-----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, JCw9gth3T6QK2+7Ett99NDz6fS5zXMNCLtl3Xrv5oB6YW3+ShuFfIxz2lEhitAAJ NkH6GlctZjPznMGorC5x0Q== 0000950156-01-500316.txt : 20010822 0000950156-01-500316.hdr.sgml : 20010822 ACCESSION NUMBER: 0000950156-01-500316 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010820 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CDC NVEST FUNDS TRUST I CENTRAL INDEX KEY: 0000770540 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04323 FILM NUMBER: 1719722 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 8002831155 MAIL ADDRESS: STREET 1: 399 BOYLSTON STREET CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: NEW ENGLAND FUNDS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NEW ENGLAND FUNDS TRUST I DATE OF NAME CHANGE: 19940614 FORMER COMPANY: FORMER CONFORMED NAME: NVEST FUNDS TRUST I DATE OF NAME CHANGE: 20000202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CDC NVEST FUNDS TRUST III CENTRAL INDEX KEY: 0000949683 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07345 FILM NUMBER: 1719723 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON STREET STREET 2: 6TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 617-449-2840 MAIL ADDRESS: STREET 1: 399 BOYLSTON STREET CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: NVEST FUNDS TRUST III DATE OF NAME CHANGE: 20000202 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CDC NVEST FUNDS TRUST II CENTRAL INDEX KEY: 0000052136 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 041990692 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-00242 FILM NUMBER: 1719724 BUSINESS ADDRESS: STREET 1: 399 BOYLSTON ST STREET 2: 4TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 617-449-2840 MAIL ADDRESS: STREET 1: 399 BOYLSTON STREET STREET 2: 6TH FLOOR CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: NEW ENGLAND FUNDS TRUST II DATE OF NAME CHANGE: 19940615 FORMER COMPANY: FORMER CONFORMED NAME: NVEST FUNDS TRUST II DATE OF NAME CHANGE: 20000202 FORMER COMPANY: FORMER CONFORMED NAME: TNE FUNDS TRUST DATE OF NAME CHANGE: 19940615 N-30D 1 d568131_n30.txt CDC NVEST EQUITY FUNDS [Logo] CDC NVEST FUNDS(SM) CDC IXIS Asset Management Distributors CDC NVEST CAPITAL GROWTH FUND CDC NVEST GROWTH FUND CDC NVEST GROWTH AND INCOME FUND CDC NVEST BALANCED FUND CDC NVEST LARGE CAP VALUE FUND CDC NVEST MID CAP GROWTH FUND CDC NVEST SELECT FUND CDC NVEST BULLSEYE FUND CDC NVEST INTERNATIONAL EQUITY FUND WHERE THE BEST MINDS MEET(R) SEMIANNUAL REPORT JUNE 30, 2001 RISKS OF THE CDC NVEST EQUITY FUNDS Any mutual fund investment involves risk. The following notes describe some of the risks of the CDC Nvest Funds discussed in this report. These risks may affect the value of your investment. See the funds' prospectus for details. CDC NVEST CAPITAL GROWTH FUND invests primarily in growth stocks, which tend to be more sensitive to market movements because their stock prices are based on future expectations. From time to time it may also invest a portion of assets in small-cap companies that are more volatile than the overall market. Frequent portfolio turnover may increase your risk of greater tax liability and lower your return from this fund. CDC NVEST GROWTH FUND invests primarily in growth stocks, which tend to be more sensitive to market movements because their stock prices are based on future expectations. The fund may also invest in foreign securities that have special risks, including regulatory and currency risks, which may affect the value of your investment. It may also invest in real estate investment trusts (REITs) that are subject to changes in underlying real estate values, prepayment and other mortgage-related risks. Frequent portfolio turnover may increase your risk of greater tax liability and lower your return from this fund. CDC NVEST GROWTH AND INCOME FUND invests primarily in growth stocks, which tend to be more sensitive to market movements because their stock prices are based on future expectations. It also invests in value stocks, which can fall out of favor with investors and may underperform growth stocks under certain market conditions. The fund may also invest in foreign and emerging market securities, which have special risks. From time to time it may invest a portion of assets in small-cap companies that are more volatile than the overall market. Frequent portfolio turnover may increase your risk of greater tax liability and lower your return from this fund. CDC NVEST BALANCED FUND generally invests approximately 65% of assets in stocks and 35% in fixed-income securities. The fund's equity securities may include both growth and value stocks. Growth stocks are generally more sensitive to market movements because their stock prices are based on future expectations. Value stocks can fall out of favor with investors and may underperform growth stocks during certain market conditions. The fund may also invest in foreign securities that have special risks, and in mortgage securities that are subject to prepayment risk. Fixed-income securities are subject to credit risk, interest rate risk, and liquidity risk. CDC NVEST LARGE CAP VALUE FUND invests primarily in value stocks, which can fall out of favor with investors, and which may underperform growth stocks during certain conditions. The fund may also invest in foreign securities that have special risks, including regulatory and currency risks, which may affect the value of your investment. It may also invest in real estate investment trusts (REITs) that are subject to changes in underlying real estate values, prepayment and other mortgage-related risks. CDC NVEST MID CAP GROWTH FUND invests primarily in stocks of companies that fall within the Russell Midcap Growth Index. Mid-cap growth stocks tend to be more sensitive to market movement because their stock prices are based on future expectations. The fund may also invest in foreign securities that have special risks, including regulatory and currency risks; and it may invest in Initial Public Offerings, which may involve greater risk than other investments. It may also invest in real estate investment trusts (REITs) that are subject to changes in underlying real estate values, prepayment and other mortgage-related risks. CDC NVEST SELECT FUND invests primarily in value stocks, which can fall out of favor with investors, and which may underperform growth stocks under certain conditions. Because the fund is non-diversified and concentrates in relatively few securities, changes in value of a single security (up or down) may have a greater impact on the fund's performance than if the fund were more broadly diversified. CDC NVEST BULLSEYE FUND is non-diversified. Because it concentrates in relatively few securities, changes in value of a single security (up or down) may have a greater impact on the fund's performance than if the fund were more broadly diversified. Value stocks, the fund's primary investment medium, can fall out of favor with investors and may underperform growth stocks during certain market conditions. It may also invest in foreign securities, which have special risks. An "all-cap" portfolio, the fund may own small-cap companies, which are more volatile than the overall market. REITs (real estate investment trusts) are another investment alternative available to the fund; REITs change in price with underlying real estate values and have other mortgage-related risks. Frequent portfolio turnover may increase your risk of greater tax liability and lower your return from this fund. CDC NVEST INTERNATIONAL EQUITY FUND invests in foreign and emerging market securities - strategies that have special risks, including political, economic, regulatory and currency risks. Emerging markets may be more subject to these risks than developed markets. The fund emphasizes growth stocks, which are generally more sensitive to market movements because their stock prices are based on future expectations. It also invests in stocks of small-cap and emerging-growth companies that are also more volatile than the overall market. Frequent portfolio turnover may increase your risk of greater tax liability and lower your return from this fund. - ------------------------------------------------------------------------------- NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- TABLE OF CONTENTS - ------------------------------------------------------------------------------- SEMIANNUAL REPORT JUNE 30, 2001 President's Letter ...................................................... i Economic Update ......................................................... 1 Portfolio Managers' Commentary and Performance CDC Nvest Capital Growth Fund ......................................... 2 CDC Nvest Growth Fund ................................................. 4 CDC Nvest Growth and Income Fund ...................................... 6 CDC Nvest Balanced Fund ............................................... 8 CDC Nvest Large Cap Value Fund ........................................ 10 CDC Nvest Mid Cap Growth Fund ......................................... 12 CDC Nvest Select Fund ................................................. 14 CDC Nvest Bullseye Fund ............................................... 16 CDC Nvest International Equity Fund ................................... 18 Financial Statements Schedules of Investments CDC Nvest Capital Growth Fund ......................................... 20 CDC Nvest Growth Fund ................................................. 22 CDC Nvest Growth and Income Fund ...................................... 23 CDC Nvest Balanced Fund ............................................... 25 CDC Nvest Large Cap Value Fund ........................................ 28 CDC Nvest Mid Cap Growth Fund ......................................... 30 CDC Nvest Select Fund ................................................. 32 CDC Nvest Bullseye Fund ............................................... 33 CDC Nvest International Equity Fund ................................... 34 Statements of Assets and Liabilities .................................... 36 Statements of Operations ................................................ 38 Statements of Changes in Net Assets ..................................... 40 Financial Highlights .................................................... 44 Notes to Financial Statements ........................................... 52 Additional Information .................................................. 65 - ------------------------------------------------------------------------------- PRESIDENT'S LETTER - ------------------------------------------------------------------------------- AUGUST 2001 - ------------------------------------------------------------------------------- [Photo of John T. Hailer] John T. Hailer President and Trustee CDC Nvest Funds Dear Shareholder: As a multi-manager fund group that draws its investment talent from a diverse pool of investment managers, CDC Nvest Funds recently conducted a survey of our portfolio managers. The survey illustrated something we've been saying all along: the Best Minds we draw on to manage our funds don't always think alike. When we surveyed 29 mutual fund managers and teams at 10 different firms we learned they held diverging views on everything from leading industry sectors to inflation estimates for the second half of 2001. Current market conditions have erased obvious trends and standard predictions, showing more clearly the extent to which investment managers' views can differ. Ever since the year 2000 brought an end to the longest economic expansion in peacetime history, investors have been re-learning an old, time-tested lesson: asset allocation is one of the best ways to build for your future. Jumping from fund to fund chasing yesterday's winners doesn't work. For example, during the six months ended June 30, 2001, only small-cap value indices showed gains on the equity side. Aggressive growth stocks - the big winners in 1999 - continued to slump. Meanwhile, high-yield bond prices enjoyed a strong recovery early in the year, only to decline again in June. What's next? In our survey, the consensus of the managers who participated believe the stock market will show modest gains for the second half of 2001, but they were evenly split over whether the technology sector would lag or outperform the market for the balance of the year. What sets CDC Nvest Funds apart is the breadth of diversification we offer you under a single roof - including investment managers with distinctive styles and expertise, as well as portfolios diversified by industry and by security. If you've ever wondered how the performance of other funds in our lineup compared to your fund's results, the new format we are introducing with this series of shareholder reports may help. By grouping comparable funds in a single book, we've made it easier for you to view a "snapshot" of each fund manager's strategies and investments. Everyone needs a portfolio tailored to his or her unique needs and characteristics - one with the right combination of stocks seeking growth or value from large-, mid- and small-cap companies; corporate, government and municipal bonds; domestic and international portfolios; and such basics as money market funds. Our new format not only enables us to reduce fund expenses, it's designed to help you and your financial adviser review your asset allocation plan and determine any adjustments you may need to make. This information and more is also available on our website, www.cdcnvestfunds.com. As part of a large, multi-national financial firm - CDC IXIS Asset Management - we have new resources and access to more Best Minds, and we are working on more new products and services aimed at helping you and your financial adviser build a diversified, all-market portfolio. As an affiliate of one of the 25 largest investment management firms in the world, with nearly $286 billion* in assets under management, we hope you share our confidence for the future. Sincerely yours, /s/ John T. Hailer *As of June 30, 2001. [callout] "What sets CDC Nvest Funds apart is the breadth of diversification we offer you under a single roof - including investment managers with distinctive styles and expertise, as well as portfolios diversified by industry and by security." - ------------------------------------------------------------------------------- ECONOMIC UPDATE - ------------------------------------------------------------------------------- AUGUST 2001 - ------------------------------------------------------------------------------- While U.S. manufacturers retrench and unemployment creeps higher, consumers are pushing slowly ahead. Leading economic indicators have turned modestly positive, led by resilient consumers whose confidence in their business and job prospects moved up in May and again in June, according to the Conference Board. Consumer confidence is viewed as a key indicator because spending by individuals accounts for about two-thirds of U.S. economic output. Homebuilding has been another area of persistent strength despite mortgage rates that have remained relatively high. Corporate retrenchment is the result of slumping profits, which also depressed stock prices. Damage to earnings has been greatest in technology, where swollen inventories have only now begun to shrink, and in telecommunications, where overbuilding has left much costly new capacity idle. Meanwhile, international trade has been weak because the U.S. economy is the world's best customer. Much of what we buy - or don't buy - is produced abroad. Global markets turned in mixed results overall. LOWER RATES ARE STARTING TO MAKE AN IMPACT After six closely spaced interest-rate cuts in the first six months of 2001, the Federal Reserve Board has brought down the Discount Rate by 2.75% since January, in a series of moves that reversed its direction during the first half of 2000. (The Discount Rate - the only rate the Board controls directly - is the interest rate the Fed charges banks on short-term loans.) Investors reacted to lower rates by putting money to work in stocks and bonds. Cash reserves currently barely earn enough to offset underlying inflation, now around 3.6%. Low interest rates also encourage business investment. After dropping sharply in February and March, most stock market indices began a steep climb in April, only to sag in June and close the period at or below their levels at the beginning of the year. While no one can state definitively that the low point is behind us, encouraging signs include increased investor participation as stock prices rose. A further impact of lower rates has been to reduce yields on short-term Treasury bills. Longer-term Treasuries fell in price and their yields moved higher, implying higher rates to come if economic growth resumes. Municipal bonds performed well as higher tax revenues strengthened the finances of many of the nation's cities and towns. On the other hand, high-yield bonds were volatile and offered mixed results. LOOKING AHEAD Except for energy and utility companies, second-quarter corporate earnings were largely disappointing and third quarter earnings may be weak as well. Nevertheless, investors have driven up stock prices in the heavy industry, basic materials and retail sectors, all of which should benefit from a rebounding economy. Uncertainties surrounding the current economic situation are considerable. This summer's tax rebates, together with lower interest rates and falling energy costs, may stimulate consumer spending. In the past, market rallies often have followed tax cuts. In summary, interest rates are lower, inflation is moderate and taxes are coming down. This may be the right mix of ingredients for renewed economic growth late this year or early next. FEDERAL RESERVE BOARD'S CHANGES IN INTEREST RATES DISCOUNT RATE: 2000 THROUGH FIRST HALF OF 2001 12/31/99 5.00% 1/31/00 5.00% 2/29/00 5.25% 3/31/00 5.50% 4/30/00 5.50% 5/31/00 6.00% 6/30/00 6.00% 7/31/00 6.00% 8/31/00 6.00% 9/30/00 6.00% 10/31/00 6.00% 11/30/00 6.00% 12/31/00 6.00% 1/31/01 5.00% 2/28/01 5.00% 3/31/01 4.50% 4/30/01 4.00% 5/31/01 4.00% 6/30/01 3.75% - ------------------------------------------------------------------------------- CDC NVEST CAPITAL GROWTH FUND - ------------------------------------------------------------------------------- INTERVIEW WITH YOUR PORTFOLIO MANAGER - ------------------------------------------------------------------------------- Q. HOW DID THE FUND PERFORM DURING THE FIRST HALF OF 2001? For the six months ended June 30, 2001, CDC Nvest Capital Growth Fund A shares had a total return of -9.29% at net asset value. The fund's benchmark, the Russell 1000 Growth Index, returned -14.24% for the same period, while Morningstar Large Cap Growth Fund Average returned -15.75%. Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE PERIOD? Investors focused on interest rates and corporate earnings. There were hopes that the Federal Reserve Board's interest-rate cuts would energize the stock market, but a string of earnings shortfalls - most notably in the technology sector - hindered progress. Investors continued to be concerned that the difficulties in the tech sector would start to influence other areas, even though consumer spending held up fairly well so far this year. Within this environment, investors favored those sectors and stocks that appeared to be undervalued. Q. WHAT STRATEGIES DID YOU USE IN RESPONSE TO THESE EVENTS? We started the year with a bias toward attractively priced stocks of companies with the potential for steady earnings growth even in a sluggish economy. We had rotated away from the technology sector last year and, with the Fed's rate cuts on the horizon, the portfolio featured companies whose profits are sensitive to changes in interest rates. As 2001 progressed, we gradually shifted the fund toward a more neutral valuation stance, focusing on stocks with strong growth prospects, but with an eye to growth at a reasonable price. By the end of June, this shift resulted in an increase in the fund's technology investments because, after months of declining prices, this sector had begun to seem attractively valued. By the end of June 2001, the fund's weighting in technology was greater than that of its benchmark, the Russell 1000 Growth Index, while its price/earnings ratio* was lower. Stocks that attracted us included Lexmark, Tech Data, and Scientific Atlanta, which we purchased when their valuations appeared relatively low. We also reduced the fund's investments in stocks sensitive to declining interest rates, such as credit card companies. Q. WHICH INVESTMENTS INFLUENCED PERFORMANCE THE MOST, BOTH POSITIVELY AND NEGATIVELY? Mutual fund performance relative to its benchmark often can be affected as much by what it doesn't invest in as by what it does own. For example, during the past six months the fund benefited from our decision to underweight the technology sector in general, and Lucent Technologies in particular, as demand for telecom equipment plunged. Positive performers included the interest-rate sensitive stocks we mentioned, to which we would add Americredit. In addition, steady earnings in a slow-growth environment helped Pepsi Bottling Group do well. On the negative side, two smaller technology stocks, Juniper Networks and Tech Data, were caught in the technology downdraft. Qwest Communications also declined in response to Wall Street's harsh reaction to disappointing first-quarter earnings. Q. WHAT IS YOUR CURRENT OUTLOOK? Although forecasts are especially difficult to make right now, we expect a recovery to get underway late this year or early in 2002. We wouldn't be surprised if it takes longer than many expect for the stock market to break out of the doldrums, with broad market averages making little progress in the next year or two. We also expect the market to shift from growth to value and back again much more rapidly than in the past. Nonetheless, we think there will be ample opportunities to provide capital growth for shareholders if we remain nimble in maneuvering CDC Nvest Capital Growth Fund wherever prospects seem brightest. [sidebar] PORTFOLIO PROFILE - ------------------------------------------------------------------------------- OBJECTIVE: Seeks long-term growth of capital - ------------------------------------------------------------------------------- STRATEGY: Invests primarily in common stock of U.S. large and mid-capitalization companies in any industry - ------------------------------------------------------------------------------- INCEPTION DATE: August 3, 1992 - ------------------------------------------------------------------------------- MANAGER: Gerald H. Scriver Westpeak Investment Advisors, L.P. - ------------------------------------------------------------------------------ SYMBOLS: Class A NEFCX Class B NECBX Class C NECGX - ------------------------------------------------------------------------------ NET ASSET VALUE PER SHARE: (JUNE 30, 2001) Class A $13.64 Class B 12.17 Class C 12.17 * A price/earnings ratio - or P/E - compares a stock's price to its earnings. A stock with a high P/E is deemed to be expensive, but sometimes investors are willing to pay a higher price for potential earnings growth. - ------------------------------------------------------------------------------- CDC NVEST CAPITAL GROWTH FUND - ------------------------------------------------------------------------------- INVESTMENT RESULTS THROUGH JUNE 30, 2001 - ------------------------------------------------------------------------------- Performance in Perspective The charts comparing CDC Nvest Capital Growth Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES AUGUST 1992 (INCEPTION) THROUGH JUNE 2001 NET ASSET VALUE(1) MAXIMUM SALES CHARGE(2) RUSSELL 1000 GROWTH(4) 8/3/92 10000 9425 10000 9904 9335 9878 10120 9538 9993 10728 10111 10142 11344 10692 10584 11490 10830 10688 11668 10997 10566 11240 10594 10399 11684 11012 10599 10941 10312 10175 11587 10921 10531 6/30/93 11838 11157 10435 11563 10898 10248 12023 11332 10668 12290 11583 10589 12362 11652 10883 12031 11340 10812 12398 11685 10999 12787 12052 11253 12454 11738 11048 11789 11111 10514 11772 11096 10564 11724 11050 10723 6/30/94 11220 10575 10407 11651 10981 10763 12146 11448 11362 11943 11256 11207 12463 11746 11471 11919 11233 11104 12195 11494 11291 12292 11585 11531 12779 12045 12014 13201 12442 12366 13405 12634 12637 13778 12986 13078 6/30/95 14695 13851 13583 15353 14470 14148 15629 14731 14163 16157 15228 14816 15900 14986 14827 16286 15349 15404 15945 15028 15491 16240 15306 16010 16664 15706 16303 16508 15559 16324 17331 16334 16754 17851 16824 17338 6/30/96 17608 16596 17363 16395 15453 16345 17019 16040 16767 18431 17372 17988 18422 17363 18096 19340 18228 19455 18664 17590 19073 19719 18585 20410 19177 18074 20271 17743 16723 19175 18509 17444 20448 20136 18978 21924 6/30/97 20698 19507 22801 22151 20877 24817 21133 19918 23365 21771 20519 24515 20892 19691 23608 21439 20206 24611 21879 20621 24887 22055 20786 25631 23568 22213 27558 24621 23205 28658 25059 23619 29053 24456 23050 28228 6/30/98 25729 24249 29956 25487 24022 29758 21440 20208 25291 22727 21420 27234 24387 22985 29423 25852 24365 31662 28241 26617 34518 29662 27956 36545 27995 26385 34875 28610 26965 36712 29170 27492 36760 28637 26990 35632 6/30/99 30153 28419 38126 29483 27788 36913 29743 28033 37515 29309 27624 36727 31351 29548 39500 32282 30426 41629 35226 33200 45959 33238 31327 43803 34625 32634 45945 37399 35249 49235 36290 34203 46891 34595 32606 44528 6/30/00 36875 34755 47903 35920 33855 45906 38729 36502 50060 35151 33130 45324 33932 31981 43181 29355 27667 36816 28349 26719 35652 29706 27998 38116 25673 24197 31644 23279 21940 28201 26427 24907 31768 26125 24623 31301 6/30/01 25716 24238 30575 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. AVERAGE ANNUAL TOTAL RETURNS -- JUNE 30, 2001 - ------------------------------------------------------------------------------- CLASS A (Inception 8/3/92) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -9.29% -30.26% 7.87% 11.19% With Maximum Sales Charge(2) -14.52 -34.27 6.60 10.45 - ------------------------------------------------------------------------------- CLASS B (Inception 9/13/93) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -9.63% -30.79% 6.97% 9.46% With CDSC(3) -14.15 -33.56 6.78 9.46 - ------------------------------------------------------------------------------- CLASS C (Inception 12/30/94) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Inception Net Asset Value(1) -9.63% -30.91% 6.97% 11.25% With Maximum Sales Charge and CDSC(3) -11.45 -32.14 6.76 11.08 - -------------------------------------------------------------------------------
SINCE SINCE SINCE FUND'S FUND'S FUND'S CLASS A CLASS B CLASS C COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS INCEPTION INCEPTION INCEPTION Russell 1000 Growth(4) -14.24% -36.17% 11.99% 13.34% 14.65% 16.56% Morningstar Large Growth Fund Avg.(5) -15.75 -29.75 11.80 13.79 13.44 16.26 Lipper Multi-Cap Growth Funds Avg.(6) -16.13 -31.72 11.30 13.80 13.06 15.73 NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) Russell 1000 Growth Index is an unmanaged index measuring the performance of the largest 1000 U.S. companies within the Russell 3000 selected for their growth orientation. You may not invest directly in an index. Class A since-inception return is calculated from 7/31/92. Class B since-inception return is calculated from 9/30/93. (5) Morningstar Large Growth Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. Class A since-inception return is calculated from 7/31/92. Class B since-inception return is calculated from 9/30/93. (6) Lipper Multi-Cap Growth Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper Inc.
[sidebar] PORTFOLIO FACTS % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMMON STOCKS 99.9 98.9 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 0.1 1.1 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 12/31/00 - ------------------------------------------------------------------------------- GENERAL ELECTRIC CO. 9.1 9.9 - ------------------------------------------------------------------------------- MICROSOFT CORP. 6.2 3.2 - ------------------------------------------------------------------------------- PFIZER, INC. 5.7 5.4 - ------------------------------------------------------------------------------- INTEL CORP. 4.4 3.1 - ------------------------------------------------------------------------------- AOL TIME WARNER, INC. 3.3 -- - ------------------------------------------------------------------------------- INTERNATIONAL BUSINESS MACHINES CORP. 3.2 2.0 - ------------------------------------------------------------------------------- CISCO SYSTEMS, INC. 3.0 5.4 - ------------------------------------------------------------------------------- LEXMARK INTERNATIONAL, INC. 2.6 -- - ------------------------------------------------------------------------------- IVAX CORP. 2.1 1.4 - ------------------------------------------------------------------------------- SUNGARD DATA SYSTEMS, INC. 2.0 1.3 - ------------------------------------------------------------------------------- % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMPUTER SOFTWARE 13.8 3.9 - ------------------------------------------------------------------------------- DRUGS 12.7 14.8 - ------------------------------------------------------------------------------- SEMICONDUCTORS 11.0 8.0 - ------------------------------------------------------------------------------- FINANCIAL SERVICES 10.6 11.3 - ------------------------------------------------------------------------------- COMPUTER HARDWARE 9.0 11.1 - ------------------------------------------------------------------------------- Portfolio holdings and asset allocations will vary. - ------------------------------------------------------------------------------- CDC NVEST GROWTH FUND - ------------------------------------------------------------------------------- INTERVIEW WITH YOUR PORTFOLIO MANAGER Q. HOW DID THE FUND PERFORM DURING THE FIRST HALF OF 2001? For the six months ended June 30, 2001, the total return on Class A shares of CDC Nvest Growth Fund was -11.48% at net asset value, including $0.03 per share in reinvested distributions. The fund's benchmark, Standard & Poor's 500 Index, returned -6.70% for the same period, while Morningstar Large-Cap Blend Fund Average returned -7.98%. Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE PERIOD? During the first half of 2001, the U.S. economy showed increasing weakness. Capital spending on technology dropped, cutting sharply into the profits of telecommunications and technology companies. Consumer spending slipped, although consumer confidence remained well above levels historically associated with economic weakness or recession. Despite an aggressive program of interest-rate cuts implemented by the Federal Reserve Board in an effort to revive the economy, most stock-market indices declined during this period, and growth stocks were weaker than value stocks. Q. WHAT WAS YOUR STRATEGY WITH THE FUND? We withdrew from the more defensive investments we maintained at the end of last year, selling the fund's real estate investment trusts (REITs), as well as food and beverage stocks and healthcare. We also eliminated the fund's energy stocks because we believe the weakened global economy, combined with the negative impact of the recent spike in natural gas prices, has clouded the outlook for this sector. We used the proceeds of sales to invest in stocks of some leading retailers, including Lowe's Companies and Best Buy, as well as such consumer-finance companies as Capital One, Providian, and Household International. We continued to avoid most technology stocks even though their prices were severely depressed. However, we did look for companies within the technology sector that should benefit from the consolidation we believe will result from the current, difficult conditions. Q. WHICH STOCKS BOOSTED PERFORMANCE AND WHICH PROVED DISAPPOINTING? In general, the widespread weakness of growth stocks during the first half of 2001 was hard on the fund, and largely responsible for its underperformance. The most disappointing individual stocks were Wellpoint and Nike, and we've sold both stocks. Positive performers included Philip Morris, Lowe's and Best Buy, but good results from these stocks were not enough to offset declines elsewhere. We continue to expect these well-managed consumer and retail companies to maintain significant earnings momentum as a result of cost controls and significant gains in market share. Q. WHAT IS YOUR CURRENT OUTLOOK? Unlike previous periods when the economy slowed, the current period of weakness appears to have been triggered by excessive expansion in the technology and telecom industries rather than by restrictive Fed monetary policy or far-reaching problems within the banking system. Since the downturn has been centered on relatively few industries and regions of the country, consumer confidence and spending generally have remained relatively unscathed. We believe consumers will be the driving force behind an economic recovery we expect sometime in 2002, so we expect consumer-related stocks to lead the way, spurred by the combined effects of the Fed's program to cut interest rates and the recently enacted tax cuts. We believe CDC Nvest Growth Fund is well positioned to benefit from this scenario. [sidebar] PORTFOLIO PROFILE OBJECTIVE: Seeks long-term growth of capital - ------------------------------------------------------------------------------- STRATEGY: Invests primarily in a focused portfolio of companies with above-average growth potential. - ------------------------------------------------------------------------------- INCEPTION DATE: November 27, 1968 - ------------------------------------------------------------------------------- MANAGER: G. Kenneth Heebner Capital Growth Management Limited Partnership - ------------------------------------------------------------------------------- SYMBOLS: Class A NEFGX Class B NEBGX Class C NEGCX Class Y NEGYX - ------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE: (JUNE 30, 2001) Class A $8.25 Class B 7.91 Class C 7.92 Class Y 8.27 - ------------------------------------------------------------------------------- CDC NVEST GROWTH FUND - ------------------------------------------------------------------------------- INVESTMENT RESULTS THROUGH JUNE 30, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Growth Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index, and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES - -------------------------------------------------------------------------------- JUNE 1991 THROUGH JUNE 2001 NET ASSET VALUE(1) MAXIMUM SALES CHARGE(2) S&P 500(4) 6/30/91 10000 9425 10000 10857 10233 10468 11384 10730 10714 11224 10579 10538 11676 11005 10680 11431 10774 10248 13060 12309 11419 12418 11704 11207 12535 11814 11350 11952 11264 11128 12232 11528 11452 12267 11561 11514 6/30/92 11765 11088 11347 11765 11088 11804 11298 10648 11566 11485 10824 11699 11625 10956 11741 12010 11319 12136 12194 11493 12295 12436 11721 12385 12000 11310 12552 12569 11846 12822 12400 11687 12508 12702 11972 12846 6/30/93 12690 11960 12888 12617 11892 12828 12980 12234 13316 13210 12451 13218 13718 12929 13486 13391 12621 13359 13571 12790 13524 14363 13537 13977 13856 13060 13599 13025 12276 13008 13038 12288 13177 13285 12521 13392 6/30/94 12794 12059 13061 13239 12478 13493 13579 12798 14042 13134 12379 13704 13187 12428 14018 12428 11713 13503 12613 11888 13700 12315 11607 14057 12912 12170 14602 13310 12545 15034 14135 13322 15472 14988 14126 16083 6/30/95 16087 15162 16461 16813 15847 17009 16899 15927 17055 17207 16217 17769 16853 15884 17707 17657 16642 18486 17419 16418 18828 18030 16993 19476 18608 17538 19663 18608 17538 19852 18261 17211 20144 18542 17476 20663 6/30/96 18344 17289 20748 17270 16277 19825 17436 16433 20245 18632 17561 21383 19727 18593 21969 21264 20041 23636 21056 19845 23173 22957 21637 24612 22576 21278 24811 21617 20374 23779 22848 21534 25199 23970 22592 26746 6/30/97 25039 23599 27939 27465 25885 30157 26053 24555 28480 27387 25813 30041 26313 24800 29038 26013 24517 30382 26013 24517 30905 26438 24917 31248 28762 27108 33501 30611 28851 35216 31785 29958 35572 31285 29486 34960 6/30/98 32960 31064 36379 33134 31229 35994 26812 25271 30789 27004 25451 32762 29723 28014 35426 32197 30346 37573 34702 32707 39737 37054 34924 41398 34397 32419 40111 35221 33196 41715 35099 33081 43329 33969 32016 42307 6/30/99 36474 34376 44655 35618 33570 43262 35557 33513 43045 33449 31526 41866 34732 32735 44516 36046 33973 45420 39971 37672 48095 36846 34727 45680 40116 37809 44817 40552 38220 49200 39026 36782 47719 37464 35309 46741 6/30/00 37609 35446 47891 36410 34316 47144 38134 35941 50071 36755 34641 47428 36831 34713 47228 36486 34388 43507 38150 35957 43720 34768 32768 45272 33667 31731 41143 32811 30924 38535 34238 32269 41529 33545 31616 41807 6/30/01 33772 31830 40791 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. AVERAGE ANNUAL TOTAL RETURNS -- JUNE 30, 2001 - -------------------------------------------------------------------------------- CLASS A (Inception 11/27/68) 6 MONTHS 1 YEAR 5 YEARS 10 YEARS 20 YEARS Net Asset Value(1) -11.48% -10.20% 12.98% 12.94% 15.20% With Maximum Sales Charge(2) -16.56 -15.35 11.65 12.24 14.86 - ------------------------------------------------------------------------------- SINCE CLASS B (Inception 2/28/97) 6 MONTHS 1 YEAR INCEPTION Net Asset Value(1) -11.91% -11.01% 8.88% With CDSC(3) -16.29 -14.96 8.66 - ------------------------------------------------------------------------------- SINCE CLASS C (Inception 9/1/98) 6 MONTHS 1 YEAR INCEPTION Net Asset Value(1) -11.80% -10.90% 5.66% With Maximum Sales Charge and CDSC(3) -13.54 -12.56 5.29 - ------------------------------------------------------------------------------- SINCE CLASS Y (Inception 6/30/99) 6 MONTHS 1 YEAR INCEPTION Net Asset Value(1) -11.36% -9.95% -3.51% - -------------------------------------------------------------------------------
SINCE SINCE SINCE FUND'S FUND'S FUND'S CLASS A CLASS B CLASS Y COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS 10 YEARS 20 YEARS INCEPTION INCEPTION INCEPTION S&P 500(4) -6.70% -14.83% 14.48% 15.10% 15.33% 12.15% 10.43% -4.43% Morningstar Large Cap Blend Fund Average(5) -7.98 -15.34 11.84 13.24 -- 10.06 19.47 -3.84 Lipper Large-Cap Core Funds Average(6) -8.44 -16.11 11.24 13.00 12.95 9.39 10.52 -5.09 NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and return will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those noted. Class Y shares are available to certain institutional investors only. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) S&P 500 Stock Index is an unmanaged index of U.S. common stock performance. You may not invest directly in an index. (5) Morningstar Large Cap Blend Fund Average is an average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. Class C since-inception return is calculated from 8/31/98. The Morningstar Large Blend Average does not track a 20-year performance average. (6) Lipper Large-Cap Core Funds Average is the average performance without sales charges of mutual funds with a similar current investment style or objective as calculated by Lipper Inc. Class C since-inception return is calculated from 8/31/98.
[sidebar] PORTFOLIO FACTS - ------------------------------------------------------------------------------- % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMMON STOCKS 99.7 100.2 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 0.3 (0.2) % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 12/31/00 - ------------------------------------------------------------------------------- PHILIP MORRIS COMPANIES, INC. 8.3 6.3 - ------------------------------------------------------------------------------- WASHINGTON MUTUAL, INC. 6.1 4.7 - ------------------------------------------------------------------------------- INCO LTD. 6.0 5.8 - ------------------------------------------------------------------------------- PROVIDIAN FINANCIAL CORP. 5.3 -- - ------------------------------------------------------------------------------- HOUSEHOLD INTERNATIONAL, INC. 5.3 -- - ------------------------------------------------------------------------------- CELESTICA, INC. 5.2 -- - ------------------------------------------------------------------------------- LOWE'S CO., INC. 5.2 -- - ------------------------------------------------------------------------------- ELECTRONIC DATA SYSTEMS CORP. 5.1 -- - ------------------------------------------------------------------------------- CITIGROUP, INC. 5.0 -- - ------------------------------------------------------------------------------- LABORATORY CORPORATION OF OF AMERICA HOLDINGS 4.9 -- - ------------------------------------------------------------------------------- % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 6/30/01 12/31/00 - ------------------------------------------------------------------------------- RETAIL 17.8 -- - ------------------------------------------------------------------------------- FINANCIAL SERVICES 15.2 9.4 - ------------------------------------------------------------------------------- INSURANCE 9.1 10.1 - ------------------------------------------------------------------------------- ELECTRONIC & Communication Equipment 8.9 -- - ------------------------------------------------------------------------------- BEVERAGES & TOBACCO 8.3 11.1 Portfolio holdings and asset allocations will vary. - ------------------------------------------------------------------------------- CDC NVEST GROWTH AND INCOME FUND - ------------------------------------------------------------------------------- INTERVIEW WITH YOUR PORTFOLIO MANAGER Q. HOW DID THE FUND PERFORM DURING THE FIRST HALF OF 2001? For the six months ended June 30, 2001, the total return on Class A shares of CDC Nvest Growth and Income Fund was -7.11% at net asset value. The fund's benchmark, the Standard & Poor's 500 Index, returned -6.70% for the same period, while the return of funds in the Morningstar Large Cap Value Fund Average was - -0.89%. Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE PERIOD? Interest rates and corporate earnings were foremost on investors' minds. Many hoped the Federal Reserve Board's aggressive program of cutting interest rates would help revive the market. However, a steady stream of downward earnings revisions - particularly in the technology sector - foiled the market's attempted rallies. Investors worried that problems in technology would spill into other areas, although consumer spending held up fairly well. In this environment, the market continued to favor value stocks over growth stocks. Q. HOW DID YOU POSITION THE FUND IN RESPONSE TO THESE EVENTS? In managing CDC Nvest Growth and Income Fund, we bias the portfolio toward value or growth as the market shifts, pursuing the best returns available at any given time. This flexibility is designed to help the fund adapt to changing trends. We started 2001 with a strong bias toward value; the fund's average price/earnings ratio* was below that of its benchmark, the S&P 500, even though the fund's average growth rate was about the same as the index. As the year progressed, we gradually shifted to a more neutral valuation stance, emphasizing stocks offering strong growth potential as long as they seemed reasonably valued. Since many technology stocks had declined in value so much, we used this opportunity to increase the fund's emphasis on this sector. Our investments included AOL Time Warner, Lexmark, and Apple. At the same time, we trimmed the fund's interest-rate sensitive stocks. These performed well early in the year, but we had begun to see an increased potential for higher interest rates going forward, which would be a negative for these companies. Although this sector is now underweighted relative to the S&P 500, some financial stocks remain in the portfolio. Q. WHICH INVESTMENTS INFLUENCED PERFORMANCE THE MOST, BOTH POSITIVELY AND NEGATIVELY? The performance of a mutual fund relative to its benchmark can be influenced by the securities it avoids as well as by what it owns. For example, during the first half of 2001, CDC Nvest Growth and Income Fund benefited because we decided to underweight Intel, which declined in value during the period on earnings disappointments. Two other technology stocks in the portfolio - Juniper Networks and Tech Data - were caught in the technology downdraft and hurt performance. However, we believe attractively valued technology stocks will rebound when the economy recovers. Positive performers during the period included financial services, which tend to benefit when interest rates are declining, as well as energy, which profited from higher energy prices and improved refining margins. Q. WHAT IS YOUR CURRENT OUTLOOK? We expect the economy to recover some time late this year or early in 2002, reviving corporate earnings, but the time frame is uncertain. We would not be surprised if a rebound in the equity market takes longer than many expect, with market averages making little progress over the next year or two. Nevertheless, we believe there will be ample opportunities for capital appreciation if we remain nimble and maneuver the fund's sector weightings, shifting between value and growth stocks in a timely manner. * A price/earnings ratio - or P/E - compares a stock's price to its earnings. A stock with a high P/E is deemed to be expensive, but sometimes investors are willing to pay a higher price for potential earnings growth. [sidebar] PORTFOLIO PROFILE - ------------------------------------------------------------------------------- OBJECTIVE: Seeks long-term capital growth and income - ------------------------------------------------------------------------------- STRATEGY: Invests primarily in common stock of large and mid-capitalization companies in any industry - ------------------------------------------------------------------------------- INCEPTION DATE: May 6, 1931 - ------------------------------------------------------------------------------- MANAGER: Gerald H. Scriver Westpeak Investment Advisors, L.P. - ------------------------------------------------------------------------------- SYMBOLS: Class A NEFOX Class B NEGBX Class C NECOX Class Y NEOYX - ------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE: (JUNE 30, 2001) Class A $12.81 Class B 12.41 Class C 12.39 Class Y 12.93 - ------------------------------------------------------------------------------- CDC NVEST GROWTH AND INCOME FUND - ------------------------------------------------------------------------------- INVESTMENT RESULTS THROUGH JUNE 30, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Growth and Income Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES - ------------------------------------------------------------------------------- JUNE 1991 THROUGH JUNE 2001 NET ASSET VALUE(1) MAXIMUM SALES CHARGE(2) S&P 500(4) 6/30/91 10000 9425 10000 10444 9843 10468 10675 10061 10714 10490 9887 10538 10648 10036 10680 10211 9624 10248 11346 10694 11419 11269 10621 11207 11423 10766 11350 11240 10593 11128 11607 10940 11452 11617 10949 11514 6/30/92 11453 10795 11347 11930 11244 11804 11648 10978 11566 11774 11097 11699 11872 11189 11741 12253 11548 12136 12400 11687 12295 12471 11754 12385 12654 11926 12552 12877 12137 12822 12591 11867 12508 12857 12118 12846 6/30/93 12888 12147 12888 12826 12089 12828 13329 12563 13316 13196 12437 13218 13433 12661 13486 13237 12476 13359 13385 12616 13524 13871 13074 13977 13459 12685 13599 12897 12156 13008 13004 12256 13177 13258 12496 13392 6/30/94 12961 12216 13061 13345 12578 13493 13911 13111 14042 13580 12800 13704 13795 13002 14018 13323 12557 13503 13518 12741 13700 13856 13059 14057 14313 13490 14602 14711 13865 15034 15160 14288 15472 15652 14752 16083 6/30/95 16018 15097 16461 16577 15624 17009 16731 15769 17055 17466 16461 17769 17294 16299 17707 17871 16844 18486 18265 17215 18828 18837 17754 19476 18938 17849 19663 19033 17939 19852 19097 17999 20144 19389 18274 20663 6/30/96 18974 17883 20748 18030 16993 19825 18463 17402 20245 19408 18292 21383 20006 18855 21969 21784 20531 23636 21408 20177 23173 22473 21181 24612 22751 21442 24811 21761 20510 23779 22905 21588 25199 24375 22973 26746 6/30/97 25569 24099 27939 27181 25618 30157 26406 24888 28480 28036 26424 30041 26807 25266 29038 27963 26355 30382 28566 26923 30905 28733 27081 31248 31041 29256 33501 32790 30905 35216 32958 31063 35572 32511 30642 34960 6/30/98 33870 31922 36379 33349 31431 35994 28306 26678 30789 29715 28006 32762 31862 30030 35426 33307 31392 37573 35400 33365 39737 36426 34331 41398 35550 33506 40111 36041 33969 41715 38178 35982 43329 38007 35821 42307 6/30/99 39193 36939 44655 38036 35849 43262 37522 35364 43045 36001 33931 41866 37443 35290 44516 37552 35393 45420 38745 36517 48095 36723 34612 45680 35485 33445 44817 38366 36160 49200 37734 35564 47719 36571 34469 46741 6/30/00 37052 34921 47891 36825 34707 47144 39297 37037 50071 37500 35344 47428 37604 35442 47228 35364 33331 43507 35911 33846 43720 35937 33871 45272 33802 31858 41143 31901 30067 38535 34505 32521 41529 34557 32570 41807 6/30/01 33360 31441 40791 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. AVERAGE ANNUAL TOTAL RETURNS-- JUNE 30, 2001 - ------------------------------------------------------------------------------- CLASS A (Inception 5/6/31) 6 MONTHS 1 YEAR 5 YEARS 10 YEARS Net Asset Value(1) -7.11% -9.97% 11.95% 12.80% With Maximum Sales Charge(2) -12.44 -15.12 10.63 12.15 - ------------------------------------------------------------------------------- CLASS B (Inception 9/13/93) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -7.39% -10.58% 11.13% 11.79% With CDSC(3) -12.02 -14.91 10.91 11.79 - ------------------------------------------------------------------------------- CLASS C (Inception 5/1/95) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -7.40% -10.59% 11.12% 12.84% With Maximum Sales Charge and CDSC(3) -9.28 -12.32 10.90 12.66 - ------------------------------------------------------------------------------- CLASS Y (Inception 11/18/98) 6 MONTHS 1 YEAR SINCE INCEPTION Net Asset Value(1) -6.78% -9.44% 1.09% - -------------------------------------------------------------------------------
SINCE SINCE SINCE FUND'S FUND'S FUND'S CLASS B CLASS C CLASS Y COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS 10 YEARS INCEPTION INCEPTION INCEPTION S&P 500(4) -6.70% -14.83% 14.48% 15.10% 15.66% 17.02% 3.23% Morningstar Large Cap Value Fund Avg.(5) -0.89 7.95 12.07 13.57 13.19 14.59 5.88 Lipper Multi-Cap Core Funds Average(6) 1.36 11.37 12.76 14.23 13.73 14.80 8.23 NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and return will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. Class Y shares are available to certain institutional investors only. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) S&P 500 Stock Index is an unmanaged index of U.S. common stock performance. You may not invest directly in an index. (5) Morningstar Large Cap Value Fund Average is an average performance of funds with similar investment objectives as calculated without sales charges by Morningstar, Inc. Class B since-inception return is calculated from 9/30/93. Class C since-inception return is calculated from 4/30/95. Class Y since-inception return is calculated from 11/30/98. (6) Lipper Multi-Cap Core Funds Average is the average performance of mutual funds with a similar current investment style or objective as calculated without sales charges by Lipper Inc. Class B since-inception return is calculated from 9/30/93. Class C since-inception return is calculated from 4/30/95. Class Y since-inception return is calculated from 11/30/98.
[sidebar] PORTFOLIO FACTS % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMMON STOCKS 98.9 99.5 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 1.1 0.5 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 12/31/00 - ------------------------------------------------------------------------------- EXXON MOBIL CORP. 4.3 3.3 - ------------------------------------------------------------------------------- PFIZER, INC. 3.7 3.8 - ------------------------------------------------------------------------------- JOHNSON & JOHNSON, INC. 3.4 2.3 - ------------------------------------------------------------------------------- VERIZON COMMUNICATIONS, INC. 3.3 0.6 - ------------------------------------------------------------------------------- TYCO INTERNATIONAL, LTD. 3.0 -- - ------------------------------------------------------------------------------- AOL TIME WARNER, INC. 2.9 -- - ------------------------------------------------------------------------------- MERCK & CO. 2.7 3.4 - ------------------------------------------------------------------------------- THE WALT DISNEY CO. 2.5 0.8 - ------------------------------------------------------------------------------- FLEETBOSTON FINANCIAL CORP. 2.4 2.3 - ------------------------------------------------------------------------------- GENERAL ELECTRIC CO. 2.3 4.4 % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 6/30/01 12/31/00 - ------------------------------------------------------------------------------- DRUGS 8.3 10.4 - ------------------------------------------------------------------------------- BANKS 7.9 14.5 - ------------------------------------------------------------------------------- ENERGY RESERVES 7.8 3.8 - ------------------------------------------------------------------------------- TELECOMMUNICATIONS 6.1 3.6 - ------------------------------------------------------------------------------- RETAIL - DEPARTMENT STORE 6.0 3.2 Portfolio holdings and asset allocations will vary. - ------------------------------------------------------------------------------- CDC NVEST BALANCED FUND - ------------------------------------------------------------------------------- INTERVIEW WITH YOUR PORTFOLIO MANAGERS - ------------------------------------------------------------------------------- Q. HOW DID THE FUND PERFORM IN THE FIRST HALF OF 2001? For the six months ended June 30, 2001, the total return on Class A shares of CDC Nvest Balanced Fund was -6.51% at net asset value, including $0.11 per share in reinvested distributions. To provide a balanced model as a benchmark, we combine 65% of S&P 500 Stock Index and 35% of Lehman Brothers Government/Corporate Bond Index. The return on the combined index was -3.13% for the first half of 2001, while Morningstar Domestic Hybrid Fund Average returned - -2.41%. Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE? Against a background of slowing economic growth, investors continued to avoid growth stocks, focusing on more conservative investments like value stocks and fixed-income securities. The decline in stock prices that began in March of 2000 continued into the first half of 2001, with technology suffering some of the sharpest declines. Many companies reported earnings shortfalls, as the long-running economic expansion stalled. Hopes for improving business conditions rose as the Federal Reserve Board cut interest rates six times during the first six months, and by the end of June 2001, most stock market indices were up from their March lows. However, most indices were down year-to-date. Meanwhile, except for some lower rated issues, bonds performed well. Q. HOW DID THE FUND'S EQUITY PORTFOLIO PERFORM? Growth stocks in general underperformed. The fund's emphasis on technology hurt performance, even though it featues large, established companies. Cisco Systems, EMC Corp. and Intel experienced sharp losses. Low demand for technology products and a substantial buildup in semiconductor inventories were significant negatives. However, Microsoft was up, and AOL Time Warner rose as the merger of these internet and media giants proceeded. Viacom (which now owns CBS) and other media companies were also positive. Strong sales, acquisitions, and news that it would be added to the S&P 500 Stock Index boosted shares of financial transaction processor Concord EFS. Value stocks returned to the limelight after a long absence. Chevron rose on news of its proposed merger with Texaco, although a strike caused Suncor Energy to lag despite positive earnings. Among airlines, Southwest Air descended with cutbacks in business travel. Financial stocks that did well included brokerage giant Lehman Brothers, and First Data Corp., the largest processor of credit-card transactions in the U.S. Among the fund's healthcare holdings, Baxter International, a maker of medical and surgical equipment, did well, while Pfizer and Pharmacia slumped as the near-term outlook for drug-company profits weakened. Q. HOW DID THE BOND MARKETS AFFECT PERFORMANCE? Bonds had a strong first half. Among corporate issues, our timely sale of Motorola bonds aided performance. The higher yielding bonds in the portfolio did well overall, although prices weakened in June. Holdings include: AES Corporation, a private utility; Lyondell Chemical, a manufacturer of basic chemicals and polymers; and Global Crossing, whose fiber-optic communications network serves companies worldwide. When Treasury securities began to look overvalued, we shortened the portfolio's duration - a measure of a bond's sensitivity to interest rates. Any weakness in Treasuries could also be a negative for other sectors. Meanwhile, we increased holdings in securities of the Federal National Mortgage Association (FNMA) as mortgage-backed issues were trading at attractive valuations. Q. WHAT IS YOUR CURRENT OUTLOOK? The Fed's rate cuts were geared to stimulate growth by lowering the cost of borrowing. However, typically it takes six to nine months for lower rates to be felt in the economy. In the meantime, this summer's tax rebate checks may have a positive impact on consumer spending, a key component of our economy. [SIDEBAR] PORTFOLIO PROFILE OBJECTIVE: Seeks a reasonable long-term investment return from a combination of long-term capital appreciation and moderate current income - ------------------------------------------------------------------------------- STRATEGY: Invests principally in common stocks of quality, large- to mid-capitalization companies in any industry and investment-grade bonds - ------------------------------------------------------------------------------- INCEPTION DATE: November 27, 1968 - ------------------------------------------------------------------------------- MANAGERS: Nicholas E. Moore Guy Elliffe Eric Hull Jurika & Voyles, L.P. Mark Baribeau Pamela Czekanski Richard Skaggs John Hyll Kurt Wagner Loomis, Sayles & Company, L.P. - ------------------------------------------------------------------------------- SYMBOLS: Class A NEFBX Class B NEBBX Class C NEBCX Class Y NEBYX - ------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE: (JUNE 30, 2001) Class A $9.89 Class B 9.90 Class C 9.85 Class Y 9.80 - ------------------------------------------------------------------------------- CDC NVEST BALANCED FUND - ------------------------------------------------------------------------------- [sidebar] PORTFOLIO FACTS INVESTMENT RESULTS THROUGH JUNE 30, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Balanced Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES - ------------------------------------------------------------------------------- JUNE 1991 THROUGH JUNE 2001 S&P 500/ Lehman Brothers Govt./ Net Asset Value(1) Maximum Sales Charge(2) Corp. Blend 6/30/91 10000 9425 10000 10322 9728 10348 10515 9910 10590 10376 9779 10554 10506 9901 10679 10105 9524 10436 11052 10416 11334 11270 10622 11139 11531 10868 11252 11399 10744 11087 11640 10971 11320 11739 11064 11437 6/30/92 11554 10889 11388 11918 11233 11788 11631 10962 11670 11863 11181 11813 11830 11150 11777 12263 11558 12031 12592 11868 12206 12851 12112 12357 12942 12197 12556 13156 12400 12746 12997 12250 12577 13258 12496 12796 6/30/93 13384 12614 12925 13407 12636 12915 13863 13066 13338 13898 13099 13291 14024 13218 13485 13967 13164 13349 14378 13551 13477 14923 14065 13841 14543 13707 13492 13925 13124 12995 14008 13203 13067 14056 13248 13197 6/30/94 13873 13075 12975 14245 13426 13345 14617 13776 13700 14269 13448 13413 14256 13437 13607 13822 13027 13274 13993 13189 13431 14167 13353 13748 14614 13774 14206 14969 14108 14513 15369 14486 14858 15920 15005 15457 6/30/95 16264 15329 15737 16554 15602 16056 16642 15685 16156 16979 16003 16654 16913 15941 16701 17442 16439 17276 17675 16659 17572 18052 17014 18003 18133 17090 17982 18139 17096 18041 18194 17147 18170 18370 17314 18464 6/30/96 18418 17359 18600 18050 17012 18077 18377 17321 18311 19134 18034 19094 19701 18568 19589 20833 19635 20682 20701 19510 20338 21057 19846 21168 21206 19986 21295 20566 19384 20630 20955 19750 21536 21791 20538 22466 6/30/97 22651 21349 23211 24047 22665 24658 23342 22000 23670 24085 22700 24643 23639 22280 24246 24019 22637 25021 24331 22932 25393 24467 23060 25701 25406 23945 26888 26065 24566 27812 26082 24583 28043 25739 24259 27835 6/30/98 25816 24332 28668 25247 23795 28479 23003 21681 25997 24154 22765 27340 25204 23755 28717 25793 24310 29908 26321 24807 31053 26165 24660 31974 25464 24000 31061 25937 24446 31923 27190 25627 32754 26955 25405 32134 6/30/99 27283 25715 33258 26555 25028 32551 25787 24305 32436 24959 23523 31961 25497 24031 33305 25357 23899 33737 25333 23876 34957 24596 23182 33812 23383 22038 33545 24248 22854 35847 23549 22195 35084 23156 21825 34605 6/30/00 23711 22348 35406 23733 22368 35178 25170 23723 36772 24641 23224 35558 24354 22954 35540 23075 21748 33932 23708 22345 34274 23885 22512 35267 22955 21635 33303 21957 20694 31984 22647 21345 33516 22580 21282 33730 6/30/01 22163 20889 33254 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. AVERAGE ANNUAL TOTAL RETURNS-- JUNE 30, 2001 - ------------------------------------------------------------------------------- CLASS A (Inception 11/27/68) 6 MONTHS 1 YEAR 5 YEARS 10 YEARS Net Asset Value(1) -6.51% -6.53% 3.77% 8.28% With Maximum Sales Charge(2) -11.87 -11.90 2.55 7.64 - ------------------------------------------------------------------------------- CLASS B (Inception 9/13/93) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -6.80% -7.19% 3.00% 5.39% With CDSC(3) -11.44 -11.81 2.74 5.39 - ------------------------------------------------------------------------------- CLASS C (Inception 12/30/94) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -6.83% -7.23% 2.97% 6.49% With Maximum Sales Charge and CDSC(3) -8.71 -9.09 2.76 6.33 - ------------------------------------------------------------------------------- Class Y (Inception 3/8/94) 6 MONTHS 1 YEAR 5 YEARS SINCE INCEPTION Net Asset Value(1) -6.27% -6.04% 4.24% 6.50% - -------------------------------------------------------------------------------
SINCE SINCE SINCE FUND'S FUND'S FUND'S CLASS B CLASS C CLASS Y COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS 10 YEARS INCEPTION INCEPTION INCEPTION S&P/Lehman Gov't./Corp. Blend(4) -3.13% -5.74% 12.00% 12.59% 12.39% 14.76% 13.65% Morningstar Domestic Hybrid Fund Avg.(5) -2.41 -1.84 9.21 10.61 9.49 11.56 10.40 Lipper Balanced Funds Average(6) -2.54 -2.27 9.81 10.80 10.25 12.33 11.21 NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. Class Y shares are available to certain institutional investors only. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) S&P 500/Lehman Brothers Gov't./Corp. Blend is an unmanaged index made up of 65% S&P 500 and 35% of the Lehman Brothers Government/Corporate Bond Index. You may not invest directly in an index. Class B since-inception return is calculated from 9/30/93. Class Y since-inception return is calculated from 3/31/94. (5) Morningstar Domestic Hybrid Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. Class B since-inception return is calculated from 9/30/93. Class Y since-inception return is calculated from 3/31/94. (6) Lipper Balanced Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper Inc. Class B since-inception return is calculated from 9/30/93. Class Y since-inception return is calculated from 3/31/94.
[sidebar] PORTFOLIO FACTS % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMMON STOCKS 64.6 61.6 - ------------------------------------------------------------------------------- BONDS AND NOTES 30.8 37.2 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 4.6 1.2 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 12/31/00 - ------------------------------------------------------------------------------- FNMA, 7.50%, 12/01/99 4.0 -- - ------------------------------------------------------------------------------- BAXTER INTERNATIONAL, INC. 2.4 0.5 - ------------------------------------------------------------------------------- NORTHWEST AIRLINES CORP. 8.38%, 3/15/04 2.1 1.7 - ------------------------------------------------------------------------------- FHLMC, 6.88%, 1/15/05 2.1 -- - ------------------------------------------------------------------------------- FNMA, 7.13%, 2/15/05 2.0 -- - ------------------------------------------------------------------------------- LAQUINTA INNS, INC., 7.40%, 9/15/05 2.0 1.3 - ------------------------------------------------------------------------------- MCGRAW-HILL CO., INC. 1.8 0.6 - ------------------------------------------------------------------------------- AMERCO, 7.85%, 5/15/03 1.7 1.4 - ------------------------------------------------------------------------------- MICROSOFT CORP. 1.6 -- - ------------------------------------------------------------------------------- FREDDIE MAC 1.6 -- % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 6/30/01 12/31/00 - ------------------------------------------------------------------------------- DRUGS & HEALTHCARE 10.3 5.1 - ------------------------------------------------------------------------------- MORTGAGES 8.5 8.2 - ------------------------------------------------------------------------------- COMPUTERS & BUSINESS EQUIPMENT 8.2 0.9 - ------------------------------------------------------------------------------- COMMUNICATION SERVICES 7.4 -- - ------------------------------------------------------------------------------- SOFTWARE 6.3 0.8 - ------------------------------------------------------------------------------- Portfolio holdings and asset allocations will vary. - ------------------------------------------------------------------------------- CDC NVEST LARGE CAP VALUE FUND - ------------------------------------------------------------------------------- INTERVIEW WITH YOUR PORTFOLIO MANAGER Q. HOW DID THE FUND PERFORM DURING THE FIRST HALF OF 2001? For the six months ending June 30, 2001, the total return on CDC Nvest Large Cap Value Fund's Class A shares was -0.24% based on net asset value, including $0.01 per share in reinvested distributions. For the same period, the fund's benchmark - - Russell 1000 Value Index - returned -1.26%, and Morningstar Large Cap Value Fund Average returned -0.89%. Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE? We are still in a volatile period that began early last year, when technology stocks led a steep decline. We believe these declines were proof that many growth stocks had reached unsustainably high valuations. Recently, however, as growth stocks faltered, value stocks became more popular. The Federal Reserve Board's series of interest rate cuts benefited financial companies, which are among the first to respond to changes in interest rates, as well as other companies whose earnings tend to reflect the ups and downs of the economy. Q. GIVEN THAT MARKET ENVIRONMENT, WHAT STRATEGIES DID YOU PURSUE? In keeping with our bottom-up process, we look first for those stocks that appear to be most attractively valued. Only then do we consider sector weightings. The fund's sector allocation has remained relatively stable so far this year, and individual stock selection has become much more important. We continued to emphasize financial stocks, as this sector is undergoing a wave of consolidations and increased globalization. For CDC Nvest Large Cap Value Fund, we favor industry leaders like Citigroup and Merrill Lynch, which are positioned to take advantage of these trends. We sold Bank of New York when its price exceeded our target valuation, but added Mellon Bank. American International Group, a high-quality insurance company that was already in the portfolio, recently bought American General - reflecting consolidation trends within the industry. The fund has a smaller position in utilities and consumer cyclicals than its benchmark, but it has a higher weighting in healthcare because we believe it's a resilient sector. HCA, formerly Hospital Corporation of America, is a good example of the companies we like; management has trimmed expenses by streamlining operations, and Medicare has increased its reimbursements as a result of several lawsuits. Q. WHICH OTHER INVESTMENTS PARTICULARLY HELPED OR HINDERED PERFORMANCE? The fund benefited when shares of mortgage insurer Radian Guaranty moved up on surprisingly strong earnings. Radian's stock had suffered when the economy began to slow, but management was able to generate profits even in a sluggish environment. Dell Computer and Applied Materials rebounded from overly depressed valuations. And shares of retailer Family Dollar Stores rose as investors bought retail stocks in anticipation of an eventual economic recovery. Among the period's disappointments, Honeywell's stock fell when its proposed acquisition by GE was held up by the European Commission, but the stock price is now so depressed that we feel justified in holding it. Shares of Kimberly Clark - - makers of Kleenex, Scott and other brands - also fell on low sales volume. Finally, shares of Interpublic Group, a worldwide advertising and media agency, fell as slow growth hurt its earnings. Q. WHAT IS YOUR CURRENT OUTLOOK? We believe the building blocks for better economic times are falling into place. A goal of the Fed's rate cuts this year has been to keep consumers from retrenching, since consumer spending accounts for about two-thirds of the nation's economy. Although consumer confidence levels are down from a year ago, they recently reached a six-month high. If economic output revives next year, we believe stock prices will follow, despite interim volatility. [sidebar] PORTFOLIO PROFILE - ------------------------------------------------------------------------------- OBJECTIVE: Seeks total return from capital growth and dividend income - ------------------------------------------------------------------------------- STRATEGY: Invests primarily in under-valued common stocks of mid- to large-capitalization companies - ------------------------------------------------------------------------------- INCEPTION DATE: November 28, 1995 - ------------------------------------------------------------------------------- MANAGER: Margaret M. Buescher Vaughan, Nelson, Scarborough & McCullough, L.P. - ------------------------------------------------------------------------------- SYMBOLS: Class A NEEIX Class B NEBIX Class C NECEX - ------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE: (JUNE 30, 2001) Class A $18.43 Class B 18.34 Class C 18.35 - ------------------------------------------------------------------------------- CDC NVEST LARGE CAP VALUE FUND - ------------------------------------------------------------------------------- INVESTMENT RESULTS THROUGH JUNE 30, 2001 - ------------------------------------------------------------------------------- PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Large Cap Value Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES - ------------------------------------------------------------------------------- NOVEMBER 1995 (INCEPTION) THROUGH JUNE 2001 MAXIMUM RUSSELL 1000 NET ASSET VALUE(1) SALES CHARGE(2) VALUE INDEX(4) 11/28/95 10000 9425 10000 10032 9455 10009 10321 9727 10260 10553 9947 10580 10698 10083 10661 10875 10249 10842 11123 10484 10883 11460 10801 11019 6/30/96 11356 10703 11028 11067 10431 10611 11284 10635 10915 11701 11028 11349 12343 11633 11788 13106 12352 12643 13067 12316 12481 13464 12690 13086 13714 12926 13279 13093 12340 12801 13542 12763 13338 14206 13389 14084 6/30/97 14628 13787 14688 15603 14706 15793 15154 14283 15231 15708 14805 16150 14948 14089 15700 15582 14686 16394 16026 15104 16873 15825 14915 16633 17083 16100 17752 17847 16821 18839 17810 16786 18965 17198 16209 18684 6/30/98 17001 16023 18923 16267 15332 18590 13964 13161 15824 14768 13919 16732 15887 14973 18029 16386 15444 18869 16453 15507 19511 15818 14909 19667 15491 14601 19390 15400 14514 19791 16796 15830 21640 16730 15768 21402 6/30/99 17364 16365 22022 16960 15985 21377 16321 15383 20584 15602 14705 19863 16401 15458 21008 16138 15210 20844 16133 15206 20944 15532 14638 20261 14328 13504 18756 15778 14870 21044 15825 14915 20800 16041 15119 21018 6/30/00 15736 14831 20058 16048 15125 20308 17091 16108 21437 17056 16075 21635 17615 16602 22167 16885 15914 21344 17587 16576 22414 17692 16674 22499 17083 16101 21873 16788 15823 21101 17473 16468 22135 17948 16916 22633 6/30/01 17544 16535 22131 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. AVERAGE ANNUAL TOTAL RETURNS -- JUNE 30, 2001 - ------------------------------------------------------------------------------- SINCE CLASS A (Inception 11/28/95) 6 MONTHS(7) 1 YEAR(7) 5 YEARS(7) INCEPTION(7) Net Asset Value(1) -0.24% 11.49% 9.09% 10.58% With Maximum Sales Charge(2) -5.99 5.06 7.81 9.42 - ------------------------------------------------------------------------------- SINCE CLASS B (Inception 9/15/97) 6 MONTHS(7) 1 YEAR(7) INCEPTION(7) Net Asset Value(1) -0.57% 10.72% 2.72% With CDSC(3) -5.54 5.72 1.98 - ------------------------------------------------------------------------------- SINCE CLASS C (Inception 9/15/97) 6 MONTHS(7) 1 YEAR(7) INCEPTION(7) Net Asset Value(1) -0.62% 10.71% 2.73% With CDSC(3) -2.62 8.60 2.47 - ------------------------------------------------------------------------------- SINCE SINCE FUND'S FUND'S CLASS A CLASS B AND C COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS INCEPTION INCEPTION
SINCE SINCE FUND'S FUND'S CLASS A CLASS B AND C COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS INCEPTION INCEPTION Russell 1000 Value(4) -1.26% 10.33% 14.95% 15.27% 8.76% Morningstar Large Cap Value Fund Avg.(5) -0.89 7.95 12.07 13.03 6.79 Lipper Large Cap Value Funds Average(6) -2.79 3.88 11.90 12.85 6.28 NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) Russell 1000 Value Index is an unmanaged index of the largest 1000 U.S. companies within the Russell 3000, selected for their value orientation. You may not invest directly in an index. Class B and Class C share since-inception return is calculated from 9/30/97. (5) Morningstar Large Cap Value Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. Class A share since-inception is calculated from 11/30/95. Class B and C share since-inception performance is calcualted from 9/30/97. (6) Lipper Large Cap Value Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper, Inc. Class A share since-inception return is calculated from 11/30/95. Class B and C share since- inception performance is calculated from 9/30/97. (7) Fund performance has been increased by voluntary expense waivers, without which performance would have been lower.
[sidebar] PORTFOLIO FACTS - ------------------------------------------------------------------------------- % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMMON STOCKS 99.4 93.9 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 0.6 6.1 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 12/31/00 - ------------------------------------------------------------------------------- CITIGROUP, INC. 4.5 3.9 - ------------------------------------------------------------------------------- J.P. MORGAN & CO., INC. 4.4 2.9 - ------------------------------------------------------------------------------- ACE, LTD. 4.1 0.1 - ------------------------------------------------------------------------------- AMERICAN GENERAL CORP. 4.0 4.1 - ------------------------------------------------------------------------------- FANNIE MAE 3.8 3.0 - ------------------------------------------------------------------------------- EXXON MOBIL CORP. 3.7 3.2 - ------------------------------------------------------------------------------- HCA INC. 3.4 -- - ------------------------------------------------------------------------------- MERRILL LYNCH & CO., INC. 3.4 2.5 - ------------------------------------------------------------------------------- DUKE POWER CO. 3.2 4.1 - ------------------------------------------------------------------------------- AMERICAN INTERNATIONAL GROUP, INC. 3.2 4.3 % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 6/30/01 12/31/00 - ------------------------------------------------------------------------------- FINANCIAL SERVICES 17.0 12.4 - ------------------------------------------------------------------------------- INSURANCE 15.4 12.1 - ------------------------------------------------------------------------------- HEALTH CARE - DRUGS 8.4 10.3 - ------------------------------------------------------------------------------- COMMUNICATION SERVICES 6.2 6.0 - ------------------------------------------------------------------------------- FOOD & BEVERAGES 5.5 5.7 Portfolio holdings and asset allocations will vary. - ------------------------------------------------------------------------------- CDC NVEST MID CAP GROWTH FUND - ------------------------------------------------------------------------------- INTERVIEW WITH YOUR PORTFOLIO MANAGERS - ------------------------------------------------------------------------------- Q. HOW DID THE FUND PERFORM DURING THE PERIOD? Since inception on March 15, 2001, the total return on Class A shares of CDC Nvest Mid Cap Growth Fund was 4.30% based on net asset value. The fund's benchmark, the Russell Midcap Growth Index returned 10.00% for the same period. Q. WHAT IS THE FUND'S INVESTMENT STRATEGY? The fund seeks long-term growth of capital by investing in leading mid-cap companies in high-growth industries. The fund defines mid-cap companies as those with market capitalizations between $1 billion and $10 billion at the time of purchase. Target companies are those with distinctive products, technologies or services; dynamic sales growth; prospects for high levels of profitability; and solid management. The portfolio will generally invest in 60 to 75 companies. Q. DID THE VOLATILE INVESTMENT ENVIRONMENT AFFECT YOUR STRATEGY? In some ways it made our job more difficult, but it's also been an advantage. Some sectors that had been experiencing very rapid growth, such as telecommunications equipment and services, collapsed as investors could not agree on what their growth rates are likely to be. We looked for fundamentally sound companies whose growth has slowed as a result of broad economic conditions, avoiding businesses that underperformed for company-specific reasons, such as product transitions or weak management. The positive side of the downturn has been that stocks of some high-growth companies, particularly in the technology area, have declined so much that their current valuations do not appear to adequately reflect their long-term potential. This gives us bargain-hunting opportunities. Faced with a volatile market, we plan to remain true to our mandate: to stay essentially fully invested in growth-oriented stocks, and not move into defensive issues or raise the fund's cash position. At June 30, 2001, the fund had only been in existence for three and one half months, and had a relatively large cash position pending investment. Q. WHERE DID YOU FIND OPPORTUNITIES? In the technology sector, we sought undervalued stocks of companies active in networking, storage and software. The performance of these stocks was mixed. Storage companies, such as Qlogic and Brocade, bucked the negative trend in the technology sector, while other issues succumbed. We also invested in some healthcare stocks, including biotechnology, where we selected companies like Idec Pharmaceuticals, which reported strong product sales, and Gilead Sciences, which had favorable clinical results. Early in the period, the energy sector seemed attractive, but later we pulled back. Energy companies, including independent power producers, were among the weakest performers. Declining profit margins for power companies and the California energy crisis hurt the stock of Calpine, an innovative power producer, and weakening oil and gas prices eroded earnings in oil-services stocks, like B.J. Services. Q. WHAT IS YOUR CURRENT OUTLOOK? Long-term, we believe the mid-cap growth area of the market offers substantial opportunities. Mid-cap stocks tend to be overlooked by investors who either focus on large, well-established companies for conservative growth, or on smaller, aggressive companies. This can work to our advantage. We believe we've identified a number of attractively priced, mid-cap companies with the potential for rapid earnings growth. Because the economy remains in the doldrums, however, these companies have yet to exhibit strong performance. Once the stock market begins to anticipate an economic recovery, we believe CDC Nvest Mid Cap Growth Fund should be well positioned to seek long-term capital growth. [sidebar] PORTFOLIO PROFILE OBJECTIVE: Seeks long-term capital growth - ------------------------------------------------------------------------------- STRATEGY: Invests primarily in equity securities of companies with mid-size market capitalizations - ------------------------------------------------------------------------------- INCEPTION DATE: March 15, 2001 - ------------------------------------------------------------------------------- MANAGERS: Christopher R. Ely David L. Smith Philip C. Fine Loomis, Sayles & Company, L.P. - ------------------------------------------------------------------------------- SYMBOLS: Class A NRMAX+ Class B NRMBX+ Class C NRMCX+ - ------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE: (JUNE 30, 2001) Class A $10.43 Class B 10.41 Class C 10.41 + Pending NASDAQ approval. - ------------------------------------------------------------------------------- CDC NVEST MID CAP GROWTH FUND - ------------------------------------------------------------------------------- INVESTMENT RESULTS THROUGH JUNE 30, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Mid Cap Growth Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES - ------------------------------------------------------------------------------- MARCH 2001 (INCEPTION) THROUGH JUNE 2001 RUSSELL 1000 NET ASSET VALUE(1) MAXIMUM SALES CHARGE(2) MIDCAP GROWTH INDEX(4) 3/15/01 10000 9425 10000 3/31/01 9850 9284 9468 4/30/01 11200 10556 11046 5/31/01 10790 10170 10994 6/30/01 10430 9830 11000 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. TOTAL RETURNS -- JUNE 30, 2001 - ------------------------------------------------------------------------------- CLASS A (Inception 3/15/01) SINCE INCEPTION(5) Net Asset Value(1) 4.30% With Maximum Sales Charge(2) -1.70 - ------------------------------------------------------------------------------ CLASS B (Inception 3/15/01) SINCE INCEPTION(5) Net Asset Value(1) 4.10% With CDSC(3) -0.90 - ------------------------------------------------------------------------------ CLASS C (Inception 3/15/01) SINCE INCEPTION(5) Net Asset Value(1) 4.10% With CDSC(3) 2.08 - ------------------------------------------------------------------------------ SINCE FUND'S CLASS A, B AND C COMPARATIVE PERFORMANCE INCEPTION Russell Midcap Growth Index(4) 10.00% NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) Russell 1000 Midcap Growth Index is an unmanaged index of medium-capitalization, growth-oriented stocks of U.S. corporations. You may not invest directly in an index. (5) Fund performance has been increased by voluntary expense waivers, without which performance would have been lower. [sidebar] PORTFOLIO FACTS % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 - ------------------------------------------------------------------------------- COMMON STOCKS 90.0 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 10.0 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 - ------------------------------------------------------------------------------- QLOGIC CORP. 2.5 - ------------------------------------------------------------------------------- MACROVISION CORP. 2.3 - ------------------------------------------------------------------------------- EMULEX CORP. 2.0 - ------------------------------------------------------------------------------- KLA - TENCOR CORP. 2.0 - ------------------------------------------------------------------------------- QUEST SOFTWARE, INC. 1.9 - ------------------------------------------------------------------------------- COX RADIO INC. 1.9 - ------------------------------------------------------------------------------- INTERSIL HOLDING CORP. 1.9 - ------------------------------------------------------------------------------- VERISIGN, INC. 1.9 - ------------------------------------------------------------------------------- LABORATORY CORP. 1.8 - ------------------------------------------------------------------------------- FOUNDRY NETWORKS, INC. 1.8 - ------------------------------------------------------------------------------- % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 6/30/01 - ------------------------------------------------------------------------------- ELECTRONICS - SEMICONDUCTORS 17.6 - ------------------------------------------------------------------------------- DRUGS & HEALTHCARE 16.0 - ------------------------------------------------------------------------------- REPURCHASE AGREEMENT 10.0 - ------------------------------------------------------------------------------- SOFTWARE 9.1 - ------------------------------------------------------------------------------- TELECOMMUNICATIONS - EQUIPMENT 9.1 - ------------------------------------------------------------------------------- Portfolio holdings and asset allocations will vary. - ------------------------------------------------------------------------------- CDC NVEST SELECT FUND - ------------------------------------------------------------------------------- INTERVIEW WITH YOUR PORTFOLIO MANAGERS - ------------------------------------------------------------------------------- Q. HOW HAS THE FUND PERFORMED SO FAR? From its March 15, 2001 inception through June 30, the total return on Class A shares of CDC Nvest Select Fund at net asset value was 9.90%. For the same period, the fund's benchmark, the Standard & Poor's 500 Index, returned 4.68%. Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE? The stock market has been trying to sustain a rally after last year's volatile slide, but disappointing earnings forecasts and widespread layoffs were clear signs of a slowing economy. The Federal Reserve Board's aggressive program of cutting interest rates during the first half of 2001 was geared to revive the economy, and we view this as a long-term positive. We also welcome the market's return to traditional ways of valuing stocks - examining a company's intrinsic worth based on performance rather than on earnings expectations. Q. PLEASE DESCRIBE YOUR INVESTMENT STYLE. We believe in building a concentrated portfolio of mid- and large-cap stocks - typically around 20. By limiting the number of stocks we own, only our favorites will be in the portfolio. We are also bottom-up investors, which means we start with an analysis of individual companies, looking for stocks that appear to be undervalued, rather than targeting sectors. When we select a stock, we ask the same questions a buyer of the whole business might ask: What is the company's long-term profit potential? How effective are its managers? Do they have significant ownership stakes themselves? Q. WHAT STRATEGIES HAVE YOU USED TO CONSTRUCT THE FUND'S PORTFOLIO? In the first few months of operation, we selected 20 stocks that we liked the most. Because we don't predetermine sector weightings, CDC Nvest Select Fund's large position in the financial sector indicates that we are finding good value there. Washington Mutual, the nation's largest savings and loan company, has outstanding management and generates substantial free cash flow - one of the key factors in our valuation process. In this case, management has used cash to buy back stock when it is low, and to make strategic acquisitions when the stock's price is high. We also hold two well-known telecommunications companies whose stock prices appear to understate the sum of their parts. Although AT&T's share of the long-distance market has shrunk, that business continues to produce large cash flows, and the company is growing its broadband business. Sprint has been using cash to buy telephone assets and has a fast-growing data communications business. Sprint also offers e-commerce services to businesses over its own internet backbone. We began buying shares of J.C. Penney when they were trading well below book value (the company's assets minus its liabilities). The company has new management with a strong track record in revitalizing faltering retail chains and Penney seems poised to stage a turnaround - one of our key stock-selection criteria. Q. WHAT IS YOUR CURRENT OUTLOOK? Although value investing has staged a solid comeback since the middle of last year, we are still finding many stocks that we believe to be undervalued. A good sign that there is value in the marketplace is that companies are buying other companies - or parts of them - within their own industry. These transactions often lead to cost-cutting and other synergies that eventually are reflected in the bottom line. We believe lower interest rates will work their way through the economy in due course, reviving corporate profits. In the meantime, we view the current economic slowdown and resulting lower stock prices as an opportunity to invest in companies with attractive long-term potential at discount prices. [sidebar] PORTFOLIO PROFILE OBJECTIVE: Seeks long-term capital appreciation - ------------------------------------------------------------------------------- STRATEGY: Invests primarily in common stocks of U.S. companies - ------------------------------------------------------------------------------- INCEPTION DATE: March 15, 2001 - ------------------------------------------------------------------------------- MANAGERS: William C. Nygren Floyd J. Bellman Harris Associates, L.P. - ------------------------------------------------------------------------------- SYMBOLS: Class A NRSAX+ Class B NRSBX+ Class C NRSCX+ - ------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE: (JUNE 30, 2001) Class A $10.99 Class B 10.97 Class C 10.97 + Pending NASDAQ approval. INVESTMENT RESULTS THROUGH JUNE 30, 2001 - ------------------------------------------------------------------------------- PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Select Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES - ------------------------------------------------------------------------------- MARCH 2001 (INCEPTION) THROUGH JUNE 2001 NET ASSET VALUE(1) MAXIMUM SALES CHARGE(2) S&P 500(4) 3/15/01 10000 9425 10000 3/31/01 10090 9510 9890 4/30/01 10420 9821 10658 5/31/01 10690 10075 10729 6/30/01 10990 10358 10468 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. TOTAL RETURNS -- JUNE 30, 2001 - ------------------------------------------------------------------------------- CLASS A (Inception 3/15/01) SINCE INCEPTION(5) Net Asset Value(1) 9.90% With Maximum Sales Charge(2) 3.58 - ------------------------------------------------------------------------------ CLASS B (Inception 3/15/01) SINCE INCEPTION(5) Net Asset Value(1) 9.70% With CDSC(3) 4.70 - ------------------------------------------------------------------------------ CLASS C (Inception 3/15/01) SINCE INCEPTION(5) Net Asset Value(1) 9.70% With CDSC(3) 7.62 - ------------------------------------------------------------------------------ SINCE FUND'S CLASS A, B AND C COMPARATIVE PERFORMANCE INCEPTION S&P 500(4) 4.68% NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) S&P 500 Stock Index is an unmanaged index of U.S. common stock performance. You may not invest directly in an index. (5) Fund performance has been increased by voluntary expense waivers, without which performance would have been lower. [sidebar] PORTFOLIO FACTS % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 - ------------------------------------------------------------------------------- COMMON STOCKS 92.4 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 7.6 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 - ------------------------------------------------------------------------------- WASHINGTON MUTUAL 14.4 - ------------------------------------------------------------------------------- KNIGHT-RIDDER, INC. 4.7 - ------------------------------------------------------------------------------- AT&T CORP. 4.6 - ------------------------------------------------------------------------------- BURLINGTON RESOURCES, INC. 4.5 - ------------------------------------------------------------------------------- FORD MOTOR CO. 4.5 - ------------------------------------------------------------------------------- ELECTRONIC DATA SYSTEMS CORP. 4.4 - ------------------------------------------------------------------------------- Black & DECKER CORP. 4.4 - ------------------------------------------------------------------------------- THE KROGER CO. 4.4 - ------------------------------------------------------------------------------- NOVELL, INC. 4.4 - ------------------------------------------------------------------------------- TXU CORP. 4.4 % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 6/30/01 - ------------------------------------------------------------------------------- FINANCIAL SERVICES 18.7 - ------------------------------------------------------------------------------- COMPUTER SOFTWARE & Services 8.8 - ------------------------------------------------------------------------------- Telecommunications 8.6 - ------------------------------------------------------------------------------- Energy 7.9 - ------------------------------------------------------------------------------- Repurchase Agreement 7.6 - ------------------------------------------------------------------------------- Portfolio holdings and asset allocations will vary. - ------------------------------------------------------------------------------- CDC NVEST BULLSEYE FUND - ------------------------------------------------------------------------------- INTERVIEW WITH YOUR PORTFOLIO MANAGER - ------------------------------------------------------------------------------- Q. HOW DID THE FUND PERFORM DURING THE FIRST HALF OF 2001? For the six months ended June 30, 2001, the total return on Class A shares of CDC Nvest Bullseye Fund was -1.24% based on net asset value, including $0.05 per share in reinvested dividends. The fund's benchmark, Standard & Poor's 500, returned -6.70% for the same period, while Morningstar Midcap Blend Fund Average returned -1.30%. Our selection process is to seek attractively priced stocks of 15 to 25 companies of any size that we believe have the best prospects for capital appreciation. This aggressive approach is likely to make the fund more volatile, both on the upside and downside. Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE DURING THE PERIOD? Two forces competed: A spate of disappointing earnings announcements by some leading companies had a negative impact, while the Federal Reserve Board's aggressive series of interest-rate cuts was geared to increase the money supply and encourage business investment. The spending boom in telecommunications stalled, leaving many companies with excess inventories, while a slower economy contributed to reduced corporate spending. Both the finance and energy sectors fell in and out of favor as the market tried to regain its footing, and returns for most stock market indices were negative during the period. Certain segments of the technology sector - such as semiconductor capital equipment - started to attract attention during the second quarter because new equipment orders had declined so much that investors began to anticipate a rebound. Q. WHAT STRATEGIES DID YOU PURSUE? We continued to seek reasonably priced stocks of companies we believed had the best potential for earnings growth once the economy rebounds. Two of our longer-term holdings looked particularly attractive: AMR Corp., the parent company of American Airlines, and Southwest Airlines. Fundamentals in the airline industry were under cyclical pressure, but we believe declining energy prices will improve these companies' cash flows. We also maintained the fund's position in Cox Communications and initiated one in Comcast - com- panies with excellent revenue potential because of their near-monopoly status. They've also remained relatively immune to the disturbance caused by weakening business spending. The new digital technologies are also attractive right now. Despite the slump in tech and telecom, we maintained significant positions in Scientific Atlanta, which provides digital TV equipment; SanDisk, a manufacturer of digital solid-state memory cards; Palm, the dominant handheld device provider; and Cognex Corp., which produces machine vision systems. Other digitally related investments include Sprint PCS, a leading provider of wireless communications services; and Instersil, which provides wireless networking semiconductors. Among the other stocks that performed well for the fund year-to-date were: First Data Corporation, the largest processor of credit card transactions in the U.S.; and two transportation firms - the Norfolk Southern Railroad and Teekay Shipping, a sea transport company. Norfolk Southern performed well because of the widespread expectation that an increase in automobile production would have a positive impact on the company's earnings. Teekay increased the prices it charges customers. Video game maker Electronic Arts was also a positive for the fund when it introduced a new video-game platform. Q. WHAT IS YOUR CURRENT OUTLOOK? Several factors suggest a healthy stock market going forward, including prospects for a recovery as the effects of the Fed's rate cuts are felt and as the U.S. dollar regains strength. We also expect a decrease in speculative activity by people who invest borrowed money, which helped to inflate stock valuations in 1999 and early 2000. This should help stabilize stock prices. Consequently, we've positioned CDC Nvest Bullseye Fund to benefit from an improving economy, sparked by low interest rates and cheaper energy prices. [sidebar] PORTFOLIO PROFILE OBJECTIVE: Seeks long-term growth of capital - ------------------------------------------------------------------------------- STRATEGY: Invests substantially all of its assets in a non-diversified portfolio of equity securities - ------------------------------------------------------------------------------- INCEPTION DATE: March 31, 1998 - ------------------------------------------------------------------------------- MANAGER: Nicholas E. Moore Jurika & Voyles, L.P. - ------------------------------------------------------------------------------- SYMBOLS: Class A NFBSX Class B NFBBX Class C NFBCX - ------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE: (JUNE 30, 2001) Class A $10.79 Class B 10.47 Class C 10.47 - ------------------------------------------------------------------------------- CDC NVEST BULLSEYE FUND - ------------------------------------------------------------------------------- INVESTMENT RESULTS THROUGH JUNE 30, 2001 PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest Bullseye Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES - ------------------------------------------------------------------------------- MARCH 1998 (INCEPTION) THROUGH JUNE 2001 NET ASSET VALUE(1) MAXIMUM SALES CHARGE(2) S&P 500(4) 3/31/98 10000 9425 10000 10280 9689 10101 9608 9056 9927 6/30/98 9672 9116 10330 9064 8543 10221 7560 7125 8743 8464 7977 9303 9424 8882 10060 9416 8875 10669 10120 9538 11284 10008 9433 11755 9384 8844 11390 9752 9191 11845 10360 9764 12304 10304 9711 12014 6/30/99 10840 10217 12680 10664 10051 12285 10504 9900 12223 9608 9055 11888 10344 9749 12641 11728 11054 12897 13832 13037 13657 13744 12954 12972 13544 12765 12726 14640 13798 13971 14176 13361 13550 13368 12599 13273 6/30/00 13536 12758 13599 13448 12675 13387 14106 13295 14218 12980 12234 13468 13275 12512 13411 11706 11033 12354 12288 11582 12415 13407 12636 12856 12568 11845 11683 11673 11001 10942 12590 11866 11793 12825 12088 11872 6/30/01 12136 11438 11583 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. AVERAGE ANNUAL TOTAL RETURNS -- JUNE 30, 2001 - ------------------------------------------------------------------------------- SINCE CLASS A (Inception 3/31/98) 6 MONTHS(7) 1 YEAR(7) INCEPTION(7) Net Asset Value(1) -1.24% -10.34% 6.14% With Maximum Sales Charge(2) -6.92 -15.49 4.23 - ------------------------------------------------------------------------------ SINCE CLASS B (Inception 3/31/98) 6 MONTHS(7) 1 YEAR(7) INCEPTION(7) Net Asset Value(1) -1.64% -11.04% 5.40% With CDSC(3) -6.54 -14.18 4.71 - ------------------------------------------------------------------------------ SINCE CLASS C (Inception 3/31/98) 6 MONTHS(7) 1 YEAR(7) INCEPTION(7) Net Asset Value(1) -1.64% -11.04% 5.40% With Maximum Sales Charge and CDSC(3) -3.61 -12.56 5.06 - ------------------------------------------------------------------------------ SINCE FUND'S CLASS A, B AND C COMPARATIVE PERFORMANCE 6 MONTHS(7) 1 YEAR(7) INCEPTION(7) S&P 5004 -6.70% -14.83% 4.63% Morningstar Midcap Blend Fund Average(5) -1.30 -1.68 5.51 Lipper Multi-Cap Core Value Funds Average(6) 1.36 11.37 5.10 NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) S&P 500 Index is an unmanaged index of U.S. common stock performance. You may not invest directly in an index. (5) Morningstar Midcap Blend Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. (6) Lipper Multi-Cap Core Value Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper Inc. (7) Fund performance has been increased by voluntary expense waivers, without which performance would have been lower. [sidebar] PORTFOLIO FACTS % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMMON STOCKS 92.7 100.3 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 7.3 (0.3) % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 12/31/00 - ------------------------------------------------------------------------------- BLOCKBUSTER, INC. 5.8 5.5 - ------------------------------------------------------------------------------- COX COMMUNICATIONS, INC. 5.7 6.1 - ------------------------------------------------------------------------------- INTERSIL HOLDING CORP. 5.6 -- - ------------------------------------------------------------------------------- AMR CORP. 5.6 5.0 - ------------------------------------------------------------------------------- COMPUTER SCIENCES CORP. 5.0 5.0 - ------------------------------------------------------------------------------- PFIZER, INC. 5.0 4.8 - ------------------------------------------------------------------------------- COMCAST CORP. 4.9 -- - ------------------------------------------------------------------------------- THE INTERPUBLIC GROUP OF COMPANIES, INC. 4.8 -- - ------------------------------------------------------------------------------- PHARMACIA CORP. 4.7 6.0 - ------------------------------------------------------------------------------- SCIENTIFIC - ATLANTA, INC. 4.7 3.9 % OF NET ASSETS AS OF FIVE LARGEST INDUSTRIES 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMMUNICATION SERVICES 24.7 10.1 - ------------------------------------------------------------------------------- ELECTRONICS 9.9 3.6 - ------------------------------------------------------------------------------- AIRLINES 9.8 9.7 - ------------------------------------------------------------------------------- HEALTH CARE - DRUGS 9.7 10.8 - ------------------------------------------------------------------------------- RETAIL 5.8 5.5 Portfolio holdings and asset allocations will vary. - ------------------------------------------------------------------------------- CDC NVEST INTERNATIONAL EQUITY FUND - ------------------------------------------------------------------------------- INTERVIEW WITH YOUR PORTFOLIO MANAGER - ------------------------------------------------------------------------------- Q. HOW DID THE FUND PERFORM DURING THE FIRST HALF OF 2001? For the six months ended June 30, 2001, the total return on Class A shares of CDC Nvest International Equity Fund was -15.52% at net asset value. Its benchmark, MSCI EAFE had a total return of -14.87% for the same period, while Morningstar Foreign Stock Fund Average, a group of comparable international stock funds, had a return of -14.23%. Q. WHAT WAS THE INVESTMENT ENVIRONMENT LIKE? During the past six months, economic growth continued to slow - in the United States and internationally - and almost all equity market indices were negative. Value stocks outperformed growth stocks. If you break down the results of Morningstar's universe of international equity funds, you'll find that those in the top half were value-oriented funds, while those in the lower half were growth-oriented. Your fund was a strong performer in the growth-oriented half for the six months ended June 30, 2001, but it didn't do as well as the value-oriented funds. Our growth orientation served the fund well in 1999, when the economy was accelerating, but performance suffered when the Federal Reserve Board's series of interest-rate increases contributed to slower growth around the world. So far this year, six rate cuts in as many months indicate the Fed's concern about the economy's downside risks. And when we talk to top corporate executives, they express confidence that demand for their products and services will revive eventually, but they're not sure when. Q. WHICH INVESTMENTS DID WELL AND WHICH WERE DISAPPOINTING? Our best sectors to date have been healthcare, finance and retail. The fund also benefited from its holdings in industrial services firms, most of which provide services for companies active in searching for and producing energy. These include Canada's Precision Drilling Corp.; Coflexip SA, a French drilling company; and TransCanada Pipelines. Countries that performed well include France, Ireland and Switzerland, all of which are more heavily weighted in the portfolio than in the EAFE index. The fund also has benefited from its investments in India - a country not represented in the EAFE index - as well as Sweden. Most disappointments have been technology companies and manufacturers of electronic components - including Hitachi, Furukawa Electric, Kawasaki, and Mitsubishi. Japan, Israel and Germany have been our least successful country positions. Japan was also disappointing last year and we have been trimming this position, despite our strong belief in this country's potential for recovery. Our largest holding in Israel, Check Point Software Technologies, had performed well for the fund in the past. However, like many other software companies, recent concerns about slowing demand depressed the price of the stock so much that we decided to sell it. Q. WHAT'S YOUR CURRENT OUTLOOK FOR INTERNATIONAL STOCKS? After five straight quarters when growth stocks underperformed value, we may be nearing the next shift toward growth. However, economies around the world are sluggish currently, and we don't yet see any catalyst for renewed activity. Long term, we believe international markets will outperform the U.S., if only because they never reached the same highs. We are encouraged to note that U.S.-style capitalism is taking hold internationally. Germany has enacted tax reductions not unlike those in the U.S. Italy's new prime minister vowed to lower taxes. And Great Britain's recently re-elected prime minister has been moving the Labor party closer to a free-market economy. We also believe in the growth potential of some emerging markets, including Australia, Brazil, Israel, India and Russia. Our emphasis on fundamental research is designed to help us identify the most promising companies in many countries in an effort to find growth through international diversification for shareholders of CDC Nvest International Equity Fund. [sidebar] PORTFOLIO PROFILE OBJECTIVE: Seeks total return from long-term capital growth and dividend income - ------------------------------------------------------------------------------- STRATEGY: Invests primarily in equity securities of companies organized or headquartered outside of the United States. - ------------------------------------------------------------------------------- INCEPTION DATE: May 21, 1992 - ------------------------------------------------------------------------------- MANAGERS: Alexander Muromcew John Tribolet Eswar Menon Loomis, Sayles & Company, L.P. - ------------------------------------------------------------------------------- SYMBOLS: Class A NEFIX Class B NEIBX Class C NECIX Class Y NEIYX - ------------------------------------------------------------------------------- NET ASSET VALUE PER SHARE: (JUNE 30, 2001) Class A $14.04 Class B 13.46 Class C 13.51 Class Y 14.42 - ------------------------------------------------------------------------------- CDC NVEST INTERNATIONAL EQUITY FUND - ------------------------------------------------------------------------------- INVESTMENT RESULTS THROUGH JUNE 30, 2001 - ------------------------------------------------------------------------------- PERFORMANCE IN PERSPECTIVE The charts comparing CDC Nvest International Equity Fund's performance to a benchmark index provide you with a general sense of how the fund performed. To put this information in context, it may be helpful to understand the special differences between the two. The fund's total return for the period shown below appears with and without sales charges and includes fund expenses and management fees. A securities index measures the performance of a theoretical portfolio. Unlike a fund, the index is unmanaged and does not have expenses that affect the results. It is not possible to invest directly in an index. In addition, few investors could purchase all of the securities necessary to match the index and would incur transaction costs and other expenses even if they could. GROWTH OF A $10,000 INVESTMENT IN CLASS A SHARES - ------------------------------------------------------------------------------- MAY 1992 (INCEPTION) THROUGH JUNE 2001 NET ASSET VALUE(1) MAXIMUM SALES CHARGE(2) MSCI EAFE 5/21/92 10000 9425 10000 10160 9576 10121 6/30/92 9840 9274 9644 9424 8882 9400 9880 9312 9993 9680 9123 9800 9288 8754 9288 9480 8935 9378 9503 8956 9430 9422 8880 9432 9583 9032 9719 10509 9905 10570 11282 10634 11576 11468 10808 11824 6/30/93 11202 10558 11642 11677 11006 12051 12257 11552 12705 12015 11324 12421 12289 11583 12806 11548 10884 11690 12295 11588 12536 13189 12431 13599 12999 12252 13564 12668 11939 12982 13148 12392 13536 13123 12369 13462 6/30/94 13347 12579 13655 13454 12681 13789 13818 13024 14119 13371 12602 13677 13835 13040 14135 13173 12415 13459 13286 12522 13547 12651 11924 13029 12729 11997 12996 13166 12409 13810 13509 12732 14334 13466 12691 14166 6/30/95 13354 12587 13921 14100 13289 14791 13612 12829 14230 13757 12966 14512 13269 12506 14126 13603 12821 14523 14054 13246 15111 13958 13155 15176 14019 13213 15231 14359 13533 15558 14890 14034 16014 14794 13944 15723 6/30/96 14908 14050 15816 14394 13566 15357 14428 13599 15394 14623 13782 15806 14365 13539 15648 14711 13866 16274 14513 13679 16069 13632 12848 15510 13819 13024 15767 13801 13008 15829 13614 12832 15916 14317 13494 16955 6/30/97 14922 14064 17895 15412 14525 18188 14059 13251 16833 15018 14155 17779 13654 12869 16417 13358 12590 16253 13415 12644 16399 13921 13120 17154 14713 13867 18258 15457 14568 18824 15467 14577 18977 15113 14244 18890 6/30/98 14560 13723 19037 14722 13876 19235 12747 12014 16856 12440 11725 16343 13208 12449 18051 13938 13136 18981 14313 13490 19734 14293 13471 19681 13651 12866 19216 13901 13102 20023 14504 13670 20838 14032 13225 19769 6/30/99 14634 13793 20544 15286 14408 21161 15487 14597 21243 16096 15171 21462 17422 16421 22271 21461 20227 23051 26849 25305 25123 25527 24059 23530 30180 28445 24168 27748 26153 25110 24354 22953 23795 22525 21229 23219 6/30/00 23423 22076 24131 21975 20711 23125 22641 21339 23331 21545 20306 22199 19707 18574 21680 18434 17374 20871 19183 18080 21618 19148 18047 21625 17347 16350 20007 15858 14947 18649 16736 15773 19930 16493 15545 19193 6/30/01 16205 15273 18404 The illustration represents past performance and does not guarantee future results. Share price and return will vary and you may have a gain or loss when you sell your shares. Other classes of shares are available for which performance, fees, and expenses will differ. All results include reinvestment of dividends and capital gains. AVERAGE ANNUAL TOTAL RETURNS -- JUNE 30, 2001 - ------------------------------------------------------------------------------- SINCE CLASS A (Inception 5/21/92) 6 MONTHS 1 YEAR 5 YEARS(7) INCEPTION(7) Net Asset Value(1) -15.52% -30.82% 1.68% 5.44% With Maximum Sales Charge(2) -20.36 -34.79 0.49 4.76 - ------------------------------------------------------------------------------- SINCE CLASS B (Inception 9/13/93) 6 MONTHS 1 YEAR 5 YEARS(7) INCEPTION(7) Net Asset Value(1) -15.82% -31.29% 0.97% 2.94% With CDSC(3) -20.03 -34.43 0.66 2.94 - ------------------------------------------------------------------------------- SINCE CLASS C (Inception 12/30/94) 6 MONTHS 1 YEAR 5 YEARS(7) INCEPTION(7) Net Asset Value(1) -15.83% -31.29% 0.98% 2.42% With Maximum Sales Charge and CDSC(3) -17.49 -32.60 0.78 2.25 - ------------------------------------------------------------------------------- SINCE CLASS Y (Inception 9/9/93) 6 MONTHS 1 YEAR 5 YEARS(7) INCEPTION(7) Net Asset Value(1) -15.28% -30.37% 2.32% 4.37% - -------------------------------------------------------------------------------
SINCE SINCE SINCE SINCE FUND'S FUND'S FUND'S FUND'S CLASS A CLASS B CLASS C CLASS y COMPARATIVE PERFORMANCE 6 MONTHS 1 YEAR 5 YEARS INCEPTION INCEPTION INCEPTION INCEPTION MSCI EAFE(4) -14.87% -23.84% 2.83% 6.52% 4.94% 4.56% 4.94% Morningstar Foreign Stock Fund Avg.(5) -14.23 -24.40 4.68 7.53 7.13 6.86 7.13 Lipper International Funds Average(6) -14.26 -24.03 4.26 7.07 6.15 5.82 6.15 NOTES TO CHARTS These returns represent past performance and do not guarantee future results. Share price and returns will vary, and you may have a gain or loss when you sell your shares. Recent returns may be higher or lower than those shown. Class Y shares are available to certain institutional investors only. (1) These results include reinvestment of any dividends and capital gains, but do not include a sales charge. (2) These results include reinvestment of any dividends and capital gains, and the maximum sales charge of 5.75%. (3) These results include reinvestment of any dividends and capital gains. Performance for Class B shares assumes a maximum 5.00% contingent deferred sales charge ("CDSC") applied when you sell shares. Class C share performance assumes a 1.00% sales charge and a 1.00% CDSC applied when you sell shares within one year of purchase. (4) The Morgan Stanley Capital International (MSCI) Europe Australasia Far East Index (EAFE) is an unmanaged index of common stocks traded outside the U.S. You may not invest directly in an index. (5) Morningstar Foreign Stock Fund Average is the average performance without sales charges of funds with similar investment objectives as calculated by Morningstar, Inc. Class A since-inception return is calculated from 5/31/92. Class B and Y since-inception returns are calculated from 9/30/93. Class C since-inception returns are calculated from 12/31/94. (6) Lipper International Funds Average is the average performance without sales charges of funds with similar investment objectives as calculated by Lipper Inc. Class A since-inception return is calculated from 5/28/92. Class B and Y since-inception returns are calculated from 9/30/93. Class C since-inception returns are calculated from 12/31/94. (7) Fund performance has been increased by voluntary expense waivers for the periods indicated, without which performance would have been lower.
[sidebar] PORTFOLIO FACTS % OF NET ASSETS AS OF FUND COMPOSITION 6/30/01 12/31/00 - ------------------------------------------------------------------------------- COMMON STOCKS 95.8 94.4 - ------------------------------------------------------------------------------- SHORT TERM INVESTMENTS AND OTHER 4.2 5.6 % OF NET ASSETS AS OF TEN LARGEST HOLDINGS 6/30/01 12/31/00 - ------------------------------------------------------------------------------- SHIRE PHARMACEUTICALS GROUP PLC 2.3 1.0 - ------------------------------------------------------------------------------- ELAN CORP., PLC (ADR) 2.2 1.2 - ------------------------------------------------------------------------------- NOVO NORDISK A/S 2.2 1.2 - ------------------------------------------------------------------------------- COMPASS GROUP 1.5 -- - ------------------------------------------------------------------------------- FORTIS NV 1.4 -- - ------------------------------------------------------------------------------- NINTENDO CO. 1.4 -- - ------------------------------------------------------------------------------- ING GROEP NV 1.4 -- - ------------------------------------------------------------------------------- COFLEXIP SA 1.4 1.1 - ------------------------------------------------------------------------------- NUENCHENER RUECKVERSICHERUNGS- GESELLSCHAFT AG 1.4 1.6 - ------------------------------------------------------------------------------- ALLIED DOMECQ PLC 1.4 1.5 % OF NET ASSETS AS OF FIVE LARGEST COUNTRIES 6/30/01 12/31/00 - ------------------------------------------------------------------------------- JAPAN 20.4 13.4 - ------------------------------------------------------------------------------- UNITED KINGDOM 17.4 14.8 - ------------------------------------------------------------------------------- FRANCE 10.3 8.1 - ------------------------------------------------------------------------------- CANADA 6.8 11.1 - ------------------------------------------------------------------------------- NETHERLANDS 6.8 4.3 Portfolio holdings and asset allocations will vary. - ------------------------------------------------------------------------------- CAPITAL GROWTH FUND - SCHEDULE OF INVESTMENTS - ------------------------------------------------------------------------------- Investments as of June 30, 2001 (Unaudited) SHARES DESCRIPTION VALUE (a) - ------------------------------------------------------------------------------- COMMON STOCK-- 99.9% OF TOTAL NET ASSETS COMPUTER HARDWARE-- 9.0% 259,900 Cisco Systems, Inc. (c) ............................ $ 5,029,065 78,700 EMC Corp. (c) ...................................... 2,286,235 20,700 Hewlett-Packard Co. ................................ 592,020 8,000 Juniper Networks, Inc. (c) ......................... 247,600 64,100 Lexmark International, Inc. (c) .................... 4,310,725 23,700 RSA Security, Inc. (c) ............................. 734,700 114,900 Sun Microsystems, Inc. (c) ......................... 1,855,635 ------------- 15,055,980 ------------- COMPUTER SOFTWARE-- 13.8% 9,700 Adobe Systems, Inc. ................................ 455,706 17,400 Cerner Corp. (c) ................................... 744,894 47,200 International Business Machines Corp. .............. 5,333,600 9,800 Intuit, Inc. (c) ................................... 383,670 32,800 Mentor Graphics Corp. (c) .......................... 570,720 144,800 Microsoft Corp. (c) ................................ 10,398,088 151,000 Oracle Corp. (c) ................................... 2,976,210 26,300 PeopleSoft, Inc. (c) ............................... 1,272,920 17,800 Synopsys, Inc. (c) ................................. 843,720 ------------- 22,979,528 ------------- DRUGS-- 12.7% 36,600 Albany Molecular Research, Inc. (c) ................ 1,444,236 24,100 Amgen, Inc. (c) .................................... 1,486,970 35,400 Bristol-Myers Squibb Co. ........................... 1,851,420 8,550 Cardinal Health, Inc. .............................. 589,950 8,000 Eli Lilly & Co. .................................... 592,000 12,087 King Pharmaceuticals, Inc. (c) ..................... 649,676 6,000 Medicis Pharmaceutical Corp. (c) ................... 318,000 43,900 Merck & Co. ........................................ 2,805,649 238,050 Pfizer, Inc. ....................................... 9,533,903 52,000 Schering-Plough Corp. .............................. 1,884,480 ------------- 21,156,284 ------------- DRUGS & HEALTHCARE-- 4.8% 26,300 Amerisource Health Corp. (c) ....................... 1,454,390 19,900 Andrx Corp. (c) .................................... 1,500,957 16,300 Barr Labs, Inc. (c) ................................ 1,147,683 90,500 IVAX Corp. ......................................... 3,529,500 9,000 Pharmacia & Upjohn, Inc. ........................... 413,550 ------------- 8,046,080 ------------- ELECTRONICS-- 4.2% 16,000 Agilent Technologies, Inc. (c) ..................... 520,000 36,000 Ciena Corp. (c) .................................... 1,365,840 31,600 Comverse Technology, Inc. (c) ...................... 1,824,584 35,000 Corning, Inc. ...................................... 584,850 12,600 Sanmina Corp. (c) .................................. 304,164 36,400 Scientific Atlanta, Inc. ........................... 1,477,840 26,100 Solectron Corp. (c) ................................ 477,630 19,400 Technitrol, Inc. ................................... 504,400 ------------- 7,059,308 ------------- ENERGY RESERVES-- 1.9% 45,600 Anadarko Petroleum Corp. ........................... 2,463,768 9,700 Murphy Oil Corp. ................................... 713,920 ------------- 3,177,688 ------------- ENTERTAINMENT-- 0.3% 12,200 Pixar, Inc. (c) .................................... 513,742 ------------- FINANCIAL SERVICES-- 10.6% 49,900 AmeriCredit Corp. (c) .............................. 2,592,305 311,800 General Electric Co. ............................... 15,200,250 ------------- 17,792,555 ------------- FOOD & BEVERAGES-- 2.7% 71,100 Pepsi Bottling Group, Inc. ......................... 2,851,110 36,100 PepsiCo, Inc. ...................................... 1,595,620 ------------- 4,446,730 ------------- FREIGHT TRANSPORTATION-- 0.6% 25,100 Tidewater, Inc. .................................... 946,270 ------------- HEALTH CARE-PRODUCTS-- 2.3% 18,800 Johnson & Johnson, Inc. ............................ 940,000 40,000 Varian Medical Systems, Inc. (c) ................... 2,860,000 ------------- 3,800,000 ------------- HOTELS & RESTAURANTS-- 0.5% 30,500 MGM Grand, Inc. (c) ................................ 913,780 ------------- HOUSEHOLD PRODUCTS-- 2.3% 73,400 Alberto-Culver Co. ................................. 3,085,736 12,000 Colgate-Palmolive Co. .............................. 707,880 ------------- 3,793,616 ------------- INFORMATION SERVICES-- 5.1% 17,300 Automatic Data Processing, Inc. .................... 859,810 26,900 DST Systems, Inc. (c) .............................. 1,417,630 71,000 Jack Henry & Associates, Inc. ...................... 2,158,400 18,800 Paychex, Inc. ...................................... 776,252 110,000 SunGard Data Systems, Inc. (c) ..................... 3,301,100 ------------- 8,513,192 ------------- INTERNET-- 4.7% 105,400 AOL Time Warner, Inc. (c) .......................... 5,586,200 45,300 Interwoven, Inc. (c) ............................... 810,417 25,600 VeriSign, Inc. (c) ................................. 1,486,080 ------------- 7,882,697 ------------- MEDIA & ENTERTAINMENT-- 2.0% 5,000 Cablevision Systems Corp. (c) ...................... 129,000 21,000 Cablevision Systems Corp. (c) ...................... 1,228,500 17,700 General Motors Corp., Class H (c) .................. 358,425 60,800 Insight Communications Co., Inc. (c) ............... 1,578,368 ------------- 3,294,293 ------------- OIL & GAS-DRILLING EQUIPMENT-- 0.6% 31,600 Noble Drilling (c) ................................. 1,034,900 ------------- RESTAURANTS-- 0.4% 29,100 Brinker International, Inc. (c) .................... 752,235 ------------- RETAIL-CLOTHING-- 0.2% 7,800 American Eagle Outfitters, Inc. (c) ................ 286,728 ------------- RETAIL-DEPARTMENT STORE-- 2.9% 37,300 Kohl's Corp. (c) ................................... 2,339,829 50,700 Wal-Mart Stores, Inc. .............................. 2,474,160 ------------- 4,813,989 ------------- RETAIL-GROCERY-- 1.0% 6,900 Safeway, Inc. (c) .................................. 331,200 52,800 The Kroger Co. (c) ................................. 1,320,000 ------------- 1,651,200 ------------- RETAIL-SPECIALTY-- 2.8% 6,600 Best Buy Co., Inc. (c) ............................. 419,232 20,200 CVS Corp. .......................................... 779,720 62,250 Home Depot, Inc. ................................... 2,897,738 15,200 Walgreen Co. ....................................... 519,080 ------------- 4,615,770 ------------- SEMICONDUCTORS-- 11.0% 11,200 Analog Devices, Inc. (c) ........................... 484,400 27,900 Applied Materials, Inc. (c) ........................ 1,428,480 31,000 Cirrus Logic (c) ................................... 787,400 244,500 Intel Corp. ........................................ 7,398,570 25,800 Intersil Holding Corp. (c) ......................... 883,650 6,200 Linear Technology Corp. ............................ 279,000 9,700 Maxim Integrated Products, Inc. (c) ................ 450,177 18,800 Micron Technology, Inc. (c) ........................ 772,680 41,800 Novellus Systems, Inc. (c) ......................... 2,327,842 19,500 NVIDIA Corp. (c) ................................... 1,791,855 47,210 Texas Instruments, Inc. ............................ 1,487,115 8,500 Xilinx, Inc. (c) ................................... 346,800 ------------- 18,437,969 ------------- TELECOMMUNICATIONS-- 2.6% 92,800 Qwest Communications International, Inc.(c) ........ 2,957,536 19,900 Sprint Corp. (PCS Group) (c) ....................... 480,585 21,500 Western Wireless Corp. (c) ......................... 904,075 ------------- 4,342,196 ------------- TOBACCO-- 0.9% 52,700 UST, Inc. .......................................... 1,520,922 ------------- Total Common Stock (Identified Cost $175,789,079) 166,827,652 ------------- PRINCIPAL AMOUNT DESCRIPTION - ------------------------------------------------------------------------------- SHORT TERM INVESTMENT-- 0.4% $ 660,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $660,151 on 7/02/2001, collateralized by $720,000 U.S. Treasury Bond, 5.250%, due 2/15/2029 valued at $677,292 .................................. $ 660,000 ------------- Total Short Term Investment (Identified Cost $660,000) 660,000 ------------- Total Investments-- 100.3% (Identified Cost $176,449,079) (b).................... 167,487,652 Other assets less liabilities ........................ (484,266) ------------- Total Net Assets-- 100% .............................. $ 167,003,386 ============= (a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At June 30, 2001 the net unrealized depreciation on investments based on cost of $176,449,079 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost......... $ 20,904,119 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value ........ (29,865,546) ------------- Net unrealized depreciation .............................. $ (8,961,427) ============= (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at June 30, 2001. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- GROWTH FUND - SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- Investments as of June 30, 2001 (Unaudited) SHARES DESCRIPTION VALUE (a) - ------------------------------------------------------------------------------ COMMON STOCK -- 99.7% OF TOTAL NET ASSETS BANKS-MONEY CENTER-- 5.0% 1,200,000 Citigroup, Inc. ................................. $ 63,408,000 -------------- BEVERAGES & TOBACCO-- 8.3% 2,055,000 Philip Morris Companies, Inc. ................... 104,291,250 -------------- COMPUTER SOFTWARE-- 5.1% 1,030,000 Electronic Data Systems Corp. ................... 64,375,000 -------------- ELECTRONIC & COMMUNICATION EQUIPMENT-- 8.9% 1,280,000 Celestica, Inc. (c) ............................. 65,920,000 1,725,000 Flextronics International, Ltd. (c) ............. 46,057,500 -------------- 111,977,500 -------------- FINANCIAL SERVICES-- 15.2% 980,000 Capital One Financial Corp. ..................... 58,800,000 1,000,000 Household International, Inc. ................... 66,700,000 1,130,000 Providian Financial Corp. ....................... 66,896,000 -------------- 192,396,000 -------------- HEALTH CARE-SERVICES-- 8.3% 810,000 Laboratory Corporation of America Holdings (c) .. 62,289,000 560,000 Quest Diagnostics, Inc. (c) ..................... 41,916,000 -------------- 104,205,000 -------------- HOTELS & Restaurants-- 3.5% 1,020,000 Tricon Global Restaurants, Inc. (c) ............. 44,778,000 -------------- INSURANCE-- 9.1% 925,000 Loews Corp. ..................................... 59,597,750 670,000 XL Capital Ltd. ................................. 55,007,000 -------------- 114,604,750 -------------- MANUFACTURING-DIVERSIFIED-- 4.9% 1,130,000 Tyco International, Ltd. ........................ 61,585,000 -------------- METALS & MINING -- 6.0% 4,380,000 Inco Ltd.(C) .................................... 75,598,800 -------------- OFFICE EQUIPMENT-- 1.5% 290,000 Lexmark International Group, Inc. (c) ........... 19,502,500 -------------- RETAIL-- 17.8% 940,000 Best Buy Co., Inc. (c) .......................... 59,708,800 1,910,000 Dollar General Corp. ............................ 37,245,000 990,000 Kohl's Corp. (c) ................................ 62,102,700 895,000 Lowe's Companies, Inc. .......................... 64,932,250 -------------- 223,988,750 -------------- SAVINGS & LOAN-- 6.1% 2,040,000 Washington Mutual, Inc. ......................... 76,602,000 -------------- Total Common Stock (Identified Cost $1,170,849,931) ................ 1,257,312,550 PRINCIPAL AMOUNT DESCRIPTION - ------------------------------------------------------------------------------ SHORT TERM INVESTMENT-- 0.2% $ 2,770,000 American Express Credit Corp., 7/02/2001 ........ $ 2,770,000 ------------- Total Short Term Investment (Identified Cost $2,770,000) .................... 2,770,000 -------------- Total Investments-- 99.9% (Identified Cost $1,173,619,931) (b) ............ 1,260,082,550 Other assets less liabilities ................... 1,251,144 -------------- Total Net Assets-- 100% ......................... $1,261,333,694 ============== (a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At June 30, 2001 the net unrealized appreciation on investments based on cost of $1,173,619,931 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost .......................................... $ 115,079,187 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value ............................................. (28,616,568) -------------- Net unrealized appreciation ............................ $ 86,462,619 ============== For the year ended December 31, 2000, the Fund has elected to defer $73,757,431 of capital losses attributable to Post-October losses. (c) Non-income producing security. Percentage of net assets by country at June 30, 2001 (unaudited): United States 88.7% Canada 11.2% See accompanying notes to financial statements. - -------------------------------------------------------------------------------- GROWTH AND INCOME FUND - SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- Investments as of June 30, 2001 (Unaudited) SHARES DESCRIPTION VALUE (a) - ------------------------------------------------------------------------------ COMMON STOCK-- 98.9% OF TOTAL NET ASSETS AEROSPACE/DEFENSE-- 0.9% 49,600 United Technologies Corp. ....................... $ 3,633,696 -------------- AIRLINES-- 0.8% 65,700 Continental Airlines, Inc. (c) .................. 3,235,725 -------------- BANKS-- 7.9% 126,600 Bank America Corp. .............................. 7,599,798 169,666 Citigroup, Inc. ................................. 8,965,151 253,000 FleetBoston Financial Corp. ..................... 9,980,850 19,800 Mercantile Bankshares Corp. ..................... 783,288 62,200 North Fork Bancorp, Inc. ........................ 1,928,200 62,700 Northern Trust Corp. ............................ 4,037,880 -------------- 33,295,167 -------------- BEVERAGES-ALCOHOLIC-- 1.8% 181,500 Anheuser-Busch Companies, Inc. .................. 7,477,800 BUSINESS SERVICES-- 2.5% 65,000 Electronic Data Systems Corp. ................... 4,062,500 60,000 Jack Henry & Associates, Inc. ................... 1,824,000 95,300 Paychex, Inc. ................................... 3,934,937 38,600 West Corp. (c) .................................. 953,034 -------------- 10,774,471 -------------- CABLE & MEDIA-- 0.6% 25,000 Cablevision Systems Corp. (c) ................... 1,462,500 45,900 Insight Communications Co., Inc. (c) ............ 1,191,564 -------------- 2,654,064 -------------- CHEMICALS-- 0.7% 185,700 Lyondell Chemical Co. ........................... 2,856,066 -------------- CHEMICALS-SPECIALTY-- 0.5% 48,100 Ashland, Inc. ................................... 1,928,810 -------------- COMPUTER HARDWARE-- 4.2% 129,900 Apple Computer, Inc. (c) ........................ 3,133,188 131,400 EMC Corp. ....................................... 3,817,170 206,800 Ingram Micro, Inc. (c) .......................... 2,996,532 72,300 Juniper Networks, Inc. (c) ...................... 2,237,685 72,100 Quantum Corp. (c) ............................... 727,489 136,400 Tech Data Corp. (c) ............................. 4,775,364 -------------- 17,687,428 -------------- COMPUTER SOFTWARE & SERVICES-- 3.0% 44,100 Cadence Design Systems, Inc. (c) ................ 821,583 114,800 Mentor Graphics Corp. (c) ....................... 1,997,520 107,600 Microsoft Corp. (c) ............................. 7,726,756 44,200 Sabre Group Holdings, Inc. (c) .................. 2,210,000 -------------- 12,755,859 -------------- COMPUTERS & BUSINESS EQUIPMENT-- 1.2% 74,100 Lexmark International Group, Inc. (c) ........... 4,983,225 -------------- DRUGS-- 8.3% 127,600 Bristol-Myers Squibb Co. ........................ 6,673,480 12,500 Eli Lilly & Co. ................................. 925,000 178,100 Merck & Co. ..................................... 11,382,371 387,100 Pfizer, Inc. .................................... 15,503,355 19,800 Schering-Plough Corp. ........................... 717,552 -------------- 35,201,758 -------------- ELECTRIC UTILITIES-- 2.3% 54,900 American Electric Power, Inc. ................... 2,534,733 65,800 Duke Power Co. .................................. 2,566,858 27,700 Exelon Corp. .................................... 1,776,124 37,700 Mirant Corp. (c) ................................ 1,296,880 30,300 PPL Corp. ....................................... 1,666,500 -------------- 9,841,095 -------------- ELECTRICAL EQUIPMENT-- 0.5% 57,800 Rockwell International Corp. .................... 2,203,336 -------------- ELECTRONICS-- 3.2% 44,300 CIENA Corp. (c) ................................. 1,680,742 44,200 Comverse Technology (c) ......................... 2,552,108 39,900 Corning, Inc. ................................... 666,729 65,800 PerkinElmer, Inc. ............................... 1,811,474 117,100 Scientific-Atlanta, Inc. ........................ 4,754,260 78,900 UTStarcom, Inc. (c) ............................. 1,915,692 -------------- 13,381,005 -------------- ENERGY RESERVES-- 7.8% 49,100 El Paso Corp. ................................... 2,579,714 207,300 Exxon Mobil Corp. ............................... 18,107,655 195,300 Occidental Petroleum Corp. ...................... 5,193,027 120,900 Phillips Petroleum Co. .......................... 6,891,300 -------------- 32,771,696 -------------- FINANCIAL SERVICES-- 3.6% 63,200 Fannie Mae .. 5,381,480 201,500 General Electric Co. ............................ 9,823,125 -------------- 15,204,605 -------------- FOOD & BEVERAGES-- 3.9% 93,700 Pepsi Bottling Group, Inc. ...................... 3,757,370 186,100 PepsiCo, Inc. ................................... 8,225,620 69,000 Sysco Corp. ..................................... 1,873,350 44,300 Unilever NV ..................................... 2,638,951 -------------- 16,495,291 -------------- FREIGHT TRANSPORTATION-- 0.5% 56,000 Teekay Shipping Corp. ........................... 2,241,120 -------------- HEALTHCARE-MANAGED CARE-- 1.4% 95,800 UnitedHealth Group, Inc. ........................ 5,915,650 -------------- HEALTH CARE-PRODUCTS-- 3.7% 32,000 Baxter International, Inc. ...................... 1,568,000 283,200 Johnson & Johnson, Inc. ......................... 14,160,000 -------------- 15,728,000 -------------- HOME BUILDERS-- 1.2% 40,700 Centex Corp. .................................... 1,658,525 78,800 Lennar Corp. .................................... 3,285,960 -------------- 4,944,485 -------------- HOTELS & Restaurants-- 0.9% 44,900 Darden Restaurants, Inc. ........................ 1,252,710 108,000 Wendy's International, Inc. ..................... 2,758,320 -------------- 4,011,030 -------------- HOUSEHOLD PRODUCTS-- 1.7% 125,000 Colgate-Palmolive Co. ........................... 7,373,750 -------------- INFORMATION SERVICES-- 1.8% 47,800 Omnicom Group, Inc. ............................. 4,110,800 114,400 SunGard Data Systems, Inc. (c) .................. 3,433,144 -------------- 7,543,944 -------------- INSURANCE-- 2.1% 15,900 American International Group, Inc. .............. 1,367,400 114,500 Loews Corp. ..................................... 7,377,235 -------------- 8,744,635 -------------- MANUFACTURING-DIVERSIFIED-- 3.0% 232,200 Tyco International, Ltd. ........................ 12,654,900 -------------- MEDIA & Entertainment-- 5.4% 229,200 AOL Time Warner, Inc. (c) ....................... 12,147,600 363,900 The Walt Disney Co. ............................. 10,513,071 -------------- 22,660,671 -------------- OIL & GAS-- 0.6% 26,800 Chevron Corp. ................................... 2,425,400 -------------- OIL & GAS-REFINING/MARKETING-- 0.6% 16,200 Texaco, Inc. .................................... 1,078,920 32,100 Ultramar Diamond Shamrock Corp. ................. 1,516,725 -------------- 2,595,645 -------------- OIL & GAS-SERVICES -- 0.2% 17,700 Schlumberger Ltd. ............................... 931,905 -------------- RETAIL-CLOTHING-- 0.6% 22,900 Neiman Marcus Group (c) ......................... 709,900 125,600 Venator Group, Inc. (c) ......................... 1,921,680 -------------- 2,631,580 -------------- RETAIL-DEPARTMENT STORE-- 6.0% 131,200 Federated Department Stores, Inc. (c) ........... 5,576,000 43,300 Kohl's Corp. (c) ................................ 2,716,209 242,100 May Department Stores Co. ....................... 8,294,346 188,100 Sears, Roebuck & Co. ............................ 7,958,511 18,100 Wal-Mart Stores, Inc. ........................... 883,280 -------------- 25,428,346 -------------- RETAIL-GROCERY-- 1.2% 201,700 The Kroger Co. (c) .............................. 5,042,500 -------------- RETAIL-SPECIALTY-- 1.0% 25,900 Best Buy Co., Inc. (c) .......................... 1,645,168 102,300 Circuit City Stores .. 1,841,400 16,100 CVS Corp. ....................................... 621,460 -------------- 4,108,028 -------------- SEMICONDUCTORS-- 3.5% 260,200 Arrow Electronics, Inc. (c) ..................... 6,320,258 91,600 Integrated Device Technology, Inc. (c) .......... 2,830,440 98,900 Novellus Systems, Inc. (c) ...................... 5,507,741 -------------- 14,658,439 -------------- SOFTWARE-- 2.5% 135,800 Computer Associates International, Inc. ......... 4,888,800 61,200 PeopleSoft, Inc. (c) ............................ 2,962,080 58,700 Synopsys, Inc. (c) .............................. 2,782,380 -------------- 10,633,260 -------------- TELECOMMUNICATIONS-- 6.1% 213,500 BellSouth Corp. ................................. 8,597,645 357,100 Global Crossing, Ltd. (c) ....................... 3,085,344 262,400 Verizon Communications, Inc. .................... 14,038,400 -------------- 25,721,389 -------------- TOBACCO-- 1.2% 177,900 UST, Inc. ....................................... 5,134,194 -------------- Total Common Stock (Identified Cost $411,260,341) 417,509,968 PRINCIPAL AMOUNT DESCRIPTION - ------------------------------------------------------------------------------ SHORT TERM INVESTMENT-- 0.8% $ 3,333,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $3,333,764 on 7/02/2001, collateralized by $1,030,000 U.S. Treasury Bond, 7.500%, due 11/15/2016 valued at $3,403,261 ............................ $ 3,333,000 -------------- Total Short Term Investment (Identified Cost $3,333,000) .................... 3,333,000 -------------- Total Investments-- 99.7% (Identified Cost $414,593,341) (b) .............. 420,842,968 Other assets less liabilities ................... 1,168,773 -------------- Total Net Assets-- 100% ......................... $ 422,011,741 ============== (a) See Note 2a of Notes to Financial Statements (b) Federal Tax Information: At June 30, 2001 the net unrealized appreciation on investments based on cost of $414,593,341 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost .......................................... $ 35,833,909 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value ............................................. (29,584,282) -------------- Net unrealized appreciation ............................ $ 6,249,627 ============== At December 31, 2000 the Fund had a capital loss carryover of approximately $19,895,206 which expires on December 31, 2008. For the year ended December 31, 2000, the Fund has elected to defer $9,003,183 of capital losses attributable to Post-October losses. (c) Non-income producing security. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- BALANCED FUND - SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- Investments as of June 30, 2001 (Unaudited) SHARES DESCRIPTION VALUE (a) - ------------------------------------------------------------------------------ COMMON STOCK-- 64.6% - ------------------------------------------------------------------------------ AIR TRAVEL-- 1.0% 37,000 AMR Corp. (c) ................................... $ 1,336,810 -------------- AIRLINES-- 0.9% 67,300 Southwest Airlines .............................. 1,244,377 -------------- AUTOMOTIVE-- 0.4% 12,700 Harley-Davidson, Inc. ........................... 597,916 -------------- BANKS-- 1.4% 10,600 Citigroup, Inc. ................................. 560,104 10,200 Comerica, Inc. .................................. 587,520 16,000 Wells Fargo & Co. ............................... 742,880 -------------- 1,890,504 -------------- BUSINESS SERVICES-- 4.9% 33,400 Concord EFS, Inc. ............................... 1,865,390 35,200 Ecolab, Inc. .................................... 1,442,144 33,700 First Data Corp. ................................ 2,165,225 29,900 Sabre Group Holdings, Inc. (c) .................. 1,495,000 -------------- 6,967,759 -------------- CHEMICALS-- 1.0% 24,200 OM Group, Inc. .................................. 1,361,250 -------------- COMMUNICATION SERVICES-- 7.4% 28,800 AOL Time Warner, Inc. (c) ....................... 1,526,400 7,800 Clear Channel Communications, Inc. (c) .......... 489,060 39,000 McGraw-Hill Co., Inc. ........................... 2,579,850 17,200 Omnicom Group, Inc. ............................. 1,479,200 29,800 SBC Communications, Inc. ........................ 1,193,788 35,300 Sprint Corp. (PCS Group) (c) .................... 852,495 30,800 The Interpublic Group of Companies, Inc. ........ 903,980 11,500 Univision Communications, Inc. .................. 491,970 18,800 Viacom, Inc. (c) ................................ 972,900 -------------- 10,489,643 -------------- COMPUTERS & BUSINESS EQUIPMENT-- 8.2% 110,400 3Com Corp. (c) .................................. 568,560 54,400 Cisco Systems, Inc. (c) ......................... 1,052,640 32,200 Dell Computer Corp. (c) ......................... 856,520 33,900 EMC Corp. (c) ................................... 984,795 38,100 Intel Corp. ..................................... 1,152,906 16,700 International Business Machines Corp. ........... 1,887,100 23,100 LSI Logic Corp. (c) ............................. 434,280 14,800 Maxim Integrated Products, Inc. (c) ............. 686,868 14,500 ONI Systems Corp. (c) ........................... 394,850 109,300 Palm, Inc. (c) .................................. 662,904 22,900 SanDisk Corp. (c) ............................... 634,330 12,600 Scientific-Atlanta, Inc. ........................ 511,560 15,600 STMicroelectronics NV ........................... 530,400 35,900 Sun Microsystems, Inc. (c) ...................... 579,785 18,200 Texas Instruments, Inc. ......................... 573,300 -------------- 11,510,798 -------------- CONGLOMERATES-- 2.8% 46,300 General Electric Co. ............................ 2,257,125 4,400 Minnesota Mining & Manufacturing Co. ............ 502,040 22,400 Tyco International, Ltd. ........................ 1,220,800 -------------- 3,979,965 -------------- CONSTRUCTION-- 0.8% 13,300 Baker Hughes, Inc. .............................. 445,550 24,800 Santa Fe International Corp. .................... 719,200 -------------- 1,164,750 -------------- DOMESTIC OIL-- 2.5% 8,900 Amerada Hess Corp. .............................. 719,120 16,100 Chevron Corp. ................................... 1,457,050 51,300 Suncor Eneac .................................... 1,318,410 -------------- 3,494,580 -------------- DRUGS & HEALTHCARE-- 10.3% 14,700 Abbott Laboratories ............................. 705,747 9,400 Allergan, Inc. .................................. 803,700 69,000 Baxter International, Inc. ...................... 3,381,000 23,350 Cardinal Health, Inc. ........................... 1,611,150 15,900 Forest Laboratories, Inc. (c) ................... 1,128,900 13,500 Johnson & Johnson, Inc. ......................... 675,000 14,400 King Pharmaceuticals, Inc. (c) .................. 774,000 29,200 Pfizer, Inc. .................................... 1,169,460 10,300 Pharmacia & Upjohn, Inc. ........................ 473,285 7,800 Quest Diagnostics, Inc. ......................... 583,830 25,300 Schering-Plough Corp. ........................... 916,872 14,100 Stryker Corp. ................................... 773,385 15,700 Tenet Healthcare Corp. (c) ...................... 809,963 7,800 Wellpoint Health Networks, Inc. ................. 735,072 -------------- 14,541,364 -------------- ELECTRIC UTILITIES-- 1.1% 36,400 AES Corp. (c) ................................... 1,567,020 -------------- FINANCIAL-CONSUMER/DIVERSIFIED-- 1.6% 32,700 Freddie Mac ..................................... 2,289,000 -------------- FINANCIAL SERVICES-- 0.3% 10,500 Nationwide Financial Services ................... 458,325 -------------- FOOD & BEVERAGES-- 1.8% 83,900 Hormel Foods Corp. .............................. 2,042,126 11,700 PepsiCo, Inc. ................................... 517,140 -------------- 2,559,266 -------------- GAS & PIPELINE UTILITIES-- 1.5% 13,800 Dynegy, Inc. .................................... 641,700 8,800 El Paso Corp. ................................... 462,352 20,900 Enron Corp. ..................................... 1,024,100 -------------- 2,128,152 -------------- HOTELS & RESTAURANTS-- 0.4% 20,400 Brinker International, Inc. (c) ................. 527,340 -------------- HOUSEHOLD PRODUCTS-- 0.9% 23,400 Kimberly-Clark Corp. ............................ 1,308,060 -------------- INDUSTRIAL MACHINERY-- 1.3% 27,900 Cognex Corp. (c) ................................ 831,141 27,800 Deere & Co. ..................................... 1,052,230 -------------- 1,883,371 -------------- INSURANCE-- 1.3% 14,300 Allmerica Financial Corp. ....................... 822,250 28,400 ..Protective Life Corp. .................. 976,108 -------------- 1,798,358 -------------- INVESTMENT BANKING/BROKER/MANAGEMENT-- 1.8% 27,400 Charles Schwab Corp. ............................ 419,220 21,100 Lehman Brothers Holdings, Inc. .................. 1,640,525 7,800 Merrill Lynch & Co., Inc. ....................... 462,150 -------------- 2,521,895 -------------- REAL ESTATE INVESTMENT TRUSTS-- 0.3% 7,800 Equity Residential Properties Trust ............. 441,090 -------------- RETAIL-- 2.7% 26,000 Best Buy Company, Inc. (c) ...................... 1,651,520 61,500 Blockbuster, Inc. ............................... 1,122,375 7,500 Lowe's Co., Inc. ................................ 544,125 14,000 Target Corp. .................................... 484,400 -------------- 3,802,420 -------------- RETAIL-GROCERY-- 1.0% 52,500 Sysco Corp. ..................................... 1,425,375 -------------- SOFTWARE-- 6.3% 32,500 Computer Sciences Corp. (c) ..................... 1,124,500 19,400 Electronic Data Systems Corp. ................... 1,212,500 32,600 Microsoft Corp. (c) ............................. 2,341,006 11,700 Nvidia Corp. (c) ................................ 1,075,113 27,700 Siebel Systems, Inc. (c) ........................ 1,317,412 55,400 Transaction Systems Architects, Inc. (c) ........ 689,730 17,200 VERITAS Software Corp. (c) ...................... 1,159,108 -------------- 8,919,369 -------------- TRUCKING & FREIGHT FORWARDING-- 0.7% 17,200 United Parcel Service, Inc. ..................... 994,160 -------------- Total Common Stock (Identified Cost $91,516,191) 91,202,917 RATINGS (D) ----------------- PRINCIPAL STANDARD AMOUNT MOODY'S & POOR'S - ------------------------------------------------------------------------------ BONDS AND NOTES-- 30.8% OF TOTAL NET ASSETS AEROSPACE/DEFENSE-- 1.2% $ 1,780,000 Raytheon Co., 6.300%, 3/15/2005 .... Baa3 BBB- 1,751,983 AIRLINES-- 2.5% 600,000 Delta Air Lines, Inc., 9.200%, 9/23/2014 .......................... Baa3 BBB 588,390 3,000,000 Northwest Airlines Corp., 8.375%, 3/15/2004 .......................... Ba2 BB 2,948,490 -------------- 3,536,880 -------------- AUTOMOTIVE-- 1.2% 1,700,000 Ford Motor Co., 7.450%, 7/16/2031 A2 A 1,633,581 -------------- BROADCASTING-- 1.3% 1,800,000 Clear Channel Communications, 7.650%, 9/15/2010 .................. Baa3 BBB- 1,865,862 -------------- CHEMICALS-MAJOR-- 1.3% 1,775,000 Dow Chemical Co., 7.375%, 11/01/2029 A1 A 1,821,221 -------------- ELECTRIC UTILITIES-- 0.7% 1,000,000 Calpine Corp., 7.625%, 4/15/2006 .... Ba1 BB+ 967,330 -------------- ENERGY-- 0.8% 1,200,000 Williams Holdings Co., 6.250%, 2/01/2006 .......................... Baa2 BBB- 1,174,584 -------------- FEDERAL AGENCIES-- 2.1% 2,800,000 Federal Home Loan Mortgage Corp., 6.875%, 1/15/2005 .................. Aaa AAA 2,943,500 -------------- FINANCE & BANKING-- 0.9% 1,300,000 Capital One Bank, 6.875%, 2/01/2006 Baa2 BBB- 1,271,868 -------------- GOVERNMENT-- 1.4% 800,000 United States Treasury Bonds, 6.125%, 11/15/2027 ................. Aaa AAA 823,496 1,200,000 United States Treasury Bonds, 5.500%, 8/15/2028 .................. Aaa AAA 1,136,436 -------------- 1,959,932 -------------- HOTELS & MOTELS-- 2.0% 3,000,000 La Quinta Inns, Inc., 7.400%, 9/15/2005 .......................... Ba3 BB- 2,805,000 -------------- HOTELS & RESTAURANTS-- 0.7% 950,000 Tricon Global Restaurants, Inc., 8.500%, 4/15/2006 .................. Ba1 BB 971,375 -------------- INDUSTRIALS-- 2.3% 2,505,000 AMERCO, 7.850%, 5/15/2003 .......... Ba1 BBB 2,463,367 800,000 TRW, Inc., 7.625%, 3/15/2006 ....... Baa2 BBB 827,208 -------------- 3,290,575 -------------- MORTGAGES-- 8.5% 2,700,000 Federal National Mortgage Association, 7.125%, 2/15/2005 ..... Aaa AAA 2,860,731 1,175,000 Federal National Mortgage Association, 6.375%, 6/15/2009 ..... Aaa AAA 1,198,688 1,192,064 Federal National Mortgage Association, 6.000%, 5/01/2016 ..... Aaa AAA 1,174,183 1,196,301 Federal National Mortgage Association, 6.000%, 5/01/2031 Aaa AAA 1,148,066 5,500,000 Federal National Mortgage Association, 7.500%, 12/01/2099 .... Aaa AAA 5,611,705 -------------- 11,993,373 -------------- REAL ESTATE INVESTMENT TRUSTS-- 0.9% 1,775,000 National Health Investors, Inc., 7.300%, 7/16/2007 .................. B2 B+ 1,242,500 -------------- TELECOMMUNICATIONS-- 3.0% 555,000 Global Crossings Holdings, Ltd., 9.625%, 5/15/2008 .................. Ba2 BB 438,450 1,600,000 Sprint Spectrum, LP (e), 1.000%, 8/15/2006 .................. Baa2 BBB+ 1,675,024 955,000 Williams Communications Group, Inc., 10.875%, 10/01/2009 ................ B2 B+ 382,000 1,750,000 WorldCom, Inc., 8.000%, 5/15/2006 ... A3 BBB+ 1,820,595 -------------- 4,316,069 -------------- Total Bonds and Notes (Identified Cost $44,986,112) ...... 43,545,633 -------------- PRINCIPAL AMOUNT DESCRIPTION - ------------------------------------------------------------------------------ SHORT TERM INVESTMENTS-- 5.3% $ 2,373,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $2,373,544 on 7/02/2001, collateralized by $2,055,000 U.S. Treasury Bond, 7.500%, due 11/15/2016 valued at $2,424,160 ............................ $ 2,373,000 5,122,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $5,123,174 on 7/02/2001, collateralized by $4,430,000 U.S. Treasury Bond, 7.500%, due 11/15/2016 valued at $5,225,805 ............................ 5,122,000 -------------- Total Short Term Investment (Identified Cost $7,495,000) .................... 7,495,000 -------------- Total Investments-- 100.7% (Identified Cost $143,997,303) (b) .............. 142,243,550 Other assets less liabilities ................... (1,040,398) -------------- Total Net Assets-- 100% ......................... $ 141,203,152 ============== (a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At June 30, 2001 the net unrealized depreciation on investments based on cost of $143,997,303 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost ............................................... $ 5,596,343 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value ............................................. (7,350,096) -------------- Net unrealized depreciation ............................ $ (1,753,753) ============== At December 31, 2000, the Fund had a capital loss carryover of approximately $15,926,671 which expires on December 31, 2008. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2000, the Fund has elected to defer $2,740,982 of capital losses attributable to Post-October losses. (c) Non-income producing security. (d) The ratings shown are believed to be the most recent ratings available at June 30, 2001. Securities are generally rated at the time of issuance. The rating agencies may revise their rating from time to time. As a result, there can be no assurance that the same ratings would be assigned if the securities were rated at June 30, 2001. The Fund's subadviser independently evaluates the Fund's portfolio securities and in making investment decisions does not rely solely on the ratings of agencies. (e) Step Bond: Coupon rate is zero or below market for an initial period and then increases to a higher coupon rate at a specified date. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- LARGE CAP VALUE FUND - SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- INVESTMENTS AS OF JUNE 30, 2001 (UNAUDITED) SHARES DESCRIPTION VALUE (a) - ------------------------------------------------------------------------------ COMMON STOCK-- 99.4% OF TOTAL NET ASSETS AEROSPACE-- 1.1% 6,500 Honeywell International, Inc. ................... $ 227,435 -------------- BANKS-- 4.4% 4,000 Bank of America Corp. ........................... 240,120 14,000 Mellon Financial Corp. .......................... 644,000 -------------- 884,120 -------------- BROADCAST MEDIA-- 1.9% 13,000 The Walt Disney Co. ............................. 375,570 -------------- BUSINESS SERVICES-- 4.7% 3,800 Electronic Data Systems Corp. ................... 237,500 5,100 The Interpublic Group of Companies, Inc. ........ 149,685 18,000 Waste Management, Inc. .......................... 554,760 -------------- 941,945 -------------- CHEMICALS-- 1.4% 6,000 E.l. du Pont de Nemours & Co. ................... 289,440 -------------- COMMUNICATION SERVICES-- 6.2% 10,000 AT&T Corp. ...................................... 220,000 9,500 BellSouth Corp. ................................. 382,565 9,516 Verizon Communications, Inc. .................... 509,106 8,500 WorldCom, Inc. (c) .............................. 126,650 340 Worldcom, Inc. Georgia .......................... 5,746 -------------- 1,244,067 -------------- COMPUTERS & BUSINESS EQUIPMENT-- 4.5% 4,400 Applied Materials, Inc. (c) ..................... 225,280 12,100 Dell Computer Corp. (c) ......................... 321,860 7,000 Hewlett-Packard Co. ............................. 200,200 10,000 Motorola, Inc. .................................. 165,600 -------------- 912,940 -------------- DOMESTIC OIL-- 4.5% 8,400 Exxon Mobil Corp. ............................... 733,740 3,500 Mitchell Energy & Development Corp. ............. 161,875 -------------- 895,615 -------------- ELECTRIC UTILITIES-- 3.2% 16,600 Duke Power Co. .................................. 647,566 -------------- FINANCIAL SERVICES-- 17.0% 17,200 Citigroup, Inc. ................................. 908,848 9,000 Fannie Mae ...................................... 766,350 19,900 J.P. Morgan & Co., Inc. ......................... 887,540 11,400 Merrill Lynch & Co., Inc. ....................... 675,450 2,000 The Goldman Sachs Group, Inc. ................... 171,600 -------------- 3,409,788 -------------- FOOD & BEVERAGES-- 5.5% 6,600 Kraft Foods, Inc. (c) ........................... 204,600 6,300 PepsiCo, Inc. ................................... 278,460 6,800 Quaker Oats Co. ................................. 620,500 -------------- 1,103,560 -------------- FOREST PRODUCTS-- 0.9% 3,300 Weyerhaeuser Co. ................................ 181,401 -------------- HEALTH CARE-- 3.4% 15,000 HCA Inc. ........................................ 677,850 -------------- HEALTH CARE-DRUGS-- 8.4% 11,800 Baxter International, Inc. ...................... 578,200 7,400 Johnson & Johnson, Inc. ......................... 370,000 4,600 Merck & Co. ..................................... 293,986 12,200 Schering-Plough Corp. ........................... 442,128 -------------- 1,684,314 -------------- INSURANCE-- 15.4% 21,000 ACE, Ltd. ....................................... 820,890 17,400 American General Corp. .......................... 808,230 7,500 American International Group, Inc. .............. 645,000 5,300 Chubb Corp. ..................................... 410,379 9,800 Radian Group, Inc. .............................. 396,410 -------------- 3,080,909 -------------- INTERNATIONAL OIL-- 4.8% 7,200 BP Amoco PLC (ADR) .............................. 358,920 12,000 Shell Transport & Trading Co. (ADR) ............. 604,080 -------------- 963,000 -------------- OFFICE FURNISHINGS & SUPPLIES-- 1.4% 5,400 Avery Dennison Corp. ............................ 275,670 -------------- PAPER-- 1.3% 4,600 Kimberly-Clark Corp. ............................ 257,140 -------------- REAL ESTATE INVESTMENT TRUSTS-- 5.0% 19,400 Duke-Weeks Realty Corp. ......................... 482,090 9,100 Equity Residential Properties Trust ............. 514,605 -------------- 996,695 -------------- RETAIL-- 2.3% 18,100 Family Dollar Stores, Inc. ...................... 463,903 -------------- TOBACCO-- 2.1% 8,500 Philip Morris Companies, Inc. ................... 431,375 -------------- TRANSPORTATION-- 0.0% 86 Seabulk International, Inc. (c) ................. 430 54 Seabulk International, Inc. (c) ................. 20 -------------- 450 -------------- Total Common Stock (Identified Cost $18,465,553) 19,944,753 -------------- PRINCIPAL AMOUNT DESCRIPTION - ------------------------------------------------------------------------------ SHORT TERM INVESTMENT-- 0.6% $ 123,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $123,028 on 7/02/01, collateralized by $100,000 U.S. Treasury Bond, 8.125%, due 5/15/2021 valued at $127,275 ....... $ 123,000 -------------- Total Short Term Investment (Identified Cost $123,000) ...................... 123,000 -------------- Total Investments-- 100.0% (Identified Cost $18,588,553) (b) ............... 20,067,753 Other assets less liabilities ................... 3,612 -------------- Total Net Assets-- 100% ......................... $ 20,071,365 ============== (a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At June 30, 2001 the net unrealized appreciation on investments based on cost of $18,588,553 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost ............................................... $ 2,831,881 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value ............................................. (1,352,681) -------------- Net unrealized depreciation ............................ $ 1,479,200 ============== At December 31, 2000 the Fund had a capital loss carryover of approximately $702,097 of which $238,648 expires on December 31, 2007 and $463,449 expires on December 31, 2008. This may be available to offset future realized capital gains, if any, to the extent provided by regulations. For the year ended December 31, 2000, the Fund has elected to defer $207,165 of capital losses attributable to Post-October losses. (C) Non-income producing security ADR- An American Depositary Receipt is a certificate issued by a U.S. bank representing the right to receive securities of the foreign issuer described. The values of ADRs are significantly influenced by trading on exchanges not located in the United States. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- MID CAP GROWTH FUND - SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- Investments as of June 30, 2001 (Unaudited) SHARES DESCRIPTION VALUE (a) - ------------------------------------------------------------------------------ COMMON STOCK-- 90.0% OF TOTAL NET ASSETS BANKS-- 1.2% 1,250 Investors Financial Services Corp. .............. $ 84,275 -------------- BROADCAST MEDIA-- 3.3% 5,000 Cox Radio, Inc. (c) ............................. 139,250 2,350 Univision Communications, Inc. .................. 100,533 -------------- 239,783 -------------- CHEMICALS-- 1.3% 1,550 Cabot Microelectronics Corp. (c) ................ 97,247 -------------- COMMUNICATION SERVICES-- 0.9% 1,600 Triton PCS Holdings, Inc. ....................... 64,320 -------------- COMPUTER SOFTWARE & SERVICES-- 4.9% 2,000 Electronic Arts, Inc. (c) ....................... 115,100 2,250 Manugistics Group, Inc. (c) ..................... 58,298 1,650 Mercury Interactive Corp. (c) ................... 100,930 1,650 Synopsys, Inc. (c) .............................. 78,210 -------------- 352,538 -------------- COMPUTERS & BUSINESS EQUIPMENT-- 4.5% 1,650 CDW Computer Centers, Inc. (c) .................. 65,258 3,000 Lam Research Corp. (c) .......................... 89,490 3,550 Mcdata Corp. .................................... 70,822 3,150 Research in Motion, Ltd. ........................ 101,556 -------------- 327,126 -------------- DRUGS & HEALTHCARE-- 16.0% 2,350 Abgenix, Inc. (c) ............................... 103,541 1,500 Biovail Corp. (c) ............................... 65,250 700 Cephalon, Inc. (c) .............................. 50,085 1,500 COR Therapeutics, Inc. (c) ...................... 45,600 900 Enzon, Inc. (c) ................................. 55,665 1,750 Express Scripts, Inc. (c) ....................... 97,125 1,400 Gilead Sciences, Inc. (c) ....................... 82,950 1,250 ICOS Corp. (c) .................................. 79,000 1,350 IDEC Pharmaceuticals Corp. (c) .................. 87,939 2,250 ImClone Systems, Inc. (c) ....................... 116,100 2,250 King Pharmaceuticals, Inc. (c) .................. 120,938 1,700 Laboratory Corp. ................................ 130,730 950 MedImmune, Inc. (c) ............................. 45,163 900 Protein Design Labs, Inc. ....................... 75,600 -------------- 1,155,686 -------------- EDUCATION-- 1.4% 2,350 Apollo Group (c) ................................ 99,288 -------------- ELECTRONICS-SEMICONDUCTORS-- 17.6% 3,700 Cree Research, Inc. (c) ......................... 98,790 6,600 Foundry Networks, Inc. (c) ...................... 128,700 2,950 Integrated Device Technology, Inc. (c) .......... 91,155 4,000 Intersil Holding Corp. (c) ...................... 137,000 2,400 KLA-Tencor Corp. (c) ............................ 141,216 2,500 LSI Logic Corp. (c) ............................. 47,000 3,700 Marvell Technology Group, Ltd. .................. 100,085 2,250 Novellus Systems, Inc. .......................... 125,302 2,800 QLogic Corp. .................................... 180,236 3,850 RF Micro Devices, Inc. .......................... 101,948 3,750 Semtech Corp. ................................... 117,000 -------------- 1,268,432 -------------- ENERGY-- 3.5% 950 Ballard Power Systems, Inc. (c) ................. 44,365 2,350 Calpine Corp. (c) ............................... 88,830 2,800 Capstone Turbine Corp. (c) ...................... 61,600 1,650 Mirant Corp. .................................... 56,760 -------------- 251,555 -------------- FINANCIAL SERVICES-- 1.6% 2,250 Lincoln National Corp., Inc. .................... 116,438 -------------- HEALTH CARE-MEDICAL TECHNOLOGY-- 4.3% 4,950 Cytyc Corp. (c) ................................. 113,998 1,550 Human Genome Sciences, Inc. (c) ................. 92,876 1,350 Quest Diagnostics, Inc. ......................... 101,048 -------------- 307,922 -------------- INDUSTRIAL SERVICES-- 1.5% 2,700 Shaw Group, Inc. ................................ 108,270 -------------- LEISURE & LODGING-- 3.1% 3,500 Harrahs Entertainment, Inc. (c) ................. 123,550 2,000 Hotel Reservations Network, Inc. (c) ............ 98,000 -------------- 221,550 -------------- OIL & GAS-EXPLORATION & PRODUCTION-- 3.0% 3,600 BJ Services Co. (c) ............................. 102,168 1,300 Devon Energy Corp. .............................. 68,250 1,750 National-Oilwell, Inc. (c) ...................... 46,900 -------------- 217,318 -------------- RETAIL-CLOTHING-- 1.4% 2,800 American Eagle Outfitters, Inc. (c) ............. 102,928 -------------- RETAIL-SPECIALTY-- 2.3% 2,250 Bed Bath & Beyond, Inc. (c) ..................... 68,670 2,500 Williams-Sonoma, Inc. ........................... 97,050 -------------- 165,720 -------------- SOFTWARE-- 9.1% 2,450 Macrovision Corp. ............................... 165,865 2,800 Openwave Systems, Inc. .......................... 91,115 3,700 Quest Software, Inc. ............................ 139,934 9,000 TIBCO Software, Inc. ............................ 123,750 2,350 VeriSign, Inc. (c) .............................. 136,417 -------------- 657,081 -------------- TELECOMMUNICATIONS-EQUIPMENT-- 9.1% 2,800 Brocade Communications Systems, Inc. (c) ........ 121,520 3,650 Emulex Corp. (c) ................................ 142,423 4,100 Extreme Networks, Inc. (c) ...................... 117,465 6,550 Finisar Corp. (c) ............................... 122,092 2,750 ONI Systems Corp. ............................... 74,885 3,500 Sonus Networks, Inc. ............................ 78,400 -------------- 656,785 -------------- Total Common Stock (Identified Cost $6,455,348) 6,494,262 -------------- PRINCIPAL AMOUNT DESCRIPTION - ------------------------------------------------------------------------------ SHORT TERM INVESTMENT-- 10.0% $ 722,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at$722,165 on 7/02/01, collateralized by $625,000 U.S. Treasury Bond, 7.500%, due 11/15/2016 valued at $737,275 ....... $ 722,000 -------------- Total Short Term Investment (Identified Cost $722,000) ...................... 722,000 -------------- Total Investments-- 100.3% (Identified Cost $7,177,348) (b)................. 7,216,262 Other assets less liabilities ................... 99 -------------- Total Net Assets-- 100% ......................... $ 7,216,361 ============== (a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At June 30, 2001 the net unrealized appreciation on investments based on cost of $7,177,348 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost..................... $ 385,509 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value ........................................ (346,595) -------------- Net unrealized appreciation ............................ $ 38,914 ============== (c) Non-income producing security. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- SELECT FUND - SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- Investments as of June 30, 2001 (Unaudited) SHARES DESCRIPTION VALUE (a) - ------------------------------------------------------------------------------ COMMON STOCK-- 92.4% OF TOTAL NET ASSETS AUTO & RELATED-- 4.5% 98,100 Ford Motor Co. .................................. $ 2,408,355 -------------- BROADCASTING-- 2.3% 69,900 AT&T Corp., Liberty Media Group (c) ............. 1,222,551 -------------- BUSINESS SERVICES-- 6.8% 25,400 First Data Corp. ................................ 1,631,950 65,000 Waste Management, Inc. .......................... 2,003,300 -------------- 3,635,250 -------------- COMPUTER SOFTWARE & SERVICES-- 8.8% 37,700 Electronic Data Systems Corp. ................... 2,356,250 447,900 Novell, Inc. (c) ................................ 2,338,038 -------------- 4,694,288 -------------- CONSUMER GOODS & SERVICES-- 4.4% 59,500 Black & Decker Corp. ............................ 2,347,870 -------------- ENERGY-- 7.9% 83,600 Energizer Holdings, Inc. (c) .................... 1,918,620 48,300 TXU Corp. ....................................... 2,327,577 -------------- 4,246,197 -------------- FINANCIAL SERVICES-- 18.7% 35,220 H & R Block, Inc. ............................... 2,273,451 204,800 Washington Mutual, Inc. ......................... 7,690,240 -------------- 9,963,691 -------------- FOOD-RETAILERS/WHOLESALERS-- 4.4% 93,600 The Kroger Co. (c) .............................. 2,340,000 -------------- LEISURE-- 3.1% 69,000 Brunswick Corp. ................................. 1,658,070 -------------- MEDICAL PRODUCTS & SUPPLIES-- 3.5% 35,700 Chiron Corp. (c) ................................ 1,859,256 -------------- OIL & GAS-EXPLORATION & PRODUCTION-- 4.5% 60,800 Burlington Resources, Inc. ...................... 2,428,960 -------------- PUBLISHING-- 4.7% 42,330 Knight-Ridder, Inc. ............................. 2,510,169 -------------- RESTAURANTS-- 3.8% 46,600 Tricon Global Restaurants, Inc. (c) ............. 2,045,740 -------------- RETAIL-CLOTHING-- 2.3% 24,200 Liz Claiborne, Inc. ............................. 1,220,890 -------------- RETAIL-DEPARTMENT STORE-- 4.1% 83,600 J.C. Penney, Inc. ............................... 2,203,696 -------------- TELECOMMUNICATIONS-- 8.6% 111,300 AT&T Corp. ...................................... 2,448,600 99,400 Sprint Corp. .................................... 2,123,184 -------------- 4,571,784 -------------- Total Common Stock (Identified Cost $46,631,462) 9,356,767 -------------- PRINCIPAL AMOUNT DESCRIPTION - ------------------------------------------------------------------------------ SHORT TERM INVESTMENTS-- 7.6% $ 4,045,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 3.85% to be repurchased at $4,046,298 on 7/02/01, collateralized by $3,860,000 U.S. Treasury Bond, 6.250%, due 8/15/2023 valued at $4,127,826 ...... $ 4,045,000 -------------- Total Short Term Investment (Identified Cost $4,045,000) .................... 4,045,000 -------------- Total Investments-- 100.0% (Identified Cost $50,676,462) (b)................ 53,401,767 Other assets less liabilities ................... (12,971) -------------- Total Net Assets-- 100% ......................... $ 53,388,796 ============== (a) See Note 2a of Notes to Financial Statements. (b) Federal Tax Information: At June 30, 2001 the net unrealized appreciation on investments based on cost of $50,676,462 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost .............. $ 3,269,479 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value ............................................. (544,174) -------------- Net unrealized appreciation ............................. $ 2,725,305 ============== (c) Non-income producing security. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- BULLSEYE FUND- SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- Investments as of June 30, 2001 (Unaudited) SHARES DESCRIPTION VALUE (a) - ------------------------------------------------------------------------------ COMMON STOCK-- 92.7% OF TOTAL NET ASSETS AIRLINES-- 9.8% 26,500 AMR Corp. (c) ................................... $ 957,445 40,000 Southwest Airlines .............................. 739,600 -------------- 1,697,045 -------------- COMMUNICATION SERVICES-- 24.7% 19,500 Comcast Corp. (c) ............................... 846,300 22,000 Cox Communications, Inc. (c) .................... 974,600 20,000 Scientific-Atlanta, Inc. ........................ 812,000 28,000 The Interpublic Group of Companies, Inc. ........ 821,800 28,000 The Walt Disney Co. ............................. 808,920 -------------- 4,263,620 -------------- COMPUTER HARDWARE-- 3.8% 23,600 SanDisk Corp. (c) ............................... 653,720 -------------- COMPUTER SOFTWARE & SERVICES-- 5.0% 25,000 Computer Sciences Corp. (c) ..................... 865,000 -------------- COMPUTERS & BUSINESS EQUIPMENT-- 3.2% 90,000 Palm, Inc. (c) .................................. 545,850 -------------- ELECTRONICS-- 9.9% 25,000 Cognex Corp. (c) ................................ 744,750 28,000 Intersil Holding Corp. (c) ...................... 959,000 -------------- 1,703,750 -------------- HEALTH CARE-DRUGS-- 9.7% 21,500 Pfizer, Inc. .................................... 861,075 17,850 Pharmacia Corp. ................................. 820,207 -------------- 1,681,282 -------------- INSURANCE-- 4.6% 23,000 Protective Life Corp. ........................... 790,510 -------------- MINING-- 2.9% 27,000 Newmont Mining Corp. ............................ 502,470 -------------- PAPER & FOREST PRODUCTS-- 4.5% 14,000 Kimberly-Clark Corp. ............................ 782,600 -------------- RETAIL-- 5.8% 55,000 Blockbuster, Inc. ............................... 1,003,750 -------------- SERVICES-DATA PROCESSING-- 4.5% 12,000 First Data Corp. ................................ 771,000 -------------- SOFTWARE-- 4.3% 35,000 WebMethods, Inc. (c) (d) ........................ 737,450 -------------- Total Common Stock (Identified Cost $17,945,136) 15,998,047 -------------- PRINCIPAL AMOUNT DESCRIPTION - ------------------------------------------------------------------------------ SHORT TERM INVESTMENT-- 6.9% $ 1,191,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $1,191,273 on 7/02/01, collateralized by $1,030,000 U.S. Treasury Bond, 7.500%, due 11/15/2016 valued at $1,215,029 ..... $ 1,191,000 -------------- Total Short Term Investment (Identified Cost $1,191,000) .................... 1,191,000 -------------- Total Investments-- 99.6% (Identified Cost $19,136,136) (b) ............... 17,189,047 Other assets less liabilities ................... 65,357 -------------- Total Net Assets-- 100% ......................... $ 17,254,404 ============== (a) See Note 2a of Notes to Financial Statements (b) Federal Tax Information: At June 30, 2001 the net unrealized depreciation on investments based on cost of $19,136,136 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost ................................................ $ 1,103,647 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value .............................................. (3,050,736) -------------- Net unrealized depreciation ............................. $ (1,947,089) ============== (c) Non-income producing security. (d) All or a portion of this security was on loan to brokers at June 30, 2001. See accompanying notes to financial statements. - -------------------------------------------------------------------------------- INTERNATIONAL EQUITY FUND - SCHEDULE OF INVESTMENTS - -------------------------------------------------------------------------------- Investments as of June 30, 2001 (Unaudited) SHARES DESCRIPTION VALUE (a) - ------------------------------------------------------------------------------ COMMON STOCK-- 95.8% OF TOTAL INVESTMENTS AUSTRALIA-- 4.8% 22,300 Commonwealth Bank of Australia .................. $ 388,426 256,200 Foster's Brewing Group, Ltd. .................... 716,098 21,300 National Australia Bank, Ltd. ................... 380,807 138,100 QBE Insurance Group, Ltd. ....................... 831,872 36,200 Rio Tinto, Ltd. ................................. 630,354 49,300 Wesfarmers, Ltd. ................................ 681,694 -------------- 3,629,251 -------------- BELGIUM-- 1.1% 30,200 Interbrew (c) ................................... 808,738 -------------- BRAZIL-- 1.0% 19,773 Embraer Empresa Brasileira De ................... 772,136 -------------- CANADA-- 6.8% 43,500 Anderson Exploration, Ltd. (c) .................. 878,542 47,500 Bombardier, Inc., Class B ....................... 713,627 18,500 Canadian Pacific, Ltd. .......................... 714,839 28,100 Petro-Canada .................................... 666,949 19,900 Precision Drilling Corp. ........................ 620,892 24,000 Royal Bank of Canada ............................ 768,107 64,300 TransCanada Pipelines, Ltd. ..................... 794,429 -------------- 5,157,385 -------------- DENMARK-- 3.4% 50,900 Danske Bank A/S ................................. 915,342 37,500 Novo Nordisk A/S (c) ............................ 1,660,312 -------------- 2,575,654 -------------- FINLAND-- 0.9% 27,900 Nokia OYJ ....................................... 632,946 -------------- FRANCE-- 10.3% 18,800 Accor SA ........................................ 794,213 12,700 Aventis SA ...................................... 1,014,914 13,300 Carrefour SA .................................... 704,443 7,300 Coflexip SA ..................................... 1,057,872 45,575 JC Decaux SA (c) ................................ 610,236 48,300 Orange SA (c) ................................... 392,945 11,700 STMicroelectronics NV ........................... 397,800 6,440 TotalFinaElf SA ................................. 902,683 23,500 Vivendi Environnemt ............................. 989,978 15,900 Vivendi Universal SA ............................ 927,716 -------------- 7,792,800 -------------- GERMANY-- 2.7% 3,400 Allianz AG ...................................... 993,338 3,700 Muenchener Rueckversicherungs- Gesellschaft AG ................................. 1,032,228 -------------- 2,025,566 -------------- HONG KONG-- 3.2% 140,000 China Mobile (Hong Kong), Ltd. (c) .............. 737,711 611,000 Cnooc, Ltd. (c) ................................. 583,598 17,600 Dah Sing Financial Group ........................ 90,936 782,000 Huaneng Power International, Inc. ............... 478,737 60,000 Sun Hung Kai Properties, Ltd., 144A ............. 540,398 -------------- 2,431,380 -------------- INDIA-- 0.8% 33,500 Dr. Reddy's Laboratories, Ltd. (c) .............. 621,425 -------------- IRELAND-- 4.3% 210,300 Anglo Irish Bank Corp., 144A .................... 800,202 27,500 Elan Corp., PLC (ADR) (c) ....................... 1,677,500 70,800 Ryanair Holdings PLC ............................ 734,993 -------------- 3,212,695 -------------- ISRAEL-- 0.6% 7,600 Teva Pharmaceutical Industries, Ltd. (ADR) ...... 471,580 -------------- ITALY-- 2.1% 64,450 Eni SpA ......................................... 786,501 61,700 Riunione Adriatica di Sicurta SpA ............... 759,217 -------------- 1,545,718 -------------- JAPAN-- 20.4% 15,000 Canon, Inc. ..................................... 606,206 103,000 Daiwa House Industry Co., Ltd. .................. 807,746 21,000 Fuji Photo Film Co. ............................. 905,942 48,000 Hitachi, Ltd. ................................... 471,494 19,000 Honda Motor Co. ................................. 834,897 107,200 JGC Corp. ....................................... 893,978 15,800 Kirin Beverage .................................. 335,739 43,000 Marui Co., Ltd. ................................. 620,640 16,500 Matsumotokiyoshi Co., Ltd. ...................... 636,396 255,000 Mitsui O.S.K. Lines, Ltd. ....................... 748,376 23,000 NEC Corp. ....................................... 310,761 5,900 Nintendo Co. .................................... 1,073,932 206,000 Nishimatsu Construction Co., Ltd. ............... 796,183 84,000 Nissan Motor Co., Ltd. .......................... 579,937 38 NTT DoCoMo, Inc. ................................ 661,214 6,000 Orix Corp. ...................................... 583,594 28,000 Ricoh Co. ....................................... 603,961 5,930 Shohkoh Fund & Co. .............................. 969,076 11,800 Sony Corp. ...................................... 775,880 9,400 Takefuji Corp. .................................. 853,997 140,000 Teijin .......................................... 786,946 30,000 The Nomura Securities Co., Ltd. ................. 574,934 -------------- 15,431,829 -------------- NETHERLANDS-- 6.8% 22,500 ASM Lithography Holding NV (c) .................. 504,000 44,269 Fortis NV ....................................... 1,077,452 18,325 Heineken NV (c) ................................. 739,671 16,300 ING Groep NV .................................... 1,066,397 27,600 Koninklijke Ahold NV (c) ........................ 865,416 15,460 Royal Dutch Petroleum Co. ....................... 890,645 -------------- 5,143,581 -------------- PORTUGAL-- 1.2% 124,855 Portugal Telecom, SGPS, SA ...................... 871,861 -------------- SINGAPORE-- 0.6% 111,480 Datacraft Asia, Ltd. ............................ 454,838 -------------- SOUTH AFRICA-- 0.7% 127,400 Standard Bank Investment Corp., Ltd. ............ 555,399 -------------- SOUTH KOREA-- 0.9% 2,300 Samsung Electronics ............................. 339,562 12,470 Samsung Securities Co., Ltd. .................... 354,779 -------------- 694,341 -------------- SPAIN-- 2.4% 42,400 Endesa SA ....................................... 676,956 48,700 Grupo Ferrovial, SA ............................. 805,606 28,613 Telefonica SA (ADR) ............................. 353,052 -------------- 1,835,614 -------------- SWITZERLAND-- 3.4% 4,100 Nestle SA ....................................... 871,806 1,540 Synthes-Stratec, Inc. ........................... 945,516 5,300 UBS AG .......................................... 759,672 -------------- 2,576,994 -------------- UNITED KINGDOM-- 17.4% 164,600 Allied Domecq PLC ............................... 1,027,481 26,400 Anglo American PLC .............................. 395,958 122,500 BHP Billiton PLC ................................ 611,141 112,100 BP PLC .......................................... 922,753 125,900 British Telecom PLC ............................. 792,553 112,500 Capita Group PLC ................................ 732,756 140,400 Compass Group .. 1,125,057 92,600 Diageo PLC ...................................... 1,017,187 34,900 Glaxosmithkline ................................. 982,993 45,600 Royal Bank of Scotland Group PLC ................ 1,006,303 94,200 Shire Pharmaceuticals Group PLC ................. 1,716,644 73,400 Standard Chartered PLC .......................... 941,694 265,700 Tesco ........................................... 959,785 427,646 Vodafone Group PLC .............................. 948,550 -------------- 13,180,855 -------------- Total Common Stock (Identified Cost $72,742,595) 72,422,586 -------------- PRINCIPAL AMOUNT DESCRIPTION - ------------------------------------------------------------------------------ SHORT TERM INVESTMENTS-- 5.7% $ 27,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $27,006 on 7/02/01, collateralized by $25,000 U.S. Treasury Bond, 7.500%, due 2/15/2005 valued at $27,901 ..................... 27,000 4,320,000 Repurchase Agreement with State Street Bank and Trust Co. dated 6/29/2001 at 2.75% to be repurchased at $4,320,990 on 7/02/01, collateralized by $3,740,000 U.S. Treasury Bond, 7.500%, due 11/15/2016 valued at $4,411,854 ..... 4,320,000 -------------- Total Short Term Investments (Identified Cost $4,347,000) .................... 4,347,000 -------------- Total Investments-- 101.5% (Identified Cost $77,089,595 .................... 76,769,586 Other assets less liabilities ................... (1,170,215) -------------- Total Net Assets-- 100% ......................... $ 75,599,371 ============== (a) See Note 2a of Notes to Financial Statements (b) Federal Tax Information: At June 30, 2001 the net unrealized appreciation on investments based on cost of $77,089,595 for federal income tax purposes was as follows: Aggregate gross unrealized appreciation for all investments in which there is an excess of value over tax cost ............... $ 3,599,748 Aggregate gross unrealized depreciation for all investments in which there is an excess of tax cost over value .............................................. (3,919,757) -------------- Net unrealized appreciation ............................. $ (320,009) ============== (c) Non-income producing security. ADR An American Depositary Receipt is a certificate issued by a U.S. bank representing the right to receive securities of the foreign issuer described. The values of ADRs are significantly influenced by trading on exchanges not located in the United States. 144A Securities exempt from registration under Rule 144A of the Securities act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $1,340,600 or 1.8% of net assets. INDUSTRY HOLDINGS AT JUNE 30, 2001 Drugs & Healthcare 10.7% Banks 8.7% Food & Beverages 7.3% Financial Services 7.3% Oil & Gas - Exploration & Production 5.5% Oil & Gas 4.2% Retail - Grocery 4.2% Utilities 3.9% Electronics 3.9% Telecommunications - Cellular 3.6% Construction 3.3% Telecommunications 2.7% Hotels & Restaurants 2.5% Financial - Consumer/Diversified 2.4% Metals & Mining 2.2% Media & Entertainment 2.0% Aerospace 2.0% Other, less than 2.0% each 23.6% See accompanying notes to financial statements. - ------------------------------------------------------------------------------------------------------------------------------ STATEMENTS OF ASSETS & LIABILITIES - ------------------------------------------------------------------------------------------------------------------------------ June 30, 2001 (Unaudited)
CAPITAL GROWTH GROWTH GROWTH AND FUND FUND INCOME FUND --------------- --------------- --------------- ASSETS Investments at cost ................................................ $ 176,449,079 $ 1,173,619,931 $ 414,593,341 Net unrealized appreciation (depreciation) ......................... (8,961,427) 86,462,619 6,249,627 --------------- --------------- --------------- Investments at value .............................................. 167,487,652 1,260,082,550 420,842,968 Cash ............................................................... 348 1,231 39 Foreign cash at value (identified cost $95,101) .................... -- -- -- Investments held as collateral for loaned securities ............... 4,303,946 -- -- Receivable for Fund shares sold .................................... 38,415 91,010 175,500 Receivable for securities sold ..................................... -- 25,463,578 2,130,054 Dividends and interest receivable .................................. 22,339 1,335,005 315,549 Tax reclaims receivable ............................................ -- -- -- Receivable from investment adviser ................................. -- -- -- Securities lending income receivable ............................... 4,777 -- -- Unamortized organization expense ................................... -- -- -- --------------- --------------- --------------- TOTAL ASSETS ...................................................... 171,857,477 1,286,973,374 423,464,110 --------------- --------------- --------------- LIABILITIES Collateral on securities loaned, at value .......................... 4,303,946 -- -- Payable for securities purchased ................................... -- 23,277,520 -- Payable for Fund shares redeemed ................................... 265,971 855,401 919,088 Withholding taxes payable .......................................... -- -- -- Management fees payable ............................................ 105,128 696,036 238,920 Deferred Trustees' fees ............................................ 43,397 245,191 51,411 Transfer agent fees payable ........................................ 58,598 350,002 136,055 Accounting and administrative fees payable ......................... 6,279 45,986 15,899 Other accounts payable and accrued expenses ........................ 70,772 169,544 90,996 --------------- --------------- --------------- TOTAL LIABILITIES ................................................. 4,854,091 25,639,680 1,452,369 --------------- --------------- --------------- NET ASSETS ........................................................... $ 167,003,386 $ 1,261,333,694 $ 422,011,741 =============== =============== =============== NET ASSETS CONSIST OF: Paid in capital .................................................... $ 191,720,204 $ 1,310,303,864 $ 469,993,324 Undistributed (overdistributed) net investment income (loss) ....... (1,147,206) (349,219) (845,435) Accumulated net realized gain (loss) on investments ................ (14,608,185) (135,083,570) (53,385,775) Net unrealized appreciation (depreciation) of investments and foreign currency transactions ................................ (8,961,427) 86,462,619 6,249,627 --------------- --------------- --------------- NET ASSETS ........................................................... $ 167,003,386 $ 1,261,333,694 $ 422,011,741 =============== =============== =============== COMPUTATION OF NET ASSET VALUE AND OFFERING PRICE: CLASS A SHARES: Net assets ........................................................ $ 118,764,231 $ 1,157,689,672 $ 253,002,078 =============== =============== =============== Shares of beneficial interest ..................................... 8,705,226 140,365,489 19,745,216 =============== =============== =============== Net asset value and redemption price per share .................... $ 13.64 $ 8.25 $ 12.81 =============== =============== =============== Offering price per share .......................................... $ 14.47 $ 8.75 $ 13.59 =============== =============== =============== CLASS B SHARES: (redemption price is equal to net asset value less any applicable contingent deferred sales charges) Net assets ........................................................ $ 46,242,778 $ 89,289,802 $ 143,248,883 =============== =============== =============== Shares of beneficial interest ..................................... 3,798,408 11,282,069 11,544,413 =============== =============== =============== Net asset value and offering price per share ...................... $ 12.17 $ 7.91 $ 12.41 =============== =============== =============== CLASS C SHARES: (redemption price is equal to net asset value less any applicable contingent deferred sales charges) Net assets ........................................................ $ 1,996,377 $ 4,532,074 $ 12,729,652 =============== =============== =============== Shares of beneficial interest ..................................... 164,072 572,425 1,027,053 =============== =============== =============== Net asset value per share ......................................... $ 12.17 $ 7.92 $ 12.39 =============== =============== =============== Offering price per share .......................................... $ 12.29 $ 8.00 $ 12.52 =============== =============== =============== CLASS Y SHARES: Net assets ........................................................ $ -- $ 9,822,146 $ 13,031,128 =============== =============== =============== Shares of beneficial interest ..................................... -- 1,188,007 1,007,949 =============== =============== =============== Net asset value, offering and redemption price per share .......... $ -- $ 8.27 $ 12.93 =============== =============== =============== See accompanying notes to financial statements.
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BALANCED LARGE CAP MID CAP SELECT BULLSEYE INTERNATIONAL FUND VALUE FUND GROWTH FUND FUND FUND EQUITY FUND - ------------- ------------- ------------- ------------- ------------- ------------- $ 143,997,303 $ 18,588,553 $ 7,177,348 $ 50,676,462 $ 19,136,136 $ 77,089,595 (1,753,753) 1,479,200 38,914 2,725,305 (1,947,089) (320,009) - ------------- ------------- ------------- ------------- ------------- ------------- 142,243,550 20,067,753 7,216,262 53,401,767 17,189,047 76,769,586 1,274 454 705 994 369 4,008 -- -- -- -- -- 98,163 -- -- -- -- 957,030 -- 27,794 16,818 318,684 -- 193,386 515,352 5,471,233 -- 43,336 2,002,575 108,196 724,979 841,392 24,735 110 40,164 4,202 98,284 61 -- -- -- -- 35,280 -- 11,309 72,434 26,389 19,307 -- -- 2,495 1,070 1,070 2,852 3,351 -- -- -- -- 7,321 -- - ------------- ------------- ------------- ------------- ------------- ------------- 148,585,304 20,123,564 7,652,601 55,472,959 18,481,710 78,249,003 - ------------- ------------- ------------- ------------- ------------- ------------- -- -- -- -- 957,030 -- 6,897,458 -- 394,719 1,923,373 -- 1,476,127 217,005 8,344 2,353 75,886 215,133 961,870 -- -- -- -- -- 8,763 88,782 -- -- 44,003 -- 56,815 81,895 7,299 579 815 6,561 32,319 42,820 8,035 5,369 11,000 7,175 27,005 5,303 747 5,754 5,753 647 2,828 48,889 27,774 27,466 23,333 40,760 83,905 - ------------- ------------- ------------- ------------- ------------- ------------- 7,382,152 52,199 436,240 2,084,163 1,227,306 2,649,632 - ------------- ------------- ------------- ------------- ------------- ------------- $ 141,203,152 $ 20,071,365 $ 7,216,361 $ 53,388,796 $ 17,254,404 $ 75,599,371 ============= ============= ============= ============= ============= ============= $ 167,741,928 $ 19,257,378 $ 7,417,413 $ 50,666,393 $ 19,713,043 $ 91,706,397 (162,600) 17,267 (11,227) (2,902) (96,049) (255,179) (24,622,423) (682,480) (228,739) -- (415,501) (15,536,528) (1,753,753) 1,479,200 38,914 2,725,305 (1,947,089) (315,319) - ------------- ------------- ------------- ------------- ------------- ------------- $ 141,203,152 $ 20,071,365 $ 7,216,361 $ 53,388,796 $ 17,254,404 $ 75,599,371 ============= ============= ============= ============= ============= ============= $ 84,263,191 $ 9,945,655 $ 4,198,959 $ 18,050,760 $ 7,895,104 $ 42,005,181 ============= ============= ============= ============= ============= ============= 8,519,205 539,569 402,471 1,642,470 731,946 2,991,565 ============= ============= ============= ============= ============= ============= $ 9.89 $ 18.43 $ 10.43 $ 10.99 $ 10.79 $ 14.04 ============= ============= ============= ============= ============= ============= $ 10.49 $ 19.55 $ 11.07 $ 11.66 $ 11.45 $ 14.90 ============= ============= ============= ============= ============= ============= $ 33,362,681 $ 9,145,786 $ 2,497,571 $ 23,344,673 $ 8,345,977 $ 22,322,174 ============= ============= ============= ============= ============= ============= 3,369,813 498,608 239,991 2,128,999 797,115 1,658,973 ============= ============= ============= ============= ============= ============= $ 9.90 $ 18.34 $ 10.41 $ 10.97 $ 10.47 $ 13.46 ============= ============= ============= ============= ============= ============= $ 1,647,411 $ 979,924 $ 519,831 $ 11,993,363 $ 1,013,323 $ 3,307,327 ============= ============= ============= ============= ============= ============= 167,170 53,390 49,942 1,093,687 96,816 244,820 ============= ============= ============= ============= ============= ============= $ 9.85 $ 18.35 $ 10.41 $ 10.97 $ 10.47 $ 13.51 ============= ============= ============= ============= ============= ============= $ 9.95 $ 18.54 $ 10.52 $ 11.08 $ 10.58 $ 13.65 ============= ============= ============= ============= ============= ============= $ 21,929,868 $ -- $ -- $ -- $ -- $ 7,964,689 ============= ============= ============= ============= ============= ============= 2,237,020 -- -- -- -- 552,325 ============= ============= ============= ============= ============= ============= $ 9.80 $ -- $ -- $ -- $ -- $ 14.42 ============= ============= ============= ============= ============= =============
- ------------------------------------------------------------------------------------------------------------------------------ STATEMENTS OF OPERATIONS - ------------------------------------------------------------------------------------------------------------------------------ For the Six Months Ended June 30, 2001 (Unaudited)
CAPITAL GROWTH GROWTH GROWTH AND FUND FUND INCOME FUND --------------- --------------- --------------- INVESTMENT INCOME Dividends .......................................................... $ 365,239 $ 8,770,255 $ 2,746,280 Interest ........................................................... 33,879 130,120 76,541 Securities lending income .......................................... 31,081 -- -- Less net foreign taxes withheld .................................... -- (681,261) (5,582) --------------- --------------- --------------- 430,199 8,219,114 2,817,239 --------------- --------------- --------------- Expenses Management fees ................................................... 669,964 4,414,756 1,503,032 Service fees - Class A ............................................ 158,356 1,497,433 335,780 Service and distribution fees - Class B ........................... 249,347 459,309 752,517 Service and distribution fees - Class C ........................... 10,934 24,668 77,225 Trustees' fees and expenses ....................................... 7,819 38,965 15,411 Accounting and administrative ..................................... 38,613 282,405 96,763 Custodian ......................................................... 47,037 107,663 61,165 Transfer agent - Class A, Class B, Class C ........................ 323,758 1,972,825 745,150 Transfer agent - Class Y .......................................... -- 5,120 6,320 Audit and tax services ............................................ 14,309 14,524 12,886 Legal ............................................................. 6,583 39,272 13,247 Printing .......................................................... 30,647 91,900 47,816 Registration ...................................................... 11,818 12,817 22,547 Amortization of organization expenses ............................. -- -- -- Miscellaneous ..................................................... 6,832 41,078 15,325 --------------- --------------- --------------- Total expenses before reductions ................................... 1,576,017 9,002,735 3,705,184 Less waiver/reimbursement ......................................... -- -- -- Less reductions ................................................... (29,779) (228,767) (79,536) --------------- --------------- --------------- Net expenses ....................................................... 1,546,238 8,773,968 3,625,648 --------------- --------------- --------------- Net investment income (loss) ....................................... (1,116,039) (554,854) (808,409) --------------- --------------- --------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS Realized gain (loss) on: Investments - net ................................................. (11,861,024) (60,961,948) (24,348,973) Foreign currency transactions - net ............................... -- -- -- Change in unrealized appreciation (depreciation) of: Investments - net ................................................. (5,928,607) (116,188,147) (9,507,685) Foreign currency transactions - net ............................... -- -- -- --------------- --------------- --------------- Net realized and unrealized gain (loss) on investments and foreign currency transactions ............................... (17,789,631) (177,150,095) (33,856,658) --------------- --------------- --------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS ...... $ (18,905,670) $ (177,704,949) $ (34,665,067) =============== =============== =============== * The Mid Cap Growth Fund and Select Fund commenced operations on March 15, 2001. See accompanying notes to financial statements.#
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BALANCED LARGE CAP MID CAP SELECT BULLSEYE INTERNATIONAL FUND VALUE FUND GROWTH FUND FUND FUND EQUITY FUND - ------------- ------------- ------------- ------------- ------------- ------------- $ 410,158 $ 171,217 $ 444 $ 98,291 $ 53,300 $ 721,474 2,295,418 10,244 4,123 41,436 31,982 44,748 -- 16,236 3,209 3,209 18,556 43,090 (1,646) (1,515) -- -- -- (86,837) - ------------- ------------- ------------- ------------- ------------- ------------- 2,703,930 196,182 7,776 142,936 103,838 722,475 - ------------- ------------- ------------- ------------- ------------- ------------- 577,382 66,507 9,122 73,339 86,352 379,988 114,568 11,363 1,456 6,383 10,560 57,876 178,965 42,161 3,068 33,031 43,448 122,581 8,966 4,460 710 14,750 5,210 21,214 7,198 3,456 1,425 1,854 3,446 5,212 33,307 3,998 19,093 17,598 3,935 18,236 68,530 37,423 26,193 23,536 43,263 109,266 235,343 39,132 17,790 27,012 40,434 150,627 12,364 -- -- -- -- 4,691 17,133 8,837 7,685 7,685 11,315 16,979 7,642 433 932 1,702 614 2,403 69,275 13,069 5,396 3,875 14,402 29,073 19,050 17,727 7,292 4,500 23,658 26,497 -- -- -- -- 2,071 -- 7,712 954 550 993 1,779 4,001 - ------------- ------------- ------------- ------------- ------------- ------------- 1,357,435 249,520 100,712 216,258 290,487 948,644 -- (76,470) (81,556) (55,725) (94,924) -- (29,089) (4,336) (153) (14,695) (272) -- - ------------- ------------- ------------- ------------- ------------- ------------- 1,328,346 168,714 19,003 145,838 195,291 948,644 - ------------- ------------- ------------- ------------- ------------- ------------- 1,375,584 27,468 (11,227) (2,902) (91,453) (226,169) - ------------- ------------- ------------- ------------- ------------- ------------- (4,566,832) 226,782 (228,739) -- (185,218) (12,390,126) -- -- -- -- -- (85,293) (7,593,236) (267,093) 38,914 2,725,305 (10,031) (2,304,218) -- -- -- -- -- (31,855) - ------------- ------------- ------------- ------------- ------------- ------------- (12,160,068) (40,311) (189,825) 2,725,305 (195,249) (14,811,492) - ------------- ------------- ------------- ------------- ------------- ------------- $ (10,784,484) $ (12,843) $ (201,052) $ 2,722,403 $ (286,702) $ (15,037,661) ============= ============= ============= ============= ============= =============
- --------------------------------------------------------------------------------------------------------------------------------- STATEMENTS OF CHANGES IN NET ASSETS - ---------------------------------------------------------------------------------------------------------------------------------
CAPITAL GROWTH GROWTH GROWTH AND INCOME FUND FUND FUND ---------------------------- -------------------------------- ----------------------------- SIX MONTHS SIX MONTHS SIX MONTHS ENDED ENDED ENDED JUNE 30, YEAR ENDED JUNE 30, YEAR ENDED JUNE 30, YEAR ENDED 2001 DECEMBER 31, 2001 DECEMBER 31, 2001 DECEMBER 31, (UNAUDITED) 2000 (UNAUDITED) 2000 (UNAUDITED) 2000 ------------ ------------ -------------- -------------- ------------ ------------- FROM OPERATIONS: Net investment income (loss) .................. $ (1,116,039) $ (2,661,117) $ (554,854) $ 13,575,437 $ (808,409) $ (1,289,466) Net realized gain (loss) on investments and foreign currency transactions ............ (11,861,024) 36,617,435 (60,961,948) 12,770,111 (24,348,973) (28,022,955) Net change in unrealized appreciation (depreciation) on investments ............. (5,928,607) (84,752,540) (116,188,147) (118,691,383) (9,507,685) (15,665,445) ------------ ------------ -------------- -------------- ------------ ------------- Increase (decrease) in net assets resulting from operations .............. (18,905,670) (50,796,222) (177,704,949) (92,345,835) (34,665,067) (44,977,866) ------------ ------------ -------------- -------------- ------------ ------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A ................. -- -- (4,833,948) (8,340,768) -- -- Class B ................. -- -- (386,702) (147,789) -- -- Class C ................. -- -- (19,590) (7,510) -- -- Class Y ................. -- -- (40,392) (114,156) -- -- Net realized gain on investments Class A ................. (27,207) (28,038,980) -- (91,898,737) -- (9,846,335) Class B ................. (11,813) (12,056,741) -- (7,089,946) -- (5,698,512) Class C ................. (510) (515,976) -- (353,917) -- (657,800) Class Y ................. -- -- -- (770,634) -- (324,610) In excess of net realized gain on investments Class A ................. -- (37,905) -- (65,697,938) -- -- Class B ................. -- (16,299) -- (5,068,566) -- -- Class C ................. -- (698) -- (253,013) -- -- Class Y ................. -- -- -- (550,922) -- -- ------------ ------------ -------------- -------------- ------------ ------------- (39,530) (40,666,599) (5,280,632) (180,293,896) -- (16,527,257) ------------ ------------ -------------- -------------- ------------ ------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS .............. (16,847,118) 15,399,125 (95,409,922) (218,727,513) (29,309,130) (86,001,450) ------------ ------------ -------------- -------------- ------------ ------------- Total increase (decrease) in net assets ............ (35,792,318) (76,063,696) (278,395,503) (491,367,244) (63,974,197) (147,506,573) ------------ ------------ -------------- -------------- ------------ ------------- NET ASSETS Beginning of the period ... 202,795,704 278,859,400 1,539,729,197 2,031,096,441 485,985,938 633,492,511 ------------ ------------ -------------- -------------- ------------ ------------- End of the period ......... $167,003,386 $202,795,704 $1,261,333,694 $1,539,729,197 $422,011,741 $ 485,985,938 ============ ============ ============== ============== ============ ============= UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME (LOSS) ............. $ (1,147,206) $ (31,167) $ (349,219) $ 5,486,267 $ (845,435) $ (37,026) ============ ============ ============== ============== ============ ============= * The Mid Cap Growth Fund and Select Fund commenced operations on March 15, 2001. See accompanying notes to financial statements.
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BALANCED LARGE CAP VALUE MID CAP GROWTH SELECT FUND FUND FUND* FUND* - ------------------------------ ------------------------------ ------------- ------------- SIX MONTHS SIX MONTHS ENDED ENDED PERIOD ENDED PERIOD ENDED JUNE 30, YEAR ENDED JUNE 30, YEAR ENDED JUNE 30, JUNE 30, 2001 DECEMBER 31, 2001 DECEMBER 31, 2001 2001 (UNAUDITED) 2000 (UNAUDITED) 2000 (UNAUDITED) (UNAUDITED) - ------------- ------------- ------------- ------------- ------------- ------------- $ 1,375,584 $ 4,200,131 $ 27,468 $ 101,551 $ (11,227) $ (2,902) (4,566,832) (20,039,633) 226,782 (675,512) (228,739) -- (7,593,236) (1,389,661) (267,093) 1,684,729 38,914 2,725,305 - ------------- ------------- ------------- ------------- ------------- ------------- (10,784,484) (17,229,163) (12,843) 1,110,768 (201,052) 2,722,403 - ------------- ------------- ------------- ------------- ------------- ------------- (987,558) (2,671,815) (8,072) (98,327) -- -- (185,031) (324,462) (7,435) (14,783) -- -- (9,369) (18,562) (795) (1,897) -- -- (363,695) (1,218,118) -- -- -- -- -- (15,553) -- -- -- -- -- (6,046) -- -- -- -- -- (308) -- -- -- -- -- (4,792) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ------------- ------------- ------------- ------------- ------------- ------------- (1,545,653) (4,259,656) (16,302) (115,007) -- -- - ------------- ------------- ------------- ------------- ------------- ------------- (17,769,767) (92,677,754) 2,952,114 (6,117,119) 7,417,413 50,666,393 - ------------- ------------- ------------- ------------- ------------- ------------- (30,099,904) (114,166,573) 2,922,969 (5,121,358) 7,216,361 53,388,796 171,303,056 285,469,629 17,148,396 22,269,754 -- -- - ------------- ------------- ------------- ------------- ------------- ------------- $ 141,203,152 $ 171,303,056 $ 20,071,365 $ 17,148,396 $ 7,216,361 $ 53,388,796 ============= ============= ============= ============= ============= ============= $ (162,600) $ 7,469 $ 17,267 $ 6,101 $ (11,227) $ (2,902) ============= ============= ============= ============= ============= =============
- ------------------------------------------------------------------------------------------------------------------ STATEMENTS OF CHANGES IN NET ASSETS - ------------------------------------------------------------------------------------------------------------------
BULLSEYE INTERNATIONAL EQUITY FUND FUND ------------------------------ ------------------------------ SIX MONTHS SIX MONTHS ENDED ENDED JUNE 30, YEAR ENDED JUNE 30, YEAR ENDED 2001 DECEMBER 31, 2001 DECEMBER 31, (UNAUDITED) 2000 (UNAUDITED) 2000 ------------- ------------- ------------- ------------- FROM OPERATIONS: Net investment income (loss) ............... $ (91,453) $ (249,540) $ (226,169) $ (1,396,809) Net realized gain (loss) on investments and foreign currency transactions ........ (185,218) 3,407,799 (12,475,419) 3,406,865 Net change in unrealized appreciation (depreciation) on investments ............ (10,031) (5,675,480) (2,336,073) (42,495,629) ------------- ------------- ------------- ------------- Increase (decrease) in net assets resulting from operations .......................... (286,702) (2,517,221) (15,037,661) (40,485,573) ------------- ------------- ------------- ------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class A .................................. -- -- -- (558,378) Class B .................................. -- -- -- (292,183) Class C .................................. -- -- -- (40,426) Class Y .................................. -- -- -- (115,432) Net realized gain on investments Class A .................................. (38,283) (3,013,383) -- (4,370,530) Class B .................................. (41,763) (2,946,671) -- (2,325,819) Class C .................................. (4,915) (377,593) -- (341,473) Class Y .................................. -- -- -- (903,746) In excess of net realized gain on investments Class A .................................. -- -- -- (406,191) Class B .................................. -- -- -- (216,159) Class C .................................. -- -- -- (31,736) Class Y .................................. -- -- -- (83,993) ------------- ------------- ------------- ------------- (84,961) (6,337,647) -- (9,686,066) ------------- ------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS ............................... (592,239) 4,533,110 (10,798,231) 39,656,764 ------------- ------------- ------------- ------------- Total increase (decrease) in net assets ..... (963,902 (4,321,758) (25,835,892) (10,514,875) NET ASSETS Beginning of the period .................... 18,218,306 22,540,064 101,435,263 111,950,138 ------------- ------------- ------------- ------------- End of the period .......................... $ 17,254,404 $ 18,218,306 $ 75,599,371 $ 101,435,263 ============= ============= ============= ============= UNDISTRIBUTED (OVERDISTRIBUTED) NET INVESTMENT INCOME (LOSS) ................... $ (96,049) $ (4,596) $ (255,179) $ (29,010) ============= ============= ============= ============= See accompanying notes to financial statements.
- ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - ----------------------------------------------------------------------------------------------------------------------------------- For a share outstanding throughout each period.
INCOME (LOSS) FROM INVESTMENT OPERATIONS: LESS DISTRIBUTIONS: ---------------------------------------- ------------------------------------------------------------------ DISTRI- DISTRI- BUTIONS NET ASSET DIVIDENDS BUTIONS IN EXCESS VALUE, NET NET REALIZED TOTAL DIVIDENDS IN EXCESS FROM NET OF NET BEGINNING INVESTMENT AND UNREALIZED FROM FROM NET OF NET REALIZED REALIZED RETURN OF THE INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT CAPITAL CAPITAL OF TOTAL PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INCOME GAINS GAINS CAPITAL DISTRIBUTIONS ------ ---------- ----------- ---------- ---------- ---------- ------- --------- ------- ------------- CAPITAL GROWTH FUND - ------------------- CLASS A 2001(f) $15.04 $(0.07)(d) $(1.33) $(1.40) $ -- $ -- $ 0.00(e) $ -- $ -- $ -- 2000 22.86 (0.18)(d) (4.14) (4.32) -- -- (3.50) 0.00(e) -- (3.50) 1999 20.67 (0.13)(d) 5.05 4.92 -- -- (2.73) -- -- (2.73) 1998 19.95 (0.13)(d) 5.18 5.05 -- -- (4.33) -- -- (4.33) 1997 19.27 (0.18)(d) 3.43 3.25 -- -- (2.57) -- -- (2.57) 1996 18.41 (0.14)(d) 3.22 3.08 -- -- (2.22) -- -- (2.22) CLASS B 2001(f) 13.47 (0.11)(d) (1.19) (1.30) -- -- 0.00(e)-- -- -- 2000 21.06 (0.32)(d) (3.77) (4.09) -- -- (3.50) 0.00(e) -- (3.50) 1999 19.37 (0.27)(d) 4.69 4.42 -- -- (2.73) -- -- (2.73) 1998 19.10 (0.27)(d) 4.87 4.60 -- -- (4.33) -- -- (4.33) 1997 18.74 (0.32)(d) 3.25 2.93 -- -- (2.57) -- -- (2.57) 1996 18.09 (0.28)(d) 3.15 2.87 -- -- (2.22) -- -- (2.22) CLASS C 2001(f) 13.47 (0.11)(d) (1.19) (1.30) -- -- 0.00(e) -- -- -- 2000 21.06 (0.32)(d) (3.77) (4.09) -- -- (3.50) 0.00(e) -- (3.50) 1999 19.37 (0.27)(d) 4.69 4.42 -- -- (2.73) -- -- (2.73) 1998 19.11 (0.27)(d) 4.86 4.59 -- -- (4.33) -- -- (4.33) 1997 18.74 (0.34)(d) 3.28 2.94 -- -- (2.57) -- -- (2.57) 1996 18.08 (0.28)(d) 3.16 2.88 -- -- (2.22) -- -- (2.22) GROWTH FUND - ----------- CLASS A 2001(f) $ 9.36 $ 0.00(d)(e) $(1.08) $(1.08) $(0.03) $ -- $ -- $ -- $ -- $(0.03) 2000 11.00 0.09(d) (0.60) (0.51) (0.06) -- (0.62) (0.45) -- (1.13) 1999 11.36 0.02 1.57 1.59 -- -- (1.95) -- -- (1.95) 1998 10.41 0.08(d) 3.00 3.08 (0.10) -- (1.32) (0.35) (0.36) (2.13) 1997 11.63 0.01 2.79 2.80 -- -- (4.02) -- -- (4.02) 1996 10.55 0.04 2.07 2.11 (0.04) -- (0.99) -- -- (1.03) CLASS B 2001(f) 9.02 (0.03)(d) (1.05) (1.08) (0.03) -- -- -- -- (0.03) 2000 10.67 0.01(d) (0.58) (0.57) (0.01) -- (0.62) (0.45) -- (1.08) 1999 11.15 (0.05) 1.52 1.47 -- -- (1.95) -- -- (1.95) 1998 10.32 0.00(d)(e) 2.95 2.95 (0.06) -- (1.32) (0.35) (0.39) (2.12) 1997(g) 12.47 (0.07) 1.94 1.87 -- -- (4.02) -- -- (4.02) CLASS C 2001(f) 9.02 (0.03)(d) (1.04) (1.07) (0.03) -- -- -- -- (0.03) 2000 10.67 0.01(d) (0.58) (0.57) (0.01) -- (0.62) (0.45) -- (1.08) 1999 11.15 (0.05) 1.52 1.47 -- -- (1.95) -- -- (1.95) 1998(h) 11.18 0.00(d)(e) 2.09 2.09 (0.06) -- (1.32) (0.35) (0.39) (2.12) CLASS Y 2001(f) 9.37 0.02(d) (1.09) (1.07) (0.03) -- -- -- -- (0.03) 2000 11.01 0.12(d) (0.60) (0.48) (0.09) -- (0.62) (0.45) -- (1.16) 1999(i) 11.94 0.03 0.99 1.02 -- -- (1.95) -- -- (1.95) (a) A sales charge for Class A and Class C shares and a contingent deferred sales charge for Class B and Class C shares are not reflected in in total return calculations. Periods less than one year are not annualized. (b) Computed on an annualized basis for periods less than one year. (c) Certain Funds have entered into agreements with certain brokers to rebate a portion of brokerage commissions. The rebated commissions are used to reduce operating expenses of the Fund. (d) Per share net investment income (loss) has been calculated using the average shares outstanding during the period. (e) Amount rounds to less than $0.01 per share. (f) For the six months ended June 30, 2001 (unaudited). (g) For the period February 28, 1997 (inception) through December 31, 1997. (h) For the period September 1, 1998 (inception) through December 31, 1998. (i) For the period June 30, 1999 (inception) through December 31, 1999. See accompanying notes to financial statements.
RATIOS TO AVERAGE NET ASSETS: ------------------------------------------------ NET ASSET NET ASSETS, EXPENSES VALUE, TOTAL END OF AFTER EXPENSE NET INVESTMENT PORTFOLIO END OF RETURN THE PERIOD EXPENSES REDUCTIONS INCOME (LOSS) TURNOVER THE PERIOD (%)(a) (000) (%)(b) (%)(b)(c) (%)(b) RATE (%) ---------- ------- ----------- -------- -------- ---- -------------- ---------- $13.64 (9.3) $ 118,764 1.55 1.52 (1.03) 46 15.04 (19.5) 143,425 1.40 1.37 (0.80) 118 22.86 24.7 200,821 1.39 1.39 (0.61) 124 20.67 29.0 175,511 1.46 1.46 (0.62) 136 19.95 17.2 149,734 1.45 1.45 (0.87) 48 19.27 17.1 141,326 1.50 1.50 (0.71) 74 12.17 (9.6) 46,243 2.30 2.27 (1.78) 46 13.47 (20.1) 56,884 2.15 2.12 (1.55) 118 21.06 23.8 74,774 2.14 2.14 (1.36) 124 19.37 28.2 57,796 2.21 2.21 (1.37) 136 19.10 15.9 45,546 2.20 2.20 (1.62) 48 18.74 16.2 37,439 2.25 2.25 (1.46) 74 12.17 (9.6) 1,996 2.30 2.27 (1.79) 46 13.47 (20.1) 2,487 2.15 2.12 (1.55) 118 21.06 23.8 3,110 2.14 2.14 (1.36) 124 19.37 28.1 1,609 2.21 2.21 (1.37) 136 19.11 15.9 979 2.20 2.20 (1.62) 48 18.74 16.2 504 2.25 2.25 (1.46) 74 $ 8.25 (11.5) $1,157,690 1.33 1.29 (0.03) 140 9.36 (4.6) 1,413,685 1.18 1.16 0.83 266 11.00 15.2 1,871,138 1.12 1.12 0.23 206 11.36 33.4 1,825,107 1.12 1.12 0.74 202 10.41 23.5 1,459,747 1.12 1.12 0.08 214 11.63 20.9 1,296,542 1.18 1.18 0.33 199 7.91 (11.9) 89,290 2.08 2.04 (0.78) 140 9.02 (5.2) 107,594 1.93 1.91 0.08 266 10.67 14.4 135,786 1.87 1.87 (0.52) 206 11.15 32.4 75,444 1.87 1.87 (0.01) 202 10.32 14.4 17,757 1.87 1.87 (0.67) 214 7.92 (11.8) 4,532 2.08 2.04 (0.78) 140 9.02 (5.2) 5,830 1.93 1.91 0.08 266 10.67 14.4 8,754 1.87 1.87 (0.52) 206 11.15 22.2 2,030 1.87 1.87 (0.01) 202 8.27 (11.4) 9,822 0.87 0.84 0.43 140 9.37 (4.2) 12,260 0.85 0.83 1.16 266 11.01 9.7 15,418 0.87 0.87 0.48 206
- ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - ----------------------------------------------------------------------------------------------------------------------------------- For a share outstanding throughout each period.
INCOME (LOSS) FROM INVESTMENT OPERATIONS: LESS DISTRIBUTIONS: ---------------------------------------- ------------------------------------------------------------------ DISTRI- DISTRI- BUTIONS NET ASSET DIVIDENDS BUTIONS IN EXCESS VALUE, NET NET REALIZED TOTAL DIVIDENDS IN EXCESS FROM NET OF NET BEGINNING INVESTMENT AND UNREALIZED FROM FROM NET OF NET REALIZED REALIZED RETURN OF THE INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT CAPITAL CAPITAL OF TOTAL PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INCOME GAINS GAINS CAPITAL DISTRIBUTIONS ------ ---------- ----------- ---------- ---------- ---------- ------- --------- ------- ------------- GROWTH AND INCOME FUND - ---------------------- CLASS A 2001(f) $13.79 $(0.01)(d) $(0.97) $(0.98) $ -- $ -- $ -- $ -- $ -- $ -- 2000 15.33 0.01(d) (1.09) (1.08) -- -- (0.46) -- -- (0.46) 1999 16.57 0.08 1.40 1.48 (0.06) 0.00(e) (2.66) -- -- (2.72) 1998 15.35 0.04 3.29 3.33 (0.01) -- (2.10) -- -- (2.11) 1997 13.87 0.07(d) 4.40 4.47 (0.06) -- (2.93) -- -- (2.99) 1996 14.39 0.13 2.07 2.20 (0.13) -- (2.59) -- -- (2.72) CLASS B 2001(f) 13.40 (0.05)(d) (0.94) (0.99) -- -- -- -- -- -- 2000 15.03 (0.10)(d) (1.07) (1.17) -- -- (0.46) -- -- (0.46) 1999 16.37 (0.04) 1.36 1.32 -- 0.00(e) (2.66) -- -- (2.66) 1998 15.28 (0.05) 3.24 3.19 -- -- (2.10) -- -- (2.10) 1997 13.87 (0.05)(d) 4.40 4.35 (0.01) -- (2.93) -- -- (2.94) 1996 14.40 0.03 2.07 2.10 (0.04) -- (2.59) -- -- (2.63) CLASS C 2001(f) 13.38 (0.05)(d) (0.94) (0.99) -- -- -- -- -- -- 2000 15.01 (0.10)(d) (1.07) (1.17) -- -- (0.46) -- -- (0.46) 1999 16.35 (0.04) 1.36 1.32 -- 0.00(e) (2.66) -- -- (2.66) 1998 15.28 (0.04) 3.21 3.17 -- -- (2.10) -- -- (2.10) 1997 13.85 (0.05)(d) 4.42 4.37 (0.01) -- (2.93) -- -- (2.94) 1996 14.39 0.04 2.05 2.09 (0.04) -- (2.59) -- -- (2.63) CLASS Y 2001(f) 13.87 0.03(d) (0.97) (0.94) -- -- -- -- -- -- 2000 15.36 0.07(d) (1.10) (1.03) -- -- (0.46) -- -- (0.46) 1999 16.57 0.02 1.51 1.53 (0.08) 0.00(e) (2.66) -- -- (2.74) 1998(g) 15.42 0.02 1.22 1.24 (0.02) -- (0.07) -- -- (0.09) BALANCED FUND - ------------- CLASS A 2001(h) $10.70 $ 0.10 $(0.80) $(0.70) $(0.11) $ -- $ -- $ -- $ -- $(0.11) 2000 11.69 0.23 (0.98) (0.75) (0.24) -- 0.00(e) -- -- (0.24) 1999 13.52 0.32 (0.82) (0.50) (0.32) -- (1.01) -- -- (1.33) 1998 14.25 0.33 0.74 1.07 (0.32) -- (1.48) -- -- (1.80) 1997 13.94 0.33 2.05 2.38 (0.33) -- (1.74) -- -- (2.07) 1996 13.14 0.38 1.76 2.14 (0.39) -- (0.95) -- -- (1.34) CLASS B 2001(h) 10.68 0.07 (0.80) (0.73) (0.05) -- -- -- -- (0.05) 2000 11.58 0.16 (0.99) (0.83) (0.07) -- 0.00(e) -- -- (0.07) 1999 13.40 0.21 (0.80) (0.59) (0.22) -- (1.01) -- -- (1.23) 1998 14.15 0.21 0.74 0.95 (0.22) -- (1.48) -- -- (1.70) 1997 13.86 0.23 2.03 2.26 (0.23) -- (1.74) -- -- (1.97) 1996 13.08 0.29 1.74 2.03 (0.30) -- (0.95) -- -- (1.25) CLASS C 2001(h) 10.63 0.07 (0.80) (0.73) (0.05) -- -- -- -- (0.05) 2000 11.53 0.16 (0.99) (0.83) (0.07) -- 0.00(e) -- -- (0.07) 1999 13.35 0.21 (0.80) (0.59) (0.22) -- (1.01) -- -- (1.23) 1998 14.10 0.21 0.74 0.95 (0.22) -- (1.48) -- -- (1.70) 1997 13.82 0.23 2.02 2.25 (0.23) -- (1.74) -- -- (1.97) 1996 13.05 0.29 1.73 2.02 (0.30) -- (0.95) -- -- (1.25) (a) A sales charge for Class A and Class C shares and a contingent deferred sales charge for Class B and Class C shares are not reflected in in total return calculations. Periods less than one year are not annualized. (b) Computed on an annualized basis for periods less than one year. (c) Certain Funds have entered into agreements with certain brokers to rebate a portion of brokerage commissions. The rebated commissions are used to reduce operating expenses of the Fund. (d)Per share net investment income (loss) has been calculated using the average shares outstanding during the period. (e) Amount rounds to less than $0.01 per share. (f) For the six months ended June 30, 2001 (unaudited). See accompanying notes to financial statements.
RATIOS TO AVERAGE NET ASSETS: ------------------------------------------------ NET ASSET NET ASSETS, EXPENSES VALUE, TOTAL END OF AFTER EXPENSE NET INVESTMENT PORTFOLIO END OF RETURN THE PERIOD EXPENSES REDUCTIONS INCOME (LOSS) TURNOVER THE PERIOD (%)(a) (000) (%)(b) (%)(b)(c) (%)(b) RATE (%) ---------- ------- ----------- -------- -------- ---- -------------- ---------- $12.81 (7.1) $253,002 1.39 1.36 (0.10) 72 13.79 (7.3) 290,714 1.31 1.28 0.04 139 15.33 9.5 375,676 1.21 1.21 0.48 133 16.57 23.9 304,139 1.23 1.23 0.33 114 15.35 33.4 220,912 1.25 1.25 0.46 103 13.87 17.2 166,963 1.30 1.30 0.92 127 12.41 (7.4) 143,249 2.14 2.11 (0.85) 72 13.40 (8.1) 165,767 2.06 2.03 (0.71) 139 15.03 8.6 216,457 1.96 1.96 (0.27) 133 16.37 23.1 153,369 1.98 1.98 (0.42) 114 15.28 32.4 81,066 2.00 2.00 (0.29) 103 13.87 16.3 46,856 2.05 2.05 0.17 127 12.39 (7.4) 12,730 2.14 2.11 (0.86) 72 13.38 (8.1) 19,373 2.06 2.03 (0.71) 139 15.01 8.6 26,983 1.96 1.96 (0.27) 133 16.35 22.9 18,288 1.98 1.98 (0.42) 114 15.28 32.6 6,735 2.00 2.00 (0.29) 103 13.85 16.3 3,912 2.05 2.05 0.17 127 12.93 (6.8) 13,031 0.90 0.86 0.42 72 13.87 (7.0) 10,131 0.87 0.84 0.48 139 15.36 9.8 14,377 0.96 0.96 (0.73) 133 16.57 8.1 1 0.98 0.98 0.58 114 $ 9.89 (6.5) $ 84,263 1.66 1.62 1.89 123 10.70 (6.4) 100,993 1.56 1.52 2.08 133 11.69 (3.8) 167,943 1.33 1.33 2.30 61 13.52 8.2 222,866 1.30 1.30 2.25 81 14.25 17.5 233,421 1.29 1.29 2.25 69 13.94 17.1 219,626 1.33 1.33 2.79 70 9.90 (6.8) 33,363 2.41 2.37 1.14 123 10.68 (7.2) 39,548 2.31 2.27 1.33 133 11.58 (4.4) 65,492 2.08 2.08 1.55 61 13.40 7.3 84,255 2.05 2.05 1.50 81 14.15 16.7 76,558 2.04 2.04 1.50 69 13.86 16.3 58,367 2.08 2.08 2.04 70 9.85 (6.8) 1,647 2.41 2.37 1.14 123 10.63 (7.2) 2,022 2.31 2.27 1.33 133 11.53 (4.5) 4,454 2.08 2.08 1.55 61 13.35 7.3 5,480 2.05 2.05 1.50 81 14.10 16.6 4,596 2.04 2.04 1.50 69 13.82 16.2 2,538 2.08 2.08 2.04 70 (g) For the period November 18, 1998 (inception) through December 31, 1998. (h) For the six months ended June 30, 2001 (unaudited). As required, effective January 1, 2001, the Balanced Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium on debt securities. The effect of this change was to decrease the ratio of net investment income to average net assets from 1.90% to 1.89% for Class A, 1.15% to 1.14% for Class B, and 1.15% to 1.14% for Class C.
- ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - ----------------------------------------------------------------------------------------------------------------------------------- For a share outstanding throughout each period.
INCOME (LOSS) FROM INVESTMENT OPERATIONS: LESS DISTRIBUTIONS: ---------------------------------------- ------------------------------------------------------------------ DISTRI- DISTRI- BUTIONS NET ASSET DIVIDENDS BUTIONS IN EXCESS VALUE, NET NET REALIZED TOTAL DIVIDENDS IN EXCESS FROM NET OF NET BEGINNING INVESTMENT AND UNREALIZED FROM FROM NET OF NET REALIZED REALIZED RETURN OF THE INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT CAPITAL CAPITAL OF TOTAL PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INCOME GAINS GAINS CAPITAL DISTRIBUTIONS ------ ---------- ----------- ---------- ---------- ---------- ------- --------- ------- ------------- BALANCED FUND (continued) - ------------------------ CLASS Y 2001(l) $10.62 $ 0.11 $(0.78) $(0.67) $(0.15) $ -- $ -- $ -- $ -- $(0.15) 2000 11.71 0.28 (0.98) (0.70) (0.39) -- 0.00(e) -- -- (0.39) 1999 13.54 0.36 (0.81) (0.45) (0.37) -- (1.01) -- -- (1.38) 1998 14.27 0.39 0.74 1.13 (0.38) -- (1.48) -- -- (1.86) 1997 13.95 0.40 2.06 2.46 (0.40) -- (1.74) -- -- (2.14) 1996 13.15 0.44 1.76 2.20 (0.45) -- (0.95) -- -- (1.40) LARGE CAP VALUE FUND CLASS A 2001(h) $18.49 $ 0.06(d) $(0.11) $(0.05) $(0.01) $ -- $ -- $ -- $ -- $(0.01) 2000 17.16 0.16(d) 1.37 1.53 (0.20) -- -- -- -- (0.20) 1999 17.62 0.17 (0.51) (0.34) (0.12) -- 0.00(e) -- -- (0.12) 1998 17.59 0.26(d) 0.20(f) 0.46 (0.26) -- (0.17) -- -- (0.43) 1997 15.15 0.25 3.15 3.40 (0.26) -- (0.70) -- -- (0.96) 1996 12.86 0.31 3.11 3.42 (0.30) -- (0.83) -- -- (1.13) CLASS B 2001(h) 18.46 (0.01)(d) (0.10) (0.11) (0.01) -- -- -- -- (0.01) 2000 17.10 0.04(d) 1.35 1.39 (0.03) -- -- -- -- (0.03) 1999 17.62 0.03 (0.50) (0.47) (0.05) -- 0.00(e) -- -- (0.05) 1998 17.59 0.13(d) 0.20 0.33 (0.13) -- (0.17) -- -- (0.30) 1997(i) 17.06 0.03 0.60 0.63 (0.04) -- (0.06) -- -- (0.10) CLASS C 2001(h) 18.48 (0.01)(d) (0.11) (0.12) (0.01) -- -- -- -- (0.01) 2000 17.11 0.04(d) 1.36 1.40 (0.03) -- -- -- -- (0.03) 1999 17.63 0.03 (0.50) (0.47) (0.05) -- 0.00(e) -- -- (0.05) 1998 17.59 0.13(d) 0.21(f) 0.34 (0.13) -- (0.17) -- -- (0.30) 1997(i) 17.06 0.03 0.60 0.63 (0.04) -- (0.06) -- -- (0.10) MID CAP GROWTH FUND CLASS A 2001(j) $10.00 $(0.03)(d) $ 0.46 $ 0.43 $ -- $ -- $ -- $ -- $ -- $ -- CLASS B 2001(j) 10.00 (0.05)(d) 0.46 0.41 -- -- -- -- -- -- CLASS C 2001(j) 10.00 (0.05)(d) 0.46 0.41 -- -- -- -- -- -- SELECT FUND CLASS A 2001(j) $10.00 $ 0.01(d) $ 0.98 $ 0.99 $ -- $ -- $ -- $ -- $ -- $ -- CLASS B 2001(j) 10.00 (0.01)(d) 0.98 0.97 -- -- -- -- -- -- CLASS C 2001(j) 10.00 (0.01)(d) 0.98 0.97 -- -- -- -- -- -- (a) A sales charge for Class A and Class C shares and a contingent deferred sales charge for Class B and Class C shares are not reflected in in total return calculations. Had certain expenses not been reduced during the periods shown, total returns would have been lower. Periods less than one year are not annualized. (b) Computed on an annualized basis for periods less than one year. (c) Certain Funds have entered into agreements with certain brokers to rebate a portion of brokerage commissions. The rebated commissions are used to reduce operating expenses of the Fund. (d) Per share net investment income (loss) has been calculated using the average shares outstanding during the period. (e) Amount rounds to less than $0.01 per share. (f) The amount shown for a share outstanding does not correspond with the aggregate net gain/(loss) for the period ended December 31, 1998, due to the timing of purchases and redemptioms of Fund shares in relation to fluctuating market values of the investments of the Fund. See accompanying notes to financial statements.
RATIOS TO AVERAGE NET ASSETS: ------------------------------------------------ NET ASSET NET ASSETS, EXPENSES VALUE, TOTAL END OF AFTER EXPENSE NET INVESTMENT PORTFOLIO END OF RETURN THE PERIOD EXPENSES REDUCTIONS INCOME (LOSS) TURNOVER THE PERIOD (%)(a) (000) (%)(b) (%)(b)(c) (%)(b) RATE (%) ---------- ------- ----------- -------- -------- ---- -------------- ---------- $ 9.80 (6.3) $21,930 1.15 1.11 2.40 123 10.62 (6.0) 28,740 1.02 0.97 2.63 133 11.71 (3.3) 47,130 0.93 0.93 2.68 61 13.54 8.6 73,212 0.90 0.90 2.65 81 14.27 18.1 85,620 0.88 0.88 2.66 69 13.95 17.6 77,665 0.88 0.88 3.24 70 $18.43 (0.2)(k) $ 9,946 1.50(g) 1.50(g) 0.68 13 18.49 9.0 (k) 8,510 1.50(g) 1.47(g) 0.96 31 17.16 (1.9)(k) 11,291 1.50(g) 1.50(g) 0.94 93 17.62 2.7 (k) 17,839 1.50(g) 1.50(g) 1.48 61 17.59 22.6 (k) 14,681 1.50(g) 1.50(g) 1.76 33 15.15 26.6 (k) 2,613 1.50(g) 1.50(g) 2.06 45 18.34 (0.6)(k) 9,146 2.25(g) 2.20(g) (0.07) 13 18.46 8.2 (k) 7,839 2.25(g) 2.22(g) 0.21 31 17.10 (2.7)(k) 9,643 2.25(g) 2.25(g) 0.19 93 17.62 2.0 (k) 16,623 2.25(g) 2.25(g) 0.73 61 17.59 3.7 (k) 9,375 2.25(g) 2.25(g) 1.01 33 18.35 (0.6)(k) 980 2.25(g) 2.20(g) (0.08) 13 18.48 8.2 (k) 799 2.25(g) 2.22(g) 0.21 31 17.11 (2.7)(k) 1,336 2.25(g) 2.25(g) 0.19 93 17.63 2.0 (k) 2,101 2.25(g) 2.25(g) 0.73 61 17.59 3.7 (k) 1,596 2.25(g) 2.25(g) 1.01 33 $10.43 4.3 (k) $ 4,199 1.70(g) 1.68(g) (0.89) 59 10.41 4.1 (k) 2,498 2.45(g) 2.43(g) (1.61) 59 10.41 4.1 (k) 520 2.45(g) 2.43(g) (1.61) 59 $10.99 9.9 (k) $ 18,051 1.70(g) 1.50(g) 0.45 -- 10.97 9.7 (k) 23,345 2.45(g) 2.26(g) (0.28) -- 10.97 9.7 (k) 11,993 2.45(g) 2.26(g) (0.28) -- (g) The investment adviser agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement, expense ratios would have been higher. (h) For the six months ended June 30, 2001 (unaudited). (i) For the period September 15, 1997 (inception) through December 31, 1997. (j) For the period March 15, 2001 (inception) through June 30,2001 (unaudited). (k) Had certain expenses not been reduced during the period, total returns would have been lower. (l) For the six months ended June 30, 2001 (unaudited). As required, effective January 1, 2001, the Balanced Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium on debt securities. The effect of this change was to decrease the ratio of net investment income to average net assets from 2.42% to 2.40% for Class Y.
- ----------------------------------------------------------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS - ----------------------------------------------------------------------------------------------------------------------------------- For a share outstanding throughout each period.
INCOME (LOSS) FROM INVESTMENT OPERATIONS: LESS DISTRIBUTIONS: ---------------------------------------- ------------------------------------------------------------------ DISTRI- DISTRI- BUTIONS NET ASSET DIVIDENDS BUTIONS IN EXCESS VALUE, NET NET REALIZED TOTAL DIVIDENDS IN EXCESS FROM NET OF NET BEGINNING INVESTMENT AND UNREALIZED FROM FROM NET OF NET REALIZED REALIZED RETURN OF THE INCOME GAIN (LOSS) ON INVESTMENT INVESTMENT INVESTMENT CAPITAL CAPITAL OF TOTAL PERIOD (LOSS) INVESTMENTS OPERATIONS INCOME INCOME GAINS GAINS CAPITAL DISTRIBUTIONS ------ ---------- ----------- ---------- ---------- ---------- ------- --------- ------- ------------- BULLSEYE FUND - ------------- CLASS A 2001(f) $10.98 $(0.03) $(0.11) $(0.14) $ -- $ -- $(0.05) $ -- $ -- $(0.05) 2000 17.29 (0.12) (1.55) (1.67) -- -- (4.64) -- -- (4.64) 1999 12.65 (0.09) 4.73 4.64 -- -- -- -- -- -- 1998(h) 12.50 (0.02) 0.17 0.15 -- -- -- -- -- -- Class B 2001(f) 10.70 (0.07) (0.11) (0.18) -- -- (0.05) -- -- (0.05) 2000 17.10 (0.24) (1.52) (1.76) -- -- (4.64) -- -- (4.64) 1999 12.60 (0.19) 4.69 4.50 -- -- -- -- -- -- 1998(h) 12.50 (0.08) 0.18 0.10 -- -- -- -- -- -- CLASS C 2001(f) 10.70 (0.07) (0.11) (0.18) -- -- (0.05) -- -- (0.05) 2000 17.09 (0.24) (1.51) (1.75) -- -- (4.64) -- -- (4.64) 1999 12.59 (0.18) 4.68 4.50 -- -- -- -- -- -- 1998(h) 12.50 (0.08) 0.17 0.09 -- -- -- -- -- -- INTERNATIONAL EQUITY FUND - ------------------------- CLASS A 2001(f) $16.62 $(0.02) $(2.56) $(2.58) $ -- $ -- $ -- $ -- $ -- $ -- 2000 25.39 (0.22) (6.90) (7.12) (0.17) -- (1.35) (0.13) -- (1.65) 1999 14.26 (0.03) 12.31 12.28 (0.02) -- (1.13) -- -- (1.15) 1998 14.06 0.15 0.77 0.92 (0.23) (0.21) (0.19) (0.09) -- (0.72) 1997 16.31 0.09 (1.25) (1.16) -- -- (1.05) (0.04) -- (1.09) 1996 16.13 0.02 0.51 0.53 (0.02) -- (0.33) -- -- (0.35) CLASS B 2001(f) 15.99 (0.08) (2.45) (2.53) -- -- -- -- -- -- 2000 24.71 (0.37) (6.70) (7.07) (0.17) -- (1.35) (0.13) -- (1.65) 1999 13.98 (0.15) 12.01 11.86 -- -- (1.13) -- -- (1.13) 1998 13.71 0.04 0.75 0.79 (0.12) (0.12) (0.19) (0.09) -- (0.52) 1997 16.00 (0.03) (1.17) (1.20) -- -- (1.05) (0.04) -- (1.09) 1996 15.93 (0.10) 0.50 0.40 -- -- (0.33) -- -- (0.33) CLASS C 2001(f) 16.05 (0.08) (2.46) (2.54) -- -- -- -- -- -- 2000 24.78 (0.34) (6.74) (7.08) (0.17) -- (1.35) (0.13) -- (1.65) 1999 14.02 (0.15) 12.04 11.89 -- -- (1.13) -- -- (1.13) 1998 13.74 0.05 0.75 0.80 (0.12) (0.12) (0.19) (0.09) -- (0.52) 1997 16.03 (0.03) (1.17) (1.20) -- -- (1.05) (0.04) -- (1.09) 1996 15.96 (0.10) 0.50 0.40 -- -- (0.33) -- -- (0.33) CLASS Y 2001(f) 17.02 0.01 (2.61) (2.60) -- -- -- -- -- -- 2000 25.81 (0.10) (7.04) (7.14) (0.17) -- (1.35) (0.13) -- (1.65) 1999 14.45 0.02 12.54 12.56 (0.07) -- (1.13) -- -- (1.20) 1998 14.35 0.25 0.77 1.02 (0.33) (0.31) (0.19) (0.09) -- (0.92) 1997 16.48 0.19 (1.23) (1.04) -- -- (1.05) (0.04) -- (1.09) 1996 16.25 0.11 0.54 0.65 (0.09) -- (0.33) -- -- (0.42) (a) A sales charge for Class A and Class C shares and a contingent deferred sales charge for Class B and Class C shares are not reflected in in total return calculations. Periods less than one year are not annualized. (b) Computed on an annualized basis for periods less than one year. (c) Certain Funds have entered into agreements with certain brokers to rebate a portion of brokerage commissions. The rebated commissions are used to reduce operating expenses of the Fund. (d) Per share net investment income (loss) has been calculated using the average shares outstanding during the period. (e) The investment adviser agreed to reimburse a portion of the Fund's expenses during the period. Without this reimbursement, expense ratios would have been higher. (f) For the six months ended June 30, 2001 (unaudited). (g) Had certain expenses not been reduced during the period, total returns would have been lower. (h) For the period March 31, 1998 (inception) through December 31, 1998. See accompanying notes to financial statements.
RATIOS TO AVERAGE NET ASSETS: ------------------------------------------------ NET ASSET NET ASSETS, EXPENSES VALUE, TOTAL END OF AFTER EXPENSE NET INVESTMENT PORTFOLIO END OF RETURN THE PERIOD EXPENSES REDUCTIONS INCOME (LOSS) TURNOVER THE PERIOD (%)(a) (000) (%)(b) (%)(b)(c) (%)(b) RATE (%) ---------- ------- ----------- -------- -------- ---- -------------- ---------- $ 10.79 (1.2)(g) $ 7,895 1.75(e) 1.75(e) (0.60) 97 10.98 (11.2)(g) 8,453 1.75(e) 1.74(e) (0.76) 265 17.29 36.7(g) 10,549 1.75(e) 1.75(e) (0.71) 138 12.65 1.2(g) 9,653 1.75(e) 1.75(e) (0.28) 68 10.47 (1.6)(g) 8,346 2.50(e) 2.50(e) (1.35) 97 10.70 (11.8)(g) 8,664 2.50(e) 2.49(e) (1.51) 265 17.10 35.7(g) 9,774 2.50(e) 2.50(e) (1.45) 138 12.60 0.8(g) 8,618 2.50(e) 2.50(e) (1.03) 68 10.47 (1.6)(g) 1,013 2.50(e) 2.50(e) (1.35) 97 10.70 (11.8)(g) 1,102 2.50(e) 2.49(e) (1.51) 265 17.09 35.7(g) 2,218 2.50(e) 2.50(e) (1.45) 138 12.59 0.8(g) 2,987 2.50(e) 2.50(e) (1.03) 68 $ 14.04 (15.5) $ 42,005 2.05 2.05 (0.34) 107 16.62 (28.6) 54,826 1.96 1.96 (1.01) 212 25.39 87.6(g) 67,197 2.00(e) 2.00(e) (0.15) 229 14.26 6.7(g) 47,444 1.91(e) 1.91(e) 1.04 105 14.06 (7.6)(g) 57,845 1.75(e) 1.75(e) 0.62 154 16.31 3.3(g) 109,773 1.75(e) 1.75(e) 0.14 59 13.46 (15.8) 22,322 2.80 2.80 (1.08) 107 15.99 (29.2) 29,013 2.71 2.71 (1.76) 212 24.71 86.3(g) 29,045 2.75(e) 2.75(e) (0.90) 229 13.98 5.8(g) 19,797 2.66(e) 2.66(e) 0.29 105 13.71 (8.0)(g) 25,216 2.50(e) 2.50(e) (0.13) 154 16.00 2.5(g) 45,974 2.50(e) 2.50(e) (0.61) 59 13.51 (15.8) 3,307 2.80 2.80 (1.18) 107 16.05 (29.1) 5,656 2.71 2.71 (1.76) 212 24.78 86.2(g) 1,267 2.75(e) 2.75(e) (0.90) 229 14.02 5.9(g) 860 2.66(e) 2.66(e) 0.29 105 13.74 (8.0)(g) 843 2.50(e) 2.50(e) (0.13) 154 16.03 2.5(g) 850 2.50(e) 2.50(e) (0.61) 59 14.42 (15.3) 7,965 1.50 1.50 0.19 107 17.02 (28.2) 11,940 1.39 1.39 (0.44) 212 25.81 88.6(g) 14,441 1.55(e) 1.55(e) 0.10 229 14.45 7.3(g) 5,552 1.31(e) 1.31(e) 1.64 105 14.35 (6.7)(g) 4,752 1.15(e) 1.15(e) 1.22 154 16.48 4.0(g) 52,161 1.00(e) 1.00(e) 0.89 59
- -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- For the Six Months Ended June 30, 2001 (Unaudited) 1. ORGANIZATION. CDC Nvest Funds Trust I, formerly Nvest Funds Trust I, CDC Nvest Funds Trust II, formerly Nvest Funds Trust II and CDC Nvest Funds Trust III, formerly Nvest Funds Trust III, (the "Trusts" and each a "Trust") are organized as Massachusetts business trusts. Each Trust is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. Each Declaration of Trust permits the Trustees to issue an unlimited number of shares of the Trust in multiple series (individually, a "Fund" and, collectively, the "Funds"). Information presented in these financial statements pertains to the equity funds of the Trusts, the financial statements of the other Funds of the Trusts are presented in separate reports. The following table provides a list of the Funds included in this report. CDC Nvest Funds Trust I: - ------------------------ CDC Nvest Capital Growth Fund (the "Capital Growth Fund"), formerly Nvest Capital Growth Fund CDC Nvest Growth Fund (the "Growth Fund"), formerly Nvest Growth Fund CDC Nvest Balanced Fund (the "Balanced Fund"), formerly Nvest Balanced Fund CDC Nvest Funds Trust II: - ------------------------- CDC Nvest Growth and Income Fund (the "Growth and Income Fund"), formerly Nvest Growth and Income Fund CDC Nvest Funds Trust III: - -------------------------- CDC Nvest Large Cap Value Fund (the "Large Cap Value Fund"), formerly Nvest Large Cap Value Fund CDC Nvest Mid Cap Growth Fund (the "Mid Cap Growth Fund") CDC Nvest Select Fund (the "Select Fund") CDC Nvest Bullseye Fund (the "Bullseye Fund"), formerly Nvest Bullseye Fund CDC Nvest International Equity Fund (the "International Equity Fund"), formerly Nvest International Equity Fund Each Fund offers Class A, Class B, and Class C shares. Growth Fund, Growth and Income Fund, Balanced Fund and International Equity Fund also offer Class Y shares. Class A shares are sold with a maximum front end sales charge of 5.75%. Class B shares do not pay a front end sales charge, but pay a higher ongoing distribution fee than Class A shares for eight years (at which point they automatically convert to Class A shares), and are subject to a contingent deferred sales charge ("CDSC") if those shares are redeemed within six years of purchase (or five years if purchased before May 1, 1997). Class C shares are sold with a maximum front end sales charge of 1.00%, do not convert to any other class of shares and pay a higher ongoing distribution fee than Class A shares and may be subject to a CDSC of 1.00% if those shares are redeemed within one year. Class Y shares do not pay a front end sales charge, a CDSC or distribution fees. They are intended for institutional investors with a minimum initial investment of $1,000,000. Expenses of a Fund are borne pro rata by the holders of each class of shares, except that each class bears expenses unique to that class (including the Rule 12b-1 service and distribution fees and transfer agent fees applicable to such class), and votes as a class only with respect to its own Rule 12b-1 Plan. Shares of each class would receive their pro rata share of the net assets of a Fund, if the Fund were liquidated. The Trustees approve separate dividends from net investment income on each class of shares. 2. SIGNIFICANT ACCOUNTING POLICIES. The following is a summary of significant accounting policies consistently followed by each Fund in the preparation of its financial statements. The Funds' financial statements are prepared in accordance with accounting principles generally accepted in the United States of America which require the use of management estimates that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. A. SECURITY VALUATION. Equity securities are valued on the basis of valuations furnished to the Fund by a pricing service which has been authorized by the Trustees. The pricing service provides the last reported sale price for securities listed on an applicable securities exchange or on the NASDAQ national market system, or, if no sale was reported and in the case of over-the-counter securities not so listed, the last reported bid price. Short-term obligations with a remaining maturity of less than sixty days are stated at amortized cost, which approximates market value. All other securities and assets are valued at their fair value as determined in good faith by the Fund's investment adviser and subadviser, under the supervision of the Fund's Trustees. B. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME. Security transactions are accounted for on trade date. Dividend income is recorded on ex-dividend date and interest income is recorded on an accrual basis. Interest income is increased by the accretion of discount and decreased by the amortization of premium. In determining net gain or loss on securities sold, the cost of securities has been determined on an identified cost basis. C. FOREIGN CURRENCY TRANSLATION. The books and records of the Funds are maintained in U.S. dollars. The value of securities, currencies and other assets and liabilities denominated in currencies other than U.S. dollars are translated into U.S. dollars based upon foreign exchange rates prevailing at the end of the period. Purchases and sales of investment securities, income and expenses are translated on the respective dates of such transactions. Since the values of investment securities are presented at the foreign exchange rates prevailing at the end of the period, it is not practical to isolate that portion of the results of operations arising from changes in exchange rates from fluctuations arising from changes in market prices of the investment securities. Such changes are included with the net realized and unrealized gain or loss on investments. Net realized foreign exchange gains or losses arise from: sales of foreign currency, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund's books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities at the end of the fiscal periods, resulting from changes in exchange rates. D. FORWARD FOREIGN CURRENCY CONTRACTS. The International Equity Fund may use foreign currency contracts to facilitate transactions in foreign securities and to manage the Fund's currency exposure. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are used to hedge the Fund's investments against currency fluctuation. Also, a contract to buy or sell can offset a previous contract. These contracts involve market risk in excess of the unrealized gain or loss reflected in the Fund's Statement of Assets and Liabilities. The U.S. dollar value of the currencies the Fund has committed to buy or sell (if any) is shown in the portfolio composition under the caption "Forward Currency Contracts Outstanding." These amounts represent the aggregate exposure to each currency the Fund has acquired or hedged through currency contracts outstanding at period end. All contracts are "marked-to-market" daily at the applicable exchange rates and any gains or losses are recorded for financial statement purposes as unrealized until settlement date. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. E. FEDERAL AND FOREIGN INCOME TAXES. The Trusts treat each Fund as a separate entity for federal income tax purposes. Each Fund intends to meet the requirements of the Internal Revenue Code applicable to regulated investment companies, and to distribute to its shareholders substantially all of its net investment income and any net realized capital gains, at least annually. Accordingly, no provision for federal income tax has been made. A Fund may be subject to foreign taxes on income and gains on investments that are accrued based upon the Fund's understanding of the tax rules and regulations that exist in the countries in which the Fund invests. Foreign governments may also impose taxes or other payments on investments with respect to foreign securities, such taxes are accrued as applicable. F. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Dividends and distributions are recorded on ex-dividend date. The timing and characterization of certain income and capital gains distributions are determined in accordance with federal tax regulations which may differ from accounting principles generally accepted in the United States of America. These differences are primarily due to differing treatments for book and tax purposes of items such as distributions from real estate investment trusts, net operating losses, paydowns on mortgage-backed securities, non-deductible expenses, foreign currency transactions and gains realized from passive foreign investment companies. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to capital accounts. G. REPURCHASE AGREEMENTS. Each Fund, through its custodian, receives delivery of the underlying securities collateralizing repurchase agreements. It is each Fund's policy that the market value of the collateral be at least equal to 100% of the repurchase price, including interest. Each Fund's subadviser (adviser for the Growth Fund) is responsible for determining that the value of the collateral is at all times at least equal to the repurchase price, including interest. Repurchase agreements could involve certain risks in the event of default or insolvency of the counterparty including possible delays or restrictions upon a Fund's ability to dispose of the underlying securities. H. ORGANIZATION EXPENSE. Costs incurred by Bullseye Fund in connection with the Fund's organization and initial registration, amounting to $21,223 in the aggregate, are being amortized over 60 months. 2. PURCHASES AND SALES OF SECURITIES. For the period ended June 30, 2001, purchases and sales of securities (excluding U.S. Government/Agency securities and short-term investments) were as follows: Fund Purchases Sales ---- --------- ----- Capital Growth Fund $ 82,603,577 $ 98,647,057 Growth Fund 1,861,320,273 1,969,978,197 Growth and Income Fund 323,981,262 356,397,220 Balanced Fund 155,730,750 171,763,477 Large Cap Value Fund 5,479,823 2,327,562 Mid Cap Growth Fund 8,799,604 2,115,518 Select Fund 46,631,462 -- Bullseye Fund 15,815,556 17,885,042 International Equity Fund 88,616,663 97,245,675 For the period ended June 30, 2001, purchases and sales of U.S. Government/Agency securities by Balanced Fund were $29,026,420 and $35,448,631, respectively. 3A. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES. CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Advisers") is the investment adviser to each of the Funds except the Growth Fund. Capital Growth Management Limited Partnership ("CGM") is the investment adviser to the Growth Fund. Under the terms of the management agreements, each Fund pays a management fee at the following annual rates, calculated daily and payable monthly, based on each Fund's average daily net assets:
PERCENTAGE OF AVERAGE DAILY NET ASSETS ------------------------------------------------------------------------ FIRST NEXT NEXT NEXT OVER FUND $200 MILLION $300 MILLION $500 MILLION $1 BILLION $2 BILLION ---- ------------ ------------ ------------ ---------- ---------- Capital Growth Fund 0.750% 0.700% 0.650% 0.650% 0.650% Growth Fund 0.750% 0.700% 0.650% 0.650% 0.600% Growth and Income Fund 0.700% 0.650% 0.600% 0.600% 0.600% Balanced Fund 0.750% 0.700% 0.650% 0.650% 0.650% Large Cap Value Fund 0.700% 0.650% 0.600% 0.600% 0.600% Mid Cap Growth Fund 0.950% 0.950% 0.950% 0.825% 0.825% Select Fund 1.000% 1.000% 1.000% 0.950% 0.950% Bullseye Fund 0.950% 0.900% 0.850% 0.850% 0.850% International Equity Fund 0.900% 0.850% 0.800% 0.800% 0.800%
For the period ended June 30, 2001, the management fees and waivers for each Fund were as follows:
GROSS WAIVER OF NET PERCENTAGE OF AVERAGE MANAGEMENT MANAGEMENT MANAGEMENT DAILY NET ASSETS FUND FEE FEE FEE GROSS NET ---- --- --- --- ----- --- Capital Growth Fund 669,964 -- 669,964 0.75% 0.75% Growth Fund 4,414,756 -- 4,414,756 0.68% 0.68% Growth and Income Fund 1,503,032 -- 1,503,032 0.67% 0.67% Balanced Fund 577,382 -- 577,382 0.75% 0.75% Large Cap Value Fund 66,507 66,507 -- 0.70% 0.00% Mid Cap Growth Fund 9,122 9,122 -- 0.95% 0.00% Select Fund 73,339 55,725 17,614 1.00% 0.24% Bullseye Fund 86,352 86,352 -- 0.95% 0.00% International Equity Fund 379,988 -- 379,988 0.90% 0.90%
CDC IXIS Advisers has entered into subadviser agreements for each Fund listed below. Payments to CDC IXIS Advisers are reduced by payments to the subadvisers. Capital Growth Fund Westpeak Investment Advisors, L.P. Growth and Income Fund Westpeak Investment Advisors, L.P. Balanced Fund Loomis, Sayles & Company, L.P. ("Loomis Sayles") Jurika & Voyles, L.P. ("J&V") Large Cap Value Fund Vaughan, Nelson, Scarborough & McCullough, L.P. ("VNSM") Mid Cap Growth Fund Loomis, Sayles & Company, L.P. Select Fund Harris Associates, L.P. ("Harris") Bullseye Fund Jurika & Voyles, L.P. International Equity Fund Loomis, Sayles & Company, L.P.
CDC IXIS Advisers and each of the subadvisers are wholly-owned subsidiaries of CDC IXIS Asset Management North America, L.P. CGM is a 50% owned subsidiary of CDC IXIS Asset Management North America, L.P. Certain officers and directors of CDC IXIS Advisers are also officers or Trustees of the Funds. B. ACCOUNTING AND ADMINISTRATIVE EXPENSE. CDC IXIS Asset Management Services, Inc. ("CIS"), a wholly owned subsidiary of CDC IXIS Asset Management North America, L.P., performs certain accounting and administrative services for the Funds. Pursuant to an agreement among the Trusts, CDC Nvest Cash Management Trust, CDC Nvest Tax Exempt Money Market Trust, CDC Nvest Companies Trust I and CIS each Fund pays CIS its pro rata portion of a group fee for these services representing the higher amount based on the following calculations: (1) Percentage of Eligible Average Daily Net Assets ----------------------------------------------- First Next Over $5 billion $5 billion $10 billion ---------- ---------- ----------- 0.0350% 0.0325% 0.0300% or (2) Each Fund's pro rata portion, based on eligible assets, of the annual aggregate minimum fee of $2.5 million. Funds that became effective after January 1, 2001, pay the higher amount of the asset based fee or an annual fee of $70,000. For the period ended June 30, 2001, amounts paid to CIS for accounting and administrative expense were as follows: Accounting And Percentage of Average Fund Administrative Daily Net Assets ---- -------------- ---------------- Capital Growth Fund $ 38,613 0.043% Growth Fund 282,405 0.043% Growth and Income Fund 96,763 0.043% Balanced Fund 33,307 0.043% Large Cap Value Fund 3,998 0.043% Mid Cap Growth Fund 19,093 1.988% Select Fund 17,598 0.240% Bullseye Fund 3,935 0.043% International Equity Fund 18,236 0.043% C. TRANSFER AGENT FEES. CIS is the transfer and shareholder servicing agent for each Fund and has subcontracted with Boston Financial Data Services ("BFDS") to serve as sub-transfer agent. Each Fund pays CIS service fees for servicing shareholder accounts. Class A, B and C shareholders pay service fees monthly representing the higher amount based on the following calculations: (1) Annual aggregate fee determined by applying an annual fee rate (see schedule below) to the eligible average daily net assets. Eligible assets are the average daily net assets of all non-networked accounts in equity funds offered within the CDC Nvest Family of Funds for which there are exchange privileges among the Funds. First Next Over $5.7 billion $5 billion $10.7 billion ------------ ---------- ------------- 0.184% 0.180% 0.175% Each Class of shares is subject to an annual class minimum of $18,000. or (2) An allocated portion, based on eligible assets, of an annual aggregate minimum fee of $10.5 million. In addition, pursuant to other servicing agreements, Class A, B and C shareholders pay service fees to other firms that provide similar services for their own shareholder accounts. Class Y shareholders pay service fees monthly at an annual rate of 0.10% of their average daily net assets. CIS and BFDS and other firms are also reimbursed by the Funds for out-of-pocket expenses. For the period ended June 30, 2001, amounts paid to CIS as compensation for its services as transfer agent were as follows: Transfer Agent Percentage of Average Fund Fee Daily Net Assets ---- --- ---------------- Capital Growth Fund $ 231,037 0.259% Growth Fund 1,629,723 0.250% Growth and Income Fund 751,470 0.236% Balanced Fund 181,891 0.236% Large Cap Value Fund 27,715 0.301% Mid Cap Growth Fund 15,968 1.663% Select Fund 18,923 0.258% Bullseye Fund 27,000 0.297% International Equity Fund 100,503 0.238% D. SERVICE AND DISTRIBUTION FEES. Pursuant to Rule 12b-1 under the 1940 Act, the Trusts have adopted a Service Plan relating to each Fund's Class A shares (the "Class A Plan") and Service and Distribution Plans relating to each Fund's Class B and Class C shares (the "Class B and Class C Plans"). Under the Class A Plan, the Fund pays CDC IXIS Asset Management Distributors, L.P. ("CDC IXIS Distributors"), the Fund's distributor (a wholly owned subsidiary of CDC IXIS Asset Management North America, L.P. ), a monthly service fee at the annual rate of 0.25% of the average daily net assets attributable to the Fund's Class A shares, as reimbursement for expenses incurred by CDC IXIS Distributors in providing personal services to investors in Class A shares and/or the maintenance of shareholder accounts. Under the Class B and Class C Plans, the Fund pays CDC IXIS Distributors a monthly service fee at the annual rate of 0.25% of the average daily net assets attributable to the Fund's Class B and Class C shares, as compensation for services provided and expenses incurred by CDC IXIS Distributors in providing personal services to investors in Class B and Class C shares and/or the maintenance of shareholder accounts. Also under the Class B and Class C Plans, the Fund pays CDC IXIS Distributors a monthly distribution fee at the annual rate of 0.75% of the average daily net assets attributable to the Fund's Class B and Class C shares, as compensation for services provided and expenses incurred by CDC IXIS Distributors in connection with the marketing or sale of Class B and Class C shares. For the period ended June 30, 2001, the Funds paid the following service and distribution fees:
Service Fee Distribution Fee --------------------------------- --------------------- Fund Class A Class B Class C Class B Class C ---- ------- ------- ------- ------- ------- Capital Growth Fund $ 158,356 $ 62,337 $ 2,734 $ 187,010 $ 8,200 Growth Fund 1,497,433 114,827 6,167 344,482 18,501 Growth and Income Fund 335,780 188,129 19,306 564,388 57,919 Balanced Fund 114,568 44,741 2,242 134,224 6,724 Large Cap Value Fund 11,363 10,540 1,115 31,621 3,345 Mid Cap Growth Fund 1,456 767 178 2,301 532 Select Fund 6,383 8,258 3,688 24,773 11,062 Bullseye Fund 10,560 10,862 1,303 32,586 3,907 International Equity Fund 57,876 30,645 5,304 91,936 15,910
Prior to September 13, 1993 for Capital Growth Fund, Balanced Fund and International Equity Fund and June 1, 1993 for Growth Fund, to the extent that reimburseable expenses of CDC IXIS Distributors in prior years exceeded the maximum amount payable under the Plan for that year, such expenses could be carried forward for reimbursement in future years in which the Class A Plan remains in effect. Unreimbursed expenses carried forward at December 31, 2000 were as follows: Fund ---- Capital Growth Fund $ 563,284 Growth Fund 2,030,882 Balanced Fund 2,041,399 International Equity Fund 514,256 Commissions (including contingent deferred sales charges) on Fund shares paid to CDC IXIS Distributors by investors in shares of the Funds during the period ended June 30, 2001 were as follows: Fund ---- Capital Growth Fund $ 161,605 Growth Fund 684,080 Growth and Income Fund 403,765 Balanced Fund 101,603 Large Cap Value Fund 47,333 Mid Cap Growth Fund 94,891 Select Fund 330,988 Bullseye Fund 25,473 International Equity Fund 109,572 E. TRUSTEES FEES AND EXPENSES. The Funds do not pay any compensation directly to their officers or Trustees who are directors, officers or employees of CDC IXIS Advisers, CDC IXIS Distributors, CDC IXIS Asset Management North America, L.P., CIS or their affiliates. Each other Trustee receives a retainer fee at the annual rate of $40,000 and meeting attendance fees of $3,500 for each meeting of the Board of Trustees attended. Each committee member receives an additional retainer fee at the annual rate of $6,000 while each committee chairman receives a retainer fee (beyond the $6,000 fee) at the annual rate of $4,000. These fees are allocated to the various CDC Nvest Funds based on a formula that takes into account, among other factors, the relative net assets of each Fund. A deferred compensation plan (the "Plan") is available to the Trustees on a voluntary basis. Each participating Trustee will receive an amount equal to the value that such deferred compensation would have been had it been invested in the Funds or certain other CDC Nvest Funds on the normal payment date. Deferred amounts remain in the Funds until distributed in accordance with the Plan. For the Six Months Ended June 30, 2001 (Unaudited) 4. CAPITAL SHARES. Each Fund may issue an unlimited number of shares of beneficial interest. Transactions in capital shares were as follows:
CAPITAL GROWTH FUND ------------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, 2000 --------------------- -------------------- SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ CLASS A - ------- Shares sold .............................................. 306,422 $ 4,276,043 2,070,086 $ 47,256,732 Shares issued in connection with the reinvestment of: Dividends from net investment income ................... -- -- -- -- Distributions from net realized gain ................... 1,994 26,534 1,719,068 27,349,712 ---------- ------------ --------- ------------ 308,416 4,302,577 3,789,154 74,606,444 Shares repurchased ....................................... (1,138,184) (15,709,190) (3,040,068) (68,575,974) ---------- ------------ --------- ------------ Net increase (decrease) .................................. (829,768) $(11,406,613) 749,086 $ 6,030,470 ---------- ------------ --------- ------------ CLASS B - ------- Shares sold .............................................. 218,026 $ 2,699,075 741,402 $ 15,265,298 Shares issued in connection with the reinvestment of: Dividends from net investment income ................... -- -- -- -- Distributions from net realized gain ................... 974 11,575 826,447 11,800,258 ---------- ------------ --------- ------------ 219,000 2,710,650 1,567,849 27,065,556 Shares repurchased ....................................... (642,312) (7,899,165) (896,553) (18,087,383) ---------- ------------ --------- ------------ Net increase (decrease) .................................. (423,312) $ (5,188,515) 671,296 $ 8,978,173 ---------- ------------ --------- ------------ CLASS C - ------- Shares sold .............................................. 13,570 $ 168,649 97,875 $ 2,003,918 Shares issued in connection with the reinvestment of: Dividends from net investment income ................... -- -- -- -- Distributions from net realized gain ................... 42 499 34,957 498,562 ---------- ------------ --------- ------------ 13,612 169,148 132,832 2,502,480 Shares repurchased ....................................... (34,229) (421,138) (95,844) (1,967,375) ---------- ------------ --------- ------------ Net increase (decrease) .................................. (20,617) $ (251,990) 36,988 $ 535,105 ---------- ------------ --------- ------------ CLASS Y - ------- Shares sold .............................................. -- $ -- 7,479 $ 175,584 Shares issued in connection with the reinvestment of: Dividends from net investment income ................... -- -- -- -- Distributions from net realized gain ................... -- -- -- -- ---------- ------------ --------- ------------ -- -- 7,479 175,584 Shares repurchased ....................................... -- -- (14,198) (320,207) ---------- ------------ --------- ------------ Net increase (decrease) .................................. -- $ -- (6,719) $ (144,623) ---------- ------------ --------- ------------ Increase (decrease) derived from capital shares transactions (1,273,697) $(16,847,118) 1,450,651 $ 15,399,125 ========== ============ ========= ============
GROWTH FUND GROWTH AND INCOME FUND ----------- ---------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, 2000 JUNE 30, 2001 DECEMBER 31, 2000 ---------------------- --------------------- --------------------- --------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ ------ ------ ------ ------ 3,013,111 $ 25,829,833 6,442,912 $ 67,793,846 1,348,575 $ 17,426,510 2,873,932 $ 42,088,117 -- -- 862,365 8,037,715 -- -- -- -- 588,286 4,641,577 15,943,237 152,763,355 -- -- 563,741 8,467,385 ----------- ------------ ----------- ------------- ---------- ------------ --------- ------------ 3,601,397 30,471,410 23,248,514 228,594,916 1,348,575 17,426,510 3,437,673 50,555,502 (14,218,439) (118,825,601) (42,339,597) (435,596,467) (2,689,324) (35,356,865) (6,850,800) (99,658,068) ----------- ------------ ----------- ------------- ---------- ------------ --------- ------------ (10,617,042) $(88,354,191) (19,091,083) $(207,001,551) (1,340,749) $(17,930,355) (3,413,127) $(49,102,566) ----------- ------------ ----------- ------------- ---------- ------------ --------- ------------ ------------ 557,037 $ 4,442,348 1,867,464 $ 18,801,530 542,343 $ 6,870,658 2,001,301 $ 28,452,164 -- -- 13,645 132,353 -- -- -- -- 47,010 355,864 1,212,653 11,187,136 -- -- 363,541 5,322,243 ----------- ------------ ----------- ------------- ---------- ------------ --------- ------------ 604,047 4,798,212 3,093,762 30,121,019 542,343 6,870,658 2,364,842 33,774,407 (1,290,557) (10,260,050) (3,849,341) (38,906,352) (1,367,859) (17,201,745) (4,398,290) (62,609,963) ----------- ------------ ----------- ------------- ---------- ------------ --------- ------------ (686,510) $ (5,461,838) (755,579) $ (8,785,333) (825,516) $(10,331,087) (2,033,448) $(28,835,556) ----------- ------------ ----------- ------------- ---------- ------------ --------- ------------ 48,790 $ 400,513 220,068 $ 2,116,323 106,012 $ 1,339,681 351,286 $ 4,982,198 -- -- 519 5,036 -- -- -- -- 1,961 14,842 47,518 437,813 -- -- 38,767 566,773 ----------- ------------ ----------- ------------- ---------- ------------ --------- ------------ 50,751 415,355 268,105 2,559,172 106,012 1,339,681 390,053 5,548,971 (124,449) (995,846) (442,204) (4,430,762) (526,635) (6,316,738) (740,101) (10,572,630) ----------- ------------ ----------- ------------- ---------- ------------ --------- ------------ (73,698) $ (580,491) (174,099) $ (1,871,590) (420,623) $ (4,977,057) (350,048) $ (5,023,659) ----------- ------------ ----------- ------------- ---------- ------------ --------- ------------ 52,164 $ 434,037 139,551 $ 1,464,823 443,574 $ 6,092,650 156,868 $ 2,289,327 -- -- 12,302 114,156 -- -- -- -- 5,087 40,392 137,485 1,321,552 -- -- 21,472 324,011 ----------- ------------ ----------- ------------- ---------- ------------ --------- ------------ 57,251 474,429 289,338 2,900,531 443,574 6,092,650 178,340 2,613,338 (177,346) (1,487,831) (381,854) (3,969,570) (165,829) (2,163,281) (384,312) (5,653,007) ----------- ------------ ----------- ------------- ---------- ------------ --------- ------------ (120,095) $ (1,013,402) (92,516) $ (1,069,039) 277,745 $ 3,929,369 (205,972) $ (3,039,669) ----------- ------------ ----------- ------------- ---------- ------------ --------- ------------ (11,497,345) $(95,409,922) (20,113,277) $(218,727,513) (2,309,143) $(29,309,130) (6,002,595) $(86,001,450) =========== ============ =========== ============= ========== ============ ========== ============
For the Six Months Ended June 30, 2001 (Unaudited)
BALANCED FUND ------------- SIX MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, 2000 --------------------- -------------------- SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ CLASS A - ------- Shares sold .............................................. 231,544 $ 2,358,664 506,126 $ 5,568,331 Shares issued in connection with the reinvestment of: Dividends from net investment income ................... 93,226 919,263 229,172 2,510,444 Distributions from net realized gain ................... -- -- 1,303 14,819 ----------- ------------ ----------- ------------ 324,770 3,277,927 736,601 8,093,594 Shares repurchased ....................................... (1,247,899) (12,750,155) (5,656,229) (62,263,739) ----------- ------------ ----------- ------------ Net increase (decrease) .................................. (923,129) $ (9,472,228) (4,919,628) $(54,170,145) ----------- ------------ ----------- ------------ CLASS B - ------- Shares sold .............................................. 143,594 $ 1,457,911 342,695 $ 3,724,246 Shares issued in connection with the reinvestment of: Dividends from net investment income ................... 17,951 177,217 28,811 313,046 Distributions from net realized gain ................... -- -- 518 5,835 ----------- ------------ ----------- ------------ 161,545 1,635,128 372,024 4,043,127 Shares repurchased ....................................... (494,124) (5,056,215) (2,362,349) (25,785,001) ----------- ------------ ----------- ------------ Net increase (decrease) .................................. (332,579) $ (3,421,087) (1,990,325) $(21,741,874) ----------- ------------ ----------- ------------ CLASS C - ------- Shares sold .............................................. 14,327 $ 147,956 24,535 $ 268,681 Shares issued in connection with the reinvestment of: Dividends from net investment income ................... 903 8,870 1,600 17,303 Distributions from net realized gain ................... -- -- 26 288 ----------- ------------ ----------- ------------ 15,230 156,826 26,161 286,272 Shares repurchased ....................................... (38,228) (390,171) (222,250) (2,417,313) ----------- ------------ ----------- ------------ Net increase (decrease) .................................. (22,998) $ (233,345) (196,089) $ (2,131,041) ----------- ------------ ----------- ------------ CLASS Y - ------- Shares sold .............................................. 101,786 $ 1,037,002 196,077 $ 2,129,973 Shares issued in connection with the reinvestment of: Dividends from net investment income ................... 37,215 363,695 111,724 1,218,118 Distributions from net realized gain ................... -- -- 421 4,792 ----------- ------------ ----------- ------------ 139,001 1,400,697 308,222 3,352,883 Shares repurchased ....................................... (608,293) (6,043,804) (1,627,899) (17,987,577) ----------- ------------ ----------- ------------ Net increase (decrease) .................................. (469,292) $ (4,643,107) (1,319,677) $(14,634,694) ----------- ------------ ----------- ------------ Increase (decrease) derived from capital shares transactions (1,747,998) $(17,769,767) (8,425,719) $(92,677,754) =========== ============ =========== ============
LARGE CAP VALUE FUND MID CAP GROWTH FUND -------------------- ------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED JUNE 30, 2001 DECEMBER 31, 2000 JUNE 30, 2001 ---------------------- --------------------- --------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ ------ ------ 143,230 $ 2,593,869 82,121 $ 1,442,544 409,631 $ 4,413,651 419 7,682 5,430 94,701 -- -- -- -- -- -- -- -- ----------- ------------ ----------- ------------ ----------- ------------ 143,649 2,601,551 87,551 1,537,245 409,631 4,413,651 (64,434) (1,155,610) (285,382) (4,785,760) (7,160) (78,244) ----------- ------------ ----------- ------------ ----------- ------------ 79,215 $ 1,445,941 (197,831) $ (3,248,515) 402,471 $ 4,335,407 ----------- ------------ ----------- ------------ ----------- ------------ 110,869 $ 1,994,066 67,804 $ 1,171,513 241,616 $ 2,563,554 357 6,518 752 12,942 -- -- -- -- -- -- -- -- ----------- ------------ ----------- ------------ ----------- ------------ 111,226 2,000,584 68,556 1,184,455 241,616 2,563,554 (37,254) (674,986) (207,958) (3,466,428) (1,625) (17,034) ----------- ------------ ----------- ------------ ----------- ------------ 73,972 $ 1,325,598 (139,402) $ (2,281,973) 239,991 $ 2,546,520 ----------- ------------ ----------- ------------ ----------- ------------ 15,987 $ 287,023 66,438 $ 1,155,252 50,974 $ 547,268 33 604 94 1,626 -- -- -- -- -- -- -- -- ----------- ------------ ----------- ------------ ----------- ------------ 16,020 287,627 66,532 1,156,878 50,974 547,268 (5,870) (107,052) (101,382) (1,743,509) (1,032) (11,782) ----------- ------------ ----------- ------------ ----------- ------------ 10,150 $ 180,575 (34,850) $ (586,631) 49,942 $ 535,486 ----------- ------------ ----------- ------------ ----------- ------------ -- $ -- -- $ -- -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- ----------- ------------ ----------- ------------ ----------- ------------ -- -- -- -- -- -- -- -- -- -- -- -- ----------- ------------ ----------- ------------ ----------- ------------ -- $ -- -- $ -- -- $ -- ----------- ------------ ----------- ------------ ----------- ------------ 163,337 $ 2,952,114 (372,083) $ (6,117,119) 692,404 $ 7,417,413 =========== ============ =========== ============ =========== ============ (a) Commencement of operations
SELECT FUND ----------- FOR THE PERIOD MARCH 15, 2001(A) THROUGH JUNE 30, 2001 ------------------------------- SHARES AMOUNT ------ ------ CLASS A - ------- Shares sold ............................................................. 1,718,693 $ 17,881,596 Shares issued in connection with the reinvestment of: Distributions from net realized gain .................................. -- -- ----------- ------------ 1,718,693 17,881,596 Shares repurchased ...................................................... (76,223) (785,435) ----------- ------------ Net increase (decrease) ................................................. 1,642,470 $ 17,096,161 ----------- ------------ CLASS B - ------- Shares sold ............................................................. 2,150,632 $ 22,319,275 Shares issued in connection with the reinvestment of: Distributions from net realized gain .................................. -- -- ----------- ------------ 2,150,632 22,319,275 Shares repurchased ...................................................... (21,633) (229,961) ----------- ------------ Net increase (decrease) ................................................. 2,128,999 $ 22,089,314 ----------- ------------ CLASS C - ------- Shares sold ............................................................. 1,099,946 $ 11,545,311 Shares issued in connection with the reinvestment of: Distributions from net realized gain .................................. -- -- ----------- ------------ 1,099,946 11,545,311 Shares repurchased ...................................................... (6,259) (64,393) ----------- ------------ Net increase (decrease) ................................................. 1,093,687 $ 11,480,918 ----------- ------------ CLASS Y - ------- Shares sold ............................................................. -- $ -- Shares issued in connection with the reinvestment of: Distributions from net realized gain .................................. -- -- ----------- ------------ -- -- Shares repurchased ...................................................... -- -- ----------- ------------ Net increase (decrease) ................................................. -- $ -- ----------- ------------ Increase (decrease) derived from capital shares transactions ............ 4,865,156 $ 50,666,393 =========== ============
BULLSEYE FUND INTERNATIONAL EQUITY FUND ------------- ------------------------- SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED JUNE 30, 2001 DECEMBER 31, 2000 JUNE 30, 2001 DECEMBER 31, 2000 ---------------------- --------------------- --------------------- --------------------- SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ------ ------ ------ ------ ------ ------ ------ ------ 90,595 $ 1,009,045 169,758 $ 2,783,293 1,659,280 $ 24,203,840 6,041,069 $130,410,637 3,546 37,272 229,865 2,887,310 -- -- 273,220 5,057,795 ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ 94,141 1,046,317 399,623 5,670,603 1,659,280 24,203,840 6,314,289 135,468,432 (131,924) (1,459,457) (239,866) (3,581,391) (1,966,355) (28,863,716) (5,661,976) (120,604,737) ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ (37,783) $ (413,140) 159,757 $ 2,089,212 (307,075) $ (4,659,876) 652,313 $ 14,863,695 ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ 62,447 $ 690,420 123,443 1,962,756 86,141 $ 1,234,146 885,381 $ 20,233,007 3,913 39,908 226,568 2,771,856 -- -- 148,131 2,640,281 ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ 66,360 730,328 350,011 4,734,612 86,141 1,234,146 1,033,512 22,873,288 (78,997) (845,539) (111,926) (1,707,458) (241,885) (3,460,728) (394,426) (8,217,240) ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ (12,637) $ (115,211) 238,085 $ 3,027,154 (155,744) $ (2,226,582) 639,086 $ 14,656,048 ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ 32,239 $ 335,078 14,157 $ 218,392 316,663 $ 4,903,904 717,222 $ 13,840,232 437 4,457 28,004 343,846 -- -- 14,535 258,483 ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ 32,676 339,535 42,161 562,238 316,663 4,903,904 731,757 14,098,715 (38,835) (403,423) (68,905) (1,145,494) (424,246) (6,532,755) (430,484) (7,767,471) ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ (6,159) $ (63,888) (26,744) $ (583,256) (107,583) $ (1,628,851) 301,273 $ 6,331,244 ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ -- $ -- -- $ -- 50,793 $ 773,632 287,339 $ 7,194,382 -- -- -- -- -- -- 57,967 1,096,473 ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ -- -- -- -- 50,793 773,632 345,306 8,290,855 -- -- -- -- (199,964) (3,056,554) (203,374) (4,485,078) ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ -- $ -- -- $ -- (149,171) $ (2,282,922) 141,932 $ 3,805,777 ----------- ------------ ----------- ------------ ---------- ------------ ---------- ------------ (56,579) $ (592,239) 371,098 $ 4,533,110 (719,573) $(10,798,231) 1,734,604 $ 39,656,764 =========== ============ =========== ============ ========== ============ ========== ============ (a) Commencement of operations
5. LINE OF CREDIT. Each Fund, except Mid Cap Growth Fund and Select Fund, along with certain other Funds that comprise the CDC Nvest Funds Trusts participate in a $100,000,000 committed line of credit provided by Citibank, N.A. under a credit agreement (the "Agreement") dated March 2, 2001. Advances under the Agreement are taken primarily for temporary or emergency purposes. Borrowings under the Agreement bear interest at a rate tied to one of several short-term rates that may be selected by the lender from time to time. In addition, the Funds are charged a facility fee equal to 0.08% per annum on the unused portion of the line of credit. The annual cost of maintaining the line of credit and the facility fee is apportioned pro rata among the participating Funds. There were no borrowings as of or during the period ended June 30, 2001. 6. SECURITY LENDING. Each Fund except Growth Fund, Growth and Income Fund and Balanced Fund have entered into an agreement with a third party to lend their securities. The loans are collateralized at all times with cash or securities with a market value at least equal to the market value of the securities on loan. The Funds receive fees for lending their securities. The market value of securities on loan to third parties and the value of collateral held by the Funds with respect to such loans at June 30, 2001, is as follows: Market Value of Value of Collateral Fund Securities on Loan Received ---- ------------------ -------- Capital Growth Fund $ 3,704,301 $4,303,946 Bullseye Fund 735,343 957,030 7. EXPENSE REDUCTIONS AND CONTINGENT EXPENSE OBLIGATIONS. Each Fund has entered into agreements with certain brokers whereby the brokers will rebate a portion of brokerage commissions. Amounts earned by the Funds under such agreements are presented as a reduction of expenses in the statements of operations. For the period ended June 30, 2001, expenses were reduced under these agreements as follows: Fund Fund ---- ---- Capital Growth Fund $ 29,779 Mid Cap Growth Fund $ 153 Growth Fund 228,767 Select Fund 14,695 Growth and Income Fund 79,536 Bullseye Fund 272 Balanced Fund 29,089 International Equity Fund -- Large Cap Value Fund 4,336 CDC IXIS Advisers has given binding undertakings to Large Cap Value Fund, Mid Cap Growth Fund, Select Fund and Bullseye Fund to defer its management fees and, if necessary, bear certain expenses associated with these Funds to limit their operating expenses. These undertakings are in effect until May 1, 2002 and will be reevaluated on an annual basis. If in the following fiscal year the actual operating expenses of a Fund that previously received a deferral or reimbursement are less than the expense limit for that Fund, the Fund is required to pay an amount of additional expense that is the lower of the difference between the expense limit and the actual amount of fees previously waived or expenses reimbursed. At June 30, 2001, the expense limits as a percentage of average daily net assets and amounts subject to possible reimbursement under the expense limitation agreements were as follows: Expense Limit as a Percentage of Average Daily Net Assets Cumulative Expenses Waived ----------------------------- or Reimbursed Subject Class A Class B Class C To Future Payment ------- ------- ------- ----------------- Large Cap Value Fund 1.50% 2.25% 2.25% $ 251,805 Mid Cap Growth Fund 1.70% 2.45% 2.45% 81,556 Select Fund 1.70% 2.45% 2.45% 55,725 Bullseye Fund 1.75% 2.50% 2.50% 276,732 8. CONCENTRATION OF RISK. Bullseye Fund and Select Fund are non-diversified Funds. Compared with diversified mutual funds, the Funds may invest a greater percentage of their assets in a particular company. Therefore, the Funds' returns could be significantly affected by the performance of any one of the small number of stocks in their portfolios. International Equity Fund had the following geographic concentrations in excess of 10% of its total net assets at June 30, 2001: France 10.3%, Japan 20.4%, United Kingdom 17.4%. The Fund pursues its objectives by investing in foreign securities. There are certain risks involved in investing in foreign securities which are in addition to the usual risks inherent in domestic investments. These risks include those resulting from future adverse political or economic developments and the possible imposition of currency exchange blockages or other foreign governmental laws or restrictions. 9. CHANGE IN ACCOUNTING PRINCIPLE. As required, effective January 1, 2001, the Balanced Fund has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium on debt securities. Prior to January 1, 2001, the Fund did not amortize premiums on debt securities. The cumulative effect of this accounting change had no impact on total net assets of the Fund, but resulted in $36,690 reduction in cost of securities and a corresponding increase in unrealized appreciation, based on securities held by the Fund on January 1, 2001. The effect of this change for the period ended June 30, 2001 was to decrease net investment income by $11,259, increase net unrealized appreciation by $3,774, and increase net realized gains by $7,485. The statement of changes in net assets anf financial highlights for prior periods have not been restated to reflect this change in presentation. SHAREHOLDER MEETING (UNAUDITED). At a special shareholders' meeting held on April 20, 2001 (the "Meeting"), Shareholders of the Nvest Balanced Fund (now known as the CDC Nvest Balanced Fund) voted for the following proposals: 1. Approval of a new subadvisory agreement among Nvest Funds Trust I (now known as CDC Nvest Funds Trust I, and herein referred to as the "Trust"), on behalf of the Nvest Balanced Fund (now known as the CDC Nvest Balanced Fund, and referred to herein as the "Fund"), Nvest Funds Management L.P. (now known as CDC IXIS Asset Management Advisers, L.P.) and Loomis, Sayles & Company, L.P. VOTED FOR VOTED AGAINST ABSTAINED VOTES TOTAL VOTES --------- ------------- --------------- ----------- 8,320,147.092 173,280.957 331,148.791 8,824,576.840 2. Approval of a new subadvisory agreement among the Trust on behalf of the the Fund, Nvest Funds Management L.P. (now known as CDC IXIS Asset Management Advisers, L.P. and Jurika & Voyles, L.P. VOTED FOR VOTED AGAINST ABSTAINED VOTES TOTAL VOTES --------- ------------- --------------- ----------- 7,872,345.865 620,570.306 331,660.669 8,824,576.840 3a. Proposal to amend the Fund's fundamental policies relating to diversification. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,750,703.669 618,078.057 353,938.114 1,101,857.000 8,824,576.840 3b. Proposal to amend the Fund's fundamental policies relating to industry concentration. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,757,167.599 615,827.633 349,724.608 1,101,857.000 8,824,576.840 3c. Proposal to amend the Fund's fundamental policies relating to short sales and margin purchases. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,680,782.805 683,277.566 358,659.469 1,101,857.000 8,824,576.840 3d. Proposal to amend the Fund's fundamental policy regarding borrowing. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,610,318.607 752,285.981 360,115.252 1,101,857.000 8,824,576.840 3e. Proposal to amend the Fund's fundamental policy regarding loans. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,640,622.631 729,083.993 353,013.216 1,101,857.000 8,824,576.840 3f. Proposal to amend the Fund's fundamental policy prohibiting purchases and sales of certain types of securities. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,680,646.626 680,985.763 361,087.451 1,101,857.000 8,824,576.840 3g. Proposal to amend the Fund's fundamental policy relating to issuing senior securities. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,730,063.015 637,859.584 354,797.241 1,101,857.000 8,824,576.840 3h. Proposal to reclassify the Fund's fundamental policy regarding purchasing options or warrants. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,729,599.335 648,417.317 344,703.188 1,101,857.000 8,824,576.840 3i. Proposal to reclassify the Fund's fundamental policy regarding writing options or warrants. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,754,591.118 638,408.425 329,720.297 1,101,857.000 8,824,576.840 3j. Proposal to eliminate the Fund's fundamental policy regarding pledging. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,661,064.298 725,010.344 336,645.198 1,101,857.000 8,824,576.840 3k. Proposal to amend the Fund's fundamental policy concerning unseasoned businesses. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,680,472.630 717,336.446 324,910.764 1,101,857.000 8,824,576.840 3l. Proposal to eliminate the Fund's fundamental policy prohibiting purchases of securities if held by the Trust's or investment adviser's trustees/directors and officers. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,711,247.548 685,144.578 326,327.714 1,101,857.000 8,824,576.840 3m. Proposal to eliminate the Fund's fundamental policy relating to exercising control or management. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,722,564.605 648,474.778 351,680.457 1,101,857.000 8,824,576.840 3n. Proposal to eliminate the Fund's fundamental policy relating to joint trading accounts. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,780,927.997 617,742.595 324,049.248 1,101,857.000 8,824,576.840 3o. Proposal to eliminate the Fund's fundamental policy relating to investing in other investment companies. VOTED FOR VOTED AGAINST ABSTAINED VOTES BROKER NON-VOTES TOTAL VOTES --------- ------------- --------------- ---------------- ----------- 6,742,557.633 655,484.199 324,678.008 1,101,857.000 8,824,576.840 INITIAL SHARE CLASS PURCHASE Nvest Funds Distributor, L.P. (now known as CDC IXIS Asset Management Distributors, L.P., and referred to herein as the "Distributor"), purchased one share each of Class A, Class B, and Class C shares of the CDC Nvest Mid Cap Growth Fund and one share each of Class A, Class B, and Class C shares of the CDC Nvest Select Fund, each a series of Nvest Funds Trust III (now known as CDC Nvest Funds Trust III, and referred to herein as the "Trust") at a net asset value of $10.00 per share on March 14, 2001. CONSENT OF SOLE SHAREHOLDER On March 14, 2001, the Distributor, as the sole shareholder of Class A, Class B, and Class C shares of the CDC Nvest Mid Cap Growth Fund and the CDC Nvest Select Fund (together, the "Funds") adopted the following resolutions: 1. Approval of the advisory agreement between the Trust on behalf of the relevant Fund and Nvest Funds Management, L.P. (now known as CDC IXIS Asset Management Advisers, L.P. ("CDC IXIS Advisers")) 2. FOR CDC NVEST SELECT FUND ONLY Approval of a subadvisory agreement among the Trust on behalf of the Fund, CDC IXIS Advisers and Harris Associates L.P. 3. FOR CDC NVEST MID CAP GROWTH FUND ONLY Approval of a subadvisory agreement among the Trust on behalf of the Fund, CDC IXIS Advisers and Loomis Sayles & Company, L.P. 4. Approval of the distribution agreements between the Trust and the Distributor 5. Approval of the investment goals of each of the Funds as stated in the Prospectus 6. Approval of the investment restrictions for each of the Funds as stated in the Statement of Additional Information 7. Approval of PricewaterhouseCoopers, LLP as each Fund's independent public accountant for the current fiscal year 8. Approval of the Service Plan relating to Class A shares of each Fund 9. Approval of the Service and Distribution Plan relating to Class B shares of each Fund 10. Approval of the Service and Distribution Plan relating to Class C shares of each Fund CDC NVEST FUNDS CDC Nvest AEW Real Estate Fund CDC Nvest Balanced Fund CDC Nvest Bond Income Fund CDC Nvest Bullseye Fund CDC Nvest Capital Growth Fund CDC Nvest Cash Management Trust -- Money Market Series* CDC Nvest Government Securities Fund CDC Nvest Growth Fund CDC Nvest Growth and Income Fund CDC Nvest High Income Fund CDC Nvest International Equity Fund CDC Nvest Large Cap Value Fund CDC Nvest Limited Term U.S. Government Fund CDC Nvest Massachusetts Tax Free Income Fund CDC Nvest Mid Cap Growth Fund CDC Nvest Municipal Income Fund CDC Nvest Select Fund CDC Nvest Short Term Corporate Income Fund CDC Nvest Star Advisers Fund CDC Nvest Star Small Cap Fund CDC Nvest Star Value Fund CDC Nvest Star Worldwide Fund CDC Nvest Strategic Income Fund CDC Nvest Tax Exempt Money Market Trust* Kobrick Capital Fund Kobrick Emerging Growth Fund Kobrick Growth Fund *Investments in money market funds are not insured or guaranteed by the FDIC or any government agency. INVESTMENT MANAGERS AEW Management and Advisors Capital Growth Management Harris Associates/Oakmark Funds Jurika & Voyles Loomis, Sayles & Company Mercury Advisors Montgomery Asset Management Reich & Tang Asset Management RS Investment Management Vaughan, Nelson, Scarborough & McCullough Westpeak Investment Advisors For current fund performance, ask your financial representative, access the CDC Nvest Funds website at www.cdcnvestfunds.com, or call CDC Nvest Funds at 800-225-5478 for the current edition of FUND FACTS. This material is authorized for distribution to prospective investors when it is preceded or accompanied by the Fund's current prospectus, which contains information about sales charges, management and other items of interest. Investors are advised to read the prospectus carefully before investing. CDC IXIS Asset Management Distributors, L.P., and other firms selling shares of CDC Nvest Funds are members of the National Association of Securities Dealers, Inc. (NASD). As a service to investors, the NASD has asked that we inform you of the availability of a brochure on its Public Disclosure Program. The program provides access to information about securities firms and their representatives. Investors may obtain a copy by contacting the NASD at 800-289-9999 or by visiting their website at www.NASDR.com. [Logo] CDC NVEST FUNDS(SM) ----------------- CDC IXIS Asset Management Distributors Presort Standard U.S. Postage Paid Brockton, MA Permit No. 770 ----------------- ------------------- P.O. Box 8551 Boston, Massachusetts 02266-8551 ------------------- www.cdcnvestfunds.com TO THE HOUSEHOLD OF: DROWNING IN PAPER? Go to: www.cdcnvestfunds.com Click on: Sign up now for E-delivery* Get your next CDC Nvest Funds report online. *Not available for Corporate Retirement Plans and SIMPLE IRAs EF58-0601 -----END PRIVACY-ENHANCED MESSAGE-----