities Act of 1933, as amended (the "1933 Act"), the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the 1940 Act and file reports and other information with the SEC under those Acts. Reports, proxy and information statements, charter documents and other information filed by the Hartford Funds can be obtained by calling or writing the Hartford Funds and can also be inspected and copied by the public at the following locations of the SEC: Public Reference Room Midwest Regional Office 450 Fifth Street, N.W. Citicorp Center, Suite 1400 Room 1024 500 West Madison Street Washington, D.C. 20549 Chicago, Illinois 60661
Copies of the information also may be obtained by mail from the Public Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington D.C. 20549, at prescribed rates. Further information on the operations of the public reference facilities may be obtained by calling 1-800-SEC-0330. In addition, the SEC maintains an Internet site that contains copies of the information. The address of the site is http://www.sec.gov. FORTIS FUNDS Information about the Fortis Funds is contained in each Fortis Fund's current Prospectus, Annual Report to Shareholders, subsequent Semiannual Report to Shareholders (if any), Statement of Additional Information, and the Statement of Additional Information dated December , 2001 (relating to this Prospectus/Proxy Statement), each of which is incorporated herein by reference. Copies of such Prospectuses, Annual and Semiannual Reports, and Statements of Additional Information, which have been filed with the SEC, may be obtained upon request and without charge from the Fortis Funds by calling or writing the Fortis Funds at: Fortis Funds P.O. Box 64387 St. Paul, Minnesota 55164-0387 1-800-800-2000, extension 3012 The Fortis Funds are subject to the informational requirements of the 1933 Act, the 1934 Act and the 1940 Act and in accordance therewith file reports and other information with the SEC. Reports, proxy and 43 information statements, charter documents and other information filed by the Fortis Funds can be obtained by calling or writing the Fortis Funds and can also be inspected at the public reference facilities maintained by the SEC or obtained at prescribed rates at the addresses listed in the previous section or from the SEC's Internet site at http://www.sec.gov. VOTING INFORMATION This Prospectus/Proxy Statement is furnished in connection with the solicitation by the Board of Directors of the Fortis Funds of proxies for use at the Special Meeting of Shareholders (the "Special Meeting") to be held on January 31, 2002, at 10:00 a.m., Central Time at 500 Bielenberg Drive, Woodbury, Minnesota 55125, and at any adjournments thereof. The proxy confers discretionary authority on the persons designated therein to vote on other business not currently contemplated which may properly come before the Special Meeting. A proxy, if properly executed, duly returned and not revoked, will be voted in accordance with the specifications thereon; if no instructions are given, such proxy will be voted in favor of the Plan. A shareholder may revoke a proxy at any time prior to use by filing with the Secretary of the Fortis Funds an instrument revoking the proxy, by submitting a proxy bearing a later date or by attending and voting at the Special Meeting. The cost of the solicitation, including the printing and mailing of proxy materials, will be borne by Hartford Life or the applicable Hartford Funds. In addition to solicitations through the mails, proxies may be solicited by officers, employees and agents of Hartford Administrative Services Company or Hartford Life. Such solicitations may be by telephone, telegraph or personal contact. Hartford Administrative Services Company or Hartford Life may also arrange for an outside firm, Georgeson Shareholder, to solicit shareholder votes by telephone of the Fortis Funds' behalf. The services provided by Georgeson Shareholder are expected to cost approximately $137,300. If votes are recorded by telephone, Georgeson Shareholder will use procedures designed to authenticate shareholders' identities, to allow shareholders to authorize the voting of their shares in accordance with their instructions, and to confirm that a shareholder's instructions have been properly recorded. You may vote by completing and signing the enclosed proxy card(s) and mailing them in the enclosed postage paid envelope. You may also vote your shares by phone at 1-888-221-0697. Internet voting is also available at www.proxyweb.com. Instructions for voting by phone or internet are on your proxy card. 44 OUTSTANDING SHARES AND VOTING REQUIREMENTS The Board of Directors of the Fortis Funds has fixed the close of business on December 11, 2001, as the record date for the determination of shareholders of the Fortis Funds entitled to notice of and to vote at the Special Meeting and any adjournments thereof. Each share of a Fortis Fund is entitled to one vote and fractional shares have proportionate voting rights. Only shareholders of record as of the record date are entitled to vote on the proposal. As of the record date, each of the Fortis Funds had the number of shares of different classes issued and outstanding listed below:
FUND NAME TOTAL SHARES OUTSTANDING - --------- ------------------------ Fortis Asset Allocation Portfolio Fortis Asset Allocation Portfolio-Class A................. 10,701,298 Fortis Asset Allocation Portfolio-Class B................. 1,664,417 Fortis Asset Allocation Portfolio-Class C................. 751,950 Fortis Asset Allocation Portfolio-Class H................. 2,551,598 Fortis Asset Allocation Portfolio-Class Z................. 158,130 Fortis Global Growth Portfolio Fortis Global Growth Portfolio-Class A.................... 4,954,170 Fortis Global Growth Portfolio-Class B.................... 716,714 Fortis Global Growth Portfolio-Class C.................... 215,960 Fortis Global Growth Portfolio-Class H.................... 931,263 Fortis Growth & Income Fund Fortis Growth & Income Fund-Class A....................... 1,682,128 Fortis Growth & Income Fund-Class B....................... 562,600 Fortis Growth & Income Fund-Class C....................... 161,430 Fortis Growth & Income Fund-Class H....................... 429,591 Fortis High Yield Portfolio Fortis High Yield Portfolio-Class A....................... 9,472,463 Fortis High Yield Portfolio-Class B....................... 2,070,965 Fortis High Yield Portfolio-Class C....................... 582,793 Fortis High Yield Portfolio-Class H....................... 5,053,930 Fortis International Equity Portfolio Fortis International Equity Portfolio-Class A............. 956,219 Fortis International Equity Portfolio-Class B............. 214,203 Fortis International Equity Portfolio-Class C............. 66,744 Fortis International Equity Portfolio-Class H............. 235,799 Fortis Money Fund Fortis Money Fund-Class A................................. 195,371,313 Fortis Money Fund-Class B................................. 2,912,273 Fortis Money Fund-Class C................................. 1,262,470 Fortis Money Fund-Class H................................. 2,819,135
45 On the record date, the Directors and officers of each Fortis Fund as a group owned less than 1% of the outstanding shares of each Fortis Fund. To the best knowledge of each Fortis Fund, as of the record date, no person, except as set forth in the table below, owned beneficially or of record 5% or more of the outstanding shares of any class of a Fortis Fund.
NAME OF FUND AND PERCENT OF CLASS NAME AND ADDRESS OF RECORD OWNER SHARES OWNED CLASS - ---------------- ------------------------------------ ------------ ---------- Fortis Asset Allocation Portfolio-Class Z Vanguard Fiduciary Trust Co. 143,407.88 90% FBO Fortis 401(k) Plan #90895 PO Box 2600 Valley Forge, PA Fortis International Equity Portfolio-Class A Mitra & Co. 49,307.06 5% 1000 N Water St, Fl 14 Milwaukee, WI Fortis International Equity Portfolio-Class C US Bank, N.A. C/F 5,702.05 8% Dolores F. Posey IRA RR 5 Box 76B Fairmont, WV Donaldson Lufkin Jenrette Securities 3,760.15 5% Corporation, Inc. PO Box 2052 Jersey City, NJ Fortis International Equity Portfolio-Class H US Bank, N.A. C/F 13,603.97 5% M. Judy Wardle R/O IRA 1300 Country Club Dr Findlay, OH Fortis Money Fund-Class B Salomon Smith Barney, Inc. 173,833.35 5% 333 W 34th St, 3rd Fl New York, NY Fortis Money Fund-Class C US Bank, N.A. C/F 258,698.20 21% Donald A. Pulice R/O IRA 2024 Henderson Ave Clarksburg, WV US Bank, N.A. C/F 198,460.54 16% Robert E. Phillips R/O IRA 4025 Fairmont Rd Morgantown, WV US Bank, N.A. C/F 197,118.59 16% Robert F. Matz IRA 68 Wilson Ave Morgantown, WV Harlan L. & Madeline J. Bahr JTWROS 139,463.16 11% 344 N 5th St New Strawn, KS
46
NAME OF FUND AND PERCENT OF CLASS NAME AND ADDRESS OF RECORD OWNER SHARES OWNED CLASS - ---------------- ------------------------------------ ------------ ---------- US Bank, N.A. C/F 92,156.05 7% Kenneth C. Brand Jr. IRA RR 7 Box 208 Fairmont, WV US Bank, N.A. C/F Mississippi 64,675.75 5% State University TDI FBO Melissa J. Mixon 102 Laurel Hill Dr Starkville, MS Fortis Money Fund-Class H Catherine J. Childers 462,860.62 16% 5404 San Jose Blvd Jacksonville, FL US Bank Piper Jaffray C/F 141,334.21 5% John D. Jeffries IRA 800 Nicollet Mall Minneapolis, MN
On the record date, the Directors and officers of each Hartford Fund as a group owned less than 1% of the outstanding shares of each Hartford Fund. To the best knowledge of the Hartford Funds, as of the record date, no person, except as set forth in the table below, owned beneficially or of record 5% or more of the outstanding shares of any Hartford Fund.
NAME OF FUND AND PERCENT OF CLASS NAME AND ADDRESS OF RECORD OWNER SHARES OWNED CLASS - ---------------- ------------------------------------ ------------ ---------- The Hartford Advisers Fund- Class A Edward D. Jones & Co. 52,814,706.82 68% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford Advisers Fund- Class B Edward D. Jones & Co. 8,446,498.49 19% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford Advisers Fund- Class C Edward D. Jones & Co. 3,813,487.37 11% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford Advisers Fund- Class Y Natalie Delemar Acct Admin 3,795,915.90 97% Bankers Trust Co. TTEE ITT Hartford Invest & Savings Plan Dtd 12/19/95 34 Exchange Place, MS 3048 Jersey City, NJ
47
NAME OF FUND AND PERCENT OF CLASS NAME AND ADDRESS OF RECORD OWNER SHARES OWNED CLASS - ---------------- ------------------------------------ ------------ ---------- The Hartford Global Leaders Fund-Class A Edward D. Jones & Co. 12,928,193.11 68% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford Global Leaders Fund-Class B Edward D. Jones & Co. 1,356,297.51 27% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford Global Leaders Fund-Class C Edward D. Jones & Co. 962,537.654 11% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford Global Leaders Fund-Class Y Natalie Delemar Acct Admin 623,287.46 100% Bankers Trust Co. TTEE ITT Hartford Invest & Savings Plan Dtd 12/19/95 34 Exchange Place, MS 3048 Jersey City, NJ The Hartford Growth and Income Fund-Class A Edward D. Jones & Co. 20,042,807.52 83% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford Growth and Income Fund-Class B Edward D. Jones & Co. 2,102,385.45 48% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford Growth and Income Fund-Class C Edward D. Jones & Co. 1,451,978.42 23% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford Growth and Income Fund-Class Y HL Investment Advisors 31,811.91 75% Attn: Greg Bubnash PO Box 2999, Wing A-3 Hartford, CT The Hartford High Yield Fund- Class A Edward D. Jones & Co. 3,488,813.42 57% FBO its customers 201 Progress Pkwy Maryland Heights, MO
48
NAME OF FUND AND PERCENT OF CLASS NAME AND ADDRESS OF RECORD OWNER SHARES OWNED CLASS - ---------------- ------------------------------------ ------------ ---------- HL Investment Advisors 342,751.25 5% Attn: Greg Bubnash PO Box 2999, Wing A-3 Hartford, CT The Hartford High Yield Fund- Class B Edward D. Jones & Co. 436,354.87 19% FBO its customers 201 Progress Pkwy Maryland Heights, MO HL Investment Advisors 126,555.78 5% Attn: Greg Bubnash PO Box 2999, Wing A-3 Hartford, CT The Hartford High Yield Fund- Class C Edward D. Jones & Co. 259,896.88 7% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford High Yield Fund- Class Y Natalie Delemar Acct Admin 396,292.71 75% Bankers Trust Co. TTEE ITT Hartford Invest & Savings Plan Dtd 12/19/95 34 Exchange Place, MS 3048e Jersey City, NJ HL Investment Advisors 130,627.45 24% Attn: Greg Bubnash PO Box 2999, Wing A-3 Hartford, CT The Hartford International Opportunities Fund-Class A Edward D. Jones & Co. 5,101,534.02 70% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford International Opportunities Fund-Class B Edward D. Jones & Co. 524,691.16 25% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford International Opportunities Fund-Class C Edward D. Jones & Co. 247,250.38 12% FBO its customers 201 Progress Pkwy Maryland Heights, MO
49
NAME OF FUND AND PERCENT OF CLASS NAME AND ADDRESS OF RECORD OWNER SHARES OWNED CLASS - ---------------- ------------------------------------ ------------ ---------- The Hartford International Opportunities Fund-Class Y Natalie Delemar Acct Admin 1,294,273.81 70% Bankers Trust Co. TTEE ITT Hartford Invest & Savings Plan Dtd 12/19/95 34 Exchange Place, MS 3048 Jersey City, NJ Saxon & Co. FBO 257,592.18 14% 20-42-002-3500639 PO Box 7780-1888 Philadelphia, PA Hartford Life Insurance Co. C/O 201,392.66 11% Greg Bubnash A3 East 200 Hopmeadow St Simsbury, CT The Hartford Money Market Fund-Class A Edward D. Jones & Co. 12,937,618.63 13% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford Money Market Fund-Class B Edward D. Jones & Co. 3,404,468.07 7% FBO its customers 201 Progress Pkwy Maryland Heights, MO The Hartford Money Market Fund-Class Y Natalie Delemar Acct Admin 31,961,767.62 96% Bankers Trust Co. TTEE ITT Hartford Invest & Savings Plan Dtd 12/19/95 34 Exchange Place, MS 3048 Jersey City, NJ
Assuming a quorum is present, approval of the Plan with respect to a Fortis Fund requires the affirmative vote, in person or by proxy, of a majority of the votes cast at the meeting, with all classes of a Fund voting together. Under Maryland law, Fortis Fund shareholders are not entitled to assert dissenters' rights of appraisal in connection with the Reorganization. In the event that shareholders of one or more of the Fortis Funds do not approve the Plan, the Reorganization will proceed with respect to those Fortis Funds that have approved the Plan, subject to certain other conditions being met. The votes of shareholders of the Hartford Funds are not being solicited since their approval is not required in order to effect the Reorganization. Each Fortis Fund will vote separately on the proposal. In order for the shareholder meeting to go forward for a Fortis Fund, there must be a quorum. This means that a majority of that Fund's shares must be represented at the meeting -- either in person or by proxy. All returned proxies count toward a quorum, regardless of how they are voted. An abstention will be counted as a vote cast at the meeting in determining whether the proposal has been approved, and will have the same effect as a vote "against" the proposal. Broker non-votes, although counted toward a quorum, will not be counted as cast in calculating the vote on the proposal and will therefore have no effect on the vote. (Broker non-votes are shares for which (a) the underlying owner has not voted and (b) the broker holding the shares does not have 50 discretionary authority to vote on the particular matter.) If you sign and date your proxy, but do not specify instructions, your shares will be voted in favor of the proposal. If a quorum is not obtained for any Fortis Fund or if sufficient votes to approve the proposal are not received, the persons named as proxies may propose one or more adjournments of the meeting for that Fund to permit further solicitation of proxies. Any adjournment will require a vote in favor of the adjournment by the holders of a majority of the shares present in person or by proxy at the meeting (or any adjournment of the meeting). OTHER MATTERS Management of the Fortis Funds knows of no other matters that may properly be, or which are likely to be, brought before the Special Meeting. However, if any other business shall properly come before the Special Meeting, the persons named in the proxy intend to vote thereon in accordance with their best judgment. BOARD RECOMMENDATION After carefully considering the issues involved, the Board of Directors of the Fortis Funds has unanimously concluded that the proposed Reorganization is in the best interests of shareholders. The Board of Directors of the Fortis Funds recommends that you vote to approve the Plan. Whether or not shareholders expect to attend the Special Meeting, all shareholders are urged to promptly sign, fill in and return the enclosed proxy form or vote by toll-free telephone call or the internet. 51 APPENDIX A AGREEMENT AND PLAN OF REORGANIZATION THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of , 2001, between The Hartford Mutual Funds, Inc., a Maryland corporation ("Hartford"), on behalf of each segregated portfolio of assets thereof ("series") listed on Schedule A to this Agreement ("Schedule A") (each, an "Acquiring Fund"), and Hartford-Fortis Series Fund, Inc., a Maryland corporation ("Fortis"), on behalf of each series thereof listed on Schedule A (each, a "Target Fund"). (Each Acquiring Fund and Target Fund is sometimes referred to herein individually as a "Fund" and collectively as the "Funds," and Hartford and Fortis are sometimes referred to herein individually as an "Investment Company" and collectively as the "Investment Companies.") All agreements, representations and warranties, actions, and obligations described herein made or to be taken or undertaken by a Fund are made and shall be taken or undertaken by Hartford on behalf of each Acquiring Fund and by Fortis on behalf of each Target Fund. The Investment Companies wish to effect six separate reorganizations, each described in section 368(a)(1) of the Internal Revenue Code of 1986, as amended ("Code"), and intend this Agreement to be, and adopt it as, a "plan of reorganization" within the meaning of the regulations under section 368 of the Code ("Regulations"). Target Fund and Acquiring Fund each have multiple classes of shares. Each reorganization will involve the transfer of the assets of a Target Fund, subject to the liabilities of such Target Fund, to the corresponding Acquiring Fund listed on Schedule A, in exchange solely for Class A, Class B and Class C shares of common stock of such Acquiring Fund ("Acquiring Fund Shares"), followed by the constructive distribution of those shares pro rata to the holders of shares of the corresponding classes of common stock of that Target Fund ("Target Fund Shares"),such corresponding classes being set forth on Schedule A hereto, all on the terms and conditions set forth herein. (All such transactions involving each Target Fund and its corresponding Acquiring Fund are referred to herein as a "Reorganization.") For convenience, the balance of this Agreement refers only to a single Reorganization, one Acquiring Fund, and one Target Fund, but the provisions of this Agreement shall apply separately to each Reorganization. The consummation of one Reorganization shall not be contingent on the consummation of any other Reorganization. In consideration of the mutual promises contained herein, the parties agree as follows: 1. PLAN OF REORGANIZATION 1.1. Subject to the requisite approval by Target Fund shareholders and to the other terms and conditions set forth herein and on the basis of the representations and warranties contained herein, Target Fund agrees to assign, sell, convey, transfer, and deliver all of its assets described in paragraph 1.2 ("Assets") to Acquiring Fund and Acquiring Fund agrees in exchange therefor (a) to assume all of the liabilities of Target Fund described in paragraph 1.3 ("Liabilities"), and (b) to issue and deliver to Target Fund the number of full and fractional (rounded to the third decimal place) Acquiring Fund Shares of each specified class determined by dividing the value of the Assets attributable to the corresponding class of Target Fund Shares less the Liabilities attributable to such Target Fund Shares by the net asset value ("NAV") of an Acquiring Fund Share of such class (both computed as set forth in paragraph 2.1). Such transactions shall take place at the Closing (as defined in paragraph 3.1). 1.2. The Assets shall include all cash, cash equivalents, securities, receivables (including interest and dividends receivable), claims and rights of action, rights to register shares under applicable securities laws, books and records, deferred and prepaid expenses shown as assets on Target Fund's books, and other property owned by Target Fund at the Effective Time (as defined in paragraph 3.1). 1.3. The Liabilities shall include all liabilities, debts, obligations, and duties of whatever kind or nature of the Target Fund at the Effective Time, whether absolute, accrued, contingent, or otherwise, whether or not arising in the ordinary course of business, and whether or not specifically referred to in this Agreement, including any obligation to indemnify the directors of Fortis, acting in their capacities as such, A-1 to the fullest extent permitted by law and the amended and restated articles of incorporation ("Articles of Incorporation") and bylaws of Fortis (collectively "Liabilities"). 1.4. At or immediately before the Effective Time, Target Fund shall declare and pay to its shareholders a dividend and/or other distribution in an amount large enough so that it will have distributed all of its investment company taxable income (as defined in section 852(b)(2) of the Code but computed without regard to any deduction for dividends paid) and substantially all of its net capital gain (as defined in section 852(b)(3) of the Code, but computed without regard to any deduction for capital gain dividends) for the current taxable year through the Effective Time. 1.5. At the Effective Time (or as soon thereafter as is reasonably practicable), Target Fund shall distribute the Acquiring Fund Shares it receives pursuant to paragraph 1.1 to Target Fund's shareholders of record, determined as of the Effective Time (each, a "Shareholder"), in constructive exchange for their Target Fund Shares. Such distribution shall be accomplished by Hartford's transfer agent's opening accounts on Acquiring Fund's share transfer books in the Shareholders' names and transferring such Acquiring Fund Shares thereto. Each Shareholder's account shall be credited with the respective pro rata number of full and fractional (rounded to the third decimal place) Acquiring Fund Shares of the appropriate class due that Shareholder. All outstanding Target Fund Shares, including any represented by certificates, shall simultaneously be canceled on Target Fund's share transfer books. Acquiring Fund shall not issue certificates representing the Acquiring Fund Shares issued in connection with the Reorganization. 1.6. No front-end sales charges will be incurred by Target Fund shareholders in connection with their acquisition of Acquiring Fund Shares pursuant to this Agreement. In addition, in determining contingent deferred sales charges applicable to any Acquiring Fund Shares distributed in the Reorganization and in determining the date upon which any Class B Acquiring Fund Shares distributed in the Reorganization convert to Class A Acquiring Fund Shares, credit shall be given for the period during which the holders thereof held the Target Fund Shares in exchange for which such Acquiring Fund Shares were issued. 1.7. As soon as reasonably practicable after distribution of the Acquiring Fund Shares pursuant to paragraph 1.5, Fortis shall wind up the affairs of Target Fund and shall file any required final regulatory reports, including but not limited to any Form N-SAR and Rule 24f-2 filings with respect to Target Fund. 1.8. Any transfer taxes payable on issuance of Acquiring Fund Shares in a name other than that of the registered holder on Target Fund's books of the Target Fund Shares constructively exchanged therefor shall be paid by the person to whom such Acquiring Fund Shares are to be issued, as a condition of such transfer. 2. VALUATION 2.1. For purposes of paragraph 1.1(b), the value of the Assets and the Liabilities and the NAV of an Acquiring Fund Share shall be computed as of the close of business on the date of the Closing ("Valuation Time"). The NAV of an Acquiring Fund Share shall be computed using the valuation procedures set forth in the Acquiring Fund's then current prospectus and statement of additional information ("SAI"). The value of the Assets and Liabilities shall be computed using the valuation procedures set forth in the Target Fund's then current prospectus and SAI, subject to adjustment by the amount, if any, agreed to by Hartford and Fortis. Hartford and Fortis agree to use all commercially reasonable efforts to resolve any material differences between the value of the Assets and Liabilities determined in accordance with the valuation procedures of the Target Fund and the value of the Assets and Liabilities determined in accordance with the valuation procedures of the Acquiring Fund prior to the Valuation Time. 2.2. All computations pursuant to paragraph 2.1 shall be made by or under the direction of Hartford Administrative Services Company. A-2 3. CLOSING AND EFFECTIVE TIME 3.1. The Reorganization, together with related acts necessary to consummate the same ("Closing"), shall occur at the offices of Dorsey & Whitney LLP, 50 South Sixth Street, Minneapolis, Minnesota 55402, on or about , 2002, or at such other place and/or on such other date as to which the Investment Companies may agree. All acts taking place at the Closing shall be deemed to take place simultaneously as of the close of business on the date thereof or at such other time as to which the Investment Companies may agree ("Effective Time"). If, immediately before the Valuation Time, (a) the New York Stock Exchange is closed to trading or trading thereon is restricted or (b) trading or the reporting of trading on that exchange or elsewhere is disrupted, so that accurate appraisal of the value of the Assets and Liabilities and the NAV of an Acquiring Fund Share is impracticable, the Effective Time shall be postponed until the first business day after the day when such trading has fully resumed and such reporting has been restored. 3.2. Fortis shall deliver to Hartford at the Closing a schedule of the Assets and Liabilities as of the Effective Time, which shall set forth for all portfolio securities included therein and all other Assets, their adjusted basis and holding period, by lot, for federal income tax purposes. Fortis' custodian shall deliver at the Closing a certificate of an authorized officer stating that (a) the Assets held by the custodian will be transferred to Acquiring Fund at the Effective Time and (b) all necessary taxes in conjunction with the delivery of the Assets, including all applicable federal and state stock transfer stamps, if any, have been paid or provision for payment has been made. 3.3. Fortis' transfer agent shall deliver to Hartford at the Closing a statement of an authorized officer thereof certifying that its records contain the names and addresses of the Shareholders and the number and percentage ownership of outstanding Target Fund Shares of each class owned by each Shareholder, all as of the Effective Time. Hartford's transfer agent shall deliver at the Closing a certificate as to the opening on Acquiring Fund's share transfer books of accounts in the Shareholders' names. Hartford shall issue and deliver a confirmation to Fortis evidencing the Acquiring Fund Shares of each class to be credited to Target Fund at the Effective Time or provide evidence satisfactory to Fortis that such Acquiring Fund Shares have been credited to Target Fund's account on Acquiring Fund's books. At the Closing, each Investment Company shall deliver to the other bills of sale, checks, assignments, stock certificates, receipts, or other documents the other Investment Company or its counsel reasonably requests. 3.4. Each Investment Company shall deliver to the other at the Closing a certificate executed in its name by its President or a Vice President in form and substance satisfactory to the recipient and dated the Effective Time, to the effect that the representations and warranties it made in this Agreement are true and correct at the Effective Time except as they may be affected by the transactions contemplated by this Agreement. 4. REPRESENTATIONS AND WARRANTIES 4.1. Fortis represents and warrants as follows: 4.1.1. Fortis is a corporation that is duly organized, validly existing, and in good standing under the laws of the State of Maryland; and its Articles of Incorporation are on file with the Secretary of the State of Maryland; 4.1.2. Fortis is duly registered as an open-end management investment company under the Investment Company Act of 1940, as amended ("1940 Act"), and such registration is in full force and effect; 4.1.3. Target Fund is a duly established and designated series of Fortis; and all Target Fund Shares outstanding at the Effective Time will have been duly authorized and duly and validly issued and outstanding shares of Target Fund, fully paid and non-assessable; 4.1.4. At the Closing, Target Fund will have good and marketable title to the Assets and full right, power, and authority to sell, assign, transfer, and deliver the Assets free of any liens or other A-3 encumbrances; and on delivery and payment for the Assets, Acquiring Fund will acquire good and marketable title thereto; 4.1.5. Target Fund's current prospectus and SAI conform in all material respects to the applicable requirements of the Securities Act of 1933, as amended ("1933 Act"), and the 1940 Act and the rules and regulations thereunder and do not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; 4.1.6. Target Fund is not in violation of, and the execution and delivery of this Agreement and consummation of the transactions contemplated hereby will not conflict with or violate, applicable law or any provision of Fortis' Articles of Incorporation or By-Laws or of any agreement, instrument, lease, or other undertaking to which Target Fund is a party or by which it is bound or result in the acceleration of any obligation, or the imposition of any penalty, under any agreement, judgment, or decree to which Target Fund is a party or by which it is bound, except as previously disclosed in writing to and accepted by Hartford; 4.1.7. Except as otherwise disclosed in writing to and accepted by Hartford, all material contracts and other commitments of or applicable to Target Fund (other than this Agreement and investment contracts, including options, futures, and forward contracts) will be terminated, or provision for discharge of any liabilities of Target Fund thereunder will be made, at or prior to the Effective Time, without either Fund's incurring any liability or penalty with respect thereto and without diminishing or releasing any rights Target Fund may have had with respect to actions taken or omitted or to be taken by any other party thereto prior to the Closing; 4.1.8. Except as otherwise disclosed in writing to and accepted by Hartford, no litigation, administrative proceeding, or investigation of or before any court or governmental body is presently pending or (to Fortis' knowledge) threatened against Fortis or any of its properties or assets that, if adversely determined, would materially and adversely affect Target Fund's financial condition or the conduct of its business; and Fortis knows of no facts that might form the basis for the institution of any such litigation, proceeding, or investigation and is not a party to or subject to the provisions of any order, decree, or judgment of any court or governmental body that materially or adversely affects its business or its ability to consummate the transactions contemplated hereby; 4.1.9. The execution, delivery, and performance of this Agreement have been duly authorized as of the date hereof by all necessary action on the part of Fortis' board of directors; and, subject to approval by Target Fund's shareholders, this Agreement constitutes a valid and legally binding obligation of Target Fund, enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and similar laws relating to or affecting creditors' rights and by general principles of equity; 4.1.10. At the Effective Time, the performance of this Agreement shall have been duly authorized by all necessary action by Target Fund's shareholders; 4.1.11. No governmental consents, approvals, authorizations, or filings are required under the 1933 Act, the Securities Exchange Act of 1934, as amended ("1934 Act"), the 1940 Act, or applicable state securities laws for the execution or performance of this Agreement by Fortis, except for (a) the filing with the Securities and Exchange Commission ("SEC") of a registration statement by Hartford on Form N-14 relating to the Acquiring Fund Shares issuable hereunder, and any supplement or amendment thereto ("Registration Statement"), including therein a prospectus/proxy statement ("Proxy Statement"), and (b) such consents, approvals, authorizations, and filings as have been made or received or as may be required subsequent to the Effective Time; 4.1.12. On the effective date of the Registration Statement, at the time of the shareholders' meeting referred to in paragraph 5.2, and at the Effective Time, the Proxy Statement will (a) comply in all material respects with the applicable provisions of the 1933 Act, the 1934 Act, and the 1940 Act and the rules and regulations thereunder and (b) not contain any untrue statement of a A-4 material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which such statements were made, not misleading; provided that the foregoing shall not apply to statements in or omissions from the Proxy Statement made in reliance on and in conformity with information furnished by Hartford for use therein; 4.1.13. There are no Liabilities other than Liabilities disclosed or provided for in Fortis' financial statements referred to in paragraph 4.1.19 and Liabilities incurred by Target Fund in the ordinary course of its business subsequent to July 31, 2001 for the Fortis High Yield Portfolio, August 31, 2001 for the Fortis Asset Allocation Portfolio and the Fortis Growth & Income Fund, September 30, 2001 for the Fortis Money Fund, and October 31, 2001 for the Fortis Global Growth Portfolio and the Fortis International Equity Portfolio, or otherwise previously disclosed to Hartford, none of which has been materially adverse to the business, assets, or results of Target Fund's operations; 4.1.14. Target Fund is a "fund" as defined in section 851(g)(2) of the Code; it qualified for treatment as a regulated investment company under Subchapter M of the Code ("RIC") for each past taxable year since it commenced operations and will continue to meet all the requirements for such qualification for its current taxable year; the Assets will be invested at all times through the Effective Time in a manner that ensures compliance with the foregoing; and Target Fund has no earnings and profits accumulated in any taxable year in which the provisions of Subchapter M did not apply to it; 4.1.15. Target Fund's federal income tax returns, and all applicable state and local tax returns, for all taxable years through and including the taxable year ended July 31, 2000 for the Fortis High Yield Portfolio, August 31, 2000 for the Fortis Asset Allocation Portfolio and the Fortis Growth & Income Fund, September 30, 2000 for the Fortis Money Fund, and October 31, 2000 for the Fortis Global Growth Portfolio and the Fortis International Equity Portfolio have been timely filed and all taxes payable pursuant to such returns have been timely paid; and 4.1.16. Fortis' financial statements for the year ended July 31, 2001 for the Fortis High Yield Portfolio, August 31, 2001 for the Fortis Asset Allocation Portfolio and the Fortis Growth & Income Fund, September 30, 2001 for the Fortis Money Fund, and October 31, 2001 for the Fortis Global Growth Portfolio and the Fortis International Equity Portfolio to be delivered to Hartford, fairly represent Target Fund's financial position as of such date and the results of its operations and changes in its net assets for the period then ended. 4.2. Hartford represents and warrants as follows: 4.2.1. Hartford is a corporation that is duly organized, validly existing, and in good standing under the laws of the State of Maryland; and its articles of incorporation ("Articles of Incorporation") are on file with the Secretary of the State of Maryland; 4.2.2. Hartford is duly registered as an open-end management investment company under the 1940 Act, and such registration will be in full force and effect at the Effective Time; 4.2.3. Acquiring Fund is a duly established and designated series of Hartford; 4.2.4. No consideration other than Acquiring Fund Shares will be issued in exchange for the Assets in the Reorganization; 4.2.5. The Acquiring Fund Shares to be issued and delivered to Target Fund hereunder will, at the Effective Time, have been duly authorized and, when issued and delivered as provided herein, will be duly and validly issued and outstanding shares of Acquiring Fund, fully paid and non-assessable; 4.2.6. Acquiring Fund's current prospectus and SAI conform in all material respects to the applicable requirements of the 1933 Act and the 1940 Act and the rules and regulations thereunder and do not include any untrue statement of a material fact or omit to state any material fact required A-5 to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; 4.2.7. Acquiring Fund is not in violation of, and the execution and delivery of this Agreement and consummation of the transactions contemplated hereby will not conflict with or violate, applicable law or any provision of Hartford's Articles of Incorporation or By-Laws or of any provision of any agreement, instrument, lease, or other undertaking to which Acquiring Fund is a party or by which it is bound or result in the acceleration of any obligation, or the imposition of any penalty, under any agreement, judgment, or decree to which Acquiring Fund is a party or by which it is bound, except as previously disclosed in writing to and accepted by Fortis; 4.2.8. Except as otherwise disclosed in writing to and accepted by Fortis, no litigation, administrative proceeding, or investigation of or before any court or governmental body is presently pending or (to Hartford's knowledge) threatened against Hartford or any of its properties or assets that, if adversely determined, would materially and adversely affect Acquiring Fund's financial condition or the conduct of its business; and Hartford knows of no facts that might form the basis for the institution of any such litigation, proceeding, or investigation and is not a party to or subject to the provisions of any order, decree, or judgment of any court or governmental body that materially or adversely affects its business or its ability to consummate the transactions contemplated hereby; 4.2.9. The execution, delivery, and performance of this Agreement have been duly authorized as of the date hereof by all necessary action on the part of Hartford's board of directors (together with Fortis' board of directors, the "Boards"); no approval of this Agreement by Acquiring Fund's shareholders is required under Hartford's Articles of Incorporation or By-Laws, or applicable law; and this Agreement constitutes a valid and legally binding obligation of Acquiring Fund, enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and similar laws relating to or affecting creditors' rights and by general principles of equity; 4.2.10. No governmental consents, approvals, authorizations, or filings are required under the 1933 Act, the 1934 Act, the 1940 Act, or applicable state securities laws for the execution or performance of this Agreement by Hartford, except for (a) the filing with the SEC of the Registration Statement and (b) such consents, approvals, authorizations, and filings as have been made or received or as may be required subsequent to the Effective Time; 4.2.11. On the effective date of the Registration Statement, at the time of the shareholders' meeting referred to in paragraph 5.2, and at the Effective Time, the Proxy Statement will (a) comply in all material respects with the applicable provisions of the 1933 Act, the 1934 Act, and the 1940 Act and the rules and regulations thereunder and (b) not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which such statements were made, not misleading; provided that the foregoing shall not apply to statements in or omissions from the Proxy Statement made in reliance on and in conformity with information furnished by Fortis for use therein; 4.2.12. Acquiring Fund is a "fund" as defined in section 851(g)(2) of the Code; it qualified for treatment as a RIC for each past taxable year since it commenced operations and will continue to meet all the requirements for such qualification for its current taxable year; Acquiring Fund intends to continue to meet all such requirements for the next taxable year; and it has no earnings and profits accumulated in any taxable year in which the provisions of Subchapter M of the Code did not apply to it; 4.2.13. Acquiring Fund's federal income tax returns, and all applicable state and local tax returns, for all taxable years through and including the taxable year ended October 31, 2001 have been timely filed and all taxes payable pursuant to such returns have been timely paid; and A-6 4.2.14. Hartford's financial statements for the year ended October 31, 2001 to be delivered to Fortis, fairly represent Acquiring Fund's financial position as of that date and the results of its operations and changes in its net assets for the year then ended. 4.3. Each Investment Company represents and warrants as follows: 4.3.1. The fair market value of the Acquiring Fund Shares received by each Shareholder will be approximately equal to the fair market value of its Target Fund Shares constructively surrendered in exchange therefor; 4.3.2. The Shareholders will pay their own expenses, if any, incurred in connection with the Reorganization; 4.3.3. There is no intercompany indebtedness between the Funds that was issued or acquired, or will be settled, at a discount; 5. COVENANTS 5.1. Each Fund covenants to operate its respective business in the ordinary course between the date hereof and the Closing, it being understood that such ordinary course will include declaring and paying customary dividends and other distributions (including the dividend and/or other distribution referred to in paragraph 1.4) and changes in operations contemplated by each Fund's normal business activities. 5.2. Target Fund covenants to call a shareholders' meeting to consider and act on this Agreement and to take all other action necessary to obtain approval of the transactions contemplated hereby. 5.3. Target Fund covenants that the Acquiring Fund Shares to be delivered hereunder are not being acquired for the purpose of making any distribution thereof, other than in accordance with the terms hereof. 5.4. Target Fund covenants that it will assist Hartford in obtaining information Hartford reasonably requests concerning the beneficial ownership of Target Fund Shares. 5.5. Target Fund covenants that its books and records (including all books and records required to be maintained under the 1940 Act and the rules and regulations thereunder) will be turned over to Hartford at the Closing. 5.6. Each Fund covenants to cooperate in preparing the Proxy Statement in compliance with applicable federal and state securities laws. 5.7. Each Fund covenants that it will, from time to time, as and when requested by the other Fund, execute and deliver or cause to be executed and delivered all such assignments and other instruments, and will take or cause to be taken such further action, as the other Fund may deem necessary or desirable in order to vest in, and confirm to, (a) Acquiring Fund, title to and possession of all the Assets, and (b) Target Fund, title to and possession of the Acquiring Fund Shares to be delivered hereunder, and otherwise to carry out the intent and purpose hereof. 5.8. Acquiring Fund covenants to use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act, the 1940 Act, and state securities laws it deems appropriate to continue its operations after the Effective Time. 5.9. Subject to this Agreement, each Fund covenants to take or cause to be taken all actions, and to do or cause to be done all things, reasonably necessary, proper, or advisable to consummate and effectuate the transactions contemplated hereby. 6. CONDITIONS PRECEDENT Each Fund's obligations hereunder shall be subject to (a) performance by the corresponding Fund of all its obligations to be performed hereunder at or before the Effective Time, (b) all representations and warranties of the corresponding Fund contained herein being true and correct in all material respects as of A-7 the date hereof and, except as they may be affected by the transactions contemplated hereby, as of the Effective Time, with the same force and effect as if made at and as of the Effective Time, and (c) the following further conditions that, at or before the Effective Time: 6.1. This Agreement and the transactions contemplated hereby shall have been duly adopted and approved by each Board and shall have been approved by Target Fund's shareholders in accordance with Fortis' Articles of Incorporation and By-Laws and applicable law. 6.2. All necessary filings shall have been made with the SEC and state securities authorities, and no order or directive shall have been received that any other or further action is required to permit the parties to carry out the transactions contemplated hereby. The Registration Statement shall have become effective under the 1933 Act, no stop orders suspending the effectiveness thereof shall have been issued, and the SEC shall not have issued an unfavorable report with respect to the Reorganization under section 25(b) of the 1940 Act nor instituted any proceedings seeking to enjoin consummation of the transactions contemplated hereby under section 25(c) of the 1940 Act. All consents, orders, and permits of federal, state, and local regulatory authorities (including the SEC and state securities authorities) deemed necessary by either Investment Company to permit consummation, in all material respects, of the transactions contemplated hereby shall have been obtained, except where failure to obtain same would not involve a risk of a material adverse effect on either Fund's assets or properties, provided that either Investment Company may for itself waive any of such conditions. 6.3. At the Effective Time, no action, suit, or other proceeding shall be pending before any court or governmental agency in which it is sought to restrain or prohibit, or to obtain damages or other relief in connection with, the transactions contemplated hereby. 6.4. Fortis shall have received an opinion of Kevin J. Carr, counsel to Hartford, substantially to the effect that: 6.4.1. Acquiring Fund is a duly established series of Hartford, a corporation duly organized, validly existing, and in good standing under the laws of the State of Maryland with power under its Articles of Incorporation to own all its properties and assets and, to the knowledge of such counsel, to carry on its business as presently conducted; 6.4.2. This Agreement has been duly authorized, executed, and delivered by Hartford on behalf of Acquiring Fund; no approval of this Agreement by Acquiring Fund's shareholders is required under Hartford's Articles or Incorporation or By-Laws, or applicable law; and assuming due authorization, execution, and delivery of this Agreement by Fortis on behalf of Target Fund, this Agreement is a valid and legally binding obligation of Hartford with respect to Acquiring Fund, enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and similar laws relating to or affecting creditors' rights and by general principles of equity; 6.4.3. The Acquiring Fund Shares to be issued and distributed to the Shareholders under this Agreement, assuming their due delivery as contemplated by this Agreement, will be duly authorized, validly issued and outstanding, and fully paid and non-assessable; 6.4.4. The execution and delivery of this Agreement did not, and the consummation of the transactions contemplated hereby will not, violate Hartford's Articles of Incorporation or By-Laws or any provision of any agreement (known to such counsel, without any independent inquiry or investigation) to which Hartford (with respect to Acquiring Fund) is a party or by which it is bound or (to the knowledge of such counsel, without any independent inquiry or investigation) result in the acceleration of any obligation, or the imposition of any penalty, under any agreement, judgment, or decree to which Hartford (with respect to Acquiring Fund) is a party or by which it is bound, except as set forth in such opinion or as previously disclosed in writing to and accepted by Fortis; 6.4.5. No consent, approval, authorization, or order of any court or governmental authority is required for the consummation by Hartford (on behalf of Acquiring Fund) of the transactions A-8 contemplated herein, except those obtained under the 1933 Act, the 1934 Act, and the 1940 Act and those that may be required under state securities laws; 6.4.6. Hartford is registered with the SEC as an investment company, and to the knowledge of such counsel no order has been issued or proceeding instituted to suspend such registration; and 6.4.7. To the knowledge of such counsel (without any independent inquiry or investigation), (a) no litigation, administrative proceeding, or investigation of or before any court or governmental body is pending or threatened as to Hartford (with respect to Acquiring Fund) or any of its properties or assets attributable or allocable to Acquiring Fund and (b) Hartford (with respect to Acquiring Fund) is not a party to or subject to the provisions of any order, decree, or judgment of any court or governmental body that materially and adversely affects Acquiring Fund's business, except as set forth in such opinion or as otherwise disclosed in writing to and accepted by Fortis. In rendering such opinion, such counsel may (1) rely, as to matters governed by the laws of the State of Maryland, on an opinion of competent Maryland counsel, (2) make assumptions regarding the authenticity, genuineness, and/or conformity of documents and copies thereof without independent verification thereof, (3) limit such opinion to applicable federal and state law, and (4) define the word "knowledge" and related terms to mean the knowledge of attorneys then with such counsel who have devoted substantive attention to matters directly related to this Agreement and the Reorganization. 6.5. Hartford shall have received an opinion of Dorsey & Whitney LLP, counsel to Fortis, substantially to the effect that: 6.5.1. Target Fund is a duly established series of Fortis, a corporation duly organized, validly existing, and in good standing under the laws of the State of Maryland with power under its Articles of Incorporation to own all its properties and assets and, to the knowledge of such counsel, to carry on its business as presently conducted.; 6.5.2. This Agreement (a) has been duly authorized, executed, and delivered by Fortis on behalf of Target Fund and (b) assuming due authorization, execution, and delivery of this Agreement by Hartford on behalf of Acquiring Fund, is a valid and legally binding obligation of Fortis with respect to Target Fund, enforceable in accordance with its terms, except as the same may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and similar laws relating to or affecting creditors' rights and by general principles of equity; 6.5.3. The execution and delivery of this Agreement did not, and the consummation of the transactions contemplated hereby will not, violate Fortis' Articles of Incorporation or By-Laws or any provision of any agreement (known to such counsel, without any independent inquiry or investigation) to which Fortis (with respect to Target Fund) is a party or by which it is bound or (to the knowledge of such counsel, without any independent inquiry or investigation) result in the acceleration of any obligation, or the imposition of any penalty, under any agreement, judgment, or decree to which Fortis (with respect to Target Fund) is a party or by which it is bound, except as set forth in such opinion or as previously disclosed in writing to and accepted by Hartford; 6.5.4. No consent, approval, authorization, or order of any court or governmental authority is required for the consummation by Fortis (on behalf of Target Fund) of the transactions contemplated herein, except those obtained under the 1933 Act, the 1934 Act, and the 1940 Act and those that may be required under state securities laws; 6.5.5. Fortis is registered with the SEC as an investment company, and to the knowledge of such counsel no order has been issued or proceeding instituted to suspend such registration; and 6.5.6. To the knowledge of such counsel (without any independent inquiry or investigation), (a) no litigation, administrative proceeding, or investigation of or before any court or governmental body is pending or threatened as to Fortis (with respect to Target Fund) or any of its properties or assets attributable or allocable to Target Fund and (b) Fortis (with respect to Target Fund) is not a party to or subject to the provisions of any order, decree, or judgment of any court or governmental A-9 body that materially and adversely affects Target Fund's business, except as set forth in such opinion or as otherwise disclosed in writing to and accepted by Hartford. In rendering such opinion, such counsel may (1) rely, as to matters governed by the laws of the State of Maryland, on an opinion of competent Maryland counsel, (2) make assumptions regarding the authenticity, genuineness, and/or conformity of documents and copies thereof without independent verification thereof, (3) limit such opinion to applicable federal and state law, and (4) define the word "knowledge" and related terms to mean the knowledge of attorneys then with such counsel who have devoted substantive attention to matters directly related to this Agreement and the Reorganization. 6.6. Each Investment Company shall have received an opinion of Dorsey & Whitney LLP, addressed to and in form and substance reasonably satisfactory to it, as to the federal income tax consequences mentioned below ("Tax Opinion"). In rendering the Tax Opinion, such counsel may rely as to factual matters, exclusively and without independent verification, on the representations and warranties made in this Agreement, which such counsel may treat as representations and warranties made to it, and in separate letters addressed to such counsel and the certificates delivered pursuant to paragraph 3.4. The Tax Opinion shall be substantially to the effect that, based on the facts and assumptions stated therein and conditioned on consummation of the Reorganization in accordance with this Agreement, for federal income tax purposes: 6.6.1. Acquiring Fund's acquisition of the Assets in exchange solely for Acquiring Fund Shares, followed by Target Fund's distribution of those shares pro rata to the Shareholders in exchange for their Target Fund Shares, will qualify as a reorganization within the meaning of section 368(a)(1) of the Code, and each Fund will be "a party to a reorganization" within the meaning of section 368(b) of the Code; 6.6.2. Target Fund will recognize no gain or loss on the transfer of the Assets to Acquiring Fund in exchange solely for Acquiring Fund Shares or on the subsequent distribution of those shares to the Shareholders in exchange for their Target Fund Shares; 6.6.3. Acquiring Fund will recognize no gain or loss on its receipt of the Assets in exchange solely for Acquiring Fund Shares and the assumption by Acquiring Fund of the liabilities of Target Fund; 6.6.4. Acquiring Fund's basis in the Assets will be the same as Target Fund's basis therein immediately before the Reorganization, and Acquiring Fund's holding period for the Assets will include Target Fund's holding period therefor; 6.6.5. A Shareholder will recognize no gain or loss on the exchange of all its Target Fund Shares solely for Acquiring Fund Shares pursuant to the Reorganization. Shareholders subject to taxation will recognize income upon receipt of any net investment income or net capital gains of Target Fund which are distributed by Target Fund prior to the Closing; 6.6.6. A Shareholder's aggregate basis in the Acquiring Fund Shares to be received by it in the Reorganization will be the same as the aggregate basis in its Target Fund Shares to be constructively surrendered in exchange for those Acquiring Fund Shares, and its holding period for those Acquiring Fund Shares will include its holding period for those Target Fund Shares, provided the Shareholder held them as capital assets at the Effective Time; and 6.6.7. Acquiring Fund will succeed to and take into account the items of Target Fund described in Section 381(c) of the Code. Acquiring Fund will take these items into account subject to the conditions and limitations specified in Sections 381, 382, 383 and 384 of the Code and the Regulations thereunder. Notwithstanding subparagraphs 6.6.2 and 6.6.4, the Tax Opinion may state that no opinion is expressed as to the effect of the Reorganization on the Funds or any Shareholder with respect to any asset as to which any unrealized gain or loss is required to be recognized for federal income tax purposes at the end of a taxable year (or on the termination or transfer thereof) under a mark-to-market system of accounting. A-10 At any time before the Closing, either Investment Company may waive any of the foregoing conditions (except that set forth in paragraph 6.1) if, in the judgment of its Board, such waiver will not have a material adverse effect on its Fund's shareholders' interests. 7. BROKERAGE FEES Each Investment Company represents and warrants to the other that there are no brokers or finders entitled to receive any payments in connection with the transactions provided for herein. 8. EXPENSES; INDEMNIFICATION 8.1 The parties hereto understand and agree that the cost of the transactions contemplated by this Agreement are being borne by Hartford Life and Accident Insurance Company and/or its affiliates, to the extent not borne by the Acquiring Funds. 8.2 The Acquiring Fund agrees to indemnify and hold harmless the Target Fund and each of the Target Fund's directors and officers from and against any and all losses, claims, damages, liabilities or expenses (including, without limitation, the payment of reasonable legal fees and reasonable costs of investigation) to which, jointly or severally, the Target Fund or any of its directors or officers may become subject, insofar as any such loss, claim, damage, liability or expense (or actions with respect thereto) arises out of or is based on any breach by the Acquiring Fund of any of its representations, warranties, covenants or agreements set forth in this Agreement. 8.3 The Target Fund agrees to indemnify and hold harmless the Acquiring Fund and each of the Acquiring Fund's directors and officers from and against any and all losses, claims, damages, liabilities or expenses (including, without limitation, the payment of reasonable legal fees and reasonable costs of investigation) to which, jointly or severally, the Acquiring Fund or any of its directors or officers may become subject, insofar as any such loss, claim, damage, liability or expense (or actions with respect thereto) arises out of or is based on any breach by the Acquired Fund of any of its representations, warranties, covenants or agreements set forth in this Agreement. 9. ENTIRE AGREEMENT; NO SURVIVAL Neither party has made any representation, warranty, or covenant not set forth herein, and this Agreement constitutes the entire agreement between the parties. The representations, warranties, and covenants contained herein or in any document delivered pursuant hereto or in connection herewith shall not survive the Closing. 10. TERMINATION OF AGREEMENT This Agreement may be terminated at any time at or prior to the Effective Time, whether before or after approval by Target Fund's shareholders: 10.1. By either Fund (a) in the event of the other Fund's material breach of any representation, warranty, or covenant contained herein to be performed at or prior to the Effective Time, (b) if a condition to its obligations has not been met and it reasonably appears that such condition will not or cannot be met, or (c) if the Closing has not occurred on or before December 31, 2002; or 10.2. By the parties' mutual agreement. In the event of termination under paragraphs 10.1(c) or 10.2, there shall be no liability for damages on the part of either Fund to the other Fund. 11. AMENDMENT This Agreement may be amended, modified, or supplemented at any time, notwithstanding approval thereof by Target Fund's shareholders, in any manner mutually agreed on in writing by the parties; provided that following such approval no such amendment may have the effect of changing the provisions A-11 for determining the number of Acquiring Fund shares to be issued to Target Fund shareholders under this Agreement to the detriment of such shareholders without their further approval. 12. MISCELLANEOUS 12.1. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Minnesota; provided that, in the case of any conflict between such laws and the federal securities laws, the latter shall govern. 12.2. Nothing expressed or implied herein is intended or shall be construed to confer upon or give any person, firm, trust, or corporation other than the parties and their respective successors and assigns any rights or remedies under or by reason of this Agreement. 12.3. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been executed by each Investment Company and delivered to the other party hereto. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. IN WITNESS WHEREOF, each party has caused this Agreement to be executed and delivered by its duly authorized officers as of the day and year first written above. THE HARTFORD MUTUAL FUNDS, INC. on behalf of its series, The Hartford Advisers Fund The Hartford Global Leaders Fund The Hartford Growth and Income Fund The Hartford High Yield Fund The Hartford International Opportunities Fund The Hartford Money Market Fund By: ------------------------------------ Its: ------------------------------------ HARTFORD-FORTIS SERIES FUND, INC. on behalf of its series, Fortis Asset Allocation Portfolio Fortis Global Growth Portfolio Fortis Growth & Income Fund Fortis High Yield Portfolio Fortis International Equity Portfolio Fortis Money Fund By: ------------------------------------ Its: ------------------------------------ A-12 SCHEDULE A
TARGET FUND/SHARE CLASS CORRESPONDING ACQUIRING FUND/SHARE CLASS - ----------------------- ---------------------------------------- Fortis Asset Allocation Portfolio The Hartford Advisers Fund - Class A - Class A - Class B - Class B - Class H - Class B - Class C - Class C - Class Z - Class A Fortis Global Growth Portfolio The Hartford Global Leaders Fund - Class A - Class A - Class B - Class B - Class H - Class B - Class C - Class C Fortis Growth & Income Fund Hartford Global and Income Fund - Class A - Class A - Class B - Class B - Class H - Class B - Class C - Class C Fortis High Yield Portfolio The Hartford High Yield Fund - Class A - Class A - Class B - Class B - Class H - Class B - Class C - Class C Fortis International Equity Portfolio The Hartford International Opportunities Fund - Class A - Class A - Class B - Class B - Class H - Class B - Class C - Class C Fortis Money Fund The Hartford Money Market Fund - Class A - Class A - Class B - Class B - Class H - Class B - Class C - Class C
A-13 APPENDIX B HARTFORD FUND PORTFOLIO MANAGER DISCUSSIONS Set forth in this Appendix are discussions of the performance of each Hartford Fund, other than Hartford Money Market Fund, during the fiscal year ended October 31, 2001. B-1 The Hartford Advisers Fund Portfolio Management Team [PHOTO OF RAND L. ALEXANDER] RAND L. ALEXANDER, CFA Senior Vice President, Partner & Director of U.S. Core Equities Wellington Management Company, LLP [PHOTO OF PAUL D. KAPLAN] PAUL D. KAPLAN Senior Vice President, Partner & Director of Fixed Income Wellington Management Company, LLP Performance Overview 7/22/96 - 10/31/01 Growth of a $10,000 investment in Class A which includes Sales Charge [LINE GRAPH]
Advisors Fund S&P 500 Lehman Govt/Corp - ------------- ------- ---------------- 9,450 10,000 10,000 10,188 11,198 10,430 11,123 12,845 10,565 12,484 14,790 11,349 14,383 18,118 11,762 14,766 18,044 12,514 16,678 22,070 12,501 16,771 22,674 12,432 17,964 24,054 12,619 18,086 24,054 13,318 16,157 18,087 15,358
RETURNS (Inception 7/22/96)
Standard Non-Standard ANNUALIZED ANNUALIZED 1 YEAR(1) 5 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) 5 YEAR(2) SINCE INCEPT.(2) ---------------------------------------- ---------------------------------------- Advisers A -15.58% 8.43% 9.51% -10.67% 9.66% 10.69% Advisers B -16.27% 8.77% 9.81% -11.27% 8.91% 9.93% Advisers C* -13.15% 8.53% 9.71% -11.26% 8.89% 9.92% S&P 500 -24.89% 10.04% 10.68% Lehman Govt/Corp 15.32% 8.05% 8.47%
The chart represents a hypothetical investment in The Hartford Advisers Fund. Past performance does not guarantee future results. The value of shares will fluctuate so that when redeemed, shares may be worth more or less than their original cost. (1) The initial investment in Class A and C shares reflects the maximum sales charge and B shares reflect a CDSC. (2) Performance results do not reflect sales charge. * Class C Shares commenced operations on 8/1/98. Performance prior to 8/1/98 reflects Class B performance less Class C sales charges where applicable. A $10,000 investment in the fund's Class B shares at the Fund's inception on 7/22/96 would have been valued at $16,489 on 10/31/01 ($16,159 with a redemption at the end of the period.) A $10,000 investment in the fund's Class C shares at the Fund's inception on 7/22/96 would have been valued at $16,309 on 10/31/01 (a redemption at the end of the period would result in the same value because the CDSC period expired.) Performance information may reflect historical or current expense waivers/reimbursements from an affiliate of the investment adviser, without which performance would have been lower. For information on current expense waivers/reimbursements, please see the prospectus. Q. How Did The Fund Perform? The Hartford Advisers Fund returned -10.7% (for class A shares) for the twelve-month period ending October 31, 2001. The Fund outperformed the Lipper Flexible Portfolio peer group -12.39%, while underperforming the Composite Index(+) benchmark -9.30%. Q. Why Did The Fund Perform This Way? During the year, the equity ratio in the Fund declined from a high of 70% to 55% but is currently back to 60% as we gradually reduce our exposure to bonds. In the past twelve months, the Fund greatly decreased its position in Technology, eliminating such holdings as Dell Computer and Veritas Software, and is now underweight in the industry. Despite overall poor performance of Technology throughout the year, good Technology stock selection with respect to the benchmark contributed positively to Fund performance for the twelve-month period. Over the year, the Fund also decreased its position in Consumer Staples and increased its weight in Utilities and Materials. In a year marked by falling interest rates, missed earnings and falling stock prices, the fixed-income portion of the portfolio was helped by its longer-than-benchmark duration. Corporate- and mortgage-backed securities outperformed Treasuries early in the year, but later lagged, as refinancing activity increased due to interest rate cuts. By the end of the fiscal year, Treasury securities were showing the best performance in the fixed-income area. Q. What Is Your Outlook? Like nearly everyone in the world, we were shocked and saddened by the tragic events of September 11th. Although we believe that the economy will be weak for some months to come and that corporate earnings will also be under pressure, we believe that in the long run the U.S. economy will recover and prosper once again. While the near-term outlook for the U.S. economy may be poor, aggressive fiscal and monetary policy actions, coupled with low inflation, should re-ignite growth in 2002. It remains clear that the Fed and the Congress are doing whatever they can in order to help the economy recover. In the current low-interest rate environment, large capitalization, high quality growth companies look very attractive and should prove to be rewarding investments over the next few years. (+) Composite benchmark consists of the S&P 500 and the Lehman Govt/Corp Index. B-2 The Hartford Global Leaders Fund Portfolio Manager [PHOTO OF ANDREW S. OFFIT] ANDREW S. OFFIT Senior Vice President & Partner Wellington Management Company, LLP Performance Overview 9/30/98 - 10/31/01 Growth of a $10,000 investment in Class A which includes Sales Charge [LINE GRAPH]
Global Leaders MSCI Fund World 9,450 10,000 10,697 10,902 13,478 13,037 14,697 13,619 18,472 14,640 17,288 13,767 12,781 10,255
GLOBAL LEADERS FUND MSCI WORLD $9,450 starting value $10,000 starting value RETURNS (Inception 9/30/98)
Standard Non-Standard ANNUALIZED ANNUALIZED 1 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) SINCE INCEPT.(2) -------- --------------- -------- ---------------- Global Leaders A -30.14% 8.27% -26.07% 10.27% Global Leaders B -31.64% 8.66% -26.64% 9.47% Global Leaders C -28.35% 9.15% -26.62% 9.49% MSCI World -25.20% 1.20%
The chart represents a hypothetical investment in The Hartford Global Leaders Fund. Past performance does not guarantee future results. The value of shares will fluctuate so that when redeemed, shares may be worth more or less than their original cost. (1) The initial investment in Class A and C shares reflects the maximum sales charge and B shares reflect a CDSC. (2) Performance results do not reflect sales charge. A $10,000 investment in the fund's Class B shares at the Fund's inception on 9/30/98 would have been valued at $13,224 on 10/31/01 ($12,827 with a redemption at the end of the period.) A $10,000 investment in the fund's Class C shares at the Fund's inception on 9/30/98 would have been valued at $13,103 on 10/31/01 (a redemption at the end of the period would result in the same value because the CDSC period expired.) Performance information may reflect historical or current expense waivers/reimbursements from an affiliate of the investment adviser, without which performance would have been lower. For information on current expense waivers/reimbursements, please see the prospectus. Q. How Did The Fund Perform? The Hartford Global Leaders Fund returned -26.1% (for class A shares) for the twelve-month period ending October 31, 2001. The Fund underperformed its benchmarks, the MSCI World Index, which returned -25.2%, and the Lipper Global Average, which returned -25.8%. Q. Why Did The Fund Perform This Way? During the past twelve months, stock picking has been critical to the strategy and strength of the Fund. Good technology stock selection with respect to the benchmark contributed positively to Fund performance for the twelve-month period. Holdings such as Micron Technology and STMicroelectronics were additive. The Fund's largest industry overweight, Consumer Discretionary, exhibited some of the best stock selection during the period, while, the Telecommunications industry was the major detractor from the Fund's performance for the twelve months. Q. What Is Your Outlook? Overall, we are optimistic for the medium-term. The Technology, Consumer Discretionary, and Telecom areas have underperformed the market dramatically over the last several quarters and, with many investors underweight in these areas and business trends bottoming, we should see improvements. Larger-cap global-leading names should emerge from this slowdown stronger and better positioned. We are taking full advantage of this trend. Volatility can cause periods of uncertainty. Overall this is good news for the Fund because by their very nature, global leaders have superior products, market share, and management. Over the long term, if we continue to identify the winning sectors and companies, the Fund should succeed and outperform. B-3 The Hartford Growth and Income Fund Portfolio Manager [PHOTO OF JAMES A. RULLO] JAMES A. RULLO, CFA Senior Vice President & Partner Wellington Management Company, LLP Performance Overview 4/30/98 - 10/31/01 Growth of a $10,000 investment in Class A which includes Sales Charge [LINE GRAPH]
Growth and Income Fund S&P 500 - ----------- ------- 9,450 10,000 9,625 9,959 11,652 12,181 11,861 12,515 13,104 13,414 13,124 13,276 10,380 9,982
RETURNS (Inception 4/30/98)
Standard Non-Standard ANNUALIZED ANNUALIZED 1 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) SINCE INCEPT.(2) ---------------------------- ---------------------------- Growth & Inc A -25.25% 1.07% -20.90% 2.71% Growth & Inc B -26.51% 1.13% -21.51% 1.95% Growth & Inc C* -23.29% 1.70% -21.50% 1.99% S&P 500 -24.89% -0.10%
The chart represents a hypothetical investment in The Hartford Growth and Income Fund. Past performance does not guarantee future results. The value of shares will fluctuate so that when redeemed, shares may be worth more or less than their original cost. (1) The initial investment in Class A and C shares reflects the maximum sales charge and B shares reflect a CDSC. (2) Performance results do not reflect sales charge. * Class C Shares commenced operations on 8/1/98. Performance prior to 8/1/98 reflects Class B performance less Class C sales charges where applicable. A $10,000 investment in the fund's Class B shares at the Fund's inception on 4/30/98 would have been valued at $10,702 on 10/31/01 ($10,381 with a redemption at the end of the period.) A $10,000 investment in the fund's Class C shares at the Fund's inception on 4/30/98 would have been valued at $10,609 on 10/31/01 (a redemption at the end of the period would result in the same value because the CDSC period expired.) Performance information may reflect historical or current expense waivers/reimbursements from an affiliate of the investment adviser, without which performance would have been lower. For information on current expense waivers/reimbursements, please see the prospectus. Q. How Did The Fund Perform? The Hartford Growth and Income Fund returned -20.9% (for class A shares) for the 12-month period ending October 31, 2001. The Fund's return exceeded the return for the S&P 500 Index, which returned -24.9% and the Lipper Large Cap Core Average, which returned -25.5% during the same time period. Q. Why Did The Fund Perform This Way? Good stock selection within Financials, Technology, and Health Care contributed to the Fund's outperformance relative to the S&P 500 Index during the period. Strong performers in the Financials sector included Pacific Century, UnionBanCal, and Lehman Brothers. Technology holdings IBM, Micron and Intuit held up relatively well during the period. Health Care holdings Genzyme, Johnson & Johnson, and Tenet Healthcare were among the strongest performers in the Fund. Q. What Is Your Outlook? Before the terrorist attacks of September 11, we believed that consumer spending would sustain the economy just long enough for a late 2001 early 2002 economic rebound to take hold, driven by a completed inventory correction. In the wake of the terrorist attacks, we now forecast that consumer spending will fall faster and to levels lower than consensus expectations and that corporations will face another round of inventory corrections. It is likely that a recovery will not take place until the second half of 2002. Despite the gloomy economic forecast and geopolitical uncertainty, we are finding attractive stocks and sectors as a result of the changing environment. In this highly volatile market environment, we will continue to focus on selecting attractive companies trading at attractive valuations. B-4 The Hartford High Yield Fund Portfolio Manager [PHOTO OF ALISON D. GRANGER] ALISON D. GRANGER, CFA Senior Vice President Hartford Investment Management Company Performance Overview 9/30/98 - 10/31/01 Growth of a $10,000 investment in Class A which includes Sales Charge [LINE GRAPH]
High Yield Lehman High Fund Yield ---- ----- 9,550 10,000 9,529 9,795 10,326 10,603 10,040 10,222 10,049 10,230 10,176 10,057 10,359 10,040
RETURNS (Inception 9/30/98)
Standard Non-Standard ANNUALIZED ANNUALIZED 1 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) SINCE INCEPT.(2) ---------------------------- ---------------------------- High Yield A -2.78% 1.15% 1.80% 2.67% High Yield B -4.01% 0.97% 0.99% 1.91% High Yield C -1.00% 1.60% 1.01% 1.93% Lehman High Yield -0.16% 0.13%
The chart represents a hypothetical investment in The Hartford High Yield Fund. Past performance does not guarantee future results. The value of shares will fluctuate so that when redeemed, shares may be worth more or less than their original cost. (1) The initial investment in Class A and C shares reflects the maximum sales charge and B shares reflect a CDSC. (2) Performance results do not reflect sales charge. A $10,000 investment in the fund's Class B shares at the Fund's inception on 9/30/98 would have been valued at $10,602 on 10/31/01 ($10,284 with a redemption at the end of the period.) A $10,000 investment in the fund's Class C shares at the Fund's inception on 9/30/98 would have been valued at $10,502 on 10/31/01 (a redemption at the end of the period would result in the same value because the CDSC period expired.) Performance information may reflect historical or current expense waivers/reimbursements from an affiliate of the investment adviser, without which performance would have been lower. For information on current expense waivers/reimbursements, please see the prospectus. Q. How Did The Fund Perform? The Hartford High Yield Fund's shares placed in the 19th percentile of its Lipper peer group for the one year ended October 31, 2001, producing a total return of 1.8% (for class A shares) versus the - 2.7% return of the Lipper Mutual Fund and Variable Annuity High Yield Fixed Income Universe. Q. Why Did The Fund Perform This Way? The Fund's above-average credit quality and low default experience continued to benefit performance this year. Our overweight positions in the healthcare and energy industries benefited performance throughout the year. Health Care providers continue to enjoy rating upgrades due to greater pricing power and therefore, improved financial situations. Energy issuers, despite the more recent fall in the price of oil, also strengthened their balance sheets over the past two years as the relatively high price of oil allowed them to pay down debt. Although premature in the second quarter, the Funds' increased exposure to select telecommunications issuers also aided performance. Specifically, the funds increased their exposure to select telecom equipment manufacturers and wireline providers as investors sold securities due to heightened default concerns. These deeply-discounted issues have since recovered from the depths of their second-quarter sell-off. Finally our underweight to cable assets weighed on the Funds' returns throughout the year. Q. What Is Your Outlook? Given the backdrop of the Fed's 450 basis points of easing year to date, we believe that riskier assets are poised to outperform in the coming quarters. As such, we have begun to downgrade the portfolio, anticipating that lower quality assets stand to gain the most. To that end, we continue to favor issuers in the wireline and technology segments of the telecommunications industry. Such issuers continue to trade at relatively attractive prices as we believe the market is currently overestimating the likelihood of default. We also are emphasizing some of the basic industries and commodity issuers such as pulp/paper, chemicals, and metals and mining paper as prices of such issuers have cheapened dramatically in response to poor economic data. Individual issuer and security selection is key, and we are working closely with our traders and analysts to identify those with high potential for attractive return Conversely, the tragic events of September 11th reinforced the view we have held for most of the year that consumer-related high yield issuers such as those in the retail, homebuilding and gaming industries, along with lodging and transportation issuers were overvalued. We will therefore maintain our underweight to such issuers as prices have yet to reflect our view. B-5 The Hartford International Opportunities Fund Portfolio Manager [PHOTO OF TROND SKRAMSTAD] TROND SKRAMSTAD Senior Vice President, Partner & Director of International Equities Wellington Management Company, LLP Associate Portfolio Manager [PHOTO OF ANDREW S. OFFIT] ANDREW S. OFFIT Senior Vice President & Partner Wellington Management Company, LLP Performance Overview 7/22/96 - 10/31/01 Growth of a $10,000 investment in Class A which includes Sales Charge [LINE GRAPH]
International MSCI EAFE Opportunities GDP 9,450 10,000 9,658 10,221 10,115 10,629 10,483 11,077 11,864 13,326 10,675 12,961 12,745 15,054 13,630 16,350 15,378 17,590 13,685 15,958 10,283 11,821
INTERNATIONAL OPPORTUNITIES MSCI EAFE GDP $9,450 starting value $10,000 starting value RETURNS (Inception 7/22/96)
Standard Non-Standard ANNUALIZED ANNUALIZED 1 YEAR(1) 5 YEAR(1) SINCE INCEPT.(1) 1 YEAR(2) 5 YEAR(2) SINCE INCEPT.(2) -------- -------- --------------- -------- -------- --------------- Int'l Opp A -29.00% 0.06% 0.53% -24.87% 1.20% 1.61% Int'l Opp B -30.46% 0.03% 0.71% -25.46% 0.50% 0.89% Int'l Opp C* -27.25% 0.08% 0.68% -25.51% 0.48% 0.87% MSCI EAFE GDP -25.86% 2.97% 3.10%
The chart represents a hypothetical investment in The Hartford International Opportunities Fund. Past performance does not guarantee future results. The value of shares will fluctuate so that when redeemed, shares may be worth more or less than their original cost. (1) The initial investment in Class A and C shares reflects the maximum sales charge and B shares reflect a CDSC. (2) Performance results do not reflect sales charge. * Class C Shares commenced operations on 8/1/98. Performance prior to 8/1/98 reflects Class B performance less Class C sales charges where applicable. A $10,000 investment in the fund's Class B shares at the Fund's inception on 7/22/96 would have been valued at $10,479 on 10/31/01 ($10,269 with a redemption at the end of the period.) A $10,000 investment in the fund's Class C shares at the Fund's inception on 7/22/96 would have been valued at $10,363 on 10/31/01 (a redemption at the end of the period would result in the same value because the CDSC period expired.) Performance information may reflect historical or current expense waivers/reimbursements from an affiliate of the investment adviser, without which performance would have been lower. For information on current expense waivers/reimbursements, please see the prospectus. Q. How Did The Fund Perform? The Hartford International Opportunities Fund returned -24.9% (for class A share) for the twelve-month period ending October 31, 2001. The Fund outperformed both the Lipper International Fund Average, which returned -26.38% and the MSCI EAFE GDP Index, which returned -25.81%. Q. Why Did The Fund Perform This Way? The Fund benefited from strong regional and asset allocation decisions as the underweights in the weak Japan and Latin American markets, overweight in the strong UK and Korea markets and larger than normal cash weighting all contributed positively to performance. The Fund also benefited from strong stock selection in Europe, particularly France, Switzerland and Sweden, which offset weak stock selection in Japan and the emerging markets. From a industry point of view, stock selection was strong in the Technology and Materials industries but lagged somewhat in Telecommunications. Over the year, the Fund had reduced its positions in Telecommunications and Technology, as the weakening economy most noticeably affected these sectors. However, the Fund has recently been increasing its positions in these areas, and is currently overweight in both, as well as in Health Care. The most significant increase in position during the past year has been in the Consumer Discretionary industry, although concern over a slowdown in consumer spending has recently led us to begin reducing exposure in this area. Q. What Is Your Outlook? We continue to favor Europe over Japan and the Pac Basin ex-Japan due to its more stable economy and attractively valued currencies. The Japanese economy remains in very poor shape, and the Koizumi government, while promising much, has so far produced little in the way of economic restructuring or banking reform. The recent terrorist attacks on the United States will likely amplify economic and market developments that were already unfolding, resulting in a longer and deeper slowdown than was expected. We expect slower growth over the coming months, particularly on the consumer side, as people re-assess priorities and conserve resources amidst uncertainty. Capital investment is also likely to be further restrained. We expect considerable market volatility in the short-run, as economic and geopolitical risk remains high. We are taking advantage of market weakness, however, as the massive amounts of liquidity and growing fiscal stimulus promise to turn the global economy around by next year. B-6 APPENDIX C HARTFORD FUND FINANCIAL HIGHLIGHTS The tables included in this Appendix are intended to help you understand the financial performance of each Hartford Fund for the past five years or, if shorter, the period since the Fund's inception. Certain information reflects financial results for a single Fund share. The total returns in the tables represent the rate an investor would have earned, or lost, on an investment in each Fund (assuming reinvestment of all dividends and distributions). This information has been audited by Arthur Andersen LLP, whose report, along with each Fund's financial statements and financial highlights, are included in the annual report which is available upon request. C-1 FINANCIAL HIGHLIGHTS - --------------------------------------------------------------------------------
-- SELECTED PER-SHARE DATA(A) -- ----------------------------------------------------------------------------------------------- NET REALIZED AND DISTRIBUTIONS NET ASSET NET UNREALIZED TOTAL DIVIDENDS FROM VALUE AT INVESTMENT GAIN FROM FROM NET REALIZED DISTRIBUTIONS BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT CAPITAL FROM OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME GAINS CAPITAL --------- ---------- ------------ ---------- ---------- ------------- ------------- THE HARTFORD ADVISERS FUND For the Year Ended October 31, 2001 Class A...................... $17.07 $ 0.30 $(2.05) $(1.75) $(0.31) $(0.64) $ -- Class B...................... 16.90 0.20 (2.03) (1.83) (0.19) (0.64) -- Class C...................... 17.05 0.20 (2.04) (1.84) (0.20) (0.64) -- Class Y...................... 17.24 0.38 (2.07) (1.69) (0.38) (0.64) -- For the Ten Months Ended October 31, 2000 Class A...................... 17.02 0.24 0.19 0.43 (0.22) (0.16) -- Class B...................... 16.87 0.15 0.17 0.32 (0.13) (0.16) -- Class C...................... 17.02 0.15 0.17 0.32 (0.13) (0.16) -- Class Y...................... 17.16 0.33 0.16 0.49 (0.25) (0.16) -- For the Year Ended December 31, 1999 Class A...................... 15.71 0.27 1.60 1.87 (0.25) (0.31) -- Class B...................... 15.59 0.16 1.58 1.74 (0.15) (0.31) -- Class C...................... 15.73(f) 0.17(f) 1.58(f) 1.75(f) (0.15)(f) (0.31)(f) --(f) Class Y...................... 15.80 0.35 1.61 1.96 (0.29) (0.31) -- For the Year Ended December 31, 1998 Class A...................... 13.41 0.23 2.58 2.81 (0.25) (0.26) -- Class B...................... 13.33 0.15 2.54 2.69 (0.17) (0.26) -- Class Y...................... 13.46 0.29 2.59 2.88 (0.28) (0.26) -- From inception August 1, 1998, through December 31, 1998 Class C...................... 15.56(f) 0.16(f) 0.64(f) 0.80(f) (0.22)(f) (0.40)(f) --(f) For the Year Ended December 31, 1997 Class A...................... 11.08 0.16 2.41 2.57 (0.17) (0.07) -- Class B...................... 11.05 0.16 2.31 2.47 (0.12) (0.07) -- Class Y...................... 11.10 0.31 2.32 2.63 (0.20) (0.07) -- From inception July 1, 1996 to December 31, 1996 Class A...................... 10.00 0.09 1.07 1.16 (0.08) -- -- Class B...................... 10.00 0.02 1.11 1.13 (0.08) -- -- Class Y...................... 10.00 0.03 1.16 1.19 (0.09) -- -- THE HARTFORD GLOBAL LEADERS FUND For the Year Ended October 31, 2001 Class A...................... 17.55 0.01 (4.54) (4.53) (0.18) (0.01) Class B...................... 17.29 (0.08) (4.48) (4.56) -- (0.18) (0.01) Class C...................... 17.30 (0.10) (4.46) (4.56) -- (0.18) (0.01) Class Y...................... 17.73 0.08 (4.59) (4.51) -- (0.18) (0.01) For the Ten Months Ended October 31, 2000 Class A...................... 18.56 --(g) (0.92) (0.92) -- (0.09) -- Class B...................... 18.40 (0.06) (0.96) (1.02) -- (0.09) -- Class C...................... 18.40 (0.06) (0.95) (1.01) -- (0.09) -- Class Y...................... 18.68 0.03 (0.89) (0.86) -- (0.09) -- For the Year Ended December 31, 1999 Class A...................... 12.67 --(g) 6.01 6.01 -- (0.12) -- Class B...................... 12.65 (0.02) 5.89 5.87 -- (0.12) -- Class C...................... 12.65 (0.02) 5.89 5.87 -- (0.12) -- Class Y...................... 12.69 0.03 6.08 6.11 -- (0.12) -- From inception September 30, 1998, through December 31, 1998 Class A...................... 10.00 (0.01) 3.03 3.02 -- (0.35) -- Class B...................... 10.00 (0.02) 3.02 3.00 -- (0.35) -- Class C...................... 10.00 (0.02) 3.02 3.00 -- (0.35) -- Class Y...................... 10.00 0.01 3.03 3.04 -- (0.35) --
- --------------- (a)Information presented relates to a share of capital share outstanding throughout the indicated period. (b)Annualized. (c)Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period and no sales charge. Total return would be reduced if sales charges were taken into account. (d)Not annualized. (e)Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (f)Per share amounts have been restated to reflect a reverse stock split for Class C shares effective February 11, 1999. (g)Net Investment Income (Loss) is less than a penny a share. C-2 - --------------------------------------------------------------------------------
-- RATIOS AND SUPPLEMENTAL DATA -- - --------------------------------------------------------------------------------------------------- RATIO OF EXPENSES NET ASSETS TO AVERAGE NET INCREASE NET ASSET AT END OF NET ASSETS TOTAL (DECREASE) IN VALUE AT TOTAL PERIOD BEFORE WAIVERS AND DISTRIBUTIONS NET ASSETS END OF PERIOD RETURN(C) (IN THOUSANDS) REIMBURSEMENTS ------------- ------------- ------------- --------- -------------- ------------------ $(0.94)... $(2.69) $14.38 (10.67)% $1,088,858 1.27% (0.83)... (2.66) 14.24 (11.27) 622,519 1.93 (0.84)... (2.68) 14.37 (11.26) 478,194 1.93 (1.01)... (2.70) 14.54 (10.20) 56,320 0.74 (0.38)... 0.05 17.07 2.52(d) 893,954 1.26(b) (0.29)... 0.03 16.90 1.89(d) 631,930 1.92(b) (0.29)... 0.03 17.05 1.89(d) 432,171 1.92(b) (0.41)... 0.08 17.24 2.90(d) 64,889 0.75(b) (0.56)... 1.31 17.02 12.08 693,136 1.31 (0.46)... 1.28 16.87 11.29 555,338 1.97 (0.46)(f) 1.29(f) 17.02(f) 11.29 323,631 1.99 (0.60)... 1.36 17.16 12.62 68,133 0.79 (0.51)... 2.30 15.71 21.09 316,435 1.43 (0.43)... 2.26 15.59 20.27 237,959 2.11 (0.54)... 2.34 15.80 21.62 57,891 0.90 (0.62)(f) 0.17(f) 15.73(f) 5.25(d) 54,907 2.18(b) (0.24)... 2.33 13.41 23.30 98,633 1.60 (0.19)... 2.28 13.33 22.44 39,334 2.31 (0.27)... 2.36 13.46 23.80 39,773 1.03 (0.08)... 1.08 11.08 11.56(d) 14,347 2.99(b) (0.08)... 1.05 11.05 11.28(d) 1,499 6.71(b) (0.09)... 1.10 11.10 11.88(d) 34 144.82(b) (0.19) (4.72) 12.83 (26.07) 247,094 1.53 (0.19) (4.75) 12.54 (26.64) 62,973 2.23 (0.19) (4.75) 12.55 (26.62) 103,574 2.19 (0.19) (4.70) 13.03 (25.68) 7,908 0.98 (0.09) (1.01) 17.55 (4.98)(d) 255,959 1.53(b) (0.09) (1.11) 17.29 (5.56)(d) 75,702 2.22(b) (0.09) (1.10) 17.30 (5.51)(d) 142,549 2.19(b) (0.09) (0.95) 17.73 (4.62)(d) 10,001 1.01(b) (0.12) 5.89 18.56 47.68 84,632 1.62 (0.12) 5.75 18.40 46.64 24,588 2.29 (0.12) 5.75 18.40 46.64 43,012 2.33 (0.12) 5.99 18.68 48.39 4,423 1.10 (0.35) 2.67 12.67 30.36(d) 3,771 2.71(b) (0.35) 2.65 12.65 30.16(d) 486 3.55(b) (0.35) 2.65 12.65 30.16(d) 517 3.57(b) (0.35) 2.69 12.69 30.57(d) 392 2.46(b) -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------- RATIO OF RATIO OF EXPENSES NET TO AVERAGE INVESTMENT NET ASSETS INCOME (LOSS) PORTFOLIO AFTER WAIVERS AND TO AVERAGE TURNOVER REIMBURSEMENTS NET ASSETS RATE(E) ----------------- ------------- --------- 1.22% 1.99% 36.9% 1.93 1.28 -- 1.93 1.28 -- 0.74 2.48 -- 1.21(b) 1.76(b) 38.4 1.92(b) 1.05(b) -- 1.92(b) 1.05(b) -- 0.75(b) 2.22(b) -- 1.26 1.72 34.6 1.97 1.00 -- 1.99 0.99 -- 0.79 2.18 -- 1.38 1.67 40.2 2.10 0.98 -- 0.90 2.09 -- 2.10(b) 1.06(b) -- 1.40 1.54 38.6 2.10 0.80 -- 0.95 2.08 -- 1.40(b) 2.13(b) 19.8 2.10(b) 1.24(b) -- 0.95(b) 2.75(b) -- 1.48 0.08 381.7 2.23 (0.66) -- 2.19 (0.63) -- 0.98 0.58 -- 1.48(b) (0.06)(b) 290.0 2.22(b) (0.80)(b) -- 2.19(b) (0.77)(b) -- 1.01(b) 0.41(b) -- 1.57 (0.15) 203.7 2.29 (0.86) -- 2.33 (0.89) -- 1.10 0.32 -- 1.65(b) (0.19)(b) 49.0 2.35(b) (0.92)(b) -- 2.35(b) (0.90)(b) -- 1.20(b) 0.31(b) --
C-3 FINANCIAL HIGHLIGHTS -- (CONTINUED) - --------------------------------------------------------------------------------
-- SELECTED PER-SHARE DATA(A) -- ----------------------------------------------------------------------------------------------- NET REALIZED AND DISTRIBUTIONS NET ASSET NET UNREALIZED TOTAL DIVIDENDS FROM VALUE AT INVESTMENT GAIN FROM FROM NET REALIZED DISTRIBUTIONS BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT CAPITAL FROM OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME GAINS CAPITAL --------- ---------- ------------ ---------- ---------- ------------- ------------- THE HARTFORD GROWTH AND INCOME FUND For the Year Ended October 31, 2001 Class A...................... $13.63 $ --(g) $(2.75) $(2.75) $ -- $(0.52) $ -- Class B...................... 13.40 (0.05) (2.73) (2.78) -- (0.52) -- Class C...................... 13.41 (0.06) (2.72) (2.78) -- (0.52) -- Class Y...................... 13.78 0.03 (2.77) (2.74) -- (0.52) -- For the Ten Months Ended October 31, 2000 Class A...................... 13.72 (0.02) 0.04 0.02 -- (0.11) -- Class B...................... 13.58 (0.06) (0.01) (0.07) -- (0.11) -- Class C...................... 13.58 (0.06) 0.00 (0.06) -- (0.11) -- Class Y...................... 13.83 0.02 0.04 0.06 -- (0.11) -- For the Year Ended December 31, 1999 Class A...................... 11.45 0.01 2.36 2.37 -- (0.10) -- Class B...................... 11.41 (0.02) 2.29 2.27 -- (0.10) -- Class C...................... 11.41(f) (0.03)(f) 2.30(f) 2.27(f) --(f) (0.10)(f) --(f) Class Y...................... 11.48 0.06 2.39 2.45 -- (0.10) -- From inception April 30, 1998, through December 31, 1998 Class A...................... 10.00 0.02 1.45 1.47 -- -- (0.02) Class B...................... 10.00 (0.01) 1.43 1.42 -- -- (0.01) Class Y...................... 10.00 0.05 1.46 1.51 -- -- (0.03) From inception August 1, 1998, through December 31, 1998 Class C...................... 10.14(f) 0.01(f) 1.29(f) 1.30(f) --(f) --(f) (0.03)(f) THE HARTFORD HIGH YIELD FUND For the Year Ended October 31, 2001 Class A...................... 9.06 0.78 (0.61) 0.17 (0.78) -- -- Class B...................... 9.05 0.72 (0.62) (0.10) (0.72) -- -- Class C...................... 9.05 0.72 (0.62) (0.10) (0.72) -- -- Class Y...................... 9.10 0.83 (0.63) 0.20 (0.82) -- -- For the Ten Months Ended October 31, 2000 Class A...................... 9.75 0.66 (0.69) (0.03) (0.66) -- -- Class B...................... 9.74 0.62 (0.71) (0.09) (0.60) -- -- Class C...................... 9.74 0.61 (0.70) (0.09) (0.60) -- -- Class Y...................... 9.78 0.69 (0.69) (0.00) (0.68) -- -- For the Year Ended December 31, 1999 Class A...................... 10.15 0.75 (0.40) 0.35 (0.75) -- -- Class B...................... 10.14 0.68 (0.40) 0.28 (0.68) -- -- Class C...................... 10.14 0.68 (0.40) 0.28 (0.68) -- -- Class Y...................... 10.16 0.78 (0.39) 0.39 (0.77) -- -- From inception September 30, 1998, through December 31, 1998 Class A...................... 10.00 0.19 0.13 0.32 (0.17) -- -- Class B...................... 10.00 0.16 0.14 0.30 (0.16) -- -- Class C...................... 10.00 0.16 0.14 0.30 (0.16) -- -- Class Y...................... 10.00 0.21 0.13 0.34 (0.18) -- --
- --------------- (a)Information presented relates to a share of capital share outstanding throughout the indicated period. (b)Annualized. (c)Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period and no sales charge. Total return would be reduced if sales charges were taken into account. (d)Not annualized. (e)Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (f)Per share amounts have been restated to reflect a reverse stock split for Class C shares effective February 11, 1999. (g)Net Investment Income (Loss) is less than a penny a share. C-4 - --------------------------------------------------------------------------------
-- RATIOS AND SUPPLEMENTAL DATA -- - --------------------------------------------------------------------------------------------------- RATIO OF EXPENSES NET ASSETS TO AVERAGE NET INCREASE NET ASSET AT END OF NET ASSETS TOTAL (DECREASE) IN VALUE AT TOTAL PERIOD BEFORE WAIVERS AND DISTRIBUTIONS NET ASSETS END OF PERIOD RETURN(C) (IN THOUSANDS) REIMBURSEMENTS ------------- ------------- ------------- --------- -------------- ------------------ $(0.52)... $(3.27) $10.36 (20.90)% $239,698 1.43% (0.52)... (3.30) 10.10 (21.51) 43,210 2.11 (0.52)... (3.30) 10.11 (21.50) 60,409 2.09 (0.52)... (3.26) 10.52 (20.60) 440 0.96 (0.11)... (0.09) 13.63 0.15(d) 197,176 1.43(b) (0.11)... (0.18) 13.40 (0.51)(d) 41,126 2.11(b) (0.11)... (0.17) 13.41 (0.44)(d) 63,650 2.09(b) (0.11)... (0.05) 13.78 0.44(d) 490 0.95(b) (0.10)... 2.27 13.72 20.80 74,764 1.49 (0.10)... 2.17 13.58 20.00 20,375 2.13 (0.10)(f) 2.17(f) 13.58(f) 19.98 29,265 2.16 (0.10)... 2.35 13.83 21.45 480 0.93 (0.02)... 1.45 11.45 14.78(d) 11,120 1.63(b) (0.01)... 1.41 11.41 14.21(d) 3,538 2.32(b) (0.03)... 1.48 11.48 15.18(d) 386 1.20(b) (0.03)(f) 1.27(f) 11.41(f) 12.80(d) 3,726 2.38(b) (0.78) (0.61) 8.45 1.80% 45,753 1.40 (0.72) (0.62) 8.43 0.99 16,922 2.08 (0.72) (0.62) 8.43 1.01 27,605 2.08 (0.82) (0.62) 8.48 2.15 4,223 0.88 (0.66) (0.69) 9.06 (0.35)(d) 23,214 1.38(b) (0.60) (0.69) 9.05 (0.92)(d) 7,929 2.04(b) (0.60) (0.69) 9.05 (0.90)(d) 9,534 2.04(b) (0.68) (0.68) 9.10 0.02(d) 2,955 0.89(b) (0.75) (0.40) 9.75 3.47 17,465 1.41 (0.68) (0.40) 9.74 2.80 7,436 2.08 (0.68) (0.40) 9.74 2.81 8,573 2.09 (0.77) (0.38) 9.78 3.98 2,314 0.90 (0.17) 0.15 10.15 3.33(d) 8,507 1.58(b) (0.16) 0.14 10.14 3.09(d) 2,322 2.31(b) (0.16) 0.14 10.14 3.08(d) 2,278 2.31(b) (0.18) 0.16 10.16 3.51(d) 1,034 1.17(b) -- RATIOS AND SUPPLEMENTAL DATA -- - --- --------------------------------------------- RATIO OF RATIO OF EXPENSES NET TO AVERAGE INVESTMENT NET ASSETS INCOME (LOSS) PORTFOLIO AFTER WAIVERS AND TO AVERAGE TURNOVER REIMBURSEMENTS NET ASSETS RATE(E) ----------------- ------------- --------- 1.38% (0.07)% 79.8% 2.11 (0.80) -- 2.09 (0.78) -- 0.96 0.34 -- 1.38(b) (0.17)(b) 62.6 2.11(b) (0.90)(b) -- 2.09(b) (0.88)(b) -- 0.95(b) 0.26(b) -- 1.44 0.01 53.0 2.13 (0.68) -- 2.15 (0.69) -- 0.93 0.51 -- 1.45(b) 0.23(b) 35.1 2.15(b) (0.47)(b) -- 1.00(b) 0.76(b) -- 2.15(b) (0.53)(b) -- 1.35 9.00 62.8 2.08 8.28 -- 2.08 8.28 -- 0.88 9.48 -- 1.33(b) 8.55(b) 57.2 2.04(b) 7.84(b) -- 2.04(b) 7.83(b) -- 0.89(b) 8.99(b) -- 1.36 7.74 53.0 2.08 7.03 -- 2.09 7.01 -- 0.90 8.20 -- 1.40(b) 7.06(b) 10.9 2.10(b) 6.50(b) -- 2.10(b) 6.49(b) -- 0.95(b) 7.48(b) --
C-5 FINANCIAL HIGHLIGHTS -- (CONTINUED) - --------------------------------------------------------------------------------
-- SELECTED PER-SHARE DATA(A) -- ----------------------------------------------------------------------------------------------- NET REALIZED AND DISTRIBUTIONS NET ASSET NET UNREALIZED TOTAL DIVIDENDS FROM VALUE AT INVESTMENT GAIN FROM FROM NET REALIZED DISTRIBUTIONS BEGINNING INCOME (LOSS) ON INVESTMENT INVESTMENT CAPITAL FROM OF PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME GAINS CAPITAL --------- ---------- ------------ ---------- ---------- ------------- ------------- THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND For the Year Ended October 31, 2001 Class A...................... $13.03 $ 0.05 $(3.14) $(3.09) $ -- $(0.61) $-- Class B...................... 12.74 (0.04) (3.05) (3.09) -- (0.61) -- Class C...................... 12.68 (0.03) (3.05) (3.08) -- (0.61) -- Class Y...................... 13.19 0.09 (3.18) (3.09) -- (0.61) -- For the Ten Months Ended October 31, 2000 Class A...................... 15.43 0.08 (2.42) (2.34) (0.01) (0.05) -- Class B...................... 15.17 0.01 (2.39) (2.38) (0.00) (0.05) -- Class C...................... 15.10 0.07 (2.44) (2.37) (0.00) (0.05) -- Class Y...................... 15.56 0.12 (2.43) (2.31) (0.01) (0.05) -- For the Year Ended December 31, 1999 Class A...................... 11.89 0.06 4.46 4.52 (0.15) (0.83) -- Class B...................... 11.73 0.01 4.32 4.33 (0.06) (0.83) -- Class C...................... 11.74(f) (0.02)(f) 4.33(f) 4.31(f) (0.12)(f) (0.83)(f) --(f) Class Y...................... 11.97 0.09 4.51 4.60 (0.18) (0.83) -- For the Year Ended December 31, 1998 Class A...................... 10.58 0.07 1.26 1.33 (0.02) -- -- Class B...................... 10.49 0.01 1.23 1.24 -- -- -- Class Y...................... 10.62 0.12 1.27 1.39 (0.04) -- -- From inception August 1,1998, through December 31, 1998 Class C...................... 12.26(f) (0.01)(f) (0.49)(f) (0.50)(f) (0.03)(f) --(f) --(f) For the Year Ended December 31, 1997 Class A...................... 10.72 0.09 (0.01) 0.08 (0.05) (0.17) -- Class B...................... 10.69 0.07 (0.06) 0.01 (0.04) (0.17) -- Class Y...................... 10.73 0.15 (0.02) 0.13 (0.07) (0.17) -- From inception July 1, 1996 to December 31, 1996 Class A...................... 10.00 0.02 0.79 0.81 (0.06) (0.03) -- Class B...................... 10.00 (0.01) 0.80 0.79 (0.07) (0.03) -- Class Y...................... 10.00 --(g) 0.84 0.84 (0.08) (0.03) -- THE HARTFORD MONEY MARKET FUND For the Year Ended October 31, 2001 Class A...................... 1.00 0.04 -- 0.04 (0.04) -- -- Class B...................... 1.00 0.03 -- 0.03 (0.03) -- -- Class C...................... 1.00 0.03 -- 0.03 (0.03) -- -- Class Y...................... 1.00 0.04 -- 0.04 (0.04) -- -- For the Ten Months Ended October 31, 2000 Class A...................... 1.00 0.04 -- 0.04 (0.04) -- -- Class B...................... 1.00 0.04 -- 0.04 (0.04) -- -- Class C...................... 1.00 0.04 -- 0.04 (0.04) -- -- Class Y...................... 1.00 0.05 -- 0.05 (0.05) -- -- For the Year Ended December 31, 1999 Class A...................... 1.00 0.04 -- 0.04 (0.04) -- -- Class B...................... 1.00 0.04 -- 0.04 (0.04) -- -- Class C...................... 1.00 0.04 -- 0.04 (0.04) -- -- Class Y...................... 1.00 0.05 -- 0.05 (0.05) -- -- For the Year Ended December 31, 1998 Class A...................... 1.00 0.05 -- 0.05 (0.05) -- -- Class B...................... 1.00 0.04 -- 0.04 (0.04) -- -- Class Y...................... 1.00 0.05 -- 0.05 (0.05) -- -- From inception August 1, 1998, through December 31, 1998 Class C...................... 1.00 0.02 -- 0.02 (0.02) -- -- For the Year Ended December 31, 1997 Class A...................... 1.00 0.05 -- 0.05 (0.05) -- -- Class Y...................... 1.00 0.05 -- 0.05 (0.05) -- -- From inception August 22, 1997 to December 31, 1997 Class B...................... 1.00 0.01 -- 0.01 (0.01) -- -- From inception July 1, 1996 to December 31, 1996 Class A...................... 1.00 0.02 -- 0.02 (0.02) -- -- Class Y...................... 1.00 0.02 -- 0.02 (0.02) -- --
- --------------- (a)Information presented relates to a share of capital share outstanding throughout the indicated period. (b)Annualized. (c)Assumes initial investment at net asset value at the beginning of each period, reinvestment of all distributions, the complete redemption of the investment at net asset value at the end of each period and no sales charge. Total return would be reduced if sales charges were taken into account. (d)Not annualized. (e)Portfolio turnover rate is calculated on the basis of the Fund as a whole without distinguishing between the classes of shares issued. (f)Per share amounts have been restated to reflect a reverse stock split for Class C shares effective February 11, 1999. (g)Net Investment Income (Loss) is less than a penny a share. C-6 - --------------------------------------------------------------------------------
-- RATIOS AND SUPPLEMENTAL DATA -- - --------------------------------------------------------------------------------------------------- RATIO OF EXPENSES NET ASSETS TO AVERAGE NET INCREASE NET ASSET AT END OF NET ASSETS TOTAL (DECREASE) IN VALUE AT TOTAL PERIOD BEFORE WAIVERS AND DISTRIBUTIONS NET ASSETS END OF PERIOD RETURN(C) (IN THOUSANDS) REIMBURSEMENTS ------------- ------------- ------------- --------- -------------- ------------------ $(0.61) $(3.70) $ 9.33 (24.87)% $72,326 1.61% (0.61) (3.70) 9.04 (25.46) 18,798 2.30 (0.61) (3.69) 8.99 (25.51) 18,523 2.28 (0.61) (3.70) 9.49 (24.56) 17,092 1.06 (0.06) (2.40) 13.03 (15.18)(d) 89,309 1.60(b) (0.05) (2.43) 12.74 (15.70)(d) 25,872 2.29(b) (0.05) (2.42) 12.68 (15.70)(d) 26,912 2.27(b) (0.06) (2.37) 13.19 (14.91)(d) 22,454 1.06(b) (0.98) 3.54 15.43 39.13 63,281 1.61 (0.89) 3.44 15.17 38.11 22,835 2.26 (0.95)(f) 3.36(f) 15.10(f) 37.98 13,514 2.31 (1.01) 3.59 15.56 39.63 25,403 1.11 (0.02) 1.31 11.89 12.53 32,014 1.89 -- 1.24 11.73 11.82 11,767 2.56 (0.04) 1.35 11.97 13.11 10,860 1.36 (0.03)(f) (0.53)(f) 11.74(f) (4.05)(d) 1,379 2.83(b) (0.22) (0.14) 10.58 0.84 15,701 2.30 (0.21) (0.20) 10.49 0.12 7,188 3.03 (0.24) (0.11) 10.62 1.31 6,422 1.76 (0.09) 0.72 10.72 8.14(d) 4,294 5.40(b) (0.10) 0.69 10.69 7.86(d) 163 32.61(b) (0.11) 0.73 10.73 8.36(d) 64 126.52(b) (0.04)... -- 1.00 4.02 86,748 1.19 (0.03)... -- 1.00 3.31 48,998 1.85 (0.03)... -- 1.00 3.31 53,873 1.82 (0.04)... -- 1.00 4.49 33,309 0.61 (0.04)... -- 1.00 4.54(d) 43,897 1.20(b) (0.04)... -- 1.00 3.94(d) 14,974 1.85(b) (0.04)... -- 1.00 3.93(d) 6,842 1.85(b) (0.05)... -- 1.00 4.94(d) 18,325 0.65(b) (0.04)... -- 1.00 4.32 44,663 1.15 (0.04)... -- 1.00 3.59 25,762 1.81 (0.04)... -- 1.00 3.59 9,904 1.84 (0.05)... -- 1.00 4.80 8,953 0.64 (0.05)... -- 1.00 4.69 29,424 1.25 (0.04)... -- 1.00 3.97 11,936 1.86 (0.05)... -- 1.00 5.16 5,320 0.71 (0.02)... -- 1.00 1.58(d) 1,203 2.02(b) (0.05)... -- 1.00 4.73 22,578 1.28 (0.05)... -- 1.00 5.23 2,638 0.82 (0.01)... -- 1.00 1.45(d) 4,449 3.63(b) (0.02)... -- 1.00 2.01(d) 10,754 2.75(b) (0.02)... -- 1.00 2.34(d) 0.30 3,496.38(b) -- RATIOS AND SUPPLEMENTAL DATA -- - --- ------------------------------------------ RATIO OF RATIO OF EXPENSES NET TO AVERAGE INVESTMENT NET ASSETS INCOME PORTFOLIO AFTER WAIVERS AND TO AVERAGE TURNOVER REIMBURSEMENTS NET ASSETS RATE(E) ----------------- ---------- --------- 1.56% 0.47% 158.1% 2.30 (0.28) -- 2.28 (0.25) -- 1.06 0.97 -- 1.55(b) 0.64(b) 120.9 2.29(b) (0.09)(b) -- 2.27(b) (0.07)(b) -- 1.06(b) 1.13(b) -- 1.56 0.61 128.3 2.26 (0.09) -- 2.31 (0.13) -- 1.11 1.07 -- 1.65 0.69 148.6 2.35 0.01 -- 1.20 1.17 -- 2.35(b) (0.71)(b) -- 1.65 0.88 59.2 2.35 (0.05) -- 1.20 1.33 -- 1.65(b) 0.51(b) 21.5 2.35(b) (0.86)(b) -- 1.20(b) 0.57(b) -- 1.00 3.63 N/A 1.70 2.93 -- 1.70 2.93 -- 0.55 4.08 -- 1.00(b) 5.35(b) N/A 1.70(b) 4.65(b) -- 1.70(b) 4.65(b) -- 0.55(b) 5.80(b) -- 1.00 4.25 N/A 1.70 3.55 -- 1.70 3.56 -- 0.55 4.70 -- 1.00 4.57 N/A 1.70 3.83 -- 0.55 4.99 -- 1.70(b) 3.57(b) -- 1.00 4.67 N/A 0.55 5.13 -- 1.70(b) 3.92(b) -- 1.00(b) 4.49(b) N/A 0.55(b) 4.56(b) --
C-7 PART B STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER , 2001 ACQUISITION OF THE ASSETS OF FORTIS ASSET ALLOCATION PORTFOLIO FORTIS GLOBAL GROWTH PORTFOLIO FORTIS GROWTH & INCOME FUND FORTIS HIGH YIELD PORTFOLIO FORTIS INTERNATIONAL EQUITY PORTFOLIO FORTIS MONEY FUND EACH A SERIES OF HARTFORD - FORTIS SERIES FUND, INC. 500 BIELENBERG DRIVE, WOODBURY, MINNESOTA 55125 MAILING ADDRESS: P.O. BOX 64284, ST. PAUL, MINNESOTA 55164 (800) 738-4000 BY AND IN EXCHANGE FOR SHARES OF THE HARTFORD ADVISERS FUND THE HARTFORD GLOBAL LEADERS FUND THE HARTFORD GROWTH AND INCOME FUND THE HARTFORD HIGH YIELD FUND THE HARTFORD INTERNATIONAL OPPORTUNITIES FUND THE HARTFORD MONEY MARKET FUND EACH A SERIES OF THE HARTFORD MUTUAL FUNDS, INC. 500 BIELENBERG DRIVE, WOODBURY, MINNESOTA 55125 MAILING ADDRESS: P.O. BOX 64284, ST. PAUL, MINNESOTA 55164 (888) 843-7824 This Statement of Additional Information relates specifically to the reorganization of the series of Fortis Series Fund, Inc. referenced above (each a "Fortis Fund") into the above-referenced series of The Hartford Mutual Funds, Inc. (each a "Hartford Fund"). Pursuant to this reorganization, each Hartford Fund would acquire all of the assets of a Fortis Fund that has a substantially similar investment objective and substantially identical investment strategies and risks, and Hartford Fund shares would be distributed pro rata by each Fortis Fund to the holders of its shares, in complete liquidation of the Fortis Fund. For the name of the Hartford Fund into which your Fortis Fund would be reorganized, see the "Summary -- About the Proposed Reorganization" in the Prospectus/Proxy Statement dated December __, 2001. This Statement of Additional Information consists of this cover page and the following documents, of which items 1 through 8 are incorporated by reference herein: 1. The Statement of Additional Information dated December 1, 2001 of Fortis Series Fund, Inc. (now known as Hartford - Fortis Series Fund, Inc.) included in the Post-Effective Amendment to the Registration Statement on Form N-1A of Fortis Series Fund, Inc. filed on November 30, 2001, (SEC File Nos. 002-11387/811-00558), previously filed on EDGAR, Accession Number 0000950137-01-504943. 2. The Statement of Additional Information dated May 1, 2001 of The Hartford Mutual Funds, Inc., included in the Post-Effective Amendment to the Registration Statement on Form N-1A of The Hartford Mutual Funds, Inc. filed on April 30, 2001, (SEC File Nos. 333-02381/811-07589), previously filed on EDGAR, Accession Number 0000950133-01-500819. 3. The audited financial statements of Fortis Money Fund included in the Fortis Money Fund Annual Report for the fiscal year ended September 30, 2001, previously filed on EDGAR, Accession Number 0000912057-01-540063. 4. The audited financial statements of Fortis Asset Allocation Portfolio and Fortis Growth & Income Fund included in the Fortis Stock Funds Annual Report for the fiscal year ended August 31, 2001, previously filed on EDGAR, Accession Number 0000912057-01-536560. 5. The audited financial statements of Fortis Global Growth Portfolio and Fortis International Equity Portfolio included in the Fortis International Stock Funds Annual Report for the fiscal year ended October 31, 2000, previously filed on EDGAR, Accession Number 0000912057-00-054224. 6. The unaudited financial statements of Fortis Global Growth Portfolio and Fortis International Equity Portfolio included in the Fortis International Stock Funds Semiannual Report for the six months ended April 30, 2001, previously filed on EDGAR, Accession Number 0000912057-01-520216. 7. The audited financial statement of Fortis High Yield Portfolio included in the Fortis Bond Funds Annual Report for the fiscal year ended July 31, 2001, previously filed on EDGAR, Accession Number 0000912057-01-532576. 8. The audited financial statements of The Hartford Advisers Fund, The Hartford Global Leaders Fund, The Hartford Growth and Income Fund, The Hartford High Yield Fund, The Hartford International Opportunities Fund and The Hartford Money Market Fund included in the Annual Report of The Hartford Mutual Funds, Inc. for the fiscal year ended October 31, 2001; previously filed on EDGAR, Accession Number 0000950135-01-503842. 9. Financial Statements required by Form N-14, Item 14 (to the extent not included in items 3 through 9 above). This Statement of Additional Information dated December __, 2001 is not a prospectus. A Prospectus/Proxy Statement dated December __, 2001 relating to the above-referenced matters may be obtained from the Hartford Funds or the Fortis Funds at the addresses and telephone numbers shown above. This Statement of Additional Information should be read in conjunction with such Prospectus/Proxy Statement. 2 PROFORMA STATEMENT OF ASSETS AND LIABILITIES At October 31, 2001 (Unaudited) FORTIS ASSET ALLOCATION (ACQUIRED) HARTFORD ADVISERS FUND (ACQUIRING)
FORTIS HARTFORD ACQUIRED ACQUIRING FUND FUND 10/31/2001 10/31/2001 PROFORMA PROFORMA (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED ------------ ------------ ----------- ----------- ASSETS Investments, at value $222,943 $2,231,662 0 $2,454,605 Cash, receivables and other assets 1,410 24,523 0 25,933 Collateral for securities lending transactions 0 249,066 0 249,066 ---------- ----------- ---------- ----------- TOTAL ASSETS 224,353 2,505,251 0 2,729,604 ---------- ----------- ---------- ----------- LIABILITIES Payable upon return of securities loaned 0 249,066 0 249,066 Payable for investment securities purchased 0 6,923 0 6,923 Redemptions of capital stock 33 2,394 0 2,427 Accounts payable and accrued expenses 246 977 0 1,223 ---------- ----------- ---------- ----------- TOTAL LIABILITIES 279 259,360 0 259,639 ---------- ----------- ---------- ----------- NET ASSETS Net proceeds of capital stock, par value $.01 per share 237,789 2,442,527 0 2,680,316 Unrealized appreciation (depreciation) of investments in securities (11,858) (133,175) 0 (145,033) Undistributed net investment income 225 3,162 0 3,387 Accumulated net realized loss from sale of investments (2,083) (66,623) 0 (68,706) ---------- ----------- ---------- ----------- TOTAL NET ASSETS $224,074 $2,245,891 0 $2,469,965 ========== =========== ========== =========== OUTSTANDING SHARES Class A 10,755,133 75,719,253 (18,194) (A) 86,456,192 Class B 1,638,505 43,726,969 2,515,799 (A) 47,881,273 Class C 756,693 33,286,046 (22,643) (A) 34,020,096 Class H 2,584,675 0 (2,584,675) (A) 0 Class Y 0 3,875,798 0 (A) 3,875,798 Class Z 164,162 0 (164,162) (A) 0 15,899,168 156,608,066 (273,875) (A) 172,233,359 NET ASSET VALUE Class A $14.14 $14.38 $14.38 Class B $14.02 $14.24 $14.24 Class C $13.94 $14.37 $14.37 Class H $14.00 $0.00 $0.00 Class Y $0.00 $14.54 $14.54 Class Z $14.13 $0.00 $0.00
(a) Reflects increase (decrease) in shares due to differences in the net asset values of the funds. Fortis Class H will merge to Hartford Class B, Fortis Class Z will merge to Hartford Class A. PROFORMA STATEMENT OF OPERATIONS For the Year Ended October 31, 2001 (Unaudited) FORTIS ASSET ALLOCATION (ACQUIRED) HARTFORD ADVISERS FUND (ACQUIRING
FORTIS HARTFORD ACQUIRED ACQUIRING FUND FUND 10/31/01 10/31/01 PROFORMA PROFORMA (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED ------------ ------------ ----------- -------- NET INVESTMENT INCOME: Income Interest Income $6,597 $53,502 0 $60,099 Dividend Income 1,753 15,383 0 17,136 Fee income 53 751 0 804 -------- --------- ---- --------- Total Income 8,403 69,636 0 78,039 -------- --------- ---- --------- Expenses: Investment advisory and management fees 2,217 14,009 (697) (A) 15,529 Transfer agent fees 0 4,715 560 (A) 5,275 Distribution fees 1,554 14,521 (164) (A) 15,911 Registration fees 75 396 (33) (A) 438 Custodian fees, gross 36 20 (37) (A) 19 Custodian fees, expense offset 0 (6) 0 (6) Accounting services 0 417 51 (A) 468 Directors' fees and expenses 22 10 (22) (A) 10 Other 67 389 (21) (A) 435 -------- --------- ---- --------- Total expenses (before reimbursements and waivers) 3,970 34,471 (363) 38,078 Expense reimbursements 0 0 0 0 Class A distribution fees waived 0 (503) (88) (A) (591) -------- --------- ---- --------- Total expenses, net 3,970 33,968 (451) 37,487 -------- --------- ---- --------- NET INVESTMENT INCOME (LOSS) 4,433 35,668 451 40,552 -------- --------- ---- --------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized loss from investments (4,389) (66,684) 0 (71,073) Net change in unrealized appreciation (depreciation) of investments (38,894) (223,962) 0 (262,856) -------- --------- ---- --------- NET LOSS ON INVESTMENTS (43,282) (290,646) 0 (333,928) -------- --------- ---- --------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ($38,850) ($254,978) $451 ($293,377) ======== ========= ==== =========
(a) For further information regarding variations in expense structure, please look to footnotes on expense proforma. PRO FORMA FOOTNOTES OF MERGER BETWEEN ACQUIRED FUND AND ACQUIRING FUND October 31, 2001 (Unaudited) 1. GENERAL The accompanying proforma financial statements are presented to show the effect of the proposed acquisition of Fortis Series Fund, Inc. -- Asset Allocation Portfolio (Acquired Fund) by The Hartford Mutual Funds, Inc. -- Hartford Advisers Fund (Acquiring Fund) as if such acquisition had taken place as of the close of business on October 31, 2000. Under the terms of the Agreement and Plan of Reorganization, the combination of the Acquired Fund and the Acquiring Fund will be taxed as a tax-free business combination and accordingly will be accounted for by a method of accounting for tax-free mergers of investment companies (sometimes referred to as the pooling without restatement method). The acquisition would be accomplished by an acquisition of the net assets of the Acquired Fund in exchange for shares of the Acquiring Fund at net asset value. The statements of assets and liabilities and the related statements of operations of the Acquired Fund and the Acquiring Fund have been combined as of and for the twelve-month period ended October 31, 2001. The accompanying pro forma financial statements should be read in conjunction with the financial statements and schedule of investments of the Acquiring Fund, which are included in its annual report dated October 31, 2001. The following notes refer to the accompanying pro forma financial statements as if the above mentioned acquisition of the Acquired Fund and the Acquiring Fund had taken place as of the close of business on October 31, 2000. 2. SIGNIFICANT ACCOUNTING POLICIES The Acquiring Fund is organized under the laws of the State of Maryland, registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Acquiring Fund issues multiple class shares. Class A shares are sold with a front-end sales charge of up to 5.50%. Class B shares are sold without a front-end sales charge and may be subject to a contingent deferred sales charge which is assessed on the lesser of the net asset value of the shares at the time of redemption or the original purchase price, and declines from 5.00% to zero depending on the period of time the shares are held, and such shares automatically convert to Class A after eight years. Class C shares are sold with a front-end sales charge of up to 1% and a contingent deferred sales charge of up to 1%. Class Y shares are sold to certain eligible institutional investors without a sales charge. All classes of shares have identical voting, redemption, dividend, liquidation and other rights and the same terms and conditions, except that each class may have different expenses, which may affect performance. Income and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets. The significant accounting policies followed by the Acquiring Fund are summarized as follows: SECURITY VALUATION: Investments in securities traded on a national securities exchange (domestic or foreign) or on the NASDAQ National Market System are valued at the last reported sales price. Securities for which over-the-counter market quotations are readily available are valued on the basis of the last current bid price. An outside pricing service may be utilized to provide such valuations. For fixed income securities, the pricing service may employ a matrix system to determine valuations using methods which include consideration of yields or prices of bonds of comparable quality, type of issue, coupon, maturity and rating indications as to value from dealers, and general market conditions. Options are valued at the last sales price. If no sale took place on such day, then options are valued at the mean between the bid and asked prices. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by management under supervision of the Board of Directors. Short-term investments, with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued at amortized cost. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions are accounted for on the trade date and dividend income is recorded on the ex-dividend date, except that certain dividends for foreign securities where the ex-dividend date may have passed are recorded as soon as the Fund is informed of the dividend in the exercise of reasonable diligence. Interest income and expenses are recorded on the accrual basis. Realized security gains and losses are determined using the identified cost method. LENDING OF PORTFOLIO SECURITIES: At October 31, 2001, securities were on loan to brokers from the Funds. For collateral, the Funds' custodian received cash, which is maintained in a separate account and invested by the custodian in short-term investment vehicles. The risks to the Funds in security lending transactions are that the borrower may not provide additional collateral when required or return the securities when due and that the proceeds from the sale of investments made with cash collateral received will be less than amounts required to be returned to the borrowers. JOINT TRADING ACCOUNT: The Acquiring Fund, pursuant to an exemptive order issued by the Securities and Exchange Commission, may transfer uninvested cash balances into a joint trading account (for all Hartford Funds) managed by Wellington Management Company LLP (Wellington). These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. REPURCHASE AGREEMENTS: A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Acquiring Fund enters into a repurchase agreement, the value of the underlying collateral security (ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement. Securities, which serve to collateralize the repurchase agreement, are held by the Acquiring Fund's custodian in book entry or physical form in the custodial account of the Acquiring Fund. Repurchase agreements are valued at cost plus accrued interest receivable. All repurchase agreements are executed through the Acquiring Fund's custodian, State Street Bank. FUTURES, OPTIONS ON FUTURES AND OPTIONS TRANSACTIONS: A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. When the Funds enter into such contracts, they are required to deposit with their custodian an amount of "initial margin" of cash, commercial paper or U.S. Treasury Bills. Subsequent payments, called maintenance margin, to and from the broker, are made on a daily basis as the price of the underlying security fluctuates, making the long and short positions in the futures contract more or less valuable (i.e. mark-to-market), which results in an unrealized gain or loss to the Funds. The market value of a traded futures contract is the last sale price. In the absence of a last sale price, the last offering price is used. In the absence of either of these prices, fair value is determined according to procedures established by the Funds' Board of Directors. At any time prior to expiration of the futures contract, the Funds may close the position by taking an opposite position, which would operate to terminate the position in the futures contract. A final determination of the maintenance margin is then made, additional cash is required to be paid by or released to the Funds and the Funds realize a gain or loss. The use of futures contracts involve elements of market and counter party risk, which may exceed the amount recognized in the Statements of Net Assets (Assets and Liabilities). Change in the value of the futures contracts may decrease the effectiveness of a Fund's strategies and potentially result in loss. The premium paid by a Fund for the purchase of a call or put option is included in the Fund's Statement of Net Assets (Schedule of Investments) as an investment and subsequently "marked-to-market" through net unrealized appreciation (depreciation) of options to reflect the current market value of the option as of the end of the reporting period. If a purchased option expires on its stipulated expiration date, the Fund realizes a loss in the amount of the cost of the option. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a call option, the cost of the security, which the Fund purchases upon exercise, will be increased by the premium originally paid to buy the call. The Funds may write covered options. "Covered" means that so long as a Fund is obligated as the writer of an option, it will own either the underlying securities or currency or the option to purchase or sell the same underlying securities or currency having the expiration date of the covered option and an exercise price equal to or less than the exercise price of the covered option, or will establish or maintain with it's custodian for the term of the option a "segregated account" consisting of cash or other liquid securities having a value equal to the fluctuating market value of the option securities or currencies. A Fund receives a premium for writing a call or put option, recorded as a component of other liabilities on the Statement of Net Assets (Assets and Liabilities), which increases the Funds' return, recorded as a realized gain, if the option expires unexercised or is closed out at a net profit. Any loss realized from the covered option is offset by the gain realized on the sale of the underlying securities or currency. Covered options, at times before exercise or close out, are marked-to-market through net unrealized appreciation (depreciation) of options. There is a risk of loss from a change in value of such options, which may exceed the related premiums received. INDEXED SECURITIES: The Acquiring Fund may invest in indexed securities whose values are linked to changes in interest rates, indices, or other underlying instruments. The Acquiring Fund uses these securities to increase or decrease it's exposure to different underlying instruments and to gain exposure to markets that might be difficult to invest through conventional securities. Indexed securities may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment and there is a limit to the potential appreciation of the investment. FEDERAL INCOME TAXES: The Acquiring Fund intends to qualify, under the Internal Revenue Code, as a regulated investment company, and, if so qualified, will not have to pay federal income taxes to the extent that its taxable net income is distributed. On a calendar year basis, the Acquiring Fund intends to distribute substantially all of its net investment income and realized gains, if any, to avoid payment of federal excise taxes. It is the policy of the Funds to pay quarterly distributions from net investment income. The distributions are recorded on the record date and are payable in cash or reinvested in additional shares of the fund at net asset value without any charge to the shareholder. Net investment income and net realized gains may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may, therefore, differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the fund. USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the reporting period. Actual results could differ from those estimates. ILLIQUID SECURITIES: Each Fund is permitted to invest up to 15% of its net assets in illiquid securities. "Illiquid Securities" are those that may not be sold or disposed of in the ordinary course of business, at approximately the price used to determine a Fund's net asset value per share. Each Fund may also purchase certain restricted (unregistered) securities, commonly known as Rule 144A securities, that can be resold to institutions and which may be determined to be liquid pursuant to policies and guidelines established by the Fund's Board of Directors. PAYMENTS TO RELATED PARTIES: Hartford Investment Financial Services Company (HIFSCO), a wholly owned indirect subsidiary of The Hartford Financial Services Group, Inc. (The Hartford), is the investment manager for the Acquiring Fund. As investment manager, HIFSCO has overall investment supervisory responsibility for the Acquiring Fund. In addition, HIFSCO provides administrative personnel, services, equipment and facilities and office space for proper operation of the Acquiring Fund. HIFSCO has contracted with Wellington for the provision of day to day investment management services in accordance with the Fund's investment objective and policies. The Acquiring Fund pays a fee to HIFSCO, a portion of which may be used to compensate Wellington. The Acquiring Fund's investment advisory and management fees are computed at an annual rate of .75% of the first $500 million of average daily net assets, .65% for the next $500 million, and .60% for average daily net assets over $1 billion. In addition to the investment advisory and management fee, Classes A, B and C pay HIFSCO (the Acquiring Fund's principal underwriter) distribution fees equal to .35% of average daily net assets for Class A and 1.00% of average daily net assets for Classes B and C on an annual basis, to be used to compensate those who sell shares of the fund and to pay certain other expenses of selling fund shares. The Class A Rule 12b-1 fee for the Acquiring Fund has been voluntarily capped at .30% through at least February 28, 2003. The cap may be removed at any time thereafter. There is no distribution plan for Class Y Shares. Allocable expenses incurred by The Hartford Funds (including the Acquiring Fund) are allocated to each Hartford Fund (including the Acquiring Fund) in proportion to the average daily net assets of each Hartford Fund (including the Acquiring Fund), except where allocation of certain expenses is more fairly made directly to a specific Fund (including the Acquiring Fund) or to specific classes within in a Fund (including the Acquiring Fund). The Hartford has voluntarily agreed to limit the total operating expense of the Class A, B, C and Y shares of the Acquiring Fund, exclusive of taxes, interest, brokerage commissions, certain distribution expenses and extraordinary expenses, until at least February 28, 2002. For Class A the limit is 1.40%, Classes B and C the limit is 2.10% and for Class Y the limit is .95%. The Hartford may terminate such voluntary and temporary fee waivers and expense limitation arrangements at any time after February 28, 2002 without notice. The Hartford and its subsidiaries provide facilities and office equipment, as well as perform certain other services, including fund accounting and financial reporting to the Acquiring Fund. Certain officers of the Acquiring Fund are directors and/or officers of HIFSCO and/or The Hartford or its subsidiaries. No officer of the Funds receives any compensation directly from the Acquiring Fund. For the twelve-month period ended October 31, 2001, legal fees and expenses of the Acquired Fund were paid to a law firm of which the secretary of the fund is a partner. The Acquiring Fund has entered into certain expense offset arrangements with its Custodian bank. The amount of the Acquiring Fund's expense reductions is shown on the accompanying Statement of Operations as custodian fee expense offset. LINE OF CREDIT: The Acquiring Fund participates in a $500,000,000 committed revolving line of credit facility. The facility is to be used for temporary or emergency purposes. Under the arrangement, the Acquiring Fund is required to own securities having a market value in excess of 300% of the total bank borrowing. The interest rate on the borrowing varies depending on the nature of the loan. The facility also requires a fee to be paid based on the amount of the commitment, which has not been utilized. 3. PRO FORMA ADJUSTMENTS The accompanying pro forma financial statements reflect changes in fund shares as if the merger had taken place on October 31, 2001, and adjustments made to expenses for duplicated services that would not have been incurred if the merger had taken place as of the close of business on October 31, 2000. PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001(UNAUDITED) ACQUIRING FUND : THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- COMMON STOCK "FOOD, BEVERAGE & TOBACCO" 34 395 429 Coca-Cola Co. $1,642 $18,913 $20,555 78 539 617 Pepsico, Inc. $3,819 $26,250 $30,069 TOTAL FOR INDUSTRY: "FOOD, BEVERAGE & TOBACCO" $5,461 $45,163 $50,624 "METALS, MINERALS & MINING" 0 250 250 "Illinois Tool Works, Inc." $ 0 $14,300 $14,300 57 630 687 Alcoa, Inc. $1,836 $20,330 $22,166 TOTAL FOR INDUSTRY: "METALS, MINERALS & MINING" $1,836 $34,630 $36,466 AEROSPACE & DEFENSE 0 677 677 "General Motors Corp., Class H" $ 0 $9,309 $ 9,309 BANKS 52 550 602 American Express Co. $1,527 $16,187 $17,714 50 420 470 Bank One Corp. $1,663 $13,940 $15,603 106 981 1,087 Citigroup, Inc. $4,839 $44,651 $49,490 46 400 446 FleetBoston Financial Corp. $1,498 $13,144 $14,642 68 600 668 J.P. Morgan Chase & Co. $2,390 $21,216 $23,606 50 460 510 State Street Corp. $2,295 $20,948 $23,243 76 800 876 U.S. Bancorp (with rights) $1,351 $14,224 $15,575
PAGE 1 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- TOTAL FOR INDUSTRY: BANKS $15,563 $144,310 $159,873 BUSINESS SERVICES 90 500 590 Accenture Ltd. Class A $ 1,581 $ 8,785 $ 10,366 CHEMICALS 52 485 537 Dow Chemical Co. $ 1,724 $ 16,120 $ 17,844 COMMUNICATIONS 0 6 6 "McDATA Corp., Class A" $ 0 $ 94 $ 94 0 335 335 "Verizon Communications, Inc." $ 0 $ 16,686 $ 16,686 48 400 448 Qwest Communications International, Inc. $ 628 $ 5,180 $ 5,808 66 433 499 SBC Communications, Inc. $ 2,515 $ 16,498 $ 19,013 128 1,099 1,227 WorldCom, Inc. - WorldCom Group (with rights) $ 1,719 $ 14,785 $ 16,504 TOTAL FOR INDUSTRY: COMMUNICATIONS $ 4,862 $ 53,243 $ 58,105 COMPUTERS & OFFICE EQUIPMENT 132 1,216 1,348 Cisco Systems, Inc. (with rights) $ 2,232 $ 20,570 $ 22,802 130 1,017 1,147 Compaq Computer Corp. $ 1,138 $ 8,896 $ 10,034 72 714 786 EMC Corp. $ 887 $ 8,792 $ 9,679 32 261 293 International Business Machines Corp. $ 3,415 $ 28,195 $ 31,610 100 883 983 Solectron Corp. (with rights) $ 1,230 $ 10,857 $ 12,087
PAGE 2 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001(UNAUDITED) ACQUIRING FUND : THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- TOTAL FOR INDUSTRY: COMPUTERS & OFFICE EQUIPMENT $ 8,902 $ 77,310 $ 86,212 CONSUMER NON-DURABLES 40 300 340 Gillette Co. $ 1,244 $ 9,327 $ 10,571 67 661 728 Safeway, Inc. $ 2,799 $ 27,547 $ 30,346 67 440 507 Tyco International Ltd. (with rights) $ 3,292 $ 21,622 $ 24,914 TOTAL FOR INDUSTRY: CONSUMER NON-DURABLES $ 7,335 $ 58,496 $ 65,831 DRUGS 51 400 451 Abbott Laboratories (with rights) $ 2,707 $ 21,192 $ 23,899 46 437 483 American Home Products Corp. (with rights) $ 2,540 $ 24,392 $ 26,932 46 424 470 Bristol-Myers Squibb Co. $ 2,453 $ 22,663 $ 25,116 42 378 420 Merck & Co., Inc. $ 2,667 $ 24,120 $ 26,787 82 748 830 Pfizer, Inc. $ 3,448 $ 31,350 $ 34,798 52 300 352 Pharmacia Corp. (with rights) $ 2,087 $ 12,160 $ 14,247 65 584 649 Schering-Plough Corp. (with rights) $ 2,428 $ 21,713 $ 24,141 TOTAL FOR INDUSTRY: DRUGS $18,330 $157,590 $175,920 ELECTRONICS 32 260 292 Emerson Electric Co. $ 1,574 $ 12,745 $ 14,319 103 1,285 1,388 General Electric Co. $ 3,743 $ 46,783 $ 50,526 114 1,015 1,129 Intel Corp. $ 2,772 $ 24,786 $ 27,558 49 395 444 Texas Instruments, Inc. (with rights) $ 1,369 $ 11,056 $ 12,425
PAGE 3 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD ADVISERS FUND ACQUIRED FUND: FORTIS ADVANTAGE FUNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- TOTAL FOR INDUSTRY: ELECTRONICS $9,458 $ 95,370 $104,828 ENERGY 26 0 26 Phillips Petroleum Co. $1,420 $ 0 $ 1,420 ENERGY & SERVICES 0 400 400 "Conoco, Inc." $ 0 $ 10,280 $ 10,280 25 271 296 Anadarko Petroleum Corp. (with rights) $1,426 $ 15,449 $ 16,875 0 154 154 ChevronTexaco Corp. $ 0 $ 13,637 $ 13,637 129 1,161 1,290 Exxon Mobil Corp. $5,081 $ 45,801 $ 50,882 40 348 388 Schlumberger Ltd. $1,951 $ 16,865 $ 18,816 TOTAL FOR INDUSTRY: ENERGY & SERVICES $8,458 $102,032 $110,490 FINANCE 24 0 24 Dime Bancorp, Inc. (Warrants) $ 5 $ 0 $ 5 32 0 32 Golden West Financial Corp. $1,550 $ 0 $ 1,550 TOTAL FOR INDUSTRY: FINANCE $1,555 $ 0 $ 1,555 FINANCIAL SERVICES 46 483 529 Franklin Resources, Inc. $1,486 $ 15,488 $ 16,974 49 452 501 Merrill Lynch & Co., Inc. $2,146 $ 19,774 $ 21,920 TOTAL FOR INDUSTRY: FINANCIAL SERVICES $3,632 $ 35,262 $ 38,894 FOREST & PAPER PRODUCTS
PAGE 4 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD ADVISERS FUND ACQUIRED FUND: FORTIS ADVANTAGE FUNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 46 200 246 International Paper Co. $1,636 $ 7,160 $ 8,796 38 340 378 Kimberly-Clark Corp. $2,109 $18,851 $20,960 0 140 140 Weyerhaeuser Co. $ 0 $ 6,987 $ 6,987 TOTAL FOR INDUSTRY: FOREST & PAPER PRODUCTS $3,745 $32,998 $36,743 HEALTH CARE 35 0 35 McKesson, Inc. $1,295 $ 0 $ 1,295 HEALTH SERVICES 42 462 504 HCA, Inc. $1,662 $18,307 $19,969 HOTELS & GAMING 23 125 148 Marriott International, Inc. Class A $ 721 $ 3,916 $ 4,637 INSURANCE 42 400 442 American International Group, Inc. $3,333 $31,438 $34,771 34 339 373 Marsh & McLennan Companies, Inc. $3,260 $32,827 $36,087 TOTAL FOR INDUSTRY: INSURANCE $6,593 $64,265 $70,858 MACHINERY 29 272 301 United Technologies Corp. $1,552 $14,663 $16,215
PAGE 5 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD ADVISERS FUND ACQUIRED FUND: FORTIS ADVANTAGE FUNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- MEDIA & ENTERTAINMENT 26 448 474 Gannett Co., Inc. (with rights) $1,643 $28,314 $29,957 130 1,300 1,430 Liberty Media Corp. Class A $1,526 $15,197 $16,723 44 425 469 Viacom, Inc. Class B $1,599 $15,517 $17,116 TOTAL FOR INDUSTRY: MEDIA & ENTERTAINMENT $4,768 $59,028 $63,796 MEDICAL INSTRUMENTS & SUPPLIES 56 380 436 Johnson & Johnson $3,243 $22,006 $25,249 RETAIL 40 460 500 CVS Corp. $ 956 $10,994 $11,950 64 600 664 Home Depot, Inc. $2,431 $22,938 $25,369 74 703 777 Wal-Mart Stores, Inc. $3,793 $36,139 $39,932 TOTAL FOR INDUSTRY: RETAIL $7,180 $70,071 $77,251 SERVICES 39 0 39 Comcast Corp. Special Class A $1,398 $ 0 $ 1,398 SOFTWARE & SERVICES 96 900 996 AOL Time Warner, Inc. (with rights) $3,006 $28,089 $31,095 32 300 332 Automatic Data Processing, Inc. $1,653 $15,498 $17,151
PAGE 6 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 0 283 283 Computer Sciences Corp. $ 0 $ 10,159 $ 10,159 46 420 466 i2 Technologies, Inc. $ 208 $ 1,915 $ 2,123 100 920 1,020 Microsoft Corp. $ 5,815 $ 53,498 $ 59,313 120 1,100 1,220 Oracle Corp. $ 1,620 $ 14,916 $ 16,536 TOTAL FOR INDUSTRY: SOFTWARE & SERVICES $ 12,302 $ 124,075 $ 136,377 TECHNOLOGY 0 0 0 @Track Communications, Inc. (Warrants) $ 0 $ 0 $ 0 TRANSPORTATION 41 408 449 Boeing Co. $ 1,324 $ 13,301 $ 14,625 44 330 374 FedEx Corp. $ 1,787 $ 13,556 $ 15,343 TOTAL FOR INDUSTRY: TRANSPORTATION $ 3,111 $ 26,857 $ 29,968 UTILITIES 47 447 494 Duke Energy Corp. $ 1,821 $ 17,185 $ 19,006 44 450 494 El Paso Corp. $ 2,142 $ 22,077 $ 24,219 0 450 450 Exelon Corp. $ 0 $ 18,932 $ 18,932 35 296 331 FPL Group, Inc. $ 1,858 $ 15,707 $ 17,565 40 0 40 Reliant Energy, Inc. $ 1,118 $ 0 $ 1,118 TOTAL FOR INDUSTRY: UTILITIES $ 6,939 $ 73,901 $ 80,840 TOTAL FOR SEGMENT: COMMON STOCK $144,626 $1,347,707 $1,492,333
PAGE 7 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- ASSET BACKED SECURITIES FINANCE 1,000 0 1,000 Citibank Credit Card Master Trust I 6.900% 11/15/2006 $1,080 $ 0 $1,080 657 0 657 Money Store Home Improvement Trust 7.410% 05/15/2017 $ 688 $ 0 $ 688 1,500 0 1,500 Standard Credit Card Master Trust 8.450% 01/07/2007 $1,674 $ 0 $ 1,674 TOTAL FOR INDUSTRY: FINANCE $3,442 $ 0 $ 3,442 TOTAL FOR SEGMENT: ASSET BACKED SECURITIES $3,442 $ 0 $ 3,442 CORPORATE BONDS "FOOD, BEVERAGE & TOBACCO" 0 4,906 4,906 "CanAgra Foods, Inc. (Baa1)" 6.700% 8/1/27 $ 0 $ 5,016 $ 5,016 0 3,000 3,000 "PepsiAmericas, Inc. (Baa1)" 6.375% 5/1/09 $ 0 $ 3,087 $ 3,087 0 7,000 7,000 "PepsiAmericas, Inc. (Baa1)" 5.950% 2/15/06 $ 0 $ 7,270 $ 7,270 0 5,000 5,000 Archer-Daniels-Midland Co. (A1) 7.000% 2/1/31 $ 0 $ 5,302 $ 5,302 0 2,000 2,000 Archer-Daniels-Midland Co. (A1) 8.125% 6/1/12 $ 0 $ 2,400 $ 2,400 0 2,000 2,000 Hershey Foods Corp. (A1) 7.200% 8/15/27 $ 0 $ 2,114 $ 2,114 TOTAL FOR INDUSTRY: "FOOD, BEVERAGE & TOBACCO" $ 0 $25,189 $25,189 "METALS, MINERALS & MINING" 0 7,000 7,000 "Alcoa, Inc. (A1)" 7.375% 8/1/10 $ 0 $ 7,886 $ 7,886 0 4,000 4,000 Vulcan Materials Co. (A1) 5.750% 4/1/04 $ 0 $ 4,143 $ 4,143 TOTAL FOR INDUSTRY: "METALS, MINERALS & MINING" $ 0 $12,029 $12,029
PAGE 8 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- BANKS 0 2,005 2,005 American Express Co. (A1) 6.875% 11/1/05 $ 0 $ 2,154 $ 2,154 0 500 500 Bank of America Corp. (Aa3) 7.875% 12/1/02 $ 0 $ 527 $ 527 0 3,000 3,000 Bank One Corp. (Aa3) 6.875% 8/1/06 $ 0 $ 3,240 $ 3,240 0 3,000 3,000 Bank One Corp. (Aa3) 6.500% 2/1/06 $ 0 $ 3,188 $ 3,188 0 2,000 2,000 Bayerische Landesbank Girozentrale (NY) 5.650% 2/1/09 $ 0 $ 2,029 $ 2,029 0 545 545 First Union National Bank (A1) 5.800% 12/1/08 $ 0 $ 553 $ 553 0 2,755 2,755 Key Bank N.A. (A1) 5.800% 4/1/04 $ 0 $ 2,882 $ 2,882 0 3,000 3,000 Wachovia Corp. (A2) 5.625% 12/15/08 $ 0 $ 3,001 $ 3,001 0 5,000 5,000 Wells Fargo & Co. (Aa2) 6.500% 9/3/02 $ 0 $ 5,159 $ 5,159 TOTAL FOR INDUSTRY: BANKS $ 0 $22,733 $22,733 CAPITAL GOODS 250 0 250 Boeing Capital Corp., 6.10%, 3-1-2011 6.100% 03/01/2011 $253 $ 0 $ 253 250 0 250 Northrop Grumman Corp., 7.125%, 2-15-201 7.125% 02/15/2011 $264 $ 0 $ 264 TOTAL FOR INDUSTRY: CAPITAL GOODS $517 $ 0 $ 517 CHEMICALS 0 500 500 "ICI Wilmington, Inc. (Baa2)" 6.950% 9/15/04 $ 0 $ 531 $ 531 0 1,000 1,000 "Praxair, Inc. (A3)" 6.150% 4/15/03 $ 0 $ 1,033 $ 1,033 0 7,000 7,000 Rohm & Haas Co. (A3) 7.400% 7/15/09 $ 0 $ 7,751 $ 7,751 TOTAL FOR INDUSTRY: CHEMICALS $ 0 $ 9,315 $ 9,315 COMMUNICATIONS
PAGE 9 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 0 1,580 1,580 "Motorola, Inc. (A3)" 7.600% 1/1/07 $ 0 $ 1,608 $ 1,608 0 7,000 7,000 "WorldCom, Inc. (A3)" 6.400% 8/15/05 $ 0 $ 7,165 $ 7,165 0 3,000 3,000 AT&T Corp. (A3) 6.500% 3/15/29 $ 0 $ 2,593 $ 2,593 0 1,000 1,000 New York Telephone Co. (A1) 6.000% 4/15/08 $ 0 $ 1,033 $ 1,033 0 7,055 7,055 Sprint Capital Corp. (Baa1) 6.125% 11/15/08 $ 0 $ 7,111 $ 7,111 TOTAL FOR INDUSTRY: COMMUNICATIONS $ 0 $19,510 $19,510 COMPUTERS & OFFICE EQUIPMENT 0 2,000 2,000 "Pitney Bowes, Inc. (Aa3)" 5.500% 4/15/04 $ 0 $ 2,073 $ 2,073 0 5,000 5,000 Hewlett-Packard Co. (A2) 7.150% 6/15/05 $ 0 $ 5,378 $ 5,378 TOTAL FOR INDUSTRY: COMPUTERS & OFFICE EQUIPMENT $ 0 $ 7,451 $ 7,451 CONSUMER CYCLICAL 250 0 250 Abitibi Consolidated, Inc., 8.85%, 8-1-2030 8.850% 08/01/2030 $ 252 $ 0 $ 252 500 0 500 DaimlerChrysler N.A. Holding Corp. 7.400% 01/20/2005 $ 530 $ 0 $ 530 250 0 250 DaimlerChrysler N.A. Holding Corp. 7.750% 01/18/2011 $ 259 $ 0 $ 259 250 0 250 Federated Department Stores, Inc. 6.300% 04/01/2009 $ 248 $ 0 $ 248 600 0 600 Georgia-Pacific Group, 9.625%, 3-15-2022 9.625% 03/15/2022 $ 606 $ 0 $ 606 250 0 250 Safeway, Inc., 7.25%, 2-1-2031 7.250% 02/01/2031 $ 271 $ 0 $ 271 250 0 250 Sysco Corp., 6.50%, 8-1-2028 6.500% 08/01/2028 $ 243 $ 0 $ 243 TOTAL FOR INDUSTRY: CONSUMER CYCLICAL $2,409 $ 0 $ 2,409 CONSUMER NON-DURABLES 0 2,500 2,500 Alberto-Culver Co. (Baa1) 8.250% 11/1/05 $ 0 $ 2,730 $ 2,730
PAGE 10 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 0 7,000 7,000 Clorox Co. (The) (A1) 6.125% 2/1/11 $ 0 $ 7,147 $ 7,147 0 2,000 2,000 Colgate-Palmolive Co. (Aa3) 5.580% 11/6/08 $ 0 $ 2,089 $ 2,089 0 7,000 7,000 Procter & Gamble Co. (The) (Aa3) 9.360% 1/1/21 $ 0 $ 9,309 $ 9,309 TOTAL FOR INDUSTRY: CONSUMER NON-DURABLES $ 0 $21,275 $21,275 CONSUMER STAPLES 250 0 250 Anheuser-Busch Companies, Inc., 7.55%, 10-01-2030 7.550% 10/01/2030 $ 298 $ 0 $ 298 250 0 250 Coca-Cola Bottling Co., 6.375%, 5-1-2009 6.375% 05/01/2009 $ 259 $ 0 $ 259 250 0 250 Coca-Cola Enterprises, Inc., 8.50%, 2-1-2022 8.500% 02/01/2022 $ 305 $ 0 $ 305 500 0 500 Pepsi Bottling Group, Inc., 7.00%, Ser B 3-1-2029 7.000% 03/01/2029 $ 546 $ 0 $ 546 250 0 250 Proctor & Gamble Co., 6.875%, 9-15-2009 6.875% 09/15/2009 $ 278 $ 0 $ 278 TOTAL FOR INDUSTRY: CONSUMER STAPLES $1,686 $ 0 $ 1,686 DRUGS 0 2,000 2,000 American Home Products Corp. (A3) 7.250% 3/1/23 $ 0 $ 2,073 $ 2,073 0 3,000 3,000 Pharmacia Corp. (A1) 6.600% 12/1/28 $ 0 $ 3,157 $ 3,157 TOTAL FOR INDUSTRY: DRUGS $ 0 $ 5,230 $ 5,230 ELECTRICAL EQUIPMENT 0 2,000 2,000 Danaher Corp. (A2) 6.000% 10/15/08 $ 0 $ 2,043 $ 2,043 0 5,000 5,000 Eaton Corp. (A2) 6.950% 11/15/04 $ 0 $ 5,386 $ 5,386 TOTAL FOR INDUSTRY: ELECTRICAL EQUIPMENT $ 0 $ 7,429 $ 7,429 ENERGY 500 0 500 Conoco, Inc., 6.95%, 4-15-2029 6.950% 04/15/2029 $ 504 $ 0 $ 504
PAGE 11 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 500 0 500 Texaco Capital, Inc., 8.625%, 6-30-2010 8.625% 06/30/2010 $ 607 $ 0 $ 607 250 0 250 Valero Energy Corp., 8.375%, 6-15-2005 8.375% 06/15/2005 $ 278 $ 0 $ 278 300 0 300 Williams Companies, Inc., 7.50%, Ser A 1-15-2031 7.500% 01/15/2031 $ 299 $ 0 $ 299 TOTAL FOR INDUSTRY: ENERGY $1,688 $ 0 $ 1,688 ENERGY & SERVICES 0 7,000 7,000 Atlantic Richfield Co. (Aa1) 5.900% 4/15/09 $ 0 $ 7,278 $ 7,278 0 7,000 7,000 Enron Corp. (Baa2) 6.400% 7/15/06 $ 0 $ 5,439 $ 5,439 TOTAL FOR INDUSTRY: ENERGY & SERVICES $ 0 $12,717 $12,717 FINANCE 250 0 250 American General Corp., 6.625%, 2-15-2029 6.625% 02/15/2029 $ 250 $ 0 $ 250 500 0 500 Aristar, Inc., 7.25%, 6-15-2006 7.250% 06/15/2006 $ 541 $ 0 $ 541 500 0 500 BankAmerica Corp., 6.20%, 2-15-2006 6.200% 02/15/2006 $ 528 $ 0 $ 528 500 0 500 Bear Stearns Capital Trust I, 7.00%, Variable, 1-15-2027 7.000% 01/15/2027 $ 503 $ 0 $ 503 250 0 250 British Columbia (Province of), 6.50%, Ser B, 1-15-2026 6.500% 01/15/2026 $ 266 $ 0 $ 266 500 0 500 BSCH Issuance Ltd., 7.625%, 11-3-2009 7.625% 11/03/2009 $ 541 $ 0 $ 541 250 0 250 Capital One Bank, 6.875%, 2-1-2006 6.875% 02/01/2006 $ 251 $ 0 $ 251 750 0 750 CIT Group, Inc., 7.375%, 3-15-2003 7.375% 03/15/2003 $ 790 $ 0 $ 790 500 0 500 Citigroup, Inc., 6.50%, 1-18-2011 6.500% 01/18/2011 $ 533 $ 0 $ 533 250 0 250 Corp Andina de Fomento, 7.10%, 2-1-2003 7.100% 02/01/2003 $ 258 $ 0 $ 258 500 0 500 Ford Motor Co., 6.375%, 2-1-2029 6.375% 02/01/2029 $ 408 $ 0 $ 408 500 0 500 General Motors Acceptance Corp., 6.15%, 4-5-2007 6.150% 04/05/2007 $ 495 $ 0 $ 495 500 0 500 Goldman Sachs Group, Inc., 6.65%, 5-15-2009 6.650% 05/15/2009 $ 524 $ 0 $ 524
PAGE 12 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD ADVISERS FUND ACQUIRED FUND: FORTIS ADVANTAGE FUNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 250 0 250 Heller Financial, Inc., 6.375%, 3-15-2006 6.375% 03/15/2006 $270 $0 $270 500 0 500 Household Finance Corp., 6.00%, 5-1-2004 6.000% 05/01/2004 $527 $0 $527 500 0 500 Inter-American Development Bank, 7.375%, 1-15-2010 7.375% 01/15/2010 $588 $0 $588 500 0 500 International Bank for Reconstruction & Deve 7.000% 01/27/2005 $554 $0 $554 500 0 500 J.P. Morgan Chase & Co., 6.75%, 2-1-2011 6.750% 02/01/2011 $530 $0 $530 250 0 250 KeyCorp Capital II, 6.875%, 3-17-2029 6.875% 03/17/2029 $232 $0 $232 250 0 250 Korea (Republic of), 8.875%, 4-15-2008 8.875% 04/15/2008 $294 $0 $294 250 0 250 Korea Development Bank, 7.125%, 4-22-2004 7.125% 04/22/2004 $267 $0 $267 500 0 500 Lehman Brothers Holdings, Inc., 7.875%, 11-1-2009 7.875% 11/01/2009 $556 $0 $556 500 0 500 Mellon Financial Corp., 6.375%, 2-15-2010 6.375% 02/15/2010 $522 $0 $522 250 0 250 Morgan Stanley Dean Witter & Co., 7.75%, 6-15-2005 7.750% 06/15/2005 $277 $0 $277 250 0 250 National City Corp., 6.875%, 5-15-2019 6.875% 05/15/2019 $254 $0 $254 500 0 500 NBD Bancorp, 7.125%, 5-15-2007 7.125% 05/15/2007 $538 $0 $538 500 0 500 Ontario (Province of), 5.50%, 10-1-2008 5.500% 10/01/2008 $524 $0 $524 250 0 250 Poland (Republic of), 7.125%, 7-1-2004 7.125% 07/01/2004 $269 $0 $269 500 0 500 Prudential Insurance Co., 6.375%, 7-23-2006 6.375% 07/23/2006 $527 $0 $527 500 0 500 Quebec (Province of), 7.50%, 9-15-2029 7.500% 09/15/2029 $586 $0 $586 500 0 500 ReliaStar Financial Corp., 8.00%, 10-30-2006 8.000% 10/30/2006 $564 $0 $564 250 0 250 Republic New York Capital I, 7.75%, 11-15-2026 7.750% 11/15/2026 $254 $0 $254 500 0 500 Salomon Smith Barney Holdings, Inc., 5.875%, 3-15-2006 5.875% 03/15/2006 $526 $0 $526 500 0 500 St. Paul Bancorp, Inc., 7.125%, 2-15-2004 7.125% 02/15/2004 $531 $0 $531 200 0 200 State Street Corp., 7.65%, 6-15-2010 7.650% 06/15/2010 $228 $0 $228 500 0 500 Textron Financial Corp., 7.125%, 12-9-2004 7.125% 12/09/2004 $535 $0 $535
PAGE 13 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD ADVISERS FUND ACQUIRED FUND: FORTIS ADVANTAGE FUNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 500 0 500 Wells Fargo Bank, N.A., 6.45%, 2-1-2011 6.450% 02/01/2011 $ 524 $ 0 $ 524 TOTAL FOR INDUSTRY: FINANCE $16,365 $ 0 $16,365 FINANCIAL SERVICES 0 2,000 2,000 "AXA Financial, Inc. (A2)" 7.000% 4/1/28 $ 0 $ 2,018 $ 2,018 0 2,000 2,000 Associates Corp. of North America (Aa1) 6.000% 7/15/05 $ 0 $ 2,105 $ 2,105 0 2,725 2,725 ERAC USA Finance Co. (Baa1) 7.350% 6/15/08 $ 0 $ 2,809 $ 2,809 0 10,000 10,000 Financing Corp. (AAA S&P) 9.800% 4/6/18 $ 0 $14,682 $14,682 0 7,000 7,000 General Motors Acceptance Corp. (A2) 8.000% 11/1/31 $ 0 $ 7,244 $ 7,244 0 2,000 2,000 Toyota Motor Credit Corp. (Aa1) 5.500% 12/15/08 $ 0 $ 2,040 $ 2,040 0 2,000 2,000 Transamerica Finance Corp. (A3) 6.125% 11/1/01 $ 0 $ 2,000 $ 2,000 0 5,000 5,000 USAA Capital Corp. (Aa1) 6.900% 11/1/02 $ 0 $ 5,213 $ 5,213 TOTAL FOR INDUSTRY: FINANCIAL SERVICES $ 0 $38,111 $38,111 FOREIGN CORPORATIONS 0 2,000 2,000 "Alcan, Inc. (A2)" 7.250% 11/1/28 $ 0 $ 2,124 $ 2,124 0 255 255 "Chilquinta Energia Finance Co., LLC (Aaa)" 6.620% 4/1/11 $ 0 $ 266 $ 266 0 7,000 7,000 Apache Finance Property Ltd. (A3) 7.000% 3/15/09 $ 0 $ 7,488 $ 7,488 0 4,000 4,000 TXU Eastern Funding Co. (Baa1) 6.450% 5/15/05 $ 0 $ 4,152 $ 4,152 TOTAL FOR INDUSTRY: FOREIGN CORPORATIONS $ 0 $14,030 $14,030 FOREST & PAPER PRODUCTS 0 7,000 7,000 Westvaco Corp. (Baa1) 7.950% 2/15/31 $ 0 $ 7,251 $ 7,251
PAGE 14 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD ADVISERS FUND ACQUIRED FUND: FORTIS ADVANTAGE FUNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- HEALTH CARE 375 0 375 Bristol-Myers Squibb Co., 6.80%, 11-15-2026 6.800% 11/15/2026 $412 $ 0 $ 412 150 0 150 Cardinal Health, Inc., 6.75%, 2-15-2011 6.750% 02/15/2011 $162 $ 0 $ 162 TOTAL FOR INDUSTRY: HEALTH CARE $574 $ 0 $ 574 INSURANCE 0 2,000 2,000 "John Hancock Financial Services, Inc. (A1)" 7.375% 2/15/24 $ 0 $2,069 $2,069 0 1,000 1,000 "MBIA, Inc. (Aa2)" 7.000% 12/15/25 $ 0 $ 994 $ 994 0 7,000 7,000 "Provident Cos., Inc. (Baa1)" 7.000% 7/15/18 $ 0 $6,863 $6,863 0 1,000 1,000 "UnitedHealth Group, Inc. (A3)" 6.600% 12/1/03 $ 0 $1,054 $1,054 0 3,000 3,000 ACE INA Holdings (A2) 8.300% 8/15/06 $ 0 $3,272 $3,272 0 2,000 2,000 Allmerica Financial Corp. (A2) 7.625% 10/15/25 $ 0 $2,081 $2,081 0 1,900 1,900 Allstate Corp. (The) (A1) 6.750% 6/15/03 $ 0 $2,007 $2,007 0 2,000 2,000 Allstate Corp. (The) (A1) 6.750% 5/15/18 $ 0 $2,046 $2,046 0 7,000 7,000 American Re Corp. (Aa1) 7.450% 12/15/26 $ 0 $7,604 $7,604 0 1,420 1,420 AmerUs Group Co. (Baa3) 6.950% 6/15/05 $ 0 $1,462 $1,462 0 1,000 1,000 CIGNA Corp. (A3) 6.375% 1/15/06 $ 0 $1,044 $1,044 0 1,260 1,260 CIGNA Corp. (A3) 7.400% 5/15/07 $ 0 $1,385 $1,385 0 2,000 2,000 Jackson National Life Insurance Co. (A2) 8.150% 3/15/27 $ 0 $2,180 $2,180 0 1,000 1,000 Liberty Financial Co. (A3) 6.750% 11/15/08 $ 0 $1,102 $1,102 0 5,000 5,000 Liberty Mutual Insurance (A2) 8.200% 5/4/07 $ 0 $5,400 $5,400 0 2,000 2,000 New England Mutual Life Insurance Co. (A1) 7.875% 2/15/24 $ 0 $2,067 $2,067
PAGE 15 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 0 2,000 2,000 Prudential Funding LLC (A2) 6.750% 9/15/23 $0 $ 1,894 $ 1,894 0 2,000 2,000 Torchmark Corp. (Baa1) 8.250% 8/15/09 $0 $ 2,188 $ 2,188 TOTAL FOR INDUSTRY: INSURANCE $0 $46,712 $46,712 MACHINERY 0 2,000 2,000 Parker Hannifin Corp. (A2) 5.650% 9/15/03 $0 $ 2,080 $ 2,080 0 7,000 7,000 United Technologies Corp. (A3) 7.125% 11/15/10 $0 $ 7,772 $ 7,772 TOTAL FOR INDUSTRY: MACHINERY $0 $ 9,852 $ 9,852 MEDIA & ENTERTAINMENT 0 7,000 7,000 "USA Networks, Inc. (Baa3)" 6.750% 11/15/05 $0 $ 7,327 $ 7,327 0 7,000 7,000 "Viacom, Inc. (A3)" 7.700% 7/30/10 $0 $ 7,814 $ 7,814 0 7,000 7,000 Comcast Cable Communications (Baa2) 6.875% 6/15/09 $0 $ 7,323 $ 7,323 0 500 500 Scripps (E.W.) Co. (The) (A2) 6.375% 10/15/02 $0 $ 513 $ 513 0 3,000 3,000 Washington Post Co. (Aa3) 5.500% 2/15/09 $0 $ 3,005 $ 3,005 TOTAL FOR INDUSTRY: MEDIA & ENTERTAINMENT $0 $25,982 $25,982 MEDICAL INSTRUMENTS & SUPPLIES 0 2,000 2,000 "Becton, Dickinson & Co. (A2)" 6.700% 8/1/28 $0 $ 2,002 $ 2,002 RETAIL 0 4,000 4,000 "Albertson's, Inc. (Baa1)" 6.550% 8/1/04 $0 $ 4,245 $ 4,245 0 5,000 5,000 "Home Depot, Inc. (The) (Aa3)" 6.500% 9/15/04 $0 $ 5,416 $ 5,416 0 6,000 6,000 "Wal-Mart Stores, Inc. (Aa2)" 6.875% 8/10/09 $0 $ 6,708 $ 6,708
PAGE 16 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 0 1,345 1,345 Target Corp. (A2) 5.875% 11/1/08 $ 0 $ 1,398 $ 1,398 TOTAL FOR INDUSTRY: RETAIL $ 0 $17,767 $17,767 SERVICES 250 0 250 AT&T Corp. - Liberty Media Corp. 8.250% 02/01/2030 $ 233 $ 0 $ 233 250 0 250 Clear Channel Communications, Inc. 7.650% 09/15/2010 $ 264 $ 0 $ 264 500 0 500 Comcast Cable Communications, Inc. 8.500% 05/01/2027 $ 564 $ 0 $ 564 500 0 500 Cox Communications, Inc., 6.40%, 8-1-2008 6.400% 08/01/2008 $ 523 $ 0 $ 523 500 0 500 Park Place Entertainment Corp., 8.50%, 11-15-2006 8.500% 11/15/2006 $ 521 $ 0 $ 521 500 0 500 Viacom, Inc., 7.625%, 1-15-2016 7.625% 01/15/2016 $ 568 $ 0 $ 568 250 0 250 Waste Management, Inc., 7.375%, 8-1-2010 7.375% 08/01/2010 $ 267 $ 0 $ 267 TOTAL FOR INDUSTRY: SERVICES $2,940 $ 0 $2,940 SOFTWARE & SERVICES 0 1,000 1,000 "Computer Associates International, Inc. (Baa) 6.500% 4/15/08 $ 0 $ 967 $ 967 TECHNOLOGY 250 0 250 AirTouch Communications, Inc., 6.65%, 5-1-2008 6.650% 05/01/2008 $ 261 $ 0 $ 261 500 0 500 ALLTEL Corp., 6.80%, 5-1-2029 6.800% 05/01/2029 $ 445 $ 0 $ 445 750 0 750 AT&T Corp., 6.00%, 3-15-2009 6.000% 03/15/2009 $ 729 $ 0 $ 729 250 0 250 AT&T Wireless Services, Inc., 8.75 %, 3-1-2031 8.750% 03/01/2031 $ 284 $ 0 $ 284 250 0 250 Deutsche Telekom International Financial BV 8.250% 06/15/2030 $ 277 $ 0 $ 277 250 0 250 France Telecom, 7.75%, 3-1-2011 7.750% 03/01/2011 $ 273 $ 0 $ 273
PAGE 17 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 250 0 250 GTE Corp., 7.51%, 4-1-2009 7.510% 04/01/2009 $ 277 $ 0 $ 277 250 0 250 Koninklijke KPN N.V., 8.375%, 10-1-2030 8.375% 10/01/2030 $ 197 $ 0 $ 197 500 0 500 Lockheed Martin Corp., 7.65%, 5-1-2016 7.650% 05/01/2016 $ 586 $ 0 $ 586 400 0 400 Raytheon Co., 7.20%, 8-15-2027 7.200% 08/15/2027 $ 403 $ 0 $ 403 250 0 250 Sprint Capital Corp., 6.875%, 11-15-2028 6.875% 11/15/2028 $ 228 $ 0 $ 228 250 0 250 Sprint Capital Corp., 7.625%, 1-30-2011 7.625% 01/30/2011 $ 265 $ 0 $ 265 250 0 250 Telecomunicaciones de Puerto Rico, Inc. 6.650% 05/15/2006 $ 258 $ 0 $ 258 500 0 500 Telefonica Europe BV, 7.35%, 9-15-2005 7.350% 09/15/2005 $ 536 $ 0 $ 536 500 0 500 Time Warner, Inc., 6.875%, 6-15-2018 6.875% 06/15/2018 $ 499 $ 0 $ 499 250 0 250 Tyco International Group S.A., 6.875%, 1-15-2029 6.875% 01/15/2029 $ 250 $ 0 $ 250 750 0 750 US West Communications, 7.20%, 11-1-2004 7.200% 11/01/2004 $ 792 $ 0 $ 792 250 0 250 Verizon Global Funding Corp., 7.25%, 12-1-2010 7.250% 12/01/2010 $ 274 $ 0 $ 274 250 0 250 Verizon Global Funding Corp., 7.75%, 12-1-2030 7.750% 12/01/2030 $ 282 $ 0 $ 282 500 0 500 Vodafone Group plc, 7.875%, Ser B 2-15-2030 7.875% 02/15/2030 $ 570 $ 0 $ 570 750 0 750 WorldCom, Inc., 6.125%, 4-15-2002 6.125% 04/15/2002 $ 759 $ 0 $ 759 TOTAL FOR INDUSTRY: TECHNOLOGY $8,445 $ 0 $8,445 TRANSPORTATION 0 6,000 6,000 Burlington Northern Santa Fe Corp. (Baa2) 7.875% 4/15/07 $ 0 $6,756 $6,756 750 0 750 CSX Corp., 7.90%, 5-1-2017 7.900% 05/01/2017 $ 856 $ 0 $ 856 0 5,000 5,000 DaimlerChrysler North America Holding Corp 7.125% 4/10/03 $ 0 $5,182 $5,182 0 7,000 7,000 Ford Motor Co. (A3) 6.625% 10/1/28 $ 0 $5,909 $5,909 250 0 250 Norfolk Southern Corp., 6.75%, 2-15-2011 6.750% 02/15/2011 $ 263 $ 0 $ 263 0 2,000 2,000 Rockwell International Corp. (A3) 6.700% 1/15/28 $ 0 $1,886 $1,886
PAGE 18 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD ADVISERS FUND ACQUIRED FUND: FORTIS ADVANTAGE FUNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- TOTAL FOR INDUSTRY: TRANSPORTATION $1,119 $19,733 $20,852 UTILITIES 0 2,000 2,000 "Great Plains Energy, Inc. (A2)" 7.125% 12/15/05 $ 0 $ 2,136 $ 2,136 0 500 500 "Williams Cos., Inc. (The) (Baa2)" 6.500% 11/15/02 $ 0 $ 514 $ 514 0 4,000 4,000 Alabama Power Co. (A2) 7.125% 8/15/04 $ 0 $ 4,325 $ 4,325 500 0 500 Alabama Power Co., 7.125%, Ser L 10-1-200 7.125% 10/01/2007 $ 549 $ 0 $ 549 0 200 200 Allegheny Energy Supply (Baa1) 7.800% 3/15/11 $ 0 $ 217 $ 217 500 0 500 CMS Panhandle Holding Co. 7.000% 07/15/2029 $ 448 $ 0 $ 448 250 0 250 Dominion Fiber Ventures LLC 7.050% 03/15/2005 $ 261 $ 0 $ 261 0 4,000 4,000 Duke Energy Corp. (A1) 5.375% 1/1/09 $0 $ 3,952 $ 3,952 500 0 500 Duke Energy Corp., 6.00%, Ser A 12-1-2028 6.000% 12/01/2028 $ 454 $ 0 $ 454 250 0 250 El Paso Energy Corp., 8.05%, 10-15-2030 8.050% 10/15/2030 $ 265 $ 0 $ 265 250 0 250 Enron Corp., 7.375%, 5-15-2019 05/15/2019 $ 187 $ 0 $ 187 500 0 500 Madison Gas & Electric Co. 6.020% 09/15/2008 $ 508 $ 0 $ 508 0 4,000 4,000 National Fuel Gas Co. (A2) 6.000% 3/1/09 $ 0 $ 3,970 $ 3,970 189 0 189 Niagara Mohawk Power Co., 7.625%, Ser F 7.625% 10/01/2005 $ 205 $ 0 $ 205 0 1,150 1,150 Northern Border Pipeline Co. (A3) 7.750% 9/1/09 $ 0 $ 1,218 $ 1,218 250 0 250 Tennessee Gas Pipeline Co., 7.50%, 4-1-2017 7.500% 04/01/2017 $ 259 $ 0 $ 259 250 0 250 TransCanada Pipelines Ltd. 6.490% 01/21/2009 $ 260 $ 0 $ 260 500 0 500 TXU Electric Capital V, 8.175%, 1-30-2037 8.175% 01/30/2037 $ 588 $ 0 $ 588 TOTAL FOR INDUSTRY: UTILITIES $3,984 $16,332 $20,316
PAGE 19 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FUNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- TOTAL FOR SEGMENT: CORPORATE BONDS $39,727 $341,617 $381,344 U.S. GOVERNMENT SECURITIES FEDERAL NATIONAL MORTGAGE ASSOCIATION 264 0 264 FNMA 6.30% #380269 4-1-2008 6.300% 04/01/2008 $ 285 $ 0 $ 285 1,625 0 1,625 FNMA 7.25% 5-15-2030 7.250% 05/15/2030 $ 1,998 $ 0 $ 1,998 43 0 43 FNMA 9.00% #038270 11-1-2016 9.000% 11/01/2016 $ 47 $ 0 $ 47 34 0 34 FNMA 9.00% #115286 3-1-2021 9.000% 03/01/2021 $ 37 $ 0 $ 37 TOTAL FOR INDUSTRY: FEDERAL NATIONAL MORTGAGE ASSOCIATION $ 2,367 $ 0 $ 2,367 GOVERNMENT NATIONAL MORTGAGE ASSOCIATION 0 416,708 416,708 5.00% due 02/15/11 $ 0 $455,556 $455,556 298 0 298 GNMA #465193 8.00%, 5-15-2030 8.000% 05/15/2030 $ 316 $ 0 $ 316 172 0 172 GNMA #520976 7.50%, 9-15-2030 7.500% 09/15/2030 $ 181 $ 0 $ 181 590 0 590 GNMA 9.00% #341679 1-15-2023 9.000% 01/15/2023 $ 645 $ 0 $ 645 16 0 16 GNMA 9.50% #256373 10-15-2019 9.500% 10/15/2019 $ 17 $ 0 $ 17 TOTAL FOR INDUSTRY: GOVERNMENT NATIONAL MORTGAGE ASSOCIATION $ 1,159 $455,556 $456,715 OTHER DIRECT FEDERAL OBLIGATIONS 1,300 0 1,300 Tennessee Valley Authority, 5.375%, Ser G I 5.375% 11/13/2008 $ 1,354 $ 0 $ 1,354 U.S. TREASURY SECURITIES 5,000 0 5,000 US Treasury 6.00% Note 8-15-2004 6.000% 08/15/2004 $ 5,417 $ 0 $ 5,417
PAGE 20 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FUNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 2,000 0 2,000 US Treasury Bond, 10.375% 11-15-2012 10.375% 11/15/2012 $ 2,678 $ 0 $ 2,678 4,000 0 4,000 US Treasury Note 4.625% 2-28-2003 4.625% 02/28/2003 $ 4,129 $ 0 $ 4,129 4,000 0 4,000 US Treasury Note 5.625% 2-15-2006 5.625% 02/15/2006 $ 4,348 $ 0 $ 4,348 1,000 0 1,000 US Treasury Note 5.75% 11-30-2002 5.750% 11/30/2002 $ 1,039 $ 0 $ 1,039 3,000 0 3,000 US Treasury Note, 5.00%, 2-15-2011 5.000% 02/15/2011 $ 3,166 $ 0 $ 3,166 3,900 0 3,900 US Treasury, Zero Coupon Strip 11-15-2021 11/15/2021 $ 1,362 $ 0 $ 1,362 TOTAL FOR INDUSTRY: U.S. TREASURY SECURITIES $ 22,139 $ 0 $ 22,139 TOTAL FOR SEGMENT: U.S. GOVERNMENT SECURITIES $ 27,019 $ 455,556 $ 482,575 S-T INVESTMENTS FINANCE 8,126 0 8,126 Repurchase Agreement 2.57% 11-01-01 2.570% 11/01/2001 $ 8,126 $ 0 $ 8,126 3 0 3 U.S. Bank N.A. Money Market Variable Rate $3 $ 0 $ 3 TOTAL FOR INDUSTRY: FINANCE $ 8,129 $ 0 $ 8,129 REPURCHASE AGREEMENT 0 86,782 86,782 Joint Repurchase Agreement 2.570% 11/1/01 $ 0 $ 86,782 $ 86,782 TOTAL FOR SEGMENT: S-T INVESTMENTS $ 8,129 $ 86,782 $ 94,911 TOTAL FOR FUND: THE HARTFORD ADVISERS FUND $222,943 $2,231,662 $2,454,605
PAGE 21 OF 22 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD ADVISERS FUND ACQUIRED FUND : FORTIS ADVANTAGE FUNDS - ASSET ALLOCATION
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- -----------
1. Management does not anticipate having to sell any securities as a result of the merger. PAGE 22 OF 22 PROFORMA STATEMENT OF ASSETS AND LIABILITIES At October 31, 2001 (Unaudited) FORTIS WORLDWIDE GLOBAL GROWTH (ACQUIRED) HARTFORD GLOBAL LEADERS FUND (ACQUIRING)
FORTIS HARTFORD ACQUIRED ACQUIRING FUND FUND 10/31/2001 10/31/2001 PROFORMA PROFORMA (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED ------------ ------------ ----------- ---------- ASSETS Investments, at value $105,830 $399,921 0 $505,751 Cash, receivables and other assets 7,285 30,486 0 37,771 Collateral for securities lending transactions 0 9,334 0 9,334 Unrealized appreciation on forward foreign currency contracts 14 0 0 14 --------- ---------- --------- ---------- TOTAL ASSETS 113,129 439,741 0 552,870 --------- ---------- --------- ---------- LIABILITIES Unrealized depreciation on forward foreign currency contracts 0 0 0 0 Payable upon return of securities loaned 0 9,334 0 9,334 Payable for investment securities purchased 1,852 6,894 0 8,746 Redemptions of capital stock 127 1,811 0 1,938 Accounts payable and accrued expenses 180 153 0 333 --------- ---------- --------- ---------- TOTAL LIABILITIES 2,159 18,192 0 20,351 --------- ---------- --------- ---------- NET ASSETS Net proceeds of capital stock, par value $.01 per share 97,164 573,695 0 670,859 Unrealized appreciation (depreciation) of investments in securities and translations of assets and liabilities denominated in foreign currency (120) (775) 0 (895) Undistributed net investment loss 0 (51) 0 (51) Accumulated net realized gain (loss) from sale of investments and currency 13,925 (151,320) 0 (137,394) --------- ---------- --------- ---------- TOTAL NET ASSETS $110,970 $421,549 0 $532,519 ========= ========== ========= ========== OUTSTANDING SHARES Class A 4,351,471 19,262,984 2,011,241 (A) 25,625,696 Class B 631,687 5,021,010 1,422,862 (A) 7,075,559 Class C 202,464 8,254,026 84,212 (A) 8,540,702 Class H 823,909 0 (823,909) (A) 0 Class Y 0 607,000 0 (A) 607,000 6,009,531 33,145,020 2,694,406 (A) 41,848,957 NET ASSET VALUE Class A $18.76 $12.83 $12.83 Class B $17.70 $12.54 $12.54 Class C $17.77 $12.55 $12.55 Class H $17.70 $0.00 $0.00 Class Y $0.00 $13.03 $13.03
(a) Reflects increase (decrease) in shares due to differences in the net asset values of the funds. Fortis Class H will merge to Hartford Class B. PROFORMA STATEMENT OF OPERATIONS For the Year Ended October 31, 2001 FORTIS WORLDWIDE GLOBAL GROWTH (ACQUIRED) HARTFORD GLOBAL LEADERS FUND (ACQUIRING)
FORTIS HARTFORD ACQUIRED ACQUIRING FUND FUND 10/31/01 10/31/01 PROFORMA PROFORMA (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED ------------ ------------ ----------- -------- NET INVESTMENT INCOME: Income Interest Income $407 $1,401 0 $1,808 Dividend Income 1,256 5,862 0 7,118 Fee income 14 115 0 129 --------- ---------- --------- ---------- Total Income 1,677 7,378 0 9,055 --------- ---------- --------- ---------- Expenses: Investment advisory and management fees 1,475 4,021 (367) (A) 5,129 Transfer agent fees 0 1,143 363 (A) 1,506 Distribution fees 653 2,920 110 (A) 3,683 Registration fees 45 83 (30) (A) 98 Custodian fees, gross 49 192 (49) (A) 192 Custodian fees, expense offset 0 (22) 0 (22) Accounting services 0 91 30 (A) 121 Directors' fees and expenses 14 2 (14) (A) 2 Other 122 87 (94) (A) 115 --------- ---------- --------- ---------- Total expenses (before reimbursements and waivers) 2,358 8,517 (51) 10,824 Expense reimbursements 0 0 0 0 Class A distribution fees waived 0 (132) (55) (A) (187) --------- ---------- --------- ---------- Total expenses, net 2,358 8,385 (106) 10,637 --------- ---------- --------- ---------- NET INVESTMENT INCOME (LOSS) (681) (1,007) 106 (1,582) --------- ---------- --------- ---------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain from investments & foreign currency transactions 18,111 (142,160) 0 (124,049) Net change in unrealized appreciation (depreciation) from investments and translation of assets & liabilities denominated in foreign currency (91,616) (700) 0 (92,316) --------- ---------- --------- ---------- NET LOSS ON INVESTMENTS (73,505) (142,860) 0 (216,365) --------- ---------- --------- ---------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ($74,186) ($143,867) $106 ($217,947) ========= ========= ========= ==========
(a) For further information regarding variations in expense structure, please look to footnotes on expense proforma. PRO FORMA FOOTNOTES OF MERGER BETWEEN ACQUIRED FUND AND ACQUIRING FUND October 31, 2001 (Unaudited) 1. GENERAL The accompanying proforma financial statements are presented to show the effect of the proposed acquisition of Fortis Series Fund, Inc. -- Global Growth Portfolio (Acquired Fund) by The Hartford Mutual Funds, Inc. -- Hartford Global Leaders Fund (Acquiring Fund) as if such acquisition had taken place as of the close of business on October 31, 2000. Under the terms of the Agreement and Plan of Reorganization, the combination of the Acquired Fund and the Acquiring Fund will be taxed as a tax-free business combination and accordingly will be accounted for by a method of accounting for tax-free mergers of investment companies (sometimes referred to as the pooling without restatement method). The acquisition would be accomplished by an acquisition of the net assets of the Acquired Fund in exchange for shares of the Acquiring Fund at net asset value. The statements of assets and liabilities and the related statements of operations of the Acquired Fund and the Acquiring Fund have been combined as of and for the twelve-month period ended October 31, 2001. The accompanying pro forma financial statements should be read in conjunction with the financial statements and schedule of investments of the Acquiring Fund, which are included in its annual report dated October 31, 2001. The following notes refer to the accompanying pro forma financial statements as if the above mentioned acquisition of the Acquired Fund and the Acquiring Fund had taken place as of the close of business on October 31, 2000. 2. SIGNIFICANT ACCOUNTING POLICIES The Acquiring Fund is organized under the laws of the State of Maryland, registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Acquiring Fund issues multiple class shares. Class A shares are sold with a front-end sales charge of up to 5.50%. Class B shares are sold without a front-end sales charge and may be subject to a contingent deferred sales charge which is assessed on the lesser of the net asset value of the shares at the time of redemption or the original purchase price, and declines from 5.00% to zero depending on the period of time the shares are held, and such shares automatically convert to Class A after eight years. Class C shares are sold with a front-end sales charge of up to 1% and a contingent deferred sales charge of up to 1%. Class Y shares are sold to certain eligible institutional investors without a sales charge. All classes of shares have identical voting, redemption, dividend, liquidation and other rights and the same terms and conditions, except that each class may have different expenses, which may affect performance. Income and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets. The significant accounting policies followed by the Acquiring Fund are summarized as follows: SECURITY VALUATION: Investments in securities traded on a national securities exchange (domestic or foreign) or on the NASDAQ National Market System are valued at the last reported sales price. Securities for which over-the-counter market quotations are readily available are valued on the basis of the last current bid price. An outside pricing service may be utilized to provide such valuations. Securities quoted in foreign currencies are translated into U.S. dollars at the exchange rates at the end of each business day. Options are valued at the last sales price. If no sale took place on such day, then options are valued at the mean between the bid and asked prices. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by management under supervision of the Board of Directors. Short-term investments, with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued at amortized cost. FOREIGN CURRENCY TRANSACTIONS AND FORWARD CURRENCY CONTRACTS: The accounting records of the Acquiring Fund are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. The Acquiring Fund does not isolate that portion of portfolio security valuation resulting from fluctuations in foreign currency exchange rates on portfolio securities from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments in the accompanying financial statements. Net realized foreign exchange gains or losses arise from sales of foreign currencies and the difference between asset and liability amounts initially stated in foreign currencies and the U.S. dollar value of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of other assets and liabilities at the end of the reporting period resulting from changes in the exchange rates. For the twelve-months ended October 31, 2001 the Funds entered into forward foreign currency exchange contracts that obligate the Funds to repurchase/ replace or sell currencies at specified future dates. The Funds enter into forward foreign currency contracts to hedge against adverse fluctuations in exchange rates between currencies. Forward contracts involve elements of market risk in excess of the amount reflected in the Statement of Net Assets (Assets and Liabilities). In addition, risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of the contract and from unanticipated movement in the value of foreign currencies relative to the U.S. dollar. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions are accounted for on the trade date and dividend income is recorded on the ex-dividend date, except that certain dividends for foreign securities where the ex-dividend date may have passed are recorded as soon as the Fund is informed of the dividend in the exercise of reasonable diligence. Interest income and expenses are recorded on the accrual basis. Realized security gains and losses are determined using the identified cost method. LENDING OF PORTFOLIO SECURITIES: At October 31, 2001, securities were on loan to brokers from the Funds. For collateral, the Funds' custodian received cash, which is maintained in a separate account and invested by the custodian in short-term investment vehicles. The risks to the Funds in security lending transactions are that the borrower may not provide additional collateral when required or return the securities when due and that the proceeds from the sale of investments made with cash collateral received will be less than amounts required to be returned to the borrowers. JOINT TRADING ACCOUNT: The Acquiring Fund, pursuant to an exemptive order issued by the Securities and Exchange Commission, may transfer uninvested cash balances into a joint trading account (for all Hartford Funds) managed by Wellington Management Company LLP (Wellington). These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. REPURCHASE AGREEMENTS: A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Acquiring Fund enters into a repurchase agreement, the value of the underlying collateral security (ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement. Securities, which serve to collateralize the repurchase agreement, are held by the Acquiring Fund's custodian in book entry or physical form in the custodial account of the Acquiring Fund. Repurchase agreements are valued at cost plus accrued interest receivable. All repurchase agreements are executed through the Acquiring Fund's custodian, State Street Bank. FUTURES, OPTIONS ON FUTURES AND OPTIONS TRANSACTIONS: A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. When the Funds enter into such contracts, they are required to deposit with their custodian an amount of "initial margin" of cash, commercial paper or U.S. Treasury Bills. Subsequent payments, called maintenance margin, to and from the broker, are made on a daily basis as the price of the underlying security fluctuates, making the long and short positions in the futures contract more or less valuable (i.e. mark-to-market), which results in an unrealized gain or loss to the Funds. The market value of a traded futures contract is the last sale price. In the absence of a last sale price, the last offering price is used. In the absence of either of these prices, fair value is determined according to procedures established by the funds' Board of Directors. At any time prior to expiration of the futures contract, the Funds may close the position by taking an opposite position, which would operate to terminate the position in the futures contract. A final determination of the maintenance margin is then made, additional cash is required to be paid by or released to the Funds and the Funds realize a gain or loss. The use of futures contracts involve elements of market and counter party risk, which may exceed the amount recognized in the Statements of Net Assets (Assets and Liabilities). Change in the value of the futures contracts may decrease the effectiveness of a Fund's strategies and potentially result in loss. The premium paid by a Fund for the purchase of a call or put option is included in the Fund's Statement of Net Assets (Schedule of Investments) as an investment and subsequently "marked-to-market" through net unrealized appreciation (depreciation) of options to reflect the current market value of the option as of the end of the reporting period. If a purchased option expires on its stipulated expiration date, the Fund realizes a loss in the amount of the cost of the option. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a call option, the cost of the security, which the Fund purchases upon exercise, will be increased by the premium originally paid to buy the call. The Funds may write covered options. "Covered" means that so long as a Fund is obligated as the writer of an option, it will own either the underlying securities or currency or the option to purchase or sell the same underlying securities or currency having the expiration date of the covered option and an exercise price equal to or less than the exercise price of the covered option, or will establish or maintain with it's custodian for the term of the option a "segregated account" consisting of cash or other liquid securities having a value equal to the fluctuating market value of the option securities or currencies. A Fund receives a premium for writing a call or put option, recorded as a component of other liabilities on the Statement of Net Assets (Assets and Liabilities), which increases the Funds' return, recorded as a realized gain, if the option expires unexercised or is closed out at a net profit. Any loss realized from the covered option is offset by the gain realized on the sale of the underlying securities or currency. Covered options, at times before exercise or close out, are marked-to-market through net unrealized appreciation (depreciation) of options. There is a risk of loss from a change in value of such options, which may exceed the related premiums received. INDEXED SECURITIES: The Acquiring Fund may invest in indexed securities whose values are linked to changes in interest rates, indices, or other underlying instruments. The Acquiring Fund uses these securities to increase or decrease it's exposure to different underlying instruments and to gain exposure to markets that might be difficult to invest through conventional securities. Indexed securities may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment and there is a limit to the potential appreciation of the investment. FEDERAL INCOME TAXES: The Acquiring Fund intends to qualify, under the Internal Revenue Code, as a regulated investment company, and, if so qualified, will not have to pay federal income taxes to the extent that its taxable net income is distributed. On a calendar year basis, the Acquiring Fund intends to distribute substantially all of its net investment income and realized gains, if any, to avoid payment of federal excise taxes. It is the policy of the Funds to pay annual distributions from net investment income. The distributions are recorded on the record date and are payable in cash or reinvested in additional shares of the fund at net asset value without any charge to the shareholder. Net investment income and net realized gains may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may, therefore, differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the fund. USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the reporting period. Actual results could differ from those estimates. ILLIQUID SECURITIES: Each Fund is permitted to invest up to 15% of its net assets in illiquid securities. "Illiquid Securities" are those that may not be sold or disposed of in the ordinary course of business, at approximately the price used to determine a Fund's net asset value per share. Each Fund may also purchase certain restricted (unregistered) securities, commonly known as Rule 144A securities, that can be resold to institutions and which may be determined to be liquid pursuant to policies and guidelines established by the Fund's Board of Directors. PAYMENTS TO RELATED PARTIES: Hartford Investment Financial Services Company (HIFSCO), a wholly owned indirect subsidiary of The Hartford Financial Services Group, Inc. (The Hartford), is the investment manager for the Acquiring Fund. As investment manager, HIFSCO has overall investment supervisory responsibility for the Acquiring Fund. In addition, HIFSCO provides administrative personnel, services, equipment and facilities and office space for proper operation of the Acquiring Fund. HIFSCO has contracted with Wellington for the provision of day to day investment management services in accordance with the Fund's investment objective and policies. The Acquiring Fund pays a fee to HIFSCO, a portion of which may be used to compensate Wellington. The Acquiring Fund's investment advisory and management fees are computed at an annual rate of .85% of the first $500 million of average daily net assets, .75% for the next $500 million, and .70% for average daily net assets over $1 billion. In addition to the investment advisory and management fee, Classes A, B and C pay HIFSCO (the Acquiring Fund's principal underwriter) distribution fees equal to .35% of average daily net assets for Class A and 1.00% of average daily net assets for Classes B and C on an annual basis, to be used to compensate those who sell shares of the fund and to pay certain other expenses of selling fund shares. The Class A Rule 12b-1 fee for the Acquiring Fund has been voluntarily capped at .30% through at least February 28, 2003. The cap may be removed at any time thereafter. There is no distribution plan for Class Y Shares. Allocable expenses incurred by The Hartford Funds (including the Acquiring Fund) are allocated to each Hartford Fund (including the Acquiring Fund) in proportion to the average daily net assets of each Hartford Fund (including the Acquiring Fund), except where allocation of certain expenses is more fairly made directly to a specific Fund (including the Acquiring Fund) or to specific classes within in a Fund (including the Acquiring Fund). The Hartford has voluntarily agreed to limit the total operating expense of the Class A, B, C and Y shares of the Acquiring Fund, exclusive of taxes, interest, brokerage commissions, certain distribution expenses and extraordinary expenses, until at least February 28, 2002. For Class A the limit is 1.65%, Classes B and C the limit is 2.35% and for Class Y the limit is 1.20%. The Hartford may terminate such voluntary and temporary fee waivers and expense limitation arrangements at any time after February 28, 2002 without notice. The Hartford and its subsidiaries provide facilities and office equipment, as well as perform certain other services, including fund accounting and financial reporting to the Acquiring Fund. Certain officers of the Acquiring Fund are directors and/or officers of HIFSCO and/or The Hartford or its subsidiaries. No officer of the Funds receives any compensation directly from the Acquiring Fund. For the twelve-month period ended October 31, 2001, legal fees and expenses of the Acquired Fund were paid to a law firm of which the secretary of the fund is a partner. The Acquiring Fund has entered into certain expense offset arrangements with its Custodian bank. The amount of the Acquiring Fund's expense reductions is shown on the accompanying Statement of Operations as custodian fee expense offset. LINE OF CREDIT: The Acquiring Fund participates in a $500,000,000 committed revolving line of credit facility. The facility is to be used for temporary or emergency purposes. Under the arrangement, the Acquiring Fund is required to own securities having a market value in excess of 300% of the total bank borrowing. The interest rate on the borrowing varies depending on the nature of the loan. The facility also requires a fee to be paid based on the amount of the commitment, which has not been utilized. 3. PRO FORMA ADJUSTMENTS The accompanying pro forma financial statements reflect changes in fund shares as if the merger had taken place on October 31, 2001, and adjustments made to expenses for duplicated services that would not have been incurred if the merger had taken place as of the close of business on October 31, 2000. PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD GLOBAL LEADERS FUND ACQUIRED FUND: FORTIS WORLDWIDE - GLOBAL GROWTH
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - -------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) COMMON STOCK "FOOD, BEVERAGE & TOBACCO" 6 21 27 Nestle S.A. $1,212 $ 4,393 $ 5,605 28 105 133 Pepsico, Inc. $1,374 $ 5,090 $ 6,464 15 56 71 Philip Morris Companies, Inc. $ 702 $ 2,607 $ 3,309 TOTAL FOR INDUSTRY: "FOOD, BEVERAGE & TOBACCO" $3,288 $12,090 $15,378 "METALS, MINERALS & MINING" 14 51 65 Alcoa, Inc. $ 445 $ 1,655 $ 2,100 AEROSPACE & DEFENSE 34 125 159 Raytheon Co. $1,090 $ 4,025 $ 5,115 APPAREL & TEXTILE 15 56 71 Adidas-Salomon AG $ 857 $ 3,156 $ 4,013
PAGE 1 OF 8 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD GLOBAL LEADERS FUND ACQUIRED FUND : FORTIS WORLDWIDE - GLOBAL GROWTH
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) BANKS 21 80 101 Banco Popular Espanol S.A. $ 722 $ 2,677 $ 3,399 12 45 57 Bank of America Corp. $ 720 $ 2,643 $ 3,363 16 60 76 Bank One Corp. $ 538 $ 2,001 $ 2,539 15 55 70 Bayerische Hypo- und Vereinsbank AG $ 455 $ 1,682 $ 2,137 23 83 106 BNP Paribas S.A. $ 1,876 $ 6,902 $ 8,778 68 249 317 Citigroup, Inc. $ 3,082 $11,318 $14,400 50 183 233 Credit Suisse Group $ 1,815 $ 6,685 $ 8,500 30 112 142 Deutsche Bank AG $ 1,678 $ 6,215 $ 7,893 78 289 367 Royal Bank of Scotland Group plc $ 1,873 $ 6,910 $ 8,783 TOTAL FOR INDUSTRY: BANKS $12,759 $47,033 $59,792 BUSINESS SERVICES 196 722 918 Capita Group plc $ 1,241 $ 4,582 $ 5,823 627 2,293 2,920 Rentokil Initial plc $ 2,258 $ 8,236 $10,494 TOTAL FOR INDUSTRY: BUSINESS SERVICES $ 3,499 $12,818 $16,317 COMMUNICATIONS 165 606 771 COLT Telecom Group plc $ 281 $ 1,037 $ 1,318 105 386 491 Deutsche Telekom AG $ 1,613 $ 5,950 $ 7,563 78 292 370 Nokia Oyj $ 1,642 $ 6,111 $ 7,753 0 0 0 NTT DoCoMo, Inc. $ 800 $ 2,943 $ 3,743
PAGE 2 OF 8 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD GLOBAL LEADERS FUND ACQUIRED FUND : FORTIS WORLDWIDE - GLOBAL GROWTH
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - -------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) 60 219 279 SK Telecom Co. Ltd. ADR $ 1,273 $ 4,623 $ 5,896 284 1,051 1,335 Telefonaktiebolaget LM Ericsson AB $ 1,234 $ 4,567 $ 5,801 170 618 788 Telefonica S.A. $ 2,045 $ 7,428 $ 9,473 23 86 109 Verizon Communications, Inc. $ 1,166 $ 4,304 $ 5,470 1,834 6,749 8,583 Vodafone Group plc $ 4,240 $15,608 $19,848 TOTAL FOR INDUSTRY: COMMUNICATIONS $14,294 $52,571 $66,865 COMPUTERS & OFFICE EQUIPMENT 89 329 418 Cisco Systems, Inc. (with rights) $ 1,499 $ 5,558 $ 7,057 58 212 270 Dell Computer Corp. (with rights) $ 1,391 $ 5,074 $ 6,465 92 332 424 Hewlett-Packard Co. $ 1,540 $ 5,594 $ 7,134 11 39 50 International Business Machines Corp. $ 1,156 $ 4,258 $ 5,414 6 21 27 Minnesota Mining and Manufacturing Co. $ 605 $ 2,234 $ 2,839 61 225 286 Solectron Corp. (with rights) $ 748 $ 2,765 $ 3,513 TOTAL FOR INDUSTRY: COMPUTERS & OFFICE EQUIPMENT $ 6,939 $25,483 $32,422 CONSUMER NON-DURABLES 28 101 129 Avon Products, Inc. $ 1,288 $ 4,730 $ 6,018 10 36 46 Cardinal Health, Inc. $ 663 $ 2,446 $ 3,109 17 63 80 Fuji Photo Film Co. Ltd. $ 561 $ 2,079 $ 2,640 63 232 295 Gillette Co. $ 1,962 $ 7,219 $ 9,181 54 198 252 Mattel, Inc. $ 1,020 $ 3,744 $ 4,764 28 103 131 McKesson, Inc. $ 1,025 $ 3,806 $ 4,831 7 26 33 Nintendo Co. Ltd. $ 1,095 $ 3,964 $ 5,059
PAGE 3 OF 8 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD GLOBAL LEADERS FUND ACQUIRED FUND : FORTIS WORLDWIDE - GLOBAL GROWTH
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ----------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) 8 30 38 Tyco International Ltd. (with rights) $ 393 $ 1,464 $ 1,857 TOTAL FOR INDUSTRY: CONSUMER NON-DURABLES $8,007 $29,452 $37,459 DRUGS 31 115 146 Abbott Laboratories (with rights) $1,658 $ 6,087 $ 7,745 25 91 116 American Home Products Corp. (with rights) $1,401 $ 5,069 $ 6,470 44 162 206 AstraZeneca plc $1,979 $ 7,279 $ 9,258 60 222 282 GlaxoSmithKline plc $1,606 $ 5,970 $ 7,576 TOTAL FOR INDUSTRY: DRUGS $6,644 $24,405 $31,049 ELECTRONICS 0 142 142 "Samsung Electronics Co., Ltd., GDR" $ 0 $10,730 $10,730 195 713 908 Arm Holdings plc $ 985 $ 3,592 $ 4,577 30 112 142 General Electric Co. $1,107 $ 4,092 $ 5,199 69 254 323 Intel Corp. $1,692 $ 6,208 $ 7,900 13 49 62 Kyocera Corp. $ 912 $ 3,341 $ 4,253 15 55 70 Murata Manufacturing Co. Ltd. $ 929 $ 3,419 $ 4,348 25 93 118 Siemens AG $1,186 $ 4,421 $ 5,607 46 169 215 Sony Corp. $1,725 $ 6,381 $ 8,106 29 106 135 Texas Instruments, Inc. (with rights) $ 806 $ 2,961 $ 3,767 TOTAL FOR INDUSTRY: ELECTRONICS $9,342 $45,145 $54,487 ENERGY & SERVICES 41 152 193 Exxon Mobil Corp. $1,629 $ 6,008 $ 7,637
PAGE 4 OF 8 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD GLOBAL LEADERS FUND ACQUIRED FUND : FORTIS WORLDWIDE - GLOBAL GROWTH
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) 13 46 59 Royal Dutch Petroleum Co. $ 641 $ 2,346 $ 2,987 18 67 85 TotalFinaElf S.A. $ 2,543 $ 9,386 $11,929 TOTAL FOR INDUSTRY: ENERGY & SERVICES $ 4,813 $17,740 $22,553 FINANCIAL SERVICES 0 89 89 Fortis Netherlands N.V. $ 0 $ 2,115 $ 2,115 7 26 33 Goldman Sachs Group, Inc. $ 555 $ 2,048 $ 2,603 41 150 191 Merrill Lynch & Co., Inc. $ 1,775 $ 6,539 $ 8,314 23 84 107 Softbank Corp. $ 492 $ 1,792 $ 2,284 TOTAL FOR INDUSTRY: FINANCIAL SERVICES $ 2,822 $12,494 $15,316 FOREST & PAPER PRODUCTS 22 79 101 International Paper Co. $ 770 $ 2,821 $ 3,591 41 152 193 UPM-Kymmene Oyj $ 1,343 $ 4,939 $ 6,282 TOTAL FOR INDUSTRY: FOREST & PAPER PRODUCTS $ 2,113 $ 7,760 $ 9,873 INSURANCE 16 58 74 American International Group, Inc. $ 1,250 $ 4,575 $ 5,825 93 343 436 Lloyds TSB Group plc $ 938 $ 3,450 $ 4,388 TOTAL FOR INDUSTRY: INSURANCE $ 2,188 $ 8,025 $10,213 MEDIA & ENTERTAINMENT 84 312 396 Reed International plc $ 688 $ 2,556 $ 3,244 14 51 65 Thomson Multimedia S.A. $ 330 $ 1,206 $ 1,536 54 197 251 Viacom, Inc. Class B $ 1,961 $ 7,196 $ 9,157
PAGE 5 OF 8 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD GLOBAL LEADERS FUND ACQUIRED FUND : FORTIS WORLDWIDE - GLOBAL GROWTH
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ----------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) TOTAL FOR INDUSTRY: MEDIA & ENTERTAINMENT $2,979 $10,958 $13,937 MEDICAL INSTRUMENTS & SUPPLIES 47 171 218 Boston Scientific Corp. $1,060 $3,877 $4,937 41 148 189 Johnson & Johnson $2,397 $8,588 $10,985 TOTAL FOR INDUSTRY: MEDICAL INSTRUMENTS & SUPPLIES $3,457 $12,465 $15,922 RETAIL 746 2,699 3,445 Marks & Spencer plc $3,112 $11,302 $14,414 20 73 93 McDonald's Corp. $527 $1,911 $2,438 158 572 730 Staples, Inc. $2,302 $8,340 $10,642 22 80 102 Wal-Mart Stores, Inc. $1,126 $4,122 $5,248 TOTAL FOR INDUSTRY: RETAIL $7,067 $25,675 $32,742 SOFTWARE & SERVICES 68 250 318 AOL Time Warner, Inc. (with rights) $2,129 $7,796 $9,925 37 138 175 Check Point Software Technologies Ltd. $1,086 $4,059 $5,145 47 173 220 Microsoft Corp. $2,727 $10,077 $12,804 84 305 389 Sun Microsystems, Inc. $848 $3,098 $3,946 7 27 34 VeriSign, Inc. $275 $1,030 $1,305 TOTAL FOR INDUSTRY: SOFTWARE & SERVICES $7,065 $26,060 $33,125 TECHNOLOGY 39 0 39 Samsung Electronics Co. Ltd. GDR $2,633 $0 $2,633
PAGE 6 OF 8 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD GLOBAL LEADERS FUND ACQUIRED FUND : FORTIS WORLDWIDE - GLOBAL GROWTH
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ----------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) TRANSPORTATION 4 16 20 Northrop Grumman Corp. (with rights) $ 450 $ 1,619 $ 2,069 UTILITIES 19 69 88 Vivendi Environnement $ 719 $ 2,635 $ 3,354 TOTAL FOR SEGMENT: COMMON STOCK $103,470 $383,264 $486,734 PREFERRED STOCKS COMMUNICATIONS 33 122 155 Telecomunicacoes Brasileiras S.A. ADR $ 863 $ 3,171 $ 4,034 TOTAL FOR SEGMENT: PREFERRED STOCKS $ 863 $ 3,171 $ 4,034 S-T INVESTMENTS FINANCE 1,495 0 1,495 Repurchase Agreement 2.57% 11-01-01 2.570% 11/01/2001 $ 1,495 $ 0 $ 1,495 2 0 2 U.S. Bank N.A. Money Market Variable Rate $ 2 $ 0 $ 2 TOTAL FOR INDUSTRY: FINANCE $ 1,497 $ 0 $ 1,497
PAGE 7 OF 8 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD GLOBAL LEADERS FUND ACQUIRED FUND : FORTIS WORLDWIDE - GLOBAL GROWTH
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ----------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) REPURCHASE AGREEMENT 0 13,486 13,486 Joint Repurchase Agreement 2.570% 11/1/01 $ 0 $ 13,486 $ 13,486 TOTAL FOR SEGMENT: S-T INVESTMENTS $ 1,497 $ 13,486 $ 14,983 TOTAL FOR FUND: THE HARTFORD GLOBAL LEADERS FUND $105,830 $399,921 $505,751
1. Management does not anticipate having to sell any securities as a result of the merger. PAGE 8 OF 8 PROFORMA STATEMENT OF ASSETS AND LIABILITIES At October 31, 2001 (Unaudited) Fortis Growth & Income (Acquired) Hartford Growth and Income Fund (Acquiring)
Fortis Hartford Acquired Acquiring Fund Fund 10/31/2001 10/31/2001 Proforma Proforma (Historical) (Historical) Adjustments Combined ------------ ------------ ----------- -------- ASSETS Investments, at value $34,218 $346,881 0 $381,099 Cash, receivables and other assets 653 9,837 0 10,490 Collateral for securities lending transactions 0 9,219 0 9,219 --------- ---------- ------- ---------- TOTAL ASSETS 34,871 365,937 0 400,808 --------- ---------- ------- ---------- LIABILITIES Payable upon return of securities loaned 0 9,219 0 9,219 Payable for investment securities purchased 897 12,221 0 13,118 Redemptions of capital stock 0 511 0 511 Accounts payable and accrued expenses 54 229 0 283 --------- ---------- ------- ---------- TOTAL LIABILITIES 951 22,180 0 23,131 --------- ---------- ------- ---------- NET ASSETS Net proceeds of capital stock, par value $.01 per share 33,645 421,718 0 455,363 Unrealized appreciation (depreciation) of investments in securities and futures contracts (1,904) (41,254) 0 (43,158) Undistributed net investment income (loss) (35) 0 0 (35) Accumulated net realized gain (loss) from sale of investments 2,215 (36,707) 0 (34,492) --------- ---------- ------- ---------- TOTAL NET ASSETS $33,920 $343,757 0 $377,677 ========= ========== ======= ========== OUTSTANDING SHARES Class A 1,553,904 23,146,033 386,976 (a) 25,086,913 Class B 528,563 4,276,016 649,645 (a) 5,454,224 Class C 150,502 5,974,996 39,151 (a) 6,164,649 Class H 405,177 0 (405,177) (a) 0 Class Y 0 42,000 0 (a) 42,000 2,638,146 33,439,045 670,595 36,747,786 NET ASSET VALUE Class A $12.94 $10.36 $10.36 Class B $12.74 $10.10 $10.10 Class C $12.74 $10.11 $10.11 Class H $12.75 $0.00 $0.00 Class Y $0.00 $10.52 $10.52
(a) Reflects increase (decrease) in shares due to differences in the net asset values of the funds. Fortis Class H will merge to Hartford Class B. PROFORMA STATEMENT OF OPERATIONS For the Year Ended October 31, 2001 (Unaudited) Fortis Growth & Income (Acquired) Hartford Growth and Income Fund (Acquiring)
Fortis Hartford Acquired Acquiring Fund Fund 10/31/01 10/31/01 Proforma Proforma (Historical) (Historical) Adjustments Combined ------------ ------------ ----------- -------- NET INVESTMENT INCOME: Income Interest Income $160 $455 0 $615 Dividend Income 493 3,953 0 4,446 Fee income 2 40 0 42 ------- -------- --- -------- Total Income 655 4,448 0 5,103 ------- -------- --- -------- Expenses: Investment advisory and management fees 394 2,719 (79) (a) 3,034 Transfer agent fees 0 761 91 (a) 852 Distribution fees 220 1,902 23 (a) 2,145 Registration fees 42 74 (29) (a) 87 Custodian fees, gross 20 12 (20) (a) 12 Custodian fees, expense offset 0 0 0 0 Accounting services 0 66 8 (a) 74 Directors' fees and expenses 2 1 (1) (a) 2 Other 21 62 (14) (a) 69 ------- -------- --- -------- Total expenses (before reimbursements and waivers) 699 5,597 (21) 6,275 Expense reimbursements 0 0 0 0 Class A distribution fees waived 0 (115) (12) (a) (127) ------- -------- --- -------- Total expenses, net 699 5,482 (33) 6,148 ------- -------- --- -------- NET INVESTMENT INCOME (LOSS) (43) (1,034) 33 (1,171) ------- -------- --- -------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain from investments and option & futures contracts 2,219 (35,963) 0 (33,744) Net change in unrealized appreciation (depreciation) of investments in securities & futures contracts (10,853) (43,302) 0 (54,155) ------- -------- --- -------- NET LOSS ON INVESTMENTS (8,634) (79,265) 0 (87,899) ------- -------- --- -------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ($8,677) ($80,299) $33 ($89,070) ======= ======== === ========
(a) For further information regarding variations in expense structure, please look to footnotes on expense proforma. PRO FORMA FOOTNOTES OF MERGER BETWEEN ACQUIRED FUND AND ACQUIRING FUND October 31, 2001 (Unaudited) 1. GENERAL The accompanying proforma financial statements are presented to show the effect of the proposed acquisition of Fortis Series Fund, Inc. -- Growth and Income Fund (Acquired Fund) by The Hartford Mutual Funds, Inc. -- Hartford Growth and Income Fund (Acquiring Fund) as if such acquisition had taken place as of the close of business on October 31, 2000. Under the terms of the Agreement and Plan of Reorganization, the combination of the Acquired Fund and the Acquiring Fund will be taxed as a tax-free business combination and accordingly will be accounted for by a method of accounting for tax-free mergers of investment companies (sometimes referred to as the pooling without restatement method). The acquisition would be accomplished by an acquisition of the net assets of the Acquired Fund in exchange for shares of the Acquiring Fund at net asset value. The statements of assets and liabilities and the related statements of operations of the Acquired Fund and the Acquiring Fund have been combined as of and for the twelve-month period ended October 31, 2001. The accompanying pro forma financial statements should be read in conjunction with the financial statements and schedule of investments of the Acquiring Fund, which are included in its annual report dated October 31, 2001. The following notes refer to the accompanying pro forma financial statements as if the above mentioned acquisition of the Acquired Fund and the Acquiring Fund had taken place as of the close of business on October 31, 2000. 2. SIGNIFICANT ACCOUNTING POLICIES The Acquiring Fund is organized under the laws of the State of Maryland, registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Acquiring Fund issues multiple class shares. Class A shares are sold with a front-end sales charge of up to 5.50%. Class B shares are sold without a front-end sales charge and may be subject to a contingent deferred sales charge which is assessed on the lesser of the net asset value of the shares at the time of redemption or the original purchase price, and declines from 5.00% to zero depending on the period of time the shares are held, and such shares automatically convert to Class A after eight years. Class C shares are sold with a front-end sales charge of up to 1% and a contingent deferred sales charge of up to 1%. Class Y shares are sold to certain eligible institutional investors without a sales charge. All classes of shares have identical voting, redemption, dividend, liquidation and other rights and the same terms and conditions, except that each class may have different expenses, which may affect performance. Income and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets. The significant accounting policies followed by the Acquiring Fund are summarized as follows: SECURITY VALUATION: Investments in securities traded on a national securities exchange (domestic or foreign) or on the NASDAQ National Market System are valued at the last reported sales price. Securities for which over-the-counter market quotations are readily available are valued on the basis of the last current bid price. An outside pricing service may be utilized to provide such valuations. Options are valued at the last sales price. If no sale took place on such day, then options are valued at the mean between the bid and asked prices. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by management under supervision of the Board of Directors. Short-term investments, with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued at amortized cost. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions are accounted for on the trade date and dividend income is recorded on the ex-dividend date, except that certain dividends for foreign securities where the ex-dividend date may have passed are recorded as soon as the Fund is informed of the dividend in the exercise of reasonable diligence. Interest income and expenses are recorded on the accrual basis. Realized security gains and losses are determined using the identified cost method. LENDING OF PORTFOLIO SECURITIES: At October 31, 2001, securities were on loan to brokers from the Funds. For collateral, the Funds' custodian received cash, which is maintained in a separate account and invested by the custodian in short-term investment vehicles. The risks to the Funds in security lending transactions are that the borrower may not provide additional collateral when required or return the securities when due and that the proceeds from the sale of investments made with cash collateral received will be less than amounts required to be returned to the borrowers. JOINT TRADING ACCOUNT: The Acquiring Fund, pursuant to an exemptive order issued by the Securities and Exchange Commission, may transfer uninvested cash balances into a joint trading account (for all Hartford Funds) managed by Wellington Management Company LLP (Wellington). These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. REPURCHASE AGREEMENTS: A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Acquiring Fund enters into a repurchase agreement, the value of the underlying collateral security (ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement. Securities, which serve to collateralize the repurchase agreement, are held by the Acquiring Fund's custodian in book entry or physical form in the custodial account of the Acquiring Fund. Repurchase agreements are valued at cost plus accrued interest receivable. All repurchase agreements are executed through the Acquiring Fund's custodian, State Street Bank. FUTURES, OPTIONS ON FUTURES AND OPTIONS TRANSACTIONS: A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. When the Funds enter into such contracts, they are required to deposit with their custodian an amount of "initial margin" of cash, commercial paper or U.S. Treasury Bills. Subsequent payments, called maintenance margin, to and from the broker, are made on a daily basis as the price of the underlying security fluctuates, making the long and short positions in the futures contract more or less valuable (i.e. mark-to-market), which results in an unrealized gain or loss to the Funds. The market value of a traded futures contract is the last sale price. In the absence of a last sale price, the last offering price is used. In the absence of either of these prices, fair value is determined according to procedures established by the Funds' Board of Directors. At any time prior to expiration of the futures contract, the Funds may close the position by taking an opposite position, which would operate to terminate the position in the futures contract. A final determination of the maintenance margin is then made, additional cash is required to be paid by or released to the Funds and the Funds realize a gain or loss. The use of futures contracts involve elements of market and counter party risk, which may exceed the amount recognized in the Statements of Net Assets (Assets and Liabilities). Change in the value of the futures contracts may decrease the effectiveness of a Fund's strategies and potentially result in loss. The premium paid by a Fund for the purchase of a call or put option is included in the Fund's Statement of Net Assets (Schedule of Investments) as an investment and subsequently "marked-to-market" through net unrealized appreciation (depreciation) of options to reflect the current market value of the option as of the end of the reporting period. If a purchased option expires on its stipulated expiration date, the Fund realizes a loss in the amount of the cost of the option. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a call option, the cost of the security, which the Fund purchases upon exercise, will be increased by the premium originally paid to buy the call. The Funds may write covered options. "Covered" means that so long as a Fund is obligated as the writer of an option, it will own either the underlying securities or currency or the option to purchase or sell the same underlying securities or currency having the expiration date of the covered option and an exercise price equal to or less than the exercise price of the covered option, or will establish or maintain with it's custodian for the term of the option a "segregated account" consisting of cash or other liquid securities having a value equal to the fluctuating market value of the option securities or currencies. A Fund receives a premium for writing a call or put option, recorded as a component of other liabilities on the Statement of Net Assets (Assets and Liabilities), which increases the Funds' return, recorded as a realized gain, if the option expires unexercised or is closed out at a net profit. Any loss realized from the covered option is offset by the gain realized on the sale of the underlying securities or currency. Covered options, at times before exercise or close out, are marked-to-market through net unrealized appreciation (depreciation) of options. There is a risk of loss from a change in value of such options, which may exceed the related premiums received. INDEXED SECURITIES: The Acquiring Fund may invest in indexed securities whose values are linked to changes in interest rates, indices, or other underlying instruments. The Acquiring Fund uses these securities to increase or decrease it's exposure to different underlying instruments and to gain exposure to markets that might be difficult to invest through conventional securities. Indexed securities may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment and there is a limit to the potential appreciation of the investment. FEDERAL INCOME TAXES: The Acquiring Fund intends to qualify, under the Internal Revenue Code, as a regulated investment company, and, if so qualified, will not have to pay federal income taxes to the extent that its taxable net income is distributed. On a calendar year basis, the Acquiring Fund intends to distribute substantially all of its net investment income and realized gains, if any, to avoid payment of federal excise taxes. It is the policy of the Funds to pay quarterly distributions from net investment income. The distributions are recorded on the record date and are payable in cash or reinvested in additional shares of the fund at net asset value without any charge to the shareholder. Net investment income and net realized gains may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may, therefore, differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the fund. USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the reporting period. Actual results could differ from those estimates. ILLIQUID SECURITIES: Each Fund is permitted to invest up to 15% of its net assets in illiquid securities. "Illiquid Securities" are those that may not be sold or disposed of in the ordinary course of business, at approximately the price used to determine a Fund's net asset value per share. Each Fund may also purchase certain restricted (unregistered) securities, commonly known as Rule 144A securities, that can be resold to institutions and which may be determined to be liquid pursuant to policies and guidelines established by the Fund's Board of Directors. PAYMENTS TO RELATED PARTIES: Hartford Investment Financial Services Company (HIFSCO), a wholly owned indirect subsidiary of The Hartford Financial Services Group, Inc. (The Hartford), is the investment manager for the Acquiring Fund. As investment manager, HIFSCO has overall investment supervisory responsibility for the Acquiring Fund. In addition, HIFSCO provides administrative personnel, services, equipment and facilities and office space for proper operation of the Acquiring Fund. HIFSCO has contracted with Wellington for the provision of day to day investment management services in accordance with the Fund's investment objective and policies. The Acquiring Fund pays a fee to HIFSCO, a portion of which may be used to compensate Wellington. The Acquiring Fund's investment advisory and management fees are computed at an annual rate of .80% of the first $500 million of average daily net assets, .70% for the next $500 million, and .65% for average daily net assets over $1 billion. In addition to the investment advisory and management fee, Classes A, B and C pay HIFSCO (the Acquiring Fund's principal underwriter) distribution fees equal to .35% of average daily net assets for Class A and 1.00% of average daily net assets for Classes B and C on an annual basis, to be used to compensate those who sell shares of the fund and to pay certain other expenses of selling fund shares. The Class A Rule 12b-1 fee for the Acquiring Fund has been voluntarily capped at .30% through at least February 28, 2003. The cap may be removed at any time thereafter. There is no distribution plan for Class Y Shares. Allocable expenses incurred by The Hartford Funds (including the Acquiring Fund) are allocated to each Hartford Fund (including the Acquiring Fund) in proportion to the average daily net assets of each Hartford Fund (including the Acquiring Fund), except where allocation of certain expenses is more fairly made directly to a specific Fund (including the Acquiring Fund) or to specific classes within in a Fund (including the Acquiring Fund). The Hartford has voluntarily agreed to limit the total operating expense of the Class A, B, C and Y shares of the Acquiring Fund, exclusive of taxes, interest, brokerage commissions, certain distribution expenses and extraordinary expenses, until at least February 28, 2002. For Class A the limit is 1.45%, Classes B and C the limit is 2.15% and for Class Y the limit is 1.00%. The Hartford may terminate such voluntary and temporary fee waivers and expense limitation arrangements at any time after February 28, 2002 without notice. The Hartford and its subsidiaries provide facilities and office equipment, as well as perform certain other services, including fund accounting and financial reporting to the Acquiring Fund. Certain officers of the Acquiring Fund are directors and/or officers of HIFSCO and/or The Hartford or its subsidiaries. No officer of the Funds receives any compensation directly from the Acquiring Fund. For the twelve-month period ended October 31, 2001, legal fees and expenses of the Acquired Fund were paid to a law firm of which the secretary of the fund is a partner. The Acquiring Fund has entered into certain expense offset arrangements with its Custodian bank. The amount of the Acquiring Fund's expense reductions is shown on the accompanying Statement of Operations as custodian fee expense offset. LINE OF CREDIT: The Acquiring Fund participates in a $500,000,000 committed revolving line of credit facility. The facility is to be used for temporary or emergency purposes. Under the arrangement, the Acquiring Fund is required to own securities having a market value in excess of 300% of the total bank borrowing. The interest rate on the borrowing varies depending on the nature of the loan. The facility also requires a fee to be paid based on the amount of the commitment, which has not been utilized. 3. PRO FORMA ADJUSTMENTS The accompanying pro forma financial statements reflect changes in fund shares as if the merger had taken place on October 31, 2001, and adjustments made to expenses for duplicated services that would not have been incurred if the merger had taken place as of the close of business on October 31, 2000.
PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD GROWTH AND INCOME FUND ACQUIRED FUND : FORTIS EQUITY FNDS - GROWTH & INCOME SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ----------------------- -------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------------------------------------------------------------------------------------------------------------------------------- COMMON STOCK "FOOD, BEVERAGE & TOBACCO" 5 45 50 Pepsi Bottling Group, Inc. $ 218 $ 2,082 $ 2,300 14 132 146 Pepsico, Inc. $ 662 $ 6,435 $ 7,097 Philip Morris 13 102 115 Companies, Inc. $ 622 $ 4,755 $ 5,377 R.J. Reynolds 5 49 54 Tobacco Holdings, Inc. $ 275 $ 2,768 $ 3,043 TOTAL FOR INDUSTRY: "FOOD, BEVERAGE & TOBACCO" $1,777 $16,040 $17,817 "METALS, MINERALS & MINING" 3 30 33 Alcoa, Inc. $ 110 $ 955 $ 1,065 6 66 72 Engelhard Corp. (with rights) $ 170 $ 1,738 $ 1,908 Freeport-McMoRan 16 158 174 Copper & Gold, Inc. $ 158 $ 1,581 $ 1,739 12 116 128 Lockheed Martin Corp. $ 585 $ 5,662 $ 6,247 TOTAL FOR INDUSTRY: "METALS, MINERALS & MINING" $ 1,023 $ 9,936 $10,959 BANKS Bank of 6 58 64 America Corp. $ 342 $ 3,439 $ 3,781
PAGE 1 OF 8
PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD GROWTH AND INCOME FUND ACQUIRED FUND : FORTIS EQUITY FNDS - GROWTH & INCOME SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ----------------------- -------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------------------------------------------------------------------------------------------------------------------------------- 29 282 311 Citigroup, Inc. $ 1,304 $12,846 $14,150 9 88 97 Fannie Mae $ 712 $ 7,116 $ 7,828 Pacific Century 23 220 243 Financial Corp. $ 534 $ 5,119 $ 5,653 PNC Financial 3 37 40 Services Group $ 181 $ 2,015 $ 2,196 12 122 134 UnionBanCal Corp. $ 414 $ 4,067 $ 4,481 Washington Mutual, 14 124 138 Inc. (with rights) $ 423 $ 3,741 $ 4,164 TOTAL FOR INDUSTRY: BANKS $ 3,910 $38,343 $42,253 CHEMICALS Du Pont (E.I.) 10 89 99 de Nemours & Co. $ 380 $ 3,543 $ 3,923 COMMUNICATIONS 20 206 226 AT&T Corp. $ 305 $ 3,142 $ 3,447 7 67 74 Motorola, Inc. $ 116 $ 1,095 $ 1,211 Qwest Communications 11 113 124 International, Inc. $ 146 $ 1,459 $ 1,605 SBC Communications, 6 59 65 Inc. $ 221 $ 2,241 $ 2,462 Sonus Networks, 18 177 195 Inc. $ 76 $ 745 $ 821 Sycamore Networks, 18 241 259 Inc. $ 81 $ 1,061 $ 1,142 5 45 50 Tekelec $ 92 $ 866 $ 958 Verizon Communications, 15 149 164 Inc. $ 742 $ 7,412 $ 8,154 WorldCom, Inc. - WorldCom Group 30 277 307 (with rights) $ 404 $ 3,726 $ 4,130 TOTAL FOR INDUSTRY: COMMUNICATIONS $ 2,183 $21,747 $23,930
PAGE 2 OF 8
PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD GROWTH AND INCOME FUND ACQUIRED FUND : FORTIS EQUITY FNDS - GROWTH & INCOME SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ----------------------- -------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------------------------------------------------------------------------------------------------------------------------------- COMPUTERS & OFFICE EQUIPMENT Cisco Systems, Inc. (with 30 285 315 rights) $ 499 $ 4,821 $ 5,320 Dell Computer Corp. (with 9 92 101 rights) $ 216 $ 2,206 $ 2,422 13 134 147 Hewlett-Packard Co. $ 226 $ 2,257 $ 2,483 International Business 4 42 46 Machines Corp. $ 476 $ 4,561 $ 5,037 Lexmark International, 6 58 64 Inc. $ 260 $ 2,609 $ 2,869 6 61 67 SanDisk Corp. $ 70 $ 663 $ 733 Solectron Corp. 14 137 151 (with rights) $ 166 $ 1,680 $ 1,846 TOTAL FOR INDUSTRY: COMPUTERS & OFFICE EQUIPMENT $ 1,913 $18,797 $20,710 CONSUMER NON-DURABLES 10 101 111 McKesson, Inc. $ 385 $ 3,751 $ 4,136 10 96 106 Procter & Gamble Co. $ 701 $ 7,053 $ 7,754 13 127 140 Safeway, Inc. $ 546 $ 5,302 $ 5,848 Tyco International 17 170 187 Ltd. (with rights) $ 845 $ 8,329 $ 9,174 TOTAL FOR INDUSTRY: CONSUMER NON-DURABLES $ 2,477 $24,435 $26,912 DRUGS 12 126 138 Abbott Laboratories (with rights) $ 662 $ 6,681 $ 7,343 American Home Products 3 32 35 Corp. (with rights) $ 184 $ 1,803 $ 1,987 Genzyme Corp. - 9 87 96 General Division $ 469 $ 4,699 $ 5,168 7 71 78 Immunex Corp. $ 170 $ 1,699 $ 1,869 6 66 72 Lilly (Eli) & Co. $ 497 $ 5,011 $ 5,508 6 59 65 Merck & Co., Inc. $ 396 $ 3,733 $ 4,129
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PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD GROWTH AND INCOME FUND ACQUIRED FUND: FORTIS EQUITY FNDS - GROWTH & INCOME SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ----------------------- -------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------------------------------------------------------------------------------------------------------------------------------- 6 60 66 Pfizer, Inc. $ 253 $ 2,526 $ 2,779 Pharmacia Corp. 22 224 246 (with rights) $ 904 $ 9,095 $ 9,999 Schering-Plough Corp. 17 169 186 (with rights) $ 636 $ 6,298 $ 6,934 TOTAL FOR INDUSTRY: DRUGS $ 4,171 $41,545 $45,716 ELECTRICAL EQUIPMENT Credence Systems 10 89 99 Corp. $ 129 $ 1,204 $ 1,333 Thermo Electron Corp. (with 7 72 79 rights) $ 148 $ 1,526 $ 1,674 TOTAL FOR INDUSTRY: ELECTRICAL EQUIPMENT $ 277 $ 2,730 $ 3,007 ELECTRONICS 26 260 286 General Electric Co. $ 965 $ 9,474 $10,439 12 118 130 Intel Corp. $ 291 $ 2,884 $ 3,175 Linear Technology 4 40 44 Corp. $ 163 $ 1,544 $ 1,707 Sanmina Corp. (with 10 106 116 rights) $ 159 $ 1,600 $ 1,759 Texas Instruments, 11 105 116 Inc. (with rights) $ 297 $ 2,945 $ 3,242 TOTAL FOR INDUSTRY: ELECTRONICS $ 1,875 $18,447 $20,322 ENERGY & SERVICES 4 41 45 ChevronTexaco Corp. $ 367 $ 3,609 $ 3,976 20 201 221 Exxon Mobil Corp. $ 789 $ 7,922 $ 8,711 Helmerich & 6 61 67 Payne, Inc. $ 194 $ 1,862 $ 2,056 Royal Dutch Petroleum Co. 5 48 53 NY Shares $ 242 $ 2,414 $ 2,656 Santa Fe 6 63 69 International Corp. $ 153 $ 1,536 $ 1,689
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PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD GROWTH AND INCOME FUND ACQUIRED FUND : FORTIS EQUITY FNDS - GROWTH & INCOME SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ----------------------- -------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------------------------------------------------------------------------------------------------------------------------------- 6 65 71 Sunoco, Inc. $ 232 $ 2,448 $ 2,680 TOTAL FOR INDUSTRY: ENERGY & SERVICES $ 1,977 $19,791 $21,768 FINANCIAL SERVICES Investment Technology 4 45 49 Group, Inc. $ 290 $ 2,892 $ 3,182 Merrill Lynch & 8 83 91 Co., Inc. $ 367 $ 3,645 $ 4,012 TOTAL FOR INDUSTRY: FINANCIAL SERVICES $ 657 $ 6,537 $ 7,194 FOREST & PAPER PRODUCTS Kimberly-Clark 4 36 40 Corp. $ 211 $ 2,009 $ 2,220 3 30 33 Temple-Inland, Inc. $ 150 $ 1,505 $ 1,655 TOTAL FOR INDUSTRY: FOREST & PAPER PRODUCTS $ 361 $ 3,514 $ 3,875 HEALTH SERVICES AmerisourceBergen 3 31 34 Corp. $ 203 $ 1,958 $ 2,161 INSURANCE Ambac Financial 10 94 104 Group, Inc. $ 461 $ 4,502 $ 4,963 American International 8 74 82 Group, Inc. $ 602 $ 5,818 $ 6,420 St. Paul Companies, Inc. 10 104 114 (with rights) $ 482 $ 4,792 $ 5,274 TOTAL FOR INDUSTRY: INSURANCE $ 1,545 $15,112 $16,657 MEDIA & ENTERTAINMENT 7 69 76 Adelphia Communications Corp. Class A $ 155 $ 1,518 $ 1,673
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PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD GROWTH AND INCOME FUND ACQUIRED FUND : FORTIS EQUITY FNDS - GROWTH & INCOME SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ----------------------- -------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------------------------------------------------------------------------------------------------------------------------------- Gannett Co., Inc. 4 36 40 (with rights) $ 246 $ 2,256 $ 2,502 Knight-Ridder, Inc. 4 40 44 (with rights) $ 219 $ 2,239 $ 2,458 Liberty Media Corp. 34 333 367 Class A $ 399 $ 3,889 $ 4,288 TOTAL FOR INDUSTRY: MEDIA & ENTERTAINMENT $ 1,019 $ 9,902 $10,921 MEDICAL INSTRUMENTS & SUPPLIES Baxter International, 4 50 54 Inc. (with rights) $ 208 $ 2,409 $ 2,617 Becton, Dickinson 10 101 111 & Co. (with rights) $ 351 $ 3,616 $ 3,967 TOTAL FOR INDUSTRY: MEDICAL INSTRUMENTS & SUPPLIES $ 559 $ 6,025 $ 6,584 RETAIL Bed Bath & Beyond, 12 121 133 Inc. $ 313 $ 3,037 $ 3,350 0 88 88 CVS Corp. $ 0 $ 2,108 $ 2,108 19 183 202 Dollar General Corp. $ 267 $ 2,611 $ 2,878 10 101 111 Home Depot, Inc. $ 398 $ 3,869 $ 4,267 7 73 80 Kroger Co. $ 179 $ 1,781 $ 1,960 Lowe's Companies, 9 83 92 Inc. $ 300 $ 2,820 $ 3,120 12 124 136 McDonald's Corp. $ 321 $ 3,230 $ 3,551 28 263 291 Staples, Inc. $ 402 $ 3,839 $ 4,241 Wal-Mart Stores, 8 79 87 Inc. $ 421 $ 4,081 $ 4,502 TOTAL FOR INDUSTRY: RETAIL $ 2,601 $27,376 $29,977 SOFTWARE & SERVICES AOL Time Warner, Inc. 21 207 228 (with rights) $ 659 $ 6,470 $ 7,129
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PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD GROWTH AND INCOME FUND ACQUIRED FUND: FORTIS EQUITY FNDS - GROWTH & INCOME SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ----------------------- -------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------------------------------------------------------------------------------------------------------------------------------- 8 82 90 First Data Corp. $ 561 $ 5,554 $ 6,115 6 57 63 Intuit, Inc. (with rights) $ 225 $ 2,305 $ 2,530 22 213 235 Microsoft Corp. $ 1,268 $12,403 $13,671 9 88 97 Oracle Corp. Rational Software $ 122 $ 1,197 $ 1,319 1 6 7 Corp. $ 13 $ 75 $ 88 6 57 63 VeriSign, Inc. $ 217 $ 2,210 $ 2,427 VERITAS Software 4 39 43 Corp. $ 116 $ 1,098 $ 1,214 TOTAL FOR INDUSTRY: SOFTWARE & SERVICES $ 3,181 $31,312 $34,493 TRANSPORTATION 5 38 43 Southwest Airlines Co. $ 75 $ 606 $ 681 6 63 69 USFreightways Corp. $ 187 $ 1,951 $ 2,138 TOTAL FOR INDUSTRY: TRANSPORTATION $ 262 $ 2,557 $ 2,819 6 0 6 UTILITIES Constellation Energy Group, Inc. $ 139 $ 0 $ 139 Dominion 4 35 39 Resources, Inc. $ 214 $ 2,158 $ 2,372 7 69 76 Duke Energy Corp. $ 261 $ 2,643 $ 2,904 10 98 108 Exelon Corp. $ 416 $ 4,115 $ 4,531 0 55 55 Pinnacle West Capital Corp. $ 0 $ 2,322 $ 2,322 9 93 102 Waste Management, Inc. $ 228 $ 2,271 $ 2,499 TOTAL FOR INDUSTRY: UTILITIES $ 1,258 $13,509 $14,767
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PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD GROWTH AND INCOME FUND ACQUIRED FUND: FORTIS EQUITY FNDS - GROWTH & INCOME SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) ----------------------- -------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------------------------------------------------------------------------------------------------------------------------------- TOTAL FOR SEGMENT: COMMON STOCK $33,609 $333,156 $366,765 S-T INVESTMENTS FINANCE 444 0 444 Repurchase Agreement 2.57% 11-01-01 2.570% 11/01/2001 $ 444 $ 0 $ 444 0 0 0 U.S. Bank N.A. Money Market Variable Rate $ 0 $ 0 $ 0 165 0 165 U.S. Treasury 3.46%, 12-20-2001 3.460% 12/20/2001 $ 165 $ 0 $ 165 TOTAL FOR INDUSTRY: FINANCE $ 609 $ 0 $ 609 REPURCHASE AGREEMENT 0 13,725 13,725 Joint Repurchase Agreement 2.570% 11/1/01 $ 0 $ 13,725 $ 13,725 TOTAL FOR SEGMENT: S-T INVESTMENTS $ 609 $13,725 $ 14,334 TOTAL FOR FUND: THE HARTFORD GROWTH AND INCOME FUND $34,218 $346,881 $381,099
1. Management does not anticipate having to sell any securities as a result of the merger. PAGE 8 OF 8
PROFORMA STATEMENT OF ASSETS AND LIABILITIES At October 31, 2001 (Unaudited) FORTIS HIGH YIELD (ACQUIRED) FORTIS HARTFORD HARTFORD HIGH YIELD FUND (ACQUIRING) ACQUIRED ACQUIRING FUND FUND 10/31/2001 10/31/2001 PROFORMA PROFORMA (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED -------------- -------------- -------------- -------------- ASSETS Investments, at value $ 99,714 $91,382 0 $191,096 Cash, receivables and other assets 3,010 3,686 0 6,696 Collateral for securities lending transactions 0 2,249 0 2,249 -------------- -------------- -------------- -------------- TOTAL ASSETS 102,724 97,317 0 200,041 -------------- -------------- -------------- -------------- LIABILITIES Payable upon return of securities loaned 0 2,249 0 2,249 Income distribution payable 313 0 0 313 Payable for investment securities purchased 136 133 0 269 Redemptions of capital stock 0 385 0 385 Accounts payable and accrued expenses 111 47 0 158 -------------- -------------- -------------- -------------- TOTAL LIABILITIES 560 2,814 0 3,374 - - - - NET ASSETS Net proceeds of capital stock, par value $.01 per share 184,647 105,320 0 289,967 Unrealized appreciation (depreciation) of investments in securities and translation of assets and liabilities denominated in foreign currency (22,576) (7,197) 0 (29,773) Undistributed net investment income (loss) 0 139 0 139 Accumulated net realized loss from sale of investments (59,907) (3,759) 0 (63,666) -------------- -------------- -------------- -------------- TOTAL NET ASSETS $102,164 $94,503 0 $196,667 ============== ============== ============== ============== OUTSTANDING SHARES Class A 12,754,174 5,418,019 (5,267,700) (a) 12,904,493 Class B 2,147,217 2,006,998 2,122,651 (a) 6,276,866 Class C 583,456 3,273,993 (240,165) (a) 3,617,284 Class H 5,105,508 0 (5,105,508) (a) 0 Class Y 0 498,001 0 (a) 498,001 20,590,355 11,197,011 (8,490,722) (a) 23,296,644 NET ASSET VALUE Class A $4.96 $8.45 $8.45 Class B $4.97 $8.43 $8.43 Class C $4.96 $8.43 $8.43 Class H $4.96 $0.00 $0.00 Class Y $0.00 $8.48 $8.48
(a) Reflects increase (decrease) in shares due to differences in the net asset values of the funds. Fortis Class H will merge to Hartford Class B.
PROFORMA STATEMENT OF OPERATIONS For the Year Ended October 31, 2001 (Unaudited) FORTIS HIGH YIELD (ACQUIRED) FORTIS HARTFORD HARTFORD HIGH YIELD FUND (ACQUIRING) ACQUIRED ACQUIRING FUND FUND 10/31/01 10/31/01 PROFORMA PROFORMA (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED -------------- -------------- ------------- ------------- NET INVESTMENT INCOME: Income Interest Income $13,039 $7,084 0 $20,123 Dividend Income 24 58 0 82 Fee income 0 7 0 7 -------------- -------------- ------------- ------------- Total Income 13,063 7,149 0 20,212 -------------- -------------- ------------- ------------- Expenses: Investment advisory and management fees 866 518 9 (a) 1,393 Transfer agent fees 0 154 271 (a) 425 Distribution fees 698 436 0 (a) 1,134 Registration fees 40 21 (28) (a) 33 Custodian fees, gross 7 7 (7) (a) 7 Custodian fees, expense offset 0 (6) 0 (6) Accounting services 0 14 23 (a) 37 Directors' fees and expenses 8 0 (8) (a) 0 Other 54 14 (34) (a) 34 -------------- -------------- ------------- ------------- Total expenses (before reimbursements and waivers) 1,674 1,158 226 3,058 Expense reimbursements 0 0 0 0 Class A distribution fees waived 0 (17) (36) (a) (53) -------------- -------------- ------------- ------------- Total expenses, net 1,674 1,141 190 3,005 -------------- -------------- ------------- ------------- NET INVESTMENT INCOME (LOSS) 11,389 6,008 (190) 17,207 -------------- -------------- ------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized loss from investments & foreign currency transactions (10,730) (1,916) 0 (12,646) Net change in unrealized appreciation (depreciation) from investments and translation of assets & liabilities denominated in foreign currency (5,593) (4,914) 0 (10,507) -------------- -------------- ------------- ------------- NET LOSS ON INVESTMENTS (16,323) (6,830) 0 (23,153) -------------- -------------- ------------- ------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ($4,934) ($822) ($190) ($5,946) ============== ============== ============= =============
(a) For further information regarding variations in expense structure, please look to footnotes on expense proforma. PRO FORMA FOOTNOTES OF MERGER BETWEEN ACQUIRED FUND AND ACQUIRING FUND October 31, 2001 (Unaudited) 1. GENERAL The accompanying proforma financial statements are presented to show the effect of the proposed acquisition of Fortis Series Fund, Inc. - High Yield Portfolio (Acquired Fund) by The Hartford Mutual Funds, Inc. - Hartford High Yield Fund (Acquiring Fund) as if such acquisition had taken place as of the close of business on October 31, 2000. Under the terms of the Agreement and Plan of Reorganization, the combination of the Acquired Fund and the Acquiring Fund will be taxed as a tax-free business combination and accordingly will be accounted for by a method of accounting for tax-free mergers of investment companies (sometimes referred to as the pooling without restatement method). The acquisition would be accomplished by an acquisition of the net assets of the Acquired Fund in exchange for shares of the Acquiring Fund at net asset value. The statements of assets and liabilities and the related statements of operations of the Acquired Fund and the Acquiring Fund have been combined as of and for the twelve-month period ended October 31, 2001. The accompanying pro forma financial statements should be read in conjunction with the financial statements and schedule of investments of the Acquiring Fund, which are included in its annual report dated October 31, 2001. The following notes refer to the accompanying pro forma financial statements as if the above mentioned acquisition of the Acquired Fund and the Acquiring Fund had taken place as of the close of business on October 31, 2000. 2. SIGNIFICANT ACCOUNTING POLICIES The Acquiring Fund is organized under the laws of the State of Maryland, registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Acquiring Fund issues multiple class shares. Class A shares are sold with a front-end sales charge of up to 5.50%. Class B shares are sold without a front-end sales charge and may be subject to a contingent deferred sales charge which is assessed on the lesser of the net asset value of the shares at the time of redemption or the original purchase price, and declines from 5.00% to zero depending on the period of time the shares are held, and such shares automatically convert to Class A after eight years. Class C shares are sold with a front-end sales charge of up to 1% and a contingent deferred sales charge of up to 1%. Class Y shares are sold to certain eligible institutional investors without a sales charge. All classes of shares have identical voting, redemption, dividend, liquidation and other rights and the same terms and conditions, except that each class may have different expenses, which may affect performance. Income and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets. The significant accounting policies followed by the Acquiring Fund are summarized as follows: SECURITY VALUATION: Investments in securities traded on a national securities exchange (domestic or foreign) or on the NASDAQ National Market System are valued at the last reported sales price. Securities for which over-the-counter market quotations are readily available are valued on the basis of the last current bid price. An outside pricing service may be utilized to provide such valuations. For fixed income securities, the pricing service may employ a matrix system to determine valuations using methods which include consideration of yields or prices of bonds of comparable quality, type of issue, coupon, maturity and rating indications as to value from dealers, and general market conditions. Options are valued at the last sales price. If no sale took place on such day, then options are valued at the mean between the bid and asked prices. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by management under supervision of the Board of Directors. Short-term investments, with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued at amortized cost. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions are accounted for on the trade date and dividend income is recorded on the ex-dividend date, except that certain dividends for foreign securities where the ex-dividend date may have passed are recorded as soon as the Fund is informed of the dividend in the exercise of reasonable diligence. Interest income and expenses are recorded on the accrual basis. Realized security gains and losses are determined using the identified cost method. LENDING OF PORTFOLIO SECURITIES: At October 31, 2001, securities were on loan to brokers from the Funds. For collateral, the Funds' custodian received cash, which is maintained in a separate account and invested by the custodian in short-term investment vehicles. The risks to the Funds in security lending transactions are that the borrower may not provide additional collateral when required or return the securities when due and that the proceeds from the sale of investments made with cash collateral received will be less than amounts required to be returned to the borrowers. JOINT TRADING ACCOUNT: The Acquiring Fund, pursuant to an exemptive order issued by the Securities and Exchange Commission, may transfer uninvested cash balances into a joint trading account (for all Hartford Funds) managed by The Hartford Investment Management Company (HIMCO). These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. REPURCHASE AGREEMENTS: A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Acquiring Fund enters into a repurchase agreement, the value of the underlying collateral security(ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement. Securities, which serve to collateralize the repurchase agreement, are held by the Acquiring Fund's custodian in book entry or physical form in the custodial account of the Acquiring Fund. Repurchase agreements are valued at cost plus accrued interest receivable. All repurchase agreements are executed through the Acquiring Fund's custodian, State Street Bank. FUTURES, OPTIONS ON FUTURES AND OPTIONS TRANSACTIONS: A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. When the Funds enter into such contracts, they are required to deposit with their custodian an amount of "initial margin" of cash, commercial paper or U.S. Treasury Bills. Subsequent payments, called maintenance margin, to and from the broker, are made on a daily basis as the price of the underlying security fluctuates, making the long and short positions in the futures contract more or less valuable (i.e. mark-to-market), which results in an unrealized gain or loss to the Funds. The market value of a traded futures contract is the last sale price. In the absence of a last sale price, the last offering price is used. In the absence of either of these prices, fair value is determined according to procedures established by the Funds' Board of Directors. At any time prior to expiration of the futures contract, the Funds may close the position by taking an opposite position, which would operate to terminate the position in the futures contract. A final determination of the maintenance margin is then made, additional cash is required to be paid by or released to the Funds and the Funds realize a gain or loss. The use of futures contracts involve elements of market and counter party risk, which may exceed the amount recognized in the Statements of Net Assets (Assets and Liabilities). Change in the value of the futures contracts may decrease the effectiveness of a Fund's strategies and potentially result in loss. The premium paid by a Fund for the purchase of a call or put option is included in the Fund's Statement of Net Assets (Schedule of Investments) as an investment and subsequently "marked-to-market" through net unrealized appreciation (depreciation) of options to reflect the current market value of the option as of the end of the reporting period. If a purchased option expires on its stipulated expiration date, the Fund realizes a loss in the amount of the cost of the option. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a call option, the cost of the security, which the Fund purchases upon exercise, will be increased by the premium originally paid to buy the call. The Funds may write covered options. "Covered" means that so long as a Fund is obligated as the writer of an option, it will own either the underlying securities or currency or the option to purchase or sell the same underlying securities or currency having the expiration date of the covered option and an exercise price equal to or less than the exercise price of the covered option, or will establish or maintain with it's custodian for the term of the option a "segregated account" consisting of cash or other liquid securities having a value equal to the fluctuating market value of the option securities or currencies. A Fund receives a premium for writing a call or put option, recorded as a component of other liabilities on the Statement of Net Assets (Assets and Liabilities), which increases the Funds' return, recorded as a realized gain, if the option expires unexercised or is closed out at a net profit. Any loss realized from the covered option is offset by the gain realized on the sale of the underlying securities or currency. Covered options, at times before exercise or close out, are marked-to-market through net unrealized appreciation (depreciation) of options. There is a risk of loss from a change in value of such options, which may exceed the related premiums received. INDEXED SECURITIES: The Acquiring Fund may invest in indexed securities whose values are linked to changes in interest rates, indices, or other underlying instruments. The Acquiring Fund uses these securities to increase or decrease it's exposure to different underlying instruments and to gain exposure to markets that might be difficult to invest through conventional securities. Indexed securities may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment and there is a limit to the potential appreciation of the investment. FEDERAL INCOME TAXES: The Acquiring Fund intends to qualify, under the Internal Revenue Code, as a regulated investment company, and, if so qualified, will not have to pay federal income taxes to the extent that its taxable net income is distributed. On a calendar year basis, the Acquiring Fund intends to distribute substantially all of its net investment income and realized gains, if any, to avoid payment of federal excise taxes. It is the policy of the Fund to pay monthly distributions from net investment income. The distributions are recorded on the record date and are payable in cash or reinvested in additional shares of the fund at net asset value without any charge to the shareholder. Net investment income and net realized gains may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may, therefore, differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the fund. USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the reporting period. Actual results could differ from those estimates. ILLIQUID SECURITIES: Each Fund is permitted to invest up to 15% of its net assets in illiquid securities. "Illiquid Securities" are those that may not be sold or disposed of in the ordinary course of business, at approximately the price used to determine a Fund's net asset value per share. Each Fund may also purchase certain restricted (unregistered) securities, commonly known as Rule 144A securities, that can be resold to institutions and which may be determined to be liquid pursuant to policies and guidelines established by the Fund's Board of Directors. PAYMENTS TO RELATED PARTIES: Hartford Investment Financial Services Company (HIFSCO), a wholly owned indirect subsidiary of The Hartford Financial Services Group, Inc. (The Hartford), is the investment manager for the Acquiring Fund. As investment manager, HIFSCO has overall investment supervisory responsibility for the Acquiring Fund. In addition, HIFSCO provides administrative personnel, services, equipment and facilities and office space for proper operation of the Acquiring Fund. HIFSCO has contracted with HIMCO for the provision of day to day investment management services in accordance with the Fund's investment objective and policies. The Acquiring Fund pays a fee to HIFSCO, a portion of which may be used to compensate HIMCO. The Acquiring Fund's investment advisory and management fees are computed at an annual rate of .75% of the first $500 million of average daily net assets, .65% for the next $500 million, and .60% for average daily net assets over $1 billion. In addition to the investment advisory and management fee, Classes A, B and C pay HIFSCO (the Acquiring Fund's principal underwriter) distribution fees equal to .35% of average daily net assets for Class A and 1.00% of average daily net assets for Classes B and C on an annual basis, to be used to compensate those who sell shares of the fund and to pay certain other expenses of selling fund shares. The Class A Rule 12b-1 fee for the Acquiring Fund has been voluntarily capped at .30% through at least February 28, 2003. The cap may be removed at any time thereafter. There is no distribution plan for Class Y Shares. Allocable expenses incurred by The Hartford Funds (including the Acquiring Fund) are allocated to each Hartford Fund (including the Acquiring Fund) in proportion to the average daily net assets of each Hartford Fund (including the Acquiring Fund), except where allocation of certain expenses is more fairly made directly to a specific Fund (including the Acquiring Fund) or to specific classes within in a Fund (including the Acquiring Fund). The Hartford has voluntarily agreed to limit the total operating expense of the Class A, B, C and Y shares of the Acquiring Fund, exclusive of taxes, interest, brokerage commissions, certain distribution expenses and extraordinary expenses, until at least February 28, 2002. For Class A the limit is 1.40%, Classes B and C the limit is 2.10% and for Class Y the limit is .95%. The Hartford may terminate such voluntary and temporary fee waivers and expense limitation arrangements at any time after February 28, 2002 without notice. The Hartford and its subsidiaries provide facilities and office equipment, as well as perform certain other services, including fund accounting and financial reporting to the Acquiring Fund. Certain officers of the Acquiring Fund are directors and/or officers of HIFSCO and/or The Hartford or its subsidiaries. No officer of the Funds receives any compensation directly from the Acquiring Fund. For the twelve-month period ended October 31, 2001, legal fees and expenses of the Acquired Fund were paid to a law firm of which the secretary of the fund is a partner. The Acquiring Fund has entered into certain expense offset arrangements with its Custodian bank. The amount of the Acquiring Fund's expense reductions is shown on the accompanying Statement of Operations as custodian fee expense offset. LINE OF CREDIT: The Acquiring Fund participates in a $500,000,000 committed revolving line of credit facility. The facility is to be used for temporary or emergency purposes. Under the arrangement, the Acquiring Fund is required to own securities having a market value in excess of 300% of the total bank borrowing. The interest rate on the borrowing varies depending on the nature of the loan. The facility also requires a fee to be paid based on the amount of the commitment, which has not been utilized. 3. PRO FORMA ADJUSTMENTS The accompanying pro forma financial statements reflect changes in fund shares as if the merger had taken place on October 31, 2001, and adjustments made to expenses for duplicated services that would not have been incurred if the merger had taken place as of the close of business on October 31, 2000. PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD HIGH YIELD FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- -------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- FOREIGN CURRENCIES 11 0 11 EURO $10 $0 $10 TOTAL FOR SEGMENT: $10 $0 $10 COMMON STOCK CONSUMER CYCLICAL 1 0 1 Hosiery Corp. of America, Inc. Class A $0 $0 $0 SERVICES 9 0 9 Marvel Enterprises, Inc. Class C (Warrants) $0 $0 $0 4 0 4 Splitrock Service (Warrants) $23 $0 $23 TOTAL FOR INDUSTRY: SERVICES $23 $0 $23 TECHNOLOGY 1 0 1 @Track Communications, Inc. (Warrants) $1 $0 $1 6 0 6 Adelphia Business Solutions, Inc. (with rights) $4 $0 $4 13 0 13 Powertel, Inc. (Warrants) $338 $0 $338 11 0 11 Telus Corp. (Warrants) $77 $0 $77 TOTAL FOR INDUSTRY: TECHNOLOGY $420 $0 $420
PAGE 1 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD HIGH YIELD FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- -------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- TOTAL FOR SEGMENT: COMMON STOCK $443 $0 $443 PREFERRED STOCKS "METALS, MINERALS & MINING" 0 21 21 Rio Algom Ltd. $0 $505 $505 COMMUNICATIONS 0 5 5 "NEXTLINK Communications, Inc." $0 $10 $10 TOTAL FOR SEGMENT: PREFERRED STOCKS $0 $515 $515 CORPORATE BONDS "FOOD, BEVERAGE & TOBACCO" 0 260 260 "Hercules, Inc. (Ba1)" 6.600% 8/1/27 $0 $215 $215 75 70 145 Smithfield Foods, Inc., 8.00%, 10-15-2009 8.000% 10/15/2009 $78 $73 $151 TOTAL FOR INDUSTRY: "FOOD, BEVERAGE & TOBACCO" $78 $288 $366 "METALS, MINERALS & MINING" 0 100 100 "Lukens, Inc. (Ca)" 7.625% 8/1/04 $0 $9 $9 1,065 1,280 2,345 AK Steel Corp., 7.875%, 2-15-2009 7.875% 02/15/2009 $996 $1,197 $2,193 180 100 280 Newmont Mining Corp., 8.625%, 5-15-2011 8.625% 05/15/2011 $187 $104 $291 585 460 1,045 Phelps Dodge Corp., 8.75%, 6-1-2011 8.750% 06/01/2011 $532 $418 $950
PAGE 2 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD HIGH YIELD FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- -------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 255 660 915 Phelps Dodge Corp., 9.50%, 6-1-2031 9.500% 06/01/2031 $228 $589 $817 375 215 590 Santa Fe Pacific Gold Corp. 8.375% 07/01/2005 $394 $226 $620 810 605 1,415 U.S. Steel L.L.C., 10.75%, 8-1-2008 10.750% 08/01/2008 $729 $545 $1,274 TOTAL FOR INDUSTRY: "METALS, MINERALS & MINING" $3,066 $3,088 $6,154 AEROSPACE & DEFENSE 0 450 450 "Condor Systems, Inc. (Ca)" 11.875% 5/1/09 $0 $153 $153 BANKS 0 300 300 "Golden State Holdings, Inc. (Ba1)" 7.125% 8/1/05 $0 $306 $306 0 520 520 "Sovereign Bankcorp, Inc. (Ba3)" 8.625% 3/15/04 $0 $550 $550 TOTAL FOR INDUSTRY: BANKS $0 $856 $856 BASIC MATERIALS 1,500 0 1,500 Hercules, Inc., 11.125%, 11-15-2007 11.125% 11/15/2007 $1,395 $0 $1,395 1,750 0 1,750 Lyondell Chemical Co., 9.875%, Ser B 5-1-2007 9.875% 05/01/2007 $1,680 $0 $1,680 TOTAL FOR INDUSTRY: BASIC MATERIALS $3,075 $0 $3,075 BUSINESS SERVICES 0 75 75 "Interpool, Inc. (Ba3)" 7.350% 8/1/07 $0 $69 $69 1,000 800 1,800 Building One Services Corp., 10.50%, 5-1-2009 10.500% 05/01/2009 $735 $588 $1,323 530 350 880 United Rentals, Inc., 10.75%, 4-15-2008 10.750% 04/15/2008 $556 $368 $924 TOTAL FOR INDUSTRY: BUSINESS SERVICES $1,291 $1,025 $2,316
PAGE 3 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD HIGH YIELD FUND ACQUIRED FUND: FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- -------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- CAPITAL GOODS 1,250 0 1,250 BRL Universal Equipment, 8.875%, 8.875% 02/15/2008 $1,288 $0 $1,288 1,625 0 1,625 Sequa Corp., 8.875%, Ser B 4-1-2008 8.875% 04/01/2008 $1,438 $0 $1,438 TOTAL FOR INDUSTRY: CAPITAL GOODS $2,726 $0 $2,726 CHEMICALS 0 1,200 1,200 "Millennium America, Inc. (Ba1)" 7.625% 11/15/26 $0 $860 $860 0 500 500 ARCO Chemical Co. (Ba3) 9.800% 2/1/20 $0 $437 $437 1,650 980 2,630 Equistar Chemical L.P., 7.55%, 2-15-2026 7.550% 02/15/2026 $1,176 $637 $1,813 0 170 170 Georgia Gulf Corp. (Ba2) 7.625% 11/15/05 $0 $174 $174 550 215 765 Georgia Gulf Corp., 10.375%, 11-1-2007 10.375% 11/01/2007 $562 $220 $782 0 300 300 Huntsman Corp. (Ca) 9.500% 7/1/07 $0 $18 $18 0 150 150 Huntsman ICI Chemicals LLC (B2) 10.125% 7/1/09 $0 $122 $122 135 125 260 IMC Global, Inc., 11.25%, 6-1-2011 11.250% 06/01/2011 $138 $128 $266 0 480 480 Lyondell Chemical Co. (Ba3) 9.625% 5/1/07 $0 $461 $461 TOTAL FOR INDUSTRY: CHEMICALS $1,876 $3,057 $4,933 COMMUNICATIONS 0 825 825 "Level 3 Communications, Inc. (Caa1)" 11.250% 3/15/10 $0 $334 $334 0 100 100 "McLeodUSA, Inc. (B3)" 9.250% 7/15/07 $0 $24 $24 0 300 300 "McLeodUSA, Inc. (B3)" 9.500% 11/1/08 $0 $72 $72 0 200 200 "McLeodUSA, Inc. (B3)" 11.500% 5/1/09 $0 $52 $52 0 100 100 "McLeodUSA, Inc. (CCC+ S&P)" 8.125% 2/15/09 $0 $23 $23 0 300 300 "Metromedia Fiber Network, Inc. (Caa3)" 10.000% 12/15/09 $0 $57 $57
PAGE 4 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD HIGH YIELD FUND ACQUIRED FUND: FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 0 100 100 "Telecorp PCS, Inc. (B3)" 10.625% 7/15/10 $0 $116 $116 0 400 400 "Tritel PCS, Inc. (B3)" 10.375% 1/15/11 $0 $459 $459 0 750 750 "XO Communications, Inc. (Caa1)" 10.750% 11/15/08 $0 $143 $143 0 1,065 1,065 "XO Communications, Inc. (Caa1)" 12.500% 4/15/06 $0 $213 $213 760 680 1,440 Allegiance Telecom, Inc., 19.08%, Ser B 02/15/2008 $308 $275 $583 0 200 200 Centennial Communications Corp. (B3) 10.750% 12/15/08 $0 $173 $173 0 325 325 Crown Castle International Corp. (B3) 10.750% 8/1/11 $0 $307 $307 1,640 860 2,500 Crown Castle International Corp. 9.375% 08/01/2011 $1,427 $748 $2,175 250 1,025 1,275 Echostar DBS Corp., 9.375%, 2-1-2009 9.375% 02/01/2009 $255 $1,046 $1,301 0 300 300 Focal Communications Corp. (Caa3) 12.250% 2/15/08 $0 $81 $81 595 295 890 Focal Communications Corp., 11.875%, Ser B 11.875% 01/15/2010 $214 $106 $320 540 810 1,350 Level 3 Communications, Inc. 11.000% 03/15/2008 $259 $389 $648 4,445 3,095 7,540 Level 3 Communications, Inc. 9.125% 05/01/2008 $2,000 $1,393 $3,393 0 150 150 Loral Space & Communications Ltd. (B3) 9.500% 1/15/06 $0 $75 $75 2,368 1,755 4,123 Lucent Technologies, Inc., 6.45%, 3-15-2029 6.450% 03/15/2029 $1,492 $1,106 $2,598 2,330 1,305 3,635 McLeodUSA, Inc., 11.375%, 1-1-2009 11.375% 01/01/2009 $629 $352 $981 320 450 770 Metromedia Fiber Network, Inc. 10.000% 12/15/2009 $70 $99 $169 2,135 1,330 3,465 Metromedia Fiber Network, Inc. 10.000% 11/15/2008 $470 $293 $763 870 1,180 2,050 Motorola, Inc., 5.22%, 10-1-2097 5.220% 10/01/2097 $539 $732 $1,271 3,670 2,620 6,290 Nextel Communications, Inc. 9.375% 11/15/2009 $2,578 $1,841 $4,419 0 870 870 NTL Communications Corp. (B3) 12.375% 2/1/08 $0 $494 $494 0 475 475 NTL Communications Corp. (B3) 9.875% 11/15/09 $0 $222 $222 1,300 450 1,750 PanAmSat Corp., 6.875%, 1-15-2028 6.875% 01/15/2028 $857 $297 $1,154
PAGE 5 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD HIGH YIELD FUND ACQUIRED FUND: FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 562 170 732 RCN Corp., 34.99%, Ser B 2-15-2008 (Zero) 02/15/2008 $135 $41 $176 1,795 1,520 3,315 Spectrasite Holdings, Inc., 16.37%, 4-15-2009 04/15/2009 $521 $441 $962 275 645 920 Time Warner Telecom LLC, 9.75%, 7-15-2008 9.750% 07/15/2008 $209 $490 $699 840 1,350 2,190 Williams Communications Group, Inc. 10.875% 10/01/2009 $353 $581 $934 2,030 2,610 4,640 Williams Communications Group, Inc. 11.700% 08/01/2008 $853 $1,122 $1,975 TOTAL FOR INDUSTRY: COMMUNICATIONS $13,169 $14,197 $27,366 CONSTRUCTION 0 100 100 "MDC Holdings, Inc. (Ba2)" 8.375% 2/1/08 $0 $101 $101 0 600 600 Centex Corp. (Baa2) 7.875% 2/1/11 $0 $613 $613 0 50 50 Del Webb Corp. (Ba1) 9.375% 5/1/09 $0 $51 $51 265 155 420 Integrated Electric Services, Inc. 9.375% 02/01/2009 $223 $130 $353 0 220 220 Kaufman and Broad Home Corp. (Ba2) 7.750% 10/15/04 $0 $220 $220 0 100 100 Toll Corp. (Ba2) 8.750% 11/15/06 $0 $101 $101 0 125 125 Toll Corp. (BB+ S&P) 7.750% 9/15/07 $0 $122 $122 TOTAL FOR INDUSTRY: CONSTRUCTION $223 $1,338 $1,561 CONSUMER CYCLICAL 1,000 0 1,000 D.R. Horton, Inc., 9.375%, 3-15-2011 9.375% 03/15/2011 $980 $0 $980 CONSUMER NON-DURABLES 0 675 675 "Fleming Cos., Inc. (Ba3)" 10.125% 4/1/08 $0 $705 $705 275 200 475 Airgas, Inc., 9.125%, 10-1-2011 9.125% 10/01/2011 $289 $210 $499
PAGE 6 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD HIGH YIELD FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 340 283 623 Arkmel Finance, Inc., 9.50%, 8-15-2009 9.500% 08/15/2009 $355 $296 $651 520 385 905 Plastipak Holdings, Inc., 10.75%, 9-1-2011 10.750% 09/01/2011 $544 $403 $947 0 400 400 Xerox Corp. (Ba1) 5.250% 12/15/03 $0 $316 $316 TOTAL FOR INDUSTRY: CONSUMER NON-DURABLES $1,188 $1,930 $3,118 CONSUMER SERVICES 0 300 300 Service Corp. International (B1) 7.875% 2/1/13 $0 $269 $269 2,375 1,245 3,620 Service Corp. International, 6.50%, 3-15-2008 6.500% 03/15/2008 $2,108 $1,105 $3,213 250 420 670 Service Corp. International, 6.875%, 10-1-2007 6.875% 10/01/2007 $226 $380 $606 TOTAL FOR INDUSTRY: CONSUMER SERVICES $2,334 $1,754 $4,088 DRUGS 0 540 540 "Watson Pharmaceuticals, Inc. (Ba1)" 7.125% 5/15/08 $0 $558 $558 275 240 515 Alaris Medical Systems, Inc., 11.625%, 12-1-2006 11.625% 12/01/2006 $291 $254 $545 TOTAL FOR INDUSTRY: DRUGS $291 $812 $1,103 ENERGY 300 0 300 Key Energy Services, Inc., 8.375%, 3-1-2008 8.375% 03/01/2008 $303 $0 $303 625 0 625 Nuevo Energy Co., 9.375%, Ser B 10-1-2010 9.375% 10/01/2010 $600 $0 $600 1,000 0 1,000 Pioneer Natural Resources Co., 9.625%, 4-1-2010 9.625% 04/01/2010 $1,127 $0 $1,127 800 0 800 Swift Energy Co., 10.25%, 8-1-2009 10.250% 08/01/2009 $812 $0 $812 TOTAL FOR INDUSTRY: ENERGY $2,842 $0 $2,842 ENERGY & SERVICES 0 75 75 "Clark Refining & Marketing, Inc. (Ba3)" 8.625% 8/15/08 $0 $65 $65
PAGE 7 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD HIGH YIELD FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 0 900 900 "Newpark Resources, Inc. (B2)" 8.625% 12/15/07 $0 $801 $801 0 450 450 "Plains Resources, Inc. (B2)" 10.250% 3/15/06 $0 $457 $457 0 400 400 "Varco International, Inc. (Baa2)" 7.500% 2/15/08 $0 $400 $400 0 125 125 "Vintage Petroleum, Inc. (Ba3)" 9.750% 6/30/09 $0 $134 $134 0 150 150 Belco Oil & Gas Corp. (Ba3) 8.875% 9/15/07 $0 $153 $153 0 50 50 Cross Timbers Oil Co. (Ba3) 8.750% 11/1/09 $0 $52 $52 0 403 403 Nuevo Energy Co. (B1) 9.500% 6/1/08 $0 $391 $391 0 161 161 Peabody Energy Corp. (B1) 9.625% 5/15/08 $0 $171 $171 0 325 325 Pioneer Natural Resources Co. (Ba1) 6.500% 1/15/08 $0 $313 $313 0 500 500 Pioneer Natural Resources Co. (Ba1) 7.200% 1/15/28 $0 $438 $438 0 650 650 Pogo Producing Co. (B1) 10.375% 2/15/09 $0 $692 $692 1,400 320 1,720 Pogo Producing Co., 8.25%, Ser B 4-15-2011 8.250% 04/15/2011 $1,418 $324 $1,742 0 100 100 R&B Falcon Corp. (Baa3) 7.375% 4/15/18 $0 $98 $98 0 150 150 R&B Falcon Corp. (Baa3) 6.500% 4/15/03 $0 $155 $155 300 200 500 Snyder Oil Corp., 8.75%, 6-15-2007 8.750% 06/15/2007 $315 $210 $525 0 575 575 Tesoro Petroleum Corp. (B1) 9.000% 7/1/08 $0 $561 $561 TOTAL FOR INDUSTRY: ENERGY & SERVICES $1,733 $5,415 $7,148 FINANCE 1,000 0 1,000 Sovereign Bancorp, Inc., 10.50%, 11-15-2006 10.500% 11/15/2006 $1,101 $0 $1,101 1,085 0 1,085 Xerox Credit Corp., 6.10%, 12-16-2003 6.100% 12/16/2003 $902 $0 $902 TOTAL FOR INDUSTRY: FINANCE $2,003 $0 $2,003 FINANCIAL SERVICES
PAGE 8 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD HIGH YIELD FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 0 200 200 "HMH Properties, Inc. (Ba2)" 8.450% 12/1/08 $0 $176 $176 0 465 465 Xerox Credit Corp. (Ba1) 6.100% 12/16/03 $0 $403 $403 TOTAL FOR INDUSTRY: FINANCIAL SERVICES $0 $579 $579 FOREIGN CORPORATIONS 0 100 100 "Placer Dome, Inc. (Baa2)" 7.125% 6/15/07 $0 $103 $103 0 645 645 "Quebecor Media, Inc. (B2)" 11.125% 7/15/11 $0 $674 $674 0 945 945 "Rogers Cablesystems, Inc. (Baa3)" 10.000% 12/1/07 $0 $1,004 $1,004 0 200 200 "Rogers Cantel, Inc. (Baa3)" 9.750% 6/1/16 $0 $197 $197 0 250 250 "Tembec Industries, Inc. (Ba1)" 8.625% 6/30/09 $0 $263 $263 435 300 735 Acetex Corp., 10.875%, 8-1-2009 10.875% 08/01/2009 $402 $278 $680 750 500 1,250 Asia Global Crossing Ltd., 13.375%, 10-15-2010 13.375% 10/15/2010 $180 $120 $300 300 220 520 AT&T Canada, Inc., 7.65%, 9-15-2006 7.650% 09/15/2006 $196 $143 $339 600 400 1,000 British Sky Broadcasting Group plc, 8.20%, 7-15-2009 8.200% 07/15/2009 $618 $412 $1,030 560 375 935 British Telecommunications plc, 8.875%, 12-15-2030 8.875% 12/15/2030 $669 $448 $1,117 750 525 1,275 Callahan Nordrhein-Westfalen, 14.00%, 7-15-2010 14.000% 07/15/2010 $495 $347 $842 255 230 485 Domtar, Inc., 7.875%, 10-15-2011 7.875% 10/15/2011 $261 $235 $496 1,350 350 1,700 eKabel Hessen GMBH, 14.50%, 9-1-2010 14.500% 09/01/2010 $729 $189 $918 0 400 400 Flowserve Finance B.V. (B3) 12.250% 8/15/10 $0 $378 $378 0 575 575 Global Crossing Holdings Ltd. (B2) 9.625% 5/15/08 $0 $98 $98 170 160 330 Global Crossing Holdings Ltd., 8.70%, 8-1-2007 8.700% 08/01/2007 $26 $25 $51 4,142 2,333 6,475 Global Crossing Holdings Ltd., 9.50%, 11-15-2009 9.500% 11/15/2009 $683 $385 $1,068 0 600 600 Inco Ltd. (Baa3) 9.600% 6/15/22 $0 $626 $626 0 415 415 Kappa Beheer B.V. (B2) 10.625% 7/15/09 $0 $400 $400
PAGE 9 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD HIGH YIELD FUND ACQUIRED FUND: FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- -------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 45 30 75 Koninklijke (Royal) KPN N.V. 8.000% 10/01/2010 $38 $25 $63 1,420 1,195 2,615 Koninklijke KPN N.V., 8.375%, 10-1-2030 8.375% 10/01/2030 $1,118 $932 $2,050 0 520 520 KPNQwest N.V. (Ba1) 7.125% 6/1/09 $0 $281 $281 1,980 1,375 3,355 KPNQwest N.V., 8.125%, 6-1-2009 8.125% 06/01/2009 $1,247 $866 $2,113 3,318 2,850 6,168 Marconi Corp. plc, 8.375%, 9-15-2030 8.375% 09/15/2030 $1,192 $1,024 $2,216 0 1,050 1,050 Messer Griesheim GmbH (B2) 10.375% 6/1/11 $0 $927 $927 350 315 665 Nortel Networks Corp., 6.875%, 9-1-2023 6.875% 09/01/2023 $222 $200 $422 0 600 600 Ono Finance PLC (Caa1) 13.000% 5/1/09 $0 $414 $414 550 250 800 Rogers Cantel, Inc., 9.375%, 6-1-2008 9.375% 06/01/2008 $549 $249 $798 0 500 500 Teekay Shipping Corp. (Ba1) 8.320% 2/1/08 $0 $512 $512 0 260 260 Telewest Communications PLC (B2) 9.625% 10/1/06 $0 $195 $195 0 1,405 1,405 Telewest Communications PLC (B2) 11.000% 10/1/07 $0 $1,089 $1,089 635 315 950 Tembec Industries, Inc., 8.50%, 2-1-2011 8.500% 02/01/2011 $668 $332 $1,000 0 100 100 Trizec Finance Ltd. (Baa3) 10.875% 10/15/05 $0 $102 $102 0 330 330 United Pan-Europe Communications N.V. 10.875% 11/1/07 $0 $42 $42 TOTAL FOR INDUSTRY: FOREIGN CORPORATIONS $9,293 $13,515 $22,808 FOREIGN GOVERNMENTS 1,150 1,000 2,150 Netherlands Government, 5.75%, 9-18-2002 5.750% 09/15/2002 $1,057 $919 $1,976 0 250 250 Republic of Brazil (B1) 12.750% 1/15/20 $0 $194 $194 0 100 100 Republic of Colombia (Ba2) 8.375% 2/15/27 $0 $71 $71 0 8 8 Republic of Ecuador (Caa2) 12.000% 11/15/12 $0 $5 $5 0 145 145 Republic of Ecuador (Caa2) 5.000% 8/15/30 $0 $58 $58 0 400 400 Russian Federation (B2) 11.000% 7/24/18 $0 $358 $358
PAGE 10 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD HIGH YIELD FUND ACQUIRED FUND: FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- -------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- TOTAL FOR INDUSTRY: FOREIGN GOVERNMENTS $1,057 $1,605 $2,662 FOREST & PAPER PRODUCTS 0 350 350 Boise Cascade Corp. (Baa3) 7.350% 2/1/16 $0 $324 $324 0 520 520 Georgia-Pacific Corp. (Baa3) 9.875% 11/1/21 $0 $534 $534 620 385 1,005 Louisiana-Pacific Corp., 8.50%, 8-15-2005 8.500% 08/15/2005 $583 $362 $945 0 507 507 Pactiv Corp. (Baa3) 8.125% 6/15/17 $0 $554 $554 690 670 1,360 Potlatch Corp., 10.00%, 7-15-2011 10.000% 07/15/2011 $711 $690 $1,401 630 400 1,030 Potlatch Corp., 9.425%, 12-1-2009 9.425% 12/01/2009 $706 $440 $1,146 0 125 125 Stone Container Corp. (B2) 12.580% 8/1/16 $0 $134 $134 1,500 600 2,100 Stone Container Corp., 9.75%, 2-1-2011 9.750% 02/01/2011 $1,579 $632 $2,211 TOTAL FOR INDUSTRY: FOREST & PAPER PRODUCTS $3,579 $3,670 $7,249 HEALTH CARE 750 0 750 AdvancePCS, 8.50%, 4-1-2008 8.500% 04/01/2008 $780 $0 $780 2,250 0 2,250 HealthSouth Corp., 10.75%, 10-1-2008 10.750% 10/01/2008 $2,514 $0 $2,514 1,500 0 1,500 Tenet Healthcare Corp., 8.625%, 1-15-2007 8.625% 01/15/2007 $1,581 $0 $1,581 200 0 200 Triad Hospitals, Inc., 8.75%, 5-1-2009 8.750% 05/01/2009 $215 $0 $215 TOTAL FOR INDUSTRY: HEALTH CARE $5,090 $0 $5,090 HEALTH SERVICES 0 1,200 1,200 "Manor Care, Inc. (Ba1)" 7.500% 6/15/06 $0 $1,238 $1,238 0 300 300 "Triad Hospitals, Inc. (B1)" 8.750% 5/1/09 $0 $320 $320 0 250 250 Columbia/HCA Healthcare Corp. (Ba1) 9.000% 2/15/14 $0 $292 $292
PAGE 11 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD HIGH YIELD FUND ACQUIRED FUND: FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- -------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 0 350 350 Columbia/HCA Healthcare Corp. (Ba1) 7.500% 11/15/95 $0 $305 $305 200 625 825 HCA, Inc., 6.91%, 6-15-2005 6.910% 06/15/2005 $209 $653 $862 1,760 200 1,960 HCA, Inc., 7.125%, 6-1-2006 7.125% 06/01/2006 $1,844 $210 $2,054 0 340 340 HEALTH SOUTH Corp. (Ba1) 7.000% 6/15/08 $0 $339 $339 0 360 360 HEALTH SOUTH Corp. (Ba1) 6.875% 6/15/05 $0 $362 $362 0 290 290 HEALTH SOUTH Corp. (Ba2) 3.250% 4/1/03 $0 $275 $275 1,605 1,075 2,680 IASIS Healthcare Corp., 13.00%, 10-15-2009 13.000% 10/15/2009 $1,717 $1,150 $2,867 250 160 410 Magellan Health Services, Inc. 9.375% 11/15/2007 $262 $168 $430 650 450 1,100 Select Medical Corp., 9.50%, 6-15-2009 9.500% 06/15/2009 $658 $456 $1,114 0 100 100 Tenet Healthcare Corp. (Baa3) 8.625% 12/1/03 $0 $111 $111 0 200 200 Tenet Healthcare Corp. (Baa3) 7.625% 6/1/08 $0 $237 $237 1,000 400 1,400 Triad Hospitals Holdings, Inc., 11.00%, Ser B 11.000% 05/15/2009 $1,120 $448 $1,568 150 110 260 Vanguard Health Systems, Inc. 9.750% 08/01/2011 $158 $116 $274 TOTAL FOR INDUSTRY: HEALTH SERVICES $5,968 $6,680 $12,648 HOTELS & GAMING 0 395 395 "MGM Mirage, Inc. (Baa3)" 8.500% 9/15/10 $0 $398 $398 0 200 200 "MGM Mirage, Inc. (Baa3)" 6.875% 2/6/08 $0 $183 $183 0 25 25 "Starwood Hotels & Resorts, Inc. (Ba1)" 6.750% 11/15/05 $0 $24 $24 0 400 400 Park Place Entertainment Corp. (Ba1) 7.875% 12/15/05 $0 $390 $390 350 100 450 Park Place Entertainment Corp. 9.375% 02/15/2007 $356 $102 $458 TOTAL FOR INDUSTRY: HOTELS & GAMING $356 $1,097 $1,453 INSURANCE
PAGE 12 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD HIGH YIELD FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ----------------------------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 0 1,000 1,000 "Aetna, Inc. (Baa2)" 7.875% 3/1/11 $0 $1,017 $1,017 MACHINERY 0 100 100 "American Standard Cos., Inc. (Ba2)" 7.375% 4/15/05 $0 $102 $102 205 120 325 Briggs & Stratton Corp., 8.875%, 3-15-2011 8.875% 03/15/2011 $212 $124 $336 0 955 955 Grove Holdings LLC (C) 5/1/09 $0 $0 $0 600 255 855 Terex Corp., 10.375%, 4-1-2011 10.375% 04/01/2011 $618 $263 $881 TOTAL FOR INDUSTRY: MACHINERY $830 $489 $1,319 MEDIA & ENTERTAINMENT 0 725 725 "CSC Holdings, Inc. (Ba1)" 7.625% 4/1/11 $0 $733 $733 0 150 150 "Fox/Liberty Networks, LLC (Ba1)" 8.875% 8/15/07 $0 $157 $157 0 825 825 "Hollinger International Publishing, Inc. (Ba3)" 9.250% 2/1/06 $0 $771 $771 0 125 125 "Lenfest Communications, Inc. (Baa3)" 10.500% 6/15/06 $0 $148 $148 0 175 175 "PRIMEDIA, Inc. (Ba3)" 7.625% 4/1/08 $0 $138 $138 0 250 250 "PRIMEDIA, Inc. (Ba3)" 10.250% 6/1/04 $0 $215 $215 0 175 175 "World Color Press, Inc. (Baa2)" 7.750% 2/15/09 $0 $176 $176 0 1,225 1,225 Adelphia Communications Corp. (B2) 10.250% 6/15/11 $0 $1,139 $1,139 500 700 1,200 Adelphia Communications Corp. 10.250% 11/01/2006 $480 $672 $1,152 550 400 950 American Greetings Corp., 11.75%, 7-15-2008 11.750% 07/15/2008 $530 $386 $916 300 220 520 American Greetings, Inc., 6.10%, 8-1-2028 6.100% 08/01/2028 $255 $187 $442 600 430 1,030 AT&T Corp. - Liberty Media Corp. 8.250% 02/01/2030 $560 $401 $961 0 350 350 Charter Communications Holdings LLC (B2) 11.125% 1/15/11 $0 $370 $370
PAGE 13 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD HIGH YIELD FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ----------------------------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 925 830 1,755 Charter Communications Holdings 10.000% 05/15/2011 $934 $838 $1,772 1,315 635 1,950 Charter Communications Holdings 8.625% 04/01/2009 $1,256 $606 $1,862 1,290 540 1,830 Fox Family Worldwide, Inc. 11/01/2007 $1,290 $540 $1,830 600 200 800 Primedia, Inc., 8.50%, Ser B 2-1-2006 8.500% 02/01/2006 $499 $166 $665 TOTAL FOR INDUSTRY: MEDIA & ENTERTAINMENT $5,804 $7,643 $13,447 MEDICAL INSTRUMENTS & SUPPLIES 0 260 260 "Apogent Technologies, Inc. (Baa3)" 8.000% 4/1/11 $0 $281 $281 0 160 160 "Omnicare, Inc. (Ba2)" 8.125% 3/15/11 $0 $170 $170 450 325 775 Owens & Minor, Inc., 8.50%, 7-15-2011 8.500% 07/15/2011 $475 $343 $818 TOTAL FOR INDUSTRY: MEDICAL INSTRUMENTS & SUPPLIES $475 $794 $1,269 REAL ESTATE 275 365 640 Stewart Enterprises, Inc., 10.75%, 7-1-2008 10.750% 07/01/2008 $300 $398 $698 RETAIL 160 120 280 Autonation, Inc., 9.00%, 8-1-2008 9.000% 08/01/2008 $158 $118 $276 SERVICES 750 0 750 Adelphia Communications Corp. 10.875% 10/01/2010 $720 $0 $720 10,117 0 10,117 Australis Media Ltd., 15.75%, Disc Note 05/15/2003 $1 $0 $1 1,450 0 1,450 Insight Communications Co., Inc. 02/15/2011 $805 $0 $805 1,000 0 1,000 Penn National Gaming, Inc., 11.125%, Series B 11.125% 03/01/2008 $1,042 $0 $1,042
PAGE 14 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD HIGH YIELD FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ----------------------------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 900 0 900 Quebecor Media, Inc., 11.125%, 7-15-2011 11.125% 07/15/2011 $940 $0 $940 165 0 165 Stewart Enterprises, Inc., 10.75%, 7-1-2008 10.750% 07/01/2008 $179 $0 $179 TOTAL FOR INDUSTRY: SERVICES $3,687 $0 $3,687 TECHNOLOGY 500 0 500 CSC Holdings, Inc., 7.625%, 4-1-2011 7.625% 04/01/2011 $506 $0 $506 1,000 0 1,000 Echostar Broadband Corp., 10.375%, 10-1-20 10.375% 10/01/2007 $1,045 $0 $1,045 1,000 0 1,000 International Cabletel, Inc., 11.50%, Ser B 11.500% 02/01/2006 $600 $0 $600 250 0 250 Level 3 Communications, Inc. 03/15/2010 $51 $0 $51 1,200 0 1,200 Nextlink Communications, Inc. 12/01/2009 $204 $0 $204 900 0 900 Nextlink Communications, Inc. 12/01/2009 $72 $0 $72 2,400 0 2,400 NTL Communications Corp., 13.91%, Ser B 10/01/2008 $912 $0 $912 1,250 0 1,250 PSINet, Inc., 11.00%, 8-1-2009 (a) 08/01/2009 $88 $0 $88 1,675 0 1,675 Telewest Communications plc 11.000% 10/01/2007 $1,306 $0 $1,306 1,500 0 1,500 United International Holdings, Inc. 02/15/2008 $240 $0 $240 300 0 300 United Pan-Europe Communications N.V., 10.875% 08/01/2009 $45 $0 $45 1 0 1 Voicestream Wireless Corp. 10.375% 11/15/2009 $2 $0 $2 1,750 0 1,750 Williams Communications Group, Inc. 11.875% 08/01/2010 $735 $0 $735 TOTAL FOR INDUSTRY: TECHNOLOGY $5,806 $0 $5,806 TRANSPORTATION 0 100 100 "Newport News Shipbuilding, Inc. (Ba1)" 8.625% 12/1/06 $0 $105 $105 0 200 200 "Newport News Shipbuilding, Inc. (Ba3)" 9.250% 12/1/06 $0 $209 $209 0 500 500 "United Air Lines, Inc. (B2)" 10.670% 5/1/04 $0 $400 $400
PAGE 15 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD HIGH YIELD FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ----------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 0 100 100 "United Air Lines, Inc. (B2)" 9.125% 1/15/12 $0 $71 $71 0 1,150 1,150 Sequa Corp. (Ba2) 9.000% 8/1/09 $0 $1,041 $1,041 1,760 770 2,530 United Air Lines, Inc., 9.75%, 8-15-2021 9.750% 08/15/2021 $1,197 $539 $1,736 TOTAL FOR INDUSTRY: TRANSPORTATION $1,197 $2,365 $3,562 UTILITIES 0 570 570 "Allied Waste North American, Inc. (B2)" 10.000% 8/1/09 $0 $577 $577 0 300 300 "Browning-Ferris Industries, Inc. (Ba3)" 6.375% 1/15/08 $0 $270 $270 0 350 350 "Cogentrix Energy, Inc. (Baa3)" 8.750% 10/15/08 $0 $376 $376 0 175 175 "Waste Management, Inc. (Ba1)" 6.875% 5/15/09 $0 $182 $182 0 510 510 "Waste Management, Inc. (Ba1)" 7.375% 8/1/10 $0 $545 $545 0 800 800 "Western Resources, Inc. (Ba1)" 7.650% 4/15/23 $0 $614 $614 0 350 350 AES Corp. (The) (Ba1) 9.375% 9/15/10 $0 $324 $324 0 75 75 AES Corp. (The) (Ba2) 10.250% 7/15/06 $0 $70 $70 2,000 575 2,575 AES Corp., 9.50%, 6-1-2009 9.500% 06/01/2009 $1,885 $542 $2,427 1,800 750 2,550 Allied Waste North America, 7.875%, Ser B 1-1-2009 7.875% 01/01/2009 $1,782 $743 $2,525 1,500 0 1,500 Azurix Corp., 10.75%, Ser B 2-15-2010 10.750% 02/15/2010 $1,320 $0 $1,320 635 400 1,035 Browning-Ferris Industries, Inc., 7.40%, 9-15-2035 7.400% 09/15/2035 $525 $331 $856 120 410 530 Calpine Corp., 8.50%, 2-15-2011 8.500% 02/15/2011 $121 $413 $534 500 0 500 Calpine Corp., 8.625%, 8-15-2010 8.625% 08/15/2010 $503 $0 $503 0 80 80 CMS Energy Corp. (Ba3) 8.500% 4/15/11 $0 $82 $82 0 245 245 CMS Energy Corp. (Ba3) 6.750% 1/15/04 $0 $243 $243 0 130 130 CMS Energy Corp. (Ba3) 9.875% 10/15/07 $0 $140 $140 550 150 700 CMS Energy Corp., 7.50%, 1-15-2009 7.500% 01/15/2009 $537 $146 $683
PAGE 16 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD HIGH YIELD FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------ ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- 515 380 895 Commonwealth Edison Co., 8.625%, 2-1-2022 8.625% 02/01/2022 $544 $402 $946 0 125 125 El Paso Electric Co. (Ba3) 9.400% 5/1/11 $0 $143 $143 430 425 855 General Chemical Industries, 10.625%, 5-1-2009 10.625% 05/01/2009 $245 $289 $534 960 0 960 Kansas Gas & Electric Co., 7.60%, 12-15-2003 7.600% 12/15/2003 $989 $0 $989 1,865 1,455 3,320 Mission Energy Holding Co., 13.50%, 7-15-2008 13.500% 07/15/2008 $2,079 $1,622 $3,701 0 170 170 Pacific Gas & Electric Co. (A2) 7.050% 3/1/24 $0 $162 $162 0 900 900 Pacific Gas & Electric Co. (A2) 6.750% 10/1/23 $0 $855 $855 1,520 0 1,520 Pacific Gas & Electric Co., 7.25%, Ser 93D 8-1-2006 7.250% 08/01/2026 $1,444 $0 $1,444 1,100 700 1,800 Sierra Pacific Power Co., 8.00%, Ser A 6-1-2008 8.000% 06/01/2008 $1,191 $758 $1,949 TOTAL FOR INDUSTRY: UTILITIES $13,165 $9,829 $22,994 TOTAL FOR SEGMENT: CORPORATE BONDS $93,640 $83,712 $177,352 U.S. GOVERNMENT SECURITIES U.S. TREASURY NOTES 0 1,250 1,250 4.625% due 05/16/06 $0 $1,299 $1,299 TOTAL FOR SEGMENT: U.S. GOVERNMENT SECURITIES $0 $1,299 $1,299 S-T INVESTMENTS FINANCE 5,619 0 5,619 Repurchase Agreement 2.567% 11-01-01 2.567% 11/01/2001 $5,619 $0 $5,619 2 0 2 U.S. Bank N.A. Money Market Variable Rate $2 $0 $2
PAGE 17 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND : THE HARTFORD HIGH YIELD FUND ACQUIRED FUND : FORTIS ADVANTAGE FNDS - HIGH YIELD
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------ ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------------------------------- -------- ---------- ----------- ----------- ----------- TOTAL FOR INDUSTRY: FINANCE $5,621 $0 $5,621 REPURCHASE AGREEMENT 0 5,856 5,856 Joint Repurchase Agreement 2.567% 11/1/01 $0 $5,856 $5,856 TOTAL FOR SEGMENT: S-T INVESTMENTS $5,621 $5,856 $11,477 TOTAL FOR FUND: THE HARTFORD HIGH YIELD FUND $99,714 $91,382 $191,096
1. Management does not anticipate having to sell any securities as a result of the merger. PAGE 18 OF 18 PROFORMA STATEMENT OF ASSETS AND LIABILITIES At October 31, 2001 (Unaudited) FORTIS WORLDWIDE INTERNATIONAL EQUITY (ACQUIRED) HARTFORD INTERNATIONAL OPPORTUNITIES FUND (ACQUIRING)
FORTIS HARTFORD ACQUIRED ACQUIRING FUND FUND 10/31/2001 10/31/2001 PROFORMA PROFORMA (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED ------------ ------------ ----------- -------- ASSETS Investments, at value $21,615 $122,511 0 $144,126 Cash, receivables and other assets 551 12,477 0 13,028 Collateral for securities lending transactions 0 2,252 0 2,252 Unrealized appreciation on forward foreign currency contracts 0 0 0 0 --------- -------- --------- ---------- TOTAL ASSETS 22,166 137,240 0 159,406 --------- -------- --------- ---------- LIABILITIES Payable upon return of securities loaned 0 2,252 0 2,252 Payable for investment securities purchased 443 6,071 0 6,514 Redemptions of capital stock 154 2,170 0 2,324 Accounts payable and accrued expenses 46 8 0 54 --------- -------- --------- ---------- TOTAL LIABILITIES 643 10,501 0 11,144 --------- -------- --------- ---------- NET ASSETS Net proceeds of capital stock, par value$.01 per share 30,126 175,580 0 205,706 Unrealized appreciation (depreciation) of investments in securities and translation of assets and liabilities denominated in foreign currency (2,157) (16,154) 0 (18,311) Undistributed net investment income (loss) 0 1 0 1 Accumulated net realized loss from sale of investments and currency (6,446) (32,688) 0 (39,134) --------- -------- --------- ---------- TOTAL NET ASSETS $21,523 $126,739 0 $148,262 ========= ========== ========= ========== OUTSTANDING SHARES Class A 1,105,649 7,754,975 471,649 (a) 9,332,273 Class B 212,933 2,080,000 423,806 (a) 2,716,739 Class C 80,378 2,060,011 36,389 (a) 2,176,778 Class H 227,986 0 227,986 (a) 0 Class Y 0 1,800,010 0 (a) 1,800,010 1,626,946 13,694,996 1,159,830 16,025,800 NET ASSET VALUE Class A $13.31 $9.33 $9.33 Class B $13.06 $9.04 $9.04 Class C $13.06 $8.99 $8.99 Class H $13.05 $0.00 $0.00 Class Y $0.00 $9.49 $9.49
(a) Reflects increase (decrease) in shares due to differences in the net asset values of the funds. Fortis Class H will merge to Hartford Class B. PROFORMA STATEMENT OF OPERATIONS For the Year Ended October 31, 2001 FORTIS WORLDWIDE INTERNATIONAL EQUITY (ACQUIRED) HARTFORD INTERNATIONAL OPPORTUNITIES FUND (ACQUIRING)
FORTIS HARTFORD ACQUIRED ACQUIRING FUND FUND 10/31/01 10/31/01 PROFORMA PROFORMA (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED ------------ ------------ ----------- -------- NET INVESTMENT INCOME: Income Interest Income $141 $620 0 $761 Dividend Income 349 2,398 0 2,747 Fee income 0 49 0 49 -------- -------- --- -------- Total Income 490 3,067 0 3,557 -------- -------- --- -------- Expenses: Investment advisory and management fees 267 1,289 (40) (A) 1,516 Transfer agent fees 0 344 68 (A) 412 Distribution fees 130 763 18 (A) 911 Registration fees 43 22 (30) (A) 35 Custodian fees, gross 26 168 (26) (A) 168 Custodian fees, expense offset 0 (1) 0 (1) Accounting services 0 29 5 (A) 34 Directors' fees and expenses 3 0 (3) (A) 0 Amortization of organization costs 5 0 0 (A) 5 Other 37 31 (36) 32 -------- -------- --- -------- Total expenses (before reimbursements and waivers) 511 2,645 (44) 3,112 Expense reimbursements 0 0 0 0 Class A distribution fees waived 0 (43) (9) (A) (52) -------- -------- --- -------- Total expenses, net 511 2,602 (53) 3,060 -------- -------- --- -------- NET INVESTMENT INCOME (LOSS) (21) 465 53 497 -------- -------- --- -------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain from investments & foreign currency transactions (5,431) (31,663) 0 (37,094) Net change in unrealized appreciation (depreciation) from investments and translation of assets & liabilities denominated in foreign currency (4,973) (8,748) 0 (13,721) -------- -------- --- -------- NET LOSS ON INVESTMENTS (10,404) (40,411) 0 (50,815) -------- -------- --- -------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ($10,425) ($39,946) $53 ($50,318) ======== ======== === ========
(a) For further information regarding variations in expense structure, please look to footnotes on expense proforma. PRO FORMA FOOTNOTES OF MERGER BETWEEN ACQUIRED FUND AND ACQUIRING FUND October 31, 2001 (Unaudited) 1. GENERAL The accompanying proforma financial statements are presented to show the effect of the proposed acquisition of Fortis Series Fund, Inc. - International Equity Portfolio (Acquired Fund) by The Hartford Mutual Funds, Inc. - Hartford International Opportunities Fund (Acquiring Fund) as if such acquisition had taken place as of the close of business on October 31, 2000. Under the terms of the Agreement and Plan of Reorganization, the combination of the Acquired Fund and the Acquiring Fund will be taxed as a tax-free business combination and accordingly will be accounted for by a method of accounting for tax-free mergers of investment companies (sometimes referred to as the pooling without restatement method). The acquisition would be accomplished by an acquisition of the net assets of the Acquired Fund in exchange for shares of the Acquiring Fund at net asset value. The statements of assets and liabilities and the related statements of operations of the Acquired Fund and the Acquiring Fund have been combined as of and for the twelve-month period ended October 31, 2001. The accompanying pro forma financial statements should be read in conjunction with the financial statements and schedule of investments of the Acquiring Fund, which are included in its annual report dated October 31, 2001. The following notes refer to the accompanying pro forma financial statements as if the above mentioned acquisition of the Acquired Fund and the Acquiring Fund had taken place as of the close of business on October 31, 2000. 2. SIGNIFICANT ACCOUNTING POLICIES The Acquiring Fund is organized under the laws of the State of Maryland, registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Acquiring Fund issues multiple class shares. Class A shares are sold with a front-end sales charge of up to 5.50%. Class B shares are sold without a front-end sales charge and may be subject to a contingent deferred sales charge which is assessed on the lesser of the net asset value of the shares at the time of redemption or the original purchase price, and declines from 5.00% to zero depending on the period of time the shares are held, and such shares automatically convert to Class A after eight years. Class C shares are sold with a front-end sales charge of up to 1% and a contingent deferred sales charge of up to 1%. Class Y shares are sold to certain eligible institutional investors without a sales charge. All classes of shares have identical voting, redemption, dividend, liquidation and other rights and the same terms and conditions, except that each class may have different expenses, which may affect performance. Income and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets. The significant accounting policies followed by the Acquiring Fund are summarized as follows: SECURITY VALUATION: Investments in securities traded on a national securities exchange (domestic or foreign) or on the NASDAQ National Market System are valued at the last reported sales price. Securities for which over-the-counter market quotations are readily available are valued on the basis of the last current bid price. An outside pricing service may be utilized to provide such valuations. Securities quoted in foreign currencies are translated into U.S. dollars at the exchange rates at the end of each business day. Options are valued at the last sales price. If no sale took place on such day, then options are valued at the mean between the bid and asked prices. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by management under supervision of the Board of Directors. Short-term investments, with maturities of less than 60 days when acquired, or which subsequently are within 60 days of maturity, are valued at amortized cost. FOREIGN CURRENCY TRANSACTIONS AND FORWARD CURRENCY CONTRACTS: The accounting records of the Acquiring Fund are maintained in U.S. dollars. All assets and liabilities initially expressed in foreign currencies are converted into U.S. dollars at prevailing exchange rates. Purchases and sales of investment securities, dividend and interest income and certain expenses are translated at the rates of exchange prevailing on the respective dates of such transactions. The Acquiring Fund does not isolate that portion of portfolio security valuation resulting from fluctuations in foreign currency exchange rates on portfolio securities from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments in the accompanying financial statements. Net realized foreign exchange gains or losses arise from sales of foreign currencies and the difference between asset and liability amounts initially stated in foreign currencies and the U.S. dollar value of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in the value of other assets and liabilities at the end of the reporting period resulting from changes in the exchange rates. For the twelve-months ended October 31, 2001 the Funds entered into forward foreign currency exchange contracts that obligate the Funds to repurchase/replace or sell currencies at specified future dates. The Funds enter into forward foreign currency contracts to hedge against adverse fluctuations in exchange rates between currencies. Forward contracts involve elements of market risk in excess of the amount reflected in the Statement of Net Assets (Assets and Liabilities). In addition, risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of the contract and from unanticipated movement in the value of foreign currencies relative to the U.S. dollar. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions are accounted for on the trade date and dividend income is recorded on the ex-dividend date, except that certain dividends for foreign securities where the ex-dividend date may have passed are recorded as soon as the Fund is informed of the dividend in the exercise of reasonable diligence. Interest income and expenses are recorded on the accrual basis. Realized security gains and losses are determined using the identified cost method. LENDING OF PORTFOLIO SECURITIES: At October 31, 2001, securities were on loan to brokers from the Funds. For collateral, the Funds' custodian received cash, which is maintained in a separate account and invested by the custodian in short-term investment vehicles. The risks to the Funds in security lending transactions are that the borrower may not provide additional collateral when required or return the securities when due and that the proceeds from the sale of investments made with cash collateral received will be less than amounts required to be returned to the borrowers. JOINT TRADING ACCOUNT: The Acquiring Fund, pursuant to an exemptive order issued by the Securities and Exchange Commission, may transfer uninvested cash balances into a joint trading account (for all Hartford Funds) managed by Wellington Management Company LLP (Wellington). These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. REPURCHASE AGREEMENTS: A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Acquiring Fund enters into a repurchase agreement, the value of the underlying collateral security (ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement. Securities, which serve to collateralize the repurchase agreement, are held by the Acquiring Fund's custodian in book entry or physical form in the custodial account of the Acquiring Fund. Repurchase agreements are valued at cost plus accrued interest receivable. All repurchase agreements are executed through the Acquiring Fund's custodian, State Street Bank. FUTURES, OPTIONS ON FUTURES AND OPTIONS TRANSACTIONS: A futures contract is an agreement between two parties to buy and sell a security at a set price on a future date. When the Funds enter into such contracts, they are required to deposit with their custodian an amount of "initial margin" of cash, commercial paper or U.S. Treasury Bills. Subsequent payments, called maintenance margin, to and from the broker, are made on a daily basis as the price of the underlying security fluctuates, making the long and short positions in the futures contract more or less valuable (i.e. mark-to-market), which results in an unrealized gain or loss to the Funds. The market value of a traded futures contract is the last sale price. In the absence of a last sale price, the last offering price is used. In the absence of either of these prices, fair value is determined according to procedures established by the Funds' Board of Directors. At any time prior to expiration of the futures contract, the Funds may close the position by taking an opposite position, which would operate to terminate the position in the futures contract. A final determination of the maintenance margin is then made, additional cash is required to be paid by or released to the Funds and the Funds realize a gain or loss. The use of futures contracts involve elements of market and counter party risk, which may exceed the amount recognized in the Statements of Net Assets (Assets and Liabilities). Change in the value of the futures contracts may decrease the effectiveness of a Fund's strategies and potentially result in loss. The premium paid by a Fund for the purchase of a call or put option is included in the Fund's Statement of Net Assets (Schedule of Investments) as an investment and subsequently "marked-to-market" through net unrealized appreciation (depreciation) of options to reflect the current market value of the option as of the end of the reporting period. If a purchased option expires on its stipulated expiration date, the Fund realizes a loss in the amount of the cost of the option. If the Fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale will be decreased by the premium originally paid. If the Fund exercises a call option, the cost of the security, which the Fund purchases upon exercise, will be increased by the premium originally paid to buy the call. The Funds may write covered options. "Covered" means that so long as a Fund is obligated as the writer of an option, it will own either the underlying securities or currency or the option to purchase or sell the same underlying securities or currency having the expiration date of the covered option and an exercise price equal to or less than the exercise price of the covered option, or will establish or maintain with it's custodian for the term of the option a "segregated account" consisting of cash or other liquid securities having a value equal to the fluctuating market value of the option securities or currencies. A Fund receives a premium for writing a call or put option, recorded as a component of other liabilities on the Statement of Net Assets (Assets and Liabilities), which increases the Funds' return, recorded as a realized gain, if the option expires unexercised or is closed out at a net profit. Any loss realized from the covered option is offset by the gain realized on the sale of the underlying securities or currency. Covered options, at times before exercise or close out, are marked-to-market through net unrealized appreciation (depreciation) of options. There is a risk of loss from a change in value of such options, which may exceed the related premiums received. INDEXED SECURITIES: The Acquiring Fund may invest in indexed securities whose values are linked to changes in interest rates, indices, or other underlying instruments. The Acquiring Fund uses these securities to increase or decrease it's exposure to different underlying instruments and to gain exposure to markets that might be difficult to invest through conventional securities. Indexed securities may be more volatile than their underlying instruments, but any loss is limited to the amount of the original investment and there is a limit to the potential appreciation of the investment. FEDERAL INCOME TAXES: The Acquiring Fund intends to qualify, under the Internal Revenue Code, as a regulated investment company, and, if so qualified, will not have to pay federal income taxes to the extent that its taxable net income is distributed. On a calendar year basis, the Acquiring Fund intends to distribute substantially all of its net investment income and realized gains, if any, to avoid payment of federal excise taxes. It is the policy of the Funds to pay annual distributions from net investment income. The distributions are recorded on the record date and are payable in cash or reinvested in additional shares of the fund at net asset value without any charge to the shareholder. Net investment income and net realized gains may differ for financial statement and tax purposes. The character of distributions made during the year from net investment income or net realized gains may, therefore, differ from their ultimate characterization for federal income tax purposes. Also, due to the timing of dividend distributions, the fiscal year in which amounts are distributed may differ from the year that the income or realized gains (losses) were recorded by the fund. USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the reporting period. Actual results could differ from those estimates. ILLIQUID SECURITIES: Each Fund is permitted to invest up to 15% of its net assets in illiquid securities. "Illiquid Securities" are those that may not be sold or disposed of in the ordinary course of business, at approximately the price used to determine a Fund's net asset value per share. Each Fund may also purchase certain restricted (unregistered) securities, commonly known as Rule 144A securities, that can be resold to institutions and which may be determined to be liquid pursuant to policies and guidelines established by the Fund's Board of Directors. PAYMENTS TO RELATED PARTIES: Hartford Investment Financial Services Company (HIFSCO), a wholly owned indirect subsidiary of The Hartford Financial Services Group, Inc. (The Hartford), is the investment manager for the Acquiring Fund. As investment manager, HIFSCO has overall investment supervisory responsibility for the Acquiring Fund. In addition, HIFSCO provides administrative personnel, services, equipment and facilities and office space for proper operation of the Acquiring Fund. HIFSCO has contracted with Wellington for the provision of day to day investment management services in accordance with the Fund's investment objective and policies. The Acquiring Fund pays a fee to HIFSCO, a portion of which may be used to compensate Wellington. The Acquiring Fund's investment advisory and management fees are computed at an annual rate of .85% of the first $500 million of average daily net assets, .75% for the next $500 million, and .70% for average daily net assets over $1 billion. In addition to the investment advisory and management fee, Classes A, B and C pay HIFSCO (the Acquiring Fund's principal underwriter) distribution fees equal to .35% of average daily net assets for Class A and 1.00% of average daily net assets for Classes B and C on an annual basis, to be used to compensate those who sell shares of the fund and to pay certain other expenses of selling fund shares. The Class A Rule 12b-1 fee for the Acquiring Fund has been voluntarily capped at .30% through at least February 28, 2003. The cap may be removed at any time thereafter. There is no distribution plan for Class Y Shares. Allocable expenses incurred by The Hartford Funds (including the Acquiring Fund) are allocated to each Hartford Fund (including the Acquiring Fund) in proportion to the average daily net assets of each Hartford Fund (including the Acquiring Fund), except where allocation of certain expenses is more fairly made directly to a specific Fund (including the Acquiring Fund) or to specific classes within in a Fund (including the Acquiring Fund). The Hartford has voluntarily agreed to limit the total operating expense of the Class A, B, C and Y shares of the Acquiring Fund, exclusive of taxes, interest, brokerage commissions, certain distribution expenses and extraordinary expenses, until at least February 28, 2002. For Class A the limit is 1.65%, Classes B and C the limit is 2.35% and for Class Y the limit is 1.20%. The Hartford may terminate such voluntary and temporary fee waivers and expense limitation arrangements at any time after February 28, 2002 without notice. The Hartford and its subsidiaries provide facilities and office equipment, as well as perform certain other services, including fund accounting and financial reporting to the Acquiring Fund. Certain officers of the Acquiring Fund are directors and/or officers of HIFSCO and/or The Hartford or its subsidiaries. No officer of the Funds receives any compensation directly from the Acquiring Fund. For the twelve-month period ended October 31, 2001, legal fees and expenses of the Acquired Fund were paid to a law firm of which the secretary of the fund is a partner. The Acquiring Fund has entered into certain expense offset arrangements with its Custodian bank. The amount of the Acquiring Fund's expense reductions is shown on the accompanying Statement of Operations as custodian fee expense offset. LINE OF CREDIT: The Acquiring Fund participates in a $500,000,000 committed revolving line of credit facility. The facility is to be used for temporary or emergency purposes. Under the arrangement, the Acquiring Fund is required to own securities having a market value in excess of 300% of the total bank borrowing. The interest rate on the borrowing varies depending on the nature of the loan. The facility also requires a fee to be paid based on the amount of the commitment, which has not been utilized. 3. PRO FORMA ADJUSTMENTS The accompanying pro forma financial statements reflect changes in fund shares as if the merger had taken place on October 31, 2001, and adjustments made to expenses for duplicated services that would not have been incurred if the merger had taken place as of the close of business on October 31, 2000. PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD INTERNATIONAL OPPORT. FUND ACQUIRED FUND : FORTIS WORLDWIDE - INTERNATIONAL
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- COMMON STOCK "FOOD, BEVERAGE & TOBACCO" 16 100 116 Compass Group plc $ 120 $ 722 $ 842 4 22 26 Heineken N.V. $ 143 $ 806 $ 949 0 0 0 Japan Tobacco, Inc. $ 137 $ 784 $ 921 1 8 9 Nestle S.A. $ 280 $ 1,619 $ 1,899 28 152 180 Sapporo Breweries Ltd. $ 84 $ 457 $ 541 TOTAL FOR INDUSTRY: "FOOD, BEVERAGE & TOBACCO" $ 764 $ 4,388 $ 5,152 "METALS, MINERALS & MINING" 0 8 8 "PoHang Iron & Steel Co., Ltd. (Metals, Mine $ 0 $ 578 $ 578 1 6 7 Alcan, Inc. $ 31 $ 186 $ 217 6 14 20 Alcan, Inc. $ 193 $ 427 $ 620 2 11 13 AngloGold Ltd. $ 64 $ 371 $ 435
PAGE 1 OF 10 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD INTERNATIONAL OPPORT. FUND ACQUIRED FUND : FORTIS WORLDWIDE - INTERNATIONAL
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 7 46 53 CRH plc $ 110 $ 711 $ 821 2 13 15 Pechiney S.A. $ 101 $ 593 $ 694 12 75 87 ThyssenKrupp AG $ 130 $ 803 $ 933 TOTAL FOR INDUSTRY: "METALS, MINERALS & MINING" $ 629 $ 3,669 $ 4,298 AEROSPACE & DEFENSE 36 214 250 BAE Systems plc $ 177 $ 1,036 $ 1,213 APPAREL & TEXTILE 5 25 30 Adidas-Salomon AG $ 282 $ 1,417 $ 1,699 10 55 65 Industria de Diseno Textil S.A. $ 181 $ 1,031 $ 1,212 15 79 94 Tokyo Style Co. Ltd. $ 139 $ 730 $ 869 TOTAL FOR INDUSTRY: APPAREL & TEXTILE $ 602 $ 3,178 $ 3,780 BANKS 28 147 175 Allied Irish Banks plc $ 266 $ 1,422 $ 1,688 23 127 150 Australia & New Zealand Banking Group Ltd. $ 204 $ 1,146 $ 1,350 61 357 418 Banca Monte dei Paschi di Siena S.p.A. $ 149 $ 874 $ 1,023 5 29 34 Banco Popular Espanol S.A. $ 175 $ 971 $ 1,146 4 23 27 Barclays plc $ 117 $ 691 $ 808 4 24 28 Bayerische Hypo- und Vereinsbank AG $ 115 $ 722 $ 837 4 23 27 BNP Paribas S.A. $ 315 $ 1,894 $ 2,209 0 1,035 1,035 Chinatrust Commercian Bank (Banks) $ 0 $ 525 $ 525
PAGE 2 OF 10 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND : THE HARTFORD INTERNATIONAL OPPORT. FUND ACQUIRED FUND : FORTIS WORLDWIDE - INTERNATIONAL
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 6 33 39 Credit Suisse Group $ 220 $ 1,192 $ 1,412 2 12 14 Deutsche Bank AG $ 122 $ 676 $ 798 13 72 85 ForeningsSparbanken AB (Swedbank) $ 132 $ 725 $ 857 12 69 81 Royal Bank of Scotland Group plc $ 297 $ 1,648 $ 1,945 12 68 80 Standard Chartered plc $ 121 $ 684 $ 805 7 41 48 Sumitomo Mitsui Banking Corp. $ 43 $ 254 $ 297 0 0 0 UFJ Holdings, Inc. $ 67 $ 424 $ 491 28 166 194 United Overseas Bank Ltd. $ 157 $ 928 $ 1,085 TOTAL FOR INDUSTRY: BANKS $2,500 $ 14,776 $17,276 BASIC MATERIALS 5 0 5 Pohang Iron & Steel Co. Ltd. ADR $ 81 $ 0 $ 81 BUSINESS SERVICES 100 579 679 Rentokil Initial plc $ 360 $ 2,080 $ 2,440 CHEMICALS 6 36 42 Akzo Nobel N.V. $ 263 $ 1,465 $ 1,728 6 33 39 Bayer AG $ 161 $ 954 $ 1,115 20 115 135 Imperial Chemical Industries plc $ 96 $ 541 $ 637 TOTAL FOR INDUSTRY: CHEMICALS $ 520 $ 2,960 $ 3,480
COMMUNICATIONS PAGE 3 OF 10 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) Acquiring Fund: The Hartford International Opport. Fund Acquired Fund: Fortis Worldwide -- International
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 0 2 2 "SK Telecom Co., Ltd. (Communications)" $ 0 $ 449 $ 449 11 66 77 Alcatel S.A. $ 160 $ 997 $ 1,157 35 166 201 British Telecommunications plc $ 175 $ 837 $ 1,012 62 389 451 China Mobile (Hong Kong) Ltd. $ 190 $ 1,179 $ 1,369 46 266 312 COLT Telecom Group plc $ 78 $ 456 $ 534 8 47 55 Deutsche Telekom AG $ 128 $ 718 $ 846 5 31 36 Deutsche Telekom AG ADR $ 81 $ 481 $ 562 11 56 67 Korea Telecom Corp. ADR $ 221 $ 1,161 $ 1,382 0 0 0 Nippon Telegraph & Telephone Corp. $ 62 $ 362 $ 424 13 73 86 Nokia Oyj $ 268 $ 1,530 $ 1,798 0 0 0 NTT DoCoMo, Inc. $ 95 $ 542 $ 637 0 86 86 Orange S.A. (Communications) $ 0 $ 700 $ 700 14 86 100 Sonera Oyj $ 83 $ 487 $ 570 27 167 194 Telefonaktiebolaget LM Ericsson AB $ 117 $ 725 $ 842 6 33 39 Telefonica S.A. $ 68 $ 401 $ 469 8 45 53 Telefonica S.A. ADR $ 274 $ 1,600 $ 1,874 174 992 1,166 Vodafone Group plc $ 403 $ 2,294 $ 2,697 TOTAL FOR INDUSTRY: COMMUNICATIONS $ 2,403 $ 14,919 $ 17,322 COMPUTERS & OFFICE EQUIPMENT 0 505 505 "Compal Electronics, Inc. (Computers & Office) $ 0 $ 402 $ 402 0 195 195 "Quanta Computers, Inc. (Computers & Office) $ 0 $ 418 $ 418 3 18 21 Canon, Inc. $ 87 $ 524 $ 611
PAGE 4 OF 10 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) Acquiring Fund: The Hartford International Opport. Fund Acquired Fund: Fortis Worldwide -- International
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- TOTAL FOR INDUSTRY: COMPUTERS & OFFICE EQUIPMENT $ 87 $1,344 $ 1,431 CONSUMER NON-DURABLES 6 40 46 Fuji Photo Film Co. Ltd. $ 198 $1,320 $ 1,518 2 14 16 L'OREAL S.A. $ 166 $ 940 $ 1,106 1 5 6 Nintendo Co. Ltd. $ 139 $ 817 $ 956 14 81 95 Reckitt Benckiser plc $ 200 $1,138 $ 1,338 TOTAL FOR INDUSTRY: CONSUMER NON-DURABLES $ 703 $4,215 $ 4,918 CONSUMER SERVICES 11 64 75 TPG NV $ 215 $1,242 $ 1,457 DRUGS 12 68 80 AstraZeneca plc $ 536 $3,069 $ 3,605 3 17 20 Aventis S.A. $ 228 $1,271 $ 1,499 12 64 76 Banyu Pharmaceutical Co. Ltd. $ 233 $1,244 $ 1,477 1 6 7 Fujisawa Pharmaceutical Co. Ltd. $ 24 $ 144 $ 168 3 18 21 Glaxo Wellcome plc ADR $ 176 $ 983 $ 1,159 1 9 10 GlaxoSmithKline plc $ 24 $ 229 $ 253 12 75 87 Novartis AG $ 467 $2,814 $ 3,281 3 17 20 Roche Holding AG $ 192 $1,156 $ 1,348 0 1 1 Serono S.A. $ 134 $ 788 $ 922
PAGE 5 OF 10 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) Acquiring Fund: The Hartford International Opport. Fund Acquired Fund: Fortis Worldwide -- International
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- TOTAL FOR INDUSTRY: DRUGS $ 2,014 $ 11,698 $ 13,712 ELECTRONICS 0 7 7 "Samsung Electronics Co., Ltd. (Electronics)" $ 0 $ 922 $ 922 9 51 60 Koninklijke (Royal) Philips Electronics N.V. $ 200 $ 1,168 $ 1,368 3 16 19 Kyocera Corp. $ 184 $ 1,082 $ 1,266 14 81 95 NEC Corp. $ 127 $ 735 $ 862 1 4 5 Rohm Co. Ltd. $ 75 $ 426 $ 501 3 21 24 Siemens AG $ 162 $ 981 $ 1,143 6 36 42 Sony Corp. $ 235 $ 1,358 $ 1,593 0 1,980 1,980 United Microelectronics Corp. (Electronics) $ 0 $ 1,629 $ 1,629 TOTAL FOR INDUSTRY: ELECTRONICS $ 983 $ 8,301 $ 9,284 ENERGY & SERVICES 18 104 122 ENI S.p.A. $ 231 $ 1,301 $ 1,532 7 40 47 Royal Dutch Petroleum Co. $ 336 $ 2,030 $ 2,366 2 13 15 Royal Dutch Petroleum Co. NY Shares $ 111 $ 636 $ 747 2 14 16 Schlumberger Ltd. $ 111 $ 654 $ 765 6 31 37 Suez S.A. $ 173 $ 975 $ 1,148 4 21 25 TotalFinaElf S.A. $ 506 $ 3,005 $ 3,511 TOTAL FOR INDUSTRY: ENERGY & SERVICES $ 1,468 $ 8,601 $ 10,069 FINANCIAL SERVICES 11 60 71 Axa $ 241 $ 1,311 $ 1,552
PAGE 6 OF 10 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD ACQUIRED FUND: FORTIS WORLDWIDE - INTERNATIONAL OPPORT. FUND INTERNATIONAL
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 6 29 35 CNP Assurances $ 177 $ 890 $ 1,067 0 49 49 Fortis Netherlands N.V. (Financial Services) $ 0 $1,162 $ 1,162 0 0 0 Mizuho Holdings, Inc. $ 42 $ 248 $ 290 11 63 74 Nikko Cordial Corp. $ 59 $ 340 $ 399 4 21 25 Promise Co. Ltd. $ 239 $1,333 $ 1,572 TOTAL FOR INDUSTRY: FINANCIAL SERVICES $ 758 $5,284 $ 6,042 FOREST & PAPER PRODUCTS 10 59 69 Abitibi-Consolidated, Inc. $ 64 $ 358 $ 422 34 198 232 Smurfit (Jefferson) Group $ 67 $ 393 $ 460 3 18 21 UPM-Kymmene Oyj $ 101 $ 578 $ 679 TOTAL FOR INDUSTRY: FOREST & PAPER PRODUCTS $ 232 $1,329 $ 1,561 INSURANCE 13 72 85 Aegon N.V. $ 317 $1,809 $ 2,126 17 90 107 Alleanza Assicurazioni S.p.A. $ 179 $ 929 $ 1,108 10 52 62 CGNU plc $ 121 $ 616 $ 737 18 103 121 Lloyds TSB Group plc $ 177 $1,038 $ 1,215 TOTAL FOR INDUSTRY: INSURANCE $ 794 $4,392 $ 5,186 MEDIA & ENTERTAINMENT 7 38 45 British Sky Broadcasting plc $ 76 $ 430 $ 506 165 928 1,093 Granada plc $ 312 $1,748 $ 2,060 11 67 78 Pearson plc $ 128 $ 808 $ 936
PAGE 7 OF 10 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD ACQUIRED FUND: FORTIS WORLDWIDE - INTERNATIONAL OPPORT. FUND INTERNATIONAL
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 25 143 168 Reed International plc $ 206 $ 1,168 $ 1,374 0 1 1 SKY Perfect Communications, Inc. $ 112 $ 637 $ 749 4 26 30 Vivendi Universal S.A. $ 199 $ 1,211 $ 1,410 TOTAL FOR INDUSTRY: MEDIA & ENTERTAINMENT $ 1,033 $ 6,002 $ 7,035 MEDICAL INSTRUMENTS & SUPPLIES 5 31 36 Eisai Co. Ltd. $ 128 $ 793 $ 921 22 117 139 Gambro AB Class A $ 130 $ 683 $ 813 5 27 32 Hoya Corp. $ 299 $ 1,612 $ 1,911 TOTAL FOR INDUSTRY: MEDICAL INSTRUMENTS & SUPPLIES $ 557 $ 3,088 $ 3,645 REAL ESTATE 13 77 90 Cheung Kong (Holdings) Ltd. $ 110 $ 652 $ 762 99 557 656 New World Development Co. Ltd. $ 68 $ 382 $ 450 27 154 181 Sun Hung Kai Properties Ltd. $ 165 $ 944 $ 1,109 TOTAL FOR INDUSTRY: REAL ESTATE $ 343 $ 1,978 $ 2,321 RETAIL 6 36 42 Carrefour S.A. $ 311 $ 1,848 $ 2,159 13 79 92 Hennes & Mauritz AB $ 232 $ 1,378 $ 1,610 76 457 533 Marks & Spencer plc $ 318 $ 1,912 $ 2,230 TOTAL FOR INDUSTRY: RETAIL $ 861 $ 5,138 $ 5,999 SOFTWARE & SERVICES 1 3 4 Cap Gemini S.A. $ 68 $ 175 $ 243
PAGE 8 OF 10 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD ACQUIRED FUND: FORTIS WORLDWIDE - INTERNATIONAL OPPORT. FUND INTERNATIONAL
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- 3 19 22 Check Point Software Technologies Ltd. $ 86 $ 555 $ 641 4 20 24 SAP AG ADR $ 90 $ 517 $ 607 TOTAL FOR INDUSTRY: SOFTWARE & SERVICES $ 244 $ 1,247 $ 1,491 TECHNOLOGY 15 0 15 Orange S.A. $ 119 $ 0 $ 119 2 0 2 Samsung Electronics Co. Ltd. GDR $ 121 $ 0 $ 121 27 0 27 United Microelectronics ADR $ 151 $ 0 $ 151 TOTAL FOR INDUSTRY: TECHNOLOGY $ 391 $ 0 $ 391 TRANSPORTATION 41 233 274 British Airways plc $ 88 $ 507 $ 595 17 0 17 Ryanair Holdings plc $ 155 $ 0 $ 155 0 96 96 Rynair Holdings PLC (Transportation) $ 0 $ 887 $ 887 4 26 30 Toyota Motor Corp. $ 109 $ 633 $ 742 TOTAL FOR INDUSTRY: TRANSPORTATION $ 352 $ 2,027 $ 2,379 UTILITIES 7 41 48 Endesa S.A. ADR $ 113 $ 626 $ 739 0 75 75 Korea Electric Power Corp. (Utilities) $ 0 $ 1,175 $ 1,175 24 9 33 Korea Electric Power Corp. ADR $ 213 $ 78 $ 291 6 35 41 RWE AG $ 223 $ 1,356 $ 1,579 2 10 12 Vivendi Environnement $ 65 $ 391 $ 456
PAGE 9 OF 10 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (UNAUDITED) ACQUIRING FUND: THE HARTFORD INTERNATIONAL OPPORT. FUND ACQUIRED FUND: FORTIS WORLDWIDE - INTERNATIONAL
SHARES PAR (HISTORICAL) MARKET VALUE AMOUNT (HISTORICAL) - ------------------------------------- ------------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) INTEREST MATURITY FUND FUND COMBINED (IN '000'S) (IN '000'S) (IN '000'S) SECURITY RATE DATE (IN '000'S) (IN '000'S) (IN '000'S) - ----------- ----------- ----------- -------- ---- ---- ----------- ----------- ----------- TOTAL FOR INDUSTRY: UTILITIES $ 614 $ 3,626 $ 4,240 TOTAL FOR SEGMENT: COMMON STOCK $ 19,685 $ 116,518 $136,203 PREFERRED STOCKS COMMUNICATIONS 8 39 47 Telecomunicacoes Brasileiras S.A. ADR $ 202 $ 1,000 $ 1,202 TOTAL FOR SEGMENT: PREFERRED STOCKS $ 202 $ 1,000 $ 1,202 S-T INVESTMENTS FINANCE 1,730 0 1,730 Repurchase Agreement 2.57% 11-01-01 2.570% 11/01/2001 $ 1,730 $ 0 $ 1,730 0 0 0 U.S. Bank N.A. Money Market Variable Rate $ 0 $ 0 $ 0 TOTAL FOR INDUSTRY: FINANCE $ 1,730 $ 0 $ 1,730 REPURCHASE AGREEMENT 0 4,993 4,993 Joint Repurchase Agreement 2.570% 11/1/01 $ 0 $ 4,993 $ 4,993 TOTAL FOR SEGMENT: S-T INVESTMENTS $ 1,730 $ 4,993 $ 6,723 TOTAL FOR FUND: THE HARTFORD INTERNATIONAL OPPORT. FUND $ 21,615 $ 122,511 $144,126
1. Management does not anticipate having to sell any securities as a result of the merger. PAGE 10 OF 10
PROFORMA STATEMENT OF ASSETS AND LIABILITIES At October 31, 2001 (Unaudited) FORTIS MONEY FUND (ACQUIRED) FORTIS HARTFORD HARTFORD MONEY MARKET FUND (ACQUIRING) ACQUIRED ACQUIRING FUND FUND 10/31/2001 10/31/2001 PROFORMA PROFORMA (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED -------------- -------------- ------------- ------------ ASSETS Investments, at value $209,067 $230,212 0 $439,279 Cash, receivables and other assets 848 3,153 0 4,001 -------------- -------------- ------------- ------------ TOTAL ASSETS 209,915 233,365 0 443,280 -------------- -------------- ------------- ------------ LIABILITIES Income and Cap Gain distribution payable 19 12 0 31 Payable for investment securities purchased 0 2,985 0 2,985 Redemptions of capital stock 0 7,352 0 7,352 Accounts payable and accrued expenses 195 88 0 283 -------------- -------------- ------------- ------------ TOTAL LIABILITIES 214 10,437 0 10,651 -------------- -------------- ------------- ------------ NET ASSETS Net proceeds of capital stock, par value $.01 per share 209,701 222,928 0 432,629 Unrealized appreciation (depreciation) of investments in securities 0 0 0 0 Undistributed net investment income 0 0 0 0 Accumulated net realized gain from sale of investments 0 0 0 0 -------------- -------------- ------------- ------------ TOTAL NET ASSETS $209,701 $222,928 0 $432,629 ============== ============== ============= ============ OUTSTANDING SHARES Class A 202,662,473 86,748,000 0 (a) 289,410,473 Class B 3,027,374 48,998,000 2,728,681 (a) 54,754,055 Class C 1,281,979 53,873,000 0 (a) 55,154,979 Class H 2,728,681 0 (2,728,681) (a) 0 Class Y 0 33,309,000 0 (a) 33,309,000 209,700,507 222,928,000 0 (a) 432,628,507 NET ASSET VALUE Class A $1.00 $1.00 $1.00 Class B $1.00 $1.00 $1.00 Class C $1.00 $1.00 $1.00 Class H $1.00 $0.00 $0.00 Class Y $0.00 $1.00 $1.00
(a) Reflects increase (decrease) in shares due to differences in the net asset values of the funds. Fortis Class H will merge to Hartford Class B.
PROFORMA STATEMENT OF OPERATIONS For the Year Ended October 31, 2001 (Unaudited) FORTIS MONEY FUND (ACQUIRED) FORTIS HARTFORD HARTFORD MONEY MARKET FUND (ACQUIRING) ACQUIRED ACQUIRING FUND FUND 10/31/01 10/31/01 PROFORMA PROFORMA (HISTORICAL) (HISTORICAL) ADJUSTMENTS COMBINED -------------- -------------- ------------- ------------ NET INVESTMENT INCOME: Income Interest Income $10,162 $6,831 0 $16,993 Dividend Income 0 0 0 0 Fee income 0 0 0 0 -------------- -------------- ------------- ------------ Total Income 10,162 6,831 0 16,993 -------------- -------------- ------------- ------------ Expenses: Investment advisory and management fees 1,246 737 (207) (a) 1,776 Transfer agent fees 187 332 377 (a) 896 Distribution fees 46 836 718 (a) 1,600 Registration fees 117 51 (36) (a) 132 Custodian fees, gross 6 6 (6) (a) 6 Custodian fees, expense offset 0 (1) 0 (1) Accounting services 0 29 42 (a) 71 Directors' fees and expenses 22 0 (22) (a) (0) Other 72 26 (35) 63 -------------- -------------- ------------- ------------ Total expenses (before reimbursements and waivers) 1,696 2,016 831 4,543 Expense reimbursements 0 (183) (297) (480) Class A distribution fees waived 0 (31) (101) (a) (132) -------------- -------------- ------------- ------------ Total expenses, net 1,696 1,802 433 3,931 -------------- -------------- ------------- ------------ NET INVESTMENT INCOME (LOSS) 8,466 5,029 (433) 13,062 -------------- -------------- ------------- ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain from investments 3 3 0 6 Net change in unrealized appreciation (depreciation) of investments 0 0 0 0 -------------- -------------- ------------- ------------ NET GAIN ON INVESTMENTS 3 3 0 6 -------------- -------------- ------------- ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $8,469 $5,032 ($433) $13,068 ============== ============== ============= ============
(a) For further information regarding variations in expense structure, please look to footnotes on expense proforma. PRO FORMA FOOTNOTES OF MERGER BETWEEN ACQUIRED FUND AND ACQUIRING FUND October 31, 2001 (Unaudited) 1. GENERAL The accompanying proforma financial statements are presented to show the effect of the proposed acquisition of Fortis Series Fund, Inc. - Fortis Money Fund (Acquired Fund) by The Hartford Mutual Funds, Inc. - Hartford Money Market Fund (Acquiring Fund) as if such acquisition had taken place as of the close of business on October 31, 2000. Under the terms of the Agreement and Plan of Reorganization, the combination of the Acquired Fund and the Acquiring Fund will be taxed as a tax-free business combination and accordingly will be accounted for by a method of accounting for tax-free mergers of investment companies (sometimes referred to as the pooling without restatement method). The acquisition would be accomplished by an acquisition of the net assets of the Acquired Fund in exchange for shares of the Acquiring Fund at net asset value. The statements of assets and liabilities and the related statements of operations of the Acquired Fund and the Acquiring Fund have been combined as of and for the twelve-month period ended October 31, 2001. The accompanying pro forma financial statements should be read in conjunction with the financial statements and schedule of investments of the Acquiring Fund, which are included in its annual report dated October 31, 2001. The following notes refer to the accompanying pro forma financial statements as if the above mentioned acquisition of the Acquired Fund and the Acquiring Fund had taken place as of the close of business on October 31, 2000. 2. SIGNIFICANT ACCOUNTING POLICIES The Acquiring Fund is organized under the laws of the State of Maryland, registered under the Investment Company Act of 1940, as amended, as a diversified, open-end management investment company. The Acquiring Fund issues multiple class shares. Class A shares are sold with a front-end sales charge of up to 5.50%. Class B shares are sold without a front-end sales charge and may be subject to a contingent deferred sales charge which is assessed on the lesser of the net asset value of the shares at the time of redemption or the original purchase price, and declines from 5.00% to zero depending on the period of time the shares are held, and such shares automatically convert to Class A after eight years. Class C shares are sold with a front-end sales charge of up to 1% and a contingent deferred sales charge of up to 1%. Class Y shares are sold to certain eligible institutional investors without a sales charge. All classes of shares have identical voting, redemption, dividend, liquidation and other rights and the same terms and conditions, except that each class may have different expenses, which may affect performance. Income and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets. The significant accounting policies followed by the Acquiring Fund are summarized as follows: SECURITY VALUATION: Short-term securities held in the Acquiring Fund are valued at amortized cost or original cost plus accrued interest receivable, both of which approximate market value. The use of this method results in a constant net asset value of $1.00 under normal market conditions. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME: Security transactions are accounted for on the trade date. Interest income and expenses are recorded on the accrual basis. JOINT TRADING ACCOUNT: The Acquiring Fund, pursuant to an exemptive order issued by the Securities and Exchange Commission, may transfer uninvested cash balances into a joint trading account (for all Hartford Funds) managed by The Hartford Investment Management Company (HIMCO). These balances may be invested in one or more repurchase agreements and/or short-term money market instruments. REPURCHASE AGREEMENTS: A repurchase agreement is an agreement by which the seller of a security agrees to repurchase the security sold at a mutually agreed upon time and price. At the time the Acquiring Fund enters into a repurchase agreement, the value of the underlying collateral security (ies), including accrued interest, will be equal to or exceed the value of the repurchase agreement. Securities, which serve to collateralize the repurchase agreement, are held by the Acquiring Fund's custodian in book entry or physical form in the custodial account of the Acquiring Fund. Repurchase agreements are valued at cost plus accrued interest receivable. All repurchase agreements are executed through the Acquiring Fund's custodian, State Street Bank. FEDERAL INCOME TAXES: The Acquiring Fund intends to qualify, under the Internal Revenue Code, as a regulated investment company, and, if so qualified, will not have to pay federal income taxes to the extent that its taxable net income is distributed. On a calendar year basis, the Acquiring Fund intends to distribute substantially all of its net investment income and realized gains, if any, to avoid payment of federal excise taxes. It is the policy of the Fund to declare daily and pay monthly distributions from net investment income. Distributions from the Fund are not paid on shares until the day following the date on which the shares are issued. The distributions are payable in cash or reinvested in additional shares of the fund at net asset value without any charge to the shareholder. USE OF ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increase and decrease in net assets from operations during the reporting period. Actual results could differ from those estimates. ILLIQUID SECURITIES: The Fund is permitted to invest up to 10% of its net assets in illiquid securities. "Illiquid Securities" are those that may not be sold or disposed of in the ordinary course of business, at approximately the price used to determine a Fund's net asset value per share. Each Fund may also purchase certain restricted (unregistered) securities, commonly known as Rule 144A securities, that can be resold to institutions and which may be determined to be liquid pursuant to policies and guidelines established by the Fund's Board of Directors. PAYMENTS TO RELATED PARTIES: Hartford Investment Financial Services Company (HIFSCO), a wholly owned indirect subsidiary of The Hartford Financial Services Group, Inc. (The Hartford), is the investment manager for the Acquiring Fund. As investment manager, HIFSCO has overall investment supervisory responsibility for the Acquiring Fund. In addition, HIFSCO provides administrative personnel, services, equipment and facilities and office space for proper operation of the Acquiring Fund. HIFSCO has contracted with HIMCO for the provision of day to day investment management services in accordance with the Fund's investment objective and policies. The Acquiring Fund pays a fee to HIFSCO, a portion of which may be used to compensate HIMCO. The Acquiring Fund's investment advisory and management fees are computed at an annual rate of .50% of the first $500 million of average daily net assets, .45% for the next $500 million, and .40% for average daily net assets over $1 billion. In addition to the investment advisory and management fee, Classes A, B and C pay HIFSCO (the Acquiring Fund's principal underwriter) distribution fees equal to .35% of average daily net assets for Class A and 1.00% of average daily net assets for Classes B and C on an annual basis, to be used to compensate those who sell shares of the fund and to pay certain other expenses of selling fund shares. The Class A Rule 12b-1 fee for the Acquiring Fund has been voluntarily capped at .30% through at least February 28, 2003. The cap may be removed at any time thereafter. There is no distribution plan for Class Y Shares. Allocable expenses incurred by The Hartford Funds (including the Acquiring Fund) are allocated to each Hartford Fund (including the Acquiring Fund) in proportion to the average daily net assets of each Hartford Fund (including the Acquiring Fund), except where allocation of certain expenses is more fairly made directly to a specific Fund (including the Acquiring Fund) or to specific classes within in a Fund (including the Acquiring Fund). The Hartford has voluntarily agreed to limit the total operating expense of the Class A, B, C and Y shares of the Acquiring Fund, exclusive of taxes, interest, brokerage commissions, certain distribution expenses and extraordinary expenses, until at least February 28, 2003. For Class A the limit is 1.00%, Classes B and C the limit is 1.70% and for Class Y the limit is .55%. The Hartford may terminate such voluntary and temporary fee waivers and expense limitation arrangements at any time after February 28, 2003 without notice. The Hartford and its subsidiaries provide facilities and office equipment, as well as perform certain other services, including fund accounting and financial reporting to the Acquiring Fund. Certain officers of the Acquiring Fund are directors and/or officers of HIFSCO, HIMCO and/or The Hartford or its subsidiaries. No officer of the Funds receives any compensation directly from the Acquiring Fund. For the twelve-month period ended October 31, 2001, legal fees and expenses of the Acquired Fund were paid to a law firm of which the secretary of the fund is a partner. The Acquiring Fund has entered into certain expense offset arrangements with its Custodian bank. The amount of the Acquiring Fund's expense reductions is shown on the accompanying Statement of Operations as custodian fee expense offset. LINE OF CREDIT: The Acquiring Fund participates in a $500,000,000 committed revolving line of credit facility. The facility is to be used for temporary or emergency purposes. Under the arrangement, the Acquiring Fund is required to own securities having a market value in excess of 300% of the total bank borrowing. The interest rate on the borrowing varies depending on the nature of the loan. The facility also requires a fee to be paid based on the amount of the commitment, which has not been utilized. 3. PRO FORMA ADJUSTMENTS The accompanying pro forma financial statements reflect changes in fund shares as if the merger had taken place on October 31, 2001, and adjustments made to expenses for duplicated services that would not have been incurred if the merger had taken place as of the close of business on October 31, 2000. PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD MONEY MARKET FUND ACQUIRED FUND: FORTIS MONEY FUND
SHARES PAR(HISTORICAL) MARKET VALUE AMOUNT(HISTORICAL) - ------------------------------------ --------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) FUND FUND COMBINED (IN (IN (IN INTEREST MATURITY (IN (IN (IN '000'S) '000'S) '000'S) SECURITY RATE DATE '000'S) '000'S) '000'S) - ------------------------------------------------------------------------------------------------------------------------------------ CORPORATE BONDS 0 2,000 2,000 "Cargill, Inc." 2.570% 1/14/02 $0 $2,000 $2,000 0 2,000 2,000 "Caterpillar Financial Services, Inc." 3.633% 2/28/02 $0 $2,001 $2,001 0 3,000 3,000 "Goldman Sachs Group, Inc. (The)" 2.820% 12/27/01 $0 $3,001 $3,001 0 1,000 1,000 "Merrill Lynch & Co., Inc." 2.360% 1/28/02 $0 $1,000 $1,000 0 1,000 1,000 "Morgan (J.P.) Chase & Co., Inc." 2.510% 1/28/02 $0 $1,001 $1,001 0 5,000 5,000 American Honda Finance Corp. 3.630% 2/8/02 $0 $5,000 $5,000 0 2,000 2,000 Australia and New Zealand Banking Group 3.360% 12/13/01 $0 $2,000 $2,000 0 1,000 1,000 Bank of America Corp. 3.745% 2/11/02 $0 $1,000 $1,000 0 3,000 3,000 Bank One Corp. 3.125% 12/20/01 $0 $3,000 $3,000 0 2,000 2,000 Chase Manhattan Corp. 2.486% 4/23/02 $0 $2,002 $2,002 0 1,000 1,000 Citicorp 3.898% 2/21/02 $0 $1,001 $1,001 0 2,000 2,000 First Union National Bank 3.558% 11/21/01 $0 $2,000 $2,000 0 2,500 2,500 Fleet National Bank 3.804% 2/1/02 $0 $2,501 $2,501 0 2,500 2,500 General Motors Acceptance Corp. 3.620% 12/10/01 $0 $2,500 $2,500 0 2,000 2,000 Hewlett-Packard Co. 2.556% 10/15/02 $0 $2,000 $2,000 0 3,000 3,000 International Business Machines Corp. 2.180% 12/12/01 $0 $2,993 $2,993 0 2,000 2,000 John Deere Capital Corp. 2.380% 1/14/02 $0 $2,000 $2,000 0 2,500 2,500 Morgan Stanley Dean Witter & Co. 3.330% 12/17/01 $0 $2,501 $2,501 0 2,500 2,500 PNC Bank 2.415% 1/24/02 $0 $2,501 $2,501 0 2,000 2,000 Salomon Smith Barney 2.493% 7/24/02 $0 $2,003 $2,003 0 4,000 4,000 Toyota Motor Credit Corp. 2.370% 10/11/02 $0 $3,999 $3,999
PAGE 1 OF 8 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD MONEY MARKET FUND ACQUIRED FUND: FORTIS MONEY FUND
SHARES PAR(HISTORICAL) MARKET VALUE AMOUNT(HISTORICAL) - ------------------------------------ --------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) FUND FUND COMBINED (IN (IN (IN INTEREST MATURITY (IN (IN (IN '000'S) '000'S) '000'S) SECURITY RATE DATE '000'S) '000'S) '000'S) - ------------------------------------------------------------------------------------------------------------------------------------ 0 4,000 4,000 Unilever 2.473% 10/24/02 $0 $4,004 $4,004 0 1,000 1,000 Wells Fargo & Co. 2.430% 4/26/02 $0 $1,001 $1,001 TOTAL FOR INDUSTRY: $0 $53,009 $53,009 TOTAL FOR SEGMENT: CORPORATE BONDS $0 $53,009 $53,009 S-T INVESTMENTS 0 3,500 3,500 "Anheuser-Busch Cos., Inc." 3.680% 4/3/02 $0 $3,441 $3,441 0 3,000 3,000 "Caterpillar Financial Services, Inc." 2.390% 11/28/01 $0 $2,995 $2,995 0 1,500 1,500 "Gannett Co., Inc." 2.490% 11/13/01 $0 $1,499 $1,499 0 2,000 2,000 "Goldman Sachs Group, Inc. (The)" 2.400% 11/20/01 $0 $1,997 $1,997 0 5,000 5,000 "Honeywell International, Inc." 2.670% 11/26/01 $0 $4,991 $4,991 0 3,500 3,500 "KFW International Finance, Inc." 2.800% 3/7/02 $0 $3,460 $3,460 0 5,000 5,000 "Merck & Co., Inc." 2.330% 12/11/01 $0 $4,987 $4,987 0 3,500 3,500 "Nordea North America, Inc." 2.760% 3/19/02 $0 $3,463 $3,463 0 3,000 3,000 "Nordea North America, Inc." 3.320% 11/6/01 $0 $2,999 $2,999 0 3,000 3,000 "Pfizer, Inc." 2.050% 1/23/02 $0 $2,986 $2,986 0 2,000 2,000 "Pfizer, Inc." 2.450% 11/28/01 $0 $1,996 $1,996 0 5,000 5,000 "SBC Communications, Inc." 3.520% 11/8/01 $0 $4,993 $4,993 0 5,000 5,000 "Svenska Handelsbanken, Inc." 2.420% 3/6/02 $0 $4,954 $4,954 0 1,000 1,000 "Texeco, Inc." 3.537% 9/9/02 $0 $1,000 $1,000 0 5,000 5,000 "Texeco, Inc." 2.510% 11/13/01 $0 $4,992 $4,992 0 5,000 5,000 "UBS Finance (Delaware), Inc." 2.700% 12/18/01 $0 $4,980 $4,980
PAGE 2 OF 18 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD MONEY MARKET FUND ACQUIRED FUND: FORTIS MONEY FUND
SHARES PAR(HISTORICAL) MARKET VALUE AMOUNT(HISTORICAL) - ------------------------------------ --------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) FUND FUND COMBINED (IN (IN (IN INTEREST MATURITY (IN (IN (IN '000'S) '000'S) '000'S) SECURITY RATE DATE '000'S) '000'S) '000'S) - ------------------------------------------------------------------------------------------------------------------------------------ 0 5,000 5,000 "Wal-Mart Stores, Inc." 2.430% 11/2/01 $0 $4,999 $4,999 0 3,000 3,000 Abbey National North America Corp. 2.390% 2/5/02 $0 $2,981 $2,981 0 1,500 1,500 American Express Credit Corp. 3.300% 11/7/01 $0 $1,499 $1,499 0 3,500 3,500 American Express Credit Corp. 2.350% 1/28/02 $0 $3,468 $3,468 0 3,000 3,000 Bradford & Bingley Building PLC 2.080% 1/28/02 $0 $2,985 $2,985 0 1,500 1,500 Bradford & Bingley Building PLC 2.460% 11/29/01 $0 $1,497 $1,497 0 5,000 5,000 Coca-Cola Co. (The) 2.290% 12/4/01 $0 $4,990 $4,990 0 5,000 5,000 Federal Home Loan Mortgage Corp. 3.670% 3/15/02 $0 $4,929 $4,929 0 1,500 1,500 Federal National Mortgage Association 3.740% 3/22/02 $0 $1,478 $1,478 0 1,500 1,500 Ford Motor Credit Co. 2.800% 11/14/01 $0 $1,498 $1,498 0 3,500 3,500 General Electric Capital Corp. 4.650% 11/19/01 $0 $3,496 $3,496 0 1,500 1,500 General Electric Capital Corp. 2.960% 4/10/02 $0 $1,480 $1,480 0 2,500 2,500 General Motors Acceptance Corp. 2.850% 12/4/01 $0 $2,493 $2,493 0 5,000 5,000 Gillette Co. (The) 2.050% 1/26/02 $0 $4,967 $4,967 0 5,000 5,000 Halifax PLC 2.440% 12/27/01 $0 $4,981 $4,981 0 3,000 3,000 International Lease Financing Corp. 2.380% 11/19/01 $0 $2,996 $2,996 0 30,023 30,023 Joint Repurchase Agreement 2.567% 11/1/01 $0 30,023 30,023 0 3,000 3,000 Monsanto Co. 2.340% 12/10/01 $0 $2,992 $2,992 0 3,500 3,500 Nationwide Building Society 3.300% 11/13/01 $0 $3,496 $3,496 0 2,000 2,000 Salomon Smith Barney 2.370% 12/3/01 $0 $1,996 $1,996 0 4,000 4,000 State Street Corp. 2.280% 12/3/01 $0 $3,992 $3,992 0 1,000 1,000 Swedbank 3.490% 4/29/02 $0 $983 $983 0 3,500 3,500 Toronto-Dominion Holdings Corp. 3.650% 4/11/02 $0 $3,443 $3,443
PAGE 3 OF 8 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD MONEY MARKET FUND ACQUIRED FUND: FORTIS MONEY FUND
SHARES PAR(HISTORICAL) MARKET VALUE AMOUNT(HISTORICAL) - ------------------------------------ --------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) FUND FUND COMBINED (IN (IN (IN INTEREST MATURITY (IN (IN (IN '000'S) '000'S) '000'S) SECURITY RATE DATE '000'S) '000'S) '000'S) - ------------------------------------------------------------------------------------------------------------------------------------ 0 1,500 1,500 Toronto-Dominion Holdings Corp. 2.510% 11/27/01 $0 $1,497 $1,497 0 1,000 1,000 Toyota Motor Credit Corp. 2.430% 11/16/01 $0 $999 $999 0 5,000 5,000 United Technologies Corp. 2.850% 3/22/02 $0 $4,943 $4,943 0 5,000 5,000 Verizon Global Funding 2.300% 1/7/02 $0 $4,954 $4,954 0 2,500 2,500 Walt Disney Co. 3.570% 3/8/02 $0 $2,469 $2,469 0 2,000 2,000 Walt Disney Co. 2.810% 11/5/01 $0 $1,999 $1,999 0 1,000 1,000 Washington Post Co. 2.700% 12/14/01 $0 $997 $997 0 3,000 3,000 Well Fargo & Co. 2.360% 11/13/01 $0 $2,998 $2,998 0 3,000 3,000 Westpac Capitol Corp. 3.700% 4/5/02 $0 $2,952 $2,952 TOTAL FOR INDUSTRY: $0 $177,203 $177,203 BASIC MATERIALS 5,000 0 5,000 Pfizer Inc. 2.290% 12/14/2001 $4,980 $0 $4,980 1,000 0 1,000 Pfizer, Inc. 2.450% 11/28/2001 $996 $0 $996 TOTAL FOR INDUSTRY: BASIC MATERIALS $5,976 $0 $5,976 CAPITAL GOODS 6,000 0 6,000 Honeywell International 2.670% 11/26/2001 $5,973 $0 $5,973 6,000 0 6,000 IBM Corp. 2.180% 12/12/2001 $5,984 $0 $5,984 6,000 0 6,000 Textron, Inc. 2.450% 12/19/2001 $5,964 $0 $5,964 1,000 0 1,000 United Technologies Corp. 2.500% 04/22/2002 $985 $0 $985 5,000 0 5,000 United Technologies Corp. 2.850% 03/22/2002 $4,926 $0 $4,926 TOTAL FOR INDUSTRY: CAPITAL GOODS $23,832 $0 $23,832
PAGE 4 OF 8 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD MONEY MARKET FUND ACQUIRED FUND: FORTIS MONEY FUND
SHARES PAR(HISTORICAL) MARKET VALUE AMOUNT(HISTORICAL) - ------------------------------------ --------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) FUND FUND COMBINED (IN (IN (IN INTEREST MATURITY (IN (IN (IN '000'S) '000'S) '000'S) SECURITY RATE DATE '000'S) '000'S) '000'S) - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER CYCLICAL 6,000 0 6,000 7 Eleven Inc. 2.180% 12/13/2001 $5,984 $0 $5,984 1,000 0 1,000 American Honda Finance Corp. 2.420% 11/08/2001 $997 $0 $997 1,000 0 1,000 Ford Motor Credit Co. 2.800% 11/14/2001 $997 $0 $997 6,000 0 6,000 General Motors Acceptance Corp. 2.850% 12/04/2001 $5,970 $0 $5,970 1,000 0 1,000 Gillette Co. 2.960% 03/13/2002 $985 $0 $985 2,000 0 2,000 Hewlett-Packard Co., Floater, 10-15-2002 10/15/2002 $2,000 $0 $2,000 5,000 0 5,000 Wal-mart 2.390% 11/05/2001 $4,997 $0 $4,997 TOTAL FOR INDUSTRY: CONSUMER CYCLICAL $21,930 $0 $21,930 CONSUMER STAPLES 2,500 0 2,500 Anheuser Busch Companies, Inc. 3.560% 05/06/2002 $2,430 $0 $2,430 2,500 0 2,500 Anheuser Busch Companies, Inc. 3.680% 04/03/2002 $2,432 $0 $2,432 5,000 0 5,000 Unilever N.V., Floating Rate, 10-24-2002 10/24/2002 $5,007 $0 $5,007 TOTAL FOR INDUSTRY: CONSUMER STAPLES $9,869 $0 $9,869 ENERGY 5,000 0 5,000 Texaco, Inc. FRN 09/09/2002 $5,000 $0 $5,000 FINANCE 5,000 0 5,000 American Express Credit Corp. 3.300% 11/07/2001 $4,973 $0 $4,973 1,000 0 1,000 American Express Credit Corp. 2.960% 04/22/2002 $982 $0 $982 5,000 0 5,000 American Honda Finance FRN 10/09/2002 $5,000 $0 $5,000
PAGE 5 OF 8 PROFORMA SCHEDULE OF INVESTMENTS AS OF OCTOBER 31, 2001 (Unaudited) ACQUIRING FUND: THE HARTFORD MONEY MARKET FUND ACQUIRED FUND: FORTIS MONEY FUND
SHARES PAR(HISTORICAL) MARKET VALUE AMOUNT(HISTORICAL) - ------------------------------------ --------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) FUND FUND COMBINED (IN (IN (IN INTEREST MATURITY (IN (IN (IN '000'S) '000'S) '000'S) SECURITY RATE DATE '000'S) '000'S) '000'S) - ------------------------------------------------------------------------------------------------------------------------------------ 6,000 0 6,000 ANZ Delaware Inc. 2.270% 11/20/2001 $5,989 $0 $5,989 5,000 0 5,000 Bank One Corp., FRN 01/07/2002 $5,002 $0 $5,002 1,000 0 1,000 Bradford & Bingley plc 2.460% 11/29/2001 $995 $0 $995 5,000 0 5,000 Bradford & Bingley Plc. 2.220% 12/17/2001 $4,983 $0 $4,983 4,000 0 4,000 Caterpillar Financial Services. 2.390% 11/28/2001 $3,989 $0 $3,989 5,000 0 5,000 Chase Manhattan Corp., FRN 04/23/2002 $5,004 $0 $5,004 1,000 0 1,000 FHLMC 3.680% 03/28/2002 $972 $0 $972 4,000 0 4,000 FHLMC 3.670% 03/15/2002 $3,894 $0 $3,894 1,000 0 1,000 FHLMC 3.750% 03/27/2002 $972 $0 $972 5,000 0 5,000 Fleet National Bank FRN 02/01/2002 $5,002 $0 $5,002 1,000 0 1,000 FNMA 3.740% 03/22/2002 $972 $0 $972 5,000 0 5,000 General Electric Capital Corp. 3.450% 11/02/2001 $4,972 $0 $4,972 1,000 0 1,000 General Electric Capital Corp. 2.960% 04/10/2002 $983 $0 $983 2,000 0 2,000 Goldman Sachs Group, Inc. 2.400% 11/20/2001 $1,992 $0 $1,992 4,000 0 4,000 Goldman Sachs Group, Inc. FRN 3.741% 08/21/2002 $4,005 $0 $4,005 6,000 0 6,000 Halifax plc 2.440% 12/27/2001 $5,962 $0 $5,962 6,000 0 6,000 International Lease Finance Corp. 2.380% 11/19/2001 $5,976 $0 $5,976 5,000 0 5,000 KFW International Finance, Inc. 3.680% 04/05/2002 $4,863 $0 $4,863 5,000 0 5,000 Nordea North America, Inc. 2.800% 02/28/2002 $4,936 $0 $4,936 4,098 0 4,098 Repurchase Agreement 2.56% 11-01-01 2.560% 11/01/2001 $4,098 $0 $4,098 1,000 0 1,000 Salomon Smith Barney Hld 2.370% 12/03/2001 $996 $0 $996 5,000 0 5,000 Salomon Smith Barney Holdings FRN 07/24/2002 $5,007 $0 $5,007 5,000 0 5,000 State Street Corp. 2.280% 12/03/2001 $4,987 $0 $4,987
PAGE 6 OF 8 Proforma Schedule of Investments as of October 31, 2001 (Unaudited) Acquiring Fund: The Hartford Money Acquired Fund: Fortis Money Fund Market Fund
SHARES PAR(HISTORICAL) MARKET VALUE AMOUNT(HISTORICAL) - ------------------------------------ --------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) FUND FUND COMBINED (IN (IN (IN INTEREST MATURITY (IN (IN (IN '000'S) '000'S) '000'S) SECURITY RATE DATE '000'S) '000'S) '000'S) - ------------------------------------------------------------------------------------------------------------------------------------ 1,000 0 1,000 Svenska Handelsbanken, Inc. 3.350% 03/08/2002 $983 $0 $983 1,000 0 1,000 Svenska Handelsbanken, Inc. 2.420% 03/06/2002 $989 $0 $989 4,000 0 4,000 Svenska Handelsbanken, Inc. 3.520% 11/02/2001 $3,966 $0 $3,966 5,000 0 5,000 Swedbank 2.340% 12/05/2001 $4,980 $0 $4,980 1,000 0 1,000 Swedbank, Inc. 2.350% 11/21/2001 $996 $0 $996 5,000 0 5,000 Toronto Dominion Holdings USA, Inc. 3.650% 04/11/2002 $4,864 $0 $4,864 1,000 0 1,000 Toronto Dominion Holdings USA, Inc. 2.510% 11/27/2001 $996 $0 $996 5,000 0 5,000 Toyota Motor Credit Corp., Floating Rate 10/11/2002 $4,999 $0 $4,999 Note 2 0 2 U.S. Bank N.A. Money Market Variable Rate $2 $0 $2 1,000 0 1,000 UBS Finance (Delaware), Inc. 2.700% 12/18/2001 $993 $0 $993 5,000 0 5,000 Westpac Capital Corp. 3.700% 04/05/2002 $4,862 $0 $4,862 TOTAL FOR INDUSTRY: FINANCE $126,136 $0 $126,136 TECHNOLOGY 1,000 0 1,000 SBC Communications, Inc. 2.450% 12/19/2001 $994 $0 $994 5,000 0 5,000 SBC Communications, Inc. 3.520% 11/08/2001 $4,955 $0 $4,955 5,000 0 5,000 Verizon Global Funding 2.300% 01/14/2002 $4,970 $0 $4,970 1,000 0 1,000 Verizon Global Funding Corp. 2.500% 04/30/2002 $985 $0 $985 1,000 0 1,000 Walt Disney Co 2.810% 11/05/2001 $998 $0 $998 3,500 0 3,500 Walt Disney Co. 3.570% 03/08/2002 $3,422 $0 $3,422 TOTAL FOR INDUSTRY: TECHNOLOGY $16,324 $0 $16,324 TOTAL FOR SEGMENT: S-T INVESTMENTS $209,067 $177,203 $386,270
PAGE 7 OF 8 Proforma Schedule of Investments as of October 31, 2001 (Unaudited) Acquiring Fund: The Hartford Money Acquired Fund: Fortis Money Fund Market Fund
SHARES PAR(HISTORICAL) MARKET VALUE AMOUNT(HISTORICAL) - ------------------------------------ --------------------------------- ACQUIRED ACQUIRING ACQUIRED ACQUIRING FUND FUND COMBINED(1) FUND FUND COMBINED (IN (IN (IN INTEREST MATURITY (IN (IN (IN '000'S) '000'S) '000'S) SECURITY RATE DATE '000'S) '000'S) '000'S) - ------------------------------------------------------------------------------------------------------------------------------------ TOTAL FOR FUND: THE HARTFORD MONEY MARKET FUND $209,067 $230,212 $439,279
1. Management does not anticipate having to sell any securities as a result of the merger. PAGE 8 OF 8 PART C OTHER INFORMATION ITEM 15. INDEMNIFICATION. Incorporated herein by reference to Article V of the Articles of Incorporation filed with the Registrant's initial registration statement on April 9, 1996. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim is made for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person in connection with the securities being registered), the registrant undertakes that it will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 16. EXHIBITS. (1) Articles of Incorporation (a) (2) By-Laws (a) (3) Not applicable (4) Agreement and Plan of Reorganization is attached as Exhibit A to the Prospectus/Proxy Statement included in Part A of this Registration Statement on Form N-14 (5) See (1) above (6a) Form of Investment Advisory Agreement (a) (6b) Form of Sub-Advisory Agreement (a) (6c) Investment Management Agreement with Hartford Investment Financial Services Company (c) (6d) Investment Sub-Advisory Agreement with Wellington Management Company LLP (c) (6e) Investment Services Agreement with The Hartford Investment Management Company (c) (6f) Form of Amendment Number 1 to Investment Management Agreement (d) (6g) Form of Amendment Number 1 to Sub-Advisory Agreement between Hartford Investment Financial Services Company and Wellington Management Company LLP (d) (6h) Form of Amendment Number 2 to Investment Management Agreement (e) (6i) Form of Amendment Number 2 to Sub-Advisory Agreement between Hartford Investment Financial Services Company and Wellington Management Company LLP (e) (6j) Form of Amendment Number 1 to Investment Services Agreement with The Hartford Investment Management Company (g) (6k) Form of Amendment Number 3 to Investment Management Agreement (g) (6l) Form of Amendment Number 3 to Sub-Advisory Agreement between Hartford Investment Financial Services Company and Wellington Management Company LLP (g) (6m) Form of Amendment Number 4 to Investment Management Agreement (h) (6n) Form of Amendment Number 4 to Sub-Advisory Agreement between Hartford Investment Financial Services Company and Wellington Management Company LLP (h) (6o) Form of Amendment Number 5 to Investment Management Agreement (i) (6p) Form of Amendment Number 5 to Sub-Advisory Agreement between Hartford Investment Financial Services Company and Wellington Management Company LLP (i) (6q) Form of Amendment Number 6 to Investment Management Agreement (j) (6r) Form of Amendment Number 6 to Sub-Advisory Agreement between Hartford Investment Financial Services Company and Wellington Management Company LLP (j) (7a) Form of Principal Underwriting Agreement (a) (7b) Form of Dealer Agreement with the Distributor (b) 2 (7c) Form of Amendment Number 1 to Principal Underwriting Agreement (d) (7d) Form of Amendment Number 2 to Principal Underwriting Agreement (e) (7e) Form of Amendment Number 3 to Principal Underwriting Agreement (g) (7f) Form of Amendment Number 4 to Principal Underwriting Agreement (h) (7g) Form of Amendment Number 5 to Principal Underwriting Agreement (i) (7h) Form of Amendment Number 6 to Principal Underwriting Agreement (j) (8) Not applicable (9a) Form of Custodian Agreement (b) (9b) Form of Amendment Number 1 to Custodian Agreement (d) (9c) Form of Amendment Number 2 to Custodian Agreement (e) (9d) Form of Amendment Number 3 to Custodian Agreement (g) (9e) Form of Amendment Number 4 to Custodian Agreement (h) (9f) Form of Letter Amendment to Custodian Agreement (i) (9g) Form of Letter Amendment to Custodian Agreement (j) (10a) Form of Rule 12b-1 Distribution Plan for Class A Shares (a) (10b) Form of Rule 12b-1 Distribution Plan for Class B Shares (a) (10c) Form of Rule 12b-1 Distribution Plan for Class C Shares (f) (10d) Form of Amended Rule 12b-1 Distribution Plan for Class A Shares (d) (10e) Form of Amended Rule 12b-1 Distribution Plan for Class B Shares (d) (10f) Form of Amendment Number 1 to Amended and Restated Rule 12b-1 Distribution Plan for Class A Shares (e) 3 (10g) Form of Amendment Number 1 to Amended and Restated Rule 12b-1 Distribution Plan for Class B Shares (e) (10h) Form of Amendment Number 2 to Amended and Restated Rule 12b-1 Distribution Plan for Class A Shares (g) (10i) Form of Amendment Number 2 to Amended and Restated Rule 12b-1 Distribution Plan for Class B Shares (g) (10j) Form of Amendment Number 1 to Rule 12b-1 Distribution Plan for Class C Shares (g) (10k) Form of Amendment Number 3 to Amended and Restated Rule 12b-1 Distribution Plan for Class A Shares (h) (10l) Form of Amendment Number 3 to Amended and Restated Rule 12b-1 Distribution Plan for Class B Shares (h) (10m) Form of Amendment Number 2 to Rule 12b-1 Distribution Plan for Class C Shares (h) (10n) Form of Amendment Number 4 to Amended and Restated Rule 12b-1 Distribution Plan for Class A Shares (i) (10o) Form of Amendment Number 4 to Amended and Restated Rule 12b-1 Distribution Plan for Class B Shares (i) (10p) Form of Amendment Number 3 to Rule 12b-1 Distribution Plan for Class C Shares (i) (10q) Form of Amendment Number 5 to Amended and Restated Rule 12b-1 Distribution Plan for Class A Shares (j) (10r) Form of Amendment Number 5 to Amended and Restated Rule 12b-1 Distribution Plan for Class B Shares (j) (10s) Form of Amendment Number 4 to Rule 12b-1 Distribution Plan for Class C Shares (j) (10t) Form of Rule 18f-3 Plan (a) (10u) Form of Amended Rule 18f-3 Plan (d) (10v) Form of Amendment Number 1 to Amended and Restated Rule 18f-3 Plan (e) (10w) Form of Amended and Restated Rule 18f-3 Plan to Add Class C Shares (f) 4 (10x) Form of Amendment Number 1 to Amended and Restated Rule 18f-3 Plan which added Class C Shares (g) (10y) Form of Amendment Number 2 to Amended and Restated Rule 18f-3 Plan which added Class C Shares (h) (10z) Form of Amendment Number 3 to Amended and Restated Rule 18f-3 Plan which added Class C Shares (i) (10aa) Form of Amendment Number 4 to Amended and Restated Rule 18f-3 Plan which added Class C Shares (j) (11) Opinion and consent of Kevin J. Carr, in-house counsel to the Registrant, with respect to the legality of the securities being registered (k). (12) Opinion and consent of Dorsey & Whitney LLP with respect to tax matters (to be filed by amendment). (13) Not applicable. (14a) Consent of Arthur Andersen LLP (filed herewith). (14b) Consent of KPMG LLP (filed herewith). (15) Not applicable. (16) Power of attorney (k). (17) Form of proxy card (k). - ---------- (a) Incorporated herein by reference to Registrant's Initial Registration Statement filed on April 9, 1996. (b) Incorporated herein by reference to Registrant's Pre-Effective Amendment #1 filed on June 27, 1996. (c) Incorporated herein by reference to Registrant's Post-Effective Amendment #3 filed on June 20, 1997. (d) Incorporated herein by reference to Registrant's Post-Effective Amendment #4 filed on October 16, 1997. (e) Incorporated herein by reference to Registrant's Post-Effective Amendment #5 filed on February 6, 1998. (f) Incorporated herein by reference to Registrant's Post-Effective Amendment #7 filed on May 13, 1998. 5 (g) Incorporated herein by reference to Registrant's Post-Effective Amendment #9 filed on July 15, 1998. (h) Incorporated herein by reference to Registrant's Post-Effective Amendment #13 filed on February 2, 2000. (i) Incorporated herein by reference to Registrant's Post-Effective Amendment #16 filed on August 10, 2000. (j) Incorporated herein by reference to Registrant's Post-Effective Amendment #17 filed on February 14, 2001. (k) Incorporated herein by reference to Registrant's Registration Statement on Form N-14 filed on November 9, 2001. ITEM 17. UNDERTAKINGS. (1) The undersigned Registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this Registration Statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act, the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. (2) The undersigned Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to the Registration Statement and will not be used until the amendment is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them. (3) The undersigned Registrant agrees to file, by post-effective amendment, an opinion of counsel or a copy of a ruling of the Internal Revenue Service supporting the tax consequences of the proposed reorganization within a reasonable time after receipt of such opinion or ruling. SIGNATURES As required by the Securities Act of 1933, this registration statement has been signed on behalf of the registrant, in the city of Hartford, and the state of Connecticut on the 19th day of December, 2001. THE HARTFORD MUTUAL FUNDS, INC. By: David M. Znamierowski* Its: President 6 As required by the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated.
Signature Title - --------- ----- David M. Znamierowski* President (Chief Executive Officer & Director) George R. Jay* Controller & Treasurer (Chief Accounting Officer & Chief Financial Officer) Winifred E. Coleman* Director Duane E. Hill* Director William A. O'Neil* Director Millard H. Pryor, Jr.* Director Lowndes A. Smith* Director John K. Springer* Director
/s/ Kevin J. Carr Dated: December 19, 2001 - ------------------------ * By Kevin J. Carr Attorney-in-fact 7 EX-14.A 3 c65873a2ex14-a.txt CONSENT OF ARTHUR ANDERSEN LLP EXHIBIT 14a CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use of our report (and to all references to our Firm) included in or made a part of Registration Statement File No. 811-07589 for The Hartford Mutual Funds, Inc. on Form N-14. ARTHUR ANDERSEN LLP Hartford, Connecticut December 19, 2001 EX-14.B 4 c65873a2ex14-b.txt CONSENT OF KPMG LLP EXHIBIT 14b Independent Auditors' Consent The Board of Directors Hartford-Fortis Series Fund, Inc. (Formerly Fortis Worldwide Portfolios, Inc. Fortis Global Growth Portfolio Fortis International Equity Portfolio Fortis Advantage Portfolios, Inc. Fortis High Yield Portfolio Fortis Asset Allocation Portfolio Fortis Equity Portfolios, Inc. Fortis Growth and Income Fund Fortis Money Portfolios, Inc. Fortis Money Fund): We consent to the incorporation by reference in the registration statement on Form N-14 (the "Registration Statement") of The Hartford Mutual Funds, Inc. of each of our reports dated December 3, 2000 for Fortis Global Growth Portfolio and Fortis International Equity Portfolio, September 7, 2001 for Fortis High Yield Portfolio, October 5, 2001 for Fortis Asset Allocation Portfolio and Fortis Growth and Income Fund, and November 2, 2001 for Fortis Money Fund, relating to the financial statements and financial highlights of each Fund. We also consent to the reference of our Firm under the heading "Other Service Providers" in the Registration Statement. KPMG LLP Minneapolis, Minnesota December 17, 2001 -----END PRIVACY-ENHANCED MESSAGE-----