-----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, Deiix7ILAKkA8EkRHrwMImzwEbLQqllCZKGp0AFQryX2sq1nGaZ8zr4KqZDd9Ely T4a+KxXlG3YLUKplq0faXQ== 0001206774-03-000122.txt : 20030306 0001206774-03-000122.hdr.sgml : 20030306 20030306160818 ACCESSION NUMBER: 0001206774-03-000122 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030306 EFFECTIVENESS DATE: 20030306 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITIZENS FUNDS CENTRAL INDEX KEY: 0000711202 IRS NUMBER: 942874420 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-03626 FILM NUMBER: 03594788 BUSINESS ADDRESS: STREET 1: 230 COMMERCE WAY STREET 2: STE 300 CITY: PORTSMOUTH STATE: NH ZIP: 03801 BUSINESS PHONE: 6034365152 FORMER COMPANY: FORMER CONFORMED NAME: WORKING ASSETS MONEY FUND DATE OF NAME CHANGE: 19920531 FORMER COMPANY: FORMER CONFORMED NAME: WORKING ASSETS COMMON HOLDINGS DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CITIZENS INVESTMENT TRUST DATE OF NAME CHANGE: 19951106 N-CSR 1 d12079.txt As filed with the Securities and Exchange Commission on March 6, 2003 File No. 811-3626 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANY CITIZENS FUNDS (Exact Name of Registrant as Specified in Charter) 230 Commerce Way, Portsmouth, New Hampshire 03801 (Address of Principal Executive Offices) Registrant's Telephone Number, including Area Code: (603) 436-5152 Sophia Collier Citizens Advisers, Inc. 230 Commerce Way Portsmouth, NH 03801 (Name and Address of Agent for Service) June 30, 2003 (Date of fiscal year end) December 31, 2002 (Date of reporting period) Item 1. Report to Shareholders. - -------------------------------------------------------------------------------- December 31, 2002 -- Semi-Annual Report - -------------------------------------------------------------------------------- CELEBRATING [LOGO] CITIZENS FUNDS(R) o 20 YEARS Citizens Core Growth Fund(R) Citizens Emerging Growth Fund(R) Citizens Small Cap Core Growth Fund(R) Citizens Value Fund(SM) Citizens Balanced Fund(SM) Citizens Global Equity Fund(R) Citizens International Growth Fund(R) Citizens Income Fund(R) Citizens Ultra Short Bond Fund(SM) Citizens Money Market Fund(R) CELEBRATING [LOGO] CITIZENS FUNDS(R) o 20 YEARS Table of Contents President's Letter ........................................................ 1 Portfolio Review ........................................................... 2 Portfolio Holdings ......................................................... 10 Statements of Assets and Liabilities ....................................... 24 Statements of Operations ................................................... 26 Statements of Changes in Net Assets ........................................ 28 Financial Highlights ....................................................... 30 Notes to Financial Statements .............................................. 39 [PHOTO] Dear Shareholder: The second half of 2002 was a period where our fixed-income portfolios turned in the best performance across our fund family. Investors have increasingly turned to fixed-income investments, seeking to lower risk and earn a steady return from dividends. In response to this interest, Citizens has launched two new funds -- the Citizens Ultra Short Bond Fund, which invests in high-quality, short-term bonds, and the Citizens Balanced Fund, investing in both stocks and bonds. In our equity portfolios, our focus has been to outperform our peers. Our flagship equity fund, the Citizens Core Growth Fund, Standard shares, outperformed 75% of its large cap equity peers (661 funds) for the one year ended December 31, 2002 according to Lipper Analytical Services. While the fund's average annual return for the same period was negative (-25.74%), since inception on March 5, 1995 it has provided an average annual return of 7.82% and outperformed 74% of the 166 large cap growth funds tracked by Lipper. Looking at the long term it is clear that socially responsible equity investing can be financially rewarding, however, the last three years of negative returns for our equity funds and the market as a whole have been discouraging. [Note: for the five-year period ended December 31, 2002, the fund's Standard shares had an average annual return of -2.62%, and outperformed 55% of the 315 funds in its peer group according to Lipper.] One of our most important initiatives has been to seek to improve the corporate governance and social responsibility of the companies in which we invest. While some share prices have fallen due to the end of the high-tech bubble, other declines have resulted from poor corporate governance practices. When Wall Street woke up to scandals, share prices sold off sharply, taking the good companies down with the bad. Citizens has taken a leadership role in seeking to define best practices in corporate governance. In 2002 we filed two shareholder resolutions at Cisco and Microsoft focusing on auditor independence. Although neither resolution passed, they attained the highest favorable vote ever for a non-management sponsored resolution at their respective companies. Interestingly, the policy we advocated eventually became one of the core aspects of the Sarbanes-Oxley Act, which has now become law. In 2003 our social focus will remain on corporate governance and environmental issues, both areas highlighted in our shareholder survey. Our plans include encouraging companies to adopt specific and measurable energy conservation programs. As we look at potential war in the Middle East I cannot help but wonder how different our world would be if the United States was not dependent on oil as a primary energy source. Conservation programs are more critical than ever. And as social investors we also would point out that effective conservation programs can help the bottom line. That's what social investing is all about -- seeking better practices that can enhance investment returns and make our world better at the same time. Thank you for being part of Citizens Funds. Sincerely yours, /s/ Sophia Collier Sophia Collier President Lipper rankings are based on total returns. Past performance does not guarantee future results. Returns reflect expense reimbursements/ waivers in effect, without which returns would have been lower. Investment return and principal value of an investment in Citizens Funds mutual funds will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Please call (800) 223-7010 for a prospectus that contains complete details of fees and expenses and should be read carefully before investing. Distributed by Citizens Securities, Inc., Portsmouth, NH 03801 - -------------------------------------------------------------------------------- Portfolio Review Citizens Core Growth Fund - -------------------------------------------------------------------------------- Goal: Long-term capital appreciation Strategy: Invests mainly in stocks of large-capitalization U.S. companies Inception Dates: Standard shares 03/03/95 Institutional shares 01/25/96 Administrative shares 02/04/00 FOOTNOTES All index and fund performance figures assume reinvestment of dividends and distributions. Index results do not include costs of investing, which would lower performance. The index is unmanaged and you cannot invest in it directly. Past performance is not an indication of future results. Returns reflect expense reimbursements/waivers in effect, without which returns would have been lower. When you sell your fund shares, they may be worth more or less than what you paid for them. The S&P 500 Index is an unmanaged index of the common stock of 500 of the most widely held companies in the U.S. stock market. AVERAGE ANNUAL RETURNS (AS OF 12/31/02) Ticker 6 1 5 Since Symbol Months Year Years Inception - -------------------------------------------------------------------------------- Standard shares WAIDX -10.34% -25.74% -2.62% 7.82% S&P 500 Index -- -10.30% -22.10% -0.59% 9.69% - -------------------------------------------------------------------------------- Institutional shares WINIX -10.03% -25.24% -1.94% 6.41% Administrative shares CGADX -10.17% -25.47% -- -21.27% - -------------------------------------------------------------------------------- The last six months of 2002 saw the market sustain significant losses within a relatively short period in the third quarter, and then regain some footing in the fourth. Positive contributors in the fourth quarter included reports of decreasing jobless claims, increasing durable goods orders, steadying consumer confidence, and a surprising 50 basis point interest rate cut by the Federal Reserve. Unfortunately, rising geopolitical tensions hampered the fourth quarter rally as the markets sold off in December. The fund's performance was in line with its benchmark, the S&P 500 Index, during the six-month period ended December 31, 2002. This was achieved with underweight positions versus the benchmark in industrials, energy and utilities, combined with overweight positions in health care and information technology. Along with good sector allocation, stock selection was also an important component of performance in energy and industrials. Within the health care sector, health care facilities and pharmaceutical and biotechno-logy stocks helped performance as investors poured into these areas based on new product developments, attractive valuations and fundamentals, and excellent long-term growth prospects. In technology, owning the best-in-class names in the software and hardware industries paid off as investors sought safety in well-known companies with strong, free cash flows and minimal debt loads. Relative to the S&P 500 Index, an overweighting in consumer discretionary and a neutral weighting in financial services negatively impacted the fund's performance. The continued fallout over accounting irregularities, analyst downgrades, and debt rating changes drove down companies within the cable and media sectors. Also hurting performance in the discretionary sector were specialty retail store stocks, which were sold off on news of weaker sales and reduced profit outlooks. In the financial services area, money center banks and investment services hurt the portfolio as investors sold off these positions due to continuing fears of loan exposure to telecommunications companies, weak quarterly earnings, and corporate governance issues. Looking ahead, we are optimistic that the economy's current recovery will continue and eventually accelerate, despite a murky earnings outlook and somewhat mixed economic data. Low consumer and business confidence have contributed to a self-reinforcing cycle where less confidence leads to lower spending, which leads to lower confidence. We believe that the situation in Iraq will be resolved within a relatively short time frame and this should allow confidence to rebuild. Thus, we believe the necessary elements are in place to insure a continued economic recovery and create an environment in which stocks will do well again. From our perspective, we believe our investment focus on high-quality, well-established, fundamentally strong and socially responsible companies positions us well for the next year and beyond. 2 - -------------------------------------------------------------------------------- Portfolio Review Citizens Emerging Growth Fund - -------------------------------------------------------------------------------- Goal: Aggressive growth Strategy: Invests mainly in stocks of young, growing, medium-capitalization companies Inception Dates: Standard shares 02/08/94 Institutional shares 11/01/99 Administrative shares 02/04/00 FOOTNOTES (1) Since inception return as of February 28, 1994. All index and fund performance figures assume reinvestment of dividends and distributions. Index results do not include costs of investing, which would lower performance. The index is unmanaged and you cannot invest in it directly. Past performance is not an indication of future results. Returns reflect expense reimbursements/waivers in effect, without which returns would have been lower. When you sell your fund shares, they may be worth more or less than what you paid for them. Investments in the Citizens Emerging Growth Fund involve unique risks, as small- and medium-sized companies may have inexperienced management, limited product lines, a difficult time obtaining financing or market share, and their shares may be more volatile and not traded as frequently or in as large a volume as larger companies. The Russell MidCap(R) Growth Index measures the performance of those Russell MidCap companies with higher price-to-book ratios and higher forecasted growth values. The stocks are also members of the Russell 1000 Growth Index. AVERAGE ANNUAL RETURNS (AS OF 12/31/02) Ticker 6 15 Since Symbol Months Year Years Inception - -------------------------------------------------------------------------------- Standard shares WAEGX -17.68% -28.72% 2.64% 9.82% Russell MidCap Growth Index -- -9.59% -27.41% -1.82% 6.13%(1) - -------------------------------------------------------------------------------- Institutional shares CEGIX -17.39% -28.25% -- -14.65% Administrative shares CGRDX -17.45% -28.44% -- -23.81% - -------------------------------------------------------------------------------- The plunge that occurred in the equity markets during the third quarter of 2002 was partially reversed in the fourth quarter as markets began to rally due to leading economic indicators suggesting a recovery was in the making. Positive factors included reports of decreasing jobless claims, increasing durable goods orders, and steadying consumer confidence. Equity markets got a lift in October and November when the Federal Reserve lowered interest rates by 50 basis points and investors anticipated tax cuts in light of election results. This rally helped beaten-down companies in certain sectors, which attracted many investors. As always, we favored what we believe are high-quality companies that show earnings acceleration, sustainable earnings, reasonable valuation, and credible, motivated management teams. Despite a difficult market environment for growth companies during the third quarter of 2002, many of our holdings rebounded during the rally in the fourth quarter. During the past six months, the fund's holdings in the consumer staples and industrials sectors outperformed the Russell MidCap Growth Index in absolute returns. Within these sectors, our holdings in food and drug retailing, transportation, and commercial services and suppliers all moved higher based on increasing sales and earnings, and improving outlooks. Additionally, our exposure to well-known, high-quality companies in the consumer durables and apparel industries such as the Columbia Sportswear Company, benefited performance. Compared to the benchmark, the fund's holdings in the information technology, consumer discretionary, and health care sectors were relative underperformers. Within the technology sector, we avoided the riskier growth opportunities that rewarded others investing in the mid-cap growth universe in the fourth quarter. Our holdings within the restaurants and specialty retail industries suffered in tandem with declining consumer confidence. Despite consumers continuing to spend their money on new homes and cars over the last six months, stocks in these sub-sectors sold off as retail sales data pointed to future weakness. The health care sector was another area of weakness for the fund -- the market turned away from more defensive areas and many of the fund's holdings were hurt when a large hospital company lowered profit guidance and announced the departures of several executives. We believe that our focus on the higher-quality mid-cap growth names will allow us to outperform over the long term. While the recent economic indicators lean toward economic recovery, the strength and depth of the recovery still remains uncertain. Geopolitical tensions are particularly concerning. In this uncertain environment, we maintain that the fundamentally strong and socially responsible companies we have traditionally favored will be among those that do well in 2003. 3 - -------------------------------------------------------------------------------- Portfolio Review Citizens Small Cap Core Growth Fund - -------------------------------------------------------------------------------- Goal: Capital appreciation Strategy: Invests mainly in stocks of small-capitalization U.S. companies Inception Date: Standard shares 12/28/99 FOOTNOTES All index and fund performance figures assume reinvestment of dividends and distributions. Index results do not include costs of investing, which would lower performance. The index is unmanaged and you cannot invest in it directly. Past performance is not an indication of future results. Returns reflect expense reimbursements/waivers in effect, without which returns would have been lower. When you sell your fund shares, they may be worth more or less than what you paid for them. Investments in the Citizens Small Cap Core Growth Fund involve unique risks, as small- and medium-sized companies may have inexperienced management, limited product lines, a difficult time obtaining financing or market share, and their shares may be more volatile and not traded as frequently or in as large a volume as larger companies. The Russell 2000 Growth Index measures the performance of those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. AVERAGE ANNUAL RETURNS (AS OF 12/31/02) Ticker 6 1 Since Symbol Months Year Inception - -------------------------------------------------------------------------------- Standard shares CSCSX -17.21% -25.42% -8.66% Russell 2000 Growth Index -- -15.63% -30.26% -21.09% - -------------------------------------------------------------------------------- The last six months of 2002 began with a sluggish economy, continued concerns over corporate accounting, and eroding investor confidence. Fortunately, investor optimism increased significantly during the fourth quarter as reports of a stronger economy began to emerge. Decreasing initial jobless claims, a strong Gross Domestic Product growth number, and rising durable goods orders all supported an emerging economic recovery. The Federal Reserve's surprising 50 basis point interest rate reduction also helped. The fund's strategy during this period was to be positioned in more aggressive, high-quality socially responsible names that would move higher based on a broad economic recovery. However, investors did not embrace these high-quality names, instead focusing on more speculative, high-risk securities primarily in the technology and telecommunications services sectors -- especially during the fourth quarter. During the period, the fund's holdings in the consumer staples, industrials, and health care sectors outperformed the Russell 2000 Growth Index in absolute returns. Within the consumer staples and industrials sectors, our holdings in supermarkets, transportation, and commercial services and suppliers all moved higher with increasing sales and earnings, and improving outlooks. Additionally, the fund benefited from our exposure to pharmaceuticals and biotechnology, which had compelling valuations, strong fundamentals, and analyst upgrades. Another positive factor, which specifically helped Cephalon, Inc., a holding of the fund, was a Food and Drug Administration's shake-up that could potentially speed up the approval of certain biotechnology drugs. An overweighting in information technology and hospitals and services versus the benchmark hurt performance. Despite the fund's technology holdings suffering from a sell-off in the third quarter, and then participating strongly in the fourth quarter rally, investors favored riskier, lower-quality names. The fund's equipment and supplies holdings were negatively affected by Tenet Healthcare Corporation acknowledging that its Medicare billing practices were being audited by the U.S. Health and Human Services Department. We believe recent data indicates that the economic recovery is progressing moderately. Also, with market sentiment improving, we continue to believe the foundation has been laid for the expansion to resume during the coming year. With that said, we continue to be optimistic on the outlook for small-cap growth stocks outperforming mid- and large-caps because of their relative insulation from major geopolitical events, and their ability to react more quickly to economic and market changes. 4 - -------------------------------------------------------------------------------- Portfolio Review Citizens Value Fund - -------------------------------------------------------------------------------- Goal: Long-term capital appreciation Strategy: Invests mainly in stocks and other equities of U.S. large-capitalization companies Inception Date: Standard shares 6/13/96(2) FOOTNOTES (1) Includes performance of the fund's predecessor, the Meyers Pride Value Fund for the periods prior to September 24, 2001. (2) The inception date of the Citizens Value Fund's predecessor, the Meyer's Pride Value Fund. All index and fund performance figures assume reinvestment of dividends and distributions. Index results do not include costs of investing, which would lower performance. The index is unmanaged and you cannot invest in it directly. Past performance is not an indication of future results. Returns reflect expense reimbursements/waivers in effect, without which returns would have been lower. When you sell your fund shares, they may be worth more or less than what you paid for them. The S&P 500 Index is an unmanaged index of the common stock of 500 of the most widely held companies in the U.S. stock market. AVERAGE ANNUAL RETURNS (AS OF 12/31/02) Ticker 6 1 5 Since Symbol Months Year Years Inception - -------------------------------------------------------------------------------- Standard shares(1) MYPVX -13.62% -40.50% -0.36% 4.00% S&P 500 Index -- -10.30% -22.10% -0.59% 5.84% - -------------------------------------------------------------------------------- The second half of 2002 started out on a particularly tough note for investors as the stock market (as measured by the S&P 500 Index) had its worst quarter since 1987, with September being the worst month since 1937. This climate changed in the fourth quarter as improving economic indicators rallied the markets in October and November, before increasing geopolitical tensions caused a pull-back in December. Surprisingly, investors' aversion to risk in the fourth quarter gave way to renewed interest in areas of the market that had been beaten down earlier in the year -- particularly in information technology and telecommunications services. Relative to the S&P 500 Index, our overweighting in technology and telecommunications helped the absolute performance of the fund over the six-month period. Our holdings in these areas reaped the benefits of an improving market environment and the issuance of favorable earnings reports during the period. Specifically, International Business Machines and Cisco Systems performed admirably for the fund. Additionally, our exposure to select diversified financial companies helped performance, as these names recovered from the bad press plaguing the overall sector for much of the year. Hurting portfolio performance the most was the fund's overweighting in the pharmaceutical industries and consumer discretionary sectors, along with our exposure to certain food and beverage names. Despite our focus on owning the highest-quality names, reports of questionable accounting practices and lowered earnings brought down our pharmaceutical holdings. In consumer discretionary, declining consumer confidence and lowered sales forecasts from many retailers hurt the overall group. Within our supermarket holdings, increasing competition and declining profit outlooks hurt performance. Given the current environment, we believe that there is reason to be optimistic about the economy. The double-dip recession that many investors feared would come to pass has thus far been averted, and confidence in the economy appears to be building. Concerns over Iraq and North Korea still persist, but we believe our focus on high-quality companies trading at a significant discount to their intrinsic value will be well rewarded over the long term. 5 - -------------------------------------------------------------------------------- Portfolio Review Citizens Global Equity Fund - -------------------------------------------------------------------------------- Goal: Capital appreciation Strategy: Invests mainly in stocks and other equities of foreign and U.S. companies Inception Dates: Standard shares 02/08/94 Institutional shares 11/01/99 Administrative shares 02/04/00 FOOTNOTES All index and fund performance figures assume reinvestment of dividends and distributions. Index results do not include costs of investing, which would lower performance. The index is unmanaged and you cannot invest in it directly. Past performance is not an indication of future results. Returns reflect expense reimbursements/waivers in effect, without which returns would have been lower. When you sell your fund shares, they may be worth more or less than what you paid for them. Investments in the Citizens Global Equity Fund involve risks of investing in foreign markets, including political instability and currency risks, excessive taxation, different financial and auditing standards, increased market volatility and other factors. The Morgan Stanley Capital International (MSCI) World Index is a market capitalization weighted equity index of over 1,500 stocks traded in 22 world markets. AVERAGE ANNUAL RETURNS (AS OF 12/31/02) Ticker 6 1 5 Since Symbol Months Year Years Inception - -------------------------------------------------------------------------------- Standard shares WAGEX -10.27% -21.43% 0.70% 5.09% MSCI World Index -- -12.14% -19.89% -2.11% 4.16% - -------------------------------------------------------------------------------- Institutional shares CGEIX -9.93% -20.96% -- -13.98% Administrative shares CEADX -10.07% -21.25% -- -25.95% - -------------------------------------------------------------------------------- The final half of 2002 began with gloom and nervousness in worldwide equity markets, only to snap back from oversold levels in October and November. Unfortunately, geopolitical tensions hampered the fourth quarter rally as markets reversed themselves going into December. A surprisingly large interest rate cut by a rather patient Federal Reserve, which lowered the Fed funds rate to 1.25%, was a primary thrust for worldwide markets during the fourth quarter. Within this environment, our approach was to remain broadly diversified across the sectors and position the portfolio for an economic recovery. We became increasingly concerned that consumer spending would slow as unemployment figures rose and people became more concerned about economic weakness during the third quarter. As such, we trimmed or sold those holdings that were dependent on a strong consumer market and looked for companies with above-average earnings growth through superior products, broad distribution, or patent-protected technologies. Relative to the MSCI World Index, the only sector with positive returns for the fund during the report period was the utilities sector. Other sectors which were down slightly, but did not substantially hamper performance, included health care, technology and telecommunications. These sectors, which had experienced extreme underperformance in the third quarter, rallied in the final few months of the year as investors' appetite for risk grew noticeably. Within technology and telecommunications, Vodafone Group plc, SBC Communications Inc., and Alltel Corporation all rebounded from the intense selling they experienced in the first three quarters of 2002. The weakest sectors for the fund in the second half of 2002 were financial services, consumer discretionary and staples, and industrials. These were the sectors that had enjoyed relatively strong performance in the first half of the year. Nevertheless, these areas sold off primarily because investors believed that valuations were not compelling and the risk/reward metrics for technology and telecommunications were more attractive. We believe that a recovery is underway worldwide. In the U.S., this recovery is more subdued than those of years past in part because the consumer never stopped spending through the downturn. However, we note that companies have spent many months cleaning up their balance sheets and many now have a good deal of cash. It is our belief that while companies may use their funds to make acquisitions or to repurchase their own shares, a healthy percentage will go toward capital expenditures. This should help to propel the economy forward. We would make similar observations on the international markets, albeit valuations look cheaper than those of their U.S. counterparts. These more compelling values, coupled with the prospect of further monetary easing by the European Central Bank, lead us to adopt a somewhat more positive attitude. This is compounded by our view that a number of high-quality global companies have suffered disproportionately from the sell-off and have the potential to bounce back to a greater extent. Therefore, we are optimistic that 2003 will be a year in which a careful stock-specific focus will finally reward the equity investor. 6 - -------------------------------------------------------------------------------- Portfolio Review Citizens International Growth Fund - -------------------------------------------------------------------------------- Goal: Capital appreciation Strategy: Invests mainly in stocks and other equities of foreign companies Inception Date: Standard shares 12/20/00 FOOTNOTES All index and fund performance figures assume reinvestment of dividends and distributions. Index results do not include costs of investing, which would lower performance. The index is unmanaged and you cannot invest in it directly. Past performance is not an indication of future results. Returns reflect expense reimbursements/waivers in effect, without which returns would have been lower. When you sell your fund shares, they may be worth more or less than what you paid for them. Investments in the Citizens International Growth Fund involve risks of investing in foreign markets, including political instability and currency risks, excessive taxation, different financial and auditing standards, increased market volatility and other factors. The MSCI EAFE Index is an unmanaged index of foreign stocks and is an aggregate of 21 individual country indices that collectively represent many of the major markets of the world. AVERAGE ANNUAL RETURNS (AS OF 12/31/02) 6 1 Since Months Year Inception - ------------------------------------------------------------------------------- Standard shares -12.78% -19.81% -23.08% MSCI EAFE Index -14.55% -15.94% -17.79% - ------------------------------------------------------------------------------- Having plunged during the third quarter, international equity markets regained their composure and rebounded sharply upwards in October and November. In December, these markets again capitulated in tired trading and thin volume to end the year down. The wild fluctuations registered over the six-month period did little to diminish investors'intent on exiting equity markets to move into cash and bonds. Continued jawboning by the U.S. over a potential attack on Iraq, and a mixed bag of economic data combined to depress already negative market psychology even further. Relative to the MSCI EAFE Index, our underweighting in industrials and utilities benefited performance. Additionally, despite the fund's overweight in technology and telecommunications, relatively good stock selection was able to mitigate what otherwise would have been a negative allocation. Indeed, within both of these sectors, many of the stocks that were hardest hit during the summer were the greatest beneficiaries of the two-month rally. Holdings such as Flextronics International Ltd., Nokia Corporation, and Vodafone Group plc all performed admirably for the fund. Additionally, our decision to trim back some of our larger positions in these areas going into year-end also helped to avoid further losses. Financial stocks experienced a particularly volatile time over the six-month period ended December 31, 2002, especially in the third quarter due in part to the precipitous declines in the insurance industry. Allianz AG's disappointing quarterly earnings announcement began the sell-off in the industry, which affected our other insurance holdings, including AXA and ING Groep N.V. Despite rallying sharply in November, these stocks were the main detractors from performance during the six-month period. Looking forward, our view for 2003 remains positive. Based on various measures, international markets look less expensive than their U.S. counterparts, and as we saw in the fourth quarter, earnings expectations are at such a low level that we believe significant upside potential from current levels is probable. More specifically, once consumer confidence stabilizes, we believe investors will favor companies with the higher-quality, socially responsible characteristics that we own. 7 - -------------------------------------------------------------------------------- Portfolio Review Citizens Income Fund - -------------------------------------------------------------------------------- Goal: Current income and monthly dividend payment Strategy: Invests mainly in bonds and mortgage-backed securities Inception Date: Standard shares 06/10/92 FOOTNOTES All index and fund performance figures assume reinvestment of dividends and distributions. Index results do not include costs of investing, which would lower performance. The index is unmanaged and you cannot invest in it directly. Past performance is not an indication of future results. Returns reflect expense reimbursements/waivers in effect, without which returns would have been lower. When you sell your fund shares, they may be worth more or less than what you paid for them. The Lehman Brothers U.S. Aggregate Index is an unmanaged index of taxable, investment-grade fixed-income securities, including government, corporate, mortgage and asset-backed securities. AVERAGE ANNUAL RETURNS (AS OF 12/31/02) Ticker 6 1 5 10 Symbol Months Year Years Years - -------------------------------------------------------------------------------- Standard shares WAIMX 5.31% 3.51% 3.98% 5.82% Lehman Brothers U.S. Aggregate Index -- 6.23% 10.25% 7.54% 7.51% - -------------------------------------------------------------------------------- The third quarter of 2002 was characterized by the Federal Reserve's (Fed) reluctance to lower rates, gloomy economic and corporate forecasts, and the increasing possibility of war with Iraq. Economic growth showed improvement in the fourth quarter due to a number of factors. These included a strong third quarter Gross Domestic Product number, declining jobless claims, rising durable goods orders, and stronger than expected new and existing home sales. In November, the Fed cut interest rates by 50 basis points, signaling it remained cautious about the state of the economy. Within this environment, the fund's strategy was to be diversified and invested mainly in higher-quality, socially responsible, investment-grade names with attractive yields during the six-month period ended December 31, 2002. Targeting the intermediate part of the yield curve -- the 4 to 10-year area -- the fund's performance benefited from being invested in government agency mortgage-backed securities, and securities in the cable and financial services sectors. Low interest rates on long-term fixed-rate mortgages continued to fuel the refinancing wave in 2002 and ultimately benefited our exposure to Government National Mortgage Association (GNMA) mortgage-backed securities and Fannie Mae and Freddie Mac agency issues. In cable and financial services, fund holdings such as Comcast Corporation and J.P. Morgan Chase and Company benefited from improving fundamentals, decreasing headline risk from earlier in the year, and investor enthusiasm. Our underweight in the telecommunications and media sectors hurt the fund's performance during the six-month period ended December 31, 2002. This was especially true in the fourth quarter as investors became more willing to buy speculative names regardless of credit quality and solid cash flows. While market conditions have improved recently, there are still many concerns over potential terrorist attacks and a war with Iraq. In light of these concerns, we believe that improving corporate profits and steady consumer spending will lead to moderate U.S. economic growth in 2003. In addition, the Fed appears to be in a holding pattern for the near future. Within this environment, our main focus will remain on socially responsible, investment-grade issues in the intermediate part of the yield curve that we believe should tend to outperform. 8 - -------------------------------------------------------------------------------- Portfolio Review Citizens Money Market Fund - -------------------------------------------------------------------------------- Goal: Current income consistent with safety and liquidity Strategy: Invests exclusively in money market instruments Inception Dates: Standard shares 08/30/83 Institutional shares 02/01/96 FOOTNOTES (1) Since inception return from 01/01/91. Complete data for periods prior to 1991 is not available. All fund performance figures assume reinvestment of dividends and distributions. Past performance is not an indication of future results. Returns reflect expense reimbursements/ waivers in effect, without which returns would have been lower. When you sell your fund shares, they may be worth more or less than what you paid for them. Investments in the Citizens Money Market Fund are not insured or guaranteed by the FDIC or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
AVERAGE ANNUAL RETURNS (AS OF 12/31/02) 7-Day Ticker Simple 6 1 5 10 Since Symbol Yield Months Year Years Years Inception - ------------------------------------------------------------------------------------- Standard shares WKAXX 0.54% 0.42% 0.95% 3.66% 3.75% 3.84%(1) Institutional shares WAIXX 0.90% 0.59% 1.26% 4.04% -- 4.32% - -------------------------------------------------------------------------------------
In the third quarter, the Federal Reserve (Fed) decided to leave the Fed funds rate unchanged at 1.75% despite persistent stock market weakness and declining consumer and business spending. In the fourth quarter, an equity market rally was fueled by encouraging economic news and the Fed's surprising 50 basis point interest rate cut. The Fed's aggressive rate-cutting strategy, which began in January 2001, has dramatically affected the yields of money market funds over the past two years. While credit woes continued to affect money markets, the fund's strategy during the six-month period ended December 31, 2002 focused on investing in high-quality, socially responsible securities. Initially, the portfolio was positioned to gain more yield by going out farther on the yield curve. Early in the fourth quarter we positioned the portfolio for a possible interest rate reduction by the Fed by increasing the fund's weighted average maturity and avoiding securities with credit and headline risk. The Fed's 50 basis point cut was deeper than expected -- and surprised the market. While we were positioned to benefit from a rate cut, the fund's weighted average maturity was, on average, shorter than its peer group. This caused the fund's performance to lag its peers. As of December 31, 2002, the weighted average maturity of the fund was 46 days. While the mood of the markets has improved recently, much concern remains over potential terrorist attacks and a war with Iraq. In light of that, we believe that improving corporate profits and steady consumer spending will be some of the key factors influencing the U.S. economy to modestly grow in 2003. In addition, the Fed appears to be in a holding pattern for the near future. Within this environment, we will remain cautious as we look for shorter maturity opportunities to pick up yield and lower the fund's weighted average maturity to reflect the current neutral environment. - -------------------------------------------------------------------------------- Portfolio Review Additional Funds - -------------------------------------------------------------------------------- Portfolio reviews for the Citizens Balanced Fund (inception: 12/20/02) and the Citizens Ultra Short Bond Fund (inception: 11/21/02) are not available in this report. Portfolio holdings and financial information for these funds are included in subsequent sections. 9 - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Core Growth Fund Security Shares Value ($) - -------------------------------------------------------------------------------- COMMON STOCKS - 97.3% Air Freight - 1.7% FedEx Corp. 106,060 5,751 Banks - 3.2% Bank of America Corp. 160,000 11,131 Biotechnology - 4.9% Amgen, Inc.a 103,150 4,986 Cephalon, Inc.a 105,000 5,111 Forest Laboratories, Inc.a 19,000 1,866 Gilead Sciences, Inc.a 71,000 2,414 IDEC Pharmaceuticals Corp.a 73,000 2,421 ------ 16,798 Chemicals - 1.0% Air Products & Chemicals, Inc. 81,000 3,463 Computers - 11.3% Dell Computer Corp.a 302,100 8,078 Hewlett-Packard Co. 94,000 1,632 Intel Corp. 246,200 3,833 International Business Machines Corp. 56,000 4,340 Microsoft Corp.a 325,800 16,844 Symantec Corp.a 106,700 4,322 ------ 39,049 Electronics - 4.2% Analog Devices, Inc.a 131,000 3,127 Cisco Systems, Inc.a 451,900 5,920 Flextronics Internationala 289,000 2,367 Maxim Integrated Products, Inc. 95,000 3,139 ------ 14,553 Energy & Utilities - 8.0% Anadarko Petroleum Corp. 78,000 3,736 Baker Hughes, Inc. 118,000 3,798 BJ Services Co.a 163,000 5,267 Burlington Resources, Inc. 44,200 1,885 ConocoPhillips 54,000 2,613 Devon Energy Corp. 79,000 3,626 EOG Resources, Inc. 169,000 6,746 Vulcan Power Co., Class Aa c 40,000 0 ------ 27,671 Entertainment - 2.3% Viacom, Inc.a 190,424 7,762 Financial - Diversified - 10.8% Citigroup, Inc. 457,700 16,105 Fannie Mae 44,700 2,876 FleetBoston Financial Corp. 185,000 4,496 Freddie Mac 43,000 2,539 J.P. Morgan Chase & Co. 255,000 6,120 Wells Fargo & Co. 106,000 4,968 ------ 37,104 Foods - 2.1% PepsiCo, Inc. 167,500 7,072 Health Care - 15.9% AmerisourceBergen Corp. 37,000 2,009 Eli Lilly & Co. 109,900 6,979 Guidant Corp.a 88,000 2,715 HCA, Inc. 85,000 3,528 Johnson & Johnson, Inc. 170,948 9,181 Medtronic, Inc. 118,338 5,396 Merck & Co., Inc. 95,000 5,378 Pfizer, Inc. 479,200 14,648 St. Jude Medical, Inc.a 56,997 2,264 UnitedHealth Group, Inc. 33,000 2,756 ------ 54,854 Insurance - 6.5% ACE Ltd. 119,000 3,491 American International Group, Inc. 251,934 14,575 Willis Group Holdings Ltd.a 93,000 2,666 XL Capital Ltd. 22,000 1,700 ------ 22,432 Investment Banking & Brokerage - 1.9% Lehman Brothers Holdings, Inc. 120,000 6,395 Manufacturing - 6.3% 3M Co. 70,300 8,668 American Standard Cos., Inc.a 26,900 1,914 Eaton Corp. 65,000 5,077 Illinois Tool Works, Inc. 95,000 6,162 ------ 21,821 Personal Care - 2.6% Avon Products, Inc. 66,300 3,572 Gillette Co. 172,000 5,222 ------ 8,794 Publishing - 2.3% Gannett Co., Inc. 59,800 4,294 The Washington Post Co. 5,000 3,690 ------ 7,984 10 See Financial Notes - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Core Growth Fund (cont'd) Security Shares Value ($) - -------------------------------------------------------------------------------- Retail - 4.5% Costco Wholesale Corp.a 131,400 3,687 Kohl's Corp.a 56,700 3,172 Lowe's Cos., Inc. 107,400 4,028 Target Corp. 150,000 4,500 --------- 15,387 Services - 2.0% Concord EFS, Inc.a 262,000 4,124 Fiserv, Inc.a 82,000 2,784 --------- 6,908 Telecommunications - 5.8% BellSouth Corp. 135,000 3,492 Nokia Corp. (ADR) 49,000 760 QUALCOMM, Inc.a 54,000 1,965 SBC Communications, Inc. 226,264 6,134 Verizon Communications, Inc. 197,900 7,669 --------- 20,020 --------- Total Common Stocks 334,949 Cost: $309,952 Security Rate, Maturity Date Principal ($) Value ($) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 3.0% Fifth Third Bank, Inc., 0.75%, 01/02/03 (collateralized by Fifth Third Bank Mortgage Loan Trust security) 10,245 10,245 Cost: $10,245 --------- Total Investments - 100.3% 345,194 Cost: $320,197(b) Percentages indicated are based on net assets of $344,110. a Non-income producing security. b Aggregate cost for federal income tax purposes is substantially the same. c Restricted security constituting 0.00% of net assets which may not be publicly sold without registration under the Securities Act of 1933. This security is valued at its fair value as determined in good faith under procedures consistently applied under the general supervision of the Board of Trustees. Additional information on the security is as follows: Acquisition Date: March 3, 1995 Cost: $300 Value: $0 ADR - American Depositary Receipt Citizens Emerging Growth Fund Security Shares Value ($) - -------------------------------------------------------------------------------- COMMON STOCKS - 98.9% Apparel Manufacturers - 2.2% Columbia Sportswear Co.a 80,300 3,567 Biotechnology - 16.9% Allergan, Inc. 73,400 4,229 Cephalon, Inc.a 114,015 5,549 Gilead Sciences, Inc.a 184,900 6,287 IDEC Pharmaceuticals Corp.a 155,700 5,165 MedImmune, Inc.a 32,500 883 Millenium Pharmaceuticals, Inc.a 178,765 1,419 Neurocrine Biosciences, Inc.a 70,400 3,214 ------- 26,746 Chemicals - 2.1% Air Products & Chemicals, Inc. 76,500 3,270 Computers - 12.4% BEA Systems, Inc.a 307,000 3,521 Emulex Corp.a 83,900 1,556 Intuit, Inc.a 35,700 1,675 Lexmark International, Inc.a 54,900 3,321 Mercury Interactive Corp.a 54,200 1,607 NetworkAssociates, Inc.a 259,200 4,172 Symantec Corp.a 96,400 3,905 ------- 19,757 Electrical Equipment - 2.3% Fairchild Semiconductor Corp.a 335,330 3,591 Electronics - 10.0% Analog Devices, Inc.a 92,890 2,217 Flextronics Internationala 357,600 2,929 International Rectifier Corp.a 205,300 3,789 Jabil Circuit, Inc.a 132,200 2,369 Maxim Integrated Products, Inc. 68,000 2,247 Microchip Technology, Inc. 95,200 2,328 ------- 15,879 Energy & Utilities - 8.0% BJ Services Co.a 24,200 782 Devon Energy Corp. 51,400 2,359 Noble Energy, Inc. 90,500 3,399 Ocean Energy, Inc. 95,200 1,901 Smith International, Inc.a 48,388 1,578 Weatherford International Ltd.a 65,400 2,611 ------- 12,630 11 - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Emerging Growth Fund (cont'd) Security Shares Value ($) - -------------------------------------------------------------------------------- Health Care - 13.6% AmerisourceBergen Corp. 74,960 4,070 Cytyc Corp.a 262,500 2,678 Express Scripts, Inc.a 34,600 1,662 Guidant Corp.a 53,800 1,660 St. Jude Medical, Inc.a 47,100 1,871 Triad Hospitals, Inc.a 135,162 4,032 Trimeris, Inc.a 92,000 3,964 WellPoint Health Networks, Inc.a 23,900 1,701 -------- 21,638 Insurance - 6.6% Platinum Underwriters Holdings Ltd.a 144,100 3,798 W.R. Berkley Corp. 86,727 3,435 Willis Group Holdings Ltd.a 114,100 3,271 -------- 10,504 Investment Banking & Brokerage - 3.0% Affiliated Managers Group, Inc.a 94,400 4,748 Leisure - 1.0% Harley-Davidson, Inc. 33,000 1,525 Manufacturing - 2.1% American Standard Cos., Inc.a 47,700 3,393 Multimedia - 2.0% Belo Corp., Class A 76,300 1,627 Cox Radio, Inc.a 73,000 1,665 -------- 3,292 Publishing - 2.2% The Washington Post Co. 4,790 3,535 Restaurants - 1.0% Starbucks Corp.a 76,800 1,565 Retail - 1.6% Foot Locker, Inc.a 235,400 2,472 Services - 10.1% ARAMARK Corp.a 73,000 1,716 Concord EFS, Inc.a 268,100 4,220 Dun & Bradstreet Corp.a 144,070 4,969 Fiserv, Inc.a 149,600 5,079 -------- 15,984 Telecommunications - 1.8% Nextel Communications, Inc.a 251,100 2,900 -------- Total Common Stocks 156,996 Cost: $162,003 Security Rate, Maturity Date Principal ($) Value ($) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 1.7% Fifth Third Bank, Inc., 0.75%, 01/02/03 (collateralized by Federal Home Loan Mortgage Corporation security) 2,746 2,746 Cost: $2,746 -------- Total Investments - 100.6% 159,742 Cost: $164,749b Percentages indicated are based on net assets of $158,822. a Non-income producing security. b Aggregate cost for federal income tax purposes is substantially the same. Citizens Small Cap Core Growth Fund Security Shares Value ($) - -------------------------------------------------------------------------------- COMMON STOCKS - 96.7% Apparel Manufacturers - 2.0% Columbia Sportswear Co.a 6,600 293 Banks - 4.1% East West Bancorp, Inc. 8,830 319 UCBH Holdings, Inc. 7,090 301 ------ 620 Biotechnology - 12.0% Cephalon, Inc.a 11,960 582 EXACT Sciences Corp.a 12,000 130 Integra LifeSciences Holdings Corp.a 21,670 382 Neurocrine Biosciences, Inc.a 6,600 301 XOMA Ltd.a 99,670 422 ------ 1,817 Broadcasting - 2.5% Entravision Communications Corp., Class Aa 37,310 372 Computers - 10.3% BEA Systems, Inc.a 29,200 335 Borland Software Corp.a 12,100 149 Emulex Corp.a 8,300 154 Internet Security Systems, Inc.a 15,500 284 Mercury Interactive Corp.a 5,000 148 Network Associates, Inc.a 24,700 398 Quest Software, Inc.a 7,200 74 ------ 1,542 12 See Financial Notes - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Small Cap Core Growth Fund (cont'd) Security Shares Value ($) - -------------------------------------------------------------------------------- Electrical Equipment - 2.3% Fairchild Semiconductor Corp.a 31,870 341 Electronics - 11.6% Cabot Microelectronics Corp.a 4,500 212 Cree, Inc.a 8,200 134 Daktronics, Inc.a 12,800 171 Flextronics Internationala 34,000 278 International Rectifier Corp.a 19,500 361 Jabil Circuit, Inc.a 12,600 226 LSI Logic Corp.a 40,000 231 OmniVision Technologies, Inc.a 9,300 126 ------- 1,739 Energy & Utilities - 6.4% Newfield Exploration Co.a 10,550 380 Precision Drilling Corp.a 4,800 156 Western Gas Resources, Inc. 11,330 418 ------- 954 Health Care - 14.5% AdvancePCS, Inc.a 13,570 301 Cytyc Corp.a 55,100 563 SICOR, Inc.a 19,070 302 Thoratec Corp.a 56,900 435 Triad Hospitals, Inc.a 10,100 301 Trimeris, Inc.a 6,700 289 ------- 2,191 Insurance - 5.2% Platinum Underwriters Ltd.a 15,600 411 W.R. Berkley Corp. 9,183 364 ------- 775 Investment Banking & Brokerage - 2.2% Affiliated Managers Group, Inc.a 6,500 327 Manufacturing - 7.2% A.O. Smith Corp. 22,400 605 The Manitowoc Co., Inc. 18,800 479 ------- 1,084 Media - 2.1% Belo Corp., Class A 7,200 154 Cox Radio, Inc.a 6,800 155 ------- 309 Retail - 5.9% Foot Locker, Inc.a 21,900 230 The J. Jill Group, Inc.a 11,900 166 Linens 'n Things, Inc.a 21,900 495 ------- 891 Services - 2.5% Fair Isaac & Co., Inc. 8,700 371 Transportation - 3.8% Roadway Corp. 15,400 567 Waste Management - 2.1% Waste Connections, Inc.a 8,090 312 ------- Total Common Stocks 14,505 Cost: $14,722 Security Rate, Maturity Date Principal ($) Value ($) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 2.2% Fifth Third Bank, Inc., 0.75%, 01/02/03 (collateralized by Federal National Mortgage Association security) 337 337 Cost: $337 ------- Total Investments - 98.9% 14,842 Cost: $15,059b Percentages indicated are based on net assets of $15,007. a Non-income producing security. b Aggregate cost for federal income tax purposes is substantially the same. Citizens Value Fund Security Shares Value ($) - -------------------------------------------------------------------------------- COMMON STOCKS - 95.8% Air Freight - 1.2% FedEx Corp. 3,500 190 Banks - 1.8% Bank of America Corp. 3,900 271 Computers - 11.5% Hewlett-Packard Co. 19,900 345 Intel Corp. 18,700 291 International Business Machines Corp. 5,700 442 Microsoft Corp.a 13,500 698 ------- 1,776 Consumer Finance - 1.2% Capital One Financial Corp. 6,400 190 Electronics - 2.3% Cisco Systems, Inc.a 27,200 356 Energy & Utilities - 2.0% EOG Resources, Inc. 7,800 311 13 - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Value Fund (cont'd) Security Shares Value ($) - -------------------------------------------------------------------------------- Financial - Diversified - 20.7% The Bear Stearns Cos., Inc. 9,200 546 CIT Group, Inc. 19,500 382 Citigroup, Inc. 17,200 605 FleetBoston Financial Corp. 27,900 679 J.P. Morgan Chase & Co. 26,500 637 Nationwide Financial Services, Inc., Class A 6,300 180 Wells Fargo & Co. 3,900 183 ------- 3,212 Foods - 1.2% PepsiCo, Inc. 4,400 186 Health Care - 14.0% AmerisourceBergen Corp. 6,700 364 Eli Lilly & Co. 5,700 362 HCA, Inc. 10,055 417 Merck & Co., Inc. 5,027 285 Pfizer, Inc. 24,600 752 ------- 2,180 Insurance - 5.9% American International Group, Inc. 6,000 347 Anthem, Inc.a 6,100 384 Lincoln National Corp. 5,600 177 ------- 908 Investment Banking & Brokerage - 3.3% The Goldman Sachs Group, Inc. 7,400 504 Manufacturing - 1.2% 3M Co. 1,500 185 Pharmaceuticals - 2.4% Watson Pharmaceuticals, Inc.a 13,100 370 Publishing - 1.3% Gannett Co., Inc. 2,700 194 Retail - 11.5% Duane Reade, Inc.a 14,000 238 The Gap, Inc. 43,600 676 Home Depot, Inc. 15,100 362 Target Corp. 16,800 504 ------- 1,780 Services - 2.4% Concord EFS, Inc.a 11,400 179 Fiserv, Inc.a 5,500 187 ------- 366 Telecommunications - 11.9% AT&T Wireless Services, Inc.a 60,136 340 BellSouth Corp. 15,100 391 QUALCOMM, Inc.a 9,500 346 SBC Communications, Inc. 14,300 388 Verizon Communications, Inc. 10,100 390 ------- 1,855 ------- Total Common Stocks 14,834 Cost: $16,155 Security Rate, Maturity Date Principal ($) Value ($) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 4.7% Fifth Third Bank, Inc., 0.75%, 01/02/03 (collateralized by Fifth Third Mortgage Loan Trust security) 725 725 Cost: $725 ------- Total Investments - 100.5% 15,559 Cost: $16,880b Percentages indicated are based on net assets of $15,478. a Non-income producing security. b Aggregate cost for federal income tax purposes is substantially the same. Citizens Balanced Fund Security Shares Value ($)(a) - -------------------------------------------------------------------------------- COMMON STOCKS - 49.2% Air Freight - 0.9% FedEx Corp. 20 1,084 Banks - 1.7% Bank of America Corp. 30 2,087 Biotechnology - 2.4% Amgen, Inc.b 19 919 Cephalon, Inc.b 17 827 Forest Laboratories, Inc.b 4 393 Gilead Sciences, Inc.b 13 442 IDEC Pharmaceuticals Corp.b 14 464 ------- 3,045 Chemicals - 0.4% Air Products & Chemicals, Inc. 11 470 Computers - 5.8% Dell Computer Corp.b 56 1,497 Hewlett-Packard Co. 17 295 Intel Corp. 46 716 14 See Financial Notes - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Balanced Fund (cont'd) Security Shares Value($)(a) - -------------------------------------------------------------------------------- International Business Machines Corp. 10 775 Microsoft Corp.b 60 3,103 Symantec Corp.b 20 810 -------- 7,196 Electronics - 2.2% Analog Devices, Inc.b 24 573 Cisco Systems, Inc.b 84 1,100 Flextronics Internationalb 53 434 Maxim Integrated Products, Inc. 18 595 -------- 2,702 Energy & Utilities - 4.0% Anadarko Petroleum Corp. 14 671 Baker Hughes, Inc. 22 708 BJ Services Co.b 30 969 Burlington Resources, Inc. 8 341 ConocoPhillips 7 339 Devon Energy Corp. 15 689 EOG Resources, Inc. 31 1,237 -------- 4,954 Entertainment - 1.0% Viacom, Inc.b 32 1,304 Financial - Diversified - 5.5% Citigroup, Inc. 85 2,992 Fannie Mae 8 515 FleetBoston Financial Corp. 34 826 Freddie Mac 8 472 J.P. Morgan Chase & Co. 47 1,128 Wells Fargo & Co. 20 937 -------- 6,870 Foods - 1.1% PepsiCo, Inc. 31 1,309 Health Care - 8.1% AmerisourceBergen Corp. 7 380 Eli Lilly & Co. 20 1,270 Guidant Corp.b 16 494 HCA, Inc. 16 664 Johnson & Johnson, Inc. 32 1,719 Medtronic, Inc. 22 1,003 Merck & Co., Inc. 18 1,019 Pfizer, Inc. 88 2,691 St. Jude Medical, Inc.b 11 437 UnitedHealth Group, Inc. 6 501 -------- 10,178 Insurance - 3.0% ACE Ltd. 16 469 American International Group, Inc. 47 2,719 Willis Group Holdings Ltd.b 12 344 XL Capital Ltd. 3 232 -------- 3,764 Investment Banking & Brokerage - 0.9% Lehman Brothers Holdings, Inc. 22 1,172 Manufacturing - 3.3% 3M Co. 13 1,603 American Standard Cos., Inc.b 5 356 Eaton Corp. 12 937 Illinois Tool Works, Inc. 18 1,167 -------- 4,063 Personal Care - 1.3% Avon Products, Inc. 12 646 Gillette Co. 32 972 -------- 1,618 Publishing - 1.3% Gannett Co., Inc. 11 790 The Washington Post Co. 1 738 -------- 1,528 Retail - 2.3% Costco Wholesale Corp.b 24 673 Kohl's Corp.b 10 560 Lowe's Cos., Inc. 20 750 Target Corp. 28 840 -------- 2,823 Services - 1.0% Concord EFS, Inc.b 48 756 Fiserv, Inc.b 15 509 -------- 1,265 Telecommunications - 3.0% BellSouth Corp. 25 647 Nokia Corp. (ADR) 9 140 QUALCOMM, Inc.b 10 364 SBC Communications, Inc. 42 1,139 Verizon Communications, Inc. 37 1,433 -------- 3,723 -------- Total Common Stocks 61,155 Cost $62,128 15 - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Balanced Fund (cont'd) Security Rate, Maturity Date Principal($)(a) Value($)(a) U.S. GOVERNMENT AGENCY OBLIGATIONS - 21.3% Federal National Mortgage Association - 17.1% 1.88%, 12/15/04 6,000 6,013 5.25%, 01/15/09 14,000 15,317 -------- 21,330 Federal Farm Credit Bank - 4.2% 5.10%, 11/24/03 5,000 5,171 -------- Total U.S. Government Agency Obligations 26,501 Cost $ 26,241 U.S. TREASURY NOTES - 8.1% 3.00%, 11/15/07 5,000 5,060 4.00%, 11/15/12 5,000 5,071 -------- Cost $10,040 10,131 Total Investments - 78.6% 97,787 Cost $98,409c Percentages indicated are based on net assets of $124,389. a Actual principal and value. b Non-income producing security. c Aggregate cost for federal income tax purposes is substantially the same. Citizens Global Equity Fund Security Shares Value ($) - -------------------------------------------------------------------------------- COMMON STOCKS - 97.7% Apparel Manufacturers - 0.7% Gucci Group NV 9,496 871 Automobile Manufacturing - 3.2% Honda Motor Co. Ltd. 60,400 2,234 Volkswagen AG 42,000 1,521 -------- 3,755 Banks - 3.7% Northern Trust Corp. 51,900 1,819 Royal Bank of Scotland Group plc 108,709 2,604 -------- 4,423 Biotechnology - 3.8% Amgen, Inc.a 17,000 822 Applied Biosystems Group 76,000 1,333 Celltech Group plca 200,072 1,111 Invitrogen Corp.a 40,600 1,270 -------- 4,536 Broadcasting - 0.7% Univision Communications, Inc.a 35,800 877 Chemicals - 1.2% Shin-Etsu Chemical Co. 45,400 1,488 Communications Equipment - 1.1% Cisco Systems, Inc.a 81,000 1,062 Ericsson AB, B sharesa 379,200 265 -------- 1,327 Computers - 8.0% Automatic Data Processing, Inc. 48,900 1,919 Dell Computer Corp.a 50,300 1,345 Intel Corp. 70,000 1,090 International Business Machines Corp. 25,000 1,938 Microsoft Corp.a 62,500 3,231 -------- 9,523 Construction - 1.2% Grupo Dragados SA 82,649 1,405 Diversified Manufacturing - 4.0% 3M Co. 15,000 1,850 Gentex Corp.a 29,000 918 Illinois Tool Works, Inc. 31,000 2,010 -------- 4,778 Electrical Equipment - 3.8% Analog Devices, Inc.a 30,000 716 Applied Materials, Inc.a 45,000 586 ASML Holding NVa 67,626 565 Emerson Electric Co. 38,300 1,948 Flextronics Internationala 81,600 668 -------- 4,483 Electronics - 2.1% Sony Corp. 60,800 2,541 Energy & Utilities - 10.6% Anadarko Petroleum Corp. 50,000 2,395 Encana Corp. 81,843 2,527 EOG Resources, Inc. 65,000 2,596 Noble Corp.a 50,000 1,758 Precision Drilling Corp.a 31,730 1,023 Scottish Power plc 308,672 1,801 Vestas Wind SystemsA/S 50,450 502 -------- 12,602 16 See Financial Notes - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Global Equity Fund (cont'd) Security Shares Value ($) - -------------------------------------------------------------------------------- Financial Services - 1.0% American Express Co. 35,000 1,237 Financial - Diversified - 8.6% Citigroup, Inc. 57,400 2,020 HSBC Holdings plc 187,883 2,077 Lloyds TSB Group plc 232,356 1,668 Mitsubishi Tokyo Financial Group, Inc. 184 1,000 UBS AGa 41,300 2,007 Wells Fargo & Co. 32,000 1,500 -------- 10,272 Food & Beverages - 2.4% The Coca-Cola Co. 35,200 1,542 PepsiCo, Inc. 30,000 1,267 -------- 2,809 Health & Beauty Aids - 1.5% L'Oreal SA 23,191 1,766 Health Care - 11.8% AstraZeneca plc 40,719 1,455 GlaxoSmithKline plc 170,140 3,265 HCA, Inc. 34,000 1,411 Johnson & Johnson, Inc. 22,000 1,182 Medtronic, Inc. 40,000 1,824 Merck & Co., Inc. 20,200 1,144 Pfizer, Inc. 58,400 1,785 Sanofi-Synthelabo SA 32,285 1,974 -------- 14,040 Insurance - 6.8% Allianz AG 8,600 813 American International Group, Inc. 35,000 2,025 AXA 89,926 1,207 ING Groep NV 80,000 1,355 Marsh & McLennan Cos., Inc. 58,200 2,689 -------- 8,089 Office Equipment & Supplies - 3.8% Avery Dennison Corp. 29,600 1,808 Canon, Inc. 71,000 2,674 -------- 4,482 Personal Care - 2.3% Gillette Co. 51,000 1,548 Kimberly-Clark Corp. 25,000 1,187 -------- 2,735 Railroads - 1.0% Norfolk Southern Corp. 60,000 1,199 Retail - 3.5% Carrefour SA 35,794 1,594 Target Corp. 59,400 1,782 The TJX Cos., Inc. 40,000 781 -------- 4,157 Services - 2.9% Ecolab, Inc. 25,000 1,238 Sysco Corp. 32,200 959 WPP Group plc 169,128 1,292 -------- 3,489 Telecommunications - 8.0% Alltel Corp. 21,300 1,086 Nippon Telegraph & Telephone Corp. 350 1,271 Nokia Oyj 76,500 1,216 NTT DoCoMo, Inc. 738 1,362 SBC Communications, Inc. 60,700 1,646 Telefonica SAa 114,444 1,024 Vodafone Group plc 1,084,939 1,979 -------- 9,584 -------- Total Common Stocks 116,468 Cost: $142,438 PREFERRED STOCKS - 1.0% Automobile Manufacturing - 1.0% Porsche AG 2,926 1,216 Cost: $838 Security Rate, Maturity Date Principal ($) Value ($) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 0.5% Fifth Third Bank, Inc., 0.75%, 01/02/03 (collateralized by Federal National Mortgage Association security) 549 549 Cost: $549 -------- Total Investments - 99.2% 118,233 Cost: $143,825b Percentages indicated are based on net assets of $119,137. a Non-income producing security. b Aggregate cost for federal income tax purposes is substantially the same. 17 - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Global Equity Fund (cont'd) - -------------------------------------------------------------------------------- At December 31, 2002, the fund's open short forward currency contracts were as follows: Contract Delivery Amount Currency Date (Local Currency) - -------------------------------------------------------------------------------- Euro 01/03/03 (euro)(497,163) Contract Current Value Value Unrealized (U.S. Dollar) (U.S. Dollar) Depreciation - -------------------------------------------------------------------------------- $(510,587) $(521,649) $(11,062) The fund's portfolio holdings as of December 31, 2002, were distributed among the following countries: Percentage of Net Assets ----------------------------------- Short Term Equity & Other Total ----------------------------------- Canada 3.0% 3.0% Denmark 0.4% 0.4% Finland 1.0% 1.0% France 5.5% 5.5% Germany 3.0% 3.0% Japan 10.6% 10.6% Netherlands 2.3% 2.3% Singapore 0.6% 0.6% Spain 2.0% 2.0% Sweden 0.2% 0.2% Switzerland 1.7% 1.7% United Kingdom 14.4% 14.4% United States 54.0% 0.5% 54.5% ----------------------------------- 98.7% 0.5% 99.2% Citizens International Growth Fund Security Shares Value ($) - -------------------------------------------------------------------------------- COMMON STOCKS - 98.5% Apparel Manufacturers - 3.8% Gucci Group NV 1,065 98 Automobile Manufacturing - 4.1% Honda Motor Co. Ltd. 2,900 107 Banks - 4.0% Royal Bank of Scotland Group plc 4,378 105 Biotechnology - 1.0% Celltech Group plca 4,476 25 Communications Equipment - 0.4% Ericsson AB, B sharesa 13,600 10 Construction - 4.8% Grupo Dragados SA 7,348 125 Electrical Equipment - 3.5% ASML Holding NVa 4,389 37 Celestica, Inc.a 2,414 34 Flextronics Internationala 2,600 21 ----- 92 Electronics - 3.5% Sony Corp. 2,200 92 Energy & Utilities - 14.0% Encana Corp. 5,394 167 Precision Drilling Corp.a 1,215 39 Scottish Power plc 19,516 114 Vestas Wind Systems A/S 4,100 41 ----- 361 Financial - Diversified - 13.4% HSBC Holdings plc 7,096 78 Lloyds TSB Group plc 7,396 53 Mitsubishi Tokyo Financial Group, Inc. 13 71 National Australia Bank Ltd. 3,800 68 UBS AGa 1,590 77 ----- 347 18 See Financial Notes - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens International Growth Fund (cont'd) Security Shares Value ($) - -------------------------------------------------------------------------------- Food & Beverages - 2.0% Nestle SA 245 52 Health & Beauty Aids - 4.2% L'Oreal SA 1,434 109 Health Care - 9.7% AstraZeneca plc 593 21 GlaxoSmithKline (ADR) 2,807 104 Novartis AG 645 24 Sanofi-Synthelabo SA 1,694 104 ----- 253 Insurance - 6.2% Allianz AG 400 38 AXA (ADR) 5,743 78 ING Groep NV 2,685 45 ----- 161 Office Equipment & Supplies - 4.4% Canon, Inc. (ADR) 3,096 114 Retail - 4.2% Carrefour SA 2,453 109 Services - 3.9% WPP Group plc 13,112 100 Telecommunications - 11.4% Nippon Telegraph & Telephone Corp. 13 47 Nokia Oyj 2,600 41 NTT DoCoMo, Inc. 28 52 Telecom Italia SpA 7,100 36 Telefonica SA (ADR)a 1,040 28 Telefonica SAa 961 9 Vodafone Airtouch plc (ADR) 4,700 84 ----- 297 ----- Total Common Stocks 2,557 Cost: $3,176 Security Rate, Maturity Date Principal ($) Value ($) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS - 1.6% Fifth Third Bank, Inc., 0.75%, 01/02/03 (collateralized by Federal Home Loan Mortgage Corporation security) 42 42 Cost: $42 ----- Total Investments - 100.1% 2,599 Cost: $3,218b Percentages indicated are based on net assets of $2,597. a Non-income producing security. b Aggregate cost for federal income tax purposes is substantially the same. ADR - American Depositary Receipt The fund's portfolio holdings as of December 31, 2002, were distributed among the following countries: Percentage of Net Assets ---------------------------------- Short Term Equity & Other Total ---------------------------------- Australia 2.6% 2.6% Canada 9.2% 9.2% Denmark 1.6% 1.6% Finland 1.6% 1.6% France 15.4% 15.4% Germany 1.5% 1.5% Italy 1.4% 1.4% Japan 18.6% 18.6% Netherlands 6.9% 6.9% Singapore 0.8% 0.8% Spain 6.2% 6.2% Sweden 0.4% 0.4% Switzerland 5.9% 5.9% United Kingdom 26.4% 26.4% United States 0.0% 1.6% 1.6% ---------------------------------- 98.5% 1.6% 100.1% 19 - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Income Fund Security Rate, Maturity Date Principal ($) Value ($) - -------------------------------------------------------------------------------- CORPORATE BONDS - 65.1% Airlines - 0.8% Southwest Airlines Co., 6.50%, 03/01/12 500 522 Banks - 5.3% Bank of America Corp., 3.90%, 01/15/08 1,500 1,522 FleetBoston Financial Corp., 4.20%, 11/30/07 1,000 1,006 Sovereign Bancorp, Inc., 10.50%, 11/15/06 1,000 1,112 -------- 3,640 Broadcasting - 9.5% Chancellor Media Corp., 8.75%, 06/15/07 1,000 1,044 8.00%, 11/01/08 500 546 Comcast Corp., 6.40%, 01/30/06 1,500 1,569 Cox Communications, Inc., 6.75%, 03/15/11 1,000 1,076 7.10%, 10/01/12 1,000 1,111 Univison Communications, Inc., 7.85%, 07/15/11 1,000 1,134 -------- 6,480 Computers - 1.5% International Business Machines Corp., 4.25%, 09/15/09 1,000 1,021 Consumer Finance - 3.2% American Express Co., 5.50%, 09/12/06 2,000 2,160 Data Processing - Management - 1.6% First Data Corp., 5.60%, 11/01/11 1,000 1,058 Energy & Utilities - 2.2% Ocean Energy, Inc., 4.40%, 10/01/07 1,500 1,522 Financial - Diversified - 10.8% American General Finance Corp., 5.40%, 10/01/12 1,000 1,022 CIT Group, Inc., 5.50%, 11/30/07 2,000 2,045 Citigroup, Inc., 6.50%, 01/18/11 1,000 1,122 Countrywide Financial Corp., 4.25%, 12/19/07 1,000 1,012 J.P. Morgan Chase & Co., 5.25%, 05/30/07 1,000 1,057 SLM Corp., 5.10%, 08/27/12 1,000 1,026 -------- 7,284 Foods - 1.6% PepsiAmericas, Inc., 5.95%, 02/15/06 1,000 1,080 Health Care - 3.1% AmerisourceBergen Corp., 8.10%, 09/01/08 1,000 1,065 HCA, Inc., 7.10%, 06/01/06 1,000 1,060 -------- 2,125 Home Building - 1.6% Pulte Corp., 8.10%, 03/01/11 1,000 1,119 Insurance - 3.2% Ace Ltd., 6.00%, 04/01/07 1,000 1,070 Anthem, Inc., 6.80%, 08/01/12 1,000 1,088 -------- 2,158 Investment Banking & Brokerage - 6.2% The Bear Stearns Co., Inc., 5.70%, 11/15/14 1,000 1,023 The Goldman Sachs Group, Inc., 6.60%, 01/15/12 1,000 1,105 5.50%, 11/15/14 1,000 1,008 Lehman Bros. Holdings, Inc., 6.60%, 01/18/12 1,000 1,107 -------- 4,243 20 See Financial Notes - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Income Fund (cont'd) Security Rate, Maturity Date Principal ($) Value ($) - -------------------------------------------------------------------------------- Real Estate - 3.3% Property Trust of America, 6.90%, 02/15/08 750 788 Weingarten Realty Investors, 6.90%, 06/25/27 1,300 1,443 -------- 2,231 Retail - 8.0% The Gap, Inc., 10.55%, 12/15/08 1,000 1,090 Kroger Co., 6.80%, 04/01/11 1,000 1,096 6.75%, 04/15/12 1,000 1,106 Target Corp., 5.50%, 04/01/07 1,000 1,080 Tricon Global Restaurants, Inc., 8.90%, 04/15/11 1,000 1,085 -------- 5,457 Telecommunications - 3.2% AT&T Wireless, Inc., 7.50%, 05/01/07 1,000 1,030 Verizon Global Funding Corp., 7.40%, 09/01/12 1,000 1,151 -------- 2,181 -------- Total Corporate Bonds 44,281 Cost: $41,954 MUNICIPAL NOTES - 1.6% Government of Quebec, 1,000 1,110 6.10%, 01/22/11 Cost: $ 993 U.S. GOVERNMENT AGENCY OBLIGATIONS - 29.9% Federal Home Loan Mortgage Corporation - 6.1% 4.50%, 07/23/07 2,000 2,082 4.00%, 10/29/07 2,000 2,060 -------- 4,142 Federal National Mortgage Association - 14.9% 0.80%, 01/02/03a 3,974 3,974 6.50%, 08/01/31 4,000 4,167 6.00%, 08/01/32 1,952 2,020 -------- 10,161 Government National Mortgage Association - 8.9% 6.00%, 04/15/31 201 209 6.50%, 12/15/31 2,000 2,101 6.50%, 06/15/32 3,567 3,746 -------- 6,056 -------- Total U.S. Government Agency Obligations 20,359 Cost: $ 20,102 U.S. TREASURY NOTES - 3.0% 3.00%, 11/15/07 2,000 2,024 Cost: $2,015 -------- Total Investments - 99.6% 67,774 Cost: $65,064b Percentages indicated are based on net assets of $68,043. a Rate presented represents the effective yield at the time of purchase. b Aggregate cost for federal income tax purposes is substantially the same. 21 - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Ultra Short Bond Fund Security Rate, Maturity Date Principal ($) Value ($) - -------------------------------------------------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS - 4.1% Bear Stearns Asset Backed Securities, 5.49%, 06/25/32 150 153 Cost: $153 CORPORATE BONDS - 39.7% Automotive Finance - 6.5% Ford Credit Auto Owner Trust, 7.09%, 11/17/03 91 92 Volkswagen Alt, 2.36%, 12/20/05 150 151 ------ 243 Banks - 3.0% Bank of America Corp., 7.875%, 05/16/05 100 113 Financial - Diversified - 18.7% American Express Co., 6.75%, 06/23/04 100 107 American General Finance, 7.45%, 01/15/05 50 54 Citibank Credit Card Master Trust, 6.65%, 11/15/06 150 163 Citicorp, 7.625%, 05/01/05 50 56 Countrywide Capital, 5.25%, 06/15/04 100 104 Goldman Sachs, 7.25%, 10/01/05 100 111 International Lease Finance Corp., 5.50%, 06/07/04 100 103 ------ 698 Pharmaceuticals - 2.8% Pfizer Inc, 3.625%, 11/01/04 100 103 Telecommunications - 8.7% CBS Corp., 7.15%, 05/20/05 150 164 Chesapeake (Bell Atlantic Virginia), 6.13%, 07/15/05 100 108 Pacific Bell, 7.00%, 07/15/04 50 54 ------ 326 ------ Total Corporate Bonds 1,483 Cost: $1,478 MUNICIPAL NOTES - 4.5% Province of Ontario, 7.00%, 08/04/05 150 167 Cost: $166 U.S. GOVERNMENT AGENCY OBLIGATIONS - 55.9% Federal Home Loan Mortgage Corporation - 16.8% 4.00%, 03/04/05 25 25 2.50%, 06/30/05 100 100 2.70%, 10/07/05 200 201 4.20%, 11/07/05 100 102 3.20%, 09/27/06 200 202 ------ 630 Federal National Mortgage Association - 39.1% 0.80%, 01/02/03a 800 800 2.45%, 12/06/04 105 105 3.04%, 10/04/05 200 201 3.00%, 11/28/05 100 100 2.88%, 12/02/05 100 101 4.03%, 08/25/29 150 153 ------ 1,460 ------ Total U.S. Government Agency Obligations 2,090 Cost: $2,084 ------ Total Investments -104.2% 3,893 Cost: $3,881b Percentages indicated are based on net assets of $3,737. a Rate presented represents the effective yield at the time of purchase. b Aggregate cost for federal income tax purposes is substantially the same. 22 See Financial Notes - -------------------------------------------------------------------------------- Portfolio Holdings (unaudited) December 31, 2002 ($ x 1,000) - -------------------------------------------------------------------------------- Citizens Money Market Fund Security Rate, Maturity Date Principal ($) Value ($) - -------------------------------------------------------------------------------- CERTIFICATES OF DEPOSIT - 6.9% Bank of Scotland, 1.50%, 05/06/03 5,000 5,000 City National Bank of New Jersey, 1.70%, 03/17/03a 100 100 Independence Federal Savings Bank, 2.05%, 09/26/03a 100 100 Mercantile Safe Deposit and Trust, 1.60%, 12/09/03 3,000 3,000 Self Help Credit Union, 1.75%, 03/14/03a 100 100 ------- Total Certificates of Deposit 8,300 Cost: $8,300 COMMERCIAL PAPER - 74.8% American Express Corp., 1.69%, 03/13/03 5,022 5,005 American General Finance Corp., 1.62%, 01/17/03 5,000 4,996 Atlantis One Funding Corp., 1.67%, 03/25/03 5,341 5,320 Blue Ridge Asset, 1.35%, 01/15/03 4,000 3,998 Citicorp, 1.52%, 01/30/03 3,779 3,774 The Coca Cola Co., 1.28%, 01/07/03 4,577 4,576 Cooperative Association of Tractor Dealers, 1.71%, 02/04/03 3,000 2,994 1.37%, 02/07/03 3,000 2,996 1.77%, 03/05/03 2,715 2,707 1.40%, 03/12/03 2,000 1,995 Dow Jones & Co., Inc., 1.33%, 01/13/03 2,105 2,104 Galaxy Funding, Inc., 1.36%, 02/07/03 3,000 2,996 Galleon Capital Corp., 1.56%, 01/06/03 5,000 4,999 ING America Insurance, 1.32%, 02/05/03 5,000 4,994 The Goldman Sachs Group, Inc., 1.71%, 02/10/03 2,424 2,419 J.P. Morgan Chase & Co., 1.76%, 01/24/03 4,638 4,633 Marshall & Ilsley Corp., 1.30%, 01/14/03 782 782 Marsh and McLennan Cos., Inc., 1.63%, 01/10/03 4,301 4,299 Metlife Funding, Inc., 1.50%, 01/10/03 1,187 1,187 1.32%, 01/16/03 2,603 2,602 Pfizer, Inc., 1.28%, 01/23/03 4,000 3,997 Stellar Funding Group, Inc., 1.78%, 01/22/03 3,592 3,588 1.55%, 07/25/03 2,024 2,006 UBS Finance Corp., 1.20%, 01/02/03 5,522 5,522 Volkswagen, 1.33%, 01/13/03 2,079 2,078 1.32%, 01/27/03 3,196 3,193 ------- Total Commercial Paper 89,760 Cost: $89,760 CORPORATE BONDS - 14.1% The Bank of New York Co., Inc., 2.14%, 08/12/03b 3,000 3,000 The Bear Stearns Co., 1.42%, 03/21/03b 5,000 5,000 Merrill Lynch & Co., 1.42%, 03/05/03b 5,000 5,000 Pelican Capital LLC, 1.70%, 04/01/28b 595 595 Redding Life Care LLC, 1.50%, 10/01/05b 3,300 3,300 ------- Total Corporate Bonds 16,895 Cost: $16,895 MUNICIPAL NOTES - 2.9% New York State Housing Finance Agency, 1.55%, 11/15/29b 3,500 3,500 Cost: $3,500 ------- Total Investments - 98.7% 118,455 Cost: $118,455c Percentages indicated are based on net assets of $119,942. a Restricted from resale. b Variable rate security. The rate presented represents the rate in effect at December 31, 2002. c Represents cost and value for financial reporting and federal income tax purposes. 23 - -------------------------------------------------------------------------------- Statements of Assets and Liabilities As of December 31, 2002 (unaudited) - --------------------------------------------------------------------------------
Citizens Citizens Citizens Citizens Core Growth Emerging Growth Small Cap Core Value Fund Fund Growth Fund Fund - ----------------------------------------------------------------------------------------------------------------- Assets Investments, at value $ 345,193,773 $ 159,742,449 $ 14,841,861 $ 15,559,290 Cash -- -- -- -- Foreign currency -- -- -- -- Receivables: Interest and dividends 223,680 55,603 1,700 13,214 Investments sold -- -- 300,911 -- Tax reclaims -- -- -- -- Due from investment adviser -- -- -- -- Deferred offering costs -- -- -- -- Prepaid expenses and other assets 24,107 15,399 4,606 3,923 ----------- ----------- ---------- ---------- Total assets 345,441,560 159,813,451 15,149,078 15,576,427 Liabilities Payables: Dividends to shareholders -- -- -- -- Investments purchased -- -- 74,880 -- Investment management fees 592,628 540,666 16,657 41,427 Administrative fees 118,525 62,488 5,634 5,534 Shareholder service fees 218,754 40,495 3,702 2,955 Distribution expenses 236,533 136,442 12,822 13,835 Other accrued expenses 165,306 211,145 28,384 34,693 Unrealized depreciation on forward foreign currency contracts -- -- -- -- ----------- ----------- ---------- ---------- Total liabilities 1,331,746 991,236 142,079 98,444 - ----------------------------------------------------------------------------------------------------------------- Net assets $ 344,109,814 $ 158,822,215 $ 15,006,999 $ 15,477,983 - ----------------------------------------------------------------------------------------------------------------- Net assets Standard shares: Net assets $ 272,537,534 $ 146,774,301 $ 15,006,999 $ 15,477,983 Number of shares outstanding 18,168,346 15,087,014 1,974,422 2,050,544 Net asset value, offering and redemption price per share $ 15.00 $ 9.73 $ 7.60 $ 7.55 Institutional shares: Net assets $ 69,488,366 $ 5,235,192 -- -- Number of shares outstanding 5,654,190 527,167 -- -- Net asset value, offering and redemption price per share $ 12.29 $ 9.93 -- -- Administrative shares: Net assets $ 2,083,914 $ 6,812,722 -- -- Number of shares outstanding 137,168 692,600 -- -- Net asset value, offering and redemption price per share $ 15.19 $ 9.84 -- -- Net assets consist of: Paid-in capital $ 460,151,489 $ 389,424,994 $ 19,997,525 $ 28,229,616 Accumulated net investment income/loss (286,917) (1,243,895) (87,477) (77,058) Accumulated net realized gains/losses on investments and foreign currency transactions (140,751,268) (224,352,140) (4,685,907) (11,353,803) Net unrealized appreciation/depreciation on investments and foreign currencies 24,996,510 (5,006,744) (217,142) (1,320,772) - ----------------------------------------------------------------------------------------------------------------- Net assets $ 344,109,814 $ 158,822,215 $ 15,006,999 $ 15,477,983 - ----------------------------------------------------------------------------------------------------------------- Investments, at cost $ 320,197,263 $ 164,749,193 $ 15,059,003 $ 16,880,062
24 See Financial Notes
- ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- Citizens Citizens Citizens Citizens Citizens Citizens Balanced Global Equity International Income Ultra Short Money Market Fund Fund Growth Fund Fund Bond Fund Fund - ------------------------------------------------------------------------------------------------------- $ 97,787 $ 118,232,536 $ 2,598,954 $ 67,773,826 $ 3,892,702 $ 118,455,058 1,205 -- -- 376 510 1,784,428 -- 898,468 9,822 -- -- -- 423 117,073 1,644 815,598 23,568 66,417 -- 521,723 -- -- -- -- -- 93,874 781 -- -- -- 1,854 -- -- -- 9,798 -- 9,073 -- -- -- 7,417 -- 15,091 19,103 255 5,234 17,175 21,887 ------- ----------- --------- ---------- --------- ----------- 125,433 119,882,777 2,611,456 68,595,034 3,951,170 120,327,790 -- -- -- 259,231 7,100 60,083 -- -- -- -- 200,000 -- -- 405,664 701 148,711 -- 148,334 11 45,256 999 24,659 363 42,381 9 19,415 544 8,027 80 18,444 7 95,647 2,212 56,903 780 -- 1,017 168,422 9,952 54,702 5,575 116,737 -- 11,062 -- -- -- -- ------- ----------- --------- ---------- --------- ----------- 1,044 745,466 14,408 552,233 213,898 385,979 - ------------------------------------------------------------------------------------------------------ $ 124,389 $ 119,137,311 $ 2,597,048 $ 68,042,801 $ 3,737,272 $ 119,941,811 - ------------------------------------------------------------------------------------------------------ $ 124,389 $ 110,353,001 $ 2,597,048 $ 68,042,801 $ 3,737,272 $ 106,593,986 12,495 8,649,706 442,172 6,858,482 372,572 106,665,942 $ 9.96 $ 12.76 $ 5.87 $ 9.92 $ 10.03 $ 1.00 -- $ 6,781,252 -- -- -- $ 13,347,825 -- 522,778 -- -- -- 13,349,445 -- $ 12.97 -- -- -- $ 1.00 -- $ 2,003,058 -- -- -- -- -- 155,818 -- -- -- -- -- $ 12.86 -- -- -- -- $ 125,000 $ 264,047,525 $ 3,762,326 $ 73,474,725 $ 3,718,840 $ 119,949,346 9 (1,142,564) (32,839) (20,731) 6,968 1,548 2 (118,278,216) (513,691) (8,120,635) (241) (9,083) (622) (25,489,434) (618,748) 2,709,442 11,705 -- - ------------------------------------------------------------------------------------------------------ $ 124,389 $ 119,137,311 $ 2,597,048 $ 68,042,801 $ 3,737,272 $ 119,941,811 - ------------------------------------------------------------------------------------------------------ $ 98,409 $ 143,825,063 $ 3,218,398 $ 65,064,384 $ 3,880,997 $ 118,455,058
25
- --------------------------------------------------------------------------------------------------------- Statements of Operations For the six months ended December 31, 2002 (unaudited) - --------------------------------------------------------------------------------------------------------- Citizens Citizens Citizens Citizens Core Growth Emerging Growth Small Cap Core Value Fund Fund Growth Fund Fund - --------------------------------------------------------------------------------------------------------- Investment income Interest $ 71,811 $ 61,641 $ 6,190 $ 4,240 Dividends 1,846,343 382,375 19,829 87,487 ------------ ------------ ----------- ----------- Total investment income 1,918,154 444,016 26,019 91,727 Expenses Investment management fees 909,954 875,323 39,185 78,284 Administrative fees 181,990 87,660 8,481 8,671 Distribution expenses: Standard shares 360,516 203,477 19,592 21,677 Administrative shares 2,241 8,860 -- -- Shareholder service fees: Standard shares 371,372 79,249 8,004 8,080 Institutional shares 677 92 -- -- Administrative shares 92 151 -- -- Transfer agent fees: Standard shares 425,649 239,646 31,958 39,820 Institutional shares 2,047 282 -- -- Administrative shares 695 293 -- -- Accounting expenses 73,140 36,215 5,027 5,119 Custody expenses 9,811 6,611 8,179 2,358 Offering costs -- -- -- -- Registration expenses 5,792 15,309 3,244 5,581 Trustee expenses 32,394 15,629 1,371 1,204 Other expenses 153,359 155,080 6,657 9,563 ------------ ------------ ----------- ----------- Expenses before reimbursement or waiver 2,529,729 1,723,877 131,698 180,357 Reimbursement or waiver from adviser (324,658) (35,966) (18,202) (11,572) ------------ ------------ ----------- ----------- Net expenses 2,205,071 1,687,911 113,496 168,785 Net investment income/loss $ (286,917) $ (1,243,895) $ (87,477) $ (77,058) ------------ ------------ ----------- ----------- Realized and unrealized gains/losses on investments and foreign currency transactions Realized gains/losses on investments and foreign currency transactions $(50,362,157) $(44,270,769) $(3,848,934) $(9,965,459) Change in unrealized appreciation/ depreciation on investments and foreign currencies 8,380,062 9,796,811 733,347 7,255,891 Net realized and unrealized gains/losses on investments and foreign currencies (41,982,095) (34,473,958) (3,115,587) (2,709,568) ------------ ------------ ----------- ----------- Change in net assets from operations $(42,269,012) $(35,717,853) $(3,203,064) $(2,786,626) ------------ ------------ ----------- -----------
1 For the period December 20, 2002 (commencement of operations) to December 31, 2002. 2 For the period November 21, 2002 (commencement of operations) to December 31, 2002. 3 Dividend income net of withholding taxes. For the six months ended December 31, 2002, withholding taxes for the Citizens Global Equity and International Growth Funds were $59,299 and $1,609, respectively. 26 See Financial Notes
- ------------------------------------------------------------------------------------------------------------ Citizens Citizens Citizens Citizens Citizens Citizens Balanced Global Equity International Income Ultra Short Money Market Fund(1) Fund Growth Fund Fund Bond Fund(2) Fund - ------------------------------------------------------------------------------------------------------------ $ 45 $ 13,909 $ 586 $1,889,383 $ 6,968 $1,172,405 -- 774,848(3) 17,934(3) -- -- -- 45 788,757 18,520 1,889,383 6,968 1,172,405 --------- ------------ --------- ---------- -------- ---------- 16 628,692 14,612 223,036 1,092 226,624 11 67,945 1,511 36,622 392 69,275 7 145,001 3,479 85,783 780 -- -- 2,490 -- -- -- -- 9 37,752 1,196 15,824 80 37,013 -- 151 -- -- -- 368 -- 92 -- -- -- -- 288 216,768 5,340 62,399 1,480 164,354 -- 358 -- -- -- 1,207 -- 912 -- -- -- -- 612 28,813 3,680 15,765 3,120 24,505 99 12,220 5,650 4,508 560 5,980 427 -- -- -- 2,083 -- 419 6,718 1,486 3,584 1,863 11,225 -- 11,279 234 6,047 80 11,576 18 49,089 1,141 21,856 360 48,166 --------- ------------ --------- ---------- -------- ---------- 1,906 1,208,280 38,329 475,424 11,890 600,293 (1,870) -- (12,614) -- (11,890) -- --------- ------------ --------- ---------- -------- ---------- 36 1,208,280 25,715 475,424 -- 600,293 $ 9 $ (419,523) $ (7,195) $1,413,959 $ 6,968 $ 572,112 --------- ------------ --------- ---------- -------- ---------- $ 2 $ (5,724,741) $ (9,580) $ 578,256 $ (241) $ -- (622) (8,860,245) (402,299) 1,525,508 11,705 -- --------- ------------ --------- ---------- -------- ---------- (620) (14,584,986) (411,879) 2,103,764 11,464 -- $ (611) $(15,004,509) $(419,074) $3,517,723 $ 18,432 $ 572,112 --------- ------------ --------- ---------- -------- ----------
27 - -------------------------------------------------------------------------------- Statements of Changes in Net Assets - --------------------------------------------------------------------------------
Citizens Core Citizens Emerging Growth Fund Growth Fund - ---------------------------------------------------------------------------------------------------------------------- For the six For the six months ended For the months ended For the 12/31/02 year ended 12/31/02 year ended (unaudited) 06/30/02 (unaudited) 06/30/02 - ---------------------------------------------------------------------------------------------------------------------- Operations Net investment income/loss $ (286,917) $ (1,512,276) $ (1,243,895) $ (3,375,032) Realized gain/(loss) on investments (50,362,157) (39,059,766) (44,270,769) (65,722,098) Change in unrealized appreciation/ depreciation on investments 8,380,062 (99,310,432) 9,796,811 (5,409,210) ------------- ------------- ------------- ------------- Change in net assets from operations (42,269,012) (139,882,474) (35,717,853) (74,506,340) Dividends to shareholders From net realized gains on investments: Standard shares -- -- -- -- Increase/decrease in net assets from capital transactions (27,583,233) (44,810,423) (11,143,287) (32,743,870) Change in net assets $ (69,852,245) $(184,692,897) $ (46,861,140) $(107,250,210) ------------- ------------- ------------- ------------- Net assets - --------------------------------------------------------------------------------------------------------------------- Beginning of period 413,962,059 598,654,956 205,683,355 312,933,565 End of period $ 344,109,814 $ 413,962,059 $ 158,822,215 $ 205,683,355 - --------------------------------------------------------------------------------------------------------------------- Accumulated net investment income/loss (286,917) -- (1,243,895) --
- --------------------------------------------------------------------------------------------------------------------- Citizens Global Citizens International Equity Fund Growth Fund - --------------------------------------------------------------------------------------------------------------------- For the six For the six months ended For the months ended For the 12/31/02 year ended 12/31/02 year ended Operations (unaudited) 06/30/02 (unaudited) 06/30/02 - --------------------------------------------------------------------------------------------------------------------- Net investment income/loss $ (419,523) $ (1,187,621) $ (7,195) $ (6,805) Realized gain/loss on investments and foreign currency transactions (5,724,741) (58,190,264) (9,580) (445,542) Change in unrealized appreciation/ depreciation on investments and foreign currencies (8,860,245) 8,768,398 (402,299) (148,631) ------------- ------------- ------------- ------------- Change in net assets from operations (15,004,509) (50,609,487) (419,074) (600,978) Dividends to shareholders From net investment income Standard shares -- -- -- -- Institutional shares -- -- -- -- ------------- ------------- ------------- ------------- Total Dividends -- -- -- -- Increase/decrease in net assets from capital transactions (13,476,636) (56,075,279) (151,644) 2,131,472 Change in net assets $ (28,481,145) $(106,684,766) $ (570,718) $ 1,530,494 ------------- ------------- ------------- ------------- Net assets - --------------------------------------------------------------------------------------------------------------------- Beginning of period 147,618,456 254,303,222 3,167,766 1,637,272 End of period $ 119,137,311 $ 147,618,456 $ 2,597,048 $ 3,167,766 - --------------------------------------------------------------------------------------------------------------------- Accumulated net investment income/loss (1,142,564) (723,041) (32,839) (25,644)
1 Commencement of operations 28 See Financial Notes - -------------------------------------------------------------------------------- - --------------------------------------------------------------------------------
Citizens Small Cap Citizens Citizens Core Growth Fund Value Fund Balanced Fund - ---------------------------------------------------------------------------------------------------------- For the six For the six For the months ended For the months ended period For the For the period 12/31/02 year ended 12/31/02 06/01/02- year ended 12/20/02(1) -12/31/02 (unaudited) 06/30/02 (unaudited) 06/30/02 05/31/02 (unaudited) - ---------------------------------------------------------------------------------------------------------- $ (87,477) $ (156,548) $ (77,058) $ (25,121) $ (201,215) $ 9 (3,848,934) 815,380 (9,965,459) (163,773) (771) 2 733,347) (1,534,841) 7,255,891) (3,403,915) (6,143,982) (622) - ------------- ------------- ------------- ------------- ------------- ------------- (3,203,064) (876,009) (2,786,626) (3,592,809) (6,345,968) (611) -- -- -- -- (2,126,224) -- (249,333) 3,832,696 (2,795,384) (328,336) 19,075,057 125,000 $ (3,452,397) $ 2,956,687 $ (5,582,010) $ (3,921,145) $ 10,602,865 $ 124,389 - ------------- ------------- ------------- ------------- ------------- ------------- - ---------------------------------------------------------------------------------------------------------- 18,459,396 15,502,709 21,059,993 24,981,138 14,378,273 -- $ 15,006,999 $ 18,459,396 $ 15,477,983) $ 21,059,993 $ 24,981,138 $ 124,389 - ---------------------------------------------------------------------------------------------------------- (87,477) -- (77,058) -- -- 9
- ------------------------------------------------------------------------------------- Citizens Citizens Ultra Citizens Money Income Fund Short Bond Fund Market Fund - ------------------------------------------------------------------------------------- For the six For the six months ended For the For the period months ended For the 12/31/02 year ended 11/21/02(1)-12/31/02 12/31/02 year ended (unaudited) 06/30/02 (unaudited) (unaudited) 06/30/02 - ------------------------------------------------------------------------------------- $ 1,413,959 $ 4,289,896 $ 6,968 $ 572,112 $ 2,637,823 578,256 (7,467,992) (241) -- -- 1,525,508 2,469,102 11,705 -- -- - ------------- ------------- ------------- ------------- ------------- 3,517,723 (708,994) 18,432 572,112 2,637,823 (1,431,137) (4,272,706) (7,100) (478,764) (2,026,320) -- -- -- (91,800) (602,601) - ------------- ------------- ------------- ------------- ------------- (1,431,137) (4,272,706) (7,100) (570,564) (2,628,921) (1,531,812) 830,365 3,725,940 (10,869,910) (13,884,963) $ 554,774 $ (4,151,335) $ 3,737,272) $ (10,868,362) $ (13,876,061) - ------------- ------------- ------------- ------------- ------------- - ------------------------------------------------------------------------------------- 67,488,027 71,639,362 -- 130,810,173 144,686,234 $ 68,042,801 $ 67,488,027 $ 3,737,272 $ 119,941,811 $ 130,810,173 - ------------------------------------------------------------------------------------- (20,731) (3,553) 6,968 1,548 --
29 - -------------------------------------------------------------------------------- Financial Highlights Citizens Core Growth Fund - --------------------------------------------------------------------------------
Standard shares Six months Year Year Year Year Year ended 12/31/02 ended ended ended ended ended Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 06/30/99 06/30/98 - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 16.73 $ 22.12 $ 32.59 $ 30.52 $ 23.46 $ 18.04 Income/loss from investment operations: Net investment loss (0.02) (0.09) (0.16) (0.22) (0.15) (0.07) Net realized and unrealized gains/losses on investments (1.71) (5.30) (9.01) 4.08 7.52 6.44 ------------------------------------------------------------------------------------- Total from investment operations (1.73) (5.39) (9.17) 3.86 7.37 6.37 Less dividends to shareholders: From net realized gains -- -- (1.30) (1.79) (0.31) (0.95) ------------------------------------------------------------------------------------- Net asset value, end of period $ 15.00 $ 16.73 $ 22.12 $ 32.59 $ 30.52 $ 23.46 ------------------------------------------------------------------------------------- Total return (%) (10.34)(1) (24.37) (28.42) 12.82 31.58 36.50 Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ($ x 1,000) $ 272,538 $ 326,793 $ 472,779 $ 699,399 $ 578,286 $ 341,395 Ratio of expenses to average net assets, net of reimbursement (%) 1.35(2) 1.34 1.34 1.49 1.58 1.59 Ratio of net investment loss to average net assets (%) (0.29)(2) (0.43) (0.62) (0.75) (0.68) (0.39) Ratio of expenses to average net assets prior to reimbursement (%) 1.55(2) 1.44 1.42 1.52 1.58 1.59 Portfolio turnover rate (%) 79.40 76.40 44.95 20.04 18.04 13.64 - ------------------------------------------------------------------------------------------------------------------------------
1 Not annualized. 2 Annualized. - -------------------------------------------------------------------------------- Financial Highlights Citizens Core Growth Fund - --------------------------------------------------------------------------------
Institutional shares Six months Year Year Year Year Year ended 12/31/02 ended ended ended ended ended Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 06/30/99 06/30/98 - ------------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 13.66 $ 17.94 $ 26.59 $ 25.02 $ 19.13 $ 14.84 Income/loss from investment operations: Net investment income 0.02 0.04 0.01 -- 0.01 0.11 Net realized and unrealized gains/losses on investments (1.39) (4.32) (7.36) 3.36 6.19 5.21 ------------------------------------------------------------------------------------- Total from investment operations (1.37) (4.28) (7.35) 3.36 6.20 5.32 Less dividends to shareholders: From net investment income -- -- -- -- -- (0.08) From net realized gains -- -- (1.30) (1.79) (0.31) (0.95) ------------------------------------------------------------------------------------- Total dividends -- -- (1.30) (1.79) (0.31) (1.03) ------------------------------------------------------------------------------------- Net asset value, end of period $ 12.29 $ 13.66 $ 17.94 $ 26.59 $ 25.02 $ 19.13 ------------------------------------------------------------------------------------- Total return (%) (10.03)(1) (23.86) (27.98) 13.67 32.62 37.38 Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ($ x 1,000) $ 69,488 $ 85,140 $ 123,912 $ 180,779 $ 98,705 $ 31,673 Ratio of expenses to average net assets, net of reimbursement (%) 0.69(2) 0.68 0.68 0.74 0.83 0.88 Ratio of net investment income to average net assets (%) 0.36(2) 0.23 0.04 0.00 0.05 0.28 Ratio of expenses to average net assets prior to reimbursement (%) 0.76(2) 0.73 0.74 0.74 0.83 0.88 Portfolio turnover rate (%) 79.40 76.40 44.95 20.04 18.04 13.64 - ------------------------------------------------------------------------------------------------------------------------------
1 Not annualized. 2 Annualized. 30 See Financial Notes - -------------------------------------------------------------------------------- Financial Highlights Citizens Core Growth Fund - --------------------------------------------------------------------------------
Administrative shares Six months Year Year From ended 12/31/02 ended ended 02/04/00(1) - Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 - ------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 16.91 $ 22.27 $ 32.66 $ 32.09 Income/loss from investment operations: Net investment income/loss 0.01 (0.01) (0.03)(2) (0.01) Net realized and unrealized gains/losses on investments (1.73) (5.35) (9.06) 0.58 -------------------------------------------------------- Total from investment operations (1.72) (5.36) (9.09) 0.57 Less dividends to shareholders: From net realized gains -- -- (1.30) -- -------------------------------------------------------- Net asset value, end of period $ 15.19 $ 16.91 $ 22.27 $ 32.66 -------------------------------------------------------- Total return (%) (10.17)(3) (24.07) (28.11) 1.78(3) Ratios and supplemental data - ------------------------------------------------------------------------------------------------- Net assets, end of period ($ x 1,000) $ 2,084 $ 2,029 $ 1,964 $ 21 Ratio of expenses to average net assets, net of reimbursement (%) 0.96(4) 0.94 0.94 0.99(4) Ratio of net investment income/ loss to average net assets (%) 0.09(4) (0.05) (0.14) (0.27)(4) Ratio of expenses to average net assets prior to reimbursement (%) 1.09(4) 1.01 5.63 101.59(4) Portfolio turnover rate (%) 79.40 76.40 44.95 20.04 - -------------------------------------------------------------------------------------------------
1 Commencement of operations. 2 Based on average shares outstanding. 3 Not annualized. 4 Annualized. - -------------------------------------------------------------------------------- Financial Highlights Citizens Emerging Growth Fund - --------------------------------------------------------------------------------
Standard shares Six months Year Year Year Year Year ended 12/31/02 ended ended ended ended ended Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 06/30/99 06/30/98 - ------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 11.82 $ 15.79 $ 33.48 $ 21.76 $ 17.55 $ 14.14 Income/loss from investment operations: Net investment loss (0.08) (0.20) (0.21) (0.30)(1) (0.19) (0.20) Net realized and unrealized gains/ losses on investments (2.01) (3.77) (11.41) 16.58 6.19 4.61 ------------------------------------------------------------------------------- Total from investment operations (2.09) (3.97) (11.62) 16.28 6.00 4.41 Less dividends to shareholders: From net realized gains -- -- (6.07) (4.56) (1.79) (1.00) ------------------------------------------------------------------------------- Net asset value, end of period $ 9.73 $ 11.82 $ 15.79 $ 33.48 $ 21.76 $ 17.55 ------------------------------------------------------------------------------- Total return (%) (17.68)(2) (25.14) (37.52) 82.19 36.04 33.05 Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ($ x 1,000) $ 146,774 $ 190,812 $ 283,760 $ 386,670 $ 136,137 $ 87,892 Ratio of expenses to average net assets, net of reimbursement (%) 1.97(3) 1.80 1.68 1.69 1.82 1.96 Ratio of net investment loss to average net assets (%) (1.46)(3) (1.39) (1.09) (1.09) (1.20) (1.37) Ratio of expenses to average net assets prior to reimbursement (%) 2.01(3) 1.86 1.75 1.75 1.83 1.96 Portfolio turnover rate (%) 196.73 202.57 136.63 159.95 208.49 245.30 - ------------------------------------------------------------------------------------------------------------------------
1 Based on average shares outstanding. 2 Not annualized. 3 Annualized. 31 - -------------------------------------------------------------------------------- Financial Highlights Citizens Emerging Growth Fund - --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------- Institutional shares Six months Year Year From ended 12/31/02 ended ended 11/01/99(1)- Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 - ----------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 12.02 $ 15.96 $ 33.61 $ 25.67 Income/loss from investment operations: Net investment loss (0.04) (0.11)(2) (0.12) (0.11) Net realized and unrealized gains/ losses on investments (2.05) (3.83) (11.46) 12.61 ------------------------------------------------------ Total from investment operations (2.09) (3.94) (11.58) 12.50 Less dividends to shareholders: From net realized gains -- -- (6.07) (4.56) Net asset value, end of period $ 9.93 $ 12.02 $ 15.96 $ 33.61 ------------------------------------------------------ Total return (%) (17.39)(3) (24.69) (37.21) 55.02(3) Ratios and supplemental data - ----------------------------------------------------------------------------------------------- Net assets, end of period ($ x 1,000) $ 5,235 $ 6,428 $ 19,676 $ 16,284 Ratio of expenses to average net assets, net of reimbursement (%) 1.24(4) 1.20 1.30 1.24(4) Ratio of net investment loss to average net assets (%) (0.73)(4) (0.78) (0.69) (0.61)(4) Ratio of expenses to average net assets prior to reimbursement (%) 1.28(4) 1.26 1.36 1.31(4) Portfolio turnover rate (%) 196.73 202.57 136.63 159.95 - -----------------------------------------------------------------------------------------------
1 Commencement of operations. 2 Based on average shares outstanding. 3 Not annualized. 4 Annualized. - -------------------------------------------------------------------------------- Financial Highlights Citizens Emerging Growth Fund - --------------------------------------------------------------------------------
Administrative shares Six months Year Year From ended 12/31/02 ended ended 02/04/00(1) - Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 - ----------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 11.92 $ 15.87 $ 33.57 $ 28.70 Income/loss from investment operations: Net investment loss (0.05) (0.13) (0.17)(2) (0.10)(2) Net realized and unrealized gains/ losses on investments (2.03) (3.82) (11.46) 4.97 ------------------------------------------------------ Total from investment operations (2.08) (3.95) (11.63) 4.87 Less dividends to shareholders: From net realized gains -- -- (6.07) -- ------------------------------------------------------ Net asset value, end of period $ 9.84 $ 11.92 $ 15.87 $ 33.57 ------------------------------------------------------ Total return (%) (17.45)(3) (24.89) (37.43) 16.97(3) Ratios and Supplemental Data - ----------------------------------------------------------------------------------------------- Net assets, end of period ($ x 1,000) $ 6,813 $ 8,444 $ 9,497 $ 8 Ratio of expenses to average net assets, net of reimbursement (%) 1.51(4) 1.47 1.55 1.55(4) Ratio of net investment loss to average net assets (%) (1.01)(4) (1.07) (0.96) (0.90)(4) Ratio of expenses to average net assets prior to reimbursement (%) 1.56(4) 1.53 2.06 158.14(4) Portfolio turnover rate (%) 196.73 202.57 136.63 159.95 - -----------------------------------------------------------------------------------------------
1 Commencement of operations. 2 Based on average shares outstanding. 3 Not annualized. 4 Annualized. 32 See Financial Notes - -------------------------------------------------------------------------------- Financial Highlights Citizens Small Cap Core Growth Fund - --------------------------------------------------------------------------------
Standard shares Six months Year Year From ended 12/31/02 ended ended 12/28/99(1) - Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 - ---------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 9.18 $ 9.52 $ 11.23 $ 10.00 Income/loss from investment operations: Net investment loss (0.05) (0.08) (0.05) -- Net realized and unrealized gains/ losses on investments (1.53) (0.26) (1.64) 1.23 ------------------------------------------------------ Total from investment operations (1.58) (0.34) (1.69) 1.23 Less dividends to shareholders: From net realized gains -- -- (0.02) -- ------------------------------------------------------ Net asset value, end of period $ 7.60 $ 9.18 $ 9.52 $ 11.23 ------------------------------------------------------ Total return (%) (17.21)(2) (3.57) (15.08) 12.30(2) Ratios and supplemental data - ---------------------------------------------------------------------------------------------- Net assets, end of period ($ x 1,000) $ 15,007 $ 18,459 $ 15,503 $ 8,397 Ratio of expenses to average net assets, net of reimbursement (%) 1.45(3) 1.34 1.34 1.49(3) Ratio of net investment income/ loss to average net assets (%) (1.12)(3) (0.93) (0.57) 0.00(3) Ratio of expenses to average net assets prior to reimbursement (%) 1.68(3) 1.40 3.20 5.98(3) Portfolio turnover rate (%) 208.91 294.26 146.62 20.16 - ----------------------------------------------------------------------------------------------
1 Commencement of operations. 2 Not annualized. 3 Annualized. - -------------------------------------------------------------------------------- Financial Highlights Citizens Value Fund - --------------------------------------------------------------------------------
Standard shares Six months ended From Year Year Year Year Year 12/31/02 06/01/02- ended ended ended ended ended Selected per share data (unaudited) 06/30/02 05/31/02 05/31/01 05/31/00 05/31/99 05/31/98 - ---------------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 8.74 $ 10.21 $ 15.29 $ 14.58 $ 14.03 $ 12.98 $ 12.23 Income loss from investment operations: Net investment loss (0.06) (0.01) (0.08) (0.07) (0.08) (0.08) (0.06) Net realized and unrealized gains/losses from investments (1.13) (1.46) (3.57) 2.70 2.05 1.95 2.36 --------------------------------------------------------------------------------------- Total from investment operations (1.19) (1.47) (3.65) 2.63 1.97 1.87 2.30 Less dividends to shareholders: From net realized gains -- -- (1.43) (1.92) (1.42) (0.82) (1.55) --------------------------------------------------------------------------------------- Net asset value, end of period $ 7.55 $ 8.74 $ 10.21 $ 15.29 $ 14.58 $ 14.03 $ 12.98 --------------------------------------------------------------------------------------- Total return (%) (13.62)(1) (14.40)(1) (25.58) 20.71 14.36 15.43 20.56 Ratios and supplemental data - ---------------------------------------------------------------------------------------------------------------------------------- Net assets, end of period ($ x 1,000) $ 15,478 $ 21,060 $ 24,981 $ 14,378 $ 8,726 $ 4,611 $ 3,123 Ratio of expenses to average net assets, net of reimbursement (%) 1.95(2) 1.95(2) 1.95 1.95 1.95 1.95 1.95 Ratio of net investment income/ loss to average net assets (%) (0.89)(2) (1.33)(2) (1.04) (0.65) (0.68) (0.79) (0.61) Ratio of expenses to average net assets prior to reimbursement (%) 2.08(2) 2.05(2) 2.54 4.63 7.11 10.32 12.30 Portfolio turnover rate (%) 58.08 5.87 34.77 62.55 72.32 73.70 39.00 - ----------------------------------------------------------------------------------------------------------------------------------
1 Not annualized. 2 Annualized. 33 - -------------------------------------------------------------------------------- Financial Highlights Citizens Balanced Fund - -------------------------------------------------------------------------------- Standard shares From 12/20/02(1) -12/31/02 Selected per share data (unaudited) - -------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.00 Income from investment operations: Net investment income 0.00(2) Net realized and unrealized loss on investments (0.04) -------- Total from investment operations (0.04) Less dividends to shareholders: From net investment income -- -------- Net asset value, end of period $ 9.96 -------- Total return (%) (0.40)(3) Ratios and supplemental data - -------------------------------------------------------------------------------- Net assets, end of period ($ x 1,000) $ 124 Ratio of expenses to average net assets, net of reimbursement (%) 1.30(4) Ratio of net investment income to average net assets (%) 0.33(4) Ratio of expenses to average net assets prior to reimbursement (%) 68.80(4) Portfolio turnover rate (%) 0.00 - -------------------------------------------------------------------------------- 1 Commencement of operations. 2 Less than $0.005 per share. 3 Not annualized. 4 Annualized. - -------------------------------------------------------------------------------- Financial Highlights Citizens Global Equity Fund - --------------------------------------------------------------------------------
Standard shares Six months Year Year Year Year Year ended 12/31/02 ended ended ended ended ended Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 06/30/99 06/30/98 - ---------------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 14.22 $ 18.31 $ 29.99 $ 20.22 $ 16.95 $ 14.47 Income/loss from investment operations: Net investment loss (0.05) (0.11)(1) (0.16) (0.22)(1) (0.12) (0.20) Redemption fee 0.01 0.01 -- -- -- -- Net realized and unrealized gains/losses on investments and foreign currencies (1.42) (3.99) (9.61) 10.94 3.86 3.24 -------------------------------------------------------------------------------- Total from investment operations (1.46) (4.09) (9.77) 10.72 3.74 3.04 Less dividends to shareholders: From net realized gains -- -- (1.91) (0.95) (0.47) (0.56) -------------------------------------------------------------------------------- Net asset value, end of period $ 12.76 $ 14.22 $ 18.31 $ 29.99 $ 20.22 $ 16.95 -------------------------------------------------------------------------------- Total return (%) (10.27)(2) (22.34) (33.69) 53.27 22.34 21.75 Ratios and supplemental data - ---------------------------------------------------------------------------------------------------------------------------- Net assets, end of period ($ x 1,000) $ 110,353 $ 135,881 $ 236,080 $ 354,818 $ 90,549 $ 49,045 Ratio of expenses to average net assets, net of reimbursement (%) 1.97(3) 1.84 1.82 1.82 1.96 2.20 Ratio of net investment loss to average net assets (%) (0.72)(3) (0.66) (0.71) (0.79) (0.88) (0.76) Ratio of expenses to average net assets prior to reimbursement (%) 1.97(3) 1.84 1.82 1.83 1.96 2.20 Portfolio turnover rate (%) 14.98 132.82 151.95 120.69 64.07 72.33 - ----------------------------------------------------------------------------------------------------------------------------
1 Based on average shares outstanding. 2 Not annualized. 3 Annualized. 34 See Financial Notes - -------------------------------------------------------------------------------- Financial Highlights Citizens Global Equity Fund - --------------------------------------------------------------------------------
Institutional shares Six months Year Year From ended 12/31/02 ended ended 11/01/991 - Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 - ----------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 14.40 $ 18.46 $ 30.08 $ 23.45 Income/loss from investment operations: Net investment loss 0.00(2)(3) (0.01)(2) (0.05)(2) (0.05)(2) Redemption fee 0.01 0.01 -- -- Net realized and unrealized gains/ losses on investments and foreign currencies (1.44) (4.06) (9.66) 7.63 ---------------------------------------------------------------- Total from investment operations (1.43) (4.06) (9.71) 7.58 Less dividends to shareholders: From net realized gains -- -- (1.91) (0.95) ---------------------------------------------------------------- Net asset value, end of period $ 12.97 $ 14.40 $ 18.46 $ 30.08 ---------------------------------------------------------------- Total return (%) (9.93)(4) (21.99) (33.35) 32.55(4) Ratios and supplemental data - ----------------------------------------------------------------------------------------------------------- Net assets, end of period ($ x 1,000) $ 6,781 $ 9,531 $ 16,475 $ 12,544 Ratio of expenses to average net assets, net of reimbursement (%) 1.30(5) 1.27 1.39 1.39(5) Ratio of net investment loss to average net assets (%) (0.02)(5) (0.05) (0.23) (0.25)(5) Ratio of expenses to average net assets, prior to reimbursement (%) 1.30(5) 1.27 1.42 1.43(5) Portfolio turnover rate (%) 14.98 132.82 151.95 120.69 - -----------------------------------------------------------------------------------------------------------
1 Commencement of operations. 2 Based on average shares outstanding. 3 Less than $0.005 per share. 4 Not annualized. 5 Annualized. - -------------------------------------------------------------------------------- Financial Highlights Citizens Global Equity Fund - --------------------------------------------------------------------------------
Administrative shares Six months Year Year From ended 12/31/02 ended ended 02/04/001 - Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 - ----------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 14.30 $ 18.38 $ 30.02 $ 33.45 Income/loss from investment operations: Net investment loss (0.02)(2) (0.06)(2) (0.11)(2) (0.06) Redemption fee 0.01 0.01 -- -- Net realized and unrealized losses on investments and foreign currencies (1.43) (4.03) (9.62) (3.37) ---------------------------------------------------------------- Total from investment operations (1.44) (4.08) (9.73) (3.43) Less dividends to shareholders: From net realized gains -- -- (1.91) -- Net asset value, end of period $ 12.86 $ 14.30 $ 18.38 $ 30.02 ---------------------------------------------------------------- Total return (%) (10.07)(3) (22.20) (33.52) (10.25)(3) Ratios and supplemental data - ----------------------------------------------------------------------------------------------------------- Net assets, end of period ($ x 1,000) $ 2,003 $ 2,207 $ 1,748 $ 1 Ratio of expenses to average net assets, net of reimbursement (%) 1.63(4) 1.64 1.68 1.68(4) Ratio of net investment loss to average net assets (%) (0.38)(4) (0.39) (0.48) (0.48)(4) Ratio of expenses to average net assets prior to reimbursement (%) 1.63(4) 1.64 3.18 296.20(4) Portfolio turnover rate (%) 14.98 132.82 151.95 120.69 - -----------------------------------------------------------------------------------------------------------
1 Commencement of operations. 2 Based on average shares outstanding. 3 Not annualized. 4 Annualized. 35 - -------------------------------------------------------------------------------- Financial Highlights Citizens International Growth Fund - -------------------------------------------------------------------------------- Standard shares Six months ended Year From 12/31/02 ended 12/20/001- Selected per share data (unaudited) 06/30/02 06/30/01 - -------------------------------------------------------------------------------- Net asset value, beginning of period $ 6.73 $ 8.22 $ 10.00 Income/loss from investment operations: Net investment income/loss (0.03) (0.02)(2) 0.04(2) Redemption fee -- 0.02 -- Net realized and unrealized losses on investments and foreign currencies (0.83) (1.49) (1.82) --------------------------------------- Total from investment operations (0.86) (1.49) (1.78) --------------------------------------- Net asset value, end of period $ 5.87 $ 6.73 $ 8.22 --------------------------------------- Total return (%) (12.78)(3) (18.13) (17.80)(3) Ratios and supplemental data - -------------------------------------------------------------------------------- Net assets, end of period ($ x 1,000) $ 2,597 $ 3,168 $ 1,637 Ratio of expenses to average net assets, net of reimbursement (%) 1.85(4) 1.85 1.85(4) Ratio of net investment income/ loss to average net assets (%) (0.52)(4) (0.23) 0.86(4) Ratio of expenses to average net assets prior to reimbursement (%) 2.76(4) 3.06 17.47(4) Portfolio turnover rate (%) 10.61 158.84 39.88 - -------------------------------------------------------------------------------- 1 Commencement of operations. 2 Based on average shares outstanding. 3 Not annualized. 4 Annualized. 36 See Financial Notes - -------------------------------------------------------------------------------- Financial Highlights Citizens Income Fund - --------------------------------------------------------------------------------
Standard shares Six months Year Year Year Year Year ended 12/31/02 ended ended ended ended ended Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 06/30/99 06/30/98 - -------------------------------------------------------------------------------------------------------------------- Net asset value, beginning of period $ 9.62 $ 10.28 $ 10.20 $ 10.51 $ 11.03 $ 10.56 Income/loss from investment operations: Net investment income 0.20 0.58 0.68 0.65 0.59 0.60 Net realized and unrealized gains/losses on investments 0.30 (0.66) 0.10 (0.32) (0.50) 0.49 ------------------------------------------------------------------------- Total from investment operations 0.50 (0.08) 0.78 0.33 0.09 1.09 Less dividends to shareholders: From net investment income (0.20) (0.58) (0.70) (0.63) (0.59) (0.60) From net realized gains -- -- 0.00(1) (0.01) (0.02) (0.02) ------------------------------------------------------------------------- Total dividends (0.20) (0.58) (0.70) (0.64) (0.61) (0.62) ------------------------------------------------------------------------- Net asset value, end of period $ 9.92 $ 9.62 $ 10.28 $ 10.20 $ 10.51 $ 11.03 ------------------------------------------------------------------------- Total return (%) 5.31(2) (0.87) 7.87 3.35 0.78 10.49 Ratios and supplemental data - -------------------------------------------------------------------------------------------------------------------- Net assets, end of period ($ x 1,000) $ 68,043 $ 67,488 $ 71,639 $ 61,836 $ 62,837 $ 51,366 Ratio of expenses to average net assets, net of reimbursement (%) 1.39(3) 1.38 1.40 1.45 1.45 1.74 Ratio of net investment income to average net assets (%) 4.12(3) 5.77 6.55 6.34 5.50 5.55 Ratio of expenses to average net assets prior to reimbursement (%) 1.39(3) 1.38 1.48 1.47 1.49 1.86 Portfolio turnover rate (%) 110.13 54.05 60.53 52.96 44.07 80.14 - --------------------------------------------------------------------------------------------------------------------
1 Less than $0.005 per share. 2 Not annualized. 3 Annualized. - -------------------------------------------------------------------------------- Financial Highlights Citizens Ultra Short Bond Fund - -------------------------------------------------------------------------------- Standard shares From 11/21/02(1)-12/31/02 Selected per share data (unaudited) - -------------------------------------------------------------------------------- Net asset value, beginning of period $ 10.00 Income from investment operations: Net investment income 0.02 Net realized and unrealized gains on investments 0.03 -------- Total from investment operations 0.05 Less dividends to shareholders: From net investment income (0.02) -------- Net asset value, end of period $ 10.03 -------- Total return (%) 0.53(2) Ratios and supplemental data - -------------------------------------------------------------------------------- Net assets, end of period ($ x 1,000) $ 3,737 Ratio of expenses to average net assets, net of reimbursement (%) 0.00 Ratio of net investment income to average net assets (%) 2.22(3) Ratio of expenses to average net assets prior to reimbursement (%) 3.78(3) Portfolio turnover rate (%) 0.00 - -------------------------------------------------------------------------------- 1 Commencement of operations. 2 Not annualized. 3 Annualized. 37 - -------------------------------------------------------------------------------- Financial Highlights Citizens Money Market Fund - --------------------------------------------------------------------------------
Standard shares Six months ended Year Year Year Year Year 12/31/02 ended ended ended ended ended Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 06/30/99 06/30/98 - ------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations: Net investment income 0.00(1) 0.02 0.05 0.05 0.04 0.05 Less dividends to shareholders: From net investment income (0.00)(1) (0.02) (0.05) (0.05) (0.04) (0.05) ------------------------------------------------------------------------------- Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------------------------------------------------------------------------------- Total return (%) 0.42(2) 1.71 5.23 4.67 4.07 4.54 Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ($ x 1,000) $ 106,594 $ 114,271 $ 117,211 $ 112,700 $ 105,740 $ 103,597 Ratio of expenses to average net assets, net of reimbursement (%) 0.97(3) 0.92 0.89 1.17 1.19 1.21 Ratio of net investment income to average net assets (%) 0.84(3) 1.72 5.08 4.59 4.00 4.46 Ratio of expenses to average net assets prior to reimbursement (%) 0.97(3) 0.92 0.89 1.18 1.24 1.23 - ------------------------------------------------------------------------------------------------------------------------
1 Less than $.005 per share. 2 Not annualized. 3 Annualized. - -------------------------------------------------------------------------------- Financial Highlights Citizens Money Market Fund - -------------------------------------------------------------------------------- Institutional shares
Six months Year Year Year Year Year ended 12/31/02 ended ended ended ended ended Selected per share data (unaudited) 06/30/02 06/30/01 06/30/00 06/30/99 06/30/98 - ------------------------------------------------------------------------------------------------------------------------ Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 Income from investment operations: Net investment income 0.01 0.02 0.05 0.05 0.05 0.05 Less dividends to shareholders: From net investment income (0.01) (0.02) (0.05) (0.05) (0.05) (0.05) ------------------------------------------------------------------------------- Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ------------------------------------------------------------------------------- Total return (%) 0.59(1) 1.97 5.43 5.04 4.58 5.23 Ratios and supplemental data - ------------------------------------------------------------------------------------------------------------------------ Net assets, end of period ($ x 1,000) $ 13,348 $ 16,539 $ 27,475 $ 23,370 $ 22,464 $ 18,178 Ratio of expenses to average net assets, net of reimbursement (%) 0.63(2) 0.67 0.70 0.81 0.70 0.56 Ratio of net investment income to average net assets (%) 1.18(2) 1.95 5.22 4.93 4.47 5.11 Ratio of expenses to average net assets prior to reimbursement (%) 0.63(2) 0.67 0.70 0.82 0.70 0.56 - ------------------------------------------------------------------------------------------------------------------------
1 Not annualized. 2 Annualized. 38 See Financial Notes - -------------------------------------------------------------------------------- Financial Notes (unaudited) - -------------------------------------------------------------------------------- Organization Citizens Funds (the "Trust"), a Massachusetts Business Trust, is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the "1940 Act"). The Trust contains the following funds (individually a "fund," collectively the "funds"):
Fund Short Name Fund Short Name - ---- ---------- ---- ---------- Citizens Core Growth Fund Core Growth Fund Citizens Global Equity Fund Global Equity Fund Citizens Emerging Growth Fund Emerging Growth Fund Citizens International Growth Fund International Growth Fund Citizens Small Cap Core Growth Fund Small Cap Core Growth Fund Citizens Income Fund Income Fund Citizens Value Fund Value Fund Citizens Ultra Short Bond Fund Ultra Short Bond Fund Citizens Balanced Fund Balanced Fund Citizens Money Market Fund Money Market Fund
The funds are authorized to issue an unlimited number of shares of beneficial interest with no par value. The Core Growth Fund, Emerging Growth Fund and Global Equity Fund currently offer three classes of shares: Standard shares, Institutional shares and Administrative shares. The Money Market Fund offers two classes of shares: Standard shares and Institutional shares. The Small Cap Core Growth Fund, Value Fund, Balanced Fund, International Growth Fund, Income Fund and Ultra Short Bond Fund offer one class of shares: Standard shares. Each class of shares in the funds has identical rights and privileges except with respect to fees paid under class-specific agreements, voting rights on matters affecting a single class of shares, and the exchange privilege of each class of shares. Significant Accounting Policies The following is a summary of significant accounting policies followed by the funds in the preparation of their financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. Securities Valuation Equity securities are valued at the last sale price on the primary exchange on which such securities are traded or on the principal over-the-counter market on which such securities are traded, as of the close of business on the day the securities are valued, or lacking any sales, at the last available bid price for domestic securities and halfway between the bid and ask price for international securities. Fixed-income investments generally are valued at the bid price for securities. Securities may also be valued on the basis of valuations furnished by a pricing service that uses both dealer-supplied valuations and valuations based upon analysis of market data or other factors if these valuations are believed to more accurately reflect the fair value of such securities. Investments for which market quotations are not readily available (including restricted securities which are subject to limitations on their sales) are valued at fair value, using procedures determined in good faith by the Board of Trustees. Short-term securities maturing within 60 days and investments of the Money Market Fund are valued at amortized cost, which approximates fair value. Under the amortized cost method, premium or discount, if any, is amortized or accreted, respectively, on a constant (straight-line) basis to the maturity of the security. Security Transactions and Related Investment Income Security transactions are accounted for on the trade date (date the order to buy or sell is executed). The cost of securities sold is determined on the identified cost basis, unless otherwise specified. Interest income is recorded on an accrual basis and includes, where applicable, the amortization or accretion of a premium or discount. Dividend income is recorded on the ex-dividend date. Foreign Currency Translation The accounting records of the funds are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current rate of exchange. Purchases and sales of securities, and 39 - -------------------------------------------------------------------------------- Financial Notes (unaudited) - -------------------------------------------------------------------------------- income and expenses, are translated into U.S. dollars at the prevailing rate of exchange on the respective dates of such transactions. The changes in foreign exchange rates on investments are not isolated on the Statement of Operations. Such fluctuations are included with the net realized and unrealized gain or loss on investments. Foreign Currency Contracts The Global Equity Fund and International Growth Fund use foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses may arise from changes in the value of the foreign currency or if the coun-terparties do not perform under the contract's terms. The U.S. dollar value of foreign currency contracts is determined using the contractual currency exchange rates established at the time of each trade. Repurchase Agreements The funds may acquire repurchase agreements with an entity which is a member of the Federal Reserve System collateralized by instruments issued by the U.S. Government, its agencies or instrumentalities. The repurchase price generally equals the price paid by a fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying securities. It is the funds' policy to receive collateral securities of which the value, including accrued interest, is at least equal to 102% of the amount to be repaid to the funds under each agreement at its maturity. Collateral subject to repurchase agreements is held by the funds' custodian or another qualified custodian. Restricted Securities The funds are permitted to invest in privately placed securities. These securities may be resold in transactions exempt from registration, or to the public, if the securities are registered under the Securities Act of 1933. Disposal of these securities may involve time-consuming negotiations and expense, and the prompt sale at an acceptable price may be difficult. Restricted securities (excluding Rule 144A issues) are valued at their fair value in good faith under procedures approved by the Board of Trustees. Restricted securities held by the funds at the end of the period are presented in the fund's Portfolio Holdings. Redemption Fee The Global Equity Fund and International Growth Fund charge a redemption fee of 2% (paid to the funds) with respect to shares of those funds redeemed within 60 days of purchase. The fee does not apply to shares purchased through the reinvestment of dividends or other distributions, redemptions by the funds of accounts below minimum balances, redemptions due to shareholder death or disability, or certain omnibus accounts or retirement plans. For the period ended December 31, 2002, the Global Equity and International Growth Funds collected $123,186 and $692 in redemption fees, respectively. These fees are included in the "increase/decrease in net assets from capital transactions" amounts in the Statements of Changes in Net Assets. Dividends to Shareholders The Core Growth Fund, Emerging Growth Fund, Small Cap Core Growth Fund, Value Fund, Global Equity Fund and International Growth Fund declare and distribute dividends from net investment income, if any, to shareholders annually. The Balanced Fund declares and distributes dividends from net investment income to shareholders quarterly. The Income Fund declares and distributes dividends from net investment income to shareholders monthly. Dividends from net investment income for the Ultra Short Bond Fund and the Money Market Fund are declared daily and paid monthly. The funds' net realized gains, if any, are distributed to shareholders at least annually. Additional dividends may also be paid to the funds' shareholders to the extent necessary to avoid federal excise tax on certain undistributed income and net realized gains. The amount of dividends from net investment income and net realized gains are determined in accordance with federal income tax regulations which may differ from GAAP. These "book/tax" differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions), such amounts are reclassified to capital; temporary differences do not require reclassification. 40 - -------------------------------------------------------------------------------- Financial Notes (unaudited) - -------------------------------------------------------------------------------- Federal Income Taxes Each fund is a separate taxable entity for federal tax purposes. Each fund has qualified and intends to qualify each year as a "regulated investment company" under Subchapter M of the Internal Revenue Code, as amended and distributes substantially all of its taxable net investment income and net realized gains, if any, to their shareholders. Fees and Other Transactions with Affiliates Investment Management Fee Citizens Advisers, Inc. (the "Adviser") serves as Adviser to each of the funds. Under the terms of the management contract, the Adviser is paid a fee that is computed daily based on an annual rate for each fund's average daily net assets. Those rates are as follows:
Fee Rate Fee Rate Fee Rate -------- -------- -------- Core Growth Fund 0.50% Balanced Fund 0.65% Income Fund 0.65% Emerging Growth Fund 1.00% Global Equity Fund 1.00% Ultra Short Bond Fund 0.35% Small Cap Core Growth Fund 0.50% International Growth Fund 1.05% Money Market Fund 0.35% Value Fund 0.70%
From July 1, 2002 to November 1, 2002, the Adviser was paid a fee based on an annual rate of 1.00% for the Value Fund. State Street Global Advisors Funds Management, Inc. serves as the Sub-Adviser for the Global Equity Fund and International Growth Fund. For its services, the Sub-Adviser receives a fee computed daily based on an annual rate for each funds' average daily net assets, paid by the Adviser as follows: Fee Rate -------- Global Equity Fund 0.35% of the first $500 million, 0.25% thereafter International Growth Fund 0.40% of the first $500 million, 0.30% thereafter For the period July 1, 2002 to October 30, 2002 Meyers Capital Management, LLC ("Meyers") served as the Sub-Adviser for the Citizens Value Fund. For its services, Meyers received a fee based on an annual rate of 0.30% of the first $100 million of average daily net assets and 0.45% of average daily net assets in excess of $100 million, paid by the Adviser. Distribution Fee Citizens Securities, Inc. (the "Distributor") is a wholly owned subsidiary of the Adviser and serves as the funds' Distributor. Pursuant to Rule 12b-1 under the 1940 Act, the Trust's shareholders have adopted a separate distribution plan with respect to the funds' Standard and Administrative shares pursuant to which the funds, except the Money Market Fund, compensate the Distributor for services in an amount equal to 0.25% of average annual net assets. Administrative and Shareholder Service Fees The Adviser, with whom certain officers and trustees are affiliated, performs administrative duties for the Trust under a separate administrative contract, which provides for the reimbursement of out of pocket expenses as well as fees for services rendered. In accordance with the terms of the administrative contract, fees and expenses are accrued daily based on average daily net assets of each fund at the annual rate of 0.10%. In addition, Citizens Securities, Inc., a wholly owned subsidiary of the Adviser, provides a number of administrative services to the Trust relating primarily to shareholder services and communications, and is paid an account fee for providing such services and communications for each of the individual funds with the exception of the Core Growth Fund, Standard shares. The Core Growth Fund, Standard shares, may be charged a shareholder service fee of up to 0.35% based on the average daily net assets of the class. For the period ended December 31, 2002, a fee of 0.25% was charged. 41 - -------------------------------------------------------------------------------- Financial Notes (unaudited) - -------------------------------------------------------------------------------- Transfer Agency, Fund Accounting and Custody BISYS Fund Services Ohio, Inc. provides transfer agency and fund accounting services to the funds pursuant to certain fee arrangements. Fifth Third Bank acts as custodian for the funds. Custody expenses may be incurred or offset from fees or credits arising from cash balances maintained on deposit. Transfer agent fees also include the cost of services rendered by third parties to provide sub-transfer agency services. Trustee Fees Certain officers and trustees of the Trust are "interested persons," as defined in the 1940 Act, of the Adviser. Currently, each Trustee who is not an "interested person" receives an annual retainer of $12,000 and $1,250 for each day's attendance at a Trustee meeting. The independent trustees have elected a Chair and Vice Chair, who each receive an annual retainer of $17,000, and a committee chair for Social Responsibility Committee, who receives an annual retainer of $14,500. Expense Allocation Expenses directly attributable to a fund are charged to that fund. Expenses not directly attributable to a fund are allocated proportionately among various or all funds within the Trust in relation to the net assets of each fund or on another reasonable basis. Expenses specific to a class are charged to that class. Fee Reductions and Reimbursements The Adviser contractually agreed to limit the total expenses, exclusive of taxes, brokerage commissions and extraordinary expenses, for certain classes of the funds to the extent they exceeded the following limits:
Expense Expense Fund Class Limitation Fund Class Limitation - -------------------------------------------------- -------------------------------------------------------- Core Growth Fund Standard 1.39% Global Equity Fund Standard 2.05% Institutional 0.74% Institutional 1.39% Administrative 1.06% Administrative 1.68% Emerging Growth Fund Institutional 1.30% International Growth Administrative 1.55% Fund Standard 1.85% Small Cap Core Income Fund Standard 1.40% Growth Fund Standard 1.45% Money Market Fund Standard 1.50% of the first Value Fund Standard 1.95% $40 million of assets and 1.00% thereafter
For the period July 1, 2002 to November 30, 2002, the Adviser contractually agreed to limit total expenses for the Core Growth Fund to 1.34%, 0.68% and 0.94% for the Standard, Institutional and Administrative shares, respectively. The Adviser voluntarily waived 0.10% of its fee for the Emerging Growth Fund when the fund's monthly average net assets exceeded $100 million. The Adviser voluntarily waived fees and reimbursed expenses so that total annual operating expenses did not exceed 1.30% on the Balanced Fund. In addition, the Adviser voluntarily waived all fees and reimbursed all expenses on the Ultra Short Bond Fund. The Adviser may terminate these waivers at any time. Investment Transactions The following summarizes purchases and sales of investment securities, other than short-term investments, by fund for the period ended December 31, 2002:
Fund Purchases Sales Fund Purchases Sales - --------------------------------------------------------- ------------------------------------------------------ Core Growth Fund $ 282,948,073 $ 314,579,749 Global Equity Fund $ 18,597,422 $ 29,671,977 Emerging Growth Fund 334,754,070 343,446,707 International Growth Fund 293,671 285,995 Small Cap Core Growth Fund 31,936,025 32,204,125 Income Fund 70,984,587 75,251,104 Value Fund 9,897,491 12,941,882 Ultra Short Bond Fund 3,038,359 -- Balanced Fund 94,352 1,007
42 - -------------------------------------------------------------------------------- Financial Notes - -------------------------------------------------------------------------------- Capital Shares At December 31, 2002, there were an unlimited amount of shares of beneficial interest authorized, at no par value. Transactions in capital shares of the funds are as follows:
Small Cap Core Core Growth Fund Emerging Growth Fund Growth Fund - --------------------------------------------------------------------------------------------------------------------- Six months Six months Six months ended Year ended Year ended Year 12/31/02 ended 12/31/02 ended 12/31/02 ended Capital transactions (unaudited) 06/30/02 (unaudited) 06/30/02 (unaudited) 06/30/02 - --------------------------------------------------------------------------------------------------------------------- Standard Shares Proceeds from shares issued $11,995,874 $42,567,841 $22,280,739 $56,221,231 $2,345,327 $12,270,553 Dividends reinvested -- -- -- -- -- -- Cost of shares redeemed (32,759,057) (77,794,151) (33,130,593) (80,428,934) (2,594,660) (8,437,857) - --------------------------------------------------------------------------------------------------------------------- Total (20,763,183) (35,226,310) (10,849,854) (24,207,703) (249,333) 3,832,696 - --------------------------------------------------------------------------------------------------------------------- Institutional Shares Proceeds from shares issued 15,568,109 31,393,835 1,732,029 3,944,080 -- -- Dividends reinvested -- -- -- -- -- -- Cost of shares redeemed (22,643,960) (41,615,831) (1,826,186) (13,893,132) -- -- - --------------------------------------------------------------------------------------------------------------------- Total (7,075,851) (10,221,996) (94,157) (9,949,052) -- -- - --------------------------------------------------------------------------------------------------------------------- Administrative Shares Proceeds from shares issued 758,005 943,987 2,896,911 9,721,056 -- -- Dividends reinvested -- -- -- -- -- -- Cost of shares redeemed (502,204) (306,104) (3,096,187) (8,308,171) -- -- - --------------------------------------------------------------------------------------------------------------------- Total 255,801 637,883 (199,276) 1,412,885 -- -- - --------------------------------------------------------------------------------------------------------------------- Change in net assets from capital transactions $(27,583,233) $(44,810,423) $(11,143,287) $(32,743,870) $(249,333) $3,832,696 - --------------------------------------------------------------------------------------------------------------------- Share transactions - --------------------------------------------------------------------------------------------------------------------- Standard Shares Issued 783,875 2,152,690 2,143,893 4,217,604 297,807 1,251,105 Reinvested -- -- -- -- -- -- Redeemed (2,151,234) (3,989,536) (3,204,374) (6,041,917) (334,707) (868,569) - --------------------------------------------------------------------------------------------------------------------- Net change (1,367,359) (1,836,841) (1,060,481) (1,824,313) (36,900) 382,536 - --------------------------------------------------------------------------------------------------------------------- Institutional Shares Issued 1,244,890 1,964,990 165,330 293,475 -- -- Reinvested -- -- -- -- -- -- Redeemed (1,823,671) (2,637,569) (172,943) (991,621) -- -- - --------------------------------------------------------------------------------------------------------------------- Net change (578,781) (672,579) (7,613) (698,146) -- -- - --------------------------------------------------------------------------------------------------------------------- Administrative Shares Issued 48,669 47,642 277,417 721,866 -- -- Reinvested -- -- -- -- -- -- Redeemed (31,504) (15,822) (293,255) (611,698) -- -- - --------------------------------------------------------------------------------------------------------------------- Net change 17,165 31,820 (15,838) 110,168 -- -- - --------------------------------------------------------------------------------------------------------------------- Change in shares from share transactions (1,928,975) (2,477,605) (1,083,932) (2,412,291) (36,900) 382,536 - ---------------------------------------------------------------------------------------------------------------------
43 - -------------------------------------------------------------------------------- Financial Notes - -------------------------------------------------------------------------------- Capital Shares
Balanced Global Value Value Fund Fund Equity Fund - ------------------------------------------------------------------------------------------------------------------------------------ Six months From ended From Year 12/20/02(1) - Six months Year 12/31/02 06/01/02 - ended 12/31/02 ended ended Capital transactions (unaudited) 06/30/02 05/31/02 (unaudited) 12/31/02 06/30/02 - ------------------------------------------------------------------------------------------------------------------------------------ Standard Shares Proceeds from shares issued $ 3,988,232 $ 938,031 $ 24,800,162 $ 125,000 $ 19,399,019 $ 198,374,332 Dividends reinvested -- -- 2,070,609 -- -- -- Cost of shares redeemed (6,783,616) (1,266,367) (7,795,714) -- (31,077,277) (251,921,233) - ------------------------------------------------------------------------------------------------------------------------------------ Total (2,795,384) (328,336) 19,075,057 125,000 (11,678,258) (53,546,901) - ------------------------------------------------------------------------------------------------------------------------------------ Institutional Shares Proceeds from shares issued -- -- -- -- 26,043,373 54,298,201 Dividends reinvested -- -- -- -- -- -- Cost of shares redeemed -- -- -- -- (27,871,069) (57,777,479) - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- -- -- (1,827,696) (3,479,278) - ------------------------------------------------------------------------------------------------------------------------------------ Administrative Shares Proceeds from shares issued -- -- -- -- 376,081 1,591,347 Dividends reinvested -- -- -- -- -- -- Cost of shares redeemed -- -- -- -- (346,763) (640,447) - ------------------------------------------------------------------------------------------------------------------------------------ Total -- -- -- -- 29,318 950,900 - ------------------------------------------------------------------------------------------------------------------------------------ Change in net assets from capital transactions $ (2,795,384) $ (328,336) $ 19,075,057 $ 125,000 $ (13,476,636) $ (56,075,279) - ------------------------------------------------------------------------------------------------------------------------------------ Share transactions - ------------------------------------------------------------------------------------------------------------------------------------ Standard Shares Issued 524,856 100,445 1,987,625 12,495 1,499,165 12,492,604 Reinvested -- -- 165,516 -- -- -- Redeemed (883,171) (138,633) (646,233) -- (2,407,584) (15,828,132) - ------------------------------------------------------------------------------------------------------------------------------------ Net change (358,315) (38,188) 1,506,908 12,495 (908,419) (3,335,528) - ------------------------------------------------------------------------------------------------------------------------------------ Institutional Shares Issued -- -- -- -- 1,993,704 3,421,162 Reinvested -- -- -- -- -- -- Redeemed -- -- -- -- (2,132,664) (3,652,158) - ------------------------------------------------------------------------------------------------------------------------------------ Net change -- -- -- -- (138,960) (230,996) - ------------------------------------------------------------------------------------------------------------------------------------ Administrative Shares Issued -- -- -- -- 28,852 99,269 Reinvested -- -- -- -- -- -- Redeemed -- -- -- -- (27,378) (40,048) - ------------------------------------------------------------------------------------------------------------------------------------ Net change -- -- -- -- 1,474 59,221 - ------------------------------------------------------------------------------------------------------------------------------------ Change in shares from share transactions (358,315) (38,188) 1,506,908 12,495 (1,045,905) (3,507,303) - ------------------------------------------------------------------------------------------------------------------------------------
1 Commencement of operations. 44 - -------------------------------------------------------------------------------- Financial Notes - --------------------------------------------------------------------------------
International Ultra Short Growth Fund Income Fund Bond Fund Money Market Fund - ------------------------------------------------------------------------------------------------------------------------- Six months Six months From Six months months ended Year ended Year 11/21/02(1)- ended Year 12/31/02 ended 12/31/02 ended 12/31/02 12/31/02 ended (unaudited) 06/30/02 (unaudited) 06/30/02 (unaudited) (unaudited) 06/30/02 - ------------------------------------------------------------------------------------------------------------------------- $ 735,972 $ 4,791,279 $ 6,718,110 $ 26,499,837 $ 3,850,940 $ 47,040,781 $ 131,426,668 -- -- 1,335,027 3,903,979 -- 503,066 2,214,847 (887,616) (2,659,807) (9,584,949) (29,573,451) (125,000) (55,221,953) (136,588,995) - ------------------------------------------------------------------------------------------------------------------------- (151,644) 2,131,472 (1,531,812) 830,365 3,725,940 (7,678,104) (2,947,480) - ------------------------------------------------------------------------------------------------------------------------- -- -- -- -- -- 1,994,299 17,644,804 -- -- -- -- -- 98,194 658,558 -- -- -- -- -- (5,284,298) (29,240,845) - ------------------------------------------------------------------------------------------------------------------------- -- -- -- -- -- (3,191,805) (10,937,483) - ------------------------------------------------------------------------------------------------------------------------- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------- $ (151,644) $ 2,131,472 $ (1,531,812) $ 830,365 3,725,940 $ (10,869,910) $ (13,884,963) - ------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------- 122,682 644,662 688,827 2,597,522 372,572 47,040,781 131,415,588 -- -- 137,088 383,963 -- 503,068 2,214,857 (151,412) (372,894) (982,784) (2,932,132) -- (55,221,953) (136,588,544) - ------------------------------------------------------------------------------------------------------------------------- (28,730) 271,768 (156,869) 49,353 372,572 (7,678,104) (2,958,099) - ------------------------------------------------------------------------------------------------------------------------- -- -- -- -- -- 1,994,299 17,655,439 -- -- -- -- -- 98,194 658,558 -- -- -- -- -- (5,284,298) (29,240,845) - ------------------------------------------------------------------------------------------------------------------------- -- -- -- -- -- (3,191,805) (10,926,848) - ------------------------------------------------------------------------------------------------------------------------- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------- -- -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------- (28,730) 271,768 (156,869) 49,353 372,572 (10,869,909) (13,884,947) - -------------------------------------------------------------------------------------------------------------------------
Meyers Pride Value Fund Reorganization The Trust entered an agreement and plan of reorganization and liquidation with Meyers Investment Trust on behalf of its series Meyers Pride Value Fund, pursuant to which the net assets of the Meyers Pride Value Fund ($12,506,840) were transferred to the Citizens Value Fund in exchange for 1,083,741 shares of the Citizens Value Fund. The reorganization, which qualified as a tax-free exchange for federal income tax purposes, was completed on September 24, 2001, following approval by shareholders of the Meyers Pride Value Fund at a special shareholder meeting. The aggregate net assets of the Meyers Pride Value Fund and the Citizens Value Fund were $12,506,840 and $0, respectively, prior to the reorganization and the combined net assets were $12,506,840 immediately after the reorganization. 45 Trustees: Judy Belk Walter D. Bristol, Jr. Sophia Collier Jeannie H. Diefenderfer Pablo S. Eisenberg Orlando Hernandez Mitchell A. Johnson Martha S. Pope Distributor: Citizens Securities, Inc. 230 Commerce Way Portsmouth, NH 03801 800.223.7010 603.436.5152 Manager: Citizens Advisers, Inc. 230 Commerce Way Portsmouth, NH 03801 800.223.7010 603.436.5152 Custodian: Fifth Third Bank Cincinnati, OH 45263 Transfer and Accounting Agent: BISYS Fund Services Ohio, Inc. 3435 Stelzer Road Columbus, OH 43219 Legal Counsel: Bingham McCutchen LLP Boston, MA 02110 Independent Auditors: PricewaterhouseCoopers LLP Columbus, OH 43215 - -------------------------------------------------------------------------------- Citizens Funds(R) Citizens Core Growth Fund(R); Citizens Emerging Growth Fund(R); Citizens Small Cap Core Growth Fund(R); Citizens Value Fund(SM); Citizens Balanced Fund(SM); Citizens Global Equity Fund(R); Citizens International Growth Fund(R); Citizens Income Fund(R); Citizens Ultra Short Bond Fund(SM); Citizens Money Market Fund(R) Supplement dated February 19, 2003 to Prospectus dated November 1, 2002 Thomas Coler no longer serves as co-manager of the Citizens Emerging Growth Fund and Citizens Small Cap Core Growth Fund. - -------------------------------------------------------------------------------- CELEBRATING [LOGO] CITIZENS FUNDS(R) o 20 YEARS 800.223.7010 www.citizensfunds.com Citizens Funds are available through such popular mutual fund supermarkets as Charles Schwab's Mutual Fund OneSource(R) and Fidelity Investments FundsNetwork(R). Citizens Funds(R) and Eofund(R) are registered trademarks of Citizens Advisers, Inc. Transfer and Dividend Paying Agent: BISYS, 3435 Stelzer Road, Columbus, OH 43219 (C)2003 Citizens Advisers, Inc. SEC File No. 811-3626 [RECYCLED LOGO] Printed on recycled paper with soy-based inks. SAR 12/02 Item 2. Code of Ethics. Not applicable. Item 3. Audit Committee Financial Expert. Not applicable. Items 4-8. (Reserved) Item 9. Controls and Procedures. Not applicable. Item 10. Exhibits. 10(a). Not applicable. 10(b). Certifications. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 6, 2003 By: /s/ Sophia Collier ------------------------------------- Sophia Collier President Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: March 6, 2003 By: /s/ Sophia Collier ------------------------------------- Sophia Collier President Date: March 6, 2003 By: /s/ Sean P. Driscoll ------------------------------------- Sean P. Driscoll Treasurer EX-99.CERT 3 ex-99.txt Exhibit 10(b) CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Sean P. Driscoll, certify that: 1. I have reviewed this report on Form N-CSR of Citizens Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. Date: March 6, 2003 By: /s/ Sean P. Driscoll ------------------------------------- Sean P. Driscoll Treasurer CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Sean P. Driscoll, certify that: 1. This report on Form N-CSR of Citizens Funds (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the issuer. Date: March 6, 2003 By: /s/ Sean P. Driscoll ------------------------------------- Sean P. Driscoll Treasurer Exhibit 10(b) CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Sophia Collier, certify that: 1. I have reviewed this report on Form N-CSR of Citizens Funds; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. Date: March 6, 2003 By: /s/ Sophia Collier ------------------------------------- Sophia Collier President CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 I, Sophia Collier, certify that: 1. This report on Form N-CSR of Citizens Funds (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the issuer. Date: March 6, 2003 By: /s/ Sophia Collier ------------------------------------- Sophia Collier President -----END PRIVACY-ENHANCED MESSAGE-----