-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, aT8HxeLvCig1alBuG9GIXIzPo0ke5oGooH6xf80yPWutliO0SKzP1NVvydFJpITP jf8gcsAZ2PBMIrF5KWNzRg== 0000757440-94-000017.txt : 19940831 0000757440-94-000017.hdr.sgml : 19940831 ACCESSION NUMBER: 0000757440-94-000017 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940630 FILED AS OF DATE: 19940830 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST UNION FUNDS/ CENTRAL INDEX KEY: 0000757440 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 046599663 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04154 FILM NUMBER: 94547148 BUSINESS ADDRESS: STREET 1: 99 HIGH ST CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6173383200 MAIL ADDRESS: STREET 1: FEDERATED INVESTORS TOWER CITY: PITTSBURGH STATE: PA ZIP: 15222-3779 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION HIGH GRADE TAX FREE PORT DATE OF NAME CHANGE: 19940519 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION FUNDS DATE OF NAME CHANGE: 19921230 FORMER COMPANY: FORMER CONFORMED NAME: SALEM FUNDS DATE OF NAME CHANGE: 19920703 N-30D 1 FORM DOCUMENT 1994 SEMI-ANNUAL REPORT First Union Funds TRUST SHARES CLASS B INVESTMENT SHARES CLASS C INVESTMENT SHARES JUNE 30, 1994 Logo FIRST UNION FUNDS PRESIDENT'S MESSAGE - -------------------------------------------------------------------------------- Dear Investor: I am pleased to present you with the Semi-Annual Report of First Union Funds (the "Funds") for the six-month period ending June 30, 1994. It contains complete financial information--including the Investment Reviews and Portfolios of Investments--for the entire family of Funds. In addition, Financial Highlights have been included for Trust Shares, Class B Investment Shares, and Class C Investment Shares, where applicable. You will notice that, as we add new funds to the family, the number of pages in your report continues to grow. By combining information about all the Funds in one report, we can present this information to our shareholders in an efficient, cost-effective manner. I urge you to read the information about your investment carefully. Your next report will include financial information about two new international additions to the First Union Funds. First Union International Equity Portfolio and First Union Emerging Markets Growth Portfolio are being developed to bring the growth opportunities of international stocks to our investors.* As always, if you would like more complete information about any of the First Union Funds, please call 1-800-326-3241 or see your First Union Brokerage Services Investment Representative and ask for a prospectus. The prospectus includes more complete information on charges and expenses. Please read it carefully before investing or sending money. Thank you for selecting the First Union Funds to pursue your financial goals. As always, we welcome your questions, comments, or suggestions. Sincerely, Edward C. Gonzales President August 15, 1994 * A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This report shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. INVESTMENT REVIEWS - -------------------------------------------------------------------------------- FIRST UNION MONEY MARKET PORTFOLIO As of June 30, 1994, the First Union Money Market Portfolio's ("Money Market Fund") Trust Shares, Class B Investment Shares, and Class C Investment Shares had a 7-day net yield of 3.93%, 3.73%, and 3.18%, respectively, and an average maturity of 50 days.* As we enter the fourth year of the U.S. economic recovery, the economy is displaying typical late-cycle patterns--higher capacity utilization, fuller employment, rising commodity prices, and increased demand for credit. In order to slow the economy and head off higher inflation, the Federal Reserve Board (the "Fed") raised short-term interest rates from 3.5% to 4.25% during the second quarter of 1994. While we expect economic activity to slow as the year progresses, we anticipate that the Fed will continue upward pressure on short-term interest rates. As a result, we have established and will continue to maintain shorter average maturities during the third quarter to maintain maximum flexibility in the Money Market Fund. FIRST UNION TAX FREE MONEY MARKET PORTFOLIO As of June 30, 1994, the First Union Tax Free Money Market Portfolio's ("Tax Free Money Market Fund") Trust Shares and Class B Investment Shares had a 7-day net yield of 2.69% and 2.39%, respectively, and an average maturity of 72 days.* As we enter the fourth year of the U.S. economic recovery, the economy is displaying typical late-cycle patterns--higher capacity utilization, fuller employment, rising commodity prices, and increased demand for credit. In order to slow the economy and head off higher inflation, the Fed raised short-term interest rates from 3.5% to 4.25% during the second quarter of 1994. While we expect economic activity to slow as the year progresses, we anticipate that the Fed will continue upward pressure on short-term interest rates. As a result, we will generally maintain shorter than normal average maturities during the coming months to maintain maximum flexibility in the Tax Free Money Market Fund. FIRST UNION TREASURY MONEY MARKET PORTFOLIO As of June 30, 1994, the First Union Treasury Money Market Portfolio's ("Treasury Money Market Fund") Trust Shares and Class B Investment Shares had a 7-day net yield of 3.83% and 3.53%, respectively, and an average maturity of 46 days.* As we enter the fourth year of the U.S. economic recovery, the economy is displaying typical late-cycle patterns--higher capacity utilization, fuller employment, rising commodity prices, and increased demand for credit. In order to slow the economy and head off higher inflation, the Fed raised short-term interest rates from 3.5% to 4.25% during the second quarter of 1994. While we expect economic activity to slow as the year progresses, we anticipate that the Fed will continue upward pressure on short-term interest rates. As a result, we have established and will continue to maintain shorter average maturities during the third quarter to maintain maximum flexibility in the Treasury Money Market Fund. We utilize a barbell structure in the portfolio, as opposed to a laddered maturity approach (i.e. the portfolio is composed of 30% Treasury securities with maturities of six months to one year and 70% overnight and term repurchase agreements).** FIRST UNION BALANCED PORTFOLIO In 1994's difficult climate for both stock and bond investors, the First Union Balanced Portfolio ("Balanced Fund") has performed well compared to its peers and to a similarly constructed index of the * Past performance may not be indicative of future performance. ** Portfolio percentages expressed above are calculated on the basis of market value. - ------------------------------------------------------------------------------ Standard & Poor's Composite Stock Price Index (the "S&P 500") and Lehman Brothers Government Corporate Bond Index. As an indication of its favorable risk and return relationship, during the first half of 1994, the Balanced Fund was rated * * * * (i.e., 4 stars) by Morningstar, Inc. on June 30, 1994.+ The Balanced Fund's asset allocation of 65% stocks and 35% bonds was changed in May (as the market attempted to rally) reducing common stock investments to 60%, bonds to 33%, and increasing money market instruments to 7%. We do not view this as a significant defensive move, but rather a small tactical adjustment, which will give us flexibility should the correction in stock prices continue. In addition, the yield on money market instruments is more competitive.** Our overall strategy within the common stock portion of the Balanced Fund is to own stock in a broadly diversified portfolio of companies which will benefit from a slow growth, low inflation economy. Many of the companies in the portfolio also were selected because they will be beneficiaries of the global economic recovery which is underway. In the fixed income portion of the portfolio, the Balanced Fund is approximately 61% invested in high quality corporate bonds and 39% in U.S. government securities and agency obligations. We are maintaining an average maturity of 9.53 years with a duration of 5.13 years.** We believe the Balanced Fund is well positioned to weather the correction which is taking place in the stock and bond markets and to resume its progress as the investment climate improves. FIRST UNION FIXED INCOME PORTFOLIO On June 30, 1994, the First Union Fixed Income Portfolio's ("Fixed Income Fund") Trust Shares, Class B Investment Shares, and Class C Investment Shares had an SEC 30-day yield of 6.24%, 5.88%, and 5.47%, respectively, and an average maturity of 11.06 years.* During a period in which interest rates rose more rapidly than they have since late 1980--causing bond prices to decline sharply--the Fixed Income Fund performed well relative to its peers. As an indication of its favorable risk and return characteristics, the Fixed Income Fund was rated * * * * by Morningstar, Inc. on June 30, 1994.+ The Fixed Income Fund's solid performance during a difficult period is a result of the controlled risk approach which focuses on managing duration structure to limit price sensitivity to rate increases and concentrates on high quality fixed income investments which offer the most attractive yields. On June 30, 1994, the Fixed Income Fund was invested 22% in 0-1 year securities, 35% in 1-3 year securities, 24% in 3-5 year securities, and 19% in 5-10 year securities. The breakdown of the quality ratings were 20% U.S. government securities, 47% AAA rated, 5% AA rated, and 28% A rated.** We continue to believe that markets are overreacting to growth and inflationary concerns, presenting opportunity for the fixed income investor. It is our view that economic activity will moderate as the year progresses and that strong secular forces will continue to dampen inflationary pressure. While the past six months have been unsettling to investors, we believe the Fixed Income Fund is well positioned for the future. FIRST UNION FLORIDA MUNICIPAL BOND PORTFOLIO As of June 30, 1994, the First Union Florida Municipal Bond Portfolio's ("Florida Fund") Trust Shares, Class B Investment Shares, and Class C Investment Shares had an SEC 30-day yield of 5.49%, 5.01% and 4.71%, respectively, and an average maturity of 20.09 years.* The Florida Fund was invested 92% in tax free fixed income securities and 8% in tax free money market instruments.** During the first half of 1994, in order to maintain the yield on the Florida Fund at a relatively high level, we held its overall maturity relatively constant. Individual issues are owned with a full range of + Morningstar, Inc. is an independent fund rating service that uses a five-stars rating system to measure risk-adjusted performance. Five stars means "highest" and four stars means "above-average." Ratings are based on past performance and are subject to change every two weeks. This rating is as of June 30, 1994. * Performance quoted represents past performance. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. ** Portfolio percentages expressed above are calculated on the basis of market value. - -------------------------------------------------------------------------------- maturities with 5% maturing in 0-10 years, 32% maturing in 15-20 years, and 63% maturing in 20 years and longer. To help assure the safety of the portfolio, it is broadly diversified by issuer and of investment grade quality. At quarter end, 53% of the holdings were AAA rated by a nationally recognized statistical ratings organization ("NRSRO"), 24% were AA rated by an NRSRO, 6% were A rated by an NRSRO, and 3% were Aa, Baa, and BBB rated, respectively, by an NRSRO. While the rapid increase in interest rates during the first half of 1994 caused the market value of the investments in the Florida Fund to decline, income earned in the portfolio has been maintained and is relatively stable. In addition, with inflation running at approximately 3%, the above mentioned SEC 30-day yields on the Florida Fund provide a very attractive return over-and-above inflation and are particularly attractive for investors in higher tax brackets. It is our view that as the year progresses, the economy will slow from the more rapid pace earlier this year; inflation will remain relatively dormant and the climate for fixed income investors will be more favorable. We believe investors have overreacted to the prospects of the economy growing too rapidly--triggering higher inflation later--and that fixed income investments such as those held in the Florida Fund, are very attractive. FIRST UNION GEORGIA MUNICIPAL BOND PORTFOLIO As of June 30, 1994, the First Union Georgia Municipal Bond Portfolio's ("Georgia Fund") Trust Shares, Class B Investment Shares, and Class C Investment Shares had an SEC 30-day yield of 5.71%, 5.35%, and 5.06%, respectively, and an average maturity of 21.50 years.* The Georgia Fund was invested 98% in tax free fixed income securities and 2% in tax free money market instruments.** During the first half of 1994, in order to maintain the yield on the Georgia Fund at a relatively high level, we held its overall maturity relatively constant. Individual issues are owned with a full range of maturities with 1% maturing in 0-10 years, 11% maturing in 10-15 years, 40% maturing in 15-20 years, and 48% maturing in 20 years and longer. To help assure the safety of the portfolio, it is broadly diversified by issuer and of investment grade quality. At quarter end, 54% of the holdings were AAA rated by an NRSRO, 15% were AA rated by an NRSRO, 21% were A rated by an NRSRO, and 3% were rated BBB by an NRSRO. While the rapid increase in interest rates during the first half of 1994 caused the market value of the investments in the Georgia Fund to decline, income earned in the portfolio has been maintained and is relatively stable. In addition, with inflation running at approximately 3%, the above mentioned SEC 30-day yields on the Georgia Fund provide a very attractive return over-and-above inflation and are particularly attractive for investors in higher tax brackets. It is our view that as the year progresses, the economy will slow from the more rapid pace earlier this year; inflation will remain relatively dormant and the climate for fixed income investors will be more favorable. We believe investors have overreacted to the prospects of the economy growing too rapidly--triggering higher inflation later--and that fixed income investments, such as those held in the Georgia Fund, are very attractive. FIRST UNION HIGH GRADE TAX FREE PORTFOLIO As of June 30, 1994, the First Union High Grade Tax Free Portfolio's ("High Grade Tax Free Fund") Trust Shares, Class B Investment Shares, and Class C Investment Shares had an SEC 30-day yield of 5.44%, 4.97%, and 4.67%, respectively, and an average maturity of 20.29 years.* The High Grade Tax Free Fund was invested 100% in tax free fixed income securities.** * Performance quoted represents past performance. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. ** Portfolio percentages expressed above are calculated on the basis of market value. - -------------------------------------------------------------------------------- During the first half of 1994, in order to maintain the yield on the High Grade Tax Free Fund at a relatively high level, we held its overall maturity relatively constant. Individual issues are owned with a full range of maturities with 2% in 0-10 years, 10% 10-15 years, 31% 15-20 years, and 57% 20 years and longer. To help assure the safety of the portfolio, it is broadly diversified by issuer and currently 100% of the bonds in the High Grade Tax Free Fund are insured and rated AAA by an NRSRO. While the rapid increase in interest rates during the first half of 1994 caused the market value of the investments in the High Grade Tax Free Fund to decline, income earned in the portfolio has been maintained and is relatively stable. In addition, with inflation running at approximately 3%, the above mentioned SEC 30-day yields on the High Grade Tax Free Fund provide a very attractive return over-and-above inflation and are particularly attractive for investors in higher tax brackets. It is our view that as the year progresses, the economy will slow from the more rapid pace earlier this year; inflation will remain relatively dormant and the climate for fixed income investors will be more favorable. We believe investors have overreacted to the prospects of the economy growing too rapidly--triggering higher inflation later--and that fixed income investments, such as those held in the High Grade Tax Free Fund, are very attractive. FIRST UNION MANAGED BOND PORTFOLIO On June 30, 1994, the First Union Managed Bond Portfolio ("Managed Bond Fund") had an SEC 30-day yield of 6.59%.* During the second quarter of 1994, interest rates on short, intermediate, and long-term fixed income investments rose 1.06%, 0.85% and 0.52%, respectively, in response to continued investor concern about accelerating economic growth and the prospects for higher inflation. We continue to believe that markets are overreacting to growth and inflationary concerns, presenting opportunity for the fixed income investor. It is our view that economic activity will moderate as the year progresses and that strong secular forces will continue to dampen inflationary pressure. Already, we are seeing signs that consumer purchases of houses, automobiles, and appliances are beginning to slow. Within the Managed Bond Fund, we have maintained our average maturity structure at 8.40 years, with a duration of 5.10 years, with only minor adjustments during the quarter. The sector composition of the Managed Bond Fund at quarter-end was 27% U.S. government securities and agency obligations, 66% corporates and 7% cash equivalents. Overall, credit quality remains very high.** FIRST UNION NORTH CAROLINA MUNICIPAL BOND PORTFOLIO As of June 30, 1994, the First Union North Carolina Municipal Bond Portfolio's ("North Carolina Fund") Trust Shares, Class B Investment Shares, and Class C Investment Shares had an SEC 30-day yield of 5.67%, 5.20%, and 4.90%, respectively, and an average maturity of 21.79 years.* The North Carolina Fund was invested 98% in tax free fixed income securities and 2% in tax free money market instruments.** During the first half of 1994, in order to maintain the yield on the North Carolina Fund at a relatively high level, we held its overall maturity relatively constant. Individual issues are owned with a full range of maturities with 3% maturing in 0-10 years, 7% maturing in 10-15 years, 27% maturing in 15-20 years, and 63% maturing in 20 years and longer. To help assure the safety of the portfolio, it is broadly diversified by issuer and of high quality. At quarter end, 46% of the holdings were AAA rated by an NRSRO, 22% were AA rated by an NRSRO, 31% were A rated by an NRSRO, and 1% were nonrated bonds. * Performance quoted represents past performance. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. ** Portfolio percentages expressed above are calculated on the basis of market value. - -------------------------------------------------------------------------------- While the rapid increase in interest rates during the first half of 1994 caused the market value of the investments in the North Carolina Fund to decline, income earned in the portfolio has been maintained and is relatively stable. In addition, with inflation running at approximately 3%, the above mentioned SEC 30-day yields on the North Carolina Fund provide a very attractive return over-and-above inflation and are particularly attractive for investors in higher tax brackets. It is our view that as the year progresses, the economy will slow from the more rapid pace earlier this year; inflation will remain relatively dormant and the climate for fixed income investors will be more favorable. We believe investors have overreacted to the prospects of the economy growing too rapidly--triggering higher inflation later--and that fixed income investments, such as those held in the North Carolina Fund, are very attractive. FIRST UNION SOUTH CAROLINA MUNICIPAL BOND PORTFOLIO As of June 30, 1994, the First Union South Carolina Municipal Bond Portfolio's ("South Carolina Fund") Trust Shares, Class B Investment Shares, and Class C Investment Shares had an SEC 30-day yield of 5.82%, 5.33%, and 5.05%, respectively, and an average maturity of 20.06 years.* The South Carolina Fund was invested 96% in tax free fixed income securities and 4% in tax free money market instruments.** During the first half of 1994, in order to maintain the yield on the South Carolina Fund at a relatively high level, we held its overall maturity relatively constant. Individual issues are owned with a full range of maturities with 8% maturing in 0-10 years, 9% maturing in 10-15 years, 35% maturing in 15-20 years, and 48% maturing in 20 years and longer. To help assure the safety of the portfolio, it is broadly diversified by issuer and of investment grade quality. At quarter end, 61% of the holdings were AAA rated by an NRSRO, 19% were AA rated by an NRSRO, 11% were A rated by an NRSRO, and 6% were BBB rated by an NRSRO. While the rapid increase in interest rates during the first half of 1994 caused the market value of the investments in the South Carolina Fund to decline, income earned in the portfolio has been maintained and is relatively stable. In addition, with inflation running at approximately 3%, the above mentioned SEC 30-day yields on the South Carolina Fund provide a very attractive return over-and-above inflation and are particularly attractive for investors in higher tax brackets. It is our view that as the year progresses, the economy will slow from the more rapid pace earlier this year; inflation will remain relatively dormant and the climate for fixed income investors will be more favorable. We believe investors have overreacted to the prospects of the economy growing too rapidly--triggering higher inflation later--and that fixed income investments, such as those held in the South Carolina Fund, are very attractive. FIRST UNION U.S. GOVERNMENT PORTFOLIO On June 30, 1994, the First Union U.S. Government Portfolio's ("U.S. Government Fund") Trust Shares, Class B Investment Shares, and Class C Investment Shares had an SEC 30-day yield of 6.60%, 6.09%, and 5.83%, respectively, and an average maturity of 18.13 years.* During a period in which interest rates rose more rapidly than they have since late 1980--causing bond prices to decline sharply--the U.S. Government Fund performed well relative to its peers. The U.S. Government Fund's solid performance during a difficult period is a result of the controlled risk approach which focuses on managing duration structure to limit price sensitivity to interest rate increases and concentrates on fixed income investments which offer the most attractive yields. * Performance quoted represents past performance. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. ** Portfolio percentages expressed above are calculated on the basis of market value. - -------------------------------------------------------------------------------- We continue to believe that markets are overreacting to growth and inflationary concerns, presenting opportunity for the fixed income investor. It is our view that economic activity will moderate as the year progresses and that strong secular forces will continue to dampen inflationary pressure. While the past six months have been unsettling to investors, we believe the U.S. Government Fund is well positioned for the future. FIRST UNION UTILITY PORTFOLIO During a difficult period for utility investors, the First Union Utility Portfolio ("Utility Fund") has performed very well relative to its peers and the Standard & Poor's Utility Index (the "S&P Utility Index"). Triggered by a rapid rise in interest rates beginning in the fall of 1993 and continuing into the first half of 1994, utility stocks have experienced a significant correction as reflected by the S&P Utility Index, which declined 8.38% during the six month period ended June 30, 1994.* Additionally, investor concern about the regulatory outlook for utilities and increased competition exaggerated the correction. The Utility Fund's good results during a difficult period are attributable to several strategies we have pursued: first, the decision to underweight electric utilities relative to the S&P Utility Index; second, the Utility Fund invested 15% in high yielding non-utility common stocks such as Atlantic Richfield Co., Monsanto Co., and Eli Lilly and Company; and finally, the Utility Fund holds approximately 7% in fixed income securities.** During the second quarter, utility investments began to stabilize as the upward trend in long-term interest rates eased. We believe the price attrition, experienced during the first half of 1994, will abate as the economy slows during the remainder of the year. With an SEC 30-day yield of 5.21%, 4.74%, and 4.44%, for Trust Shares, Class B Investment Shares, and Class C Investment Shares, respectively, on June 30, 1994, the Utility Fund is an attractive income-oriented vehicle which also offers the prospect for more growth than the S&P Utility Index.*** FIRST UNION VALUE PORTFOLIO The First Union Value Portfolio ("Value Fund") has performed well in a difficult environment for common stock investors. With the Dow Jones, S&P 500, and NASDAQ composites returning (2.12%), (3.44%), and (8.78%), respectively, for the six months ended June 30, 1994,**** the Value Fund's total return for Trust Shares, Class B Investment Shares, and Class C Investment Shares of (1.33%), (5.32%), and (5.61%), respectively, reflects the disciplined value-oriented approach which it pursues.*** The Value Fund's portfolio remains well-diversified and relatively defensive. The Value Fund sector weightings are near sector weightings, reducing risk and emphasizing stock selection. The dividend yield of the equity securities within the Value Fund's portfolio is 3.8%, 32% above the S&P 500, and their Price-to-Earnings Ratio ("P/E") is 12.5%, 20% below the S&P 500. The lower P/E has minimized the negative impact of the market's "P/E contraction" which began in early 1993. As the second quarter ended, some signs of slowing economic momentum began to appear, mostly related to consumer demand. Production, however, remained strong. The U.S. Dollar came under selling pressure, particularly against the Yen and Mark. The dollar's weakness can be attributed to the declining trade deficit, which is a result of stronger U.S. import demand combined with weaker demand for U.S. exports from weaker foreign economies. Within the Value Fund, anticipating a slower economy will lead to reduced earnings for cyclical companies, we have selectively reduced exposure in companies like DuPont, Rohm and Haas, Phelps Dodge (copper), and Temple Inland (paper board), in favor of companies like Air Products, Union Pacific, and General Electric which we believe are attractively priced and less vulnerable to a slowdown in economic growth. * This index is unmanaged. ** Portfolio percentages expressed above are calculated on the basis of market value. *** Performance quoted represents past performance. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. **** These indices are unmanaged. - -------------------------------------------------------------------------------- We believe the Value Fund is well positioned to weather the current stock market correction should it continue and resume its growth as the investment climate improves. FIRST UNION VIRGINIA MUNICIPAL BOND PORTFOLIO As of June 30, 1994, the First Union Virginia Municipal Bond Portfolio's ("Virginia Fund") Trust Shares, Class B Investment Shares, and Class C Investment Shares had an SEC 30-day yield of 5.63%, 5.15%, and 4.85%, respectively, and an average maturity of 18.76 years.* The Virginia Fund was invested 97% in tax free fixed income securities and 3% in tax free money market instruments.** During the first half of 1994, in order to maintain the yield on the Virginia Fund at a relatively high level, we held its overall maturity relatively constant. Individual issues are owned with a full range of maturities with 3% maturing in 0-10 years, 7% maturing in 10-15 years, 55% maturing in 15-20 years, and 35% maturing in 20 years and longer. To help assure the safety of the portfolio, it is broadly diversified by issuer and of very high quality. At quarter end, 23% of the holdings were AAA rated by an NRSRO, 57% were AA rated by an NRSRO, and 20% were A rated by an NRSRO. While the rapid increase in interest rates during the first half of 1994 caused the market value of the investments in the Virginia Fund to decline, income earned in the portfolio has been maintained and is relatively stable. In addition, with inflation running at approximately 3%, the above mentioned SEC 30-day yields on the Virginia Fund provide a very attractive return over-and-above inflation and are particularly attractive for investors in higher tax brackets. It is our view that as the year progresses, the economy will slow from the more rapid pace earlier this year; inflation will remain relatively dormant and the climate for fixed income investors will be more favorable. We believe investors have overreacted to the prospects of the economy growing too rapidly--triggering higher inflation later--and that fixed income investments, such as those held in the Virginia Fund, are very attractive. ECONOMIC HIGHLIGHTS The economy's momentum is slowing, as growth in consumer spending and home sales top out. Continued gains in business fixed investment and a pick up in exports should keep the expansion on track, however. Job growth is expected to pick up to a 2.5% pace this year, as 2.7 million new jobs are created. Inflation is turning, with the Consumer Price Index expected to move to 3.5% in 1995. The recent problems on Wall Street--bonds, stocks, and the dollar--will not quickly translate into problems on Main Street. Indeed, it is part of the enigma of capitalism that these two sectors--the "financial" world and the "real" world--which are so interdependent in the long run so often appear disconnected in the short run. The key to understanding the apparent contradiction is to realize that money cannot be in two places at once. When business in Main Street's "real" world is lousy, funds flow to Wall Street, improving balance sheets and net worth. This was the case from 1990 through 1993. When the business expansion cranks up, Main Street draws down its liquidity and Wall Street suffers. This was the case for the first half of 1994. The Wall Street/Main Street relationship is symbiotic and synergistic, but not simultaneous. The business cycle it's called, and right now the momentum is with Main Street. As 1994 progresses, we expect the momentum of the economy to slow and a better balance between the needs of Main Street and the needs of Wall Street to evolve. Continued growth in corporate earnings should allow stocks to overcome recent interest pressures permitting them to work their way higher as 1995 approaches. The outlook for bonds is more problematic; however, we believe much of the upward pressure on long-term interest rates has passed and that at current levels intermediate to long-term issues have appeal for the patient investor. * Performance quoted represents past performance. Investment return and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. ** Portfolio percentages expressed above are calculated on the basis of market value. - -------------------------------------------------------------------------------- STOCK MARKET HIGHLIGHTS Since the Fall of 1990, the U.S. stock market has had one of the longest bull market runs in post-war history. During this period, the U.S. has seen an all-time record level of equity issuance and the inflow of dollars into equity mutual funds has been at a torrid pace. Early this year, the Fed began shifting monetary policy to a level more appropriate for a strong economy and the upward move in the stock prices was interrupted by a sharper upturn in interest rates. Despite the correction in 1994, we believe that the long-term bull market is not over owing to several secular macroeconomic forces at work, including a favorable outlook in interest rates and inflation. Since the beginning of the year, equity prices have declined broadly as shown below:
YEAR-TO-DATE % CHANGE Dow Jones Industrial Average -3.4% S&P 500 -4.8% NYSE Composite -5.4% NASDAQ Composite -9.1%
While these price corrections occurred, corporate earnings continued to grow bringing P/E multiples for stocks back down to their historic averages. It is our belief that as signs the economy is beginning to slow become more apparent, the climate for equity investing will become more favorable. Further, stock price advances will be fueled by continued growth in corporate earnings. We look for the best earnings gains to come from manufacturing oriented companies serving industrial and foreign markets. FIXED INCOME HIGHLIGHTS More rapid than expected economic growth in the fourth quarter of last year and on into the first half of 1994, prompted the Fed to increase short-term interest rates in February. This was a preemptive strike designed to slow the economy and diminish the prospects for higher inflation later in 1994 and on into 1995. Caught off-guard by the Fed's move and concerned about the pace of economic activity, many fixed income investors sold fixed income securities triggering the sharpest decline in fixed income prices since 1980. Between January and June interest rates rose between 1% and 1.5% on fixed income investments. The sell-off was aggravated by hedge funds and other speculators who borrow money to leverage their investments. The table below shows the total returns (income minus price change) for various fixed income securities during the first half of 1994:
U.S. OBLIGATIONS CORPORATE BONDS MUNICIPAL BONDS MATURITY TOTAL RETURNS MATURITY TOTAL RETURNS MATURITY TOTAL RETURNS 1-3 -0.42 1-3 -0.14 0-3 0.71 3-5 -2.91 3-5 -1.72 3-7 -2.13 5-7 -4.09 5-10 -4.49 7-12 -3.90 7-10 -6.12 10+ -6.73 12-22 -6.56 10 + -6.42
We believe that markets are overreacting to growth and inflationary concerns, presenting opportunity for the fixed income investor. It is our view that economic activity will moderate as the year progresses and that strong secular forces will continue to dampen inflationary pressure. Already, we are seeing signs that consumer purchases of houses, automobiles, and appliances are beginning to slow. While short-term interest rates are likely to experience modest upward pressure, we believe yields on long-term fixed income investments fully reflect inflationary expectations and the level of future economic activity. As a result we believe intermediate and long-term bonds have appeal for the patient investor. FIRST UNION MONEY MARKET PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - ------------- -------------------------------------------------------------------------------- --------------- BANKERS ACCEPTANCE--1.9% - ----------------------------------------------------------------------------------------------- $ 2,000,000 American Express Bank Ltd., 3.26%, 7/11/94 $ 1,998,189 -------------------------------------------------------------------------------- --------------- CERTIFICATE OF DEPOSIT--3.9% - ----------------------------------------------------------------------------------------------- 4,000,000 First Alabama Bank Ltd., 3.70%, 9/8/94 3,999,994 -------------------------------------------------------------------------------- --------------- *COMMERCIAL PAPER--48.4% - ----------------------------------------------------------------------------------------------- CONSTRUCTION--1.9% -------------------------------------------------------------------------------- 2,000,000 AES Shady Point, 4.30%, 7/12/94 1,997,372 -------------------------------------------------------------------------------- --------------- DIVERSIFIED--3.9% -------------------------------------------------------------------------------- 4,000,000 Mitsubishi International Corp., 4.22%, 7/29/94 3,986,871 -------------------------------------------------------------------------------- --------------- ENERGY--1.9% -------------------------------------------------------------------------------- 2,000,000 Oryx Energy Co., 4.37%, 8/1/94 1,992,474 -------------------------------------------------------------------------------- --------------- FINANCE--9.7% -------------------------------------------------------------------------------- 2,000,000 Beta Finance, Inc., 4.50%, 8/16/94 1,988,500 -------------------------------------------------------------------------------- 4,000,000 JTB Finance Americas, Inc., 4.30%, 7/19/94 3,991,400 -------------------------------------------------------------------------------- 4,000,000 Hanson Finance UK, PLC, 4.12%, 7/20/94 3,991,302 -------------------------------------------------------------------------------- --------------- Total 9,971,202 -------------------------------------------------------------------------------- --------------- FUNDING CORPORATIONS--21.3% -------------------------------------------------------------------------------- 4,000,000 Alloman Funding Corp., 4.43%, 7/26/94 3,987,694 -------------------------------------------------------------------------------- 3,000,000 Broadway Capital Corp., 3.90%, 7/8/94 2,997,725 -------------------------------------------------------------------------------- 4,000,000 Dynamic Funding Corp., 4.45%, 7/22/94 3,989,617 -------------------------------------------------------------------------------- 4,000,000 Enterprise Funding Corp., 4.45%, 9/1/94 3,969,344 -------------------------------------------------------------------------------- 4,000,000 Falcon Asset Securitization, 4.35%, 8/9/94 3,981,150 -------------------------------------------------------------------------------- 3,000,000 Strategic Asset Funding Corp., 4.83%, 10/31/94 2,950,895 -------------------------------------------------------------------------------- --------------- Total 21,876,425 -------------------------------------------------------------------------------- --------------- INSURANCE--2.9% -------------------------------------------------------------------------------- 3,000,000 Export Finance & Insurance Co., 4.25%, 7/15/94 2,995,042 -------------------------------------------------------------------------------- --------------- REAL ESTATE--6.8% -------------------------------------------------------------------------------- 4,000,000 McGuire Thomas Partners, 4.47%, 9/7/94 3,966,227 -------------------------------------------------------------------------------- 3,000,000 One Embarcadero CT Venture, 4.32%, 7/15/94 2,994,960 -------------------------------------------------------------------------------- --------------- Total 6,961,187 -------------------------------------------------------------------------------- --------------- TOTAL COMMERCIAL PAPER 49,780,573 -------------------------------------------------------------------------------- --------------- VARIABLE RATE ISSUES--20.5% - ----------------------------------------------------------------------------------------------- 4,000,000 American Honda Finance Corp., 4.50%, 11/16/94 4,000,000 -------------------------------------------------------------------------------- 3,000,000 Bank One Milwaukee, NA, WI, 4.41 %, 3/22/95 2,998,814 -------------------------------------------------------------------------------- 3,000,000 CIT Group Holdings Inc., 3.50%, 7/26/94 2,999,795 --------------------------------------------------------------------------------
FIRST UNION MONEY MARKET PORTFOLIO - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT OR SHARES VALUE - ------------- -------------------------------------------------------------------------------- --------------- VARIABLE RATE ISSUES--CONTINUED - ----------------------------------------------------------------------------------------------- $ 3,000,000 FCC National Bank Wilmington, DEL, 4.78%, 1/6/95 $ 3,000,000 -------------------------------------------------------------------------------- 4,000,000 Merrill Lynch & Co., 4.75%, 10/4/94 4,001,043 -------------------------------------------------------------------------------- 4,000,000 Salomon Brothers, Inc., 4.79%, 6/12/95 4,000,000 -------------------------------------------------------------------------------- --------------- TOTAL VARIABLE RATE ISSUES 20,999,652 -------------------------------------------------------------------------------- --------------- NOTES--19.7% - ----------------------------------------------------------------------------------------------- 2,000,000 American Express Co., 11.95%, 1/15/95 2,085,124 -------------------------------------------------------------------------------- 1,000,000 American General Corp., 9.50%, 12/15/94 1,025,108 -------------------------------------------------------------------------------- 1,000,000 American General Finance Corp., 6.25%, 4/14/95 1,008,310 -------------------------------------------------------------------------------- 1,000,000 Associates Corp. of North America, 12.75%, 8/15/94 1,010,686 -------------------------------------------------------------------------------- 1,500,000 Beneficial Corp., 12.00%, 11/1/94 1,540,666 -------------------------------------------------------------------------------- 2,692,307 Capital Auto Receivables Assets, 3.30%, 11/15/94 2,687,146 -------------------------------------------------------------------------------- 3,000,000 Citicorp, 7.20%, 2/15/95 3,035,087 -------------------------------------------------------------------------------- 1,000,000 Exxon Capital Corp., 8.25%, 10/15/94 1,012,655 -------------------------------------------------------------------------------- 2,000,000 Household Finance Corp., 4.70%, 8/29/94 2,000,000 -------------------------------------------------------------------------------- 1,000,000 International Lease Finance Corp., 7.20%, 10/1/94 1,008,707 -------------------------------------------------------------------------------- 2,000,000 Philip Morris Cos., Inc., 8.70%, 8/1/94 2,007,305 -------------------------------------------------------------------------------- 828,996 Premier Auto, 3.48%, 12/2/94 828,996 -------------------------------------------------------------------------------- 1,000,000 Security Pacific Corp., 6.97%, 12/15/94 1,013,206 -------------------------------------------------------------------------------- --------------- TOTAL NOTES 20,262,996 -------------------------------------------------------------------------------- --------------- **REPURCHASE AGREEMENT--2.8% - ----------------------------------------------------------------------------------------------- 2,883,000 Donaldson, Lufkin & Jenrette Securities Corp., 4.125%, dated 6/30/94, due 7/1/94 (at amortized cost)(Note 2B) 2,883,000 -------------------------------------------------------------------------------- --------------- MUTUAL FUND SHARES--2.0% - ----------------------------------------------------------------------------------------------- 2,001,483 Lehman Prime Value (at net asset value) (Note 2A) 2,001,483 -------------------------------------------------------------------------------- --------------- TOTAL INVESTMENTS, AT AMORTIZED COST AND VALUE $ 101,925,887+ -------------------------------------------------------------------------------- ---------------
*Each issue shows the rate of discount at the time of purchase for discount issues, or the coupon for interest bearing issues. **Repurchase agreement is fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. +Also represents cost for federal tax purposes. Note: The categories of investments are shown as a percentage of net assets ($102,700,379) at June 30, 1994. (See Notes which are an integral part of the Financial Statements) FIRST UNION MONEY MARKET PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - ------------------------------------------------------------------------------------------------- Investments, at amortized cost and value (Notes 2A and 2B) $ 101,925,887 - ------------------------------------------------------------------------------------------------- Cash 5,181 - ------------------------------------------------------------------------------------------------- Interest receivable 638,019 - ------------------------------------------------------------------------------------------------- Receivable for Fund shares sold 522,577 - ------------------------------------------------------------------------------------------------- --------------- Total assets 103,091,664 - ------------------------------------------------------------------------------------------------- LIABILITIES: - ------------------------------------------------------------------------------------------------- Payable for Fund shares redeemed $ 332,855 - ------------------------------------------------------------------------------------ Dividends payable 49,447 - ------------------------------------------------------------------------------------ Accrued expenses 8,983 - ------------------------------------------------------------------------------------ ----------- Total liabilities 391,285 - ------------------------------------------------------------------------------------------------- --------------- NET ASSETS for 102,700,379 shares of beneficial interest outstanding $ 102,700,379 - ------------------------------------------------------------------------------------------------- --------------- NET ASSET VALUE and Offering Price per Share: - ------------------------------------------------------------------------------------------------- Class B Investment Shares (net assets of $90,312,729 / 90,312,729 shares of beneficial interest outstanding) $1.00 - ------------------------------------------------------------------------------------------------- --------------- Class C Investment Shares (net assets of $3,818,772 / 3,818,772 shares of beneficial interest outstanding) $1.00 - ------------------------------------------------------------------------------------------------- --------------- Trust Shares (net assets of $8,568,878 / 8,568,878 shares of beneficial interest outstanding) $1.00 - ------------------------------------------------------------------------------------------------- --------------- REDEMPTION PROCEEDS PER SHARE: - ------------------------------------------------------------------------------------------------- Class B Investment Shares $1.00 - ------------------------------------------------------------------------------------------------- --------------- Class C Investment Shares ( 96/100 of $1.00) $0.96* - ------------------------------------------------------------------------------------------------- --------------- Trust Shares $1.00 - ------------------------------------------------------------------------------------------------- ---------------
* See "Redeeming Shares" in the prospectus. (See Notes which are an integral part of the Financial Statements) FIRST UNION MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - --------------------------------------------------------------------------------------------------- Interest income (Note 2C) $ 1,923,410 - --------------------------------------------------------------------------------------------------- EXPENSES-- - --------------------------------------------------------------------------------------------------- Investment advisory fee* $ 180,412 - -------------------------------------------------------------------------------------- Trustees' fees 367 - -------------------------------------------------------------------------------------- Administrative personnel and services fee* 43,626 - -------------------------------------------------------------------------------------- Custodian and portfolio accounting fees 18,376 - -------------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 25,540 - -------------------------------------------------------------------------------------- Distribution services fee--Class B Investment Shares* 138,528 - -------------------------------------------------------------------------------------- Distribution services fee--Class C Investment Shares* 6,833 - -------------------------------------------------------------------------------------- Fund share registration costs 21,864 - -------------------------------------------------------------------------------------- Legal fees 559 - -------------------------------------------------------------------------------------- Auditing fees 2,614 - -------------------------------------------------------------------------------------- Printing and postage 3,842 - -------------------------------------------------------------------------------------- Insurance premiums 2,301 - -------------------------------------------------------------------------------------- Miscellaneous 1,167 - -------------------------------------------------------------------------------------- ----------- Total expenses 446,029 - -------------------------------------------------------------------------------------- Deduct-- - -------------------------------------------------------------------------------------- Waiver of investment advisory fee* $ 126,280 - ------------------------------------------------------------------------- Waiver of distribution services fee--Class B Investment Shares* 46,176 172,456 - ------------------------------------------------------------------------- ----------- ----------- Net expenses 273,573 - --------------------------------------------------------------------------------------------------- ------------- Net investment income $ 1,649,837 - --------------------------------------------------------------------------------------------------- -------------
* See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION MONEY MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1994* 1993 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS: - ----------------------------------------------------------------------------- OPERATIONS-- - ----------------------------------------------------------------------------- Net investment income $ 1,649,837 $ 2,679,270 - ----------------------------------------------------------------------------- ---------------- ---------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ----------------------------------------------------------------------------- Dividends to shareholders from net investment income: - ----------------------------------------------------------------------------- Class B Investment Shares (1,472,649) (2,429,592) - ----------------------------------------------------------------------------- Class C Investment Shares (26,849) -- - ----------------------------------------------------------------------------- Trust Shares (150,339) (249,678) - ----------------------------------------------------------------------------- ---------------- ---------------- Change in net assets from distributions to shareholders (1,649,837) (2,679,270) - ----------------------------------------------------------------------------- ---------------- ---------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ----------------------------------------------------------------------------- Proceeds from sale of shares 216,892,176 397,777,259 - ----------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 1,503,517 2,464,947 - ----------------------------------------------------------------------------- Cost of shares redeemed (212,981,606) (376,993,301) - ----------------------------------------------------------------------------- ---------------- ---------------- Change in net assets from Fund share transactions 5,414,087 23,248,905 - ----------------------------------------------------------------------------- ---------------- ---------------- Change in net assets 5,414,087 23,248,905 - ----------------------------------------------------------------------------- NET ASSETS: - ----------------------------------------------------------------------------- Beginning of period 97,286,292 74,037,387 - ----------------------------------------------------------------------------- ---------------- ---------------- End of period $ 102,700,379 $ 97,286,292 - ----------------------------------------------------------------------------- ---------------- ----------------
* Six months ended June 30, 1994 (unaudited). (See Notes which are an integral part of the Financial Statements) FIRST UNION TAX FREE MONEY MARKET PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE SHORT-TERM MUNICIPAL SECURITIES--106.9% - ----------------------------------------------------------------------------------- ALABAMA--3.0% ------------------------------------------------------------------- $ 9,000,000 Jefferson County, AL, Weekly VRDN (Special Obligation)/ (Columbus Bank & Trust Co. LOC) A+ $ 9,000,000 ------------------------------------------------------------------- 1,100,000 Livingston, AL, IDB Weekly VRDN (Series 1989)/(Toin Corp. U.S.A. Project)/(Subject to AMT)/(Industrial Bank of Japan LOC) AA 1,100,000 ------------------------------------------------------------------- 3,500,000 Mobile County, AL, Industrial Development Board, Weekly VRDN (Sherman International Corp.) A+ 3,500,000 ------------------------------------------------------------------- --------------- Total 13,600,000 ------------------------------------------------------------------- --------------- ARIZONA--3.6% ------------------------------------------------------------------- 900,000 Chandler County, AZ, IDA Monthly VRDN (Series 1983) (Parsons Municipal Services) AA 900,000 ------------------------------------------------------------------- 4,000,000 Maricopa County, AZ, 3.20% PCR (Southern Cal Edison), 10/4/94 P-1 4,000,000 ------------------------------------------------------------------- 8,000,000 Maricopa County, AZ, Weekly VRDN (El Paso Electric Co.)/(Credit Suisse LOC) VMIG-1 8,000,000 ------------------------------------------------------------------- 480,000 Maricopa County, AZ, IDA Weekly VRDN (McLane County)/(Barclays Bank PLC LOC) P-1 480,000 ------------------------------------------------------------------- 2,800,000 Tucson, AZ, IDA Weekly VRDN (Tucson Co. Parking Garage)/(Societe Generale LOC) VMIG1 2,800,000 ------------------------------------------------------------------- --------------- Total 16,180,000 ------------------------------------------------------------------- --------------- CALIFORNIA--23.4% ------------------------------------------------------------------- 1,400,000 Barstow, CA, Weekly VRDN (Multi-Family Housing Revenue Bond)/(Series 1988A)/(Rimrock Village Apartment Project)/(Mercury Savings & Loan LOC) NR 1,400,000 ------------------------------------------------------------------- 4,000,000 California State, 3.35% (MBIA Insured), 11/1/94 VMIG-1 4,001,171 ------------------------------------------------------------------- 6,100,000 California State, 3.75% (Series A), 12/21/94 MIG1 6,110,739 ------------------------------------------------------------------- 8,800,000 Fresno, CA, Weekly VRDN (Housing Heritage Apartments)/(Series 1985B)/(Western Federal Savings & Loan LOC) AAA 8,800,000 ------------------------------------------------------------------- 3,900,000 Fresno, CA, Weekly VRDN (Housing Sanger Project)/ (Series 1985B)/ (Western Federal Savings & Loan LOC) AAA 3,900,000 ------------------------------------------------------------------- 1,500,000 Hemet, CA, Weekly VRDN (Mercury Savings & Loan LOC) AAA 1,500,000 ------------------------------------------------------------------- 10,000,000 Irvine, CA, Unified School District, 4.50% TANs, 7/28/95 SP1+ 10,077,500 ------------------------------------------------------------------- 3,000,000 Los Angeles, CA, Unified School District, 3.25%, 7/15/94 MIG1 3,000,491 -------------------------------------------------------------------
FIRST UNION TAX FREE MONEY MARKET PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE SHORT-TERM MUNICIPAL SECURITIES--CONTINUED - ----------------------------------------------------------------------------------- CALIFORNIA--CONTINUED ------------------------------------------------------------------- $ 5,195,000 Los Angeles, CA, Weekly VRDN (Los Angeles Department of Water & Power) AA $ 5,195,000 ------------------------------------------------------------------- 9,700,000 Los Angeles County, CA, 4.50% TRANs, 6/30/95 MIG1 9,760,528 ------------------------------------------------------------------- 8,000,000 Moreno Valley, CA, Unified School District, 4.50% TRANs, 6/30/95 MIG1 8,049,920 ------------------------------------------------------------------- 6,260,000 Northern California Power Agency, 9.75% Public Revenue Bonds (Northern California Geothermal Project No. 3)/ (Series A) (U.S. Government Securities Prerefunded), 7/1/95 AAA 6,734,565 ------------------------------------------------------------------- 8,525,000 Oceanside, CA, Weekly VRDN (Community Development Multi-Family Revenue Bond)/(Parcwood Apartments Project)/(Western Federal Savings & Loan LOC) AAA 8,525,000 ------------------------------------------------------------------- 15,000,000 Orange County CA, 4.50% TRANs (Series A), 7/19/95 MIG1 15,112,350 ------------------------------------------------------------------- 2,650,000 Redwood City, CA, Public Facilities, 8.20% (U.S. Government Securities Prerefunded), 6/1/95 AAA 2,787,836 ------------------------------------------------------------------- 4,500,000 San Diego, CA, Housing Authority, Weekly VRDN (Multi-Family Housing Revenue Bonds)/(Oro Vista Apartments Project)/(Series 1987A)/(Mercury Savings & Loan LOC) AAA 4,500,000 ------------------------------------------------------------------- 2,000,000 San Francisco, CA, 9.00% Sales Tax Revenue Bonds (Bay Area Rapid Transit) (U.S. Government Securities Prerefunded), 7/1/95 AAA 2,153,134 ------------------------------------------------------------------- 5,000,000 Santa Anna, CA, Housing Authority, Weekly VRDN (Multi-Family Housing Revenue Bonds)/(Vella Verde Apartments)/(Series 1985B)/(Mercury Savings & Loan LOC) AAA 5,000,000 ------------------------------------------------------------------- --------------- Total 106,608,234 ------------------------------------------------------------------- --------------- COLORADO--0.2% ------------------------------------------------------------------- 1,000,000 Adams Arapahoe Counties, CO, School District, 10.75% (U.S. Government Securities Prerefunded), 12/1/94 AAA 1,040,498 ------------------------------------------------------------------- --------------- CONNECTICUT--1.2% ------------------------------------------------------------------- 5,255,000 Connecticut State Housing Finance Authority, Daily VRDN (Housing Mortgage Finance Project) Floating Trust Receipts MIG1 5,255,000 ------------------------------------------------------------------- --------------- DISTRICT OF COLUMBIA--1.1% ------------------------------------------------------------------- 5,000,000 District of Columbia, 2.80%, Supplemental Student Loan Revenue (Series 1985)/(Conservative Loan Project)/ (Mitsubishi Bank LOC) 7/1/94 VMIG-1 5,000,000 ------------------------------------------------------------------- --------------- FLORIDA--4.4% ------------------------------------------------------------------- 1,050,000 Alachua County, FL, Health Facilities Authority, 3.20% Revenue Bonds (Barnette Bank LOC), 7/12/94 A2 1,050,000 -------------------------------------------------------------------
FIRST UNION TAX FREE MONEY MARKET PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE SHORT-TERM MUNICIPAL SECURITIES--CONTINUED - ----------------------------------------------------------------------------------- FLORIDA--CONTINUED ------------------------------------------------------------------- $ 13,860,000 Florida State Board of Education Public School, Weekly VRDN (Capital Outlay)/(Series A)/(Class A)/(ADP Investment LOC) NR $ 13,860,000 ------------------------------------------------------------------- 1,400,000 Jacksonville, FL, Electric Authority, 10.00% Revenue Bonds (St. John's River Electric Authority)/(U.S. Government Securities Prerefunded), 10/1/94 AAA 1,440,530 ------------------------------------------------------------------- 3,500,000 Orange County, FL, IDR, 3.40% (General Accident Life Insurance), Optional Tender 12/1/94 A-1+ 3,500,000 ------------------------------------------------------------------- --------------- Total 19,850,530 ------------------------------------------------------------------- --------------- GEORGIA--4.4% ------------------------------------------------------------------- 2,000,000 Columbus, GA, Weekly VRDN, Industrial Facilities and Pollution Control Financing Authority, Solid Waste Disposal Revenue Bonds (B&G Realty, Inc.)/(Bankers Trust LOC) Aa2 2,000,000 ------------------------------------------------------------------- 545,000 Columbus, GA, IDA Weekly VRDN (R.P. Real Estate Project) (Columbus Bank and Trust Co. LOC) AA 545,000 ------------------------------------------------------------------- 2,455,000 Fulton County, GA, Weekly VRDN (Series 1993)/(Fulton County, GA, Housing Authority)/(Federal Home Loan Atlanta LOC) AAA 2,455,000 ------------------------------------------------------------------- 4,000,000 Georgia Municipal Electric Authority, 9.875% Revenue Bonds (U.S. Government Securities Prerefunded), 1/1/95 A1 4,214,346 ------------------------------------------------------------------- 800,000 Georgia State, 10.00% (Series B), Mandatory Tender 7/1/94 AAA 824,000 ------------------------------------------------------------------- 5,965,000 Metropolitan Atlanta Rapid Transit Authority, GA, Weekly VRDN (Sales Tax Revenue Refunding Bonds)/(Series A-BTP-58) NR 5,965,000 ------------------------------------------------------------------- 1,800,000 Municipal Electric Authority, GA, 3.85% (Series A)/ (Morgan Guaranty Trust Bank LOC), 6/1/95 VMIG-1 1,800,000 ------------------------------------------------------------------- 2,000,000 Polk, GA, Weekly VRDN (Series 1985)/(Kimoto Tech, Inc.) AA2 2,000,000 ------------------------------------------------------------------- --------------- Total 19,803,346 ------------------------------------------------------------------- --------------- HAWAII--3.8% ------------------------------------------------------------------- 17,000,000 Eagle Tax-Exempt Trust, Weekly VRDN (Series 1993Q)/ (Class A Certificate of Participants)/(Hawaii GO)/ (Citibank LOC) AA 17,000,000 ------------------------------------------------------------------- --------------- ILLINOIS--5.9% ------------------------------------------------------------------- 1,100,000 Illinois Development Finance Authority, Weekly VRDN (Series 1986)/(Industrial Bank of Japan Ltd. LOC)/(Subject to AMT) Aa2 1,100,000 -------------------------------------------------------------------
FIRST UNION TAX FREE MONEY MARKET PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE SHORT-TERM MUNICIPAL SECURITIES--CONTINUED - ----------------------------------------------------------------------------------- ILLINOIS--CONTINUED ------------------------------------------------------------------- $ 1,400,000 Illinois Development Finance Authority, Weekly VRDN (Series 1991)/(Industrial Bank of Japan Ltd. LOC)/(Subject to AMT) Aa3 $ 1,400,000 ------------------------------------------------------------------- 950,000 Illinois Development Finance Authority, Weekly VRDN (Series 1991)/(Cobbler Square)/(Sumitomo Bank LOC) A-1 950,000 ------------------------------------------------------------------- 2,735,000 Illinois Development Finance Authority, Weekly VRDN (Cobbler Square)/(Sumitomo Bank LOC) A-1+ 2,735,000 ------------------------------------------------------------------- 1,300,000 Illinois Development Finance Authority, Weekly VRDN (Dart Container Corp.)/(National Bank of Detroit LOC) Aa 1,300,000 ------------------------------------------------------------------- 2,900,000 Illinois Development Finance Authority, Weekly VRDN (Randolph Pickle Corp.)/(American National Chicago LOC) A+ 2,900,000 ------------------------------------------------------------------- 6,800,000 Illinois Development Finance Authority, 2.85% (General Accident Life Insurance), Optional Tender 9/1/94 A-1+ 6,800,000 ------------------------------------------------------------------- 3,500,000 Illinois Economic Development Revenue, Weekly VRDN (MTI Corporate Project)/(Industrial Bank of Japan Ltd. LOC)/(Subject to AMT) VMIG-1 3,500,000 ------------------------------------------------------------------- 1,300,000 Illinois Health Facilities Authority, Daily VRDN (Series 92)/Franciscan Sisters Health Care Corp.) MIG1 1,300,000 ------------------------------------------------------------------- 5,024,432 LaSalle National Bank, Weekly VRDN (Series 1993A)/ (LaSalle National Bank LOC) A-1+ 5,024,432 ------------------------------------------------------------------- --------------- Total 27,009,432 ------------------------------------------------------------------- --------------- INDIANA--0.4% ------------------------------------------------------------------- 750,000 Avilla, IN, EDR Weekly VRDN (G & P Partners Partnership)/(Credit Commercial De France LOC)/ (Subject to AMT) VMIG-1 750,000 ------------------------------------------------------------------- 300,000 Indiana State Employment Development Commission, Weekly VRDN (Griner Engineering Co.)/(Credit Commercial De France LOC)/(Subject to AMT) VMIG-1 300,000 ------------------------------------------------------------------- 1,000,000 Sullivan, IN, 3.30% PCR (Hoosier Electric)/(National Rural Utilities Corp. Guaranty), 10/4/94 P-1 1,000,000 ------------------------------------------------------------------- --------------- Total 2,050,000 ------------------------------------------------------------------- --------------- IOWA--0.8% ------------------------------------------------------------------- 3,620,000 Iowa Municipalities Workers Compensation Association, 2.80%, (Self-Insured Funding Revenue Bonds)/(Series 1988), 7/1/94 Aa3 3,620,000 ------------------------------------------------------------------- --------------- KANSAS--1.1% ------------------------------------------------------------------- 4,800,000 Osage, KS, Weekly VRDN, Industrial Revenue Bonds NR 4,800,000 ------------------------------------------------------------------- ---------------
FIRST UNION TAX FREE MONEY MARKET PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE SHORT-TERM MUNICIPAL SECURITIES--CONTINUED - ----------------------------------------------------------------------------------- KENTUCKY--2.0% ------------------------------------------------------------------- $ 9,000,000 Pendleton County, KY, 3.35% Multi-County Lease Revenue Bonds (Commonwealth of Australia LOC), 8/1/94 AA $ 9,000,000 ------------------------------------------------------------------- --------------- LOUISIANA--0.2% ------------------------------------------------------------------- 1,000,000 Louisiana Public Facilities Authority, 3.25%, Multi-Family Housing Revenue Refunding Bonds (Kingston Village Apartments Project)/(Series 1988)/(National Fire Insurance Company of Hartford Surety Bond), Mandatory Tender 12/1/94 AA- 1,000,000 ------------------------------------------------------------------- --------------- MARYLAND--4.0% ------------------------------------------------------------------- 3,650,000 Maryland State Community Development, Department of Housing 3.20%, 10/1/94 AA 3,650,000 ------------------------------------------------------------------- 1,000,000 Maryland State Health & Higher Education Facilities Authority, Weekly VRDN (Pooled Loan Project)/(Kennedy Krieger Institute)/(Series 1993D)/(First National Bank LOC) A 1,000,000 ------------------------------------------------------------------- 4,800,000 Northeast, MD, 2.50%, (Waste Disposal Authority), Reserve Recovery Revenue Bond (Long Option Period Refunding CR-120), Optional Tender 7/1/94 AAA 4,800,000 ------------------------------------------------------------------- 8,500,000 Northeast, MD, 2.50%, (Waste Disposal Authority), Reserve Recovery Revenue Bond (Long Option Period Refunding CR-122), Optional Tender 7/1/94 AAA 8,500,000 ------------------------------------------------------------------- --------------- Total 17,950,000 ------------------------------------------------------------------- --------------- MICHIGAN--4.3% ------------------------------------------------------------------- 1,000,000 Detroit, MI, 4.00% GO TANs (Series 94-A)/(National Bank of Detroit LOC) MIG1 1,004,136 ------------------------------------------------------------------- 2,800,000 Farmington Hills Hospital Finance Authority, Daily VRDN (Botsford General)/(Series 91B)/(MBIA Insured) VMIG-1 2,800,000 ------------------------------------------------------------------- 800,000 Meridian, MI, EDC, IDR Weekly VRDN (Series 1984)/ (Hanna Technology & Research Center) AA+ 800,000 ------------------------------------------------------------------- 2,380,000 Michigan State Building Authority, 5.40% Revenue Bonds (Series 1987I)/(University of Michigan)/(U.S. Government Securities ETM), 3/1/95 AAA 2,414,930 ------------------------------------------------------------------- 12,500,000 Michigan State Job Development Authority, Weekly VRDN (Sumitomo Bank LOC) AA3 12,500,000 ------------------------------------------------------------------- --------------- Total 19,519,066 ------------------------------------------------------------------- --------------- MINNESOTA--1.2% ------------------------------------------------------------------- 5,300,000 Eagle Tax-Exempt Trust Weekly VRDN (Series 94C-2302) 5,300,000 ------------------------------------------------------------------- ---------------
FIRST UNION TAX FREE MONEY MARKET PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE SHORT-TERM MUNICIPAL SECURITIES--CONTINUED - ----------------------------------------------------------------------------------- MISSOURI--1.1% ------------------------------------------------------------------- $ 2,000,000 St. Louis, MO, IDA, Weekly VRDN (Schmuck Markets, Inc.)/(Bankers Trust LOC) P-1 $ 2,000,000 ------------------------------------------------------------------- 2,910,000 Springfield, MO, IDA Weekly VRDN (Springfield Retirement Center)/(National Bank of Australia LOC) VMIG-1 2,910,000 ------------------------------------------------------------------- --------------- Total 4,910,000 ------------------------------------------------------------------- --------------- MONTANA--0.7% ------------------------------------------------------------------- 3,300,000 Montana State Board Investment Resource Recovery, Weekly VRDN (Coalstrip Project)/(Fuji Bank Ltd. LOC)/ (Subject to AMT) P-1 3,300,000 ------------------------------------------------------------------- --------------- NEW YORK--1.8% ------------------------------------------------------------------- 8,000,000 Eagle Tax-Exempt Trust, Weekly VRDN (Series 94-3205)/ (New York State Environmental Facilities)/(Citibank LOC) AA 8,000,000 ------------------------------------------------------------------- --------------- NEVADA--0.7% ------------------------------------------------------------------- 3,170,000 Nevada Housing Division, 3.10%, 10/1/94 AA 3,170,000 ------------------------------------------------------------------- --------------- NORTH CAROLINA--2.4% ------------------------------------------------------------------- 7,700,000 Columbus County, NC, Industrial Facilities & PCR Weekly VRDN (Solid Waste Disposal Revenue Bonds)/(Federal Paper Board Co., Inc. Project)/(Series 1992)/(Dai-Ichi Kangyo Bank LOC)/(Subject to AMT) AA-1 7,700,000 ------------------------------------------------------------------- 3,000,000 Durham, NC, 4.00% BANs (Series A)/(Public Improvement) MIG1 3,012,226 ------------------------------------------------------------------- --------------- Total 10,712,226 ------------------------------------------------------------------- --------------- NORTH DAKOTA--0.8% ------------------------------------------------------------------- 3,600,000 Grand Forks, ND, Daily VRDN, Health Facilities Revenue (Series 92B)/ (United Hospital Group)/(Fuji Bank LOC) VMIG-1 3,600,000 ------------------------------------------------------------------- --------------- OHIO--0.8% ------------------------------------------------------------------- 3,500,000 City of Cleveland, OH, 3.50%, Public Power Systems Improvement Revenue BANs (Series 1993B), 8/1/94 MIG1 3,501,212 ------------------------------------------------------------------- --------------- OKLAHOMA--0.3% ------------------------------------------------------------------- 1,500,000 Oklahoma Housing Finance Agency, 3.875% SFM, 5/1/95 VMIG-1 1,500,000 ------------------------------------------------------------------- --------------- OREGON--0.2% ------------------------------------------------------------------- 1,000,000 Metropolitan Service District, OR, Weekly VRDN (Ridel Oregon Compost Co.)/(Series 1990-1)/(Bank of Oregon LOC) P-1 1,000,000 ------------------------------------------------------------------- --------------- PENNSYLVANIA--2.4% ------------------------------------------------------------------- 8,950,000 Montgomery County, PA, IDA Weekly VRDN (Radnor/ Plymouth Partnership III Project)/(Series 1985)/(Fuji Bank LOC) A-1 8,950,000 -------------------------------------------------------------------
FIRST UNION TAX FREE MONEY MARKET PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE SHORT-TERM MUNICIPAL SECURITIES--CONTINUED - ----------------------------------------------------------------------------------- PENNSYLVANIA--CONTINUED ------------------------------------------------------------------- $ 1,890,000 Westmoreland County, PA, IDA 3.74%, Revenue Bond (White Consolidated Industries, Inc. Project), Optional Tender 12/1/94 P1 $ 1,890,000 ------------------------------------------------------------------- --------------- Total 10,840,000 ------------------------------------------------------------------- --------------- SOUTH CAROLINA--3.1% ------------------------------------------------------------------- 1,370,000 Anderson County, SC, IDR 3.25% (Kravit Fabrics, Inc.)/ (South Carolina National Bank LOC), 3/1/95 AA2 1,370,000 ------------------------------------------------------------------- 900,000 South Carolina Jobs, EDA Weekly VRDN (Harvin Choice Meats)/(Bank of Tokyo Ltd. LOC)/(Subject to AMT) VMIG-1 900,000 ------------------------------------------------------------------- 850,000 South Carolina Jobs, EDA Weekly VRDN (Tuttle Co.) (Credit Commercial De France LOC)/(Subject to AMT) VMIG-1 850,000 ------------------------------------------------------------------- 750,000 South Carolina Jobs, EDA Daily VRDN (Series 1989B)/ (Ridge Pallets, Inc.)/(Credit Commercial De France LOC)/ (Subject to AMT) P-1 750,000 ------------------------------------------------------------------- 300,000 South Carolina Jobs, EDA Weekly VRDN (Kent Manufacturing Project)/(Credit Commercial De France LOC)/(Subject to AMT) VMIG-1 300,000 ------------------------------------------------------------------- 1,520,000 South Carolina Jobs, EDA Weekly VRDN (Batesburg Industrial Fabrics)/(Credit Commercial De France)/ (Subject to AMT) VMIG-1 1,520,000 ------------------------------------------------------------------- 200,000 South Carolina Jobs EDA, Weekly VRDN (Sudan Co. and Delta Properties)/(Credit Commercial De France LOC)/ (Subject to AMT) VMIG-1 200,000 ------------------------------------------------------------------- 1,300,000 South Carolina Jobs, EDA Weekly VRDN (Regal Beloit Corp. Project)/(Credit Commercial De France LOC)/ (Subject to AMT) P-1 1,300,000 ------------------------------------------------------------------- 1,750,000 South Carolina Public Service Authority, 3.30%, 10/4/94 NR 1,750,000 ------------------------------------------------------------------- 5,049,000 State of South Carolina, Weekly VRDN (Capital Import Bonds)/(Series V-BTP-27)/(Class A Certificates)/(ADP Investment LOC) NR 5,049,000 ------------------------------------------------------------------- --------------- Total 13,989,000 ------------------------------------------------------------------- --------------- TENNESSEE--6.4% ------------------------------------------------------------------- 4,425,000 Franklin County, TN, Monthly VRDN (Health & Education Facilities Board)/(Series 1990)/(University of the South Project) A-1 4,425,000 ------------------------------------------------------------------- 1,000,000 Blount, TN, IDR Weekly VRDN (Series 1988)/(Advanced Crystal, Inc.)/(Subject to AMT)/(Industrial Bank of Japan Ltd. LOC) AA 1,000,000 ------------------------------------------------------------------- 3,540,000 Knoxville, TN, Weekly VRDN (Waste Water System Revenue Refunding Improvement Bonds)/(Series 1993BTP-57)/(ADP Investment LOC) NR 3,540,000 -------------------------------------------------------------------
FIRST UNION TAX FREE MONEY MARKET PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE SHORT-TERM MUNICIPAL SECURITIES--CONTINUED - ----------------------------------------------------------------------------------- TENNESSEE--CONTINUED ------------------------------------------------------------------- $ 4,665,000 Memphis, TN, Weekly VRDN (Electric System Revenue Refunding Bonds)/(Series 1992)/(Series BTP-28)/(Class A Certificates)/(ADP Investment LOC) NR $ 4,665,000 ------------------------------------------------------------------- 2,790,000 Memphis-Shelby County, TN, IDB Weekly VRDN (Series 1985)/(Wang International, Inc. Project)/(Northwestern Mutual Life Insured) Aaa 2,790,000 ------------------------------------------------------------------- 3,000,000 Metropolitan Nashville Airport Authority, Weekly VRDN (Aerotech, Inc.)/(Norden Banken LOC)/(Subject to AMT) VMIG-1 3,000,000 ------------------------------------------------------------------- 1,300,000 Metropolitan Government, Nashville County, TN, Health & Education Facilities, 3.25% Revenue Bonds (Baptist Hospital Service)/(National Bank of Georgia LOC), 8/1/94 A-1 1,300,000 ------------------------------------------------------------------- 5,000,000 Metropolitan Government, Nashville County, TN, Health & Education Facilities, 3.20% Revenue Bonds (Baptist Hospital Service)/(National Bank of Georgia LOC), 10/4/94 A-1 5,000,000 ------------------------------------------------------------------- 3,700,000 Rutherford County, TN, Weekly VRDN (Outboard Marine Corp.) Aa3 3,700,000 ------------------------------------------------------------------- --------------- Total 29,420,000 ------------------------------------------------------------------- --------------- TEXAS--6.6% ------------------------------------------------------------------- 15,600,000 Eagle Tax-Exempt Trust, Certificates of Participation, Weekly VRDN (Series 1994E)/(Class A)/(Harris County, TX, Highway and Flood Control)/(Citibank LOC) AA 15,600,000 ------------------------------------------------------------------- 3,455,000 Houston, TX, Weekly VRDN (Houston, TX, Water & Sewer System)/(MBIA Insured) AAA 3,455,000 ------------------------------------------------------------------- 4,900,000 Midlothian, TX, Weekly VRDN (Crow Cement Co.)/ (Union Bank of Switzerland LOC) P-1 4,900,000 ------------------------------------------------------------------- 1,000,000 Port Development Corp., TX, 3.25% Marine Term Bits (Series A)/(Mitsui & Co. USA, Inc.)/(Industrial Bank of Japan LOC), 9/1/94 AAA 1,000,000 ------------------------------------------------------------------- 2,255,000 Tarrant County, TX, Weekly VRDN (Housing Finance Corporation)/(Multi-Family Housing Revenue)/(Lincoln Meadows Project)/(Series 1988)/(Continental Casualty Surety Bond)/(Algemene SBPA) AAA 2,255,000 ------------------------------------------------------------------- 3,000,000 Texas State, 3.50%, 10/4/94 AA 3,000,000 ------------------------------------------------------------------- --------------- Total 30,210,000 ------------------------------------------------------------------- --------------- UTAH--1.5% ------------------------------------------------------------------- 6,783,000 Variable Rate Trust Certificates XVII, Weekly VRDN (Utah Intermountain Power Supply Agency)/(Payment Guaranteed) Aa 6,783,000 ------------------------------------------------------------------- ---------------
FIRST UNION TAX FREE MONEY MARKET PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE SHORT-TERM MUNICIPAL SECURITIES--CONTINUED - ----------------------------------------------------------------------------------- VIRGINIA--4.1% ------------------------------------------------------------------- $ 6,900,000 Alexandria, VA, Redevelopment & Housing Authority, Weekly VRDN (Sumitomo Bank BPA) AAA $ 6,900,000 ------------------------------------------------------------------- 6,900,000 Amelia County, VA, IDA Weekly VRDN (Chambers Waste Systems)/(NationsBank LOC)/(Subject to AMT) VMIG-1 6,900,000 ------------------------------------------------------------------- 4,600,000 Charles County & City, VA, Weekly VRDN (Chambers Development)/(NationsBank LOC)/(Subject to AMT) VMIG-1 4,600,000 ------------------------------------------------------------------- --------------- Total 18,400,000 ------------------------------------------------------------------- --------------- WASHINGTON--2.9% ------------------------------------------------------------------- 6,365,000 King City, WA, Weekly VRDN Unlimited Tax GO Refunding Bonds (Series 1993C-BTP-56)/ (ADP Investment LOC) NR 6,365,000 ------------------------------------------------------------------- 793,000 Pilchuck Development Public Corporation, Weekly VRDN (Crystal Creek Lot Pound 11)/(Mitsubishi Bank Ltd. LOC) AA 793,000 ------------------------------------------------------------------- 1,000,000 Seattle, WA, Weekly VRDN (Industrial Development Corp.)/(Northwestern Industrial Project)/(Industrial Bank of Japan Ltd. LOC) AAA 1,000,000 ------------------------------------------------------------------- 5,035,000 Washington State, Weekly VRDN (Washington State Public Power Supply) NR 5,035,000 ------------------------------------------------------------------- --------------- Total 13,193,000 ------------------------------------------------------------------- --------------- WISCONSIN--5.0% ------------------------------------------------------------------- 1,000,000 Racine, WI, 3.25%, TRANs (Unified School District), 8/24/94 SP1+ 1,000,503 ------------------------------------------------------------------- 1,450,000 Wisconsin Housing & Economic Development Authority, 3.05% Revenue Bonds, 9/1/94 AA 1,450,000 ------------------------------------------------------------------- 20,000,000 Wisconsin State, 4.50% Operating Notes 6/15/95 MIG1 20,149,700 ------------------------------------------------------------------- --------------- Total 22,600,203 ------------------------------------------------------------------- --------------- WYOMING--1.1% ------------------------------------------------------------------- 5,000,000 Lincoln County, WY, 3.40% PCR (Series C)/(Exxon Corp. Guaranty), 12/1/94 P-1 5,000,000 ------------------------------------------------------------------- --------------- TOTAL SHORT-TERM MUNICIPAL SECURITIES (AT AMORTIZED COST) 484,714,747 ------------------------------------------------------------------- ---------------
FIRST UNION TAX FREE MONEY MARKET PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: MOODY'S SHARES OR S&P* VALUE MUTUAL FUND SHARES--6.5% - ----------------------------------------------------------------------------------- 14,300,000 Dreyfus Municipal Cash Management Plus $ 14,300,000 ------------------------------------------------------------------- 15,265,000 Lehman Municipal Money Market Fund 15,265,000 ------------------------------------------------------------------- --------------- TOTAL MUTUAL FUND SHARES (AT NET ASSET VALUE) (NOTE 2A) 29,565,000 ------------------------------------------------------------------- --------------- TOTAL INVESTMENTS (AT AMORTIZED COST AND VALUE) $ 514,279,747+ ------------------------------------------------------------------- ---------------
* Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. + Also represents cost for federal tax purposes. Note: The categories of investments are shown as a percentage of net assets ($453,298,568) at June 30, 1994. The following abbreviations are used in this portfolio: AMT -- Alternative Minimum Tax IDR -- Industrial Development Revenue BANs -- Bond Anticipation Notes LOC -- Letter of Credit BPA -- Bond Purchase Agreement MBIA -- Municipal Bond Investors EDA -- Economic Development Authority Assurance EDC -- Economic Development Commission PCR -- Pollution Control Revenue SBPA -- Surety Bond Purchase Agreement EDR -- Economic Development Revenue SFM -- Single Family Mortgage ETM -- Escrowed to Maturity TANs -- Tax Anticipation Notes GO -- General Obligation TRANs -- Tax and Revenue Anticipation IDA -- Industrial Development Authority Notes IDB -- Industrial Development Bond VRDN -- Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements) FIRST UNION TAX FREE MONEY MARKET PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - ------------------------------------------------------------------------------------------------ Investments, at amortized cost and value (Note 2A) $514,279,747 - ------------------------------------------------------------------------------------------------ Cash 10,810 - ------------------------------------------------------------------------------------------------ Interest receivable 3,065,552 - ------------------------------------------------------------------------------------------------ Receivable for Fund shares sold 2,057 - ------------------------------------------------------------------------------------------------ --------------- Total assets 517,358,166 - ------------------------------------------------------------------------------------------------ LIABILITIES: - ------------------------------------------------------------------------------------------------ Payable for investments purchased $63,149,998 - -------------------------------------------------------------------------------- Dividends payable 668,383 - -------------------------------------------------------------------------------- Payable to distributor (Note 4) 149,010 - -------------------------------------------------------------------------------- Payable for Fund shares redeemed 10,000 - -------------------------------------------------------------------------------- Accrued expenses 82,207 - -------------------------------------------------------------------------------- -------------- Total liabilities 64,059,598 - ------------------------------------------------------------------------------------------------ --------------- NET ASSETS for 453,298,568 shares of beneficial interest outstanding $453,298,568 - ------------------------------------------------------------------------------------------------ --------------- NET ASSETS VALUE, Offering Price and Redemption Proceeds per Share: - ------------------------------------------------------------------------------------------------ Class B Investment Shares (net assets of $400,626,203 / 400,626,203 shares of beneficial interest outstanding) $1.00 - ------------------------------------------------------------------------------------------------ --------------- Trust Shares (net assets of $52,672,365 / 52,672,365 shares of beneficial interest outstanding) $1.00 - ------------------------------------------------------------------------------------------------ ---------------
(See Notes which are an integral part of the Financial Statements) FIRST UNION TAX FREE MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - --------------------------------------------------------------------------------------------------- Interest income (Note 2C) $5,812,147 - --------------------------------------------------------------------------------------------------- EXPENSES-- - --------------------------------------------------------------------------------------------------- Investment advisory fee* $729,040 - ------------------------------------------------------------------------------------ Trustees' fees 2,316 - ------------------------------------------------------------------------------------ Administrative personnel and services fee* 176,275 - ------------------------------------------------------------------------------------ Custodian and portfolio accounting fees 60,380 - ------------------------------------------------------------------------------------ Transfer and dividend disbursing agent fees and expenses* 20,667 - ------------------------------------------------------------------------------------ Distribution services fee* 552,415 - ------------------------------------------------------------------------------------ Fund share registration costs 23,859 - ------------------------------------------------------------------------------------ Legal fees 3,884 - ------------------------------------------------------------------------------------ Auditing fees 5,836 - ------------------------------------------------------------------------------------ Printing and postage 12,496 - ------------------------------------------------------------------------------------ Insurance premiums 5,229 - ------------------------------------------------------------------------------------ Miscellaneous 1,504 - ------------------------------------------------------------------------------------ ------------- Total expenses 1,593,901 - ------------------------------------------------------------------------------------ Deduct--Waiver of investment advisory fee* 509,387 - ------------------------------------------------------------------------------------ ------------- Net expenses 1,084,514 - --------------------------------------------------------------------------------------------------- ------------- Net investment income $4,727,633 - --------------------------------------------------------------------------------------------------- -------------
*See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION TAX FREE MONEY MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1994* 1993 INCREASE (DECREASE) IN NET ASSETS: - ----------------------------------------------------------------------------- OPERATIONS-- - ----------------------------------------------------------------------------- Net investment income $ 4,727,633 $ 6,989,442 - ----------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ----------------------------------------------------------------------------- Dividends to shareholders from net investment income: - ----------------------------------------------------------------------------- Class B Investment Shares (4,110,590) (5,828,807) - ----------------------------------------------------------------------------- Trust Shares (617,043) (1,160,635) - ----------------------------------------------------------------------------- --------------- ----------------- Change in net assets from distributions to shareholders (4,727,633) (6,989,442) - ----------------------------------------------------------------------------- --------------- ----------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ----------------------------------------------------------------------------- Proceeds from sale of shares 949,099,756 1,830,901,913 - ----------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 1,325,153 2,181,449 - ----------------------------------------------------------------------------- Cost of shares redeemed (778,955,090) (1,752,549,719) - ----------------------------------------------------------------------------- --------------- ----------------- Change in net assets from Fund share transactions 171,469,819 80,533,643 - ----------------------------------------------------------------------------- --------------- ----------------- Change in net assets 171,469,819 80,533,643 - ----------------------------------------------------------------------------- NET ASSETS: - ----------------------------------------------------------------------------- Beginning of period 281,828,749 201,295,106 - ----------------------------------------------------------------------------- --------------- ----------------- End of period $ 453,298,568 $ 281,828,749 - ----------------------------------------------------------------------------- --------------- -----------------
*Six months ended June 30, 1994 (unaudited). (See Notes which are an integral part of the Financial Statements) FIRST UNION TREASURY MONEY MARKET PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------- -------------------------------------------------------------------------------- --------------- U.S. TREASURY OBLIGATIONS--38.3% - ------------------------------------------------------------------------------------------------ U.S. TREASURY BILL--3.1% -------------------------------------------------------------------------------- $ 20,000,000 7/7/94 $ 19,989,417 -------------------------------------------------------------------------------- --------------- U.S. TREASURY BOND--1.6% -------------------------------------------------------------------------------- 10,000,000 8.75%, 8/15/94 10,063,727 -------------------------------------------------------------------------------- --------------- U.S. TREASURY NOTES--33.6% -------------------------------------------------------------------------------- 25,000,000 3.875%, 3/31/95 24,755,696 -------------------------------------------------------------------------------- 10,000,000 4.00%, 9/30/94 10,016,363 -------------------------------------------------------------------------------- 70,000,000 4.25%, 7/31/94-1/31/95 69,968,859 -------------------------------------------------------------------------------- 20,700,000 4.625%, 11/30/94 20,760,747 -------------------------------------------------------------------------------- 30,000,000 6.00%, 11/15/94 30,232,591 -------------------------------------------------------------------------------- 8,000,000 7.75%, 2/15/95 8,128,392 -------------------------------------------------------------------------------- 15,000,000 8.25%, 11/15/94 15,189,483 -------------------------------------------------------------------------------- 15,000,000 8.625%, 8/15/94 15,095,581 -------------------------------------------------------------------------------- 20,000,000 STRIP, 4.15%, 11/15/94 19,697 059 -------------------------------------------------------------------------------- --------------- Total 213,844 771 -------------------------------------------------------------------------------- --------------- TOTAL U.S. TREASURY OBLIGATIONS 243,897,915 -------------------------------------------------------------------------------- --------------- *REPURCHASE AGREEMENTS--60.8% - ------------------------------------------------------------------------------------------------ 30,000,000 Barclays Bank PLC, 4.05%, dated 6/30/94, due 7/1/94 30,000,000 -------------------------------------------------------------------------------- 30,000,000 Carroll, McEntee & McGinley, Inc., 4.15%, dated 6/30/94, due 7/1/94 30,000,000 -------------------------------------------------------------------------------- 50,000,000 Dean Witter Reynolds, Inc., 4.35%, dated 6/30/94, due 7/1/94 50,000,000 -------------------------------------------------------------------------------- 46,848,000 Donaldson, Lufkin & Jenrette Securities Corp., 4.125%, dated 6/30/94, due 7/1/94 46,848,000 -------------------------------------------------------------------------------- 20,000,000 First Boston Corp., 4.125%, dated 6/30/94, due 7/1/94 20,000,000 -------------------------------------------------------------------------------- 30,000,000 Goldman, Sachs & Co., 4.15%, dated 6/30/94, due 7/1/94 30,000,000 -------------------------------------------------------------------------------- 50,000,000 NationsBank, 4.28%, dated 6/30/94, due 7/1/94 50,000,000 -------------------------------------------------------------------------------- 30,000,000 Nikko Securities Co. International, Inc., 4.25%, dated 6/30/94, due 7/1/94 30,000,000 -------------------------------------------------------------------------------- 50,000,000 **Fuji Securities, Inc., 4.30%, dated 6/27/94, due 7/5/94 50,000,000 -------------------------------------------------------------------------------- 50,000,000 **Kidder, Peabody & Co., Inc., 4.25%, dated 6/27/94, due 7/5/94 50,000,000 -------------------------------------------------------------------------------- --------------- TOTAL REPURCHASE AGREEMENTS, (NOTE 2B) 386,848,000 -------------------------------------------------------------------------------- ---------------
FIRST UNION TREASURY MONEY MARKET PORTFOLIO - --------------------------------------------------------------------------------
SHARES VALUE - -------------- -------------------------------------------------------------------------------- --------------- MUTUAL FUND SHARES--0.6% - ------------------------------------------------------------------------------------------------ 2,611,377 Fidelity U.S. Treasury, Inc. Portfolio $ 2,611,377 -------------------------------------------------------------------------------- 1,090,288 Lehman Treasury Instruments 1,090,288 -------------------------------------------------------------------------------- --------------- TOTAL MUTUAL FUND SHARES, AT NET ASSET VALUE (NOTE 2A) 3,701,665 -------------------------------------------------------------------------------- --------------- TOTAL INVESTMENTS, AT AMORTIZED COST AND VALUE $ 634,447,580+ -------------------------------------------------------------------------------- ---------------
* Repurchase agreements are fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. ** Although final maturity falls beyond seven days, a liquidity feature is included in each transaction to permit termination of the repurchase agreement. + Also represents cost for federal tax purposes. Note: The categories of investments are shown as a percentage of net assets ($635,801,989) at June 30, 1994. (See Notes which are an integral part of the Financial Statements) FIRST UNION TREASURY MONEY MARKET PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - ------------------------------------------------------------------------------------------------ Investments in repurchase agreements (Note 2B) $ 386,848,000 - ------------------------------------------------------------------------------- Investments in other securities (Note 2A) 247,599,580 - ------------------------------------------------------------------------------- --------------- Total investments at amortized cost and value $ 634,447,580 - ------------------------------------------------------------------------------------------------ Interest receivable 3,122,826 - ------------------------------------------------------------------------------------------------ Deferred expenses (Note 2F) 41,814 - ------------------------------------------------------------------------------------------------ --------------- Total assets 637,612,220 - ------------------------------------------------------------------------------------------------ LIABILITIES: - ------------------------------------------------------------------------------------------------ Dividends payable 1,533,270 - ------------------------------------------------------------------------------- Payable to Distributor (Note 4) 148,885 - ------------------------------------------------------------------------------- Payable for Fund shares redeemed 18,330 - ------------------------------------------------------------------------------- Accrued expenses 109,746 - ------------------------------------------------------------------------------- --------------- Total liabilities 1,810,231 - ------------------------------------------------------------------------------------------------ --------------- NET ASSETS for 635,801,989 shares of beneficial interest outstanding $ 635,801,989 - ------------------------------------------------------------------------------------------------ --------------- NET ASSET VALUE, Offering Price, and Redemption Proceeds per Share: - ------------------------------------------------------------------------------------------------ Class B Investment Shares (net assets of $406,339,419 / 406,339,419 shares of beneficial interest outstanding) $1.00 - ------------------------------------------------------------------------------------------------ --------------- Trust Shares (net assets of $229,462,570 / 229,462,570 shares of beneficial interest outstanding) $1.00 - ------------------------------------------------------------------------------------------------ ---------------
(See Notes which are an integral part of the Financial Statements) FIRST UNION TREASURY MONEY MARKET PORTFOLIO STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - -------------------------------------------------------------------------------------------------- Interest income (Note 2C) $ 11,491,601 - -------------------------------------------------------------------------------------------------- EXPENSES-- - -------------------------------------------------------------------------------------------------- Investment advisory fee* $ 1,138,369 - ----------------------------------------------------------------------------------- Trustees' fees 4,771 - ----------------------------------------------------------------------------------- Administrative personnel and services fee* 275,262 - ----------------------------------------------------------------------------------- Custodian and portfolio accounting fees 79,929 - ----------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 21,310 - ----------------------------------------------------------------------------------- Distribution services fee* 519,015 - ----------------------------------------------------------------------------------- Fund share registration costs 56,800 - ----------------------------------------------------------------------------------- Legal fees 2,727 - ----------------------------------------------------------------------------------- Auditing fees 5,811 - ----------------------------------------------------------------------------------- Printing and postage 9,481 - ----------------------------------------------------------------------------------- Insurance premiums 6,907 - ----------------------------------------------------------------------------------- Taxes 233 - ----------------------------------------------------------------------------------- Miscellaneous 2,830 - ----------------------------------------------------------------------------------- ------------- Total expenses 2,123,445 - ----------------------------------------------------------------------------------- Deduct-- - ----------------------------------------------------------------------------------- Waiver of investment advisory fee* $ 1,019,877 - -------------------------------------------------------------------- Waiver of administrative personnel and services fee* 111,106 1,130,983 - -------------------------------------------------------------------- ------------- ------------- Net expenses 992,462 - -------------------------------------------------------------------------------------------------- -------------- Net investment income $ 10,499,139 - -------------------------------------------------------------------------------------------------- --------------
* See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION TREASURY MONEY MARKET PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, -------------------------------------- 1994* 1993 ------------------ ------------------ INCREASE (DECREASE) IN NET ASSETS: - ------------------------------------------------------------------------- OPERATIONS-- - ------------------------------------------------------------------------- Net investment income $ 10,499,139 $ 16,203,545 - ------------------------------------------------------------------------- ------------------ ------------------ DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ------------------------------------------------------------------------- Dividends to shareholders from net investment income: - ------------------------------------------------------------------------- Class B Investment Shares (5,426,542) (6,814,308) - ------------------------------------------------------------------------- Trust Shares (5,072,597) (9,389,237) - ------------------------------------------------------------------------- ------------------ ------------------ Change in net assets from distributions to shareholders (10,499,139) (16,203,545) - ------------------------------------------------------------------------- ------------------ ------------------ FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ------------------------------------------------------------------------- Proceeds from sale of shares 1,302,995,635 2,533,728,363 - ------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 1,877,556 3,678,413 - ------------------------------------------------------------------------- Cost of shares redeemed (1,296,654,498) (2,404,845,463) - ------------------------------------------------------------------------- ------------------ ------------------ Change in net assets from Fund share transactions 8,218,693 132,561,313 - ------------------------------------------------------------------------- ------------------ ------------------ Change in net assets 8,218,693 132,561,313 - ------------------------------------------------------------------------- NET ASSETS: - ------------------------------------------------------------------------- Beginning of period 627,583,296 495,021,983 - ------------------------------------------------------------------------- ------------------ ------------------ End of period $ 635,801,989 $ 627,583,296 - ------------------------------------------------------------------------- ------------------ ------------------
* Six months ended June 30, 1994 (unaudited). (See Notes which are an integral part of the Financial Statements) FIRST UNION BALANCED PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
SHARES VALUE - --------------- ------------------------------------------------------------------------------- --------------- COMMON STOCKS--59.6% - ------------------------------------------------------------------------------------------------ AUTO PARTS/EQUIPMENT--0.8% ------------------------------------------------------------------------------- 150,000 Eaton Corp. $ 7,800,000 ------------------------------------------------------------------------------- --------------- BANKING & FINANCE--5.3% ------------------------------------------------------------------------------- 187,500 A.G. Edwards, Inc. 3,234,375 ------------------------------------------------------------------------------- 120,000 BankAmerica Corp. 5,490,000 ------------------------------------------------------------------------------- 267,000 Boatmens Bancshares, Inc. 8,410,500 ------------------------------------------------------------------------------- 140,000 Corestates Financial Corp. 3,605,000 ------------------------------------------------------------------------------- 18,800 First Tennessee National Corp. 822,500 ------------------------------------------------------------------------------- 97,400 First Virginia Banks, Inc. 3,591,625 ------------------------------------------------------------------------------- 200,000 NBD Bancorp, Inc. 6,325,000 ------------------------------------------------------------------------------- 254,400 National City Corp. 6,964,200 ------------------------------------------------------------------------------- 150,000 NationsBank Corp. 7,706,250 ------------------------------------------------------------------------------- 50,000 Suntrust Banks 2,418,750 ------------------------------------------------------------------------------- --------------- Total 48,568,200 ------------------------------------------------------------------------------- --------------- BASIC INDUSTRY--2.6% ------------------------------------------------------------------------------- 350,000 Hanson PLC 6,431,250 ------------------------------------------------------------------------------- 115,000 International Paper Co. 7,618,750 ------------------------------------------------------------------------------- 180,000 Phelps Dodge Corp. 10,260,000 ------------------------------------------------------------------------------- --------------- Total 24,310,000 ------------------------------------------------------------------------------- --------------- BUILDING MATERIALS--1.1% ------------------------------------------------------------------------------- 175,000 Sherwin Williams Co. 5,512,500 ------------------------------------------------------------------------------- 200,000 Pulte Corp. 4,600,000 ------------------------------------------------------------------------------- --------------- Total 10,112,500 ------------------------------------------------------------------------------- --------------- CAPITAL GOODS--1.6% ------------------------------------------------------------------------------- 150,000 Boeing Co. 6,937,500 ------------------------------------------------------------------------------- 125,000 Raytheon Co. 8,093,750 ------------------------------------------------------------------------------- --------------- Total 15,031,250 ------------------------------------------------------------------------------- --------------- CHEMICALS--4.8% ------------------------------------------------------------------------------- 180,000 Air Products & Chemicals, Inc. 7,627,500 ------------------------------------------------------------------------------- 105,000 Dow Chemical Co. 6,864,375 ------------------------------------------------------------------------------- 140,000 duPont (E.I.) de Nemours & Co. 8,172,500 ------------------------------------------------------------------------------- 175,000 Imperial Chemical Industries, PLC 8,312,500 ------------------------------------------------------------------------------- 120,000 Monsanto Co. 9,075,000 ------------------------------------------------------------------------------- 75,000 Rohm & Haas Co. 4,668,750 ------------------------------------------------------------------------------- --------------- Total 44,720,625 ------------------------------------------------------------------------------- ---------------
FIRST UNION BALANCED PORTFOLIO
SHARES VALUE - --------------- ------------------------------------------------------------------------------- --------------- COMMON STOCKS--CONTINUED - ------------------------------------------------------------------------------------------------ CONGLOMERATE/DIVERSIFIED--0.9% ------------------------------------------------------------------------------- 150,000 Textron, Inc. $ 7,856,250 ------------------------------------------------------------------------------- --------------- CONSUMER DURABLES--1.3% ------------------------------------------------------------------------------- 125,000 General Motors Corp. 6,281,250 ------------------------------------------------------------------------------- 175,000 Goodyear Tire and Rubber 6,300,000 ------------------------------------------------------------------------------- --------------- Total 12,581,250 ------------------------------------------------------------------------------- --------------- CONSUMER PRODUCTS--1.3% ------------------------------------------------------------------------------- 175,000 Nestle SA 7,344,330 ------------------------------------------------------------------------------- 90,000 Philip Morris Cos., Inc. 4,635,000 ------------------------------------------------------------------------------- --------------- Total 11,979,330 ------------------------------------------------------------------------------- --------------- DATA PROCESSING--1.8% ------------------------------------------------------------------------------- 300,000 COMPAQ Computer Corp. 9,675,000 ------------------------------------------------------------------------------- 200,000 SunGuard Data Systems 7,250,000 ------------------------------------------------------------------------------- --------------- Total 16,925,000 ------------------------------------------------------------------------------- --------------- DRUGS--0.9% ------------------------------------------------------------------------------- 130,000 Schering-Plough Corp. 7,962,500 ------------------------------------------------------------------------------- --------------- ELECTRONICS--2.0% ------------------------------------------------------------------------------- 205,000 Harris Corp. 9,045,625 ------------------------------------------------------------------------------- 100,000 Hewlett-Packard Co. 7,537,500 ------------------------------------------------------------------------------- 120,000 E G & G, Inc. 1,800,000 ------------------------------------------------------------------------------- --------------- Total 18,383,125 ------------------------------------------------------------------------------- --------------- ENERGY--5.1% ------------------------------------------------------------------------------- 182,000 Chevron Corp. 7,621,250 ------------------------------------------------------------------------------- 125,000 Exxon Corp. 7,078,125 ------------------------------------------------------------------------------- 125,000 Mobil Corp. 10,203,125 ------------------------------------------------------------------------------- 90,000 Royal Dutch Petroleum Co. 9,416,250 ------------------------------------------------------------------------------- 140,000 Texaco, Inc. 8,452,500 ------------------------------------------------------------------------------- 150,000 Tosco Corp. 4,462,500 ------------------------------------------------------------------------------- --------------- Total 47,233,750 ------------------------------------------------------------------------------- --------------- FINANCE--0.9% ------------------------------------------------------------------------------- 220,000 Beneficial Corp. 8,030,000 ------------------------------------------------------------------------------- --------------- FINANCIAL SERVICES--0.8% ------------------------------------------------------------------------------- 85,000 Federal National Mortgage Association 7,097,500 ------------------------------------------------------------------------------- --------------- FOOD & BEVERAGE--1.6% ------------------------------------------------------------------------------- 122,500 CPC International, Inc. 5,910,625 ------------------------------------------------------------------------------- 300,000 McDonalds Corp. 8,662,500 ------------------------------------------------------------------------------- --------------- Total 14,573,125 ------------------------------------------------------------------------------- ---------------
FIRST UNION BALANCED PORTFOLIO - --------------------------------------------------------------------------------
SHARES VALUE - --------------- ------------------------------------------------------------------------------- --------------- COMMON STOCKS--CONTINUED - ------------------------------------------------------------------------------------------------ FOREIGN--0.7% ------------------------------------------------------------------------------- 120,000 Telefonos De Mexico SA $ 6,705,000 ------------------------------------------------------------------------------- --------------- FOREST PRODUCTS--0.6% ------------------------------------------------------------------------------- 150,000 Weyerhaeuser Co. 6,000,000 ------------------------------------------------------------------------------- --------------- HARDWARE & TOOLS--0.1% ------------------------------------------------------------------------------- 37,000 Black & Decker Corp. 638,250 ------------------------------------------------------------------------------- --------------- HEALTHCARE & COSMETICS--1.7% ------------------------------------------------------------------------------- 95,000 Bausch & Lomb, Inc. 3,515,000 ------------------------------------------------------------------------------- 150,000 Foundation Health Corp. 5,831,250 ------------------------------------------------------------------------------- 200,000 National Medical Enterprises 3,125,000 ------------------------------------------------------------------------------- 55,000 Warner Lambert Co. 3,630,000 ------------------------------------------------------------------------------- --------------- Total 16,101,250 ------------------------------------------------------------------------------- --------------- INFORMATION PROCESSING--1.0% ------------------------------------------------------------------------------- 75,000 *Intel Corp. 4,387,500 ------------------------------------------------------------------------------- 250,000 *Sun Microsystems, Inc. 5,156,250 ------------------------------------------------------------------------------- --------------- Total 9,543,750 ------------------------------------------------------------------------------- --------------- INSURANCE--2.0% ------------------------------------------------------------------------------- 188,200 American General Corp. 5,199,025 ------------------------------------------------------------------------------- 195,000 Travelers, Inc. 6,288,750 ------------------------------------------------------------------------------- 220,000 Providian Corp. 6,655,000 ------------------------------------------------------------------------------- --------------- Total 18,142,775 ------------------------------------------------------------------------------- --------------- MACHINERY-DIVERSIFIED--0.6% ------------------------------------------------------------------------------- 150,000 Ingersoll Rand Co. 5,268,750 ------------------------------------------------------------------------------- --------------- MANUFACTURING/DISTRIBUTING--0.9% ------------------------------------------------------------------------------- 260,000 Avnet, Inc. 8,190,000 ------------------------------------------------------------------------------- --------------- MISCELLANEOUS--0.5% ------------------------------------------------------------------------------- 100,000 Eastman Kodak Co. 4,812,500 ------------------------------------------------------------------------------- --------------- MULTI-INDUSTRY--4.9% ------------------------------------------------------------------------------- 150,000 Emerson Electric Co. 8,531,250 ------------------------------------------------------------------------------- 180,000 General Electric Co. 8,392,500 ------------------------------------------------------------------------------- 105,000 ITT Corp. 8,570,625 ------------------------------------------------------------------------------- 60,000 Loews Corp. 5,115,000 ------------------------------------------------------------------------------- 110,000 Temple Inland, Inc. 5,238,750 ------------------------------------------------------------------------------- 145,000 United Technologies Corp. 9,316,250 ------------------------------------------------------------------------------- --------------- Total 45,164,375 ------------------------------------------------------------------------------- --------------- OFFICE EQUIPMENT & SUPPLIES--1.8% ------------------------------------------------------------------------------- 180,000 Pitney Bowes, Inc. 6,885,000 -------------------------------------------------------------------------------
FIRST UNION BALANCED PORTFOLIO - --------------------------------------------------------------------------------
SHARES VALUE - --------------- ------------------------------------------------------------------------------- --------------- COMMON STOCKS--CONTINUED - ------------------------------------------------------------------------------------------------ OFFICE EQUIPMENT & SUPPLIES--CONTINUED ------------------------------------------------------------------------------- 100,000 Xerox Corp. $ 9,775,000 ------------------------------------------------------------------------------- --------------- Total 16,660,000 ------------------------------------------------------------------------------- --------------- OIL & GAS--0.8% ------------------------------------------------------------------------------- 75,000 Atlantic Richfield Co. 7,659,375 ------------------------------------------------------------------------------- --------------- REAL ESTATE INVESTMENT TRUSTS--1.0% ------------------------------------------------------------------------------- 396,800 HealthCare REIT, Inc. 8,481,600 ------------------------------------------------------------------------------- 40,500 Highwood Properties, Inc. 804,937 ------------------------------------------------------------------------------- --------------- Total 9,286,537 ------------------------------------------------------------------------------- --------------- RETAIL & APPAREL--1.5% ------------------------------------------------------------------------------- 100,000 Dayton Hudson Corp. 8,100,000 ------------------------------------------------------------------------------- 150,000 May Department Stores Co. 5,887,500 ------------------------------------------------------------------------------- --------------- Total 13,987,500 ------------------------------------------------------------------------------- --------------- STEEL-IRON--0.6% ------------------------------------------------------------------------------- 195,000 Birmingham Steel Corp. 5,265,000 ------------------------------------------------------------------------------- --------------- TELEPHONE--2.1% ------------------------------------------------------------------------------- 110,000 Bell Atlantic Corp. 6,160,000 ------------------------------------------------------------------------------- 160,000 Southwestern Bell Corp. 6,960,000 ------------------------------------------------------------------------------- 150,000 U.S. West, Inc. 6,281,250 ------------------------------------------------------------------------------- --------------- Total 19,401,250 ------------------------------------------------------------------------------- --------------- TOBACCO--0.7% ------------------------------------------------------------------------------- 200,000 American Brands, Inc. 6,325,000 ------------------------------------------------------------------------------- --------------- TRANSPORTATION--3.3% ------------------------------------------------------------------------------- 150,000 British Airways PLC 8,643,750 ------------------------------------------------------------------------------- 150,000 Conrail, Inc. 8,212,500 ------------------------------------------------------------------------------- 100,000 Norfolk Southern Corp. 6,300,000 ------------------------------------------------------------------------------- 125,000 Union Pacific Corp. 7,078,125 ------------------------------------------------------------------------------- --------------- Total 30,234,375 ------------------------------------------------------------------------------- --------------- UTILITIES--2.0% ------------------------------------------------------------------------------- 100,000 Central & South West Corp. 2,125,000 ------------------------------------------------------------------------------- 120,000 Duke Power Co. 4,290,000 ------------------------------------------------------------------------------- 215,000 GTE Corp. 6,772,500 ------------------------------------------------------------------------------- 170,000 Union Electric Co. 5,397,500 ------------------------------------------------------------------------------- --------------- Total 18,585,000 ------------------------------------------------------------------------------- --------------- TOTAL COMMON STOCKS (IDENTIFIED COST $502,997,326) 551,135,092 ------------------------------------------------------------------------------- ---------------
FIRST UNION BALANCED PORTFOLIO - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - --------------- ------------------------------------------------------------------------------- --------------- CORPORATE BONDS--20.3% - ------------------------------------------------------------------------------------------------ ASSET-BACKED SECURITIES--3.7% ------------------------------------------------------------------------------- $ 2,492,250 Dillon Read Structure Finance, 6.66%, 8/15/2010 $ 2,189,721 ------------------------------------------------------------------------------- 2,652,081 Fleet Financial Home Equity Trust, 6.70%, 1/16/2006 2,649,132 ------------------------------------------------------------------------------- 10,000,013 Resolution Trust Corporation, 7.50%, 9/25/2022 9,799,882 ------------------------------------------------------------------------------- 20,000,000 Strategic Asset Funding Co., 3.98%, 7/15/94 19,887,000 ------------------------------------------------------------------------------- --------------- Total 34,525,735 ------------------------------------------------------------------------------- --------------- BANKING--1.6% ------------------------------------------------------------------------------- 3,000,000 Boatmens Bancshares, Inc., 6.75%, 3/15/2003 2,755,521 ------------------------------------------------------------------------------- 5,000,000 Wachovia Corp., 7.00%, 12/15/99 4,899,275 ------------------------------------------------------------------------------- 7,000,000 Wells Fargo, 5.65%, 8/21/95 6,968,486 ------------------------------------------------------------------------------- --------------- Total 14,623,282 ------------------------------------------------------------------------------- --------------- CHEMICALS--0.6% ------------------------------------------------------------------------------- 5,000,000 Dow Chemical Co., 8.625%, 4/1/2006 5,266,040 ------------------------------------------------------------------------------- --------------- CONSUMER PRODUCTS--1.3% ------------------------------------------------------------------------------- 5,000,000 General Mills, Inc., 9.00%, 12/20/2002 5,309,245 ------------------------------------------------------------------------------- 6,405,000 Philip Morris Cos., Inc., 8.65%-8.75%, 12/1/96-5/15/98 6,657,342 ------------------------------------------------------------------------------- --------------- Total 11,966,587 ------------------------------------------------------------------------------- --------------- ENERGY--1.2% ------------------------------------------------------------------------------- 4,000,000 Atlantic Richfield Co., 9.00%, 4/01/2021 4,275,720 ------------------------------------------------------------------------------- 2,000,000 BP North America, Inc., 9.875%, 3/15/2004 2,263,594 ------------------------------------------------------------------------------- 4,400,000 Texaco Capital Corp., 7.90%, 2/13/97 4,521,611 ------------------------------------------------------------------------------- --------------- Total 11,060,925 ------------------------------------------------------------------------------- --------------- FINANCE AND INSURANCE--6.6% ------------------------------------------------------------------------------- 633,079 CIT Group Securitization Corp., 4.70%, 6/15/2018 617,404 ------------------------------------------------------------------------------- 12,550,000 Chrysler Financial Corp., 9.54%, 5/15/2008 13,318,010 ------------------------------------------------------------------------------- 5,500,000 Dean Witter Discover & Co., 6.75%, 10/15/2013 4,569,559 ------------------------------------------------------------------------------- 5,500,000 General Electric Capital Corp., 8.75%, 3/14/2003 5,877,713 ------------------------------------------------------------------------------- 2,750,000 International Bank for Reconstruction & Development Co., 7.95%, 5/15/2016 2,764,388 ------------------------------------------------------------------------------- 5,000,000 International Lease Finance Co., 6.00%, 1/15/95 5,008,255 ------------------------------------------------------------------------------- 10,000,000 Merrill Lynch & Co., 7.00%-7.25%, 5/15/97-4/27/2008 9,503,340 ------------------------------------------------------------------------------- 4,250,000 Norwest Financial, Inc., 7.10%, 11/15/96 4,291,034 ------------------------------------------------------------------------------- 10,000,000 Salomon, Inc., 4.83%, 11/23/95 9,775,010 ------------------------------------------------------------------------------- 5,000,000 Transamerica Financial Corp., 2.75%, 7/15/94 5,003,095 ------------------------------------------------------------------------------- --------------- Total 60,727,808 ------------------------------------------------------------------------------- ---------------
FIRST UNION BALANCED PORTFOLIO - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - --------------- ------------------------------------------------------------------------------- --------------- CORPORATE BONDS--CONTINUED - ------------------------------------------------------------------------------------------------ FOOD AND BEVERAGE--1.1% ------------------------------------------------------------------------------- $ 5,500,000 Coca Cola Enterprises, 8.35%, 6/20/95 $ 5,630,372 ------------------------------------------------------------------------------- 4,250,000 Pepsico, Inc., 7.625%, 11/1/98 4,352,663 ------------------------------------------------------------------------------- --------------- Total 9,983,035 ------------------------------------------------------------------------------- --------------- GOVERNMENT AGENCIES--0.7% ------------------------------------------------------------------------------- 7,000,000 United States Government Department, 8.625%, 12/15/2013 6,923,525 ------------------------------------------------------------------------------- --------------- HARDWARE & TOOLS--0.4% ------------------------------------------------------------------------------- 4,300,000 Stanley Works, 7.375%, 12/15/2002 4,194,057 ------------------------------------------------------------------------------- --------------- MEDICAL EQUIPMENT--0.5% ------------------------------------------------------------------------------- 5,000,000 Baxter International, Inc., 7.25%, 2/15/2008 4,558,855 ------------------------------------------------------------------------------- --------------- MISCELLANEOUS--0.6% ------------------------------------------------------------------------------- 5,000,000 General American Transn Corp., 9.30%, 8/1/95 5,175,045 ------------------------------------------------------------------------------- --------------- POLLUTION CONTROL--0.2% ------------------------------------------------------------------------------- 1,400,000 Waste Management, 8.75%, 5/01/2018 1,448,786 ------------------------------------------------------------------------------- --------------- SOVEREIGN GOVERNMENT--0.5% ------------------------------------------------------------------------------- 5,000,000 Ontario Province CDA, 7.75%, 6/4/2002 4,976,175 ------------------------------------------------------------------------------- --------------- UTILITIES--1.3% ------------------------------------------------------------------------------- 7,000,000 Indianapolis Power & Light, 8.00%, 10/15/2006 7,038,885 ------------------------------------------------------------------------------- 3,600,000 Union Electric Co., 8.00%, 12/15/2022 3,433,446 ------------------------------------------------------------------------------- 2,000,000 Virginia Electric & Power Co., 9.375%, 11/1/94 2,025,220 ------------------------------------------------------------------------------- --------------- Total 12,497,551 ------------------------------------------------------------------------------- --------------- TOTAL CORPORATE BONDS (IDENTIFIED COST $191,831,233) 187,927,406 ------------------------------------------------------------------------------- --------------- GOVERNMENT BONDS--13.2% - ------------------------------------------------------------------------------------------------ 3,494,579 Government National Mortgage Association, 9.50%, 2/15/2021 3,688,965 ------------------------------------------------------------------------------- 3,822,135 Government National Mortgage Association, 8.50%, 5/15/2021 3,865,134 ------------------------------------------------------------------------------- 2,967,431 Government National Mortgage Association, 8.50%, 7/15/2021 3,000,815 ------------------------------------------------------------------------------- 3,347,614 Government National Mortgage Association, 9.00%, 9/15/2021 3,464,780 ------------------------------------------------------------------------------- 5,937,663 Government National Mortgage Association, 9.00%, 10/15/2021 6,145,481 ------------------------------------------------------------------------------- 5,473,094 Government National Mortgage Association, 8.50%, 6/15/2022 5,534,666 ------------------------------------------------------------------------------- 600,000 United States Treasury Bills, 7/21/94 599,006 ------------------------------------------------------------------------------- 275,000 United States Treasury Bills, 10/20/94 271,354 ------------------------------------------------------------------------------- 275,000 United States Treasury Bills, 12/1/94 269,693 ------------------------------------------------------------------------------- 1,900,000 United States Treasury Bond, 7.875%, 2/15/2000 1,927,903 ------------------------------------------------------------------------------- 20,000,000 United States Treasury Bond, 7.625%, 2/15/2007 20,037,500 ------------------------------------------------------------------------------- 32,400,000 United States Treasury Bond, 8.875%, 8/15/2017 36,298,076 ------------------------------------------------------------------------------- 15,000,000 United States Treasury Bond, 9.125%, 5/15/2018 17,231,250 ------------------------------------------------------------------------------- 10,000,000 United States Treasury Note, 8.125%, 2/15/98 10,453,110 -------------------------------------------------------------------------------
FIRST UNION BALANCED PORTFOLIO - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - --------------- ------------------------------------------------------------------------------- --------------- GOVERNMENT BONDS--CONTINUED - ------------------------------------------------------------------------------------------------ $ 3,500,000 United States Treasury Note, 8.875%, 11/15/98 $ 3,761,401 ------------------------------------------------------------------------------- 500,000 United States Treasury Note, 8.50%, 5/15/2000 535,000 ------------------------------------------------------------------------------- 5,000,000 United States Treasury Note, 7.50%, 5/15/2002 5,071,875 ------------------------------------------------------------------------------- --------------- TOTAL GOVERNMENT BONDS (IDENTIFIED COST $130,039,562) 122,156,009 ------------------------------------------------------------------------------- --------------- **REPURCHASE AGREEMENT--6.6% - ------------------------------------------------------------------------------------------------ 61,126,000 Donaldson, Lufkin & Jenrette Securities Corp., 4.125%, dated 6/30/93, due 7/1/94 (at amortized cost) (Note 2B) 61,126,000 ------------------------------------------------------------------------------- --------------- TOTAL INVESTMENTS (IDENTIFIED COST $885,994,121) $ 922,344,507+ ------------------------------------------------------------------------------- ---------------
* Non-income producing securities. ** Repurchase agreement is fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. + The cost for federal tax purposes amounts to $885,994,121. The net unrealized appreciation of investments on a federal tax basis amounts to $36,350,386, which is comprised of $70,329,683 appreciation and $33,979,297 depreciation at June 30, 1994. Note: The categories of investments are shown as a percentage of net assets ($924,633,434) at June 30, 1994. (See Notes which are an integral part of the Financial Statements) FIRST UNION BALANCED PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - ------------------------------------------------------------------------------------------------ Investments in securities, at value (Notes 2A and 2B) (identified and tax cost $885,994,121) $ 922,344,507 - ------------------------------------------------------------------------------------------------ Cash 718 - ------------------------------------------------------------------------------------------------ Dividends and interest receivable 6,202,823 - ------------------------------------------------------------------------------------------------ Receivable for Fund shares sold 2,149,648 - ------------------------------------------------------------------------------------------------ Deferred expenses (Note 2F) 43,424 - ------------------------------------------------------------------------------------------------ --------------- Total assets 930,741,120 - ------------------------------------------------------------------------------------------------ LIABILITIES: - ------------------------------------------------------------------------------------------------ Payable for Fund shares redeemed $ 5,725,116 - --------------------------------------------------------------------------------- Payable for futures variation margin 190,000 - --------------------------------------------------------------------------------- Taxes payable 48,232 - --------------------------------------------------------------------------------- Accrued expenses 144,338 - --------------------------------------------------------------------------------- ------------- Total liabilities 6,107,686 - ------------------------------------------------------------------------------------------------ --------------- NET ASSETS for 80,619,501 shares of beneficial interest outstanding $ 924,633,434 - ------------------------------------------------------------------------------------------------ --------------- NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------------------------ Paid-in capital $ 882,812,751 - ------------------------------------------------------------------------------------------------ Unrealized appreciation (depreciation) of investments and future contracts (Note 2G) 35,542,886 - ------------------------------------------------------------------------------------------------ Accumulated undistributed net realized gain (loss) on investments 4,996,078 - ------------------------------------------------------------------------------------------------ Undistributed net investment income 1,281,719 - ------------------------------------------------------------------------------------------------ --------------- Total Net Assets $ 924,633,434 - ------------------------------------------------------------------------------------------------ --------------- NET ASSET VALUE: - ------------------------------------------------------------------------------------------------ Class B Investment Shares (net assets of $41,251,170 / 3,596,536 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $11.47 - ------------------------------------------------------------------------------------------------ --------------- CLASS C INVESTMENT SHARES (NET ASSETS OF $90,330,909 / 7,870,320 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $11.48 - ------------------------------------------------------------------------------------------------ --------------- TRUST SHARES (NET ASSETS OF $793,051,355 / 69,152,645 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $11.47 - ------------------------------------------------------------------------------------------------ --------------- OFFERING PRICE PER SHARE: - ------------------------------------------------------------------------------------------------ Class B Investment Shares (100/96 of $11.47) $11.95* - ------------------------------------------------------------------------------------------------ --------------- Class C Investment Shares $11.48 - ------------------------------------------------------------------------------------------------ --------------- Trust Shares $11.47 - ------------------------------------------------------------------------------------------------ --------------- REDEMPTION PROCEEDS PER SHARE: - ------------------------------------------------------------------------------------------------ Class B Investment Shares $11.47 - ------------------------------------------------------------------------------------------------ --------------- Class C Investment Shares (96/100 of $11.48) $11.02** - ------------------------------------------------------------------------------------------------ --------------- Trust Shares $11.47 - ------------------------------------------------------------------------------------------------ ---------------
* See "What Shares Cost" in the prospectus. ** See "Redeeming Shares" in the prospectus. (See Notes which are an integral part of the Financial Statements) FIRST UNION BALANCED PORTFOLIO STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: (NOTE 2C): - ------------------------------------------------------------------------------------------------- Dividends $ 8,427,035 - ------------------------------------------------------------------------------------------------- Interest 11,592,612 - ------------------------------------------------------------------------------------------------- --------------- Total income 20,019,647 - ---------------------------------------------------------------------------------- EXPENSES-- - ------------------------------------------------------------------------------------------------- Investment advisory fee* $ 2,262,482 - ---------------------------------------------------------------------------------- Trustees' fees 5,432 - ---------------------------------------------------------------------------------- Administrative personnel and services fee* 382,967 - ---------------------------------------------------------------------------------- Custodian and portfolio accounting fees 105,449 - ---------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 61,847 - ---------------------------------------------------------------------------------- Distribution services fee--Class B Investments Shares* 49,116 - ---------------------------------------------------------------------------------- Distribution services fee--Class C Investment Shares* 298,246 - ---------------------------------------------------------------------------------- Fund share registration costs 34,519 - ---------------------------------------------------------------------------------- Legal fees 9,379 - ---------------------------------------------------------------------------------- Auditing fees 6,037 - ---------------------------------------------------------------------------------- Printing and postage 17,703 - ---------------------------------------------------------------------------------- Insurance premiums 8,693 - ---------------------------------------------------------------------------------- Miscellaneous 1,469 - ---------------------------------------------------------------------------------- ------------- Total expenses 3,243,339 - ------------------------------------------------------------------------------------------------- --------------- Net investment income 16,776,308 - ------------------------------------------------------------------------------------------------- --------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: - ------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (identified cost basis) 4,995,857 - ------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (54,061,367) - ------------------------------------------------------------------------------------------------- --------------- Net realized and unrealized gain (loss) on investments (49,065,510) - ------------------------------------------------------------------------------------------------- --------------- Change in net assets resulting from operations ($ 32,289,202) - ------------------------------------------------------------------------------------------------- ---------------
* See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION BALANCED PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1994* 1993 --------------- --------------- INCREASE (DECREASE) IN NET ASSETS: - ------------------------------------------------------------------------------- OPERATIONS-- - ------------------------------------------------------------------------------- Net investment income $ 16,776,308 $ 26,157,736 - ------------------------------------------------------------------------------- Net realized gain (loss) on investments ($4,995,857 and $6,403,838; net gain, respectively, as computed for federal tax purposes) 4,995,857 6,403,838 - ------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (54,061,367) 36,471,303 - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets resulting from operations (32,289,202) 69,032,877 - ------------------------------------------------------------------------------- --------------- --------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ------------------------------------------------------------------------------- Dividends to shareholders from net investment income: - ------------------------------------------------------------------------------- Class B Investment Shares (665,021) (954,537) - ------------------------------------------------------------------------------- Class C Investment Shares (1,154,816) (945,268) - ------------------------------------------------------------------------------- Trust Shares (14,014,907) (24,091,006) - ------------------------------------------------------------------------------- Distribution to shareholders from net realized gain on investment transactions: - ------------------------------------------------------------------------------- Class B Investment Shares -- (260,072) - ------------------------------------------------------------------------------- Class C Investment Shares -- (477,731) - ------------------------------------------------------------------------------- Trust Shares -- (5,667,426) - ------------------------------------------------------------------------------- Distributions in excess of net investment income: - ------------------------------------------------------------------------------- Class B Investment Shares -- (13,448) - ------------------------------------------------------------------------------- Class C Investment Shares -- (106,237) - ------------------------------------------------------------------------------- Trust Shares -- -- - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from distributions to shareholders (15,834,744) (32,515,725) - ------------------------------------------------------------------------------- --------------- --------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ------------------------------------------------------------------------------- Proceeds from sale of shares 185,243,384 363,660,154 - ------------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 15,601,615 31,675,975 - ------------------------------------------------------------------------------- Cost of shares redeemed (88,741,249) (108,839,064) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from Fund share transactions 112,103,750 286,497,065 - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets 63,979,804 323,014,217 - ------------------------------------------------------------------------------- NET ASSETS: - ------------------------------------------------------------------------------- Beginning of period 860,653,630 537,639,413 - ------------------------------------------------------------------------------- --------------- --------------- End of period (including undistributed net investment income of $1,281,719 and $340,833, respectively) $ 924,633,434 $ 860,653,630 - ------------------------------------------------------------------------------- --------------- ---------------
* Six months ended June 30, 1994 (unaudited). (See Notes which are an integral part of the Financial Statements) FIRST UNION FIXED INCOME PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------- -------------------------------------------------------------------------------- --------------- CORPORATE BONDS--73.0% - ------------------------------------------------------------------------------------------------ ASSET-BACKED SECURITIES--9.1% -------------------------------------------------------------------------------- $ 1,567,051 BW TR, 9.50%, 2/15/2005 $ 1,607,527 -------------------------------------------------------------------------------- 2,848,857 CIT Group Holdings, 4.70% 6/15/2018 2,778,317 -------------------------------------------------------------------------------- 1,874,559 Chemical Grantor Trust, 8.90%, 12/15/96 1,903,087 -------------------------------------------------------------------------------- 1,000,000 Discover Card Trust, 9.00%, 9/17/2001 1,041,510 -------------------------------------------------------------------------------- 8,850,039 FCC Grantor Trust, 9.00%, 7/15/97 9,078,538 -------------------------------------------------------------------------------- 5,447,060 Fleet Financial Home Equity Trust, 6.70%, 1/16/2006-10/16/2006 5,443,084 -------------------------------------------------------------------------------- 12,999,261 Fleetwood Credit Grantor Trust, 4.95%, 8/15/2008 12,466,409 -------------------------------------------------------------------------------- 1,382,464 General Motors Acceptance Corp. Grantor Trust, 5.05%, 1/15/97 1,375,564 -------------------------------------------------------------------------------- 388,846 Nissan Auto Receivables, 6.80%, 9/16/96 390,813 -------------------------------------------------------------------------------- 243,318 Security Pacific Grantor Trust, 6.70%, 1/15/97 244,016 -------------------------------------------------------------------------------- --------------- Total 36,328,865 -------------------------------------------------------------------------------- --------------- AUTOMOTIVE--3.3% -------------------------------------------------------------------------------- 10,000,000 Chrysler Buildings, 9.125%, 5/1/99 10,607,470 -------------------------------------------------------------------------------- 2,500,000 Nissan Capital Corp., 7.75%, 8/15/94 2,509,400 -------------------------------------------------------------------------------- --------------- Total 13,116,870 -------------------------------------------------------------------------------- --------------- BANKING--6.6% -------------------------------------------------------------------------------- 2,000,000 Citicorp, 7.57%, 2/24/95 2,030,138 -------------------------------------------------------------------------------- 13,000,000 First Chicago Corp., 7.625%-9.20%, 6/15/99-1/15/2003 13,171,963 -------------------------------------------------------------------------------- 5,000,000 First Security Corp., 6.40%, 2/10/2003 4,514,315 -------------------------------------------------------------------------------- 1,500,000 J.P. Morgan & Co., Inc., 9.625%, 12/15/98 1,566,575 -------------------------------------------------------------------------------- 5,000,000 NationsBank Corp., 6.50%, 8/15/2003 4,508,035 -------------------------------------------------------------------------------- 500,000 Security Pacific Corp., 10.45%, 5/8/2001 563,374 -------------------------------------------------------------------------------- --------------- Total 26,354,400 -------------------------------------------------------------------------------- --------------- BASIC INDUSTRY--1.2% -------------------------------------------------------------------------------- 5,000,000 Hanson, PLC, 7.375%, 1/15/2003 4,815,415 -------------------------------------------------------------------------------- --------------- FINANCE--13.2% -------------------------------------------------------------------------------- 3,000,000 Discover Credit Corp., 7.76%, 5/13/97 3,055,017 -------------------------------------------------------------------------------- 10,000,000 Ford Motor Credit Company, 5.625%-9.85%, 5/3/96-1/15/99 9,945,835 -------------------------------------------------------------------------------- 10,210,000 General Electric Capital Corp., 8.52%, 12/15/2007 10,349,754 -------------------------------------------------------------------------------- 4,000,000 General Motors Acceptance Corp., 8.30%, 7/18/94 4,019,316 -------------------------------------------------------------------------------- 12,500,000 Lehman Brothers Holdings, Inc., 7.00%-8.875%, 5/15/97-3/1/2002 12,541,820 -------------------------------------------------------------------------------- 1,000,000 Morgan Stanley Group, Inc., 9.40%, 3/5/98 1,067,869 --------------------------------------------------------------------------------
FIRST UNION FIXED INCOME PORTFOLIO - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------- -------------------------------------------------------------------------------- --------------- CORPORATE BONDS--CONTINUED - ------------------------------------------------------------------------------------------------ FINANCE--CONTINUED -------------------------------------------------------------------------------- $ 10,800,000 Salomon Brothers, Inc., 8.57%-9.01%, 3/10/97-5/1/97 $ 11,257,981 -------------------------------------------------------------------------------- --------------- Total 52,237,592 -------------------------------------------------------------------------------- --------------- INSURANCE--5.4% -------------------------------------------------------------------------------- 2,000,000 Associated P & C Holdings, Inc., 6.75%, 7/15/2003 1,890,000 -------------------------------------------------------------------------------- 6,000,000 First Colony Corp., 6.625%, 8/1/2003 5,457,714 -------------------------------------------------------------------------------- 10,000,000 Metropolitan Life Insurance Co., 6.30%, 11/1/2003 8,800,000 -------------------------------------------------------------------------------- 6,000,000 Progressive Corp. Ohio, 6.60%, 1/15/2004 5,392,500 -------------------------------------------------------------------------------- --------------- Total 21,540,214 -------------------------------------------------------------------------------- --------------- INTERNATIONAL INDUSTRIAL BUILDING PRODUCTS--1.3% -------------------------------------------------------------------------------- 5,000,000 Boral Limited Australia Co., 7.90%, 11/19/99 5,001,395 -------------------------------------------------------------------------------- --------------- MORTGAGE-BACKED SECURITIES--30.5% -------------------------------------------------------------------------------- 4,360,705 CMC Securities Corp., 7.25%-10.00%, 2/25/2015-7/25/2023 4,507,211 -------------------------------------------------------------------------------- 9,500,000 CWMBS, Inc., 7.00%, 10/25/2023 9,308,907 -------------------------------------------------------------------------------- 1,499,770 Federal Home Loan Bank, 10.50%, 9/1/2015 1,610,846 -------------------------------------------------------------------------------- 10,000,000 Federal Home Loan Mortgage Corporation, 7.40%, 10/15/2005 9,981,690 -------------------------------------------------------------------------------- 5,073,421 Federal National Mortgage Association, 7.00%-14.00%, 6/1/2011-7/25/2020 4,820,763 -------------------------------------------------------------------------------- 4,917,251 GCC Second Mortgage Trust, 10.00%, 7/15/2005 5,151,454 -------------------------------------------------------------------------------- 4,237,959 GMAC 56, 7.43% (FHA Insured), 11/1/2022 4,117,813 -------------------------------------------------------------------------------- 8,127,909 Green Tree Financial Corp., 4.60%-4.90%, 4/15/2018-10/15/2018 8,021,936 -------------------------------------------------------------------------------- 5,398,620 Merrill Lynch Mortgage Investments, 6.85%, 4/15/2012 5,420,156 -------------------------------------------------------------------------------- 9,517,303 Prudential Home Mortgage Securities Co., 6.30%-7.50%, 5/25/99-1/25/2023 9,198,512 -------------------------------------------------------------------------------- 10,907,388 Resolution Trust Corp., 5.90%-8.35%, 7/25/2023-6/25/2029 11,006,752 -------------------------------------------------------------------------------- 8,796,442 Saxon Mortgage Securities Corp., 7.375%, 9/25/2023 8,748,088 -------------------------------------------------------------------------------- 1,113,945 Shawmut National Trust, 9.15%, 8/15/2005 1,133,204 -------------------------------------------------------------------------------- 5,544,930 USGI, 7.43% (FHA Insured), 7/1/2022 5,331,118 -------------------------------------------------------------------------------- 35,280,000 U.S. Department of Veteran Affairs, 6.50%-6.75% 11/15/2009-1/15/2017 32,596,058 -------------------------------------------------------------------------------- --------------- Total 120,954,508 -------------------------------------------------------------------------------- --------------- PETROLEUM PRODUCTS/CHEMICAL--0.7% -------------------------------------------------------------------------------- 3,000,000 Witco Corp., 6.60%, 4/1/2003 2,735,244 -------------------------------------------------------------------------------- --------------- PUBLISHING--0.3% -------------------------------------------------------------------------------- 1,000,000 Times Mirror, 8.55%, 6/1/2000 1,037,850 -------------------------------------------------------------------------------- --------------- SOVEREIGN GOVERNMENT--1.4% -------------------------------------------------------------------------------- 5,000,000 Canadian National RY Co., 7.00%, 3/15/2004 4,669,730 --------------------------------------------------------------------------------
FIRST UNION FIXED INCOME PORTFOLIO - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------- -------------------------------------------------------------------------------- --------------- CORPORATE BONDS--CONTINUED - ------------------------------------------------------------------------------------------------ SOVEREIGN GOVERNMENT--CONTINUED -------------------------------------------------------------------------------- $ 900,000 New Brunswick Province CDA, 7.125%, 10/1/2002 $ 861,353 -------------------------------------------------------------------------------- --------------- Total 5,531,083 -------------------------------------------------------------------------------- --------------- TOTAL CORPORATE BONDS (IDENTIFIED COST $300,852,252) 289,653,436 -------------------------------------------------------------------------------- --------------- U.S. GOVERNMENT OBLIGATIONS--0.9% - ------------------------------------------------------------------------------------------------ 4,000,000 Federal National Mortgage Association, 6.40%, 1/13/2004 3,610,680 -------------------------------------------------------------------------------- --------------- TOTAL U.S. GOVERNMENT OBLIGATIONS (IDENTIFIED COST $3,990,640) 3,610,680 -------------------------------------------------------------------------------- --------------- U.S. TREASURY OBLIGATIONS--18.7% - ------------------------------------------------------------------------------------------------ 6,500,000 U.S. Treasury Bonds, 8.00%, 8/15/2001 6,666,563 -------------------------------------------------------------------------------- 63,400,000 U.S. Treasury Notes, 7.875%-8.875%, 1/15/98-8/15/2000 67,712,846 -------------------------------------------------------------------------------- --------------- TOTAL U.S. TREASURY OBLIGATIONS (IDENTIFIED COST $81,052,829) 74,379,409 -------------------------------------------------------------------------------- --------------- *REPURCHASE AGREEMENT--5.6% - ------------------------------------------------------------------------------------------------ 22,226,000 Donaldson, Lufkin & Jenrette Securities Corp., 4.125%, dated 6/30/94, due 7/1/94 (at amortized cost) (Note 2B) 22,226,000 -------------------------------------------------------------------------------- --------------- TOTAL INVESTMENTS (IDENTIFIED COST $408,121,721) $ 389,869,525+ -------------------------------------------------------------------------------- ---------------
* Repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market price at the date of the portfolio. + The cost for federal tax purposes amounts to $408,121,721. The net unrealized depreciation of investments on a federal tax basis amounts to $18,252,196 which is comprised of $586,729 appreciation and $18,838,925 depreciation at June 30,1994. Note: The categories of investments are shown as a percentage of net assets ($396,773,003) at June 30, 1994. (See Notes which are an integral part of the Financial Statements) FIRST UNION FIXED INCOME PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - ------------------------------------------------------------------------------------------------- Investments in securities, at value (Notes 2A and 2B) (identified and tax cost $408,121,721) $ 389,869,525 - ------------------------------------------------------------------------------------------------- Cash 40,302 - ------------------------------------------------------------------------------------------------- Interest receivable 6,338,109 - ------------------------------------------------------------------------------------------------- Receivable for Fund shares sold 933,429 - ------------------------------------------------------------------------------------------------- --------------- Total assets 397,181,365 - ------------------------------------------------------------------------------------------------- LIABILITIES: - ------------------------------------------------------------------------------------------------- Payable for Fund shares redeemed $ 327,818 - ------------------------------------------------------------------------------------ Accrued expenses 80,544 - ------------------------------------------------------------------------------------ ----------- Total liabilities 408,362 - ------------------------------------------------------------------------------------------------- --------------- NET ASSETS for 40,516,573 shares of beneficial interest outstanding $ 396,773,003 - ------------------------------------------------------------------------------------------------- --------------- NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------------------------- Paid-in capital $ 416,082,197 - ------------------------------------------------------------------------------------------------- Unrealized appreciation (depreciation) of investments (18,252,196) - ------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) on investments (923,414) - ------------------------------------------------------------------------------------------------- Accumulated distributions in excess of net investment income (Note 2C) (133,584) - ------------------------------------------------------------------------------------------------- --------------- Total Net Assets $ 396,773,003 - ------------------------------------------------------------------------------------------------- --------------- NET ASSET VALUE: - ------------------------------------------------------------------------------------------------- Class B Investment Shares (net assets of $22,160,484 / 2,263,782 shares of beneficial interest outstanding) $9.79 - ------------------------------------------------------------------------------------------------- --------------- Class C Investment Shares (net assets of $14,284,011 / 1,455,663 shares of beneficial interest outstanding) $9.81 - ------------------------------------------------------------------------------------------------- --------------- Trust Shares (net assets of $360,328,508 / 36,797,128 shares of beneficial interest outstanding) $9.79 - ------------------------------------------------------------------------------------------------- --------------- OFFERING PRICE PER SHARE: - ------------------------------------------------------------------------------------------------- Class B Investment Shares (100/96 of $9.79) $10.20* - ------------------------------------------------------------------------------------------------- --------------- Class C Investment Shares $9.81 - ------------------------------------------------------------------------------------------------- --------------- Trust Shares $9.79 - ------------------------------------------------------------------------------------------------- --------------- REDEMPTION PROCEEDS PER SHARE: - ------------------------------------------------------------------------------------------------- Class B Investment Shares $9.79 - ------------------------------------------------------------------------------------------------- --------------- Class C Investment Shares (96/100 of $9.81) $9.42** - ------------------------------------------------------------------------------------------------- --------------- Trust Shares $9.79 - ------------------------------------------------------------------------------------------------- ---------------
* See "What Shares Cost" in the prospectus. ** See "Redeeming Shares" in the prospectus. (See Notes which are an integral part of the Financial Statements) FIRST UNION FIXED INCOME PORTFOLIO STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - ------------------------------------------------------------------------------------------------- Interest income (Note 2C) $ 14,512,871 - ------------------------------------------------------------------------------------------------- EXPENSES-- - ------------------------------------------------------------------------------------------------- Investment advisory fee* $ 1,015,587 - ---------------------------------------------------------------------------------- Trustees' fees 3,093 - ---------------------------------------------------------------------------------- Administrative personnel and services fee* 171,910 - ---------------------------------------------------------------------------------- Custodian and portfolio accounting fees 73,714 - ---------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 25,566 - ---------------------------------------------------------------------------------- Distribution services fee--Class B Investment Shares* 11,201 - ---------------------------------------------------------------------------------- Distribution services fee--Class C Investment Shares* 45,285 - ---------------------------------------------------------------------------------- Fund share registration costs 11,277 - ---------------------------------------------------------------------------------- Legal fees 5,822 - ---------------------------------------------------------------------------------- Auditing fees 6,978 - ---------------------------------------------------------------------------------- Printing and postage 17,477 - ---------------------------------------------------------------------------------- Insurance premiums 4,745 - ---------------------------------------------------------------------------------- Miscellaneous 1,117 - ---------------------------------------------------------------------------------- ------------- Total expenses 1,393,772 - ------------------------------------------------------------------------------------------------- --------------- Net investment income 13,119,099 - ------------------------------------------------------------------------------------------------- --------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: - ------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (identified cost basis) (969,660) - ------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (24,613,847) - ------------------------------------------------------------------------------------------------- --------------- Net realized and unrealized gain (loss) on investments (25,583,507) - ------------------------------------------------------------------------------------------------- --------------- Change in net assets resulting from operations ($ 12,464,408) - ------------------------------------------------------------------------------------------------- ---------------
* See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION FIXED INCOME PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1994* 1993 --------------- --------------- INCREASE (DECREASE) IN NET ASSETS: - ------------------------------------------------------------------------------- OPERATIONS-- - ------------------------------------------------------------------------------- Net investment income $ 13,119,099 $ 24,189,981 - ------------------------------------------------------------------------------- Net realized gain (loss) on investments ($969,660 net loss and $7,077,185 net gain, respectively, as computed for federal tax purposes) (969,660) 7,077,185 - ------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (24,613,847) (1,395,348) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets resulting from operations (12,464,408) 29,871,818 - ------------------------------------------------------------------------------- --------------- --------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ------------------------------------------------------------------------------- Dividends to shareholders from net investment income: - ------------------------------------------------------------------------------- Class B Investment Shares (715,186) (1,355,584) - ------------------------------------------------------------------------------- Class C Investment Shares (347,809) (211,451) - ------------------------------------------------------------------------------- Trust Shares (12,056,104) (22,495,149) - ------------------------------------------------------------------------------- Distributions in excess of net investment income: - ------------------------------------------------------------------------------- Class B Investment Shares (6,940) -- - ------------------------------------------------------------------------------- Class C Investment Shares (1,744) -- - ------------------------------------------------------------------------------- Trust Shares (168,054) -- - ------------------------------------------------------------------------------- Distributions to shareholders from net realized gain on investment transactions: - ------------------------------------------------------------------------------- Class B Investment Shares (1,063) (398,665) - ------------------------------------------------------------------------------- Class C Investment Shares (679) (149,979) - ------------------------------------------------------------------------------- Trust Shares (17,637) (6,674,235) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from distributions to shareholders (13,315,216) (31,285,063) - ------------------------------------------------------------------------------- --------------- --------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ------------------------------------------------------------------------------- Proceeds from sale of shares 67,111,978 123,610,609 - ------------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 12,401,484 29,893,794 - ------------------------------------------------------------------------------- Cost of shares redeemed (65,147,023) (89,461,179) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from Fund share transactions 14,366,439 64,043,224 - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets (11,413,185) 62,629,979 - ------------------------------------------------------------------------------- NET ASSETS: - ------------------------------------------------------------------------------- Beginning of period 408,186,188 345,556,209 - ------------------------------------------------------------------------------- --------------- --------------- End of period (including undistributed net investment income of $0 and $43,154, respectively) $ 396,773,003 $ 408,186,188 - ------------------------------------------------------------------------------- --------------- ---------------
* Six months ended June 30, 1994 (unaudited). (See Notes which are an integral part of the Financial Statements) FIRST UNION FLORIDA MUNICIPAL BOND PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE - ------------- ---------------------------------------------------------------------- ---------- -------------- LONG-TERM MUNICIPAL SECURITIES--94.7% - ------------------------------------------------------------------------------------- FLORIDA--94.7% ---------------------------------------------------------------------- $ 1,500,000 Brevard County, FL, 5.25% Utility Revenue Bonds (AMBAC Insured), 3/1/2014 AAA $ 1,326,749 ---------------------------------------------------------------------- 1,000,000 Casselberry, FL, 5.125% Utility System Revenue Bonds (FGIC Insured), 10/1/2010 AAA 899,748 ---------------------------------------------------------------------- 1,000,000 Coconut Creek, FL, 5.90% Capital Improvement Revenue Bonds (MBIA Insured), 10/1/2014 AAA 959,987 ---------------------------------------------------------------------- 2,000,000 Dade County, FL, Educational Facilities Authority, 6.00% Revenue Bonds (St. Thomas University)/(Sun Bank Miami LOC), 1/1/2014 AA- 1,898,792 ---------------------------------------------------------------------- 1,720,000 Dade County, FL, Educational Facilities Authority, 6.25% Special Obligations Revenue Bonds (Courthouse Center Project), 4/1/2009 A 1,706,719 ---------------------------------------------------------------------- 1,000,000 Destin, FL, 5.60% Capital Improvement Revenue Bonds (Series A)/(MBIA Insured), 8/1/2015 AAA 921,053 ---------------------------------------------------------------------- 1,000,000 Florida State Board of Education, 5.50% GO Bonds, Capital Outlay, 6/1/2023 AA 894,078 ---------------------------------------------------------------------- 1,000,000 Florida State Municipal Power Agency, 5.50% Revenue Refunding Bonds (FGIC Insured), 10/1/2012 AAA 924,033 ---------------------------------------------------------------------- 1,500,000 Gainesville, FL, 5.50% Utilities System Revenue Bonds (Series B), 10/1/2013 AA 1,373,313 ---------------------------------------------------------------------- 1,235,000 Hialeah, FL, 5.50% Capital Improvement Revenue Bonds, 10/1/2013 Baa-1 1,077,062 ---------------------------------------------------------------------- 500,000 Hillsborough County, FL, Aviation Authority, 5.50%, (Tampa International Airport)/(FGIC Insured), 10/1/2013 AAA 455,689 ---------------------------------------------------------------------- 2,000,000 Hillsborough County, FL, 6.50% IDA Revenue Bonds (University Community Hospital)/(MBIA Insured), 8/15/2019 AAA 2,055,054 ---------------------------------------------------------------------- 1,000,000 Hillsborough County, FL, 5.50% GO Bonds (Unincorporated Area Parks & Recreation), 7/1/2023 AA- 890,389 ---------------------------------------------------------------------- 500,000 Hollywood, FL, 5.50% Water & Sewage Revenue Bonds (FGIC Insured), 10/1/2015 AAA 454,532 ---------------------------------------------------------------------- 500,000 Jacksonville Beach, FL, 5.50% Utility System Revenue Bonds (MBIA Insured), 10/1/2012 AAA 462,016 ---------------------------------------------------------------------- 1,000,000 Jacksonville, FL, 5.50% Electric Authority Revenue Bonds (St. Johns River Power-2)/(Series 7), 10/1/2014 AA 915,469 ---------------------------------------------------------------------- 1,000,000 Jacksonville, FL, 5.50% Electric Authority Revenue Bonds (St. Johns River Power-2)/(Series 8), 10/1/2013 AA 915,542 ----------------------------------------------------------------------
FIRST UNION FLORIDA MUNICIPAL BOND PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE - ------------- ---------------------------------------------------------------------- ---------- -------------- LONG-TERM MUNICIPAL SECURITIES--CONTINUED - ------------------------------------------------------------------------------------- FLORIDA--CONTINUED ---------------------------------------------------------------------- $ 1,000,000 Kissimmee, FL, Utility Authority, 5.50% Electric System Revenue Bonds (FGIC Insured), 10/1/2015 AAA $ 909,063 ---------------------------------------------------------------------- 1,375,000 Lake County, FL, 5.95% Resource Recovery Revenue Bonds (Subject to AMT), 10/1/2013 BBB+ 1,212,856 ---------------------------------------------------------------------- 1,500,000 Orange County, FL, Tourist Development, 6.00% Sales Tax Revenue Bonds (Series B)/(MBIA Insured), 10/1/2014 AAA 1,465,489 ---------------------------------------------------------------------- 1,000,000 Orlando, FL, Utilities, 6.75% Common Water & Electric Revenue Bonds (Sub-Series D), 10/1/2017 AA- 1,059,474 ---------------------------------------------------------------------- 500,000 Orlando & Orange County Expressway Authority, FL, 5.25% Senior Lien Expressway Revenue Bonds (FGIC Insured), 7/1/2023 AAA 430,454 ---------------------------------------------------------------------- 1,000,000 Orlando & Orange County Expressway Authority, FL, 5.50% Senior Lien Revenue Refunding Bonds (FGIC Insured), 7/1/2018 AAA 901,664 ---------------------------------------------------------------------- 1,000,000 Palm Beach County, FL, 6.60% GO Bonds, 10/1/2011 Aa 1,091,118 ---------------------------------------------------------------------- 500,000 Palm Beach County, FL, 5.375% Criminal Justice Revenue Bonds (FGIC Insured), 6/1/2011 AAA 456,859 ---------------------------------------------------------------------- 1,000,000 Port Everglades, FL, 7.125% Port Authority Revenue Bonds (Escrowed to Maturity), 11/1/2016 AAA 1,105,157 ---------------------------------------------------------------------- 2,765,000 Reedy Creek, FL, Import Distribution, 5.00% Utility Revenue Bonds (Series 1)/(MBIA Insured), 10/1/2019 AAA 2,313,307 ---------------------------------------------------------------------- 1,000,000 St. Petersburg, FL, 5.60% Public Utility Revenue Bonds, 10/1/2015 AA 922,907 ---------------------------------------------------------------------- 500,000 Sarasota County, FL, 5.625% Solid Waste System Revenue Bonds, 10/1/2013 A 445,471 ---------------------------------------------------------------------- 1,035,000 Sebastian, FL, 5.40% Utility System Revenue Bonds (AMBAC Insured), 10/1/2013 AAA 937,174 ---------------------------------------------------------------------- 500,000 Seminole County, FL, 5.375% Solid Waste Disposal System Revenue Bonds (FGIC Insured), 10/1/2014 AAA 448,206 ---------------------------------------------------------------------- 500,000 Vero Beach, FL, 5.375% Electric Revenue Bonds (MBIA Insured), 12/1/2021 AAA 439,635 ---------------------------------------------------------------------- 1,000,000 West Palm Beach, FL, 5.40% Utility System Revenue Bonds (FGIC Insured), 10/1/2023 AAA 871,938 ---------------------------------------------------------------------- 500,000 West Palm Beach, FL, 5.50% Parking Revenue Bonds (AMBAC Insured), 9/1/2021 AAA 448,231 ---------------------------------------------------------------------- -------------- TOTAL LONG-TERM MUNICIPAL SECURITIES (IDENTIFIED COST $36,305,963) 33,589,228 ---------------------------------------------------------------------- --------------
FIRST UNION FLORIDA MUNICIPAL BOND PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: MOODY'S SHARES OR S&P* VALUE - ------------- ---------------------------------------------------------------------- ---------- -------------- MUTUAL FUND SHARES--8.2% - ------------------------------------------------------------------------------------- 1,602,000 Dreyfus Municipal Cash Management Plus NR $ 1,602,000 ---------------------------------------------------------------------- 1,296,000 Dreyfus Tax Exempt Cash Management NR 1,296,000 ---------------------------------------------------------------------- -------------- TOTAL MUTUAL FUND SHARES (AT NET ASSET VALUE) (NOTE 2A) 2,898,000 ---------------------------------------------------------------------- -------------- TOTAL INVESTMENTS (IDENTIFIED COST $39,203,963) $ 36,487,228+ ---------------------------------------------------------------------- --------------
* Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. + The cost of investments for federal tax purposes amounts to $39,203,963. The net unrealized depreciation of investments on a federal tax basis amounts to $2,716,735, which is comprised entirely of depreciation, at June 30, 1994. Note: The categories of investments are shown as a percentage of net assets ($35,481,454) at June 30, 1994. The following abbreviations are used in this portfolio: AMBAC--American Municipal Bond Assurance Corporation AMT--Alternative Minimum Tax FGIC--Financial Guaranty Insurance Company GO--General Obligation IDA--Industrial Development Authority LOC--Letter of Credit MBIA--Municipal Bond Investors Assurance (See Notes which are an integral part of the Financial Statements) FIRST UNION FLORIDA MUNICIPAL BOND PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - -------------------------------------------------------------------------------------------------- Investments in securities, at value (Note 2A) (identified and tax cost $39,203,963) $ 36,487,228 - -------------------------------------------------------------------------------------------------- Receivable for investments sold 2,932,076 - -------------------------------------------------------------------------------------------------- Interest receivable 506,899 - -------------------------------------------------------------------------------------------------- Receivable for Fund shares sold 381,694 - -------------------------------------------------------------------------------------------------- Receivable from Bank 14,583 - -------------------------------------------------------------------------------------------------- Deferred expenses (Note 2F) 18,672 - -------------------------------------------------------------------------------------------------- -------------- Total assets 40,341,152 - -------------------------------------------------------------------------------------------------- LIABILITIES: - -------------------------------------------------------------------------------------------------- Payable for investments purchased $ 4,694,269 - ----------------------------------------------------------------------------------- Payable for Fund shares redeemed 76,961 - ----------------------------------------------------------------------------------- Dividends payable 66,225 - ----------------------------------------------------------------------------------- Accrued expenses 22,243 - ----------------------------------------------------------------------------------- ------------- Total liabilities 4,859,698 - -------------------------------------------------------------------------------------------------- -------------- NET ASSETS for 3,840,659 shares of beneficial interest outstanding $ 35,481,454 - -------------------------------------------------------------------------------------------------- -------------- NET ASSETS CONSIST OF: - -------------------------------------------------------------------------------------------------- Paid-in capital $ 38,822,838 - -------------------------------------------------------------------------------------------------- Unrealized appreciation (depreciation) of investments (2,716,735) - -------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) on investments (624,649) - -------------------------------------------------------------------------------------------------- -------------- Total Net Assets $ 35,481,454 - -------------------------------------------------------------------------------------------------- -------------- NET ASSET VALUE: - -------------------------------------------------------------------------------------------------- Class B Investment Shares (net assets of $9,063,272 / 980,766 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $9.24 - -------------------------------------------------------------------------------------------------- -------------- CLASS C INVESTMENT SHARES (NET ASSETS OF $24,728,733 / 2,676,990 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $9.24 - -------------------------------------------------------------------------------------------------- -------------- TRUST SHARES (NET ASSETS OF $1,689,449 / 182,903 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $9.24 - -------------------------------------------------------------------------------------------------- -------------- OFFERING PRICE PER SHARE: - -------------------------------------------------------------------------------------------------- Class B Investment Shares (100/96 of $9.24) $9.63* - -------------------------------------------------------------------------------------------------- -------------- Class C Investment Shares $9.24 - -------------------------------------------------------------------------------------------------- -------------- Trust Shares $9.24 - -------------------------------------------------------------------------------------------------- -------------- REDEMPTION PROCEEDS PER SHARE: - -------------------------------------------------------------------------------------------------- Class B Investment Shares $9.24 - -------------------------------------------------------------------------------------------------- -------------- Class C Investment Shares (96/100 of $9.24) $8.87** - -------------------------------------------------------------------------------------------------- -------------- Trust Shares $9.24 - -------------------------------------------------------------------------------------------------- --------------
* See "What Shares Cost" in the prospectus. ** See "Redeeming Shares" in the prospectus. (See Notes which are an integral part of the Financial Statements) FIRST UNION FLORIDA MUNICIPAL BOND PORTFOLIO STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - -------------------------------------------------------------------------------------------------- Interest income (Note 2C) $ 880,890 - -------------------------------------------------------------------------------------------------- EXPENSES-- - -------------------------------------------------------------------------------------------------- Investment advisory fee* $ 78,111 - ------------------------------------------------------------------------------------- Trustees' fees 897 - ------------------------------------------------------------------------------------- Administrative personnel and services fee* 35,151 - ------------------------------------------------------------------------------------- Custodian and portfolio accounting fees 24,482 - ------------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 11,746 - ------------------------------------------------------------------------------------- Distribution services fee--Class B Investment Shares* 11,097 - ------------------------------------------------------------------------------------- Distribution services fee--Class C Investment Shares* 82,123 - ------------------------------------------------------------------------------------- Fund share registration costs 11,678 - ------------------------------------------------------------------------------------- Legal fees 1,192 - ------------------------------------------------------------------------------------- Auditing fees 5,193 - ------------------------------------------------------------------------------------- Printing and postage 8,232 - ------------------------------------------------------------------------------------- Insurance premiums 2,275 - ------------------------------------------------------------------------------------- Miscellaneous 1,480 - ------------------------------------------------------------------------------------- ----------- Total expenses 273,657 - ------------------------------------------------------------------------------------- Deduct-- - -------------------------------------------------------------------------- Waiver of investment advisory fee* $ 78,111 - -------------------------------------------------------------------------- Waiver of administrative personnel and services fee* 35,151 - -------------------------------------------------------------------------- Reimbursement of other operating expenses by Adviser* 14,821 128,083 - -------------------------------------------------------------------------- --------- ----------- Net expenses 145,574 - -------------------------------------------------------------------------------------------------- ------------- Net investment income 735,316 - -------------------------------------------------------------------------------------------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: - -------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (identified cost basis) (616,967) - -------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (3,083,444) - -------------------------------------------------------------------------------------------------- ------------- Net realized and unrealized gain (loss) on investments (3,700,411) - -------------------------------------------------------------------------------------------------- ------------- Change in net assets resulting from operations ($ 2,965,095) - -------------------------------------------------------------------------------------------------- -------------
* See Note 4. (The accompanying Notes are an integral part of the Financial Statements) FIRST UNION FLORIDA MUNICIPAL BOND PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1994* 1993** -------------- -------------- INCREASE (DECREASE) IN NET ASSETS: - --------------------------------------------------------------------------------- OPERATIONS-- - --------------------------------------------------------------------------------- Net investment income $ 735,316 $ 291,407 - --------------------------------------------------------------------------------- Net realized gain (loss) on investments ($616,967 and $7,682 net loss, respectively, as computed for federal tax purposes) (616,967) (7,682) - --------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (3,083,444) 366,708 - --------------------------------------------------------------------------------- -------------- -------------- Change in net assets resulting from operations (2,965,095) 650,433 - --------------------------------------------------------------------------------- -------------- -------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - --------------------------------------------------------------------------------- Dividends to shareholders from net investment income: - --------------------------------------------------------------------------------- Class B Investment Shares (224,494) (77,073) - --------------------------------------------------------------------------------- Class C Investment Shares (498,357) (214,334) - --------------------------------------------------------------------------------- Trust Shares (12,465) -- - --------------------------------------------------------------------------------- -------------- -------------- Change in net assets from distributions to shareholders (735,316) (291,407) - --------------------------------------------------------------------------------- -------------- -------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - --------------------------------------------------------------------------------- Proceeds from sale of shares 16,929,841 26,324,308 - --------------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 393,313 150,806 - --------------------------------------------------------------------------------- Cost of shares redeemed (4,634,771) (340,658) - --------------------------------------------------------------------------------- -------------- -------------- Change in net assets from Fund share transactions 12,688,383 26,134,456 - --------------------------------------------------------------------------------- -------------- -------------- Change in net assets 8,987,972 26,493,482 - --------------------------------------------------------------------------------- NET ASSETS: - --------------------------------------------------------------------------------- Beginning of period 26,493,482 -- - --------------------------------------------------------------------------------- -------------- -------------- End of period $ 35,481,454 $ 26,493,482 - --------------------------------------------------------------------------------- -------------- --------------
* Six months ended June 30, 1994 (unaudited). ** For the period from July 2, 1993 (commencement of operations) to December 31, 1993. (See Notes which are an integral part of the Financial Statements) FIRST UNION GEORGIA MUNICIPAL BOND PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE - ------------- ---------------------------------------------------------------------- ---------- -------------- LONG-TERM MUNICIPAL SECURITIES--100.9% - ------------------------------------------------------------------------------------- GEORGIA--100.3% ---------------------------------------------------------------------- $ 650,000 Atlanta, GA, 6.00% Airport Facilities Revenue Bonds (Series B)/(AMBAC Insured), 1/1/2021 AAA $ 615,441 ---------------------------------------------------------------------- 250,000 Atlanta, GA, 6.25%, Downtown Development Authority (Underground Atlanta Project), 10/1/2012 AA 248,357 ---------------------------------------------------------------------- 130,000 Bartow County School District, GA, 5.70%, GO (Series 1993), 5/1/2014 A 119,026 ---------------------------------------------------------------------- 60,000 Chatham County, GA, 6.85%, Hospital Authority (Series B)/ (Memorial Medical Hospital)/(MBIA Insured), 1/1/2021 AAA 62,107 ---------------------------------------------------------------------- 250,000 Cherokee County, GA, 5.50% Water & Sewer Authority Revenue Refunding Bonds (MBIA Insured), 8/1/2023 AAA 219,860 ---------------------------------------------------------------------- 100,000 Cobb Marietta, GA, 5.50% Coliseum Exhibit Hall Authority Revenue Refunding Bond (MBIA Insured), 10/1/2012 AAA 91,892 ---------------------------------------------------------------------- 300,000 Columbus, GA, 5.70% Water & Sewer Revenue Refunding Bond, 5/1/2020 A+ 268,403 ---------------------------------------------------------------------- 200,000 DeKalb County School District, GA, 6.25%, GO Bond (Series A), 7/1/2011 AA 200,000 ---------------------------------------------------------------------- 75,000 Douglas County School District, GA, 5.625%, (MBIA Insured), 1/1/2010 AAA 71,135 ---------------------------------------------------------------------- 200,000 Douglasville County, GA, 5.625% Water & Sewer Authority Revenue Bonds (AMBAC Insured), 6/1/2015 AAA 183,863 ---------------------------------------------------------------------- 300,000 Fayette County School District, GA, 6.125%, GO Bonds, 3/1/2015 A+ 290,078 ---------------------------------------------------------------------- 300,000 Fulco, GA, 6.25%, Hospital Authority Anticipation Certificates, 9/1/2013 A 290,855 ---------------------------------------------------------------------- 250,000 Fulco, GA, 5.50%, Hospital Authority Anticipation Certificates (St. Joseph Hospital), 10/1/2018 A 217,203 ---------------------------------------------------------------------- 300,000 Fulton County, GA, 6.00% Development Authority Revenue Bonds, 6/1/2009 AAA 292,772 ---------------------------------------------------------------------- 305,000 Fulton County School District, GA, 5.625%-6.375%, Refunding GO, 5/1/2017-1/1/2021 AA 285,815 ---------------------------------------------------------------------- 175,000 Fulton County, GA, 6.25%-6.375% Water & Sewer Revenue Refunding Bond (FGIC Insured), 1/1/2006-1/1/2014 AAA 179,128 ---------------------------------------------------------------------- 100,000 Fulton-DeKalb County, GA, 5.50% Hospital Authority Revenue Refunding Bond (MBIA Insured), 1/1/2020 AAA 87,513 ---------------------------------------------------------------------- 100,000 Gainesville, GA, 6.00% Water & Sewer Revenue (Series B)/ (FGIC Insured), 11/15/2012 AAA 97,495 ----------------------------------------------------------------------
FIRST UNION GEORGIA MUNICIPAL BOND PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE - ------------- ---------------------------------------------------------------------- ---------- -------------- LONG-TERM MUNICIPAL SECURITIES--CONTINUED - ------------------------------------------------------------------------------------- GEORGIA--CONTINUED ---------------------------------------------------------------------- $ 300,000 Georgia Municipal Gas Authority, 6.40% Gas Revenue Bond (Southern Storage Gas Project), 7/1/2014 NR $ 290,161 ---------------------------------------------------------------------- 425,000 Georgia State, 5.65%-6.10%, GO Refunding (Series B), 3/1/2005-3/1/2012 AAA 418,033 ---------------------------------------------------------------------- 100,000 Georgia State, 5.50%, GO Refunding (Series D), 8/1/2006 AAA 99,038 ---------------------------------------------------------------------- 100,000 Georgia State, 6.00%, GO Refunding (Series E), 7/1/2004 AAA 104,906 ---------------------------------------------------------------------- 300,000 Georgia State, 6.50% Housing & Finance Authority Revenue Refunding Bond (Single Family Mortgage)/(Series A)/ (FHA/VA Insured), 12/1/2017 AA+ 298,195 ---------------------------------------------------------------------- 250,000 Georgia Municipal Electric Power Authority, 6.60% Revenue Refunding Bond (Series V)/(GO of Participants Insured), 1/1/2018 A+ 251,189 ---------------------------------------------------------------------- 400,000 Georgia Municipal Electric Power Authority, 7.25% Revenue Refunding Bond (Series EE)/(AMBAC Insured), 1/1/2024 AAA 442,555 ----------------------------------------------------------------------- 200,000 Hall County School District, GA, 6.40%, GO Bond (Series B), 12/1/2007 A 207,663 ----------------------------------------------------------------------- 200,000 Henry County, GA, 5.25% Water & Sewer Authority Revenue Refunding Bond (Series A)/(AMBAC Insured), 2/1/2018 AAA 171,534 ----------------------------------------------------------------------- 250,000 Henry County School District GA. 6.00% GO Bond (MBIA Insured), 8/1/2014 AAA 242,333 ----------------------------------------------------------------------- 100,000 Metropolitan Atlantic Rapid Transit Authority, GA, 6.25% Sales Tax Revenue Refunding Bond (Series N), 7/1/2018 AA- 95,466 ----------------------------------------------------------------------- 100,000 Paulding County, GA, 5.60% GO Bonds, 8/1/2011 AAA 92,340 ----------------------------------------------------------------------- 275,000 Peach County School District, GA, 6.30%, GO Bonds (MBIA State Aid Withholding Insured), 2/1/2014 AAA 275,000 ----------------------------------------------------------------------- 100,000 Private Colleges & Universities Authority, GA, 5.50%, (Agnes Scott College Project), 6/1/2023 AA- 90,608 ----------------------------------------------------------------------- 300,000 Private Colleges & Universities Authority, GA, 6.20%, (Spelman College Project)/(FGIC Insured), 6/1/2014 AAA 296,598 ----------------------------------------------------------------------- 250,000 Roswell, GA, 5.60% Housing Authority Multi-family Revenue Bond (Wood Creek Apartments Project)/(FNMA Insured), 3/1/2014 AAA 225,709 ----------------------------------------------------------------------- 300,000 Tri-City Hospital Authority, GA, 6.375% Hospital Revenue Bond, 7/1/2016 BBB 271,792 ----------------------------------------------------------------------- ------------- Total 7,694,063 ----------------------------------------------------------------------- ------------- PUERTO RICO--0.6% ----------------------------------------------------------------------- 50,000 Puerto Rico Electric Power Authority, 6.25%, 7/1/2017 A- 48,868 ----------------------------------------------------------------------- ------------- TOTAL LONG-TERM MUNICIPAL SECURITIES (IDENTIFIED COST $8,178,786) 7,742,931 ----------------------------------------------------------------------- -------------
FIRST UNION GEORGIA MUNICIPAL BOND PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: MOODY'S SHARES OR S&P* VALUE - ------------- ----------------------------------------------------------------------- ---------- ------------- MUTUAL FUND SHARES--2.1% - -------------------------------------------------------------------------------------- 163,000 Lehman Municipal Money Market Fund (AT NET ASSET VALUE) (NOTE 2A) NR $ 163,000 ----------------------------------------------------------------------- ------------- TOTAL INVESTMENTS (IDENTIFIED COST $8,341,786) $ 7,905,931+ ----------------------------------------------------------------------- -------------
* Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. + The cost of investments for federal tax purposes amounts to $8,341,786. The net unrealized depreciation of investments on a federal tax basis amounts to $435,855, which is comprised of $1,565 appreciation and $437,420 depreciation at June 30, 1994. Note: The categories of investments are shown as a percentage of net assets ($7,674,136) at June 30, 1994. The following abbreviations are used in this portfolio: AMBAC--American Municipal Bond Assurance Corporation FGIC--Financial Guaranty Insurance Company FHA/VA--Federal Housing Authority/Veteran Administration FNMA--Federal National Mortgage Association GO--General Obligation MBIA--Municipal Bond Investors Assurance (See Notes which are an integral part of the Financial Statements) FIRST UNION GEORGIA MUNICIPAL BOND PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - --------------------------------------------------------------------------------------------------- Investments in securities, at value (Note 2A) (identified and tax cost $8,341,786) $7,905,931 - --------------------------------------------------------------------------------------------------- Cash 66 - --------------------------------------------------------------------------------------------------- Receivable for Fund shares sold 205,847 - --------------------------------------------------------------------------------------------------- Interest receivable 136,235 - --------------------------------------------------------------------------------------------------- Receivable from Bank 25,735 - --------------------------------------------------------------------------------------------------- Deferred expenses (Note 2F) 25,141 - --------------------------------------------------------------------------------------------------- ------------- Total assets 8,298,955 - --------------------------------------------------------------------------------------------------- LIABILITIES: - --------------------------------------------------------------------------------------------------- Payable for investments purchased $595,884 - -------------------------------------------------------------------------------------- Payable for Fund shares redeemed 21,539 - -------------------------------------------------------------------------------------- Dividends payable 7,396 - -------------------------------------------------------------------------------------- ----------- Total liabilities 624,819 - --------------------------------------------------------------------------------------------------- ------------- NET ASSETS for 846,578 shares of beneficial interest outstanding $7,674,136 - --------------------------------------------------------------------------------------------------- ------------- NET ASSETS CONSIST OF: - --------------------------------------------------------------------------------------------------- Paid-in capital $8,351,034 - --------------------------------------------------------------------------------------------------- Unrealized appreciation (depreciation) of investments (241,043) - --------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) on investments (435,855) - --------------------------------------------------------------------------------------------------- ------------- Total Net Assets $7,674,136 - --------------------------------------------------------------------------------------------------- ------------- NET ASSET VALUE: - --------------------------------------------------------------------------------------------------- Class B Investment Shares (net assets of $1,379,746 / 152,215 shares of beneficial interest outstanding) $9.06 - --------------------------------------------------------------------------------------------------- ------------- Class C Investment Shares (net assets of $6,204,840 / 684,484 shares of beneficial interest outstanding) $9.06 - --------------------------------------------------------------------------------------------------- ------------- Trust Shares (net assets of $89,550 / 9,879 shares of beneficial interest outstanding) $9.06 - --------------------------------------------------------------------------------------------------- ------------- OFFERING PRICE PER SHARE: - --------------------------------------------------------------------------------------------------- Class B Investment Shares (100/96 of $9.06) $9.44* - --------------------------------------------------------------------------------------------------- ------------- Class C Investment Shares $9.06 - --------------------------------------------------------------------------------------------------- ------------- Trust Shares $9.06 - --------------------------------------------------------------------------------------------------- ------------- REDEMPTION PROCEEDS PER SHARE: - --------------------------------------------------------------------------------------------------- Class B Investment Shares $9.06 - --------------------------------------------------------------------------------------------------- ------------- Class C Investment Shares (96/100 of $9.06) $8.70** - --------------------------------------------------------------------------------------------------- ------------- Trust Shares $9.06 - --------------------------------------------------------------------------------------------------- -------------
*See "What Shares Cost" in the prospectus. **See "Redeeming Shares" in the prospectus. (See Notes which are an integral part of the Financial Statements) FIRST UNION GEORGIA MUNICIPAL BOND PORTFOLIO STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - ---------------------------------------------------------------------------------------------------- Interest income (Note 2C) $165,933 - ---------------------------------------------------------------------------------------------------- EXPENSES-- - ---------------------------------------------------------------------------------------------------- Investment advisory fee* $14,931 - --------------------------------------------------------------------------------------- Administrative personnel and services fee* 35,150 - --------------------------------------------------------------------------------------- Custodian and portfolio accounting fees 14,304 - --------------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 8,102 - --------------------------------------------------------------------------------------- Distribution services fee--Class B Investment Shares* 1,226 - --------------------------------------------------------------------------------------- Distribution services fee--Class C Investment Shares* 18,716 - --------------------------------------------------------------------------------------- Fund share registration costs 9,135 - --------------------------------------------------------------------------------------- Legal fees 564 - --------------------------------------------------------------------------------------- Auditing fees 3,490 - --------------------------------------------------------------------------------------- Printing and postage 5,765 - --------------------------------------------------------------------------------------- Insurance premiums 1,855 - --------------------------------------------------------------------------------------- Miscellaneous 1,014 - --------------------------------------------------------------------------------------- ----------- Total expenses 114,252 - --------------------------------------------------------------------------------------- Deduct-- - ---------------------------------------------------------------------------- Waiver of investment advisory fee* $ 14,931 - ---------------------------------------------------------------------------- Waiver of administrative personnel and services fee* 35,150 - ---------------------------------------------------------------------------- Reimbursement of other operating expenses by Adviser* 36,782 86,863 - ---------------------------------------------------------------------------- --------- ----------- Net expenses 27,389 - ---------------------------------------------------------------------------------------------------- ----------- Net investment income 138,544 - ---------------------------------------------------------------------------------------------------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: - ---------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (identified cost basis) (241,043) - ---------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (470,588) - ---------------------------------------------------------------------------------------------------- ----------- Net realized and unrealized gain (loss) on investments (711,631) - ---------------------------------------------------------------------------------------------------- ----------- Change in net assets resulting from operations $(573,087) - ---------------------------------------------------------------------------------------------------- -----------
*See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION GEORGIA MUNICIPAL BOND PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, ----------------------- 1994* 1993** --------- --------- INCREASE (DECREASE) IN NET ASSETS: - ------------------------------------------------------------------------------------ OPERATIONS-- - ------------------------------------------------------------------------------------ Net investment income $ 138,544 $ 45,877 - ------------------------------------------------------------------------------------ Net realized gain (loss) on investments ($241,043 net loss and $1,437 net gain, respectively, as computed for federal tax purposes) (241,043) 1,437 - ------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) on investments (470,588) 34,728 - ------------------------------------------------------------------------------------ ------------- ------------- Change in net assets resulting from operations (573,087) 82,042 - ------------------------------------------------------------------------------------ ------------- ------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ------------------------------------------------------------------------------------ Dividends to shareholders from net investment income: - ------------------------------------------------------------------------------------ Class B Investment Shares (24,820) (7,930) - ------------------------------------------------------------------------------------ Class C Investment Shares (113,690) (37,947) - ------------------------------------------------------------------------------------ Trust Shares (34) -- - ------------------------------------------------------------------------------------ Distributions to shareholders from net realized gain on investment transactions: - ------------------------------------------------------------------------------------ Class B Investment Shares -- (255) - ------------------------------------------------------------------------------------ Class C Investment Shares -- (1,182) - ------------------------------------------------------------------------------------ Trust Shares -- -- - ------------------------------------------------------------------------------------ ------------- ------------- Change in net assets from distributions to shareholders (138,544) (47,314) - ------------------------------------------------------------------------------------ ------------- ------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ------------------------------------------------------------------------------------ Proceeds from sale of shares 4,187,263 4,449,992 - ------------------------------------------------------------------------------------ Net asset value of shares issued to shareholders in payment of dividends declared 102,422 36,136 - ------------------------------------------------------------------------------------ Cost of shares redeemed (412,892) (11,882) - ------------------------------------------------------------------------------------ ------------- ------------- Change in net assets from Fund share transactions 3,876,793 4,474,246 - ------------------------------------------------------------------------------------ ------------- ------------- Change in net assets 3,165,162 4,508,974 - ------------------------------------------------------------------------------------ NET ASSETS: - ------------------------------------------------------------------------------------ Beginning of period 4,508,974 -- - ------------------------------------------------------------------------------------ ------------- ------------- End of period $ 7,674,136 $ 4,508,974 - ------------------------------------------------------------------------------------ ------------- -------------
*Six months ended June 30, 1994 (unaudited). **For the period from July 2, 1993 (commencement of operations) to December 31, 1993. (See Notes which are an integral part of the Financial Statements) FIRST UNION HIGH GRADE TAX FREE PORTFOLIO (FORMERLY, FIRST UNION INSURED TAX FREE PORTFOLIO) PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE - ------------- --------------------------------------------------------------------- ---------- --------------- LONG-TERM MUNICIPAL SECURITIES--96.7% - ------------------------------------------------------------------------------------ CALIFORNIA--0.8% --------------------------------------------------------------------- $ 1,000,000 San Jose, CA, 6.00% Redevelopment Agency, Tax Allocation Bonds (MBIA Insured), 8/1/2015 AAA $ 960,686 --------------------------------------------------------------------- --------------- DELAWARE--2.2% --------------------------------------------------------------------- 2,400,000 Delaware State Economic Development Authority, 7.30% Gas Facilities Revenue Bonds, (Delmarva Power and Light Project)/(FGIC Insured), 7/1/2021 (Subject to AMT) AAA 2,573,767 --------------------------------------------------------------------- --------------- DISTRICT OF COLUMBIA--2.5% --------------------------------------------------------------------- 3,250,000 District of Columbia, 5.50% GO Refunding Bonds, (Series B)/(FSA Insured)/(Original Issue Yield: 5.70%), 6/1/2010 AAA 2,957,406 --------------------------------------------------------------------- --------------- FLORIDA--6.4% --------------------------------------------------------------------- 1,000,000 Hillsborough County, FL, Industrial Development Authority, 6.50% IDA Revenue Bonds (University Community Hospital)/(MBIA Insured), 8/15/2019 AAA 1,027,527 --------------------------------------------------------------------- 1,000,000 Holly Hill, FL, 6.125% Water and Sewer Revenue Bonds (MBIA Insured), 10/1/2014 AAA 981,686 --------------------------------------------------------------------- 3,000,000 Jacksonville, FL, Health Facilities Authority, 6.625% Revenue Bonds (Memorial Medical Center Project)/(MBIA Insured), 5/1/2008 AAA 3,266,604 --------------------------------------------------------------------- 2,250,000 Orange County, FL, Water and Waste Authority, 6.25% Revenue Refunding Bonds (AMBAC Insured), 10/1/2017 AAA 2,236,088 --------------------------------------------------------------------- --------------- Total 7,511,905 --------------------------------------------------------------------- --------------- GEORGIA--6.5% --------------------------------------------------------------------- 7,000,000 Atlanta, GA, 6.00% Airport Facilities Revenue Bonds (Series B)/(AMBAC Insured)/(Original Issue Yield: 6.35%), 1/1/2021 (Subject to AMT) AAA 6,627,831 --------------------------------------------------------------------- 1,000,000 Georgia Municipal Electric Authority, 6.125% Revenue Bonds (Series B)/(FGIC Insured), 1/1/2014 AAA 976,660 --------------------------------------------------------------------- --------------- Total 7,604,491 --------------------------------------------------------------------- --------------- ILLINOIS--9.6% --------------------------------------------------------------------- 2,000,000 Chicago, IL, 5.75% Revenue Bonds, Public Building (Chicago Bank District)/(FGIC Insured), 1/1/2010 AAA 1,894,028 --------------------------------------------------------------------- 2,000,000 Greenville, IL, 6.75% GO Bonds (AMBAC Insured), 12/1/2014 AAA 2,083,142 ---------------------------------------------------------------------
FIRST UNION HIGH GRADE TAX FREE PORTFOLIO (FORMERLY, FIRST UNION INSURED TAX FREE PORTFOLIO) - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE - ------------- --------------------------------------------------------------------- ---------- --------------- LONG-TERM MUNICIPAL SECURITIES--CONTINUED - ------------------------------------------------------------------------------------ ILLINOIS--CONTINUED --------------------------------------------------------------------- $ 3,000,000 Illinois Development Finance Authority, 7.25% PCR Bonds (Commonwealth Edison Co. Project)/(MBIA Insured), 6/1/2011 AAA $ 3,240,597 --------------------------------------------------------------------- 1,400,000 Illinois Health Facilities Authority, 6.25% Revenue Bonds (Children's Memorial Hospital)/(MBIA Insured), 8/15/2013 1,373,868 --------------------------------------------------------------------- 1,500,000 Illinois Health Facilities Authority, 6.625% Revenue Bonds (Southern Illinois Hospital)/(MBIA Insured), 3/1/2020 AAA 1,532,016 --------------------------------------------------------------------- 1,000,000 Illinois State Toll Highway Authority, 6.35% (Series A)/ (FGIC Insured), Pre-Refunded 1/1/2003 (02), 1/1/2010 AAA 1,069,819 --------------------------------------------------------------------- --------------- Total 11,193,470 --------------------------------------------------------------------- --------------- INDIANA--1.9% --------------------------------------------------------------------- 2,300,000 Indiana Municipal Power Supply System, 6.125% Revenue Bonds (Series A)/(MBIA Insured), 1/1/2019 AAA 2,215,365 --------------------------------------------------------------------- --------------- IOWA--1.4% --------------------------------------------------------------------- 1,750,000 Salix, IA, 5.90%, PCR (Northwestern Public Service Co.)/ (MBIA Insured), 6/1/2023 AAA 1,615,885 --------------------------------------------------------------------- --------------- LOUISIANA--2.3% --------------------------------------------------------------------- 2,500,000 Jefferson, LA, 6.75% Sales Tax Revenue Bonds (Series A)/ (FGIC Insured), 12/1/2006 AAA 2,726,277 --------------------------------------------------------------------- --------------- MICHIGAN--2.4% --------------------------------------------------------------------- 1,750,000 Bay City, MI, Utility Authority, 6.60% Revenue Bonds (AMBAC Insured), 1/1/2012 AAA 1,793,396 --------------------------------------------------------------------- 1,000,000 Huron Valley School District, MI, 6.125% GO Bonds (FGIC Insured), 5/1/2020 AAA 959,865 --------------------------------------------------------------------- --------------- Total 2,753,261 --------------------------------------------------------------------- --------------- NEVADA--8.6% --------------------------------------------------------------------- 2,500,000 Clark County School District, NV, 6.75% GO Bonds (Series A)/(MBIA Insured), 3/1/2007 AAA 2,629,642 --------------------------------------------------------------------- 1,575,000 Clark County, NV, 6.50% GO Bonds, (Series A)/(AMBAC Insured)/(Original Issue Yield: 6.52%), 6/1/2017 AAA 1,595,590 --------------------------------------------------------------------- 1,000,000 Clark County, NV, 6.00% GO Bonds (AMBAC Insured), 6/1/2016 AAA 961,104 --------------------------------------------------------------------- 2,040,000 Henderson, NV, 6.375% GO Bonds (Series 1993 A)/ (AMBAC Insured), 12/1/2017 AAA 2,032,485 --------------------------------------------------------------------- 1,000,000 Las Vegas Library District, NV, 6.00% GO Bonds (FGIC Insured), 2/1/2012 AAA 969,342 ---------------------------------------------------------------------
FIRST UNION HIGH GRADE TAX FREE PORTFOLIO (FORMERLY, FIRST UNION INSURED TAX FREE PORTFOLIO) - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE - ------------- --------------------------------------------------------------------- ---------- --------------- LONG-TERM MUNICIPAL SECURITIES--CONTINUED - ------------------------------------------------------------------------------------ NEVADA--CONTINUED --------------------------------------------------------------------- $ 2,000,000 Washoe County, NV, 5.70% GO Bonds (Series A)/(FGIC Insured) 7/1/2017 AAA $ 1,832,600 --------------------------------------------------------------------- --------------- Total 10,020,763 --------------------------------------------------------------------- --------------- NORTH CAROLINA--0.5% --------------------------------------------------------------------- 570,000 North Carolina Municipal Power Agency No. 1, 6.50% Revenue Bonds (MBIA Insured), (Escrowed to Maturity), 1/1/2010 AAA 596,152 --------------------------------------------------------------------- --------------- OKLAHOMA--1.9% --------------------------------------------------------------------- 2,250,000 Enid, OK, Municipal Authority Tax and Utility, 6.20% Revenue Bonds (FGIC Insured), 2/1/2012 AAA 2,233,206 --------------------------------------------------------------------- --------------- PENNSYLVANIA--3.1% --------------------------------------------------------------------- 3,500,000 Montgomery County, PA, 6.70% IDA Revenue Bonds (Philadelphia Electric Company)/(MBIA Insured), 12/1/2021 AAA 3,585,603 --------------------------------------------------------------------- --------------- RHODE ISLAND--1.6% --------------------------------------------------------------------- 2,000,000 Rhode Island Depositors Economic Protection, 5.80% (MBIA Insured), 8/1/2012 AAA 1,901,106 --------------------------------------------------------------------- --------------- SOUTH CAROLINA--3.1% --------------------------------------------------------------------- 3,500,000 South Carolina Port Authority, 6.625% Revenue Bonds (AMBAC Insured), 7/1/2011 (Subject to AMT) AAA 3,644,312 --------------------------------------------------------------------- --------------- SOUTH DAKOTA--3.1% --------------------------------------------------------------------- 3,500,000 South Dakota State Health and Education Facilities Authority, 6.625% Revenue Bonds (MBIA Insured), 7/1/2011 AAA 3,607,548 --------------------------------------------------------------------- --------------- TENNESSEE--6.3% --------------------------------------------------------------------- 4,100,000 Knox County, TN, Health, Educational & Housing Facilities Board, 5.75% Hospital Facilities Revenue Bonds (Fort Sanders Alliance)/(Series C)/(MBIA Insured), 1/1/2014 AAA 3,875,160 --------------------------------------------------------------------- 3,500,000 Metropolitan Nashville Airport, TN, 6.60% Revenue Bonds (Series C)/(FGIC Insured)/(Original Issue Yield: 6.72%), 7/1/2015 AAA 3,556,896 --------------------------------------------------------------------- --------------- Total 7,432,056 --------------------------------------------------------------------- --------------- TEXAS--10.2% --------------------------------------------------------------------- 2,000,000 Dallas-Fort Worth, TX, Regional Airport, 7.80% Revenue Bonds (FGIC Insured), 11/1/2007 AAA 2,304,488 --------------------------------------------------------------------- 2,000,000 Harris County, TX, 5.30%, Revenue Toll Roads, Senior Lien Bonds (AMBAC Insured)/(Original Issue Yield: 5.40%), 8/15/2013 AAA 1,781,358 ---------------------------------------------------------------------
FIRST UNION HIGH GRADE TAX FREE PORTFOLIO (FORMERLY, FIRST UNION INSURED TAX FREE PORTFOLIO) - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE - ------------- --------------------------------------------------------------------- ---------- --------------- LONG-TERM MUNICIPAL SECURITIES--CONTINUED - ------------------------------------------------------------------------------------ TEXAS--CONTINUED --------------------------------------------------------------------- $ 4,000,000 Houston, TX, Water and Sewer System, 6.375%, (Series A)/ (MBIA Insured), 12/1/2022 AAA $ 4,000,000 --------------------------------------------------------------------- 1,500,000 Lower Colorado River Authority, TX, 6.00% Revenue Bonds (FSA Insured), 1/1/2016 AAA 1,438,875 --------------------------------------------------------------------- 2,290,000 Southland Oaks, TX, Municipal Utility District, 6.50% Revenue Bonds (City of Austin)/(FGIC Insured), 11/15/2009 AAA 2,357,228 --------------------------------------------------------------------- --------------- Total 11,881,949 --------------------------------------------------------------------- --------------- UTAH--5.4% --------------------------------------------------------------------- 2,500,000 Iron County School District, UT, 6.40% GO Bonds (MBIA Insured)/(Original Issue Yield: 6.45%), 1/15/2012 AAA 2,524,700 --------------------------------------------------------------------- 1,000,000 Salt Lake City, UT, 6.00%, Utah Airport Authority (FGIC Insured), 12/1/2012 AAA 960,150 --------------------------------------------------------------------- 3,000,000 Salt Lake City, UT, 5.875%, Utah Airport Authority (FGIC Insured), 12/1/2018 AAA 2,815,257 --------------------------------------------------------------------- --------------- Total 6,300,107 --------------------------------------------------------------------- --------------- WASHINGTON--9.1% --------------------------------------------------------------------- 2,540,000 Seattle, WA, Metropolitan Seattle Sewer, 5.70% Revenue Bonds (FGIC Insured), 1/1/2014 AAA 2,340,841 --------------------------------------------------------------------- 3,965,000 Seattle, WA, Metropolitan Seattle Sewer, 6.25% Revenue Bonds (MBIA Insured), 1/1/2021 AAA 3,816,289 --------------------------------------------------------------------- 1,000,000 Spokane, WA, Regional Solid Waste Management System, 6.25% Revenue Bonds (AMBAC Insured), 12/1/2011 AAA 992,604 --------------------------------------------------------------------- 3,500,000 Tacoma, WA, Electric System, 6.25% Revenue Bonds, (FGIC Insured)/(Original Issue Yield: 6.45%), 1/1/2015 AAA 3,444,420 --------------------------------------------------------------------- --------------- Total 10,594,154 --------------------------------------------------------------------- --------------- WEST VIRGINIA--1.3% --------------------------------------------------------------------- 1,500,000 Harrison County, WV, Board of Education, 6.30% GO Bonds (FGIC Insured), 5/1/2005 AAA 1,566,934 --------------------------------------------------------------------- --------------- WISCONSIN--6.5% --------------------------------------------------------------------- 4,500,000 Superior, WS, 6.90% Ltd. Obligations Revenue Bonds (Midwest Energy)/(Series E)/(FGIC Insured), 8/1/2021 AAA 4,733,523 --------------------------------------------------------------------- 1,000,000 Wisconsin State Health and Education Facilities Authority, 5.50% Revenue Bonds (Sorrowful Mother Corp.)/(Series D)/(MBIA Insured)/(Original Issue Yield: 5.65%), 8/15/2019 AAA 875,795 ---------------------------------------------------------------------
FIRST UNION HIGH GRADE TAX FREE PORTFOLIO (FORMERLY, FIRST UNION INSURED TAX FREE PORTFOLIO) - --------------------------------------------------------------------------------
CREDIT PRINCIPAL RATING: AMOUNT MOODY'S OR SHARES OR S&P* VALUE - ------------- --------------------------------------------------------------------- ---------- --------------- LONG-TERM MUNICIPAL SECURITIES--CONTINUED - ------------------------------------------------------------------------------------ WISCONSIN--CONTINUED --------------------------------------------------------------------- $ 2,000,000 Wisconsin State Health and Education Facilities Authority, 6.625% Revenue Bonds (Wausau Hospital)/(AMBAC Insured), 8/15/2011 AAA $ 2,039,232 --------------------------------------------------------------------- --------------- Total 7,648,550 --------------------------------------------------------------------- --------------- TOTAL LONG-TERM MUNICIPAL SECURITIES (IDENTIFIED COST $113,748,797) 113,124,953 --------------------------------------------------------------------- --------------- MUTUAL FUND SHARES--0.2% - ------------------------------------------------------------------------------------ 218,000 Dreyfus Municipal Cash Plus (at net asset value) (Note 2A) 218,000 --------------------------------------------------------------------- --------------- TOTAL INVESTMENTS (IDENTIFIED COST $113,966,797) $ 113,342,953+ --------------------------------------------------------------------- ---------------
* Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. + The cost of investments for federal tax purposes amounts to $113,966,797. The net unrealized depreciation of investments on a federal tax basis amounts to $623,844, which is comprised of $1,963,117 appreciation and $2,586,961 depreciation at June 30, 1994. Note: The categories of investments are shown as a percentage of net assets ($117,027,734) at June 30, 1994. The following abbreviations are used in this portfolio: AMBAC--American Municipal Bond Assurance Corporation AMT--Alternative Minimum Tax FGIC--Financial Guaranty Insurance Co. FSA--Financial Security Assurance GO--General Obligation IDA--Industrial Development Authority MBIA--Municipal Bond Investors Assurance PCR--Pollution Control Revenue VRDN--Variable Rate Demand Note (See Notes which are an integral part of the Financial Statements) FIRST UNION HIGH GRADE TAX FREE PORTFOLIO (FORMERLY, FIRST UNION INSURED TAX FREE PORTFOLIO) STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - ------------------------------------------------------------------------------------------------- Investments in securities, at value (Note 2A) (identified and tax cost $113,966,797) $ 113,342,953 - ------------------------------------------------------------------------------------------------- Interest receivable 2,172,312 - ------------------------------------------------------------------------------------------------- Receivable for investments sold 1,753,125 - ------------------------------------------------------------------------------------------------- Receivable for Fund shares sold 396,338 - ------------------------------------------------------------------------------------------------- Deferred expenses (Note 2F) 7,128 - ------------------------------------------------------------------------------------------------- --------------- Total assets 117,671,856 - ------------------------------------------------------------------------------------------------- LIABILITIES: - ------------------------------------------------------------------------------------------------- Payable for Fund shares redeemed $ 370,435 - ------------------------------------------------------------------------------------ Dividends payable 190,918 - ------------------------------------------------------------------------------------ Accrued expenses 82,769 - ------------------------------------------------------------------------------------ ----------- Total liabilities 644,122 - ------------------------------------------------------------------------------------------------- --------------- NET ASSETS for 11,458,625 shares of beneficial interest outstanding $ 117,027,734 - ------------------------------------------------------------------------------------------------- --------------- NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------------------------- Paid-in capital $ 117,142,395 - ------------------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) of investments (623,844) - ------------------------------------------------------------------------------------------------- Accumulated undistributed net realized gain (loss) on investments 509,183 - ------------------------------------------------------------------------------------------------- --------------- Total Net Assets $ 117,027,734 - ------------------------------------------------------------------------------------------------- --------------- NET ASSET VALUE: - ------------------------------------------------------------------------------------------------- Class B Investment Shares (net assets of $75,085,374 / 7,352,026 shares of beneficial interest outstanding) $10.21 - ------------------------------------------------------------------------------------------------- --------------- Class C Investment Shares (net assets of $38,341,250 / 3,754,060 shares of beneficial interest outstanding) $10.21 - ------------------------------------------------------------------------------------------------- --------------- Trust Shares (net assets of $3,601,110 / 352,539 shares of beneficial interest outstanding) $10.21 - ------------------------------------------------------------------------------------------------- --------------- OFFERING PRICE PER SHARE: - ------------------------------------------------------------------------------------------------- Class B Investment Shares (100/96 of $10.21) $10.64* - ------------------------------------------------------------------------------------------------- --------------- Class C Investment Shares $10.21 - ------------------------------------------------------------------------------------------------- --------------- Trust Shares $10.21 - ------------------------------------------------------------------------------------------------- --------------- REDEMPTION PROCEEDS PER SHARE: - ------------------------------------------------------------------------------------------------- Class B Investment Shares $10.21 - ------------------------------------------------------------------------------------------------- --------------- Class C Investment Shares (96/100 of $10.21) $ 9.80** - ------------------------------------------------------------------------------------------------- --------------- Trust Shares $10.21 - ------------------------------------------------------------------------------------------------- ---------------
* See "What Shares Cost" in the prospectus. ** See "Redeeming Shares" in the prospectus. (See Notes which are an integral part of the Financial Statements) FIRST UNION HIGH GRADE TAX FREE PORTFOLIO (FORMERLY, FIRST UNION INSURED TAX FREE PORTFOLIO) STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - ------------------------------------------------------------------------------------------------------------------ Interest income (Note 2C) $ 3,864,361 - ------------------------------------------------------------------------------------------------- EXPENSES-- - ------------------------------------------------------------------------------------------------- Investment advisory fee* $ 325,709 - ------------------------------------------------------------------------------------ Trustees' fees 981 - ------------------------------------------------------------------------------------ Administrative personnel and services fee* 55,133 - ------------------------------------------------------------------------------------ Custodian and portfolio accounting fees 38,780 - ------------------------------------------------------------------------------------ Transfer and dividend disbursing agent fees and expenses* 31,323 - ------------------------------------------------------------------------------------ Distribution services fee - Class B Investment Shares* 111,008 - ------------------------------------------------------------------------------------ Distribution services fee - Class C Investment Shares* 151,534 - ------------------------------------------------------------------------------------ Fund share registration costs 16,672 - ------------------------------------------------------------------------------------ Legal fees 1,748 - ------------------------------------------------------------------------------------ Auditing fees 5,815 - ------------------------------------------------------------------------------------ Printing and postage 17,162 - ------------------------------------------------------------------------------------ Insurance premiums 4,047 - ------------------------------------------------------------------------------------ Miscellaneous 3,540 - ------------------------------------------------------------------------------------ ----------- Total expenses 763,452 - ------------------------------------------------------------------------------------ Deduct--Waiver of investment advisory fee* 10,291 - ------------------------------------------------------------------------------------ ----------- Net expenses 753,161 - ------------------------------------------------------------------------------------------------- --------------- Net investment income 3,111,200 - ------------------------------------------------------------------------------------------------- --------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: - ------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (identified cost basis) 508,176 - ------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (12,266,148) - ------------------------------------------------------------------------------------------------- --------------- Net realized and unrealized gain (loss) on investments (11,757,972) - ------------------------------------------------------------------------------------------------- --------------- Change in net assets resulting from operations ($ 8,646,772) - ------------------------------------------------------------------------------------------------- ---------------
* See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION HIGH GRADE TAX FREE PORTFOLIO (FORMERLY, FIRST UNION INSURED TAX FREE PORTFOLIO) STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, -------------------------------- 1994* 1993 --------------- --------------- INCREASE (DECREASE) IN NET ASSETS: - ------------------------------------------------------------------------------- OPERATIONS-- - ------------------------------------------------------------------------------- Net investment income $ 3,111,200 $ 6,284,149 - ------------------------------------------------------------------------------- Net realized gain (loss) on investments ($508,176 and $889,675 net gain, respectively, as computed for federal tax purposes) 508,176 889,675 - ------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (12,266,148) 8,186,978 - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets resulting from operations (8,646,772) 15,360,802 - ------------------------------------------------------------------------------- --------------- --------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ------------------------------------------------------------------------------- Dividends to shareholders from net investment income: - ------------------------------------------------------------------------------- Class B Investment Shares (2,185,773) (5,090,122) - ------------------------------------------------------------------------------- Class C Investment Shares (896,670) (1,194,027) - ------------------------------------------------------------------------------- Trust Shares (28,757) -- - ------------------------------------------------------------------------------- Distributions to shareholders from net realized gain on investment transactions: - ------------------------------------------------------------------------------- Class B Investment Shares -- (610,162) - ------------------------------------------------------------------------------- Class C Investment Shares -- (244,709) - ------------------------------------------------------------------------------- Trust Shares -- -- - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from distributions to shareholders (3,111,200) (7,139,020) - ------------------------------------------------------------------------------- --------------- --------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ------------------------------------------------------------------------------- Proceeds from sale of shares 13,780,027 67,975,587 - ------------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 1,935,593 4,602,576 - ------------------------------------------------------------------------------- Cost of shares redeemed (29,312,338) (29,155,897) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from Fund share transactions (13,596,718) 43,422,266 - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets (25,354,690) 51,644,048 - ------------------------------------------------------------------------------- NET ASSETS: - ------------------------------------------------------------------------------- Beginning of period 142,382,424 90,738,376 - ------------------------------------------------------------------------------- --------------- --------------- End of period $ 117,027,734 $ 142,382,424 - ------------------------------------------------------------------------------- --------------- ---------------
* Six months ended June 30, 1994 (unaudited). (See Notes which are an integral part of the Financial Statements) FIRST UNION MANAGED BOND PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------- -------------------------------------------------------------------------------- --------------- CORPORATE BONDS--64.9% - ------------------------------------------------------------------------------------------------ BANKING--7.2% -------------------------------------------------------------------------------- $ 3,000,000 Comerica, Inc., 7.125%, 12/1/2013 $ 2,613,645 -------------------------------------------------------------------------------- 3,000,000 First Chicago Corp., 7.625%, 1/15/2003 2,919,021 -------------------------------------------------------------------------------- 2,000,000 Nationsbank Corp., 8.125%, 6/15/2002 2,016,298 -------------------------------------------------------------------------------- --------------- Total 7,548,964 -------------------------------------------------------------------------------- --------------- CHEMICALS--2.9% -------------------------------------------------------------------------------- 3,000,000 ICI Wilmington, Inc., 7.625%, 3/15/97 3,056,067 -------------------------------------------------------------------------------- --------------- DRUG--2.0% -------------------------------------------------------------------------------- 2,000,000 Baxter International, Inc., 9.25%, 12/15/99 2,140,904 -------------------------------------------------------------------------------- --------------- ELECTRONICS--2.8% -------------------------------------------------------------------------------- 3,000,000 Motorola, Inc., 7.60%, 1/1/2007 2,942,604 -------------------------------------------------------------------------------- --------------- ENERGY--2.8% -------------------------------------------------------------------------------- 3,000,000 duPont (E.I.) de Nemours & Co., 8.25%, 1/15/2022 2,960,871 -------------------------------------------------------------------------------- --------------- FINANCE AND INSURANCE--14.9% -------------------------------------------------------------------------------- 1,725,000 American General Finance Corp., 6.375%, 3/1/2003 1,561,622 -------------------------------------------------------------------------------- 1,500,000 First Colony Corp., 6.625%, 8/1/2003 1,364,429 -------------------------------------------------------------------------------- 3,000,000 General Electric Capital Corp., 7.875%, 12/1/2006 3,009,621 -------------------------------------------------------------------------------- 1,500,000 Household Finance Corp., 9.625%, 3/11/96 1,578,628 -------------------------------------------------------------------------------- 3,000,000 Merrill Lynch & Co., 7.75%, 3/1/99 3,019,164 -------------------------------------------------------------------------------- 2,000,000 Salomon Brothers, Inc., 8.31%, 3/27/95 2,033,518 -------------------------------------------------------------------------------- 3,000,000 Shearson Lehman Brothers, 8.375%, 4/1/97 3,069,330 -------------------------------------------------------------------------------- --------------- Total 15,636,312 -------------------------------------------------------------------------------- --------------- FOOD AND BEVERAGE--2.7% -------------------------------------------------------------------------------- 3,000,000 Grand Metro Investment Corp., 6.50%, 9/15/99 2,870,217 -------------------------------------------------------------------------------- --------------- FOREST PRODUCTS--2.9% -------------------------------------------------------------------------------- 3,000,000 International Paper Co., 8.02%, 4/1/99 3,055,647 -------------------------------------------------------------------------------- --------------- RETAIL--2.5% -------------------------------------------------------------------------------- 2,990,700 Dillon Read Structured Finance, 6.66%, 8/15/2010 2,627,665 -------------------------------------------------------------------------------- --------------- FOREIGN--9.3% -------------------------------------------------------------------------------- 2,000,000 Canadian National Realty Co., 7.00%, 3/15/2004 1,867,892 -------------------------------------------------------------------------------- 2,000,000 Hydro Quebec, 7.55%, 12/10/98 2,002,818 -------------------------------------------------------------------------------- 3,000,000 Manitoba Province, 8.00%, 4/15/2002 3,040,857 -------------------------------------------------------------------------------- 3,000,000 Ontario Province, 5.70%, 10/1/97 2,897,799 -------------------------------------------------------------------------------- --------------- Total 9,809,366 -------------------------------------------------------------------------------- ---------------
FIRST UNION MANAGED BOND PORTFOLIO - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------- -------------------------------------------------------------------------------- --------------- CORPORATE BONDS--CONTINUED - ------------------------------------------------------------------------------------------------ STEEL--1.8% -------------------------------------------------------------------------------- $ 2,000,000 Temple-Inland, Inc., 8.125%, 12/15/2006 $ 1,951,762 -------------------------------------------------------------------------------- --------------- TELE-COMMUNICATIONS--2.5% -------------------------------------------------------------------------------- 3,100,000 ALLTEL Corp., 6.50%, 11/1/2013 2,586,346 -------------------------------------------------------------------------------- --------------- TRANSPORTATION--2.9% -------------------------------------------------------------------------------- 3,000,000 Norfolk Southern Corp., 7.875%, 2/15/2004 3,021,117 -------------------------------------------------------------------------------- --------------- UTILITIES--7.7% -------------------------------------------------------------------------------- 2,000,000 Carolina Power & Light Co., 8.625%, 9/15/2021 2,037,042 -------------------------------------------------------------------------------- 1,500,000 Duke Power, 6.50%, 12/15/95 1,509,058 -------------------------------------------------------------------------------- 2,500,000 Indianapolis Power & Light Co., 8.00%, 10/15/2006 2,513,887 -------------------------------------------------------------------------------- 2,000,000 Progress Capital Holdings, 8.17%, 9/13/96 2,040,190 -------------------------------------------------------------------------------- --------------- Total 8,100,177 -------------------------------------------------------------------------------- --------------- TOTAL CORPORATE BONDS (IDENTIFIED COST $70,434,452) 68,308,019 -------------------------------------------------------------------------------- --------------- U.S. GOVERNMENT OBLIGATIONS--26.4% - ------------------------------------------------------------------------------------------------ U.S. TREASURY BONDS--3.9% -------------------------------------------------------------------------------- 2,000,000 7.125%, 2/15/2023 1,871,872 -------------------------------------------------------------------------------- 2,000,000 8.875%, 8/15/2017 2,240,622 -------------------------------------------------------------------------------- --------------- Total U.S. Treasury Bonds 4,112,494 -------------------------------------------------------------------------------- --------------- U.S. TREASURY NOTES--13.1% -------------------------------------------------------------------------------- 1,500,000 7.875%, 7/31/96 1,548,279 -------------------------------------------------------------------------------- 4,500,000 8.25%, 7/15/98 4,723,587 -------------------------------------------------------------------------------- 2,000,000 8.50%, 11/15/2000 2,140,000 -------------------------------------------------------------------------------- 3,000,000 8.875%, 2/15/99 3,230,625 -------------------------------------------------------------------------------- 2,000,000 8.875%, 5/15/2000 2,175,624 -------------------------------------------------------------------------------- --------------- Total U.S. Treasury Notes 13,818,115 -------------------------------------------------------------------------------- --------------- GOVERNMENT AGENCY--9.4% -------------------------------------------------------------------------------- 3,010,354 Federal Home Loan Mortgage Corp., 7.50%, 5/1/2009 2,980,251 -------------------------------------------------------------------------------- 1,287,062 Government National Mortgage Association, 9.00%, 4/15/2020 1,332,110 -------------------------------------------------------------------------------- 867,578 Government National Mortgage Association, 9.00%, 8/15/2021 897,943 -------------------------------------------------------------------------------- 1,164,860 Government National Mortgage Association, 9.50%, 2/15/2021 1,229,655 -------------------------------------------------------------------------------- 3,500,000 U.S. Department of Navy, 8.625%, 12/15/2013 3,461,762 -------------------------------------------------------------------------------- --------------- Total Government Agency 9,901,721 -------------------------------------------------------------------------------- --------------- TOTAL U.S. GOVERNMENT OBLIGATIONS (IDENTIFIED COST $30,026,656) 27,832,330 -------------------------------------------------------------------------------- ---------------
FIRST UNION MANAGED BOND PORTFOLIO - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------- -------------------------------------------------------------------------------- --------------- *REPURCHASE AGREEMENT--6.7% - ------------------------------------------------------------------------------------------------ $ 7,047,000 Donaldson, Lufkin & Jenrette Securities Corp., 4.125%, dated 6/30/94, due 7/1/94 (at amortized cost) (Note 2B) $ 7,047,000 -------------------------------------------------------------------------------- --------------- TOTAL INVESTMENTS (IDENTIFIED COST $107,508,108) $ 103,187,349+ -------------------------------------------------------------------------------- ---------------
* Repurchase agreement is fully collateralized by U.S. Government and/or agency obligations based on market price at the date of the portfolio. + The cost for federal tax purposes amounts to $107,508,108. The net unrealized depreciation of investments on a federal tax basis amounts to $4,320,759, which is comprised of $490,262 appreciation and $4,811,021 depreciation at June 30,1994. Note: The categories of investments are shown as a percentage of net assets ($105,233,047) at June 30, 1994. (See Notes which are an integral part of the Financial Statements) FIRST UNION MANAGED BOND PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - ------------------------------------------------------------------------------------------------ Investments in securities, at value (Notes 2A and 2B) (identified and tax cost $107,508,108) $ 103,187,349 - ------------------------------------------------------------------------------------------------ Cash 668 - ------------------------------------------------------------------------------------------------ Interest receivable 2,041,863 - ------------------------------------------------------------------------------------------------ Receivable for Fund shares sold 50,556 - ------------------------------------------------------------------------------------------------ Deferred expenses (Note 2F) 13,848 - ------------------------------------------------------------------------------------------------ --------------- Total assets 105,294,284 - ------------------------------------------------------------------------------------------------ LIABILITIES: - ------------------------------------------------------------------------------------------------ Payable for Fund shares redeemed $ 46,178 - ------------------------------------------------------------------------------------- Accrued expenses 15,059 - ------------------------------------------------------------------------------------- --------- Total liabilities 61,237 - ------------------------------------------------------------------------------------------------ --------------- NET ASSETS for 10,944,772 shares of beneficial interest outstanding $ 105,233,047 - ------------------------------------------------------------------------------------------------ --------------- NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------------------------ Paid-in capital $ 109,106,279 - ------------------------------------------------------------------------------------------------ Net unrealized appreciation (depreciation) of investments (4,320,759) - ------------------------------------------------------------------------------------------------ Accumulated undistributed net realized gain (loss) on investments 356,474 - ------------------------------------------------------------------------------------------------ Undistributed net investment income 91,053 - ------------------------------------------------------------------------------------------------ --------------- Total Net Assets $ 105,233,047 - ------------------------------------------------------------------------------------------------ --------------- NET ASSET VALUE, Offering Price, and Redemption Proceeds Per Share: (net assets of $105,233,047 / 10,944,772 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $9.61 - ------------------------------------------------------------------------------------------------ ---------------
(SEE NOTES WHICH ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS) FIRST UNION MANAGED BOND PORTFOLIO STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - -------------------------------------------------------------------------------------------------- Interest income (Note 2C) $ 3,858,406 - -------------------------------------------------------------------------------------------------- EXPENSES-- - -------------------------------------------------------------------------------------------------- Investment advisory fee* $ 264,233 - ------------------------------------------------------------------------------------- Trustees' fees 838 - ------------------------------------------------------------------------------------- Administrative personnel and services fee* 44,723 - ------------------------------------------------------------------------------------- Custodian and portfolio accounting fees 24,762 - ------------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 5,598 - ------------------------------------------------------------------------------------- Fund share registration costs 8,411 - ------------------------------------------------------------------------------------- Legal fees 2,615 - ------------------------------------------------------------------------------------- Auditing fees 6,176 - ------------------------------------------------------------------------------------- Printing and postage 11,363 - ------------------------------------------------------------------------------------- Insurance premiums 3,582 - ------------------------------------------------------------------------------------- Miscellaneous 3,679 - ------------------------------------------------------------------------------------- ----------- Total expenses 375,980 - ------------------------------------------------------------------------------------- Deduct--Waiver of administrative personnel and services fee* 6,055 - ------------------------------------------------------------------------------------- ----------- Net expenses 369,925 - -------------------------------------------------------------------------------------------------- ------------- Net investment income 3,488,481 - -------------------------------------------------------------------------------------------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: - -------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (identified cost basis) 363,284 - -------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (9,307,240) - ------------------------------------------------------------------------------------- ----------- ------------- Net realized and unrealized gain (loss) on investments (8,943,956) - -------------------------------------------------------------------------------------------------- ------------- Change in net assets resulting from operations ($ 5,455,475) - -------------------------------------------------------------------------------------------------- -------------
*See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION MANAGED BOND PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1994* 1993 --------------- --------------- INCREASE (DECREASE) IN NET ASSETS: - ------------------------------------------------------------------------------- OPERATIONS-- - ------------------------------------------------------------------------------- Net investment income $ 3,488,481 $ 6,944,724 - ------------------------------------------------------------------------------- Net realized gain (loss) on investments and futures contracts ($363,284 and $3,267,650 net gain, respectively, as computed for federal tax purposes) 363,284 3,267,650 - ------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (9,307,240) 1,457,883 - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets resulting from operations (5,455,475) 11,670,257 - ------------------------------------------------------------------------------- --------------- --------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ------------------------------------------------------------------------------- Dividends to shareholders from net investment income: (3,481,443) (6,916,373) - ------------------------------------------------------------------------------- Distributions to shareholders from net realized gain on investment transactions: -- (3,268,117) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from distributions to shareholders (3,481,443) (10,184,490) - ------------------------------------------------------------------------------- --------------- --------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ------------------------------------------------------------------------------- Proceeds from sale of shares 13,175,120 30,558,683 - ------------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 3,404,791 10,049,698 - ------------------------------------------------------------------------------- Cost of shares redeemed (11,477,016) (54,682,139) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from Fund share transactions 5,102,895 (14,073,758) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets (3,834,023) (12,587,991) - ------------------------------------------------------------------------------- NET ASSETS: - ------------------------------------------------------------------------------- Beginning of period 109,067,070 121,655,061 - ------------------------------------------------------------------------------- --------------- --------------- End of period (including undistributed net investment income of $91,053 and $84,015, respectively) $ 105,233,047 $ 109,067,070 - ------------------------------------------------------------------------------- --------------- ---------------
* Six months ended June 30, 1994 (unaudited). (See Notes which are an integral part of the Financial Statements) FIRST UNION NORTH CAROLINA MUNICIPAL BOND PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE - ------------- ---------------------------------------------------------------------- ---------- -------------- LONG-TERM MUNICIPAL SECURITIES--95.2% - ------------------------------------------------------------------------------------- NORTH CAROLINA--89.1% ---------------------------------------------------------------------- $ 1,300,000 Appalachian State University, NC, 5.625% Revenue Bonds (Appalachian State University Student Center)/ (MBIA Insured), 7/15/2014 AAA $ 1,219,777 ---------------------------------------------------------------------- 3,400,000 Charlotte-Mecklenberg Hospital Authority, NC, 5.75%-6.25% Health Care System Revenue Refunding Bonds, 1/1/2012-1/1/2020 AA 3,265,518 ---------------------------------------------------------------------- 1,650,000 Charlotte, NC, 6.20%, Water & Sewer, 6/1/2017 AAA 1,680,368 ---------------------------------------------------------------------- 2,425,000 Charlotte, NC, 5.90%, Water & Sewer (Series 94), 2/1/2017 AAA 2,325,691 ---------------------------------------------------------------------- 2,000,000 Charlotte, NC, 5.90%, Water & Sewer, 2/1/2019 AAA 1,919,798 ---------------------------------------------------------------------- 2,000,000 Concord, NC, 5.75% Utilities System Revenue Bonds, (Callable 12/1/2003 @102), 12/1/2017 AAA 1,852,322 ---------------------------------------------------------------------- 800,000 Cumberland County, NC, Hospital Facility, 5.50% Revenue Refunding Bonds (MBIA Insured), 10/1/2014 AAA 727,250 ---------------------------------------------------------------------- 960,000 Duplin County, NC, 5.50% (MBIA Insured)/ (Callable 4/1/2003 @102), 4/1/2012-4/1/2013 AAA 898,494 ---------------------------------------------------------------------- 2,475,000 Durham County, NC, 5.20% GO Bonds, (Callable 3/1/2002 @102), 2/1/2008 AAA 2,336,578 ---------------------------------------------------------------------- 985,000 Fremont, NC, Housing Development Corp., 6.75% Revenue Refunding Bonds (Torhunta Apartments), 7/15/2022 Aaa 986,275 ---------------------------------------------------------------------- 1,300,000 Gastonia, NC, 6.00% Combined Utility System Revenue Bonds (MBIA Insured), 5/1/2014 AAA 1,290,938 ---------------------------------------------------------------------- 1,140,000 Gastonia, NC, Housing Corp., 6.25% Revenue Bonds (Golfview/Village Square Apartments)/(Series A), 7/1/2010 A- 1,117,446 ---------------------------------------------------------------------- 600,000 Greensboro, NC, 5.25%-6.30% Public Improvement UT Bonds, 5/1/2009-3/1/2010 AAA 626,041 ---------------------------------------------------------------------- 1,000,000 Lower Cape Fear Water & Sewer, 5.50% Revenue Bonds, 3/1/2008 (Subject to AMT) A 936,881 ---------------------------------------------------------------------- 4,750,000 Martin County, NC, Industrial Facilities Authority, 6.80% (Solid Waste Wyerhauser Co.), 12/1/2023 A 4,374,937 ---------------------------------------------------------------------- 860,000 Monroe, NC, Combined Enterprise System, 6.00%, 3/1/2014 A 832,929 ---------------------------------------------------------------------- 1,000,000 North Carolina Eastern Municipal Power Agency, 6.40% (Series A)/(Callable 1/1/2003 @102), 1/1/2021 A 969,042 ---------------------------------------------------------------------- 1,800,000 North Carolina Eastern Municipal Power Agency, 6.00%, 1/1/2022 A 1,665,929 ----------------------------------------------------------------------
FIRST UNION NORTH CAROLINA MUNICIPAL BOND PORTFOLIO - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE - ------------- ---------------------------------------------------------------------- ---------- -------------- LONG-TERM MUNICIPAL SECURITIES--CONTINUED - ------------------------------------------------------------------------------------- NORTH CAROLINA--CONTINUED ---------------------------------------------------------------------- $ 1,000,000 North Carolina Eastern Municipal Power Agency, 6.00% Revenue Refunding Certificates (AMBAC Insured), 1/1/2018 AAA $ 958,737 ---------------------------------------------------------------------- 1,750,000 North Carolina Eastern Municipal Power Agency, 7.00% Refunding Bonds (Series C), 1/1/2013 A 1,829,896 ---------------------------------------------------------------------- 1,340,000 North Carolina Housing Finance Agency, 6.60% Refunding Bonds (Series F), 7/1/2017 AA 1,344,401 ---------------------------------------------------------------------- 1,980,000 North Carolina Housing Finance Agency, 6.45% Revenue Bonds (Series W), 9/1/2014 Aa 1,986,211 ---------------------------------------------------------------------- 500,000 North Carolina Medical Care Commission Health Care Facilities, 6.875% First Mortgage Revenue Refunding Bonds (Southminster)/(Series 94)/(Callable 10/1/99 @105), 10/1/2009 NR 494,352 ---------------------------------------------------------------------- 450,000 North Carolina Medical Care Commission for Rex Hospital, NC, 6.125%-6.25% Hospital Revenue Bonds, (Callable 6/1/2003 @102), 6/1/2010-6/1/2017 A+ 440,835 ---------------------------------------------------------------------- 2,800,000 North Carolina Medical Care Commission Hospital Revenue, NC, 5.50% Revenue Refunding Bonds (Presbyterian Health Service) 10/1/2020 AA 2,494,254 ---------------------------------------------------------------------- 1,500,000 North Carolina Medical Care Commission Hospital Revenue, NC, 5.375% (Scotland Memorial Hospital), 10/1/2011 AA 1,347,077 ---------------------------------------------------------------------- 1,400,000 North Carolina Medical Care Commission Hospital Revenue, NC, 6.00% Revenue Refunding Bonds (North Carolina Baptist Hospital), 6/1/2022 AA 1,334,463 ---------------------------------------------------------------------- 1,000,000 North Carolina Medical Care Commission Hospital Revenue, NC, 6.00% Revenue Refunding Bonds (Carolina Medicorp), (Callable 5/1/2001 @100), 5/1/2015 AAA 903,503 ---------------------------------------------------------------------- 3,500,000 North Carolina Catawba Municipal Power Agency Pound1, 6.00%-6.25% Revenue Refunding Bonds (MBIA Insured), 1/1/2010-1/1/2017 AAA 3,402,294 ---------------------------------------------------------------------- 2,600,000 North Carolina Catawba Municipal Power Agency Pound1, 5.75%, 1/1/2015 A 2,356,286 ---------------------------------------------------------------------- 1,800,000 North Carolina Catawba Municipal Power Agency Pound1, 6.20% Revenue Refunding Bonds (FSA Insured), 1/1/2018 AAA 1,765,107 ---------------------------------------------------------------------- 1,000,000 Piedmont-Triad Airport Authority, 6.75% Revenue Refunding Bonds (MBIA Insured), 7/1/2016 AAA 1,051,649 ---------------------------------------------------------------------- -------------- Total 50,735,279 ---------------------------------------------------------------------- -------------- PUERTO RICO--6.1% ---------------------------------------------------------------------- 1,100,000 Puerto Rico Commonwealth, 6.00% Custodial Receipts (FSA Insured), 7/1/2022 AAA 1,061,036 ----------------------------------------------------------------------
FIRST UNION NORTH CAROLINA MUNICIPAL BOND PORTFOLIO - --------------------------------------------------------------------------------
CREDIT PRINCIPAL RATING: AMOUNT MOODY'S OR SHARES OR S&P* VALUE - ------------- ---------------------------------------------------------------------- ---------- -------------- LONG-TERM MUNICIPAL SECURITIES--CONTINUED - ------------------------------------------------------------------------------------- PUERTO RICO--CONTINUED ---------------------------------------------------------------------- $ 2,500,000 Puerto Rico Electric Power Authority, 6.00% Revenue Bonds (Series S), 7/1/2015 A- $ 2,402,062 ---------------------------------------------------------------------- -------------- Total 3,463,098 ---------------------------------------------------------------------- -------------- TOTAL LONG-TERM MUNICIPAL SECURITIES (IDENTIFIED COST $56,807,671) 54,198,377 ---------------------------------------------------------------------- -------------- MUTUAL FUND SHARES--1.9% - ------------------------------------------------------------------------------------- 1,088,000 Lehman Municipal Money Market (at net asset value) (Note 2A) 1,088,000 ---------------------------------------------------------------------- -------------- TOTAL INVESTMENTS (IDENTIFIED COST, $57,895,671) $ 55,286,377+ ---------------------------------------------------------------------- --------------
* Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. + The cost of investments for federal tax purposes amounts to $57,895,671. The net unrealized depreciation of investments on a federal tax basis amounts to $2,609,294, which consists of $62,175 appreciation and $2,671,469 depreciation, at June 30, 1994. Note: The categories of investments are shown as a percentage of net assets ($56,948,515) at June 30, 1994. The following abbreviations are used in this portfolio: AMBAC--American Municipal Bond Assurance Corporation AMT--Alternative Minimum Tax FSA--Financial Security Assurance GO--General Obligation MBIA--Municipal Bond Investors Assurance NR--Not Rated UT--Unlimited Tax (See Notes which are an integral part of the Financial Statements) FIRST UNION NORTH CAROLINA MUNICIPAL BOND PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - -------------------------------------------------------------------------------------------------- Investments in securities, at value (Note 2A) (identified and tax cost $57,895,671) $ 55,286,377 - -------------------------------------------------------------------------------------------------- Cash 905 - -------------------------------------------------------------------------------------------------- Interest receivable 1,070,042 - -------------------------------------------------------------------------------------------------- Receivable for investments sold 979,060 - -------------------------------------------------------------------------------------------------- Receivable for Fund shares sold 552,053 - -------------------------------------------------------------------------------------------------- Deferred expenses (Note 2F) 33,235 - -------------------------------------------------------------------------------------------------- -------------- Total assets 57,921,672 - -------------------------------------------------------------------------------------------------- LIABILITIES: - -------------------------------------------------------------------------------------------------- Payable for investments purchased $ 501,241 - ------------------------------------------------------------------------------------- Payable for Fund shares redeemed 359,359 - ------------------------------------------------------------------------------------- Dividends payable 61,852 - ------------------------------------------------------------------------------------- Accrued expenses 50,705 - ------------------------------------------------------------------------------------- ----------- Total liabilities 973,157 - -------------------------------------------------------------------------------------------------- -------------- NET ASSETS for 6,008,307 shares of beneficial interest outstanding $ 56,948,515 - -------------------------------------------------------------------------------------------------- -------------- NET ASSETS CONSIST OF: - -------------------------------------------------------------------------------------------------- Paid-in capital $ 61,673,436 - -------------------------------------------------------------------------------------------------- Net unrealized appreciation (depreciation) of investments (2,609,294) - -------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) on investments (2,115,627) - -------------------------------------------------------------------------------------------------- -------------- Total Net Assets $ 56,948,515 - -------------------------------------------------------------------------------------------------- -------------- NET ASSET VALUE: - -------------------------------------------------------------------------------------------------- Class B Investment Shares (net assets of $9,241,183 / 975,198 shares of beneficial interest outstanding) $9.48 - -------------------------------------------------------------------------------------------------- -------------- Class C Investment Shares (net assets of $47,470,336 / 5,008,105 shares of beneficial interest outstanding) $9.48 - -------------------------------------------------------------------------------------------------- -------------- Trust Shares (net assets of $236,996 / 25,004 shares of beneficial interest outstanding) $9.48 - -------------------------------------------------------------------------------------------------- -------------- OFFERING PRICE PER SHARE: - -------------------------------------------------------------------------------------------------- Class B Investment Shares (100/96 of $9.48) $9.88* - -------------------------------------------------------------------------------------------------- -------------- Class C Investment Shares $9.48 - -------------------------------------------------------------------------------------------------- -------------- Trust Shares $9.48 - -------------------------------------------------------------------------------------------------- -------------- REDEMPTION PROCEEDS PER SHARE: - -------------------------------------------------------------------------------------------------- Class B Investment Shares $9.48 - -------------------------------------------------------------------------------------------------- -------------- Class C Investment Shares (96/100 of $9.48) $9.10** - -------------------------------------------------------------------------------------------------- -------------- Trust Shares $9.48 - -------------------------------------------------------------------------------------------------- --------------
* See "What Shares Cost" in the prospectus. ** See "Redeeming Shares" in the prospectus. (See Notes which are an integral part of the Financial Statements) FIRST UNION NORTH CAROLINA MUNICIPAL BOND PORTFOLIO STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - -------------------------------------------------------------------------------------------------- Interest income (Note 2C) $ 1,636,332 - -------------------------------------------------------------------------------------------------- EXPENSES-- - -------------------------------------------------------------------------------------------------- Investment advisory fee* $ 143,834 - ------------------------------------------------------------------------------------- Trustees' fees 328 - ------------------------------------------------------------------------------------- Administrative personnel and services fee* 34,464 - ------------------------------------------------------------------------------------- Custodian and portfolio accounting fees 27,637 - ------------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 18,615 - ------------------------------------------------------------------------------------- Distribution services fee--Class B Investments Shares* 13,615 - ------------------------------------------------------------------------------------- Distribution services fee--Class C Investment Shares* 174,645 - ------------------------------------------------------------------------------------- Fund share registration costs 15,314 - ------------------------------------------------------------------------------------- Legal fees 243 - ------------------------------------------------------------------------------------- Auditing fees 5,270 - ------------------------------------------------------------------------------------- Printing and postage 4,701 - ------------------------------------------------------------------------------------- Insurance premiums 3,626 - ------------------------------------------------------------------------------------- Miscellaneous 2,379 - ------------------------------------------------------------------------------------- ----------- Total expenses 444,671 - ------------------------------------------------------------------------------------- ----------- Deduct-- - ------------------------------------------------------------------------ Waiver of investment advisory fee* $ 101,506 - ------------------------------------------------------------------------ Waiver of administrative personnel and services fee* 11,313 112,819 - ------------------------------------------------------------------------ ----------- ----------- Net expenses 331,852 - -------------------------------------------------------------------------------------------------- ------------- Net investment income 1,304,480 - -------------------------------------------------------------------------------------------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: - -------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (identified cost basis) (2,115,627) - -------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (4,570,489) - -------------------------------------------------------------------------------------------------- ------------- Net realized and unrealized gain (loss) on investments (6,686,116) - -------------------------------------------------------------------------------------------------- ------------- Change in net assets resulting from operations ($ 5,381,636) - -------------------------------------------------------------------------------------------------- -------------
* See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION NORTH CAROLINA MUNICIPAL BOND PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1994* 1993** -------------- -------------- INCREASE (DECREASE) IN NET ASSETS: - -------------------------------------------------------------------------------- OPERATIONS-- - -------------------------------------------------------------------------------- Net investment income $ 1,304,480 $ 1,557,587 - -------------------------------------------------------------------------------- Net realized gain (loss) on investments ($2,115,627 net loss and $186,359 net gain as computed for federal tax purposes) (2,115,627) 186,359 - -------------------------------------------------------------------------------- Change in unrealized appreciation (depreciation) of investments (4,570,489) 1,961,195 - -------------------------------------------------------------------------------- -------------- -------------- Change in net assets resulting from operations (5,381,636) 3,705,141 - -------------------------------------------------------------------------------- -------------- -------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - -------------------------------------------------------------------------------- Dividends to shareholders from net investment income: - -------------------------------------------------------------------------------- Class B Investment Shares (267,676) (381,265) - -------------------------------------------------------------------------------- Class C Investment Shares (1,034,866) (1,176,322) - -------------------------------------------------------------------------------- Trust Shares (1,938) -- - -------------------------------------------------------------------------------- Distributions to shareholders from net realized gain on investment transactions: - -------------------------------------------------------------------------------- Class B Investment Shares -- (40,911) - -------------------------------------------------------------------------------- Class C Investment Shares -- (145,448) - -------------------------------------------------------------------------------- Trust Shares -- -- - -------------------------------------------------------------------------------- -------------- -------------- Change in net assets from distributions to shareholders (1,304,480) (1,743,946) - -------------------------------------------------------------------------------- -------------- -------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - -------------------------------------------------------------------------------- Proceeds from sale of shares 13,050,079 59,880,096 - -------------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 949,606 1,139,374 - -------------------------------------------------------------------------------- Cost of shares redeemed (8,271,700) (5,074,019) - -------------------------------------------------------------------------------- -------------- -------------- Change in net assets from Fund share transactions 5,727,985 55,945,451 - -------------------------------------------------------------------------------- -------------- -------------- Change in net assets (958,131) 57,906,646 - -------------------------------------------------------------------------------- NET ASSETS: - -------------------------------------------------------------------------------- Beginning of period 57,906,646 -- - -------------------------------------------------------------------------------- -------------- -------------- End of period $ 56,948,515 $ 57,906,646 - -------------------------------------------------------------------------------- -------------- --------------
* Six months ended June 30, 1994 (unaudited). ** For the period from January 11, 1993 (commencement of operations) to December 31, 1993. (See Notes which are an integral part of the Financial Statements) FIRST UNION SOUTH CAROLINA MUNICIPAL BOND PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE - ------------ ------------------------------------------------------------------------ ---------- ------------- LONG-TERM MUNICIPAL SECURITIES--91.7% - -------------------------------------------------------------------------------------- PUERTO RICO--5.1% ------------------------------------------------------------------------ $ 50,000 Puerto Rico Commonwealth, 5.25%, Highway & Transportation Authority, 7/1/2021 A $ 42,712 ------------------------------------------------------------------------ 50,000 Puerto Rico Commonwealth, 5.50%, Public Buildings Authority, 7/1/2021 A 43,732 ------------------------------------------------------------------------ ------------- Total 86,444 ------------------------------------------------------------------------ ------------- SOUTH CAROLINA--86.6% ------------------------------------------------------------------------ 50,000 Berkeley County, SC, 6.25%, School District (AMBAC Insured), 2/1/2012 AAA 49,367 ------------------------------------------------------------------------ 100,000 Charleston, SC, 5.60% GO Bonds, 7/1/2008 AA 97,539 ------------------------------------------------------------------------ 50,000 Charleston County, SC, 5.50% Hospital Facilities Revenue Bonds (Medical Society Health Project)/(MBIA Insured), 10/1/2019 AAA 44,567 ------------------------------------------------------------------------ 50,000 Charleston County, SC, 5.625% Hospital Facilities Revenue Bonds (Bon Secours Project)/(FSA Insured), 8/15/2025 AAA 43,733 ------------------------------------------------------------------------ 100,000 Colleton, SC, 5.60% GO Bonds, 3/1/2009 BBB 90,770 ------------------------------------------------------------------------ 60,000 Columbia, SC, 5.75% Parking Facilities Refunding Revenue Bonds (Series 1994)/(AMBAC Insured), 12/1/2009 AAA 57,801 ------------------------------------------------------------------------ 50,000 Columbia, SC, 5.70% Water & Sewer Revenue Bonds, 2/1/2010 AA 47,235 ------------------------------------------------------------------------ 50,000 Gaffney, SC, 5.00% Utility System Revenue Bonds, 3/1/2009 A 43,832 ------------------------------------------------------------------------ 50,000 Greenville Hospital System, SC, 5.50% Hospital Facilities Revenue Refunding Bonds (Series C), 5/1/2016 AA- 43,369 ------------------------------------------------------------------------ 200,000 James Island, SC, 5.75% PSD Revenue Bonds (FGIC Insured), 6/1/2018 AAA 184,865 ------------------------------------------------------------------------ 200,000 Lancaster County, SC, 5.25% Water & Sewer District Revenue Bonds (FGIC Insured), 5/1/2021 AAA 170,220 ------------------------------------------------------------------------ 50,000 Oconee County School District, SC, 5.10% (MBIA Insured), 1/1/2010 AAA 44,940 ------------------------------------------------------------------------ 50,000 Piedmont Municipal Power Agency, SC, 5.00% (FGIC Insured), 1/1/2022 AAA 41,163 ------------------------------------------------------------------------ 50,000 Richland County, SC, 5.50% Sewer System GO Bonds, 3/1/2018 AA 44,491 ------------------------------------------------------------------------ 100,000 Richland County, SC, 6.10% School District Revenue Bonds (Series B)/(MBIA Insured), 5/1/2011 AAA 98,748 ------------------------------------------------------------------------ 50,000 Richland County, SC, 7.125% Solid Waste Revenue Bonds (Union Camp Corp.), 9/1/2021 A-1 51,935 ------------------------------------------------------------------------
FIRST UNION SOUTH CAROLINA MUNICIPAL BOND PORTFOLIO - --------------------------------------------------------------------------------
CREDIT PRINCIPAL RATING: AMOUNT MOODY'S OR SHARES OR S&P* VALUE - ------------ ------------------------------------------------------------------------ ---------- ------------- LONG-TERM MUNICIPAL SECURITIES--CONTINUED - -------------------------------------------------------------------------------------- SOUTH CAROLINA--CONTINUED ------------------------------------------------------------------------ $ 50,000 South Carolina State, 5.25%, 3/1/2007 AAA $ 47,466 ------------------------------------------------------------------------ 70,000 South Carolina State, 6.05% Housing Finance and Development Authority Multi-Family Revenue Bonds, 7/1/2027 AA 67,113 ------------------------------------------------------------------------ 50,000 South Carolina State, 5.50% Public Service Authority Revenue Bonds (MBIA Insured), 7/1/2021 AAA 44,135 ------------------------------------------------------------------------ 50,000 Sumter County, SC, 6.625% Hospital Facilities Revenue Bonds (Tuomey Regional)/(MBIA Insured), 11/15/2003 AAA 53,790 ------------------------------------------------------------------------ 100,000 Sumter County School District Pound2, SC, 5.75% (MBIA Insured), 2/1/2011 AAA 96,677 ------------------------------------------------------------------------ ------------- Total 1,463,756 ------------------------------------------------------------------------ ------------- TOTAL LONG-TERM MUNICIPAL SECURITIES (IDENTIFIED COST $1,643,291) 1,550,200 ------------------------------------------------------------------------ ------------- MUTUAL FUND SHARES--3.5% - -------------------------------------------------------------------------------------- 12,000 Dreyfus Municipal Cash Management Plus 12,000 ------------------------------------------------------------------------ 47,000 Dreyfus Tax Exempt Cash Management 47,000 ------------------------------------------------------------------------ ------------- TOTAL MUTUAL FUND SHARES (AT NET ASSET VALUE) (NOTE 2A) 59,000 ------------------------------------------------------------------------ ------------- TOTAL INVESTMENTS (IDENTIFIED COST, $1,702,291) $ 1,609,200+ ------------------------------------------------------------------------ -------------
* Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. + The cost of investments for federal tax purposes amounts to $1,702,291. The net unrealized depreciation on a federal tax basis amounts to $93,091, which is comprised of $2,178 appreciation and $95,269 depreciation at June 30, 1994. Note: The categories of investments are shown as a percentage of net assets ($1,689,611) at June 30, 1994. The following abbreviations are used in this portfolio: AMBAC--American Municipal Bond Assurance Corp. FGIC--Financial Guaranty Insurance Co. FSA--Financial Security Assurance GO--General Obligation MBIA--Municipal Bond Investors Assurance PSD--Pubic Service District (See Notes which are an integral part of the Financial Statements) FIRST UNION SOUTH CAROLINA MUNICIPAL BOND PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - ---------------------------------------------------------------------------------------------------- Investments in securities, at value (Note 2A) (identified and tax cost $1,702,291) $ 1,609,200 - ---------------------------------------------------------------------------------------------------- Cash 40,794 - ---------------------------------------------------------------------------------------------------- Interest receivable 26,082 - ---------------------------------------------------------------------------------------------------- Receivable for Fund shares sold 12,148 - ---------------------------------------------------------------------------------------------------- Receivable from Adviser (Note 4) 7,058 - ---------------------------------------------------------------------------------------------------- ------------- Total assets 1,695,282 - ---------------------------------------------------------------------------------------------------- LIABILITIES: - ---------------------------------------------------------------------------------------------------- Dividends payable $ 2,026 - ----------------------------------------------------------------------------------------- Accrued expenses 3,645 - ----------------------------------------------------------------------------------------- --------- Total liabilities 5,671 - ---------------------------------------------------------------------------------------------------- ------------- NET ASSETS for 187,201 shares of beneficial interest outstanding $ 1,689,611 - ---------------------------------------------------------------------------------------------------- ------------- NET ASSETS CONSIST OF: - ---------------------------------------------------------------------------------------------------- Paid-in capital $ 1,806,181 - ---------------------------------------------------------------------------------------------------- Unrealized appreciation (depreciation) of investments (93,091) - ---------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) on investments (23,479) - ---------------------------------------------------------------------------------------------------- ------------- Total Net Assets $ 1,689,611 - ---------------------------------------------------------------------------------------------------- ------------- NET ASSET VALUE PER SHARE: - ---------------------------------------------------------------------------------------------------- Class B Investment Shares (net assets of $47,225 / 5,232 shares of beneficial interest outstanding) $9.03 - ---------------------------------------------------------------------------------------------------- ------------- Class C Investment Shares (net assets of $1,547,601 / 171,478 shares of beneficial interest outstanding) $9.03 - ---------------------------------------------------------------------------------------------------- ------------- Trust Shares (net assets of $94,785 / 10,491 shares of beneficial interest outstanding) $9.03 - ---------------------------------------------------------------------------------------------------- ------------- OFFERING PRICE PER SHARE: - ---------------------------------------------------------------------------------------------------- Class B Investment Shares (100/96 of $9.03) $9.41* - ---------------------------------------------------------------------------------------------------- ------------- Class C Investment Shares $9.03 - ---------------------------------------------------------------------------------------------------- ------------- Trust Shares $9.03 - ---------------------------------------------------------------------------------------------------- ------------- REDEMPTION PROCEEDS PER SHARE: - ---------------------------------------------------------------------------------------------------- Class B Investment Shares $9.03 - ---------------------------------------------------------------------------------------------------- ------------- Class C Investment Shares (96/100 of $9.03) $8.67** - ---------------------------------------------------------------------------------------------------- ------------- Trust Shares $9.03 - ---------------------------------------------------------------------------------------------------- -------------
* See "What Shares Cost" in the prospectus. ** See "How to Redeem Shares" in the prospectus. (See Notes which are an integral part of the Financial Statements) FIRST UNION SOUTH CAROLINA MUNICIPAL BOND PORTFOLIO STATEMENT OF OPERATIONS FOR THE PERIOD FROM JANUARY 4, 1994 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - ---------------------------------------------------------------------------------------- Interest income (Note 2C) $ 27,530 - --------------------------------------------------------------------------------------------------- EXPENSES-- - --------------------------------------------------------------------------------------------------- Investment advisory fee* $ 2,527 - ---------------------------------------------------------------------------------------- Administrative personnel and services fee* 48,904 - ---------------------------------------------------------------------------------------- Custodian and portfolio accounting fees 5,253 - ---------------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 2,085 - ---------------------------------------------------------------------------------------- Distribution services fee--Class B Investment Shares* 57 - ---------------------------------------------------------------------------------------- Distribution services fee--Class C Investment Shares* 3,582 - ---------------------------------------------------------------------------------------- Legal fees 336 - ---------------------------------------------------------------------------------------- Printing and postage 2,111 - ---------------------------------------------------------------------------------------- Insurance premiums 989 - ---------------------------------------------------------------------------------------- Miscellaneous 763 - ---------------------------------------------------------------------------------------- --------- Total expenses 66,607 - ---------------------------------------------------------------------------------------- Deduct-- - ---------------------------------------------------------------------------------------- Waiver of investment advisory fee* $ 2,527 - ----------------------------------------------------------------------------- Waiver of administrative personnel and services fee* 48,904 - ----------------------------------------------------------------------------- Reimbursement of other operating expenses by Adviser* 11,536 62,967 - ----------------------------------------------------------------------------- --------- --------- Net expenses 3,640 - --------------------------------------------------------------------------------------------------- ----------- Net investment income 23,890 - --------------------------------------------------------------------------------------------------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: - --------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (identified cost basis) (23,479) - --------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (93,091) - --------------------------------------------------------------------------------------------------- ----------- Net realized and unrealized gain (loss) on investments (116,570) - --------------------------------------------------------------------------------------------------- ----------- Change in net assets resulting from operations ($ 92,680) - --------------------------------------------------------------------------------------------------- -----------
* See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION SOUTH CAROLINA MUNICIPAL BOND PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
PERIOD ENDED JUNE 30, 1994* INCREASE (DECREASE) IN NET ASSETS: - ----------------------------------------------------------------------------------------------- OPERATIONS-- - ----------------------------------------------------------------------------------------------- Net investment income $ 23,890 - ----------------------------------------------------------------------------------------------- Net realized gain (loss) on investments ($23,479 net loss as computed for federal tax purposes) (23,479) - ----------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) of investments (93,091) - ----------------------------------------------------------------------------------------------- ----------------- Change in net assets resulting from operations (92,680) - ----------------------------------------------------------------------------------------------- ----------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ----------------------------------------------------------------------------------------------- Dividends to shareholders from net investment income: - ----------------------------------------------------------------------------------------------- Class B Investment Shares (1,158) - ----------------------------------------------------------------------------------------------- Class C Investment Shares (22,434) - ----------------------------------------------------------------------------------------------- Trust Shares (298) - ----------------------------------------------------------------------------------------------- ----------------- Change in net assets from distributions to shareholders (23,890) - ----------------------------------------------------------------------------------------------- ----------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ----------------------------------------------------------------------------------------------- Proceeds from sale of shares 1,853,882 - ----------------------------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 16,787 - ----------------------------------------------------------------------------------------------- Cost of shares redeemed (64,488) - ----------------------------------------------------------------------------------------------- ----------------- Change in net assets from Fund share transactions 1,806,181 - ----------------------------------------------------------------------------------------------- ----------------- Change in net assets 1,689,611 - ----------------------------------------------------------------------------------------------- NET ASSETS: - ----------------------------------------------------------------------------------------------- Beginning of period -- - ----------------------------------------------------------------------------------------------- ----------------- End of period $ 1,689,611 - ----------------------------------------------------------------------------------------------- -----------------
* For the period from January 4, 1994 (commencement of operations) to June 30, 1994 (unaudited). (See Notes which are an integral part of the Financial Statements) FIRST UNION U.S. GOVERNMENT PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - -------------- -------------------------------------------------------------------------------- --------------- U.S. GOVERNMENT AGENCY OBLIGATIONS--45.8% - ------------------------------------------------------------------------------------------------ $ 36,431,634 Federal Home Loan Mortgage Corporation, PC 8.00%-10.50%, 11/1/96-4/1/2022 $ 37,545,130 -------------------------------------------------------------------------------- 17,054,395 Federal National Mortgage Association, 6.50%-9.50%, 6/1/2022- 1/1/2024 16,347,099 -------------------------------------------------------------------------------- 70,009,669 Government National Mortgage Association, 7.00%-10.00%, 12/15/2018-11/15/2023 69,087,231 -------------------------------------------------------------------------------- --------------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (IDENTIFIED COST $129,757,783) 122,979,460 -------------------------------------------------------------------------------- --------------- U.S. TREASURY OBLIGATIONS--52.3% - ------------------------------------------------------------------------------------------------ U.S. TREASURY BONDS--25.6% -------------------------------------------------------------------------------- 64,780,000 8.125%-8.875%, 8/15/2000-8/15/2019 68,848,343 -------------------------------------------------------------------------------- U.S. TREASURY NOTES--26.7% -------------------------------------------------------------------------------- 67,720,000 7.875%-9.375%, 4/15/96-8/15/98 71,705,935 -------------------------------------------------------------------------------- --------------- TOTAL U.S. TREASURY OBLIGATIONS (IDENTIFIED COST $153,776,246) 140,554,278 -------------------------------------------------------------------------------- --------------- *REPURCHASE AGREEMENT--0.6% - ------------------------------------------------------------------------------------------------ 1,530,000 Donaldson, Lufkin & Jenrette Securities Corp., 4.125%, dated 6/30/94, due 7/1/94 (at amortized cost)/(Note 2B) 1,530,000 -------------------------------------------------------------------------------- --------------- TOTAL INVESTMENTS (IDENTIFIED COST $285,064,029) $ 265,063,738+ -------------------------------------------------------------------------------- ---------------
PC--Participation Certificate * Repurchase agreement is fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. + The cost for federal tax purposes amounts to $285,064,029. The net unrealized depreciation of investments on a federal tax basis amounts to $20,000,291, which is comprised entirely of depreciation, at June 30, 1994. Note: The categories of investments are shown as a percentage of net assets ($268,509,135) at June 30, 1994. (See Notes which are an integral part of the Financial Statements) FIRST UNION U.S. GOVERNMENT PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - ------------------------------------------------------------------------------------------------ Investments in securities, at value (Notes 2A and 2B) (identified tax cost $285,064,029) $ 265,063,738 - ------------------------------------------------------------------------------------------------ Cash 718 - ------------------------------------------------------------------------------------------------ Interest receivable 4,407,157 - ------------------------------------------------------------------------------------------------ Receivable for Fund shares sold 1,016,534 - ------------------------------------------------------------------------------------------------ Deferred expenses (Note 2F) 106,327 - ------------------------------------------------------------------------------------------------ --------------- Total assets 270,594,474 - ------------------------------------------------------------------------------------------------ LIABILITIES: - ------------------------------------------------------------------------------------------------ Payable for Fund shares redeemed $ 1,174,270 - --------------------------------------------------------------------------------- Dividends payable 714,346 - --------------------------------------------------------------------------------- Accrued expenses 196,723 - --------------------------------------------------------------------------------- ------------- Total liabilities 2,085,339 - ------------------------------------------------------------------------------------------------ --------------- NET ASSETS for 28,774,837 shares of beneficial interest outstanding $ 268,509,135 - ------------------------------------------------------------------------------------------------ --------------- NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------------------------ Paid-in capital $ 292,779,794 - ------------------------------------------------------------------------------------------------ Unrealized appreciation (depreciation) of investments (20,000,291) - ------------------------------------------------------------------------------------------------ Accumulated net realized gain (loss) on investments (4,270,368) - ------------------------------------------------------------------------------------------------ --------------- Total Net Assets $ 268,509,135 - ------------------------------------------------------------------------------------------------ --------------- NET ASSET VALUE: - ------------------------------------------------------------------------------------------------ Class B Investment Shares (net assets of $30,569,434 / 3,276,071 shares of beneficial interest outstanding) $9.33 - ------------------------------------------------------------------------------------------------ --------------- Class C Investment Shares (net assets of $222,541,145 / 23,848,799 shares of beneficial interest outstanding) $9.33 - ------------------------------------------------------------------------------------------------ --------------- Trust Shares (net assets of $15,398,556 / 1,649,967 shares of beneficial interest outstanding) $9.33 - ------------------------------------------------------------------------------------------------ --------------- OFFERING PRICE PER SHARE: - ------------------------------------------------------------------------------------------------ Class B Investment Shares (100/96 of $9.33) $9.72* - ------------------------------------------------------------------------------------------------ --------------- Class C Investment Shares $9.33 - ------------------------------------------------------------------------------------------------ --------------- Trust Shares $9.33 - ------------------------------------------------------------------------------------------------ --------------- REDEMPTION PROCEEDS PER SHARE: - ------------------------------------------------------------------------------------------------ Class B Investment Shares $9.33 - ------------------------------------------------------------------------------------------------ --------------- Class C Investment Shares (96/100 of $9.33) $8.96** - ------------------------------------------------------------------------------------------------ --------------- Trust Shares $9.33 - ------------------------------------------------------------------------------------------------ ---------------
* See "What Shares Cost" in the prospectus. ** See "Redeeming Shares" in the prospectus. (See Notes which are an integral part of the Financial Statements) FIRST UNION U.S. GOVERNMENT PORTFOLIO STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - ------------------------------------------------------------------------------------------------- Interest income (Note 2C) $ 11,022,718 - ------------------------------------------------------------------------------------------------- EXPENSES-- - ------------------------------------------------------------------------------------------------- Investment advisory fee* $ 706,105 - ---------------------------------------------------------------------------------- Trustees' fees 1,582 - ---------------------------------------------------------------------------------- Administrative personnel and services fee* 119,531 - ---------------------------------------------------------------------------------- Custodian and portfolio accounting fees 40,738 - ---------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 97,795 - ---------------------------------------------------------------------------------- Distribution services fee--Class B Investment Shares* 43,290 - ---------------------------------------------------------------------------------- Distribution services fee--Class C Investment Shares* 875,388 - ---------------------------------------------------------------------------------- Fund share registration costs 27,098 - ---------------------------------------------------------------------------------- Legal fees 4,603 - ---------------------------------------------------------------------------------- Auditing fees 5,252 - ---------------------------------------------------------------------------------- Printing and postage 10,143 - ---------------------------------------------------------------------------------- Insurance premiums 3,992 - ---------------------------------------------------------------------------------- Miscellaneous 4,543 - ---------------------------------------------------------------------------------- ------------- Total expenses 1,940,060 - ---------------------------------------------------------------------------------- Deduct-- - ---------------------------------------------------------------------------------- Waiver of investment advisory fee* 40,632 - ---------------------------------------------------------------------------------- ------------- Net expenses 1,899,428 - ------------------------------------------------------------------------------------------------- --------------- Net investment income 9,123,290 - ------------------------------------------------------------------------------------------------- --------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: - ------------------------------------------------------------------------------------------------- Net realized gain (loss) on investment transactions (identified cost basis) (2,291,966) - ------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (19,046,869) - ------------------------------------------------------------------------------------------------- --------------- Net realized and unrealized gain (loss) on investments (21,338,835) - ------------------------------------------------------------------------------------------------- --------------- Change in net assets resulting from operations ($12,215,545) - ------------------------------------------------------------------------------------------------- ---------------
* See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION U.S. GOVERNMENT PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1994* 1993** --------------- --------------- INCREASE (DECREASE) IN NET ASSETS: - ------------------------------------------------------------------------------- OPERATIONS-- - ------------------------------------------------------------------------------- Net investment income $ 9,123,290 $ 10,464,592 - ------------------------------------------------------------------------------- Net realized gain (loss) on investments ($2,291,966 net loss, and $1,978,402 net loss, respectively, as computed for federal tax purposes) (Note 2D) (2,291,966) (1,978,402) - ------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (19,046,869) (953,422) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets resulting from operations (12,215,545) 7,532,768 - ------------------------------------------------------------------------------- --------------- --------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ------------------------------------------------------------------------------- Dividends to shareholders from net investment income: - ------------------------------------------------------------------------------- Class B Investment Shares (1,185,375) (1,599,495) - ------------------------------------------------------------------------------- Class C Investment Shares (7,425,870) (8,671,548) - ------------------------------------------------------------------------------- Trust Shares (512,045) (193,549) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from distributions to shareholders (9,123,290) (10,464,592) - ------------------------------------------------------------------------------- --------------- --------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ------------------------------------------------------------------------------- Proceeds from sale of shares 40,719,798 319,579,907 - ------------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 4,793,217 5,610,882 - ------------------------------------------------------------------------------- Cost of shares redeemed (45,698,153) (32,225,857) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from Fund share transactions (185,138) 292,964,932 - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets (21,523,973) 290,033,108 - ------------------------------------------------------------------------------- NET ASSETS: - ------------------------------------------------------------------------------- Beginning of period 290,033,108 -- - ------------------------------------------------------------------------------- --------------- --------------- End of period $ 268,509,135 $ 290,033,108 - ------------------------------------------------------------------------------- --------------- ---------------
* Six months ended June 30, 1994 (unaudited). ** For the period from January 11, 1993 (commencement of operations) to December 31, 1993. (See Notes which are an integral part of the Financial Statements) FIRST UNION UTILITY PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
SHARES VALUE - ------------- ----------------------------------------------------------------------------------- -------------- COMMON STOCKS--86.8% - -------------------------------------------------------------------------------------------------- UTILITIES--71.4% ----------------------------------------------------------------------------------- 25,100 Airtouch Communications, Inc. $ 592,988 ----------------------------------------------------------------------------------- 17,100 American Electric Power Co., Inc. 483,075 ----------------------------------------------------------------------------------- 8,400 American Water Works, Inc. 227,850 ----------------------------------------------------------------------------------- 36,800 Ameritech Corp. 1,407,600 ----------------------------------------------------------------------------------- 11,400 Atlanta Gas & Light Co. 386,175 ----------------------------------------------------------------------------------- 28,800 Bell Atlantic Corp. 1,612,800 ----------------------------------------------------------------------------------- 24,800 BellSouth Corp. 1,531,400 ----------------------------------------------------------------------------------- 8,400 British Telecommunications, Inc. ADR 473,550 ----------------------------------------------------------------------------------- 20,100 Carolina Power & Light Co. 464,813 ----------------------------------------------------------------------------------- 7,200 Consolidated Natural Gas Co. 271,800 ----------------------------------------------------------------------------------- 10,900 DQE, Inc. 322,913 ----------------------------------------------------------------------------------- 10,200 Dominion Resources, Inc. 371,025 ----------------------------------------------------------------------------------- 22,900 Duke Power Co. 818,675 ----------------------------------------------------------------------------------- 24,200 Eastern Enterprises 553,575 ----------------------------------------------------------------------------------- 7,600 Enron Corp. 248,900 ----------------------------------------------------------------------------------- 12,400 FPL Group, Inc. 370,450 ----------------------------------------------------------------------------------- 10,400 Florida Progress Corp. 269,100 ----------------------------------------------------------------------------------- 46,700 GTE Corp. 1,471,050 ----------------------------------------------------------------------------------- 29,300 General Public Utilities Corp. 769,125 ----------------------------------------------------------------------------------- 15,600 NICOR, Inc. 411,450 ----------------------------------------------------------------------------------- 8,000 North Carolina Natural Gas Corp. 181,000 ----------------------------------------------------------------------------------- 42,900 NYNEX Corp. 1,624,838 ----------------------------------------------------------------------------------- 9,000 Orange & Rockland Utilities, Inc. 281,250 ----------------------------------------------------------------------------------- 7,000 PSI Resources, Inc. 147,875 ----------------------------------------------------------------------------------- 47,600 Pacific Telesis Group 1,469,650 ----------------------------------------------------------------------------------- 38,500 Pacificorp 649,688 ----------------------------------------------------------------------------------- 12,500 Piedmont Natural Gas, Inc. 253,125 ----------------------------------------------------------------------------------- 7,800 SCANA Corp. 334,425 ----------------------------------------------------------------------------------- 44,500 Southern Co. 834,375 ----------------------------------------------------------------------------------- 15,000 Southwest Gas Corp. 270,000 ----------------------------------------------------------------------------------- 34,600 Southwestern Bell Corp. 1,505,100 ----------------------------------------------------------------------------------- 4,200 Teco Energy, Inc. 80,325 ----------------------------------------------------------------------------------- 10,300 Telefonos de Mexico ADR 575,513 ----------------------------------------------------------------------------------- 16,300 Telefonos de Mexico ADS 910,763 -----------------------------------------------------------------------------------
FIRST UNION UTILITY PORTFOLIO - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT OR SHARES VALUE - ------------- ----------------------------------------------------------------------------------- -------------- COMMON STOCKS--CONTINUED - -------------------------------------------------------------------------------------------------- UTILITIES--CONTINUED ----------------------------------------------------------------------------------- 24,500 Union Electric Co. $ 777,875 ----------------------------------------------------------------------------------- 35,800 U.S. West, Inc. 1,499,118 ----------------------------------------------------------------------------------- -------------- Total 24,453,234 ----------------------------------------------------------------------------------- -------------- BASIC INDUSTRY--1.1% ----------------------------------------------------------------------------------- 20,200 Hanson PLC ADR 371,175 ----------------------------------------------------------------------------------- -------------- CHEMICALS--2.9% ----------------------------------------------------------------------------------- 9,100 Imperial Chemical Industries PLC ADR 432,250 ----------------------------------------------------------------------------------- 7,400 Monsanto Co. 559,625 ----------------------------------------------------------------------------------- -------------- Total 991,875 ----------------------------------------------------------------------------------- -------------- COMMERCIAL SERVICES--1.1% ----------------------------------------------------------------------------------- 6,800 Dun & Bradstreet Corp. 377,400 ----------------------------------------------------------------------------------- -------------- CONSUMER NON-DURABLES--1.6% ----------------------------------------------------------------------------------- 18,000 American Brands, Inc. 569,250 ----------------------------------------------------------------------------------- -------------- ENERGY--2.3% ----------------------------------------------------------------------------------- 4,100 Atlantic Richfield Co. 418,713 ----------------------------------------------------------------------------------- 6,300 Exxon Corp. 356,738 ----------------------------------------------------------------------------------- -------------- Total 775,451 ----------------------------------------------------------------------------------- -------------- FINANCE--1.8% ----------------------------------------------------------------------------------- 23,200 National City Corp. 635,100 ----------------------------------------------------------------------------------- -------------- HEALTH TECHNOLOGY--2.4% ----------------------------------------------------------------------------------- 7,000 American Home Products Corp. 397,250 ----------------------------------------------------------------------------------- 7,400 Lilly (Eli) & Co. 420,875 ----------------------------------------------------------------------------------- -------------- Total 818,125 ----------------------------------------------------------------------------------- -------------- REAL ESTATE INVESTMENT TRUST--2.2% ----------------------------------------------------------------------------------- 11,600 Healthcare Realty Trust 247,950 ----------------------------------------------------------------------------------- 13,400 Highwoods Properties, Inc. 266,325 ----------------------------------------------------------------------------------- 10,500 JDN Realty Trust Corp. 229,688 ----------------------------------------------------------------------------------- -------------- Total 743,963 ----------------------------------------------------------------------------------- -------------- TOTAL COMMON STOCKS (IDENTIFIED COST $31,315,148) 29,735,573 ----------------------------------------------------------------------------------- -------------- CORPORATE BONDS--5.7% - -------------------------------------------------------------------------------------------------- UTILITIES--5.7% ----------------------------------------------------------------------------------- $ 220,000 Carolina Power & Light Co., 9.14%, 4/1/95 225,258 ----------------------------------------------------------------------------------- 175,000 Florida Power Corp., 8.625%, 11/1/2021 174,843 ----------------------------------------------------------------------------------- 210,000 Madison Gas & Electric Co., 7.70%, 2/15/2028 191,736 ----------------------------------------------------------------------------------- 25,000 New England Power Co., 8.00%, 8/1/2022 23,577 ----------------------------------------------------------------------------------- 1,000,000 Norsk Hydro, 7.75%, 6/15/2023 913,652 -----------------------------------------------------------------------------------
FIRST UNION UTILITY PORTFOLIO - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT VALUE - ------------- ----------------------------------------------------------------------------------- -------------- CORPORATE BONDS--CONTINUED - -------------------------------------------------------------------------------------------------- UTILITIES--CONTINUED ----------------------------------------------------------------------------------- $ 55,000 Pacific Gas & Electric Co., 8.375%, 5/1/2025 $ 53,422 ----------------------------------------------------------------------------------- 350,000 Pennsylvania Power & Light Co., 9.25%, 10/1/2019 360,264 ----------------------------------------------------------------------------------- -------------- TOTAL CORPORATE BONDS (IDENTIFIED COST $2,189,186) 1,942,752 ----------------------------------------------------------------------------------- -------------- U.S. TREASURY OBLIGATIONS--0.6% - -------------------------------------------------------------------------------------------------- 210,000 U.S. Treasury Notes, 9.50%, 11/15/95 (IDENTIFIED COST $230,475) 220,238 ----------------------------------------------------------------------------------- -------------- *REPURCHASE AGREEMENT--5.3% - -------------------------------------------------------------------------------------------------- 1,824,000 Donaldson, Lufkin & Jenrette Securities Corp., 4.125%, dated 6/30/94, due 7/1/94 (at amortized cost)/(Note 2B) 1,824,000 ----------------------------------------------------------------------------------- -------------- TOTAL INVESTMENTS (IDENTIFIED COST $35,558,809) $ 33,722,563+ ----------------------------------------------------------------------------------- --------------
* Repurchase agreement is fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. + The cost of investments for federal tax purposes amounts to $35,558,809 at June 30, 1994. The net unrealized depreciation on a federal tax cost basis amounts to $1,836,246, which is comprised of $331,983 appreciation and $2,168,229 depreciation at June 30, 1994. Note: The categories of investments are shown as a percentage of net assets ($34,239,005) at June 30, 1994. The following abbreviations are used in this portfolio: ADR--American Depositary Receipts ADS--American Depositary Shares PLC--Public Limited Company (See Notes which are an integral part of the Financial Statements) FIRST UNION UTILITY PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - ------------------------------------------------------------------------------------------------- Investments in securities, at value (Notes 2A and 2B) (identified and tax cost $35,558,809) $ 33,722,563 - ------------------------------------------------------------------------------------------------- Cash 932 - ------------------------------------------------------------------------------------------------- Receivable for Fund shares sold 450,758 - ------------------------------------------------------------------------------------------------- Dividends and interest receivable 171,767 - ------------------------------------------------------------------------------------------------- Receivable from Adviser (Note 4) 28,554 - ------------------------------------------------------------------------------------------------- -------------- Total assets 34,374,574 - ------------------------------------------------------------------------------------------------- LIABILITIES: - ------------------------------------------------------------------------------------------------- Payable for Fund shares redeemed $ 75,280 - -------------------------------------------------------------------------------------- Accrued expenses 60,289 - -------------------------------------------------------------------------------------- --------- Total liabilities 135,569 - ------------------------------------------------------------------------------------------------- -------------- NET ASSETS for 3,758,137 shares of beneficial interest outstanding $ 34,239,005 - ------------------------------------------------------------------------------------------------- -------------- NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------------------------- Paid-in capital $ 36,172,251 - ------------------------------------------------------------------------------------------------- Unrealized appreciation (depreciation) of investments (1,836,246) - ------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) on investments (103,900) - ------------------------------------------------------------------------------------------------- Undistributed net investment income 6,900 - ------------------------------------------------------------------------------------------------- -------------- Total Net Assets $ 34,239,005 - ------------------------------------------------------------------------------------------------- -------------- NET ASSET VALUE: - ------------------------------------------------------------------------------------------------- Class B Investment Shares (net assets of $3,535,764 / 388,237 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $9.11 - ------------------------------------------------------------------------------------------------- -------------- CLASS C INVESTMENT SHARES (NET ASSETS OF $25,513,572 / 2,800,479 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $9.11 - ------------------------------------------------------------------------------------------------- -------------- TRUST SHARES (NET ASSETS OF $5,189,669 / 569,421 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $9.11 - ------------------------------------------------------------------------------------------------- -------------- OFFERING PRICE PER SHARE: - ------------------------------------------------------------------------------------------------- Class B Investment Shares (100/96 of $9.11) $9.49* - ------------------------------------------------------------------------------------------------- -------------- Class C Investment Shares $9.11 - ------------------------------------------------------------------------------------------------- -------------- Trust Shares $9.11 - ------------------------------------------------------------------------------------------------- -------------- REDEMPTION PROCEEDS PER SHARE: - ------------------------------------------------------------------------------------------------- Class B Investment Shares $9.11 - ------------------------------------------------------------------------------------------------- -------------- Class C Investment Shares (96/100 of $9.11) $8.75** - ------------------------------------------------------------------------------------------------- -------------- Trust Shares $9.11 - ------------------------------------------------------------------------------------------------- --------------
* See "What Shares Cost" in the prospectus. ** See "Redeeming Shares" in the prospectus. (See Notes which are an integral part of the Financial Statements) FIRST UNION UTILITY PORTFOLIO STATEMENT OF OPERATIONS FOR THE PERIOD FROM JANUARY 4, 1994 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - -------------------------------------------------------------------------------------------------- Dividend income $ 516,585 - -------------------------------------------------------------------------------------------------- Interest income 111,373 - -------------------------------------------------------------------------------------------------- ------------- Total income (Note 2C) 627,958 - -------------------------------------------------------------------------------------------------- EXPENSES-- - ------------------------------------------------------------------------------------- Investment advisory fee* $ 58,350 - ------------------------------------------------------------------------------------- Trustees' fees 102 - ------------------------------------------------------------------------------------- Administrative personnel and services fee* 48,932 - ------------------------------------------------------------------------------------- Custodian and portfolio accounting fees 25,401 - ------------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 12,865 - ------------------------------------------------------------------------------------- Distribution services fee--Class B Investment Shares* 4,546 - ------------------------------------------------------------------------------------- Distribution services fee--Class C Investment Shares* 62,055 - ------------------------------------------------------------------------------------- Legal fees 1,336 - ------------------------------------------------------------------------------------- Printing and postage 8,151 - ------------------------------------------------------------------------------------- Insurance premiums 3,623 - ------------------------------------------------------------------------------------- Miscellaneous 3,964 - ------------------------------------------------------------------------------------- ----------- Total expenses 229,325 - ------------------------------------------------------------------------------------- Deduct-- - -------------------------------------------------------------------------- Waiver of investment advisory fee* $ 58,350 - -------------------------------------------------------------------------- Waiver of administrative personnel and services fee* 48,932 - -------------------------------------------------------------------------- Waiver of distribution services fee--Class B Investment Shares* 2,573 - -------------------------------------------------------------------------- Reimbursement of other operating expenses by Adviser* 51,122 160,977 - -------------------------------------------------------------------------- --------- ----------- Net expenses 68,348 - -------------------------------------------------------------------------------------------------- ------------- Net investment income 559,610 - -------------------------------------------------------------------------------------------------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: - -------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (identified cost basis) (103,900) - -------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (1,836,246) - -------------------------------------------------------------------------------------------------- ------------- Net realized and unrealized gain (loss) on investments (1,940,146) - -------------------------------------------------------------------------------------------------- ------------- Change in net assets resulting from operations ($1,380,536) - -------------------------------------------------------------------------------------------------- -------------
* See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION UTILITY PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
PERIOD ENDED JUNE 30, 1994* INCREASE (DECREASE) IN NET ASSETS: - ----------------------------------------------------------------------------------------------- OPERATIONS-- - ----------------------------------------------------------------------------------------------- Net investment income $ 559,610 - ----------------------------------------------------------------------------------------------- Net realized gain (loss) on investments ($103,900 net loss as computed for federal tax purposes) (103,900) - ----------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (1,836,246) - ----------------------------------------------------------------------------------------------- ----------------- Change in net assets resulting from operations (1,380,536) - ----------------------------------------------------------------------------------------------- ----------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ----------------------------------------------------------------------------------------------- Dividends to shareholders from net investment income: - ----------------------------------------------------------------------------------------------- Class B Investment Shares (370,181) - ----------------------------------------------------------------------------------------------- Class C Investment Shares (79,017) - ----------------------------------------------------------------------------------------------- Trust Shares (97,463) - ----------------------------------------------------------------------------------------------- Distributions in excess of net investment income: - ----------------------------------------------------------------------------------------------- Class B Investment Shares -- - ----------------------------------------------------------------------------------------------- Class C Investment Shares -- - ----------------------------------------------------------------------------------------------- Trust Shares (6,049) - ----------------------------------------------------------------------------------------------- ----------------- Change in net assets from distributions to shareholders (552,710) - ----------------------------------------------------------------------------------------------- ----------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ----------------------------------------------------------------------------------------------- Proceeds from sale of shares 42,005,360 - ----------------------------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 471,584 - ----------------------------------------------------------------------------------------------- Cost of shares redeemed (6,304,693) - ----------------------------------------------------------------------------------------------- ----------------- Change in net assets from Fund share transactions 36,172,251 - ----------------------------------------------------------------------------------------------- ----------------- Change in net assets 34,239,005 - ----------------------------------------------------------------------------------------------- NET ASSETS: - ----------------------------------------------------------------------------------------------- Beginning of period -- - ----------------------------------------------------------------------------------------------- ----------------- End of period (including undistributed net investment income of $6,900) $ 34,239,005 - ----------------------------------------------------------------------------------------------- -----------------
* For the period from January 4, 1994 (commencement of operations) to June 30, 1994. (See Notes which are an integral part of the Financial Statements) FIRST UNION VALUE PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
SHARES VALUE - -------------- -------------------------------------------------------------------------------- --------------- COMMON STOCKS--95.2% - ------------------------------------------------------------------------------------------------ BANKING & FINANCE--7.0% -------------------------------------------------------------------------------- 675,000 Boatmen's Bancshares, Inc. $ 21,262,500 -------------------------------------------------------------------------------- 132,000 First Tennessee National Corp. 5,775,000 -------------------------------------------------------------------------------- 960,000 National City Corp. 26,280,000 -------------------------------------------------------------------------------- --------------- Total 53,317,500 -------------------------------------------------------------------------------- --------------- CAPITAL GOODS--8.2% -------------------------------------------------------------------------------- 255,000 Boeing Co. 11,793,750 -------------------------------------------------------------------------------- 485,000 *FMC Corp. 26,250,625 -------------------------------------------------------------------------------- 365,000 Raytheon Co. 23,633,750 -------------------------------------------------------------------------------- --------------- Total 61,678,125 -------------------------------------------------------------------------------- --------------- CHEMICALS/PLASTICS--3.1% -------------------------------------------------------------------------------- 555,000 Air Products & Chemicals, Inc. 23,518,125 -------------------------------------------------------------------------------- --------------- COMMUNICATION--1.5% -------------------------------------------------------------------------------- 265,000 Harris Corp. 11,693,125 -------------------------------------------------------------------------------- --------------- CONSUMER DURABLES--3.0% -------------------------------------------------------------------------------- 645,000 Black & Decker Corp. 11,126,250 -------------------------------------------------------------------------------- 195,000 Ford Motor Co. 11,505,000 -------------------------------------------------------------------------------- --------------- Total 22,631,250 -------------------------------------------------------------------------------- --------------- CONSUMER PRODUCTS--6.3% -------------------------------------------------------------------------------- 750,000 American Brands Inc. 23,718,750 -------------------------------------------------------------------------------- 470,000 Philip Morris Cos., Inc. 24,205,000 -------------------------------------------------------------------------------- --------------- Total 47,923,750 -------------------------------------------------------------------------------- --------------- ELECTRONICS--1.6% -------------------------------------------------------------------------------- 780,000 EG & G, Inc. 11,700,000 -------------------------------------------------------------------------------- --------------- ENERGY--12.0% -------------------------------------------------------------------------------- 235,000 Atlantic Richfield Co. 23,999,375 -------------------------------------------------------------------------------- 530,000 Chevron Corp. 22,193,750 -------------------------------------------------------------------------------- 395,000 Exxon Corp. 22,366,875 -------------------------------------------------------------------------------- 365,000 Texaco, Inc. 22,036,875 -------------------------------------------------------------------------------- --------------- Total 90,596,875 -------------------------------------------------------------------------------- --------------- FOOD & BEVERAGE--6.1% -------------------------------------------------------------------------------- 225,000 Anheuser Busch Cos., Inc. 11,418,750 -------------------------------------------------------------------------------- 495,000 CPC International Inc. 23,883,750 -------------------------------------------------------------------------------- 345,000 H.J. Heinz Co. 10,996,875 -------------------------------------------------------------------------------- --------------- Total 46,299,375 -------------------------------------------------------------------------------- ---------------
FIRST UNION VALUE PORTFOLIO - --------------------------------------------------------------------------------
SHARES VALUE - -------------- -------------------------------------------------------------------------------- --------------- COMMON STOCKS--CONTINUED - ------------------------------------------------------------------------------------------------ HEALTHCARE & COSMETICS--5.8% -------------------------------------------------------------------------------- 210,000 Bristol Myers Squibb Co. $ 11,261,250 -------------------------------------------------------------------------------- 330,000 Schering-Plough Corp. 20,212,500 -------------------------------------------------------------------------------- 185,000 Warner Lambert Co. 12,210,000 -------------------------------------------------------------------------------- --------------- Total 43,683,750 -------------------------------------------------------------------------------- --------------- INSURANCE--6.3% -------------------------------------------------------------------------------- 880,000 American General Corp. 24,310,000 -------------------------------------------------------------------------------- 765,000 Providian Corp. 23,141,250 -------------------------------------------------------------------------------- --------------- Total 47,451,250 -------------------------------------------------------------------------------- --------------- MULTI-INDUSTRY--2.9% -------------------------------------------------------------------------------- 179,850 General Electric Co. 8,385,506 -------------------------------------------------------------------------------- 167,700 ITT Corp. 13,688,513 -------------------------------------------------------------------------------- --------------- Total 22,074,019 -------------------------------------------------------------------------------- --------------- OFFICE EQUIPMENT--4.0% -------------------------------------------------------------------------------- 487,700 Pitney Bowes, Inc. 18,654,525 -------------------------------------------------------------------------------- 120,000 Xerox Corp. 11,730,000 -------------------------------------------------------------------------------- --------------- Total 30,384,525 -------------------------------------------------------------------------------- --------------- PAPER & FOREST PRODUCTS--3.3% -------------------------------------------------------------------------------- 30,000 Rayonier, Inc. 866,250 -------------------------------------------------------------------------------- 510,000 Temple Inland, Inc. 24,288,750 -------------------------------------------------------------------------------- --------------- Total 25,155,000 -------------------------------------------------------------------------------- --------------- PROCESS INDUSTRIES--0.9% -------------------------------------------------------------------------------- 300,000 UNIFI Inc. 7,012,500 -------------------------------------------------------------------------------- --------------- PRODUCER MANUFACTURING--3.0% -------------------------------------------------------------------------------- 430,000 Textron, Inc. 22,521,250 -------------------------------------------------------------------------------- --------------- RETAIL & APPAREL--4.7% -------------------------------------------------------------------------------- 500,000 American Stores Co. 12,250,000 -------------------------------------------------------------------------------- 610,000 Melville Corp. 23,637,500 -------------------------------------------------------------------------------- --------------- Total 35,887,500 -------------------------------------------------------------------------------- --------------- TRANSPORTATION--4.9% -------------------------------------------------------------------------------- 370,000 Norfolk Southern Corp. 23,310,000 -------------------------------------------------------------------------------- 250,000 Union Pacific Corp. 14,156,250 -------------------------------------------------------------------------------- --------------- Total 37,466,250 -------------------------------------------------------------------------------- --------------- UTILITIES--10.6% -------------------------------------------------------------------------------- 860,000 General Public Utilities Corp. 22,575,000 -------------------------------------------------------------------------------- 745,000 GTE Corp. 23,467,500 -------------------------------------------------------------------------------- 440,000 NICOR, Inc. 11,605,000 --------------------------------------------------------------------------------
FIRST UNION VALUE PORTFOLIO - --------------------------------------------------------------------------------
PRINCIPAL AMOUNT OR SHARES VALUE - -------------- -------------------------------------------------------------------------------- --------------- COMMON STOCKS--CONTINUED - ------------------------------------------------------------------------------------------------ UTILITIES--CONTINUED -------------------------------------------------------------------------------- 720,000 Union Electric Co. $ 22,860,000 -------------------------------------------------------------------------------- --------------- Total 80,507,500 -------------------------------------------------------------------------------- --------------- TOTAL COMMON STOCKS (IDENTIFIED COST $714,876,224) 721,501,669 -------------------------------------------------------------------------------- --------------- U.S. TREASURY SECURITIES--2.7% - ------------------------------------------------------------------------------------------------ $ 20,000,000 U.S. Treasury Notes, 8.50%, 8/15/95 (IDENTIFIED COST $21,737,500) 20,618,720 -------------------------------------------------------------------------------- --------------- **REPURCHASE AGREEMENT--1.5% - ------------------------------------------------------------------------------------------------ 11,325,000 Donaldson, Lufkin & Jenrette Securities Corp., 4.125%, dated 6/30/94, due 7/1/94 (at amortized cost)/(Note 2B) 11,325,000 -------------------------------------------------------------------------------- --------------- TOTAL INVESTMENTS (IDENTIFIED COST $747,938,724) $ 753,445,389+ -------------------------------------------------------------------------------- ---------------
* Non-income producing security. ** Repurchase agreement is fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. + The cost for federal tax purposes amounts to $747,938,724. The net unrealized appreciation of investments on a federal tax basis amounts to $5,506,665, which is comprised of $40,110,363 appreciation and $34,603,698 depreciation at June 30, 1994. Note: The categories of investments are shown as a percentage of net assets of ($757,908,885) at June 30, 1994. (See Notes which are an integral part of the Financial Statements) FIRST UNION VALUE PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - ------------------------------------------------------------------------------------------------ Investments in securities, at value (Notes 2A and 2B) (identified and tax cost $747,938,724) $ 753,445,389 - ------------------------------------------------------------------------------------------------ Cash 707 - ------------------------------------------------------------------------------------------------ Receivable for investments sold 3,745,365 - ------------------------------------------------------------------------------------------------ Receivable for Fund shares sold 3,434,535 - ------------------------------------------------------------------------------------------------ Dividends and interest receivable 3,357,593 - ------------------------------------------------------------------------------------------------ --------------- Total assets 763,983,589 - ------------------------------------------------------------------------------------------------ LIABILITIES: - ------------------------------------------------------------------------------------------------ Payable for investments purchased $ 4,500,649 - --------------------------------------------------------------------------------- Payable for Fund Shares redeemed 1,342,988 - --------------------------------------------------------------------------------- Accrued expenses 231,067 - --------------------------------------------------------------------------------- ------------- Total liabilities 6,074,704 - ------------------------------------------------------------------------------------------------ --------------- NET ASSETS for 44,253,810 shares of beneficial interest outstanding $ 757,908,885 - ------------------------------------------------------------------------------------------------ --------------- NET ASSETS CONSIST OF: - ------------------------------------------------------------------------------------------------ Paid-in capital $ 728,683,276 - ------------------------------------------------------------------------------------------------ Unrealized appreciation (depreciation) of investments 5,506,665 - ------------------------------------------------------------------------------------------------ Accumulated undistributed net realized gain (loss) on investments 24,039,118 - ------------------------------------------------------------------------------------------------ Accumulated distributions in excess of net investment income (Note 2C) (320,174) - ------------------------------------------------------------------------------------------------ --------------- Total Net Assets $ 757,908,885 - ------------------------------------------------------------------------------------------------ --------------- NET ASSET VALUE: - ------------------------------------------------------------------------------------------------ Class B Investment Shares (net assets of $184,857,079 / 10,792,179 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $17.13 - ------------------------------------------------------------------------------------------------ --------------- CLASS C INVESTMENT SHARES (NET ASSETS OF $80,263,676 / 4,685,455 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $17.13 - ------------------------------------------------------------------------------------------------ --------------- TRUST SHARES (NET ASSETS OF $492,788,130 / 28,776,176 SHARES OF BENEFICIAL INTEREST OUTSTANDING) $17.12 - ------------------------------------------------------------------------------------------------ --------------- OFFERING PRICE PER SHARE: - ------------------------------------------------------------------------------------------------ Class B Investment Shares (100/96 of $17.13) $17.84* - ------------------------------------------------------------------------------------------------ --------------- Class C Investment Shares $17.13 - ------------------------------------------------------------------------------------------------ --------------- Trust Shares $17.12 - ------------------------------------------------------------------------------------------------ --------------- REDEMPTION PROCEEDS PER SHARE: - ------------------------------------------------------------------------------------------------ Class B Investment Shares $17.13 - ------------------------------------------------------------------------------------------------ --------------- Class C Investment Shares (96/100 of $17.13) $16.44** - ------------------------------------------------------------------------------------------------ --------------- Trust Shares $17.12 - ------------------------------------------------------------------------------------------------ ---------------
* See "What Shares Cost" in the prospectus. ** See "Redeeming Shares" in the prospectus. (See Notes which are an integral part of the Financial Statements) FIRST UNION VALUE PORTFOLIO STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME (NOTE 2C): - ------------------------------------------------------------------------------------------------- Dividends $ 13,448,515 - ------------------------------------------------------------------------------------------------- Interest 1,217,486 - ------------------------------------------------------------------------------------------------- --------------- Total income 14,666,001 - ------------------------------------------------------------------------------------------------- EXPENSES-- - ------------------------------------------------------------------------------------------------- Investment advisory fee* $ 1,843,383 - ---------------------------------------------------------------------------------- Trustees' fees 4,575 - ---------------------------------------------------------------------------------- Administrative personnel and services fee* 312,030 - ---------------------------------------------------------------------------------- Custodian and portfolio accounting fees 86,716 - ---------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 143,267 - ---------------------------------------------------------------------------------- Distribution services fee--Class B Investment Shares* 233,460 - ---------------------------------------------------------------------------------- Distribution services fee--Class C Investment Shares* 261,558 - ---------------------------------------------------------------------------------- Fund share registration costs 50,265 - ---------------------------------------------------------------------------------- Legal fees 6,794 - ---------------------------------------------------------------------------------- Auditing fees 5,630 - ---------------------------------------------------------------------------------- Printing and postage 13,680 - ---------------------------------------------------------------------------------- Insurance premiums 7,882 - ---------------------------------------------------------------------------------- Miscellaneous 2,222 - ---------------------------------------------------------------------------------- ------------- Total expenses 2,971,462 - ------------------------------------------------------------------------------------------------- --------------- Net investment income 11,694,539 - ------------------------------------------------------------------------------------------------- --------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: - ------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (identified cost basis)-- 24,292,475 - ------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (46,543,064) - ------------------------------------------------------------------------------------------------- --------------- Net realized and unrealized loss on investments (22,250,589) - ------------------------------------------------------------------------------------------------- --------------- Change in net assets resulting from operations ($ 10,556,050) - ------------------------------------------------------------------------------------------------- ---------------
* See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION VALUE PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1994* 1993 --------------- --------------- INCREASE (DECREASE) IN NET ASSETS: - ------------------------------------------------------------------------------- OPERATIONS-- - ------------------------------------------------------------------------------- Net investment income $ 11,694,539 $ 17,077,167 - ------------------------------------------------------------------------------- Net realized gain (loss) on investments ($24,292,475 net gain and $23,232,747 net gain, respectively, as computed for federal tax purposes) 24,292,475 23,032,837 - ------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) of investments (46,543,064) 16,353,921 - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from operations (10,556,050) 56,463,925 - ------------------------------------------------------------------------------- --------------- --------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C)-- - ------------------------------------------------------------------------------- Dividends to shareholders from net investment income: - ------------------------------------------------------------------------------- Class B Investment Shares (2,739,178) (4,784,997) - ------------------------------------------------------------------------------- Class C Investment Shares (881,867) (669,485) - ------------------------------------------------------------------------------- Trust Shares (7,758,343) (11,619,935) - ------------------------------------------------------------------------------- Distributions to shareholders from net realized gain on investment transactions: - ------------------------------------------------------------------------------- Class B Investment Shares (30,462) (6,052,200) - ------------------------------------------------------------------------------- Class C Investment Shares (11,039) (1,881,290) - ------------------------------------------------------------------------------- Trust Shares (80,024) (15,175,212) - ------------------------------------------------------------------------------- Distributions in excess of net investment income: - ------------------------------------------------------------------------------- Class B Investment Shares -- (62,803) - ------------------------------------------------------------------------------- Class C Investment Shares -- (123,293) - ------------------------------------------------------------------------------- Trust Shares -- (330,302) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from distributions to shareholders (11,500,913) (40,699,517) - ------------------------------------------------------------------------------- --------------- --------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ------------------------------------------------------------------------------- Proceeds from sale of shares 150,275,019 305,551,019 - ------------------------------------------------------------------------------- Net asset value of shares issued to shareholders in payment of dividends declared 11,010,734 38,928,569 - ------------------------------------------------------------------------------- Cost of shares redeemed (94,343,509) (142,685,153) - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets from Fund share transactions 66,942,244 201,794,435 - ------------------------------------------------------------------------------- --------------- --------------- Change in net assets 44,885,281 217,558,843 - ------------------------------------------------------------------------------- NET ASSETS: - ------------------------------------------------------------------------------- Beginning of period 713,023,604 495,464,761 - ------------------------------------------------------------------------------- --------------- --------------- End of period $ 757,908,885 $ 713,023,604 - ------------------------------------------------------------------------------- --------------- ---------------
* Six months ended June 30, 1994 (unaudited). (See Notes which are an integral part of the Financial Statements) FIRST UNION VIRGINIA MUNICIPAL BOND PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1994 (UNAUDITED) - --------------------------------------------------------------------------------
CREDIT RATING: PRINCIPAL MOODY'S AMOUNT OR S&P* VALUE - ------------ ----------------------------------------------------------------------- ----------- ------------- LONG-TERM MUNICIPAL SECURITIES--89.0% - ------------------------------------------------------------------------------------- PUERTO RICO--5.1% ----------------------------------------------------------------------- $ 50,000 Puerto Rico Commonwealth, 5.375% GO Bonds, 7/1/2006 BAA-1/A $ 47,455 ----------------------------------------------------------------------- 150,000 Puerto Rico Commonwealth, 6.45%, 7/1/2017 BAA/A 150,746 ----------------------------------------------------------------------- 65,000 Puerto Rico Commonwealth, 6.625%, Highway & Transportation Authority, 7/1/2018 BAA-1/A 67,114 ----------------------------------------------------------------------- ------------- Total 265,315 ----------------------------------------------------------------------- ------------- VIRGINIA--77.2% ----------------------------------------------------------------------- 100,000 Arlington County, VA, 5.00% IDA Hospital, 9/1/2021 A-1 80,221 ----------------------------------------------------------------------- 100,000 Arlington County, VA, 5.30% IDA Hospital, 9/1/2015 A-1 85,579 ----------------------------------------------------------------------- 300,000 Chesapeake, VA, 5.90%, 5/1/2009 AA 296,471 ----------------------------------------------------------------------- 100,000 Chesapeake, VA, Hospital, 5.25% (MBIA Insured), 7/1/2018 AAA 85,018 ----------------------------------------------------------------------- 100,000 Danville, VA, 5.70%, 4/1/2012 A 93,127 ----------------------------------------------------------------------- 100,000 Fairfax County, VA, 5.15%, Water Authority, 4/1/2011 AA 88,288 ----------------------------------------------------------------------- 100,000 Hampton Roads Sanitation District, VA, 5.20%, Wastewater Revenue Refunding Bonds, 10/1/2011 AA 88,614 ----------------------------------------------------------------------- 100,000 Isle Wight County, VA, 5.10%, 8/1/2009 A 89,135 ----------------------------------------------------------------------- 100,000 James Madison University, VA, 5.25%, Revenue Refunding Bonds (AMBAC Insured), 6/1/2013 AAA 88,482 ----------------------------------------------------------------------- 75,000 Loudoun County, VA, 6.25%, Water & Sewer Authority (FGIC Insured), 1/1/2016 AAA 74,127 ----------------------------------------------------------------------- 100,000 Newport News, VA, 5.20%, 1/1/2014 AA 88,053 ----------------------------------------------------------------------- 100,000 Prince William County, VA, 5.00%, PSA (FGIC Insured), 7/1/2013 AAA 86,011 ----------------------------------------------------------------------- 100,000 Prince William County, VA, 5.00% PSA (FGIC Insured), 7/1/2021 AAA 81,459 ----------------------------------------------------------------------- 100,000 Richmond, VA, 5.50% GO Bonds, 1/15/2022 AA 88,415 ----------------------------------------------------------------------- 100,000 Roanoke County, VA, 5.125%, Water System Revenue Bonds (FGIC Insured), 7/1/2013 AAA 87,736 ----------------------------------------------------------------------- 100,000 Roanoke County, VA, 5.25%, 8/1/2019 AA 86,058 ----------------------------------------------------------------------- 100,000 Roanoke County, VA, 5.50%, 6/1/2013 AA 92,052 ----------------------------------------------------------------------- 65,000 Southeastern, 7.00%, PSA (BIGI Insured), 7/1/2013 AAA 71,259 ----------------------------------------------------------------------- 200,000 University of Virginia, 5.20%, 6/1/2012 AA 175,778 ----------------------------------------------------------------------- 150,000 University of Virginia, 5.20%, 6/1/2015 AA 132,224 ----------------------------------------------------------------------- 200,000 Virginia Beach, VA, 5.45%, 7/15/2010 AA 187,198 ----------------------------------------------------------------------- 150,000 Virginia Beach, VA, 5.50%, 7/15/2010 AA 141,160 -----------------------------------------------------------------------
FIRST UNION VIRGINIA MUNICIPAL BOND PORTFOLIO - --------------------------------------------------------------------------------
CREDIT PRINCIPAL RATING: AMOUNT MOODY'S OR SHARES OR S&P* VALUE - ------------ ----------------------------------------------------------------------- ----------- ------------- LONG-TERM MUNICIPAL SECURITIES--CONTINUED - ------------------------------------------------------------------------------------- VIRGINIA--CONTINUED ----------------------------------------------------------------------- $ 100,000 Virginia Beach, VA, 6.00%, Virginia Beach General Hospital Authority, 2/15/2012 A1 $ 96,825 ----------------------------------------------------------------------- 100,000 Virginia Educational Loan Authority, VA, 5.75%, 9/1/2010 A 92,647 ----------------------------------------------------------------------- 100,000 Virginia State, 6.00% GO Bonds, 6/1/2015 AAA 98,589 ----------------------------------------------------------------------- 300,000 Virginia State, 6.20% Housing and Development Authority Multi-Family Revenue Bonds, 5/1/2012 AA 292,087 ----------------------------------------------------------------------- 100,000 Virginia State, 5.40%, Public Building Authority, 8/1/2013 AA 89,165 ----------------------------------------------------------------------- 100,000 Virginia State, 5.75%, Public Building Authority, 8/1/2012 AA 93,697 ----------------------------------------------------------------------- 200,000 Virginia State, 5.25%, Public School Authority, 1/1/2011 AA 181,888 ----------------------------------------------------------------------- 100,000 Virginia State, 5.40%, Public School Authority (MBIA Insured), 8/1/2009 AAA 93,341 ----------------------------------------------------------------------- 150,000 Virginia State, 6.125%, Public School Authority, 8/1/2010 AA 150,371 ----------------------------------------------------------------------- 200,000 Virginia State, 6.20%, Public School Authority, 8/1/2014 AA 198,399 ----------------------------------------------------------------------- 75,000 Virginia State, 5.125%, Water Resource Authority, 5/1/2013 AA 63,196 ----------------------------------------------------------------------- 200,000 Virginia State, 6.00%, Transportation Board Revenue Bond, 5/15/2019 AA 191,527 ----------------------------------------------------------------------- ------------- Total 4,028,197 ----------------------------------------------------------------------- ------------- WASHINGTON, D.C.--6.7% ----------------------------------------------------------------------- 300,000 Washington, D.C., 5.25%, Metropolitan Area Transit (FGIC Insured), 7/1/2014 AAA 261,993 ----------------------------------------------------------------------- 100,000 Washington, D.C. 5.375%, Metropolitan Airport Authority, General Airport Revenue Refunding Bonds (MBIA Insured), 10/1/2013 AAA 88,883 ----------------------------------------------------------------------- ------------- Total 350,876 ----------------------------------------------------------------------- ------------- TOTAL LONG-TERM MUNICIPAL SECURITIES (IDENTIFIED COST $5,016,114) 4,644,388 ----------------------------------------------------------------------- ------------- MUTUAL FUND SHARES--3.2% - ------------------------------------------------------------------------------------- 144,000 Dreyfus Municipal Cash Management Plus NR 144,000 ----------------------------------------------------------------------- 22,000 Dreyfus Tax Exempt Cash Management Plus NR 22,000 ----------------------------------------------------------------------- ------------- TOTAL MUTUAL FUND SHARES (AT NET ASSET VALUE) (NOTE 2A) 166,000 ----------------------------------------------------------------------- ------------- TOTAL INVESTMENTS (IDENTIFIED COST $5,182,114) $ 4,810,388+ ----------------------------------------------------------------------- -------------
* Please refer to the Appendix of the Statement of Additional Information for an explanation of the credit ratings. + The cost of investments for federal tax purposes amounts to $5,182,114. The net unrealized depreciation of investments on a federal tax basis amounts to $371,726, which is comprised of $2,317 appreciation and $374,043 depreciation at June 30, 1994. FIRST UNION VIRGINIA MUNICIPAL BOND PORTFOLIO - -------------------------------------------------------------------------------- Note: The categories of investments are shown as a percentage of net assets ($5,218,040) at June 30, 1994. The following abbreviations are used in this portfolio: AMBAC--American Municipal Bond Assurance Corporation BIGI--Bond Investors Guaranty Insurance, Inc. FGIC--Financial Guaranty Insurance Company GO--General Obligation IDA--Industrial Development Authority MBIA--Municipal Bond Investors Assurance PSA--Public Service Authority (See Notes which are an integral part of the Financial Statements) FIRST UNION VIRGINIA MUNICIPAL BOND PORTFOLIO STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- ASSETS: - --------------------------------------------------------------------------------------------------- Investments in securities, at value (Notes 2A and 2B) (identified and tax cost $5,182,114) $4,810,388 - --------------------------------------------------------------------------------------------------- Cash 119 - --------------------------------------------------------------------------------------------------- Receivable for Fund shares sold 255,920 - --------------------------------------------------------------------------------------------------- Interest receivable 95,889 - --------------------------------------------------------------------------------------------------- Receivable from Adviser (Note 4) 23,709 - --------------------------------------------------------------------------------------------------- Deferred expenses (Note 2F) 36,217 - --------------------------------------------------------------------------------------------------- ------------- Total assets 5,222,242 - --------------------------------------------------------------------------------------------------- LIABILITIES: - --------------------------------------------------------------------------------------------------- Dividends payable 4,202 - --------------------------------------------------------------------------------------------------- ------------- NET ASSETS for 570,331 shares of beneficial interest outstanding $5,218,040 - --------------------------------------------------------------------------------------------------- ------------- NET ASSETS CONSIST OF: - --------------------------------------------------------------------------------------------------- Paid-in capital $5,678,824 - --------------------------------------------------------------------------------------------------- Unrealized appreciation (depreciation) of investments (371,726) - --------------------------------------------------------------------------------------------------- Accumulated net realized gain (loss) on investments (89,058) - --------------------------------------------------------------------------------------------------- ------------- Total Net Assets $5,218,040 - --------------------------------------------------------------------------------------------------- ------------- NET ASSET VALUE: - --------------------------------------------------------------------------------------------------- Class B Investment Shares (net assets of $1,719,213 / 187,913 shares of beneficial interest outstanding) $9.15 - --------------------------------------------------------------------------------------------------- ------------- Class C Investment Shares (net assets of $3,401,471 / 371,781 shares of beneficial interest outstanding) $9.15 - --------------------------------------------------------------------------------------------------- ------------- Trust Shares (net assets of $97,356 / 10,637 shares of beneficial interest outstanding) $9.15 - --------------------------------------------------------------------------------------------------- ------------- OFFERING PRICE PER SHARE: - --------------------------------------------------------------------------------------------------- Class B Investment Shares (100/96 of $9.15) $9.53* - --------------------------------------------------------------------------------------------------- ------------- Class C Investment Shares $9.15 - --------------------------------------------------------------------------------------------------- ------------- Trust Shares $9.15 - --------------------------------------------------------------------------------------------------- ------------- REDEMPTION PROCEEDS PER SHARE: - --------------------------------------------------------------------------------------------------- Class B Investment Shares $9.15 - --------------------------------------------------------------------------------------------------- ------------- Class C Investment Shares (96/100 of $9.15) $8.78** - --------------------------------------------------------------------------------------------------- ------------- Trust Shares $9.15 - --------------------------------------------------------------------------------------------------- -------------
*See "What Shares Cost" in the prospectus. **See "Redeeming Shares" in the prospectus. (See Notes which are an integral part of the Financial Statements) FIRST UNION VIRGINIA MUNICIPAL BOND PORTFOLIO STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- INVESTMENT INCOME: - --------------------------------------------------------------------------------------------------- Interest income (Note 2C) $118,728 - --------------------------------------------------------------------------------------------------- EXPENSES-- - --------------------------------------------------------------------------------------------------- Investment advisory fee* $10,870 - ---------------------------------------------------------------------------------------- Administrative personnel and services fee* 35,150 - ---------------------------------------------------------------------------------------- Custodian and portfolio accounting fees 12,479 - ---------------------------------------------------------------------------------------- Transfer and dividend disbursing agent fees and expenses* 7,034 - ---------------------------------------------------------------------------------------- Distribution services fee--Class B Investment Shares* 1,862 - ---------------------------------------------------------------------------------------- Distribution services fee--Class C Investment Shares* 10,534 - ---------------------------------------------------------------------------------------- Fund share registration costs 7,787 - ---------------------------------------------------------------------------------------- Legal fees 680 - ---------------------------------------------------------------------------------------- Auditing fees 3,003 - ---------------------------------------------------------------------------------------- Printing and postage 5,082 - ---------------------------------------------------------------------------------------- Insurance premiums 1,929 - ---------------------------------------------------------------------------------------- Miscellaneous 907 - ---------------------------------------------------------------------------------------- --------- Total expenses 97,317 - ---------------------------------------------------------------------------------------- Deduct-- - ---------------------------------------------------------------------------------------- Waiver of investment advisory fee* $ 10,870 - ----------------------------------------------------------------------------- Waiver of administrative personnel and services fee* 35,150 - ----------------------------------------------------------------------------- Reimbursement of other operating expenses by Adviser* 33,576 79,596 - ----------------------------------------------------------------------------- --------- --------- Net expenses 17,721 - --------------------------------------------------------------------------------------------------- ----------- Net investment income 101,007 - --------------------------------------------------------------------------------------------------- ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: - --------------------------------------------------------------------------------------------------- Net realized gain (loss) on investments (identified cost basis) (89,058) - --------------------------------------------------------------------------------------------------- Net change in unrealized appreciation (depreciation) on investments (397,760) - --------------------------------------------------------------------------------------------------- ----------- Net realized and unrealized gain (loss) on investments (486,818) - --------------------------------------------------------------------------------------------------- ----------- Change in net assets resulting from operations ($385,811) - --------------------------------------------------------------------------------------------------- -----------
* See Note 4. (See Notes which are an integral part of the Financial Statements) FIRST UNION VIRGINIA MUNICIPAL BOND PORTFOLIO STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, ---------------------- 1994* 1993** -------- ---------- INCREASE (DECREASE) IN NET ASSETS: - ------------------------------------------------------------------------------------ OPERATIONS-- - ------------------------------------------------------------------------------------ Net investment income $ 101,007 $ 37,825 - ------------------------------------------------------------------------------------ Net realized gain (loss) on investments ($89,058 net loss and $0, respectively, as computed for federal tax purposes) (89,058) -- - ------------------------------------------------------------------------------------ Net change in unrealized appreciation (depreciation) of investments (397,760) 26,033 - ------------------------------------------------------------------------------------ ------------- ------------- Change in net assets resulting from operations (385,811) 63,858 - ------------------------------------------------------------------------------------ ------------- ------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 2C) - ------------------------------------------------------------------------------------ Dividends to shareholders from net investment income: - ------------------------------------------------------------------------------------ Class B Investment Shares (36,923) (16,985) - ------------------------------------------------------------------------------------ Class C Investment Shares (62,794) (20,840) - ------------------------------------------------------------------------------------ Trust Shares (1,290) -- - ------------------------------------------------------------------------------------ ------------- ------------- Change in net assets from distributions to shareholders (101,007) (37,825) - ------------------------------------------------------------------------------------ ------------- ------------- FUND SHARE (PRINCIPAL) TRANSACTIONS (NOTE 3)-- - ------------------------------------------------------------------------------------ Proceeds from sale of shares 2,285,713 3,778,173 - ------------------------------------------------------------------------------------ Net asset value of shares issued to shareholders in payment of dividends declared 81,761 33,132 - ------------------------------------------------------------------------------------ Cost of shares redeemed (203,252) (296,702) - ------------------------------------------------------------------------------------ ------------- ------------- Change in net assets from Fund share transactions 2,164,222 3,514,603 - ------------------------------------------------------------------------------------ ------------- ------------- Change in net assets 1,677,404 3,540,636 - ------------------------------------------------------------------------------------ NET ASSETS: - ------------------------------------------------------------------------------------ Beginning of period 3,540,636 -- - ------------------------------------------------------------------------------------ ------------- ------------- End of period $ 5,218,040 $ 3,540,636 - ------------------------------------------------------------------------------------ ------------- -------------
*Six months ended June 30, 1994 (unaudited). **For the period from July 2, 1993 (commencement of operations) to December 31, 1993. (See Notes which are an integral part of the Financial Statements) FIRST UNION MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS B INVESTMENT SHARES YEAR ENDED YEAR ENDED DECEMBER 31, MARCH 31, 1994* 1993 1992 1991 1990** 1990 1989*** NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ------------------------------------ INCOME FROM INVESTMENT OPERATIONS - ------------------------------------ Net investment income 0.02 0.03 0.03 0.05 0.06 0.09 0.02 - ------------------------------------ --------- --------- --------- --------- ----------- --------- ----------- LESS DISTRIBUTIONS - ------------------------------------ Dividends to shareholders from net investment income (0.02) (0.03) (0.03) (0.05) (0.06) (0.09) (0.02) - ------------------------------------ --------- --------- --------- --------- ----------- --------- ----------- NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ------------------------------------ --------- --------- --------- --------- ----------- --------- ----------- TOTAL RETURN+ 1.58% 2.83% 3.24% 5.68% 6.07% 8.96% 2.12% - ------------------------------------ RATIOS TO AVERAGE NET ASSETS - ------------------------------------ Expenses 0.54 (b) 0.62% 0.82% 0.73% 0.42%(b) 0.35% 0.35%(b) - ------------------------------------ Net investment income 3.19 (b) 2.81% 3.18% 5.45% 7.85%(b) 8.50% 8.85%(b) - ------------------------------------ Expense waiver/reimbursement (a) 0.34(b) 0.39% 0.24% 0.33% 0.66%(b) 0.51% 0.23%(b) - ------------------------------------ SUPPLEMENTAL DATA - ------------------------------------ Net assets, end of period (000 omitted) $90,312 $88,171 $64,794 $64,457 $32,216 $21,898 $6,850 $3,819 - ------------------------------------ CLASS C INVESTMENT SHARES ----------- YEAR ENDED DECEMBER 31, 1994**** NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 - ------------------------------------ INCOME FROM INVESTMENT OPERATIONS - ------------------------------------ Net investment income 0.01 - ------------------------------------ --------------- LESS DISTRIBUTIONS - ------------------------------------ Dividends to shareholders from net investment income (0.01) - ------------------------------------ --------------- NET ASSET VALUE, END OF PERIOD $ 1.00 - ------------------------------------ --------------- TOTAL RETURN+ 0.93% - ------------------------------------ RATIOS TO AVERAGE NET ASSETS - ------------------------------------ Expenses 1.10%(b) - ------------------------------------ Net investment income 2.95%(b) - ------------------------------------ Expense waiver/reimbursement (a) 0.24%(b) - ------------------------------------ SUPPLEMENTAL DATA - ------------------------------------ Net assets, end of period (000 omitted) $3,819 - ------------------------------------
* Six months ended June 30, 1994 (unaudited). ** Nine months ended December 31, 1990. *** Reflects operations for the period from January 3, 1989 (commencement of operations) to March 31, 1989. **** Reflects operations for the period from February 28, 1994 (commencement of operations) to June 30, 1994 (unaudited). + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
TRUST SHARES YEAR ENDED DECEMBER 31, 1994* 1993 1992 1991** - ------------------------------------------------------------------- --------- --------- --------- ----------- NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - ------------------------------------------------------------------- Net investment income 0.02 0.03 0.03 0.06 - ------------------------------------------------------------------- LESS DISTRIBUTIONS - ------------------------------------------------------------------- Dividends to shareholders from net investment income (0.02) (0.03) (0.03) (0.06) - ------------------------------------------------------------------- --------- --------- --------- ----------- NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ------------------------------------------------------------------- --------- --------- --------- ----------- TOTAL RETURN+ 1.68% 2.99% 3.43% 5.91% - ------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS - ------------------------------------------------------------------- Expenses 0.34(b) 0.47% 0.64% 0.58%(b) - ------------------------------------------------------------------- Net investment income 3.37(b) 2.96% 3.34% 5.24%(b) - ------------------------------------------------------------------- Expense waiver/reimbursement (a) 0.24(b) 0.24% 0.11% 0.26%(b) - ------------------------------------------------------------------- SUPPLEMENTAL DATA - ------------------------------------------------------------------- Net assets, end of period (000 omitted) $8,569 $9,115 $9,243 $5,550 - -------------------------------------------------------------------
* Six months ended June 30, 1994 (unaudited). ** Reflects operations for the period from January 3, 1991 (commencement of operations) to December 31, 1991. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION TAX FREE MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS B INVESTMENT SHARES TRUST SHARES YEAR ENDED YEAR ENDED DECEMBER 31, MARCH 31, YEAR ENDED DECEMBER 31, 1994* 1993 1992 1991 1990*** 1990 1989**** 1994* 1993 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ------------------- INCOME FROM INVESTMENT OPERATIONS - ------------------- Net investment income 0.01 0.02 0.03 0.04 0.04 0.06 0.01 0.01 0.02 - ------------------- --------- --------- --------- --------- ----------- --------- ----------- --------- --------- LESS DISTRIBUTIONS - ------------------- Dividends to shareholders from net investment income (0.01) (0.02) (0.03) (0.04) (0.04) (0.06) (0.01) (0.01) (0.02) - ------------------- --------- --------- --------- --------- ----------- --------- ----------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ------------------- --------- --------- --------- --------- ----------- --------- ----------- --------- --------- TOTAL RETURN+ 1.12% 2.16% 2.57% 4.20% 4.17% 5.81% 1.28% 1.27% 2.38% - ------------------- RATIOS TO AVERAGE NET ASSETS - ------------------- Expenses 0.56(b) 0.52% 0.69% 0.77% 0.65% 0.65% 0.89%(b) 0.26(b) 0.29% - ------------------- Net investment income 2.23(b) 2.16% 2.51% 4.09% 5.45% 5.71% 5.53%(b) 2.53(b) 2.37% - ------------------- Expense waiver/ reimbursement (a) 0.24(b) 0.30% 0.20% 0.22% 0.19% 0.06% 0.00%(b) 0.24(b) 0.24% - ------------------- SUPPLEMENTAL DATA - ------------------- Net assets, end of period (000 omitted) $400,626 $278,451 $184,211 $86,481 $48,603 $36,688 $37,207$ 52,672 $3,377 - ------------------- 1992 1991** NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 - ------------------- INCOME FROM INVESTMENT OPERATIONS - ------------------- Net investment income 0.03 0.01 - ------------------- --------- ----------- LESS DISTRIBUTIONS - ------------------- Dividends to shareholders from net investment income (0.03) (0.01) - ------------------- --------- ----------- NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 - ------------------- --------- ----------- TOTAL RETURN+ 2.78% 4.49% - ------------------- RATIOS TO AVERAGE NET ASSETS - ------------------- Expenses 0.51% 0.63%(b) - ------------------- Net investment income 2.76% 4.30%(b) - ------------------- Expense waiver/ reimbursement (a) 0.09% 0.22%(b) - ------------------- SUPPLEMENTAL DATA - ------------------- Net assets, end of period (000 omitted) $17,084 $37,546 - -------------------
* Six months ended June 30, 1994 (unaudited). ** Reflects operations for the period from January 3, 1991 (commencement of operations) to December 31, 1991. *** Nine months ended December 31, 1990. **** Reflects operations for the period from January 3, 1989 (commencement of operations) to March 31, 1989. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment ratios shown above (Note 4) (b) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION TREASURY MONEY MARKET PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS B INVESTMENT SHARES TRUST SHARES YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1994* 1993 1992 1991** 1994* 1993 1992 1991** NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ---------------------------------- INCOME FROM INVESTMENT OPERATIONS - ---------------------------------- Net investment income 0.02 0.03 0.03 0.04 0.02 0.03 0.04 0.05 - ---------------------------------- --------- --------- --------- ----------- ----------- --------- --------- ----------- LESS DISTRIBUTIONS - ---------------------------------- Dividends to shareholders from net investment income (0.02) (0.03) (0.03) (0.04) (0.02) (0.03) (0.04) (0.05) - ---------------------------------- --------- --------- --------- ----------- ----------- --------- --------- ----------- NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 - ---------------------------------- --------- --------- --------- ----------- ----------- --------- --------- ----------- TOTAL RETURN+ 1.55% 2.73% 3.36% 4.46% 1.70% 3.04% 3.67% 4.66% - ---------------------------------- RATIOS TO AVERAGE NET ASSETS - ---------------------------------- Expenses 0.44(b) 0.48% 0.48% 0.47%(b) 0.14%(b) 0.18% 0.17% 1.20%(b) - ---------------------------------- Net investment income 3.09(b) 2.70% 3.22% 4.95%(b) 3.39%(b) 3.00% 3.61% 5.53%(b) - ---------------------------------- Expense waiver/reimbursement (a) 0.35(b) 0.34% 0.34% 0.61%(b) 0.35%(b) 0.34% 0.35% 0.32%(b) - ---------------------------------- SUPPLEMENTAL DATA - ---------------------------------- Net assets, end of period (000 omitted) $406,339 $261,475 $208,792 $99,549 $229,463 $366,109 $286,230 $265,109 - ----------------------------------
* Six months ended June 30, 1994 (unaudited). ** Reflects operations for the period from March 6, 1991 (commencement of operations) to December 31, 1991. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION BALANCED PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS C CLASS B INVESTMENT SHARES INVESTMENT SHARES TRUST SHARES YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, YEAR ENDED DECEMBER 31, 1994* 1993 1992 1991*** 1994* 1993**** 1994* 1993 1992 - --------------------- --------- --------- --------- ----------- --------- ----------- --------- --------- --------- NET ASSET VALUE, BEGINNING OF PERIOD $ 12.07 $ 11.41 $ 11.02 $ 10.00 $ 12.08 $ 11.54 $ 12.07 $ 11.41 $ 11.02 - --------------------- INCOME FROM INVESTMENT OPERATIONS - --------------------- Net investment income 0.21 0.419 0.42 0.30 0.17 0.34 0.22 0.45 0.46 - --------------------- Net realized and unrealized gain (loss) on investments (0.62) 0.755 0.43 1.08 (0.61) 0.65 (0.61) 0.75 0.42 - --------------------- --------- --------- --------- ----------- --------- ----------- --------- --------- --------- Total from investment operations (0.41) 1.174 0.85 1.38 (0.44) 0.99 (0.39) 1.20 0.88 - --------------------- LESS DISTRIBUTIONS - --------------------- Dividends to shareholders from net investment income (0.19) (0.419) (0.42) (0.35) (0.16) (0.34) (0.21) (0.45) (0.45) - --------------------- Distributions to shareholders from net realized gain on investment transactions -- (0.091) (0.04) (0.01) -- (0.09) -- (0.09) (0.04) - --------------------- Distributions in excess of net investment income -- (0.004(a) -- -- -- (0.02)(a) -- -- -- - --------------------- --------- --------- --------- ----------- --------- ----------- --------- --------- --------- Total distributions (0.19) (0.514) (0.46) (0.36) (0.16) (0.45) (0.21) (0.54) (0.49) - --------------------- --------- --------- --------- ----------- --------- ----------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 11.47 $ 12.07 $ 11.41 $ 11.02 $ 11.48 $ 12.08 $ 11.47 $ 12.07 $ 11.41 - --------------------- --------- --------- --------- ----------- --------- ----------- --------- --------- --------- TOTAL RETURN+ (3.43%) 10.41% 7.94% 11.75% (3.67%) 8.72% (3.30%) 10.68% 8.21% - --------------------- RATIOS TO AVERAGE NET ASSETS - --------------------- Expenses 0.89(b) 0.91% 0.91% 0.92(b) 1.39(b) 1.41(b) 0.64(b) 0.66% 0.66% - --------------------- Net investment income 3.54(b) 3.61% 3.93% 4.38(b) 3.06(b) 3.09(b) 3.78(b) 3.86% 4.20% - --------------------- SUPPLEMENTAL DATA - --------------------- Net assets, end of period (000 omitted) $41,251 $35,032 $17,408 $334 90,331 $65,475 $793,051 $760,147 $520,232 - --------------------- Portfolio turnover rate 15% 19% 12% 19% 15% 19% 15% 19% 12% - --------------------- 1991** - --------------------- ----------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 - --------------------- INCOME FROM INVESTMENT OPERATIONS - --------------------- Net investment income 0.36 - --------------------- Net realized and unrealized gain (loss) on investments 1.03 - --------------------- ----------- Total from investment operations 1.39 - --------------------- LESS DISTRIBUTIONS - --------------------- Dividends to shareholders from net investment income (0.36) - --------------------- Distributions to shareholders from net realized gain on investment transactions (0.01) - --------------------- Distributions in excess of net investment income -- - --------------------- ----------- Total distributions (0.37) - --------------------- ----------- NET ASSET VALUE, END OF PERIOD $ 11.02 - --------------------- ----------- TOTAL RETURN+ 15.02% - --------------------- RATIOS TO AVERAGE NET ASSETS - --------------------- Expenses 0.68%(b) - --------------------- Net investment income 4.86%(b) - --------------------- SUPPLEMENTAL DATA - --------------------- Net assets, end of period (000 omitted) $247,472 - --------------------- Portfolio turnover rate 19% - ---------------------
* Six months ended June 30, 1994 (unaudited). ** Reflects operations for the period from April 1, 1991 (commencement of operations) to December 31, 1991. *** Reflects operations for the period from June 10, 1991 (commencement of operations) to December 31, 1991. **** Reflects operations for the period from January 26, 1993 (commencement of operations) to December 31, 1993. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) Distributions in excess of net investment income for the year ended December 31, 1993 were the result of certain book and tax differences. These differences did not represent a return of capital for federal income tax purposes for the year ended December 31, 1993. (b) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION FIXED INCOME PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS B INVESTMENT SHARES YEAR ENDED YEAR ENDED DECEMBER 31, MARCH 31, 1994* 1993 1992 1991 1990** 1990 1989*** NET ASSET VALUE, BEGINNING OF PERIOD $ 10.42 $ 10.41 $ 10.54 $ 9.99 $ 9.72 $ 9.50 $ 9.70 - ----------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - ----------------------------------------------- Net investment income 0.32 0.65 0.71 0.73 0.55 0.79 0.10 - ----------------------------------------------- Net realized and unrealized gain (loss) on investments (0.62) 0.19 (0.06) 0.60 0.24 0.20 (0.14) - ----------------------------------------------- --------- --------- --------- --------- ----------- --------- ----------- Total from investment operations (0.30) 0.84 0.65 1.33 0.79 0.99 (0.04) - ----------------------------------------------- LESS DISTRIBUTIONS - ----------------------------------------------- Dividends to shareholders from net investment income (0.33) (0.65) (0.67) (0.70) (0.52) (0.77) (0.16) - ----------------------------------------------- Distributions to shareholders from net realized gain on investment transactions -- (0.18) (0.11) (0.07) -- -- -- - ----------------------------------------------- Distributions in excess of net investment income -- -- -- (0.01)(c) -- -- -- - ----------------------------------------------- --------- --------- --------- --------- ----------- --------- ----------- Total distributions (0.33) (0.83) (0.78) (0.78) (0.52) (0.77) (0.16) - ----------------------------------------------- --------- --------- --------- --------- ----------- --------- ----------- NET ASSET VALUE, END OF PERIOD $ 9.79 $ 10.42 $ 10.41 $ 10.54 $ 9.99 $ 9.72 $ 9.50 - ----------------------------------------------- --------- --------- --------- --------- ----------- --------- ----------- TOTAL RETURN+ (2.97%) 8.29% 6.39% 13.74% 8.31% 10.51% (0.31%) - ----------------------------------------------- RATIOS TO AVERAGE NET ASSETS - ----------------------------------------------- Expenses 0.76%(b) 0.93% 0.90% 0.80% 1.01%(b) 1.00% 1.78%(b) - ----------------------------------------------- Net investment income 6.38%(b) 6.15% 6.79% 7.30% 7.53%(b) 7.57% 6.10%(b) - ----------------------------------------------- Expense waiver/reimbursement (a) -- -- -- 0.09% 0.81%(b) 0.50% -- - ----------------------------------------------- SUPPLEMENTAL DATA - ----------------------------------------------- Net assets, end of period (000 omitted) $22,160 $22,865 $21,488 $17,680 $11,765 $6,496 $11,580 - ----------------------------------------------- Portfolio turnover rate 32% 73% 66% 55% 27% 32% 18% - -----------------------------------------------
* Six months ended June 30, 1994 (unaudited). ** Nine months ended December 31, 1990. *** Reflects operations for the period from January 28, 1989 (commencement of operations) to March 31, 1989. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (c) Distributions in excess of net investment income for the year ended December 31, 1991 were a result of certain book and tax timing differences. These distributions did not represent a return of capital for federal income tax purposes for the year ended December 31, 1991. (See Notes which are an integral part of the Financial Statements) FIRST UNION FIXED INCOME PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS C INVESTMENT SHARES YEAR ENDED DECEMBER 31, 1994* 1993** NET ASSET VALUE, BEGINNING OF PERIOD $ 10.44 $ 10.57 - ----------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - ----------------------------------------------------------------------------------------- Net investment income 0.29 0.58 - ----------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments (0.63) 0.05 - ----------------------------------------------------------------------------------------- --------- --------- Total from investment operations (0.34) 0.63 - ----------------------------------------------------------------------------------------- LESS DISTRIBUTIONS - ----------------------------------------------------------------------------------------- Dividends to shareholders from net investment income (0.29) (0.58) - ----------------------------------------------------------------------------------------- Distributions to shareholders from net realized gain on investment transactions -- (0.18) - ----------------------------------------------------------------------------------------- --------- --------- Total distributions (0.29) (0.76) - ----------------------------------------------------------------------------------------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 9.81 $ 10.44 - ----------------------------------------------------------------------------------------- --------- --------- TOTAL RETURN+ (3.31%) 6.08% - ----------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS - ----------------------------------------------------------------------------------------- Expenses 1.41%(a) 1.57%(a) - ----------------------------------------------------------------------------------------- Net investment income 5.76%(a) 5.42%(a) - ----------------------------------------------------------------------------------------- SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------- Net assets, end of period (000 omitted) $14,284 $8,876 - ----------------------------------------------------------------------------------------- Portfolio turnover rate 32% 73% - -----------------------------------------------------------------------------------------
* Six months ended June 30, 1994 (unaudited). ** Reflects operations for the period from January 26, 1993 (commencement of operations) to December 31, 1993. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION FIXED INCOME PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
TRUST SHARES YEAR ENDED DECEMBER 31, 1994* 1993 1992 1991** NET ASSET VALUE, BEGINNING OF PERIOD $ 10.43 $ 10.41 $ 10.54 $ 10.06 - ------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS - ------------------------------------------------------------------ Net investment income 0.33 0.69 0.70 0.71 - ------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments (0.64) 0.19 (0.02) 0.56 - ------------------------------------------------------------------ --------- --------- --------- --------- Total from investment operations (0.31) 0.88 0.68 1.27 - ------------------------------------------------------------------ LESS DISTRIBUTIONS - ------------------------------------------------------------------ Dividends to shareholders from net investment income (0.33) (0.68) (0.70) (0.71) - ------------------------------------------------------------------ Distributions to shareholders from net realized gain on investment transactions -- (0.18) (0.11) (0.07) - ------------------------------------------------------------------ Distributions in excess of net investment income -- -- -- (0.01)(c) - ------------------------------------------------------------------ --------- --------- --------- --------- Total distributions (0.33) (0.86) (0.81) (0.79) - ------------------------------------------------------------------ --------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 9.79 $ 10.43 $ 10.41 $ 10.54 - ------------------------------------------------------------------ --------- --------- --------- --------- TOTAL RETURN+ (3.01%) 8.67% 6.64% 13.80% - ------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS - ------------------------------------------------------------------ Expenses 0.66%(b) 0.66% 0.69% 0.69%(b) - ------------------------------------------------------------------ Net investment income 6.49%(b) 6.41% 6.67% 7.12%(b) - ------------------------------------------------------------------ Expense waiver/reimbursement (a) -- -- -- 0.07%(b) - ------------------------------------------------------------------ SUPPLEMENTAL DATA - ------------------------------------------------------------------ Net assets, end of period (000 omitted) $360,329 $376,445 $324,068 $256,254 - ------------------------------------------------------------------ Portfolio turnover rate 32% 73% 66% 55% - ------------------------------------------------------------------
* Six months ended June 30, 1994 (unaudited). ** Reflects operations for the period from January 4, 1991 (commencement of operations) to December 31, 1991. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (c) Distributions in excess of net investment income for the year ended December 31, 1991 were a result of certain book and tax timing differences. These distributions did not represent a return of capital for federal income tax purposes for the year ended December 31, 1991. (See Notes which are an integral part of the Financial Statements) FIRST UNION FLORIDA MUNICIPAL BOND PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS B CLASS C INVESTMENT INVESTMENT TRUST SHARES SHARES SHARES YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 1994** 1993*** 1994** 1993**** 1994* NET ASSET VALUE, BEGINNING OF PERIOD $ 10.34 $ 10.00 $ 10.34 $ 10.00 $ 9.99 - ------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - ------------------------------------------- Net investment income 0.24 0.22 0.22 0.20 0.17 - ------------------------------------------- Net realized and unrealized gain (loss) on investments (1.10) 0.34 (1.10) 0.34 (0.75) - ------------------------------------------- ----------- ----------- ----------- ----------- ----------------- Total from investment operations (0.86) 0.56 (0.88) 0.54 (0.58) - ------------------------------------------- LESS DISTRIBUTIONS - ------------------------------------------- Dividends to shareholders from net investment income (0.24) (0.22) (0.22) (0.20) (0.17) - ------------------------------------------- ----------- ----------- ----------- ----------- ----------------- NET ASSET VALUE, END OF PERIOD $ 9.24 $ 10.34 $ 9.24 $ 10.34 $ 9.24 - ------------------------------------------- ----------- ----------- ----------- ----------- ----------------- TOTAL RETURN+ (8.36%) 5.63% (8.59%) 5.40% (5.85%) - ------------------------------------------- RATIOS TO AVERAGE NET ASSETS - ------------------------------------------- Expenses 0.58%(b) 0.25%(b) 1.09%(b) 0.75%(b) 0.43%(b) - ------------------------------------------- Net investment income 5.06%(b) 4.92%(b) 4.55%(b) 4.46%(b) 5.33%(b) - ------------------------------------------- Expense waiver/reimbursement (a) 0.82%(b) 1.58%(b) 0.82%(b) 1.58%(b) 0.75%(b) - ------------------------------------------- SUPPLEMENTAL DATA - ------------------------------------------- Net assets, end of period (000 omitted) $ 9,063 $ 8,110 $ 24,729 $ 18,383 $ 1,689 - ------------------------------------------- Portfolio turnover rate 26% 3% 26% 3% 26% - -------------------------------------------
* Reflects operations for the period from February 28, 1994 (commencement of operations) to June 30, 1994 (unaudited). ** Six months ended June 30, 1994 (unaudited). *** Reflects operations for the period from July 6, 1993 (commencement of operations) to December 31, 1993. **** Reflects operations for the period from July 2, 1993 (commencement of operations) to December 31, 1993. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION GEORGIA MUNICIPAL BOND PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS B CLASS C TRUST INVESTMENT SHARES INVESTMENT SHARES SHARES YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 1994** 1993*** 1994** 1993*** 1994* NET ASSET VALUE, BEGINNING OF PERIOD $ 10.19 $ 10.00 $ 10.19 $ 10.00 $ 9.83 - -------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - -------------------------------------------------- Net investment income 0.24 0.201 0.21 0.179 0.17 - -------------------------------------------------- Net realized and unrealized gain (loss) on investments (1.13) 0.193 (1.13) 0.193 (0.77) - -------------------------------------------------- ----------- --------- ----------- --------- ----------------- Total from investment operations (0.89) 0.394 (0.92) 0.372 (0.60) - -------------------------------------------------- LESS DISTRIBUTIONS - -------------------------------------------------- Dividends to shareholders from net investment income (0.24) (0.201) (0.21) (0.179) (0.17) - -------------------------------------------------- Distributions to shareholders from net realized gain on investment transactions -- (0.003) -- (0.003) -- - -------------------------------------------------- ----------- --------- ----------- --------- ----------------- Total distributions (0.24) (0.204) (0.21) (0.182) (0.17) - -------------------------------------------------- ----------- --------- ----------- --------- ----------------- NET ASSET VALUE, END OF PERIOD $ 9.06 $ 10.19 $ 9.06 $ 10.19 $ 9.06 - -------------------------------------------------- ----------- --------- ----------- --------- ----------------- TOTAL RETURN+ (8.83)% 3.96% (9.06)% 3.74% (6.16)% - -------------------------------------------------- RATIOS TO AVERAGE NET ASSETS - -------------------------------------------------- Expenses 0.50%(b) 0.25%(b) 1.00%(b) 0.75%(b) 0.23%(b) - -------------------------------------------------- Net investment income 5.06%(b) 4.71%(b) 4.56%(b) 4.15%(b) 5.76%(b) - -------------------------------------------------- Expense waiver/reimbursement (a) 2.90%(b) 6.57%(b) 2.90%(b) 6.57%(b) 3.01%(b) - -------------------------------------------------- SUPPLEMENTAL DATA - -------------------------------------------------- Net assets, end of period (000 omitted) $1,380 $817 $6,205 $3,692 $89 - -------------------------------------------------- Portfolio turnover rate 38% 15% 38% 15% 38% - --------------------------------------------------
* Reflects operations for the period from February 28, 1994 (commencement of operations) to June 30, 1994 (unaudited). ** Six months ended June 30, 1994 (unaudited). *** Reflects operations for the period from July 2, 1993 (commencement of operations) to December 31, 1993. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION HIGH GRADE TAX FREE PORTFOLIO (FORMERLY, FIRST UNION INSURED TAX FREE PORTFOLIO) FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS B CLASS C TRUST INVESTMENT SHARES INVESTMENT SHARES SHARES YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 1994** 1993 1992*** 1994** 1993**** 1994* NET ASSET VALUE, BEGINNING OF PERIOD $ 11.16 $ 10.42 $ 10.00 $ 11.16 $ 10.42 $ 10.93 - ------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - ------------------------------------------- Net investment income 0.26 0.54 0.51 0.24 0.47 0.18 - ------------------------------------------- Net realized and unrealized gain (loss) on investments (0.95) 0.81 0.42 (0.95) 0.81 (0.72) - ------------------------------------------- ----------- --------- ----------- ----------- ----------- --------------- Total from investment operations (0.69) 1.35 0.93 (0.71) 1.28 (0.54) - ------------------------------------------- LESS DISTRIBUTIONS - ------------------------------------------- Dividends to shareholders from net investment income (0.26) (0.54) (0.51) (0.24) (0.47) (0.18) - ------------------------------------------- Distributions to shareholders from net realized gain on investment transactions -- (0.07) -- -- (0.07) -- - ------------------------------------------- ----------- --------- ----------- ----------- ----------- --------------- Total distributions (0.26) (0.61) (0.51) (0.24) (0.54) (0.18) - ------------------------------------------- ----------- --------- ----------- ----------- ----------- --------------- NET ASSET VALUE, END OF PERIOD $ 10.21 $ 11.16 $ 10.42 $ 10.21 $ 11.16 $ 10.21 - ------------------------------------------- ----------- --------- ----------- ----------- ----------- --------------- TOTAL RETURN+ (6.23%) 13.25% 9.37% (6.46%) 12.41% (4.93%) - ------------------------------------------- RATIOS TO AVERAGE NET ASSETS - ------------------------------------------- Expenses 1.00%(b) 0.85% 0.49%(b) 1.50%(b) 1.35%(b) 0.75%(b) - ------------------------------------------- Net investment income 4.92%(b) 4.99% 5.79%(b) 4.44%(b) 4.44%(b) 5.21%(b) - ------------------------------------------- Expense waiver/reimbursement (a) 0.02%(b) 0.22% 0.62%(b) 0.02%(b) 0.22%(b) -- - ------------------------------------------- SUPPLEMENTAL DATA - ------------------------------------------- Net assets, end of period (000 omitted) $75,085 $101,352 $90,738 $38,341 $41,030 $3,601 - ------------------------------------------- Portfolio turnover rate 35% 14% 7% 35% 14% 35% - -------------------------------------------
* Reflects operations for the period from February 28, 1994 (commencement of operations) to June 30, 1994 (unaudited). ** Six months ended June 30, 1994 (unaudited). *** Reflects operations for the period from February 21, 1992 (commencement of operations) to December 31, 1992. **** Reflects operations for the period from January 11, 1993 (commencement of operations) to December 31, 1993. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION MANAGED BOND PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
TRUST SHARES (A) YEAR ENDED DECEMBER 31, 1994* 1993 1992 1991** NET ASSET VALUE, BEGINNING OF PERIOD $ 10.46 $ 10.34 $ 10.60 $ 10.00 - ------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS - ------------------------------------------------------------------ Net investment income 0.33 0.65 0.66 0.49 - ------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments (0.85) 0.43 (0.08) 0.63 - ------------------------------------------------------------------ --------- --------- --------- --------- Total from investment operations (0.52) 1.08 0.58 1.12 - ------------------------------------------------------------------ LESS DISTRIBUTIONS - ------------------------------------------------------------------ Dividends to shareholders from net investment income (0.33) (0.65) (0.66) (0.49) - ------------------------------------------------------------------ Distributions to shareholders from net realized gain on investment transactions -- (0.31) (0.18) (0.03) - ------------------------------------------------------------------ --------- --------- --------- --------- Total distributions (0.33) (0.96) (0.84) (0.52) - ------------------------------------------------------------------ --------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 9.61 $ 10.46 $ 10.34 $ 10.60 - ------------------------------------------------------------------ --------- --------- --------- --------- TOTAL RETURN+ (5.05)% 10.59% 5.65% 11.63% - ------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS - ------------------------------------------------------------------ Expenses 0.70%(c) 0.70% 0.70% 0.70%(c) - ------------------------------------------------------------------ Net investment income 6.60%(c) 6.02% 6.30% 6.57%(c) - ------------------------------------------------------------------ Expense waiver/reimbursement (b) 0.01%(c) 0.03% 0.05% -- - ------------------------------------------------------------------ SUPPLEMENTAL DATA - ------------------------------------------------------------------ Net assets, end of period (000 omitted) $105,233 $109,067 $121,655 $112,984 - ------------------------------------------------------------------ Portfolio turnover rate 9% 53% 56% 17% - ------------------------------------------------------------------
* Six months ended June 30, 1994 (unaudited). ** Reflects operations for the period from April 1, 1991 (commencement of operations) to December 31, 1991. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) Class B and Class C Investment Shares were not being offered as of June 30, 1994. Accordingly, there are no Financial Highlights for such Shares. The Financial Highlights presented above are historical information for Trust Shares. (b) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (c) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION NORTH CAROLINA MUNICIPAL BOND PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS B CLASS C INVESTMENT INVESTMENT TRUST SHARES SHARES SHARES YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 1994** 1993*** 1994** 1993*** 1994* NET ASSET VALUE, BEGINNING OF PERIOD $ 10.61 $ 10.00 $ 10.61 $ 10.00 $ 10.31 - ----------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - ----------------------------------------------------- Net investment income 0.24 0.46 0.22 0.42 0.17 - ----------------------------------------------------- Net realized and unrealized gain (loss) on investments (1.13) 0.64 (1.13) 0.64 (0.83) - ----------------------------------------------------- ----------- ----------- ----------- ----------- --------------- Total from investment operations (0.89) 1.10 (0.91) 1.06 (0.66) - ----------------------------------------------------- LESS DISTRIBUTIONS - ----------------------------------------------------- Dividends to shareholders from net investment income (0.24) (0.46) (0.22) (0.42) (0.17) - ----------------------------------------------------- Distributions to shareholders from net realized gain on investment transactions -- (0.03) -- (0.03) -- - ----------------------------------------------------- ----------- ----------- ----------- ----------- --------------- TOTAL DISTRIBUTIONS (0.24) (0.49) (0.22) (0.45) (0.17) - ----------------------------------------------------- NET ASSET VALUE, END OF PERIOD $ 9.48 $ 10.61 $ 9.48 $ 10.61 $ 9.48 - ----------------------------------------------------- ----------- ----------- ----------- ----------- --------------- TOTAL RETURN+ (8.42)% 11.28% (8.65)% 10.80% (6.42)% - ----------------------------------------------------- RATIOS TO AVERAGE NET ASSETS - ----------------------------------------------------- Expenses 0.74%(b) 0.32%(b) 1.25%(b) 0.79%(b) 0.59%(b) - ----------------------------------------------------- Net investment income 4.91%(b) 4.91%(b) 4.44%(b) 4.47%(b) 5.56%(b) - ----------------------------------------------------- Expense waiver/reimbursement (a) 0.39%(b) 0.93%(b) 0.39%(b) 0.95%(b) 0.38%(b) - ----------------------------------------------------- SUPPLEMENTAL DATA - ----------------------------------------------------- Net assets, end of period (000 omitted) $9,241 $12,739 $47,470 $45,168 $237 - ----------------------------------------------------- Portfolio turnover rate 49% 57% 49% 57% 49% - -----------------------------------------------------
* Reflects operations for the period from February 28, 1994 (commencement of operations) to June 30, 1994 (unaudited). ** Six months ended June 30, 1994 (unaudited). *** Reflects operations for the period from January 11, 1993 (commencement of operations) to December 31, 1993. + Based on net asset value, which does not reflect the sales load or contingent sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION SOUTH CAROLINA MUNICIPAL BOND PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
CLASS B CLASS C INVESTMENT INVESTMENT TRUST SHARES SHARES SHARES YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 1994** 1994*** 1994* - ---------------------------------------------------------- ----------------- ----------------- ----------------- NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 $ 10.00 $ 9.74 - ---------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - ---------------------------------------------------------- Net investment income 0.21 0.19 0.17 - ---------------------------------------------------------- Net realized and unrealized gain (loss) on investments (0.97) (0.97) (0.71) - ---------------------------------------------------------- ----------------- ----------------- ----------------- Total from investment operations (0.76) (0.78) (0.54) - ---------------------------------------------------------- LESS DISTRIBUTIONS - ---------------------------------------------------------- Dividends to shareholders from net investment income (0.21) (0.19) (0.17) - ---------------------------------------------------------- ----------------- ----------------- ----------------- NET ASSET VALUE, END OF PERIOD $ 9.03 $ 9.03 $ 9.03 - ---------------------------------------------------------- ----------------- ----------------- ----------------- TOTAL RETURN+ (7.65)% (7.86)% (5.54)% - ---------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS - ---------------------------------------------------------- Expenses 0.25%(b) 0.75%(b) 0.00%(b) - ---------------------------------------------------------- Net investment income 5.19%(b) 4.70%(b) 5.44%(b) - ---------------------------------------------------------- Expense waiver/reimbursement (a) 12.46%(b) 12.46%(b) 11.41%(b) - ---------------------------------------------------------- SUPPLEMENTAL DATA - ---------------------------------------------------------- Net assets, end of period (000 omitted) $47 $1,548 $95 - ---------------------------------------------------------- Portfolio turnover rate 21% 21% 21% - ----------------------------------------------------------
* Reflects operations for the period from February 28, 1994 (commencement of operations) to June 30, 1994 (unaudited). ** Reflects operations for the period from January 4, 1994 (commencement of operations) to June 30, 1994 (unaudited). *** Reflects operations for the period from January 5, 1994 (commencement of operations) to June 30, 1994 (unaudited). + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION U.S. GOVERNMENT PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS B CLASS C INVESTMENT SHARES INVESTMENT SHARES TRUST SHARES YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 1994* 1993*** 1994* 1993*** 1994* 1993** NET ASSET VALUE, BEGINNING OF PERIOD $ 10.05 $ 10.00 $ 10.05 $ 10.00 $ 10.05 $ 10.25 - --------------------------------------- INCOME FROM INVESTMENT OPERATIONS - --------------------------------------- Net investment income 0.33 0.68 0.31 0.63 0.34 0.25 - --------------------------------------- Net realized and unrealized gain (loss) on investments (0.72) 0.05 (0.72) 0.05 (0.72) (0.20) - --------------------------------------- --------- ----------- --------- ----------- --------- ----------- Total from investment operations (0.39) 0.73 (0.41) 0.68 (0.38) 0.05 - --------------------------------------- LESS DISTRIBUTIONS - --------------------------------------- Dividends to shareholders from net investment income (0.33) (0.68) (0.31) (0.63) (0.34) (0.25) - --------------------------------------- --------- ----------- --------- ----------- --------- ----------- NET ASSET VALUE, END OF PERIOD $ 9.33 $ 10.05 $ 9.33 $ 10.05 $ 9.33 $ 10.05 - --------------------------------------- --------- ----------- --------- ----------- --------- ----------- TOTAL RETURN+ (3.93%) 7.43% (4.17%) 6.91% (3.81%) 0.49% - --------------------------------------- RATIOS TO AVERAGE NET ASSETS - --------------------------------------- Expenses 0.94%(b) 0.68%(b) 1.44%(b) 1.19%(b) 0.69%(b) 0.48%(b) - --------------------------------------- Net investment income 6.88%(b) 6.93%(b) 6.38%(b) 6.44%(b) 7.13%(b) 7.20%(b) - --------------------------------------- Expense waiver/reimbursement (a) 0.03%(b) 0.31%(b) 0.03%(b) 0.31%(b) 0.03%(b) 0.31%(b) - --------------------------------------- SUPPLEMENTAL DATA - --------------------------------------- Net assets, end of period (000 omitted) $30,569 $38,851 $222,541 $236,696 $15,399 $14,486 - --------------------------------------- Portfolio turnover rate 4% 39% 4% 39% 4% 39% - ---------------------------------------
* Six months ended June 30, 1994 (unaudited). ** Reflects operations for the period from September 2, 1993 (commencement of operations) to December 31, 1993. *** Reflects operations for the period from January 11, 1993 (commencement of operations) to December 31, 1993. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION UTILITY PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD)
CLASS B CLASS C INVESTMENT INVESTMENT TRUST SHARES SHARES SHARES YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 1994** 1994** 1994* NET ASSET VALUE, BEGINNING OF PERIOD $ 10.00 $ 10.00 $ 9.53 - ---------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - ---------------------------------------------------------- Net investment income 0.24 0.20 0.15 - ---------------------------------------------------------- Net realized and unrealized gain (loss) on investments (0.90) (0.89) (0.41) - ---------------------------------------------------------- ----------------- ----------------- ----------------- Total from investment operations (0.66) (0.69) (0.26) - ---------------------------------------------------------- LESS DISTRIBUTIONS - ---------------------------------------------------------- Dividends to shareholders from net investment income (0.23) (0.20) (0.15) - ---------------------------------------------------------- Distributions in excess of net investment income -- -- (0.01)(c) - ---------------------------------------------------------- ----------------- ----------------- ----------------- Total distributions (0.23) (0.20) (0.16) - ---------------------------------------------------------- ----------------- ----------------- ----------------- NET ASSET VALUE, END OF PERIOD $ 9.11 $ 9.11 $ 9.11 - ---------------------------------------------------------- ----------------- ----------------- ----------------- TOTAL RETURN+ (6.63%) (6.93%) (2.75%) - ---------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS - ---------------------------------------------------------- Expenses 0.13%(b) 0.79%(b) 0.04%(b) - ---------------------------------------------------------- Net investment income 5.57%(b) 4.58%(b) 5.01%(b) - ---------------------------------------------------------- Expense waiver/reimbursement (a) 1.50%(b) 1.36%(b) 1.24%(b) - ---------------------------------------------------------- SUPPLEMENTAL DATA - ---------------------------------------------------------- Net assets, end of period (000 omitted) $3,536 $25,513 $5,190 - ---------------------------------------------------------- Portfolio turnover rate 10% 10% 10% - ----------------------------------------------------------
* Reflects operations for the period from February 28, 1994 (commencement of operations) to June 30, 1994 (unaudited). ** Reflects operations for the period from January 4, 1994 (commencement of operations) to June 30, 1994 (unaudited). + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (c) Distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These distributions do not represent a return of capital for federal income tax purposes. (See Notes which are an integral part of the Financial Statements) FIRST UNION VALUE PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS B INVESTMENT SHARES YEAR ENDED DECEMBER 31, YEAR ENDED MARCH 31, 1994* 1993 1992 1991 1990** 1990 1989 1988 1987 NET ASSET VALUE, BEGINNING OF PERIOD $ 17.63 $ 17.11 $ 17.08 $ 14.61 $ 15.12 $ 14.45 $ 12.83 $ 14.66 $ 12.35 - ---------------------- INCOME FROM INVESTMENT OPERATIONS - ---------------------- Net investment income 0.27 0.47 0.44 0.46 0.36 0.54 0.36 0.26 0.15 - ---------------------- Net realized and unrealized gain (loss) on investments (0.51) 1.10 0.89 3.17 (0.44) 1.70 2.11 (1.30) 2.38 - ---------------------- --------- --------- --------- --------- ----------- --------- --------- --------- --------- Total from investment operations (0.24) 1.57 1.33 3.63 (0.08) 2.24 2.47 (1.04) 2.53 - ---------------------- LESS DISTRIBUTIONS - ---------------------- Dividends to shareholders from net investment income (0.26) (0.47) (0.43) (0.43) (0.36) (0.57) (0.38) (0.26) (0.13) - ---------------------- Distributions to shareholders from net realized gain on investment transactions -- (0.58) (0.87) (0.73) (0.02) (1.00) (0.47) (0.53) (0.09) - ---------------------- Distributions in excess of net investment income -- -- -- -- (0.05)(c) -- -- -- -- - ---------------------- --------- --------- --------- --------- ----------- --------- --------- --------- --------- Total distributions (0.26) (1.05) (1.30) (1.16) (0.43) (1.57) (0.85) (0.79) (0.22) - ---------------------- --------- --------- --------- --------- ----------- --------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 17.13 $ 17.63 $ 17.11 $ 17.08 $ 14.61 $ 15.12 $ 14.45 $ 12.83 $ 14.66 - ---------------------- --------- --------- --------- --------- ----------- --------- --------- --------- --------- TOTAL RETURN+ (1.40)% 9.31% 7.96% 25.11% (0.51)% 15.54% 19.73% (7.14)% 20.81% - ---------------------- RATIOS TO AVERAGE NET ASSETS - ---------------------- Expenses 0.92(b) 1.99% 1.01% 0.96% 1.39%(b) 1.55% 1.71% 1.74% 1.97% - ---------------------- Net investment income 3.06(b) 2.63% 2.37% 2.78% 3.28%(b) 3.42% 2.72% 1.92% 1.41% - ---------------------- Expense waiver/ reimbursement(a) -- -- 0.01% 0.09% -- -- -- -- -- - ---------------------- SUPPLEMENTAL DATA - ---------------------- Net assets, end of period (000 omitted) $184,857 $189,983 $169,310 $135,565 $104,637 $95,995 $83,121 $21,914 $23,221 - ---------------------- Portfolio turnover rate++ 41% 46% 56% 69% 13% 11% 24% 24% 20% - ---------------------- 1986 1985*** NET ASSET VALUE, BEGINNING OF PERIOD $ 10.04 $ 10.00 - ---------------------- INCOME FROM INVESTMENT OPERATIONS - ---------------------- Net investment income 0.19 0.04 - ---------------------- Net realized and unrealized gain (loss) on investments 2.32 0.00 - ---------------------- --------- ----------- Total from investment operations 2.51 0.04 - ---------------------- LESS DISTRIBUTIONS - ---------------------- Dividends to shareholders from net investment income (0.20) -- - ---------------------- Distributions to shareholders from net realized gain on investment transactions -- -- - ---------------------- Distributions in excess of net investment income -- -- - ---------------------- --------- ----------- Total distributions (0.20) 0.00 - ---------------------- --------- ----------- NET ASSET VALUE, END OF PERIOD $ 12.35 $ 10.04 - ---------------------- --------- ----------- TOTAL RETURN+ 25.29% (0.40)% - ---------------------- RATIOS TO AVERAGE NET ASSETS - ---------------------- Expenses 2.00% 2.00%(b) - ---------------------- Net investment income 2.34% 6.47%(b) - ---------------------- Expense waiver/ reimbursement(a) -- -- - ---------------------- SUPPLEMENTAL DATA - ---------------------- Net assets, end of period (000 omitted) $5,595 $100 - ---------------------- Portfolio turnover rate++ 20% 0% - ----------------------
* Six months ended June 30, 1994 (unaudited). ** For the nine months ended December 31, 1990. *** Reflects operations for the period from August 30, 1984 (commencement of operations) to March 31, 1985. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. ++ Portfolio turnover rate for periods ending on or after March 31, 1986 include certain U.S. government obligations. (a) This voluntary expense decrease is reflected in both the expense and net investment ratios shown above (Note 4) (b) Computed on an annualized basis. (c) Distributions in excess of net investment income for the period ended December 31, 1990 were a result of certain book and tax timing differences. These distributions did not represent a return of capital for federal income tax purposes for the year ended December 31, 1990. (See Notes which are an integral part of the Financial Statements) FIRST UNION VALUE PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS C INVESTMENT SHARES YEAR ENDED DECEMBER 31, 1994* 1993** NET ASSET VALUE, BEGINNING OF PERIOD $ 17.63 $ 17.24 - ----------------------------------------------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - ----------------------------------------------------------------------------------------- Net investment income 0.22 0.35 - ----------------------------------------------------------------------------------------- Net realized and unrealized gain (loss) on investments (0.51) 1.01 - ----------------------------------------------------------------------------------------- --------- --------- Total from investment operations (0.29) 1.36 - ----------------------------------------------------------------------------------------- LESS DISTRIBUTIONS - ----------------------------------------------------------------------------------------- Dividends to shareholders from net investment income (0.21) (0.35) - ----------------------------------------------------------------------------------------- Distributions to shareholders from net realized gain on investment transactions -- (0.58) - ----------------------------------------------------------------------------------------- Distributions in excess of net investment income -- (0.04)(b) - ----------------------------------------------------------------------------------------- --------- --------- Total distributions (0.21) (0.97) - ----------------------------------------------------------------------------------------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 17.13 $ 17.63 - ----------------------------------------------------------------------------------------- --------- --------- TOTAL RETURN+ (1.65)% 7.98% - ----------------------------------------------------------------------------------------- RATIOS TO AVERAGE NET ASSETS - ----------------------------------------------------------------------------------------- Expenses 1.42%(a) 1.48%(a) - ----------------------------------------------------------------------------------------- Net investment income 2.56%(a) 2.09%(a) - ----------------------------------------------------------------------------------------- SUPPLEMENTAL DATA - ----------------------------------------------------------------------------------------- Net assets, end of period (000 omitted) $80,264 $59,953 - ----------------------------------------------------------------------------------------- Portfolio turnover rate 41% 46% - -----------------------------------------------------------------------------------------
* Six months ended June 30, 1994 (unaudited). ** Reflects operations for the period from February 2, 1993 (commencement of operations) to December 31, 1993. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) Computed on an annualized basis. (b) Distributions in excess of net investment income for the period ended December 31, 1993 were the result of certain book and tax timing differences. These distributions did not represent a return of capital for federal income tax purposes for the year ended December 31, 1993. (See Notes which are an integral part of the Financial Statements) FIRST UNION VALUE PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
TRUST SHARES YEAR ENDED DECEMBER 31, 1994* 1993 1992 1991** NET ASSET VALUE, BEGINNING OF PERIOD $ 17.63 $ 17.11 $ 17.08 $ 14.28 - ------------------------------------------------------------------ INCOME FROM INVESTMENT OPERATIONS - ------------------------------------------------------------------ Net investment income 0.29 0.52 0.49 0.47 - ------------------------------------------------------------------ Net realized and unrealized gain (loss) on investments (0.52) 1.12 0.90 3.53 - ------------------------------------------------------------------ --------- --------- --------- --------- Total from investment operations (0.23) 1.64 1.39 4.00 - ------------------------------------------------------------------ LESS DISTRIBUTIONS - ------------------------------------------------------------------ Dividends to shareholders from net investment income (0.28) (0.52) (0.49) (0.47) - ------------------------------------------------------------------ Distributions to shareholders from net realized gain on investment transactions -- (0.58) (0.87) (0.73) - ------------------------------------------------------------------ Distributions in excess of net investment income -- (0.02)(c) -- -- - ------------------------------------------------------------------ --------- --------- --------- --------- Total distributions (0.28) (1.12) (1.36) (1.20) - ------------------------------------------------------------------ --------- --------- --------- --------- NET ASSET VALUE, END OF PERIOD $ 17.12 $ 17.63 $ 17.11 $ 17.08 - ------------------------------------------------------------------ --------- --------- --------- --------- TOTAL RETURN+ (1.33)% 9.71% 8.31% 25.41% - ------------------------------------------------------------------ RATIOS TO AVERAGE NET ASSETS - ------------------------------------------------------------------ Expenses 0.67%(b) 0.65% 0.68% 0.69%(b) - ------------------------------------------------------------------ Net investment income 3.31%(b) 2.98% 2.90% 3.04%(b) - ------------------------------------------------------------------ Expense waiver/reimbursement (a) -- -- 0.01% 0.08%(b) - ------------------------------------------------------------------ SUPPLEMENTAL DATA - ------------------------------------------------------------------ Net assets, end of period (000 omitted) $492,788 $463,087 $326,154 $271,391 - ------------------------------------------------------------------ Portfolio turnover rate 41% 46% 56% 69% - ------------------------------------------------------------------
* Six months ended June 30, 1994 (unaudited). ** Reflects operations for the period from January 3, 1991 (commencement of operations) to December 31, 1991. + Based on net asset value, which does not reflect the sales load or contingent deferred sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (c) Distributions in excess of net investment income for the period ended December 31, 1993 were the result of certain book and tax timing differences. These distributions did not represent a return of capital for federal income tax purposes for the year ended December 31, 1993. (See Notes which are an integral part of the Financial Statements) FIRST UNION VIRGINIA MUNICIPAL BOND PORTFOLIO FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
CLASS B CLASS C INVESTMENT INVESTMENT TRUST SHARES SHARES SHARES YEAR ENDED YEAR ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 1994** 1993*** 1994** 1993*** 1994* NET ASSET VALUE, BEGINNING OF PERIOD $ 10.19 $ 10.00 $ 10.19 $ 10.00 $ 9.83 - ----------------------------------------------------- INCOME FROM INVESTMENT OPERATIONS - ----------------------------------------------------- Net investment income 0.23 0.20 0.21 0.17 0.17 - ----------------------------------------------------- Net realized and unrealized gain (loss) on investments (1.04) 0.19 (1.04) 0.19 (0.68) - ----------------------------------------------------- ----------- ----------- ----------- ----------- --------------- Total from investment operations (0.81) 0.39 (0.83) 0.36 (0.51) - ----------------------------------------------------- LESS DISTRIBUTIONS - ----------------------------------------------------- Dividends to shareholders from net investment income (0.23) (0.20) (0.21) (0.17) (0.17) - ----------------------------------------------------- ----------- ----------- ----------- ----------- --------------- NET ASSET VALUE, END OF PERIOD $ 9.15 $ 10.19 $ 9.15 $ 10.19 $ 9.15 - ----------------------------------------------------- ----------- ----------- ----------- ----------- --------------- TOTAL RETURN+ (7.96)% 3.89% (8.19)% 3.66% (5.27)% - ----------------------------------------------------- RATIOS TO AVERAGE NET ASSETS - ----------------------------------------------------- Expenses 0.50%(b) 0.25%(b) 1.00%(b) 0.75%(b) 0.30%(b) - ----------------------------------------------------- Net investment income 4.97%(b) 4.64%(b) 4.47%(b) 4.25%(b) 5.27%(b) - ----------------------------------------------------- Expense waiver/reimbursement (a) 3.66%(b) 7.50%(b) 3.66%(b) 7.50%(b) 3.91%(b) - ----------------------------------------------------- SUPPLEMENTAL DATA - ----------------------------------------------------- Net assets, end of period (000 omitted) $1,719 $1,306 $3,401 $2,235 $97 - ----------------------------------------------------- Portfolio turnover rate 32% 0% 32% 0% 32% - -----------------------------------------------------
* Reflects operations for the period from February 28, 1994 (commencement of operations) to June 30, 1994. ** Six months ended June 30, 1994 (unaudited). *** Reflects operations for the period from July 2, 1993 (commencement of operations) to December 31, 1993. + Based on net asset value, which does not reflect the sales load or contingent sales charge, if applicable. (a) This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above (Note 4). (b) Computed on an annualized basis. (See Notes which are an integral part of the Financial Statements) FIRST UNION FUNDS COMBINED NOTES TO FINANCIAL STATEMENTS JUNE 30, 1994 (UNAUDITED) - -------------------------------------------------------------------------------- (1) ORGANIZATION First Union Funds (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act"), as an open-end management investment company. The Trust consists of fifteen portfolios (individually referred to as the "Fund", or collectively as the "Funds"). The Board of Trustees ("Trustees") has established three classes of shares, Trust Shares, Class B Investment Shares, and Class C Investment Shares for: First Union Balanced Portfolio, First Union Fixed Income Portfolio, First Union Florida Municipal Bond Portfolio, First Union Georgia Municipal Bond Portfolio, First Union High Grade Tax Free Portfolio, (formerly, "First Union Insured Tax Free Portfolio"), First Union Managed Bond Portfolio, First Union Money Market Portfolio, First Union North Carolina Municipal Bond Portfolio, First Union South Carolina Municipal Bond Portfolio, First Union Tax Free Money Market Portfolio, First Union Treasury Money Market Portfolio, First Union U.S. Government Portfolio, First Union Utility Portfolio, First Union Value Portfolio, and First Union Virginia Municipal Bond Portfolio. As of June 30, 1994, each of the portfolios were offering the Trust Shares, Class B Investment Shares and Class C Investment Shares, except for First Union Managed Bond Portfolio, which was only offering Trust Shares; and First Union Tax Free Money Market Portfolio, and First Union Treasury Money Market Portfolio, which were only offering Trust Shares and Class B Investment Shares. The assets of each Fund are segregated and a shareholder's interest is limited to the Fund in which shares are held. The financial statements included herein present those of First Union Balanced Portfolio ("Balanced"), First Union Fixed Income Portfolio ("Fixed Income"), First Union Florida Municipal Bond Portfolio ("Florida"), First Union Georgia Municipal Bond Portfolio ("Georgia"), First Union High Grade Tax Free Portfolio ("High Grade Tax Free"), First Union Managed Bond Portfolio ("Managed Bond"), First Union Money Market Portfolio ("Money Market"), First Union North Carolina Municipal Bond Portfolio ("North Carolina"), First Union South Carolina Municipal Bond Portfolio ("South Carolina"), First Union Tax Free Money Market Portfolio ("Tax Free Money Market"), First Union Treasury Money Market Portfolio ("Treasury Money Market"), First Union U.S. Government Portfolio ("U.S. Government"), First Union Utility Portfolio ("Utility"), First Union Value Portfolio ("Value"), and First Union Virginia Municipal Bond Portfolio ("Virginia"). (2) SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by each Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles. A. INVESTMENT VALUATIONS--Municipal bonds are valued by an independent pricing service taking into consideration yield, liquidity, risk, credit, quality, coupon, maturity, type of issue, and any other factors or market data it deems relevant in determining valuations for normal institutional-size trading units of debt securities. The independent pricing service does not rely exclusively on quoted prices. Listed equity securities are valued at the last sale price reported on national securities exchanges. Unlisted bonds and securities and short-term obligations (and private placement securities) are generally valued at the prices provided by an independent pricing service. Listed corporate bonds (and other fixed-income and asset-backed securities) are valued at the last sale price reported on national securities exchanges. U.S. government obligations are generally valued at the mean between the over-the-counter bid and asked prices as furnished by an independent pricing service. Short-term securities with remaining maturities of sixty days or less may be stated at amortized cost, which approximates value. Investments in other regulated investment companies are valued at net asset value. Money Market, Tax Free Money Market, and Treasury Money Market use of the amortized cost method to value their portfolio securities is in accordance with Rule 2a-7 under the Act. B. REPURCHASE AGREEMENTS--It is the policy of the Funds to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral in support of repurchase agreement investments. Additionally, procedures have been established by the Funds to monitor, on a daily basis, the market value of each repurchase agreement's underlying collateral to ensure the value at least equals the principal amount of the repurchase agreement, including accrued interest. The Funds will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Trust's adviser to be creditworthy pursuant to guidelines established by the Trustees. Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Funds could receive less than the repurchase price on the sale of collateral securities. C. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Dividend income and distributions to shareholders are recorded on the ex-dividend date. Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These distributions do not represent a return of capital for federal income tax purposes. D. FEDERAL TAXES--It is the policy of the Funds to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of their taxable or tax-exempt income. Accordingly, no provisions for federal tax are necessary. The Florida Fund failed to meet its investment objective of qualifying as an investment exempt from the Florida intangibles tax during the tax year 1993. Under Florida law, the investment portfolio of the Fund had to consist entirely of investments exempt from the Florida intangibles tax on the last business day of calendar year 1993, in order to qualify as an exempt investment. However, at December 31, 1993, the Fund owned several securities that were not exempt. The Fund's investment adviser has agreed to reimburse shareholders of the Fund for the resulting tax liability and has instituted management changes in order to prevent similar occurrences in the future. At December 31, 1993, Florida and U.S. Government, for federal tax purposes, had capital loss carryforwards of $7,682 and $1,978,402, respectively, which will reduce each Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Funds of liability for federal tax. Pursuant to the Code, such capital loss carryforwards will expire in the year 2001. E. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Funds may engage in when-issued or delayed delivery transactions. A Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked-to-market daily and begin earning interest on the settlement date. F. DEFERRED EXPENSES--The costs incurred by each Fund with respect to registration of its shares in its first fiscal year, excluding the initial expense of registering the shares, have been deferred and are being amortized using the straight-line method over a period of five years from each Fund's commencement date. G. FUTURES CONTRACTS--Upon entering into a financial futures contract with a broker, Balanced is required to deposit in a segregated account an amount ("initial margin") of cash or U.S. government securities equal to a percentage of the contract value. The Fund agrees to receive from or to pay to the broker an amount of cash equal to a specific dollar amount times the difference between the closing value and the price at which the contract was made. On a daily basis, the value of the financial futures contract is determined and any difference between such value and the original futures contract value is reflected in the "daily variation margin" account. Daily variation margin adjustments, arising from this "marking-to-market" process, are recorded by the Fund as unrealized gains or losses. The Fund may decide to close its position on a contract at any time prior to the contract's expiration. When a contract is closed, the Fund recognizes a realized gain or loss. Risks of entering into futures contracts include the possibility that a change in the value of the contract may not correlate with changes in the value of the underlying securities. For the six months ended June 30, 1994, the Fund had a realized loss of $408,450 on future contracts. At June 30,1994, the Fund had outstanding futures contracts as set out below:
CONTRACTS UNREALIZED EXPIRATION TO DELIVER/ APPRECIATION DATE RECEIVE POSITION (DEPRECIATION) September 15, 1994 100 S&P Index Futures Long ($ 807,500)
H. OTHER--Investment transactions are accounted for on the trade date. (3) SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At June 30, 1994, capital paid-in for Money Market, Tax Free Money Market and Treasury Money Market aggregated $102,700,379, $453,298,568 and $635,801,989 respectively. Transactions in Fund shares were as follows:
MONEY MARKET TAX FREE MONEY MARKET TREASURY MONEY MARKET YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1994* 1993 1994* 1993** 1994* 1993 CLASS B INVESTMENT SHARES: SHARES SHARES SHARES SHARES SHARES SHARES Shares sold 202,739,859 390,039,358 792,233,695 1,715,543,145 874,425,902 1,612,728,750 - -------------------------------- Shares issued to shareholders in payment of dividends declared 1,407,726 2,215,425 1,325,153 2,181,449 1,877,556 3,678,413 - -------------------------------- Shares redeemed (202,006,449) (368,877,898) (671,383,930) (1,623,484,621) (731,438,647) (1,563,724,945) - -------------------------------- ------------ ------------ ------------ -------------- ------------ -------------- Net change resulting from Class B Investment Shares transactions 2,141,136 23,376,885 122,174,918 94,239,973 144,864,811 52,682,218 - -------------------------------- ------------ ------------ ------------ -------------- ------------ -------------- MONEY MARKET TAX FREE MONEY MARKET TREASURY MONEY MARKET YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1994* 1993 1994* 1993 1994* 1993 TRUST SHARES: SHARES SHARES SHARES SHARES SHARES SHARES Shares sold 8,015,967 7,737,901 156,866,061 115,358,768 428,569,733 920,999,613 - -------------------------------- Shares issued to shareholders in payment of dividends declared 67,845 249,522 -- -- -- -- - -------------------------------- Shares redeemed (8,629,633) (8,115,403) (107,571,160) (129,065,098) (565,215,851) (841,120,518) - -------------------------------- ------------ ------------ ------------ -------------- ------------ -------------- Net change resulting from Trust Shares transactions (545,821) (127,980) 49,294,901 (13,706,330) (136,646,118) 79,879,095 - -------------------------------- ------------ ------------ ------------ -------------- ------------ --------------
FIRST UNION FUNDS - --------------------------------------------------------------------------------
MONEY MARKET TAX FREE MONEY MARKET TREASURY MONEY MARKET YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1994*** 1993 1994* 1993 1994* 1993 CLASS C INVESTMENT SHARES: SHARES SHARES SHARES SHARES SHARES SHARES Shares sold 6,136,350 -- -- -- -- -- - -------------------------------- Shares issued to shareholders in payment of dividends declared 27,946 -- -- -- -- -- - -------------------------------- Shares redeemed (2,345,524) -- -- -- -- -- - -------------------------------- ------------ ------------ ------------ -------------- ------------ -------------- Net change resulting from Class C Shares transactions 3,818,772 -- -- -- -- -- - -------------------------------- ------------ ------------ ------------ -------------- ------------ -------------- Total net change resulting from Fund transactions 5,414,087 23,248,905 171,469,819 80,533,643 8,218,693 132,561,313 - -------------------------------- ------------ ------------ ------------ -------------- ------------ --------------
*Six months ended June 30, 1994. **For the year ended December 31, 1993, which is inclusive of a reclassification to paid-in-capital of ($41,726). ***For the period from February 28, 1994 (commencement of operations) to June 30, 1994.
BALANCED YEAR ENDED DECEMBER 31, 1994(A) 1993 CLASS B INVESTMENT SHARES: SHARES DOLLARS SHARES DOLLARS Shares sold 1,027,942 $ 12,337,884 15,852,202 $ 18,730,505 - ------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 54,324 646,632 99,375 1,185,158 - ------------------------------------------------------------------- Shares redeemed (387,176) (4,605,755) (306,407) (3,630,320) - ------------------------------------------------------------------- ---------- ------------ ---------- ------------ Net change resulting from Class B Investment Shares transactions 695,090 $ 8,378,761 15,645,170 $ 16,285,343 - ------------------------------------------------------------------- ---------- ------------ ---------- ------------ FIXED INCOME YEAR ENDED DECEMBER 31, 1994(A) 1993 SHARES DOLLARS SHARES DOLLARS Shares sold 343,259 $ 3,465,004 481,694 $ 5,143,194 - ------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 60,213 607,193 144,232 1,529,307 - ------------------------------------------------------------------- Shares redeemed (333,443) (3,369,947) (495,713) (5,294,878) - ------------------------------------------------------------------- ---------- ------------ ---------- ------------ Net change resulting from Class B Investment Shares transactions 70,029 $ 702,250 130,213 $ 1,377,623 - ------------------------------------------------------------------- ---------- ------------ ---------- ------------ FLORIDA YEAR ENDED DECEMBER 31, 1994(A) 1993(B) SHARES DOLLARS SHARES DOLLARS Shares sold 495,082 $ 4,938,303 792,567 $ 8,099,364 - ------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 12,667 121,842 4,610 47,316 - ------------------------------------------------------------------- Shares redeemed (311,058) (2,993,525) (13,102) (133,968) - ------------------------------------------------------------------- ---------- ------------ ---------- ------------ Net change resulting from Class B Investment Shares transactions 196,691 $ 2,066,620 784,075 $ 8,012,712 - ------------------------------------------------------------------- ---------- ------------ ---------- ------------
FIRST UNION FUNDS - --------------------------------------------------------------------------------
GEORGIA YEAR ENDED DECEMBER 31, 1994(A) 1993(C) CLASS B INVESTMENT SHARES: SHARES DOLLARS SHARES DOLLARS Shares sold 77,674 $ 729,619 79,679 $ 806,248 - ------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 2,065 19,350 627 6,358 - ------------------------------------------------------------------- Shares redeemed (7,730) (72,182) (100) (1,013) - ------------------------------------------------------------------- ---------- ------------ ---------- ------------ Net change resulting from Class B Investment Shares transactions 72,009 $ 676,787 80,206 $ 811,593 - ------------------------------------------------------------------- ---------- ------------ ---------- ------------ HIGH GRADE TAX FREE YEAR ENDED DECEMBER 31, 1994(A) 1993 SHARES DOLLARS SHARES DOLLARS Shares sold 470,009 $ 5,199,839 2,372,549 $ 25,481,548 - ------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 131,475 1,394,043 338,294 3,700,973 - ------------------------------------------------------------------- Shares redeemed (2,335,184) (24,773,166) (2,331,329) (25,357,024) - ------------------------------------------------------------------- ---------- ------------ ---------- ------------ Net change resulting from Class B Investment Shares transactions (1,733,700) ($18,179,284) 379,514 $ 3,825,497 - ------------------------------------------------------------------- ---------- ------------ ---------- ------------
NORTH CAROLINA SOUTH CAROLINA YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1994(A) 1993(D) 1994(E) SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS Shares sold 298,425 $ 3,043,488 1,519,411 $15,643,890 10,148 $ 101,010 - ---------------------------------- Shares issued to shareholders in payment of dividends declared 19,256 191,923 27,953 291,429 70 653 - ---------------------------------- Shares redeemed (542,897) (5,491,226) (346,949) (3,632,402) (4,986) (47,018) - ---------------------------------- ---------- ------------ --------- ----------- --------- ----------- Net change resulting from Class B Investment Shares transactions (225,216) $ (2,255,815) 1,200,415 $12,302,917 5,232 $ 54,645 - ---------------------------------- ---------- ------------ --------- ----------- --------- ----------- U.S. GOVERNMENT UTILITY YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1994(A) 1993(D) 1994(E) SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS Shares sold 439,169 $ 4,312,133 4,717,613 $47,917,982 926,021 $ 9,075,418 - ---------------------------------- Shares issued to shareholders in payment of dividends declared 61,384 592,558 85,591 869,493 7,909 74,174 - ---------------------------------- Shares redeemed (1,091,168) (10,559,321) (936,518) (9,556,254) (545,693) (5,182,220) - ---------------------------------- ---------- ------------ --------- ----------- --------- ----------- Net change resulting from Class B Investment Shares transactions (590,615) ($ 5,654,630) 3,866,686 $39,231,221 388,237 $ 3,967,372 - ---------------------------------- ---------- ------------ --------- ----------- --------- ----------- VALUE YEAR ENDED DECEMBER 31, 1994(A) 1993 SHARES DOLLARS SHARES DOLLARS Shares sold 715,946 $ 12,529,215 1,670,336 $ 29,146,008 - -------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 155,004 2,721,290 612,728 10,927,661 - -------------------------------------------------------------------- Shares redeemed (853,442) (15,004,703) (1,404,525) (24,783,785) - -------------------------------------------------------------------- --------- ------------ ---------- ------------ Net change resulting from Class B Investment Shares transactions 17,508 $ 245,802 878,539 $ 15,289,884 - -------------------------------------------------------------------- --------- ------------ ---------- ------------
VIRGINIA YEAR ENDED DECEMBER 31, 1994(A) 1993(C) CLASS B INVESTMENT SHARES: SHARES DOLLARS SHARES DOLLARS Shares sold 68,888 $ 659,819 152,762 $ 1,544,349 - -------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 3,195 30,160 1,492 15,096 - -------------------------------------------------------------------- Shares redeemed (12,292) (113,249) (26,132) (262,837) - -------------------------------------------------------------------- --------- ------------ ---------- ------------ Net change resulting from Class B Investment Shares transactions 59,791 $ 576,730 128,122 $ 1,296,608 - -------------------------------------------------------------------- --------- ------------ ---------- ------------ BALANCED YEAR ENDED DECEMBER 31, 1994(A) 1993(F) CLASS C INVESTMENT SHARES: SHARES DOLLARS SHARES DOLLARS Shares sold 2,746,697 $ 32,845,884 5,420,941 $ 64,347,220 - -------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 93,262 1,110,446 111,109 1,330,890 - -------------------------------------------------------------------- Shares redeemed (390,118) (4,616,081) (111,571) (1,334,779) - -------------------------------------------------------------------- --------- ------------ ---------- ------------ Net change resulting from Class C Investment Shares transactions 2,449,841 $ 29,340,249 5,420,479 $ 64,343,331 - -------------------------------------------------------------------- --------- ------------ ---------- ------------ FIXED INCOME YEAR ENDED DECEMBER 31, 1994(A) 1993(F) SHARES DOLLARS SHARES DOLLARS Shares sold 737,279 $ 7,510,559 876,785 $ 9,419,506 - -------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 24,761 249,444 25,320 268,072 - -------------------------------------------------------------------- Shares redeemed (156,318) (1,570,286) (52,164) (601,263) - -------------------------------------------------------------------- --------- ------------ ---------- ------------ Net change resulting from Class C Investment Shares transactions 605,722 $ 6,189,717 849,941 $ 9,086,315 - -------------------------------------------------------------------- --------- ------------ ---------- ------------ FLORIDA YEAR ENDED DECEMBER 31, 1994(A) 1993(C) SHARES DOLLARS SHARES DOLLARS Shares sold 1,031,835 $ 10,197,394 1,787,845 $ 18,224,944 - -------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 28,176 269,801 10,087 103,490 - -------------------------------------------------------------------- Shares redeemed (160,844) (1,550,104) (20,109) (206,690) - -------------------------------------------------------------------- --------- ------------ ---------- ------------ Net change resulting from Class C Investment Shares transactions 899,167 $ 8,917,091 1,777,823 $ 18,121,744 - -------------------------------------------------------------------- --------- ------------ ---------- ------------ GEORGIA YEAR ENDED DECEMBER 31, 1994(A) 1993(C) SHARES DOLLARS SHARES DOLLARS Shares sold 349,434 $ 3,367,406 360,422 $ 3,643,744 - -------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 8,878 83,027 2,856 29,778 - -------------------------------------------------------------------- Shares redeemed (36,043) (340,341) (1,063) (10,869) - -------------------------------------------------------------------- --------- ------------ ---------- ------------ Net change resulting from Class C Investment Shares transactions 322,269 $ 3,110,092 362,215 $ 3,662,653 - -------------------------------------------------------------------- --------- ------------ ---------- ------------
FIRST UNION FUNDS - --------------------------------------------------------------------------------
HIGH GRADE TAX FREE YEAR ENDED DECEMBER 31, 1994(A) 1993(D) CLASS C INVESTMENT SHARES: SHARES DOLLARS SHARES DOLLARS Shares sold 441,289 $ 4,809,803 3,967,806 $ 42,494,039 - -------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 51,086 539,002 81,800 901,603 - -------------------------------------------------------------------- Shares redeemed (416,493) (4,401,510) (371,428) (3,798,873) - -------------------------------------------------------------------- --------- ------------ ---------- ------------ Net change resulting from Class C Investment Shares transactions 75,882 $ 947,295 3,678,178 $ 39,596,769 - -------------------------------------------------------------------- --------- ------------ ---------- ------------ NORTH CAROLINA YEAR ENDED DECEMBER 31, 1994(A) 1993(D) SHARES DOLLARS SHARES DOLLARS Shares sold 959,228 $ 9,767,126 4,313,146 $ 44,236,206 - -------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 76,656 756,505 81,273 847,945 - -------------------------------------------------------------------- Shares redeemed (284,109) (2,780,426) (138,089) (1,441,617) - -------------------------------------------------------------------- --------- ------------ ---------- ------------ Net change resulting from Class C Investment Shares transactions 751,775 $ 7,743,205 4,256,330 $ 43,642,534 - -------------------------------------------------------------------- --------- ------------ ---------- ------------
SOUTH CAROLINA U.S. GOVERNMENT YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1994(G) 1994(A) 1993(D) SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS Shares sold 171,671 $ 1,657,447 2,979,116 $ 29,321,907 24,115,682 $244,699,849 - -------------------------------------- Shares issued to shareholders in payment of dividends declared 1,759 16,134 390,888 3,759,556 451,760 4,588,421 - -------------------------------------- Shares redeemed (1,952) (17,421) (3,077,520) (29,603,308) (1,011,127) (10,259,387) - -------------------------------------- --------- ----------- ---------- ------------ ---------- ------------ Net change resulting from Class C Investment Shares transactions 171,478 $ 1,656,160 292,484 $ 3,478,155 23,556,315 $239,028,883 - -------------------------------------- --------- ----------- ---------- ------------ ---------- ------------ UTILITY VALUE YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1994(E) 1994(A) 1993(H) SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS Shares sold 2,887,298 $27,609,419 1,502,072 $ 26,310,386 3,381,196 $ 59,423,618 - -------------------------------------- Shares issued to shareholders in payment of dividends declared 33,881 314,079 48,941 860,016 147,332 2,593,366 - -------------------------------------- Shares redeemed (120,700) (1,121,424) (266,138) (4,651,829) (127,948) (2,272,549) - -------------------------------------- --------- ----------- ---------- ------------ ---------- ------------ Net change resulting from Class C Investment Shares transactions 2,800,479 $26,802,074 1,284,875 $ 22,518,573 3,400,580 $ 59,744,435 - -------------------------------------- --------- ----------- ---------- ------------ ---------- ------------
VIRGINIA YEAR ENDED DECEMBER 31, 1994(A) 1993(C) SHARES DOLLARS SHARES DOLLARS Shares sold 157,012 $ 1,525,643 220,937 $ 2,233,824 - ----------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 5,462 51,598 1,782 18,036 - ----------------------------------------------------------------- Shares redeemed (10,039) (89,954) (3,373) (33,865) - ----------------------------------------------------------------- ---------- ------------ ---------- ------------ Net change resulting from Class C Investment Shares transactions 152,435 $ 1,487,287 219,346 $ 2,217,995 - ----------------------------------------------------------------- ---------- ------------ ---------- ------------
BALANCED YEAR ENDED DECEMBER 31, 1994(A) 1993 TRUST SHARES: SHARES DOLLARS SHARES DOLLARS Shares sold 11,705,541 $140,059,616 23,651,918 $280,582,429 - ----------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 1,163,323 13,844,537 2,447,097 29,159,927 - ----------------------------------------------------------------- Shares redeemed (6,678,839) (79,519,413) (8,749,448) (103,873,965) - ----------------------------------------------------------------- ---------- ------------ ---------- ------------ Net change resulting from Trust Shares transactions 6,190,025 $ 74,384,740 17,349,567 $205,868,391 - ----------------------------------------------------------------- ---------- ------------ ---------- ------------ FIXED INCOME YEAR ENDED DECEMBER 31, 1994(A) 1993 SHARES DOLLARS SHARES DOLLARS Shares sold 5,506,269 $ 56,136,415 10,175,682 $109,047,909 - ----------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared 1,144,590 11,544,847 2,632,696 28,096,415 - ----------------------------------------------------------------- Shares redeemed (5,960,553) (60,206,790) (7,821,815) (83,565,038) - ----------------------------------------------------------------- ---------- ------------ ---------- ------------ Net change resulting from Trust Shares transactions 690,306 $ 7,474,472 4,986,563 $ 53,579,286 - ----------------------------------------------------------------- ---------- ------------ ---------- ------------
FLORIDA GEORGIA HIGH GRADE TAX FREE YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1994(I) 1994(I) 1994(I) SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS Shares sold 192,533 $ 1,794,144 9,914 $ 90,238 365,565 $ 3,770,385 - ------------------------ Shares issued to share- holders in payment of dividends declared 179 1,670 5 45 247 2,548 - ------------------------ Shares redeemed (9,809) (91,142) (40) (369) (13,273) (137,662) - ------------------------ ---------- ------------ ---------- ------------ ---------- ------------- Net change resulting from Trust Shares transactions 182,903 $ 1,704,672 9,879 $ 89,914 352,539 $ 3,635,271 - ------------------------ ---------- ------------ ---------- ------------ ---------- ------------- MANAGED BOND NORTH CAROLINA YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1994(A) 1993 1994(I) SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS Shares sold 1,323,163 $ 13,175,120 2,814,758 $ 30,558,683 24,886 $ 239,465 - ------------------------ Shares issued to share- holders in payment of dividends declared 340,483 3,404,791 941,085 10,049,698 123 1,178 - ------------------------ Shares redeemed (1,142,386) (11,477,016) (5,102,996) (54,682,139) (5) (48) - ------------------------ ---------- ------------ ---------- ------------ ---------- ------------- Net change resulting from Trust Shares transactions 521,260 $ 5,102,895 (1,347,153) ($14,073,758) 25,004 $ 240,595 - ------------------------ ---------- ------------ ---------- ------------ ---------- -------------
SOUTH CAROLINA U.S. GOVERNMENT YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1994(I) 1994(A) 1993(J) TRUST SHARES: SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS Shares sold 10,496 $ 95,425 729,650 $ 7,085,758 2,640,585 $ 26,962,076 - -------------------------------- Shares issued to shareholders in payment of dividends declared -- -- 45,895 441,103 15,175 152,968 - -------------------------------- Shares redeemed (5) (49) (567,190) (5,535,524) (1,214,148) (12,410,216) - -------------------------------- --------- ---------- ---------- ------------ ---------- ------------- Net change resulting from Trust Shares transactions 10,491 $ 95,376 208,355 $ 1,991,337 1,441,612 $ 14,704,828 - -------------------------------- --------- ---------- ---------- ------------ ---------- ------------- UTILITY VALUE YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31, 1994(K) 1994(A) 1993 SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS Shares sold 560,502 $5,320,523 6,345,801 $111,435,418 12,354,825 $ 216,981,393 - -------------------------------- Shares issued to shareholders in payment of dividends declared 9,032 83,331 423,165 7,429,428 1,415,290 25,407,542 - -------------------------------- Shares redeemed (113) (1,049) (4,262,756) (74,686,977) (6,561,135) (115,628,819) - -------------------------------- --------- ---------- ---------- ------------ ---------- ------------- Net change resulting from Trust Shares transactions 569,421 $5,402,805 2,506,210 $ 44,177,869 7,208,980 $ 126,760,116 - -------------------------------- --------- ---------- ---------- ------------ ---------- -------------
VIRGINIA YEAR ENDED DECEMBER 31, 1994(I) SHARES DOLLARS Shares sold 10,641 $ 100,253 - ---------------------------------------------------------------------------------------------- Shares issued to shareholders in payment of dividends declared -- -- - ---------------------------------------------------------------------------------------------- Shares redeemed (5) (48) - ---------------------------------------------------------------------------------------------- ----------- --------- Net change resulting from Trust Share transactions 10,636 $ 100,205 - ---------------------------------------------------------------------------------------------- ----------- ---------
YEAR ENDED DECEMBER 31, 1994(A) 1993 SHARES DOLLARS SHARES DOLLARS Total net change resulting from Balanced transactions 9,334,956 $112,103,750 38,415,216 $286,497,065 - --------------------------------------------------------- ---------- ------------ ---------- ------------ Total net change resulting from Fixed Income transactions 1,366,057 14,366,439 5,966,717 64,043,224 - --------------------------------------------------------- ---------- ------------ ---------- ------------ Total net change resulting from Florida transactions 1,278,761 12,688,383 2,561,898 26,134,456 - --------------------------------------------------------- ---------- ------------ ---------- ------------ Total net change resulting from Georgia transactions 404,157 3,876,793 442,421 4,474,246 - --------------------------------------------------------- ---------- ------------ ---------- ------------ Total net change resulting from High Grade Tax Free transactions (1,305,279) (13,596,718) 4,057,692 43,422,266 - --------------------------------------------------------- ---------- ------------ ---------- ------------ Total net change resulting from Managed Bond transactions 521,260 5,102,895 (1,347,153) (14,073,758) - --------------------------------------------------------- ---------- ------------ ---------- ------------ Total net change resulting from North Carolina transactions 551,563 5,727,985 5,456,745 55,945,451 - --------------------------------------------------------- ---------- ------------ ---------- ------------ Total net change resulting from South Carolina transactions 187,201 1,806,181 -- -- - --------------------------------------------------------- ---------- ------------ ---------- ------------ Total net change resulting from U.S. Government transactions (89,776) (185,138) 28,864,613 292,964,932 - --------------------------------------------------------- ---------- ------------ ---------- ------------ Total net change resulting from Utility transactions 3,758,137 36,172,251 -- -- - --------------------------------------------------------- ---------- ------------ ---------- ------------ Total net change resulting from Value transactions 3,808,593 66,942,244 11,488,099 201,794,435 - --------------------------------------------------------- ---------- ------------ ---------- ------------ Total net change resulting from Virginia transactions 222,862 2,164,222 347,468 3,514,603 - --------------------------------------------------------- ---------- ------------ ---------- ------------
(a) Six months ended June 30, 1994. (b) For the period from July 6, 1993 (commencement of operations) to December 31, 1993. (c) For the period from July 2, 1993 (commencement of operations) to December 31, 1993. (d) For the period from January 11, 1993 (commencement of operations) to December 31, 1993. (e) For the period from January 4, 1994 (commencement of operations) to June 30, 1994. (f) For the period from January 26, 1993 (commencement of operations) to December 31, 1993. (g) For the period from January 5, 1994 (commencement of operations) to June 30, 1994. (h) For the period from February 2, 1993 (commencement of operations) to December 31, 1993. (i) For the period from February 28, 1994 (commencement of operations) to June 30, 1994. (j) For the period from September 2, 1993 (commencement of operations) to December 31, 1993. (k) For the period from March 8, 1994 (commencement of operations) to June 30, 1994. (4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT ADVISORY FEE--First Union National Bank of North Carolina, the Trust's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee based on a percentage of each Fund's average daily net assets (see below). The Adviser may voluntarily choose to waive a portion of its fee and reimburse certain operating expenses of the Funds. The Adviser can modify or terminate this voluntary waiver and reimbursement at any time at its sole discretion.
FUND ANNUAL RATE Balanced 0.50% - ------------------------------------------------------------------------------------------------- Fixed Income 0.50% - ------------------------------------------------------------------------------------------------- Florida 0.50% - ------------------------------------------------------------------------------------------------- Georgia 0.50% - ------------------------------------------------------------------------------------------------- High Grade Tax Free 0.50% - ------------------------------------------------------------------------------------------------- Managed Bond 0.50% - ------------------------------------------------------------------------------------------------- Money Market 0.35% - ------------------------------------------------------------------------------------------------- North Carolina 0.50% - ------------------------------------------------------------------------------------------------- South Carolina 0.50% - ------------------------------------------------------------------------------------------------- Tax Free Money Market 0.35% - ------------------------------------------------------------------------------------------------- Treasury Money Market 0.35% - ------------------------------------------------------------------------------------------------- U.S. Government 0.50% - ------------------------------------------------------------------------------------------------- Utility 0.50% - ------------------------------------------------------------------------------------------------- Value 0.50% - ------------------------------------------------------------------------------------------------- Virginia 0.50% - -------------------------------------------------------------------------------------------------
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS") provides each Fund with certain administrative personnel and services. The FAS fee is based on the level of average aggregate net assets of the Trust for the period. FAS may voluntarily choose to waive a portion of its fee. DISTRIBUTION PLAN--The Trust has adopted two Distribution Plans (the "Plans") pursuant to Rule 12b-1 under the Act. Under the terms of the Plans, the Trust will pay Federated Securities Corp. ("FSC"), the principal distributor, up to 0.35 of 1% of the average daily net assets of the Class B Investment Shares for Money Market, Tax Free Money Market, and Treasury Money Market, and 0.75 of 1% of the average daily net assets of the Class C Investment Shares for Money Market, and up to 0.75 of 1% of the average daily net assets of the Class B and Class C Investment Shares for Balanced, Fixed Income, Florida, Georgia, High Grade Tax Free, Managed Bond, North Carolina, South Carolina, U.S. Government, Utility, Value, and Virginia, annually, to pay commissions, maintenance fees and to compensate FSC. For the foreseeable future, FSC intends to limit its fees to 0.30 of 1% of the Class B Investment Shares' average daily net assets for Money Market, Tax Free Money Market, and Treasury Money Market, and to 0.25 of 1% of the Class B Investment Shares' average daily net assets for Balanced, Florida, Georgia, High Grade Tax Free, North Carolina, South Carolina, U.S. Government, Utility, Value, and Virginia, and to 0.10 of 1% of the Class B Investment Shares' average daily net assets for Fixed Income. Managed Bond does not offer Investment Shares to which the Plan relates and therefore, no payments were made by the Fund to FSC. The distributor may voluntarily choose to waive a portion of its fee. The distributor can modify or terminate this voluntary waiver at any time at its sole discretion. TRANSFER AND DIVIDEND DISBURSING AGENT FEES--Federated Services Company ("FServ") serves as transfer agent and dividend disbursing agent for the Funds. The FServ fee is based on the size, type and number of accounts and transactions made by shareholders. ORGANIZATIONAL EXPENSES--Organizational expenses were borne initially by FAS. Managed Bond, and Money Market, have agreed to reimburse FAS, at an annual rate of .005 of 1% of average daily net assets until expenses borne by FAS are reimbursed, or the expiration of five years from the date these Funds became effective, whichever occurs earlier. Florida, Georgia, High Grade Tax Free, North Carolina, South Carolina, U. S. Government, Utility, and Virginia have agreed to reimburse FAS during the five year period following the date these Funds became effective. Pursuant to these arrangements, for the six months ended June 30, 1994, the Funds paid FAS as follows:
INITIAL ORGANIZATIONAL ORGANIZATIONAL EXPENSES FUND EXPENSES REIMBURSED Florida $ 40,000 $ 1,491 - ------------------------------------------------------------------------- Georgia 40,000 1,432 - ------------------------------------------------------------------------- High Grade Tax-Free 75,393 3,183 - ------------------------------------------------------------------------- Managed Bond 32,513 2,697 - ------------------------------------------------------------------------- Money Market 17,588 2,606 - ------------------------------------------------------------------------- North Carolina 60,000 5,020 - ------------------------------------------------------------------------- South Carolina 89,722 2,093 - ------------------------------------------------------------------------- U.S.Government 40,000 4,299 - ------------------------------------------------------------------------- Utility 50,000 1,667 - ------------------------------------------------------------------------- Virginia 40,000 2,940 - -------------------------------------------------------------------------
Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies. (5) CONCENTRATION OF CREDIT RISK Since Florida, Georgia, North Carolina, South Carolina, and Virginia invest a substantial portion of their assets in issuers located in one state, they will be more susceptible to factors adversely affecting issuers of that state than would be a comparable general tax-exempt mutual fund. In order to reduce the risk associated with such factors, at June 30, 1994, 53.7%, 48.2%, 22.3%, 58% and 21.2% of the securities in the portfolio of investments of Florida, Georgia, North Carolina, South Carolina, and Virginia, respectively, were backed by letters of credit or bond insurance of various financial institutions and financial guaranty assurance agencies. The aggregate percentages by financial institutions ranged from 5.2% to 23.6%, 2.9% to 17.9%, 1.7% to 15.5%, 3% to 24% and 1.5% to 12.3% of total investments, respectively, for Florida, Georgia, North Carolina, South Carolina, and Virginia. (6) INVESTMENT TRANSACTIONS Purchases and sales of investments, excluding short-term securities, for the six months ended June 30, 1994, were as follows:
HIGH GRADE BALANCED FIXED INCOME FLORIDA GEORGIA TAX FREE PURCHASES-- $ 198,189,758 $ 126,185,224 $ 20,747,070 $ 6,594,547 $ 44,795,403 - -------------------- SALES-- $ 131,041,134 $ 123,126,713 $ 7,831,165 $ 2,255,952 $ 56,439,479 - -------------------- MANAGED NORTH SOUTH BOND CAROLINA CAROLINA U.S. GOVERNMENT UTILITY PURCHASES-- $ 9,468,586 $ 31,128,161 $ 1,940,220 $ 34,964,323 $ 207,179,409 - -------------------- SALES-- $ 10,501,052 $ 27,964,109 $ 273,363 $ 11,519,903 $ 2,501,353 - -------------------- VALUE VIRGINIA PURCHASES-- $ 347,296,550 $ 3,085,480 - -------------------- SALES-- $ 298,134,885 $ 1,252,706 - --------------------
TRUSTEES OFFICERS - -------------------------------------------------------------------------------- James S. Howell, Chairman Edward C. Gonzales Edward C. Gonzales President and Treasurer Gerald M. McDonnell Joseph S. Machi Thomas L. McVerry Vice President and Assistant Treasurer William Walt Pettit Peter J. Germain Russell A. Salton, III, M.D. Secretary Michael S. Scofield Mark A. Sheehan Assistant Secretary
Mutual funds are not obligations of, or insured by, any bank, nor are they insured by the federal government or any of its agencies. Investment in these shares involves risk, including the possible loss of principal. This report is authorized for distribution to prospective investors only when preceded or accompanied by a Fund's prospectus which contains facts concerning its objective and policies, management fees, expenses and other information. For more complete information about the First Union International Equity Portfolio and First Union Emerging Markets Growth Portfolio, including charges and expenses please call 1-800-326-3241 for a prospectus. Read it carefully before investing. Federated Securities Corp., Distributor 3012205 (8/94) Logo 534514 -----END PRIVACY-ENHANCED MESSAGE-----