<DOCUMENT>
<TYPE>N-30D
<SEQUENCE>1
<FILENAME>dn30d.txt
<DESCRIPTION>AMSOUTH FUNDS ANNUAL REPORT
<TEXT>
<PAGE>
ANNUAL REPORT
CLASS A SHARES
CLASS B SHARES
TRUST SHARES
JULY 31, 2001
AMSOUTH FUNDS
AMSOUTH INVESTMENT MANAGEMENT COMPANY, LLC, INVESTMENT ADVISOR
BISYS FUND SERVICES, DISTRIBUTOR
NOT FDIC INSURED
WWW.AMSOUTHFUNDS.COM
<PAGE>
AmSouth(R) Funds
Table of Contents
<TABLE>
<S> <C>
Management Discussion of Performance
Message from the Chairman and Investment
Advisor......................................... 3
Fund Summary
Value Fund....................................... 4
Growth Fund...................................... 6
Capital Growth Fund.............................. 8
Large Cap Fund................................... 10
Mid Cap Fund..................................... 12
Small Cap Fund................................... 14
Equity Income Fund............................... 16
Balanced Fund.................................... 18
Select Equity Fund............................... 20
Enhanced Market Fund............................. 22
International Equity Fund........................ 24
Strategic Portfolios............................. 26
Bond Fund........................................ 32
Limited Term Bond Fund........................... 34
Government Income Fund........................... 36
Limited Term U.S. Government Fund................ 38
Municipal Bond Fund.............................. 40
Florida Tax-Exempt Fund.......................... 42
Tennessee Tax-Exempt Fund........................ 44
Limited Term Tennessee Tax-Exempt Fund........... 46
Money Market Funds............................... 48
Financial Statements
Value Fund....................................... 49
Growth Fund...................................... 56
Capital Growth Fund.............................. 62
Large Cap Fund................................... 69
Mid Cap Fund..................................... 76
Small Cap Fund................................... 81
Equity Income Fund............................... 88
Balanced Fund.................................... 95
Select Equity Fund............................... 102
Enhanced Market Fund............................. 108
International Equity Fund........................ 118
Strategic Portfolios: Aggressive Growth
Portfolio....................................... 125
Strategic Portfolios: Growth Portfolio........... 131
Strategic Portfolios: Growth and Income
Portfolio....................................... 137
Strategic Portfolios: Moderate Growth and Income
Portfolio....................................... 143
Bond Fund........................................ 149
Limited Term Bond Fund........................... 157
Government Income Fund........................... 164
Limited Term U.S. Government Fund................ 170
Municipal Bond Fund.............................. 176
Florida Tax-Exempt Fund.......................... 185
Tennessee Tax-Exempt Fund........................ 192
Limited Term Tennessee Tax-Exempt Fund........... 199
Prime Money Market Fund.......................... 204
U.S. Treasury Money Market Fund.................. 209
Treasury Reserve Money Market Fund............... 213
Tax-Exempt Money Market Fund..................... 217
Institutional Prime Obligations Money Market
Fund............................................ 223
Notes to Financial Statements...................... 228
Report of Independent Auditors..................... 264
</TABLE>
1
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[This Page Intentionally Left Blank]
2
<PAGE>
Message From the Chairman and Investment Advisor
Dear Shareholders:
We are pleased to send you this annual report for the 12 months ended July 31,
2001, a time that tested the patience of many equity investors, while most
fixed-income shareholders were positively elated. It was also a year that
proved, again, the value of portfolio diversification.
As March 2000 dawned on Wall Street, stock investors, especially those owning
shares of technology and telecommunications companies, were euphoric about the
paper profits they had realized during the historic Bull Run of the market.
Early that month, the Nasdaq Composite Index,/1/ home to most technology is-
sues, reached an all-time high. Two weeks later, the S&P 500 Stock Index,/2/ a
benchmark for the market as a whole, touched its highest levels ever.
As we write this letter in early August 2001, such glories are simply footnotes
in the stock market's volatile history. As of July 31, 2001, the S&P 500 Index
lost 14.32%. Nasdaq had an even rougher time of it, plunging 46.19% during the
fiscal year.
Still, while many growth stocks, especially those in the technology and tele-
communications sectors, retreated under the weight of unsustainable valuations
and depressed earnings, other areas of the market prospered. Value stocks--for
years, considered stodgy relics of a bygone, less technologically driven era--
regained their luster, and rewarded their faithful backers with handsome re-
turns.
Shareholders in a number of AmSouth's equity funds profited, as well.
The AmSouth Value Fund, for example, had a splendid year. All four of our Stra-
tegic Portfolios, whose managers shrewdly increased their allocation to the
Value Fund as an underlying component, also did well. The AmSouth Select Equity
Fund, which employs a "stable growth" style, produced a robust performance,
ranking the Fund among the top 9% of all domestic equity mutual funds during
the period. In contrast, for this period the Growth, Capital Growth and Mid Cap
Funds--with their emphasis on technology stocks--experienced negative returns
typical of the average mutual fund investing in the growth sector./3/
For all of the stock market's inconsistency over the last 12 months, the fixed-
income arena was a haven for bond investors. Conditions were virtually perfect.
Economic growth slowed dramatically, inflation remained benign, disillusioned
equity investors fled to bonds for a measure of relative security and stabili-
ty, and the Federal Reserve Board lowered short-term interest rates six times
through July 31, 2001. All these elements produced a recipe for historically
strong returns in nearly every type of fixed-income security, with the excep-
tion of money market instruments, which perform better when short-term rates
rise, not fall.
So, what now? Without a doubt, the last 12 months have been unusually turbulent
though not unprecedented, especially for equity investors who were spoiled by
uncommonly strong returns in the last half of the 1990s. Bond investors have
enjoyed the other side of these circumstances. Nevertheless, making money in
the financial markets requires investors to look forward.
With our eyes fixed on the horizon for the next six to 12 months, and beyond,
we see signs that conditions could be changing for the better. Despite the lag-
ging economy, worker productivity continues to be strong, indicating that gains
created by new technologies over the last few years truly might be enduring,
not transitory. In addition, corporate profits are not uniformly disappointing,
especially outside the technology sector. The yield curve has returned to a
positive slope, where longer bonds yield more than shorter securities.
Whichever way the markets move, the last 12 months have reaffirmed the wisdom
of using portfolio diversification to support your financial goals. We do this
by allocating your assets among both stocks and bonds, and by owning shares of
value equity funds as well as growth funds. While no investment strategy guar-
antees success, history has shown us that diversification can potentially re-
duce volatility, while producing positive price appreciation.
In the months and years ahead, we will remain committed to helping you achieve
your investment goals. We thank you for your past and future support.
Sincerely,
/s/ J David Huber
J. David Huber
Chairman
AmSouth Funds
Brian B. Sullivan
President, AmSouth Investment
Management Co., LLC
Chief Investment Officer, AmSouth Bank
Editor's note: This
message and the re-
ports that follow
were written prior
to the events of
September 11, 2001.
While it is far too
early to assess the
impact on the finan-
cial sector, we join
the nation in ex-
tending our sympa-
thies to those who
were most deeply af-
fected by the trage-
dies of that day.
/1/The Nasdaq Composite Index is a market capitalization price-only
index that tracks the performance of domestic common stocks traded on
the regular NASDAQ market as well as National Market System-traded
foreign common stocks and ADR's.
/2/The Standard & Poor's 500 Stock Index is an unmanaged index generally
representative of the U.S. stock market as a whole. The index does not
reflect the deduction of fees associated with a mutual fund, such as
investment management and fund accounting fees. Investors cannot
invest directly in an index, although they can invest in its
underlying securities.
/3/The AmSouth Select Equity Fund ranked 43 out of 514 funds in the
domestic equity funds category for the one-year period, but was not
ranked for the five- and 10-year periods. Lipper rankings are based on
total return and do not include the effect of a sales charge. All
rankings are as of 7/31/01.
Investments in the Funds are neither guaranteed by, nor obligations of, AmSouth
Bank or any other bank and are not insured by the FDIC or any other government
agency. Investment in mutual funds involves risk, including the possible loss
of principal. This material must be preceded or accompanied by a current pro-
spectus.
3
<PAGE>
AmSouth Value Fund
Portfolio Manager
Richard H. Calvert, CFA
Vice President
AmSouth Bank
AmSouth Investment Management
Company, LLC
Richard has been a portfolio
manager and analyst for more than
seven years. He is a member of
AmSouth Bank's value strategy group
and the asset allocation committee.
He holds a B.S. in economics.
PORTFOLIO MANAGERS' PERSPECTIVE
"The AmSouth Value Fund uses a 'value investing' aproach. Rather than pursue hot
stocks that are in high demand, we search for solid companies with good
fundamentals that are available at attractive prices. By adhering to this
investment approach through entire market cycles, we seek to achieve above
average long-term results with less volatility than the overall market."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the AmSouth Value Fund produced a to-
tal return of 21.10% (Class A Shares at NAV). In comparison, the S&P 500 Stock
Index produced a -14.32% return, while the Lipper Multi-Cap Value Funds Index
gained 14.03%.+
Q. What factors affected your performance?
A. However we look at it, the Fund enjoyed a spectacular year. We not only rode
the "value wave" to performance that far exceeded the negative return of the
S&P 500 Stock Index, but we outperformed our value benchmark, as well.
The speculative bubble that inflated prices in many technology and
telecommunica-
tions stocks damaged the overall market during the past year. At the same time,
the value sector performed admirably. Value investing prospered precisely be-
cause it does focus on fundamental valuations, as opposed to the false promise
of future profits that was floated by many technology companies.
The Fund profited from our energy holdings, several of our specialty chemical
stocks and selected business equipment names. In addition, some of the technol-
ogy stocks we own also did well.
From our perspective, a "value" stock does not have to be a low-growth company;
it just has to present us with good valuation. Some of the technology stocks we
bought during the period included Keane, Inc. (1.30% of net assets), Computer
Associates
International, Inc. (3.00%), and Cabletron Systems, Inc. (3.29%).++
As of July 31, 2001, the Fund's top five holdings were Cabletron Systems, Inc.
(3.29% of net assets), Washington Mutual, Inc. (3.23%), Marsh & McLennan Cos.,
Inc. (3.06%), Computer Associates International, Inc. (3.00%), and St. Paul
Cos., Inc. (2.77%).++
Q. What is your outlook for the next six to 12 months?
A. We do not try to guess which way the market is going to go. We do continue
to believe that the next 12 months will be much like the last 12, in that it's
going to be a stock picker's market. We produced above-average returns in the
last year and we hope to continue our success going forward.
+ The Lipper Multi-Cap Value Funds Index consists of managed mutual funds
that, by portfolio practice, invest in a variety of market capitalization
ranges, without concentrating more than 75% of their equity assets in any
one market capitalization range over an extended period of time.
++The Fund's portfolio composition is subject to change.
4
<PAGE>
AmSouth Value Fund
Value of a $10,000 Investment
[CHART]
AmSouth Value AmSouth Value AmSouth Value
Fund Fund Fund S&P 500
(Class A Shares)* (Class B Shares) (Trust Shares) Stock Index
7/31/1991 $ 9,451 $10,000 $10,000 $10,000
8/31/1991 9,476 10,021 10,027 10,235
9/30/1991 9,336 9,863 9,878 10,067
10/31/1991 9,424 9,947 9,971 10,202
11/30/1991 8,976 9,472 9,498 9,790
12/31/1991 9,889 10,422 10,463 10,909
1/31/1992 10,000 10,528 10,581 10,706
2/29/1992 10,207 10,739 10,799 10,843
3/31/1992 9,981 10,496 10,561 10,630
4/30/1992 10,385 10,908 10,988 10,940
5/31/1992 10,455 10,971 11,062 10,999
6/30/1992 10,247 10,750 10,842 10,839
7/31/1992 10,673 11,183 11,293 11,276
8/31/1992 10,289 10,771 10,887 11,048
9/30/1992 10,446 10,929 11,053 11,176
10/31/1992 10,490 10,961 11,099 11,216
11/30/1992 10,858 11,341 11,489 11,594
12/31/1992 10,910 11,383 11,544 11,746
1/31/1993 11,201 11,679 11,851 11,831
2/28/1993 11,362 11,837 12,022 11,991
3/31/1993 11,741 12,218 12,423 12,249
4/30/1993 11,777 12,249 12,461 11,949
5/31/1993 12,130 12,608 12,834 12,271
6/30/1993 12,101 12,566 12,804 12,312
7/31/1993 12,146 12,598 12,851 12,254
8/31/1993 12,606 13,073 13,339 12,721
9/30/1993 12,433 12,883 13,155 12,627
10/31/1993 12,643 13,083 13,377 12,883
11/30/1993 12,564 12,988 13,293 12,762
12/31/1993 12,916 13,347 13,666 12,919
1/31/1994 13,501 13,939 14,285 13,352
2/28/1994 13,180 13,601 13,945 12,991
3/31/1994 12,556 12,946 13,286 12,426
4/30/1994 12,625 12,999 13,358 12,588
5/31/1994 12,919 13,295 13,670 12,793
6/30/1994 12,746 13,105 13,487 12,477
7/31/1994 13,107 13,464 13,868 12,890
8/31/1994 13,509 13,865 14,294 13,414
9/30/1994 13,224 13,559 13,992 13,091
10/31/1994 13,376 13,706 14,153 13,391
11/30/1994 12,800 13,105 13,543 12,900
12/31/1994 12,964 13,263 13,717 13,088
1/31/1995 13,208 13,506 13,975 13,428
2/28/1995 13,772 14,065 14,572 13,949
3/31/1995 14,179 14,467 15,004 14,362
4/30/1995 14,718 15,005 15,573 14,780
5/31/1995 15,127 15,417 16,006 15,364
6/30/1995 15,150 15,428 16,031 15,725
7/31/1995 15,631 15,903 16,539 16,248
8/31/1995 15,661 15,913 16,572 16,292
9/30/1995 15,985 16,230 16,914 16,975
10/31/1995 15,698 15,924 16,611 16,916
11/30/1995 16,321 16,547 17,270 17,660
12/31/1995 16,515 16,727 17,475 17,987
1/31/1996 17,009 17,212 17,998 18,605
2/29/1996 17,223 17,413 18,224 18,784
3/31/1996 17,671 17,856 18,698 18,964
4/30/1996 18,222 18,395 19,281 19,243
5/31/1996 18,425 18,585 19,496 19,739
6/30/1996 18,264 18,405 19,326 19,820
7/31/1996 17,362 17,487 18,372 18,938
8/31/1996 17,957 18,068 19,001 19,340
9/30/1996 18,353 18,458 19,420 20,427
10/31/1996 18,280 18,363 19,343 20,987
11/30/1996 19,355 19,430 20,481 22,579
12/31/1996 19,114 19,176 20,227 22,137
1/31/1997 19,848 19,894 21,002 23,512
2/28/1997 20,505 20,539 21,698 23,702
3/31/1997 20,086 20,095 21,255 22,716
4/30/1997 20,566 20,560 21,762 24,072
5/31/1997 22,086 22,059 23,371 25,550
6/30/1997 22,919 22,872 24,252 26,690
7/31/1997 24,715 24,646 26,153 28,809
8/31/1997 23,853 23,770 25,241 27,207
9/30/1997 25,339 25,238 26,818 28,697
10/31/1997 24,036 23,945 25,445 27,739
11/30/1997 24,818 24,703 26,278 29,023
12/31/1997 25,288 25,157 26,746 29,522
1/31/1998 25,368 25,225 26,847 29,850
2/28/1998 27,188 27,013 28,768 32,003
3/31/1998 28,641 28,434 30,314 33,642
4/30/1998 28,379 28,170 30,055 33,980
5/31/1998 28,291 28,056 29,968 33,396
6/30/1998 28,591 28,336 30,280 34,752
7/31/1998 27,765 27,499 29,411 34,382
8/31/1998 24,050 23,808 25,488 29,411
9/30/1998 25,568 25,287 27,093 31,295
10/31/1998 27,745 27,429 29,409 33,841
11/30/1998 29,080 28,725 30,832 35,892
12/31/1998 29,742 29,357 31,595 37,960
1/31/1999 29,769 29,367 31,630 39,548
2/28/1999 29,115 28,704 30,941 38,318
3/31/1999 29,896 29,457 31,778 39,852
4/30/1999 32,124 31,639 34,152 41,395
5/31/1999 32,210 31,701 34,248 40,418
6/30/1999 32,943 32,393 35,035 42,661
7/31/1999 31,907 31,358 33,949 41,329
8/31/1999 30,873 30,315 32,843 41,124
9/30/1999 29,295 28,751 31,186 39,997
10/31/1999 30,589 30,000 32,555 42,528
11/30/1999 30,295 29,689 32,249 43,393
12/31/1999 30,891 30,275 32,864 45,949
1/31/2000 29,116 28,506 30,977 43,640
2/29/2000 27,136 26,551 28,877 42,814
3/31/2000 30,472 29,805 32,423 47,003
4/30/2000 30,113 29,437 32,057 45,588
5/31/2000 30,621 29,903 32,586 44,653
6/30/2000 28,831 28,138 30,699 45,754
7/31/2000 29,295 28,580 31,194 45,038
8/31/2000 31,365 30,578 33,404 47,836
9/30/2000 31,492 30,669 33,527 45,311
10/31/2000 32,237 31,377 34,325 45,119
11/30/2000 31,101 30,257 33,082 41,562
12/31/2000 32,460 31,556 34,552 41,765
1/31/2001 34,336 33,361 36,554 43,247
2/28/2001 33,669 32,687 35,829 39,303
3/31/2001 32,659 31,699 34,775 36,814
4/30/2001 34,959 33,897 37,213 39,674
5/31/2001 35,986 34,868 38,313 39,940
6/30/2001 35,717 34,595 38,032 38,968
7/31/2001 35,477 34,323 37,777 38,585
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
Average Annual Total Return
As of Inception 1 5 10
July 31, 2001 Date Year Year Year
-----------------------------------------------------------------
Class A Shares* 12/1/88 14.42% 14.06% 13.50%
-----------------------------------------------------------------
Class B Shares** 9/3/97/1/ 15.09% 14.20% 13.12%
-----------------------------------------------------------------
Trust Shares 9/2/97/1/ 21.10% 15.51% 14.21%
-----------------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/91 to 7/31/01 versus a similar investment in the Fund's benchmark,
and represents the reinvestment of dividends and capital gains in the Fund.
The performance of the AmSouth Value Fund is measured against the S&P 500
Stock Index, an unmanaged index generally representative of the U.S. stock
market as a whole. The index does not reflect the deduction of fees associ-
ated with a mutual fund, such as investment management fees. The Fund's per-
formance does reflect the deduction of fees for these value-added services.
Investors cannot invest directly in an index, although they can invest in its
underlying securities. During the period shown, the Advisor waived and/or re-
imbursed fees for various expenses. Had these waivers and/or reimbursements
not been in effect, performance quoted would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 9/3/97 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and
net asset value will fluctuate, so that an investor's shares, when redeemed,
may be worth more or less than the original cost.
5
<PAGE>
AmSouth Growth Fund
Portfolio Manager
Dennis A. Johnson, CFA
President and Chief Investment
Officer,
Peachtree Asset Management (sub-
advisor)
Dennis has a B.S. in economics and
an M.S. in finance. His 20 years of
investment experience are backed by
an investment team with an average
of 11 years of experience.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Growth Fund uses a well defined and rigorously proven investment
process to select domestic large capitalization growth stocks. We buy companies
we feel can sustain above average growth in operating earnings per share. We
sell a stock when we feel it is overvalued or when it experiences sustained
deterioration in its earnings or fundamentals."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund produced a total return of
-32.44% (Class A Shares at NAV). In comparison, the S&P 500 Stock Index pro-
duced a -14.32% return.
Q. What factors affected your performance?
A. The past year was difficult for the market in general, and especially tough
on growth stocks. The Fund's performance was hurt by three sectors in particu-
lar: consumer cyclicals, financials, and technology. Each area had a signifi-
cant, negative impact on our portfolio, which offset the success we enjoyed
from our health-care, utility and consumer staples holdings.
We are, however, long-term investors with investment horizons that stretch out
three to five years, and longer. With this in mind, we have viewed selected de-
clines in the market as excellent buying opportunities; we continue to seek out
attractive companies in industries that have been beaten down in recent months.
Specifically, we think technology continues to be an area that remains high on
our list. We are positioning the technology portion of the portfolio to capi-
talize on what we anticipate to be the next move.
It is also important to point out that our investments in technology, as well
as in other sectors, are extremely diversified. We have exposure to semiconduc-
tor, software, network and Internet-related companies. The same broad diversi-
fication is evident in our financial holdings, which include brokerage compa-
nies, regional banks, money center banks and credit card companies.
As of July 31, 2001, the Fund's top five holdings were MBNA Corp. (3.30% of net
assets), Boeing Co. (3.23%), AOL-Time Warner, Inc. (3.20%), Capital One Finan-
cial Corp. (3.10%), and Lehman Brothers Holdings, Inc. (2.65%).++
Q. What is your outlook for the next six to 12 months?
A. Going forward, we believe the market will do better than it did over the
last 12 months. Obviously, there is a great deal of pessimism among many in-
vestors related to the economic environment and corporate profits; these con-
cerns are no surprise to anyone, in light of the Fed's tightening throughout
2000. However, at some point in the near future, we will look back at this par-
ticular juncture and realize that circumstances were not as dire as stock
prices are suggesting. We anticipate that the economic backdrop should improve;
and the liquidity that is being provided by the Fed could help the domestic
economy. This should be positive for stocks in general, and we believe that the
areas of the market on which we are focusing have the opportunity to do well.
++The Fund's portfolio composition is subject to change.
6
<PAGE>
AmSouth Growth Fund
Value of a $10,000 Investment
[CHART]
AmSouth Growth AmSouth Growth Fun AmSouth Growth Fund
Fund Fund Fund S&P 500
(Class A Shares)* (Class B Shares)** (Trust Shares) Stock Index
8/3/1997 $ 9,452 $10,000 $10,000 $10,000
8/31/1997 9,026 9,540 9,550 9,440
9/30/1997 9,499 10,040 10,050 9,957
10/31/1997 9,093 9,600 9,620 9,624
11/30/1997 9,338 9,860 9,890 10,070
12/31/1997 9,546 10,070 10,110 10,242
1/31/1998 9,584 10,110 10,150 10,356
2/28/1998 10,425 10,980 11,040 11,103
3/31/1998 10,888 11,470 11,540 11,671
4/30/1998 10,851 11,420 11,500 11,789
5/31/1998 10,595 11,140 11,230 11,586
6/30/1998 11,115 11,690 11,790 12,057
7/31/1998 10,983 11,540 11,650 11,928
8/31/1998 8,885 9,330 9,430 10,206
9/30/1998 9,820 10,300 10,410 10,857
10/31/1998 10,709 11,230 11,360 11,741
11/30/1998 11,399 11,950 12,100 12,453
12/31/1998 12,802 13,404 13,594 13,170
1/31/1999 13,497 14,120 14,330 13,720
2/28/1999 12,678 13,263 13,463 13,294
3/31/1999 13,135 13,727 13,947 13,826
4/30/1999 13,040 13,626 13,856 14,361
5/31/1999 12,525 13,071 13,302 14,022
6/30/1999 13,754 14,351 14,622 14,800
7/31/1999 13,373 13,958 14,219 14,338
8/31/1999 13,249 13,827 14,098 14,267
9/30/1999 13,116 13,676 13,957 13,876
10/31/1999 14,240 14,845 15,156 14,754
11/30/1999 14,640 15,248 15,579 15,057
12/31/1999 15,162 15,780 16,131 15,941
1/31/2000 14,500 15,079 15,431 15,140
2/29/2000 15,132 15,728 16,110 14,853
3/31/2000 16,604 17,244 17,677 16,306
4/30/2000 16,120 16,742 17,176 15,816
5/31/2000 14,944 15,508 15,922 15,491
6/30/2000 15,270 15,832 16,267 15,873
7/31/2000 14,747 15,278 15,713 15,625
8/31/2000 16,149 16,721 17,207 16,596
9/30/2000 15,201 15,728 16,204 15,719
10/31/2000 15,043 15,561 16,037 15,653
11/30/2000 12,396 12,810 13,206 14,419
12/31/2000 12,320 12,731 13,150 14,489
1/31/2001 13,030 13,149 13,899 15,004
2/28/2001 10,761 11,109 11,491 13,637
3/31/2001 9,481 9,785 10,127 12,773
4/30/2001 10,926 11,258 11,665 13,765
5/31/2001 10,584 10,893 11,290 13,857
6/30/2001 10,571 10,879 11,277 13,520
7/31/2001 9,962 10,017 10,635 13,388
Average Annual Total Return
As of Inception 1 Since
July 31, 2001 Date Year Inception
--------------------------------------------------------
Class A Shares* 8/3/97 -36.16% -0.09%
--------------------------------------------------------
Class B Shares** 9/3/97/1/ -35.54% 0.04%
--------------------------------------------------------
Trust Shares 9/2/97/1/ -32.32% 1.56%
--------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 8/3/97 to 7/31/01 in the indicated share class, versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
The performance of the AmSouth Growth Fund is measured against the S&P 500
Stock Index, an unmanaged index generally representative of the U.S. stock
market as a whole. The index does not reflect the deduction of fees associ-
ated with a mutual fund, such as investment management fees. The Fund's per-
formance does reflect the deduction of fees for these value-added services.
Investors cannot invest directly in an index, although they can invest in
its underlying securities. During the period shown, the Advisor waived
and/or reimbursed fees for various expenses. Had these waivers and/or reim-
bursements not been in effect, performance quoted would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 9/3/97 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
7
<PAGE>
AmSouth Capital Growth Fund
Portfolio Manager
Charles E. Winger, Sr., CFA
Senior Vice President
AmSouth Bank
AmSouth Investment Management
Company, LLC
Charley has more than 30 years of
investment management experience.
He earned a Chartered Financial
Analyst designation and holds his
M.B.A. and a B.A. in psychology
from the University of Tennessee.
PORTFOLIO MANAGER'S PERSPECTIVE
"As a growth-oriented fund, the Capital Growth Fund focuses on industry leaders
with high earnings per share. We generally look for annual earnings growth of
15% or higher. After identifying strong themes, such as technology or health
care, we select companies that have financial strength, good return on equity,
reasonable debt-to-equity ratios and strong revenue growth. We apply sell
discipline through price targets and downside alerts."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund's total return was -21.27%
(Class A Shares at NAV). In comparison, the S&P 500 Stock Index produced a
-14.32% return, and the Lipper Growth Funds Index returned -22.92%.+
Q. What factors affected your performance?
A. Several factors affected our performance: On one side was the disaster in
technology and telecommunication stocks, and on the other side, most sectors--
apart from technology and telecommunications--produced a modestly positive re-
turn. Not surprisingly, what hurt the Fund was our weighting in technology. At
the end of the period, we were overweighted in technoloy;
this reflected our growth style of investing and our belief that select tech-
nology issues offer attractive, long-term potential.
On the positive side, the Fund profited from overweightings in health-care,
capital industrials and consumer discretionary (specialty retail) names. Those
three areas did well for us during the period.
As of July 31, 2001, the Fund's top five holdings were Pfizer, Inc. (2.90% of
net assets), Forest Laboratories, Inc. (2.88%), Cardinal Health, Inc. (2.81%),
Citigroup, Inc. (2.68%) and Stryker Corp. (2.65%).++
Q. What is your outlook for the next six to 12 months?
A. We are optimistic. The conditions we see in the stock market today are com-
pletely opposite to what we had 12 months ago. First, instead of higher inter-
est rates in our faces, we have significantly lower rates, which should stimu-
late the economy and lead to higher stock prices. Second, a year ago, a tax cut
was only a possibility, and now we have it. And third, energy prices are much
lower than they were in the summer of 2000; the reduction in energy prices is
like putting money in the consumer's pocket.
The weakness in the economy has been confined pretty much to the manufacturing
sector, specifically technology. The consumer has been holding up well, contin-
uing to spend. We believe consumer spending will remain strong, particularly
with the tax cut proceeds now available for spending. By year-end, we expect to
see firm evidence of an economic recovery, though the technology sector might
take another six months to get back on track.
+ The Lipper Growth Funds Index consists of managed mutual funds that nor-
mally invest in companies with long-term earnings expected to grow signifi-
cantly faster than the earnings of the stocks represented in the major un-
managed stock indices.
++The Fund's portfolio composition is subject to change.
8
<PAGE>
AmSouth Capital Growth Fund
Value of a $10,000 Investment
[CHART]
AmSouth AmSouth AmSouth
Capital Capital Capital
Growth Fund Growth Fund Growth Fund S&P 500
(Class A Shares)* (Class B Shares) (Trust Shares) Stock Index
7/31/1991 $ 9,447 $10,000 $10,000 $10,000
8/31/1991 9,652 10,218 10,217 10,235
9/30/1991 9,352 9,891 9,900 10,067
10/31/1991 9,558 10,091 10,117 10,202
11/30/1991 9,226 9,746 9,766 9,790
12/31/1991 10,221 10,780 10,819 10,909
1/31/1992 9,953 10,490 10,535 10,706
2/29/1992 10,000 10,526 10,585 10,843
3/31/1992 9,795 10,309 10,368 10,630
4/30/1992 9,858 10,363 10,435 10,940
5/31/1992 9,921 10,417 10,502 10,999
6/30/1992 9,526 10,000 10,084 10,839
7/31/1992 9,810 10,290 10,385 11,276
8/31/1992 9,652 10,109 10,217 11,048
9/30/1992 9,968 10,436 10,552 11,176
10/31/1992 10,190 10,653 10,786 11,216
11/30/1992 10,616 11,089 11,237 11,594
12/31/1992 10,885 11,361 11,522 11,746
1/31/1993 11,074 11,561 11,722 11,831
2/28/1993 11,011 11,488 11,656 11,991
3/31/1993 11,327 11,797 11,990 12,249
4/30/1993 10,821 11,270 11,455 11,949
5/31/1993 11,027 11,470 11,672 12,271
6/30/1993 10,964 11,397 11,605 12,312
7/31/1993 11,011 11,434 11,656 12,254
8/31/1993 11,248 11,670 11,906 12,721
9/30/1993 11,311 11,724 11,973 12,627
10/31/1993 11,185 11,579 11,839 12,883
11/30/1993 11,090 11,470 11,739 12,762
12/31/1993 11,264 11,652 11,923 12,919
1/31/1994 11,706 12,087 12,391 13,352
2/28/1994 11,548 11,924 12,224 12,991
3/31/1994 11,058 11,397 11,706 12,426
4/30/1994 10,979 11,307 11,622 12,588
5/31/1994 11,043 11,361 11,689 12,793
6/30/1994 10,695 10,998 11,321 12,477
7/31/1994 10,964 11,270 11,605 12,890
8/31/1994 11,469 11,779 12,140 13,414
9/30/1994 11,248 11,543 11,906 13,091
10/31/1994 11,374 11,670 12,040 13,391
11/30/1994 10,995 11,270 11,639 12,900
12/31/1994 11,216 11,488 11,873 13,088
1/31/1995 11,517 11,779 12,191 13,428
2/28/1995 11,959 12,214 12,659 13,949
3/31/1995 12,243 12,505 12,960 14,362
4/30/1995 12,227 12,468 12,943 14,780
5/31/1995 12,670 12,922 13,411 15,364
6/30/1995 12,844 13,085 13,595 15,725
7/31/1995 13,491 13,739 14,281 16,248
8/31/1995 13,365 13,593 14,147 16,292
9/30/1995 13,870 14,102 14,682 16,975
10/31/1995 13,776 13,993 14,582 16,916
11/30/1995 14,534 14,737 15,385 17,660
12/31/1995 14,629 14,828 15,485 17,987
1/31/1996 15,197 15,390 16,087 18,605
2/29/1996 15,577 15,771 16,488 18,784
3/31/1996 15,798 15,971 16,722 18,964
4/30/1996 16,224 16,388 17,174 19,243
5/31/1996 16,509 16,661 17,475 19,739
6/30/1996 16,493 16,642 17,458 19,820
7/31/1996 15,482 15,608 16,388 18,938
8/31/1996 15,782 15,898 16,706 19,340
9/30/1996 16,651 16,751 17,625 20,427
10/31/1996 17,362 17,459 18,378 20,987
11/30/1996 18,389 18,475 19,465 22,579
12/31/1996 17,883 17,949 18,930 22,137
1/31/1997 18,847 18,893 19,950 23,512
2/28/1997 18,562 18,603 19,649 23,702
3/31/1997 17,705 17,731 18,742 22,716
4/30/1997 18,828 18,838 19,930 24,072
5/31/1997 19,998 19,982 21,168 25,550
6/30/1997 20,782 20,762 21,998 26,690
7/31/1997 22,570 22,523 23,891 28,809
8/31/1997 21,447 21,379 22,702 27,207
9/30/1997 22,575 22,486 23,897 28,697
10/31/1997 22,084 21,978 23,377 27,739
11/30/1997 22,734 22,613 24,064 29,023
12/31/1997 23,389 23,249 24,547 29,522
1/31/1998 23,517 23,358 24,683 29,850
2/28/1998 25,363 24,936 26,637 32,003
3/31/1998 26,550 26,098 27,899 33,642
4/30/1998 26,459 25,989 27,802 33,980
5/31/1998 25,418 24,955 26,719 33,396
6/30/1998 26,715 26,207 28,079 34,752
7/31/1998 26,952 26,407 28,330 34,382
8/31/1998 23,371 22,886 24,576 29,411
9/30/1998 25,186 24,652 26,500 31,295
10/31/1998 26,559 25,979 27,934 33,841
11/30/1998 27,840 27,215 29,291 35,892
12/31/1998 30,887 30,162 32,502 37,960
1/31/1999 32,453 31,701 34,163 39,548
2/28/1999 31,583 30,834 33,240 38,318
3/31/1999 32,496 31,701 34,209 39,852
4/30/1999 32,279 31,462 34,001 41,395
5/31/1999 31,126 30,335 32,802 40,418
6/30/1999 33,540 32,676 35,339 42,661
7/31/1999 32,931 32,069 34,693 41,329
8/31/1999 32,431 31,571 34,186 41,124
9/30/1999 31,806 30,948 33,547 39,997
10/31/1999 33,271 32,342 35,077 42,528
11/30/1999 34,581 33,603 36,466 43,393
12/31/1999 37,637 36,530 39,681 45,949
1/31/2000 36,275 35,193 38,263 43,640
2/29/2000 36,248 35,167 38,263 42,814
3/31/2000 39,863 38,654 42,078 47,003
4/30/2000 38,841 37,658 41,021 45,588
5/31/2000 37,768 36,583 39,881 44,653
6/30/2000 39,287 38,025 41,466 45,754
7/31/2000 39,208 37,920 41,410 45,038
8/31/2000 41,661 40,298 44,015 47,836
9/30/2000 41,096 39,731 43,444 45,311
10/31/2000 40,800 39,407 43,101 45,119
11/30/2000 38,243 36,926 40,443 41,562
12/31/2000 37,378 36,058 39,524 41,765
1/31/2001 37,406 36,087 39,554 43,247
2/28/2001 33,285 32,090 35,206 39,303
3/31/2001 29,476 28,407 31,190 36,814
4/30/2001 32,574 31,376 34,451 39,674
5/31/2001 32,603 31,376 34,481 39,940
6/30/2001 31,693 30,491 33,545 38,968
7/31/2001 30,869 29,663 32,670 38,585
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longe apply.
-------------------------------------------------------------------------------
-
Average Annual Total Return
-------------------------------------------------------------------------------
-
As of Inception 1 5 10
July 31, 2001 Date Year Year Year
-----------------------------------------------------------------
Class A Shares* 4/1/96/1/ -25.59% 13.51% 11.93%
-----------------------------------------------------------------
Class B Shares** 2/5/98/2/ -25.37% 13.46% 11.49%
-----------------------------------------------------------------
Trust Shares 10/3/97/2/ -21.11% 14.80% 12.57%
-----------------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/91 to 7/31/01 in the indicated share class versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
Performance of the AmSouth Capital Growth Fund is measured against the S&P
500 Stock Index, an unmanaged index generally representative of the U.S.
stock market as a whole. The index does not reflect the deduction of fees
associated with a mutual fund, such as investment management fees. The
Fund's performance does reflect the deduction of fees for these value-added
services. Investors cannot invest directly in an index, although they can
invest in its underlying securities. During the period shown, the Advisor
waived and/or reimbursed fees for various expenses. Had these waivers and/or
reimbursements not been in effect, performance quoted would have been lower.
The quoted returns reflect the performance from 4/1/96 to 3/12/00 of the ISG
Capital Growth Fund, an open-end investment company that was the predecessor
fund to the AmSouth Capital Growth Fund.
/1/The ISG Capital Growth Fund commenced operations on 4/1/96, through a
transfer of assets from certain collective trust fund ("commingled") ac-
counts managed by First American National Bank, using substantially the
same investment objective, policies and methodologies as the Fund. The
quoted performance of the Fund includes performance of the commingled ac-
counts for periods dating back to 7/31/91, and prior to the mutual fund's
commencement of operations, as adjusted to reflect the expenses associ-
ated with the Fund. The commingled accounts were not registered with the
Securities and Exchange Commission and, therefore, were not subject to
the investment restrictions imposed by law on registered mutual funds. If
the commingled accounts had been registered, the commingled accounts'
performance may have been adversely affected.
/2/Performance for the Class B and Trust Shares, which commenced operations
on 2/5/98 and 10/3/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date.
The historical performance for the Class B Shares has been adjusted to
reflect the higher 12b-1 fees and the contingent deferred sales charge
(CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
9
<PAGE>
AmSouth Large Cap Fund
Portfolio Manager
Ronald E. Lindquist
Senior Vice President
AmSouth Bank
AmSouth Investment Management
Company, LLC
Ron has more than 30 years of
investment management experience.
He has a master's degree in
management from Florida
International University and a B.S.
in finance from Florida State
University.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Large Cap Fund is managed in a classic large-cap growth style. Our
goal is to outperform the S&P 500 over multiple market cycles. We look for
industry leaders that have relatively predictable 3-to-5 year earnings streams.
We select large-company stocks with superior earnings rates and appropriate
price/earnings ratios. We sell when a stock's relative price/earnings levels are
well in excess of the market or when a significant earnings stream deterioration
is in forecast."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund's total return was -11.72%
(Class A Shares at NAV). In comparison, the S&P's 500 Stock Index produced a
-14.32% return.
Q. What factors affected your performance?
A. This was a very challenging period for the market as a whole, and for large-
cap growth stocks in particular. Nonetheless, although we are classic growth
managers, and despite the fact that we bought more technology shares during the
period--when the technology sector was languishing--we were able to preserve
shareholder value, relative to our benchmark.
Our relatively good performance was due partly to good fortune and partly to
judicious stock selection in the sectors we favored. For example, we benefited
from our significant holdings among consumer discretionary and consumer staple
stocks. We did well with Philip Morris Cos., Inc. (0.74% of net assets), along
with health care names such as Johnson & Johnson (4.39%), Abbott Laboratories
(2.61%), and American Home Products Corp. (1.96%).++
During the last six months, we sold our modest position in Heinz and added some
new holdings to the portfolio: Citigroup, Inc. (0.41%), AFLAC, Inc. (0.48%),
Bristol-Myers Squibb Co. (1.15%), and General Dynamics Corp. (0.98%), and with
these changes, the Fund now owns 69 stocks.++
As of July 31, 2001, the Fund's top five holdings were Johnson & Johnson (4.39%
of net assets), IBM Corp. (3.41%), Merck & Co., Inc. (3.31%), Home Depot, Inc.
(2.86%), and Schering-Plough Corp. (2.85%).++
Q. What is your outlook for the next six to 12 months?
A. Looking forward, we believe it's going to be some time before the gross do-
mestic product growth rate perks up to the level we experienced the last few
years. However, on the positive side, we do not expect interest rates or in-
flation to be a problem any time soon. From our point of view, the overall en-
vironment looks pretty good, except for the lack of "visibility" of earnings,
especially in the technology sector. Investors' lack of confidence in future
earnings could continue to be a drag on stocks for several more calendar quar-
ters. When investor confidence improves and the market does recover, our sig-
nificant technology exposure should greatly benefit our investors, but the wait
seems just maddening.
++The Fund's portfolio composition is subject to change.
10
<PAGE>
AmSouth Large Cap Fund
Value of a $10,000 Investment
[CHART]
AmSouth AmSouth AmSouth
Large Cap Large Cap Large Cap
Fund (Class Fund (Class Fund (Trust S&P 500
A Shares)* B Shares) Shares) Stock Index
8/3/1992 $ 9,452 $10,000 $10,000 $10,000
8/31/1992 9,329 9,862 9,870 9,795
9/30/1992 9,440 9,965 9,988 9,910
10/31/1992 9,526 10,046 10,078 9,945
11/30/1992 9,924 10,461 10,500 10,283
12/31/1992 9,980 10,507 10,559 10,410
1/31/1993 9,961 10,484 10,539 10,497
2/28/1993 10,057 10,576 10,640 10,640
3/31/1993 10,129 10,645 10,716 10,864
4/30/1993 9,746 10,230 10,311 10,601
5/31/1993 10,062 10,553 10,646 10,885
6/30/1993 9,881 10,357 10,454 10,917
7/31/1993 9,823 10,288 10,393 10,873
8/31/1993 10,179 10,645 10,769 11,286
9/30/1993 9,943 10,392 10,519 11,199
10/31/1993 10,376 10,841 10,978 11,431
11/30/1993 10,415 10,864 11,019 11,322
12/31/1993 10,539 10,991 11,150 11,459
1/31/1994 10,704 11,152 11,325 11,848
2/28/1994 10,558 10,991 11,171 11,527
3/31/1994 10,135 10,541 10,723 11,024
4/30/1994 10,174 10,576 10,764 11,165
5/31/1994 10,262 10,657 10,857 11,349
6/30/1994 9,977 10,346 10,555 11,071
7/31/1994 10,124 10,495 10,711 11,434
8/31/1994 10,586 10,968 11,200 11,903
9/30/1994 10,379 10,737 10,981 11,612
10/31/1994 10,764 11,129 11,388 11,873
11/30/1994 10,527 10,876 11,137 11,440
12/31/1994 10,726 11,071 11,348 11,610
1/31/1995 11,047 11,394 11,687 11,911
2/28/1995 11,427 11,774 12,090 12,375
3/31/1995 11,714 12,062 12,393 12,740
4/30/1995 12,075 12,431 12,776 13,116
5/31/1995 12,387 12,742 13,106 13,640
6/30/1995 12,661 13,007 13,396 13,957
7/31/1995 13,126 13,479 13,887 14,419
8/31/1995 12,964 13,295 13,716 14,456
9/30/1995 13,561 13,894 14,347 15,066
10/31/1995 13,854 14,182 14,657 15,012
11/30/1995 14,350 14,689 15,182 15,671
12/31/1995 14,479 14,804 15,319 15,973
1/31/1996 15,091 15,415 15,966 16,516
2/29/1996 15,280 15,599 16,167 16,670
3/31/1996 15,024 15,323 15,896 16,830
4/30/1996 15,236 15,530 16,120 17,078
5/31/1996 15,564 15,853 16,466 17,519
6/30/1996 15,562 15,829 16,465 17,585
7/31/1996 14,894 15,138 15,758 16,808
8/31/1996 15,138 15,369 16,016 17,163
9/30/1996 16,137 16,371 17,073 18,130
10/31/1996 16,201 16,429 17,140 18,629
11/30/1996 17,475 17,707 18,489 20,037
12/31/1996 17,031 17,235 18,019 19,640
1/31/1997 18,119 18,329 19,170 20,867
2/28/1997 18,152 18,341 19,205 21,031
3/31/1997 17,498 17,673 18,513 20,167
4/30/1997 18,752 18,917 19,839 21,370
5/31/1997 19,842 20,012 20,993 22,672
6/30/1997 20,663 20,818 21,861 23,689
7/31/1997 22,377 22,523 23,675 25,573
8/31/1997 21,220 21,348 22,451 24,140
9/30/1997 22,166 22,281 23,451 25,461
10/31/1997 21,520 21,613 22,769 24,611
11/30/1997 22,811 22,903 24,134 25,750
12/31/1997 23,150 23,226 24,493 26,193
1/31/1998 23,767 23,825 25,146 26,482
2/28/1998 25,366 25,415 26,837 28,392
3/31/1998 26,087 26,094 27,600 29,847
4/30/1998 26,297 26,290 27,822 30,147
5/31/1998 25,910 25,887 27,413 29,629
6/30/1998 27,185 27,143 28,761 30,832
7/31/1998 27,118 27,051 28,691 30,504
8/31/1998 23,927 23,848 25,315 26,100
9/30/1998 25,568 25,472 27,051 27,765
10/31/1998 27,771 27,638 29,381 30,024
11/30/1998 29,607 29,447 31,324 31,845
12/31/1998 31,917 31,731 33,758 33,678
1/31/1999 33,470 33,252 35,401 35,086
2/28/1999 32,265 32,042 34,126 33,996
3/31/1999 32,806 32,549 34,697 35,357
4/30/1999 32,620 32,342 34,501 36,725
5/31/1999 32,076 31,777 33,925 35,858
6/30/1999 34,328 33,978 36,307 37,848
7/31/1999 33,771 33,402 35,718 36,666
8/31/1999 33,748 33,356 35,694 36,485
9/30/1999 32,994 32,584 34,895 35,485
10/31/1999 34,269 33,828 36,257 37,730
11/30/1999 36,112 35,614 38,194 38,506
12/31/1999 37,933 37,373 40,118 40,765
1/31/2000 36,714 36,147 38,829 38,716
2/29/2000 35,712 35,137 37,784 37,984
3/31/2000 38,305 37,656 40,518 41,699
4/30/2000 38,576 37,898 40,804 40,445
5/31/2000 38,305 37,602 40,518 39,615
6/30/2000 39,646 38,895 41,951 40,592
7/31/2000 38,102 37,359 40,317 39,957
8/31/2000 39,708 38,916 42,031 42,439
9/30/2000 38,328 37,527 40,571 40,199
10/31/2000 38,932 38,100 41,210 40,029
11/30/2000 37,293 36,468 39,491 36,873
12/31/2000 37,092 36,253 39,279 37,053
1/31/2001 37,647 36,775 39,866 38,368
2/28/2001 34,904 34,071 36,981 34,873
3/31/2001 32,384 31,589 34,299 32,665
4/30/2001 34,429 33,565 36,463 35,200
5/31/2001 34,920 34,024 36,999 35,436
6/30/2001 33,462 32,569 35,456 34,575
7/31/2001 33,636 32,727 35,641 34,236
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
Average Annual Total Return
As of Inception 1 5 Since
July 31, 2001 Date Year Year Inception
-----------------------------------------------------------------
Class A Shares* 8/3/92 -16.58% 16.37% 14.43%
-----------------------------------------------------------------
Class B Shares** 12/15/98/1/ -16.13% 16.46% 14.09%
-----------------------------------------------------------------
Trust Shares 12/14/98/1/ -11.60% 17.73% 15.17%
-----------------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 8/3/92 to 7/31/91 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Large Cap Fund is measured against the S&P
500 Stock Index, an unmanaged index generally representative of the U.S.
stock market as a whole. The index does not reflect the deduction of fees
associated with a mutual fund, such as investment management fees. The
Fund's performance does reflect the deduction of fees for these value-added
services. Investors cannot invest directly in an index, although they can
invest in its underlying securities. During the period shown, the Advisor
waived and/or reimbursed fees for various expenses. Had these waivers and/or
reimbursements not been in effect, performance quoted would have been lower.
The quoted returns reflect the performance from 8/3/92 to 12/13/98 of the DG
Equity Fund and from 12/14/98 to 3/12/00 of the ISG Large Cap Equity Fund,
which were open-end investment companies that were predecessor funds to the
AmSouth Large Cap Fund.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 12/15/98 and 12/14/98, respectively, are based on the historical per-
formance of the Class A Shares (without sales charge) prior to that date.
The historical performance for the Class B Shares has been adjusted to
reflect the higher 12b-1 fees and the contingent deferred sales charge
(CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
11
<PAGE>
AmSouth Mid Cap Fund
Portfolio Managers
Van Schreiber, Chief Portfolio
Manager
Robert Deaton, CFA, Portfolio
Manager
Bennett Lawrence Management, LLC
(sub-advisor)
Van has 35 years of investment
management experience. He holds an
M.B.A. from New York University and
an undergraduate degree from
Williams College. Robert is a
Chartered Financial Analyst with 14
years of experience in the
securities business. He has an
M.B.A. from Vanderbilt University
and a B.A. from Davidson College.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Mid Cap Fund uses a two-step investment process. First, we
identify major demand trends that present powerful investment opportunities.
Then, we select companies that are best positioned to benefit from these trends.
Before a company is selected, our analysts conduct extensive analysis of the
business and its associated risks. The outcome of this process is a portfolio
invested in a relatively small number of highly profitable companies."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund's total return was -27.65%
(Class A Shares at NAV). In comparison, the Russell MidCap(R) Growth Index pro-
duced a -31.81% return.
Q. What factors affected your performance?
A. While our overall performance for this period was disappointing, we did
outperform our benchmark by being underweighted, relative to the index, in the
shares of technology and health care companies. Traditionally, these two sec-
tors have very high valuations, so they were hit particularly hard during the
period as valuations corrected almost across the board.
Keeping our exposure to technology and health care relatively low was a con-
scious effort. In the case of technology companies, we felt that the fallout
from the "dot-com" implosion--for a growth-oriented fund--would work its way up
and down the supply chain with a far-reaching impact on the semiconductor,
telecommunication equipment, and networking businesses.
In health care, we stayed away from biotechnology companies. We are primarily
interested in companies with above-average revenue and earnings growth, which
prevents us from owning most of the biotech names. We have enjoyed very good
results from Forest Laboratories, Inc. (4.16% of net assets), a well-positioned
pharmaceutical company that is marketing a new drug for depression. Varian Med-
ical Systems, Inc. (3.82%), which has developed a promising treatment for can-
cer, also has performed well for us. Our holdings of the financial-services
stocks, were profitable as they were big beneficiaries of lower interest rates.
Nonetheless, the last year was a difficult one for growth-oriented funds, and
we did not escape the strong negative pull of the market on growth stocks. We
are, however, long-term investors with investment horizons that stretch out
three to five years and longer. We continue to seek out attractive companies
that will deliver solid returns over a market cycle.++
As of July 31, 2001, the Fund's top five holdings were Laboratory Corporation
of America (4.81%), Eclipsys Corp. (4.46%), Forest Laboratories, Inc. (4.16%),
Microchip Technology, Inc. (3.95%) and Varian Medical Systems, Inc. (3.82%).++
Q. What is your outlook for the next six to 12 months?
A. We believe that corporate profits will continue to decline, with the economy
not starting to improve until the first calendar quarter of 2002. However,
while we are not economic prognosticators, we feel that the downside for the
stock market is limited. As has been the case in recent months, this will be a
stock picker's market, with sector rotation continuing to be swift. We will re-
main focused on companies that we believe are capable of delivering good oper-
ating results.
++The Fund's portfolio composition is subject to change.
12
<PAGE>
AmSouth Mid Cap Fund
Value of a $10,000 Investment
[CHART]
<TABLE>
<CAPTION>
AmSouth Mid Cap Fund AmSouth Mid Cap AmSouth Mid Cap Fund Russell Mid-Cap
Class A Shares Fund Class B Shares Trust Shares Growth Index
<S> <C> <C> <C> <C>
5/4/1999 $ 9,452 $10,000 $10,000 $10,000
5/31/1999 9,338 9,880 9,880 9,871
6/30/1999 10,331 10,920 10,940 10,561
7/31/1999 10,567 11,170 11,190 10,224
8/31/1999 10,614 11,210 11,240 10,118
9/30/1999 10,851 11,450 11,490 10,032
10/31/1999 11,786 12,440 12,490 10,808
11/30/1999 13,696 14,450 14,510 11,927
12/31/1999 16,380 17,280 17,370 13,992
1/31/2000 16,304 17,160 17,270 13,989
2/29/2000 19,026 20,010 20,150 16,930
3/31/2000 18,507 19,450 19,600 16,947
4/30/2000 16,153 16,960 17,110 15,302
5/31/2000 14,792 15,530 15,670 14,187
6/30/2000 16,115 16,900 17,070 15,692
7/31/2000 15,756 16,520 16,700 14,698
8/31/2000 17,656 18,500 18,720 16,915
9/30/2000 16,928 17,730 17,950 16,088
10/31/2000 15,794 16,530 16,740 14,987
11/30/2000 13,327 13,940 14,130 11,730
12/31/2000 13,932 14,560 14,780 12,348
1/31/2001 13,894 14,520 14,750 13,053
2/28/2001 12,628 13,190 13,400 10,795
3/31/2001 11,399 11,860 12,060 9,250
4/30/2001 12,524 13,020 13,250 10,792
5/31/2001 12,694 13,190 13,430 10,742
6/30/2001 12,231 12,700 12,940 10,747
7/31/2001 11,399 11,530 12,060 10,023
</TABLE>
-------------------------------------------------------------------------
Average Annual Total Return
-------------------------------------------------------------------------
As of Inception 1 Since
July 31, 2001 Date Year Inception
-------------------------------------------------------------------------
Class A Shares* 5/4/99 -31.63% 6.02%
-------------------------------------------------------------------------
Class B Shares ** 5/4/99 -31.97% 6.56%
-------------------------------------------------------------------------
Trust Shares 5/4/99 -27.78% 8.72%
-------------------------------------------------------------------------
*Reflects maximum 5.05% sales charge
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 5/4/99 to 7/31/01 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Mid Cap Fund is measured against the Russell
MidCap(R) Growth Index, an unmanaged index representative of the performance
of a basket of more than 430 mid-cap growth stocks. The index does not re-
flect the deduction of fees associated with a mutual fund, such as investment
management fees. The Fund's performance does reflect the deduction of fees
for these value-added services. Investors cannot invest directly in an index,
although they can invest in its underlying securities. During the period
shown, the Advisor waived and/or reimbursed fees for various expenses. Had
these waivers and/or reimbursements not been in effect, performance quoted
would have been lower.
The total returns reflect the performance from 5/4/99 to 3/12/00 of the ISG
Mid-Cap Fund, an open-end investment company that was predecessor to the
AmSouth Mid Cap Fund.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
13
<PAGE>
AmSouth Small Cap Fund+
Portfolio Manager
Dean McQuiddy, CFA
Principal and Director of Equity
Investments
Sawgrass Asset Management, LLC
(sub-advisor)
Dean McQuiddy, Portfolio Manager to
the AmSouth Small Cap Fund, has 19
years of experience in investment
management and a B.S. in finance.
He created and managed the small-
cap growth product at Barnett
Capital Advisors for 11 years.
PORTFOLIO MANAGER'S PERSPECTIVE
"For the AmSouth Small Cap Fund, we use a disciplined investment process to
identify 60 to 80 fundamentally attractive small companies that share certain
attributes: above-market sales and earnings growth, increasing estimates of
future earnings and reasonable valuations. We aim to buy these companies in the
early stages of their growth--before their stocks get overvalued in the
marketplace."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund produced a total return of -
10.33% (Class A Shares at NAV). In comparison, the Russell 2000(R) Growth Index
produced a -23.31% return.
Q. What factors affected your performance?
A. Over the last 12 months, we were challenged by a very tough environment for
most types of growth stocks, especially small caps. We were not immune to these
market realities despite the outperformance of our benchmark. We are in the
middle or, hopefully, close to the end, of a true bear market. Thanks to some
strong stock selection, we were able to keep losses modest on a relative basis.
Factors that benefited the Fund included our significant underweighting in
technology, a sector that fell precipitously during the period; only about 15%
of the portfolio was invested in technology stocks, compared to our benchmark's
30% technology weighting. More specifically, we had no exposure to Internet and
telecommunications equipment stocks, and managed to avoid the massive losses
suffered by those areas, each of which was down more than 70% for the year.
We primarily seek small companies, which are profitable, and whose earnings
growth appears to be unusually strong and attractive. We believe this invest-
ment discipline enabled us to reduce risk. We were also helped by solid gains
in such consumer cyclical areas as retail, homebuilders, and education service
companies.
As of July 31, 2001, the Fund's top five holdings were Career Education Corp.
(3.34% of net assets), Pharmaceutical Product Development, Inc. (3.20%), New
York Community Bancorp, Inc. (2.94%), First Health Group Corp. (2.91%) and
AdvancePCS (2.76%).++
Q. What is your outlook for the next six to 12 months?
A. The Fed is working hard to provide liquidity, and we believe they will win
this battle. Historically, when the Fed has cut rates as they have done this
year, stocks in general, and small stocks in particular, have risen over the
next 12 months. Overall, we are encouraged that stocks with positive earnings
are still selling at a discount to the market, despite higher, historical and
projected earnings growth rates. We believe that this is a very attractive sec-
tor going forward.
+ Small-capitalization funds typically carry additional risks since smaller
companies generally have a higher risk of failure. Historically, smaller
companies' stocks have experienced a greater degree of market volatility
than large company stocks on average.
++The Fund's portfolio composition is subject to change.
14
<PAGE>
AmSouth Small Cap Fund
[CHART]
Value of a $10,000 Investment
<TABLE>
<CAPTION>
AmSouth Small Cap AmSouth Small Cap AmSouth Small Cap Russell 2000
Fund (Class A Shares)* Fund (Class B Shares)** Fund (Trust Shares) Growth Index
<S> <C> <C> <C> <C>
3/2/1998 $ 9,450 $10,000 $10,000 $10,000
3/31/1998 9,764 10,290 10,302 10,419
4/30/1998 9,764 10,290 10,302 10,483
5/31/1998 9,063 9,540 9,572 9,722
6/30/1998 9,328 9,810 9,852 9,821
7/31/1998 8,664 9,110 9,152 9,001
8/31/1998 6,712 7,050 7,091 6,923
9/30/1998 7,479 7,860 7,911 7,625
10/31/1998 7,261 7,630 7,681 8,023
11/30/1998 7,840 8,220 8,281 8,645
12/31/1998 8,901 9,340 9,422 9,427
1/31/1999 8,456 8,860 8,941 9,852
2/28/1999 7,698 8,060 8,141 8,950
3/31/1999 7,186 7,520 7,601 9,269
4/30/1999 7,091 7,420 7,511 10,088
5/31/1999 7,299 7,630 7,731 10,104
6/30/1999 8,001 8,360 8,481 10,636
7/31/1999 7,963 8,310 8,441 10,307
8/31/1999 7,925 8,270 8,401 9,922
9/30/1999 8,105 8,450 8,591 10,113
10/31/1999 8,134 8,480 8,631 10,372
11/30/1999 8,958 9,330 9,502 11,469
12/31/1999 10,323 10,740 10,952 13,490
1/31/2000 10,295 10,720 10,942 13,364
2/29/2000 12,390 12,890 13,162 16,474
3/31/2000 12,523 13,020 13,302 14,742
4/30/2000 12,238 12,720 13,002 13,254
5/31/2000 11,565 12,000 12,282 12,093
6/30/2000 12,561 13,040 13,352 13,655
7/31/2000 11,869 12,310 12,612 12,485
8/31/2000 12,940 13,410 13,752 13,798
9/30/2000 12,911 13,370 13,722 13,113
10/31/2000 12,902 13,350 13,712 12,048
11/30/2000 11,262 11,650 11,972 9,861
12/31/2000 12,251 12,664 13,026 10,464
1/31/2001 11,536 11,608 12,262 11,311
2/28/2001 11,031 11,385 11,729 9,760
3/31/2001 10,390 10,718 11,053 8,873
4/30/2001 11,315 11,674 12,040 9,959
5/31/2001 11,105 11,441 11,818 10,190
6/30/2001 10,947 11,285 11,652 10,468
7/31/2001 10,642 10,656 11,330 9,576
</TABLE>
--------------------------------------------------------------------------
Average Annual Total Return
--------------------------------------------------------------------------
As of Inception 1 Since
July 31, 2001 Date Year Inception
--------------------------------------------------------------------------
Class A Shares* 3/2/98 -15.27% 1.84%
--------------------------------------------------------------------------
Class B Shares** 3/2/98 -15.03% 1.88%
--------------------------------------------------------------------------
Trust Shares 3/2/98 -10.16% 3.73%
--------------------------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 3/2/98 to 7/31/01 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Small Cap Fund is measured against the Russell
2000(R) Growth Index, an unmanaged index generally representative of domesti-
cally traded common stocks of small to mid-sized companies. The index does
not reflect the deduction of fees associated with a mutual fund, such as in-
vestment management fees. The Fund's performance does reflect the deduction
of fees for these value-added services. Investors cannot invest directly in
an index, although they can invest in its underlying securities. During the
period shown, the Advisor waived and/or reimbursed fees for various expenses.
Had these waivers and/or reimbursements not been in effect, performance
quoted would have been lower.
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
15
<PAGE>
AmSouth Equity Income Fund
Portfolio Manager
Christopher Wiles, CFA
President and Chief Investment
Officer
Rockhaven Asset Management, LLC
(sub-advisor)
Chris has more than 15 years of
investment management experience
and holds an M.B.A. and a
bachelor's degree in finance.
Previously, he was affiliated with
Federated Investments and Mellon
Bank.
PORTFOLIO MANAGER'S PERSPECTIVE
"With the AmSouth Equity Income Fund, we try to reduce risk through a
disciplined portfolio construction limited, under normal conditions, to 50
stocks. Then we select the most attractive securities on a risk/reward basis in
each sector. Rather than trying to time the market or guess which sector may
offer the greatest return, we put our emphais on investing in what we believe
are the best-yielding, best dividend-growing securities, sector by sector."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund's total return was -12.96%
(Class A Shares at NAV). In comparison, the S&P 500 Index produced a -14.32%
return, and the Lipper Equity Income Funds Index returned 6.97%.+
Q. What factors affected your performance?
A. The last 12 months, really the last 18 months, have been a true bear market
in every sense of the term. Technology, telecommunications, and a majority of
other industrial companies continued to come under pressure from an economic
slowdown, and a tight monetary policy, although the Fed did reverse course and
has eased interest rates considerably since the first of the year. Clearly, we
have had a bear market in a large segment of the U.S. stock market. It is now
apparent that the S&P 500 Stock Index is not immune, and neither were we.
In hindsight, the reason we did not outperform our Lipper Equity Income bench-
mark was that we owned good companies, run by good managers, but we held them
longer than we should have; fundamentally, the companies were doing very well,
but their stock prices were overvalued relative to the marketplace.
What differentiates us from a lot of our peers in the equity income sector, is
that we are sector-neutral to the S&P 500, rather than concentrating simply on
value-oriented companies. Our goal is to provide shareholders with market per-
formance, while delivering above-average income and below-average risk. Over
the last three years, we have achieved this goal. During the most recent 12
months, however, the classic equity income fund--which buys stocks based on
yield--profited from gains in such high-yield sectors as financials, utilities
and energy. Being sector-neutral, we were not overweighted in these sectors,
and this in turn hurt performance during the period.
As of July 31, 2001, the Fund's top five holdings Citigroup, Inc., common
shares (3.17% of net assets); Washington Mutual, Inc., convertible shares
(2.82%); L-3 Communications, Inc., convertible bond (2.42%); Exxon Mobil Corp.,
common shares (2.40%); and EOG Resources, convertible shares (2.39%).++
Q. What is your outlook for the next six to 12 months?
A. We believe the economy will begin to show some recovery in the beginning of
2002, evident by a couple of positive signs on the horizon. One is that there
are many healthy paradoxes in the stock market and the economy; one of those
paradoxes is that whenever industrial production falls, the stock market usu-
ally stages a powerful rally over the next 12 months. We are already seeing
signs that companies are making bottoms in announcing bad news and building on
a base for future growth. Do not underestimate the resolve of corporate America
to respond to changing economic realities.
+ The Lipper Equity Income Funds Index is an index comprised of managed mu-
tual funds that seek relatively high current income and growth of income
through investing 65% or more of their portfolio in dividend-paying equity
securities.
++The Fund's portfolio composition is subject to change.
16
<PAGE>
AmSouth Equity Income Fund
Value of a $10,000 Investment
[CHART]
AmSouth AmSouth AmSouth
Equity Equity Equity
Income Income Income
Fund Fund Fund S&P 500
(Class A (Class (Trust Stock
Shares)* B Shares)** Shares) Index
3/20/1997 $ 9,452 $10,000 $10,000 $10,000
3/31/1997 9,293 9,829 9,832 9,589
4/30/1997 9,618 10,171 10,175 10,162
5/31/1997 10,168 10,742 10,758 10,780
6/30/1997 10,482 11,063 11,090 11,264
7/31/1997 11,136 11,745 11,781 12,160
8/31/1997 10,805 11,384 11,432 11,478
9/30/1997 11,291 11,871 11,948 12,107
10/31/1997 10,878 11,434 11,514 11,703
11/30/1997 11,129 11,693 11,781 12,244
12/31/1997 11,331 11,898 11,999 12,455
1/31/1998 11,457 12,025 12,134 12,592
2/28/1998 12,221 12,812 12,935 13,501
3/31/1998 12,664 13,271 13,407 14,192
4/30/1998 12,635 13,234 13,390 14,335
5/31/1998 12,351 12,929 13,092 14,088
6/30/1998 12,394 12,967 13,140 14,661
7/31/1998 11,947 12,490 12,669 14,504
8/31/1998 10,428 10,901 11,061 12,411
9/30/1998 10,839 11,314 11,488 13,202
10/31/1998 11,634 12,139 12,345 14,276
11/30/1998 12,383 12,914 13,142 15,142
12/31/1998 12,707 13,244 13,489 16,014
1/31/1999 13,113 13,655 13,912 16,683
2/28/1999 12,718 13,235 13,506 16,165
3/31/1999 13,050 13,583 13,862 16,812
4/30/1999 13,586 14,124 14,435 17,463
5/31/1999 13,231 13,749 14,048 17,050
6/30/1999 13,911 14,449 14,785 17,997
7/31/1999 13,640 14,156 14,497 17,435
8/31/1999 13,601 14,106 14,459 17,348
9/30/1999 13,289 13,782 14,141 16,873
10/31/1999 14,234 14,738 15,137 17,941
11/30/1999 14,647 15,158 15,580 18,309
12/31/1999 15,854 16,402 16,882 19,384
1/31/2000 16,049 16,589 17,090 18,410
2/29/2000 16,541 17,101 17,617 18,061
3/31/2000 17,276 17,849 18,406 19,828
4/30/2000 16,726 17,260 17,810 19,231
5/31/2000 16,271 16,778 17,328 18,837
6/30/2000 16,889 17,409 18,000 19,301
7/31/2000 16,248 16,738 17,331 18,999
8/31/2000 17,928 18,454 19,112 20,180
9/30/2000 17,017 17,505 18,143 19,114
10/31/2000 16,466 16,938 17,558 19,033
11/30/2000 14,741 15,145 15,723 17,533
12/31/2000 15,624 16,049 16,665 17,619
1/31/2001 16,181 16,606 17,261 18,244
2/28/2001 14,827 15,210 15,820 16,582
3/31/2001 13,986 14,334 14,925 15,532
4/30/2001 14,954 15,323 15,959 16,737
5/31/2001 15,068 15,431 16,095 16,850
6/30/2001 14,312 14,639 15,278 16,440
7/31/2001 14,142 14,255 15,098 16,279
Average Annual Total Return
As of Inception 1 Since
July 31, 2001 Date Year Inception
--------------------------------------------------------
Class A Shares* 3/20/97 -17.76% 8.26%
--------------------------------------------------------
Class B Shares** 9/3/97/1/ -17.93% 8.46%
--------------------------------------------------------
Trust Shares 9/2/97/1/ -12.88% 9.90%
--------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 3/20/97 to 7/31/01 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Equity Income Fund is measured against the S&P
500 Stock Index, an unmanaged index generally representative of the U.S.
stock market as a whole. The index does not reflect the deduction of fees as-
sociated with a mutual fund, such as investment management fees. The Fund's
performance does reflect the deduction of fees for these value-added servic-
es. Investors cannot invest directly in an index, although they can invest in
its underlying securities. During the period shown, the Advisor waived and/or
reimbursed fees for various expenses. Had these waivers and/or reimbursements
not been in effect, performance quoted would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 9/3/97 and 9/2/97, respectively, are based on the historical performance
of the Class A Shares (without sales charge) prior to that date. The his-
torical performance for the Class B Shares has been adjusted to reflect the
higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
17
<PAGE>
AmSouth Balanced Fund
Portfolio Managers
Richard H. Calvert, CFA, Vice
Preident
John P. Boston, CFA, Senior Vice
President
AmSouth Bank
AmSouth Investment Management
Company, LLC
Richard has been a portfolio
manager and analyst for more than
seven years. He is a member of
AmSouth Bank's value strategy group
and the asset allocation committee.
Richard also manages the AmSouth
Value Fund. He holds a B.S. in
economics.
John manages the AmSouth Government
Income Fund, the Limited Term Bond
Fund and co-manages the AmSouth
Bond Fund. He has more than 10
years of experience as a fixed-
income manager. He holds a
bachelor's degree in finance and
political science.
PORTFOLIO MANAGER PERSPECTIVE
"The AmSouth Balanced Fund is a diversified fund that offers investors a simple
and easy way to balance their investments in stock as well as in bonds. Within
our equity components, we follow a value strategy, seeking to buy solid
companies at attractive prices. We also assess market opportunities to allocate
assets where we feel they have the best prospects for risk-adjusted returns."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund produced a total return of
13.93% (Class A Shares at NAV). In comparison, the S&P 500 Stock Index produced
a -14.32%, the Lehman Brothers Government/Credit Bond Index gained 12.71%, and
the Lipper Balanced Funds Index had a -0.85% return.+
Q. What factors affected your performance?
A. We had a great year, outdistancing our benchmarks, the S&P 500 and the Leh-
man Brothers Government/Credit Bond Index, and strongly outperforming our peers
in the Lipper Balanced Funds Index. During a period when stocks generally sank
and bonds rose in value, a Fund such as ours--with significant weighting in
fixed-income securities--had no trouble outperforming the major equity aver-
ages. However, it was our judicious stock picking and sizable allocation to
value stocks that helped us post a very attractive positive return.
We feel the speculative bubble that inflated prices in the technology and tele-
communications sectors damaged the overall market. Valuations went beyond ex-
treme levels; in fact, we feel this could have been the largest speculative
bubble the U.S. stock market has ever seen, and the results of the bubble's de-
flation could last for years.
At the same time, the value sector performed admirably. Value investing pros-
pered precisely because it does focus on fundamental valuations, as opposed to
the false promise of future profits that was floated by many technology compa-
nies.
Among our value-oriented holdings, the Fund profited from investments in ener-
gy, specialty chemical, and business equipment stocks. We also saw several of
our growth stocks rise in value and contribute to the Fund's performance. We
believe that our mandate as a "balanced" portfolio obliges us to employ a bal-
anced approach that includes growth stocks offering attractive valuations.
As of July 31, 2001, the Fund's top five equity holdings were Washington Mutu-
al, Inc (2.28% of net assets), Engelhard Corp. (2.03%), First Data Corp.
(1.88%), Texaco, Inc. (1.87%) and St. Paul Cos., Inc. (1.58%).++
On the fixed-income side, this was a very good time for investors to have expo-
sure to bonds. There was a marked slowdown in economic growth, and we have seen
four consecutive quarters of below-average growth in the Gross Domestic Prod-
uct.++ Additionally, the Fed has lowered interest rates six times since the
first of the year through July 31, 2001. We now have a Fed that has moved to a
stimulative monetary policy, and we have in place a stimulative fiscal policy,
namely, a tax cut. Over the last 12 months, we have seen almost unprecedented
easing of monetary policy. Such an environment is always productive for bonds.
As of July 31, 2001, the fixed-income securities within the Fund maintained an
average credit quality of AAA (as rated by Standard & Poor's), with an average
maturity of 7.0 years. Approximately 49.4% of the Fund's assets were invested
in stocks, with 48.0% invested in bonds and 1.8% in cash equivalents.++
Q. What is your outlook for the next six to 12 months?
A. With regard to stocks, we don't try to guess which way the market is going
to go. We do continue to believe that the next 12 months will be much like the
last 12, in that it's going to be a stock picker's market. In the fixed-income
arena, we wouldn't be surprised to see the bond market just tread water, with
yields and prices hovering in a fairly narrow trading range. The Fed could cut
rates a little lower, to protect further against economic recession, but we
don't believe there is much more room on the downside for rates.
+ The Lipper Balanced Funds Index consists of mutual funds whose primary ob-
jective is to conserve principal by maintaining at all times a balanced
portfolio of both stocks and bonds. Typically, the stock/bond ratio ranges
around 60%/40%.
++ The Gross Domestic Product (GDP) is the measure of market value of the
goods and services produced by labor and property in the United States.
The GDP is made up of consumer and government purchases, private domestic
investments, and net exports of goods and services.
++ The Fund's portfolio composition is subject to change.
18
<PAGE>
AmSouth Balanced Fund
[CHART]
Value of a $10,000 Investment
Lehman
Brothers
AmSouth AmSouth AmSouth Government/
Balanced Balanced Balanced Credit
Fund (Class Fund (Class Fund (Trust Bond S&P 500
A Shares)* B Shares) Shares) Index Stock Index
12/19/1991 $ 9,452 $10,000 $10,000 $10,000 $10,000
12/31/1991 10,064 10,655 10,647 10,337 11,144
1/31/1992 10,084 10,655 10,669 10,184 10,936
2/29/1992 10,217 10,799 10,810 10,238 11,078
3/31/1992 10,084 10,642 10,669 10,182 10,862
4/30/1992 10,303 10,865 10,901 10,243 11,181
5/31/1992 10,420 10,983 11,024 10,441 11,236
6/30/1992 10,377 10,931 10,979 10,595 11,069
7/31/1992 10,746 11,311 11,369 10,866 11,521
8/31/1992 10,602 11,140 11,216 10,963 11,285
9/30/1992 10,774 11,311 11,399 11,112 11,418
10/31/1992 10,704 11,232 11,325 10,942 11,457
11/30/1992 10,869 11,402 11,499 10,932 11,847
12/31/1992 10,942 11,468 11,576 11,120 11,993
1/31/1993 11,191 11,717 11,840 11,363 12,093
2/28/1993 11,384 11,913 12,045 11,599 12,258
3/31/1993 11,614 12,136 12,288 11,638 12,516
4/30/1993 11,688 12,202 12,366 11,728 12,214
5/31/1993 11,880 12,398 12,569 11,722 12,541
6/30/1993 11,944 12,451 12,636 11,988 12,577
7/31/1993 11,977 12,477 12,672 12,065 12,527
8/31/1993 12,335 12,844 13,051 12,342 13,002
9/30/1993 12,253 12,739 12,964 12,386 12,902
10/31/1993 12,388 12,870 13,106 12,436 13,169
11/30/1993 12,312 12,779 13,026 12,296 13,044
12/31/1993 12,513 12,975 13,239 12,350 13,201
1/31/1994 12,912 13,381 13,661 12,535 13,650
2/28/1994 12,645 13,093 13,378 12,262 13,280
3/31/1994 12,198 12,621 12,906 11,962 12,701
4/30/1994 12,223 12,634 12,932 11,862 12,864
5/31/1994 12,407 12,818 13,126 11,841 13,075
6/30/1994 12,301 12,700 13,014 11,814 12,754
7/31/1994 12,591 12,988 13,322 12,050 13,173
8/31/1994 12,831 13,224 13,575 12,055 13,713
9/30/1994 12,585 12,962 13,315 11,873 13,378
10/31/1994 12,676 13,041 13,411 11,860 13,678
11/30/1994 12,330 12,674 13,045 11,838 13,180
12/31/1994 12,465 12,805 13,188 11,916 13,376
1/31/1995 12,688 13,014 13,424 12,145 13,723
2/28/1995 13,134 13,473 13,896 12,427 14,257
3/31/1995 13,390 13,722 14,167 12,510 14,678
4/30/1995 13,769 14,102 14,568 12,684 15,110
5/31/1995 14,220 14,548 15,045 13,216 15,714
6/30/1995 14,277 14,587 15,105 13,321 16,079
7/31/1995 14,511 14,823 15,353 13,269 16,613
8/31/1995 14,593 14,889 15,439 13,439 16,654
9/30/1995 14,831 15,125 15,691 13,576 17,357
10/31/1995 14,772 15,046 15,629 13,776 17,295
11/30/1995 15,209 15,478 16,091 14,003 18,054
12/31/1995 15,396 15,662 16,289 14,209 18,402
1/31/1996 15,737 15,990 16,650 14,297 19,028
2/29/1996 15,690 15,924 16,600 13,994 19,205
3/31/1996 15,853 16,081 16,772 13,877 19,390
4/30/1996 16,051 16,265 16,982 13,781 19,676
5/31/1996 16,110 16,317 17,045 13,757 20,184
6/30/1996 16,147 16,343 17,083 13,942 20,260
7/31/1996 15,724 15,898 16,636 13,974 19,365
8/31/1996 15,959 16,121 16,885 13,940 19,773
9/30/1996 16,283 16,435 17,227 14,188 20,887
10/31/1996 16,478 16,619 17,434 14,519 21,462
11/30/1996 17,126 17,261 18,119 147,86 230,85
12/31/1996 16,891 17,012 17,871 14,622 22,627
1/31/1997 17,253 17,353 18,254 14,640 24,041
2/28/1997 17,518 17,615 18,535 14,670 24,229
3/31/1997 17,179 17,261 18,175 14,496 23,234
4/30/1997 17,550 17,615 18,568 14,707 24,621
5/31/1997 18,295 18,349 19,357 14,844 26,120
6/30/1997 18,761 18,794 19,850 15,022 27,292
7/31/1997 19,877 19,895 21,030 15,482 29,462
8/31/1997 19,353 191358 20,475 15,309 27,811
9/30/1997 20,160 20,150 21,334 15,549 29,334
10/31/1997 19,759 19,741 20,914 15,798 28,354
11/30/1997 20,116 20,089 21,296 15,881 29,667
12/31/1997 20,412 20,372 21,615 16,048 30,176
1/31/1998 20,617 20,553 21,822 16,274 30,510
2/28/1998 21,350 21,288 22,617 16,242 32,711
3/31/1998 22,007 21,919 23,304 16,292 34,386
4/30/1998 21,907 21,806 23,217 16,374 34,732
5/31/1998 21,945 21,835 23,263 16,549 34,135
6/30/1998 22,144 22,006 23,463 16,718 35,522
7/31/1998 21,774 21,625 23,076 16,731 35,143
8/31/1998 20,400 20,245 21,623 17,057 30,070
9/30/1998 21,374 21,215 22,677 17,545 31,988
10/31/1998 22,261 22,084 23,622 17,421 34,591
11/30/1998 22,914 22,721 24,320 17,525 36,689
12/31/1998 23,091 22,866 24,515 17,567 38,800
1/31/1999 23,098 22,861 24,528 17,692 40,423
2/28/1999 22,594 22,364 23,997 17,271 39,167
3/31/1999 22,957 22,692 24,388 17,357 40,735
4/30/1999 24,015 23,742 25,517 17,401 42,311
5/31/1999 24,013 23,701 25,519 17,221 41,312
6/30/1999 24,223 23,893 25,746 17,168 43,605
7/31/1999 23,820 23,497 25,324 17,120 42,243
8/31/1999 23,471 23,121 24,959 17,106 42,034
9/30/1999 22,950 22,608 24,410 17,260 40,882
10/31/1999 23,385 23,023 24,877 17,305 43,469
11/30/1999 23,280 22,904 24,771 17,295 44,362
12/31/1999 23,397 22,999 24,887 17,189 46,965
1/31/2000 22,767 22,356 24,217 17,184 44,605
2/29/2000 22,304 21,902 23,730 17,399 43,761
3/31/2000 23,688 23,249 25,209 17,649 48,042
4/30/2000 23,572 23,121 25,088 17,563 46,596
5/31/2000 23,726 23,258 25,276 17,547 45,640
6/30/2000 23,214 22,740 24,714 17,905 46,766
7/31/2000 23,570 23,075 25,097 18,095 46,034
8/31/2000 24,545 24,016 26,139 18,350 48,894
9/30/2000 24,645 24,081 26,248 18,420 46,313
10/31/2000 24,995 24,409 26,625 18,536 46,117
11/30/2000 24,953 24,370 26,583 18,853 42,481
12/31/2000 25,780 25,166 27,467 19,224 42,689
1/31/2001 26,118 25,480 27,830 19,547 44,203
2/28/2001 26,059 25,387 27,772 19,748 40,176
3/31/2001 25,801 25,120 27,499 19,839 37,633
4/30/2001 26,502 25,809 28,250 19,690 40,554
5/31/2001 26,952 26,212 28,735 19,805 40,825
6/30/2001 26,712 25,960 28,481 19,900 39,833
7/31/2001 26,853 26,082 28,634 20,395 39,443
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
Average Annual Total Return
As of Inception 1 5 Since
July 31, 2001 Date Year Year Inception
---------------------------------------------------------------------------
Class A Shares* 12/19/91 7.63% 10.04% 10.82%
---------------------------------------------------------------------------
Class B Shares** 9/2/97/1/ 8.05% 10.14% 10.48%
---------------------------------------------------------------------------
Trust Shares 9/2/97/1/ 14.09% 11.47% 11.56%
---------------------------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 12/19/91 to 7/31/01 in the indicated share class versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
The performance of the AmSouth Balanced Fund is measured against the S&P 500
Stock Index, an unmanaged index generally representative of the U.S. stock
market as a whole; and the Lehman Brothers Government/Credit Bond Index, an
unmanaged broad-based index representative of the total return of long-term
government and corporate bonds. The indices do not reflect the deduction of
fees associated with a mutual fund, such as investment management fees. The
Fund's performance does reflect the deduction of fees for these value-added
services. Investors cannot invest directly in an index, although they can in-
vest in its underlying securities. During the period shown, the Advisor
waived and/or reimbursed fees for various expenses. Had these waivers and/or
reimbursements not been in effect, performance quoted would have been lower.
/1/ Performance for the Class B and Trust Shares, which commenced operations
on 9/2/97, are based on the historical performance of the Class A Shares
(without sales charge) prior to that date. The historical performance for the
Class B Shares has been adjusted to reflect the higher 12b-1 fees and the
contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
19
<PAGE>
AmSouth Select Equity Fund
Portfolio Managers
Neil Wright, President and Chief
Investment Officer
Janna Sampson, Director of
Portfolio Management
Peter Jankovskis, Director of
Research
OakBrook Investments, LLC (sub-
advisor)
As Portfolio Managers of the
AmSouth Select Equity Fund and the
AmSouth Enhanced Market Fund, Neil,
Janna and Peter have 50 years of
combined experience. Neil and Peter
have Ph.D.s in economics, and Janna
holds an M.A. in economics. They
have worked together for the past
nine years.
PORTFOLIO MANAGER'S PERSPECTIVE
"Our goal in managing the AmSouth Select Equity Fund is to outperform the S&P
500 over a complete market cycle while experiencing less volatility than the
broad stock market. We look for 20 to 25 leading companies that have a dominant
market position, or a well-known brand name, yet whose stock price is
undervalued. To make this 'growth at a reasonable price' strategy work, we use
economic theory to determine whether a company is likely to recover its dominant
position after a dip. We believe our patient, long-term approach offers
excellent defensive protection, which can reduce losses when the market is
weak."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund's total return was 28.96%
(Class A Shares at NAV). In comparison, the S&P 500 Index produced a -14.32%
return.+
This was a tremendous year for the Fund, outperforming the S&P 500 Stock Index
by more than 43%. This performance ranked among the top 9% of all domestic eq-
uity mutual funds during the period.++
Q. What factors affected your performance?
A. The Fund benefited from its stable growth investment style, which became
more attractive to investors during the last 12 months, and strong stock selec-
tion within the stable growth category. The dramatic decline in the value of
technology shares during the period caused investors to seek out stocks with
records of stable earnings growth. We feel our market power analysis enabled us
to identify many of the best-performing stocks within the stable growth style.
For example, four of our holdings rose more than 50%: H&R Block, Inc. (6.83% of
net assets), up 129%; Waste Management, Inc. (8.06%), up 67%; Ralston Purina
Group (4.83%), up 61%; and J.M. Smucker Co. (2.28%), up 54%.++
As of July 31, 2001, the Fund's top five holdings were Waste Management, Inc.
(8.06% of net assets), SYSCO Corp. (7.31%), H&R Block, Inc. (6.83%), General
Mills, Inc. (6.73%) and Moody's Corp. (6.24%).++
Q. What is your outlook for the next six to 12 months?
A. Looking ahead, we are hopeful that the market in general can regain its
equilibrium. Taking out the disastrous declines in technology and communication
services, the rest of the market actually rose by about 6% during the period.
We believe the core of the U.S. economy remains intact, and that the rest of
the market has a chance to move forward. We feel our strategy has served our
shareholders and us very well during the last 12 months, and we hope to main-
tain our advantage going forward.
+ The recent growth rate in the stock market has helped to produce short-term
returns that are not typical and may not continue in the future.
++ The AmSouth Select Equity Fund ranked 43 out of 514 funds in the domestic
equity funds category for the one-year period, but was not ranked for the
five- and 10-year periods. Lipper rankings are based on total return and
do not include the effect of a sales charge. All rankings are as of
7/31/01.
++The Fund's portfolio composition is subject to change.
20
<PAGE>
AmSouth Select Equity Fund
[CHART]
Value of a $10,000 Investment
<TABLE>
<CAPTION>
AmSouth Select Equity AmSouth Select Equity AmSouth Select Equity S&P 500
Fund (Class A Shares)* Fund (Class B Shares)** Fund (Trust Shares) Stock Index
<S> <C> <C> <C> <C>
9/1/1998 $ 9,452 $10,000 $10,000 $10,000
9/30/1998 9,928 10,500 10,504 10,638
10/31/1998 10,772 11,390 11,396 11,503
11/30/1998 11,052 11,670 11,693 12,201
12/31/1998 11,400 12,026 12,051 12,903
1/31/1999 11,286 11,895 11,941 13,443
2/28/1999 11,003 11,590 11,643 13,025
3/31/1999 10,994 11,574 11,636 13,547
4/30/1999 11,924 12,556 12,631 14,071
5/31/1999 11,488 12,085 12,159 13,738
6/30/1999 11,973 12,591 12,686 14,501
7/31/1999 11,289 11,859 11,962 14,048
8/31/1999 10,919 11,468 11,569 13,979
9/30/1999 10,409 10,914 11,022 13,596
10/31/1999 10,514 11,024 11,143 14,456
11/30/1999 10,057 10,542 10,659 14,753
12/31/1999 10,246 10,733 10,863 15,619
1/31/2000 9,537 9,984 10,123 14,834
2/29/2000 8,803 9,199 9,337 14,553
3/31/2000 9,346 9,776 9,915 15,977
4/30/2000 9,170 9,590 9,741 15,496
5/31/2000 9,606 10,027 10,191 15,178
6/30/2000 9,461 9,868 10,039 15,552
7/31/2000 9,048 9,431 9,602 15,309
8/31/2000 9,516 9,911 10,101 16,260
9/30/2000 9,840 10,250 10,457 15,402
10/31/2000 10,261 10,697 10,893 15,336
11/30/2000 10,711 11,156 11,372 14,127
12/31/2000 11,543 12,018 12,266 14,196
1/31/2001 11,075 11,227 11,771 14,700
2/28/2001 11,159 11,592 11,848 13,361
3/31/2001 10,826 11,254 11,506 12,515
4/30/2001 11,107 11,538 11,804 13,486
5/31/2001 11,522 11,953 12,244 13,577
6/30/2001 11,439 11,865 12,156 13,247
7/31/2001 11,668 11,795 12,399 13,117
</TABLE>
--------------------------------------------------------------------------
Average Annual Total Return
--------------------------------------------------------------------------
As of Inception 1 Since
July 31, 2001 Date Year Inception
--------------------------------------------------------------------------
Class A Shares* 9/1/98 21.83% 5.44%
--------------------------------------------------------------------------
Class B Shares** 9/2/98/1/ 23.24% 5.83%
--------------------------------------------------------------------------
Trust Shares 12/3/98/1/ 29.12% 7.66%
--------------------------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 9/1/98 to 7/31/01 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Select Equity Fund is measured against the S&P
500 Stock Index, an unmanaged index generally representative of the U.S.
stock market as a whole. The index does not reflect the deduction of fees as-
sociated with a mutual fund, such as investment management fees. The Fund's
performance does reflect the deduction of fees for these value-added servic-
es. Investors cannot invest directly in an index, although they can invest in
its underlying securities. During the period shown, the Advisors waived
and/or reimbursed fees for various expenses. Had these waivers and/or reim-
bursements not been in effect, performance quoted would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 9/2/98 and 12/3/98, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
21
<PAGE>
AmSouth Enhanced Market Fund
Portfolio Managers
Neil Wright, President and Chief
Investment Officer
Janna Sampson, Director of
Portfolio Management
Peter Jankovskis, Director of
Research
OakBrook Investments, LLC (sub-
advisor)
As Portfolio Managers of the
AmSouth Enhanced Market Fund and
the AmSouth Select Equity Fund,
Neil, Janna and Peter have 50 years
of combined experience. Neil and
Peter have Ph.D.s in economics, and
Janna holds an M.A. in economics.
They have worked together for the
past nine years.
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund's total return was -14.60%
(Class A Shares at NAV). In comparison, the S&P 500 Stock Index produced a -
14.32% return.
Q. What factors affected your performance?
A. The decline of the overall market was largely due to continued weakness in
the communication and technology services sectors--which were down more than
20% and 50%, respectively, for the period as a whole. Demand for computers and
related technology surged during 1999--as the world prepared to cope with the
Y2K situation--leading many investors to believe that the sales of technology
companies would continue to grow at 1999's high rate for several years. Howev-
er, after Y2K passed, corporate buyers began to
slow their rate of new orders, depressing earnings and leading to a tremendous
drop-off in the stock prices of technology and communication companies.
The Fund benefited from strong selection throughout the year, demonstrating the
value of the disciplined stock picking that is the hallmark of our active man-
agement style. Examples included our decisions to overweight SBC Communica-
tions, Inc. (1.54% of net assets), a stalwart in the communications services
sector, and IBM Corp. (1.89%), which held most of its value in the face of
withering losses in the technology sector. We also preserved shareholder value
by underweighting American International Group, Inc. (1.97%), which was a lag-
gard in the financial services sector.++
Unfortunately, our strong individual selections were not enough to overcome the
dramatic decline in the value of technology shares. As with the S&P 500 Index,
on
which our portfolio is based, falling technology prices were responsible for
most of the decline in the Fund's value during the period.
As of July 31, 2001, the Fund's top five holdings were General Electric Co.
(3.65% of net assets), Microsoft Corp. (3.38%), Exxon Mobil Corp. (2.89%), Pfi-
zer, Inc. (2.52%) and Citigroup, Inc. (2.47%).++
Q. What is your outlook for the next six to 12 months?
A. Looking ahead, we are hopeful that the market in general can regain its
equilibrium. Taking out the disastrous declines in technology and communication
services, the rest of the market actually rose by about 6% during the period.
We believe the core of the U.S. economy remains intact, and the remainder of
the market has a chance to move forward.
++The Fund's portfolio composition is subject to change.
22
<PAGE>
AmSouth Enhanced Market Fund
Value of a $10,000 Investment
[CHART]
AmSouth AmSouth AmSouth
Enhanced Enhanced Enhanced
Market Fund Market Fund Market Fund S&P 500
(Class A Shares)* (Class B Shares)** (Trust Shares) Stock Index
9/1/1998 $ 9,452 $10,000 $10,000 $10,000
9/30/1998 10,048 10,623 10,631 10,638
10/31/1998 10,841 11,447 11,470 11,503
11/30/1998 11,535 12,173 12,204 12,201
12/31/1998 12,130 12,799 12,834 12,903
1/31/1999 12,624 13,305 13,358 13,443
2/28/1999 12,195 12,845 12,906 13,025
3/31/1999 12,746 13,410 13,482 13,547
4/30/1999 13,222 13,912 14,000 14,071
5/31/1999 12,901 13,568 13,651 13,738
6/30/1999 13,624 14,322 14,430 14,501
7/31/1999 13,226 13,890 14,010 14,048
8/31/1999 13,233 13,890 14,021 13,979
9/30/1999 12,840 13,469 13,608 13,596
10/31/1999 13,588 14,243 14,403 14,456
11/30/1999 13,884 14,536 14,710 14,753
12/31/1999 14,684 15,381 15,573 15,619
1/31/2000 14,025 14,675 14,875 14,834
2/29/2000 13,747 14,375 14,573 14,553
3/31/2000 15,070 15,755 15,990 15,977
4/30/2000 14,674 15,330 15,571 15,496
5/31/2000 14,368 14,988 15,248 15,178
6/30/2000 14,635 15,268 15,531 15,552
7/31/2000 14,477 15,092 15,374 15,309
8/31/2000 15,397 16,046 16,352 16,260
9/30/2000 14,546 15,144 15,451 15,402
10/31/2000 14,530 15,123 15,436 15,336
11/30/2000 13,405 13,930 14,233 14,127
12/31/2000 13,474 14,001 14,319 14,196
1/31/2001 13,927 14,155 14,789 14,700
2/28/2001 12,615 13,092 13,408 13,361
3/31/2001 11,799 12,237 12,541 12,515
4/30/2001 12,766 13,240 13,569 13,486
5/31/2001 12,796 13,261 13,601 13,577
6/30/2001 12,504 12,944 13,290 13,247
7/31/2001 12,363 12,486 13,141 13,117
Average Annual Total Return
As of Inception 1 Since
July 31, 2001 Date Year Inception
--------------------------------------------------------
Class A Shares* 9/1/98 -19.29% 7.56%
--------------------------------------------------------
Class B Shares** 9/2/98/1/ -19.44% 7.92%
--------------------------------------------------------
Trust Shares 12/11/98/1/ -14.53% 9.83%
--------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 9/1/98 to 7/31/01 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Enhanced Market Fund is measured against the
S&P 500 Stock Index, an unmanaged index generally representative of the U.S.
stock market as a whole. The index does not reflect the deduction of fees
associated with a mutual fund, such as investment management fees. The
Fund's performance does reflect the deduction of fees for these value-added
services. Investors cannot invest directly in an index, although they can
invest in its underlying securities. During the period shown, the Advisor
waived and/or reimbursed fees for various expenses. Had these waivers and/or
reimbursements not been in effect, performance quoted would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 9/2/98 and 12/11/98, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
23
<PAGE>
AmSouth International Equity Fund+
Portfolio Managers
Herbert Gullquist, Chief Investment
Officer
John Reinsberg, Managing Director
International Equity Management
Lazard Asset Management (Sub-
Advisor)
Herbert and John have 37 years and
17 years of investment experience,
respectively. Herbert has a B.A.
from Northwestern University. John
holds an M.B.A. from Columbia
University and a B.A. from the
University of Pennsylvania.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth International Equity Fund selects undervalued companies in global
markets, primarily in Europe and the Pacific Basin. Our team of global analysts
uses fundamental research to assess the strengths and weaknesses of individual
companies and their competitors, applying both quantitative and qualitative
reviews. We seek to manage portfolio risk through security, market, country and
regional diversification. We maintain a strict discipline of selling stocks
when they reach our valuation targets."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund's total return was -20.62%
(Class A Shares at NAV). In comparison, the Morgan Stanley Capital Interna-
tional Europe, Australasia and Far East Index(R) produced a -21.88% return.
Q. What factors affected your performance?
A. While absolute performance was disappointing, our relative performance was,
however, some consolation, as we modestly outperformed our benchmark in a dif-
ficult environment for foreign stocks.
Going back a year ago, the beginning of a sharp decline in international mar-
kets in many ways mirrored the difficulties of the U.S. market--specifically,
heavy selling and negative momentum of technology, media and telecommunica-
tions ("TMT") stocks. This downturn reflected the unusual degree to which the
stock market had "overcapitalized" TMT companies, whose sales and earnings in
large part could not sustain the growth rates on which their valuations were
based.
The decline of the euro had a significant negative impact on the performance
of international markets, as investors continued to favor dollars in light of
global economic uncertainty. In addition--and somewhat because of the decline
in TMT--we are now in the midst of a global economic slowdown. The Gross Do-
mestic Product++ activity is lower; earnings are weaker or even negative; and
stock prices have reacted to this reality and headed sharply lower.
We believe the primary reasons the Fund outperformed its benchmark was stock
selection--particularly the holdings of technology and telecommunications
stocks--and adherence to our value discipline.
An integral part of the story of global markets is Japan, which has been
struggling for a decade with perpetually weak economic fundamentals (including
deflation). In our opinion, the election of a new Prime Minister earlier this
year could lead to necessary reforms, though such reforms could be painful in
the short term.
As of July 31, 2001, 22.0% of the Fund's assets were invested in Japan, 19.6%
in the United Kingdom, 14.7% in France, 11.9% in the Netherlands, 6.3% in Ger-
many, 4.0% in Italy, 3.1% in Sweden, 3.1% in Spain, 2.5% in Singapore, and
2.3% in Switzerland. A total of 4.3% of assets were diversified across a num-
ber of developed and emerging countries, and the remaining 6.2% was allocated
to cash equivalents.++
Q. What is your outlook for the next six to 12 months?
A. Despite the bad economic news around the world, we pay more attention to
the merits of individual companies than we do to larger economic issues we can
not control. We continue to see selected European companies as attractive, due
to improving return-on-equity and low relative valuations, as stock prices
have fallen more than corporate earnings. Valuations in Japan are also compel-
ling, particularly in an environment of increasing financial and corporate re-
form under the new Prime Minister.
+ International investing involves increased risk and volatility.
++ The Gross Domestic Product (GDP) is the measure of market value of the
goods and services produced by labor and property in a country. The GDP is
made up of consumer and government purchases, private domestic invest-
ments, and net exports of goods and services.
++The Fund's portfolio composition is subject to change.
24
<PAGE>
AmSouth International Equity Fund+
[CHART]
Value of a $10,000 Investment
<TABLE>
<CAPTION>
AmSouth International AmSouth International AmSouth International
Equity Fund Equity Fund Equity Fund
(Class A Shares)* (Class B Shares)** (Trust Shares) MSCI EAFE Index
<S> <C> <C> <C> <C>
8/5/1997 9,452 10,000 10,000 10,000
8/31/1997 9,149 9,673 9,680 9,253
9/30/1997 9,773 10,327 10,340 9,772
10/31/1997 8,998 9,504 9,520 9,020
11/30/1997 9,093 9,594 9,620 8,928
12/31/1997 9,168 9,663 9,700 9,006
1/31/1998 9,395 9,901 9,940 9,418
2/28/1998 9,897 10,426 10,471 10,023
3/31/1998 10,493 11,041 11,102 10,331
4/30/1998 10,673 11,219 11,292 10,413
5/31/1998 10,730 11,278 11,352 10,362
6/30/1998 10,474 11,001 11,082 10,441
7/31/1998 10,588 11,110 11,202 10,547
8/31/1998 8,875 9,306 9,390 9,240
9/30/1998 8,449 8,850 8,939 8,957
10/31/1998 9,149 9,574 9,680 9,890
11/30/1998 9,679 10,129 10,241 10,397
12/31/1998 10,037 10,496 10,619 10,807
1/31/1999 9,952 10,396 10,529 10,775
2/28/1999 9,705 10,149 10,258 10,519
3/31/1999 10,028 10,476 10,609 10,958
4/30/1999 10,559 11,021 11,161 11,402
5/31/1999 10,170 10,605 10,750 10,815
6/30/1999 10,654 11,110 11,262 11,236
7/31/1999 10,995 11,457 11,633 11,570
8/31/1999 11,166 11,625 11,804 11,612
9/30/1999 11,147 11,596 11,784 11,729
10/31/1999 11,422 11,873 12,075 12,169
11/30/1999 11,754 12,210 12,426 12,591
12/31/1999 12,724 13,210 13,456 13,721
1/31/2000 11,794 12,240 12,473 12,850
2/29/2000 11,852 12,290 12,534 13,196
3/31/2000 12,389 12,830 13,102 13,707
4/30/2000 11,852 12,270 12,544 12,986
5/31/2000 11,670 12,070 12,341 12,669
6/30/2000 12,197 12,610 12,909 13,164
7/31/2000 11,861 12,260 12,554 12,612
8/31/2000 11,855 12,243 12,547 12,722
9/30/2000 11,279 11,642 11,938 12,102
10/31/2000 11,135 11,482 11,785 11,816
11/30/2000 10,808 11,142 11,440 11,373
12/31/2000 11,262 11,607 11,924 11,777
1/31/2001 11,262 11,296 11,924 11,781
2/28/2001 10,627 10,935 11,251 10,900
3/31/2001 9,843 10,120 10,421 10,160
4/30/2001 10,359 10,636 10,968 10,858
5/31/2001 10,120 10,388 10,716 10,456
6/30/2001 9,813 10,068 10,390 10,026
7/31/2001 9,416 9,377 9,980 9,853
</TABLE>
--------------------------------------------------------------------
Average Annual Total Return
--------------------------------------------------------------------
As of Inception 1 Since
July 31, 2001 Date Year Inception
--------------------------------------------------------------------
Class A Shares* 8/15/97 -24.98% -1.51%
--------------------------------------------------------------------
Class B Shares** 2/2/99/1/ -35.06% -1.62%
--------------------------------------------------------------------
Trust Shares 12/14/98/1/ -20.50% -0.05%
--------------------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 8/15/97 to 7/31/01 in the indicated share class versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
The performance of the AmSouth International Equity Fund is measured against
the Morgan Stanley Capital International, MSCI (Europe, Australasia and Far
East) EAFE(R) Index, which is unmanaged index that is comprised of a sample
of companies representative of the market structure of 20 European and Pa-
cific Basin countries. The index does not reflect the deduction of fees as-
sociated with a mutual fund, such as investment management fees. The Fund's
performance does reflect the deduction of fees for these value-added servic-
es. Investors cannot invest directly in an index, although they can invest
in its underlying securities. During the period shown, the Advisor waived
and/or reimbursed fees for various expenses. Had these waivers and/or reim-
bursements not been in effect, performance quoted would have been lower.
The quoted returns reflect the performance from 8/15/97 to 12/13/98 of the
DG International Equity Fund and from 12/14/98 to 3/12/00 of the ISG Inter-
national Equity Fund, which were open-end investment companies that were the
predecessor funds to the AmSouth International Equity Fund.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 2/2/99 and 12/14/98, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
25
<PAGE>
AmSouth Strategic Portfolios
Aggressive Growth
Growth
Growth and Income
Moderate Growth and Income
The AmSouth Strategic Portfolios
are managed by a team of AmSouth
investment managers, including both
equity and fixed-income
specialists, with more than 40
years of combined investment
management experience.
PORTFOLIO MANAGERS' PERSPECTIVE
The Funds seek to provide investors with the potential to achieve a variety of
long- and short-term goals, commensurate with investors' specific time horizons
and tolerance for risk. Each of the four Strategic Portfolios invests in a
combination of underlying mutual funds from the AmSouth Fund Family. Based on
each Portfolio's asset-allocation target, the managers periodically rebalance
stock, bond and money-market holdings--based on analysis of economic market
trends.
[LOGO] Q&A
Q. How did the Funds perform during the period?
A. For the 12 months ended July 31, 2001, the Funds' total returns and compara-
tive benchmark returns were as follows:
AmSouth Aggressive Growth Portfolio
(Class A Shares at NAV): -3.42%
Lipper Growth Funds Index/1/: -22.92%
S&P 1500 Stock Index: -12.46%
Merrill Lynch Government/Corporate Master Index: 12.76%
MSCI EAFE(R) Index: -21.88%
AmSouth Growth Portfolio
(Class A Shares at NAV): -2.04%
Lipper Balanced Funds Index/2/: -0.85%
S&P 1500 Stock Index: -12.46%
Merrill Lynch Government/Corporate Master Index: 12.76%
MSCI EAFE(R) Index: -21.88%
AmSouth Growth and Income Portfolio
(Class A Shares at NAV): 1.61%
Lipper Balanced Funds Index/2/: -0.85%
S&P 1500 Stock Index: -12.46%
Merrill Lynch Government/Corporate Master Index: 12.76%
MSCI EAFE(R) Index: -21.88%
AmSouth Moderate Growth and Income Portfolio
(Class A Shares at NAV): 4.91%
Lipper Balanced Funds Index/2/: -0.85%
S&P 1500 Stock Index: -12.46%
Merrill Lynch Government/Corporate Master Index: 12.76%
Q. What factors affected the Funds' performance?
A. Performance was affected by the stock markets' reaction to the incredibly
sharp contraction in corporate earnings and the continued dismal outlook for
earnings. We also saw an unwinding of the excesses that had been overbuilt in
the technology and telecommunications sectors.
On the positive side--and why our Strategic Portfolios did a good job of
preserving shareholder value were the Portfolios' fixed-income holdings and, on
the equity side, value investing's return to favor. Not only has the value
investing style in general been productive over the last 12 months, but the
execution of the AmSouth Value Fund enabled it to deliver returns considerably
in excess of the average value fund's numbers.
Because the Strategic Portfolios are actively managed, with asset allocation a
key component of our investing discipline, we were able to take full advantage
of the Value Fund's success to enhance performance. Approximately 40% of the
equity portion of each of our four portfolios, including the Aggressive Growth
Portfolio, were invested in the underlying Value Fund.++
As of July 31, 2001, the Funds' portfolios were allocated as follows:++
Aggressive Growth: 90% stocks, 0% bonds, 10% money market.
Growth: 65% stocks, 23% bonds, 12% money market.
Growth and Income: 50% stocks, 45% bonds, 5% money market.
Moderate Growth and Income: 40% stocks, 55% bonds, 5% money market.
Q. What is your outlook for the next six to 12 months?
A. Since the beginning of calendar year 2001, we have increased the equity
weighting of all four portfolios by 5% to 10%, as we anticipate an eventual re-
covery in stock prices. We expect to see some improvement in smaller- to mid-
size companies; they appear to have greater potential for earnings. For the
most part, these companies are not caught up in the international currency
fluctuations that are dampening returns for larger, multi-national corpora-
tions. We also anticipate additional easing in interest rates from the Fed.
While long-term rates might not fall any further, our sense is the Fed has some
more work to do on the short-end of the yield curve.
/1/The Lipper Growth Funds Index consists of managed mutual funds that nor-
mally invest in companies with long-term earnings expected to grow signifi-
cantly faster than the earnings of the stocks represented in the major un-
managed stock indices.
/2/The Lipper Balanced Funds Index consists of mutual funds whose primary ob-
jective is to conserve principal by maintaining at all times a balanced
portfolio of both stocks and bonds. Typically, the stock/bond ratio ranges
around 60%/40%.
++The Fund's portfolio composition is subject to change.
26
<PAGE>
AmSouth Aggressive Growth Portfolio
[CHART]
Value of a $10,000 Investment
<TABLE>
<CAPTION>
AmSouth Aggressive Growth S&P 1500 Merrill Lynch Government/
Portfolio (Class A Shares)* Stock Index Corporate Master Index MSCI/(R)/ EAFE Index
<S> <C> <C> <C> <C>
1/13/99 9,452 10,000 10,000 10,000
1/31/99 9,518 10,000 10,072 9,970
2/28/99 9,253 9,656 9,818 9,733
3/31/99 9,395 10,026 9,880 10,139
4/30/99 9,565 10,451 9,913 10,550
5/31/99 9,348 10,239 9,805 10,007
6/30/99 9,773 10,806 9,775 10,397
7/31/99 9,707 10,484 9,747 10,706
8/31/99 9,612 10,397 9,740 10,745
9/30/99 9,528 10,119 9,830 10,853
10/31/99 9,813 10,732 9,849 11,260
11/30/99 10,353 10,980 9,844 11,651
12/31/99 11,051 11,634 9,795 12,696
1/31/00 10,678 11,073 9,792 11,890
2/29/00 10,870 10,978 9,910 12,210
3/31/00 11,389 11,993 10,064 12,683
4/30/00 11,162 11,632 10,011 12,016
5/31/00 10,943 11,397 10,000 11,722
6/30/00 11,235 11,682 10,199 12,181
7/31/00 11,058 11,520 10,301 11,670
8/31/00 11,568 12,280 10,446 11,771
9/30/00 11,443 11,677 10,490 11,198
10/31/00 11,495 11,607 10,559 10,934
11/30/00 11,011 10,687 10,750 10,524
12/31/00 11,217 10,822 10,965 10,898
1/31/01 11,465 11,198 11,127 10,901
2/28/01 10,872 11,278 11,440 10,086
3/31/01 10,238 10,611 10,783 9,401
4/30/01 10,939 11,335 11,522 10,047
5/31/01 11,068 11,459 11,647 9,675
6/30/01 10,842 11,222 11,419 9,277
7/31/01 10,680 10,760 11,249 9,117
</TABLE>
------------------------------------------------------------
Average Annual Total Return
------------------------------------------------------------
As of Inception 1 Since
July 31, 2001 Date Year Inception
------------------------------------------------------------
Class A Shares* 1/13/99 -8.72% 2.62%
------------------------------------------------------------
Class B Shares** 1/27/99 -8.34% 2.97%
------------------------------------------------------------
Trust Shares 1/28/99 -3.30% 4.81%
------------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison to a hypothetical $10,000 investment
from 1/13/99 to 7/31/01 in the Class A Shares class versus a similar invest-
ment in the Fund's benchmark.
The Portfolio's performance is compared to the Morgan Stanley Capital Inter-
national (Europe, Australasia and Far East) MSCI EAFE/(R)/ Index, which is gen-
erally representative of stock markets in those regions; the Merrill Lynch
Government/Corporate Master Index, which is generally representative of the
performance of corporate and U.S. Government bonds; and the S&P 1500 Index,
which is generally representative of the performance of large and small com-
panies in the U.S. stock market. These indices are unmanaged and do not re-
flect the expenses associated with a mutual fund, such as investment manage-
ment fees. The Portfolio's performance does reflect the deduction of fees for
these value-added services. Investors cannot invest directly in an index, al-
though they can invest in its underlying securities. During the period shown,
the Advisor waived and/or reimbursed fees for various expenses. Had these
waivers and/or reimbursements not been in effect, performance quoted would
have been lower.
The quoted returns reflect the performance from 1/13/99 to 3/12/00 of the ISG
Aggressive Growth Portfolio, which was an open-end investment company and
predecessor fund to the AmSouth Aggressive Growth Portfolio.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
27
<PAGE>
AmSouth Growth Portfolio
[CHART]
Value of a $10,000 Investment
<TABLE>
<CAPTION>
AmSouth Growth Portfolio S&P 1500 Merrill Lynch Government/
(Class A Shares)* Stock Index Corporate Master Index MSCI EAFE(R) Index
<S> <C> <C> <C> <C>
2/11/99 9,448 10,000 10,000 10,000
2/28/99 9,286 10,000 9,748 9,762
3/31/99 9,239 10,384 9,809 10,169
4/30/99 9,429 10,824 9,842 10,581
5/31/99 9,286 10,604 9,735 10,036
6/30/99 9,605 11,192 9,705 10,428
7/31/99 9,538 10,858 9,677 10,738
8/31/99 9,414 10,768 9,670 10,777
9/30/99 9,355 10,480 9,759 10,885
10/31/99 9,566 11,115 9,778 11,293
11/30/99 9,845 11,371 9,774 11,685
12/31/99 10,284 12,049 9,724 12,734
1/31/00 10,022 11,468 9,722 11,925
2/29/00 10,100 11,370 9,839 12,246
3/31/00 10,495 12,420 9,992 12,721
4/30/00 10,291 12,047 9,939 12,051
5/31/00 10,118 11,804 9,928 11,757
6/30/00 10,375 12,099 10,126 12,217
7/31/00 10,240 11,931 10,227 11,705
8/31/00 10,706 12,718 10,371 11,806
9/30/00 10,542 12,094 10,415 11,231
10/31/00 10,537 12,021 10,483 10,966
11/30/00 10,157 11,068 10,673 10,555
12/31/00 10,345 11,208 10,886 10,930
1/31/01 10,505 11,598 11,047 10,934
2/28/01 10,125 10,681 10,709 10,116
3/31/01 9,724 10,250 10,276 9,429
4/30/01 10,150 10,707 10,737 10,077
5/31/01 10,224 10,779 10,815 9,704
6/30/01 10,076 10,614 10,659 9,305
7/31/01 10,032 10,266 10,613 9,144
</TABLE>
------------------------------------------------------------------------
Average Annual Total Return
------------------------------------------------------------------------
As of Inception 1 Since
July 31, 2001 Date Year Inception
------------------------------------------------------------------------
Class A Shares* 2/11/99 -7.43% 0.13%
------------------------------------------------------------------------
Class B Shares** 2/15/99 -7.29% 1.08%
------------------------------------------------------------------------
Trust Shares 2/1/99 -1.98% 2.41%
------------------------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison to a hypothetical $10,000 investment
from 2/11/99 to 7/31/01 in the Class A Shares versus a similar investment in
the Fund's benchmark.
The Portfolio's performance is compared to the Morgan Stanley Capital Inter-
national (Europe, Australasia and Far East) MSCI EAFE(R) Index, which is gen-
erally representative of stock markets in those regions; the Merrill Lynch
Government/Corporate Master Index, which is generally representative of the
performance of corporate and U.S. Government bonds; and the S&P 1500 Index,
which is generally representative of the performance of large and small com-
panies in the U.S. stock market. These indices are unmanaged and do not re-
flect the expenses associated with a mutual fund, such as investment manage-
ment fees. The Portfolio's performance does reflect the deduction of fees for
these value-added services. Investors cannot invest directly in an index, al-
though they can invest in its underlying securities. During the period shown,
the Advisor waived and/or reimbursed fees for various expenses. Had these
waivers and/or reimbursements not been in effect, performance quoted would
have been lower.
The quoted returns reflect the performance from 2/1/99 to 3/12/00 of the ISG
Growth Portfolio, which was an open-end investment company and predecessor
fund to the AmSouth Growth Portfolio.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
28
<PAGE>
AmSouth Growth and Income Portfolio
Value of a $10,000 Investment
[CHART]
Merrill Lynch
AmSouth Growth & Government
Income Portfolio S&P 1500 /Corp Master
(Class A Shares)* Stock Index Index MSCI EAFE(R) Index
3/8/99 9,448 10,000 10,000 10,000
3/31/99 9,392 10,384 10,063 10,417
4/30/99 9,495 10,824 10,096 10,840
5/31/99 9,355 10,604 9,986 10,281
6/30/99 9,508 11,192 9,956 10,682
7/31/99 9,424 10,858 9,928 11,000
8/31/99 9,377 10,768 9,920 11,040
9/30/99 9,304 10,480 10,011 11,151
10/31/99 9,473 11,115 10,031 11,569
11/30/99 9,708 11,371 10,026 11,971
12/31/99 9,940 12,049 9,976 13,045
1/31/00 9,770 11,468 9,973 12,216
2/29/00 9,751 11,370 10,093 12,545
3/31/00 10,109 12,420 10,250 13,031
4/30/00 10,066 12,047 10,196 12,345
5/31/00 10,000 11,804 10,185 12,044
6/30/00 10,212 12,099 10,387 12,515
7/31/00 10,109 11,931 10,491 11,990
8/31/00 10,422 12,718 10,639 12,094
9/30/00 10,343 12,094 10,684 11,505
10/31/00 10,368 12,021 10,754 11,234
11/30/00 10,179 11,068 10,949 10,812
12/31/00 10,359 11,208 11,167 11,197
1/31/01 10,526 11,597 11,332 11,200
2/28/01 10,248 10,845 11,182 10,363
3/31/01 9,980 10,544 10,891 9,659
4/30/01 10,303 10,891 11,244 10,323
5/31/01 10,365 10,950 11,323 9,941
6/30/01 10,260 10,832 11,198 9,532
7/31/01 10,271 10,554 11,221 9,367
Average Annual Total Return
As of Inception 1 Since
July 31, 2001 Date Year Inception
-------------------------------------------------------------------------------
Class A Shares* 3/8/99 -3.95% 1.12%
-------------------------------------------------------------------------------
Class B Shares** 1/27/99 -3.55% 2.17%
-------------------------------------------------------------------------------
Trust Shares 2/8/99 1.84% 4.77%
-------------------------------------------------------------------------------
* Reflects maximum 5.50% sales charge.
** Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison to a hypothetical $10,000 investment
from 3/8/99 to 7/31/01 in the Class A Shares versus a similar investment in
the Fund's benchmark.
The Portfolio's performance is compared to the Morgan Stanley Capital Inter-
national (Europe, Australasia and Far East) MSCI EAFE(R) Index, which is gen-
erally representative of stock markets in those regions; the Merrill Lynch
Government/Corporate Master Index, which is generally representative of the
performance of corporate and U.S. Government bonds and the S&P 1500 Index,
which is generally representative of the performance of large and small com-
panies in the U.S. stock market. These indices are unmanaged and do not re-
flect the expenses associated with a mutual fund, such as investment manage-
ment fees. The Portfolio's performance does reflect the deduction of fees for
these value-added services. Investors cannot invest directly in an index, al-
though they can invest in its underlying securities. During the period shown,
the Advisor waived and/or reimbursed fees for various expenses. Had these
waivers and/or reimbursements not been in effect, performance quoted would
have been lower.
The quoted returns reflect the performance from 1/27/99 to 3/12/00 of the ISG
Growth & Income Portfolio, which was an open-end investment company and pred-
ecessor fund to the AmSouth Growth and Income Portfolio.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than original cost.
29
<PAGE>
AmSouth Moderate Growth and Income Portfolio
[CHART]
Value of a $10,000 Investment
AmSouth Moderate Growth S&P 1500 Merrill Lynch Government/
Fund (Class A Shares)* Stock Index Corporate Master Index
2/9/1999 $ 9,454 $10,000 $10,000
2/28/1999 9,473 10,000 9,748
3/31/1999 9,513 10,384 9,809
4/30/1999 9,561 10,824 9,842
5/31/1999 9,446 10,604 9,735
6/30/1999 9,525 11,192 9,705
7/31/1999 9,457 10,858 9,677
8/31/1999 9,428 10,768 9,670
9/30/1999 9,399 10,480 9,759
10/31/1999 9,515 11,115 9,778
11/30/1999 9,660 11,371 9,774
12/31/1999 9,772 12,049 9,724
1/31/2000 9,654 11,468 9,722
2/29/2000 9,625 11,370 9,839
3/31/2000 9,932 12,420 9,992
4/30/2000 9,907 12,047 9,939
5/31/2000 9,873 11,804 9,928
6/30/2000 10,031 12,099 10,126
7/31/2000 10,009 11,931 10,227
8/31/2000 10,268 12,718 10,371
9/30/2000 10,235 12,094 10,415
10/31/2000 10,273 12,021 10,483
11/30/2000 10,186 11,068 10,673
12/31/2000 10,343 11,208 10,886
1/31/2001 10,545 11,598 11,047
2/28/2001 10,342 10,658 10,978
3/31/2001 10,145 10,448 10,770
4/30/2001 10,404 10,709 11,044
5/31/2001 10,492 10,793 11,138
6/30/2001 10,420 10,700 11,062
7/31/2001 10,500 10,484 11,147
---------------------------------------------------------------------
Average Annual Total Return
---------------------------------------------------------------------
As of Inception 1 Since
July 31, 2001 Date Year inception
---------------------------------------------------------------------
Class A Shares* 2/9/99 -0.90% 1.99%
---------------------------------------------------------------------
Class B Shares** 1/28/99 -0.75% 1.91%
---------------------------------------------------------------------
Trust Shares 2/10/99 4.93% 4.50%
---------------------------------------------------------------------
*Reflects maximum 5.50% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison to a hypothetical $10,000 investment
from 2/9/99 to 7/31/01 in the Class A Shares versus a similar investment in
the Fund's benchmark.
The Portfolio's performance is compared to the Merrill Lynch
Government/Corporate Master Index, which is generally representative of the
performance of corporate and U.S. Government bonds, and the S&P 1500 Index,
which is generally representative of the performance of large and small com-
panies in the U.S. stock market. These indices are unmanaged and do not re-
flect the expenses associated with a mutual fund, such as investment manage-
ment fees. The Portfolio's performance does reflect the deduction of fees for
these value-added services. Investors cannot invest directly in an index, al-
though they can invest in its underlying securities. During the period shown,
the Advisor waived and/or reimbursed fees for various expenses. Had these
waivers and/or reimbursements not been in effect, performance quoted would
have been lower.
The quoted returns reflect the performance from 1/28/99 to 3/12/00 of the ISG
Moderate Growth & Income Portfolio, which was an open-end investment company
and predecessor fund to the AmSouth Moderate Growth and Income Portfolio.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
30
<PAGE>
[This Page Intentionally Left Blank]
31
<PAGE>
AmSouth Bond Fund
Portfolio Managers
Brian B. Sullivan, CFA, Chief
Investment Officer
John P. Boston, CFA, Senior Vice
President
AmSouth Bank
AmSouth Investment Management
Company, LLC
The AmSouth Bond Fund is co-managed
by Brian Sullivan, CFA, and John
Boston, CFA. Brian has 16 years of
fixed-income investment management
experience and holds an M.B.A. in
finance and a bachelor's degree in
economics. John has more than 11
years of experience as a fixed-
income manager. He holds a
bachelor's degree in finance and
political science.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Bond Fund seeks to take advantage of changes in interest rates to
pursue strong returns. We buy longer bonds when interest rates are high and
expected to fall and shorter bonds when interest rates are low and expected to
rise. The change in the average maturity or duration is one of the most
powerful determinants of return. Through the active use of high-quality
investments, we strive to obtain excellent returns."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund produced a total return
of 11.63% (Class A Shares at NAV). In comparison, the Lehman Brothers
Government/Credit Bond Index rose 12.71%, and the Lipper Corporate A-Rated Debt
Funds Index gained 12.32%.+
Q. What factors affected your performance?
A. This was a very good time for investors to have exposure to bonds. There was
a marked slowdown in economic growth, and we saw four consecutive quarters of
below-average growth in the Gross Domestic Product.++ Additionally, the Fed has
lowered interest rates six times since the first of the year through July 31,
2001. We now have a Fed that has moved to a stimulative monetary policy, and we
have in place a stimulative fiscal policy, namely, a tax cut. Over the last 12
months, we have seen almost unprecedented easing of monetary policy.
With the slowdown we are talking about, interest rates dropped dramatically in
the short- and intermediate areas of the yield curve. Although there was not
much of a decline in longer interest rates, declines in interest rates are al-
ways good for bonds. This was especially true for corporate bonds. During the
period, the best- performing area of the bond market was the corporate sector.
How did we react to the changing environment? We made substantial changes to
the structure of the Bond Fund. We reduced the portfolio's average maturity; we
do not feel there is much room left for rates to decline, and we are reluctant
to take undue risk. We also reduced our exposure to Treasury securities. If we
are correct in our analysis that the U.S. economy is at a trough and could pick
up in the near term, we believe the best place to be is in the middle part of
the yield curve, with an emphasis on corporate bonds.
As of July 31, 2001, approximately 47.8% of the portfolio was invested in cor-
porate issues, 27.7% in securities issued by the U.S. Treasury, 22% in U.S.
government agency paper, 0.1% in municipal securities, and the remainder in
cash equivalents. The securities within the Fund maintained an average credit
quality of AAA (as rated by Standard & Poor's), with an average maturity of 6.9
years.++
Q. What is your outlook for the next six to 12 months?
A. For at least the next few months, and perhaps longer, we would not be sur-
prised to see the bond market just tread water, with yields and prices hovering
in a narrow trading range. We believe the Fed could cut rates a little lower,
to further protect against an economic recession, but we do not believe there
is much more room on the downside for rates. Therefore, we do not anticipate
the kind of robust gains we enjoyed over the last 12 months.
+ The Lipper Corporate A-Rated Debt Funds Index is an index comprised of man-
aged funds that invest at least 65% of their assets in corporate debt is-
sues rated "A" or better or government issues.
++ The Gross Domestic Product (GDP) is the measure of market value of the
goods and services produced by labor and property in the United States.
The GDP is made up of consumer and government purchases, private domestic
investments, and net exports of goods and services.
++The Fund's portfolio composition is subject to change.
32
<PAGE>
AmSouth Bond Fund
[CHART]
Value of a $10,000 Investment
AmSouth AmSouth AmSouth Lehman Brothers
Bond Fund Bond Fund Bond Fund Government/Credit
(Class A Shares)* (Class B Shares) (Trust Shares) Bond Index
7/31/1991 $ 9,604 $10,000 $10,000 $10,000
8/31/1991 9,829 10,224 10,234 10,230
9/30/1991 10,027 10,435 10,440 10,444
10/31/1991 10,159 10,561 10,578 10,537
11/30/1991 10,305 10,701 10,730 10,642
12/31/1991 10,627 11,024 11,066 11,001
1/31/1992 10,444 10,827 10,875 10,838
2/29/1992 10,493 10,870 10,926 10,895
3/31/1992 10,420 10,785 10,850 10,835
4/30/1992 10,505 10,856 10,939 10,900
5/31/1992 10,696 11,052 11,137 11,112
6/30/1992 10,867 11,220 11,316 11,275
7/31/1992 11,175 11,529 11,637 11,564
8/31/1992 11,298 11,641 11,764 11,667
9/30/1992 11,537 11,879 12,013 11,826
10/31/1992 11,330 11,655 11,798 11,645
11/30/1992 11,258 11,571 11,722 11,634
12/31/1992 11,403 11,711 11,874 11,834
1/31/1993 11,676 11,978 12,158 12,092
2/28/1993 11,907 12,216 12,156 12,344
3/31/1993 11,968 12,258 12,462 12,386
4/30/1993 12,073 12,356 12,571 12,481
5/31/1993 12,049 12,328 12,546 12,475
6/30/1993 12,252 12,525 12,589 12,758
7/31/1993 12,274 12,539 12,780 12,840
8/31/1993 12,491 12,749 13,007 13,135
9/30/1993 12,546 12,791 13,064 13,181
10/31/1993 12,568 12,805 13,086 13,235
11/30/1993 12,490 12,707 13,006 13,085
12/31/1993 12,530 12,735 13,047 13,143
1/31/1994 12,687 12,889 13,211 13,340
2/28/1994 12,482 12,679 12,997 13,049
3/31/1994 12,230 12,412 12,735 12,730
4/30/1994 12,125 12,286 12,626 12,624
5/31/1994 12,134 12,286 12,634 12,601
6/30/1994 12,096 12,244 12,596 12,572
7/31/1994 12,301 12,440 12,809 12,824
8/31/1994 12,322 12,440 12,830 12,829
9/30/1994 12,120 12,230 12,621 12,635
10/31/1994 12,094 12,202 12,593 12,621
11/30/1994 12,055 12,146 12,553 12,599
12/31/1994 12,125 12,202 12,626 12,682
1/31/1995 12,339 12,412 12,848 12,925
2/28/1995 12,643 12,707 13,165 13,225
3/31/1995 12,707 12,763 13,231 13,314
4/30/1995 12,892 12,931 13,424 13,499
5/31/1995 13,435 13,464 13,990 14,064
6/30/1995 13,536 13,562 14,095 14,177
7/31/1995 13,489 13,506 14,046 14,121
8/31/1995 13,642 13,647 14,205 14,302
9/30/1995 13,763 13,759 14,331 14,448
10/31/1995 13,958 13,941 14,534 14,661
11/30/1995 14,179 14,151 14,764 14,902
12/31/1995 14,357 14,306 14,949 15,121
1/31/1996 14,456 14,404 15,052 15,215
2/29/1996 14,195 14,123 14,781 14,893
3/31/1996 14,038 13,955 14,617 14,768
4/30/1996 13,908 13,815 14,482 14,666
5/31/1996 13,872 13,773 14,445 14,641
6/30/1996 14,048 13,941 14,628 14,837
7/31/1996 14,079 13,955 14,660 14,871
8/31/1996 14,009 13,871 14,587 14,835
9/30/1996 14,265 14,109 14,854 15,099
10/31/1996 14,637 14,474 15,241 15,451
11/30/1996 14,930 14,755 15,546 15,736
12/31/1996 14,724 14,530 15,332 15,561
1/31/1997 14,716 14,516 15,324 15,580
2/28/1997 14,729 14,516 15,337 15,612
3/31/1997 14,506 14,278 15,105 15,427
4/30/1997 14,744 14,502 15,352 15,652
5/31/1997 14,875 14,614 15,489 15,797
6/30/1997 15,051 14,783 15,672 15,987
7/31/1997 15,553 15,259 16,195 16,476
8/31/1997 15,341 15,035 15,974 16,292
9/30/1997 15,605 15,275 16,235 16,547
10/31/1997 15,866 15,544 16,524 16,812
11/30/1997 15,930 15,600 16,592 16,901
12/31/1997 16,089 15,728 16,744 17,079
1/31/1998 16,325 15,962 17,005 17,319
2/28/1998 16,260 15,877 16,940 17,285
3/31/1998 16,315 15,920 16,998 17,338
4/30/1998 16,374 15,966 17,061 17,425
5/31/1998 16,536 16,113 17,231 17,612
6/30/1998 16,691 16,254 17,394 17,791
7/31/1998 16,711 16,263 17,417 17,805
8/31/1998 17,100 16,618 17,823 18,153
9/30/1998 17,604 17,096 18,350 18,672
10/31/1998 17,543 17,026 18,288 18,539
11/30/1998 17,523 16,997 18,269 18,650
12/31/1998 17,567 17,026 18,317 18,695
1/31/1999 17,639 17,085 18,394 18,828
2/28/1999 17,267 16,713 18,007 18,380
3/31/1999 17,360 16,789 18,105 18,472
4/30/1999 17,387 16,804 18,135 18,518
5/31/1999 17,195 16,610 17,935 18,327
6/30/1999 17,163 16,568 17,904 18,270
7/31/1999 17,143 16,521 17,885 18,219
8/31/1999 17,103 16,468 17,844 18,205
9/30/1999 17,243 16,606 17,992 18,368
10/31/1999 17,265 16,600 18,016 18,416
11/30/1999 17,240 16,578 17,991 18,405
12/31/1999 17,118 16,442 17,867 18,293
1/31/2000 17,102 16,408 17,852 18,287
2/29/2000 17,358 16,657 18,120 18,516
3/31/2000 17,652 16,921 18,431 18,783
4/30/2000 17,560 16,822 18,337 18,691
5/31/2000 17,533 16,787 18,311 18,674
6/30/2000 17,877 17,107 18,673 19,055
7/31/2000 18,018 17,231 18,822 19,257
8/31/2000 18,269 17,460 19,087 19,528
9/30/2000 18,363 17,540 19,188 19,602
10/31/2000 18,464 17,626 19,314 19,726
11/30/2000 18,794 17,930 19,643 20,063
12/31/2000 19,182 18,275 20,051 20,458
1/31/2001 19,411 18,482 20,292 20,802
2/28/2001 19,586 18,658 20,496 21,016
3/31/2001 19,705 18,745 20,604 21,113
4/30/2001 19,513 18,565 20,424 20,955
5/31/2001 19,580 18,618 20,478 21,076
6/30/2001 19,670 18,674 20,575 21,177
7/31/2001 20,114 19,086 21,041 21,705
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
Average Annual Total Return
As of Inception 1 5 10
July 31, 2001 Date Year Year Year
---------------------------------------------------------------------------
Class A Shares* 12/1/88 7.15% 6.52% 7.24%
---------------------------------------------------------------------------
Class B Shares** 9/16/97/1/ 5.77% 6.15% 6.68%
---------------------------------------------------------------------------
Trust Shares 9/2/97/1/ 11.79% 7.50% 7.72%
---------------------------------------------------------------------------
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/91 to 7/31/01 in the indicated share class versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
The performance of the AmSouth Bond Fund is measured against the Lehman
Brothers Government/Credit Bond Index, an unmanaged broad-based index repre-
sentative of the total return of long-term government and corporate bonds.
The index does not reflect the deduction of fees associated with a mutual
fund, such as investment management fees. The Fund's performance does re-
flect the deduction of fees for these value-added services. Investors cannot
invest directly in an index, although they can invest in its underlying se-
curities. During the period shown, the Advisor waived and/or reimbursed fees
for various expenses. Had these waivers and/or reimbursements not been in
effect, performance quoted would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 9/16/97 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date.
The historical performance for the Class B Shares has been adjusted to
reflect the higher 12b-1 fees and the contingent deferred sales charge
(CDSC).
Effective 12/1/99 the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
33
<PAGE>
AmSouth Limited Term Bond Fund
Portfolio Manager
John P. Boston, CFA
Senior Vice President
AmSouth Bank
AmSouth Investment Management
Company, LLC
John manages the AmSouth Limited
Term Bond Fund and the AmSouth
Government Income Fund and co-
manages the AmSouth Bond Fund. He
has more than 11 years of
experience as a fixed-income
manager. He holds a bachelor's
degree in finance and political
science and is a Chartered
Financial Analyst.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Limited Term Bond Fund was designed to fill the gap between money
market funds and long term bond funds. For investors looking for a diversified
bond fund, this Fund represents the first step out on the 'risk/return' spectrum
from the money market arena."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund produced a total return of
10.12% (Class A Shares at NAV). In comparison, the Merrill Lynch 1-5-Year
Government/Corporate Bond Index rose 11.18%, and the Lipper Short Intermediate
Investment Grade Debt Funds Index gained 11.05%.+
Q. What factors affected your performance?
A. This was a very good time for investors to have exposure to bonds. There was
a marked slowdown in economic growth, and we saw four consecutive quarters of
below-average growth in the Gross Domestic Product.++ Additionally, the Fed has
lowered interest rates six times since the first of the year through July 31,
2001. We now have a Fed that has moved to a stimulative monetary policy, and we
have in place a stimulative fiscal policy, namely, a tax cut.
Over the last 12 months, we have seen almost unprecedented easing of monetary
policy.
With the slowdown we are talking about, interest rates dropped dramatically in
the short- and intermediate areas of the yield curve, though there was not as
much of a decline in longer interest rates; declines in interest rates are al-
ways good for bonds. This was especially true for corporate bonds. During the
period, the best-performing area of the bond market was the corporate sector.
How did we react to the changing environment? Among other things, we increased
our allocation of corporate bonds to 79.4% of the portfolio's assets, from 72%
a year ago. If we are correct in our analysis that the U.S. economy is at a
trough and could pick up in the near term, we believe the best place to be is
in the middle part of the yield curve, with an emphasis on corporate bonds.++
As of July 31, 2001, approximately 79.4% of the portfolio was invested in cor-
porate issues, 7.9% in securities issued by the U.S. Treasury, 10.6% in U.S.
government agency paper, and the remainder in cash equivalents. The securities
within the Fund maintained an average credit quality of AAA (as rated by Stan-
dard & Poor's), with an average maturity of 2.7 years.++
Q. What is your outlook for the next six to 12 months?
A. For at least the next few months, and perhaps longer, we would not be sur-
prised to see the bond market just tread water, with yields and prices hovering
in a narrow trading range. We believe the Fed could cut rates a little lower,
to further protect against an economic recession; even if the Fed does not act,
short-term rates should remain low. Therefore, we have not changed the average
maturity of the Fund. We believe we are positioned to take full advantage of a
relatively static fixed-income environment.
+ The Lipper Short Intermediate Investment Grade Debt Funds Index is com-
prised of managed funds that invest at least 65% of their assets in invest-
ment-grade debt issues (rated in the top four grades) with dollar-weighted
average maturities of one to five years.
++ The Gross Domestic Product (GDP) is the measure of market value of the
goods and services produced by labor and property in the United States.
The GDP is made up of consumer and government purchases, private domestic
investments, and net exports of goods and services.
++The Fund's portfolio composition is subject to change.
34
<PAGE>
AmSouth Limited Term Bond Fund
[CHART]
AmSouth AmSouth AmSouth Merrill Lynch
Class A Class B Trust 1-5-Year
Shares Limited Shares Limited Shares Limited Government/
Term Bond Term Bond Term Bond Corp Bond
Fund Fund Fund Index
7/31/1991 9,604 10,000 10,000 10,000
8/31/1991 9,744 10,140 10,146 10,162
9/30/1991 9,849 10,238 10,254 10,299
10/31/1991 9,959 10,350 10,369 10,419
11/30/1991 10,064 10,448 10,478 10,536
12/31/1991 10,242 10,616 10,664 10,731
1/31/1992 10,220 10,588 10,641 10,681
2/29/1992 10,278 10,644 10,701 10,715
3/31/1992 10,268 10,616 10,691 10,696
4/30/1992 10,330 10,672 10,756 10,801
5/31/1992 10,410 10,756 10,839 10,932
6/30/1992 10,577 10,910 11,012 11,074
7/31/1992 10,704 11,036 11,145 11,242
8/31/1992 10,783 11,106 11,227 11,359
9/30/1992 10,917 11,232 11,367 11,494
10/31/1992 10,825 11,134 11,270 11,386
11/30/1992 10,796 11,092 11,241 11,345
12/31/1992 10,860 11,148 11,307 11,470
1/31/1993 11,011 11,289 11,465 11,646
2/28/1993 11,133 11,415 11,592 11,788
3/31/1993 11,172 11,443 11,632 11,834
4/30/1993 11,256 11,513 11,720 11,926
5/31/1993 11,229 11,485 11,692 11,894
6/30/1993 11,382 11,625 11,851 12,017
7/31/1993 11,423 11,653 11,894 12,043
8/31/1993 11,573 11,807 12,050 12,188
9/30/1993 11,610 11,835 12,088 12,233
10/31/1993 11,616 11,821 12,094 12,260
11/30/1993 11,588 11,793 12,065 12,238
12/31/1993 11,638 11,835 12,117 12,288
1/31/1994 11,751 11,933 12,235 12,392
2/28/1994 11,634 11,807 12,113 12,269
3/31/1994 11,474 11,639 11,946 12,157
4/30/1994 11,389 11,541 11,858 12,086
5/31/1994 11,381 11,527 11,850 12,103
6/30/1994 11,380 11,513 11,849 12,128
7/31/1994 11,512 11,639 11,986 12,257
8/31/1994 11,541 11,653 12,016 12,300
9/30/1994 11,469 11,569 11,942 12,236
10/31/1994 11,475 11,569 11,948 12,253
11/30/1994 11,414 11,499 11,884 12,189
12/31/1994 11,428 11,499 11,898 12,221
1/31/1995 11,596 11,653 12,074 12,407
2/28/1995 11,801 11,863 12,287 12,619
3/31/1995 11,882 11,933 12,372 12,695
4/30/1995 12,000 12,031 12,494 12,825
5/31/1995 12,292 12,325 12,798 13,126
6/30/1995 12,360 12,381 12,869 13,205
7/31/1995 12,392 12,395 12,902 13,239
8/31/1995 12,475 12,465 12,989 13,330
9/30/1995 12,545 12,535 13,062 13,406
10/31/1995 12,651 12,619 13,172 13,538
11/30/1995 12,779 12,745 13,305 13,682
12/31/1995 12,881 12,829 13,412 13,804
1/31/1996 12,983 12,927 13,518 13,928
2/29/1996 12,898 12,829 13,429 13,832
3/31/1996 12,842 12,759 13,371 13,792
4/30/1996 12,827 12,731 13,355 13,778
5/31/1996 12,838 12,731 13,366 13,788
6/30/1996 12,927 12,815 13,459 13,907
7/31/1996 12,976 12,857 13,510 13,956
8/31/1996 12,991 12,857 13,526 13,990
9/30/1996 13,112 12,969 13,652 14,143
10/31/1996 13,265 13,109 13,811 14,339
11/30/1996 13,380 13,207 13,931 14,479
12/31/1996 13,356 13,179 13,907 14,442
1/31/1997 13,402 13,207 13,954 14,507
2/28/1997 13,421 13,221 13,974 14,531
3/31/1997 13,351 13,137 13,901 14,497
4/30/1997 13,487 13,263 14,042 14,637
5/31/1997 13,576 13,333 14,135 14,743
6/30/1997 13,676 13,417 14,239 14,858
7/31/1997 13,916 13,655 14,489 15,077
8/31/1997 13,860 13,585 14,431 15,056
9/30/1997 14,010 13,711 14,588 15,196
10/31/1997 14,145 13,838 14,731 15,332
11/30/1997 14,162 13,852 14,750 15,361
12/31/1997 14,265 13,936 14,858 15,476
1/31/1998 14,443 14,104 15,045 15,657
2/28/1998 14,422 14,076 15,010 15,654
3/31/1998 14,457 14,090 15,063 15,715
4/30/1998 14,523 14,146 15,131 15,790
5/31/1998 14,616 14,230 15,230 15,885
6/30/1998 14,700 14,300 15,318 15,978
7/31/1998 14,743 14,328 15,365 16,048
8/31/1998 14,977 14,552 15,610 16,281
9/30/1998 15,242 14,790 15,887 16,573
10/31/1998 15,250 14,790 15,901 16,627
11/30/1998 15,243 14,776 15,895 16,604
12/31/1998 15,282 14,790 15,937 16,665
1/31/1999 15,340 14,846 15,999 16,749
2/28/1999 15,214 14,720 15,869 16,597
3/31/1999 15,326 14,806 15,987 16,733
4/30/1999 15,350 14,823 15,998 16,789
5/31/1999 15,273 14,743 15,934 16,723
6/30/1999 15,313 14,757 15,977 16,771
7/31/1999 15,334 14,769 16,001 16,790
8/31/1999 15,367 14,788 16,020 16,823
9/30/1999 15,466 14,887 16,141 16,960
10/31/1999 15,477 14,888 16,153 16,999
11/30/1999 15,511 14,894 16,190 17,027
12/31/1999 15,490 14,873 16,170 17,029
1/31/2000 15,475 14,841 16,155 16,991
2/29/2000 15,585 14,947 16,271 17,113
3/31/2000 15,699 15,051 16,408 17,246
4/30/2000 15,706 15,034 16,401 17,258
5/31/2000 15,749 15,080 16,448 17,308
6/30/2000 15,947 15,260 16,657 17,538
7/31/2000 16,039 15,338 16,754 17,662
8/31/2000 16,166 15,450 16,890 17,826
9/30/2000 16,302 15,569 17,033 17,987
10/31/2000 16,349 15,589 17,084 18,068
11/30/2000 16,525 15,762 17,270 18,276
12/31/2000 16,763 15,980 17,521 18,542
1/31/2001 17,004 16,184 17,775 18,810
2/28/2001 17,129 16,309 17,907 18,957
3/31/2001 17,255 16,404 18,040 19,130
4/30/2001 17,290 16,427 18,080 19,142
5/31/2001 17,367 16,490 18,161 19,255
6/30/2001 17,403 16,530 18,219 19,327
7/31/2001 17,662 16,749 18,474 19,636
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
Average Annual Total Return
As of Inception 1 5 10
July 31, 2001 Date Year Year Year
--------------------------------------------------------------------------
Class A Shares* 2/1/89 5.74% 5.49% 5.85%
--------------------------------------------------------------------------
Class B Shares** 1/21/99/1/ 4.20% 5.11% 5.29%
--------------------------------------------------------------------------
Trust Shares 9/2/97/1/ 10.26% 6.46% 6.33%
--------------------------------------------------------------------------
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/91 to 7/31/01 in the indicated share class versus a similar in-
vestment in the Fund's benchmark, and represents the reinvestment of divi-
dends and capital gains in the Fund.
The performance of the AmSouth Limited Term Bond Fund is measured against
the Merrill Lynch 1-5-Year Government/Corporate Bond Index, an unmanaged in-
dex generally representative of the total return of short-term government
and corporate bonds. The index does not reflect the deduction of fees asso-
ciated with a mutual fund, such as investment management fees. The Fund's
performance does reflect the deduction of fees for these value-added servic-
es. Investors cannot invest directly in an index, although they can invest
in its underlying securities. During the period shown, the Advisor waived
and/or reimbursed fees for various expenses. Had these waivers and/or reim-
bursements not been in effect, performance quoted would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 1/21/99 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date.
The historical performance for the Class B Shares has been adjusted to
reflect the higher 12b-1 fees and the contingent deferred sales charge
(CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
35
<PAGE>
AmSouth Government Income Fund
Portfolio Managers
John P. Boston, CFA, Senior Vice
President
John Mark McKenzie, Senior Vice
President
AmSouth Bank
The AmSouth Government Income Fund
is co-managed by John Boston, CFA,
and John Mark McKenzie. John Boston
also manages the AmSouth Limited
Term Bond Fund, and co-manages the
AmSouth Bond Fund. He has more than
11 years of experience as a fixed-
income manager. He holds a
bachelor's degree in finance and
political science and is a
Chartered Financial Analyst.
John Mark McKenzie has more than 14
years of investment management
experience. In addition to co-
managing the AmSouth Government
Income Fund, he manages the AmSouth
Limited Term U.S. Government Fund
and four of the AmSouth Money
Market Funds: U.S. Treasury,
Treasury Reserve, Prime, and
Institutional Prime Obligations. He
holds bachelor's degrees in banking
and finance and earned a law degree
from the University of Mississippi
School of Law.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Government Income Fund is more suitable for investors who seek
income but also demand the safety of U.S. government securities. Although we
attempt to consistently generate a high level of income, investors should be
aware that yields and principal values vary and that the Fund is not guaranteed
by the U.S. government."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund produced a total return of
11.25% (Class A Shares at NAV). In comparison, the Lehman Brothers Mortgage In-
dex rose 12.54%, while the Lipper U.S. Mortgage Funds Index gained 11.48%.+
Q. What factors affected your performance?
A. Traditionally, the AmSouth Government Income Funds returns are based, to a
large extent, on the performance of the U.S. Treasury and mortgage-backed secu-
rities. During the most recent, 12-month period, we benefited from an overall
rally in Treasury securities, continuing Treasury buy backs--which boost the
price of these securities--and a contraction in mortgage spreads.
With the Fed lowering interest rates during the last seven months, we saw a ma-
jor shift in yields, especially at the short end of the yield curve. Generally,
yield declines in the bond market increases proportionally the value of compa-
rable bonds held in our portfolio. For example, from July 2000 to July 2001,
yields on one-year securities tumbled 265 basis points (2.65%); five-year paper
fell 160 basis points (1.60%); and the 30-year bond's yield declined 35 basis
points (0.35%). We feel that this disparity between long- and short-securities'
yields was expected. The Fed policy affects short-term rates, while the market
sets long-term rates. Consequently, most price appreciation took place among
the short- and intermediate-term securities we owned.
A slower economy and benign inflation in general also helped bonds; although
inflation picked up slightly during the period, we feel it was not considered a
major concern by bond investors.
As of July 31, 2001, the Fund's average maturity was 6.0 years, and its average
credit quality was AAA (as rated by the Standard & Poor's). Approximately 38.6%
of the Fund was invested in government agency securities, 20.6% in U.S. Trea-
suries, 38.5% in mortgage-backed securities, and 0.9% in cash equivalents.++
Q. What is your outlook for the next six to 12 months?
A. In recent months, we have become a bit more defensive in positioning the
portfolio; we believe much of the bond-market rally is over. We anticipate the
economy will bounce back sometime toward the end of this year or the beginning
of 2002. We see interest rates either stabilizing or, when the economy picks
up, even rising somewhat. In response, we began shortening the Fund's average
maturity.
+ The Lipper U.S. Mortgage Funds Index consists of managed mutual funds that
invest at least 65% of their assets in mortgages/securities issued or guar-
anteed as to principal and interest by the U.S. government and certain fed-
eral agencies.
++The Fund's portfolio composition is subject to change.
36
<PAGE>
AmSouth Government Income Fund
[CHART]
Value of a $10,000 Investment
AmSouth AmSouth AmSouth Lehman
Government Government Government Brothers
Income Fund Income Fund Income Fund Mortgage
(Class A Shares)* (Class B Shares) (Trust Shares) Index
10/1/1993 9,597 10,000 10,000 10,000
10/31/1993 9,573 9,958 9,975 10,029
11/30/1993 9,549 9,930 9,950 10,009
12/31/1993 9,598 9,972 10,001 10,090
1/31/1994 9,656 10,028 10,061 10,190
2/28/1994 9,597 9,958 10,000 10,119
3/31/1994 9,460 9,804 9,858 9,855
4/30/1994 9,411 9,748 9,806 9,783
5/31/1994 9,431 9,762 9,827 9,822
6/30/1994 9,461 9,776 9,858 9,800
7/31/1994 9,572 9,888 9,973 9,996
8/31/1994 9,603 9,916 10,005 10,028
9/30/1994 9,552 9,846 9,952 9,886
10/31/1994 9,552 9,846 9,952 9,880
11/30/1994 9,511 9,790 9,909 9,849
12/31/1994 9,562 9,832 9,962 9,928
1/31/1995 9,720 9,986 10,125 10,140
2/28/1995 9,904 10,168 10,318 10,399
3/31/1995 9,926 10,182 10,340 10,448
4/30/1995 10,027 10,280 10,445 10,596
5/31/1995 10,309 10,559 10,737 10,930
6/30/1995 10,376 10,615 10,807 10,992
7/31/1995 10,379 10,615 10,810 11,011
8/31/1995 10,476 10,699 10,911 11,125
9/30/1995 10,558 10,783 10,996 11,223
10/31/1995 10,672 10,881 11,114 11,323
11/30/1995 10,807 11,021 11,255 11,452
12/31/1995 10,936 11,133 11,388 11,595
1/31/1996 11,000 11,189 11,454 11,682
2/29/1996 10,864 11,049 11,314 11,586
3/31/1996 10,820 10,993 11,269 11,544
4/30/1996 10,767 10,923 11,213 11,511
5/31/1996 10,739 10,895 11,183 11,478
6/30/1996 10,847 10,993 11,295 11,636
7/31/1996 10,888 11,021 11,337 11,680
8/31/1996 10,909 11,035 11,359 11,680
9/30/1996 11,072 11,189 11,529 11,875
10/31/1996 11,308 11,427 11,774 12,107
11/30/1996 11,494 11,594 11,968 12,280
12/31/1996 11,381 11,483 11,850 12,217
1/31/1997 11,428 11,510 11,899 12,307
2/28/1997 11,446 11,524 11,917 12,348
3/31/1997 11,339 11,399 11,806 12,232
4/30/1997 11,494 11,552 11,968 12,426
5/31/1997 11,598 11,650 12,075 12,548
6/30/1997 11,737 11,776 12,221 12,695
7/31/1997 12,001 12,028 12,495 12,933
8/31/1997 11,937 11,958 12,429 12,902
9/30/1997 12,103 12,112 12,603 13,066
10/31/1997 12,252 12,252 12,760 13,211
11/30/1997 12,309 12,308 12,820 13,255
12/31/1997 12,445 12,434 12,963 13,375
1/31/1998 12,580 12,559 13,105 13,508
2/28/1998 12,600 12,559 13,127 13,536
3/31/1998 12,643 12,601 13,173 13,593
4/30/1998 12,691 12,629 13,223 13,670
5/31/1998 12,787 12,727 13,325 13,761
6/30/1998 12,861 12,783 13,390 13,827
7/31/1998 12,910 12,825 13,442 13,897
8/31/1998 13,056 12,965 13,609 14,024
9/30/1998 13,273 13,161 13,823 14,193
10/31/1998 13,253 13,133 13,803 14,175
11/30/1998 13,314 13,189 13,882 14,246
12/31/1998 13,334 13,203 13,904 14,307
1/31/1999 13,417 13,273 13,978 14,409
2/28/1999 13,284 13,133 13,854 14,351
3/31/1999 13,343 13,175 13,917 14,447
4/30/1999 13,400 13,217 13,978 14,514
5/31/1999 13,334 13,147 13,910 14,432
6/30/1999 13,291 13,091 13,866 14,382
7/31/1999 13,248 13,049 13,807 14,284
8/31/1999 13,226 13,007 13,815 14,284
9/30/1999 13,381 13,147 13,964 14,515
10/31/1999 13,436 13,203 14,022 14,600
11/30/1999 13,454 13,203 14,042 14,607
12/31/1999 13,418 13,161 14,006 14,572
1/31/2000 13,389 13,119 13,976 14,445
2/29/2000 13,527 13,245 14,121 14,613
3/31/2000 13,716 13,413 14,320 14,772
4/30/2000 13,664 13,368 14,268 14,782
5/31/2000 13,655 13,335 14,261 14,790
6/30/2000 13,877 13,558 14,494 15,106
7/31/2000 13,983 13,654 14,623 15,203
8/31/2000 14,178 13,835 14,828 15,434
9/30/2000 14,242 13,889 14,897 15,594
10/31/2000 14,365 14,002 15,012 15,707
11/30/2000 14,592 14,214 15,267 15,942
12/31/2000 14,850 14,442 15,522 16,199
1/31/2001 15,020 14,598 15,702 16,452
2/28/2001 15,145 14,712 15,835 16,545
3/31/2001 15,211 14,769 15,906 16,641
4/30/2001 15,156 14,707 15,851 16,665
5/31/2001 15,223 14,764 15,922 16,775
6/30/2001 15,259 14,789 15,962 16,810
7/31/2001 15,556 15,069 16,275 17,109
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
-------------------------------------------------------------------------------
-
Average Annual Total Return
-------------------------------------------------------------------------------
-
As of Inception 1 5 Since
July 31, 2000 Date Year Year Inception
-------------------------------------------------------------------------------
-
Class A Shares* 10/1/93 6.80% 6.53% 5.81%
-------------------------------------------------------------------------------
-
Class B Shares** 3/13/00/1/ 5.36% 6.14% 5.38%
-------------------------------------------------------------------------------
-
Trust Shares 9/2/97/1/ 11.30% 7.50% 6.42%
-------------------------------------------------------------------------------
-
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%)
The chart above represents a comparison of a hypothetical $10,000 investment
from 10/1/93 to 7/31/01 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Government Income Fund is measured against the
Lehman Brothers Mortgage Index, an unmanaged index generally representative
of the mortgage bond market as a whole. The index does not reflect the deduc-
tion of fees associated with a mutual fund, such as investment management
fees. The Fund's performance does reflect the deduction of fees for these
value-added services. Investors cannot invest directly in an index, although
they can invest in its underlying securities. During the period shown, the
Advisor waived and/or reimbursed fees for various expenses. Had these waivers
and/or reimbursements not been in effect, performance quoted would have been
lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 3/13/00 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
37
<PAGE>
AmSouth Limited Term U.S. Government Fund
Portfolio Manager
John Mark McKenzie
Senior Vice President
AmSouth Bank
AmSouth Investment Management
Company, LLC
John Mark has more than 14 years of
investment management experience.
In addition to managing the AmSouth
Limited Term U.S. Government Fund,
he co-manages the AmSouth
Government Income Fund and manages
four of the AmSouth Money Market
Funds: U.S.Treasury, Treasury
Reserve, Prime, and Institutional
Prime Obligations. He holds
bachelors' degrees in banking and
finance and earned a law degree
from the University of Mississippi
School of Law.
PORTFOLIO MANAGER'S PROSPECTIVE
"The AmSouth Limited Term U.S. Government Fund seeks to provide current income
from high grade securities while limiting shape price fluctuations. We minimize
share price movements by investing in securities with short maturities. While we
generally track the Merrill Lynch 1 to 5 Year Government Bond Index, we seek to
outperform it through an occasional contrarian stance to prevailing market
sentiment."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund produced a total return of
8.71% (Class A Shares at NAV). In comparison, the Merrill Lynch 1-5-Year Gov-
ernment Bond Index gained 10.46%.
Q. What factors affected your performance?
A. Traditionally, the AmSouth Limited Term U.S. Government Funds returns are
based, to a large extent, on the performance of the U.S. Treasury and mortgage-
backed securities. During the most recent, 12-month period, we benefited from
an overall rally in Treasury securities, continuing Treasury buy backs--which
boost the price of these securities--and a contraction in mortgage spreads.
With the Fed lowering interest rates during the last seven months, we saw a ma-
jor shift in yields, especially at the short end of the yield curve. Generally,
yield declines in the bond market increase proportionally the value of compara-
ble bonds held in our portfolio. For example, from July 2000 to July 2001,
yields on one-year securities tumbled 265 basis points (2.65%); five-year paper
fell 160 basis points (1.60%); and the 30-year bond's yield declined 35 basis
points (0.35%).
We feel that this disparity between long- and short-securities' yields was ex-
pected. The Fed policy affects short-term rates, while the market sets long-
term rates. Consequently, the short-term holdings of the portfolio helped to
produce significant price appreciation. We responded to prevailing conditions
by lengthening the average maturity of the portfolio slightly, and continued to
emphasize agency paper.
As of July 31, 2001, the Fund's average maturity was 2.8 years, and its average
credit quality was AAA (as rated by the Standard & Poor's). Approximately 35.5%
of the Fund were invested in government agency securities, 42.4% in U.S. Trea-
suries, 17.7% in mortgage-backed securities, and 2.9% in cash.++
Q. What is your outlook for the next six to 12 months?
A. In recent months, we have become a bit more defensive in positioning the
portfolio; we believe much of the bond-market rally is over. We anticipate the
economy will bounce back sometime toward the end of this year or the beginning
of 2002. We see interest rates either stabilizing or, when the economy picks
up, even rising somewhat. Still, we have not lowered the Fund's average maturi-
ty; with its short structure, we feel the interest-rate risk of the portfolio
should be minimal.
++The Fund's portfolio composition is subject to change.
38
<PAGE>
AmSouth Limited Term U.S. Government Fund
Value of a $10,000 Investment
[CHART]
AmSouth Limited AmSouth Limited AmSouth Limited Merrill Lynch
Term U.S. Term U.S. Term U.S. 1-5-Year
Government Fund Government Fund Government Fund Government
(Class A Shares)* (Class B Shares) (Trust Shares) Bond Index
7/31/91 9,601 10,000 10,000 10,000
8/31/91 9,787 10,192 10,194 10,163
9/30/91 9,947 10,356 10,361 10,326
10/31/91 10,067 10,466 10,485 10,462
11/30/91 10,173 10,575 10,596 10,581
12/31/91 10,399 10,795 10,832 10,701
1/31/92 10,280 10,658 10,707 10,899
2/29/92 10,306 10,685 10,735 10,843
3/31/92 10,253 10,616 10,680 10,879
4/30/92 10,346 10,699 10,777 10,853
5/31/92 10,493 10,849 10,929 10,959
6/30/92 10,626 10,973 11,068 11,087
7/31/92 10,799 11,151 11,248 11,229
8/31/92 10,919 11,260 11,373 11,393
9/30/92 11,079 11,411 11,540 11,516
10/31/92 10,905 11,233 11,359 11,654
11/30/92 10,826 11,137 11,276 11,538
12/31/92 10,972 11,274 11,429 11,495
1/31/93 11,185 11,479 11,650 11,623
2/28/93 11,358 11,658 11,831 11,798
3/31/93 11,385 11,671 11,859 11,938
4/30/93 11,478 11,753 11,956 11,980
5/31/93 11,425 11,699 11,900 12,071
6/30/93 11,545 11,808 12,025 12,035
7/31/93 11,558 11,808 12,039 12,157
8/31/93 11,691 11,932 12,178 12,181
9/30/93 11,731 11,973 12,219 12,328
10/31/93 11,744 11,973 12,233 12,372
11/30/93 11,704 11,918 12,191 12,396
12/31/93 11,744 11,945 12,233 12,375
1/31/94 11,824 12,027 12,316 12,423
2/28/94 11,704 11,890 12,191 12,523
3/31/94 11,598 11,767 12,080 12,400
4/30/94 11,531 11,699 12,011 12,287
5/31/94 11,531 11,685 12,011 12,215
6/30/94 11,545 11,685 12,025 12,232
7/31/94 11,651 11,781 12,136 12,256
8/31/94 11,678 11,808 12,164 12,383
9/30/94 11,625 11,740 12,108 12,426
10/31/94 11,638 11,740 12,122 12,361
11/30/94 11,598 11,699 12,080 12,378
12/31/94 11,625 11,712 12,108 12,312
1/31/95 11,758 11,836 12,247 12,344
2/28/95 11,931 12,000 12,427 12,531
3/31/95 11,997 12,055 12,497 12,741
4/30/95 12,104 12,151 12,607 12,813
5/31/95 12,330 12,370 12,843 12,942
6/30/95 12,397 12,425 12,913 13,238
7/31/95 12,397 12,411 12,913 13,313
8/31/95 12,477 12,479 12,996 13,348
9/30/95 12,543 12,548 13,065 13,439
10/31/95 12,663 12,658 13,190 13,514
11/30/95 12,783 12,767 13,315 13,644
12/31/95 12,889 12,863 13,426 13,785
1/31/96 12,969 12,932 13,509 13,904
2/29/96 12,850 12,795 13,384 14,028
3/31/96 12,783 12,712 13,315 13,933
4/30/96 12,743 12,671 13,273 13,893
5/31/96 12,743 12,658 13,273 13,879
6/30/96 12,836 12,740 13,370 13,888
7/31/96 12,876 12,767 13,412 14,006
8/31/96 12,876 12,753 13,412 14,054
9/30/96 12,996 12,863 13,537 14,088
10/31/96 13,156 13,014 13,703 14,240
11/30/96 13,289 13,137 13,842 14,431
12/31/96 13,236 13,068 13,786 14,567
1/31/97 13,289 13,110 13,842 14,531
2/28/97 13,316 13,123 13,870 14,596
3/31/97 13,265 13,068 13,817 14,620
4/30/97 13,369 13,164 13,925 14,585
5/31/97 13,447 13,219 14,007 14,724
6/30/97 13,538 13,301 14,101 14,828
7/31/97 13,719 13,466 14,290 14,941
8/31/97 13,677 13,425 14,246 15,153
9/30/97 13,805 13,548 14,379 15,135
10/31/97 13,922 13,644 14,501 15,273
11/30/97 13,945 13,671 14,525 15,411
12/31/97 14,053 13,767 14,638 15,443
1/31/98 14,200 13,890 14,791 15,559
2/28/98 14,202 13,890 14,793 15,738
3/31/98 14,237 13,929 14,830 15,736
4/30/98 14,299 13,963 14,894 15,795
5/31/98 14,376 14,027 14,975 15,868
6/30/98 14,438 14,088 15,039 15,961
7/31/98 14,487 14,124 15,090 16,053
8/31/98 14,693 14,313 15,305 16,123
9/30/98 14,956 14,557 15,579 16,374
10/31/98 14,962 14,549 15,584 16,660
11/30/98 14,950 14,527 15,572 16,726
12/31/98 14,993 14,556 15,610 16,684
1/31/99 15,056 14,606 15,675 16,743
2/28/99 14,923 14,467 15,536 16,820
3/31/99 15,015 14,546 15,633 16,668
4/30/99 15,061 14,580 15,680 16,794
5/31/99 15,004 14,515 15,621 16,846
6/30/99 15,004 14,505 15,621 16,790
7/31/99 15,007 14,497 15,624 16,839
8/31/99 15,025 14,503 15,642 16,866
9/30/99 15,135 14,599 15,757 16,908
10/31/99 15,153 14,606 15,775 17,036
11/30/99 15,168 14,611 15,792 17,073
12/31/99 15,155 14,588 15,778 17,098
1/31/00 15,127 14,536 15,733 17,096
2/29/00 15,219 14,614 15,829 17,060
3/31/00 15,322 14,707 15,954 17,180
4/30/00 15,315 14,706 15,948 17,313
5/31/00 15,364 14,729 15,986 17,341
6/30/00 15,541 14,889 16,188 17,402
7/31/00 15,627 14,977 16,280 17,622
8/31/00 15,749 15,084 16,409 17,736
9/30/00 15,874 15,179 16,524 17,895
10/31/00 15,941 15,249 16,613 18,042
11/30/00 16,091 15,366 16,771 18,153
12/31/00 16,279 15,553 16,969 18,364
1/31/01 16,461 15,702 17,162 18,626
2/28/01 16,586 15,811 17,277 18,865
3/31/01 16,681 15,900 17,395 19,003
4/30/01 16,664 15,882 17,379 19,161
5/31/01 16,723 15,928 17,443 19,171
6/30/01 16,768 15,946 17,493 19,270
7/31/01 16,989 16,162 17,726 19,334
Average Annual Total Return
As of Inception 1 5 10
July 31, 2001 Date Year Year Year
--------------------------------------------------------------------------
Class A Shares* 2/28/97/1/ 4.38% 4.85% 5.44%
--------------------------------------------------------------------------
Class B Shares** 3/3/98/2/ 2.91% 4.50% 4.92%
--------------------------------------------------------------------------
Trust Shares 12/14/98/2/ 8.88% 5.74% 5.89%
--------------------------------------------------------------------------
* Reflects maximum 4.00% sales charge.
** Reflects applicable contingent deferred sales charge (maximum 5.00%).
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
The chart above represents a comparison of a hypothetical $10,000 investment
7/31/91 to 7/31/01 in the indicated share class versus a similar investment
in the Fund's benchmark, and represents the reinvestment of dividends and
capital gains in the Fund.
The performance of the AmSouth Limited Term U.S. Government Fund is measured
against the Merrill Lynch 1-5-Year Government Bond Index, which is generally
representative of the performance of government bonds in that maturity range
with a rating of at least Baa. The index does not reflect the deduction of
fees associated with a mutual fund, such as investment management fees. The
Fund's performance does reflect the deduction of fees for these value-added
services. Investors cannot invest directly in an index, although they can in-
vest in its underlying securities. During the period shown, the Advisor
waived and/or reimbursed fees for various expenses. Had these waivers and/or
reimbursements not been in effect, performance quoted would have been lower.
The quoted returns reflect the performance from 2/28/97 to 3/12/00 of the ISG
Limited Term U.S. Government Fund, an open-end investment company that was
the predecessor fund to the AmSouth Limited Term U.S. Government Fund.
/1/The ISG Limited Term U.S. Government Fund commenced operations on 2/28/97,
through a transfer of assets from certain collective trust fund ("commin-
gled") accounts managed by First American National Bank, using substan-
tially the same investment objective, policies and methodologies as the
Fund. The quoted performance of the Fund includes performance of the com-
mingled accounts for periods dating back to 7/31/91, and prior to the mu-
tual fund's commencement of operations, as adjusted to reflect the ex-
penses associated with the Fund. The commingled accounts were not regis-
tered with the Securities and Exchange Commission and, therefore, were not
subject to the investment restrictions imposed by law on registered mutual
funds. If the commingled accounts had been registered, the commingled ac-
counts' performance may have been adversely affected.
/2/Performance for the Class B and Trust Shares, which commenced operations
on 3/3/98 and 12/14/98, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
39
<PAGE>
AmSouth Municipal Bond Fund+
Portfolio Manager
Dorothy E. Thomas, CFA
Senior Vice President
AmSouth Bank
AmSouth Investment Management
Company, LLC
Dorothy has more than 17 years of
experience as an investment
portfolio manager. She holds a
M.B.A and a B.A. in economics. She
also serves as manager of tax-
exempt, fixed-income investments.
PORTFOLIO MANAGER'S PERSPECTIVE
With the AmSouth Municipal Bond Fund, we concentrate on high quality muncipal
bonds those in the top three rating classes, or of comparable quality. As with
other AmSouth bond funds, we strive to achieve strong returns by taking
advantage of anticipated changes in interest rates."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund produced a total return of
8.36% (Class A Shares at NAV). In comparison, the Merrill Lynch 3-7-Year Munic-
ipal Bond Index and the Merrill Lynch 1-12-Year Municipal Bond Index rose 9.21%
and 9.52%, respectively, while the Lipper Intermediate Municipal Debt Funds In-
dex gained 8.77%.++
It is also important to recognize income yield to shareholders. As of July 31,
2001, the Fund's 30-day SEC yield (Class A Shares) was 3.33%. For investors in
the 39.1% federal income tax bracket, that is equivalent to a taxable yield of
5.47% (shareholders who are residents of Alabama could realize a higher tax-
able-equivalent yield. The yield percentage is annualized.)
We achieved our objectives while maintaining an average credit quality of AA1
(as rated by Standard & Poor's). As of July 31, 2001, the Fund's average matu-
rity was 5.5 years.++
Q. What factors affected your performance?
A. The 12-month period offered conditions that were very accommodating to the
fortunes of fixed-income securities, and the municipal bond market. The Fund
benefited from this constructive environment. While debt securities at the
short end of the yield curve were appreciably affected by the Fed's six rate
cuts in 2001 through July 31, 2001, yields on the intermediate-term securities
we favor were not impacted as significantly. In fact, much of our positive
price performance, driven higher by a decline in yields, took place at the end
of 2000 and the beginning of 2001.
With the majority of our shareholders living in Alabama, we maintained a
signifi- cant allocation to municipal debt securities issued in the state
(46.9% as of July 31, 2001). Therefore, Alabama shareholders enjoyed a tax-
equivalent yield higher than the Funds' stated yield, because the interest from
securities issued in Alabama generally was tax free to Alabama residents.++
Q. What is your outlook for the next six to 12 months?
A. With an eye toward the future, we are positioned defensively. Usually, when
there is a rebound in the economy--and we anticipate a modest recovery in the
next year--that tends to put some pressure on bond prices. We also believe that
the decline in interest rates is much closer to the end than the beginning.
Therefore, we do not expect the type of huge boost from falling rates that we
enjoyed during the last fiscal year.
+ The Fund's income may be subject to certain state and local taxes and, de-
pending on one's tax status, the federal alternative minimum tax.
++ The Lipper Intermediate Municipal Debt Funds Index consists of managed mu-
tual funds that invest in municipal debt issues with dollar-weighted aver-
age maturities of five to ten years.
++The Fund's portfolio composition is subject to change.
40
<PAGE>
AmSouth Municipal Bond Fund+
Value of a $10,000 Investment
[CHART]
AmSouth AmSouth AmSouth Merrill Lynch Merrill Lynch
Municipal Municipal Municipal 3-7 Year 1-12 Year
Bond Fund Bond Fund Bond Fund Municipal Municipal
(Class A (Class B (Trust Bond Bond
Shares)* Shares) Shares) Index Index
7/31/1991 $ 9,594 $10,000 $10,000 $10,000 $10,000
8/31/1991 9,725 10,123 10,136 10,166 10,181
9/30/1991 9,817 10,219 10,232 10,265 10,266
10/31/1991 9,935 10,329 10,355 10,335 10,350
11/30/1991 9,935 10,315 10,355 10,365 10,363
12/31/1991 10,131 10,521 10,559 10,530 10,521
1/31/1992 10,144 10,521 10,573 10,620 10,576
2/29/1992 10,105 10,466 10,532 10,578 10,514
3/31/1992 10,079 10,438 10,505 10,568 10,517
4/30/1992 10,131 10,479 10,559 10,662 10,618
5/31/1992 10,249 10,589 10,682 10,699 10,655
6/30/1992 10,406 10,753 10,846 10,900 10,883
7/31/1992 10,615 10,959 11,064 11,095 11,154
8/31/1992 10,563 10,890 11,010 11,031 11,030
9/30/1992 10,576 10,890 11,023 11,107 11,103
10/31/1992 10,576 10,890 11,023 11,012 10,976
11/30/1992 10,720 11,027 11,173 11,303 11,242
12/31/1992 10,733 11,027 11,187 11,355 11,321
1/31/1993 10,785 11,068 11,241 11,445 11,449
2/28/1993 11,060 11,342 11,528 11,682 11,739
3/31/1993 10,969 11,247 11,432 11,664 11,682
4/30/1993 11,021 11,288 11,487 11,728 11,786
5/31/1993 11,060 11,315 11,528 11,814 11,818
6/30/1993 11,152 11,397 11,623 11,907 11,958
7/31/1993 11,191 11,438 11,664 11,884 11,956
8/31/1993 11,322 11,562 11,801 12,004 12,133
9/30/1993 11,427 11,658 11,910 12,120 12,228
10/31/1993 11,453 11,671 11,937 12,187 12,323
11/30/1993 11,387 11,589 11,869 12,089 12,214
12/31/1993 11,545 11,740 12,033 12,262 12,407
1/31/1994 11,597 11,795 12,087 12,384 12,530
2/28/1994 11,427 11,603 11,910 12,176 12,252
3/31/1994 11,139 11,301 11,610 11,836 11,926
4/30/1994 11,178 11,329 11,651 11,913 11,977
5/31/1994 11,204 11,356 11,678 11,995 12,031
6/30/1994 11,243 11,384 11,719 12,000 12,021
7/31/1994 11,387 11,521 11,869 12,220 12,278
8/31/1994 11,414 11,534 11,896 12,231 12,309
9/30/1994 11,335 11,452 11,814 12,132 12,169
10/31/1994 11,257 11,356 11,733 12,056 12,087
11/30/1994 11,126 11,219 11,596 11,939 11,936
12/31/1994 11,243 11,329 11,719 12,049 12,092
1/31/1995 11,335 11,411 11,814 12,128 12,270
2/28/1995 11,558 11,630 12,046 12,383 12,598
3/31/1995 11,662 11,712 12,156 12,459 12,659
4/30/1995 11,702 11,753 12,196 12,542 12,709
5/31/1995 11,911 11,945 12,415 12,826 13,074
6/30/1995 11,924 11,959 12,428 12,839 13,049
7/31/1995 12,068 12,082 12,578 12,943 13,149
8/31/1995 12,147 12,151 12,660 13,060 13,288
9/30/1995 12,160 12,164 12,674 13,058 13,300
10/31/1995 12,304 12,288 12,824 13,120 13,411
11/30/1995 12,369 12,342 12,892 13,302 13,634
12/31/1995 12,408 12,370 12,933 13,333 13,710
1/31/1996 12,461 12,411 12,988 13,489 13,877
2/29/1996 12,500 12,452 13,029 13,464 13,745
03/31/1996 12,369 12,301 12,892 13,351 13,735
4/30/1996 12,343 12,274 12,865 13,349 13,736
5/31/1996 12,330 12,247 12,851 13,340 13,738
6/30/1996 12,408 12,315 12,933 13,395 13,817
7/31/1996 12,500 12,397 13,029 13,509 13,948
8/31/1996 12,552 12,438 13,083 13,529 13,960
9/30/1996 12,605 12,479 13,138 13,647 14,086
10/31/1996 12,709 12,575 13,247 13,772 14,220
11/30/1996 12,866 12,712 13,411 13,932 14,399
12/31/1996 12,840 12,685 13,383 13,915 14,381
1/31/1997 12,814 12,644 13,356 13,945 14,426
2/28/1997 12,906 12,726 13,452 14,044 14,526
3/31/1997 12,762 12,575 13,301 13,903 14,374
4/30/1997 12,788 12,589 13,329 13,931 14,432
5/31/1997 12,945 12,726 13,492 14,096 14,638
6/30/1997 13,089 12,863 13,643 14,260 14,787
7/31/1997 13,333 13,096 13,896 14,502 15,116
8/31/1997 13,219 12,973 13,779 14,411 14,994
9/30/1997 13,374 13,110 13,940 14,560 15,163
10/31/1997 13,424 13,151 13,993 14,614 15,225
11/30/1997 13,452 13,164 14,037 14,671 15,287
12/31/1997 13,634 13,329 14,228 14,817 15,487
1/31/1998 13,745 13,438 14,331 14,931 15,616
2/28/1998 13,733 13,411 14,333 14,953 15,642
3/31/1998 13,720 13,384 14,321 14,975 15,662
4/30/1998 13,643 13,301 14,242 14,914 15,590
5/31/1998 13,851 13,493 14,460 15,105 15,817
6/30/1998 13,885 13,521 14,497 15,145 15,861
7/31/1998 13,906 13,534 14,520 15,199 15,911
8/31/1998 14,142 13,753 14,752 15,417 16,156
9/30/1998 14,301 13,890 14,935 15,562 16,330
10/31/1998 14,308 13,890 14,929 15,594 16,351
11/30/1998 14,325 13,890 14,948 15,612 16,375
12/31/1998 14,373 13,932 14,999 15,698 16,457
1/31/1999 14,570 14,110 15,206 15,883 16,685
2/28/1999 14,456 13,979 15,088 15,828 16,586
3/31/1999 14,427 13,957 15,060 15,840 16,572
4/30/1999 14,474 13,977 15,109 15,894 16,619
5/31/1999 14,360 13,861 14,991 15,830 16,527
6/30/1999 14,108 13,624 14,744 15,651 16,291
7/31/1999 14,227 13,716 14,854 15,781 16,431
8/31/1999 14,177 13,665 14,819 15,785 16,412
9/30/1999 14,197 13,660 14,826 15,800 16,435
10/31/1999 14,085 13,545 14,710 15,746 16,347
11/30/1999 14,195 13,654 14,842 15,844 16,495
12/31/1999 14,133 13,568 14,763 15,801 16,456
1/31/2000 14,054 13,489 14,681 15,774 16,399
2/29/2000 14,165 13,587 14,798 15,838 16,518
3/31/2000 14,370 13,769 15,014 15,989 16,730
4/30/2000 14,268 13,678 14,925 15,942 16,668
5/31/2000 14,211 13,600 14,852 15,938 16,622
6/30/2000 14,543 13,926 15,217 16,258 17,009
7/31/2000 14,742 14,094 15,426 16,447 17,237
8/31/2000 14,925 14,260 15,605 16,622 17,455
9/30/2000 14,852 14,196 15,546 16,592 17,392
10/31/2000 14,961 14,278 15,662 16,711 17,550
11/30/2000 15,040 14,343 15,747 16,780 17,634
12/31/2000 15,379 14,659 16,104 17,105 18,042
1/31/2001 15,597 14,858 16,317 17,405 18,310
2/28/2001 15,631 14,896 16,370 17,421 18,333
3/31/2001 15,742 14,979 16,488 17,586 18,503
4/30/2001 15,589 14,824 16,315 17,472 18,296
5/31/2001 15,747 14,951 16,482 17,670 18,509
6/30/2001 15,814 15,020 16,554 17,772 18,641
7/31/2001 15,975 15,164 16,741 17,962 18,877
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
Average Annual Total Return
As of Inception 1 5 10
July 31, 2001 Date Year Year Year
--------------------------------------------------------------------------
Class A Shares* 7/1/97/1/ 3.99% 4.17% 4.80%
--------------------------------------------------------------------------
Class B Shares** 2/3/99/2/ 2.60% 3.77% 4.25%
--------------------------------------------------------------------------
Trust Shares 9/2/97/2/ 8.52% 5.14% 5.29%
--------------------------------------------------------------------------
* Reflects maximum 4.00% sales charge.
** Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/91 to 7/31/01 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Municipal Bond Fund is measured against the
Merrill Lynch 3-7-Year Municipal Bond Index and the Merrill Lynch 1-12-Year
Municipal Bond Index, which are unmanaged indices that are generally repre-
sentative of municipal bonds with intermediate maturities. The indices do not
reflect the deduction of fees associated with a mutual fund, such as invest-
ment management fees. The Fund's performance does reflect the deduction of
fees for these value-added services. Investors cannot invest directly in an
index, although they can invest in its underlying securities. During the pe-
riod shown, the Advisor waived and/or reimbursed fees for various expenses.
Had these waivers and/or reimbursements not been in effect, performance
quoted would have been lower.
/1/The quoted performance of the AmSouth Municipal Bond Fund ("Mutual Fund")
includes performance of common and collective trust fund ("commingled")
accounts advised by AmSouth Bank for periods dating back to 7/31/91 for
the Municipal Bond Fund and prior to the Mutual Fund's commencement of op-
erations on 7/1/97, as adjusted to reflect the expenses associated with
the Mutual Funds. The commingled accounts were not registered with the Se-
curities and Exchange Commission and, therefore, were not subject to the
investment restrictions imposed by law on registered mutual funds. If the
commingled account had been registered, the commingled accounts' perfor-
mance may have been adversely affected.
/2/Performance for the Class B and Trust Shares, which commenced operations
on 2/3/99 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
41
<PAGE>
AmSouth Florida Tax-Exempt Fund+
Portfolio Manager
Dorothy E. Thomas, CFA
Senior Vice President
AmSouth Bank
AmSouth Investment Management
Company, LLC
Dorothy has more than 17 years of
experience as an investment
portfolio manager. She holds a
M.B.A. and a B.A. in economics. She
also serves as manager of tax-
exempt, fixed-income investments.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Florida Tax Exempt Fund has a portfolio of high quality issues in a
fast growing state with a strong economic base. Interest on the bonds is exempt
from both Federal income tax and the Florida intangibles tax. This portfolio is
managed to benefit from expected interest rate moves."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund produced a total return of
7.46% (Class A Shares at NAV). In comparison, the Merrill Lynch 3-7-Year Munic-
ipal Bond Index rose 9.21%.
It is also important to recognize income yield to shareholders. As of July 31,
2001, the Fund's 30-day SEC yield (Class A Shares) was 3.23%. For investors in
the 39.1% federal income tax bracket, that is equivalent to a taxable yield of
5.30% (shareholders who are residents of Florida could realize a higher tax-
able-equivalent yield. The yield percentage is annualized.)
We achieved our objectives while maintaining an average credit quality of AA1
(as rated by Standard & Poor's). As of July 31, 2001, the Fund's average matu-
rity was 5.3 years.++
Q. What factors affected your performance?
A. The 12-month period offered conditions that were very accommodating to the
fortunes of fixed-income securities, and the municipal bond market. The Fund
benefited from this constructive environment. While debt securities at the
short end of the yield curve were appreciably affected by the Fed's six rate
cuts in 2001 through July 31, 2001, yields on the intermediate-term securities
we favor were not impacted as significantly. In fact, much of our positive
price performance, driven higher by a decline in yields, took place at the end
of 2000 and the beginning of 2001.
On a state-specific basis, the Florida municipal market remained very active.
With the majority of our shareholders living in Florida, we maintained a sig-
nificant allocation to municipal debt securities issued in the state (96.4% as
of July 31,
2001). As a result, Florida shareholders enjoyed a higher tax-equivalent
yield.++
Q. What is your outlook for the next six to 12 months?
A. With an eye toward the future, we are positioned defensively. Usually, when
there is a rebound in the economy--and we anticipate a modest recovery in the
next year--that tends to put some pressure on bond prices. We also believe that
the decline in interest rates is much closer to the end than the beginning.
Therefore, we do not expect the type of huge boost from falling rates that we
enjoyed during the last fiscal year.
+ The Fund's income may be subject to certain state and local taxes and, de-
pending on one's tax status, the federal alternative minimum tax.
++The Fund's portfolio composition is subject to change.
42
<PAGE>
AmSouth Florida Tax-Exempt Fund+
Value of a $10,000 Investment
[CHART]
AmSouth AmSouth AmSouth
Florida Florida Florida
Tax-Exempt Tax-Exempt Tax-Exempt Merrill Lynch Merrill Lynch
Fund Fund Fund 3-7-Year 1-12-Year
(Class A (Class B (Trust Municipal Municipal
Shares)* Shares)** Shares) Bond Index Bond Index
9/30/94 9,597 10,000 10,000 10,000 10,000
10/31/94 9,530 9,918 9,930 9,937 9,933
11/30/94 9,414 9,790 9,809 9,841 9,808
12/31/94 9,497 9,860 9,896 9,932 9,936
1/31/95 9,633 10,000 10,038 9,997 10,083
2/28/95 9,841 10,210 10,254 10,207 10,352
3/31/95 9,915 10,269 10,331 10,269 10,403
4/30/95 9,950 10,304 10,368 10,338 10,444
5/31/95 10,142 10,491 10,568 10,572 10,744
6/30/95 10,149 10,491 10,575 10,582 10,723
7/31/95 10,223 10,561 10,652 10,668 10,806
8/31/95 10,288 10,619 10,720 10,765 10,919
9/30/95 10,304 10,619 10,737 10,763 10,929
10/31/95 10,390 10,701 10,827 10,814 11,020
11/30/95 10,476 10,783 10,916 10,964 11,204
12/31/95 10,545 10,841 10,988 10,990 11,266
1/31/96 10,637 10,935 11,084 11,118 11,403
2/29/96 10,627 10,911 11,073 11,098 11,295
3/31/96 10,512 10,783 10,953 11,005 11,286
4/30/96 10,518 10,783 10,960 11,003 11,288
5/31/96 10,515 10,771 10,956 10,995 11,289
6/30/96 10,553 10,806 10,997 11,041 11,354
7/31/96 10,655 10,900 11,102 11,135 11,462
8/31/96 10,655 10,888 11,102 11,151 11,471
9/30/96 10,722 10,946 11,172 11,248 11,575
10/31/96 10,804 11,016 11,257 11,351 11,685
11/30/96 10,938 11,145 11,398 11,483 11,833
12/31/96 10,925 11,121 11,384 11,469 11,817
1/31/97 10,943 11,133 11,402 11,494 11,854
2/28/97 11,020 11,203 11,483 11,576 11,937
3/31/97 10,910 11,086 11,368 11,459 11,812
4/30/97 10,944 11,110 11,403 11,482 11,860
5/31/97 11,069 11,227 11,534 11,618 12,028
6/30/97 11,163 11,308 11,631 11,753 12,151
7/31/97 11,389 11,530 11,867 11,954 12,422
8/31/97 11,297 11,425 11,772 11,878 12,321
9/30/97 11,416 11,542 11,896 12,001 12,460
10/31/97 11,468 11,589 11,952 12,046 12,511
11/30/97 11,504 11,612 11,990 12,093 12,562
12/31/97 11,640 11,741 12,145 12,213 12,726
1/31/98 11,722 11,811 12,220 12,307 12,832
2/28/98 11,725 11,811 12,236 12,325 12,854
3/31/98 11,736 11,811 12,237 12,343 12,871
4/30/98 11,673 11,741 12,172 12,292 12,811
5/31/98 11,858 11,916 12,365 12,451 12,998
6/30/98 11,876 11,928 12,397 12,483 13,034
7/31/98 11,897 11,939 12,420 12,528 13,075
8/31/98 12,083 12,114 12,604 12,708 13,276
9/30/98 12,204 12,231 12,731 12,827 13,419
10/31/98 12,199 12,208 12,727 12,853 13,436
11/30/98 12,225 12,231 12,755 12,868 13,456
12/31/98 12,273 12,266 12,806 12,939 13,524
1/31/99 12,424 12,407 12,964 13,092 13,711
2/28/99 12,330 12,301 12,868 13,047 13,629
3/31/99 12,307 12,275 12,856 13,056 13,618
4/30/99 12,347 12,295 12,887 13,100 13,657
5/31/99 12,254 12,197 12,803 13,048 13,581
6/30/99 12,079 12,027 12,622 12,900 13,387
7/31/99 12,142 12,072 12,688 13,008 13,502
8/31/99 12,115 12,035 12,660 13,011 13,487
9/30/99 12,108 12,020 12,655 13,023 13,506
10/31/99 12,053 11,946 12,586 12,979 13,433
11/30/99 12,146 12,041 12,697 13,059 13,555
12/31/99 12,109 11,991 12,647 13,024 13,523
1/31/00 12,040 11,920 12,588 13,001 13,476
2/29/00 12,169 12,025 12,711 13,054 13,573
3/31/00 12,326 12,172 12,877 13,179 13,748
4/30/00 12,266 12,117 12,815 13,140 13,697
5/31/00 12,211 12,044 12,760 13,137 13,659
6/30/00 12,474 12,308 13,050 13,401 13,977
7/31/00 12,626 12,451 13,197 13,557 14,164
8/31/00 12,771 12,573 13,350 13,700 14,344
9/30/00 12,709 12,505 13,288 13,676 14,292
10/31/00 12,815 12,601 13,399 13,774 14,422
11/30/00 12,870 12,660 13,459 13,831 14,491
12/31/00 13,122 12,901 13,737 14,098 14,826
1/31/01 13,252 13,020 13,875 14,346 15,047
2/28/01 13,292 13,051 13,918 14,359 15,065
3/31/01 13,385 13,123 14,018 14,495 15,204
4/30/01 13,264 13,009 13,892 14,401 15,305
5/31/01 13,369 13,094 14,005 14,565 15,210
6/30/01 13,437 13,153 14,064 14,649 15,318
7/31/01 13,568 13,274 14,216 14,805 15,512
Average Annual Total Return
As of Inception 1 5 Since
July 31, 2001 Date Year Year Inception
---------------------------------------------------------------------------
Class A Shares* 9/30/94 3.19% 4.10% 4.57%
---------------------------------------------------------------------------
Class B Shares** 3/16/99/1/ 1.61% 3.68% 4.23%
---------------------------------------------------------------------------
Trust Shares 9/2/97/1/ 7.72% 5.07% 5.28%
---------------------------------------------------------------------------
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 9/30/94 to 7/31/01 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Florida Tax-Exempt Fund is measured against
the Merrill Lynch 3-7-Year Municipal Bond Index and the Merrill Lynch 1-12-
Year Municipal Bond Index, which are unmanaged indices generally representa-
tive of municipal bonds with intermediate maturities. The indices do not re-
flect the deduction of fees associated with a mutual fund, such as investment
management fees. The Fund's performance does reflect the deduction of fees
for these value-added services. Investors cannot invest directly in an index,
although they can invest in its underlying securities. During the period
shown, the Advisor waived and/or reimbursed fees for various expenses. Had
these waivers and/or reimbursements not been in effect, performance quoted
would have been lower.
/1/Performance for the Class B and Trust Shares, which commenced operations
on 3/16/99 and 9/2/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Effective 12/1/99, the Classic and Premier Shares were renamed Class A and
Trust Shares, respectively.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
43
<PAGE>
AmSouth Tennessee Tax-Exempt Fund+
Portfolio Manager
Sharon Brown
Senior Vice President
AmSouth Funds
AmSouth Investment Management
Company, LLC
Sharon Brown manages three of the
AmSouth Funds: the Tennessee Tax-
Exempt Fund, the Limited Term
Tennessee Tax-Exempt Fund and the
Tax-Exempt Money Market Fund. She
has 22 years of investment
management experience and holds a
bachelor's degree in business
administration from the University
of Tennessee.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Tennessee Tax-Exempt Fund holds a portfolio of high-quality
Tennessee municipal bonds. The Fund buys only bonds rated "A" and above, while
attempting to provide a steady flow of tax-free income. We hold bonds of
intermediate duration in our search for higher yields. We generally extend
durations slightly as interest rates drop. Average duration is 7 to 12 years."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund produced a total return of
7.55% (Class A Shares at NAV). In comparison, the Fund's benchmark, the Lehman
Brothers Municipal 10-Year Bond Index, produced a total return of 9.48%.
It is also important to recognize income yield to shareholders. As of July 31,
2001, the Fund's 30-day SEC yield at (Class A Shares) was 3.27%. For investors
in the 39.1% federal income tax bracket, that is equivalent to a taxable yield
of 5.37% (shareholders who are residents of Tennessee could realize a higher
taxable-equivalent yield. The yield percentage is annualized).
We achieved our objectives while maintaining an average credit quality of AA
(as rated by Standard & Poor's). As of July 31, 2001, the Fund's average matu-
rity was 6.6 years.++
Q. What factors affected your performance?
A. The past 12 months were profitable for just about every type of bond and
bond fund, and our portfolio was no exception. With economic conditions unusu-
ally conducive to fixed-income securities, and the stock market moving lower,
many investors found profitable refuge in funds such as ours. Our emphasis on
securities producing income tax free to Tennessee residents further benefited
shareholders who live in that state.
The municipal market "piggybacked" on the success of the taxable bond market,
with bonds helped by the Fed's persistent rate-cutting policy. Because our Fund
operates mostly in the short and intermediate portions of the yield curve, and
Fed policy directly influences shorter securities, the value of our holdings
was enhanced. A lack of supply within the state of Tennessee also worked to
lower rates and boost bond prices.
Q. What are a few of your favorite bonds in the Fund?
A. Among our favorite bonds are City of Memphis bonds yielding 5.25%, due in
2014 (2.11% of net assets). This is a good, solid, noncallable bond that tends
to perform well in most types of markets. We also like a Rutherford County is-
sue yielding 6.25%, due in 2004 (2.61%). With its high coupon and short maturi-
ty, it offers some protection should the market move against us.++
Q. What is your outlook for the next six to 12 months?
A. We would not say we are necessarily at the end of the rate-cutting road, but
we may be close to the bottom in yields; the Fed may not have much more room to
lower rates. On the positive side, we do not see an imminent resurgence of in-
flationary pressures. We believe the most likely scenario over the short- and
mid-term, is that the municipal market could experience a narrow trading range,
with most performance coming from our tax-free yields.
+ The Fund's income may be subject to certain state and local taxes and, de-
pending on one's tax status, the federal alternative minimum tax.
++The Fund's portfolio composition is subject to change.
44
<PAGE>
AmSouth Tennessee Tax-Exempt Fund+
Value of a $10,000 Investment
[CHART]
AmSouth AmSouth AmSouth Merrill Lehman
TN Tax TN Tax TN Tax Lynch Brothers
Exempt Exempt Exempt 1-12-Year Municipal
Fund Class Fund Class Fund Trust Municipal 10-Year
A Shares B Shares Shares Bond Index Index
7/31/91 9,603 10,000 10,000 10,000 10,000
8/31/91 9,757 10,152 10,161 10,181 10,135
9/30/91 9,812 10,203 10,218 10,266 10,291
10/31/91 9,989 10,381 10,402 10,350 10,374
11/30/91 9,945 10,318 10,356 10,363 10,391
12/31/91 10,110 10,483 10,529 10,521 10,612
1/31/92 10,143 10,508 10,563 10,576 10,635
2/29/92 10,077 10,432 10,494 10,514 10,619
3/31/92 10,055 10,407 10,471 10,517 10,603
4/30/92 10,099 10,445 10,517 10,618 10,703
5/31/92 10,265 10,597 10,690 10,655 10,829
6/30/92 10,430 10,762 10,862 10,883 11,016
7/31/92 10,706 11,042 11,149 11,154 11,377
8/31/92 10,530 10,851 10,966 11,030 11,243
9/30/92 10,530 10,839 10,966 11,103 11,336
10/31/92 10,408 10,699 10,839 10,976 11,221
11/30/92 10,651 10,940 11,092 11,242 11,426
12/31/92 10,662 10,953 11,103 11,321 11,559
1/31/93 10,795 11,080 11,241 11,449 11,754
2/28/93 11,115 11,398 11,575 11,739 12,184
3/31/93 11,015 11,283 11,471 11,682 12,006
4/30/93 11,148 11,410 11,609 11,786 12,120
5/31/93 11,203 11,461 11,667 11,818 12,163
6/30/93 11,325 11,576 11,793 11,958 12,402
7/31/93 11,313 11,550 11,782 11,956 12,433
8/31/93 11,534 11,766 12,011 12,133 12,691
9/30/93 11,689 11,919 12,172 12,228 12,847
10/31/93 11,678 11,893 12,161 12,323 12,867
11/30/93 11,545 11,741 12,023 12,214 12,762
12/31/93 11,755 11,944 12,241 12,407 13,034
1/31/94 11,843 12,033 12,333 12,530 13,194
2/28/94 11,545 11,715 12,023 12,252 12,833
3/31/94 10,800 10,953 11,247 11,926 12,342
4/30/94 10,851 10,991 11,300 11,977 12,478
5/31/94 10,926 11,055 11,378 12,031 12,578
6/30/94 10,856 10,978 11,305 12,021 12,524
7/31/94 11,033 11,156 11,489 12,278 12,734
8/31/94 11,073 11,182 11,532 12,309 12,784
9/30/94 10,923 11,017 11,375 12,169 12,611
10/31/94 10,740 10,813 11,184 12,087 12,427
11/30/94 10,544 10,610 10,980 11,936 12,192
12/31/94 10,747 10,813 11,192 12,092 12,412
1/31/95 11,021 11,080 11,477 12,270 12,733
2/28/95 11,291 11,334 11,758 12,598 13,094
3/31/95 11,382 11,423 11,853 12,659 13,270
4/30/95 11,379 11,398 11,850 12,709 13,286
5/31/95 11,646 11,652 12,127 13,074 13,708
6/30/95 11,526 11,525 12,003 13,049 13,623
7/31/95 11,583 11,576 12,062 13,149 13,823
8/31/95 11,720 11,703 12,205 13,288 14,011
9/30/95 11,773 11,741 12,260 13,300 14,100
10/31/95 11,912 11,868 12,404 13,411 14,263
11/30/95 12,084 12,033 12,584 13,634 14,454
12/31/95 12,187 12,122 12,691 13,710 14,542
1/31/96 12,267 12,198 12,775 13,877 14,689
2/29/96 12,140 12,058 12,642 13,745 14,629
3/31/96 11,944 11,855 12,438 13,735 14,447
4/30/96 11,877 11,779 12,369 13,736 14,397
5/31/96 11,847 11,741 12,337 13,738 14,356
6/30/96 11,938 11,804 12,431 13,817 14,493
7/31/96 12,016 11,881 12,513 13,948 14,632
8/31/96 11,973 11,830 12,469 13,960 14,632
9/30/96 12,090 11,931 12,590 14,086 14,782
10/31/96 12,221 12,046 12,726 14,220 14,969
11/30/96 12,437 12,249 12,951 14,399 15,271
12/31/96 12,356 12,160 12,867 14,381 15,202
1/31/97 12,362 12,160 12,874 14,426 15,262
2/28/97 12,439 12,211 12,953 14,526 15,405
3/31/97 12,245 12,008 12,751 14,374 15,199
4/30/97 12,300 12,046 12,809 14,432 15,311
5/31/97 12,457 12,198 12,973 14,638 15,529
6/30/97 12,550 12,274 13,070 14,787 15,699
7/31/97 12,887 12,592 13,420 15,116 16,141
8/31/97 12,738 12,440 13,265 14,994 15,984
9/30/97 12,896 12,579 13,429 15,163 16,187
10/31/97 12,965 12,643 13,501 15,225 16,273
11/30/97 13,008 12,668 13,549 15,287 16,348
12/31/97 13,237 12,884 13,789 15,487 16,606
1/31/98 13,368 12,999 13,928 15,616 16,790
2/28/98 13,326 13,010 13,873 15,642 16,789
3/31/98 13,288 12,976 13,850 15,662 16,777
4/30/98 13,157 12,839 13,716 15,590 16,685
5/31/98 13,393 13,061 13,966 15,817 16,968
6/30/98 13,392 13,052 13,967 15,861 17,031
7/31/98 13,404 13,055 13,983 15,911 17,058
8/31/98 13,628 13,265 14,220 16,156 17,355
9/30/98 13,785 13,409 14,387 16,330 17,614
10/31/98 13,782 13,397 14,386 16,351 17,621
11/30/98 13,791 13,398 14,399 16,375 17,674
12/31/98 13,800 13,398 14,411 16,457 17,728
1/31/99 13,973 13,558 14,581 16,685 18,000
2/28/99 13,843 13,426 14,462 16,586 17,838
3/31/99 13,825 13,403 14,447 16,572 17,829
4/30/99 13,862 13,431 14,488 16,619 17,877
5/31/99 13,735 13,315 14,359 16,527 17,752
6/30/99 13,498 13,066 14,113 16,291 17,421
7/31/99 13,550 13,109 14,170 16,431 17,538
8/31/99 13,477 13,032 14,097 16,412 17,473
9/30/99 13,491 13,040 14,101 16,435 17,533
10/31/99 13,365 12,912 13,972 16,347 17,410
11/30/99 13,474 13,010 14,103 16,495 17,600
12/31/99 13,376 12,909 14,004 16,456 17,508
1/31/00 13,307 12,835 13,934 16,399 17,436
2/29/00 13,416 12,935 14,051 16,518 17,574
3/31/00 13,601 13,107 14,246 16,730 17,915
4/30/00 13,516 13,004 14,144 16,668 17,826
5/31/00 13,448 12,944 14,090 16,622 17,720
6/30/00 13,764 13,239 14,423 17,009 18,202
7/31/00 13,932 13,392 14,600 17,237 18,454
8/31/00 14,097 13,527 14,759 17,455 18,740
9/30/00 14,010 13,449 14,684 17,392 18,653
10/31/00 14,142 13,567 14,825 17,550 18,844
11/30/00 14,218 13,629 14,905 17,634 18,945
12/31/00 14,534 13,925 15,239 18,042 19,391
1/31/01 14,664 14,027 15,363 18,310 19,641
2/28/01 14,691 14,059 15,408 18,333 19,674
3/31/01 14,793 14,149 15,517 18,503 19,841
4/30/01 14,604 13,959 15,321 18,296 19,597
5/31/01 14,736 14,076 15,461 18,509 19,811
6/30/01 14,809 14,137 15,540 18,641 19,930
7/31/01 14,984 14,296 15,725 18,877 20,203
Average Annual Total Return
As of Inception 1 5 Since
July 31, 2001 Date Year Year Inception
-----------------------------------------------------------------
Class A Shares* 3/28/94/1/ 3.21% 3.66% 4.13%
-----------------------------------------------------------------
Class B Shares** 2/24/98/2/ 1.75% 3.42% 3.64%
-----------------------------------------------------------------
Trust Shares 10/03/97/2/ 7.70% 4.68% 4.63%
-----------------------------------------------------------------
*Reflects maximum 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The Class B contingent deferred sales charge (CDSC) is not included in the
above graph, since the performance is for more than six years and the CDSC
would no longer apply.
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/91 to 7/31/01 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Tennessee Tax-Exempt Fund is measured against
the Merrill Lynch 1-12-Year Municipal Bond Index, which is unmanaged and is
generally representative of municipal bonds with intermediate maturities. The
Lehman Brothers Municipal 10-Year Index is an unmanaged index that includes
municipal bonds issued within the last five years by municipalities through-
out the United States, with maturities of at least one year, but no more than
12 years, and a credit quality of at least Baa. The indices do not reflect
the deduction of fees associated with a mutual fund, such as investment man-
agement fees. The Fund's performance does reflect the deduction of fees for
these value-added services. Investors cannot invest directly in an index, al-
though they can invest in its underlying securities. During the period shown,
the Advisor waived and/or reimbursed fees for various expenses. Had these
waivers and/or reimbursements not been in effect, performance quoted would
have been lower.
The quoted returns reflect the performance from 3/28/94 to 3/12/00 of the ISG
Tennessee Tax-Exempt Fund, an open-end investment company that was the prede-
cessor fund to the AmSouth Tennessee Tax-Exempt Fund.
/1/The ISG Tennessee Tax-Exempt Fund commenced operations on 3/28/94, through
a transfer of assets from certain collective trust fund ("commingled") ac-
counts managed by First American National Bank, using substantially the
same investment objective, policies and methodologies as the Fund. The
quoted performance of the Fund includes performance of the commingled ac-
counts for periods dating back to 7/31/91, and prior to the mutual fund's
commencement of operations, as adjusted to reflect the expenses associated
with the Fund. The commingled accounts were not registered with the Securi-
ties and Exchange Commission and, therefore, were not subject to the in-
vestment restrictions imposed by law on registered mutual funds. If the
commingled accounts had been registered, the commingled accounts' perfor-
mance may have been adversely affected.
/2/Performance for the Class B and Trust Shares, which commenced operations
on 2/24/98 and 10/3/97, respectively, are based on the historical perfor-
mance of the Class A Shares (without sales charge) prior to that date. The
historical performance for the Class B Shares has been adjusted to reflect
the higher 12b-1 fees and the contingent deferred sales charge (CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
45
<PAGE>
AmSouth Limited Term Tennessee Tax-Exempt Fund+
Portfolio Manager
Sharon Brown
Senior Vice President
AmSouth Bank
AmSouth Investment Management
Company, LLC
Sharon Brown manages three of the
AmSouth Funds: the Tennessee Tax-
Exempt Fund, the Limited Term
Tennessee Tax-Exempt Fund and the
Tax-Exempt Money Market Fund. She
has 22 years of investment
management experience and holds a
bachelor's degree in business
administration from the University
of Tennessee.
PORTFOLIO MANAGER'S PERSPECTIVE
"The AmSouth Limited Term Tennessee Tax-Exempt Fund holds a portfolio of
high quality, short term Tennessee municipal bonds. The Fund buys only bonds
rated 'A' and above, while attempting to provide a reliable flow of tax free
income. By investing in high quality bonds and keeping bond durations short, we
strive to limit fluctuations in the Fund's market value."
[LOGO] Q&A
Q. How did the Fund perform during the period?
A. For the 12 months ended July 31, 2001, the Fund produced a total return of
6.28% (Class A Shares at NAV). In comparison, the Fund's benchmark, Merrill
Lynch 3-7-Year Municipal Bond Index, produced a total return of 9.21%.
It is also important to recognize income yield to shareholders. As of July 31,
2001, the Fund's 30-day SEC yield (Class A Shares) was 2.38%. For investors in
the 39.1% federal income tax bracket, that is equivalent to a taxable yield of
3.91% (shareholders who are residents of Tennessee could realize a higher tax-
able-equivalent yield. The yield percentage is annualized).
We achieved our objectives while maintaining an average credit quality of AA
(as rated by Standard & Poor's). As of July 31, 2001, the Fund's average matu-
rity was 4.1 years.++
Q. What factors affected your performance?
A. The past 12 months were profitable for just about every type of bond and
bond fund, and our portfolio was no exception. With economic conditions unusu-
ally conducive to fixed-income securities, and the stock market moving lower,
many investors found profitable refuge in funds such as ours. Our emphasis on
securities producing income tax-free to Tennessee residents further benefited
shareholders who live in that state.
The municipal market "piggybacked" on the success of the taxable bond market,
with bonds helped by the Fed's persistent rate-cutting policy. Because our Fund
operates mostly on the short end of the yield curve, and Fed policy directly
influences shorter securities, the value of our holdings was enhanced. A lack
of supply within the state of Tennessee also worked to lower rates and boost
bond prices.
Q. What are a few of your favorite bonds in the Fund?
A. We especially like Rutherford County bonds yielding 6.00%, due in 2004
(8.03% of net assets). It offers a good coupon rate for such a short maturity.
On the longer end of the yield curve are bonds issued by Shelby County yielding
5.50%, due in 2009 (4.12%). These securities are noncallable and give us par-
ticipation in the intermediate segment of the yield curve.++
Q. What is your outlook for the next six to 12 months?
A. We would not say we are necessarily at the end of the rate-cutting road, but
we may be close to the bottom in yields; the Fed may not have much more room to
lower rates. On the positive side, we do not see an imminent resurgence of in-
flationary pressures. We believe the most likely scenario over the short- and
mid-term, is that the municipal market could experience a narrow trading range,
with most performance coming from our tax-free yields.
+ The Fund's income may be subject to certain state and local taxes and, de-
pending on one's tax status, the federal alternative minimum tax.
++The Fund's portfolio composition is subject to change.
46
<PAGE>
AmSouth Limited Term Tennessee Tax-Exempt Fund
[CHART]
Value of a $10,000 Investment
AmSouth Limited AmSouth Limited Term
Term Tennessee Tennessee Merrill Lynch
Tax-Exempt Fund Tax-Exempt Fund 3-7 Year
(Class A Shares)* (Class B Shares) Municipal Bond Index
7/31/91 9,595 10,000 10,000
8/31/91 9,755 10,161 10,166
9/30/91 9,828 10,235 10,265
10/31/91 9,914 10,309 10,335
11/30/91 9,914 10,297 10,365
12/31/91 10,110 10,495 10,530
1/31/92 10,147 10,532 10,620
2/29/92 10,110 10,483 10,578
3/31/92 10,123 10,483 10,568
4/30/92 10,135 10,483 10,662
5/31/92 10,221 10,569 10,699
6/30/92 10,356 10,693 10,900
7/31/92 10,503 10,842 11,095
8/31/92 10,491 10,817 11,031
9/30/92 10,442 10,755 11,107
10/31/92 10,466 10,780 11,012
11/30/92 10,577 10,879 11,303
12/31/92 10,577 10,866 11,355
1/31/93 10,687 10,978 11,445
2/28/93 10,896 11,188 11,682
3/31/93 10,834 11,114 11,664
4/30/93 10,908 11,176 11,728
5/31/93 10,933 11,188 11,814
6/30/93 11,018 11,275 11,907
7/31/93 11,018 11,262 11,884
8/31/93 11,117 11,349 12,004
9/30/93 11,190 11,423 12,120
10/31/93 11,178 11,399 12,187
11/30/93 11,129 11,337 12,089
12/31/93 11,252 11,448 12,262
1/31/94 11,350 11,547 12,384
2/28/94 11,190 11,374 12,176
3/31/94 10,920 11,089 11,836
4/30/94 10,969 11,126 11,913
5/31/94 10,994 11,139 11,995
6/30/94 10,969 11,114 12,000
7/31/94 11,043 11,176 12,220
8/31/94 11,104 11,225 12,231
9/30/94 11,043 11,151 12,132
10/31/94 10,994 11,101 12,056
11/30/94 10,883 10,978 11,939
12/31/94 10,957 11,040 12,049
1/31/95 11,043 11,114 12,128
2/28/95 11,178 11,250 12,383
3/31/95 11,252 11,312 12,459
4/30/95 11,301 11,349 12,542
5/31/95 11,497 11,535 12,826
6/30/95 11,472 11,498 12,839
7/31/95 11,583 11,609 12,943
8/31/95 11,656 11,671 13,060
9/30/95 11,681 11,683 13,058
10/31/95 11,718 11,708 13,120
11/30/95 11,816 11,795 13,302
12/31/95 11,877 11,844 13,333
1/31/96 11,951 11,918 13,489
2/29/96 11,926 11,881 13,464
3/31/96 11,816 11,757 13,351
4/30/96 11,791 11,720 13,349
5/31/96 11,779 11,708 13,340
6/30/96 11,840 11,757 13,395
7/31/96 11,902 11,807 13,509
8/31/96 11,877 11,770 13,529
9/30/96 11,951 11,832 13,647
10/31/96 12,049 11,918 13,772
11/30/96 12,184 12,042 13,932
12/31/96 12,135 11,980 13,915
1/31/97 12,184 12,030 13,945
2/28/97 12,270 12,104 14,044
3/31/97 12,143 11,968 13,903
4/30/97 12,176 11,993 13,931
5/31/97 12,284 12,079 14,096
6/30/97 12,343 12,129 14,260
7/31/97 12,539 12,314 14,502
8/31/97 12,463 12,228 14,411
9/30/97 12,561 12,314 14,560
10/31/97 12,623 12,364 14,614
11/30/97 12,663 12,389 14,671
12/31/97 12,793 12,512 14,817
1/31/98 12,905 12,611 14,931
2/28/98 12,886 12,584 14,953
3/31/98 12,871 12,561 14,975
4/30/98 12,815 12,483 14,914
5/31/98 12,951 12,618 15,105
6/30/98 12,972 12,628 15,145
7/31/98 12,994 12,638 15,199
8/31/98 13,117 12,747 15,417
9/30/98 13,205 12,822 15,562
10/31/98 13,225 12,831 15,594
11/30/98 13,245 12,839 15,612
12/31/98 13,274 12,844 15,698
1/31/99 13,374 12,944 15,883
2/28/99 13,338 12,901 15,828
3/31/99 13,332 12,886 15,840
4/30/99 13,364 12,908 15,894
5/31/99 13,305 12,842 15,830
6/30/99 13,153 12,686 15,651
7/31/99 13,201 12,723 15,781
8/31/99 13,169 12,683 15,785
9/30/99 13,205 12,696 15,800
10/31/99 13,119 12,617 15,746
11/30/99 13,180 12,666 15,844
12/31/99 13,141 12,607 15,801
1/31/00 13,095 12,567 15,774
2/29/00 13,183 12,643 15,838
3/31/00 13,262 12,713 15,989
4/30/00 13,213 12,658 15,942
5/31/00 13,183 12,622 15,938
6/30/00 13,415 12,833 16,258
7/31/00 13,551 12,953 16,447
8/31/00 13,619 13,009 16,622
9/30/00 13,597 12,980 16,592
10/31/00 13,689 13,060 16,711
11/30/00 13,727 13,098 16,780
12/31/00 13,956 13,296 17,105
1/31/01 14,132 13,460 17,405
2/28/01 14,166 13,484 17,421
3/31/01 14,231 13,551 17,586
4/30/01 14,141 13,443 17,472
5/31/01 14,247 13,536 17,670
6/30/01 14,293 13,571 17,772
7/31/01 14,403 13,667 17,962
The Class B contingent deferred sales charge (CDSC) is not included in the above
graph, since the performance is for more than six years and the CDSC would no
longer apply.
--------------------------------------------------------------------------
Average Annual Total Return
--------------------------------------------------------------------------
As of Inception 1 5 10
July 31, 2001 Date Year Year Year
--------------------------------------------------------------------------
Class A Shares* 2/28/97/1/ 2.02% 3.05% 3.72%
--------------------------------------------------------------------------
Class B Shares** 2/3/98/2/ 0.51% 2.61% 3.17%
--------------------------------------------------------------------------
*Reflects 4.00% sales charge.
**Reflects applicable contingent deferred sales charge (maximum 5.00%).
The chart above represents a comparison of a hypothetical $10,000 investment
from 7/31/91 to 7/31/01 in the indicated share class versus a similar invest-
ment in the Fund's benchmark, and represents the reinvestment of dividends
and capital gains in the Fund.
The performance of the AmSouth Limited Term Tennessee Tax-Exempt Fund is mea-
sured against the Merrill Lynch 3-7-Year Municipal Bond Index, an unmanaged
index that is generally representative of municipal bonds with intermediate
maturities. The index does not reflect the deduction of fees associated with
a mutual fund, such as investment management fees. The Fund's performance
does reflect the deduction of fees for these value-added services. Investors
cannot invest directly in an index, although they can invest in its under-
lying securities. During the period shown, the Advisor waived and/or reim-
bursed fees for various expenses. Had these waivers and/or reimbursements not
been in effect, performance quoted would have been lower.
The quoted returns reflect the performance from 2/28/97 to 3/12/00 of the ISG
Limited Term Tennessee Tax-Exempt Fund, an open-end investment company that
was the predecessor fund to the AmSouth Limited Term Tennessee Tax-Exempt
Fund.
/1/The ISG Limited Term Tennessee Tax-Exempt Fund commenced operations on
2/28/97, through a transfer of assets from certain collective trust fund
("commingled") accounts managed by First American National Bank, using sub-
stantially the same investment objective, policies and methodologies as the
Fund. The quoted performance of the Fund includes performance of the com-
mingled accounts for periods dating back to 7/31/91, and prior to the mu-
tual Fund's commencement of operations, as adjusted to reflect the expenses
associated with the Fund. The commingled accounts were not registered with
the Securities and Exchange Commission and, therefore, were not subject to
the investment restrictions imposed by law on registered mutual funds. If
the commingled accounts had been registered, the commingled accounts' per-
formance may have been adversely affected.
/2/Performance for the Class B Shares, which commenced operations on 2/3/98,
respectively, are based on the historical performance of the Class A Shares
(without sales charge) prior to that date. The historical performance for
the Class B Shares has been adjusted to reflect the higher 12b-1 fees and
the contingent deferred sales charge (CDSC).
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
47
<PAGE>
The AmSouth Money Market Funds
Portfolio Manager
John Mark McKenzie, Senior Vice
President
Sharon Brown, Senior Vice President
AmSouth Bank
AmSouth Investment Management
Company, LLC.
John Mark has more than 14 years of law degree from the University of
investment management experience. Mississippi School of Law. Sharon
In addition to managing the AmSouth Brown manages three of the AmSouth
Limited Term U.S. Government Fund, Funds: the Tennessee Tax-Exempt
he co-manages the AmSouth Fund, the Limited Term Tennessee
Government Income Fund and manages Tax-Exempt Fund and the Tax-Exempt
four of the AmSouth Money Market Money Market Fund. She has
Funds: U.S. Treasury, Treasury 22 years of investment management
Reserve, Prime and Institutional experience and holds a bachelor's
Prime Obligations. He holds degree in business administration
bachelors' degrees in banking and from the University of Tennessee.
finance, and he earned a
[LOGO] Q&A
Q. What factors affected the performance of the money market funds?
A. Since the first of the year, the Fed has lowered short-term interest rates
six times through July 31, 2001, dropping the Fed Funds rate 275 basis points
(2.75%). While lower rates are productive for most types of fixed-interest se-
curities, they have the effect of lowering yields on the short-term paper we
buy for our money-market funds.
With yields dropping, corporate treasurers were reluctant to issue new debt;
they concluded that they could wait 60 days and get a better (lower) rate. We
have also seen the credit ratings of a significant number of companies down-
graded or put on watch. We believe this has driven investors to hunt for
quality, and has made it more difficult to find creditworthy commercial debt
available at rates that were attractive to us.
Rather than stretch for yield or take undo credit risks, we have simply pur-
chased overnight repurchase agreements. Although repo rates continued to fall,
we have maintained a competitive position by holding an above- average weight-
ing in this type of debt, where it has been available.
When the economy recovers, we would expect yields to begin to rise modestly.
. As of July 31, 2001, the Prime Fund's weighted average maturity was 38 days,
compared to 35 days on January 31, 2001, and 39 days on July 31, 2000.++
. As of July 31, 2001, the U.S. Treasury Fund's weighted average maturity was
51 days, compared to 53 days on January 31, 2001, and 56 days on July 31,
2000.++
. As of July 31, 2001, the Tax-Exempt Fund's+ weighted average maturity was 19
days, compared to 78 days on January 31, 2001, and 87 days on July 31,
2000.++
. As of July 31, 2001, the Treasury Reserve Fund's weighted average maturity
was 43 days, compared to 47 days on January 31, 2001, and 54 days on July 31,
2000.++
. As of July 31, 2001, the Institutional Prime Obligations Money Market Fund's
weighted average maturity was 36 days, compared to 34 days on January 31,
2001, and 31 days on July 31, 2000.++
+ The Fund's income may be subject to certain state and local taxes and, de-
pending on one's tax status, the federal alternative minimum tax.
++The composition of the Fund's holdings is subject to change.
Investments in the Prime, the U.S. Treasury, the Tax-Exempt, Treasury Reserve
and the Institutional Prime Obligations Money Market Funds are neither in-
sured or guaranteed by the FDIC or any other government agency. Although the
Funds seek to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in the Funds.
Past performance is no guarantee of future results. Investment return and net
asset value will fluctuate, so that an investor's shares, when redeemed, may be
worth more or less than the original cost.
48
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Value Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks (99.2%)
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Aerospace/Defense (0.5%)
General Dynamics Corp. ..................................... 9,600 $ 777
Raytheon Company............................................ 100,000 2,888
Rockwell Collins............................................ 3,100 64
--------
3,729
--------
Automotive (0.1%)
Ford Motor Co. ............................................. 29,817 759
--------
Automotive Parts (0.8%)
Genuine Parts Co. .......................................... 160,000 5,267
--------
Banking (3.5%)
Bank of America Corp. ...................................... 277,184 17,634
First Union Corp. .......................................... 155,000 5,487
PNC Financial Service Group................................. 11,000 730
U.S. Bancorp................................................ 12,000 285
--------
24,136
--------
Business Services (3.7%)
Modis Professional Services, Inc. (b)....................... 2,343,500 14,928
Reynolds & Reynolds Co., Class A............................ 459,000 10,511
--------
25,439
--------
Chemicals -- Speciality (3.0%)
Dow Chemical Co. ........................................... 57,800 2,104
Engelhard Corp. ............................................ 706,300 18,399
--------
20,503
--------
Computer Hardware (3.6%)
Compaq Computer Corp. ...................................... 438,100 6,545
Gateway, Inc. (b)........................................... 100,000 1,049
Hewlett-Packard Co. ........................................ 6,400 158
IBM Corp. .................................................. 160,000 16,834
--------
24,586
--------
Computer Software (1.3%)
Keane, Inc. (b)............................................. 483,400 8,943
--------
Computer Software & Services (6.3%)
Cabletron Systems, Inc. (b)................................. 1,220,000 22,655
Computer Associates International, Inc. .................... 600,000 20,688
--------
43,343
--------
Data Processing/Management (0.4%)
Certegy Inc. (b)............................................ 92,500 3,054
--------
Electrical & Electronic (2.6%)
Avnet, Inc. ................................................ 750,000 17,917
Rockwell International Corp. ............................... 3,100 50
--------
17,967
--------
Financial Services (5.1%)
Citigroup, Inc. ............................................ 97,732 4,907
Equifax, Inc. .............................................. 185,000 4,377
Freddie Mac................................................. 10,000 684
J.P. Morgan Chase & Co. .................................... 13,500 585
Lehman Brothers Holdings, Inc. ............................. 18,800 1,354
Morgan Stanley Dean Witter & Co. ........................... 11,600 694
Washington Mutual, Inc. .................................... 550,000 22,286
--------
34,887
--------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Food Products, Processing &
Packaging (2.7%)
Kellogg Co.................................................. 50,000 $ 1,504
Sara Lee Corp............................................... 591,000 11,920
Sensient Technologies Corp.................................. 250,000 5,125
--------
18,549
--------
Forest & Paper Products (4.3%)
Georgia Pacific Corp........................................ 105,100 3,847
International Paper Co...................................... 200,000 8,172
Weyerhaeuser Co............................................. 175,000 10,452
Willamette Industries, Inc.................................. 145,000 7,207
--------
29,678
--------
Health Care (3.3%)
HCA-The Healthcare Co....................................... 22,500 1,034
Health Management Assoc., Inc., Class A (b)................. 776,953 15,352
UnitedHealth Group, Inc..................................... 91,600 6,176
--------
22,562
--------
Hotels & Lodging (0.9%)
Hilton Hotels Corp. ........................................ 500,000 6,055
--------
Insurance (9.0%)
ACE Ltd. ................................................... 90,000 3,142
American General Corp. ..................................... 8,200 379
American International Group, Inc. ......................... 5,550 462
Chubb Corp. ................................................ 250,000 17,543
Marsh & McLennan Cos., Inc. ................................ 210,000 21,083
St. Paul Cos., Inc. ........................................ 435,000 19,075
--------
61,684
--------
Medical Supplies (3.3%)
C.R. Bard, Inc. ............................................ 320,000 18,928
Guidant Corp. (b)........................................... 110,000 3,507
--------
22,435
--------
Metals & Mining (0.1%)
Alcoa, Inc. ................................................ 9,800 384
--------
Newspapers (0.9%)
Gannett Co., Inc. .......................................... 96,000 6,435
--------
Oil & Gas Exploration, Production, &
Services (15.4%)
BP Amoco, PLC, ADR.......................................... 6,396 316
Burlington Resources, Inc. ................................. 153,000 6,617
Chevron Corp. .............................................. 4,200 384
Exxon Mobil Corp. .......................................... 19,672 822
Kerr-McGee Corp. ........................................... 235,000 14,847
Noble Affiliates............................................ 300,000 10,881
Royal Dutch Petroleum Co. .................................. 15,300 887
Sunoco, Inc. ............................................... 420,000 14,524
Texaco, Inc. ............................................... 241,700 16,738
Ultramar Diamond Shamrock Corp. ............................ 335,000 15,829
USX-Marathon Group.......................................... 521,600 15,476
Valero Energy Corp. ........................................ 275,000 9,708
--------
107,029
--------
</TABLE>
Continued
49
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Value Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Pharmaceuticals (5.0%)
Baxter International, Inc. ................................. 195,000 $ 9,711
Pharmacia Corp. ............................................ 294,450 13,138
Schering-Plough Corp. ...................................... 300,000 11,715
--------
34,564
--------
Photography & Imaging (0.0%)
Eastman Kodak Co. .......................................... 6,000 260
--------
Railroads (0.1%)
Union Pacific Corp. ........................................ 7,800 419
--------
Restaurants (0.6%)
McDonald's Corp. ........................................... 150,000 4,371
--------
Retail (4.1%)
CVS Corp. .................................................. 300,000 10,804
Gap (The), Inc. ............................................ 100,000 2,731
Limited (The), Inc. ........................................ 6,800 115
May Department Stores Co. .................................. 154,500 5,129
Target Corp. ............................................... 243,000 9,404
--------
28,183
--------
Telecommunications -- Equipment (4.1%)
Harris Corp. ............................................... 345,000 10,357
Lucent Technologies, Inc. .................................. 2,025,000 13,568
Nortel Networks Corp., ADR.................................. 509,200 4,048
--------
27,973
--------
Telecommunications -- Wireless (0.4%)
AT&T Wireless Services Inc. (b)............................. 157,682 2,947
--------
Toys/Games/Hobbies (0.4%)
Hasbro, Inc. ............................................... 150,000 2,415
--------
Transportation Leasing & Trucking (0.8%)
Ryder System, Inc. ......................................... 300,000 5,700
--------
Travel (0.0%)
Carnival Corp. ............................................. 3,200 107
--------
Utilities -- Electric & Gas (6.3%)
Constellation Energy Group.................................. 250,000 7,360
Duke Energy Corp. .......................................... 6,264 242
Exelon Corp. ............................................... 6,400 362
Mirant Corp. (b)............................................ 344,284 10,649
Reliant Energy, Inc. ....................................... 508,000 16,001
Southern Co. ............................................... 170,000 3,995
Xcel Energy, Inc. .......................................... 188,500 5,078
--------
43,687
--------
Utilities -- Telecommunications (6.6%)
AT&T Corp. ................................................. 490,000 9,903
BellSouth Corp. ............................................ 225,000 9,158
SBC Communications, Inc. ................................... 195,000 8,781
Verizon Communications...................................... 330,000 17,869
--------
45,711
--------
TOTAL COMMON STOCKS......................................... 683,761
--------
</TABLE>
Investment Companies (1.3%)
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
AmSouth Prime Money Market Fund............................. 8,857,484 $ 8,857
AmSouth U.S. Treasury Money Market Fund..................... 503 1
--------
TOTAL INVESTMENT COMPANIES.................................. 8,858
--------
TOTAL INVESTMENTS
(Cost $485,643) (a) -- 100.5%.............................. 692,619
Liabilities in excess of other assets -- (0.5%)............. (3,649)
--------
NET ASSETS -- 100.0%........................................ $688,970
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $223,545
Unrealized depreciation............................................. (16,569)
--------
Net unrealized appreciation......................................... $206,976
========
</TABLE>
(b) Represents non-income producing security.
ADR -- American Depositary Receipt
See notes to financial statements
50
<PAGE>
AMSOUTH FUNDS
Value Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $485,643)....................... $692,619
Interest and dividends receivable........................... 633
Receivable for capital shares issued........................ 142
Receivable for investments sold............................. 2,549
Collateral for securities loaned, at fair value............. 122,209
Prepaid expenses and other assets........................... 24
--------
Total Assets............................................... 818,176
Liabilities:
Payable for investments purchased........................... $ 6,610
Payable for capital shares redeemed......................... 16
Payable upon return of securities loaned.................... 122,209
Accrued expenses and other payables:
Investment advisory fees................................... 194
Administration fees........................................ 22
Shareholder servicing and distribution fees................ 77
Custodian fees............................................. 16
Other...................................................... 62
--------
Total Liabilities.......................................... 129,206
--------
Net Assets:
Capital..................................................... 423,409
Accumulated net realized gains from investment
transactions............................................... 58,585
Unrealized appreciation from investments.................... 206,976
--------
Net Assets.................................................. $688,970
========
Class A Shares (b)
Net Assets................................................. $113,164
Shares outstanding......................................... 5,553
Redemption price per share................................. $ 20.38
========
Class A Shares -- Maximum Sales Charge...................... 5.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)..................................................... $ 21.57
========
Class B Shares
Net Assets................................................. $ 10,322
Shares outstanding......................................... 512
Offering price per share*.................................. $ 20.15
========
Trust Shares (c)
Net Assets................................................. $565,484
Shares outstanding......................................... 27,800
Offering and redemption price per share.................... $ 20.34
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly AmSouth Equity Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income............................................... $ 6
Dividend income............................................... 12,125
Securities lending income..................................... 195
--------
Total Investment Income...................................... 12,326
Expenses:
Investment advisory fees...................................... $5,069
Administration fees........................................... 1,267
Distribution fees -- Class B Shares........................... 63
Shareholder servicing fees -- Class A Shares (b).............. 138
Shareholder servicing fees -- Class B Shares.................. 21
Shareholder servicing fees -- Trust shares (c)................ 855
Custodian fees................................................ 174
Accounting fees............................................... 109
Transfer agent fees........................................... 183
Other fees.................................................... 186
------
Total expenses before fee reductions......................... 8,065
Expenses reduced by Distributor.............................. (285)
Expenses reduced by Fund Accountant.......................... (76)
--------
Net expenses................................................. 7,704
--------
Net Investment Income......................................... 4,622
--------
Realized/Unrealized Gains from Investments:
Net realized gains from investment transactions............... 95,732
Change in unrealized appreciation/depreciation from
investments.................................................. 25,846
--------
Net realized/unrealized gains on investments.................. 121,578
--------
Change in net assets resulting from operations................ $126,200
========
</TABLE>
See notes to financial statements
51
<PAGE>
AMSOUTH FUNDS
Value Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income.................................. $ 4,622 $ 10,150
Net realized gains from investment transactions........ 95,732 60,783
Change in unrealized appreciation/depreciation from
investments........................................... 25,846 (151,006)
-------- ----------
Change in net assets resulting from operations.......... 126,200 (80,073)
-------- ----------
Distributions to Class A Shareholders (b):
From net investment income............................. (353) (628)
From net realized gains on investment transactions..... (5,678) (9,331)
Distributions to Class B Shareholders:
From net investment income............................. (16) (51)
From net realized gains on investment transactions..... (1,012) (1,626)
Distributions to Trust Shareholders (c):
From net investment income............................. (4,657) (9,589)
From net realized gains on investment transactions..... (73,415) (123,978)
-------- ----------
Change in net assets from shareholder distributions..... (85,131) (145,203)
-------- ----------
Change in net assets from capital transactions.......... 33,893 (204,510)
-------- ----------
Change in net assets.................................... 74,962 (429,786)
Net Assets:
Beginning of period.................................... 614,008 1,043,794
-------- ----------
End of period.......................................... $688,970 $ 614,008
======== ==========
</TABLE>
(a) Formerly AmSouth Equity Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
See notes to financial statements
52
<PAGE>
AMSOUTH FUNDS
Value Fund (a)
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (b) 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 19.54 $ 25.25 $ 24.60 $ 23.35 $ 17.62
-------- ------- ------- ------- --------
Investment Activities
Net investment income.. 0.11 0.23 0.20 0.21 0.30
Net realized and
unrealized gains
(losses) from
investments........... 3.64 (2.21) 3.11 2.54 6.77
-------- ------- ------- ------- --------
Total from Investment
Activities............ 3.75 (1.98) 3.31 2.75 7.07
-------- ------- ------- ------- --------
Distributions
Net investment income.. (0.14) (0.23) (0.19) (0.25) (0.30)
Net realized gains from
investment
transactions.......... (2.77) (3.50) (2.47) (1.25) (1.04)
-------- ------- ------- ------- --------
Total Distributions.... (2.91) (3.73) (2.66) (1.50) (1.34)
-------- ------- ------- ------- --------
Change in Net Asset
Value.................. 0.84 (5.71) 0.65 1.25 5.73
-------- ------- ------- ------- --------
Net Asset Value, End of
Period................. $ 20.38 $ 19.54 $ 25.25 $ 24.60 $ 23.35
======== ======= ======= ======= ========
Total Return (excludes
sales charge).......... 21.10% (8.19)% 14.92% 12.34% 42.35%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $113,164 $45,255 $70,740 $73,165 $974,985
Ratio of expenses to
average net assets..... 1.34% 1.35% 1.33% 1.19% 1.06%
Ratio of net investment
income to average net
assets................. 0.53% 1.07% 0.82% 0.89% 1.52%
Ratio of expenses to
average net assets*.... 1.35% 1.35% 1.34% 1.19% 1.10%
Portfolio turnover**.... 43% 17% 18% 17% 24%
</TABLE>
/\ Formerly Classic Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Equity Fund.
(b) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
See notes to financial statements
53
<PAGE>
AMSOUTH FUNDS
Value Fund (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (b)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 19.41 $25.14 $ 24.55 $23.15
------- ------ ------- ------
Investment Activities
Net investment income (loss)... (0.03) 0.07 0.02 0.09
Net realized and unrealized
gains (losses) from
investments................... 3.58 (2.19) 3.10 2.68
------- ------ ------- ------
Total from Investment
Activities.................... 3.55 (2.12) 3.12 2.77
------- ------ ------- ------
Distributions
Net investment income.......... (0.04) (0.11) (0.06) (0.12)
Net realized gains from
investment transactions....... (2.77) (3.50) (2.47) (1.25)
------- ------ ------- ------
Total Distributions............ (2.81) (3.61) (2.53) (1.37)
------- ------ ------- ------
Change in Net Asset Value....... 0.74 (5.73) 0.59 1.40
------- ------ ------- ------
Net Asset Value, End of Period.. $ 20.15 $19.41 $ 25.14 $24.55
======= ====== ======= ======
Total Return (excludes
redemption charge)............. 20.09% (8.86)% 14.03% 12.49%(c)
Ratios/Supplemental Data:
Net Assets at end of period
(000).......................... $10,322 $7,949 $12,394 $7,929
Ratio of expenses to average net
assets......................... 2.09% 2.10% 2.08% 2.11%(d)
Ratio of net investment income
to average net assets.......... (0.16)% 0.32% 0.05% 0.26%(d)
Ratio of expenses to average net
assets*........................ 2.10% 2.11% 2.09% 2.11%(d)
Portfolio turnover**............ 43% 17% 18% 17%
</TABLE>
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Equity Fund.
(b) For the period from September 3, 1997 (commencement of operations) through
July 31, 1998.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
54
<PAGE>
AMSOUTH FUNDS
Value Fund (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (b)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period....................... $ 19.53 $ 25.27 $ 24.57 $ 22.51
-------- -------- -------- --------
Investment Activities
Net investment income........ 0.15 0.28 0.26 0.28
Net realized and unrealized
gains (losses) from
investments................. 3.59 (2.24) 3.16 3.31
-------- -------- -------- --------
Total from Investment
Activities.................. 3.74 (1.96) 3.42 3.59
-------- -------- -------- --------
Distributions
Net investment income........ (0.16) (0.28) (0.25) (0.28)
Net realized gains from
investment transactions..... (2.77) (3.50) (2.47) (1.25)
-------- -------- -------- --------
Total Distributions.......... (2.93) (3.78) (2.72) (1.53)
-------- -------- -------- --------
Change in Net Asset Value..... 0.81 (5.74) 0.70 2.06
-------- -------- -------- --------
Net Asset Value, End of
Period....................... $ 20.34 $ 19.53 $ 25.27 $ 24.57
======== ======== ======== ========
Total Return.................. 21.10% (8.11)% 15.43% 12.46%(c)
Ratios/Supplemental Data:
Net Assets at end of period
(000)........................ $565,484 $560,804 $960,660 $947,575
Ratio of expenses to average
net assets................... 1.19% 1.13% 1.08% 1.09%(d)
Ratio of net investment income
to average net assets........ 0.76% 1.30% 1.07% 1.26%(d)
Ratio of expenses to average
net assets*.................. 1.25% 1.15% 1.09% 1.10%(d)
Portfolio turnover**.......... 43% 17% 18% 17%
</TABLE>
/\ Formerly Premier Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly AmSouth Equity Fund.
(b) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to September
2, 1997) are being reflected as Classic Shares.
(c) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of Premier
Shares for the period from September 2, 1997 to July 31, 1998. Total return
for the Premier Shares for the period from September 2, 1997 (commencement
of operations) through July 31, 1998 was 16.52%.
(d) Annualized.
See notes to financial statements
55
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Growth Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks (98.3%)
<TABLE>
<CAPTION>
Shares Value
------ -------
<S> <C> <C>
Consumer Discretionary (9.0%)
AOL-Time Warner, Inc. (b)........................................ 15,300 $ 696
General Motors Corp. ............................................ 8,000 509
Kohl's Corp. (b)................................................. 8,000 458
Omnicom Group, Inc. ............................................. 3,300 288
------
1,951
------
Consumer Staples (2.4%)
Anheuser-Busch Cos., Inc. ....................................... 12,000 520
------
Financials (21.7%)
American Express Co. ............................................ 11,000 444
Bank of America Corp. ........................................... 7,000 445
Capital One Financial Corp. ..................................... 10,500 674
Freddie Mac...................................................... 6,000 411
Lehman Brothers Holdings, Inc. .................................. 8,000 576
MBNA Corp. ...................................................... 20,300 718
Merrill Lynch & Co., Inc. ....................................... 8,900 483
Morgan Stanley Dean Witter & Co. ................................ 8,000 479
SouthTrust Corp. ................................................ 19,000 488
------
4,718
------
Health Care (8.2%)
Cephalon, Inc. (b)............................................... 6,000 383
IVAX Corp. (b)................................................... 10,125 344
Pfizer, Inc. .................................................... 12,000 495
Pharmacia Corp. ................................................. 12,380 553
------
1,775
------
Industrials (11.3%)
Boeing Co. ...................................................... 12,000 702
Caterpillar, Inc. ............................................... 8,000 441
Norfolk Southern Corp. .......................................... 27,000 543
PACCAR, Inc. .................................................... 8,000 471
Tyco International, Ltd. ........................................ 5,500 293
------
2,450
------
Technology (41.6%)
Advanced Micro Devices, Inc. (b)................................. 17,000 310
Apple Computer, Inc. (b)......................................... 20,000 376
Applied Micro Circuits Corp. (b)................................. 9,100 156
Ariba, Inc. (b).................................................. 5,700 23
Atmel Corp. (b).................................................. 48,200 482
Autodesk, Inc. .................................................. 15,000 559
BMC Software, Inc. (b)........................................... 20,000 400
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
------ -------
<S> <C> <C>
Technology, continued
Celestica, Inc. (b)............................................. 11,500 $ 555
Cirrus Logic, Inc. (b).......................................... 15,000 278
Cisco Systems, Inc. (b)......................................... 23,000 442
Commerce One, Inc. (b).......................................... 21,700 81
Earthlink Network, Inc. (b)..................................... 11,085 181
EMC Corp. (b)................................................... 8,000 158
Harris Corp..................................................... 11,100 333
Intuit, Inc. (b)................................................ 14,000 481
JDS Uniphase Corp. (b).......................................... 7,600 70
Juniper Networks, Inc. (b)...................................... 5,600 144
Linear Technology Corp. ........................................ 10,300 449
Micron Technology, Inc. (b)..................................... 11,000 462
NVIDIA Corp. (b)................................................ 4,500 364
Oracle Corp. (b)................................................ 23,800 430
Polycom, Inc. (b)............................................... 19,000 484
Sanmina Corp. (b)............................................... 16,800 366
Siebel Systems, Inc. (b)........................................ 9,000 310
Sun Microsystems, Inc. (b)...................................... 24,100 393
Tektronix, Inc. (b)............................................. 25,300 574
Vitesse Semiconductor Corp. (b)................................. 10,300 204
-------
9,065
-------
Utilities (4.1%)
Enron Corp. .................................................... 8,000 363
Williams Cos., Inc.............................................. 16,100 539
-------
902
-------
TOTAL COMMON STOCKS............................................. 21,381
-------
TOTAL INVESTMENTS
(Cost $29,282) (a) -- 98.3%.................................... 21,381
-------
Other assets in excess of liabilities -- 1.7%................... 375
-------
NET ASSETS -- 100.0%............................................ $21,756
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes
and differs from value by net unrealized depreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................ $ 554
Unrealized depreciation............................................ (8,455)
-------
Net unrealized depreciation........................................ $(7,901)
=======
</TABLE>
(b) Represents non-income producing security.
See notes to financial statements
56
<PAGE>
AMSOUTH FUNDS
Growth Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at
value (cost
$29,282)...... $21,381
Cash........... 819
Interest and
dividends
receivable.... 4
Receivable for
capital shares
issued........ 6
Collateral for
securities
loaned, at
fair value.... 1,862
Prepaid
expenses and
other assets.. 4
-------
Total Assets.. 24,076
Liabilities:
Payable for
investments
purchased..... $ 404
Payable for
capital shares
redeemed...... 33
Payable upon
return of
securities
loaned........ 1,862
Accrued
expenses and
other
payables:
Investment
advisory
fees......... 6
Administration
fees......... 1
Shareholder
servicing and
distribution
fees......... 7
Custodian
fees......... 1
Other......... 6
------
Total
Liabilities.. 2,320
-------
Net Assets:
Capital........ 36,116
Distributions
in excess of
net investment
income........ (3)
Accumulated net
realized
losses from
investment
transactions.. (6,456)
Unrealized
depreciation
from
investments... (7,901)
-------
Net Assets..... $21,756
=======
Class A Shares
(b)
Net Assets.... $ 6,312
Shares
outstanding.. 803
Redemption
price per
share........ $ 7.86
=======
Class A
Shares --
Maximum Sales
Charge........ 5.50%
-------
Maximum
Offering
Price Per
Share
(100%/(100% --
Maximum
Sales
Charge) of
net asset
value
adjusted to
the nearest
cent)........ $ 8.32
=======
Class B Shares
Net Assets.... $ 4,991
Shares
outstanding.. 658
Offering price
per share*... $ 7.58
=======
Trust Shares
(c)
Net Assets.... $10,453
Shares
outstanding.. 1,315
Offering and
redemption
price per
share........ $ 7.95
=======
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly AmSouth Capital Growth Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Dividend income................................................. $ 158
Securities lending income....................................... 8
--------
Total Investment Income........................................ 166
Expenses:
Investment advisory fees........................................ $278
Administration fees............................................. 69
Distribution fees -- Class B Shares............................. 53
Shareholder servicing fees -- Class A Shares (b)................ 24
Shareholder servicing fees -- Class B Shares.................... 18
Shareholder servicing fees -- Trust Shares (c).................. 27
Custodian fees.................................................. 10
Accounting fees................................................. 8
Transfer agent fees............................................. 63
Other fees...................................................... 23
----
Total expenses before fee reductions........................... 573
Expenses reduced by Administrator.............................. (17)
Expenses reduced by Transfer Agent............................. (25)
Expenses reduced by Distributor................................ (9)
Expenses reduced by Fund Accountant............................ (3)
--------
Net expenses................................................... 519
--------
Net Investment Loss............................................. (353)
--------
Realized/Unrealized Losses from Investments:
Net realized losses from investment transactions................ (3,520)
Change in unrealized appreciation/depreciation from
investments.................................................... (9,095)
--------
Net realized/unrealized losses from investments................. (12,615)
--------
Change in net assets resulting from operations.................. $(12,968)
========
</TABLE>
See notes to financial statements
57
<PAGE>
AMSOUTH FUNDS
Growth Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment loss..................................... $ (353) $ (307)
Net realized gains (losses) from investment
transactions........................................... (3,520) 7,075
Change in unrealized appreciation/depreciation from
investments............................................ (9,095) (2,745)
-------- -------
Change in net assets resulting from operations........... (12,968) 4,023
-------- -------
Distributions to Class A Shareholders (b):
From net realized gains on investment transactions...... (2,235) (495)
Distributions to Class B Shareholders:
From net realized gains on investment transactions...... (1,645) (311)
Distributions to Trust Shareholders (c):
From net realized gains on investment transactions...... (4,132) (794)
-------- -------
Change in net assets from shareholder distributions...... (8,012) (1,600)
-------- -------
Change in net assets from capital transactions........... (7,651) 8,406
-------- -------
Change in net assets..................................... (28,631) 10,829
Net Assets:
Beginning of period..................................... 50,387 39,558
-------- -------
End of period........................................... $ 21,756 $50,387
======== =======
</TABLE>
(a) Formerly AmSouth Capital Growth Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
See notes to financial statements
58
<PAGE>
AMSOUTH FUNDS
Growth Fund (a)
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (b)(c)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................ $ 14.93 $ 14.04 $ 11.62 $10.00
------- ------- ------- ------
Investment Activities
Net investment loss........... (0.10) (0.09) (0.06) (0.03)
Net realized and unrealized
gains (losses) from
investments.................. (4.16) 1.53 2.57 1.65
------- ------- ------- ------
Total from Investment
Activities................... (4.26) 1.44 2.51 1.62
------- ------- ------- ------
Distributions
Net realized gains from
investment transactions...... (2.81) (0.55) (0.09) --
------- ------- ------- ------
Total Distributions........... (2.81) (0.55) (0.09) --
------- ------- ------- ------
Change in Net Asset Value...... (7.07) 0.89 2.42 1.62
------- ------- ------- ------
Net Asset Value, End of
Period........................ $ 7.86 $ 14.93 $ 14.04 $11.62
======= ======= ======= ======
Total Return (excludes sales
charge)....................... (32.44)% 10.27% 21.76% 16.20%(d)
Ratios/Supplemental Data:
Net Assets at end of period
(000)......................... $ 6,312 $13,665 $14,040 $9,720
Ratio of expenses to average
net assets.................... 1.42% 1.35% 1.23% 1.40%(e)
Ratio of net investment income
to average net assets......... (0.94)% (0.59)% (0.50)% (0.42)%(e)
Ratio of expenses to average
net assets*................... 1.55% 1.55% 1.74% 2.37%(e)
Portfolio turnover**........... 161% 111% 79% 77%
</TABLE>
/\ Formerly Classic Shares.
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Capital Growth Fund.
(b) For the period from August 3, 1997 (commencement of operations) through
July 31, 1998.
(c) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
59
<PAGE>
AMSOUTH FUNDS
Growth Fund (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (b)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................ $ 14.61 $13.85 $11.54 $ 9.82
------- ------ ------ ------
Investment Activities
Net investment loss........... (0.18) (0.19) (0.12) (0.06)
Net realized and unrealized
gains (losses) from
investments.................. (4.04) 1.50 2.52 1.78
------- ------ ------ ------
Total from Investment
Activities................... (4.22) 1.31 2.40 1.72
------- ------ ------ ------
Distributions
Net realized gains from
investment transactions...... (2.81) (0.55) (0.09) --
------- ------ ------ ------
Total Distributions........... (2.81) (0.55) (0.09) --
------- ------ ------ ------
Change in Net Asset Value...... (7.03) 0.76 2.31 1.72
------- ------ ------ ------
Net Asset Value, End of
Period........................ $ 7.58 $14.61 $13.85 $11.54
======= ====== ====== ======
Total Return (excludes
redemption charge)............ (32.95)% 9.46% 20.96% 17.52%(c)
Ratios/Supplemental Data:
Net Assets at end of period
(000)......................... $ 4,991 $9,223 $7,463 $3,477
Ratio of expenses to average
net assets.................... 2.17% 2.10% 1.97% 2.05%(d)
Ratio of net investment income
to average net assets......... (1.70)% (1.34)% (1.26)% (1.10)%(d)
Ratio of expenses to average
net assets*................... 2.30% 2.30% 2.48% 3.11%(d)
Portfolio turnover**........... 161% 111% 79% 77%
</TABLE>
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Capital Growth Fund.
(b) For the period from September 3, 1997 (commencement of operations) through
July 31, 1998.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
60
<PAGE>
AMSOUTH FUNDS
Growth Fund (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (b)(c)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 15.04 $ 14.11 $ 11.65 $ 9.55
------- ------- ------- ------
Investment Activities
Net investment loss............ (0.09) (0.06) (0.02) --
Net realized and unrealized
gains (losses) from
investments................... (4.19) 1.54 2.57 2.10
------- ------- ------- ------
Total from Investment
Activities.................... (4.28) 1.48 2.55 2.10
------- ------- ------- ------
Distributions
Net realized gains from
investment transactions....... (2.81) (0.55) (0.09) --
------- ------- ------- ------
Total Distributions............ (2.81) (0.55) (0.09) --
------- ------- ------- ------
Change in Net Asset Value...... (7.09) 0.93 2.46 2.10
------- ------- ------- ------
Net Asset Value, End of Period.. $ 7.95 $ 15.04 $ 14.11 $11.65
======= ======= ======= ======
Total Return.................... (32.32)% 10.51% 22.05% 16.50%(d)
Ratios/Supplemental Data:
Net Assets at end of period
(000).......................... $10,453 $27,499 $18,055 $2,824
Ratio of expenses to average net
assets......................... 1.27% 1.15% 0.96% 0.99%(e)
Ratio of net investment income
to average net assets.......... (0.79)% (0.40)% (0.28)% 0.00%(e)
Ratio of expenses to average net
assets*........................ 1.45% 1.37% 1.47% 2.05%(e)
Portfolio turnover**............ 161% 111% 79% 77%
</TABLE>
/\ Formerly Premier Shares.
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly AmSouth Capital Growth Fund.
(b) For the period from August 3, 1997 (commencement of operations) through
July 31, 1998.
(c) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(d) Represents total return based on the activity of Classic Shares for the
period from August 4, 1997 to September 1, 1997 and the activity of Premier
Shares for the period from September 2, 1997 to July 31, 1998. Total return
for the Premier Shares for the period from September 2, 1997 (commencement
of operations) through July 31, 1998 was 21.99%.
(e) Annualized.
See notes to financial statements
61
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Capital Growth Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks (94.3%)
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Aerospace/Defense (2.8%)
Boeing Co. ................................................. 75,000 $ 4,390
United Technologies Corp. .................................. 65,000 4,771
--------
9,161
--------
Banks (4.0%)
Fifth Third Bancorp......................................... 118,000 7,436
Northern Trust Corp. ....................................... 90,000 5,742
--------
13,178
--------
Business Equipment & Services (3.8%)
Cintas Corp. ............................................... 116,000 5,820
Paychex, Inc. .............................................. 170,000 6,681
--------
12,501
--------
Computer Hardware (3.9%)
IBM Corp. .................................................. 70,000 7,365
Network Appliance, Inc. (b)................................. 90,000 1,123
Sun Microsystems, Inc. (b).................................. 260,000 4,235
--------
12,723
--------
Computer Software & Services (17.0%)
Adobe Systems, Inc. ........................................ 50,000 1,875
AOL-Time Warner, Inc. (b)................................... 130,000 5,909
Automatic Data Processing, Inc. ............................ 160,000 8,151
BEA Systems, Inc. (b)....................................... 70,500 1,555
Cisco Systems, Inc. (b)..................................... 215,000 4,132
DST Systems, Inc. (b)....................................... 128,000 6,048
EMC Corp. (b)............................................... 200,000 3,944
Emulex Corp. (b)............................................ 65,000 1,526
Juniper Networks, Inc. (b).................................. 75,000 1,927
Microsoft Corp. (b)......................................... 100,000 6,618
Oracle Corp. (b)............................................ 150,000 2,712
Sungard Data Systems, Inc. (b).............................. 240,000 6,545
Symantec Corp. (b).......................................... 40,000 1,928
Veritas Software Corp. (b).................................. 60,500 2,566
--------
55,436
--------
Cosmetics/Toiletries (0.3%)
Colgate-Palmolive Co. ...................................... 20,000 1,084
--------
Diversified Manufacturing (4.4%)
General Electric Co. ....................................... 150,000 6,525
Tyco International, Ltd. ................................... 150,020 7,981
--------
14,506
--------
Educational Services (2.2%)
DeVry, Inc. (b)............................................. 188,300 7,347
--------
Electronic Components (2.2%)
Altera Corp. (b)............................................ 140,000 4,208
QLogic Corp. (b)............................................ 55,000 2,113
Solectron Corp. (b)......................................... 50,000 874
--------
7,195
--------
Financial Services (4.8%)
Citigroup, Inc. ............................................ 175,000 8,787
Fannie Mae.................................................. 85,000 7,076
--------
15,863
--------
Food Distributors & Wholesalers (1.7%)
Costco Wholesale Corp. (b).................................. 130,000 5,597
--------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Food Products, Processing &
Packaging (2.0%)
SYSCO Corp. ................................................ 245,200 $ 6,581
--------
Health Care (5.1%)
Cardinal Health, Inc. ...................................... 125,000 9,204
Johnson & Johnson........................................... 140,000 7,574
--------
16,778
--------
Health Care -- Drugs (0.9%)
Amgen, Inc. (b)............................................. 45,000 2,822
--------
Insurance (1.1%)
American International Group, Inc. ......................... 45,000 3,746
--------
Medical Equipment & Supplies (4.1%)
Medtronic, Inc. ............................................ 102,000 4,899
Stryker Corp. .............................................. 145,000 8,697
--------
13,596
--------
Metals & Mining (0.9%)
Alcoa, Inc. ................................................ 75,000 2,942
--------
Oil & Gas Exploration, Production, &
Services (1.0%)
Calpine Corp. (b)........................................... 10,000 360
Enron Corp. ................................................ 50,000 2,267
Schlumberger Ltd. .......................................... 5,000 269
Shaw Group (The), Inc. (b).................................. 10,000 325
--------
3,221
--------
Pharmaceuticals (7.5%)
Elan Corp., PLC-ADR (b)..................................... 100,000 5,775
Forest Laboratories, Inc. (b)............................... 120,000 9,426
Pfizer, Inc. ............................................... 230,250 9,491
--------
24,692
--------
Retail (18.7%)
Abercrombie & Fitch Co. (b)................................. 120,000 4,658
Best Buy Co., Inc. (b)...................................... 115,000 7,700
Chico's FAS, Inc. (b)....................................... 82,000 3,056
CVS Corp. .................................................. 95,000 3,421
Dollar General Corp. ....................................... 270,000 5,300
Home Depot, Inc. ........................................... 150,000 7,556
Kohl's Corp. (b)............................................ 30,000 1,718
Lowe's Cos., Inc. .......................................... 170,000 6,491
Safeway, Inc. (b)........................................... 105,000 4,637
Target Corp. ............................................... 100,000 3,870
Wal-Mart Stores, Inc. ...................................... 135,000 7,547
Walgreen Co. ............................................... 150,000 5,055
--------
61,009
--------
Semiconductors (3.9%)
Applied Materials, Inc. (b)................................. 100,000 4,586
Broadcom Corp., Class A (b)................................. 70,000 3,054
Intel Corp. ................................................ 175,000 5,217
--------
12,857
--------
Technology (1.6%)
Agilent Technologies (b).................................... 1 --*
Novellus Systems, Inc. (b).................................. 99,700 5,082
--------
5,082
--------
</TABLE>
Continued
62
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Capital Growth Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Telecommunications -- Equipment (0.4%)
Ciena Corp. (b).............................................. 35,000 $ 1,160
--------
TOTAL COMMON STOCKS.......................................... 309,077
--------
</TABLE>
Investment Companies (5.4%)
<TABLE>
<S> <C> <C>
AIM Liquid Assets Money Market Fund......................... 2,050,871 2,051
AmSouth Prime Money Market Fund............................. 5,947,332 5,947
S & P 500 Depositary Receipt................................ 80,000 9,708
--------
TOTAL INVESTMENT COMPANIES.................................. 17,706
--------
TOTAL INVESTMENTS
(Cost $323,011) (a) -- 99.7%............................... 326,783
Other assets in excess of liabilities -- 0.3%............... 935
--------
NET ASSETS -- 100.0%........................................ $327,718
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 36,788
Unrealized depreciation............................................. (33,016)
--------
Net unrealized appreciation......................................... $ 3,772
========
</TABLE>
(b) Represents non-income producing security.
* Due to rounding, figure is below thousand-dollar threshold.
ADR -- American Depositary Receipt
PLC -- Public Limited Company
See notes to financial statements
63
<PAGE>
AMSOUTH FUNDS
Capital Growth Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $323,011)........................ $326,783
Interest and dividends receivable............................ 88
Receivable for capital shares issued......................... 9
Receivable for investments sold.............................. 6,476
Receivable from investment advisor........................... 9
Collateral for securities loaned, at fair value.............. 88,415
Prepaid expenses and other assets............................ 26
--------
Total Assets................................................ 421,806
Liabilities:
Payable for investments purchased............................ $ 5,440
Payable for capital shares redeemed.......................... 39
Payable upon return of securities loaned..................... 88,415
Accrued expenses and other payables:
Investment advisory fees.................................... 93
Administration fees......................................... 8
Shareholder servicing and distribution fees................. 36
Custodian fees.............................................. 8
Other....................................................... 49
-------
Total Liabilities........................................... 94,088
--------
Net Assets:
Capital...................................................... 357,381
Distributions in excess of net investment income............. (3)
Accumulated net realized losses from investment
transactions................................................ (33,432)
Unrealized appreciation from investments..................... 3,772
--------
Net Assets................................................... $327,718
========
Class A Shares
Net Assets.................................................. $ 19,574
Shares outstanding.......................................... 1,803
Redemption price per share.................................. $ 10.86
========
Class A Shares -- Maximum Sales Charge....................... 5.50%
--------
Maximum Offering Price Per Share
(100%/(100% -- Maximum Sales Charge) of net asset value
adjusted to the nearest cent).............................. $ 11.49
========
Class B Shares
Net Assets.................................................. $ 8,967
Shares outstanding.......................................... 863
Offering price per share*................................... $ 10.39
========
Trust Shares (b)
Net Assets.................................................. $299,177
Shares outstanding.......................................... 27,653
Offering and redemption price per share..................... $ 10.82
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Capital Growth Fund.
(b) Formerly Institutional Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Dividend income.............................................. $ 1,797
Securities lending income.................................... 222
--------
Total Investment Income..................................... 2,019
Expenses:
Investment advisory fees..................................... $2,656
Administration fees.......................................... 664
Distribution fees -- Class B Shares.......................... 70
Shareholder servicing fees -- Class A Shares................. 34
Shareholder servicing fees -- Class B Shares................. 23
Shareholder servicing fees -- Trust Shares (b)............... 464
Custodian fees............................................... 92
Accounting fees.............................................. 42
Transfer agent fees.......................................... 112
Other fees................................................... 123
------
Total expenses before fee reductions/reimbursements......... 4,280
Expenses reimbursed by Investment Advisor................... (130)
Expenses reduced by Administrator........................... (166)
Expenses reduced by Distributor............................. (155)
Expenses reduced by Fund Accountant......................... (38)
--------
Net expenses................................................ 3,791
--------
Net Investment Loss.......................................... (1,772)
--------
Realized/Unrealized Losses from Investments:
Net realized losses from investment transactions............. (32,670)
Change in unrealized appreciation/depreciation from
investments................................................. (44,201)
--------
Net realized/unrealized losses from investments.............. (76,871)
--------
Change in net assets resulting from operations............... $(78,643)
========
</TABLE>
See notes to financial statements
64
<PAGE>
AMSOUTH FUNDS
Capital Growth Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended
July 31, July 31, December 31,
2001 2000 (b) 1999
---------- ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment loss...................... $ (1,772) $ (527) $ (265)
Net realized gains (losses) from
investment transactions................. (32,670) 18,488 46,657
Change in unrealized
appreciation/depreciation from
investments............................. (44,201) (3,450) 466
-------- -------- --------
Change in net assets resulting from
operations............................... (78,643) 14,511 46,858
-------- -------- --------
Distributions to Class A Shareholders:
From net realized gains on investment
transactions............................ (1,143) -- (1,690)
Distributions to Class B Shareholders:
From net realized gains on investment
transactions............................ (798) -- (1,261)
Distributions to Trust Shareholders (c):
From net investment income............... -- (35) --
From net realized gains on investment
transactions............................ (25,149) -- (39,425)
-------- -------- --------
Change in net assets from shareholder
distributions............................ (27,090) (35) (42,376)
-------- -------- --------
Change in net assets from capital
transactions............................. 111,604 47,546 74,316
-------- -------- --------
Change in net assets...................... 5,871 62,022 78,798
Net Assets:
Beginning of period...................... 321,847 259,825 181,027
-------- -------- --------
End of period............................ $327,718 $321,847 $259,825
======== ======== ========
</TABLE>
(a) Formerly ISG Capital Growth Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) Formerly Institutional Shares.
See notes to financial statements
65
<PAGE>
AMSOUTH FUNDS
Capital Growth Fund (a)
Financial Highlights, Class A Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Year Ended Year Ended Period Ended
July 31, July 31, December 31, December 31, December 31, December 31,
2001 + 2000 (b) 1999+ 1998 1997 1996 (c)
---------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 14.97 $ 14.37 $ 14.20 $12.80 $11.32 $ 10.00
------- ------- ------- ------ ------ -------
Investment Activities
Net investment income
(loss)................ (0.09) (0.04) (0.04) (0.01) 0.06 --
Net realized and
unrealized gains
(losses) from
investments........... (2.86) 0.64 2.97 3.89 3.40 1.32
------- ------- ------- ------ ------ -------
Total from Investment
Activities............ (2.95) 0.60 2.93 3.88 3.46 1.32
------- ------- ------- ------ ------ -------
Distributions
Net investment income.. -- -- -- -- (0.06) --
Net realized gains from
investment
transactions.......... (1.16) -- (2.76) (2.48) (1.92) --
------- ------- ------- ------ ------ -------
Total Distributions.... (1.16) -- (2.76) (2.48) (1.98) --
------- ------- ------- ------ ------ -------
Change in Net Asset
Value.................. (4.11) 0.60 0.17 1.40 1.48 1.32
------- ------- ------- ------ ------ -------
Net Asset Value, End of
Period................. $ 10.86 $ 14.97 $ 14.37 $14.20 $12.80 $ 11.32
======= ======= ======= ====== ====== =======
Total Return (excludes
sales charge).......... (21.27)% 4.18%(d) 21.85% 32.05% 30.79% 13.20%(d)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $19,574 $14,137 $10,310 $4,631 $ 858 $49,008
Ratio of expenses to
average net assets..... 1.30% 1.32%(e) 1.32% 1.28% 0.93% 1.20%(e)
Ratio of net investment
income to average net
assets................. (0.67)% (0.49)%(e) (0.33)% (0.19)% 0.42% (0.02)%(e)
Ratio of expenses to
average net assets*.... 1.36% 1.37%(e) 1.33% 1.29% 1.18% 1.39%(e)
Portfolio turnover**.... 100% 91% 178% 152% 116% 69%
</TABLE>
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Capital Growth Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from April 1, 1996 (commencement of operations) through
December 31, 1996.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
66
<PAGE>
AMSOUTH FUNDS
Capital Growth Fund (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Period Ended
July 31, July 31, December 31, December 31,
2001 + 2000 (b) 1999 + 1998 (c)
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $ 14.46 $13.93 $13.92 $13.10
------- ------ ------ ------
Investment Activities
Net investment loss..... (0.17) (0.09) (0.14) (0.05)
Net realized and
unrealized gains
(losses) from
investments............ (2.74) 0.62 2.91 3.35
------- ------ ------ ------
Total from Investment
Activities............. (2.91) 0.53 2.77 3.30
------- ------ ------ ------
Distributions
Net realized gains from
investment
transactions........... (1.16) -- (2.76) (2.48)
------- ------ ------ ------
Total Distributions..... (1.16) -- (2.76) (2.48)
------- ------ ------ ------
Change in Net Asset
Value................... (4.07) 0.53 0.01 0.82
------- ------ ------ ------
Net Asset Value, End of
Period.................. $ 10.39 $14.46 $13.93 $13.92
======= ====== ====== ======
Total Return (excludes
redemption charge)...... (21.77)% 3.80%(d) 21.11% 26.86%(d)
Ratios/Supplemental Data:
Net Assets at end of
period (000)............ $ 8,967 $8,939 $7,704 $2,854
Ratio of expenses to
average net assets...... 1.96% 1.96%(e) 1.92% 2.04%(e)
Ratio of net investment
income to average net
assets.................. (1.35)% (1.11)%(e) (0.93)% (0.95)%(e)
Ratio of expenses to
average net assets*..... 2.11% 2.07%(e) 1.93% (f)
Portfolio turnover**..... 100% 91% 178% 152%
</TABLE>
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Capital Growth Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 5, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
(f) There was no fee reduction in this period.
See notes to financial statements
67
<PAGE>
AMSOUTH FUNDS
Capital Growth Fund (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Year Ended Period Ended
July 31, July, 31 December 31, December 31, December 31,
2001 + 2000 (b) 1999 + 1998 1997 (c)
---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 14.89 $ 14.27 $ 14.09 $ 12.69 $ 14.51
-------- -------- -------- -------- --------
Investment Activities
Net investment income
(loss)................ (0.06) (0.02) (0.01) 0.01 0.02
Net realized and
unrealized gains
(losses) from
investments........... (2.85) 0.64 2.95 3.88 0.10
-------- -------- -------- -------- --------
Total from Investment
Activities............ (2.91) 0.62 2.94 3.89 0.12
-------- -------- -------- -------- --------
Distributions
Net investment income.. -- -- -- (0.01) (0.02)
Net realized gains from
investment
transactions.......... (1.16) -- (2.76) (2.48) (1.92)
-------- -------- -------- -------- --------
Total Distributions.... (1.16) -- (2.76) (2.49) (1.94)
-------- -------- -------- -------- --------
Change in Net Asset
Value.................. (4.07) 0.62 0.18 1.40 (1.82)
-------- -------- -------- -------- --------
Net Asset Value, End of
Period................. $ 10.82 $ 14.89 $ 14.27 $ 14.09 $ 12.69
======== ======== ======== ======== ========
Total Return............ (21.11)% 4.36%(d) 22.09% 32.40% 0.88%(d)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $299,177 $298,771 $241,810 $173,542 $141,761
Ratio of expenses to
average net assets..... 1.11% 1.11%(e) 1.07% 1.02% 0.58%(e)
Ratio of net investment
income to average net
assets................. (0.50)% (0.26)%(e) (0.09)% 0.07% 0.80%(e)
Ratio of expenses to
average net assets*.... 1.26% 1.22%(e) 1.08% 1.03% 0.99%(e)
Portfolio turnover**.... 100% 91% 178% 152% 116%
</TABLE>
/\ Formerly Institutional Shares.
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Capital Growth Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from October 3, 1997 (commencement of operations) through
December 31, 1997.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
68
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Large Cap Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks (98.9%)
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Advertising (0.9%)
The Interpublic Group of Companies, Inc. ................... 200,000 $ 5,474
--------
Aerospace/Defense (1.0%)
General Dynamics Corp. ..................................... 75,000 6,067
--------
Beverages (3.5%)
Coca-Cola Co. .............................................. 220,000 9,812
PepsiCo, Inc. .............................................. 250,000 11,658
--------
21,470
--------
Business Equipment & Services (1.3%)
Paychex, Inc. .............................................. 200,000 7,860
--------
Computer Hardware (7.4%)
Compaq Computer Corp. ...................................... 300,000 4,482
Dell Computer Corp. (b)..................................... 200,000 5,386
Hewlett-Packard Co. ........................................ 500,000 12,330
IBM Corp. .................................................. 200,000 21,042
Network Appliance, Inc. (b)................................. 200,000 2,496
--------
45,736
--------
Computer Software & Services (6.7%)
Automatic Data Processing, Inc. ............................ 300,000 15,285
Electronic Data Systems Corp. .............................. 150,000 9,578
Microsoft Corp. (b)......................................... 250,000 16,547
--------
41,410
--------
Consumer Goods (2.1%)
Gillette Co. ............................................... 200,000 5,574
Procter & Gamble Co. ....................................... 100,000 7,102
--------
12,676
--------
Diversified Manufacturing (4.6%)
General Electric Co. ....................................... 400,000 17,400
Honeywell International, Inc. .............................. 100,000 3,687
Illinois Tool Works, Inc. .................................. 120,000 7,560
--------
28,647
--------
Entertainment (1.5%)
Walt Disney (The) Co. ...................................... 350,000 9,223
--------
Financial Services (0.4%)
Citigroup, Inc. ............................................ 50,000 2,511
--------
Financials (0.5%)
American Express Co. ....................................... 75,000 3,025
--------
Food Products, Processing &
Packaging (3.2%)
Sara Lee Corp. ............................................. 300,000 6,051
SYSCO Corp. ................................................ 500,000 13,420
--------
19,471
--------
Health Care (11.7%)
American Home Products Corp. ............................... 200,000 12,062
Cardinal Health, Inc. ...................................... 150,000 11,045
Johnson & Johnson........................................... 500,000 27,049
Pfizer, Inc. ............................................... 350,000 14,427
UnitedHealth Group, Inc. ................................... 100,000 6,742
--------
71,325
--------
Health Care -- Drugs (2.0%)
Amgen, Inc. (b)............................................. 200,000 12,542
--------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Household Products/Wares (0.6%)
Clorox Corp. ............................................... 100,000 $ 3,738
--------
Industrials (3.7%)
Boeing Co. ................................................. 120,000 7,024
Tyco International, Ltd. ................................... 300,000 15,960
--------
22,984
--------
Insurance (1.3%)
AFLAC, Inc. ................................................ 100,000 2,958
American International Group, Inc. ......................... 60,000 4,995
--------
7,953
--------
Machinery & Equipment (2.3%)
Dover Corp. ................................................ 400,000 14,460
--------
Media (1.0%)
McGraw Hill Cos., Inc. ..................................... 100,000 6,137
--------
Medical Equipment & Supplies (3.2%)
IMS Health, Inc. ........................................... 200,000 5,140
Medtronic, Inc. ............................................ 300,000 14,409
--------
19,549
--------
Office Equipment & Services (2.0%)
Pitney Bowes, Inc. ......................................... 300,000 12,060
--------
Pharmaceuticals (9.9%)
Abbott Laboratories......................................... 300,000 16,077
Bristol-Myers Squibb Co. ................................... 120,000 7,097
Merck & Co., Inc. .......................................... 300,000 20,393
Schering-Plough Corp. ...................................... 450,000 17,573
--------
61,140
--------
Raw Materials (0.7%)
Avery Dennison Corp. ....................................... 90,000 4,613
--------
Restaurants (2.8%)
McDonald's Corp. ........................................... 600,000 17,484
--------
Retail (11.5%)
Albertson's, Inc. .......................................... 100,000 3,273
Dollar General Corp. ....................................... 300,000 5,889
Gap (The), Inc. ............................................ 250,000 6,828
Home Depot, Inc. ........................................... 350,000 17,629
TJX Cos., Inc. ............................................. 300,000 10,203
Wal-Mart Stores, Inc. ...................................... 300,000 16,769
Walgreen Co. ............................................... 300,000 10,110
--------
70,701
--------
Semiconductors (3.7%)
Applied Materials, Inc. (b)................................. 300,000 13,758
Intel Corp. ................................................ 300,000 8,943
--------
22,701
--------
Technology (5.7%)
Agilent Technologies (b).................................... 68,651 1,964
BMC Software, Inc. (b)...................................... 100,000 2,000
Cisco Systems, Inc. (b)..................................... 350,000 6,727
EMC Corp. (b)............................................... 200,000 3,944
Linear Technology Corp. .................................... 100,000 4,358
Oracle Corp. (b)............................................ 500,000 9,040
Sun Microsystems, Inc. (b).................................. 450,000 7,331
--------
35,364
--------
</TABLE>
Continued
69
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Large Cap Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Telecommunications -- Equipment (0.8%)
Lucent Technologies, Inc. .................................. 150,000 $ 1,005
Motorola, Inc. ............................................. 120,000 2,243
Tellabs, Inc. (b)........................................... 100,000 1,647
--------
4,895
--------
Telecommunications -- Wireless (0.1%)
AT&T Wireless Services Inc. (b)............................. 32,180 601
--------
Tobacco (0.7%)
Philip Morris Cos., Inc. ................................... 100,000 4,550
--------
Utilities -- Telecommunications (2.1%)
AT&T Corp. ................................................. 100,000 2,021
BellSouth Corp. ............................................ 150,000 6,105
SBC Communications, Inc. ................................... 110,000 4,953
--------
13,079
--------
TOTAL COMMON STOCKS......................................... 609,446
--------
</TABLE>
Investment Companies (1.1%)
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
AIM Liquid Assets Money Market Fund......................... 1,271 $ 1
AmSouth Prime Money Market Fund............................. 6,880,724 6,881
--------
TOTAL INVESTMENT COMPANIES.................................. 6,882
--------
TOTAL INVESTMENTS
(Cost $360,562) (a) -- 100.0%.............................. 616,328
Other assets in excess of liabilities -- 0.0%............... 15
--------
NET ASSETS -- 100.0%........................................ $616,343
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $296,686
Unrealized depreciation............................................. (40,920)
--------
Net unrealized appreciation......................................... $255,766
========
</TABLE>
(b) Represents non-income producing security.
See notes to financial statements
70
<PAGE>
AMSOUTH FUNDS
Large Cap Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $360,562)............................. $616,328
Interest and dividends receivable................................. 307
Receivable for capital shares issued.............................. 131
Collateral for securities loaned, at fair value................... 233,832
Prepaid expenses and other assets................................. 43
--------
Total Assets..................................................... 850,641
</TABLE>
<TABLE>
<S> <C> <C>
Liabilities:
Payable for capital shares redeemed......................... $ 125
Payable upon return of securities loaned.................... 233,832
Accrued expenses and other payables:
Investment advisory fees................................... 164
Administration fees........................................ 15
Shareholder servicing and distribution fees................ 81
Custodian fees............................................. 15
Other...................................................... 66
--------
Total Liabilities.......................................... 234,298
--------
Net Assets:
Capital..................................................... 320,420
Accumulated net realized gains from investment
transactions............................................... 40,157
Unrealized appreciation from investments.................... 255,766
--------
Net Assets.................................................. $616,343
========
Class A Shares
Net Assets................................................. $ 66,813
Shares outstanding......................................... 3,149
Redemption price per share................................. $ 21.22
========
Class A Shares -- Maximum Sales Charge...................... 5.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)..................................................... $ 22.46
========
Class B Shares
Net Assets................................................. $ 28,118
Shares outstanding......................................... 1,358
Offering price per share*.................................. $ 20.70
========
Trust Shares (b)
Net Assets................................................. $521,412
Shares outstanding......................................... 24,533
Offering and redemption price per share.................... $ 21.25
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Large-Cap Equity Fund.
(b) Formerly Institutional Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Dividend income.............................................. $ 6,963
Securities lending income.................................... 493
---------
Total Investment Income..................................... 7,456
Expenses:
Investment advisory fees..................................... $5,469
Administration fees.......................................... 1,367
Distribution fees -- Class B Shares.......................... 198
Shareholder servicing fees -- Class A Shares................. 188
Shareholder servicing fees -- Class B Shares................. 66
Shareholder servicing fees -- Trust Shares (b)............... 873
Custodian fees............................................... 189
Accounting fees.............................................. 106
Transfer agent fees.......................................... 256
Other fees................................................... 187
------
Total expenses before fee reductions........................ 8,899
Expenses reduced by Investment Advisor...................... (342)
Expenses reduced by Administrator........................... (342)
Expenses reduced by Distributor............................. (291)
Expenses reduced by Fund Accountant......................... (74)
---------
Net expenses................................................ 7,850
---------
Net Investment Loss.......................................... (394)
---------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains from investment transactions.............. 53,004
Change in unrealized appreciation/depreciation from
investments................................................. (133,341)
---------
Net realized/unrealized losses on investments................ (80,337)
---------
Change in net assets resulting from operations............... $ (80,731)
=========
</TABLE>
See notes to financial statements
71
<PAGE>
AMSOUTH FUNDS
Large Cap Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended
July 31, July 31, December 31,
2001 2000 (b) 1999
---------- ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income (loss)............ $ (394) $ (160) $ 729
Net realized gains from investment
transactions........................... 53,004 56,300 205,658
Change in unrealized
appreciation/depreciation from
investments............................ (133,341) (52,282) (70,611)
--------- -------- ---------
Change in net assets resulting from
operations.............................. (80,731) 3,858 135,776
--------- -------- ---------
Distributions to Class A Shareholders:
From net investment income.............. -- (15) (74)
From net realized gains on investment
transactions........................... (12,126) -- (11,381)
Distributions to Class B Shareholders:
From net realized gains on investment
transactions........................... (3,952) -- (2,572)
Distributions to Trust Shareholders (c):
From net investment income.............. (17) (236) (660)
From net realized gains on investment
transactions........................... (96,106) -- (104,281)
--------- -------- ---------
Change in net assets from shareholder
distributions........................... (112,201) (251) (118,968)
--------- -------- ---------
Change in net assets from capital
transactions............................ 9,414 (7,854) (57,034)
--------- -------- ---------
Change in net assets..................... (183,518) (4,247) (40,226)
Net Assets:
Beginning of period..................... 799,861 804,108 844,334
--------- -------- ---------
End of period........................... $ 616,343 $799,861 $ 804,108
========= ======== =========
</TABLE>
(a) Formerly ISG Large-Cap Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) Formerly Institutional Shares.
See notes to financial statements
72
<PAGE>
AMSOUTH FUNDS
Large Cap Fund (a)
Financial Highlights, Class A Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Period Ended Year Ended Year Ended Year Ended
July 31, July 31, December 31, December 31, February 28, February 28, February 28,
2001 + 2000 (b) 1999 + 1998 (c) 1998 1997 1996
---------- ------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 28.14 $ 28.02 $ 27.55 $ 23.01 $ 16.68 $ 14.49 $ 11.41
------- ------- ------- ------- -------- -------- --------
Investment Activities
Net investment income
(loss)................ (0.04) (0.01) 0.03 0.05 0.11 0.14 0.16
Net realized and
unrealized gains
(losses) from
investments........... (2.82) 0.14 5.07 5.79 6.48 2.54 3.63
------- ------- ------- ------- -------- -------- --------
Total from Investment
Activities............ (2.86) 0.13 5.10 5.84 6.59 2.68 3.79
------- ------- ------- ------- -------- -------- --------
Distributions
Net investment income.. -- (0.01) (0.03) (0.05) (0.11) (0.14) (0.17)
Net realized gains from
investment
transactions.......... (4.06) -- (4.60) (1.25) (0.15) (0.35) (0.54)
------- ------- ------- ------- -------- -------- --------
Total Distributions.... (4.06) (0.01) (4.63) (1.30) (0.26) (0.49) (0.71)
------- ------- ------- ------- -------- -------- --------
Change in Net Asset
Value.................. (6.92) 0.12 0.47 4.54 6.33 2.19 3.08
------- ------- ------- ------- -------- -------- --------
Net Asset Value, End of
Period................. $ 21.22 $ 28.14 $ 28.02 $ 27.55 $ 23.01 $ 16.68 $ 14.49
======= ======= ======= ======= ======== ======== ========
Total Return (excludes
sales charge).......... (11.72)% 0.45%(d) 18.85% 25.83%(d) 39.74% 18.79% 33.73%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $66,813 $81,099 $79,211 $57,772 $715,631 $490,392 $385,145
Ratio of expenses to
average net assets..... 1.25% 1.14%(e) 1.04% 1.03%(e) 0.99% 0.92% 0.94%
Ratio of net investment
income to average net
assets................. (0.16)% (0.07)%(e) 0.12% 0.21%(e) 0.54% 0.95% 1.24%
Ratio of expenses to
average net assets*.... 1.36% 1.37%(e) 1.39% 1.03%(e) (f) (f) (f)
Portfolio turnover**.... 10% 10% 15% 3% 6% 7% 15%
</TABLE>
+ Net investment income (loss) is based on average shares outstanding during
the period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Large-Cap Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from March 1, 1998 through December 31, 1998. In conjunction
with the reorganization of the ISG Funds, the Fund changed its fiscal year
end to December 31.
(d) Not annualized.
(e) Annualized.
(f) There were no fee reductions in this period.
See notes to financial statements
73
<PAGE>
AMSOUTH FUNDS
Large Cap Fund (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Period Ended
July 31, July 31, December 31, December 31,
2001 + 2000 (b) 1999 + 1998 (c)
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................ $ 27.74 $ 27.75 $ 27.54 $25.98
------- ------- ------- ------
Investment Activities
Net investment loss...... (0.21) (0.13) (0.23) --
Net realized and
unrealized gains
(losses) from
investments............. (2.77) 0.12 5.04 1.56
------- ------- ------- ------
Total from Investment
Activities.............. (2.98) (0.01) 4.81 1.56
------- ------- ------- ------
Distributions
Net realized gains from
investment
transactions............ (4.06) -- (4.60) --
------- ------- ------- ------
Total Distributions...... (4.06) -- (4.60) --
------- ------- ------- ------
Change in Net Asset
Value.................... (7.04) (0.01) 0.21 1.56
------- ------- ------- ------
Net Asset Value, End of
Period................... $ 20.70 $ 27.74 $ 27.75 $27.54
======= ======= ======= ======
Total Return (excludes
redemption charge)....... (12.40)% (0.04)%(d) 17.78% 6.02%(d)
Ratios/Supplemental Data:
Net Assets at end of
period (000)............. $28,118 $24,655 $18,584 $ 100
Ratio of expenses to
average net assets....... 2.00% 2.00%(e) 1.98% 1.10%(e)
Ratio of net investment
income to average net
assets................... (0.91)% (0.93)%(e) (0.79)% 0.23%(e)
Ratio of expenses to
average net assets*...... 2.11% 2.07%(e) 2.00% 2.11%(e)
Portfolio turnover**...... 10% 10% 15% 3%
</TABLE>
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Large-Cap Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from December 15, 1998 (commencement on operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
74
<PAGE>
AMSOUTH FUNDS
Large Cap Fund (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Year Ended
July 31, July 31, December 31, December 31,
2001 + 2000 (b) 1999 + 1998 (c)
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 28.14 $ 28.01 $ 27.54 $ 25.52
-------- -------- -------- --------
Investment Activities
Net investment income.. --* -- 0.03 --
Net realized and
unrealized gains
(losses) from
investments........... (2.83) 0.14 5.07 2.02
-------- -------- -------- --------
Total from Investment
Activities............ (2.83) 0.14 5.10 2.02
-------- -------- -------- --------
Distributions
Net investment income.. --* (0.01) 0.03 --
Net realized gains from
investment
transactions.......... (4.06) -- (4.60) --
-------- -------- -------- --------
Total Distributions.... (4.06) (0.01) (4.63) --
-------- -------- -------- --------
Change in Net Asset
Value.................. (6.89) 0.13 0.47 2.02
-------- -------- -------- --------
Net Asset Value, End of
Period................. $ 21.25 $ 28.14 $ 28.01 $ 27.54
======== ======== ======== ========
Total Return............ (11.60)% (0.50)%(d) 18.84% 7.92%(d)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $521,412 $694,107 $706,313 $786,462
Ratio of expenses to
average net assets..... 1.10% 1.07%(e) 1.04% 1.04%(e)
Ratio of net investment
income to average net
assets................. (0.01)% 0.00%(e) 0.11% 0.20%(e)
Ratio of expenses to
average net assets**... 1.26% 1.22%(e) 1.14% 1.09%(e)
Portfolio turnover***... 10% 10% 15% 3%
</TABLE>
/\ Formerly Institutional Shares.
+ Net investment income is based on average shares outstanding during the
period.
* Less than $0.005.
** During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
*** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Large-Cap Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from December 14, 1998 (commencement on operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
75
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Mid Cap Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks (90.8%)
<TABLE>
<CAPTION>
Shares Value
--------- -------
<S> <C> <C>
Cable Television (4.9%)
Cablevision Systems Corp. -- Rainbow Media Group (b)......... 65,500 $ 1,693
Cox Communications, Inc., Class A (b)........................ 37,150 1,521
-------
3,214
-------
Communications Equipment (5.2%)
Comcast Corp., Special Class A (b)........................... 30,000 1,141
L-3 Communications Holdings, Inc. (b)........................ 30,000 2,238
-------
3,379
-------
Computer Software & Services (19.3%)
Affiliated Computer Services, Inc., Class A (b).............. 29,000 2,402
BEA Systems, Inc. (b)........................................ 53,300 1,175
Eclipsys Corp. (b)........................................... 110,000 2,923
International Game Technology (b)............................ 28,000 1,455
Parametric Technology Corp. (b).............................. 160,000 1,515
Peregrine Systems, Inc. (b).................................. 79,300 2,169
Veritas Software Corp. (b)................................... 24,175 1,025
-------
12,664
-------
Data Processing & Reproduction (3.5%)
Fiserv, Inc. (b)............................................. 40,000 2,295
-------
E-Commerce (3.0%)
eBay, Inc. (b)............................................... 31,500 1,971
-------
Electronic Components (5.5%)
Microchip Technology, Inc. (b)............................... 71,200 2,584
QLogic Corp. (b)............................................. 27,150 1,043
-------
3,627
-------
Entertainment (2.6%)
MGM Mirage, Inc. (b)......................................... 55,000 1,700
-------
Financial Services (8.9%)
BB&T Corp.................................................... 60,000 2,214
National Commerce Financial Corp. ........................... 45,000 1,184
Washington Mutual, Inc. ..................................... 59,850 2,424
-------
5,822
-------
Health Care (7.2%)
Laboratory Corporation of America Holdings (b)............... 35,000 3,149
Tenet Healthcare Corp. (b)................................... 28,000 1,554
-------
4,703
-------
Human Resources (3.8%)
Robert Half International, Inc. (b).......................... 95,200 2,480
-------
Insurance (2.9%)
XL Capital, Ltd. ............................................ 25,000 1,919
-------
Medical Equipment & Supplies (3.8%)
Varian Medical Systems, Inc. (b)............................. 35,000 2,503
-------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
--------- -------
<S> <C> <C>
Oil & Gas Exploration, Production, &
Services (4.9%)
Nabors Industries, Inc. (b).................................. 32,200 $ 943
Shaw Group (The), Inc. (b)................................... 26,950 876
Smith International, Inc. (b)................................ 25,200 1,371
-------
3,190
-------
Pharmaceuticals (4.2%)
Forest Laboratories, Inc. (b)................................ 34,700 2,726
-------
Retail (8.0%)
Barnes & Noble, Inc. (b)..................................... 51,400 2,015
Kohl's Corp. (b)............................................. 34,050 1,950
Tiffany & Co. ............................................... 36,000 1,271
-------
5,236
-------
Schools & Educational Services (3.1%)
Apollo Group, Inc. (b)....................................... 46,500 2,025
-------
TOTAL COMMON STOCKS.......................................... 59,454
-------
Investment Companies (8.6%)
AmSouth Prime Money Market Fund.............................. 2,950,625 2,951
AmSouth U.S. Treasury Money Market Fund...................... 2,700,000 2,700
-------
TOTAL INVESTMENT COMPANIES................................... 5,651
-------
TOTAL INVESTMENTS
(Cost $62,631) (a) -- 99.4%................................. 65,105
Other assets in excess of liabilities -- 0.6%................ 375
-------
NET ASSETS -- 100.0%......................................... $65,480
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............................................. $ 6,064
Unrealized depreciation.............................................. (3,590)
-------
Net unrealized appreciation.......................................... $ 2,474
=======
</TABLE>
(b) Represents non-income producing security.
See notes to financial statements
76
<PAGE>
AMSOUTH FUNDS
Mid Cap Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $62,631)......................... $ 65,105
Cash......................................................... 6
Interest and dividends receivable............................ 42
Receivable for capital shares issued......................... 29
Receivable for investments sold.............................. 1,825
Collateral for securities loaned, at fair value.............. 16,433
Prepaid expenses and other assets............................ 36
--------
Total Assets................................................ 83,476
Liabilities:
Payable for investments purchased............................ $ 1,501
Payable for capital shares redeemed.......................... 8
Payable upon return of securities loaned..................... 16,433
Accrued expenses and other payables:
Investment advisory fees.................................... 23
Administration fees......................................... 2
Shareholder servicing and distribution fees................. 16
Custodian fees.............................................. 2
Other....................................................... 11
-------
Total Liabilities........................................... 17,996
--------
Net Assets:
Capital...................................................... 84,800
Accumulated net realized losses from investment
transactions................................................ (21,794)
Unrealized appreciation from investments..................... 2,474
--------
Net Assets................................................... $ 65,480
========
Class A Shares
Net Assets.................................................. $ 12,546
Shares outstanding.......................................... 1,040
Redemption price per share.................................. $ 12.06
========
Class A Shares -- Maximum Sales Charge....................... 5.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)...................................................... $ 12.76
========
Class B Shares
Net Assets.................................................. $ 11,323
Shares outstanding.......................................... 957
Offering price per share*................................... $ 11.83
========
Trust Shares (b)
Net Assets.................................................. $ 41,611
Shares outstanding.......................................... 3,449
Offering and redemption price per share..................... $ 12.06
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Mid-Cap Fund.
(b) Formerly Institutional Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Dividend income................................................. $ 278
Securities lending income....................................... 48
--------
Total Investment Income........................................ 326
Expenses:
Investment advisory fees........................................ $824
Administration fees............................................. 165
Distribution fees -- Class B Shares............................. 98
Shareholder servicing fees -- Class A Shares.................... 33
Shareholder servicing fees -- Class B Shares.................... 33
Shareholder servicing fees -- Trust Shares (b).................. 84
Custodian fees.................................................. 23
Accounting fees................................................. 15
Transfer agent fees............................................. 87
Other fees...................................................... 43
----
Total expenses before fee reductions........................... 1,405
Expenses reduced by Administrator.............................. (41)
Expenses reduced by Transfer Agent............................. (18)
Expenses reduced by Distributor................................ (28)
Expenses reduced by Fund Accountant............................ (9)
--------
Net expenses................................................... 1,309
--------
Net Investment Loss............................................. (983)
--------
Realized/Unrealized Losses from Investments:
Net realized losses from investment transactions................ (17,839)
Change in unrealized appreciation/depreciation from
investments.................................................... (7,445)
--------
Net realized/unrealized losses from investments................. (25,284)
--------
Change in net assets resulting from operations.................. $(26,267)
========
</TABLE>
See notes to financial statements
77
<PAGE>
AMSOUTH FUNDS
Mid Cap Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 2000 (b) 1999 (c)
---------- ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment loss...................... $ (983) $ (515) $ (155)
Net realized losses from investment
transactions............................ (17,839) (3,386) (570)
Change in unrealized
appreciation/depreciation from
investments............................. (7,445) (2,489) 12,408
-------- ------- -------
Change in net assets resulting from
operations............................... (26,267) (6,390) 11,683
-------- ------- -------
Change in net assets from capital
transactions............................. 3,603 52,813 30,038
-------- ------- -------
Change in net assets...................... (22,664) 46,423 41,721
Net Assets:
Beginning of period...................... 88,144 41,721 --
-------- ------- -------
End of period............................ $ 65,480 $88,144 $41,721
======== ======= =======
</TABLE>
(a) Formerly ISG Mid-Cap Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from May 4, 1999 (commencement of operations) through
December 31, 1999.
See notes to financial statements
78
<PAGE>
AMSOUTH FUNDS
Mid Cap Fund (a)
Financial Highlights, Class A Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 + 2000 (b)+ 1999 (c)+
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.. $ 16.67 $ 17.33 $10.00
------- ------- ------
Investment Activities
Net investment loss.................. (0.17) (0.13) (0.14)
Net realized and unrealized gains
(losses) from investments........... (4.44) (0.53) 7.47
------- ------- ------
Total from Investment Activities..... (4.61) (0.66) 7.33
------- ------- ------
Change in Net Asset Value............. (4.61) (0.66) 7.33
------- ------- ------
Net Asset Value, End of Period........ $ 12.06 $ 16.67 $17.33
======= ======= ======
Total Return (excludes sales charge).. (27.65)% (3.81)%(d) 73.30%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)..... $12,546 $11,536 $2,357
Ratio of expenses to average net
assets............................... 1.57% 1.62%(e) 2.28%(e)
Ratio of net investment income to
average net assets................... (1.17)% (1.27)%(e) (1.62)%(e)
Ratio of expenses to average net
assets*.............................. 1.65% 1.65%(e) 2.29%(e)
Portfolio turnover**.................. 120% 39% 20%
</TABLE>
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Mid-Cap Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from May 4, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 + 2000 (b)+ 1999 (c)+
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.. $ 16.52 $ 17.28 $10.00
------- ------- ------
Investment Activities
Net investment loss.................. (0.27) (0.20) (0.19)
Net realized and unrealized gains
(losses) from investments........... (4.42) (0.56) 7.47
------- ------- ------
Total from Investment Activities..... (4.69) (0.76) 7.28
------- ------- ------
Change in Net Asset Value............. (4.69) (0.76) 7.28
------- ------- ------
Net Asset Value, End of Period........ $ 11.83 $ 16.52 $17.28
======= ======= ======
Total Return (excludes redemption
charge).............................. (28.39)% (4.40)%(d) 72.80%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)..... $11,323 $12,912 $2,177
Ratio of expenses to average net
assets............................... 2.32% 2.33%(e) 2.86%(e)
Ratio of net investment income to
average net assets................... (1.91)% (2.00)%(e) (2.17)%(e)
Ratio of expenses to average net
assets*.............................. 2.41% 2.37%(e) 2.86%(e)
Portfolio turnover**.................. 120% 39% 20%
</TABLE>
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Mid-Cap Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from May 4, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
79
<PAGE>
AMSOUTH FUNDS
Mid Cap Fund (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 + 2000 (b)+ 1999 (c)+
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.. $ 16.70 $ 17.37 $ 10.00
------- ------- -------
Investment Activities
Net investment loss.................. (0.15) (0.11) (0.12)
Net realized and unrealized gains
(losses) from investments........... (4.49) (0.56) 7.49
------- ------- -------
Total from Investment Activities..... (4.64) (0.67) 7.37
------- ------- -------
Change in Net Asset Value............. (4.64) (0.67) 7.37
------- ------- -------
Net Asset Value, End of Period........ $ 12.06 $ 16.70 $ 17.37
======= ======= =======
Total Return.......................... (27.78)% (3.86)%(d) 73.70%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)..... $41,611 $63,696 $37,186
Ratio of expenses to average net
assets............................... 1.42% 1.46%(e) 2.18%(e)
Ratio of net investment income to
average net assets................... (1.03)% (1.08)%(e) (1.47)%(e)
Ratio of expenses to average net
assets*.............................. 1.55% 1.53%(e) 2.18%(e)
Portfolio turnover**.................. 120% 39% 20%
</TABLE>
/\ Formerly Institutional Shares.
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Mid-Cap Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from May 4, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
80
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Small Cap Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks (96.4%)
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Airlines (2.5%)
Atlantic Coast Airlines Holdings, Inc. (b).................. 156,100 $ 4,535
--------
Casino Services (3.5%)
Anchor Gaming (b)........................................... 52,900 2,750
Mandalay Resort Group (b)................................... 99,200 2,505
Shuffle Master, Inc. (b).................................... 72,100 1,260
--------
6,515
--------
Computers & Peripherals (3.7%)
Electronics for Imaging, Inc. (b)........................... 124,600 2,746
Jack Henry & Associates, Inc. .............................. 146,800 4,150
--------
6,896
--------
Construction (7.7%)
Beazer Homes USA, Inc. (b).................................. 24,300 1,773
Centex Corp. .............................................. 65,100 3,062
D. R. Horton, Inc. ......................................... 72,300 1,992
Lennar Corp. .............................................. 77,600 3,561
Pulte Homes, Inc. .......................................... 90,500 3,757
--------
14,145
--------
Consulting Services (0.5%)
MAXIMUS, Inc. (b)........................................... 22,000 975
--------
Educational Services (7.8%)
Career Education Corp. (b).................................. 100,900 6,155
Corinthian Colleges, Inc. (b)............................... 94,000 4,363
Education Management Corp. (b).............................. 93,100 3,798
--------
14,316
--------
Financial Services (7.8%)
AmeriCredit Corp. (b)....................................... 58,800 3,616
Metris Co., Inc. ........................................... 52,500 1,822
New York Community Bancorp, Inc. ........................... 127,100 5,405
Roslyn Bancorp, Inc. ....................................... 57,600 1,728
UCBH Holdings, Inc. ........................................ 58,200 1,802
--------
14,373
--------
Food Processing & Packaging (1.0%)
Smithfield Foods, Inc. (b).................................. 40,900 1,800
--------
Hazardous Waste Disposal (1.8%)
Stericycle, Inc. (b)........................................ 67,500 3,324
--------
Health Care (4.9%)
Apria Healthcare Group, Inc. (b)............................ 78,500 1,864
First Health Group Corp. (b)................................ 201,500 5,358
LifePoint Hospitals, Inc. (b)............................... 41,500 1,777
--------
8,999
--------
Manufacturing (6.2%)
Alliant Techsystems, Inc. (b)............................... 6,000 595
BE Aerospace, Inc. (b)...................................... 64,300 1,194
Columbia Sportswear Co. (b)................................. 62,950 2,445
Direct Focus, Inc. (b)...................................... 101,700 4,912
PLATO Learning, Inc. (b).................................... 21,600 711
Precision Castparts Corp. ................................. 30,000 1,095
Quiksilver, Inc. (b)........................................ 20,800 438
--------
11,390
--------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Medical Equipment & Supplies (3.8%)
Mentor Corp. ............................................... 76,200 $ 2,250
Varian Medical Systems, Inc. (b)............................ 65,900 4,712
--------
6,962
--------
Medical Services (11.7%)
AdvancePCS (b).............................................. 81,700 5,073
AmeriPath, Inc. (b)......................................... 79,400 2,384
AmSurg Corp. (b)............................................ 105,600 2,956
Beverly Enterprises, Inc. (b)............................... 136,100 1,422
DaVita, Inc. (b)............................................ 216,400 4,640
Henry Schein, Inc. (b)...................................... 136,100 5,035
--------
21,510
--------
Oil & Gas Exploration, Production, & Services (7.5%)
Energen Corp. .............................................. 20,800 530
Equitable Resources, Inc. ................................. 47,500 1,703
Key Energy Services, Inc. (b)............................... 71,700 667
Ocean Energy, Inc. ......................................... 108,100 2,123
Offshore Logistics, Inc. (b)................................ 92,900 1,798
Shaw Group (The), Inc. (b).................................. 112,700 3,662
Valero Energy Corp. ........................................ 52,400 1,850
Western Gas Resources, Inc. ............................... 50,900 1,513
--------
13,846
--------
Pharmaceuticals (3.9%)
First Horizon Pharmaceutical Corp. (b)...................... 36,500 1,250
Pharmaceutical Product Development, Inc. (b)................ 166,500 5,896
--------
7,146
--------
Restaurants (0.7%)
Ruby Tuesday, Inc. ......................................... 68,500 1,274
--------
Retail (16.5%)
Chico's FAS, Inc. (b)....................................... 130,950 4,880
Christopher & Banks Corp. (b)............................... 27,800 745
Copart, Inc. (b)............................................ 161,900 4,595
Fleming Co., Inc............................................ 80,600 2,855
Genesco, Inc. (b)........................................... 118,200 3,847
Hot Topic, Inc. (b)......................................... 79,800 2,139
O'Reilly Automotive, Inc. (b)............................... 115,800 4,041
Oakley, Inc. (b)............................................ 230,500 4,310
Pathmark Stores, Inc. (b)................................... 73,000 1,810
Skechers U.S.A., Inc. (b)................................... 52,200 1,101
--------
30,323
--------
Semiconductors (1.3%)
Ultratech Stepper, Inc. (b)................................. 105,200 2,421
--------
Telecom Services (3.6%)
Lightbridge, Inc. (b)....................................... 20,100 217
Metro One Telecommunications, Inc. (b)...................... 104,200 3,961
UTStarcom, Inc. (b)......................................... 119,200 2,465
--------
6,643
--------
TOTAL COMMON STOCKS......................................... 177,393
--------
</TABLE>
Continued
81
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Small Cap Fund July 31, 2001
(Amounts in thousands, except shares)
Investment Companies (3.8%)
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
AmSouth Prime Money Market Fund............................. 7,004,574 $ 7,005
--------
TOTAL INVESTMENT COMPANIES.................................. 7,005
--------
TOTAL INVESTMENTS
(Cost $164,802) (a) -- 100.2%.............................. 184,398
Liabilities in excess of other
assets -- (0.2%)........................................... (342)
--------
NET ASSETS -- 100.0%........................................ $184,056
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............................................. $26,296
Unrealized depreciation.............................................. (6,700)
-------
Net unrealized appreciation.......................................... $19,596
=======
</TABLE>
(b) Represents non-income producing security.
See notes to financial statements
82
<PAGE>
AMSOUTH FUNDS
Small Cap Fund
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $164,802)........................ $184,398
Interest and dividends receivable............................ 17
Receivable for capital shares issued......................... 27
Collateral for securities loaned, at fair value.............. 28,396
Prepaid expenses and other assets............................ 11
--------
Total Assets................................................ 212,849
Liabilities:
Payable for investments purchased............................ $ 260
Payable for capital shares redeemed.......................... 9
Payable upon return of securities loaned..................... 28,396
Accrued expenses and other payables:
Investment advisory fees.................................... 72
Administration fees......................................... 5
Shareholder servicing and distribution fees................. 19
Custodian fees.............................................. 4
Other....................................................... 28
-------
Total Liabilities........................................... 28,793
--------
Net Assets:
Capital...................................................... 195,778
Accumulated net realized losses from investment
transactions................................................ (31,318)
Unrealized appreciation from investments..................... 19,596
--------
Net Assets................................................... $184,056
========
Class A Shares (a)
Net Assets.................................................. $ 8,346
Shares outstanding.......................................... 825
Redemption price per share.................................. $ 10.12
========
Class A Shares -- Maximum Sales Charge....................... 5.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net assets value adjusted to the nearest
cent)...................................................... $ 10.71
========
Class B Shares
Net Assets.................................................. $ 2,975
Shares outstanding.......................................... 302
Offering price per share*................................... $ 9.85
========
Trust Shares (b)
Net Assets.................................................. $172,735
Shares outstanding.......................................... 16,902
Offering and redemption price per share..................... $ 10.22
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income............................................... $ 100
Dividend income............................................... 553
Securities lending income..................................... 57
--------
Total Investment Income...................................... 710
Expenses:
Investment advisory fees...................................... $2,200
Administration fees........................................... 367
Distribution fees -- Class B Shares........................... 23
Shareholder servicing fees -- Class A
Shares (a)................................................... 24
Shareholder servicing fees -- Class B Shares.................. 8
Shareholder servicing fees -- Trust Shares (b)................ 256
Custodian fees................................................ 50
Accounting fees............................................... 33
Transfer agent fees........................................... 78
Other fees.................................................... 66
------
Total expenses before fee reductions......................... 3,105
Expenses reduced by Investment Advisor....................... (183)
Expenses reduced by Administrator............................ (92)
Expenses reduced by Transfer Agent........................... (2)
Expenses reduced by Distributor.............................. (85)
Expenses reduced by Fund Accountant.......................... (21)
--------
Net expenses................................................. 2,722
--------
Net Investment Loss........................................... (2,012)
--------
Realized/Unrealized Gains (Losses) from Investments:
Net realized losses from investment transactions.............. (30,693)
Change in unrealized appreciation/depreciation from
investments.................................................. 12,883
--------
Net realized/unrealized losses from investments............... (17,810)
--------
Change in net assets resulting from operations................ $(19,822)
========
</TABLE>
See notes to financial statements
83
<PAGE>
AMSOUTH FUNDS
Small Cap Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment loss..................................... $ (2,012) $ (860)
Net realized gains (losses) from investment
transactions........................................... (30,693) 23,232
Change in unrealized appreciation/depreciation from
investments............................................ 12,883 (16,813)
-------- --------
Change in net assets resulting from operations........... (19,822) 5,559
-------- --------
Distributions to Class A Shareholders (a):
From net realized gains on investment transactions...... (901) --
Distributions to Class B Shareholders:
From net realized gains on investment transactions...... (326) --
Distributions to Trust Shareholders (b):
From net realized gains on investment transactions...... (16,743) --
-------- --------
Change in net assets from shareholder distributions...... (17,970) --
-------- --------
Change in net assets from capital transactions........... 48,606 143,904
-------- --------
Change in net assets..................................... 10,814 149,463
Net Assets:
Beginning of period..................................... 173,242 23,779
-------- --------
End of period........................................... $184,056 $173,242
======== ========
</TABLE>
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
See notes to financial statements
84
<PAGE>
AMSOUTH FUNDS
Small Cap Fund
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................ $ 12.52 $ 8.40 $ 9.14 $ 9.97
------- ------ ------ ------
Investment Activities
Net investment loss........... (0.14) (0.08) (0.10) (0.03)
Net realized and unrealized
gains (losses) from
investments.................. (1.05) 4.20 (0.64) (0.80)
------- ------ ------ ------
Total from Investment
Activities................... (1.19) 4.12 (0.74) (0.83)
------- ------ ------ ------
Distributions
Net realized gains from
investment transactions...... (1.21) -- -- --
------- ------ ------ ------
Total Distributions........... (1.21) -- -- --
------- ------ ------ ------
Change in Net Asset Value...... (2.40) 4.12 (0.74) (0.83)
------- ------ ------ ------
Net Asset Value, End of
Period........................ $ 10.12 $12.52 $ 8.40 $ 9.14
======= ====== ====== ======
Total Return (excludes sales
charge)....................... (10.33)% 49.05% (8.10)% (8.31)%(b)
Ratios/Supplemental Data:
Net Assets at end of period
(000)......................... $ 8,346 $8,408 $1,073 $1,372
Ratio of expenses to average
net assets.................... 1.61% 1.53% 1.66% 1.78%(c)
Ratio of net investment income
to average net assets......... (1.22)% (1.11)% (1.07)% (0.92)%(c)
Ratio of expenses to average
net assets*................... 1.77% 1.85% 2.68% 4.23%(c)
Portfolio turnover**........... 220% 318% 208% 71%
</TABLE>
/\ Formerly Classic Shares.
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from March 2, 1998 (commencement of operations) through
July 31, 1998.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
85
<PAGE>
AMSOUTH FUNDS
Small Cap Fund
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................ $ 12.31 $ 8.31 $ 9.11 $10.00
------- ------ ------ ------
Investment Activities
Net investment loss........... (0.22) (0.14) (0.14) (0.04)
Net realized and unrealized
gains (losses) from
investments.................. (1.03) 4.14 (0.66) (0.85)
------- ------ ------ ------
Total from Investment
Activities................... (1.25) 4.00 (0.80) (0.89)
------- ------ ------ ------
Distributions
Net realized gains from
investment transactions...... (1.21) -- -- --
------- ------ ------ ------
Total Distributions........... (1.21) -- -- --
------- ------ ------ ------
Change in Net Asset Value...... (2.46) 4.00 (0.80) (0.89)
------- ------ ------ ------
Net Asset Value, End of
Period........................ $ 9.85 $12.31 $ 8.31 $ 9.11
======= ====== ====== ======
Total Return (excludes
redemption charge)............ (11.03)% 48.13% (8.78)% (8.90)%(b)
Ratios/Supplemental Data:
Net Assets at end of period
(000)......................... $ 2,975 $2,619 $ 929 $ 871
Ratio of expenses to average
net assets.................... 2.36% 2.39% 2.41% 2.54%(c)
Ratio of net investment income
to average net assets......... (1.97)% (1.99)% (1.83)% (1.69)%(c)
Ratio of expenses to average
net assets*................... 2.52% 2.59% 3.42% 4.98%(c)
Portfolio turnover**........... 220% 318% 208% 71%
</TABLE>
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from March 2, 1998 (commencement of operations) through
July 31, 1998.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
86
<PAGE>
AMSOUTH FUNDS
Small Cap Fund
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period...................... $ 12.61 $ 8.44 $ 9.15 $10.00
-------- -------- ------- ------
Investment Activities
Net investment loss......... (0.12) (0.07) (0.03) (0.02)
Net realized and unrealized
gains (losses) from
investments................ (1.06) 4.24 (0.68) (0.83)
-------- -------- ------- ------
Total from Investment
Activities................. (1.18) 4.17 (0.71) (0.85)
-------- -------- ------- ------
Distributions
Net realized gains from
investment transactions.... (1.21) -- -- --
-------- -------- ------- ------
Total Distributions......... (1.21) -- -- --
-------- -------- ------- ------
Change in Net Asset Value.... (2.39) 4.17 (0.71) (0.85)
-------- -------- ------- ------
Net Asset Value, End of
Period...................... $ 10.22 $ 12.61 $ 8.44 $ 9.15
======== ======== ======= ======
Total Return................. (10.16)% 49.41% (7.76)% (8.48)%(b)
Ratios/Supplemental Data:
Net Assets at end of period
(000)....................... $172,735 $162,215 $21,777 $5,072
Ratio of expenses to average
net assets.................. 1.46% 1.42% 1.39% 1.50%(c)
Ratio of net investment
income to average net
assets...................... (1.07)% (1.01)% (0.82)% (0.52)%(c)
Ratio of expenses to average
net assets*................. 1.67% 1.70% 2.38% 3.94%(c)
Portfolio turnover**......... 220% 318% 208% 71%
</TABLE>
/\ Formerly Premier Shares.
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from March 2, 1998 (commencement of operations) through
July 31, 1998.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
87
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Equity Income Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks & Securities Convertible to Common Stocks (98.0%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
--------- --------
<S> <C> <C>
Consumer Discretionary (13.1%)
Costco Co., 0.00%, CVT. BD., 8/19/02........................ $ 3,380 $ 3,397
Ford Motor Co............................................... 129,600 3,301
Limited (The), Inc.......................................... 104,000 1,765
Omnicom Group, 2.25%, CVT. BD., 1/6/13...................... $ 1,660 3,017
Tiffany & Co................................................ 74,000 2,612
Tribune Co./AOL, 2.00%, CVT. BD., 5/15/29................... $ 26 2,762
Walt Disney (The) Co........................................ 101,000 2,661
--------
19,515
--------
Consumer Staples (7.4%)
Anheuser-Busch Cos., Inc.................................... 80,800 3,499
Estee Lauder, 6.25%, CVT. PFD., 2/23/02..................... 29,500 2,235
Quaker Oats Co.............................................. 28,900 2,543
Suiza Capital Trust II, 5.50%, CVT. PFD., 4/1/28............ 63,500 2,675
--------
10,952
--------
Energy (6.5%)
Chevron Corp................................................ 28,000 2,559
EOG Resources, 7.00%, CVT. PFD., 7/31/02.................... 112,300 3,543
Exxon Mobil Corp............................................ 85,486 3,570
--------
9,672
--------
Finance (17.3%)
American Express Co......................................... 76,000 3,065
American International Group, Inc........................... 20,300 1,690
Citigroup, Inc.............................................. 93,837 4,713
J.P. Morgan Chase & Co...................................... 75,622 3,274
Lehman Brothers Holdings, Inc............................... 48,100 3,463
Merrill Lynch & Co., Inc.................................... 48,200 2,614
Metlife Capital Trust I, 8.00%, CVT. PFD., 5/15/03.......... 29,100 2,730
Washington Mutual, Inc., 8.00%, CVT. PFD., 8/16/04 (PIES)... 46,050 4,192
--------
25,741
--------
Health Care (13.4%)
Abbott Laboratories......................................... 56,600 3,033
Amerisource Health Corp., 5.00%, CVT. BD., 12/1/07.......... $ 2,590 3,412
Johnson & Johnson........................................... 57,174 3,093
Merck & Co., Inc............................................ 49,000 3,331
Pfizer, Inc................................................. 69,900 2,881
Pharmacia Corp., 6.50%, CVT. PFD., 11/30/01................. 57,900 2,322
Schering-Plough Corp........................................ 45,750 1,787
--------
19,859
--------
Industrials (10.9%)
General Electric Co......................................... 65,600 2,854
Honeywell International, Inc................................ 67,000 2,470
Illinois Tool Works, Inc.................................... 38,300 2,413
L-3 Communications, Inc., 5.25%, CVT. BD., 6/1/09........... $ 3,150 3,591
Raytheon Co., 8.25%, CVT. PFD., 5/15/06..................... 48,800 2,574
</TABLE>
continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
--------- --------
<S> <C> <C>
Industrials, continued
W.W. Grainger, Inc......................................... 53,000 $ 2,231
--------
16,133
--------
Materials (2.4%)
Rohm & Haas Co............................................. 102,800 3,530
--------
Technology (17.6%)
Affiliated Computer Services, 3.50%, CVT. BD., 2/15/06..... $ 3,025 3,529
Amdocs, Ltd., 6.75%, CVT. PFD., 9/11/02.................... 74,450 2,971
Burr-Brown Corp./TXN, 4.25%, CVT. BD., 2/15/07............. $ 1,635 1,864
Dell Computer Corp. (b).................................... 74,100 1,996
Electronic Data Systems, 7.63%, CVT. PFD., 8/17/04......... 63,000 3,383
Microsoft Corp. (b)........................................ 43,000 2,846
Peregrine Systems, Inc., 5.50%, CVT. BD., 11/15/07......... $ 1,950 2,596
Semtech Corp., 4.50%, CVT. BD., 2/1/07..................... $ 2,610 2,838
Solectron Corp. (b)........................................ 37,900 662
Solectron Corp., 0.00%, CVT. BD., 5/8/20................... $ 4,350 2,213
Texas Instruments, Inc..................................... 31,480 1,086
--------
25,984
--------
Telecom Services (5.9%)
BellSouth Corp............................................. 64,600 2,629
Qwest Trends Trust, 5.75%, CVT. PFD., 11/17/03 (c)......... 64,400 3,011
SBC Communications, Inc.................................... 70,750 3,186
--------
8,826
--------
Utilities (3.5%)
Calpine Capital Trust II, 5.50%, CVT. PFD., 2/1/05......... 35,200 2,693
Nisource, Inc., 7.75%, CVT. PFD., 2/19/03 (PIES)........... 52,200 2,561
--------
5,254
--------
TOTAL COMMON STOCKS & SECURITIES CONVERTIBLE TO COMMON
STOCKS.................................................... $145,466
--------
</TABLE>
Continued
88
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Equity Income Fund July 31, 2001
(Amounts in thousands, except shares)
Investment Companies (1.4%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
--------- --------
<S> <C> <C>
AmSouth Prime Money Market Fund............................. 576,987 $ 577
S & P 500 Depositary Receipt................................ 12,200 1,480
--------
TOTAL INVESTMENT COMPANIES.................................. 2,057
--------
TOTAL INVESTMENTS
(Cost $146,774) (a) -- 99.4%............................... 147,523
Other assets in excess of
liabilities -- 0.6%........................................ 932
--------
NET ASSETS -- 100.0%........................................ $148,455
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............................................. $ 7,930
Unrealized depreciation.............................................. (7,181)
-------
Net unrealized appreciation.......................................... $ 749
=======
</TABLE>
(b) Represents a non-income producing security.
(c) Represents a restricted security, purchased under Rule 144A, which is
exempt from registration under the Security Act of 1933, as amended. These
securities have been deemed liquid under guidelines established by the
Board of Trustees.
PIES -- Premium Income Equity Securities
CVT. BD. -- Convertible Bond
CVT. PFD. -- Convertible Preferred Stock
<TABLE>
<CAPTION>
Number of
Contracts Value
--------- -----
<S> <C> <C>
Written options outstanding at July 31, 2001:
Covered Call Options:
Microsoft Corp. (strike price $80 per share, expires on
8/20/01)...................................................... 225 $(1)
---
Total written covered call options (premium received $30)....... $(1)
===
</TABLE>
<TABLE>
<CAPTION>
Breakdown of Sectors (as a % of net assests)
-------------------------------------------- ---
<S> <C> <C>
Common Stocks......................................................... 54.8%
Convertible Preferred Stocks.......................................... 23.5%
Convertible Bonds..................................................... 19.7%
Investment Companies.................................................. 1.4%
----
Total................................................................. 99.4%
====
</TABLE>
See notes to financial statements
89
<PAGE>
AMSOUTH FUNDS
Equity Income Fund
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $146,774)........................ $147,523
Interest and dividends receivable............................ 302
Receivable for capital shares issued......................... 24
Receivable for investments sold.............................. 7,667
Collateral for securities loaned, at fair value.............. 31,495
Prepaid expenses and other assets............................ 10
--------
Total Assets................................................ 187,021
Liabilities:
Options written, at value (premiums received $30)............ $ 1
Payable for investments purchased............................ 6,813
Payable for capital shares redeemed.......................... 150
Payable upon return of securities loaned..................... 31,495
Accrued expenses and other payables:
Investment advisory fees.................................... 42
Administration fees......................................... 4
Shareholder servicing and distribution fees................. 40
Custodian fees.............................................. 4
Other....................................................... 17
-------
Total Liabilities........................................... 38,566
--------
Net Assets:
Capital...................................................... 169,006
Distributions in excess of net investment income............. (3)
Accumulated net realized losses from investment
transactions................................................ (21,326)
Unrealized appreciation from investments and option
contracts................................................... 778
--------
Net Assets................................................... $148,455
========
Class A Shares (a)
Net Assets.................................................. $ 42,699
Shares outstanding.......................................... 3,417
Redemption price per share.................................. $ 12.50
========
Class A Shares -- Maximum Sales Charge....................... 5.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)...................................................... $ 13.23
========
Class B Shares
Net Assets.................................................. $ 28,678
Shares outstanding.......................................... 2,309
Offering price per share*................................... $ 12.42
========
Trust Shares (b)
Net Assets.................................................. $ 77,078
Shares outstanding.......................................... 6,164
Offering and redemption price per share..................... $ 12.51
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income.......................................... $ 2,501
Dividend income.......................................... 1,891
Securities lending income................................ 26
--------
Total Investment Income................................. 4,418
Expenses:
Investment advisory fees................................. $1,400
Administration fees...................................... 350
Distribution fees -- Class B Shares...................... 233
Shareholder servicing fees -- Class A Shares (a)......... 98
Shareholder servicing fees -- Class B Shares............. 78
Shareholder servicing fees -- Trust Shares (b)........... 157
Custodian fees........................................... 48
Accounting fees.......................................... 25
Transfer agent fees...................................... 92
Other fees............................................... 61
------
Total expenses before fee reductions/reimbursements..... 2,542
Expenses reduced/reimbursed by Investment Advisor....... (5)
Expenses reduced by Administrator....................... (88)
Expenses reduced by Transfer Agent...................... (4)
Expenses reduced by Distributor......................... (52)
Expenses reduced by Fund Accountant..................... (19)
--------
Net expenses............................................ 2,374
--------
Net Investment Income.................................... 2,044
--------
Realized/Unrealized Losses from Investments:
Net realized losses from investment transactions and
option contracts........................................ (18,316)
Change in unrealized appreciation/depreciation from
investments and option contracts........................ (7,979)
--------
Net realized/unrealized losses on investments............ (26,295)
--------
Change in net assets resulting from operations........... $(24,251)
========
</TABLE>
See notes to financial statements
90
<PAGE>
AMSOUTH FUNDS
Equity Income Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 2,044 $ 1,096
Net realized losses from investment transactions and
option contracts....................................... (18,316) (1,441)
Change in unrealized appreciation/depreciation from
investments and option contracts....................... (7,979) 4,396
-------- --------
Change in net assets resulting from operations........... (24,251) 4,051
-------- --------
Distributions to Class A Shareholders (a):
From net investment income.............................. (511) (317)
From net realized gains on investment transactions...... -- (1,241)
Distributions to Class B Shareholders:
From net investment income.............................. (211) (64)
From net realized gains on investment transactions...... -- (485)
Distributions to Trust Shareholders (b):
From net investment income.............................. (1,515) (600)
From net realized gains on investment transactions...... -- (796)
-------- --------
Change in net assets from shareholder distributions...... (2,237) (3,503)
-------- --------
Change in net assets from capital transactions........... 468 133,574
-------- --------
Change in net assets..................................... (26,020) 134,122
Net Assets:
Beginning of period..................................... 174,475 40,353
-------- --------
End of period........................................... $148,455 $174,475
======== ========
</TABLE>
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
See notes to financial statements
91
<PAGE>
AMSOUTH FUNDS
Equity Income Fund
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a) 1997 (b)
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 14.56 $ 13.10 $ 11.89 $ 11.72 $ 10.00
------- ------- ------- ------- -------
Investment Activities
Net investment income.. 0.17 0.17 0.17 0.24 0.07
Net realized and
unrealized gains
(losses) from
investments........... (2.05) 2.26 1.46 0.59 1.71
------- ------- ------- ------- -------
Total from Investment
Activities............ (1.88) 2.43 1.63 0.83 1.78
------- ------- ------- ------- -------
Distributions
Net investment income.. (0.18) (0.16) (0.16) (0.25) (0.06)
Net realized gains from
investment
transactions.......... -- (0.81) (0.26) (0.41) --
------- ------- ------- ------- -------
Total Distributions.... (0.18) (0.97) (0.42) (0.66) (0.06)
------- ------- ------- ------- -------
Change in Net Asset
Value.................. (2.06) 1.46 1.21 0.17 1.72
------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 12.50 $ 14.56 $ 13.10 $ 11.89 $ 11.72
======= ======= ======= ======= =======
Total Return (excludes
sales charge).......... (12.96)% 19.12% 14.17% 7.29% 17.81%(c)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $42,699 $39,201 $21,526 $26,686 $22,273
Ratio of expenses to
average net assets..... 1.31% 1.38% 1.41% 1.42% 1.30%(d)
Ratio of net investment
income to average net
assets................. 1.22% 1.22% 1.37% 2.03% 2.13%(d)
Ratio of expenses to
average net assets*.... 1.38% 1.45% 1.58% 1.57% 1.51%(d)
Portfolio turnover**.... 209% 168% 134% 83% 27%
</TABLE>
/\ Formerly Classic Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(b) For the period from March 20, 1997 (commencement of operations) through
July 31, 1997.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
92
<PAGE>
AMSOUTH FUNDS
Equity Income Fund
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 14.48 $ 13.05 $11.86 $11.60
------- ------- ------ ------
Investment Activities
Net investment income.......... 0.07 0.07 0.07 0.15
Net realized and unrealized
gains (losses) from
investments................... (2.04) 2.24 1.47 0.68
------- ------- ------ ------
Total from Investment
Activities.................... (1.97) 2.31 1.54 0.83
------- ------- ------ ------
Distributions
Net investment income.......... (0.09) (0.07) (0.09) (0.16)
Net realized gains from
investment transactions....... -- (0.81) (0.26) (0.41)
------- ------- ------ ------
Total Distributions............ (0.09) (0.88) (0.35) (0.57)
------- ------- ------ ------
Change in Net Asset Value....... (2.06) 1.43 1.19 0.26
------- ------- ------ ------
Net Asset Value, End of Period.. $ 12.42 $ 14.48 $13.05 $11.86
======= ======= ====== ======
Total Return (excludes
redemption charge)............. (13.64)% 18.24% 13.34% 7.26%(b)
Ratios/Supplemental Data:
Net Assets at end of period
(000).......................... $28,678 $28,153 $7,919 $7,733
Ratio of expenses to average net
assets......................... 2.05% 2.09% 2.16% 2.19%(c)
Ratio of net investment income
to average net assets.......... 0.49% 0.49% 0.61% 1.29%(c)
Ratio of expenses to average net
assets*........................ 2.13% 2.20% 2.33% 2.35%(c)
Portfolio turnover**............ 209% 168% 134% 83%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from September 3, 1997 (commencement of operations) through
July 31, 1998.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
93
<PAGE>
AMSOUTH FUNDS
Equity Income Fund
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 14.57 $ 13.10 $ 11.89 $11.35
------- -------- ------- ------
Investment Activities
Net investment income.......... 0.19 0.20 0.19 0.25
Net realized and unrealized
gains (losses) from
investments................... (2.05) 2.27 1.47 0.95
------- -------- ------- ------
Total from Investment
Activities.................... (1.86) 2.47 1.66 1.20
------- -------- ------- ------
Distributions
Net investment income.......... (0.20) (0.19) (0.19) (0.25)
Net realized gains from
investment transactions....... -- (0.81) (0.26) (0.41)
------- -------- ------- ------
Total Distributions............ (0.20) (1.00) (0.45) (0.66)
------- -------- ------- ------
Change in Net Asset Value....... (2.06) 1.47 1.21 0.54
------- -------- ------- ------
Net Asset Value, End of Period.. $ 12.51 $ 14.57 $ 13.10 $11.89
======= ======== ======= ======
Total Return.................... (12.88)% 19.55% 14.43% 7.54%(b)
Ratios/Supplemental Data:
Net Assets at end of period
(000).......................... $77,078 $107,121 $10,908 $8,087
Ratio of expenses to average net
assets......................... 1.17% 1.19% 1.16% 1.19%(c)
Ratio of net investment income
to average net assets.......... 1.38% 1.35% 1.59% 2.34%(c)
Ratio of expenses to average net
assets*........................ 1.28% 1.32% 1.33% 1.35%(c)
Portfolio turnover**............ 209% 168% 134% 83%
</TABLE>
/\ Formerly Premier Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(b) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of Premier
Shares for the period from September 2, 1997 to July 31, 1998. Total return
for the Premier Shares for the period from September 2, 1997 (commencement
of operations) through July 31, 1998 was 10.82%.
(c) Annualized.
See notes to financial statements
94
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Balanced Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks (49.4%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Automotive (0.0%)
Ford Motor Co. ........................................... 8 $ --*
--------
Banking (1.6%)
Bank of America Corp. .................................... 10,000 636
First Union Corp. ........................................ 15,000 531
U.S. Bancorp.............................................. 37,770 896
Wells Fargo & Co. ........................................ 13,450 620
--------
2,683
--------
Business Services (1.2%)
Modis Professional Services, Inc. (b)..................... 61,500 392
Reynolds & Reynolds Co., Class A.......................... 73,000 1,671
--------
2,063
--------
Chemicals -- Speciality (2.0%)
Engelhard Corp. .......................................... 130,000 3,387
--------
Computer Hardware (1.3%)
Compaq Computer Corp. .................................... 40,000 598
IBM Corp. ................................................ 15,000 1,578
--------
2,176
--------
Computer Software & Services (3.6%)
Automatic Data Processing, Inc. .......................... 15,130 771
Cabletron Systems, Inc. (b)............................... 100,000 1,857
Cisco Systems, Inc. (b)................................... 29,840 574
Computer Associates International, Inc. .................. 40,000 1,379
EMC Corp. (b)............................................. 18,410 363
McDATA Corp. ............................................. 338 6
Microsoft Corp. (b)....................................... 17,040 1,128
--------
6,078
--------
Diversified Manufacturing (1.0%)
General Electric Co. ..................................... 18,940 824
Tyco International, Ltd. ................................. 16,580 882
--------
1,706
--------
Electrical & Electronic (1.1%)
Avnet, Inc. .............................................. 79,000 1,887
--------
Financial Services (3.7%)
Citigroup, Inc. .......................................... 17,650 886
Moody's Corp. ............................................ 45,000 1,497
Washington Mutual, Inc. .................................. 93,750 3,799
--------
6,182
--------
Food Products, Processing & Packaging (1.6%)
Sara Lee Corp. ........................................... 46,000 928
Sensient Technologies Corp. .............................. 46,000 943
SYSCO Corp. .............................................. 31,650 849
--------
2,720
--------
Forest & Paper Products (2.6%)
International Paper Co. .................................. 35,000 1,430
Weyerhaeuser Co. ......................................... 15,000 896
Willamette Industries, Inc. .............................. 40,000 1,988
--------
4,314
--------
Health Care (1.1%)
Cardinal Health, Inc. .................................... 13,245 975
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Health Care, continued
Health Management Assoc., Inc.,
Class A (b) .............................................. 35,000 $ 692
Johnson & Johnson.......................................... 3,380 183
--------
1,850
--------
Insurance (4.1%)
ACE Ltd. .................................................. 10,000 349
American International Group, Inc. ........................ 9,700 808
Chubb Corp. ............................................... 20,000 1,403
Marsh & McLennan Cos., Inc. ............................... 15,000 1,506
St. Paul Cos., Inc. ....................................... 60,000 2,631
--------
6,697
--------
Media (0.6%)
McGraw Hill Cos., Inc. .................................... 15,250 936
--------
Medical Supplies (3.0%)
Apogent Technologies, Inc. (b)............................. 43,450 1,045
C.R. Bard, Inc. ........................................... 44,200 2,614
DENTSPLY International, Inc. .............................. 30,000 1,329
--------
4,988
--------
Newspapers (1.2%)
Gannett Co., Inc. ......................................... 30,000 2,011
--------
Oil & Gas Exploration, Production, & Services (8.2%)
Burlington Resources, Inc. ................................ 37,200 1,609
Kerr-McGee Corp. .......................................... 30,000 1,895
Noble Affiliates........................................... 25,000 907
Sunoco, Inc. .............................................. 65,000 2,248
Texaco, Inc. .............................................. 45,000 3,115
Ultramar Diamond Shamrock Corp. ........................... 30,000 1,418
USX-Marathon Group......................................... 83,000 2,462
--------
13,654
--------
Pharmaceuticals (3.2%)
Baxter International, Inc. ................................ 50,000 2,491
Merck & Co., Inc. ......................................... 10,730 729
Pfizer, Inc. .............................................. 9,230 380
Pharmacia Corp. ........................................... 40,000 1,785
--------
5,385
--------
Retail (2.3%)
CVS Corp. ................................................. 20,000 720
Home Depot, Inc. .......................................... 16,890 852
May Department Stores Co. ................................. 25,500 847
Safeway, Inc. (b).......................................... 3,770 166
Wal-Mart Stores, Inc. ..................................... 7,890 441
Walgreen Co. .............................................. 22,180 747
--------
3,773
--------
Semiconductors (0.5%)
Intel Corp. ............................................... 28,010 835
--------
Telecommunications -- Equipment (0.1%)
Lucent Technologies, Inc. ................................. 20,000 134
--------
Telecommunications -- Wireless (0.1%)
AT&T Wireless Services Inc. (b)............................ 11,263 211
--------
</TABLE>
Continued
95
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Balanced Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Transportation Leasing & Trucking (0.6%)
US Freightways Corp. ...................................... 28,000 $ 967
--------
Utilities -- Electric & Gas (3.0%)
Constellation Energy Group................................. 35,000 1,030
Mirant Corp. (b)........................................... 31,809 984
Southern Co. .............................................. 80,000 1,880
Xcel Energy, Inc. ......................................... 38,750 1,044
--------
4,938
--------
Utilities -- Telecommunications (1.7%)
AT&T Corp. ................................................ 35,000 707
Verizon Communications..................................... 38,400 2,080
--------
2,787
--------
TOTAL COMMON STOCKS........................................ 82,362
--------
Corporate Bonds (20.8%)
Banking (2.2%)
SunTrust Banks, Inc., 7.38%, 7/1/06........................ $ 2,000 2,143
Wachovia Corp., 6.63%, 11/15/06............................ 1,475 1,532
--------
3,675
--------
Brokerage Services (2.6%)
Bear Stearns & Co., Inc., 6.50%, 8/1/02.................... 2,000 2,044
Morgan Stanley Group, Inc., 8.10%, 6/24/02................. 2,000 2,071
--------
4,115
--------
Consumer Goods (1.2%)
Procter & Gamble Co., 5.25%, 9/15/03....................... 2,000 2,035
--------
Data Processing/Management (1.9%)
First Data Corp., 6.75%, 7/15/05........................... 3,000 3,135
--------
Diversified Manufacturing (1.5%)
Avnet Inc., 6.45%, 8/15/03................................. 2,500 2,497
--------
Electronic Components/
Instruments (1.2%)
Honeywell, Inc., 6.75%, 3/15/02............................ 2,000 2,031
--------
Financial Services (0.6%)
Commercial Credit Co., 7.88%, 7/15/04...................... 1,000 1,080
--------
Forest & Paper Products (0.6%)
Mead Corp., 6.60%, 3/1/02.................................. 1,000 1,012
--------
Industrial Goods & Services (2.4%)
Caterpillar Financial Services,
6.02%, 4/15/02............................................ 2,000 2,032
Illinois Tool Works, 5.75%, 3/1/09......................... 2,000 1,978
--------
4,010
--------
Oil & Gas Exploration, Production, & Services (0.9%)
Conoco Inc., 6.35%, 4/15/09................................ 1,500 1,518
--------
Retail (2.4%)
Sears, Roebuck and Co., 6.00%, 3/20/03..................... 2,000 2,035
Wal-Mart Stores, Inc., 6.75%, 5/15/02...................... 2,000 2,041
--------
4,076
--------
Tools (1.4%)
Stanley Works, 7.38%, 12/15/02............................. 2,200 2,286
--------
</TABLE>
Corporate Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Utilities -- Telecommunications (1.9%)
AT&T Corp., 7.13%, 1/15/02................................. $ 1,000 $ 1,011
BellSouth Telecommunications,
6.00%, 6/15/02............................................ 2,200 2,232
--------
3,243
--------
TOTAL CORPORATE BONDS...................................... 34,713
--------
Municipal Bonds (2.4%)
Illinois (2.4%)
Chicago Public Building, 7.00%, 1/1/06..................... 3,800 4,043
--------
TOTAL MUNICIPAL BONDS...................................... 4,043
--------
U.S. Government Agencies (12.1%)
Fannie Mae (3.1%)
6.21%, 11/7/07............................................. 5,000 5,235
--------
Freddie Mac (4.4%)
5.83%, 2/9/06.............................................. 7,000 7,212
--------
Government National Mortgage Assoc. (4.6%)
6.50%, 11/20/28............................................ 7,613 7,644
--------
TOTAL U.S. GOVERNMENT AGENCIES............................. 20,091
--------
U.S. Treasury Bonds (10.8%)
7.50%, 11/15/16............................................ 8,000 9,630
7.25%, 8/15/22............................................. 7,000 8,400
--------
TOTAL U.S. TREASURY BONDS.................................. 18,030
--------
U.S. Treasury Notes (1.9%)
6.00%, 8/15/09............................................. 3,000 3,203
--------
TOTAL U.S. TREASURY NOTES.................................. 3,203
--------
Investment Companies (1.8%)
AmSouth Prime Money Market Fund............................ 2,986,507 2,986
AmSouth U.S. Treasury Money Market Fund.................... 13,814 14
--------
TOTAL INVESTMENT COMPANIES................................. 3,000
--------
TOTAL INVESTMENTS
(Cost $134,648) (a) -- 99.2%.............................. 165,442
Other assets in excess of
liabilities -- 0.8%....................................... 1,320
--------
NET ASSETS -- 100.0%....................................... $166,762
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............................................. $33,782
Unrealized depreciation.............................................. (2,988)
-------
Net unrealized appreciation.......................................... $30,794
=======
</TABLE>
(b) Represents non-income producing security.
* Due to rounding, figure is below thousand dollar threshold.
See notes to financial statements.
96
<PAGE>
AMSOUTH FUNDS
Balanced Fund
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands, except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $134,648)........................ $165,442
Interest and dividends receivable............................ 1,395
Receivable for capital shares issued......................... 91
Collateral for securities loaned, at fair value.............. 27,752
Prepaid expenses and other assets............................ 5
--------
Total Assets................................................ 194,685
Liabilities:
Payable for capital shares redeemed.......................... $ 69
Payable upon return of securities loaned..................... 27,752
Accrued expenses and other payables:
Investment advisory fees.................................... 47
Administration fees......................................... 4
Shareholder servicing and distribution fees................. 27
Custodian fees.............................................. 4
Other....................................................... 20
-------
Total Liabilities........................................... 27,923
--------
Net Assets:
Capital...................................................... 127,640
Accumulated net investment income............................ 89
Accumulated net realized gains from investment transactions.. 8,239
Unrealized appreciation from investments..................... 30,794
--------
Net Assets................................................... $166,762
========
Class A Shares (a)
Net Assets.................................................. $ 54,978
Shares outstanding.......................................... 4,413
Redemption price per share.................................. $ 12.46
========
Class A Shares -- Maximum Sales Charge....................... 5.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)...................................................... $ 13.19
========
Class B Shares
Net Assets.................................................. $ 9,004
Shares outstanding.......................................... 725
Offering price per share*................................... $ 12.42
========
Trust Shares (b)
Net Assets.................................................. $102,780
Shares outstanding.......................................... 8,253
Offering and redemption price per share..................... $ 12.45
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................ $ 5,592
Dividend income................................................ 1,701
Securities lending income...................................... 51
-------
Total Investment Income....................................... 7,344
Expenses:
Investment advisory fees....................................... $1,368
Administration fees............................................ 342
Distribution fees -- Class B Shares............................ 55
Shareholder servicing fees -- Class A
Shares (a).................................................... 78
Shareholder servicing fees -- Class B Shares................... 19
Shareholder servicing fees -- Trust Shares (b)................. 199
Accounting fees................................................ 34
Transfer agent fees............................................ 77
Other fees..................................................... 103
------
Total expenses before fee reductions.......................... 2,275
Expenses reduced by Administrator............................. (85)
Expenses reduced by Transfer Agent............................ (4)
Expenses reduced by Distributor............................... (66)
Expenses reduced by Fund Accountant........................... (19)
-------
Net expenses.................................................. 2,101
-------
Net Investment Income.......................................... 5,243
-------
Realized/Unrealized Gains from Investments:
Net realized gains from investment transactions................ 15,011
Change in unrealized appreciation/depreciation from
investments................................................... 3,005
-------
Net realized/unrealized gains from investments................. 18,016
-------
Change in net assets resulting from operations................. $23,259
=======
</TABLE>
See notes to financial statements
97
<PAGE>
AMSOUTH FUNDS
Balanced Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 5,243 $ 9,820
Net realized gains from investment transactions......... 15,011 10,788
Change in unrealized appreciation/depreciation from
investments............................................ 3,005 (27,415)
-------- ---------
Change in net assets resulting from operations........... 23,259 (6,807)
-------- ---------
Distributions to Class A Shareholders (a):
From net investment income.............................. (953) (1,119)
From net realized gains on investment transactions...... (3,214) (4,396)
Distributions to Class B Shareholders:
From net investment income.............................. (172) (246)
From net realized gains on investment transactions...... (668) (1,214)
Distributions to Trust Shareholders (b):
From net investment income.............................. (4,280) (9,214)
From net realized gains on investment transactions...... (12,951) (35,672)
-------- ---------
Change in net assets from shareholder distributions...... (22,238) (51,861)
-------- ---------
Change in net assets from capital transactions........... (30,079) (117,882)
-------- ---------
Change in net assets..................................... (29,058) (176,550)
Net Assets:
Beginning of period..................................... 195,820 372,370
-------- ---------
End of period........................................... $166,762 $ 195,820
======== =========
</TABLE>
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
See notes to financial statements
98
<PAGE>
AMSOUTH FUNDS
Balanced Fund
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a) 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 12.48 $ 14.93 $ 15.19 $ 15.21 $ 13.03
------- ------- ------- ------- --------
Investment Activities
Net investment income.. 0.36 0.44 0.41 0.38 0.48
Net realized and
unrealized gains
(losses) from
investments........... 1.28 (0.64) 0.93 0.98 2.78
------- ------- ------- ------- --------
Total from Investment
Activities............ 1.64 (0.20) 1.34 1.36 3.26
------- ------- ------- ------- --------
Distributions
Net investment income.. (0.39) (0.47) (0.40) (0.41) (0.50)
Net realized gains from
investment
transactions.......... (1.27) (1.78) (1.20) (0.97) (0.58)
------- ------- ------- ------- --------
Total Distributions.... (1.66) (2.25) (1.60) (1.38) (1.08)
------- ------- ------- ------- --------
Change in Net Asset
Value.................. (0.02) (2.45) (0.26) (0.02) 2.18
------- ------- ------- ------- --------
Net Asset Value, End of
Period................. $ 12.46 $ 12.48 $ 14.93 $ 15.19 $ 15.21
======= ======= ======= ======= ========
Total Return (excludes
sales charge).......... 13.93% (1.05)% 9.40% 9.54% 26.42%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $54,978 $21,951 $43,223 $46,814 $372,769
Ratio of expenses to
average net assets..... 1.31% 1.35% 1.34% 1.24% 1.05%
Ratio of net investment
income to average net
assets................. 2.90% 3.28% 2.67% 2.77% 3.49%
Ratio of expenses to
average net assets*.... 1.38% 1.37% 1.35% 1.24% 1.10%
Portfolio turnover**.... 14% 16% 23% 25% 25%
</TABLE>
/\ Formerly Classic Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
See notes to financial statements
99
<PAGE>
AMSOUTH FUNDS
Balanced Fund
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $12.45 $14.90 $ 15.16 $14.99
------ ------ ------- ------
Investment Activities
Net investment income.......... 0.28 0.34 0.29 0.28
Net realized and unrealized
gains (losses) from
investments................... 1.26 (0.64) 0.95 1.15
------ ------ ------- ------
Total from Investment
Activities.................... 1.54 (0.30) 1.24 1.43
------ ------ ------- ------
Distributions
Net investment income.......... (0.30) (0.37) (0.30) (0.29)
Net realized gains from
investment transactions....... (1.27) (1.78) (1.20) (0.97)
------ ------ ------- ------
Total Distributions............ (1.57) (2.15) (1.50) (1.26)
------ ------ ------- ------
Change in Net Asset Value....... (0.03) (2.45) (0.26) 0.17
------ ------ ------- ------
Net Asset Value, End of Period.. $12.42 $12.45 $ 14.90 $15.16
====== ====== ======= ======
Total Return (excludes
redemption charge)............. 13.03% (1.80)% 8.66% 10.07%(b)
Ratios/Supplemental Data:
Net Assets at end of period
(000).......................... $9,004 $7,072 $10,131 $5,309
Ratio of expenses to average net
assets......................... 2.06% 2.10% 2.09% 2.12%(c)
Ratio of net investment income
to average net assets.......... 2.20% 2.54% 1.93% 1.83%(c)
Ratio of expenses to average net
assets*........................ 2.12% 2.12% 2.10% 2.12%(c)
Portfolio turnover**............ 14% 16% 23% 25%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from September 2, 1997 (commencement of operations) through
July 31, 1998.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
100
<PAGE>
AMSOUTH FUNDS
Balanced Fund
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period....................... $ 12.47 $ 14.93 $ 15.18 $ 14.77
-------- -------- -------- --------
Investment Activities
Net investment income........ 0.40 0.46 0.44 0.41
Net realized and unrealized
gains (losses) from
investments................. 1.26 (0.64) 0.95 1.38
-------- -------- -------- --------
Total from Investment
Activities.................. 1.66 (0.18) 1.39 1.79
-------- -------- -------- --------
Distributions
Net investment income........ (0.41) (0.50) (0.44) (0.41)
Net realized gains from
investment transactions..... (1.27) (1.78) (1.20) (0.97)
-------- -------- -------- --------
Total Distributions.......... (1.68) (2.28) (1.64) (1.38)
-------- -------- -------- --------
Change in Net Asset Value..... (0.02) (2.46) (0.25) 0.41
-------- -------- -------- --------
Net Asset Value, End of
Period....................... $ 12.45 $ 12.47 $ 14.93 $ 15.18
======== ======== ======== ========
Total Return.................. 14.09% (0.90)% 9.74% 9.73%(b)
Ratios/Supplemental Data:
Net Assets at end of period
(000)........................ $102,780 $166,797 $319,016 $329,626
Ratio of expenses to average
net assets................... 1.16% 1.13% 1.09% 1.10%(c)
Ratio of net investment income
to average net assets........ 3.16% 3.50% 2.93% 2.95%(c)
Ratio of expenses to average
net assets*.................. 1.27% 1.17% 1.10% 1.10%(c)
Portfolio turnover**.......... 14% 16% 23% 25%
</TABLE>
/\ Formerly Premier Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(b) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of Premier
Shares for the period from September 2, 1997 to July 31, 1998. Total return
for the Premier Shares for the period from September 2, 1997 (commencement
of operations) through July 31, 1998 was 12.70%.
(c) Annualized.
See notes to financial statements
101
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Select Equity Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks (98.3%)
<TABLE>
<CAPTION>
Shares Value
------- -------
<S> <C> <C>
Computer Software & Services (7.2%)
Automatic Data Processing, Inc. ............................... 9,300 $ 474
Microsoft Corp. (b)............................................ 5,200 344
-------
818
-------
Consumer Goods (4.3%)
Gillette Co. .................................................. 17,400 485
-------
Electronic Components/Instruments (6.0%)
Emerson Electric Co. .......................................... 11,900 683
-------
Financial Services (16.7%)
Dun & Bradstreet Corp. (b)..................................... 14,950 414
H & R Block, Inc. ............................................. 10,800 771
Moody's Corp. ................................................. 21,200 705
-------
1,890
-------
Food Products, Processing &
Packaging (29.4%)
General Mills, Inc. ........................................... 17,300 760
Hershey Foods Corp. ........................................... 7,500 453
International Flavors & Fragrances, Inc. ...................... 15,900 463
J.M. Smucker Co. .............................................. 9,500 258
Ralston Purina Group........................................... 17,000 546
SYSCO Corp. ................................................... 30,800 826
-------
3,306
-------
Machinery & Equipment (3.6%)
Briggs & Stratton Corp. ....................................... 4,500 187
Snap-On, Inc. ................................................. 8,300 224
-------
411
-------
Newspapers (8.7%)
Gannett Co., Inc. ............................................. 8,100 544
Lee Enterprises................................................ 6,200 209
Washington Post, Class B....................................... 401 234
-------
987
-------
Office Equipment & Services (4.0%)
Pitney Bowes, Inc. ............................................ 11,200 450
-------
Pharmaceuticals (5.8%)
Bristol-Myers Squibb Co. ...................................... 11,000 651
-------
Pollution Control Services &
Equipment (8.1%)
Waste Management, Inc. ........................................ 29,360 910
-------
Restaurants (4.5%)
McDonald's Corp................................................ 17,500 510
-------
TOTAL COMMON STOCKS............................................ 11,101
-------
</TABLE>
Investment Companies (2.5%)
<TABLE>
<CAPTION>
Shares Value
------- -------
<S> <C> <C>
AmSouth Prime Money Market Fund................................ 280,947 $ 281
AmSouth U.S. Treasury Money Market Fund........................ 1,036 1
-------
TOTAL INVESTMENT COMPANIES..................................... 282
-------
TOTAL INVESTMENTS
(Cost $9,985) (a) -- 100.8%................................... 11,383
Liabilities in excess of other assets -- (0.8%)................ (89)
-------
NET ASSETS -- 100.0%........................................... $11,294
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................... $1,867
Unrealized depreciation............................................... (469)
------
Net unrealized appreciation........................................... $1,398
======
</TABLE>
(b) Represents non-income producing security.
See notes to financial statements
102
<PAGE>
AMSOUTH FUNDS
Select Equity Fund
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $9,985).............................. $11,383
Interest and dividends receivable................................ 12
Receivable for investments sold.................................. 74
Prepaid expenses and other assets................................ 2
-------
Total Assets.................................................... 11,471
Liabilities:
Payable for investments purchased................................ $162
Accrued expenses and other payables:
Investment advisory fees........................................ 3
Shareholder servicing and distribution fees..................... 2
Other........................................................... 10
----
Total Liabilities............................................... 177
-------
Net Assets:
Capital.......................................................... 11,692
Accumulated net realized losses from investment transactions..... (1,796)
Unrealized appreciation from investments......................... 1,398
-------
Net Assets....................................................... $11,294
=======
Class A Shares (a)
Net Assets...................................................... $ 2,665
Shares outstanding.............................................. 237
Redemption price per share...................................... $ 11.23
=======
Class A Shares -- Maximum Sales Charge........................... 5.50%
-------
Maximum Offering Price Per Share
(100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to
the nearest cent).............................................. $ 11.88
=======
Class B Shares
Net Assets...................................................... $ 1,586
Shares outstanding.............................................. 143
Offering price per share*....................................... $ 11.08
=======
Trust Shares (b)
Net Assets...................................................... $ 7,043
Shares outstanding.............................................. 626
Offering and redemption price per share......................... $ 11.25
=======
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Dividend income..................................................... $ 168
------
Expenses:
Investment advisory fees............................................ $77
Administration fees................................................. 19
Distribution fees -- Class B Shares................................. 7
Shareholder servicing fees -- Class A Shares (a).................... 6
Shareholder servicing fees -- Class B Shares........................ 2
Shareholder servicing fees -- Trust Shares (b)...................... 9
Custodian fees...................................................... 3
Accounting fees..................................................... 4
Transfer agent fees................................................. 53
Audit............................................................... 9
Other fees.......................................................... 11
---
Total expenses before fee reductions............................... 200
Expenses reduced by Administrator.................................. (5)
Expenses reduced by Transfer Agent................................. (29)
Expenses reduced by Distributor.................................... (3)
Expenses reduced by Fund Accountant................................ (1)
------
Net expenses....................................................... 162
------
Net Investment Income............................................... 6
------
Realized/Unrealized Gains (Losses) from Investments:
Net realized losses from investment transactions.................... (148)
Change in unrealized appreciation/depreciation from investments..... 2,462
------
Net realized/unrealized gains from investments...................... 2,314
------
Change in net assets resulting from operations...................... $2,320
======
</TABLE>
See notes to financial statements
103
<PAGE>
AMSOUTH FUNDS
Select Equity Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 6 $ 95
Net realized losses from investment transactions........ (148) (1,118)
Change in unrealized appreciation/depreciation from
investments............................................ 2,462 (2,445)
------- -------
Change in net assets resulting from operations........... 2,320 (3,468)
------- -------
Distributions to Class A Shareholders (a):
From net investment income.............................. (3) (35)
From net realized gains on investment transactions...... -- (450)
Distributions to Class B Shareholders:
From net investment income.............................. -- (4)
From net realized gains on investment transactions...... -- (114)
Distributions to Trust Shareholders (b):
From net investment income.............................. (11) (58)
From net realized gains on investment transactions...... -- (552)
------- -------
Change in net assets from shareholder distributions...... (14) (1,213)
------- -------
Change in net assets from capital transactions........... 661 (9,603)
------- -------
Change in net assets..................................... 2,967 (14,284)
Net Assets:
Beginning of period..................................... 8,327 22,611
------- -------
End of period........................................... $11,294 $ 8,327
======= =======
</TABLE>
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
See notes to financial statements
104
<PAGE>
AMSOUTH FUNDS
Select Equity Fund
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2001 + 2000 + 1999 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 8.72 $11.88 $ 10.00
------ ------ -------
Investment Activities
Net investment income..................... 0.01 0.07 0.04
Net realized and unrealized gains (losses)
from investments......................... 2.51 (2.35) 1.91
------ ------ -------
Total from Investment Activities.......... 2.52 (2.28) 1.95
------ ------ -------
Distributions
Net investment income..................... (0.01) (0.07) (0.06)
Net realized gains from investment
transactions............................. -- (0.81) (0.01)
------ ------ -------
Total Distributions....................... (0.01) (0.88) (0.07)
------ ------ -------
Change in Net Asset Value.................. 2.51 (3.16) 1.88
------ ------ -------
Net Asset Value, End of Period............. $11.23 $ 8.72 $ 11.88
====== ====== =======
Total Return (excludes sales charge)....... 28.96% (19.86)% 19.44%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $2,665 $2,512 $10,258
Ratio of expenses to average net assets.... 1.71% 1.44% 1.13%(c)
Ratio of net investment income to average
net assets................................ 0.05% 0.67% 0.43%(c)
Ratio of expenses to average net assets*... 2.07% 1.96% 1.81%(c)
Portfolio turnover**....................... 19% 25% 10%
</TABLE>
/\ Formerly Classic Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from September 1, 1998 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
105
<PAGE>
AMSOUTH FUNDS
Select Equity Fund
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2001 + 2000 + 1999 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 8.64 $ 11.83 $ 9.98
------ ------- ------
Investment Activities
Net investment income (loss)............. (0.08) (0.01) 0.02
Net realized and unrealized gains
(losses) from investments............... 2.52 (2.34) 1.86
------ ------- ------
Total from Investment Activities......... 2.44 (2.35) 1.88
------ ------- ------
Distributions
Net investment income.................... -- (0.03) (0.02)
Net realized gains from investment
transactions............................ -- (0.81) (0.01)
------ ------- ------
Total Distributions...................... -- (0.84) (0.03)
------ ------- ------
Change in Net Asset Value................. 2.44 (3.19) 1.85
------ ------- ------
Net Asset Value, End of Period............ $11.08 $ 8.64 $11.83
====== ======= ======
Total Return (excludes redemption
charge).................................. 28.24% (20.47)% 18.83%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $1,586 $ 715 $1,933
Ratio of expenses to average net assets... 2.44% 2.21% 1.99%(c)
Ratio of net investment income to average
net assets............................... (0.75)% (0.08)% (0.49)%(c)
Ratio of expenses to average net assets*.. 2.80% 2.72% 2.58%(c)
Portfolio turnover**...................... 19% 25% 10%
</TABLE>
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from September 2, 1998 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
106
<PAGE>
AMSOUTH FUNDS
Select Equity Fund
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2001 + 2000 + 1999 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 8.73 $11.89 $ 11.52
------ ------ -------
Investment Activities
Net investment income..................... 0.02 0.09 0.04
Net realized and unrealized gains (losses)
from investments......................... 2.52 (2.36) 0.38
------ ------ -------
Total from Investment Activities.......... 2.54 (2.27) 0.42
------ ------ -------
Distributions
Net investment income..................... (0.02) (0.08) (0.04)
Net realized gains from investment
transactions............................. -- (0.81) (0.01)
------ ------ -------
Total Distributions....................... (0.02) (0.89) (0.05)
------ ------ -------
Change in Net Asset Value.................. 2.52 (3.16) 0.37
------ ------ -------
Net Asset Value, End of Period............. $11.25 $ 8.73 $ 11.89
====== ====== =======
Total Return............................... 29.12% (19.72)% 3.63%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $7,043 $5,100 $10,420
Ratio of expenses to average net assets.... 1.56% 1.25% 0.99%(c)
Ratio of net investment income to average
net assets................................ 0.19% 0.88% 0.65%(c)
Ratio of expenses to average net assets*... 1.97% 1.78% 1.58%(c)
Portfolio turnover**....................... 19% 25% 10%
</TABLE>
/\ Formerly Premier Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from December 3, 1998 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
107
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Enhanced Market Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks (100.1%)
<TABLE>
<CAPTION>
Shares Value
------ ------
<S> <C> <C>
Aerospace/Defense (1.9%)
Boeing Co. ...................................................... 5,200 $ 305
General Dynamics Corp. .......................................... 2,000 162
Lockheed Martin Corp. ........................................... 4,300 170
Northrop Grumman Corp. .......................................... 800 64
Rockwell Collins................................................. 1,800 37
United Technologies Corp. ....................................... 3,800 279
------
1,017
------
Agriculture (0.2%)
Archer-Daniels-Midland Co. ...................................... 6,411 86
------
Airlines (0.4%)
AMR Corp. (b).................................................... 1,500 53
Delta Air Lines, Inc. ........................................... 100 4
Southwest Airlines Co. .......................................... 7,500 150
------
207
------
Appliances (0.0%)
Maytag Corp. .................................................... 400 13
Whirlpool Corp. ................................................. 100 7
------
20
------
Automotive (1.1%)
Ford Motor Co. .................................................. 11,400 290
General Motors Corp. ............................................ 4,500 286
Navistar International Corp. .................................... 300 10
------
586
------
Automotive Parts (0.2%)
Cooper Tire & Rubber Co. ........................................ 400 6
Delphi Automotive Systems........................................ 2,837 46
Eaton Corp. ..................................................... 300 22
Genuine Parts Co. ............................................... 900 30
Visteon Corp. ................................................... 691 15
------
119
------
Banking (4.4%)
Bank of America Corp. ........................................... 4,600 293
Bank of New York Co., Inc. ...................................... 5,600 251
Bank One Corp. .................................................. 600 23
Comerica, Inc. .................................................. 100 6
First Union Corp. ............................................... 4,900 173
FleetBoston Financial Corp. ..................................... 8,218 309
Huntington Bancshares, Inc. ..................................... 1,286 24
J.P. Morgan Chase & Co., Inc. ................................... 10,920 474
Keycorp.......................................................... 4,200 112
Northern Trust Corp. ............................................ 1,100 70
PNC Financial Services Group..................................... 2,900 192
Regions Financial Corp. ......................................... 1,200 38
SouthTrust Corp. ................................................ 1,600 41
SunTrust Banks, Inc. ............................................ 1,500 104
Wachovia Corp. .................................................. 1,000 71
Wells Fargo Co. ................................................. 4,300 198
------
2,379
------
Beverages (1.8%)
Adolph Coors Co., Class B........................................ 400 20
Anheuser-Busch Cos., Inc. ....................................... 4,500 195
Brown-Forman Corp. .............................................. 100 7
Coca Cola Enterprises, Inc. ..................................... 1,300 19
Coca-Cola Co. ................................................... 8,800 392
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
------ ------
<S> <C> <C>
Beverages, continued
PepsiCo, Inc. ................................................... 7,200 $ 336
------
969
------
Biotechnology (0.9%)
Amgen, Inc. (b).................................................. 6,200 389
Biogen, Inc. (b)................................................. 700 40
MedImmune, Inc. (b).............................................. 1,100 42
------
471
------
Brokerage Services (1.6%)
Bear Stearns Cos. (The), Inc. ................................... 200 12
Lehman Brothers Holdings, Inc. .................................. 2,200 158
Merrill Lynch & Co., Inc. ....................................... 5,200 282
Morgan Stanley Dean Witter & Co. ................................ 6,700 401
------
853
------
Chemicals (1.2%)
Air Products and Chemicals, Inc. ................................ 2,300 94
E.I. du Pont de Nemours & Co. ................................... 7,278 311
Eastman Chemical Co. ............................................ 800 35
FMC Corp. (b).................................................... 300 20
PPG Industries, Inc. ............................................ 600 33
Praxair, Inc. ................................................... 1,600 73
Rohm & Haas Co. ................................................. 400 14
Sherwin Williams Co. ............................................ 1,600 37
Sigma Aldrich Corp. ............................................. 400 17
------
634
------
Chemicals -- Speciality (0.1%)
Ashland, Inc. ................................................... 700 28
Engelhard Corp. ................................................. 1,300 33
------
61
------
Commercial Services (0.2%)
Deluxe Corp. .................................................... 700 22
Ecolab, Inc. .................................................... 600 24
Fluor Corp. ..................................................... 400 16
Quintiles Transnational Corp. (b)................................ 600 11
R.R. Donnelley & Sons Co. ....................................... 100 3
Robert Half International, Inc. ................................. 900 23
Sabre Holdings Group, Inc. (b)................................... 400 20
------
119
------
Computer Hardware (3.8%)
Apple Computer, Inc. (b)......................................... 1,700 32
Compaq Computer Corp. ........................................... 13,300 199
Dell Computer Corp. (b).......................................... 16,100 434
Gateway, Inc. ................................................... 700 7
IBM Corp. ....................................................... 9,700 1,020
Sun Microsystems, Inc. (b)....................................... 21,200 345
------
2,037
------
Computer Software (5.9%)
Adobe Systems, Inc. ............................................. 2,400 90
Autodesk, Inc. .................................................. 300 11
Avaya, Inc. (b).................................................. 1,379 17
BMC Software, Inc. (b)........................................... 1,900 38
BroadVision, Inc. (b)............................................ 1,400 5
Citrix Systems, Inc. (b)......................................... 900 30
Computer Associates International, Inc. ......................... 5,600 193
Compuware Corp. (b).............................................. 1,900 26
</TABLE>
Continued
108
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Enhanced Market Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
------ ------
<S> <C> <C>
Computer Software, continued
Intuit, Inc. (b)................................................. 1,000 $ 34
Mercury Interactive Corp. (b).................................... 400 15
Microsoft Corp. (b).............................................. 27,500 1,821
Novell, Inc. (b)................................................. 1,700 8
Oracle Corp. (b)................................................. 33,100 599
Parametric Technology Corp. (b).................................. 1,400 13
Peoplesoft, Inc. (b)............................................. 2,900 127
Siebel Systems, Inc. (b)......................................... 4,000 138
------
3,165
------
Computers & Peripherals (3.3%)
Cabletron Systems, Inc. (b)...................................... 1,900 35
Cisco Systems, Inc. (b).......................................... 41,200 792
Convergys Corp. (b).............................................. 800 25
Electronic Data Systems Corp. ................................... 3,300 211
EMC Corp. (b).................................................... 13,062 258
Hewlett-Packard Co. ............................................. 11,900 293
Jabil Circuit, Inc. (b).......................................... 1,900 62
NCR Corp. ....................................................... 200 8
Network Appliance Corp. (b)...................................... 1,600 20
Palm, Inc. (b)................................................... 2,836 15
Sapient Corp. (b)................................................ 600 4
Seagate Technology, Inc. ........................................ 2,400 --*
Unisys Corp. (b)................................................. 2,900 33
------
1,756
------
Consumer Goods (0.3%)
American Greetings Corp., Class A................................ 300 3
Brunswick Corp. ................................................. 400 9
Nike, Inc., Class B.............................................. 2,700 128
------
140
------
Containers & Packaging (0.0%)
Ball Corp. ...................................................... 100 5
Pactiv Corp. (b)................................................. 800 12
------
17
------
Cosmetics/Personal Care (1.2%)
Gillette Co. .................................................... 5,200 145
Kimberly Clark Corp. ............................................ 3,800 231
Procter & Gamble Co. ............................................ 3,800 270
------
646
------
Data Processing & Reproduction (0.3%)
First Data Corp. ................................................ 2,000 139
Fiserv, Inc. (b)................................................. 600 34
------
173
------
Diversified Manufacturing (6.0%)
Crane Co. ....................................................... 300 9
Danaher Corp. ................................................... 400 23
General Electric Co. ............................................ 45,200 1,965
Goodrich Corp. .................................................. 1,000 35
Honeywell International, Inc. ................................... 6,200 229
ITT Industries, Inc. ............................................ 900 40
Minnesota Mining & Manufacturing Co. ............................ 2,900 324
National Service Industries, Inc. ............................... 200 5
Textron, Inc. ................................................... 400 23
Tyco International, Ltd. ........................................ 10,469 557
------
3,210
------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
------ ------
<S> <C> <C>
Electronic Components (1.3%)
Agilent Technologies, Inc. (b)................................... 2,279 $ 65
Altera Corp. (b)................................................. 4,000 120
Analog Devices, Inc. (b)......................................... 3,300 152
Applied Micro Circuits Corp. (b)................................. 1,500 26
Broadcom Corp., Class A (b)...................................... 2,400 105
Cooper Industries................................................ 900 37
Millipore Corp. ................................................. 200 13
Mirant Corp. (b)................................................. 1,651 51
Molex, Inc. ..................................................... 1,000 34
Power-One, Inc. (b).............................................. 400 6
QLogic Corp. (b)................................................. 500 19
Sanmina Corp. (b)................................................ 1,500 33
Tektronix, Inc. (b).............................................. 1,000 23
Vitesse Semiconductor Corp. (b).................................. 900 18
------
702
------
Electronic Components/Instruments (0.6%)
American Power Conversion Corp. (b).............................. 1,000 13
Johnson Controls, Inc. .......................................... 900 72
Parker-Hannifin Corp. ........................................... 1,200 54
PerkinElmer, Inc. ............................................... 1,000 32
Rockwell International Corp. .................................... 1,800 29
Teradyne, Inc. (b)............................................... 1,700 58
Thermo Electron Corp. (b)........................................ 1,500 34
Thomas & Betts Corp. ............................................ 300 6
------
298
------
Entertainment (1.8%)
AOL-Time Warner, Inc. (b)........................................ 18,300 831
Walt Disney (The) Co. ........................................... 5,000 132
------
963
------
Financial Services (7.3%)
Ambac Financial Group, Inc. ..................................... 1,100 63
American Express Co. ............................................ 8,300 335
Capital One Financial Corp. ..................................... 1,000 64
Charter One Financial, Inc. ..................................... 425 14
Citigroup, Inc. ................................................. 26,466 1,330
Concord EFS, Inc. ............................................... 2,100 120
Equifax, Inc. ................................................... 300 7
Fannie Mae....................................................... 6,200 517
Freddie Mac...................................................... 4,900 336
Golden West Financial Corp. ..................................... 1,600 103
H & R Block, Inc. ............................................... 200 14
Household International, Inc. ................................... 2,300 152
MBIA, Inc. ...................................................... 250 14
MBNA Corp. ...................................................... 6,300 223
Mellon Financial Corp. .......................................... 4,700 179
Moody's Corp. ................................................... 400 13
State Steet Corp. ............................................... 3,200 172
Stilwell Financial, Inc. ........................................ 1,100 33
Synovus Financial Corp. ......................................... 600 20
T. Rowe Price Group, Inc. ....................................... 600 23
U.S. Bancorp..................................................... 407 10
Washington Mutual, Inc. ......................................... 4,350 176
------
3,918
------
</TABLE>
Continued
109
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Enhanced Market Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
------ ------
<S> <C> <C>
Food Products, Processing & Packaging (1.0%)
Hershey Foods Corp. ............................................. 500 $ 30
International Flavors & Fragrances, Inc. ........................ 1,000 29
Quaker Oats Co. ................................................. 1,300 114
Ralston Purina Group............................................. 1,500 48
Sara Lee Corp. .................................................. 7,800 157
Unilever NV ADR.................................................. 2,850 172
------
550
------
Forest & Paper Products (0.5%)
Boise Cascade Corp. ............................................. 600 22
Georgia Pacific Corp. ........................................... 400 15
International Paper Co. ......................................... 2,400 97
Louisiana Pacific Corp. ......................................... 500 5
Mead Corp. ...................................................... 1,000 30
Temple-Inland, Inc. ............................................. 500 31
Westvaco Corp. .................................................. 1,000 27
Willamette Industries, Inc. ..................................... 1,100 55
------
282
------
Gas Distribution (0.6%)
El Paso Energy Corp. ............................................ 2,453 128
KeySpan Corp. ................................................... 700 21
Kinder Morgan, Inc. ............................................. 600 31
Nicor, Inc. ..................................................... 200 7
Oneok, Inc. ..................................................... 200 4
Sempra Energy.................................................... 1,000 25
Williams Cos., Inc. ............................................. 2,400 81
------
297
------
Health Care (0.1%)
HEALTHSOUTH Corp. (b)............................................ 3,100 53
Humana, Inc. (b)................................................. 1,700 19
------
72
------
Health Care Services (0.6%)
IMS Health, Inc. ................................................ 900 23
Manor Care, Inc. (b)............................................. 1,000 32
McKesson HBOC, Inc. ............................................. 700 29
Tenet Healthcare Corp. (b)....................................... 3,100 173
Wellpoint Health Networks, Inc. (b).............................. 600 64
------
321
------
Home Builders (0.1%)
Centex Corp. .................................................... 300 14
KB Home.......................................................... 200 7
Pulte Homes, Inc. ............................................... 400 16
------
37
------
Hotels & Lodging (0.5%)
Carnival Corp. .................................................. 5,600 187
Hilton Hotels Corp. ............................................. 3,700 45
Starwood Hotels & Resorts Worldwide, Inc. ....................... 1,000 36
------
268
------
Household Products (0.2%)
Clorox (The) Co. ................................................ 1,200 45
Fortune Brands, Inc. ............................................ 1,500 55
Newell Rubbermaid, Inc. ......................................... 800 17
Tupperware Corp. ................................................ 300 7
------
124
------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
------ ------
<S> <C> <C>
Insurance (5.7%)
AFLAC, Inc. ..................................................... 4,900 $ 145
Allstate (The) Corp. ............................................ 5,900 206
American General Corp. .......................................... 5,000 231
American International Group, Inc. .............................. 12,737 1,061
Aon Corp. ....................................................... 100 4
Chubb Corp. ..................................................... 1,700 119
Cigna Corp. ..................................................... 1,500 150
Cincinnati Financial Corp. ...................................... 800 32
Conseco, Inc. ................................................... 700 10
Hartford Financial Services Group................................ 2,300 152
Jefferson Pilot Corp. ........................................... 1,500 71
Lincoln National Corp. .......................................... 1,900 97
Loews Corp. ..................................................... 2,000 114
Marsh & McLennan Cos., Inc. ..................................... 2,400 241
MetLife, Inc. ................................................... 3,800 113
MGIC Investment Corp. ........................................... 1,100 83
Progressive Corp. ............................................... 200 27
Safeco Corp. .................................................... 600 19
St. Paul Cos. (The), Inc. ....................................... 2,200 96
Torchmark Corp. ................................................. 1,300 54
UnumProvident Corp. ............................................. 1,200 34
------
3,059
------
Machinery & Equipment (0.5%)
Black & Decker Corp. ............................................ 800 34
Caterpillar, Inc. ............................................... 1,700 94
Deere & Co. ..................................................... 1,200 50
Dover Corp. ..................................................... 600 22
Ingersoll Rand Co. .............................................. 300 13
PACCAR, Inc. .................................................... 400 24
Snap-on, Inc. ................................................... 600 16
Stanley Works (The).............................................. 400 17
------
270
------
Media (0.7%)
Comcast Corp., Special Class A (b)............................... 1,000 38
McGraw Hill Cos., Inc. .......................................... 1,000 61
Viacom, Inc., Class B (b)........................................ 5,524 275
------
374
------
Medical Supplies (1.3%)
Allergan, Inc. .................................................. 1,300 98
Applied Biosystems Group......................................... 2,100 59
Becton, Dickinson & Co. ......................................... 2,500 86
Biomet, Inc. .................................................... 900 44
Boston Scientific Corp. (b)...................................... 1,100 20
C.R. Bard, Inc. ................................................. 500 30
Guidant Corp. (b)................................................ 1,500 48
Medtronic, Inc. ................................................. 6,000 288
St. Jude Medical, Inc. (b)....................................... 700 49
------
722
------
Metals & Mining (0.3%)
Alcan Aluminum, Ltd. ............................................ 1,600 60
Allegheny Technologies, Inc. .................................... 400 8
Barrick Gold Corp. .............................................. 2,000 30
Freeport-McMoRran Copper & Gold, Inc. (b)........................ 700 8
Homestake Mining................................................. 1,300 10
Inco Ltd. (b).................................................... 900 15
</TABLE>
Continued
110
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Enhanced Market Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
------ ------
<S> <C> <C>
Metals & Mining, continued
Phelps Dodge Corp. .............................................. 405 $ 16
Placer Dome, Inc. ............................................... 1,700 17
------
164
------
Newspapers (0.2%)
Dow Jones & Co., Inc. ........................................... 200 11
Gannett Co., Inc. ............................................... 1,300 88
Knight-Ridder, Inc. ............................................. 100 6
New York Times Co. .............................................. 500 23
------
128
------
Office Equipment & Services (0.6%)
Avery Dennison Corp. ............................................ 1,100 56
Cintas Corp. .................................................... 800 40
Lexmark International Group, Inc., Class A (b)................... 600 27
Paychex, Inc. ................................................... 1,900 75
Pitney Bowes, Inc. .............................................. 2,500 101
Xerox Corp. ..................................................... 3,400 27
------
326
------
Oil & Gas Exploration, Production, & Services (6.8%)
Amerada Hess Corp. .............................................. 900 70
Apache Corp. .................................................... 1,200 62
Baker Hughes, Inc. .............................................. 3,352 119
Burlington Resources, Inc. ...................................... 2,100 91
Chevron Corp. ................................................... 1,200 110
Conoco, Inc., Class B............................................ 3,190 99
Enron Corp. ..................................................... 3,700 168
EOG Resources, Inc. ............................................. 100 4
Exxon Mobil Corp. ............................................... 37,264 1,555
McDermott International, Inc. ................................... 300 3
Nabors Industries, Inc. (b)...................................... 400 12
Noble Drilling Corp. (b)......................................... 700 21
Progress Energy, Inc., (b)....................................... 500 --*
Rowan Cos., Inc. (b)............................................. 1,000 19
Royal Dutch Petroleum Co. ....................................... 10,600 614
Schlumberger Ltd. ............................................... 2,800 151
Sunoco, Inc. .................................................... 900 31
Texaco, Inc. .................................................... 4,400 305
Tosco Corp. ..................................................... 1,400 63
Unocal Corp. .................................................... 2,400 86
USX-Marathon Group............................................... 3,100 92
------
3,675
------
Pharmaceuticals (11.6%)
Abbott Laboratories.............................................. 7,700 413
American Home Products Corp. .................................... 7,600 458
Baxter International, Inc. ...................................... 5,400 269
Bristol-Myers Squibb Co. ........................................ 11,700 692
Chiron Corp. (b)................................................. 1,000 43
Eli Lilly & Co. ................................................. 6,400 507
Forest Laboratories, Inc. (b).................................... 1,800 141
Johnson & Johnson................................................ 13,800 747
King Pharmaceuticals, Inc. (b)................................... 1,067 48
Merck & Co., Inc. ............................................... 12,900 878
Pfizer, Inc. .................................................... 32,850 1,355
Pharmacia Corp. ................................................. 8,074 360
Schering-Plough Corp. ........................................... 9,000 351
Watson Pharmaceuticals, Inc. (b)................................. 200 13
------
6,275
------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
------ ------
<S> <C> <C>
Pollution Control Services & Equipment (0.2%)
Waste Management, Inc. .......................................... 3,100 $ 96
------
Railroads (0.5%)
Burlington Northern Santa Fe..................................... 4,000 108
Norfolk Southern Corp. .......................................... 3,900 78
Union Pacific Corp. ............................................. 1,200 64
------
250
------
Restaurants (0.2%)
Darden Restaurants, Inc. ........................................ 1,200 37
McDonald's Corp. ................................................ 600 17
Starbucks Corp. (b).............................................. 1,800 32
Tricon Global Restaurants (b).................................... 400 18
Wendy's International, Inc. ..................................... 600 16
------
120
------
Retail (6.2%)
Bed Bath & Beyond, Inc. (b)...................................... 1,400 45
Best Buy Co., Inc. (b)........................................... 1,000 67
Big Lots, Inc. (b)............................................... 600 8
Circuit City Stores, Inc. ....................................... 2,000 38
Costco Wholesale Corp. .......................................... 2,200 95
CVS Corp. ....................................................... 3,600 130
Dillard's Inc., Class A.......................................... 400 6
Dollar General Corp. ............................................ 600 12
Federated Department Stores, Inc. ............................... 500 19
Gap (The), Inc................................................... 6,800 186
Home Depot, Inc. ................................................ 13,000 655
Kmart Corp. (b).................................................. 600 7
Limited (The), Inc. ............................................. 4,200 71
Liz Claiborne, Inc. ............................................. 300 16
May Department Stores Co. ....................................... 3,000 100
Office Depot, Inc. (b)........................................... 3,000 38
RadioShack Corp. ................................................ 1,800 51
Safeway, Inc. (b)................................................ 4,800 212
Staples, Inc. (b)................................................ 2,300 34
SUPERVALU, Inc. ................................................. 1,300 27
Target Corp. .................................................... 6,300 244
TJX Cos. (The), Inc. ............................................ 800 27
Toys R Us, Inc. (b).............................................. 2,000 46
Wal-Mart Stores, Inc. ........................................... 18,400 1,028
Walgreen Co. .................................................... 5,100 172
------
3,334
------
Semiconductors (4.0%)
Advanced Micro Devices, Inc. (b)................................. 1,600 29
Applied Materials, Inc. (b)...................................... 4,000 183
Conexant Systems, Inc. (b)....................................... 1,200 11
Intel Corp. ..................................................... 36,500 1,089
KLA-Tencor Corp. (b)............................................. 900 49
Linear Technology Corp. ......................................... 3,100 135
LSI Logic Corp. (b).............................................. 1,600 35
Micron Technology, Inc. (b)...................................... 4,500 189
National Semiconductor Corp. (b)................................. 1,700 54
Novellus Systems, Inc. (b)....................................... 700 36
Texas Instruments, Inc. ......................................... 10,500 362
------
2,172
------
</TABLE>
Continued
111
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Enhanced Market Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
------ ------
<S> <C> <C>
Steel (0.0%)
Timken Co. ...................................................... 300 $ 5
USX-U.S. Steel Group, Inc. ...................................... 400 8
Worthington Industries, Inc. .................................... 400 6
------
19
------
Telecommunications -- Equipment (1.4%)
ADC Telecommunications, Inc. (b)................................. 3,900 19
Andrew Corp. (b)................................................. 400 9
Corning, Inc. ................................................... 7,600 119
JDS Uniphase Corp. (b)........................................... 10,500 97
Lucent Technologies, Inc. ....................................... 25,450 171
Motorola, Inc. ................................................. 15,231 284
Scientific-Atlanta, Inc. ........................................ 1,100 28
Tellabs, Inc. (b)................................................ 2,000 33
------
760
------
Telecommunications -- Wireless (1.2%)
AT&T Wireless Services, Inc. .................................... 6,021 113
Nextel Communications, Inc. ..................................... 3,800 63
Nortel Networks Corp., ADR....................................... 15,800 126
Qualcomm, Inc. (b)............................................... 5,200 328
------
630
------
Tobacco (1.2%)
Philip Morris Cos., Inc. ........................................ 13,800 628
UST, Inc. ....................................................... 400 12
------
640
------
Toys/Games/Hobbies (0.0%)
Mattel, Inc. .................................................... 1,265 23
------
Transportation Leasing & Trucking (0.0%)
Ryder System, Inc. .............................................. 300 6
------
Utilities -- Electric & Gas (2.4%)
Allegheny Energy, Inc. ......................................... 600 26
Ameren Corp. ................................................... 700 28
American Electric Power Co. ..................................... 1,620 73
Cinergy Corp. ................................................... 800 25
CMS Energy Corp. ................................................ 600 16
Consolidated Edison, Inc. ....................................... 1,100 44
Constellation Energy Group....................................... 800 24
Dominion Resources, Inc. ........................................ 1,204 73
DTE Energy Co. .................................................. 700 30
Duke Energy Corp. ............................................... 3,800 146
Dynergy Inc., Class A............................................ 1,600 74
Edison International............................................. 1,700 24
Entergy Corp. ................................................... 1,100 41
Exelon Corp. .................................................... 1,575 88
Firstenergy Corp. ............................................... 1,100 33
FPL Group, Inc. ................................................. 900 49
GPU, Inc. ....................................................... 600 22
Niagara Mohawk Holdings, Inc. (b)................................ 800 14
Nisource, Inc. .................................................. 1,000 26
Peoples Energy Corp. ............................................ 200 8
PG&E Corp. ...................................................... 2,000 30
Pinnacle West Capital Corp. ..................................... 400 17
PPL Corp. ....................................................... 750 34
Progress Energy, Inc. ........................................... 1,037 44
Public Service Enterprise Group, Inc. ........................... 1,100 51
Reliant Energy, Inc. ............................................ 1,500 47
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
------ -------
<S> <C> <C>
Utilities -- Electric & Gas, continued
Southern Co. ................................................... 3,400 $ 80
TXU Corp. ...................................................... 1,300 60
Xcel Energy, Inc. .............................................. 1,685 45
-------
1,272
-------
Utilities -- Telecommunications (5.7%)
Alltel Corp. ................................................... 1,600 99
AT&T Corp. ..................................................... 18,711 378
BellSouth Corp. ................................................ 9,300 379
Centurytel, Inc. ............................................... 1,400 43
Citizens Communications Co. (b)................................. 100 1
Global Crossing, Ltd. (b)....................................... 4,530 30
Qwest Communications International, Inc. ....................... 3,427 89
SBC Communications, Inc. ....................................... 18,380 827
Sprint Corp. ................................................... 7,500 175
Sprint Corp. (PCS Group) (b).................................... 4,700 122
Verizon Communications.......................................... 13,406 726
WorldCom, Inc. (b).............................................. 14,300 200
-------
3,069
-------
TOTAL COMMON STOCKS............................................. 53,881
-------
</TABLE>
Investment Companies (0.0%)
<TABLE>
<S> <C> <C>
AmSouth Prime Money Market Fund.................................. 5,117 5
-------
TOTAL INVESTMENT COMPANIES....................................... 5
-------
TOTAL INVESTMENTS
(Cost $58,956) (a) -- 100.1%.................................... 53,886
Liabilities in excess of other assets -- (0.1%).................. (38)
-------
NET ASSETS -- 100.0%............................................. $53,848
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes
and differs from value by net unrealized depreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation........................................... $ 5,257
Unrealized depreciation........................................... (10,327)
--------
Net unrealized depreciation....................................... $ (5,070)
========
</TABLE>
(b) Represents non-income producing security.
* Due to rounding, figure is below thousand dollar threshold.
ADR -- American Depositary Receipt
Continued
112
<PAGE>
AMSOUTH FUNDS
Enhanced Market Fund
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $58,956)............................... $53,886
Interest and dividends receivable.................................. 35
Receivable for capital shares issued............................... 11
Collateral for securities loaned, at fair value.................... 2,359
Prepaid expenses and other assets.................................. 5
-------
Total Assets...................................................... 56,296
</TABLE>
<TABLE>
<S> <C> <C>
Liabilities:
Payable to custodian........................................... $ 46
Payable for capital shares redeemed............................ 5
Payable upon return of securities loaned....................... 2,359
Accrued expenses and other payables:
Investment advisory fees...................................... 9
Administration fees........................................... 1
Shareholder servicing and distribution fees................... 18
Custodian fees................................................ 1
Other......................................................... 9
------
Total Liabilities............................................. 2,448
-------
Net Assets:
Capital........................................................ 57,884
Distributions in excess of net investment income............... (2)
Accumulated net realized gains from investment transactions and
futures....................................................... 1,036
Unrealized depreciation from investments....................... (5,070)
-------
Net Assets..................................................... $53,848
=======
Class A Shares (a)
Net Assets.................................................... $24,666
Shares outstanding............................................ 2,011
Redemption price per share.................................... $ 12.27
=======
Class A Shares -- Maximum Sales Charge......................... 5.50%
-------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)..... $ 12.98
=======
Class B Shares
Net Assets.................................................... $13,713
Shares outstanding............................................ 1,132
Offering price per share*..................................... $ 12.11
=======
Trust Shares (b)
Net Assets.................................................... $15,469
Shares outstanding............................................ 1,260
Offering and redemption price per share....................... $ 12.28
=======
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................. $ 23
Dividend income................................................. 782
Securities lending income....................................... 8
--------
Total Investment Income........................................ 813
Expenses:
Investment advisory fees........................................ $277
Administration fees............................................. 123
Distribution fees -- Class B Shares............................. 117
Shareholder servicing fees -- Class A Shares (a)................ 46
Shareholder servicing fees -- Class B Shares.................... 39
Shareholder servicing fees -- Trust Shares (b).................. 42
Custodian fees.................................................. 17
Accounting fees................................................. 29
Transfer agent fees............................................. 72
Other fees...................................................... 31
----
Total expenses before fee reductions........................... 793
Expenses reduced by Administrator.............................. (31)
Expenses reduced by Transfer Agent............................. (21)
Expenses reduced by Distributor................................ (14)
Expenses reduced by Fund Accountant............................ (7)
--------
Net expenses................................................... 720
--------
Net Investment Income........................................... 93
--------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains from investment transactions and futures..... 1,497
Change in unrealized appreciation/depreciation from
investments.................................................... (11,257)
--------
Net realized/unrealized losses from investments................. (9,760)
--------
Change in net assets resulting from operations.................. $ (9,667)
========
</TABLE>
See notes to financial statements
113
<PAGE>
AMSOUTH FUNDS
Enhanced Market Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 93 $ 227
Net realized gains from investment transactions and
futures................................................ 1,497 769
Change in unrealized appreciation/depreciation from
investments............................................ (11,257) 3,755
-------- -------
Change in net assets resulting from operations........... (9,667) 4,751
-------- -------
Distributions to Class A Shareholders (a):
From net investment income.............................. (44) (88)
From net realized gains on investment transactions...... (287) (614)
Distributions to Class B Shareholders:
From net investment income.............................. (21) (4)
From net realized gains on investment transactions...... (260) (326)
Distributions to Trust Shareholders (b):
From net investment income.............................. (94) (156)
From net realized gains on investment transactions...... (457) (754)
-------- -------
Change in net assets from shareholder distributions...... (1,163) (1,942)
-------- -------
Change in net assets from capital transactions........... (4,594) 31,693
-------- -------
Change in net assets..................................... (15,424) 34,502
Net Assets:
Beginning of period..................................... 69,272 34,770
-------- -------
End of period........................................... $ 53,848 $69,272
======== =======
</TABLE>
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
See notes to financial statements
114
<PAGE>
AMSOUTH FUNDS
Enhanced Market Fund
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2001 + 2000 1999 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 14.64 $ 13.86 $ 10.00
------- ------- -------
Investment Activities
Net investment income..................... 0.03 0.07 0.09
Net realized and unrealized gains (losses)
from investments and futures............. (2.15) 1.23 3.89
------- ------- -------
Total from Investment Activities.......... (2.12) 1.30 3.98
------- ------- -------
Distributions
Net investment income..................... (0.03) (0.07) (0.09)
Net realized gains from investment
transactions............................. (0.22) (0.45) (0.03)
------- ------- -------
Total Distributions....................... (0.25) (0.52) (0.12)
------- ------- -------
Change in Net Asset Value.................. (2.37) 0.78 3.86
------- ------- -------
Net Asset Value, End of Period............. $ 12.27 $ 14.64 $ 13.86
======= ======= =======
Total Return (excludes sales charge)....... (14.60)% 9.46% 39.93%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $24,666 $20,555 $14,365
Ratio of expenses to average net assets.... 1.04% 1.01% 0.88%(c)
Ratio of net investment income to average
net assets................................ 0.26% 0.48% 0.79%(c)
Ratio of expenses to average net assets*... 1.14% 1.22% 1.52%(c)
Portfolio turnover**....................... 42% 30% 36%
</TABLE>
/\ Formerly Classic Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from September 1, 1998 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
115
<PAGE>
AMSOUTH FUNDS
Enhanced Market Fund
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2001 + 2000 1999 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 14.55 $ 13.82 $10.30
------- ------- ------
Investment Activities
Net investment income (loss)............. (0.06) (0.04) 0.03
Net realized and unrealized gains
(losses) from investments and futures... (2.14) 1.22 3.55
------- ------- ------
Total from Investment Activities......... (2.20) 1.18 3.58
------- ------- ------
Distributions
Net investment income.................... (0.02) -- (0.03)
Net realized gains from investment
transactions............................ (0.22) (0.45) (0.03)
------- ------- ------
Total Distributions...................... (0.24) (0.45) (0.06)
------- ------- ------
Change in Net Asset Value................. (2.44) 0.73 3.52
------- ------- ------
Net Asset Value, End of Period............ $ 12.11 $ 14.55 $13.82
======= ======= ======
Total Return (excludes redemption
charge).................................. (15.28)% 8.65% 34.85%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $13,713 $17,095 $6,132
Ratio of expenses to average net assets... 1.80% 1.77% 1.73%(c)
Ratio of net investment income to average
net assets............................... (0.48)% (0.31)% (0.12)%(c)
Ratio of expenses to average net assets*.. 1.89% 1.93% 2.28%(c)
Portfolio turnover**...................... 42% 30% 36%
</TABLE>
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from September 2, 1998 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
116
<PAGE>
AMSOUTH FUNDS
Enhanced Market Fund
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2001 + 2000 1999 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $ 14.65 $ 13.86 $ 12.18
------- ------- -------
Investment Activities
Net investment income..................... 0.06 0.10 0.07
Net realized and unrealized gains (losses)
from investments and futures............. (2.17) 1.23 1.71
------- ------- -------
Total from Investment Activities.......... (2.11) 1.33 1.78
------- ------- -------
Distributions
Net investment income..................... (0.04) (0.09) (0.07)
Net realized gains from investment
transactions............................. (0.22) (0.45) (0.03)
------- ------- -------
Total Distributions....................... (0.26) (0.54) (0.10)
------- ------- -------
Change in Net Asset Value.................. (2.37) 0.79 1.68
------- ------- -------
Net Asset Value, End of Period............. $ 12.28 $ 14.65 $ 13.86
======= ======= =======
Total Return............................... (14.53)% 9.73% 14.71%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $15,469 $31,622 $14,273
Ratio of expenses to average net assets.... 0.90% 0.81% 0.74%(c)
Ratio of net investment income to average
net assets................................ 0.43% 0.65% 0.90%(c)
Ratio of expenses to average net assets*... 1.04% 0.98% 1.29%(c)
Portfolio turnover**....................... 42% 30% 36%
</TABLE>
/\ Formerly Premier Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from December 11, 1998 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
117
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
International Equity Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks (98.5%)
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Brazil (1.5%)
Banking (0.6%)
Banco Bradesco S.A. -- ADR (b).............................. 192,700 $ 926
--------
Beverages (0.5%)
Companhia de Bebidas das Americas --ADR..................... 36,000 733
--------
Telecommunications (0.4%)
Tele Norte Leste Participacoes S.A. --ADR................... 46,109 579
--------
2,238
--------
China (0.7%)
Telecommunications (0.7%)
China Mobile, Ltd. -- ADR (b)............................... 48,300 1,070
--------
Finland (1.0%)
Forest Products & Paper (1.0%)
UPM-Kymmene OYJ............................................. 49,100 1,461
--------
France (14.7%)
Banking (1.5%)
BNP Paribas................................................. 25,420 2,209
--------
Chemicals (1.3%)
Aventis S.A................................................. 24,551 1,887
--------
Diversified (1.6%)
Lagardere S.C.A............................................. 46,200 2,435
--------
Electrical & Electronics (0.5%)
Alcatel Alsthom............................................. 40,700 725
--------
Insurance (1.8%)
AXA......................................................... 91,160 2,668
--------
Materials & Commodities (0.7%)
Compagnie de St. Gobain..................................... 6,940 1,023
--------
Multi-Industry (4.9%)
Alstom...................................................... 71,890 2,003
Suez SA..................................................... 87,800 2,963
Vivendi Universal SA........................................ 40,838 2,394
--------
7,360
--------
Oil & Gas Production & Services (2.4%)
TotalFinaElf S.A............................................ 25,541 3,634
--------
21,941
--------
Germany (6.3%)
Banking (1.9%)
Bayerische Hypo-und Vereinsbank............................. 65,160 2,896
--------
Insurance (2.5%)
Allianz AG.................................................. 13,422 3,764
--------
Multi-Industry (1.9%)
E.On AG..................................................... 33,000 1,799
Thyssen Krupp AG............................................ 71,200 979
--------
2,778
--------
9,438
--------
Hong Kong (0.9%)
Diversified (0.9%)
Hutchison Whampoa, Ltd...................................... 143,000 1,380
--------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Ireland (1.2%)
Pharmaceutical (1.2%)
Elan Corp., PLC -- ADR (b).................................. 30,700 $ 1,773
--------
Italy (4.0%)
Banking (1.1%)
San Paolo -- IMI SpA........................................ 134,300 1,664
--------
Insurance (0.8%)
Alleanza Assicurazioni SpA.................................. 102,430 1,139
--------
Oil & Gas Production & Services (2.1%)
ENI S.p.A................................................... 260,400 3,165
--------
5,968
--------
Japan (22.0%)
Automobile (3.8%)
Nissan Motor Co., Ltd. ..................................... 470,000 3,229
Toyota Motor Corp. ......................................... 72,200 2,382
--------
5,611
--------
Banking (3.6%)
Mizuho Holdings, Inc. ...................................... 388 1,491
Sumitomo Mitsui Banking Corp. .............................. 336,600 2,410
Sumitomo Trust & Banking, Ltd. ............................. 258,000 1,496
--------
5,397
--------
Computer Systems (1.6%)
Fujitsu Ltd. ............................................... 260,000 2,426
--------
Electrical & Electronics (3.7%)
Hitachi Ltd. ............................................... 301,000 2,533
Kyocera Corp. .............................................. 7,500 562
Sony Corp. ................................................. 47,700 2,349
--------
5,444
--------
Financial Services (3.1%)
Acom Co., Ltd. ............................................. 11,600 946
Nikko Securities Co. (The), Ltd. ........................... 367,000 2,304
Orix Corp. ................................................. 15,400 1,301
--------
4,551
--------
Food & Household Products (1.4%)
Kao Corp. .................................................. 89,000 2,081
--------
Office Equipment (1.2%)
Canon, Inc. ................................................ 51,000 1,723
--------
Pharmaceutical (1.7%)
Yamanouchi Pharmaceutical Co., Ltd. ........................ 92,000 2,549
--------
Railroads (0.8%)
East Japan Railway Co. ..................................... 219 1,173
--------
Telecommunications (1.1%)
NTT DoCoMo.................................................. 123 1,704
--------
Tobacco (0.0%)
Japan Tobacco, Inc. ........................................ 7 51
--------
32,710
--------
Mexico (0.6%)
Telecommunications (0.6%)
Telefonos de Mexico SA de CV -- Class L, ADR................ 23,900 829
--------
</TABLE>
Continued
118
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
International Equity Fund July 31, 2001
(Amounts in thousands, except shares)
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
Netherlands (11.9%)
Banking (2.5%)
ABN-AMRO Holding NV......................................... 208,200 $ 3,678
--------
Beverages (1.5%)
Heineken NV................................................. 58,206 2,297
--------
Chemicals (2.2%)
Akzo Nobel NV............................................... 78,550 3,281
--------
Electrical & Electronics (2.5%)
Philips Electronics NV...................................... 133,432 3,731
--------
Financial Services (2.2%)
Fortis NV................................................... 50,800 1,325
ING Groep NV................................................ 58,000 1,889
--------
3,214
--------
Publishing (1.0%)
Wolters Kluwer NV -- CVA.................................... 55,900 1,481
--------
17,682
--------
Portugal (1.4%)
Telecommunications (1.4%)
Portugal Telecom, SGPS, S.A., Bonus Rights.................. 284,948 2,042
--------
Singapore (2.5%)
Banking (2.5%)
Oversea-Chinese Banking Corp., Ltd. ........................ 226,050 1,430
United Overseas Bank, Ltd. ................................. 401,632 2,341
--------
3,771
--------
South Korea (1.0%)
Telecommunications (1.0%)
Korea Telecom Corp. -- ADR.................................. 48,100 1,020
SK Telecom Co., Ltd. -- ADR................................. 21,600 396
--------
1,416
--------
Spain (3.1%)
Energy Sources (1.9%)
Endesa S.A. ................................................ 167,300 2,730
--------
Telecommunications (1.2%)
Telefonica de Espana (b).................................... 152,243 1,854
--------
4,584
--------
Sweden (3.1%)
Appliances & Household Durables (1.2%)
Electrolux AB, Class B...................................... 121,200 1,819
--------
Investment Company (1.9%)
Investor AB, B Shares....................................... 226,400 2,812
--------
4,631
--------
Switzerland (2.3%)
Insurance (0.9%)
Zurich Financial Services AG................................ 4,220 1,400
--------
Machinery & Engineering (0.1%)
ABB Ltd. ................................................... 9,513 105
--------
Pharmaceutical (1.3%)
Roche Holding AG............................................ 24,900 1,896
--------
3,401
--------
Taiwan (0.7%)
Semiconductors (0.7%)
Taiwan Semiconductor Manufacturing Co., Ltd. -- ADR......... 65,660 1,070
--------
</TABLE>
Common Stocks, continued
<TABLE>
<CAPTION>
Shares Value
--------- --------
<S> <C> <C>
United Kingdom (19.6%)
Aerospace & Military Technology (1.3%)
British Aerospace PLC....................................... 363,000 $ 1,931
--------
Banking (2.7%)
HSBC Holdings PLC........................................... 351,300 4,068
--------
Beverages (2.8%)
Diageo PLC.................................................. 281,768 2,891
South African Breweries PLC................................. 164,000 1,227
--------
4,118
--------
Electrical & Electronics (1.0%)
Invensys PLC................................................ 1,238,500 1,505
--------
Energy Sources (2.6%)
BP Amoco PLC................................................ 472,700 3,934
--------
Food & Household Products (1.4%)
Cadbury Schweppes PLC....................................... 305,800 2,085
--------
Food Retailer (1.4%)
Tesco PLC................................................... 572,400 2,044
--------
Pharmaceutical (0.9%)
GlaxoSmithKline PLC......................................... 48,638 1,405
--------
Retail (1.1%)
Great Universal Stores PLC.................................. 176,620 1,571
--------
Telecommunications (3.5%)
British Telecommunications PLC.............................. 459,640 3,195
Vodafone Airtouch PLC....................................... 974,000 2,131
--------
5,326
--------
Utilities -- Electrical & Gas (0.9%)
National Grid Group PLC..................................... 188,000 1,273
--------
29,260
--------
TOTAL COMMON STOCKS......................................... 146,665
--------
</TABLE>
Cash Equivalents (6.2%)
<TABLE>
<S> <C> <C>
Bank of New York Deposit Account............................ 17 --*
BT Institutional Liquid Assets Fund......................... 9,271,723 9,272
--------
TOTAL CASH EQUIVALENTS...................................... 9,272
--------
TOTAL INVESTMENTS
(Cost $180,968) (a) -- 104.7%.............................. 155,937
Liabilities in excess of other assets -- (4.7)%............. (6,992)
--------
NET ASSETS -- 100.0%........................................ $148,945
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes
and differs from value by net unrealized depreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation........................................... $ 3,827
Unrealized depreciation........................................... (28,858)
--------
Net unrealized depreciation....................................... $(25,031)
========
</TABLE>
(b) Represents non-income producing securities.
ADR -- American Depositary Receipt
PLC -- Public Limited Company
* Due to rounding, figure is below thousand-dollar threshold.
See notes to financial statements
119
<PAGE>
AMSOUTH FUNDS
International Equity Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $180,968)......................... $155,937
Foreign currency (cost $35)................................... 35
Interest and dividends receivable............................. 185
Receivable for capital shares issued.......................... 2
Receivable for investments sold............................... 2,296
Receivable for reclaims....................................... 194
Prepaid expenses and other assets............................. 15
--------
Total Assets................................................. 158,664
Liabilities:
Payable for investments purchased............................. $8,349
Payable for capital shares redeemed........................... 1,257
Accrued expenses and other payables:
Investment advisory fees..................................... 54
Administration fees.......................................... 4
Shareholder servicing and distribution fees.................. 13
Other........................................................ 42
------
Total Liabilities............................................ 9,719
--------
Net Assets:
Capital....................................................... 177,817
Accumulated net investment income............................. 144
Accumulated net realized losses from investments and foreign
currency transactions........................................ (3,987)
Unrealized depreciation from investments and translation of
assets and liabilities denominated in foreign currencies..... (25,029)
--------
Net Assets.................................................... $148,945
========
Class A Shares
Net Assets................................................... $ 2,685
Shares outstanding........................................... 283
Redemption price per share................................... $ 9.49
========
Class A Shares -- Maximum Sales Charge........................ 5.50%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net assets value adjusted to the nearest cent)... $ 10.04
========
Class B Shares
Net Assets................................................... $ 516
Shares outstanding........................................... 55
Offering price per share*.................................... $ 9.35
========
Trust Shares (b)
Net Assets................................................... $145,744
Shares outstanding........................................... 15,346
Offering and redemption price per share...................... $ 9.50
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG International Equity Fund.
(b) Formerly Institutional Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Dividend income................................................ $ 2,665
Interest income................................................ 348
Foreign withholding tax expense................................ (297)
--------
Total Investment Income....................................... 2,716
Expenses:
Investment advisory fees....................................... $1,649
Administration fees............................................ 264
Distribution fees -- Class B Shares............................ 4
Shareholder servicing fees -- Class A Shares................... 6
Shareholder servicing fees -- Class B Shares................... 1
Shareholder servicing fees -- Trust Shares (b)................. 194
Custodian fees................................................. 86
Accounting fees................................................ 29
Transfer agent fees............................................ 63
Other fees..................................................... 76
------
Total expenses before fee reductions.......................... 2,372
Expenses reduced by Investment Advisor........................ (264)
Expenses reduced by Administrator............................. (66)
Expenses reduced by Transfer Agent............................ (10)
Expenses reduced by Distributor............................... (65)
Expenses reduced by Fund Accountant........................... (16)
--------
Net expenses.................................................. 1,951
--------
Net Investment Income.......................................... 765
--------
Realized/Unrealized Losses from Investments:
Net realized losses from investments and foreign currency
transactions.................................................. (4,238)
Change in unrealized appreciation/depreciation from investments
and translation of assets and liabilities denominated in
foreign currencies............................................ (26,049)
--------
Net realized/unrealized losses from investments................ (30,287)
--------
Change in net assets resulting from operations................. $(29,522)
========
</TABLE>
See notes to financial statements
120
<PAGE>
AMSOUTH FUNDS
International Equity Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended
July 31, July 31, December 31,
2001 2000 (b) 1999
---------- ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income................... $ 765 $ 378 $ 258
Net realized gains (losses) from
investment and foreign currency
transactions........................... (4,238) 4,009 1,721
Change in unrealized
appreciation/depreciation from
investments and translation of assets
and liabilities in foreign currencies.. (26,049) (8,547) 6,624
-------- -------- -------
Change in net assets resulting from
operations.............................. (29,522) (4,160) 8,603
-------- -------- -------
Distributions to Class A Shareholders:
From net investment income.............. (4) -- (11)
From net realized gains on investment
transactions........................... (58) -- --
Distributions to Class B Shareholders:
From net investment income.............. -- -- (2)(c)
From net realized losses on investment
transactions........................... (18) -- --
Distributions to Trust Shareholders (d):
From net investment income.............. (448) -- (475)
From net realized gains on investment
transactions........................... (3,891) -- --
-------- -------- -------
Change in net assets from shareholder
distributions........................... (4,419) -- (488)
-------- -------- -------
Change in net assets from capital
transactions............................ 75,458 64,224 11,123
-------- -------- -------
Change in net assets..................... 41,517 60,064 19,238
Net Assets:
Beginning of period..................... 107,428 47,364 28,126
-------- -------- -------
End of period........................... $148,945 $107,428 $47,364
======== ======== =======
</TABLE>
(a) Formerly ISG International Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from February 2, 1999 (commencement of operations) through
December 31, 1999.
(d) Formerly Institutional Shares.
See notes to financial statements
121
<PAGE>
AMSOUTH FUNDS
International Equity Fund (a)
Financial Highlights, Class A Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Period Ended Period Ended
July 31, July 31, December 31, December 31, February 28,
2001 + 2000 (b)+ 1999 1998 (c) 1998 (d)
---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 12.36 $13.27 $10.58 $10.46 $ 10.00
------- ------ ------ ------ -------
Investment Activities
Net investment income
(loss)................ 0.06 0.05 0.02 0.03 (0.02)
Net realized and
unrealized gains
(losses) from
investments and
foreign currencies.... (2.54) (0.96) 2.81 0.12 0.49
------- ------ ------ ------ -------
Total from Investment
Activities............ (2.48) 0.91 2.83 0.15 0.47
------- ------ ------ ------ -------
Distributions
Net investment income.. (0.03) -- (0.14) (0.03) (0.01)
Net realized gains from
investment
transactions.......... (0.36) -- -- -- --
------- ------ ------ ------ -------
Total Distributions.... (0.39) -- (0.14) (0.03) (0.01)
------- ------ ------ ------ -------
Change in Net Asset
Value.................. (2.87) 0.91 2.69 0.12 0.46
------- ------ ------ ------ -------
Net Asset Value, End of
Period................. $ 9.49 $12.36 $13.27 $10.58 $ 10.46
======= ====== ====== ====== =======
Total Return (excludes
sales charge).......... (20.62)% (6.78)%(e) 26.77% 1.42%(e) 4.71%(e)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $ 2,685 $1,799 $1,033 $ 149 $26,533
Ratio of expenses to
average net assets..... 1.62% 1.69%(f) 1.59% 1.81%(f) 1.77%(f)
Ratio of net investment
income to average net
assets................. 0.52% 0.69%(f) 0.26% 0.71%(f) (0.48)%(f)
Ratio of expenses to
average net assets*.... 1.89% 2.01%(f) 2.12% 2.16%(f) 2.27%(f)
Portfolio turnover**.... 45% 32% 40% 62% 21%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG International Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from March 1, 1998 through December 31, 1998. In
conjunction with the reorganization of the ISG Funds, the Fund changed its
fiscal year end to December 31.
(d) For the period from August 15, 1997 (commencement of operations) through
February 28, 1998.
(e) Not annualized.
(f) Annualized.
See notes to financial statements
122
<PAGE>
AMSOUTH FUNDS
International Equity Fund (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 + 2000 (b)+ 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.. $ 12.25 $13.21 $10.66
------- ------ ------
Investment Activities
Net investment loss.................. (0.05) -- (0.02)
Net realized and unrealized gains
(losses) from investments and
foreign currencies.................. (2.49) (0.96) 2.69
------- ------ ------
Total from Investment Activities..... (2.54) (0.96) 2.67
------- ------ ------
Distributions
Net investment income................ -- -- (0.12)
Net realized gains from investment
transactions........................ (0.36) -- --
------- ------ ------
Total Distributions.................. (0.36) -- (0.12)
------- ------ ------
Change in Net Asset Value............. (2.90) (0.96) 2.55
------- ------ ------
Net Asset Value, End of Period........ $ 9.35 $12.25 $13.21
======= ====== ======
Total Return (excludes redemption
charge).............................. (21.25)% (7.19)%(d) 25.98%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)..... $ 516 $ 595 $ 228
Ratio of expenses to average net
assets............................... 2.38% 2.47%(e) 2.45%(e)
Ratio of net investment income to
average net assets................... (0.44)% (0.04)%(e) (0.54)%(e)
Ratio of expenses to average net
assets*.............................. 2.65% 2.72%(e) 2.73%(e)
Portfolio turnover**.................. 45% 32% 40%
</TABLE>
+ Net investment loss is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG International Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 2, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
123
<PAGE>
AMSOUTH FUNDS
International Equity Fund (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Period Ended
July 31, July, 31 December 31, December 31,
2001 + 2000 (b)+ 1999 1998 (c)
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 12.37 $ 13.27 $ 10.58 $ 10.05
-------- -------- ------- -------
Investment Activities
Net investment income
(loss)................ 0.06 0.06 0.08 (0.01)
Net realized and
unrealized gains
(losses) from
investments and
foreign currencies.... (2.53) (0.96) 2.75 0.54
-------- -------- ------- -------
Total from Investment
Activities............ (2.47) (0.90) 2.83 0.53
-------- -------- ------- -------
Distributions
Net investment income.. (0.04) -- (0.14) --
Net realized gains from
investment
transactions.......... (0.36) -- -- --
-------- -------- ------- -------
Total Distributions.... (0.40) -- (0.14) --
-------- -------- ------- -------
Change in Net Asset
Value.................. (2.87) (0.90) 2.69 0.53
-------- -------- ------- -------
Net Asset Value, End of
Period................. $ 9.50 $ 12.37 $ 13.27 $ 10.58
======== ======== ======= =======
Total Return............ (20.50)% (6.71)%(d) 26.72% 5.27%(d)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $145,744 $105,034 $46,104 $27,977
Ratio of expenses to
average net assets..... 1.47% 1.59%(e) 1.56% 1.61%(e)
Ratio of net investment
income to average net
assets................. 0.59% 0.83%(e) 0.80% (1.47)%(e)
Ratio of expenses to
average net assets*.... 1.79% 1.88%(e) 1.84% 1.89%(e)
Portfolio turnover**.... 45% 32% 40% 62%
</TABLE>
/\ Formerly Institutional Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG International Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from December 14, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
124
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Strategic Portfolios: Aggressive Growth Portfolio July 31, 2001
(Amounts in thousands, except shares)
Investments in Affiliates (100.1%)
<TABLE>
<CAPTION>
Shares Value
--------- -------
<S> <C> <C>
Investment Companies (100.1%)
AmSouth Capital Growth Fund, Trust Shares (b)................ 417,465 $ 4,517
AmSouth International Equity Fund, Trust Shares.............. 233,770 2,221
AmSouth Large Cap Fund, Trust Shares......................... 211,715 4,499
AmSouth Mid Cap Fund, Trust Shares (b)....................... 94,847 1,144
AmSouth Prime Money Market Fund, Trust Shares................ 2,481,410 2,481
AmSouth Small Cap Fund, Trust Shares (b)..................... 110,495 1,129
AmSouth Value Fund, Trust Shares............................. 448,138 9,115
-------
25,106
-------
TOTAL INVESTMENTS IN AFFILIATES.............................. 25,106
-------
TOTAL INVESTMENTS
(Cost $27,730) (a) -- 100.1%................................ 25,106
Liabilities in excess of other assets --(0.1%)............... (14)
-------
NET ASSETS -- 100.0%......................................... $25,092
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes
and differs from value by net unrealized depreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 280
Unrealized depreciation............................................. (2,904)
-------
Net unrealized depreciation......................................... $(2,624)
=======
</TABLE>
(b) Represents non-income producing security.
See notes to financial statements
125
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Aggressive Growth Portfolio (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments in affiliates, at value (cost $27,730)................ $25,106
Dividends receivable.............................................. 7
Prepaid expenses and other assets................................. 1
-------
Total Assets..................................................... 25,114
Liabilities:
Payable for capital shares redeemed............................... $ 1
Accrued expenses and other payables:
Investment advisory fees......................................... 1
Shareholder servicing and distribution fees...................... 2
Custodian fees................................................... 1
Other............................................................ 17
---
Total Liabilities................................................ 22
-------
Net Assets:
Capital........................................................... 26,576
Accumulated net realized gains from investment transactions....... 1,140
Unrealized depreciation from investments.......................... (2,624)
-------
Net Assets........................................................ $25,092
=======
Class A Shares
Net Assets....................................................... $ 1,393
Shares outstanding............................................... 140
Redemption price per share....................................... $ 9.91
=======
Class A Shares -- Maximum Sales Charge............................ 5.50%
-------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)........ $ 10.49
=======
Class B Shares
Net Assets....................................................... $ 386
Shares outstanding............................................... 40
Offering price per share*........................................ $ 9.77
=======
Trust Shares (b)
Net Assets....................................................... $23,313
Shares outstanding............................................... 2,355
Offering and redemption price per share.......................... $ 9.90
=======
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Aggressive Growth Portfolio.
(b) Formerly Institutional Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Dividend income from affiliates................................... $ 520
-------
Expenses:
Investment advisory fees.......................................... $51
Administration fees............................................... 51
Distribution fees -- Class B Shares............................... 3
Shareholder servicing fees -- Class A Shares...................... 2
Shareholder servicing fees -- Class B Shares...................... 1
Shareholder servicing fees -- Trust Shares (b).................... 36
Custodian fees.................................................... 7
Accounting fees................................................... 4
Transfer agent fees............................................... 70
Registration and filing fees...................................... 40
Other fees........................................................ 13
---
Total expenses before fee reductions............................. 278
Expenses reduced by Investment Advisor........................... (25)
Expenses reduced by Administrator................................ (25)
Expenses reduced by Transfer Agent............................... (26)
Expenses reduced by Distributor.................................. (13)
Expenses reduced by Fund Accountant.............................. (3)
-------
Net expenses..................................................... 186
-------
Net Investment Income............................................. 334
-------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains from investment transactions with affiliates... 1,011
Realized gain distributions from underlying funds................. 798
Change in unrealized appreciation/depreciation from investments... (3,202)
-------
Net realized/unrealized losses from investments................... (1,393)
-------
Change in net assets resulting from operations.................... $(1,059)
=======
</TABLE>
See notes to financial statements
126
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Aggressive Growth Portfolio (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 2000 (b) 1999 (c)
---------- ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income................... $ 334 $ 43 $ 200
Net realized gains (losses) from
investment transactions with
affiliates............................. 1,011 (96) 190
Realized gain distributions from
underlying funds....................... 798 -- 1,545
Change in unrealized
appreciation/depreciation from
investments............................ (3,202) 55 523
------- ------- -------
Change in net assets resulting from
operations.............................. (1,059) 2 2,458
------- ------- -------
Distributions to Class A Shareholders:
From net investment income.............. (8) (1) (4)
From net realized gains on investment
transactions........................... (54) -- (1)
Distributions to Class B Shareholders:
From net investment income.............. (4) -- (4)(d)
From net realized gains on investment
transactions........................... (39) -- (1)(d)
Distributions to Trust Shareholders (f):
From net investment income.............. (345) (38) (192)(e)
From net realized gains on investment
transactions........................... (2,158) -- (36)(e)
------- ------- -------
Change in net assets from shareholder
distributions........................... (2,608) (39) (238)
------- ------- -------
Change in net assets from capital
transactions............................ 7,408 1,635 17,533
------- ------- -------
Change in net assets..................... 3,741 1,598 19,753
Net Assets:
Beginning of period..................... 21,351 19,753 --
------- ------- -------
End of period........................... $25,092 $21,351 $19,753
======= ======= =======
</TABLE>
(a) Formerly ISG Aggressive Growth Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from January 13, 1999 (commencement of operations) December
31, 1999.
(d) For the period from January 27, 1999 (commencement of operations) December
31, 1999.
(e) For the period from January 28, 1999 (commencement of operations) December
31, 1999.
(f) Formerly Institutional Shares.
See notes to financial statements
127
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Aggressive Growth Portfolio (a)
Financial Highlights, Class A Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 + 2000 (b) 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 11.53 $11.54 $10.00
------- ------ ------
Investment Activities
Net investment income.................. 0.08 0.02 0.09
Net realized and unrealized gains
(losses) from investments with
affiliates............................ (0.39) (0.01) 1.60
------- ------ ------
Total from Investment Activities....... (0.31) 0.01 1.69
------- ------ ------
Distributions
Net investment income.................. (0.15) (0.02) (0.11)
Net realized gains from investment
transactions.......................... (1.16) -- (0.04)
------- ------ ------
Total Distributions.................... (1.31) (0.02) (0.15)
------- ------ ------
Change in Net Asset Value............... (1.62) (0.01) 1.54
------- ------ ------
Net Asset Value, End of Period.......... $ 9.91 $11.53 $11.54
======= ====== ======
Total Return (excludes sales charge).... (3.42%) 0.06%(d) 16.92%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)....... $ 1,393 $ 476 $ 450
Ratio of expenses to average net
assets................................. 0.79% 0.86%(e) 0.96%(e)
Ratio of net investment income to
average net assets..................... 0.78% 0.26%(e) 1.65%(e)
Ratio of expenses to average net
assets*................................ 1.20% 1.24%(e) 6.10%(e)
Portfolio turnover**.................... 36% 22% 95%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole with
out distinguishing between the classes of shares issued.
(a) Formerly ISG Aggressive Growth Portfolio.
(b) For the period January 1, 2000 through July 31, 2000. In conjuction with
the reorganization of the AmSouth Funds, the fund changed its fiscal year
end to July 31.
(c) For the period from January 13, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
128
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Aggressive Growth Portfolio (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 + 2000 (b) 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period... $11.42 $11.47 $10.03
------ ------ ------
Investment Activities
Net investment income (loss).......... 0.06 (0.03) 0.07
Net realized and unrealized gains
(losses) from investments with
affiliates........................... (0.44) (0.02) 1.50
------ ------ ------
Total from Investment Activities...... (0.38) (0.05) 1.57
------ ------ ------
Distributions
Net investment income................. (0.11) -- (0.09)
Net realized gains from investment
transactions......................... (1.16) -- (0.04)
------ ------ ------
Total Distributions................... (1.27) -- (0.13)
------ ------ ------
Change in Net Asset Value.............. (1.65) (0.05) 1.44
------ ------ ------
Net Asset Value, End of Period......... $ 9.77 $11.42 $11.47
====== ====== ======
Total Return (excludes redemption
charge)............................... (4.06)% (0.43)%(d) 15.70%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)...... $ 386 $ 390 $ 456
Ratio of expenses to average net
assets................................ 1.52% 1.56%(e) 1.52%(e)
Ratio of net investment income to
average net assets.................... 0.58% (0.44)%(e) 0.92%(e)
Ratio of expenses to average net
assets*............................... 1.93% 1.94%(e) 7.86%(e)
Portfolio turnover**................... 36% 22% 95%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Aggressive Growth Portfolio.
(b) For the period January 1, 2000 through July 31, 2000. In conjuction with
the reorganization of the AmSouth Funds, the fund changed its fiscal year
end to July 31.
(c) For the period from January 27, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
129
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Aggressive Growth Portfolio (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July, 31 December 31,
2001 + 2000 (b) 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 11.51 $ 11.53 $ 10.05
------- ------- -------
Investment Activities
Net investment income.................. 0.14 0.02 0.12
Net realized and unrealized gains
(losses) from investments with
affiliates............................ (0.44) (0.02) 1.52
------- ------- -------
Total from Investment Activities....... (0.30) -- 1.64
------- ------- -------
Distributions
Net investment income.................. (0.15) (0.02) (0.12)
Net realized gains from investment
transactions.......................... (1.16) -- (0.04)
------- ------- -------
Total Distributions.................... (1.31) (0.02) (0.16)
------- ------- -------
Change in Net Asset Value............... (1.61) (0.02) 1.48
------- ------- -------
Net Asset Value, End of Period.......... $ 9.90 $ 11.51 $ 11.53
======= ======= =======
Total Return............................ (3.30%) 0.01%(d) 16.31%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)....... $23,313 $20,485 $18,847
Ratio of expenses to average net
assets................................. 0.72% 0.75%(e) 0.73%(e)
Ratio of net investment income to
average net assets..................... 1.34% 0.38%(e) 3.23%(e)
Ratio of expenses to average net
assets*................................ 1.08% 1.09%(e) 2.10%(e)
Portfolio turnover**.................... 36% 22% 95%
</TABLE>
/\ Formerly Institutional Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Aggressive Growth Portfolio.
(b) For the period January 1, 2000 through July 31, 2000. In conjuction with
the reorganization of the AmSouth Funds, the fund changed its fiscal year
end to July 31.
(c) For the period from January 28, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
130
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Strategic Portfolios: Growth Portfolio July 31, 2001
(Amounts in thousands, except shares)
Investments in Affiliates (100.0%)
<TABLE>
<CAPTION>
Shares Value
--------- -------
<S> <C> <C>
Investment Companies (100.0%)
AmSouth Capital Growth Fund, Trust Shares (b)................ 249,770 $ 2,703
AmSouth Equity Income Fund, Trust Shares..................... 78,957 988
AmSouth Government Income Fund, Trust Shares................. 471,421 4,761
AmSouth International Equity Fund, Trust Shares.............. 142,874 1,357
AmSouth Large Cap Fund, Trust Shares......................... 127,477 2,709
AmSouth Mid Cap Fund, Trust Shares (b)....................... 56,279 679
AmSouth Prime Money Market Fund, Trust Shares................ 2,470,465 2,470
AmSouth Small Cap Fund, Trust Shares (b)..................... 65,767 672
AmSouth Value Fund, Trust Shares............................. 216,397 4,402
-------
20,741
-------
TOTAL INVESTMENTS IN AFFILIATES.............................. 20,741
-------
TOTAL INVESTMENTS
(Cost $22,431) (a) -- 100.0%................................ 20,741
Liabilities in excess of other assets -- (0.0%).............. (2)
-------
NET ASSETS -- 100.0%......................................... $20,739
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 432
Unrealized depreciation............................................. (2,122)
-------
Net unrealized depreciation......................................... $(1,690)
=======
</TABLE>
(b) Represents non-income producing security.
See notes to financial statements
131
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth Portfolio (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments in affiliates, at value (cost $22,431)................ $20,741
Dividends receivable.............................................. 8
Receivable for capital shares issued.............................. 6
-------
Total Assets..................................................... 20,755
Liabilities:
Accrued expenses and other payables:
Investment advisory fees......................................... $ 1
Shareholder servicing and distribution fees...................... 3
Other............................................................ 12
---
Total Liabilities................................................ 16
-------
Net Assets:
Capital........................................................... 22,117
Accumulated net investment income................................. 19
Accumulated net realized gains from investment transactions....... 293
Unrealized depreciation from investments.......................... (1,690)
-------
Net Assets........................................................ $20,739
=======
Class A Shares
Net Assets....................................................... $ 981
Shares outstanding............................................... 105
Redemption price per share....................................... $ 9.38
=======
Class A Shares -- Maximum Sales Charge............................ 5.50%
-------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)........ $ 9.93
=======
Class B Shares
Net Assets....................................................... $ 1,710
Shares outstanding............................................... 183
Offering price per share*........................................ $ 9.34
=======
Trust Shares (b)
Net Assets....................................................... $18,048
Shares outstanding............................................... 1,916
Offering and redemption price per share.......................... $ 9.42
=======
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Growth Portfolio.
(b) Formerly Institutional Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Dividend income from affiliates................................... $ 661
-------
Expenses:
Investment advisory fees.......................................... $42
Administration fees............................................... 42
Distribution fees -- Class B Shares............................... 10
Shareholder servicing fees -- Class A Shares...................... 2
Shareholder servicing fees -- Class B Shares...................... 3
Shareholder servicing fees -- Trust Shares (b).................... 29
Custodian fees.................................................... 6
Accounting fees................................................... 3
Transfer agent fees............................................... 59
Registration and filing fees...................................... 40
Other fees........................................................ 13
---
Total expenses before fee reductions............................. 249
Expenses reduced by Investment Advisor........................... (21)
Expenses reduced by Administrator................................ (21)
Expenses reduced by Transfer Agent............................... (27)
Expenses reduced by Distributor.................................. (12)
Expenses reduced by Fund Accountant.............................. (2)
-------
Net expenses..................................................... 166
-------
Net Investment Income............................................. 495
-------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains from investment transactions with affiliates... 169
Realized gain distributions from underlying funds................. 543
Change in unrealized appreciation/depreciation from investments... (1,603)
-------
Net realized/unrealized losses from investments................... (891)
-------
Change in net assets resulting from operations.................... $ (396)
=======
</TABLE>
See notes to financial statements
132
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth Portfolio (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 2000 (b) 1999 (c)
---------- ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income................... $ 495 $ 142 $ 163
Net realized gains from investment
transactions with affiliates........... 169 377 6
Realized gain distributions from
underlying funds....................... 543 6 624
Change in unrealized
appreciation/depreciation from
investments............................ (1,603) (250) 163
------- ------- -------
Change in net assets resulting from
operations.............................. (396) 275 956
------- ------- -------
Distributions to Class A Shareholders:
From net investment income.............. (18) (2) (2)(d)
From net realized gains on investment
transactions........................... (49) -- (1)(d)
Distributions to Class B Shareholders:
From net investment income.............. (21) (5) (11)(e)
From net realized gains on investment
transactions........................... (80) -- (6)(e)
Distributions to Trust Shareholders (f):
From net investment income.............. (456) (116) (149)
From net realized gains on investment
transactions........................... (1,262) -- (35)
------- ------- -------
Change in net assets from shareholder
distributions........................... (1,886) (123) (204)
------- ------- -------
Change in net assets from capital
transactions............................ 1,522 8,813 11,782
------- ------- -------
Change in net assets..................... (760) 8,965 12,534
Net Assets:
Beginning of period..................... 21,499 12,534 --
------- ------- -------
End of period........................... $20,739 $21,499 $12,534
======= ======= =======
</TABLE>
(a) Formerly ISG Growth Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from February 1, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from February 11, 1999 (commencement of operations) through
December 31, 1999.
(e) For the period from February 15, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares.
See notes to financial statements
133
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth Portfolio (a)
Financial Highlights, Class A Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 + 2000 (b) 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period... $10.47 $10.58 $ 9.93
------ ------ ------
Investment Activities
Net investment income................. 0.23 0.07 0.14
Net realized and unrealized gains
(losses) from investments with
affiliates........................... (0.42) (0.11) 0.73
------ ------ ------
Total from Investment Activities...... (0.19) (0.04) 0.87
------ ------ ------
Distributions
Net investment income................. (0.23) (0.07) (0.14)
Net realized gains from investment
transactions......................... (0.67) -- (0.08)
------ ------ ------
Total Distributions................... (0.90) (0.07) (0.22)
------ ------ ------
Change in Net Asset Value.............. (1.09) (0.11) 0.65
------ ------ ------
Net Asset Value, End of Period......... $ 9.38 $10.47 $10.58
====== ====== ======
Total Return (excludes sales charge)... (2.04%) (0.43%)(d) 8.85%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)...... $ 981 $ 763 $ 164
Ratio of expenses to average net
assets................................ 0.78% 0.86%(e) 0.94%(e)
Ratio of net investment income to
average net assets.................... 2.31% 1.27%(e) 2.44%(e)
Ratio of expenses to average net
assets*............................... 1.22% 1.25%(e) 9.41%(e)
Portfolio turnover**................... 38% 97% 76%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Growth Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 11, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
134
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth Portfolio (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 + 2000 (b) 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period... $10.44 $10.57 $ 9.84
------ ------ ------
Investment Activities
Net investment income................. 0.15 0.03 0.12
Net realized and unrealized gains
(losses) from investments with
affiliates........................... (0.41) (0.12) 0.81
------ ------ ------
Total from Investment Activities...... (0.26) (0.09) 0.93
------ ------ ------
Distributions
Net investment income................. (0.17) (0.04) (0.12)
Net realized gains from investment
transactions......................... (0.67) -- (0.08)
------ ------ ------
Total Distributions................... (0.84) (0.04) (0.20)
------ ------ ------
Change in Net Asset Value.............. (1.10) (0.13) 0.73
------ ------ ------
Net Asset Value, End of Period......... $ 9.34 $10.44 $10.57
====== ====== ======
Total Return (excludes redemption
charge)............................... (2.82%) (0.84%)(d) 9.48%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)...... $1,710 $1,241 $ 998
Ratio of expenses to average net
assets................................ 1.53% 1.56%(e) 1.55%(e)
Ratio of net investment income to
average net assets.................... 1.53% 0.46%(e) 2.14%(e)
Ratio of expenses to average net
assets*............................... 1.97% 1.97%(e) 6.75%(e)
Portfolio turnover**................... 38% 97% 76%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Growth Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 15, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
135
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth Portfolio (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July, 31 December 31,
2001 + 2000 (b) 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period... $ 10.51 $ 10.61 $ 10.00
------- ------- -------
Investment Activities
Net investment income................. 0.24 0.08 0.16
Net realized and unrealized gains
(losses) from investments with
affiliates........................... (0.42) (0.11) 0.69
------- ------- -------
Total from Investment Activities...... (0.18) (0.03) 0.85
------- ------- -------
Distributions
Net investment income................. (0.24) (0.07) (0.16)
Net realized gains from investment
transactions......................... (0.67) -- (0.08)
------- ------- -------
Total Distributions................... (0.91) (0.07) (0.24)
------- ------- -------
Change in Net Asset Value.............. (1.09) (0.10) 0.61
------- ------- -------
Net Asset Value, End of Period......... $ 9.42 $ 10.51 $ 10.61
======= ======= =======
Total Return........................... (1.98%) (0.29%)(d) 8.59%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)...... $18,048 $19,495 $11,372
Ratio of expenses to average net
assets................................ 0.73% 0.76%(e) 0.73%(e)
Ratio of net investment income to
average net assets.................... 2.40% 1.28%(e) 4.82%(e)
Ratio of expenses to average net
assets*............................... 1.12% 1.10%(e) 3.14%(e)
Portfolio turnover**................... 38% 97% 76%
</TABLE>
/\ Formerly Institutional Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Growth Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 1, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
136
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Strategic Portfolios: Growth and Income Portfolio July 31, 2001
(Amounts in thousands, except shares)
Investments in Affiliates (100.0%)
<TABLE>
<CAPTION>
Shares Value
--------- -------
<S> <C> <C>
Investment Companies (100.0%)
AmSouth Capital Growth Fund, Trust Shares (b)................ 769,237 $ 8,323
AmSouth Equity Income Fund, Trust Shares..................... 251,897 3,151
AmSouth Government Income Fund, Trust Shares................. 2,629,963 26,563
AmSouth International Equity Fund, Trust Shares.............. 434,180 4,125
AmSouth Large Cap Fund, Trust Shares......................... 395,788 8,410
AmSouth Limited Term Bond Fund, Trust Shares................. 1,021,290 10,775
AmSouth Mid Cap Fund, Trust Shares (b)....................... 174,916 2,109
AmSouth Prime Money Market Fund, Trust Shares................ 4,137,608 4,138
AmSouth Small Cap Fund, Trust Shares (b)..................... 202,587 2,070
AmSouth Value Fund, Trust Shares............................. 660,312 13,431
-------
83,095
-------
TOTAL INVESTMENTS IN AFFILIATES.............................. 83,095
-------
TOTAL INVESTMENTS
(Cost $86,576) (a) -- 100.0%................................ 83,095
Liabilities in excess of other assets --(0.0%)............... (26)
-------
NET ASSETS -- 100.0%......................................... $83,069
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $ 2,284
Unrealized depreciation............................................. (5,765)
-------
Net unrealized depreciation......................................... $(3,481)
=======
</TABLE>
(b) Represents non-income producing security.
See notes to financial statements
137
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth and Income Portfolio (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments in affiliates, at value (cost $86,576)................ $83,095
Dividends receivable.............................................. 12
Receivable for capital shares issued.............................. 2
Prepaid expenses and other assets................................. 1
-------
Total Assets..................................................... 83,110
Liabilities:
Payable for capital shares redeemed............................... $ 6
Accrued expenses and other payables:
Investment advisory fees......................................... 3
Administration fees.............................................. 3
Shareholder servicing and distribution fees...................... 8
Other............................................................ 21
---
Total Liabilities................................................ 41
-------
Net Assets:
Capital........................................................... 85,390
Accumulated net investment income................................. 157
Accumulated net realized gains from investment transactions....... 1,003
Unrealized depreciation from investments.......................... (3,481)
-------
Net Assets........................................................ $83,069
=======
Class A Shares
Net Assets....................................................... $ 6,535
Shares outstanding............................................... 669
Redemption price per share....................................... $ 9.76
=======
Class A Shares -- Maximum Sales Charge............................ 5.50%
-------
Maximum Offering Price Per Share
(100%/(100% -- Maximum Sales Charge) of net asset value adjusted
to the nearest cent)............................................ $ 10.33
=======
Class B Shares
Net Assets....................................................... $ 1,656
Shares outstanding............................................... 170
Offering price per share*........................................ $ 9.77
=======
Trust Shares (b)
Net Assets....................................................... $74,878
Shares outstanding............................................... 7,641
Offering and redemption price per share.......................... $ 9.80
=======
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Growth & Income Portfolio.
(b) Formerly Institutional Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Dividend income from
affiliates.............. $3,295
------
Expenses:
Investment advisory
fees.................... $173
Administration fees...... 173
Distribution fees --
Class B Shares......... 12
Shareholder servicing
fees -- Class A Shares.. 4
Shareholder servicing
fees -- Class B Shares.. 4
Shareholder servicing
fees -- Trust Shares
(b)..................... 125
Custodian fees........... 24
Accounting fees.......... 13
Transfer agent fees...... 73
Registration and filing
fees.................... 39
Other fees............... 27
----
Total expenses before
fee reductions......... 667
Expenses reduced by
Investment Advisor..... (87)
Expenses reduced by
Transfer Agent......... (17)
Expenses reduced by
Distributor............ (45)
Expenses reduced by Fund
Accountant............. (10)
------
Net expenses............ 508
------
Net Investment Income.... 2,787
------
Realized/Unrealized Gains
(Losses) from
Investments:
Net realized losses from
investment transactions
with affiliates......... (547)
Realized gain
distributions from
underlying funds........ 2,374
Change in unrealized
appreciation/depreciation
from investments........ (2,996)
------
Net realized/unrealized
losses from
investments............. (1,169)
------
Change in net assets
resulting from
operations.............. $1,618
======
</TABLE>
See notes to financial statements
138
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth and Income Portfolio (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 2000 (b) 1999 (c)
---------- ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income................... $ 2,787 $ 1,254 $ 839
Net realized gains (losses) from
investment transactions with
affiliates............................. (547) (486) 363
Realized gain distributions from
underlying funds....................... 2,374 4 4,971
Change in unrealized
appreciation/depreciation from
investments............................ (2,996) 744 (1,229)
------- ------- -------
Change in net assets resulting from
operations.............................. 1,618 1,516 4,944
------- ------- -------
Distributions to Class A Shareholders:
From net investment income.............. (42) (4) (5)(d)
From net realized gains on investment
transactions........................... (16) -- (2)(d)
Distributions to Class B Shareholders:
From net investment income.............. (40) (15) (12)
From net realized gains on investment
transactions........................... (94) -- (5)
Distributions to Trust Shareholders (f):
From net investment income.............. (2,740) (1,043) (822)(e)
From net realized gains on investment
transactions........................... (5,462) -- (97)(e)
------- ------- -------
Change in net assets from shareholder
distributions........................... (8,394) (1,062) (943)
------- ------- -------
Change in net assets from capital
transactions............................ 508 (77) 84,959
------- ------- -------
Change in net assets..................... (6,268) 377 88,960
Net Assets:
Beginning of period..................... 89,337 88,960 --
------- ------- -------
End of period........................... $83,069 $89,337 $88,960
======= ======= =======
</TABLE>
(a) Formerly ISG Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from January 27, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from March 8, 1999 (commencement of operations) through
December 31, 1999.
(e) For the period from February 8, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares.
See notes to financial statements
139
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth and Income Portfolio (a)
Financial Highlights, Class A Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 + 2000 (b) 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.... $10.54 $10.48 $10.10
------ ------ ------
Investment Activities
Net investment income.................. 0.24 0.14 0.11
Net realized and unrealized gains
(losses) from investments with
affiliates............................ (0.07) 0.04 0.41
------ ------ ------
Total from Investment Activities....... 0.17 0.18 0.52
------ ------ ------
Distributions
Net investment income.................. (0.32) (0.12) (0.11)
Net realized gains from investment
transactions.......................... (0.63) -- (0.03)
------ ------ ------
Total Distributions.................... (0.95) (0.12) (0.14)
------ ------ ------
Change in Net Asset Value............... (0.78) 0.06 0.38
------ ------ ------
Net Asset Value, End of Period.......... $ 9.76 $10.54 $10.48
====== ====== ======
Total Return (excludes sales charge).... 1.61% 1.69%(d) 5.21%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)....... $6,535 $ 271 $ 535
Ratio of expenses to average net
assets................................. 0.63% 0.72%(e) 0.95%(e)
Ratio of net investment income to
average net assets..................... 2.44% 2.15%(e) 2.44%(e)
Ratio of expenses to average net
assets*................................ 0.87% 0.88%(e) 2.27%(e)
Portfolio turnover**.................... 51% 21% 57%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from March 8, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
140
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth and Income Portfolio (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended
July 31, July 31, December 31,
2001 + 2000 (b) 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.... $10.53 $10.50 $10.00
------ ------ ------
Investment Activities
Net investment income.................. 0.24 0.10 0.08
Net realized and unrealized gains
(losses) from investments with
affiliates............................ (0.12) 0.02 0.53
------ ------ ------
Total from Investment Activities....... 0.12 0.12 0.61
------ ------ ------
Distributions
Net investment income.................. (0.25) (0.09) (0.08)
Net realized gains from investment
transactions.......................... (0.63) -- (0.03)
------ ------ ------
Total Distributions.................... (0.88) (0.09) (0.11)
------ ------ ------
Change in Net Asset Value............... (0.76) 0.03 0.50
------ ------ ------
Net Asset Value, End of Period.......... $ 9.77 $10.53 $10.50
====== ====== ======
Total Return (excludes redemption
charge)................................ 1.09% 1.13%(d) 6.10%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)....... $1,656 $1,613 $1,725
Ratio of expenses to average net
assets................................. 1.37% 1.40%(e) 1.52%(e)
Ratio of net investment income to
average net assets..................... 2.40% 1.58%(e) 1.74%(e)
Ratio of expenses to average net
assets*................................ 1.60% 1.57%(e) 4.26%(e)
Portfolio turnover**.................... 51% 21% 57%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from January 27, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
141
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Growth and Income Portfolio (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July, 31 December 31,
2001 + 2000 (b) 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 10.56 $ 10.51 $ 9.85
------- ------- -------
Investment Activities
Net investment income.................. 0.32 0.14 0.13
Net realized and unrealized gains
(losses) from investments with
affiliates............................ (0.12) 0.03 0.69
------- ------- -------
Total from Investment Activities....... 0.20 0.17 0.82
------- ------- -------
Distributions
Net investment income.................. (0.33) (0.12) (0.13)
Net realized gains from investment
transactions.......................... (0.63) -- (0.03)
------- ------- -------
Total Distributions.................... (0.96) (0.12) (0.16)
------- ------- -------
Change in Net Asset Value............... (0.76) 0.05 0.66
------- ------- -------
Net Asset Value, End of Period.......... $ 9.80 $ 10.56 $ 10.51
======= ======= =======
Total Return............................ 1.84% 1.64%(d) 8.40%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)....... $74,878 $87,453 $86,700
Ratio of expenses to average net
assets................................. 0.57% 0.58%(e) 0.70%(e)
Ratio of net investment income to
average net assets..................... 3.25% 2.39%(e) 3.43%(e)
Ratio of expenses to average net
assets*................................ 0.75% 0.72%(e) 0.98%(e)
Portfolio turnover**.................... 51% 21% 57%
</TABLE>
/\ Formerly Institutional Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 8, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
142
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Strategic Portfolios: Moderate Growth and Income Portfolio July 31, 2001
(Amounts in thousands, except shares)
Investments in Affiliates (100.0%)
<TABLE>
<CAPTION>
Shares Value
--------- -------
<S> <C> <C>
Investment Companies (100.0%)
AmSouth Capital Growth Fund, Trust Shares (b)................ 201,645 $ 2,182
AmSouth Equity Income Fund, Trust Shares..................... 51,249 641
AmSouth Government Income Fund, Trust Shares................. 751,495 7,590
AmSouth Large Cap Fund, Trust Shares......................... 103,280 2,195
AmSouth Limited Term Bond Fund, Trust Shares................. 407,891 4,303
AmSouth Prime Money Market Fund, Trust Shares................ 1,060,185 1,060
AmSouth Value Fund, Trust Shares............................. 185,055 3,764
-------
21,735
-------
TOTAL INVESTMENTS IN AFFILIATES.............................. 21,735
-------
TOTAL INVESTMENTS
(Cost $21,925) (a) -- 100.0%................................ 21,735
Liabilities in excess of other assets -- (0.0%).............. (9)
-------
NET ASSETS -- 100.0%......................................... $21,726
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized depreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................... $ 669
Unrealized depreciation............................................... (859)
-----
Net unrealized depreciation........................................... $(190)
=====
</TABLE>
(a) Represents non-income producing security.
See notes to financial statements
143
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Moderate Growth and Income Portfolio (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments in affiliates, at value (cost $21,925)................. $21,735
Dividends receivable............................................... 3
Receivable for capital shares issued............................... 1
Prepaid expenses and other assets.................................. 2
-------
Total Assets...................................................... 21,741
Liabilities:
Accrued expenses and other payables:
Investment advisory fees.......................................... $ 1
Shareholder sevicing and distribution fees........................ 3
Other............................................................. 11
---
Total Liabilities................................................. 15
-------
Net Assets:
Capital............................................................ 21,762
Accumulated net investment income.................................. 49
Accumulated net realized gains from investment transactions........ 105
Unrealized depreciation from investments........................... (190)
-------
Net Assets......................................................... $21,726
=======
Class A Shares
Net Assets........................................................ $ 231
Shares outstanding................................................ 24
Redemption price per share........................................ $ 9.74
=======
Class A Shares -- Maximum Sales Charge............................. 5.50%
-------
Maximum Offering Price Per Share
(100%/(100% -- Maximum Sales Charge)
of net asset value adjusted to the nearest cent)................. $ 10.31
=======
Class B Shares
Net Assets........................................................ $ 1,231
Shares outstanding................................................ 127
Offering price per share*......................................... $ 9.71
=======
Trust Shares (b)
Net Assets........................................................ $20,264
Shares outstanding................................................ 2,076
Offering and redemption price per share........................... $ 9.76
=======
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Moderate Growth & Income Portfolio.
(b) Formerly Institutional Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Dividend income from affiliates..................................... $ 907
------
Expenses:
Investment advisory fees............................................ $43
Administration fees................................................. 43
Distribution fees -- Class B Shares................................. 7
Shareholder servicing fees -- Class B Shares........................ 3
Shareholder servicing fees -- Trust Shares (b)...................... 31
Custodian fees...................................................... 6
Accounting fees..................................................... 3
Transfer agent fees................................................. 59
Registration and filing fees........................................ 37
Other fees.......................................................... 15
---
Total expenses before fee reductions............................... 247
Expenses reduced by Investment Advisor............................. (22)
Expenses reduced by Administrator.................................. (22)
Expenses reduced by Transfer Agent................................. (27)
Expenses reduced by Distributor.................................... (11)
Expenses reduced by Fund Accountant................................ (3)
------
Net expenses....................................................... 162
------
Net Investment Income............................................... 745
------
Realized/Unrealized Gains (Losses) from Investments:
Net realized gains from investment transactions with affiliates..... 59
Realized gain distributions from underlying funds................... 316
Change in unrealized appreciation/depreciation from investments..... (88)
------
Net realized/unrealized gains from investments...................... 287
------
Change in net assets resulting from operations...................... $1,032
======
</TABLE>
See notes to financial statements
144
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Moderate Growth and Income Portfolio (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 2000 (b) 1999 (c)
---------- ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income................... $ 745 $ 388 $ 274
Net realized gains (losses) from
investment transactions with
affiliates............................. 59 (129) (40)
Realized gain distributions from
underlying funds....................... 316 1 897
Change in unrealized
appreciation/depreciation from
investments............................ (88) 268 (370)
------- ------- -------
Change in net assets resulting from
operations.............................. 1,032 528 761
------- ------- -------
Distributions to Class A Shareholders:
From net investment income.............. (3) (1) (3)(d)
From net realized gains on investment
transactions........................... (2) -- (1)(d)
Distributions to Class B Shareholders:
From net investment income.............. (27) (10) (11)
From net realized gains on investment
transactions........................... (38) -- (5)
Distributions to Trust Shareholders (f):
From net investment income.............. (729) (314) (260)(e)
From net realized gains on investment
transactions........................... (885) -- (68)(e)
------- ------- -------
Change in net assets from shareholder
distributions........................... (1,684) (325) (348)
------- ------- -------
Change in net assets from capital
transactions............................ 1,417 (1,739) 22,084
------- ------- -------
Change in net assets..................... 765 (1,536) 22,497
Net Assets:
Beginning of period..................... 20,961 22,497 --
------- ------- -------
End of period........................... $21,726 $20,961 $22,497
======= ======= =======
</TABLE>
(a) Formerly ISG Moderate Growth & Income Portfolio.
(b) For the period January 1, 2000 through July 31, 2000.
(c) For the period from January 28, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from February 9, 1999 (commencement of operations) through
December 31, 1999.
(e) For the period from February 10, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares.
See notes to financial statements
145
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Moderate Growth and Income Portfolio (a)
Financial Highlights, Class A Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 + 2000 (b) 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period..... $10.06 $ 9.96 $9.86
------ ------ -----
Investment Activities
Net investment income................... 0.32 0.14 0.17
Net realized and unrealized gains from
investments with affiliates............ 0.15 0.10 0.16
------ ------ -----
Total from Investment Activities........ 0.47 0.24 0.33
------ ------ -----
Distributions
Net investment income................... (0.34) (0.14) (0.17)
Net realized gains from investment
transactions........................... (0.45) -- (0.06)
------ ------ -----
Total Distributions..................... (0.79) (0.14) (0.23)
------ ------ -----
Change in Net Asset Value................ (0.32) 0.10 0.10
------ ------ -----
Net Asset Value, End of Period........... $ 9.74 $10.06 $9.96
====== ====== =====
Total Return (excludes sales charge)..... 4.91% 2.43%(d) 3.37%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)........ $ 231 $ 48 $ 172
Ratio of expenses to average net assets.. 0.77% 0.91%(e) 0.93%(e)
Ratio of net investment income to average
net assets.............................. 3.26% 2.85%(e) 3.32%(e)
Ratio of expenses to average net
assets*................................. 1.20% 1.26%(e) 9.78%(e)
Portfolio turnover**..................... 62% 21% 124%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Moderate Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 9, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
146
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Moderate Growth and Income Portfolio (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 + 2000 (b) 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.... $10.04 $ 9.96 $10.00
------ ------ ------
Investment Activities
Net investment income.................. 0.25 0.13 0.13
Net realized and unrealized gains from
investments with affiliates........... 0.15 0.07 0.02
------ ------ ------
Total from Investment Activities....... 0.40 0.20 0.15
------ ------ ------
Distributions
Net investment income.................. (0.28) (0.12) (0.13)
Net realized gains from investment
transactions.......................... (0.45) -- (0.06)
------ ------ ------
Total Distributions.................... (0.73) (0.12) (0.19)
------ ------ ------
Change in Net Asset Value............... (0.33) 0.08 (0.04)
------ ------ ------
Net Asset Value, End of Period.......... $ 9.71 $10.04 $ 9.96
====== ====== ======
Total Return (excludes redemption
charge)................................ 4.09% 2.00%(d) 1.50%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)....... $1,231 $ 832 $ 941
Ratio of expenses to average net
assets................................. 1.51% 1.55%(e) 1.54%(e)
Ratio of net investment income to
average net assets..................... 2.59% 2.19%(e) 2.80%(e)
Ratio of expenses to average net
assets*................................ 1.92% 1.88%(e) 6.90%(e)
Portfolio turnover**.................... 62% 21% 124%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Moderate Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from January 28, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
147
<PAGE>
AMSOUTH FUNDS
Strategic Portfolios: Moderate Growth and Income Portfolio (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Period Ended
July 31, July 31, December 31,
2001 + 2000 (b) 1999 (c)
---------- ------------ ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.... $ 10.08 $ 9.98 $ 9.88
------- ------- -------
Investment Activities
Net investment income.................. 0.34 0.18 0.20
Net realized and unrealized gains from
investments with affiliates........... 0.14 0.07 0.16
------- ------- -------
Total from Investment Activities....... 0.48 0.25 0.36
------- ------- -------
Distributions
Net investment income.................. (0.35) (0.15) (0.20)
Net realized gains from investment
transactions.......................... (0.45) -- (0.06)
------- ------- -------
Total Distributions.................... (0.80) (0.15) (0.26)
------- ------- -------
Change in Net Asset Value............... (0.32) 0.10 0.10
------- ------- -------
Net Asset Value, End of Period.......... $ 9.76 $ 10.08 $ 9.98
======= ======= =======
Total Return............................ 4.93% 2.50%(d) 3.64%(d)
Ratios/Supplemental Data:
Net Assets at end of period (000)....... $20,264 $20,081 $21,384
Ratio of expenses to average net
assets................................. 0.71% 0.74%(e) 0.73%(e)
Ratio of net investment income to
average net assets..................... 3.48% 3.03%(e) 4.46%(e)
Ratio of expenses to average net
assets*................................ 1.09% 1.03%(e) 1.87%(e)
Portfolio turnover**.................... 62% 21% 124%
</TABLE>
/\ Formerly Institutional Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly ISG Moderate Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 10, 1999 (commencement of operations) through
December 31, 1999.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
148
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Bond Fund July 31, 2001
(Amounts in thousands, except shares)
Corporate Bonds (47.8%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Aerospace/Defense (1.6%)
Boeing Corp., 6.88%, 11/1/06............................... $ 3,000 $ 3,165
United Technologies Corp., 6.40%, 9/15/01.................. 1,775 1,779
United Technologies Corp., 7.13%, 11/15/10................. 5,000 5,369
--------
10,313
--------
Agricultural Biotech (0.4%)
Pharmacia Corp., 5.75%, 12/1/05............................ 2,600 2,642
--------
Aluminum (0.7%)
Alcoa, Inc., 7.38%, 8/1/10................................. 4,000 4,330
--------
Automotive -- Finance (2.5%)
Ford Motor Credit Co., 6.25%, 12/8/05...................... 3,485 3,546
Ford Motor Credit Co., 7.35%, 11/7/11, MTN................. 1,750 1,759
General Motors Acceptance Corp., 7.50%, 7/15/05............ 3,000 3,199
General Motors Acceptance Corp., 6.15%, 4/7/07............. 2,000 2,005
Toyota Motor Credit Corp., 5.65%, 1/15/07.................. 5,000 5,043
--------
15,552
--------
Banking (4.4%)
ABN AMRO Bank, 6.63%, 10/31/01............................. 1,575 1,585
Bank One Corp., 7.00%, 7/15/05............................. 3,157 3,311
Bank One, Texas, 6.25%, 2/15/08............................ 1,000 1,008
Fifth Third Bank, 6.75%, 7/15/05........................... 4,000 4,184
First Union Corp., 6.18%, 2/15/36.......................... 1,500 1,530
J.P. Morgan & Co., 7.63%, 9/15/04.......................... 3,856 4,160
NationsBank Corp., 7.75%, 8/15/15.......................... 1,100 1,205
State Street Boston, 7.65%, 6/15/10........................ 5,000 5,487
SunTrust Banks, Inc., 7.38%, 7/1/06........................ 3,159 3,384
Wachovia Corp., 6.61%, 10/1/25............................. 1,875 1,936
--------
27,790
--------
Beverages (0.6%)
Coca-Cola Co., 5.75%, 3/15/11.............................. 4,000 3,940
--------
Brokerage Services (1.3%)
Bear Stearns & Co., Inc., 6.63%, 10/1/04................... 2,910 3,015
Dean Witter Discover & Co., 6.50%, 11/1/05................. 3,500 3,606
Merrill Lynch & Co., Inc., 6.00%, 2/12/03.................. 1,450 1,486
--------
8,107
--------
Building Products (0.6%)
Vulcan Materials Co., 5.75%, 4/1/04........................ 2,000 2,025
Vulcan Materials Co., 6.00%, 4/1/09........................ 2,000 1,963
--------
3,988
--------
Chemicals (0.8%)
Dow Chemical Corp., 5.25%, 5/14/04......................... 5,000 5,056
--------
Computers & Peripherals (1.0%)
IBM Corp., 5.38%, 2/1/09................................... 5,000 4,875
IBM Corp., 6.50%, 1/15/28.................................. 1,750 1,693
--------
6,568
--------
</TABLE>
Corporate Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Consumer Goods (1.7%)
Procter & Gamble Co., 6.88%, 9/15/09....................... $ 5,000 $ 5,313
Unilever Capital Corp., 7.13%, 11/1/10..................... 5,000 5,350
--------
10,663
--------
Cosmetics/Personal Care (1.0%)
Colgate-Palmolive Co., 5.34%, 3/27/06...................... 4,400 4,406
Kimberly-Clark Corp., 7.10%, 8/1/07........................ 1,700 1,840
--------
6,246
--------
Data Processing/Management (0.3%)
First Data Corp., 6.75%, 7/15/05........................... 2,000 2,090
--------
Electric -- Integrated (0.6%)
Alabama Power Co., 7.13%, 8/15/04.......................... 2,000 2,113
Alabama Power Co., 7.13%, 10/1/07.......................... 1,700 1,787
--------
3,900
--------
Electronic Components/Instruments (0.3%)
Honeywell, Inc., 7.00%, 3/15/07............................ 2,000 2,113
--------
Entertainment (0.5%)
Walt Disney (The) Co., 5.13%, 12/15/03..................... 3,000 3,041
--------
Financial Services (4.5%)
Associates Corp. N.A., 7.32%, 1/13/03, MTN................. 800 832
Associates Corp. N.A., 5.75%, 10/15/03..................... 2,000 2,045
Associates Corp. N.A., 5.75%, 11/1/03...................... 3,000 3,068
Boeing Capital Corp., 7.38%, 9/27/10....................... 4,000 4,360
Commercial Credit Co., 7.38%, 3/15/02...................... 3,000 3,064
Commercial Credit Co., 6.50%, 8/1/04....................... 3,000 3,131
Countrywide Home Loan, 6.84%, 10/22/04, MTN................ 2,125 2,218
Household Finance Corp., 6.50%, 1/24/06.................... 5,000 5,180
Mellon Funding Corp., 6.40%, 5/14/11....................... 2,000 2,030
Norwest Financial, Inc., 6.63%, 7/15/04.................... 2,000 2,098
--------
28,026
--------
Food Products & Services (1.6%)
Campbell Soup Co., 6.15%, 12/1/02.......................... 2,750 2,805
H.J. Heinz Co., 6.38%, 7/15/28............................. 2,000 1,828
Sara Lee Corp., 6.15%, 6/19/08, MTN........................ 5,625 5,681
--------
10,314
--------
Forest & Paper Products (0.5%)
Mead Corp., 6.60%, 3/1/02.................................. 3,000 3,034
--------
Industrial Goods & Services (2.1%)
Air Products & Chemicals, Inc., 8.35%, 1/15/02............. 3,000 3,049
E. I. Dupont de Nemours & Co., 6.50%, 9/1/02............... 2,000 2,050
E. I. Dupont de Nemours & Co., 6.75%, 10/15/02............. 2,570 2,647
Reliance Electric Co., 6.80%, 4/15/03...................... 1,850 1,931
Rockwell International Corp., 6.63%, 6/1/05................ 3,456 3,585
--------
13,262
--------
</TABLE>
Continued
149
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Bond Fund July 31, 2001
(Amounts in thousands, except shares)
Corporate Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Insurance (0.7%)
Chubb Corp., 6.15%, 8/15/05............................... $ 1,000 $ 1,021
Hartford Life, Inc., 6.90%, 6/15/04....................... 3,100 3,255
--------
4,276
--------
Machinery -- Construction and Mining (0.2%)
Caterpillar, Inc., 6.55%, 5/1/11.......................... 1,000 1,031
--------
Manufacturing (0.3%)
PPG Industries, Inc., 7.05%, 8/15/09...................... 2,000 2,040
--------
Meat Packing Plants (1.1%)
Hormel Foods Corp., 6.63%, 6/1/11......................... 7,000 7,131
--------
Newspapers (0.3%)
New York Times, 7.63%, 3/15/05............................ 2,000 2,155
--------
Oil & Gas Exploration, Production, & Services (2.1%)
Atlantic Richfield, 5.90%, 4/15/09........................ 4,250 4,282
Conoco Inc., 5.90%, 4/15/04............................... 1,500 1,534
Conoco Inc., 6.35%, 4/15/09............................... 1,000 1,013
Phillips Petroleum Co., 6.38%, 3/30/09.................... 2,000 2,028
Texaco Capital, 7.09%, 2/1/07............................. 4,000 4,304
--------
13,161
--------
Pharmaceuticals (2.7%)
Abbott Laboratories, 5.63%, 7/1/06........................ 4,000 4,060
Eli Lilly & Co., 5.50%, 7/15/06........................... 6,000 6,060
Pfizer Inc., 5.63%, 2/1/06................................ 3,900 3,973
Warner-Lambert Co., 5.75%, 1/15/03........................ 3,000 3,053
--------
17,146
--------
Photography (0.5%)
Eastman Kodak Co., 9.38%, 3/15/03......................... 3,100 3,317
--------
Retail (3.5%)
May Department Stores Co., 7.15%, 8/15/04................. 1,000 1,058
May Department Stores Co., 7.90%, 10/15/07................ 1,000 1,103
Nike, Inc., 6.38%, 12/1/03................................ 3,000 3,083
Sears Credit Account Master Trust, 6.75%, 9/16/09......... 5,000 5,283
Target Corp., 7.50%, 2/15/05.............................. 2,000 2,148
Wal-Mart Stores, Inc., 6.38%, 3/1/03...................... 5,000 5,168
Wal-Mart Stores, Inc., 5.45%, 8/1/06...................... 4,500 4,534
--------
22,377
--------
Tools (0.3%)
Stanley Works, 5.75%, 3/1/04.............................. 2,000 2,040
--------
Utilities -- Electric & Gas (6.0%)
Baltimore Gas & Electric, 7.50%, 1/15/07.................. 3,100 3,317
Cincinnati Gas & Electric Co., 6.45%, 2/15/04............. 1,500 1,538
Consolidated Edison Co. of New York, Inc., 6.63%, 2/1/02.. 2,000 2,020
Florida Power Corp., 6.54%, 7/1/02, MTN................... 1,325 1,347
National Rural Utilities Corp., Series C, 6.49%, 7/10/02,
MTN...................................................... 1,425 1,461
</TABLE>
Corporate Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Utilities -- Electric & Gas, continued
National Rural Utilities Corp., 5.00%, 10/1/02............ $ 3,500 $ 3,534
National Rural Utilities Corp., 6.38%, 10/15/04........... 3,100 3,220
Northern States Power Co., 7.88%, 10/1/01................. 2,750 2,764
Northern States Power Co., 6.88%, 8/1/09.................. 1,750 1,800
SCANA Corp., Series B, 6.25%, 7/8/03, MTN................. 2,225 2,281
Smith Enron, 5.97%, 12/15/06.............................. 1,591 1,619
Tampa Electric Co., 7.38%, 9/1/02......................... 2,000 2,060
Tampa Electric Co., 6.13%, 5/1/03......................... 2,000 2,050
Virginia Electric & Power Co., 6.63%, 4/1/03.............. 2,000 2,060
Virginia Electric & Power Co., 8.00%, 3/1/04.............. 2,500 2,669
Wisconsin Electric Power, 6.63%, 11/15/06................. 3,500 3,643
--------
37,383
--------
Utilities -- Telecommunications (3.1%)
BellAtlantic Corp., 6.25%, 2/15/04........................ 2,000 2,065
BellSouth Telecommunications, 6.50%, 6/15/05.............. 3,500 3,640
Chesapeake & Potomac Telephone, 6.00%, 5/1/03............. 2,009 2,064
GTE California, Inc., 6.70%, 9/1/09....................... 1,500 1,539
Southern New England Telecommunications Corp., 6.50%,
2/15/02.................................................. 2,000 2,028
Southwestern Bell Telephone, 6.63%, 4/1/05................ 2,000 2,078
US West Communications Group, 6.63%, 9/15/05.............. 4,000 4,085
WorldCom, Inc., 6.13%, 8/15/01............................ 2,000 2,000
--------
19,499
--------
TOTAL CORPORATE BONDS..................................... 302,531
--------
Municipal Bonds (0.1%)
Georgia (0.1%)
Atlanta Downtown Development Lease Revenue Bond, 6.88%,
2/1/21................................................... 800 819
--------
TOTAL MUNICIPAL BONDS..................................... 819
--------
U.S. Government Agencies (22.0%)
Fannie Mae (9.6%)
6.59%, 5/21/02............................................ 3,000 3,063
7.05%, 11/12/02........................................... 7,500 7,806
5.13%, 2/13/04............................................ 17,600 17,904
5.25%, 6/15/06............................................ 14,000 14,070
7.13%, 3/15/07............................................ 10,000 10,910
6.56%, 11/26/07........................................... 7,300 7,495
--------
61,248
--------
</TABLE>
Continued
150
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Bond Fund July 31, 2001
(Amounts in thousands, except shares)
U.S. Government Agencies, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Federal Home Loan Bank (0.5%)
4.88%, 4/16/04............................................. $ 3,000 $ 3,030
--------
Freddie Mac (6.3%)
6.88%, 1/15/05............................................. 25,000 26,652
7.14%, 3/12/07............................................. 700 715
7.10%, 4/10/07............................................. 2,000 2,180
10,000 10,625
--------
40,172
--------
Government National Mortgage Assoc. (4.5%)
6.50%, 8/15/11 - 12/15/30.................................. 19,667 19,787
7.00%, 9/15/11 - 11/20/28.................................. 7,606 7,785
7.50%, 8/15/11............................................. 430 449
8.00%, 5/15/10............................................. 235 246
--------
28,267
--------
Tennessee Valley Authority (1.1%)
5.38%, 11/13/08............................................ 7,000 6,976
--------
TOTAL U.S. GOVERNMENT AGENCIES............................. 139,693
--------
U.S. Treasury Bonds (6.5%)
7.50%, 11/15/16............................................ 34,000 40,928
--------
TOTAL U.S. TREASURY BONDS.................................. 40,928
--------
U.S. Treasury Notes (21.2%)
6.75%, 5/15/05............................................. 1,000 1,081
6.50%, 10/15/06............................................ 11,000 11,941
6.13%, 8/15/07............................................. 54,000 57,882
6.00%, 8/15/09............................................. 59,500 63,529
--------
TOTAL U.S. TREASURY NOTES.................................. 134,433
--------
Investment Companies (0.6%)
AmSouth Prime Money Market Fund............................ 4,106,454 4,106
AmSouth U.S. Treasury Money Market Fund.................... 7 --*
TOTAL INVESTMENT COMPANIES................................. 4,106
--------
TOTAL INVESTMENTS
(Cost $597,343) (a) -- 98.2%.............................. 622,510
Other assets in excess of liabilities -- 1.8%.............. 11,417
--------
NET ASSETS -- 100.0%....................................... $633,927
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation................................................ $26,196
Unrealized depreciation................................................ (1,029)
-------
Net unrealized appreciation............................................ $25,167
=======
</TABLE>
*Due to rounding, figure was below thousand-dollar threshold.
MTN -- Medium Term Note
See notes to financial statements
151
<PAGE>
AMSOUTH FUNDS
Bond Fund
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $597,343)....................... $622,510
Cash........................................................ 121
Interest and dividends receivable........................... 10,790
Receivable for capital shares issued........................ 757
Collateral for securities loaned, at fair value............. 276,746
Prepaid expenses and other assets........................... 24
--------
Total Assets............................................... 910,948
Liabilities:
Payable for capital shares redeemed......................... $ 3
Payable upon return of securities loaned.................... 276,746
Accrued expenses and other payables:
Investment advisory fees................................... 112
Administration fees........................................ 16
Shareholder servicing and distribution fees................ 61
Custodian fees............................................. 15
Other...................................................... 68
--------
Total Liabilities.......................................... 277,021
--------
Net Assets:
Capital..................................................... 607,228
Accumulated net investment income........................... 973
Accumulated net realized gains from investment
transactions............................................... 559
Unrealized appreciation from investments.................... 25,167
--------
Net Assets.................................................. $633,927
========
Class A Shares (a)
Net Assets................................................. $ 16,877
Shares outstanding......................................... 1,517
Redemption price per share................................. $ 11.13
========
Class A Shares -- Maximum Sales Charge...................... 4.00%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)..................................................... $ 11.59
========
Class B Shares
Net Assets................................................. $ 7,342
Shares outstanding......................................... 661
Offering price per share*.................................. $ 11.10
========
Trust Shares (b)
Net Assets................................................. $609,708
Shares outstanding......................................... 54,781
Offering and redemption price per share.................... $ 11.13
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................ $37,059
Dividend income................................................ 526
Securities lending income...................................... 416
-------
Total Investment Income....................................... 38,001
Expenses:
Investment advisory fees....................................... $3,917
Administration fees............................................ 1,205
Distribution fees -- Class B Shares............................ 38
Shareholder servicing fees -- Class A Shares (a)............... 29
Shareholder Servicing fees -- Class B Shares................... 13
Shareholder servicing fees -- Trust Shares (b)................. 879
Custodian fees................................................. 166
Accounting fees................................................ 116
Transfer agent fees............................................ 147
Other fees..................................................... 164
------
Total expenses before fee reductions.......................... 6,674
Expenses reduced by Investment Advisor........................ (904)
Expenses reduced by Administrator............................. (301)
Expenses reduced by Distributor............................... (293)
Expenses reduced by Fund Accountant........................... (72)
-------
Net expenses.................................................. 5,104
-------
Net Investment Income.......................................... 32,897
-------
Realized/Unrealized Gains from Investments:
Net realized gains from investment transactions................ 2,129
Change in unrealized appreciation/depreciation from
investments................................................... 31,821
-------
Net realized/unrealized gains from investments................. 33,950
-------
Change in net assets resulting from operations................. $66,847
=======
</TABLE>
See notes to financial statements
152
<PAGE>
AMSOUTH FUNDS
Bond Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 32,897 $ 24,461
Net realized gains from investment transactions......... 2,129 151
Change in unrealized appreciation/depreciation from
investments............................................ 31,821 (118)
-------- --------
Change in net assets resulting from operations........... 66,847 24,494
-------- --------
Distributions to Class A Shareholders (a):
From net investment income.............................. (618) (467)
From net realized gains on investment transactions...... -- (15)
Distributions to Class B Shareholders:
From net investment income.............................. (239) (141)
From net realized gains on investment transactions...... -- (5)
Distributions to Trust Shareholders (b):
From net investment income.............................. (32,336) (24,939)
From net realized gains on investment transactions...... -- (795)
-------- --------
Change in net assets from shareholder distributions...... (33,193) (26,362)
-------- --------
Change in net assets from capital transactions........... 85,587 126,737
-------- --------
Change in net assets..................................... 119,241 124,869
Net Assets:
Beginning of period..................................... 514,686 389,817
-------- --------
End of period........................................... $633,927 $514,686
======== ========
</TABLE>
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
See notes to financial statements
153
<PAGE>
AMSOUTH FUNDS
Bond Fund
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a) 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 10.52 $10.63 $11.05 $10.92 $ 10.54
------- ------ ------ ------ --------
Investment Activities
Net investment income.. 0.58 0.58 0.61 1.41 0.65
Net realized and
unrealized gains
(losses) from
investments........... 0.62 (0.06) (0.32) (0.62) 0.42
------- ------ ------ ------ --------
Total from Investment
Activities............ 1.20 0.52 0.29 0.79 1.07
------- ------ ------ ------ --------
Distributions
Net investment income.. (0.59) (0.61) (0.58) (0.63) (0.69)
Net realized gains from
investment
transactions.......... -- (0.02) (0.13) (0.03) --
------- ------ ------ ------ --------
Total Distributions.... (0.59) (0.63) (0.71) (0.66) (0.69)
------- ------ ------ ------ --------
Change in Net Asset
Value.................. 0.61 (0.11) (0.42) 0.13 0.38
------- ------ ------ ------ --------
Net Asset Value, End of
Period................. $ 11.13 $10.52 $10.63 $11.05 $ 10.92
======= ====== ====== ====== ========
Total Return (excludes
sales charge).......... 11.63% 5.10% 2.58% 7.45% 10.48%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $16,877 $9,500 $7,070 $7,032 $311,881
Ratio of expenses to
average net assets..... 0.99% 0.91% 0.81% 0.73% 0.75%
Ratio of net investment
income to average net
assets................. 5.30% 5.54% 5.46% 5.78% 6.10%
Ratio of expenses to
average net assets*.... 1.20% 1.21% 1.20% 0.95% 0.98%
Portfolio turnover**.... 24% 27% 18% 40% 35%
</TABLE>
/\ Formerly Classic Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
See notes to financial statements
154
<PAGE>
AMSOUTH FUNDS
Bond Fund
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $10.50 $10.60 $11.04 $10.88
------ ------ ------ ------
Investment Activities
Net investment income.......... 0.50 0.49 0.50 0.46
Net realized and unrealized
gains (losses) from
investments................... 0.61 (0.05) (0.31) 0.24
------ ------ ------ ------
Total from Investment
Activities.................... 1.11 0.44 0.19 0.70
------ ------ ------ ------
Distributions
Net investment income.......... (0.51) (0.52) (0.50) (0.51)
Net realized gains from
investment transactions....... -- (0.02) (0.13) (0.03)
------ ------ ------ ------
Total Distributions............ (0.51) (0.54) (0.63) (0.54)
------ ------ ------ ------
Change in Net Asset Value....... 0.60 (0.10) (0.44) 0.16
------ ------ ------ ------
Net Asset Value, End of Period.. $11.10 $10.50 $10.60 $11.04
====== ====== ====== ======
Total Return (excludes
redemption charge)............. 10.77% 4.30% 1.58% 6.58%(b)
Ratios/Supplemental Data:
Net Assets at end of period
(000).......................... $7,342 $3,636 $2,521 $ 442
Ratio of expenses to average net
assets......................... 1.73% 1.74% 1.71% 1.74%(c)
Ratio of net investment income
to average net assets.......... 4.55% 4.72% 4.63% 4.75%(c)
Ratio of expenses to average net
assets*........................ 1.95% 1.96% 1.95% 1.99%(c)
Portfolio turnover**............ 24% 27% 18% 40%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period from September 16, 1997 (commencement of operations) through
July 31, 1998.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
155
<PAGE>
AMSOUTH FUNDS
Bond Fund
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................ $ 10.52 $ 10.63 $ 11.05 $ 10.72
-------- -------- -------- --------
Investment Activities
Net investment income......... 0.60 0.59 0.61 0.57
Net realized and unrealized
gains (losses) from
investments.................. 0.61 (0.06) (0.30) 0.38
-------- -------- -------- --------
Total from Investment
Activities................... 1.21 0.53 0.31 0.95
-------- -------- -------- --------
Distributions
Net investment income......... (0.60) (0.62) (0.60) (0.59)
Net realized gains from
investment transactions...... -- (0.02) (0.13) (0.03)
-------- -------- -------- --------
Total Distributions........... (0.60) (0.64) (0.73) (0.62)
-------- -------- -------- --------
Change in Net Asset Value...... 0.61 (0.11) (0.42) 0.33
-------- -------- -------- --------
Net Asset Value, End of
Period........................ $ 11.13 $ 10.52 $ 10.63 $ 11.05
======== ======== ======== ========
Total Return................... 11.79% 5.24% 2.68% 7.54%(b)
Ratios/Supplemental Data:
Net Assets at end of period
(000)......................... $609,708 $501,550 $380,226 $327,930
Ratio of expenses to average
net assets.................... 0.84% 0.78% 0.71% 0.73%(c)
Ratio of net investment income
to average net assets......... 5.47% 5.66% 5.57% 5.72%(c)
Ratio of expenses to average
net assets*................... 1.10% 1.03% 0.95% 0.97%(c)
Portfolio turnover**........... 24% 27% 18% 40%
</TABLE>
/\ Formerly Premier Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(b) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of
Premier Shares for the period from September 2, 1997 to July 31, 1998.
Total return for the Premier Shares for the period from September 2, 1997
(commencement of operations) through July 31, 1998 was 9.03%.
(c) Annualized.
See notes to financial statements
156
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Limited Term Bond Fund July 31, 2001
(Amounts in thousands, except shares)
Corporate Bonds (79.4%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- ----------
<S> <C> <C>
Automotive -- Finance (8.3%)
Ford Motor Credit Co., 6.70%, 7/16/04.................... $ 7,000 $ 7,254
General Motors Acceptance Corp., 7.13%, 5/1/03........... 3,500 3,644
Toyota Motor Credit Corp., 5.65%, 1/15/07................ 3,000 3,026
----------
13,924
----------
Banking (3.3%)
ABN AMRO Bank, 6.63%, 10/31/01........................... 2,500 2,515
Bankers Trust, 6.75%, 10/3/01............................ 1,500 1,508
Firstar Bank, 6.25%, 12/1/02............................. 1,500 1,538
----------
5,561
----------
Beverages (1.2%)
Coca-Cola Co., 6.00%, 7/15/03............................ 2,000 2,060
----------
Building Products (1.2%)
Vulcan Materials Co., 5.75%, 4/1/04...................... 2,000 2,025
----------
Chemicals (0.9%)
Dow Chemical Corp., 5.25%, 5/14/04 (b)................... 1,500 1,517
----------
Consumer Goods (3.1%)
Procter & Gamble Co., 5.25%, 9/15/03..................... 2,000 2,035
Unilever Capital Corp., 6.88%, 11/1/05................... 3,000 3,188
----------
5,223
----------
Cosmetics/Personal Care (1.2%)
Colgate-Palmolive Co., 5.34%, 3/27/06.................... 2,000 2,003
----------
Electronic Components/Instruments (1.8%)
Emerson Electric Co., 7.88%, 6/1/05...................... 2,000 2,185
Honeywell, Inc., 6.75%, 3/15/02.......................... 850 863
----------
3,048
----------
Farm Equipment (1.2%)
John Deere Capital Corp., 5.90%, 4/8/03.................. 2,000 2,038
----------
Financial Services (13.8%)
Ameritech Capital Funding, 6.13%, 10/15/01............... 3,000 3,015
Bear Stearns & Co., Inc., 6.13%, 2/1/03.................. 3,500 3,574
CIT Group Holdings, 6.38%, 10/1/02....................... 2,000 2,050
Commercial Credit Co., 8.26%, 11/1/01.................... 1,000 1,010
General Electric Capital Corp., 6.15%, 11/5/01........... 2,500 2,516
Household Netherlands, 6.20%, 12/1/03.................... 2,500 2,563
Merrill Lynch & Co., 6.00%, 11/15/04..................... 4,000 4,104
Northern Trust Co., 6.70%, 9/15/05....................... 1,000 1,046
Norwest Financial Inc., 6.70%, 9/22/04................... 3,000 3,150
----------
23,028
----------
Food Products & Services (2.6%)
Campbell Soup Co., 6.15%, 12/1/02........................ 1,000 1,020
Hershey Foods Corp., 6.70%, 10/1/05...................... 1,710 1,798
McDonald's Corp., 6.00%, 6/23/02......................... 1,500 1,524
----------
4,342
----------
</TABLE>
Corporate Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- ----------
<S> <C> <C>
Forest & Paper Products (0.6%)
Mead Corp., 6.60%, 3/1/02............................... $ 1,000 $ 1,011
----------
Health Care (1.2%)
McKesson Corp., 6.88%, 3/1/02........................... 2,000 2,010
----------
Industrial Goods & Services (5.7%)
Air Products & Chemicals, Inc., 8.35%, 1/15/02.......... 2,000 2,033
Archer Daniels Midland, 6.25%, 5/15/03.................. 2,100 2,184
Caterpillar Financial Services, 6.02%, 4/15/02.......... 1,000 1,016
E. I. Dupont de Nemours & Co., 6.50%, 9/1/02............ 3,000 3,075
Imperial Oil, Ltd., 8.75%, 10/15/19, Callable 10/15/01 @
103.................................................... 1,178 1,222
----------
9,530
----------
Insurance (1.7%)
American General Finance, 5.75%, 11/1/03................ 2,000 2,047
Marsh & McLennan Cos., Inc., 6.63%, 6/15/04............. 750 782
----------
2,829
----------
Newspapers (1.3%)
New York Times, 7.63%, 3/15/05.......................... 2,000 2,155
----------
Oil & Gas Exploration, Production, & Services (3.3%)
Amoco Co., 6.25%, 10/15/04.............................. 3,200 3,344
Chevron Corp., 6.63%, 10/1/04........................... 2,000 2,113
----------
5,457
----------
Pharmaceuticals (3.5%)
Abbott Laboratories, 5.63%, 7/1/06...................... 2,000 2,030
Eli Lilly & Co., 5.50%, 7/15/06......................... 2,000 2,020
Warner-Lambert Co., 5.75%, 1/15/03...................... 1,850 1,882
----------
5,932
----------
Retail (8.2%)
Dayton Hudson Co., 6.40%, 2/15/03....................... 2,500 2,581
May Department Stores Co., 7.15%, 8/15/04............... 1,750 1,851
Sears Credit Account Master Trust, 6.75%, 9/16/09....... 5,000 5,284
Sears, Roebuck and Co., 6.00%, 3/20/03.................. 1,000 1,018
Target Corp., 7.50%, 2/15/05............................ 1,000 1,074
Wal-Mart Stores, Inc., 5.45%, 8/1/06.................... 2,000 2,015
----------
13,823
----------
Technology (0.6%)
IBM Corp., 5.95%, 6/2/03................................ 1,000 1,028
----------
Tools (0.6%)
Stanley Works, 7.38%, 12/15/02.......................... 500 519
Stanley Works, 5.75%, 3/1/04............................ 500 510
----------
1,029
----------
</TABLE>
Continued
157
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Limited Term Bond Fund July 31, 2001
(Amounts in thousands, except shares)
Corporate Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- ----------
<S> <C> <C>
Utilities -- Electric & Gas (11.6%)
Alabama Power Corp., 5.35%, 11/15/03................... $ 3,750 $ 3,801
Baltimore Gas & Electric Co., 6.50%, 2/15/03........... 2,500 2,574
Cincinnati Gas & Electric Co., 6.45%, 2/15/04.......... 1,300 1,333
Florida Power Corp., 6.54%, 7/1/02, MTN................ 2,000 2,033
MidAmerican Energy, 6.50%, 12/15/01.................... 2,500 2,521
National Rural Utilities Corp., Series C, 6.49%,
7/10/02, MTN.......................................... 2,000 2,050
SCANA Corp., Series B, 6.25%, 7/8/03, MTN.............. 2,000 2,050
Smith Enron, 5.97%, 12/15/06........................... 1,025 1,043
Tampa Electric Co., 7.38%, 9/1/02...................... 2,000 2,060
----------
19,465
----------
Utilities -- Telecommunications (2.5%)
AT&T Corp., 5.63%, 3/15/04............................. 1,500 1,513
BellSouth Telecommunications, 6.00%, 6/15/02........... 2,585 2,624
----------
4,137
----------
TOTAL CORPORATE BONDS.................................. 133,175
----------
U.S. Government Agencies (10.6%)
Fannie Mae (3.2%)
7.00%, 7/15/05......................................... 5,000 5,369
----------
Freddie Mac (3.2%)
6.88%, 1/15/05......................................... 5,000 5,330
----------
Government National Mortgage Assoc. (3.0%)
7.50%, 4/15/09 - 6/15/09............................... 1,749 1,828
8.00%, 12/15/07 - 4/15/10.............................. 2,507 2,619
8.50%, 9/15/09 - 12/15/09.............................. 637 664
----------
5,111
----------
Tennessee Valley Authority (1.2%)
6.00%, 9/24/02......................................... 2,000 2,048
----------
TOTAL U.S. GOVERNMENT AGENCIES......................... 17,858
----------
U.S. Treasury Notes (7.9%)
6.88%, 5/15/06......................................... 12,000 13,177
----------
TOTAL U.S. TREASURY NOTES.............................. 13,177
----------
</TABLE>
Investment Companies (0.3%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
--------- --------
<S> <C> <C>
AmSouth Prime Money Market Fund............................. 558,761 $ 559
AmSouth U.S. Treasury Money Market Fund..................... 373 --*
--------
TOTAL INVESTMENT COMPANIES.................................. 559
--------
TOTAL INVESTMENTS
(Cost $160,521) (a) -- 98.2%............................... 164,769
Other assets in excess of liabilities -- 1.8%............... 3,024
--------
NET ASSETS -- 100.0%........................................ $167,793
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes
and differs from value by net unrealized appreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................... $4,414
Unrealized depreciation............................................... (166)
------
Net unrealized appreciation........................................... $4,248
======
</TABLE>
* Due to rounding, figure is below thousand dollar threshold.
(b) Represents a restricted security, purchased under Rule 144A, which is
exempt from registration under the Security Act of 1933, as amended. These
securities have been deemed liquid under guidelines established by the
Board of Trustees.
MTN -- Medium Term Note
See notes to financial statements
158
<PAGE>
AMSOUTH FUNDS
Limited Term Bond Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $160,521)........................ $164,769
Cash......................................................... 77
Interest and dividends receivable............................ 2,332
Receivable for capital shares issued......................... 684
Collateral for securities loaned, at fair value.............. 14,770
Prepaid expenses and other assets............................ 7
--------
Total Assets................................................ 182,639
Liabilities:
Payable upon return of securities loaned..................... $14,770
Accrued expenses and other payables:
Investment advisory fees.................................... 30
Administration fees......................................... 4
Shareholder servicing and distribution fees................. 17
Custodian fees.............................................. 4
Other....................................................... 21
-------
Total Liabilities........................................... 14,846
--------
Net Assets:
Capital...................................................... 165,494
Accumulated net investment income............................ 175
Accumulated net realized losses from investment
transactions................................................ (2,124)
Unrealized appreciation from investments..................... 4,248
--------
Net Assets................................................... $167,793
========
Class A Shares (b)
Net Assets.................................................. $ 9,918
Shares outstanding.......................................... 941
Redemption price per share.................................. $ 10.55
========
Class A Shares -- Maximum Sales Charge....................... 4.00%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)...................................................... $ 10.99
========
Class B Shares
Net Assets.................................................. $ 2,614
Shares outstanding.......................................... 248
Offering price per share*................................... $ 10.54
========
Trust Shares (c)
Net Assets.................................................. $155,261
Shares outstanding.......................................... 14,718
Offering and redemption price per share..................... $ 10.55
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly AmSouth Limited Maturity Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................ $11,250
Dividend income................................................ 117
Securities lending income...................................... 48
-------
Total Investment Income....................................... 11,415
Expenses:
Investment advisory fees....................................... $1,152
Administration fees............................................ 354
Distribution fees -- Class B Shares............................ 15
Shareholder servicing fees -- Class A Shares (b)............... 19
Shareholder servicing fees -- Class B Shares................... 5
Shareholder servicing fees -- Trust Shares (c)................. 252
Custodian fees................................................. 49
Accounting fees................................................ 39
Transfer agent fees............................................ 66
Other fees..................................................... 57
------
Total expenses before fee reductions.......................... 2,008
Expenses reduced by Investment Advisor........................ (266)
Expenses reduced by Administrator............................. (89)
Expenses reduced by Transfer Agent............................ (3)
Expenses reduced by Distributor............................... (84)
Expenses reduced by Fund Accountant........................... (20)
-------
Net expenses.................................................. 1,546
-------
Net Investment Income.......................................... 9,869
-------
Realized/Unrealized Gains from Investments:
Net realized gains from investment transactions................ 355
Change in unrealized appreciation/depreciation from
investments................................................... 7,097
-------
Net realized/unrealized gains from investments................. 7,452
-------
Change in net assets resulting from operations................. $17,321
=======
</TABLE>
See notes to financial statements
159
<PAGE>
AMSOUTH FUNDS
Limited Term Bond Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 9,869 $ 8,032
Net realized gains (losses) from investment
transactions........................................... 355 (687)
Change in unrealized appreciation/depreciation from
investments............................................ 7,097 (51)
-------- --------
Change in net assets resulting from operations........... 17,321 7,294
-------- --------
Distributions to Class A Shareholders (b):
From net investment income.............................. (420) (264)
Distributions to Class B Shareholders:
From net investment income.............................. (98) (102)
Distributions to Trust Shareholders (c):
From net investment income.............................. (9,609) (7,951)
-------- --------
Change in net assets from shareholder distributions...... (10,127) (8,317)
-------- --------
Change in net assets from capital transactions........... (26,452) 74,205
-------- --------
Change in net assets..................................... (19,258) 73,182
Net Assets:
Beginning of period..................................... 187,051 113,869
-------- --------
End of period........................................... $167,793 $187,051
======== ========
</TABLE>
(a) Formerly AmSouth Limited Maturity Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
See notes to financial statements
160
<PAGE>
AMSOUTH FUNDS
Limited Term Bond Fund (a)
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (b) 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $10.13 $10.29 $10.43 $10.42 $ 10.31
------ ------ ------ ------ --------
Investment Activities
Net investment income.. 0.57 0.59 0.57 0.85 0.58
Net realized and
unrealized gains
(losses) from
investments........... 0.43 (0.13) (0.15) (0.25) 0.14
------ ------ ------ ------ --------
Total from Investment
Activities............ 1.00 0.46 0.42 0.60 0.72
------ ------ ------ ------ --------
Distributions
Net investment income.. (0.58) (0.62) (0.56) (0.59) (0.61)
------ ------ ------ ------ --------
Total Distributions.... (0.58) (0.62) (0.56) (0.59) (0.61)
------ ------ ------ ------ --------
Change in Net Asset
Value.................. 0.42 (0.16) (0.14) 0.01 0.11
------ ------ ------ ------ --------
Net Asset Value, End of
Period................. $10.55 $10.13 $10.29 $10.43 $ 10.42
====== ====== ====== ====== ========
Total Return (excludes
sales charge).......... 10.12% 4.59% 4.01% 5.94% 7.25%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $9,918 $7,913 $2,716 $3,531 $138,675
Ratio of expenses to
average net assets..... 1.00% 0.96% 0.81% 0.74% 0.77%
Ratio of net investment
income to average net
assets................. 5.43% 5.60% 5.49% 5.65% 5.65%
Ratio of expenses to
average net assets*.... 1.22% 1.24% 1.23% 0.96% 1.02%
Portfolio turnover**.... 44% 34% 39% 39% 65%
</TABLE>
/\ Formerly Classic Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Limited Maturity Fund.
(b) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
See notes to financial statements
161
<PAGE>
AMSOUTH FUNDS
Limited Term Bond Fund (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2001 + 2000 1999 (b)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $10.13 $10.27 $10.58
------ ------ ------
Investment Activities
Net investment income.................... 0.49 0.48 0.27
Net realized and unrealized gains
(losses) from investments............... 0.42 (0.10) (0.30)
------ ------ ------
Total from Investment Activities......... 0.91 0.38 (0.03)
------ ------ ------
Distributions
Net investment income.................... (0.50) (0.52) (0.28)
------ ------ ------
Total Distributions...................... (0.50) (0.52) (0.28)
------ ------ ------
Change in Net Asset Value................. 0.41 (0.14) (0.31)
------ ------ ------
Net Asset Value, End of Period............ $10.54 $10.13 $10.27
====== ====== ======
Total Return (excludes redemption
charge).................................. 9.20% 3.85% (0.33)%(c)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $2,614 $1,815 $1,599
Ratio of expenses to average net assets... 1.75% 1.76% 1.69%(d)
Ratio of net investment income to average
net assets............................... 4.66% 4.79% 4.61%(d)
Ratio of expenses to average net assets*.. 1.97% 1.99% 1.96%(d)
Portfolio turnover**...................... 44% 34% 39%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly AmSouth Limited Maturity Fund.
(b) For the period from January 21, 1999 (commencement of operations) through
July 31, 1999.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
162
<PAGE>
AMSOUTH FUNDS
Limited Term Bond Fund (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (b)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 10.13 $ 10.29 $ 10.43 $ 10.34
-------- -------- -------- --------
Investment Activities
Net investment income.......... 0.58 0.59 0.59 0.55
Net realized and unrealized
gains (losses) from
investments................... 0.43 (0.12) (0.16) 0.10
-------- -------- -------- --------
Total from Investment
Activities.................... 1.01 0.47 0.43 0.65
-------- -------- -------- --------
Distributions
Net investment income.......... (0.59) (0.63) (0.57) (0.56)
-------- -------- -------- --------
Total Distributions............ (0.59) (0.63) (0.57) (0.56)
-------- -------- -------- --------
Change in Net Asset Value....... 0.42 (0.16) (0.14) 0.09
-------- -------- -------- --------
Net Asset Value, End of Period.. $ 10.55 $ 10.13 $ 10.29 $ 10.43
======== ======== ======== ========
Total Return.................... 10.26% 4.71% 4.14% 6.04%(c)
Ratios/Supplemental Data:
Net Assets at end of period
(000).......................... $155,261 $177,323 $109,554 $106,953
Ratio of expenses to average net
assets......................... 0.86% 0.82% 0.71% 0.73%(d)
Ratio of net investment income
to average net assets.......... 5.59% 5.74% 5.60% 5.70%(d)
Ratio of expenses to average net
assets*........................ 1.12% 1.07% 0.98% 0.98%(d)
Portfolio turnover**............ 44% 34% 39% 39%
</TABLE>
/\ Formerly Premier Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly AmSouth Limited Maturity Fund.
(b) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(c) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of
Premier Shares for the period from September 2, 1997 to July 31, 1998.
Total return for the Premier Shares for the period from September 2, 1997
(commencement of operations) through July 31, 1998 was 6.37%.
(d) Annualized.
See notes to financial statements
163
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Government Income Fund July 31, 2001
(Amounts in thousands, except shares)
U.S. Government Agencies (77.1%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
----------- --------
<S> <C> <C>
Fannie Mae (10.4%)
5.75%, 4/15/03............................................ $ 2,000 $ 2,057
5.65%, 3/21/06, Callable 3/21/03 @ 100.................... 5,000 5,069
6.94%, 9/5/07, Callable 9/5/02 @ 100...................... 2,000 2,066
6.27%, 2/5/08, Callable 2/5/03 @ 100, MTN................. 5,000 5,106
6.00%, 5/15/08............................................ 7,000 7,231
7.50%, 4/1/15 - 6/1/15.................................... 6,668 6,912
8.00%, 7/1/15............................................. 3,542 3,681
--------
32,122
--------
Federal Farm Credit Bank (10.5%)
6.20%, 7/1/02............................................. 10,000 10,233
5.07%, 12/15/03........................................... 15,000 15,244
5.70%, 9/3/08............................................. 7,000 7,101
--------
32,578
--------
Federal Government Loan Mortgage Corporation (1.0%)
6.50%, 5/1/31............................................. 2,986 2,990
--------
Federal Home Loan Bank (11.8%)
5.35%, 12/1/03............................................ 3,000 3,067
5.30%, 2/18/04............................................ 5,000 5,105
6.34%, 6/29/04............................................ 2,250 2,359
7.25%, 5/13/05............................................ 10,000 10,815
5.80%, 9/2/08............................................. 10,000 10,193
5.89%, 3/30/09............................................ 5,000 5,090
--------
36,629
--------
Freddie Mac (9.7%)
5.00%, 1/15/04............................................ 10,000 10,138
5.75%, 3/15/09............................................ 10,000 10,100
6.00%, 6/1/16 - 8/1/18.................................... 6,123 6,134
7.00%, 6/1/31............................................. 3,498 3,569
--------
29,941
--------
Government National Mortgage Assoc. (27.1%)
5.50%, 2/15/14............................................ 2,031 2,007
6.00%, 5/15/16 - 6/15/31.................................. 7,675 7,679
6.50%, 7/15/14 - 5/15/31.................................. 10,408 10,561
7.00%, 12/15/26 - 2/20/29................................. 15,010 15,370
7.50%, 9/20/15 - 8/20/30.................................. 31,524 32,635
8.00%, 7/15/26 - 6/20/30.................................. 13,991 14,595
8.50%, 12/15/19 - 2/15/23................................. 116 120
9.00%, 6/15/18 - 9/15/22.................................. 495 521
9.50%, 5/15/18 - 8/15/21.................................. 375 395
--------
83,883
--------
Private Export Funding (4.4%)
6.31%, 9/30/04, Series C.................................. 2,000 2,098
5.53%, 4/30/06............................................ 2,500 2,544
6.49%, 7/15/07, Series B.................................. 2,000 2,120
5.75%, 1/15/08............................................ 3,800 3,880
5.87%, 7/31/08, Series D.................................. 3,000 3,071
--------
13,713
--------
</TABLE>
U.S. Government Agencies, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
----------- --------
<S> <C> <C>
Tennessee Valley Authority (2.2%)
5.38%, 11/13/08........................................... $ 1,500 $ 1,495
6.75%, 11/1/25............................................ 5,000 5,269
--------
6,764
--------
TOTAL U.S. GOVERNMENT AGENCIES............................ 238,620
========
</TABLE>
U.S. Treasury Bonds (8.6%)
<TABLE>
<S> <C> <C>
7.50%, 11/15/16............................................. 7,900 9,510
7.25%, 8/15/22.............................................. 7,000 8,400
7.63%, 11/15/22............................................. 7,000 8,730
--------
TOTAL U.S. TREASURY BONDS................................... 26,640
--------
U.S. Treasury Notes (12.0%)
7.88%, 8/15/01.............................................. 7,000 7,013
7.50%, 5/15/02.............................................. 10,000 10,316
5.75%, 8/15/03.............................................. 10,000 10,374
5.75%, 8/15/10.............................................. 9,000 9,470
--------
TOTAL U.S. TREASURY NOTES................................... 37,173
--------
Investment Companies (0.9%)
AIM Treasury Money Market Fund.............................. 1,000 1
AmSouth Treasury Reserve Money Market Fund.................. 2,748,330 2,748
--------
TOTAL INVESTMENT COMPANIES.................................. 2,749
--------
TOTAL INVESTMENTS
(Cost $292,517) (a) -- 98.6%............................... 305,182
Other assets in excess of liabilities -- 1.4%............... 4,224
--------
NET ASSETS -- 100.0%........................................ $309,406
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation............................................. $12,868
Unrealized depreciation............................................. (203)
-------
Net unrealized appreciation......................................... $12,665
=======
</TABLE>
MTN -- Medium Term Note
See notes to financial statements
164
<PAGE>
AMSOUTH FUNDS
Government Income Fund
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $292,517)....................... $305,182
Interest and dividends receivable........................... 3,887
Receivable for capital shares issued........................ 451
Collateral for securities loaned, at fair value............. 135,404
Prepaid expenses and other assets........................... 17
--------
Total Assets............................................... 444,941
Liabilities:
Payable upon return of securities loaned.................... $135,404
Accrued expenses and other payables:
Investment advisory fees................................... 55
Administration fees........................................ 8
Shareholder servicing and distribution fees................ 28
Custodian fees............................................. 7
Other...................................................... 33
--------
Total Liabilities.......................................... 135,535
--------
Net Assets:
Capital..................................................... 299,849
Accumulated net investment income........................... 213
Accumulated net realized losses from investment
transactions............................................... (3,321)
Unrealized appreciation from investments.................... 12,665
--------
Net Assets.................................................. $309,406
========
Class A Shares (a)
Net Assets................................................. $ 5,672
Shares outstanding......................................... 562
Redemption price per share................................. $ 10.10
========
Class A Shares -- Maximum Sales Charge...................... 4.00%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum
Sales Charge) of net asset value adjusted to the nearest
cent)..................................................... $ 10.52
========
Class B Shares
Net Assets................................................. $ 1,635
Shares outstanding......................................... 162
Offering price per share*.................................. $ 10.10
========
Trust Shares (b)
Net Assets................................................. $302,099
Shares outstanding......................................... 29,913
Offering and redemption price per share.................... $ 10.10
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................ $20,487
Dividend income................................................ 654
Securities lending income...................................... 158
-------
Total Investment Income....................................... 21,299
Expenses:
Investment advisory fees....................................... $2,143
Administration fees............................................ 659
Distribution fees -- Class B Shares............................ 6
Shareholder servicing fees -- Class A
Shares (a).................................................... 14
Shareholder servicing fees -- Class B Shares................... 2
Shareholder servicing fees -- Trust Shares (b)................. 485
Custodian fees................................................. 91
Accounting fees................................................ 65
Transfer agent fees............................................ 91
Other fees..................................................... 92
------
Total expenses before fee reductions.......................... 3,648
Expenses reduced by Investment Advisor........................ (495)
Expenses reduced by Administrator............................. (165)
Expenses reduced by Distributor............................... (162)
Expenses reduced by Fund Accountant........................... (37)
-------
Net expenses.................................................. 2,789
-------
Net Investment Income.......................................... 18,510
-------
Realized/Unrealized Gains from Investments:
Net realized gains from investment transactions................ 2,946
Change in unrealized appreciation/depreciation from
investments................................................... 14,200
-------
Net realized/unrealized gains from investments................. 17,146
-------
Change in net assets resulting from operations................. $35,656
=======
</TABLE>
See notes to financial statements
165
<PAGE>
AMSOUTH FUNDS
Government Income Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................ $ 18,510 $ 8,422
Net realized gains (losses) from investment
transactions........................................ 2,946 (3,175)
Change in unrealized appreciation/depreciation from
investments......................................... 14,200 7,276
-------- --------
Change in net assets resulting from operations........ 35,656 12,523
-------- --------
Distributions to Class A Shareholders (a):
From net investment income........................... (320) (276)
Distributions to Class B Shareholders:
From net investment income........................... (41) (8)(c)
Distributions to Trust Shareholders (b):
From net investment income........................... (18,578) (7,506)
-------- --------
Change in net assets from shareholder distributions... (18,939) (7,790)
-------- --------
Change in net assets from capital transactions........ (70,352) 349,722
-------- --------
Change in net assets.................................. (53,635) 354,455
Net Assets:
Beginning of period.................................. 363,041 8,586
-------- --------
End of period........................................ $309,406 $363,041
======== ========
</TABLE>
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
(c) For the period from March 13, 2000 (commencement of operations) through
July 31, 2000.
See notes to financial statements
166
<PAGE>
AMSOUTH FUNDS
Government Income Fund
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a) 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 9.60 $ 9.62 $ 9.88 $ 9.75 $ 9.40
------ ------ ------ ------ -------
Investment Activities
Net investment income.. 0.55 0.56 0.54 0.63 0.58
Net realized and
unrealized gains
(losses) from
investments........... 0.50 (0.04) (0.28) 0.09 0.35
------ ------ ------ ------ -------
Total from Investment
Activities............ 1.05 0.52 0.26 0.72 0.93
------ ------ ------ ------ -------
Distributions
Net investment income.. (0.55) (0.54) (0.52) (0.59) (0.58)
------ ------ ------ ------ -------
Total Distributions.... (0.55) (0.54) (0.52) (0.59) (0.58)
------ ------ ------ ------ -------
Change in Net Asset
Value.................. 0.50 (0.02) (0.26) 0.13 0.35
------ ------ ------ ------ -------
Net Asset Value, End of
Period................. $10.10 $ 9.60 $ 9.62 $ 9.88 $ 9.75
====== ====== ====== ====== =======
Total Return (excludes
sales charge).......... 11.25% 5.55% 2.62% 7.58% 10.21%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $5,672 $5,879 $5,436 $8,176 $11,622
Ratio of expenses to
average net assets..... 0.99% 0.85% 0.70% 0.71% 0.69%
Ratio of net investment
income to average net
assets................. 5.47% 5.77% 5.35% 5.95% 5.98%
Ratio of expenses to
average net assets*.... 1.20% 1.30% 1.90% 1.77% 1.29%
Portfolio turnover**.... 25% 42% 27% 35% 3%
</TABLE>
/\ Formerly Classic Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
See notes to financial statements
167
<PAGE>
AMSOUTH FUNDS
Government Income Fund
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 + 2000 (a)
---------- ----------
<S> <C> <C>
Net Asset Value, Beginning of Period................... $ 9.61 $9.48
------ -----
Investment Activities
Net investment income................................. 0.47 0.18
Net realized and unrealized gains from investments.... 0.51 0.10
------ -----
Total from Investment Activities...................... 0.98 0.28
------ -----
Distributions
Net investment income................................. (0.49) (0.15)
------ -----
Total Distributions................................... (0.49) (0.15)
------ -----
Change in Net Asset Value.............................. 0.49 0.13
------ -----
Net Asset Value, End of Period......................... $10.10 $9.61
====== =====
Total Return (excludes redemption charge).............. 10.36% 2.98%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)...................... $1,635 $ 520
Ratio of expenses to average net assets................ 1.74% 1.75%(c)
Ratio of net investment income to average net assets... 4.65% 4.77%(c)
Ratio of expenses to average net assets*............... 1.95% 1.98%(c)
Portfolio turnover**................................... 25% 42%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) For the period from March 13, 2000 (commencement of operations) through
July 31, 2000.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
168
<PAGE>
AMSOUTH FUNDS
Government Income Fund
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 9.61 $ 9.62 $ 9.87 $ 9.66
-------- -------- ------ ------
Investment Activities
Net investment income.......... 0.56 0.57 0.54 0.59
Net realized and unrealized
gains (losses) from
investments................... 0.50 (0.03) (0.26) 0.17
-------- -------- ------ ------
Total from Investment
Activities.................... 1.06 0.54 0.28 0.76
-------- -------- ------ ------
Distributions
Net investment income.......... (0.57) (0.55) (0.53) (0.55)
-------- -------- ------ ------
Total Distributions............ (0.57) (0.55) (0.53) (0.55)
-------- -------- ------ ------
Change in Net Asset Value....... 0.49 (0.01) (0.25) 0.21
-------- -------- ------ ------
Net Asset Value, End of Period.. $ 10.10 $ 9.61 $ 9.62 $ 9.87
======== ======== ====== ======
Total Return.................... 11.30% 5.91% 2.72% 7.58%(b)
Ratios/Supplemental Data:
Net Assets at end of period
(000).......................... $302,099 $356,642 $3,150 $2,521
Ratio of expenses to average net
assets......................... 0.84% 0.85% 0.60% 0.63%(c)
Ratio of net investment income
to average net assets.......... 5.62% 5.68% 5.44% 5.72%(c)
Ratio of expenses to average net
assets*........................ 1.10% 1.13% 1.65% 1.80%(c)
Portfolio turnover**............ 25% 42% 27% 35%
</TABLE>
/\ Formerly Premier Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(b) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of
Premier Shares for the period from September 2, 1997 to July 31, 1998.
Total return for the Premier Shares for the period from September 2, 1997
(commencement of operations) through July 31, 1998 was 8.04%.
(c) Annualized.
See notes to financial statements
169
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Limited Term U.S. Government Fund July 31, 2001
(Amounts in thousands, except shares)
U.S. Government Agencies (53.2%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Fannie Mae (9.3%)
5.38%, 3/15/02............................................. $ 1,000 $ 1,012
5.98%, 11/12/02............................................ 500 512
5.63%, 5/14/04............................................. 500 515
5.75%, 6/15/05............................................. 250 257
6.44%, 8/14/07............................................. 500 530
6.65%, 11/14/07............................................ 500 514
--------
3,340
--------
Federal Farm Credit Bank (6.4%)
5.76%, 7/7/03.............................................. 750 772
5.07%, 12/15/03............................................ 1,000 1,016
5.75%, 9/1/05, MTN......................................... 500 512
--------
2,300
--------
Federal Home Loan Bank (5.0%)
5.82%, 3/30/09............................................. 1,000 1,014
6.34%, 6/29/04............................................. 750 786
--------
1,800
--------
Freddie Mac (7.0%)
5.00%, 1/15/04............................................. 1,000 1,014
6.16%, 9/25/02............................................. 500 514
6.53%, 3/3/08.............................................. 1,000 1,001
--------
2,529
--------
Government National Mortgage Assoc. (8.4%)
5.50%, 3/15/16, Pool #523055............................... 983 972
7.00%, 8/15/11, Pool #423984............................... 418 432
7.00%, 9/15/11, Pool #423923............................... 397 411
7.50%, 5/15/10, Pool #407408............................... 369 385
7.50%, 8/15/11, Pool #423914............................... 430 449
7.50%, 10/15/11, Pool #431451.............................. 324 338
9.00%, 12/15/01, Pool #152718.............................. 1 1
9.00%, 2/15/03, Pool #248038............................... 37 39
--------
3,027
--------
Private Export Funding (7.2%)
6.45%, 9/30/04............................................. 1,000 1,052
5.53%, 4/30/06............................................. 1,000 1,018
5.75%, 1/15/08............................................. 500 511
--------
2,581
--------
Tennessee Valley Authority (9.9%)
6.50%, 8/20/01............................................. 1,000 1,001
5.28%, 9/14/01............................................. 1,000 1,001
6.00%, 9/24/02............................................. 1,000 1,023
5.38%, 11/13/08............................................ 600 598
--------
3,623
--------
TOTAL U.S. GOVERNMENT AGENCIES............................. 19,200
--------
</TABLE>
U.S. Treasury Notes (42.4%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
7.50%, 11/15/01............................................ $ 3,500 $ 3,540
6.63%, 4/30/02............................................. 1,500 1,535
7.50%, 5/15/02............................................. 1,000 1,032
6.25%, 6/30/02............................................. 750 769
5.63%, 12/31/02............................................ 1,000 1,028
6.50%, 8/15/05............................................. 2,000 2,152
5.63%, 2/15/06............................................. 2,000 2,094
6.50%, 10/15/06............................................ 2,000 2,171
4.75%, 11/15/08............................................ 1,000 991
--------
TOTAL U.S. TREASURY NOTES.................................. 15,312
--------
Investment Companies (2.9%)
AIM Treasury Money Market Fund............................. 4,334 4
AmSouth Treasury Reserve Money Market Fund................. 1,046,634 1,047
--------
TOTAL INVESTMENT COMPANIES................................. 1,051
--------
TOTAL INVESTMENTS
(Cost $34,931) (a) -- 98.5%............................... 35,563
Other assets in excess of liabilities -- 1.5%.............. 528
--------
NET ASSETS -- 100.0%....................................... $ 36,091
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes
and differs from value by net unrealized appreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation................................................. $646
Unrealized depreciation................................................. (14)
----
Net unrealized appreciation............................................. $632
====
</TABLE>
MTN -- Medium Term Note
See notes to financial statements
170
<PAGE>
AMSOUTH FUNDS
Limited Term U.S. Government Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $34,931)........................... $35,563
Interest and dividends receivable.............................. 542
Collateral for securities loaned, at fair value................ 3,638
Prepaid expenses and other assets.............................. 8
-------
Total Assets.................................................. 39,751
Liabilities:
Payable upon return of securities loaned....................... $3,638
Accrued expenses and other payables:
Investment advisory fees...................................... 6
Administration fees........................................... 1
Shareholder servicing and distribution fees................... 4
Custodian fees................................................ 1
Other......................................................... 10
------
Total Liabilities............................................. 3,660
-------
Net Assets:
Capital........................................................ 36,633
Accumulated net investment income.............................. 40
Accumulated net realized losses from investment transactions... (1,214)
Unrealized appreciation from investments....................... 632
-------
Net Assets..................................................... $36,091
=======
Class A Shares
Net Assets.................................................... $ 3,003
Shares outstanding............................................ 292
Redemption price per share.................................... $ 10.26
=======
Class A Shares -- Maximum Sales Charge......................... 4.00%
-------
Maximum Offering Price Per Share
(100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to
the nearest cent)............................................ $ 10.69
=======
Class B Shares
Net Assets.................................................... $ 737
Shares outstanding............................................ 72
Offering price per share* .................................... $ 10.27
=======
Trust Shares (b)
Net Assets.................................................... $32,351
Shares outstanding............................................ 3,153
Offering and redemption price per share....................... $ 10.26
=======
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Limited Term U.S. Government Fund.
(b) Formerly Institutional Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income.................................................... $2,107
Dividend income.................................................... 55
Securities lending income.......................................... 1
------
Total Investment Income........................................... 2,163
Expenses:
Investment advisory fees........................................... $244
Administration fees................................................ 75
Distribution fees -- Class B Shares................................ 4
Shareholder servicing fees -- Class A Shares....................... 8
Shareholder servicing fees -- Class B Shares....................... 1
Shareholder servicing fees -- Trust Shares (b)..................... 50
Custodian fees..................................................... 10
Accounting fees.................................................... 12
Transfer agent fees................................................ 54
Registration and filing fees....................................... 30
Other fees......................................................... 17
----
Total expenses before fee reductions.............................. 505
Expenses reduced by Investment Advisor............................ (56)
Expenses reduced by Administrator................................. (19)
Expenses reduced by Transfer Agent................................ (24)
Expenses reduced by Distributor................................... (17)
Expenses reduced by Fund Accountant............................... (4)
------
Net expenses...................................................... 385
------
Net Investment Income.............................................. 1,778
------
Realized/Unrealized Gains from Investments:
Net realized gains from investment transactions.................... 16
Change in unrealized appreciation/depreciation from investments.... 1,398
------
Net realized/unrealized gains on investments....................... 1,414
------
Change in net assets resulting from operations..................... $3,192
======
</TABLE>
See notes to financial statements
171
<PAGE>
AMSOUTH FUNDS
Limited Term U.S. Government Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended
July 31, July 31, December 31,
2001 2000 (b) 1999
---------- ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income.................... $ 1,778 $ 1,280 $ 2,342
Net realized gains (losses) from
investment transactions................. 16 (77) 22
Change in unrealized
appreciation/depreciation from
investments............................. 1,398 153 (1,865)
------- ------- -------
Change in net assets resulting from
operations............................... 3,192 1,356 499
------- ------- -------
Distributions to Class A Shareholders:
From net investment income............... (160) (98) (144)
From net realized gains on investment
transactions............................ -- -- (5)
Distributions to Class B Shareholders:
From net investment income............... (20) (9) (20)
Distributions to Trust Shareholders (c):
From net investment income............... (1,622) (1,091) (2,178)
From net realized gains on investment
transactions............................ -- -- (54)
------- ------- -------
Change in net assets from shareholder
distributions............................ (1,802) (1,198) (2,401)
------- ------- -------
Change in net assets from capital
transactions............................. (7,116) (4,655) (995)
------- ------- -------
Change in net assets...................... (5,726) (4,497) (2,897)
Net Assets:
Beginning of period...................... 41,817 46,314 49,211
------- ------- -------
End of period............................ $36,091 $41,817 $46,314
======= ======= =======
</TABLE>
(a) Formerly ISG Limited Term U.S. Government Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) Formerly Institutional Shares.
See notes to financial statements
172
<PAGE>
AMSOUTH FUNDS
Limited Term U.S. Government Fund (a)
Financial Highlights, Class A Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Year Ended Period Ended
July 31, July 31, December 31, December 31, December 31,
2001 + 2000 (b) 1999 1998 1997 (c)
---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 9.89 $ 9.85 $10.25 $10.12 $ 10.00
------ ------ ------ ------ -------
Investment Activities
Net investment income.. 0.47 0.28 0.50 0.53 0.42
Net realized and
unrealized gain
(losses) from
investments........... 0.37 0.02 (0.39) 0.14 0.12
------ ------ ------ ------ -------
Total from Investment
Activities............ 0.84 0.30 0.11 0.67 0.54
------ ------ ------ ------ -------
Distributions
Net investment income.. (0.47) (0.26) (0.50) (0.53) (0.42)
Net realized gains from
investment
transactions.......... -- -- (0.01) (0.01) --
------ ------ ------ ------ -------
Total Distributions.... (0.47) (0.26) (0.51) (0.54) (0.42)
------ ------ ------ ------ -------
Change in Net Asset
Value.................. 0.37 0.04 (0.40) 0.13 0.12
------ ------ ------ ------ -------
Net Asset Value, End of
Period................. $10.26 $ 9.89 $ 9.85 $10.25 $ 10.12
====== ====== ====== ====== =======
Total Return (excludes
sales charge).......... 8.71% 3.11%(d) 1.08% 6.69% 5.54%(d)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $3,003 $3,791 $3,571 $2,437 $20,103
Ratio of expenses to
average net assets..... 1.15% 1.09%(e) 0.98% 1.02% 1.00%(e)
Ratio of net investment
income to average net
assets................. 4.63% 4.89%(e) 4.93% 5.16% 5.34%(e)
Ratio of expenses to
average net assets*.... 1.42% 1.36%(e) 1.40% 1.54% 1.62%(e)
Portfolio turnover**.... 31% 4% 17% 86% 52%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Limited Term U.S. Government Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 28, 1997 (commencement of operations) through
December 31, 1997.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
173
<PAGE>
AMSOUTH FUNDS
Limited Term U.S. Government Fund (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Period Ended
July 31, July 31, December 31, December 31,
2001 + 2000 (b) 1999 1998 (c)
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................. $ 9.90 $ 9.86 $10.26 $10.12
------ ------ ------ ------
Investment Activities
Net investment income..... 0.38 0.25 0.41 0.35
Net realized and
unrealized gains (losses)
from investments......... 0.39 0.01 (0.39) 0.15
------ ------ ------ ------
Total from Investment
Activities............... 0.77 0.26 0.02 0.50
------ ------ ------ ------
Distributions
Net investment income..... (0.40) (0.22) (0.41) (0.35)
Net realized gains from
investment transactions.. -- -- (0.01) (0.01)
------ ------ ------ ------
Total Distributions....... (0.40) (0.22) (0.42) (0.36)
------ ------ ------ ------
Change in Net Asset Value.. 0.37 0.04 (0.40) 0.14
------ ------ ------ ------
Net Asset Value, End of
Period.................... $10.27 $ 9.90 $ 9.86 $10.26
====== ====== ====== ======
Total Return (excludes
redemption charge)........ 7.91% 2.67%(d) 0.22% 4.98%(d)
Ratios/Supplemental Data:
Net Assets at end of period
(000)..................... $ 737 $ 378 $ 462 $ 430
Ratio of expenses to
average net assets........ 1.90% 1.88%(e) 1.83% 1.97%(e)
Ratio of net investment
income to average net
assets.................... 3.75% 4.13%(e) 4.06% 4.01%(e)
Ratio of expenses to
average net assets*....... 2.17% 2.06%(e) 1.99% 2.24%(e)
Portfolio turnover**....... 31% 4% 17% 86%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Limited Term U.S. Government Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from March 3, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
174
<PAGE>
AMSOUTH FUNDS
Limited Term U.S. Government Fund (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Period Ended
July 31, July 31, December 31, December 31,
2001 + 2000 (b) 1999 1998 (c)
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................ $ 9.89 $ 9.85 $ 10.25 $ 10.29
------- ------- ------- -------
Investment Activities
Net investment income.... 0.48 0.29 0.50 0.03
Net realized and
unrealized gains
(losses) from
investments............. 0.38 0.02 (0.39) (0.04)
------- ------- ------- -------
Total from Investment
Activities.............. 0.86 0.31 0.11 (0.01)
------- ------- ------- -------
Distributions
Net investment income.... (0.49) (0.27) (0.50) (0.03)
Net realized gains from
investment
transactions............ -- -- (0.01) --
------- ------- ------- -------
Total Distributions...... (0.49) (0.27) (0.51) (0.03)
------- ------- ------- -------
Change in Net Asset
Value.................... 0.37 0.04 (0.40) (0.04)
------- ------- ------- -------
Net Asset Value, End of
Period................... $ 10.26 $ 9.89 $ 9.85 $ 10.25
======= ======= ======= =======
Total Return.............. 8.88% 3.18%(d) 1.08% (0.14%)(d)
Ratios/Supplemental Data:
Net Assets at end of
period (000)............. $32,351 $37,648 $42,281 $46,344
Ratio of expenses to
average net assets....... 1.00% 0.99%(e) 0.98% 0.69%(e)
Ratio of net investment
income to average net
assets................... 4.76% 5.00%(e) 4.94% 5.29%(e)
Ratio of expenses to
average net assets*...... 1.32% 1.21%(e) 1.14% 0.96%(e)
Portfolio turnover**...... 31% 4% 17% 86%
</TABLE>
/\ Formerly Institutional Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Limited Term U.S. Government Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from December 14, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
175
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Municipal Bond Fund July 31, 2001
(Amounts in thousands, except shares)
Municipal Bonds (95.3%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Alabama (46.9%)
Alabama 21st Century Authority, Tobacco Settlement
Revenue, 5.13%, 12/1/05.................................. $ 1,000 $ 1,025
Alabama 21st Century Authority, Tobacco Settlement
Revenue, 5.25%, 12/1/06.................................. 1,000 1,031
Alabama State Agriculture & Mechanical University,
Revenue, 4.55%, 11/1/09, Callable 5/1/08 @ 102, MBIA..... 2,245 2,309
Alabama State Agriculture & Mechanical University,
Revenue, 4.65%, 11/1/10, Callable 5/1/08 @ 102, MBIA..... 2,355 2,426
Alabama State Agriculture & Mechanical University,
Revenue, 6.50%, 11/1/25, Callable 11/1/05 @ 102, MBIA.... 2,035 2,320
Alabama State Corrections Institution, Series A, 4.90%,
4/1/03, MBIA............................................. 3,060 3,155
Alabama State Judicial Building Authority, Judicial
Facilities Project, 4.75%, 1/1/05, AMBAC................. 3,700 3,853
Alabama State Judicial Building Authority, Judicial
Facilities Project, 4.85%, 1/1/06, AMBAC................. 3,880 4,071
Alabama State Mental Health Finance Authority, Special
Tax, 4.88%, 5/1/03, MBIA................................. 2,000 2,065
Alabama State Public School & College Authority, 5.00%,
12/1/05, Callable 6/1/03 @ 103........................... 3,390 3,578
Alabama State Public School & College Authority, 5.13%,
11/1/14, Callable 11/1/08 @ 101.5, FSA................... 8,000 8,309
Alabama State Public School & College Authority, Revenue,
Series A,
4.38%, 8/1/04............................................ 10,000 10,317
Alabama State Public School & College Authority, Capital
Improvement, 4.75%, 11/1/06, Callable 11/1/05 @ 101...... 5,000 5,259
Alabama State Water Pollution Control Authority, Revolving
Fund, Series B, 5.25%, 8/15/08, Callable 8/15/06 @ 100,
AMBAC.................................................... 1,095 1,157
Alabama State Water Pollution Control Authority, Revolving
Fund, Series B, 5.38%, 8/15/10, Callable 8/15/06 @ 100,
AMBAC.................................................... 860 904
Alabama State Water Pollution Control Authority, Revolving
Fund, Series B, 5.40%, 8/15/11, Callable 8/15/06 @ 100,
AMBAC.................................................... 1,840 1,930
Alabama State Water Pollution Control Authority, Revolving
Fund, Series B, 5.50%, 8/15/16, Callable 8/15/06 @ 100,
AMBAC.................................................... 3,890 4,015
Alabama State, Series A, GO, 4.60%, 10/1/05............... 3,500 3,657
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Alabama, continued
Auburn University, University Revenues, General Fee,
5.25%, 6/1/06, Callable 6/1/03 @ 102, MBIA............... $ 1,000 $ 1,047
Birmingham, GO, 4.90%, 7/1/06............................. 1,500 1,585
Birmingham, Capital Improvements, Series A, GO, 4.75%,
10/1/10, Callable
4/1/08 @ 102............................................. 1,340 1,392
Birmingham, Capital Improvements, Series A, GO, 4.85%,
10/1/11, Callable
4/1/08 @ 102............................................. 1,430 1,484
Birmingham, Capital Improvements, Series B, GO, 4.80%,
10/1/08, Callable
4/1/07 @ 102............................................. 1,040 1,094
Birmingham Industrial Water Board, Industrial Water
Supply, 5.30%, 3/1/04, Callable 3/1/03 @ 102, ETM........ 1,100 1,157
Birmingham Industrial Water Board, Industrial Water
Supply, 5.40%, 3/1/05, Callable 3/1/03 @ 102, ETM........ 1,000 1,067
Birmingham Industrial Water Board, Industrial Water
Supply, 5.50%, 3/1/06, Prerefunded 3/1/05 @ 100.......... 1,300 1,392
Birmingham Industrial Water Board, Industrial Water
Supply, 6.20%, 7/1/08, Prerefunded 1/1/07 @ 100.......... 3,105 3,364
Birmingham Special Care Facilities Funding Authority,
Series D, 4.95%, 11/1/14, Prerefunded 11/1/07 @ 100...... 2,900 3,072
Birmingham Waterworks & Sewer Board, Water & Sewer
Revenue, 5.90%, 1/1/03, Callable 1/1/02 @ 102............ 1,375 1,421
Clark & Mobile County Gas District, 5.60%, 12/1/17,
Callable 12/1/06 @ 102, MBIA............................. 1,045 1,096
Daphne Special Care Facilities Financing Authority,
Presbyterian Retirement Corp., 7.30%, 8/15/18,
Prerefunded 8/15/01 @ 100................................ 9,500 9,515
Dothan, GO, 5.05%, 9/1/09, FSA............................ 905 965
Dothan, GO, 5.10%, 9/1/10, Callable 9/1/09 @ 101, FSA..... 1,515 1,619
Florence Water, Series B, 4.70%, 12/1/13, Callable 12/1/08
@ 102, FSA............................................... 1,025 1,038
Florence, Warrants, Series A, GO, 4.65%, 9/1/03, MBIA..... 2,180 2,253
Florence, Warrants, Series A, GO, 4.35%, 12/1/07, FSA..... 390 402
Florence, Warrants, Series A, GO, 4.40%, 12/1/08.......... 405 417
Florence, Warrants, Series A, GO, 4.50%, 12/1/09.......... 425 437
Florence, Warrants, Series A, GO, 4.60%, 12/1/10, Callable
12/1/08 @ 102............................................ 445 459
Florence, Warrants, Series B, GO, 4.35%, 12/1/07, FSA..... 790 814
</TABLE>
Continued
176
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Municipal Bond Fund July 31, 2001
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Alabama, continued
Florence, Warrants, Series B, GO, 4.40%, 12/1/08, FSA...... $ 825 $ 849
Florence, Warrants, Series B, GO, 4.50%, 12/1/09, Callable
12/1/08 @ 102, FSA........................................ 865 889
Florence, Warrants, Series B, GO, 4.60%, 12/1/10, Callable
12/1/08 @ 102, FSA........................................ 900 928
Gadsden East Alabama Medical Clinic Board, Baptist Hospital
of Gadsden, Inc., Series A, 7.80%, 11/1/21, Prerefunded
11/1/01 @ 102............................................. 3,950 4,077
Hoover, Warrants, GO, 4.50%, 3/1/13, Prerefunded 3/1/03 @
100....................................................... 5,450 5,398
Huntsville, Series A, GO, 4.75%, 11/1/18, Callable 11/1/08
@ 101..................................................... 1,445 1,404
Huntsville Electric, 4.60%, 12/1/09, Callable 12/1/07 @
102....................................................... 550 568
Huntsville Electric, 4.70%, 12/1/10, Callable 12/1/07 @
102....................................................... 660 681
Huntsville Electric, 4.80%, 12/1/11, Callable 12/1/07 @
102....................................................... 680 702
Huntsville, Warrants, Series B, GO,
4.00%, 11/1/05............................................ 3,120 3,187
Huntsville, Warrants, Series B, GO,
4.00%, 11/1/06............................................ 3,245 3,301
Huntsville, Warrants, Series B, GO,
4.10%, 11/1/07............................................ 3,380 3,433
Huntsville Water System, Warrants, 5.00%, 5/1/02, AMBAC.... 2,000 2,034
Jefferson County, GO, 5.30%, 4/1/09, Prerefunded 4/1/03 @
102....................................................... 4,000 4,144
Jefferson County Board of Education, Capital Outlay, 5.40%,
2/15/10, Callable 2/15/03 @ 102, AMBAC.................... 1,000 1,056
Jefferson County, Sewer Revenue Warrants, 5.40%, 9/1/04,
Prerefunded 3/1/03 @ 102, MBIA............................ 2,400 2,548
Jefferson County, Warrants, GO, 5.00%, 4/1/04, Callable
4/1/03 @ 102.............................................. 5,000 5,212
Jefferson County, Warrants, GO, 5.10%,
2/15/10, FSA.............................................. 1,000 1,065
Madison Water & Wastewater Board, Water & Sewer Revenue,,
4.60%, 12/1/11, AMBAC..................................... 725 738
Mobile County, Series A, GO, 5.00%, 2/1/04, Callable 2/1/03
@ 102..................................................... 1,350 1,406
Mobile County, Warrants, Series A, Limited GO, 5.10%,
2/1/05, Callable 2/1/03 @ 102............................. 5,000 5,211
Mobile, Warrants, GO, 6.50%, 2/15/05, AMBAC................ 1,630 1,793
Mobile, Warrants, GO, 6.50%, 2/15/06, AMBAC................ 1,685 1,884
Mobile, Warrants, GO, 4.85%, 2/15/09, GO................... 2,250 2,297
Mobile Water & Sewer Commissioners, Water & Sewer Revenue,
5.00%, 1/1/05, FGIC....................................... 3,250 3,411
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Alabama, continued
Montgomery County, Warrants, GO, 5.00%, 11/1/04,
Callable 11/1/02 @ 102.................................... $ 1,500 $ 1,561
Montgomery, Warrants, Series A, GO, 5.00%, 5/1/05, Callable
5/1/03 @ 102.............................................. 1,040 1,086
Montgomery, Warrants, Series A, GO, 5.00%, 5/1/06, Callable
5/1/03 @ 102.............................................. 1,000 1,041
Montgomery Waterworks & Sanitary Sewer Board, 5.50%,
9/1/08, Callable 9/1/06 @ 101, MBIA....................... 3,000 3,235
Montgomery Waterworks & Sanitary Sewer Board, Series B,
5.70%, 9/1/02............................................. 1,000 1,030
Montgomery Waterworks & Sanitary Sewer Board, Series B,
6.25%, 9/1/08,
Callable 9/1/02 @ 102..................................... 2,500 2,634
Montgomery, Waterworks & Sanitary Sewer Board, Series B,
6.30%, 9/1/10,
Callable 9/1/02 @ 102..................................... 3,565 3,758
Shelby County Board of Education, Warrants, Capital Outlay,
4.80%, 2/1/10,
Callable 2/1/09 @ 101, AMBAC.............................. 1,005 1,047
Shelby County, Warrants, Series A, 5.60%, 8/1/02, AMBAC.... 1,990 2,046
Shelby County, Warrants, Series A, 5.70%, 2/1/03, AMBAC.... 1,830 1,902
Talladega County Industrial Development Board, Cyprus 1
Project, 9.75%, 12/1/13................................... 335 337
University of Alabama, General Fee, 4.60%, 6/1/09, Callable
6/1/07 @ 102, MBIA........................................ 1,200 1,239
University of Alabama, General Fee, 4.70%, 6/1/10, Callable
6/1/07 @ 102, MBIA........................................ 1,300 1,342
University of Alabama, General Fee, 4.75%, 6/1/11, Callable
6/1/07 @ 102, MBIA........................................ 1,500 1,542
University of South Alabama, University Revenues, Tuition,
4.70%, 11/15/08, Callable 5/15/06 @ 102, AMBAC............ 2,185 2,280
--------
182,767
--------
Arizona (0.3%)
Pima County School District No.16, Catalina Foothills, GO,
5.75%, 7/1/06, MBIA....................................... 1,200 1,314
--------
California (1.6%)
Franklin-McKinley School District, Refunding, GO, 6.00%,
7/1/16, FSA............................................... 1,000 1,153
San Mateo County Transit District, Sales Tax Revenue,
Series A, 5.25%, 6/1/16, Callable 6/1/09 @ 101, FSA....... 4,765 4,952
--------
6,105
--------
Florida (7.5%)
Dade County, Series DD, GO, 7.70%, 10/1/08, AMBAC.......... 1,760 2,162
</TABLE>
Continued
177
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Municipal Bond Fund July 31, 2001
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Florida, continued
Dade County, Series DD, GO, 7.70%, 10/1/12, AMBAC......... $ 1,000 $ 1,273
Florida State Board of Education, Capital Outlay, Series
A, GO, 5.00%, 6/1/08..................................... 6,500 6,903
Jacksonville Water & Sewer District, Revenue, 5.00%,
10/1/20, MBIA............................................ 9,550 10,204
Reedy Creek Improvement District, Series 1, 5.50%,
10/1/08, Callable 10/1/07 @ 101, AMBAC................... 8,070 8,819
--------
29,361
--------
Georgia (0.3%)
Georgia State, Series A, GO, 6.10%, 2/1/03, Callable
9/10/01 @ 102............................................ 1,000 1,023
--------
Hawaii (1.0%)
Hawaii State, GO, 5.50%, 3/1/16, Prerefunded 3/1/07 @ 102,
FGIC..................................................... 3,625 4,004
--------
Illinois (2.6%)
Chicago Metropolitan Water Reclamation District, Greater
Chicago Capital Improvements, GO, 6.90%, 1/1/07.......... 7,830 8,982
Will County Forest Preservation District, Series B, GO,
0.00%, 12/1/18, FGIC..................................... 3,000 1,218
--------
10,200
--------
Kentucky (0.5%)
Carrollton & Henderson Public Energy Authority, Gas
Revenue, Series A, 5.00%, 1/1/09, FSA.................... 2,000 2,040
--------
Louisiana (0.3%)
Louisiana Local Government Environmental Facilities,
Community Development Authority, Revenue, Capital
Projects & Equipment Acquisition, 5.25%, 12/1/18, AMBAC.. 1,085 1,139
--------
Minnesota (0.6%)
Centennial Independent School District, No. 12, Series A,
GO, 5.60%, 2/1/07, MBIA.................................. 2,175 2,368
--------
Mississippi (1.4%)
Medical Center Educational Building Corp. of Mississippi,
Revenue, University of Mississippi Medical Center
Project, 5.90%, 12/1/23, Prerefunded 12/1/04 @ 102, MBIA-
IBC...................................................... 2,075 2,289
Mississippi State, Series B, GO, 5.90%, 11/15/09.......... 1,000 1,126
Mississippi State, Capital Improvements, Series A, GO,
5.20%, 8/1/11,
Callable 8/1/03 @ 100.................................... 2,000 2,087
--------
5,502
--------
Missouri (0.1%)
Missouri State, Water Pollution, Series B, GO, 5.00%,
8/1/07, Callable 8/1/03 @ 102............................ 390 407
--------
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Ohio (2.7%)
Ohio State Higher Education, Series A, GO, 5.20%, 2/1/10.. $ 9,700 $ 10,420
--------
Oklahoma (0.4%)
Moore, Refunding, GO, 5.75%, 4/1/12, MBIA................. 1,530 1,687
--------
Oregon (2.0%)
Salem, GO, 4.45%, 12/1/10, Callable 6/1/09 @ 100, FSA..... 2,365 2,406
Washington County Criminal Justice Facilities, GO, 5.00%,
12/1/09, Callable 12/1/07 @ 100.......................... 5,285 5,559
--------
7,965
--------
Pennsylvania (0.4%)
Bethlehem Area School District, GO, 6.00%, 3/1/16,
Prerefunded 3/1/06 @ 100, State Aid Withholding, MBIA.... 1,500 1,653
--------
Rhode Island (1.1%)
Rhode Island Port Authority & Economic Development Corp.,
Revenue, Shepard Building Project, Series B, 6.75%,
6/1/25, Prerefunded 6/1/04 @ 102, AMBAC.................. 1,000 1,114
Rhode Island State, Series A, GO, 5.75%, 9/1/13, Callable
9/1/09 @ 101, FGIC....................................... 3,065 3,367
--------
4,481
--------
South Carolina (2.5%)
Beaufort County School District, Series B, GO, 4.10%,
2/1/09, Callable 2/1/07 @ 101, SCSDE..................... 5,525 5,522
Beaufort County School District, Series B, GO, 4.90%,
3/1/09, Callable 3/1/05 @ 101............................ 4,125 4,275
--------
9,797
--------
Tennessee (3.0%)
Jackson, Improvements, 5.00%, 3/1/10, Prerefunded 3/1/05 @
102...................................................... 2,000 2,078
Metropolitan Government, Nashville & Davidson County,
Industrial Development Board, Revenue, Multi-Family
Housing, Arbor, Series C, 7.50%, 11/15/12,
Prerefunded 5/15/12 @ 100................................ 1,000 1,264
Metropolitan Government, Nashville & Davidson County
Industrial Development Board, Revenue, Multi-Family
Housing, Arbor, Series B, 7.50%, 11/15/10,
Prerefunded 5/15/10 @ 100................................ 1,000 1,242
Tennessee State, Series B, GO, 5.00%, 5/1/15, Callable
5/1/08 @ 100............................................. 1,500 1,526
Tennessee State, Series B, GO, 4.60%, 5/1/07, Callable
5/1/06 @ 100............................................. 5,495 5,688
--------
11,798
--------
</TABLE>
Continued
178
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Municipal Bond Fund July 31, 2001
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Texas (9.0%)
Cypress-Fairbanks Independent School District, Series A,
GO, 6.13%, 8/1/10, Prerefunded 8/1/03 @ 100, PSF-GTD...... $ 2,830 $ 3,003
Dallas County, Series A, GO, 5.25%, 8/15/09................ 3,000 3,225
El Paso, Limited GO, 6.10%, 8/15/03, FGIC.................. 855 885
El Paso, Limited GO, 6.10%, 8/15/03, FGIC.................. 145 150
Harris County, Housing Financial Corp., Multi-Family
Housing Revenue, Breton Mill Partners, 7.00%, 3/1/07,
Prerefunded 2/15/07 @ 100................................. 1,000 1,160
Katy Independent School District, Series A, GO, 4.50%,
2/15/20,
Callable 2/15/08 @ 100, PSF-GTD........................... 3,600 3,292
Lubbock Health Facilities Development Corp., Hospital
Revenue, Methodist Hospital, Series B, 6.75%, 12/1/10,
AMBAC..................................................... 1,000 1,197
Mesquite Independent School District, Series A, GO, 4.70%,
8/15/08, Callable 8/15/07 @ 100........................... 4,000 4,139
Richardson Independent School District, Series C, 4.75%,
2/15/22,
Callable 2/15/08 @ 100, PSF-GTD........................... 1,000 950
San Antonio, Series A, GO, 4.75%, 2/1/19, Callable 2/1/09 @
100....................................................... 1,590 1,524
Texas State, Series B, GO, 5.25%, 10/1/08, Callable 10/1/03
@ 100..................................................... 5,000 5,240
University of Texas, 4.60%, 7/1/08, Callable 7/1/06 @ 100.. 3,575 3,677
University of Texas, Series B, 4.25%, 8/15/09, Callable
8/15/07 @ 100............................................. 5,455 5,489
Whitehouse Independent School District, GO, 4.80%, 2/15/12,
Callable 2/15/08 @ 100.................................... 1,000 1,016
--------
34,947
--------
Utah (5.1%)
Davis County School District, GO, 4.38%, 6/1/08, School
Board Guaranty............................................ 4,805 4,919
Jordan School District, GO, 4.80%, 6/15/08, Callable
6/15/07 @ 100............................................. 3,810 3,973
Utah State, Series F, GO, 5.00%, 7/1/09,
Callable 7/1/07 @ 100..................................... 5,000 5,440
Utah State, Series F, GO, 5.00%, 7/1/09,
Callable 7/1/07 @ 100..................................... 5,200 5,441
--------
19,773
--------
Virginia (2.9%)
Virginia College Building Authority, Series A, 5.00%,
9/1/12, Callable 9/1/07 @ 101............................. 2,000 2,080
Virginia State, GO, 5.00%, 6/1/08, Callable 6/1/07 @ 100... 5,000 5,302
Virginia State Public School Authority, Series S, 5.25%,
8/1/09.................................................... 3,500 3,791
--------
11,173
--------
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Washington (2.1%)
King County Public Hospital District No. 002, GO, 5.25%,
12/1/13, MBIA............................................. $ 1,095 $ 1,145
Washington State, GO, 5.75%, 9/1/08........................ 6,500 7,197
--------
8,342
--------
West Virginia (0.3%)
Raleigh Fayette & Nicholas Counties, 6.20%, 8/1/04......... 1,000 1,086
--------
Wisconsin (0.7%)
Wisconsin State Health & Educational Facilities Authority,
Revenue, Wheaton Franciscan Services, Inc., 6.10%,
8/15/09, MBIA............................................. 2,420 2,718
--------
TOTAL MUNICIPAL BONDS...................................... 372,070
--------
Investment Companies (3.2%)
Federated Tax-Free Money Market Fund....................... 4,807 5
Goldman Sachs Tax-Free Money Market Fund................... 12,366,267 12,366
--------
TOTAL INVESTMENT COMPANIES................................. 12,371
--------
TOTAL INVESTMENTS
(Cost $368,576) (a) -- 98.5%.............................. 384,441
Other assets in excess of liabilities --1.5%.............. 5,688
--------
NET ASSETS -- 100.0%....................................... $390,129
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes and
differs from value by net unrealized appreciation of securities as follows:
<TABLE>
<S> <C>
Unrealized appreciation.............................................. $15,948
Unrealized depreciation.............................................. (83)
-------
Net unrealized appreciation.......................................... $15,865
=======
</TABLE>
AMBAC -- Insured by AMBAC Indemnity Corp.
ETM -- Escrowed to Maturity
FGIC -- Insured by Financial Guaranty Insurance Corp.
FSA -- Insured by Financial Security Assurance Inc.
GO -- General Obligation
MBIA -- Insured by Municipal Bond Insurance Assoc.
MBIA-IBC -- MBIA Insured Bond Certificates
PSF-GTD -- Permanent School Fund Guarantee
SCSDE -- South Carolina School District Enhancement
Continued
179
<PAGE>
AMSOUTH FUNDS
Municipal Bond Fund
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $368,576)............................ $384,441
Interest and dividends receivable................................ 5,822
Prepaid expenses and other assets................................ 12
--------
Total Assets.................................................... 390,275
Liabilities:
Accrued expenses and other payables:
Investment advisory fees........................................ $55
Administration fees............................................. 10
Shareholder servicing and distribution fees..................... 35
Custodian fees.................................................. 9
Other........................................................... 37
---
Total Liabilities............................................... 146
--------
Net Assets:
Capital.......................................................... 373,113
Accumulated net investment income................................ 875
Accumulated net realized gains from investment transactions...... 276
Unrealized appreciation from investments......................... 15,865
--------
Net Assets....................................................... $390,129
========
Class A Shares (a)
Net Assets...................................................... $ 8,022
Shares outstanding.............................................. 788
Redemption price per share...................................... $ 10.18
========
Class A Shares -- Maximum Sales Charge........................... 4.00%
--------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)....... $ 10.60
========
Class B Shares
Net Assets...................................................... $ 1,777
Shares outstanding.............................................. 175
Offering price per share*....................................... $ 10.17
========
Trust Shares (b)
Net Assets...................................................... $380,330
Shares outstanding.............................................. 37,330
Offering and redemption price per share......................... $ 10.19
========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................ $18,568
Dividend income................................................ 153
-------
Total Investment Income....................................... 18,721
Expenses:
Investment advisory fees....................................... $2,546
Administration fees............................................ 784
Distribution fees -- Class B Shares............................ 9
Shareholder servicing fees -- Class A Shares (a)............... 17
Shareholder servicing fees -- Class B Shares................... 3
Shareholder servicing fees -- Trust Shares (b)................. 576
Custodian fees................................................. 108
Accounting fees................................................ 85
Transfer agent fees............................................ 99
Other fees..................................................... 104
------
Total expenses before fee reductions.......................... 4,331
Expenses reduced by Investment Advisor........................ (979)
Expenses reduced by Administrator............................. (196)
Expenses reduced by Distributor............................... (192)
Expenses reduced by Fund Accountant........................... (45)
-------
Net expenses.................................................. 2,919
-------
Net Investment Income.......................................... 15,802
-------
Realized/Unrealized Gains from Investments:
Net realized gains from investment transactions................ 638
Change in unrealized appreciation/depreciation from
investments................................................... 15,672
-------
Net realized/unrealized gains on investments................... 16,310
-------
Change in net assets resulting from operations................. $32,112
=======
</TABLE>
See notes to financial statements
180
<PAGE>
AMSOUTH FUNDS
Municipal Bond Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 15,802 $ 15,180
Net realized gains (losses) from investment
transactions........................................... 638 (26)
Change in unrealized appreciation/depreciation from
investments............................................ 15,672 12
-------- --------
Change in net assets resulting from operations........... 32,112 15,166
-------- --------
Distributions to Class A Shareholders (a):
From net investment income.............................. (261) (169)
From net realized gains on investment transactions...... -- (15)
Distributions to Class B Shareholders:
From net investment income.............................. (37) (13)
From net realized gains on investment transactions...... -- (1)
Distributions to Trust Shareholders (b):
From net investment income.............................. (15,232) (14,994)
From net realized gains on investment transactions...... -- (1,647)
-------- --------
Change in net assets from shareholder distributions...... (15,530) (16,839)
-------- --------
Change in net assets from capital transactions........... (21,369) 72,586
-------- --------
Change in net assets..................................... (4,787) 70,913
Net Assets:
Beginning of period..................................... 394,916 324,003
-------- --------
End of period........................................... $390,129 $394,916
======== ========
</TABLE>
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
See notes to financial statements
181
<PAGE>
AMSOUTH FUNDS
Municipal Bond Fund
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a) 1997 (b)
---------- ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 9.76 $ 9.87 $10.13 $10.15 $ 10.00
------ ------ ------ ------ --------
Investment Activities
Net investment income.. 0.39 0.40 0.41 0.86 0.04
Net realized and
unrealized gains
(losses) from
investments........... 0.41 (0.06) (0.17) (0.43) 0.15
------ ------ ------ ------ --------
Total from Investment
Activities............ 0.80 0.34 0.24 0.43 0.19
------ ------ ------ ------ --------
Distributions
Net investment income.. (0.38) (0.40) (0.39) (0.42) (0.04)
Net realized gains from
investment
transactions.......... -- (0.05) (0.11) (0.03) --
------ ------ ------ ------ --------
Total Distributions.... (0.38) (0.45) (0.50) (0.45) (0.04)
------ ------ ------ ------ --------
Change in Net Asset
Value.................. 0.42 (0.11) (0.26) (0.02) 0.15
------ ------ ------ ------ --------
Net Asset Value, End of
Period................. $10.18 $ 9.76 $ 9.87 $10.13 $ 10.15
====== ====== ====== ====== ========
Total Return (excludes
sales charge).......... 8.36% 3.62% 2.31% 4.30% 1.86%(c)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $8,022 $6,516 $2,694 $2,689 $337,933
Ratio of expenses to
average net assets..... 0.89% 0.82% 0.71% 0.62% 0.71%(d)
Ratio of net investment
income to average net
assets................. 3.88% 4.12% 4.01% 4.26% 4.31%(d)
Ratio of expenses to
average net assets*.... 1.20% 1.20% 1.20% 0.92% 1.04%(d)
Portfolio turnover**.... 5% 9% 21% 29% 2%
</TABLE>
/\ Formerly Classic Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (September 2,
1997) are being reflected as Classic Shares.
(b) For the period from July 1, 1997 (commencement of operations) through July
31, 1997.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
182
<PAGE>
AMSOUTH FUNDS
Municipal Bond Fund
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2001 + 2000 1999 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 9.75 $9.87 $10.28
------ ----- ------
Investment Activities
Net investment income.................... 0.32 0.31 0.14
Net realized and unrealized gains
(losses) from investments............... 0.41 (0.05) (0.41)
------ ----- ------
Total from Investment Activities......... 0.73 0.26 (0.27)
------ ----- ------
Distributions
Net investment income.................... (0.31) (0.33) 0.14
Net realized gains from investment
transactions............................ -- (0.05) --
------ ----- ------
Total Distributions...................... (0.31) (0.38) 0.14
------ ----- ------
Change in Net Asset Value................. 0.42 (0.12) (0.41)
------ ----- ------
Net Asset Value, End of Period............ $10.17 $9.75 $ 9.87
====== ===== ======
Total Return (excludes redemption
charge).................................. 7.60% 2.75% (2.60)%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $1,777 $ 889 $ 16
Ratio of expenses to average net assets... 1.64% 1.64% 1.60%(c)
Ratio of net investment income to average
net assets............................... 3.12% 3.30% 3.17%(c)
Ratio of expenses to average net assets*.. 1.95% 1.96% 1.87%(c)
Portfolio turnover**...................... 5% 9% 21%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) For the period form February 3, 1999 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
183
<PAGE>
AMSOUTH FUNDS
Municipal Bond Fund
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (a)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period........................ $ 9.77 $ 9.87 $ 10.14 $ 10.04
-------- -------- -------- --------
Investment Activities
Net investment income......... 0.41 0.41 0.42 0.39
Net realized and unrealized
gain (losses) from
investments.................. 0.41 (0.05) (0.18) 0.14
-------- -------- -------- --------
Total from Investment
Activities................... 0.82 0.36 0.24 0.53
-------- -------- -------- --------
Distributions
Net investment income......... (0.40) (0.41) (0.40) (0.40)
Net realized gains from
investment transactions...... -- (0.05) (0.11) (0.03)
-------- -------- -------- --------
Total Distributions........... (0.40) (0.46) (0.51) (0.43)
-------- -------- -------- --------
Change in Net Asset Value...... 0.42 (0.10) (0.27) 0.10
-------- -------- -------- --------
Net Asset Value, End of
Period........................ $ 10.19 $ 9.77 $ 9.87 $ 10.14
======== ======== ======== ========
Total Return................... 8.52% 3.85% 2.30% 4.49%(b)
Ratios/Supplemental Data:
Net Assets at end of period
(000)......................... $380,330 $387,511 $321,293 $326,464
Ratio of expenses to average
net assets.................... 0.74% 0.68% 0.61% 0.64%(c)
Ratio of net investment income
to average net assets......... 4.04% 4.25% 4.11% 4.23%(c)
Ratio of expenses to average
net assets*................... 1.10% 1.02% 0.95% 0.97%(c)
Portfolio turnover**........... 5% 9% 21% 29%
</TABLE>
/\ Formerly Premier Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (September 2,
1997) are being reflected as Classic Shares.
(b) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of
Premier Shares for the period from September 2, 1997 to July 31, 1998.
Total return for the Municipal Bond Fund Premier Shares for the period
from September 2, 1997 (commencement of operations) through July 31, 1998
was 5.27%.
(c) Annualized.
See notes to financial statements
184
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Florida Tax-Exempt Fund July 31, 2001
(Amounts in thousands, except shares)
Municipal Bonds (96.5%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Florida (96.5%)
Altamonte Springs, Health Facilities Authority, Hospital
Revenue, 5.60%, 10/1/10, ETM.............................. $ 545 $ 608
Broward County Gas Tax Revenue, 5.25%, 9/1/09.............. 500 540
Broward County School District, GO, 5.60%, 2/15/07,
Callable 2/15/03 @ 102.................................... 1,500 1,568
Broward County School District, GO, 6.00%, 2/15/07,
Callable 2/15/02 @ 102.................................... 2,000 2,062
Clearwater Utility Revenue, 6.10%, 12/1/07, ETM............ 700 794
Dade County School Board, Certificates of Participation,
Series C, 5.25%, 8/1/06, FSA.............................. 750 805
Dade County School District, 5.75%, 8/1/03, AMBAC.......... 1,000 1,055
Dade County School District, GO, 6.00%, 7/15/06............ 1,000 1,107
Dade County School District, GO, 5.00%, 2/15/14, Callable
2/15/07 @ 101, MBIA....................................... 1,000 1,024
Dade County Aviation Authority, Series 1994 B, 6.25%,
10/1/04, AMBAC............................................ 1,000 1,089
Escambia County Utility Authority, Utility System Revenue,
5.00%, 1/1/08, FGIC....................................... 1,000 1,059
Florida Housing Finance Agency, Homeowner Mortgages, Series
1995 A-1, 5.65%, 1/1/09, Callable 1/1/06 @ 102............ 665 713
Florida State, GO, 5.00%, 7/1/11, Callable 7/1/07 @ 101,
OID....................................................... 220 230
Florida State, GO, 5.00%, 7/1/11, Callable 7/1/07 @ 101,
ETM, OID.................................................. 780 815
Florida State Board of Education, Lottery Revenue, Series
B, 5.25%, 7/1/09, Callable 7/1/08 @ 101, FGIC............. 1,000 1,077
Florida State Board of Education, Series A, GO, 5.00%,
1/1/15, Callable 1/1/08 @ 101............................. 1,000 1,017
Florida State Board of Education, Series B, GO, 5.38%,
6/1/08, Callable 6/1/07 @ 101............................. 2,000 2,159
Florida State Department of Transportation, Right of Way,
Series B, GO, 5.50%, 7/1/08, Callable 7/1/07 @ 101........ 3,310 3,606
Florida State Division of Bond Finance, Department of
General Services, Preservation 2000, Series A, 5.50%,
7/1/08, FSA............................................... 1,000 1,093
Florida State Division of Bond Finance, Department of
General Services, Preservation 2000, Series A, 5.70%,
7/1/09, Callable 7/1/05 @ 101, AMBAC...................... 1,000 1,066
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Florida, continued
Florida State Division of Bond Finance, Department of
General Services, Preservation 2000, Series A, 5.00%,
7/1/12, Callable 7/1/07 @ 101, AMBAC..................... $ 1,000 $ 1,033
Florida State Division of Bond Finance, Department of
General Services, Series B, 5.50%, 7/1/05, AMBAC......... 2,000 2,149
Florida State Division of Bond Finance, Department of
Natural Resources, Preservation 2000, Series A, 5.40%,
7/1/07, Callable 7/1/03 @ 101, FSA....................... 1,000 1,045
Florida State Turnpike Authority, Turnpike Revenue, Series
A, 5.50%, 7/1/11, Callable 7/1/05 @ 101, FGIC............ 1,000 1,051
Florida State, Senior Lien, Jacksonville Transportation,
GO, 6.25%, 7/1/06........................................ 890 992
Florida State, Senior Lien, Jacksonville Transportation,
GO, 5.25%, 7/1/15, Callable 7/1/07 @ 101................. 1,000 1,031
Florida Water Pollution Control Revenue, 5.50%, 1/15/14,
Callable 7/15/11 @ 100................................... 1,000 1,080
Ft. Lauderdale Park Improvement Project, GO, 5.50%,
7/1/17, Callable 1/1/04 @ 101............................ 1,250 1,279
Hillsborough County, Capital Improvement, County Center
Project, Series B, 5.00%, 7/1/13, Callable 7/1/06 @ 102,
MBIA..................................................... 1,000 1,026
Jacksonville Electric Authority, St. John's River Issue 2,
Series 16, 5.00%, 10/1/10, Callable 10/1/03 @ 101........ 1,000 1,024
Jacksonville, Excise Tax Revenue, Series A, 5.50%,
10/1/05, FGIC............................................ 1,010 1,090
Lee County Florida Transportation Facilities, Revenue,
Series A, 5.50%, 10/1/11, AMBAC.......................... 1,500 1,653
Manatee County School Board, Certificates of
Participation, 7/1/09, Callable 7/1/06 @ 102, MBIA....... 500 558
Miami Beach Florida Water & Sewer Revenue, 5.38%, 9/1/08,
Callable 9/7/01 @ 101, FSA, OID.......................... 1,000 1,069
Miami-Dade County Educational Facilities Authority
Revenue, Series A, 5.75%, 4/1/13, Callable 4/1/10 @ 101,
AMBAC.................................................... 1,060 1,168
Okeechobee Utility Authority, Utility System Revenue,
5.25%, 10/1/14, Callable 10/1/09 @ 101, FSA.............. 1,675 1,759
Orange County, Sales Tax Revenue, 4.80%, 1/1/17, Callable
1/1/07 @ 101, FGIC....................................... 1,000 986
Orange County, Tourist Development, Tax Revenue, 5.00%,
10/1/08, AMBAC........................................... 1,500 1,599
</TABLE>
Continued
185
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Florida Tax-Exempt Fund July 31, 2001
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Florida, continued
Orlando Utilities Commission, Water & Electric Revenue,
Series B, 5.10%, 10/1/11, Callable 10/1/06 @ 100.......... $ 1,500 $ 1,554
Palm Beach County, Criminal Justice Facilities, 5.38%,
6/1/10, FGIC.............................................. 1,000 1,089
Pasco County, Water & Sewer Revenue, Series A, 5.50%,
10/1/03, Callable 10/1/02 @ 102, FGIC..................... 1,000 1,048
Pinellas County, Capital Improvement, 4.50%, 1/1/07........ 1,000 1,036
Port of Palm Beach, 6.25%, 9/1/08, Callable 9/1/02 @ 102,
MBIA...................................................... 1,000 1,056
Reedy Creek, Improvement District, Series A, GO, 5.60%,
6/1/10, Callable 6/1/05 @ 100, MBIA....................... 1,000 1,079
St. Johns River Management District, Land Acquisition,
5.10%, 7/1/09, Callable 7/1/05 @ 100, FSA................. 1,000 1,035
Sunshine Skyway Revenue, 6.60%, 7/1/08, Callable 7/1/02 @
100....................................................... 1,000 1,013
Tallahassee Consolidated Utility System, Revenue, 5.80%,
10/1/08, Callable 10/1/03 @ 102........................... 1,000 1,079
Tampa Water & Sewer Revenue, 5.25%, 10/1/12, Callable
10/1/05 @ 102, FGIC....................................... 750 783
Tampa Sports Authority, Local Option Sales Tax Revenue,
Stadium Project, 6.00%, 1/1/06, MBIA...................... 1,550 1,700
Tampa-Hillsborough County, Expressway, 5.00%, 7/1/10,
Callable 7/1/07 @ 101..................................... 1,000 1,050
Volusia County, Sales Tax Revenue, 5.00%, 10/1/13, Callable
10/1/08 @ 101, MBIA....................................... 1,000 1,033
--------
59,634
--------
TOTAL MUNICIPAL BONDS...................................... 59,634
--------
</TABLE>
Investment Companies (2.5%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
AmSouth Tax-Exempt Money Market Fund....................... 5,066 $ 5
Dreyfus Florida Money Market Fund.......................... 1,563,230 1,563
--------
TOTAL INVESTMENT COMPANIES................................. 1,568
--------
TOTAL INVESTMENTS
(Cost $59,139) (a) -- 99.0%............................... 61,202
Other assets in excess of liabilities -- 1.0%.............. 631
--------
NET ASSETS -- 100.0%....................................... $ 61,833
========
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes
and differs from value by net unrealized appreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation.............................................. $2,075
Unrealized depreciation.............................................. (12)
------
Net unrealized appreciation.......................................... $2,063
======
</TABLE>
AMBAC -- Insured by AMBAC Indemnity Corp.
ETM -- Escrowed to Maturity
FGIC -- Insured by Financial Guaranty Insurance Corp.
FSA -- Insured by Financial Security Assurance Inc.
GO -- General Obligation
MBIA -- Insured by Municipal Bond Insurance Assoc.
OID -- Original Issue Discount
See notes to financial statements
186
<PAGE>
AMSOUTH FUNDS
Florida Tax-Exempt Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $59,139).............................. $61,202
Interest and dividends receivable................................. 641
Receivable for capital shares issued.............................. 15
Prepaid expenses and other assets................................. 4
-------
Total Assets..................................................... 61,862
Liabilities:
Accrued expenses and other payables:
Investment advisory fees......................................... $ 9
Administration fees.............................................. 1
Shareholder servicing and distribution fees...................... 7
Custodian fees................................................... 1
Other............................................................ 11
---
Total Liabilities................................................ 29
-------
Net Assets:
Capital........................................................... 60,047
Accumulated net investment income................................. 74
Accumulated net realized losses from investment transactions...... (351)
Unrealized appreciation from investments.......................... 2,063
-------
Net Assets........................................................ $61,833
=======
Class A Shares (b)
Net Assets....................................................... $ 3,267
Shares outstanding............................................... 311
Redemption price per share....................................... $ 10.51
=======
Class A Shares -- Maximum Sales Charge............................ 4.00%
-------
Maximum Offering Price Per Share
(100%/(100% -- Maximum Sales Charge) of net asset value adjusted
to the nearest cent)............................................ $ 10.95
=======
Class B Shares
Net Assets....................................................... $ 1,385
Shares outstanding............................................... 132
Offering price per share*........................................ $ 10.49
=======
Trust Shares (c)
Net Assets....................................................... $57,181
Shares outstanding............................................... 5,436
Offering and redemption price per share.......................... $ 10.52
=======
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly AmSouth Florida Tax-Free Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income.................................................... $2,868
Dividend income.................................................... 53
------
Total Investment Income........................................... 2,921
Expenses:
Investment advisory fees........................................... $405
Administration fees................................................ 125
Distribution fees -- Class B Shares................................ 6
Shareholder servicing fees -- Class A Shares (b)................... 7
Shareholder servicing fees -- Class B Shares....................... 2
Shareholder servicing fees -- Trust Shares (c)..................... 88
Custodian fees..................................................... 17
Accounting fees.................................................... 19
Transfer agent fees................................................ 54
Other fees......................................................... 28
----
Total expenses before fee reductions.............................. 751
Expenses reduced by Investment Advisor............................ (156)
Expenses reduced by Administrator................................. (62)
Expenses reduced by Transfer Agent................................ (21)
Expenses reduced by Distributor................................... (29)
Expenses reduced by Fund Accountant............................... (7)
------
Net expenses...................................................... 476
------
Net Investment Income.............................................. 2,445
------
Realized/Unrealized Gains from Investments:
Net realized gains from investment transactions.................... 48
Change in unrealized appreciation/depreciation from investments.... 2,088
------
Net realized/unrealized gains from investments..................... 2,136
------
Change in net assets resulting from operations..................... $4,581
======
</TABLE>
See notes to financial statements
187
<PAGE>
AMSOUTH FUNDS
Florida Tax-Exempt Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 2,445 $ 2,910
Net realized gains (losses) from investment
transactions........................................... 48 (399)
Change in unrealized appreciation/depreciation from
investments............................................ 2,088 50
------- -------
Change in net assets resulting from operations........... 4,581 2,561
------- -------
Distributions to Class A Shareholders (b):
From net investment income.............................. (113) (253)
From net realized gains on investment transactions...... -- (17)
Distributions to Class B Shareholders:
From net investment income.............................. (26) (23)
From net realized gains on investment transactions...... -- (2)
Distributions to Trust Shareholders (c):
From net investment income.............................. (2,311) (2,685)
From net realized gains on investment transactions...... -- (176)
------- -------
Change in net assets from shareholder distributions...... (2,450) (3,156)
------- -------
Change in net assets from capital transactions........... (5,559) (10,456)
------- -------
Change in net assets..................................... (3,428) (11,051)
Net Assets:
Beginning of period..................................... 65,261 76,312
------- -------
End of period........................................... $61,833 $65,261
======= =======
</TABLE>
(a) Formerly AmSouth Florida Tax-Free Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
See notes to financial statements
188
<PAGE>
AMSOUTH FUNDS
Florida Tax-Exempt Fund (a)
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (b) 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $10.16 $10.22 $ 10.45 $10.50 $ 10.30
------ ------ ------- ------ -------
Investment Activities
Net investment income.. 0.40 0.44 0.41 0.45 0.45
Net realized and
unrealized gains
(losses) from
investments........... 0.35 (0.06) (0.18) 0.01 0.24
------ ------ ------- ------ -------
Total from Investment
Activities............ 0.75 0.38 0.23 0.46 0.69
------ ------ ------- ------ -------
Distributions
Net investment income.. (0.40) (0.41) (0.40) (0.44) (0.48)
Net realized gains from
investment
transactions.......... -- (0.03) (0.06) (0.07) (0.01)
------ ------ ------- ------ -------
Total Distributions.... (0.40) (0.44) (0.46) (0.51) (0.49)
------ ------ ------- ------ -------
Change in Net Asset
Value.................. 0.35 (0.06) (0.23) (0.05) 0.20
------ ------ ------- ------ -------
Net Asset Value, End of
Period................. $10.51 $10.16 $ 10.22 $10.45 $ 10.50
====== ====== ======= ====== =======
Total Return (excludes
sales charge).......... 7.46% 3.99% 2.06% 4.46% 6.89%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $3,267 $2,655 $12,195 $8,663 $53,688
Ratio of expenses to
average net assets..... 0.90% 0.74% 0.59% 0.55% 0.57%
Ratio of net investment
income to average net
assets................. 3.79% 4.10% 4.00% 4.24% 4.36%
Ratio of expenses to
average net assets*.... 1.29% 1.30% 1.26% 1.06% 1.06%
Portfolio turnover**.... 7% 11% 34% 30% 24%
</TABLE>
/\ Formerly Classic Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly AmSouth Florida Tax-Free Fund.
(b) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
See notes to financial statements
189
<PAGE>
AMSOUTH FUNDS
Florida Tax-Exempt Fund (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2001 + 2000 1999 (b)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period....... $10.15 $10.20 $10.52
------ ------ ------
Investment Activities
Net investment income..................... 0.32 0.32 0.12
Net realized and unrealized gains (losses)
from investments......................... 0.34 (0.01) (0.30)
------ ------ ------
Total from Investment Activities.......... 0.66 0.31 (0.18)
------ ------ ------
Distributions
Net investment income..................... (0.32) (0.33) (0.14)
Net realized gains from investment
transactions............................. -- (0.03) --
------ ------ ------
Total Distributions....................... (0.32) (0.36) (0.14)
------ ------ ------
Change in Net Asset Value.................. 0.34 (0.05) (0.32)
------ ------ ------
Net Asset Value, End of Period............. $10.49 $10.15 $10.20
====== ====== ======
Total Return (excludes redemption charge).. 6.61% 3.14% 1.77%(c)
Ratios/Supplemental Data:
Net Assets at end of period (000).......... $1,385 $ 729 $ 569
Ratio of expenses to average net assets.... 1.64% 1.62% 1.49%(d)
Ratio of net investment income to average
net assets................................ 3.03% 3.22% 3.06%(d)
Ratio of expenses to average net assets*... 2.04% 2.05% 2.00%(d)
Portfolio turnover**....................... 7% 11% 34%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly AmSouth Florida Tax-Free Fund.
(b) For the period from March 16, 1999 (commencement of operations) through
July 31, 1999.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
190
<PAGE>
AMSOUTH FUNDS
Florida Tax-Exempt Fund (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Period Ended
July 31, July 31, July 31, July 31,
2001 + 2000 1999 1998 (b)
---------- ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 10.16 $ 10.22 $ 10.46 $ 10.39
------- ------- ------- -------
Investment Activities
Net investment income.......... 0.41 0.42 0.43 0.41
Net realized and unrealized
gains (losses) from
investments................... 0.36 (0.02) (0.20) 0.14
------- ------- ------- -------
Total from Investment
Activities.................... 0.77 0.40 0.23 0.55
------- ------- ------- -------
Distributions
Net investment income.......... (0.41) (0.43) (0.41) (0.41)
Net realized gains from
investment transactions....... -- (0.03) (0.06) (0.07)
------- ------- ------- -------
Total Distributions............ (0.41) (0.46) (0.47) (0.48)
------- ------- ------- -------
Change in Net Asset Value....... 0.36 (0.06) (0.24) 0.07
------- ------- ------- -------
Net Asset Value, End of Period.. $ 10.52 $ 10.16 $ 10.22 $ 10.46
======= ======= ======= =======
Total Return.................... 7.72% 4.02% 2.16% 4.66%(c)
Ratios/Supplemental Data:
Net Assets at end of period
(000).......................... $57,181 $61,877 $63,548 $55,369
Ratio of expenses to average net
assets......................... 0.75% 0.65% 0.49% 0.49%(d)
Ratio of net investment income
to average net assets.......... 3.95% 4.19% 4.10% 4.30%(d)
Ratio of expenses to average net
assets*........................ 1.19% 1.11% 1.01% 1.04%(d)
Portfolio turnover**............ 7% 11% 34% 30%
</TABLE>
/\ Formerly Premier Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole without
distinguishing between the classes of shares issued.
(a) Formerly AmSouth Florida Tax-Free Fund.
(b) Effective September 2, 1997, the Fund's existing shares, which were
previously unclassified, were designated either Classic Shares or Premier
Shares. For reporting purposes, past performance numbers (prior to
September 2, 1997) are being reflected as Classic Shares.
(c) Represents total return based on the activity of Classic Shares for the
period from August 1, 1997 to September 1, 1997 and the activity of Premier
Shares for the period from September 2, 1997 to July 31, 1998. Total return
for the Premier Shares for the period from September 2, 1997 (commencement
of operations) through July 31, 1998 was 5.40%.
(d) Annualized.
See notes to financial statements
191
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Tennessee Tax-Exempt Fund July 31, 2001
(Amounts in thousands, except shares)
Municipal Bonds (89.3%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- -------
<S> <C> <C>
Tennessee (89.3%)
Bristol Health & Educational Facilities, Revenue, Bristol
Memorial Hospital, 6.75%, 9/1/07, FGIC..................... $ 3,000 $ 3,450
Chattanooga, GO, 5.38%, 9/1/09, Callable 9/1/06 @101, FGIC.. 2,000 2,122
Chattanooga-Hamilton County Hospital Authority, Hospital
Revenue, 5.63%, 10/1/09, FSA............................... 1,000 1,103
Hamilton County, GO, 5.00%, 11/1/11, Callable 11/1/08 @
101........................................................ 1,000 1,051
Jackson, Hospital Revenue, Refunding and Improvement, 6.00%,
4/1/05, AMBAC.............................................. 1,000 1,086
Johnson City Health & Educational Facilities Board, Hospital
Revenue, Refunded-1st, MTG-MTN, States Health-A, 6.50%,
7/1/14, MBIA............................................... 1,000 1,171
Johnson City Health & Educational Facilities Board,
Refunding & Improvement, Medical Center Hospital, 5.00%,
7/1/18, Callable 1/1/09 @ 101, MBIA........................ 1,000 1,010
Knox County Health Education & Housing Facilities Board,
Hospital Facilities Revenue, Fort Sanders Alliance, 7.25%,
1/1/09, MBIA............................................... 2,000 2,389
Knox County Health Education & Housing Facilities Board,
Hospital Facilities Revenue, Fort Sanders Alliance, 6.25%,
1/1/13, MBIA............................................... 1,000 1,142
Knox County, Refunding, GO, 6.50%, 4/1/04, Callable 4/1/03 @
102........................................................ 1,500 1,607
Knox County, Refunding, GO, 5.50%, 4/1/11................... 2,000 2,199
Knox County, GO, 5.00%, 2/1/12, Callable 2/1/04 @ 101, OID.. 2,000 2,105
Knoxville, Water Revenue, 5.00%, 3/1/13, Callable 3/1/10 @
100, MBIA.................................................. 1,000 1,035
Marion County, GO, 5.00%, 4/1/11, AMBAC..................... 1,280 1,347
Memphis, Water Revenue, 5.90%, 1/1/04, OID.................. 1,000 1,061
Memphis, GO, 6.25%, 7/1/04.................................. 1,000 1,084
Memphis, GO, 6.00%, 11/1/06................................. 1,000 1,113
Memphis, GO, 5.25%, 4/1/14, Callable 4/1/08 @ 101, OID...... 1,250 1,306
Memphis, GO, 5.00%, 10/1/15, Callable 10/1/06 @ 101......... 1,000 1,015
Metropolitan Government, Nashville & Davidson County Health
& Educational Facilities Board, Revenue & Refunding,
Vanderbilt University, Series B, 5.00%, 10/1/11, Callable
4/1/11 @ 100............................................... 1,000 1,056
</TABLE>
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- -------
<S> <C> <C>
Tennessee, continued
Metropolitan Government, Nashville & Davidson County Energy
Production Facility, 5.25%, 7/1/13, Callable 7/1/07 @ 101,
OID, AMBAC................................................. $ 1,000 $ 1,046
Metropolitan Government, Nashville & Davidson County,
Refunding & Improvement, Series A & B, GO, 5.00%,
10/15/08................................................... 1,000 1,066
Metropolitan Government, Nashville & Davidson County,
Refunding & Improvement, Series A & B, GO, 5.25%,
10/15/09................................................... 1,000 1,081
Metropolitan Government, Nashville & Davidson County,
Refunding, GO, 6.00%, 12/1/09.............................. 1,500 1,700
Oak Ridge, GO, 5.00%, 4/1/13, Callable 4/1/11 @ 100, AMBAC.. 1,975 2,051
Rutherford County, Capital Outlay, Series A, GO, 6.25%,
5/1/04..................................................... 1,500 1,617
Shelby County Health Education & Housing Facilities Board,
Hospital Revenue, Methodist Healthcare, 5.10%, 4/1/12,
Callable 4/1/08 @ 101, MBIA................................ 1,000 1,042
Shelby County Health Education, & Housing Facilities Board,
Hospital Revenue, Methodist Health Systems, Inc., 6.25%,
8/1/07, MBIA............................................... 3,500 3,934
Shelby County Schools, Series A, GO, 5.88%, 6/1/19,
Prerefunded 6/1/06 @ 100................................... 1,000 1,103
Shelby County, Series A, GO, 6.75%, 4/1/05.................. 1,000 1,113
Tennessee Housing Development Agency Homeownership Program-
1D, 4.70%, 7/1/15, Callable 1/1/11 @ 100................... 1,000 1,009
Tennessee State, Series B, GO, 6.00%, 5/1/05................ 1,500 1,634
Tennessee State, Series B, GO, 5.50%, 5/1/23, Callable
5/1/07 @ 101.5............................................. 1,500 1,562
Tennessee State, GO, 5.00%, 5/1/12.......................... 1,000 1,057
Tennessee State, Series A, GO, 5.10%, 3/1/16, Callable
3/1/10 @ 100, OID.......................................... 1,000 1,023
Williamson County, GO, 5.00%, 3/1/11........................ 1,165 1,232
Williamson County, GO, 5.00%, 3/1/15, Callable 3/1/11 @
100........................................................ 1,000 1,023
Wilson County, Certificate of Participation Refunding,
5.25%, 6/30/15, Callable 6/30/09 @ 101, FSA................ 1,500 1,553
-------
55,298
-------
TOTAL MUNICIPAL BONDS....................................... 55,298
=======
</TABLE>
Continued
192
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Tennessee Tax-Exempt Fund July 31, 2001
(Amounts in thousands, except shares)
Investment Companies (5.6%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- -------
<S> <C> <C>
AIM Tax-Free Money Market Fund.............................. 480,555 $ 481
AmSouth Tax-Exempt Money Market Fund........................ 2,954,699 2,954
-------
TOTAL INVESTMENT COMPANIES.................................. 3,435
-------
TOTAL INVESTMENTS
(Cost $57,449) (a) -- 94.9%................................ 58,733
Other assets in excess of liabilities -- 5.1%............... 3,156
-------
NET ASSETS -- 100.0%........................................ $61,889
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes
and differs from value by net unrealized appreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation.............................................. $1,295
Unrealized depreciation.............................................. (11)
------
Net unrealized appreciation.......................................... $1,284
======
</TABLE>
AMBAC -- Insured by AMBAC Indemnity Corp.
FGIC -- Insured by Financial Guaranty Insurance Corp.
FSA -- Insured by Financial Security Assurance Inc.
GO -- General Obligation
MBIA -- Insured by Municipal Bond Insurance Assoc.
MTN -- Medium Term Note
OID -- Original Issue Discount
See notes to financial statements
193
<PAGE>
AMSOUTH FUNDS
Tennessee Tax-Exempt Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $57,449)........................... $58,733
Interest and dividends receivable.............................. 855
Receivable for investments sold................................ 3,675
Prepaid expenses and other assets.............................. 12
-------
Total Assets.................................................. 63,275
Liabilities:
Payable for investments purchased.............................. $1,350
Payable for capital shares redeemed............................ 3
Accrued expenses and other payables:
Investment advisory fees...................................... 11
Administration fees........................................... 2
Shareholder servicing and distribution fees................... 7
Custodian fees................................................ 1
Other......................................................... 12
------
Total Liabilities............................................. 1,386
-------
Net Assets:
Capital........................................................ 61,475
Accumulated net investment income.............................. 71
Accumulated net realized losses from investment transactions... (941)
Unrealized appreciation from investments....................... 1,284
-------
Net Assets..................................................... $61,889
=======
Class A Shares
Net Assets.................................................... $ 3,764
Shares outstanding............................................ 373
Redemption price per share.................................... $ 10.10
=======
Class A Shares -- Maximum Sales Charge......................... 4.00%
-------
Maximum Offering Price Per Share (100%/(100% -- Maximum Sales
Charge) of net asset value adjusted to the nearest cent)..... $ 10.52
=======
Class B Shares
Net Assets.................................................... $ 1,432
Shares outstanding............................................ 142
Offering price per share*..................................... $ 10.12
=======
Trust Shares (b)
Net Assets.................................................... $56,693
Shares outstanding............................................ 5,613
Offering and redemption price per share....................... $ 10.10
=======
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Tennessee Tax-Exempt Fund.
(b) Formerly Institutional Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income.................................................... $2,984
Dividend income.................................................... 67
------
Total Investment Income........................................... 3,051
Expenses:
Investment advisory fees........................................... $421
Administration fees................................................ 130
Distribution fees -- Class B Shares................................ 8
Shareholder servicing fees -- Class A Shares....................... 10
Shareholder servicing fees -- Class B Shares....................... 3
Shareholder servicing fees -- Trust Shares (b)..................... 90
Custodian fees..................................................... 18
Accounting fees.................................................... 17
Transfer agent fees................................................ 54
Other fees......................................................... 60
----
Total expenses before fee reductions.............................. 811
Expenses reduced by Investment Advisor............................ (97)
Expenses reduced by Administrator................................. (32)
Expenses reduced by Transfer Agent................................ (20)
Expenses reduced by Distributor................................... (30)
Expenses reduced by Fund Accountant............................... (7)
------
Net expenses...................................................... 625
------
Net Investment Income.............................................. 2,426
------
Realized/Unrealized Gains from Investments:
Net realized gains from investment transactions.................... 789
Change in unrealized appreciation/depreciation from investments.... 1,589
------
Net realized/unrealized gains on investments....................... 2,378
------
Change in net assets resulting from operations..................... $4,804
======
</TABLE>
See notes to financial statements
194
<PAGE>
AMSOUTH FUNDS
Tennessee Tax-Exempt Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended
July 31, July 31, December 31,
2001 2000 (b) 1999
---------- ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income.................... $ 2,426 $ 1,700 $ 3,167
Net realized gains (losses) from
investment transactions................. 789 (444) (1,286)
Change in unrealized
appreciation/depreciation from
investments............................. 1,589 1,811 (4,484)
------- ------- -------
Change in net assets resulting from
operations............................... 4,804 3,067 (2,603)
------- ------- -------
Distributions to Class A Shareholders:
From net investment income............... (146) (66) (103)
From net realized gains on investment
transactions............................ -- -- (1)
Distributions to Class B Shareholders:
From net investment income............... (32) (19) (38)
Distributions to Trust Shareholders (c):
From net investment income............... (2,262) (1,536) (3,025)
From net realized gains on investment
transactions............................ -- -- (28)
------- ------- -------
Change in net assets from shareholder
distributions............................ (2,440) (1,621) (3,195)
------- ------- -------
Change in net assets from capital
transactions............................. (9,608) (12,462) (10,055)
------- ------- -------
Change in net assets...................... (7,244) (11,016) (15,853)
Net Assets:
Beginning of period...................... 69,133 80,149 96,002
------- ------- -------
End of period............................ $61,889 $69,133 $80,149
======= ======= =======
</TABLE>
(a) Formerly ISG Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) Formerly Institutional Shares.
See notes to financial statements
195
<PAGE>
AMSOUTH FUNDS
Tennessee Tax-Exempt Fund (a)
Financial Highlights, Class A Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, December 31, December 31, December 31, December 31,
2001 + 2000 (b) 1999 1998 1997 1996
---------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 9.74 $ 9.55 $10.19 $10.18 $ 9.90 $ 10.19
------ ------ ------ ------ ------ -------
Investment Activities
Net investment income.. 0.36 0.21 0.33 0.35 0.44 0.42
Net realized and
unrealized gains
(losses) from
investments........... 0.36 0.18 (0.64) 0.08 0.25 (0.29)
------ ------ ------ ------ ------ -------
Total from Investment
Activities............ 0.72 0.39 (0.31) 0.43 0.69 0.13
------ ------ ------ ------ ------ -------
Distributions
Net investment income.. (0.36) (0.20) (0.33) (0.35) (0.41) (0.42)
Net realized gains from
investment
transactions.......... -- -- -- (0.07) -- --
------ ------ ------ ------ ------ -------
Total Distributions.... (0.36) (0.20) (0.33) (0.42) (0.41) (0.42)
------ ------ ------ ------ ------ -------
Change in Net Asset
Value.................. 0.36 0.19 (0.64) 0.01 0.28 (0.29)
------ ------ ------ ------ ------ -------
Net Asset Value, End of
Period................. $10.10 $ 9.74 $ 9.55 $10.19 $10.18 $ 9.90
====== ====== ====== ====== ====== =======
Total Return (excludes
sales charge).......... 7.55% 4.15%(c) (3.07%) 4.25% 7.13% 1.39%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $3,764 $2,919 $3,324 $2,919 $1,669 $88,084
Ratio of expenses to
average net assets..... 1.09% 1.13%(d) 1.25% 1.20% 0.84% 0.86%
Ratio of net investment
income to average net
assets................. 3.63% 3.78%(d) 3.34% 3.37% 4.13% 4.29%
Ratio of expenses to
average net assets*.... 1.33% 1.27%(d) 1.26% 1.20% 1.09% 1.11%
Portfolio turnover**.... 123% 23% 64% 155% 253% 219%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
196
<PAGE>
AMSOUTH FUNDS
Tennessee Tax-Exempt Fund (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Period Ended
July 31, July December 31, December 31,
2001 + 2000 (b) 1999 1998 (c)
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................. $ 9.76 $ 9.57 $10.21 $10.22
------ ------ ------ ------
Investment Activities
Net investment income..... 0.29 0.17 0.27 0.26
Net realized and
unrealized gains (losses)
from investments......... 0.36 0.18 (0.64) 0.06
------ ------ ------ ------
Total from Investment
Activities............... 0.65 0.35 (0.37) 0.32
------ ------ ------ ------
Distributions
Net investment income..... (0.29) (0.16) (0.27) (0.26)
Net realized gains from
investment transactions.. -- -- -- (0.07)
------ ------ ------ ------
Total Distributions....... (0.29) (0.16) (0.27) (0.33)
------ ------ ------ ------
Change in Net Asset Value.. 0.36 0.19 (0.64) (0.01)
------ ------ ------ ------
Net Asset Value, End of
Period.................... $10.12 $ 9.76 $ 9.57 $10.21
====== ====== ====== ======
Total Return (excludes
redemption charge)........ 6.75% 3.74%(d) (3.65)% 3.17%(d)
Ratios/Supplemental Data:
Net Assets at end of period
(000)..................... $1,432 $1,054 $1,288 $1,397
Ratio of expenses to
average net assets........ 1.84% 1.83%(e) 1.84% 1.95%(e)
Ratio of net investment
income to average net
assets.................... 2.85% 3.07%(e) 2.72% 2.50%(e)
Ratio of expenses to
average net assets*....... 2.08% 1.96%(e) 1.85% (f)
Portfolio turnover**....... 123% 23% 64% 155%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 24, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
(f) There were no fee reductions in this period.
See notes to financial statements
197
<PAGE>
AMSOUTH FUNDS
Tennessee Tax-Exempt Fund (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Year Ended Period Ended
July 31, July 31, December 31, December 31, December 31,
2001 + 2000 (b) 1999 1998 1997 (c)
---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 9.74 $ 9.55 $ 10.19 $ 10.18 $ 10.05
------- ------- ------- ------- --------
Investment Activities
Net investment income.. 0.38 0.22 0.35 0.37 0.10
Net realized and
unrealized gains
(losses) from
investments........... 0.36 0.18 (0.64) 0.08 0.13
------- ------- ------- ------- --------
Total from Investment
Activities............ 0.74 0.40 (0.29) 0.45 0.23
------- ------- ------- ------- --------
Distributions
Net investment income.. (0.38) (0.21) (0.35) (0.37) (0.10)
Net realized gains from
investment
transactions.......... -- -- -- (0.07) --
------- ------- ------- ------- --------
Total Distributions.... (0.38) (0.21) (0.35) (0.44) (0.10)
------- ------- ------- ------- --------
Change in Net Asset
Value.................. 0.36 0.19 (0.64) 0.01 0.13
------- ------- ------- ------- --------
Net Asset Value, End of
Period................. $ 10.10 $ 9.74 $ 9.55 $ 10.19 $ 10.18
======= ======= ======= ======= ========
Total Return............ 7.70% 4.26%(d) (2.83)% 4.52% 2.35%(d)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $56,693 $65,160 $75,537 $91,687 $100,742
Ratio of expenses to
average net assets..... 0.94% 0.95%(e) 1.00% 0.95% 0.56%(e)
Ratio of net investment
income to average net
assets................. 3.77% 3.95%(e) 3.57% 3.65% 4.22%(e)
Ratio of expenses to
average net assets*.... 1.23% 1.11%(e) 1.00% 0.95% 0.87%(e)
Portfolio turnover**.... 123% 23% 64% 155% 253%
</TABLE>
/\ Formerly Institutional Shares.
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from October 3, 1997 (commencement of operations) through
December 31, 1997.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
198
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Limited Term Tennessee Tax-Exempt Fund July 31, 2001
(Amounts in thousands, except shares)
Municipal Bonds (85.8%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
--------- -------
<S> <C> <C>
Tennessee (85.8%)
Chattanooga Health Education & Housing Facilities Board,
Revenue, Series A, 5.25%, 12/1/02.......................... $ 900 $ 924
Chattanooga Health Education & Housing Facilities Board,
Revenue, Catholic Health Initiatives, Refunding, 5.50%,
12/1/05.................................................... 500 533
Clarksville Water, Sewer & Gas, Refunding, 6.13%, 2/1/12,
Callable 2/1/02 @ 102, OID, MBIA........................... 500 518
Knox County Health Education & Housing Facilities Board,
Hospital Revenue, Refunding, 7.25%, 1/1/08, MBIA........... 750 883
Memphis, Electrical Systems Revenue, Refunding, 6.00%,
1/1/05, OID................................................ 500 540
Memphis, GO, 6.00%, 7/1/03.................................. 500 528
Memphis, GO, 6.25%, 7/1/04.................................. 500 542
Memphis, Refunding, GO, 6.00%, 11/1/03...................... 500 533
Metropolitan Government, Nashville & Davidson County, Health
& Education Facilities Board, Revenue, The Vanderbilt
University, Series A, 6.00%, 7/1/07........................ 500 557
Metropolitan Government, Nashville & Davidson County, Water
& Sewer Revenue, 6.00%, 1/1/06, MBIA....................... 750 822
Metropolitan Nashville Airport Authority, Airport Revenue,
Refunding, Series A, 6.63%, 7/1/07, FGIC................... 500 572
Rutherford County Capital Outlay Notes, GO, 6.00%, 4/1/04... 1,000 1,069
Shelby County, Refunding, Series B, GO, 5.50%, 8/1/09....... 500 548
Tennessee State, Refunding, Series A, GO, 5.00%, 5/1/05..... 500 527
Tennessee State, Refunding, Series A, GO, 5.00%, 5/1/08..... 655 696
Tennessee State, Refunding, Series B, GO, 5.50%, 5/1/04..... 500 530
Tennessee State, Refunding, Series B, GO, 6.00%, 5/1/06..... 500 551
Williamson County, GO, 6.00%, 3/1/08........................ 500 559
-------
11,432
-------
TOTAL MUNICIPAL BONDS....................................... 11,432
=======
</TABLE>
Investment Companies (1.1%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
--------- -------
<S> <C> <C>
AIM Tax-Free Money Market Fund............................... 106,599 $ 107
AmSouth Tax-Exempt Money Market Fund......................... 35,132 35
-------
TOTAL INVESTMENT COMPANIES 142
-------
TOTAL INVESTMENTS
(Cost $11,338) (a) -- 86.9%................................. 11,574
Other assets in excess of liabilities -- 13.1%............... 1,738
-------
NET ASSETS -- 100.0%......................................... $13,312
=======
</TABLE>
---------
(a) Represents cost for federal income tax and financial reporting purposes
and differs from value by net unrealized appreciation of securities as
follows:
<TABLE>
<S> <C>
Unrealized appreciation................................................ $236
Unrealized depreciation................................................ --
----
Net unrealized appreciation............................................ $236
====
</TABLE>
FGIC -- Financial Guaranty Insurance Corp.
GO -- General Obligation
MBIA -- Insured by Municipal Bond Insurance Assoc.
OID -- Original Issue Discount
See notes to financial statements
199
<PAGE>
AMSOUTH FUNDS
Limited Term Tennessee Tax-Exempt Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value (cost $11,338).............................. $11,574
Interest and dividends receivable................................. 124
Receivable for investments sold................................... 1,618
Prepaid expenses and other assets................................. 10
-------
Total Assets..................................................... 13,326
Liabilities:
Accrued expenses and other payables:
Investment advisory fees.......................................... $ 2
Shareholder servicing and distribution fees....................... 3
Other............................................................. 9
---
Total Liabilities................................................ 14
-------
Net Assets:
Capital........................................................... 13,290
Accumulated net investment income................................. 9
Accumulated net realized losses from investment transactions...... (223)
Unrealized appreciation from investments.......................... 236
-------
Net Assets........................................................ $13,312
=======
Class A Shares
Net Assets....................................................... $12,886
Shares outstanding............................................... 1,274
Redemption price per share....................................... $ 10.12
=======
Class A Shares -- Maximum Sales Charge............................ 4.00%
-------
Maximum Offering Price Per Share
(100%/(100% -- Maximum Sales Charge) of net assets value
adjusted to the nearest cent)................................... $ 10.54
=======
Class B Shares
Net Assets....................................................... $ 426
Shares outstanding............................................... 42
Offering price per share*........................................ $ 10.12
=======
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income....................................................... $588
Dividend income....................................................... 24
----
Total Investment Income.............................................. 612
Expenses:
Investment advisory fees.............................................. $94
Administration fees................................................... 29
Distribution fees -- Class B Shares................................... 2
Shareholder servicing fees -- Class A Shares.......................... 35
Shareholder servicing fees -- Class B Shares.......................... 1
Custodian fees........................................................ 4
Accounting fees....................................................... 6
Transfer agent fees................................................... 31
Registration and filing fees.......................................... 29
Other fees............................................................ 14
---
Total expenses before fee reductions................................. 245
Expenses reduced by Investment Advisor............................... (22)
Expenses reduced by Administrator.................................... (15)
Expenses reduced by Transfer Agent................................... (18)
Expenses reduced by Fund Accountant.................................. (2)
----
Net expenses......................................................... 188
----
Net Investment Income................................................. 424
----
Realized/Unrealized Gains from Investments:
Net realized gains from investment transactions....................... 70
Change in unrealized appreciation/depreciation from investments....... 374
----
Net realized/unrealized gains from investments........................ 444
----
Change in net assets resulting from operations........................ $868
====
</TABLE>
See notes to financial statements
200
<PAGE>
AMSOUTH FUNDS
Limited Term Tennessee Tax-Exempt Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended
July 31, July 31, December 31,
2001 2000 (b) 1999
---------- ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income.................... $ 424 $ 338 $ 612
Net realized gains (losses) from
investment transactions................. 70 (202) (60)
Change in unrealized
appreciation/depreciation from
investments............................. 374 380 (765)
------- ------- -------
Change in net assets resulting from
operations............................... 868 516 (213)
------- ------- -------
Distributions to Class A Shareholders:
From net investment income............... (424) (316) (628)
Distributions to Class B Shareholders:
From net investment income............... (7) (6) (18)
------- ------- -------
Change in net assets from shareholder
distributions............................ (431) (322) (646)
------- ------- -------
Change in net assets from capital
transactions............................. (2,903) (4,388) 660
------- ------- -------
Change in net assets...................... (2,466) (4,194) (199)
Net Assets:
Beginning of period...................... 15,778 19,972 20,171
------- ------- -------
End of period............................ $13,312 $15,778 $19,972
======= ======= =======
</TABLE>
(a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
See notes to financial statements
201
<PAGE>
AMSOUTH FUNDS
Limited Term Tennessee Tax-Exempt Fund (a)
Financial Highlights, Class A Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Year Ended Period Ended
July 31, July 31, December 31, December 31, December 31,
2001 + 2000 (b)+ 1999 1998 1997 (c)
---------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 9.81 $ 9.69 $ 10.11 $ 10.13 $ 10.00
------- ------- ------- ------- -------
Investment Activities
Net investment income.. 0.30 0.19 0.30 0.32 0.29
Net realized and
unrealized gains
(losses) from
investments........... 0.31 0.11 (0.40) 0.06 0.13
------- ------- ------- ------- -------
Total from Investment
Activities............ 0.61 0.30 (0.10) 0.38 0.42
------- ------- ------- ------- -------
Distributions
Net investment income.. (0.30) (0.18) (0.30) (0.32) (0.29)
Net realized gains from
investment
transactions.......... -- -- (0.02) (0.08) --
------- ------- ------- ------- -------
Total Distributions.... (0.30) (0.18) (0.32) (0.40) (0.29)
------- ------- ------- ------- -------
Change in Net Asset
Value.................. 0.31 0.12 (0.42) (0.02) 0.13
------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 10.12 $ 9.81 $ 9.69 $ 10.11 $ 10.13
======= ======= ======= ======= =======
Total Return (excludes
sales charge).......... 6.28% 3.12%(d) (1.00)% 3.76% 4.26%(d)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $12,886 $15,489 $19,361 $19,439 $22,893
Ratio of expenses to
average net assets..... 1.28% 1.16%(e) 1.08% 1.05% 0.98%(e)
Ratio of net investment
income to average net
assets................. 2.95% 3.29%(e) 3.07% 3.11% 3.48%(e)
Ratio of expenses to
average net assets*.... 1.66% 1.49%(e) 1.55% 1.52% 1.52%(e)
Portfolio turnover**.... 111% 20% 52% 189% 179%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 28, 1997 (commencement of operations) through
December 31, 1997.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
202
<PAGE>
AMSOUTH FUNDS
Limited Term Tennessee Tax-Exempt Fund (a)
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Period Ended
July 31, July 31, December 31, December 31,
2001 + 2000 (b)+ 1999 1998 (c)
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period................. $ 9.81 $ 9.68 $10.10 $10.18
------ ------ ------ ------
Investment Activities
Net investment income..... 0.22 0.15 0.22 0.20
Net realized and
unrealized gains (losses)
from investments......... 0.31 0.11 (0.40) --
------ ------ ------ ------
Total from Investment
Activities............... 0.53 0.26 (0.18) 0.20
------ ------ ------ ------
Distributions
Net investment income..... (0.22) (0.13) (0.22) (0.20)
Net realized gains from
investment transactions.. -- -- (0.02) (0.08)
------ ------ ------ ------
Total Distributions....... (0.22) (0.13) (0.24) (0.28)
------ ------ ------ ------
Change in Net Asset Value.. 0.31 0.13 (0.42) (0.08)
------ ------ ------ ------
Net Asset Value, End of
Period.................... $10.12 $ 9.81 $ 9.68 $10.10
====== ====== ====== ======
Total Return (excludes
redemption charge)........ 5.51% 2.74%(d) (1.84)% 1.94%(d)
Ratios/Supplemental Data:
Net Assets at end of period
(000)..................... $ 426 $ 289 $ 612 $ 732
Ratio of expenses to
average net assets........ 2.03% 1.97%(e) 1.93% 2.05%(e)
Ratio of net investment
income to average net
assets.................... 2.13% 2.50%(e) 2.21% 2.02%(e)
Ratio of expenses to
average net assets*....... 2.41% 2.21%(e) 2.15% 2.27%(e)
Portfolio turnover**....... 111% 20% 52% 189%
</TABLE>
+ Net investment income is based on average shares outstanding during the
period.
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
** Portfolio turnover is calculated on the basis of the fund as a whole
without distinguishing between the classes of shares issued.
(a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from February 3, 1998 (commencement of operations) through
December 31, 1998.
(d) Not annualized.
(e) Annualized.
See notes to financial statements
203
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Prime Money Market Fund July 31, 2001
(Amounts in thousands, except shares)
Commercial Paper -- Domestic* (48.4%)
<TABLE>
<CAPTION>
Principal
Amount Value
---------- --------
<S> <C> <C>
Aircraft Leasing (3.2%)
International Lease Finance Corp., 3.69%, 10/3/01.......... $ 42,000 $ 41,732
--------
Banking (3.1%)
Wells Fargo & Co., 3.57%, 10/26/01......................... 41,000 40,653
--------
Beverages (3.0%)
Coca-Cola Co., 3.80%, 8/30/01.............................. 39,000 38,882
--------
Chemicals (3.0%)
E.I. Du Pont De Nemours and Co., 3.60%, 8/23/01............ 39,000 38,915
--------
Consumer Goods (5.3%)
Gillette Co., 3.65%, 10/11/01.............................. 29,000 28,793
Kimberly-Clark Corp., 3.68%, 9/13/01....................... 22,000 21,904
Kimberly-Clark Corp., 3.57%, 10/24/01...................... 19,000 18,843
--------
69,540
--------
Financial Services (22.3%)
American Express Credit Corp., 3.90%, 8/27/01.............. 40,000 39,888
American General Finance Corp., 3.94%, 8/16/01............. 40,000 39,935
Chevron USA, Inc., 3.73%, 8/6/01........................... 46,000 45,976
GE Capital Investment Advisors, 3.76%, 9/6/01.............. 53,000 52,803
General Motors Acceptance Corp., 3.72%, 9/17/01............ 39,000 38,812
General Re Funding Corp., 3.57%, 10/29/01.................. 34,000 33,702
IBM Credit Corp., 3.63%, 9/25/01........................... 42,000 41,769
--------
292,885
--------
Oil & Gas Exploration, Production, & Services (3.0%)
Texaco, Inc., 3.64%, 9/19/01............................... 40,000 39,803
--------
Pharmaceuticals (3.1%)
Merck & Co., Inc., 3.66%, 9/11/01.......................... 41,000 40,830
--------
Telecommunications (2.4%)
BellSouth Corp., 3.60%, 10/12/01........................... 32,000 31,772
--------
TOTAL COMMERCIAL PAPER --DOMESTIC.......................... 635,012
--------
</TABLE>
Commercial Paper -- Foreign* (3.2%)
<TABLE>
<S> <C> <C>
Pharmaceuticals (3.2%)
Glaxo Wellcome PLC, 3.95%, 8/20/01................................ 41,700 41,614
------
TOTAL COMMERCIAL PAPER --FOREIGN.................................. 41,614
------
</TABLE>
U.S. Government Agencies* (22.5%)
<TABLE>
<CAPTION>
Principal
Amount Value
---------- ----------
<S> <C> <C>
Fannie Mae (4.5%)
4.15%, 8/1/01........................................... $ 59,000 $ 59,000
----------
Federal Farm Credit Bank (4.9%)
4.68%, 11/8/01.......................................... 66,000 65,176
----------
Federal Home Loan Bank (4.1%)
3.61%, 1/4/02........................................... 35,000 34,461
3.70%, 1/11/02.......................................... 20,000 19,679
----------
54,140
----------
Freddie Mac (4.0%)
4.68%, 8/3/01........................................... 52,750 52,737
----------
Private Export Funding (2.0%)
3.54%, 11/26/01......................................... 26,000 25,704
----------
Tennessee Valley Authority (3.0%)
3.65%, 8/14/01.......................................... 39,000 38,949
----------
TOTAL U.S. GOVERNMENT AGENCIES.......................... 295,706
----------
Repurchase Agreements (26.2%)
Cantor Fitzgerald, 3.90%, 8/1/01, dated 7/31/01, with
maturity value of $114,238 (Collateralized by various
U.S. Treasury and Government backed Securities)........ 114,225 114,225
Goldman Sachs, 3.90%, 8/1/01, dated 7/31/01, with a
maturity value of $58,006 (Collateralized by various
U.S. Government backed Securities)..................... 58,000 58,000
Prudential, 3.90%, 8/1/01, dated 7/31/01, with a
maturity value of $58,006 (Collateralized by various
U.S. Treasury and Government backed Securities)........ 58,000 58,000
Salomon Smith Barney, 3.90%, 8/1/01, dated 7/31/01, with
maturity value of $114,238 (Collateralized by various
U.S. Treasury and Government backed Securities)........ 114,225 114,225
----------
TOTAL REPURCHASE AGREEMENTS............................. 344,450
----------
TOTAL INVESTMENTS
(Cost $1,316,782) (a) -- 100.3%........................ 1,316,782
Liabilities in excess of other assets --(0.3)%.......... (4,235)
----------
NET ASSETS -- 100.0%.................................... $1,312,547
==========
</TABLE>
---------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
* Rates disclosed represent yield effective at purchase.
PLC -- Public Limited Company
See notes to financial statements
204
<PAGE>
AMSOUTH FUNDS
Prime Money Market Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value...................................... $ 972,332
Repurchase agreements, at cost............................. 344,450
----------
Total Investments......................................... 1,316,782
Interest receivable........................................ 37
Receivable for capital shares issued....................... 106
Prepaid expenses and other assets.......................... 56
----------
Total Assets.............................................. 1,316,981
Liabilities:
Distributions payable...................................... $3,674
Accrued expenses and other payables:
Investment advisory fees.................................. 396
Administration fees....................................... 22
Shareholder servicing and distribution fees............... 187
Custodian fees............................................ 31
Other..................................................... 124
------
Total Liabilities......................................... 4,434
----------
Net Assets:
Capital.................................................... 1,312,604
Accumulated net realized losses from investment
transactions.............................................. (57)
----------
Net Assets................................................. $1,312,547
==========
Class A Shares (b)
Net Assets................................................ $ 564,977
Shares outstanding........................................ 565,025
Offering and redemption price per share................... $ 1.00
==========
Class B Shares
Net Assets................................................ $ 1,908
Shares outstanding........................................ 1,908
Offering price per share*................................. $ 1.00
==========
Trust Shares (c)
Net Assets................................................ $ 745,662
Shares outstanding........................................ 745,695
Offering and redemption price per share................... $ 1.00
==========
</TABLE>
* Redemption price per share varies by length of time shares are held.
(a) Formerly AmSouth Prime Obligations Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................. $78,474
-------
Expenses:
Investment advisory fees........................................ $5,502
Administration fees............................................. 2,750
Distribution fees -- Class B Shares............................. 9
Shareholder servicing fees -- Class A Shares (b)................ 1,467
Shareholder servicing fees -- Class B Shares.................... 3
Shareholder servicing fees -- Trust Shares (c).................. 1,181
Custodian fees.................................................. 378
Accounting fees................................................. 159
Transfer agent fees............................................. 311
Other fees...................................................... 368
------
Total expenses before fee reductions/reimbursements............ 12,128
Expenses reduced by Investment Advisor......................... (688)
Expenses reimbursed by Investment Advisor...................... (45)
Expenses reduced by Administrator.............................. (1,375)
Expenses reduced by Distributor................................ (394)
Expenses reduced by Fund Accountant............................ (158)
-------
Net expenses................................................... 9,468
-------
Net Investment Income........................................... 69,006
-------
Change in net assets resulting from operations.................. $69,006
=======
</TABLE>
See notes to financial statements
205
<PAGE>
AMSOUTH FUNDS
Prime Money Market Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................. $ 69,006 $ 52,032
---------- ----------
Change in net assets resulting from operations......... 69,006 52,032
---------- ----------
Distributions to Class A Shareholders (b):
From net investment income............................ (29,126) (18,553)
Distributions to Class B Shareholders:
From net investment income............................ (46) (29)
Distributions to Trust Shareholders (c):
From net investment income............................ (39,834) (33,450)
---------- ----------
Change in net assets from shareholder distributions.... (69,006) (52,032)
---------- ----------
Change in net assets from capital transactions......... (65,217) 704,563
---------- ----------
Change in net assets................................... (65,217) 704,563
Net Assets:
Beginning of period................................... 1,377,764 673,201
---------- ----------
End of period......................................... $1,312,547 $1,377,764
========== ==========
</TABLE>
(a) Formerly AmSouth Prime Obligations Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
See notes to financial statements
206
<PAGE>
AMSOUTH FUNDS
Prime Money Market Fund (a)
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Investment Activities
Net investment income.. 0.049 0.051 0.044 0.049 0.048
-------- -------- -------- -------- --------
Total from Investment
Activities............ 0.049 0.051 0.044 0.049 0.048
-------- -------- -------- -------- --------
Distributions
Net investment income.. (0.049) (0.051) (0.044) (0.049) (0.048)
-------- -------- -------- -------- --------
Total Distributions.... (0.049) (0.051) (0.044) (0.049) (0.048)
-------- -------- -------- -------- --------
Change in Net Asset
Value.................. -- -- -- -- --
Net Asset Value, End of
Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return............ 5.03% 5.20% 4.48% 4.99% 4.90%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $564,977 $645,275 $136,078 $116,960 $111,027
Ratio of expenses to
average net assets..... 0.77% 0.75% 0.78% 0.79% 0.78%
Ratio of net investment
income to average net
assets................. 4.96% 5.35% 4.40% 4.88% 4.79%
Ratio of expenses to
average net assets*.... 0.94% 0.94% 0.94% 0.95% 0.93%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
(a) Formerly AmSouth Prime Obligations Fund.
Financial Highlights, Class B Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31,
2001 2000 1999 1998 (b)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period......................... $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- -------
Investment Activities
Net investment income.......... 0.042 0.042 0.035 0.005
------- ------- ------- -------
Total from Investment
Activities.................... 0.042 0.042 0.035 0.005
------- ------- ------- -------
Distributions
Net investment income.......... (0.042) (0.042) (0.035) (0.005)
------- ------- ------- -------
Total Distributions............ (0.042) (0.042) (0.035) (0.005)
------- ------- ------- -------
Change in Net Asset Value....... -- -- -- --
------- ------- ------- -------
Net Asset Value, End of Period.. $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= =======
Total Return (excludes
redemption charge)............. 4.25% 4.31% 3.55% 0.49%(c)
Ratios/Supplemental Data:
Net Assets at end of period
(000).......................... $ 1,908 $ 727 $ 224 $ 1
Ratio of expenses to average net
assets......................... 1.52% 1.61% 1.69% 1.85%(d)
Ratio of net investment income
to average net assets.......... 3.75% 4.35% 4.51% 3.83%(d)
Ratio of expenses to average net
assets*........................ 1.69% 1.69% 1.70% 1.88%(d)
</TABLE>
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
(a) Formerly AmSouth Prime Obligations Fund.
(b) For the period from June 15, 1998 (commencement of operations) through
July 31, 1998.
(c) Not annualized.
(d) Annualized.
See notes to financial statements
207
<PAGE>
AMSOUTH FUNDS
Prime Money Market Fund (a)
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Investment Activities
Net investment income.. 0.051 0.052 0.045 0.050 0.049
-------- -------- -------- -------- --------
Total from Investment
Activities............ 0.051 0.052 0.045 0.050 0.049
-------- -------- -------- -------- --------
Distributions
Net investment income.. (0.051) (0.052) (0.045) (0.050) (0.049)
-------- -------- -------- -------- --------
Total Distributions.... (0.051) (0.052) (0.045) (0.050) (0.049)
-------- -------- -------- -------- --------
Change in Net Asset
Value.................. -- -- -- -- --
-------- -------- -------- -------- --------
Net Asset Value, End of
Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return............ 5.18% 5.31% 4.59% 5.09% 5.00%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $745,662 $731,762 $536,899 $479,974 $416,966
Ratio of expenses to
average net assets..... 0.63% 0.67% 0.68% 0.69% 0.68%
Ratio of net investment
income to average net
assets................. 5.06% 5.24% 4.51% 4.98% 4.89%
Ratio of expenses to
average net assets*.... 0.84% 0.76% 0.69% 0.70% (b)
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
(a) Formerly AmSouth Prime Obligations Fund.
(b) There were no fee reductions in this period.
See notes to financial statements
208
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
U.S. Treasury Money Market Fund July 31, 2001
(Amounts in thousands)
U.S. Treasury Bills* (44.0%)
<TABLE>
<CAPTION>
Principal
Amount Value
---------- -------
<S> <C> <C>
4.18%, 8/16/01.............................................. $ 21,000 $20,964
3.56%, 8/23/01.............................................. 14,000 13,970
3.70%, 9/6/01............................................... 14,000 13,950
4.13%, 9/13/01.............................................. 19,000 18,908
3.77%, 9/27/01.............................................. 16,000 15,906
3.74%, 10/11/01............................................. 12,000 11,913
3.89%, 10/25/01............................................. 13,000 12,883
3.42%, 12/13/01............................................. 12,000 11,850
3.46%, 1/10/02.............................................. 12,000 11,816
-------
TOTAL U.S. TREASURY BILLS................................... 132,160
-------
U.S. Treasury Notes (22.1%)
5.50%, 8/31/01.............................................. 15,000 15,005
6.25%, 10/31/01............................................. 11,000 11,067
7.50%, 11/15/01............................................. 12,000 12,128
5.88%, 11/30/01............................................. 11,000 11,078
6.13%, 12/31/01............................................. 17,000 17,172
-------
TOTAL U.S. TREASURY NOTES................................... 66,450
-------
</TABLE>
Repurchase Agreements (33.9%)
<TABLE>
<CAPTION>
Principal
Amount Value
---------- --------
<S> <C> <C>
Goldman Sachs, 3.81%, 8/1/01, dated 7/31/01, with maturity
value of $50,943 (Collateralized by U.S. Treasury
Securities)............................................... $ 50,937 $ 50,937
Salomon Smith Barney, 3.83%, 8/1/01, dated 7/31/01, with a
maturity value of $50,943 (Collateralized by U.S. Treasury
Securities)............................................... 50,937 50,937
--------
TOTAL REPURCHASE AGREEMENTS................................ 101,874
--------
TOTAL INVESTMENTS
(Cost $300,484) (a) -- 100.0%............................. 300,484
Other assets in excess of liabilities --0.0%............... 57
--------
NET ASSETS -- 100.0%....................................... $300,541
========
</TABLE>
---------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
* Rates disclosed represent yield effective at purchase.
See notes to financial statements
209
<PAGE>
AMSOUTH FUNDS
U.S. Treasury Money Market Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value......................................... $198,610
Repurchase agreements, at cost................................ 101,874
--------
Total Investments............................................ 300,484
Interest receivable........................................... 921
Receivable for capital shares issued.......................... 135
Collateral for securities loaned, at fair value............... 52,000
Prepaid expenses and other assets............................. 22
--------
Total Assets................................................. 353,562
Liabilities:
Distributions payable......................................... $ 780
Payable upon return of securities loaned...................... 52,000
Payable for capital shares redeemed........................... 64
Accrued expenses and other payables:
Investment advisory fees..................................... 87
Administration fees.......................................... 10
Shareholder servicing fees................................... 37
Custodian fees............................................... 7
Other........................................................ 36
-------
Total Liabilities............................................ 53,021
--------
Net Assets:
Capital....................................................... 300,533
Accumulated net investment income............................. 7
Accumulated net realized gains from investment transactions... 1
--------
Net Assets.................................................... $300,541
========
Class A Shares (b)
Net Assets................................................... $101,125
Shares outstanding........................................... 101,124
Offering and redemption price per share...................... $ 1.00
========
Trust Shares (c)
Net Assets................................................... $199,416
Shares outstanding........................................... 199,409
Offering and redemption price per share...................... $ 1.00
========
</TABLE>
(a) Formerly AmSouth U.S. Treasury Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................. $16,505
Securities lending income....................................... 49
-------
Total Investment Income........................................ 16,554
Expenses:
Investment advisory fees........................................ $1,207
Administration fees............................................. 604
Shareholder servicing fees -- Class A Shares (b)................ 72
Shareholder servicing fees -- Trust Shares (c).................. 410
Custodian fees.................................................. 83
Accounting fees................................................. 53
Transfer agent fees............................................. 70
Other fees...................................................... 156
------
Total expenses before fee reductions........................... 2,655
Expenses reduced by Investment Advisor......................... (151)
Expenses reduced by Distributor................................ (137)
Expenses reduced by Fund Accountant............................ (37)
-------
Net expenses................................................... 2,330
-------
Net Investment Income........................................... 14,224
-------
Change in net assets resulting from operations.................. $14,224
=======
</TABLE>
See notes to financial statements
210
<PAGE>
AMSOUTH FUNDS
U.S. Treasury Money Market Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 14,224 $ 13,697
-------- --------
Change in net assets resulting from operations........... 14,224 13,697
-------- --------
Distributions to Class A Shareholders (b):
From net investment income.............................. (1,068) (291)
Distributions to Trust Shareholders (c):
From net investment income.............................. (13,156) (13,406)
-------- --------
Change in net assets from shareholder distributions...... (14,224) (13,697)
-------- --------
Change in net assets from capital transactions........... 1,852 (26,548)
-------- --------
Change in net assets..................................... 1,852 (26,548)
Net Assets:
Beginning of period..................................... 298,689 325,237
-------- --------
End of period........................................... $300,541 $298,689
======== ========
</TABLE>
(a) Formerly AmSouth U.S. Treasury Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
See notes to financial statements
211
<PAGE>
AMSOUTH FUNDS
U.S. Treasury Money Market Fund (a)
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $1.000 $1.000 $1.000
-------- ------- ------ ------ ------
Investment Activities
Net investment income.. 0.046 0.046 0.040 0.046 0.045
-------- ------- ------ ------ ------
Total from Investment
Activities............ 0.046 0.046 0.040 0.046 0.045
-------- ------- ------ ------ ------
Distributions
Net investment income.. (0.046) (0.046) (0.040) (0.046) (0.045)
-------- ------- ------ ------ ------
Total Distributions.... (0.046) (0.046) (0.040) (0.046) (0.045)
-------- ------- ------ ------ ------
Change in Net Asset
Value.................. -- -- -- -- --
-------- ------- ------ ------ ------
Net Asset Value, End of
Period................. $ 1.000 $ 1.000 $1.000 $1.000 $1.000
======== ======= ====== ====== ======
Total Return............ 4.71% 4.73% 4.06% 4.67% 4.60%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $101,125 $11,817 $4,390 $8,070 $9,885
Ratio of expenses to
average net assets..... 0.92% 0.85% 0.79% 0.80% 0.79%
Ratio of net investment
income to average net
assets................. 3.73% 4.72% 4.03% 4.57% 4.50%
Ratio of expenses to
average net assets*.... 0.98% 0.96% 0.95% 0.95% 0.94%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
(a) Formerly AmSouth U.S. Treasury Fund.
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
Investment Activities
Net investment income.. 0.048 0.048 0.041 0.047 0.046
-------- -------- -------- -------- --------
Total from Investment
Activities............ 0.048 0.048 0.041 0.047 0.046
-------- -------- -------- -------- --------
Distributions
Net investment income.. (0.048) (0.048) (0.041) (0.047) (0.046)
-------- -------- -------- -------- --------
Total Distributions.... (0.048) (0.048) (0.041) (0.047) (0.046)
-------- -------- -------- -------- --------
Change in Net Asset
Value.................. -- -- -- -- --
-------- -------- -------- -------- --------
Net Asset Value, End of
Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
Total Return............ 4.87% 4.86% 4.16% 4.77% 4.70%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $199,416 $286,872 $320,847 $352,055 $309,361
Ratio of expenses to
average net assets..... 0.76% 0.73% 0.69% 0.70% 0.69%
Ratio of net investment
income to average net
assets................. 4.82% 4.74% 4.10% 4.67% 4.60%
Ratio of expenses to
average net assets*.... 0.87% 0.77% 0.70% 0.70% (b)
</TABLE>
/\ Formerly Premier Shares.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
(a) Formerly AmSouth U.S. Treasury Fund.
(b) There were no fee reductions in this period.
See notes to financial statements
212
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Treasury Reserve Money Market Fund July 31, 2001
(Amounts in thousands)
U.S. Treasury Bills* (29.3%)
<TABLE>
<CAPTION>
Principal
Amount Value
----------- --------
<S> <C> <C>
4.14%, 8/16/01............................................ $ 18,000 $ 17,969
4.41%, 9/13/01............................................ 19,000 18,902
3.68%, 9/27/01............................................ 14,000 13,920
3.51%, 10/11/01........................................... 18,000 17,877
3.54%, 10/25/01........................................... 11,000 10,909
3.44%, 12/13/01........................................... 18,000 17,773
3.54%, 12/27/01........................................... 10,000 9,860
--------
TOTAL U.S. TREASURY BILLS................................. 107,210
--------
U.S. Treasury Notes (22.8%)
7.88%, 8/15/01............................................ 10,000 10,015
5.50%, 8/31/01............................................ 23,000 23,013
7.50%, 11/15/01........................................... 13,000 13,139
5.88%, 11/30/01........................................... 22,000 22,153
6.25%, 1/31/02............................................ 15,000 15,204
--------
TOTAL U.S. TREASURY NOTES................................. 83,524
--------
</TABLE>
Repurchase Agreements (47.9%)
<TABLE>
<S> <C> <C>
Goldman Sachs, 3.81%, 8/1/01, dated 7/31/01, with maturity
value of $87,846 (Collateralized by U.S. Treasury Note).. 87,836 87,836
Salomon Smith Barney, 3.83%, 8/1/01, dated 7/31/01, with
maturity value of $87,846 (Collateralized by U.S.
Treasury Note)........................................... 87,836 87,836
----------- --------
TOTAL REPURCHASE AGREEMENTS............................... 175,672
--------
TOTAL INVESTMENTS
(Cost $366,406) (a) -- 100.0%............................ 366,406
Other assets in excess of
liabilities -- 0.0%...................................... 109
--------
NET ASSETS -- 100.0%...................................... $366,515
========
</TABLE>
---------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
* Rates disclosed represent yield effective at purchase.
See notes to financial statements
213
<PAGE>
AMSOUTH FUNDS
Treasury Reserve Money Market Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at value....................................... $190,734
Repurchase agreements, at cost.............................. 175,672
--------
Total Investments.......................................... 366,406
Interest receivable......................................... 1,340
Receivable for capital shares issued........................ 1
Receivable from investment advisor.......................... 7
Collateral for securities loaned, at fair value............. 48,000
Prepaid expenses and other assets........................... 29
--------
Total Assets............................................... 415,783
Liabilities:
Distributions payable....................................... $ 1,035
Payable upon return of securities loaned.................... 48,000
Accrued expenses and other payables:
Investment advisory fees................................... 110
Administration fees........................................ 6
Shareholder servicing fees................................. 45
Custodian fees............................................. 9
Other...................................................... 63
-------
Total Liabilities.......................................... 49,268
--------
Net Assets:
Capital..................................................... 366,518
Accumulated net investment income........................... 4
Accumulated net realized losses from investment
transactions............................................... (7)
--------
Net Assets.................................................. $366,515
========
Class A Shares
Net Assets................................................. $ 99,777
Shares outstanding......................................... 99,784
Offering and redemption price per share.................... $ 1.00
========
Trust Shares (b)
Net Assets................................................. $266,738
Shares outstanding......................................... 266,752
Offering and redemption price per share.................... $ 1.00
========
</TABLE>
(a) Formerly ISG Treasury Money Market Fund.
(b) Formerly Institutional Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................. $22,433
Securities lending income....................................... 57
-------
Total Investment Income........................................ 22,490
Expenses:
Investment advisory fees........................................ $1,603
Administration fees............................................. 801
Shareholder servicing fees -- Class A Shares.................... 266
Shareholder servicing fees -- Trust Shares (b).................. 441
Custodian fees.................................................. 110
Accounting fees................................................. 47
Transfer agent fees............................................. 109
Other fees...................................................... 143
------
Total expenses before fee reductions/reimbursements............ 3,520
Expenses reduced by Investment Advisor......................... (200)
Expenses reimbursed by Investment Advisor...................... (136)
Expenses reduced by Administrator.............................. (401)
Expenses reduced by Distributor................................ (147)
Expenses reduced by Fund Accountant............................ (45)
-------
Net expenses................................................... 2,591
-------
Net Investment Income........................................... 19,899
-------
Change in net assets resulting from operations.................. $19,899
=======
</TABLE>
See notes to financial statements
214
<PAGE>
AMSOUTH FUNDS
Treasury Reserve Money Market Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended
July 31, July 31, December 31,
2001 2000 (b) 1999
---------- ------------ ------------
(Amounts in thousands)
<S> <C> <C> <C>
From Investment Activities:
Operations:
Net investment income................... $ 19,899 $ 13,999 $ 20,806
-------- -------- --------
Change in net assets resulting from
operations.............................. 19,899 13,999 20,806
-------- -------- --------
Distributions to Class A Shareholders:
From net investment income.............. (5,219) (4,361) (6,819)
Distributions to Trust Shareholders (c):
From net investment income.............. (14,680) (9,638) (13,987)
-------- -------- --------
Change in net assets from shareholder
distributions........................... (19,899) (13,999) (20,806)
-------- -------- --------
Change in net assets from capital
transactions............................ (57,932) (60,565) 7,558
-------- -------- --------
Change in net assets..................... (57,932) (60,565) 7,558
Net Assets:
Beginning of period..................... 424,447 485,012 477,454
-------- -------- --------
End of period........................... $366,515 $424,447 $485,012
======== ======== ========
</TABLE>
(a) Formerly ISG Treasury Money Market Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) Formerly Institutional Shares.
See notes to financial statements
215
<PAGE>
AMSOUTH FUNDS
Treasury Reserve Money Market Fund (a)
Financial Highlights, Class A Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, December 31, December 31, December 31, December 31,
2001 2000 (b) 1999 1998 1997 1996
---------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- -------- -------- -------- ------- -------
Investment Activities
Net investment income.. 0.048 0.030 0.043 0.046 0.047 0.047
------- -------- -------- -------- ------- -------
Total from Investment
Activities............ 0.048 0.030 0.043 0.046 0.047 0.047
------- -------- -------- -------- ------- -------
Distributions
Net investment income.. (0.048) (0.030) (0.043) (0.046) (0.047) (0.047)
------- -------- -------- -------- ------- -------
Total Distributions.... (0.048) (0.030) (0.043) (0.046) (0.047) (0.047)
------- -------- -------- -------- ------- -------
Change in Net Asset
Value.................. -- -- -- -- -- --
------- -------- -------- -------- ------- -------
Net Asset Value, End of
Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======== ======== ======== ======= =======
Total Return............ 4.95% 3.07%(c) 4.38% 4.68% 4.78% 4.78%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $99,777 $143,901 $143,208 $167,475 $77,065 $78,308
Ratio of expenses to
average net assets..... 0.72% 0.65%(d) 0.60% 0.77% 0.75% 0.56%
Ratio of net investment
income to average net
assets................. 4.90% 5.21%(d) 4.28% 4.56% 4.68% 4.72%
Ratio of expenses to
average net assets*.... 0.95% 0.86%(d) 0.70% 0.78% (e) 0.74%
</TABLE>
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
(a) Formerly ISG Treasury Money Market Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) Not annualized.
(d) Annualized.
(e) There were no fee reductions in this period.
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Period Ended Year Ended Year Ended Year Ended Period Ended
July 31, July 31, December 31, December 31, December 31, December 31,
2001 2000 (b) 1999 1998 1997 1996 (c)
---------- ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- -------- --------
Investment Activities
Net investment income.. 0.049 0.031 0.043 0.048 0.049 0.024
-------- -------- -------- -------- -------- --------
Total from Investment
Activities............ 0.049 0.031 0.043 0.048 0.049 0.024
-------- -------- -------- -------- -------- --------
Distributions
Net investment income.. (0.049) (0.031) (0.043) (0.048) (0.049) (0.024)
-------- -------- -------- -------- -------- --------
Total Distributions.... (0.049) (0.031) (0.043) (0.048) (0.049) (0.024)
-------- -------- -------- -------- -------- --------
Change in Net Asset
Value.................. -- -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period................. $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ======== ========
Total Return............ 5.06% 3.10%(d) 4.39% 4.93% 5.05% 2.43%(d)
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $266,738 $280,546 $341,803 $309,979 $114,175 $109,698
Ratio of expenses to
average net assets..... 0.62% 0.61%(e) 0.59% 0.53% 0.50% 0.52%(e)
Ratio of net investment
income to average net
assets................. 4.99% 5.24%(e) 4.31% 4.78% 4.94% 4.78%(e)
Ratio of expenses to
average net assets*.... 0.85% 0.76%(e) 0.60% (f) (f) (f)
</TABLE>
/\ Formerly Institutional Shares.
* During the period, certain fees were reduced/reimbursed. If such fee
reductions/reimbursements had not occurred, the ratios would have been as
indicated.
(a) Formerly ISG Treasury Money Market Fund.
(b) For the period from January 1, 2000 through July 31, 2000. In conjunction
with the reorganization of the AmSouth Funds, the Fund changed its fiscal
year end to July 31.
(c) For the period from July 1, 1996 (commencement of operations) through
December 31, 1996.
(e) Not annualized.
(e) Annualized.
(f) There were no fee reductions in this period.
See notes to financial statements
216
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Tax-Exempt Money Market Fund July 31, 2001
(Amounts in thousands, except shares)
Demand Notes (65.9%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
----------- --------
<S> <C> <C>
Alabama (20.8%)
Alabama State Housing Finance Authority, Multi Family
Housing Revenue, Rime Village Hoover Project, Series
A, 2.70%*, 8/1/01**, FNMA............................ $ 2,000 $ 2,000
Alabama State Housing Finance Authority, Multi Family
Housing Revenue, Rime Village Huntsville Project,
Series B, 2.70%*, 8/1/01**, FNMA..................... 1,500 1,500
Bessemer Alabama Medical Clinic Board, Revenue, Lloyd
Noland Foundation, Series A, 2.85%*, 8/2/01**, LOC:
Allied Irish Bank PLC................................ 9,600 9,600
City of Birmingham, Series 1992A, GO, 2.65%*,
8/1/01**............................................. 2,000 2,000
Columbia Alabama Industrial Development Board, PCR,
Alabama Power Co. Project, Series A,
2.80%*, 8/1/01**..................................... 1,600 1,600
Columbia Alabama Industrial Development Board, PCR,
Alabama Power Co. Project, Series D,
2.75%*, 8/1/01**..................................... 350 350
Daphne-Villa Mercy Alabama Special Care Facilities
Financing Authority, Revenue, Mercy Medical Project,
2.60%*, 8/1/01**, LOC: Southtrust Bank N.A........... 5,000 5,000
Eutaw Alabama Industrial Development Board, PCR,
Refunding, Alabama Power Co., 2.80%*, 8/1/01**....... 4,000 4,000
Homewood Educational Building Authority, Revenue,
Educational Facilities, Samford University,
2.80%*, 8/1/01**..................................... 5,700 5,700
Jacksonville Industrial Development Board, Industrial
Revenue, Parker Hannifin Corp., 2.65%*, 8/2/01**..... 1,000 1,000
Mobile Industrial Development Board, PCR, Alabama
Power Co. Project, Series B, 2.69%*, 8/2/01**........ 2,000 2,000
Port City Medical Clinic Board of Mobile Alabama,
Revenue, Infirmary Health, 2.65%*, 8/2/01**, SPA: The
Bank of Nova Scotia and KBC Bank N.V................. 2,000 2,000
Stevenson Alabama Industrial Development Board,
Environmental Improvement Revenue, Mead Corp.
Project, 2.70%*, 8/1/01**............................ 3,565 3,565
--------
40,315
--------
Arizona (1.8%)
Phoenix Industrial Development Authority, Multi Family
Housing Revenue, Del Mar Terrace, Series A, 2.70%*,
8/1/01**, FHLMC...................................... 3,450 3,450
--------
</TABLE>
Demand Notes, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
--------- --------
<S> <C> <C>
Connecticut (2.6%)
Connecticut State Health & Educational Facilities
Authority, Revenue, Yale University, Series T-1,
2.50%*, 8/2/01**.......................................... $ 5,000 $ 5,000
--------
Georgia (3.1%)
Cobb County Housing Authority, Multi Family Housing
Revenue, Post Mill Project, 2.70%*, 8/1/01**, FNMA........ 1,000 1,000
Municipal Electric Authority, Georgia, Revenue, Project
One, Subseries D, 2.65%*, 8/1/01**, MBIA.................. 5,000 5,000
--------
6,000
--------
Illinois (5.0%)
Elmhurst Revenue, Joint Common Accreditation, 2.65%*,
8/2/01**.................................................. 4,665 4,665
Illinois Developmental Finance Authority, Revenue, Provena
Health, Series C, 3.00%*, 8/1/01**........................ 5,000 5,000
--------
9,665
--------
Michigan (0.5%)
Delta County Economic Development Corp., Environmental
Improvement Revenue, Mead Escanaba Paper, Series C,
2.70%*, 8/1/01**.......................................... 900 900
--------
Nevada (1.9%)
Reno Nevada, Hospital Revenue, St. Mary's Regional Medical
Center, Series B, 2.75%*, 8/1/01**, MBIA.................. 3,600 3,600
--------
New York (3.2%)
New York, Series F-3, GO, 2.50%*, 8/1/01**................. 5,000 5,000
New York, Subseries A-10, GO, 2.60%*, 8/1/01**, LOC: Morgan
Guaranty Trust............................................ 1,100 1,100
--------
6,100
--------
North Carolina (3.6%)
University of North Carolina Hospital Chapel Hill, Revenue,
Series A, 2.75%*, 8/1/01**, SPA: Landesbank Hessen........ 7,000 7,000
--------
North Dakota (0.8%)
Grand Forks Health Care Facilities, Revenue, United
Hospital Obligation Group, Series A, 2.75%*, 8/1/01**,
LOC: LaSalle National Bank................................ 1,500 1,500
--------
Ohio (2.6%)
Montgomery County Ohio, Revenue, Catholic Health
Initiatives, Series B, 2.80%*, 8/1/01**, SPA: Morgan
Guaranty Trust............................................ 5,000 5,000
--------
</TABLE>
Continued
217
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Tax-Exempt Money Market Fund July 31, 2001
(Amounts in thousands, except shares)
Demand Notes, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
----------- --------
<S> <C> <C>
Oregon (1.7%)
Port of Portland Oregon, Reynolds Metals, PCR, 2.70%*,
8/1/01**, LOC: San Paolo Bank........................... $ 3,200 $ 3,200
--------
Pennsylvania (2.9%)
Lehigh County Pennsylvania General Purpose Authority,
Revenue, Lehigh Valley Hospital, Series A,
2.75%*, 8/1/01**, AMBAC................................. 4,200 4,200
Lehigh County Pennsylvania General Purpose Authority,
Revenue, Lehigh Valley Hospital, Series B,
2.75%*, 8/1/01**, MBIA.................................. 1,300 1,300
--------
5,500
--------
Tennessee (7.3%)
Metropolitan Government, Nashville & Davidson County,
Industrial Development Board, Revenue, Country Music
Hall of Fame, 2.65%*, 8/2/01**.......................... 5,000 5,000
Shelby County Health, Educational, & Housing Facilities
Board Revenue, Multi Family Housing, Wyndridge, 2.67%*,
8/1/01**................................................ 8,000 8,000
Sullivan County Industrial Development Board, PCR, Mead
Corporation Project, 2.70%*, 8/1/01**, LOC: Union Bank
of Switzerland.......................................... 1,190 1,190
--------
14,190
--------
Texas (4.3%)
Harris County Health Facilities Development Corporation,
Revenue, 2.75%*, 8/1/01**, SPA: Morgan Guaranty Trust... 2,900 2,900
Lone Star Texas Airport Improvement Authority, 2.75%*,
8/1/01**, LOC: Royal Bank of Canada..................... 1,000 1,000
Lone Star Texas Airport Improvement Authority, 2.75%*,
8/1/01**, LOC: Royal Bank Of Canada..................... 3,000 3,000
North Central Texas Health Facilities Development
Corporation, Revenue, Presbytarian Medical Center,
Series C, 2.75%*, 8/1/01**, MBIA........................ 1,400 1,400
--------
8,300
--------
Washington (2.6%)
Washington State, Series VR 96B, GO, 2.50%*, 8/1/01**.... 5,000 5,000
--------
Wyoming (1.2%)
Green River Wyoming, PCR, Rhone-Poulene Inc. Project,
2.70%*, 8/1/01**, LOC: ABN AMRO Bank N.V................ 2,300 2,300
--------
TOTAL DEMAND NOTES....................................... 127,020
--------
</TABLE>
Municipal Bonds (26.7%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
----------- --------
<S> <C> <C>
California (5.0%)
Brea California Public Finance Authority, Revenue, 7.00%,
8/1/15, OID, Prerefunded 8/1/01 @ 102, MBIA............. $ 9,580 $ 9,771
--------
Colorado (0.3%)
Colorado Springs Colorado, Utilities Revenue, Refunding
and Improvements, Series A, 4.50%, 11/15/01............. 615 618
--------
Connecticut (0.9%)
New Haven Connecticut, GO, 7.40%, 8/15/11, Prerefunded
8/15/01 @ 102........................................... 1,605 1,640
--------
Florida (1.9%)
Fort Lauderdale Florida, Water & Sewer Revenue, 5.50%,
9/1/01, OID, ETM........................................ 1,000 1,002
Miami Beach Florida, Park Improvement Projects, 4.00%,
9/1/01, OID, FGIC....................................... 300 300
Palm Beach County Florida School District, GO, 4.80%,
8/1/01, OID, FGIC....................................... 1,000 1,000
Reedy Creek Florida Improvement District, Utilities
Revenue, Series 1991-1, OID, 6.50%, 10/1/16, Prerefunded
10/1/01 @ 101, MBIA..................................... 850 864
Tampa Florida, Utility Tax & Special Revenue, 6.90%,
10/1/09, OID, Prerefunded 10/1/01 @ 102, AMBAC, MBIA-
IBC..................................................... 530 544
--------
3,710
--------
Georgia (1.6%)
Dougherty County Georgia School District, Tax
Anticipation Notes, 3.50%, 12/31/01..................... 3,000 3,009
--------
Indiana (0.5%)
Indiana University, Revenue, Student Fees, Series H,
6.80%, 8/1/04, OID, Prerefunded 8/1/01 @ 102............ 1,000 1,020
--------
Massachusetts (4.6%)
Chelsea Massachusetts, GO, 4.10%, 9/1/01, FGIC........... 297 297
Massachusetts State, Series C, GO, 6.75%, 8/1/06, OID,
Prerefunded 8/1/01 @ 102................................ 500 510
Pittsfield Massachusetts, Bond Anticipation Notes, 5.00%,
10/12/01................................................ 8,000 8,030
--------
8,837
--------
Michigan (2.8%)
Michigan State Hospital Finance Authority, Revenue,
Detroit Medical Center, Series A, 7.50%, 8/15/11, OID,
Prerefunded 8/15/01 @ 102............................... 5,000 5,109
Washtenaw County Michigan Building Authority, Revenue,
4.80%, 9/1/01, AMBAC.................................... 350 351
--------
5,460
--------
</TABLE>
Continued
218
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Tax-Exempt Money Market Fund July 31, 2001
(Amounts in thousands, except shares)
Municipal Bonds, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
----------- --------
<S> <C> <C>
Minnesota (0.1%)
Minnesota State Higher Education Facilities Authority,
Revenue, University of St. Thomas, Series 4-A1, 4.45%,
10/1/01.................................................. $ 100 $ 100
--------
Missouri (0.3%)
Independence Missouri, Water Utility Revenue, 3.60%,
11/1/01, AMBAC........................................... 600 601
--------
New Jersey (2.2%)
Bridgewater Township New Jersey, Bond Anticipation Notes,
3.25%, 1/30/02........................................... 4,213 4,225
--------
New York (2.6%)
Monroe Woodbury New York Central School District, Tax
Anticipation Notes, 3.05%, 9/28/01....................... 5,000 5,003
--------
Ohio (0.5%)
Cuyahoga County Ohio, Hospital Revenue, Meridia Health
System, 7.00%, 8/15/23, OID, Prerefunded 8/15/01 @ 102... 500 511
Hilliard Ohio School District, School Improvements, Series
B, GO, 4.00%, 12/1/01.................................... 515 517
--------
1,028
--------
Pennsylvania (1.8%)
Upper Merion Pennsylvania Area School District, GO, 6.90%,
9/1/16, Prerefunded 9/1/01 @ 100, State Aid Withholding.. 3,500 3,513
--------
South Carolina (0.1%)
Florence County South Carolina, Hospital Revenue, McLeod
Regional Medical Center Project, 4.60%, 11/1/01, OID,
FGIC..................................................... 215 216
--------
South Dakota (0.3%)
South Dakota State Building Authority, Lease Revenue,
Series A, 4.60%, 12/1/01, AMBAC.......................... 500 502
--------
Texas (0.6%)
Round Rock Texas Independent School District, GO, 3.40%,
8/1/01, OID, PSF-GTD..................................... 500 500
Texas State, Water Financial Assistance, GO, 5.00%,
8/1/01................................................... 600 600
--------
1,100
--------
Virginia (0.3%)
Virginia College Building Authority, Educational
Facilities Revenue, 21st Century College Program,
4.25%, 8/1/01............................................ 500 500
--------
Wisconsin (0.3%)
Wisconsin State, Refunding, Series 3, GO, 5.25%, 11/1/01.. 500 503
--------
TOTAL MUNICIPAL BONDS..................................... 51,356
--------
</TABLE>
Tax Exempt Commercial Paper (5.2%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
----------- --------
<S> <C> <C>
LPFA, 2.55%, 8/13/01...................................... $ 5,000 $ 5,000
Texas Municipal Power, 2.60%, 8/14/01..................... 5,000 5,000
--------
TOTAL TAX EXEMPT COMMERCIAL PAPER......................... 10,000
--------
Investment Companies (2.2%)
AIM Tax-Free Money Market Fund............................ 1,347,498 1,348
Goldman Sachs Tax-Free Money Market Fund.................. 2,928,155 2,928
--------
TOTAL INVESTMENT COMPANIES................................ 4,276
--------
TOTAL INVESTMENTS
(Cost $192,652) (a) -- 100.0%............................ 192,652
Liabilities in excess of other
assets -- (0.0%)......................................... (19)
--------
NET ASSETS -- 100.0%...................................... $192,633
========
</TABLE>
---------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
* Variable rate security. Rate presented represents rate in effect at July
31, 2001. Date presented reflects next rate change date.
** Put and demand features exist allowing the fund to require the repurchase
of the instrument within variable time periods including daily, weekly,
monthly, and semiannually.
AMBAC -- Insured by AMBAC Indemnity Corp.
ETM -- Escrowed to Maturity
FGIC -- Insured by Financial Guaranty Insurance Corp.
FHLMC -- Insured by Federal Home Loan Mortgage Corp.
FNMA -- Insured by Federal National Mortgage Assoc.
GO -- General Obligation
LOC -- Line of Credit
MBIA -- Insured by Municipal Bond Insurance Assoc.
MBIA-IBC -- MBIA Insured Bond Certificates
OID -- Original Issue Discount
PCR -- Pollution Control Revenue
PLC -- Public Limited Company
PSF-GTD -- Permanent School Fund Guarantee
SPA -- Standby Purchase Agreement
See notes to financial statements
219
<PAGE>
AMSOUTH FUNDS
Tax-Exempt Money Market Fund (a)
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at
value......... $192,652
Interest and
dividends
receivable.... 1,525
Prepaid
expenses and
other assets.. 29
--------
Total Assets.. 194,206
Liabilities:
Distributions
payable....... $ 300
Payable for
investments
purchased..... 1,176
Accrued
expenses and
other
payables:
Investment
advisory
fees......... 41
Administration
fees......... 6
Shareholder
servicing
fees......... 22
Custodian
fees......... 5
Other......... 23
------
Total
Liabilities.. 1,573
--------
Net Assets:
Capital........ 192,923
Accumulated net
realized
losses from
investment
transactions.. (290)
--------
Net Assets..... $192,633
========
Class A Shares
(b)
Net Assets.... $ 40,728
Shares
outstanding.. 40,786
Offering and
redemption
price per
share........ $ 1.00
========
Trust Shares
(c)
Net Assets.... $151,905
Shares
outstanding.. 152,138
Offering and
redemption
price per
share........ $ 1.00
========
</TABLE>
(a) Formerly AmSouth Tax-Exempt Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income.................................................... $6,934
Dividend income.................................................... 319
------
Total Investment Income........................................... 7,253
Expenses:
Investment advisory fees........................................... $805
Administration fees................................................ 403
Shareholder servicing fees -- Class A Shares (b)................... 110
Shareholder servicing fees -- Trust Shares (c)..................... 236
Custodian fees..................................................... 55
Accounting fees.................................................... 39
Transfer agent fees................................................ 51
Other fees......................................................... 77
----
Total expenses before fee reductions.............................. 1,776
Expenses reduced by Investment Advisor............................ (302)
Expenses reduced by Distributor................................... (79)
Expenses reduced by Fund Accountant............................... (23)
------
Net expenses...................................................... 1,372
------
Net Investment Income.............................................. 5,881
------
Realized Gains from Investments:
Net realized gains from investment transactions.................... 97
------
Change in net assets resulting from operations..................... $5,978
======
</TABLE>
See notes to financial statements
220
<PAGE>
AMSOUTH FUNDS
Tax-Exempt Money Market Fund (a)
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 5,881 $ 4,385
Net realized gains (losses) from investment
transactions........................................... 97 (172)
-------- --------
Change in net assets resulting from operations........... 5,978 4,213
-------- --------
Distributions to Class A Shareholders (b):
From net investment income.............................. (1,243) (1,179)
Distributions to Trust Shareholders (c):
From net investment income.............................. (4,638) (3,206)
-------- --------
Change in net assets from shareholder distributions...... (5,881) (4,385)
-------- --------
Change in net assets from capital transactions........... (598) 96,582
-------- --------
Change in net assets..................................... (501) 96,410
Net Assets:
Beginning of period..................................... 193,134 96,724
-------- --------
End of period........................................... $192,633 $193,134
======== ========
</TABLE>
(a) Formerly AmSouth Tax-Exempt Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
See notes to financial statements
221
<PAGE>
AMSOUTH FUNDS
Tax-Exempt Money Market Fund (a)
Financial Highlights, Class A Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 0.998 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- -------
Investment Activities
Net investment income.. 0.028 0.031 0.026 0.030 0.030
Net realized and
unrealized gain
(losses) from
investments........... 0.001 (0.002) -- -- --
------- ------- ------- ------- -------
Total from Investment
Activities............ 0.029 0.029 0.026 0.030 0.030
------- ------- ------- ------- -------
Distributions
Net investment income.. (0.028) (0.031) (0.026) (0.030) (0.030)
------- ------- ------- ------- -------
Total Distributions.... (0.028) (0.031) (0.026) (0.030) (0.030)
------- ------- ------- ------- -------
Change in Net Asset
Value.................. 0.001 (0.002) -- -- --
------- ------- ------- ------- -------
Net Asset Value, End of
Period................. $ 0.999 $ 0.998 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= =======
Total Return............ 2.83% 3.11% 2.66% 3.03% 3.04%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $40,728 $51,260 $22,844 $28,657 $27,926
Ratio of expenses to
average net assets..... 0.80% 0.71% 0.59% 0.60% 0.62%
Ratio of net investment
income to average net
assets................. 2.84% 3.14% 2.64% 2.97% 3.00%
Ratio of expenses to
average net assets*.... 0.96% 0.97% 0.98% 0.98% 0.97%
</TABLE>
/\ Formerly Classic Shares.
* During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
(a) Formerly AmSouth Tax-Exempt Fund.
Financial Highlights, Trust Shares/\
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31, July 31,
2001 2000 1999 1998 1997
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period.... $ 0.998 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- ------- ------- -------
Investment Activities
Net investment income.. 0.029 0.032 0.027 0.031 0.031
Net realized and
unrealized gains
(losses) from
investments........... --* (0.002) -- -- --
-------- -------- ------- ------- -------
Total from Investment
Activities............ 0.029 0.030 0.027 0.031 0.031
-------- -------- ------- ------- -------
Distributions
Net investment income.. (0.029) (0.032) (0.027) (0.031) (0.031)
-------- -------- ------- ------- -------
Total Distributions.... (0.029) (0.032) (0.027) (0.031) (0.031)
-------- -------- ------- ------- -------
Change in Net Asset
Value.................. -- (0.002) -- -- --
-------- -------- ------- ------- -------
Net Asset Value, End of
Period................. $ 0.998 $ 0.998 $ 1.000 $ 1.000 $ 1.000
======== ======== ======= ======= =======
Total Return............ 2.98% 3.23% 2.76% 3.13% 3.15%
Ratios/Supplemental
Data:
Net Assets at end of
period (000)........... $151,905 $141,874 $73,880 $62,084 $55,429
Ratio of expenses to
average net assets..... 0.65% 0.59% 0.49% 0.50% 0.52%
Ratio of net investment
income to average net
assets................. 2.95% 3.28% 2.71% 3.07% 3.10%
Ratio of expenses to
average net assets**... 0.86% 0.80% 0.73% 0.73% 0.72%
</TABLE>
/\ Formerly Premier Shares.
* Less than $0.0005
** During the period, certain fees were reduced. If such fee reductions had not
occurred, the ratios would have been as indicated.
(a) Formerly AmSouth Tax-Exempt Fund.
See notes to financial statements
222
<PAGE>
AMSOUTH FUNDS Schedule of Portfolio Investments
Institutional Prime Obligations Money Market Fund July 31, 2001
(Amounts in thousands, except shares)
Commercial Paper -- Domestic* (46.3%)
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Aircraft Leasing (3.0%)
International Lease Finance Corp., 3.69%, 10/3/01.......... $ 23,000 $ 22,853
--------
Banking (2.9%)
Wells Fargo & Co., 3.57%, 10/26/01......................... 22,000 21,814
--------
Beverages (2.8%)
Coca-Cola Co., 3.80%, 8/30/01.............................. 21,000 20,936
--------
Chemicals (2.8%)
E.I. Du Pont De Nemours and Co., 3.60%, 8/23/01............ 21,000 20,954
--------
Consumer Goods (5.0%)
Gillette Co., 3.65%, 10/11/01.............................. 16,000 15,886
Kimberly-Clark Corp., 3.68%, 9/13/01....................... 11,000 10,952
Kimberly-Clark Corp., 3.57%, 10/24/01...................... 11,000 10,909
--------
37,747
--------
Financial Services (21.6%)
American Express Credit Corp., 3.90%, 8/27/01.............. 23,000 22,936
American General Finance Corp., 3.94%, 8/16/01............. 22,000 21,964
Chevron USA, Inc., 3.73%, 8/6/01........................... 26,000 25,987
GE Capital Investment Advisors, 3.76%, 9/6/01.............. 29,000 28,891
General Motors Acceptance Corp., 3.72%, 9/17/01............ 21,000 20,899
General Re Funding Corp., 3.57%, 10/29/01.................. 19,000 18,834
IBM Credit Corp., 3.63%, 9/25/01........................... 23,000 22,874
--------
162,385
--------
Oil & Gas Exploration, Production, & Services (2.9%)
Texaco, Inc., 3.64%, 9/19/01............................... 22,000 21,892
--------
Pharmaceuticals (2.9%)
Merck & Co., Inc., 3.66%, 9/11/01.......................... 22,000 21,909
--------
Telecommunications (2.4%)
BellSouth Corp., 3.60%, 10/12/01........................... 18,000 17,871
--------
TOTAL COMMERCIAL PAPER -- DOMESTIC......................... 348,361
--------
Commercial Paper -- Foreign* (3.0%)
Pharmaceuticals (3.0%)
Glaxo Wellcome PLC, 3.95%, 8/20/01......................... 23,000 22,953
--------
TOTAL COMMERCIAL PAPER -- FOREIGN.......................... 22,953
--------
U.S. Government Agencies* (20.2%)
Fannie Mae (4.5%)
4.67%, 8/9/01.............................................. 34,000 33,965
--------
Federal Farm Credit Bank (3.8%)
4.68%, 11/8/01............................................. 29,000 28,638
--------
</TABLE>
U.S. Government Agencies*, continued
<TABLE>
<CAPTION>
Shares or
Principal
Amount Value
---------- --------
<S> <C> <C>
Federal Home Loan Bank (3.8%)
3.61%, 1/4/02............................................. $ 19,344 $ 19,047
3.70%, 1/11/02............................................ 10,000 9,839
--------
28,886
--------
Freddie Mac (3.5%)
4.68%, 8/3/01............................................. 26,000 25,994
--------
Private Export Funding (1.8%)
3.54%, 11/26/01........................................... 14,000 13,841
--------
Tennessee Valley Authority (2.8%)
3.65%, 8/14/01............................................ 21,000 20,972
--------
TOTAL U.S. GOVERNMENT AGENCIES............................ 152,296
--------
Investment Companies (0.0%)
AmSouth Prime Money Market Fund........................... 20,429 20
AmSouth U.S. Treasury Money Market Fund................... 16,826 17
--------
TOTAL INVESTMENT COMPANIES................................ 37
--------
Repurchase Agreements (30.8%)
Cantor Fitzgerald, 3.90%, 8/1/01, dated 7/31/01, with
maturity value of $81,990 (Collateralized by various U.S.
Treasury and Government backed Securities)............... 81,981 81,981
Goldman Sachs, 3.90%, 8/1/01, dated 7/31/01, with a
maturity value of $34,004 (Collateralized by various U.S.
Government backed Securities)............................ 34,000 34,000
Prudential, 3.90%, 8/1/01, dated 7/31/01, with a maturity
value of $34,004 (Collateralized by various U.S. Treasury
and Government backed Securities)........................ 34,000 34,000
Salomon Smith Barney, 3.90%, 8/1/01, dated 7/31/01, with a
maturity value of $81,990 (Collateralized by various U.S.
Treasury and Government backed Securities)............... 81,981 81,981
--------
TOTAL REPURCHASE AGREEMENTS............................... 231,962
--------
TOTAL INVESTMENTS
(Cost $755,609) (a) -- 100.3%............................ 755,609
Liabilities in excess of other assets -- (0.3)%........... (2,428)
--------
NET ASSETS -- 100.0%...................................... $753,181
========
</TABLE>
---------
(a) Cost and value for federal income tax and financial reporting purposes are
the same.
* Rates disclosed represent yield effective at purchase.
PLC -- Public Limited Company
223
<PAGE>
AMSOUTH FUNDS
Institutional Prime Obligations Money Market Fund
Statement of Assets and Liabilities
July 31, 2001
(Amounts in thousands,
except per share amounts)
<TABLE>
<S> <C> <C>
Assets:
Investments, at
value......... $523,647
Repurchase
agreements, at
cost.......... 231,962
--------
Total
Investments.. 755,609
Interest and
dividends
receivable.... 25
Prepaid
expenses and
other assets.. 23
--------
Total Assets.. 755,657
Liabilities:
Distributions
payable....... $2,146
Accrued
expenses and
other
payables:
Investment
advisory
fees......... 44
Administration
fees......... 12
Distribution
fees......... 139
Custodian
fees......... 17
Other......... 118
------
Total
Liabilities.. 2,476
--------
Net Assets:
Capital........ 753,177
Accumulated net
investment
income........ 5
Accumulated net
realized
losses from
investment
transactions.. (1)
--------
Net Assets..... $753,181
========
Class I Shares
Net Assets.... $221,876
Shares
outstanding.. 221,876
Offering and
redemption
price per
share........ $ 1.00
========
Class II Shares
Net Assets.... $361,629
Shares
outstanding.. 361,629
Offering and
redemption
price per
share........ $ 1.00
========
Class III
Shares
Net Assets.... $169,676
Shares
outstanding.. 169,677
Offering and
redemption
price per
share........ $ 1.00
========
</TABLE>
Statement of Operations
For the year ended July 31, 2001
(Amounts in thousands)
<TABLE>
<S> <C> <C>
Investment Income:
Interest income................................................. $32,056
Dividend income................................................. 2
-------
Total Investment Income........................................ 32,058
Expenses:
Investment advisory fees........................................ $1,172
Administration fees............................................. 586
Distribution fees -- Class II Shares............................ 616
Distribution fees -- Class III Shares........................... 722
Custodian fees.................................................. 161
Accounting fees................................................. 109
Transfer agent fees............................................. 135
Other fees...................................................... 187
------
Total expenses before fee reductions........................... 3,688
-------
Expenses reduced by Investment Advisor......................... (762)
Expenses reduced by Administrator.............................. (52)
Expenses reduced by Fund Accountant............................ (78)
-------
Net expenses................................................... 2,796
-------
Net Investment Income........................................... 29,262
-------
Change in net assets resulting from operations.................. $29,262
=======
</TABLE>
See notes to financial statements
224
<PAGE>
AMSOUTH FUNDS
Institutional Prime Obligations Money Market Fund
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
(Amounts in
thousands)
<S> <C> <C>
From Investment Activities:
Operations:
Net investment income................................... $ 29,262 $ 14,515
Net realized losses from investment transactions........ -- (1)
-------- --------
Change in net assets resulting from operations........... 29,262 14,514
-------- --------
Distributions to Class I Shareholders:
From net investment income.............................. (9,991) (7,471)
Distributions to Class II Shareholders:
From net investment income.............................. (12,372) (4,334)
Distributions to Class III Shareholders:
From net investment income.............................. (6,899) (2,710)
-------- --------
Change in net assets from shareholder distributions...... (29,262) (14,515)
-------- --------
Change in net assets from capital transactions........... 319,128 325,021
-------- --------
Change in net assets..................................... 319,128 325,020
Net Assets:
Beginning of period..................................... 434,053 109,033
-------- --------
End of period........................................... $753,181 $434,053
======== ========
</TABLE>
See notes to financial statements
225
<PAGE>
AMSOUTH FUNDS
Institutional Prime Obligations Money Market Fund
Financial Highlights, Class I Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2001 2000 1999 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 1.000 $ 1.000 $ 1.000
-------- -------- -------
Investment Activities
Net investment income.................... 0.054 0.057 0.042
-------- -------- -------
Total from Investment Activities......... 0.054 0.057 0.042
-------- -------- -------
Distributions
Net investment income.................... (0.054) (0.057) (0.042)
-------- -------- -------
Total Distributions...................... (0.054) (0.057) (0.042)
-------- -------- -------
Change in Net Asset Value................. -- -- --
-------- -------- -------
Net Asset Value, End of Period............ $ 1.000 $ 1.000 $ 1.000
======== ======== =======
Total Return.............................. 5.57% 5.82% 4.31%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $221,876 $138,779 $69,458
Ratio of expenses to average net assets... 0.25% 0.21% 0.22%(c)
Ratio of net investment income to average
net assets............................... 5.12% 5.73% 4.82%(c)
Ratio of expenses to average net assets*.. 0.40% 0.41% 0.45%(c)
</TABLE>
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
(a) For the period from September 15, 1998 (commencement of operations)
through July 31, 1999.
(b) Not annualized.
(c) Annualized.
Financial Highlights, Class II Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2001 2000 1999 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 1.000 $ 1.000 $ 1.000
-------- -------- -------
Investment Activities
Net investment income.................... 0.052 0.054 0.020
-------- -------- -------
Total from Investment Activities......... 0.052 0.054 0.020
-------- -------- -------
Distributions
Net investment income.................... (0.052) (0.054) (0.020)
-------- -------- -------
Total Distributions...................... (0.052) (0.054) (0.020)
-------- -------- -------
Change in Net Asset Value................. -- -- --
-------- -------- -------
Net Asset Value, End of Period............ $ 1.000 $ 1.000 $ 1.000
======== ======== =======
Total Return.............................. 5.31% 5.55% 1.96%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $361,629 $180,873 $26,000
Ratio of expenses to average net assets... 0.50% 0.45% 0.49%(c)
Ratio of net investment income to average
net assets............................... 5.00% 5.69% 4.45%(c)
Ratio of expenses to average net assets*.. 0.65% 0.66% 0.72%(c)
</TABLE>
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
(a) For the period from February 19, 1999 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
226
<PAGE>
AMSOUTH FUNDS
Institutional Prime Obligations Money Market Fund
Financial Highlights, Class III Shares
Selected data for a share outstanding throughout the period indicated.
<TABLE>
<CAPTION>
Year Ended Year Ended Period Ended
July 31, July 31, July 31,
2001 2000 1999 (a)
---------- ---------- ------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period...... $ 1.000 $ 1.000 $ 1.000
-------- -------- -------
Investment Activities
Net investment income.................... 0.049 0.052 0.018
-------- -------- -------
Total from Investment Activities......... 0.049 0.052 0.018
-------- -------- -------
Distributions
Net investment income.................... (0.049) (0.052) (0.018)
-------- -------- -------
Total Distributions...................... (0.049) (0.052) (0.018)
-------- -------- -------
Change in Net Asset Value................. -- -- --
-------- -------- -------
Net Asset Value, End of Period............ $ 1.000 $ 1.000 $ 1.000
======== ======== =======
Total Return.............................. 5.04% 5.29% 1.84%(b)
Ratios/Supplemental Data:
Net Assets at end of period (000)......... $169,676 $114,401 $13,575
Ratio of expenses to average net assets... 0.75% 0.71% 0.74%(c)
Ratio of net investment income to average
net assets............................... 4.81% 5.43% 4.22%(c)
Ratio of expenses to average net assets*.. 0.90% 0.91% 0.97%(c)
</TABLE>
* During the period, certain fees were reduced. If such fee reductions had
not occurred, the ratios would have been as indicated.
(a) For the period from February 22, 1999 (commencement of operations) through
July 31, 1999.
(b) Not annualized.
(c) Annualized.
See notes to financial statements
227
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements
July 31, 2001
1. Organization:
AmSouth Funds (the "Trust") was organized on October 1, 1987, and is
registered under the Investment Company Act of 1940, as amended ("the 1940
Act"), as a diversified, open-end investment company established as a
Massachusetts business trust.
The Trust is authorized to issue an unlimited number of shares without par
value. The Trust currently offers shares of the AmSouth Value Fund, the AmSouth
Growth Fund, the AmSouth Capital Growth Fund, the AmSouth Large Cap Fund, the
AmSouth Mid Cap Fund, the AmSouth Small Cap Fund, the AmSouth Equity Income
Fund, the AmSouth Balanced Fund, the AmSouth Select Equity Fund, the AmSouth
Enhanced Market Fund, the AmSouth International Equity Fund, the AmSouth
Strategic Portfolios: Aggressive Growth Portfolio, the AmSouth Strategic
Portfolios: Growth Portfolio, the AmSouth Strategic Portfolios: Growth and
Income Portfolio, the AmSouth Strategic Portfolios: Moderate Growth and Income
Portfolio, the AmSouth Bond Fund, the AmSouth Limited Term Bond Fund, the
AmSouth Government Income Fund, the AmSouth Limited Term U.S. Government Fund,
the AmSouth Municipal Bond Fund, the AmSouth Florida Tax-Exempt Fund, the
AmSouth Tennessee Tax-Exempt Fund, the AmSouth Limited Term Tennessee Tax-
Exempt Fund, (collectively, "the variable net asset funds"), the AmSouth Prime
Money Market Fund, the AmSouth U.S. Treasury Money Market Fund, the AmSouth
Treasury Reserve Money Market Fund, the AmSouth Tax-Exempt Money Market Fund
and the AmSouth Institutional Prime Obligations Money Market Fund
(collectively, "the money market funds") (collectively, "the Funds" and
individually "a Fund").
2. Reorganization:
The Funds entered into an Agreement and Plan of Reorganization with the ISG
Funds pursuant to which all of the assets and liabilities of each ISG Fund
transferred to a corresponding AmSouth Fund in exchange for shares of the
AmSouth Fund. Each ISG Fund listed below transferred all of its assets and
liabilities to the corresponding AmSouth Fund identified opposite its name in
exchange for shares of such ISG Fund and changed its fiscal year end to July
31:
<TABLE>
<CAPTION>
ISG Funds AmSouth Funds
--------- -------------
<S> <C>
ISG Capital Growth Fund AmSouth Capital Growth Fund
ISG Large-Cap Equity Fund AmSouth Large Cap Fund
ISG Mid-Cap Fund AmSouth Mid Cap Fund
ISG Small-Cap Opportunity Fund AmSouth Small Cap Fund
ISG Equity Income Fund AmSouth Equity Income Fund
ISG International Equity Fund AmSouth International Equity Fund
ISG Aggressive Growth Portfolio AmSouth Strategic Portfolios: Aggressive Growth
Portfolio
ISG Growth Portfolio AmSouth Strategic Portfolios: Growth Portfolio
ISG Growth & Income Portfolio AmSouth Strategic Portfolios: Growth and Income
Portfolio
ISG Moderate Growth & Income Portfolio AmSouth Strategic Portfolios: Moderate Growth
and Income Portfolio
ISG Income Fund AmSouth Bond Fund
ISG Limited Term Income Fund AmSouth Limited Term Bond Fund
ISG Government Income Fund AmSouth Government Income Fund
ISG Limited Term U.S. Government Fund AmSouth Limited Term U.S. Government Fund
ISG Municipal Income Fund AmSouth Municipal Bond Fund
ISG Tennessee Tax-Exempt Fund AmSouth Tennessee Tax-Exempt Fund
ISG Limited Term Tennessee Tax-Exempt Fund AmSouth Limited Term Tennessee Tax-Exempt Fund
ISG Prime Money Market Fund AmSouth Prime Money Market Fund
ISG Treasury Money Market Fund AmSouth Treasury Reserve Money Market Fund
ISG Tax-Exempt Money Market Fund AmSouth Tax-Exempt Money Market Fund
</TABLE>
Continued
228
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
The reorganization, which qualified as a tax-free exchange for federal income
tax purposes, was completed on March 13, 2000 and was approved by shareholders
of the ISG Funds at a Special Meeting of Shareholders held on February 11,
2000. The following is a summary of shares outstanding, net assets, net asset
value per share and unrealized appreciation (depreciation) immediately before
and after the reorganization:
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
--------------------------- --------------
ISG Capital AmSouth AmSouth
Growth Capital Growth Capital Growth
Fund Fund Fund
------------ -------------- --------------
<S> <C> <C> <C>
Class A
Shares ........................... 779,629 -- 779,629
Net Assets ....................... $ 10,814,963 $ -- $ 10,814,963
Net Asset Value................... $ 13.87 $ -- $ 13.87
Class B
Shares ........................... 591,438 -- 591,438
Net Assets ....................... $ 7,949,059 $ -- $ 7,949,059
Net Asset Value................... $ 13.44 $ -- $ 13.44
Trust
Shares ........................... 19,602,706 -- 19,602,706
Net Assets ....................... $270,349,507 $ -- $270,349,507
Net Asset Value................... $ 13.79 $ -- $ 13.79
Unrealized Appreciation ............ $ 35,279,850 $ -- $ 35,279,850
<CAPTION>
After
Before Reorganization Reorganization
--------------------------- --------------
ISG Large-
Cap Equity AmSouth Large AmSouth
Fund Cap Fund Large Cap Fund
------------ -------------- --------------
<S> <C> <C> <C>
Class A
Shares ........................... 2,806,201 -- 2,806,201
Net Assets ....................... $ 74,684,236 $ -- $ 74,684,236
Net Asset Value................... $ 26.61 $ -- $ 26.61
Class B
Shares ........................... 771,877 -- 771,877
Net Assets ....................... $ 20,304,387 $ -- $ 20,304,387
Net Asset Value................... $ 26.31 $ -- $ 26.31
Trust
Shares ........................... 25,140,642 -- 25,140,642
Net Assets ....................... $668,933,544 $ -- $668,933,544
Net Asset Value................... $ 26.61 $ -- $ 26.61
Unrealized Appreciation ............ $378,072,734 $ -- $378,072,734
</TABLE>
Continued
229
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
------------------------- --------------
ISG AmSouth AmSouth
Mid-Cap Mid Cap Mid Cap
Fund Fund Fund
------------- ----------- --------------
<S> <C> <C> <C>
Class A
Shares ............................ 380,582 -- 380,582
Net Assets ........................ $ 8,292,145 $ -- $ 8,292,145
Net Asset Value.................... $ 21.79 $ -- $ 21.79
Class B
Shares ............................ 364,887 -- 364,887
Net Assets ........................ $ 7,901,180 $ -- $ 7,901,180
Net Asset Value.................... $ 21.65 $ -- $ 21.65
Trust
Shares ............................ 3,166,614 -- 3,166,614
Net Assets ........................ $69,051,431 $ -- $ 69,051,431
Net Asset Value.................... $ 21.81 $ -- $ 21.81
Unrealized Appreciation ............. $27,860,513 $ -- $ 27,860,513
<CAPTION>
After
Before Reorganization Reorganization
------------------------- --------------
ISG Small-Cap AmSouth AmSouth
Opportunity Small Cap Small Cap
Fund Fund Fund
------------- ----------- --------------
<S> <C> <C> <C>
Class A
Shares ............................ 506,220 142,537 707,025
Net Assets ........................ $ 7,699,370 $ 1,943,789 $ 9,643,158
Net Asset Value.................... $ 15.21 $ 13.64 $ 13.64
Class B
Shares ............................ 29,990 100,342 133,766
Net Assets ........................ $ 449,620 $ 1,349,633 $ 1,799,253
Net Asset Value.................... $ 14.99 $ 13.45 $ 13.45
Trust
Shares ............................ 5,915,519 4,366,516 10,898,145
Net Assets ........................ $89,677,800 $59,967,533 $149,645,333
Net Asset Value.................... $ 15.16 $ 13.73 $ 13.73
Unrealized Appreciation.............. $20,902,693 $17,944,996 $ 38,847,689
Accumulated Net Realized Gains
(Losses)............................ $(2,255,510) $ 1,300,016 $ (955,554)
</TABLE>
The AmSouth Small Cap Fund retained its investment objective and financial
history after the reorganization.
Continued
230
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
--------------------------- --------------
ISG Equity AmSouth
Income Equity Income AmSouth Equity
Fund Fund Income Fund
------------- ------------- --------------
<S> <C> <C> <C>
Class A
Shares........................... 569,793 1,954,224 2,277,671
Net Assets....................... $ 4,902,199 $29,607,765 $ 34,509,964
Net Asset Value.................. $ 8.60 $ 15.15 $ 15.15
Class B
Shares........................... 727,946 878,275 1,293,141
Net Assets....................... $ 6,258,959 $13,249,379 $ 19,508,338
Net Asset Value.................. $ 8.60 $ 15.09 $ 15.09
Trust
Shares........................... 7,905,530 2,210,708 6,700,591
Net Assets....................... $68,064,110 $33,514,860 $101,578,970
Net Asset Value.................. $ 8.61 $ 15.16 $ 15.16
Unrealized Appreciation............ $ 268,340 $10,112,984 $ 10,381,324
Undistributed Net Investment
Income............................ $ 8,124 $ 11,205 $ 19,329
Accumulated Net Realized Gains
(Losses).......................... $(1,414,076) $ 4,409,413 $ 2,995,337
The AmSouth Equity Income Fund retained its investment objective and financial
history after the reorganization.
<CAPTION>
After
Before Reorganization Reorganization
--------------------------- --------------
ISG AmSouth AmSouth
International International International
Equity Fund Equity Fund Equity Fund
------------- ------------- --------------
<S> <C> <C> <C>
Class A
Shares........................... 100,618 -- 100,618
Net Assets....................... $ 1,258,163 $ -- $ 1,258,163
Net Asset Value.................. $ 12.50 $ -- $ 12.50
Class B
Shares........................... 34,916 -- 34,916
Net Assets....................... $ 433,831 $ -- $ 433,831
Net Asset Value.................. $ 12.43 $ -- $ 12.43
Trust
Shares........................... 5,322,071 -- 5,322,071
Net Assets....................... $66,536,927 $ -- $ 66,536,927
Net Asset Value.................. $ 12.50 $ -- $ 12.50
Unrealized Appreciation............ $ 5,213,330 $ -- $ 5,213,330
</TABLE>
Continued
231
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
-------------------------------- -----------------
AmSouth Strategic AmSouth Strategic
ISG Aggressive Portfolios: Portfolios:
Growth Aggressive Growth Aggressive Growth
Portfolio Portfolio Portfolio
-------------- ----------------- -----------------
<S> <C> <C> <C>
Class A
Shares..................... 42,393 -- 42,393
Net Assets................. $ 491,154 $ -- $ 491,154
Net Asset Value............ $ 11.59 $ -- $ 11.59
Class B
Shares..................... 45,939 -- 45,939
Net Assets................. $ 528,039 $ -- $ 528,039
Net Asset Value............ $ 11.49 $ -- $ 11.49
Trust
Shares..................... 1,661,023 -- 1,661,023
Net Assets................. $19,221,990 $ -- $19,221,990
Net Asset Value............ $ 11.57 $ -- $ 11.57
Unrealized Appreciation...... $ 703,404 $ -- $ 703,404
<CAPTION>
After
Before Reorganization Reorganization
-------------------------------- -----------------
AmSouth Strategic AmSouth Strategic
ISG Portfolios: Portfolios:
Growth Growth Growth
Portfolio Portfolio Portfolio
-------------- ----------------- -----------------
<S> <C> <C> <C>
Class A
Shares..................... 23,006 -- 23,006
Net Assets................. $ 242,623 $ -- $ 242,623
Net Asset Value............ $ 10.55 $ -- $ 10.55
Class B
Shares..................... 111,334 -- 111,334
Net Assets................. $ 1,171,560 $ -- $ 1,171,560
Net Asset Value............ $ 10.52 $ -- $ 10.52
Trust
Shares..................... 2,835,625 -- 2,835,625
Net Assets................. $30,021,188 $ -- $30,021,188
Net Asset Value............ $ 10.59 $ -- $ 10.59
Unrealized Appreciation...... $ 291,685 $ -- $ 291,685
</TABLE>
Continued
232
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
--------------------------------- -----------------
AmSouth Strategic AmSouth Strategic
ISG Portfolios: Portfolios:
Growth & Income Growth and Income Growth and Income
Portfolio Portfolio Portfolio
--------------- ----------------- -----------------
<S> <C> <C> <C>
Class A
Shares.................... 49,048 -- 49,048
Net Assets................ $ 508,979 $ -- $ 508,979
Net Asset Value........... $ 10.38 $ -- $ 10.38
Class B
Shares.................... 167,417 -- 167,417
Net Assets................ $ 1,737,834 $ -- $ 1,737,834
Net Asset Value........... $ 10.38 $ -- $ 10.38
Trust
Shares.................... 8,303,516 -- 8,303,516
Net Assets................ $86,414,873 $ -- $86,414,873
Net Asset Value........... $ 10.41 $ -- $ 10.41
Unrealized Depreciation..... $(2,411,311) $ -- $(2,411,311)
<CAPTION>
After
Before Reorganization Reorganization
--------------------------------- -----------------
AmSouth Strategic AmSouth Strategic
Portfolios: Portfolios:
ISG Moderate Moderate Growth Moderate Growth
Growth & Income and Income and Income
Portfolio Portfolio Portfolio
--------------- ----------------- -----------------
<S> <C> <C> <C>
Class A
Shares.................... 14,049 -- 14,049
Net Assets................ $ 138,570 $ -- $ 138,570
Net Asset Value........... $ 9.86 $ -- $ 9.86
Class B
Shares.................... 83,357 -- 83,357
Net Assets................ $ 821,149 $ -- $ 821,149
Net Asset Value........... $ 9.85 $ -- $ 9.85
Trust
Shares.................... 2,194,361 -- 2,194,361
Net Assets................ $21,690,023 $ -- $21,690,023
Net Asset Value........... $ 9.88 $ -- $ 9.88
Unrealized Depreciation..... $ (656,338) $ -- $ (656,338)
</TABLE>
Continued
233
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
------------------------- --------------
ISG Income AmSouth Bond AmSouth Bond
Fund Fund Fund
----------- ------------ --------------
<S> <C> <C> <C>
Class A
Shares............................. 318,629 667,565 960,642
Net Assets......................... $ 3,032,083 $ 6,911,513 $ 9,943,596
Net Asset Value.................... $ 9.52 $ 10.35 $ 10.35
Class B
Shares............................. 129,214 228,292 347,249
Net Assets......................... $ 1,228,472 $ 2,358,638 $ 3,587,110
Net Asset Value.................... $ 9.51 $ 10.33 $ 10.33
Trust
Shares............................. 9,630,807 36,878,722 45,727,898
Net Assets......................... $91,584,025 $381,774,047 $473,358,072
Net Asset Value.................... $ 9.51 $ 10.35 $ 10.35
Unrealized Depreciation.............. $(4,461,982) $ (8,912,776) $(13,374,758)
Accumulated Net Realized Losses...... $ (788,888) $ (986,569) $ (1,775,457)
The AmSouth Bond Fund retained its investment objective and financial history
after the reorganization.
<CAPTION>
After
Before Reorganization Reorganization
------------------------- --------------
ISG Limited AmSouth AmSouth
Term Income Limited Term Limited Term
Fund Bond Fund Bond Fund
----------- ------------ --------------
<S> <C> <C> <C>
Class A
Shares............................. 662,971 191,162 823,819
Net Assets......................... $ 6,362,409 $ 1,923,376 $ 8,285,785
Net Asset Value.................... $ 9.60 $ 10.06 $ 10.06
Class B
Shares............................. 73,432 154,285 224,282
Net Assets......................... $ 703,619 $ 1,550,600 $ 2,254,219
Net Asset Value.................... $ 9.58 $ 10.05 $ 10.05
Trust
Shares............................. 9,495,898 9,607,645 18,669,337
Net Assets......................... $91,125,732 $ 96,671,893 $187,797,625
Net Asset Value.................... $ 9.60 $ 10.06 $ 10.06
Unrealized Depreciation.............. $(2,282,663) $ (2,304,972) $ (4,587,635)
Accumulated Net Realized Losses...... $ (455,223) $ (1,097,215) $ (1,522,438)
</TABLE>
The AmSouth Limited Term Bond Fund retained its investment objective and
financial history after the reorganization.
Continued
234
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
----------------------------- ---------------
ISG AmSouth AmSouth
Government Government Government
Income Fund Income Fund Income Fund
------------ --------------- ---------------
<S> <C> <C> <C>
Class A
Shares.................. 339,412 384,924 728,990
Net Assets.............. $ 3,262,174 $3,649,318 $ 6,911,491
Net Asset Value......... $ 9.61 $ 9.48 $ 9.48
Class B
Shares.................. 57,876 -- 58,486
Net Assets.............. $ 554,307 $ -- $ 554,307
Net Asset Value......... $ 9.58 $ -- $ 9.48
Trust
Shares.................. 37,941,780 477,690 38,899,745
Net Assets.............. $364,289,541 $4,529,465 $368,819,006
Net Asset Value......... $ 9.60 $ 9.48 $ 9.48
Unrealized Depreciation... $ (8,765,840) $ (132,256) $ (8,898,096)
Accumulated Net Realized
Losses................... $ (2,904,252) $ (363,265) $ (3,267,517)
The AmSouth Government Income Fund retained its investment objective and
financial history after the reorganization.
<CAPTION>
After
Before Reorganization Reorganization
----------------------------- ---------------
ISG Limited AmSouth Limited AmSouth Limited
Term U.S. Term Term
Government U.S. Government U.S. Government
Fund Fund Fund
------------ --------------- ---------------
<S> <C> <C> <C>
Class A
Shares.................. 364,995 -- 364,995
Net Assets.............. $ 3,585,943 $ -- $ 3,585,943
Net Asset Value......... $ 9.82 $ -- $ 9.82
Class B
Shares.................. 42,704 -- 42,704
Net Assets.............. $ 419,745 $ -- $ 419,745
Net Asset Value......... $ 9.83 $ -- $ 9.83
Trust
Shares.................. 4,158,949 -- 4,158,949
Net Assets.............. $ 40,856,623 $ -- $ 40,856,623
Net Asset Value......... $ 9.82 $ -- $ 9.82
Unrealized Depreciation... $ (1,117,721) $ -- $ (1,117,721)
</TABLE>
Continued
235
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
------------------------------ ---------------
ISG Municipal AmSouth AmSouth
Income Municipal Municipal
Fund Bond Fund Bond Fund
-------------- --------------- ---------------
<S> <C> <C> <C>
Class A
Shares....................... 210,434 417,146 635,513
Net Assets................... $ 2,084,576 $ 3,983,416 $ 6,067,992
Net Asset Value.............. $ 9.91 $ 9.55 $ 9.55
Class B
Shares....................... 32,044 28,789 61,975
Net Assets................... $ 316,500 $ 274,706 $ 591,206
Net Asset Value.............. $ 9.88 $ 9.54 $ 9.54
Trust
Shares....................... 3,549,511 37,084,082 40,767,397
Net Assets................... $35,161,855 $354,205,658 $389,367,513
Net Asset Value.............. $ 9.91 $ 9.55 $ 9.55
Unrealized Depreciation........ $(1,940,180) $ (6,216,118) $ (8,156,298)
Accumulated Net Realized Gains
(Losses)...................... $ (307,415) $ (26,244) $ (281,171)
The AmSouth Municipal Bond Fund retained its investment objective and financial
history after the reorganization.
<CAPTION>
After
Before Reorganization Reorganization
------------------------------ ---------------
ISG AmSouth AmSouth
Tennessee Tennessee Tennessee
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
-------------- --------------- ---------------
<S> <C> <C> <C>
Class A
Shares....................... 333,704 -- 333,704
Net Assets................... $ 3,188,308 $ -- $ 3,188,308
Net Asset Value.............. $ 9.55 $ -- $ 9.55
Class B
Shares....................... 114,856 -- 114,856
Net Assets................... $ 1,099,417 $ -- $ 1,099,417
Net Asset Value.............. $ 9.57 $ -- $ 9.57
Trust
Shares....................... 7,645,018 -- 7,645,018
Net Assets................... $73,037,977 $ -- $ 73,037,977
Net Asset Value.............. $ 9.55 $ -- $ 9.55
Unrealized Depreciation........ $(2,069,545) $ -- $ (2,069,545)
<CAPTION>
After
Before Reorganization Reorganization
------------------------------ ---------------
ISG Limited AmSouth Limited AmSouth Limited
Term Tennessee Term Tennessee Term Tennessee
Tax-Exempt Tax-Exempt Tax-Exempt
Fund Fund Fund
-------------- --------------- ---------------
<S> <C> <C> <C>
Class A
Shares....................... 1,904,316 -- 1,904,316
Net Assets................... $18,428,450 $ -- $ 18,428,450
Net Asset Value.............. $ 9.68 $ -- $ 9.68
Class B
Shares....................... 54,544 -- 54,544
Net Assets................... $ 527,557 $ -- $ 527,557
Net Asset Value.............. $ 9.67 $ -- $ 9.67
Unrealized Depreciation........ $ (562,144) $ -- $ (562,144)
</TABLE>
Continued
236
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Before Reorganization After Reorganization
------------------------------- --------------------
ISG Prime AmSouth Prime
Money Market Money Market AmSouth Prime Money
Fund Fund Market Fund
-------------- ---------------- --------------------
<S> <C> <C> <C>
Class A
Shares................. 454,104,522 216,565,899 670,670,421
Net Assets............. $454,062,155 $216,560,228 $670,622,383
Net Asset Value........ $ 1.00 $ 1.00 $ 1.00
Class B
Shares................. 568,390 659,801 1,228,191
Net Assets............. $ 568,348 $ 659,801 $ 1,228,149
Net Asset Value........ $ 1.00 $ 1.00 $ 1.00
Trust
Shares................. 280,189,093 556,247,163 836,436,256
Net Assets............. $280,170,931 $556,231,936 $836,402,867
Net Asset Value........ $ 1.00 $ 1.00 $ 1.00
Accumulated Net Realized
Losses.................. $ (56,577) $ (6,231) $ (62,808)
The AmSouth Prime Money Market Fund retained its investment objective and
financial history after the reorganization.
<CAPTION>
Before Reorganization After Reorganization
------------------------------- --------------------
ISG Treasury AmSouth Treasury AmSouth Treasury
Money Market Reserve Money Reserve Money Market
Fund Market Fund Fund
-------------- ---------------- --------------------
<S> <C> <C> <C>
Class A
Shares................. 141,304,610 -- 141,304,610
Net Assets............. $141,297,122 $ -- $141,297,122
Net Asset Value........ $ 1.00 $ -- $ 1.00
Trust
Shares................. 321,301,450 -- 321,301,450
Net Assets............. $321,287,256 $ -- $321,287,256
Net Asset Value........ $ 1.00 $ -- $ 1.00
<CAPTION>
Before Reorganization After Reorganization
------------------------------- --------------------
ISG Tax-Exempt AmSouth Tax-
Money Market Exempt Money AmSouth Tax-Exempt
Fund Market Fund Money Market Fund
-------------- ---------------- --------------------
<S> <C> <C> <C>
Class A
Shares................. 4,913,597 51,851,926 56,765,523
Net Assets............. $ 4,901,137 $ 51,784,617 $ 56,685,754
Net Asset Value........ $ 1.00 $ 1.00 $ 1.00
Trust
Shares................. 96,647,934 57,128,168 153,776,102
Net Assets............. $ 96,445,861 $ 57,010,917 $153,456,778
Net Asset Value........ $ 1.00 $ 1.00 $ 1.00
Accumulated Net Realized
Losses.................. $ (213,700) $ (184,560) $ (398,260)
</TABLE>
The AmSouth Tax-Exempt Money Market Fund retained its investment objective and
financial history after the reorganization.
The Funds also entered into an Agreement and Plan of Reorganization pursuant
to which all of the assets and liabilities of the AmSouth Regional Equity Fund
transferred to the AmSouth Value Fund in exchange for shares of the AmSouth
Value Fund.
Continued
237
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
The reorganization, which qualified as a tax-free exchange for federal income
tax purposes, was completed on March 13, 2000 and was approved by shareholders
of the AmSouth Regional Equity Fund at a Special Meeting of Shareholders held
on February 22, 2000. The following is a summary of shares outstanding, net
assets, net asset value per share and unrealized appreciation (depreciation)
immediately before and after the reorganization:
<TABLE>
<CAPTION>
After
Before Reorganization Reorganization
------------------------- --------------
AmSouth
Regional AmSouth AmSouth
Equity Fund Value Fund Value Fund
----------- ------------ --------------
<S> <C> <C> <C>
Class A
Shares............................. 615,920 2,511,863 2,926,161
Net Assets......................... $ 7,617,190 $ 46,196,200 $ 53,813,390
Net Asset Value.................... $ 12.37 $ 18.39 $ 18.39
Class B
Shares............................. 29,790 473,298 493,136
Net Assets......................... $ 362,872 $ 8,657,687 $ 9,020,559
Net Asset Value.................... $ 12.18 $ 18.29 $ 18.29
Trust
Shares............................. 1,786,915 31,177,615 32,378,290
Net Assets......................... $22,071,696 $572,917,610 $594,989,306
Net Asset Value.................... $ 12.35 $ 18.38 $ 18.38
Unrealized Appreciation.............. $ 633,400 $122,964,346 $123,597,746
Accumulated Net Realized Gains
(Losses)............................ $ (2,981) $ 75,074 $ 72,093
</TABLE>
The AmSouth Value Fund retained its investment objective and financial history
after the reorganization.
3. Significant Accounting Policies:
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements. These policies are in
conformity with accounting principles generally accepted in the United States
of America. The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
income and expenses for the period. Actual results could differ from those
estimates.
Securities Valuation:
Investments of the money market funds are valued at either amortized cost,
which approximates market value, or at original cost which, combined with
accrued interest, approximates market value. Under the amortized cost method,
discount or premium is amortized on a constant basis to the maturity of the
security.
Investments in common stocks, corporate bonds, municipal bonds, commercial
paper and U.S. Government securities of the variable net asset value funds are
valued on the basis of valuations provided by dealers or an independent pricing
service approved by the Board of Trustees. Investments in investment companies
are valued at their net asset values as reported by such companies. The
differences between cost and market values of such investments are reflected as
unrealized appreciation or depreciation.
Securities Transactions and Related Income:
Securities transactions are accounted for on the date the security is
purchased or sold (trade date). Interest income is recognized on the accrual
basis and includes, where applicable, the pro rata amortization of premium or
discount. Dividend income is recorded on the ex-dividend date. Realized gains
or losses from sales of securities are determined by comparing the identified
cost of the security lot sold with the net sales proceeds.
Continued
238
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
Financial Futures Contracts:
The Enhanced Market Fund may invest in financial futures contracts for the
purpose of hedging its existing portfolio securities, or securities that it
intends to purchase, against fluctuations in fair value caused by changes in
prevailing market interest rates. Upon entering into a financial futures
contract, a Fund is required to pledge to the broker an amount of cash and/or
other assets equal to a certain percentage of the contract amount (initial
margin deposit). Subsequent payments, known as "variation margin," are made or
received by a Fund each day, depending on the daily fluctuations in the fair
value of the underlying security. A Fund recognizes a gain or loss equal to the
daily variation margin. Should market conditions move unexpectedly, the Fund
may not achieve the anticipated benefits of the financial futures contracts and
may realize a loss. The use of futures transactions involves the risk of
imperfect correlation in movements in the price of futures contracts, interest
rates, and the underlying hedged assets.
Repurchase Agreements:
The Funds may acquire repurchase agreements from member banks of the Federal
Deposit Insurance Corporation and from registered broker/dealers which AmSouth
Investment Management Company, LLC ("AIMCO"), deems creditworthy under
guidelines approved by the Board of Trustees, subject to the seller's agreement
to repurchase such securities at a mutually agreed upon date and price. The
repurchase price generally equals the price paid by the Funds plus interest
negotiated on the basis of current short-term rates, which may be more or less
than the rate on the underlying portfolio securities. The seller, under a
repurchase agreement, is required to maintain the value of collateral held
pursuant to the agreement at not less than the repurchase price (including
accrued interest). Securities subject to repurchase agreements are held by the
Funds' custodian or another qualified custodian or in the Federal
Reserve/Treasury book-entry system.
Foreign Currency Translation:
The market value of investment securities, other assets and liabilities of
the International Equity Fund denominated in a foreign currency are translated
into U.S. dollars at the current exchange rate. Purchases and sales of
securities, income receipts and expense payments are translated into U.S.
dollars at the exchange rate on the dates of the transactions.
The Fund does not isolate that portion of the results of operations resulting
from changes in foreign exchange rates on investments from the fluctuations
arising from changes in market prices of securities held. Such fluctuations are
included with the net realized and unrealized gains or losses from investments.
Reported net realized foreign exchange gains or losses arise from sales and
maturities of fund securities, sales of foreign currencies, currency exchange
fluctuations between the trade and settlement dates of securities transactions,
and the difference between the amounts of assets and liabilities recorded and
the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities, including investments in securities, resulting from
changes in currency exchange rates.
Risks Associated with Foreign Securities and Currencies:
Investments in securities of foreign issuers carry certain risks not
ordinarily associated with investments in securities of domestic issuers. Such
risks include future political and economic developments and the possible
imposition of exchange controls or other foreign governmental laws and
restrictions. In addition, with respect to certain countries, there is the
possibility of expropriation of assets, confiscatory taxation, political or
social instability or diplomatic developments which could adversely affect
investments in those countries.
Certain countries may also impose substantial restrictions on investments in
their capital markets by foreign entities, including restrictions on
investments in issuers or industries deemed sensitive to relevant national
interests. These factors may limit the investment opportunities available to
the International Equity Fund or result in a lack of liquidity and high price
volatility with respect to securities of issuers from developing countries.
Continued
239
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
Forward Currency Contracts:
The International Equity Fund may enter into a forward currency contract
("forward") which is an agreement between two parties to buy and sell a
currency at a set price on a future date. The market value of the forward
fluctuates with changes in currency exchange rates. The forward is marked-to-
market daily and the change in market value is recorded by the Fund as
unrealized appreciation or depreciation. When the forward is closed, the Fund
records a realized gain or loss equal to the difference between the value at
the time it was opened and the value at the time it was closed. The Fund could
be exposed to risk if a counterparty is unable to meet the terms of a forward
or if the value of the currency changes unfavorably.
Forwards may involve market or credit risk in excess of the amounts reflected
on the Fund's statement of assets and liabilities. The gain or loss from the
difference between the cost of original contracts and the amount realized upon
the closing of such contracts is included in net realized gains/losses from
investment and foreign currency transactions. Fluctuations in the value of
forwards held are recorded for financial reporting purposes as unrealized gains
and losses by the Fund.
Financial Instruments:
The Balanced Fund, Enhanced Market Fund, Equity Income Fund, Select Equity
Fund, Bond Fund, International Equity Fund, Mid Cap Equity, Capital Growth
Fund, and Large Cap Equity may write call options only on securities that are
owned by the Fund ("covered calls"). A written call option gives a specified
counter-party the right to require the writer of the option to deliver the
agreed upon securities, at the agreed upon price, up until the expiration date
specified in the contract. For this right, a premium is paid to the writer of
the option. The premium received by the Fund for writing the option is booked
as realized gains to the Fund. The risks associated with writing a covered call
option are diminished compared to writing an uncovered call. The Fund does not
bear the risk of having to purchase the securities in the open market at a
price greater than the call price should the call option be exercised. Since
the Fund owns the securities on which the call has been written, the Fund bears
the risk of not receiving the fair market value of a security if the option is
exercised. They would be required to sell the securities at the agreed upon
price, which would presumably be lower than the fair market value of the
securities if the option is exercised.
The table below reflects the Equity Income Fund's activity in covered calls,
all of which were for purposes of earning additional income, during the year
ended July 31, 2001. The premiums column represents the premiums paid by the
option counterparties to the Fund in connection with entering into the covered
calls.
Option activities for the year ended July 31, 2001:
<TABLE>
<CAPTION>
Covered Call
Options
------------------
Number of
Options Premiums
Contracts Received
--------- --------
<S> <C> <C>
Contracts outstanding at July 31, 2000....................... 40 $49,378
Options written.............................................. 225 $29,699
Options expired.............................................. -- --
Options closed............................................... -- --
Options exercised............................................ 40 --
--- -------
Contracts outstanding at July 31, 2001....................... 225 $29,699
=== =======
</TABLE>
Securities Lending:
To generate additional income, the Funds may lend up to 33 1/3% of total
assets pursuant to agreements requiring that the loan be continuously secured
by cash, U.S. government or U.S. government agency securities, shares of an
investment trust or mutual fund, or any combination of cash and such securities
as collateral equal at all times to at least 100% of the market value plus
accrued interest on the securities loaned based on prior days closing market
value. The Funds continue to earn interest and dividends on securities loaned
while simultaneously seeking to earn interest on the investment of collateral.
Continued
240
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
When cash is received as collateral for securities loaned, the Funds may
invest such cash in short-term U.S. government securities, repurchase
agreements, or other short-term corporate securities. The cash or subsequent
short-term investments are recorded as assets of the Funds, offset by a
corresponding liability to repay the cash at the termination of the loan. Fixed
income securities received as collateral are not recorded as an asset or
liability of the Fund because the Fund does not have effective control of such
securities.
There may be risks of delay in recovery of the securities or even loss of
rights in the collateral should the borrower of the securities fail
financially. However, loans will be made only to borrowers deemed by the
Advisor to be of good standing and creditworthy under guidelines established by
the Board of Trustees and when, in the judgment of the Advisor, the
consideration which can be earned currently from such securities loans
justifies the attendant risks. Loans are subject to termination by the Funds or
the borrower at any time, and are, therefore, not considered to be illiquid
investments. As of July 31, 2001, the following Funds had securities with the
following market values on loan (amounts in thousands):
<TABLE>
<CAPTION>
Market Market Value
Value of of Loaned
Collateral Securities
---------- ------------
<S> <C> <C>
Value Fund.............................................. $122,209 $118,250
Growth Fund............................................. 1,862 1,807
Capital Growth Fund..................................... 88,415 87,745
Large Cap Fund.......................................... 233,832 226,907
Mid Cap Fund............................................ 16,433 14,044
Small Cap Fund.......................................... 28,396 27,261
Equity Income Fund...................................... 31,495 27,983
Balanced Fund........................................... 27,752 27,093
Enhanced Market Fund.................................... 2,359 2,290
Bond Fund............................................... 276,746 224,662
Limited Term Bond Fund.................................. 14,770 14,480
Government Income Fund.................................. 135,404 65,202
Limited Term U.S. Government Fund....................... 3,618 3,584
U.S. Treasury Money Market Fund......................... 52,000 51,757
Treasury Reserve Money Market Fund...................... 48,000 47,778
</TABLE>
The loaned securities were collateralized by cash which was invested in U.S.
governement securities, commercial paper, investment companies, and repurchase
agreements at July 31, 2001.
Dividends to Shareholders:
Dividends from net investment income are declared daily and paid monthly for
the money market funds. Dividends from net investment income are declared and
paid monthly for the variable net asset value funds, except for the
International Equity Fund, which dividends are declared and paid annually.
Distributable net realized gains, if any, are declared and distributed at least
annually.
The amounts of dividends from net investment income and of distributions from
net realized gains are determined in accordance with federal income tax
regulations which may differ from accounting principles generally accepted in
the United States of America. These "book/tax" differences are either
considered temporary or permanent in nature. To the extent these differences
are permanent in nature, such amounts are reclassified within the composition
of net assets based on their federal tax-basis treatment; temporary differences
do not require reclassification. To the extent they exceed net investment
income and net realized gains for tax purposes, they are reported as
distributions of capital.
Continued
241
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
Federal Income Taxes:
It is the policy of each Fund to continue to qualify as a regulated
investment company by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Internal Revenue
Code (the "Code"), and to make distributions of net investment income and net
realized capital gains sufficient to relieve it from all, or substantially all,
federal income taxes.
Other:
Expenses that are directly related to one of the Funds are charged directly
to that Fund. Other operating expenses for the Trust are prorated to all the
Funds on the basis of relative net assets. Fees paid under a Fund's shareholder
servicing or distribution plans are borne by the specific class of shares to
which they apply.
New Accounting Pronouncement:
In November 2000 the American Institute of Certified Public Accountants
(AICPA) issued a revised version of the AICPA Audit and Accounting Guide for
Investment Companies ("the Guide"). The revised version of the Guide is
effective for financial statements issued for fiscal years beginning after
December 15, 2000. One of the new provisions in the Guide requires investment
companies to amortize premiums and accrete discounts on fixed income
securities. The Trust currently does not amortize premiums or accrete discounts
in all cases. Upon adoption, the Funds will be required to record a cumulative
effect adjustment to conform with accounting principles generally accepted in
the United States of America. The effect of this adjustment will be to either
increase or decrease net investment income with an offsetting decrease or
increase on unrealized appreciation (depreciation) of securities. This
adjustment will therefore have no effect on the net assets of the Funds. The
Trust has completed an analysis of the change and deemed it immaterial to the
Funds.
4.Purchases and Sales of Securities:
Purchases and sales of securities (excluding short-term securities) for the
year ended July 31, 2001 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
Purchases Sales
--------- --------
<S> <C> <C>
Value Fund.................................................. $266,471 $326,947
Growth Fund................................................. 55,963 72,235
Capital Growth.............................................. 423,148 329,905
Large Cap Equity............................................ 68,382 162,872
Mid Cap Equity.............................................. 94,642 90,641
Small Cap Fund.............................................. 423,750 393,741
Equity Income Fund.......................................... 361,241 363,034
Balanced Fund............................................... 23,544 72,693
Select Equity Fund.......................................... 2,299 1,815
Enhanced Market Fund........................................ 25,514 30,179
International Equity Fund................................... 129,704 56,653
Aggressive Growth Portfolio................................. 16,534 7,665
Growth Portfolio............................................ 8,253 6,673
Growth and Income Portfolio................................. 42,084 41,057
Moderate Growth and Income Portfolio........................ 13,476 12,854
Bond Fund................................................... 243,793 140,632
Limited Term Bond Fund...................................... 75,946 96,765
Government Income Fund...................................... 78,681 104,952
Limited Term U.S. Government Fund........................... 11,002 17,274
Municipal Bond Fund......................................... 17,391 43,724
Florida Tax-Exempt Fund..................................... 4,256 9,842
Tennessee Tax-Exempt Fund................................... 76,339 89,825
Limited Term Tennessee Tax-Exempt........................... 15,066 18,867
</TABLE>
Continued
242
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
5.Capital Share Transactions:
The Trust has issued three classes of Fund shares: Class A Shares, Trust
Shares, and Class B Shares in the Prime Money Market Fund and the variable net
asset funds. The Trust has issued three classes of fund shares in the
Institutional Prime Obligations Money Market Fund: Class I, Class II and Class
III. The Trust has issued two classes of Fund shares: Class A and Trust Shares
in the Limited Term Tennessee Tax-Exempt Fund and the money market funds. Each
class of shares in a Fund has identical rights and privileges except with
respect to fees paid under shareholder servicing or distribution plans,
expenses allocable exclusively to each class of shares, voting rights on
matters affecting a single class of shares, and the exchange privilege of each
class of shares.
Continued
243
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
Transactions in capital shares for the Funds were as follows (amounts in
thousands):
<TABLE>
<CAPTION>
Value Fund (a) Growth Fund (d)
---------------------- ---------------------
Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31,
2001 2000 2001 2000
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (b):
Proceeds from shares issued....... $ 75,760 $ 7,669 $ 981 $ 4,756
Proceeds from shares issued in
connection with AmSouth Fund
merger........................... -- 7,617 -- --
Dividends reinvested.............. 5,314 8,862 1,910 431
Cost of shares redeemed........... (16,930) (34,656) (4,414) (6,452)
--------- --------- -------- --------
64,144 (10,508) (1,523) (1,265)
--------- --------- -------- --------
Class B Shares:
Proceeds from shares issued....... 2,982 1,238 408 2,904
Proceeds from shares issued in
connection with AmSouth Fund
merger........................... -- 363 -- --
Dividends reinvested.............. 977 1,580 1,584 299
Cost of shares redeemed........... (2,052) (4,882) (1,771) (1,843)
--------- --------- -------- --------
1,907 (1,701) 221 1,360
--------- --------- -------- --------
Trust Shares (c):
Proceeds from shares issued....... 145,846 105,206 6,895 24,237
Proceeds from shares issued in
connection with AmSouth Common
Trust Fund conversion............ 23,684 -- -- --
Proceeds from shares issued in
connection with AmSouth Fund
merger........................... -- 22,072 -- --
Dividends reinvested.............. 22,238 25,799 1,863 348
Cost of shares redeemed........... (223,926) (345,378) (15,107) (16,274)
--------- --------- -------- --------
(32,158) (192,301) (6,349) 8,311
--------- --------- -------- --------
Total net increase (decrease) from
capital transactions.............. $ 33,893 $(204,510) $ (7,651) $ 8,406
========= ========= ======== ========
SHARE TRANSACTIONS:
Class A Shares (b):
Issued............................ 3,805 344 81 313
Issued in connection with AmSouth
Fund merger...................... -- 414 -- --
Reinvested........................ 292 438 193 29
Redeemed.......................... (859) (1,682) (386) (427)
--------- --------- -------- --------
3,238 (486) (112) (85)
--------- --------- -------- --------
Class B Shares:
Issued............................ 151 55 37 194
Issued in connection with AmSouth
Fund merger...................... -- 20 -- --
Reinvested........................ 54 79 165 21
Redeemed.......................... (103) (237) (175) (123)
--------- --------- -------- --------
102 (83) 27 92
--------- --------- -------- --------
Trust Shares (c):
Issued............................ 7,809 5,000 617 1,587
Issued in connection with AmSouth
Common Trust Fund conversion..... 1,283 -- -- --
Issued in connection with AmSouth
Fund merger...................... -- 1,201 -- --
Reinvested........................ 1,226 1,275 186 24
Redeemed.......................... (11,236) (16,782) (1,317) (1,061)
--------- --------- -------- --------
(918) (9,306) (514) 550
--------- --------- -------- --------
Total net increase (decrease) from
share transactions................ 2,422 (9,875) (599) 557
========= ========= ======== ========
</TABLE>
---------
(a) Formerly AmSouth Equity Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
(d) Formerly AmSouth Capital Growth Fund.
Continued
244
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Capital Growth Fund (a)
------------------------------------
Year Ended Period Ended Year Ended
July 31, July 31, December 31,
2001 2000 (b) 1999
---------- ------------ ------------
<S> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares issued.............. $ 60,744 $ 27,710 $ 6,307
Dividends reinvested..................... 1,060 -- 1,521
Cost of shares redeemed.................. (52,195) (24,349) (2,149)
-------- -------- --------
9,609 3,361 5,679
-------- -------- --------
Class B Shares:
Proceeds from shares issued.............. 3,972 1,774 4,808
Dividends reinvested..................... 704 -- 1,079
Cost of shares redeemed.................. (1,553) (865) (938)
-------- -------- --------
3,123 909 4,949
-------- -------- --------
Trust Shares (c):
Proceeds from shares issued.............. 156,398 116,255 79,575
Dividends reinvested..................... 18,101 12 37,171
Cost of shares redeemed.................. (75,627) (72,991) (53,058)
-------- -------- --------
98,872 43,276 63,688
-------- -------- --------
Total net increase (decrease) from
capital transactions.................... $111,604 $ 47,546 $ 74,316
======== ======== ========
SHARE TRANSACTIONS:
Class A Shares:
Issued................................... 4,871 1,838 428
Reinvested............................... 76 -- 110
Redeemed................................. (4,089) (1,611) (147)
-------- -------- --------
858 227 391
-------- -------- --------
Class B Shares:
Issued................................... 321 126 332
Reinvested............................... 53 -- 81
Redeemed................................. (129) (61) (65)
-------- -------- --------
245 65 348
-------- -------- --------
Trust Shares (c):
Issued................................... 12,384 8,063 5,482
Reinvested............................... 1,314 1 2,719
Redeemed................................. (6,116) (4,933) (3,581)
-------- -------- --------
7,582 3,131 4,620
-------- -------- --------
Total net increase (decrease) from share
transactions............................. 8,685 3,423 5,359
======== ======== ========
</TABLE>
---------
(a) Formerly ISG Capital Growth Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) Formerly Institutional Shares.
Continued
245
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Large Cap Fund (a) Mid Cap Fund (e)
------------------------------------- -------------------------------------
Year Ended Period Ended Year Ended Year Ended Period Ended Period Ended
July 31, July 31, December 31, July 31, July 31, December 31,
2001 2000 (b) 1999 2001 2000 (b) 1999 (c)
---------- ------------ ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................ $ 43,006 $ 26,077 $ 22,544 $ 104,956 $11,322 $ 1,820
Dividends reinvested... 10,043 33 8,796 -- -- --
Cost of shares
redeemed.............. (45,828) (24,193) (11,009) (100,350) (1,254) (177)
--------- --------- --------- --------- ------- -------
7,221 1,917 20,331 4,606 10,068 1,643
--------- --------- --------- --------- ------- -------
Class B Shares:
Proceeds from shares
issued................ 11,911 8,640 17,650 5,046 12,303 1,738
Dividends reinvested... 3,613 -- 2,255 -- -- --
Cost of shares
redeemed.............. (4,590) (2,555) (992) (2,156) (584) 28
--------- --------- --------- --------- ------- -------
10,934 6,085 18,913 2,890 11,719 1,710
--------- --------- --------- --------- ------- -------
Trust Shares (d):
Proceeds from shares
issued................ 83,513 91,011 170,115 22,470 37,775 27,414
Dividends reinvested... 64,827 314 69,492 -- -- --
Cost of shares
redeemed.............. (157,081) (107,181) (335,885) (26,363) (6,749) (729)
--------- --------- --------- --------- ------- -------
(8,741) (15,856) (96,278) (3,893) 31,026 26,685
--------- --------- --------- --------- ------- -------
Total net increase
(decrease) from capital
transactions........... $ 9,414 $ (7,854) $ (57,034) $ 3,603 $52,813 $30,038
========= ========= ========= ========= ======= =======
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 1,780 906 791 7,497 629 150
Reinvested............. 407 1 320 -- -- --
Redeemed............... (1,920) (852) (381) (7,149) (73) (14)
--------- --------- --------- --------- ------- -------
267 55 730 348 556 136
--------- --------- --------- --------- ------- -------
Class B Shares:
Issued................. 522 312 618 330 689 128
Reinvested............. 149 -- 83 -- -- --
Redeemed............... (202) (93) (35) (155) (33) (2)
--------- --------- --------- --------- ------- -------
469 219 666 175 656 126
--------- --------- --------- --------- ------- -------
Trust Shares (d):
Issued................. 3,546 3,253 5,916 1,553 2,051 2,193
Reinvested............. 2,615 11 2,527 -- -- --
Redeemed............... (6,293) (3,813) (11,784) (1,919) (377) (52)
--------- --------- --------- --------- ------- -------
(132) (549) (3,341) (366) 1,674 2,141
--------- --------- --------- --------- ------- -------
Total net increase
(decrease) from share
transactions........... 604 (275) (1,945) 157 2,886 2,403
========= ========= ========= ========= ======= =======
</TABLE>
---------
(a) Formerly ISG Large-Cap Equity Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from May 4, 1999 (commencement of operations) through
December 31, 1999.
(d) Formerly Institutional Shares.
(e) Formerly ISG Mid-Cap Fund.
Continued
246
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Small Cap Fund Equity Income Fund
--------------------- ---------------------
Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31,
2001 2000 2001 2000
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (a):
Proceeds from shares issued....... $128,298 $ 77,911 $97,599 $ 22,503
Proceeds from shares issued in
connection with ISG Fund merger.. -- 7,699 -- 4,902
Dividends reinvested.............. 725 -- 395 1,354
Cost of shares redeemed........... (126,966) (78,345) (89,043) (12,935)
-------- -------- ------- --------
2,057 7,265 8,951 15,824
-------- -------- ------- --------
Class B Shares:
Proceeds from shares issued....... 1,529 1,400 11,721 15,851
Proceeds from shares issued in
connection with ISG Fund merger.. -- 450 6,259
Dividends reinvested.............. 303 -- 188 524
Cost of shares redeemed........... (772) (439) (6,345) (2,667)
-------- -------- ------- --------
1,060 1,411 5,564 19,967
-------- -------- ------- --------
Trust Shares (b):
Proceeds from shares issued....... 81,137 60,648 30,234 46,423
Proceeds from shares issued in
connection with ISG Fund merger.. -- 89,678 -- 68,064
Dividends reinvested.............. 8,763 -- 331 431
Cost of shares redeemed........... (44,411) (15,098) (44,612) (17,135)
-------- -------- ------- --------
45,489 135,228 (14,047) 97,783
-------- -------- ------- --------
Total net increase (decrease) from
capital transactions.............. $ 48,606 $143,904 $ 468 $133,574
======== ======== ======= ========
SHARE TRANSACTIONS:
Class A Shares (a):
Issued............................ 10,745 6,120 7,143 1,502
Issued in connection with ISG Fund
merger........................... -- 564 -- 324
Reinvested........................ 65 -- 29 100
Redeemed.......................... (10,657) (6,140) (6,448) (876)
-------- -------- ------- --------
153 544 724 1,050
-------- -------- ------- --------
Class B Shares:
Issued............................ 132 109 824 1,067
Issued in connection with ISG Fund
merger........................... -- 34 -- 415
Reinvested........................ 28 -- 13 39
Redeemed.......................... (71) (42) (472) (184)
-------- -------- ------- --------
89 101 365 1,337
-------- -------- ------- --------
Trust Shares (b):
Issued............................ 7,197 4,995 2,096 3,157
Issued in connection with ISG Fund
merger........................... -- 6,531 -- 4,490
Reinvested........................ 783 -- 24 32
Redeemed.......................... (3,941) (1,244) (3,310) (1,157)
-------- -------- ------- --------
4,039 10,282 (1,190) 6,522
-------- -------- ------- --------
Total net increase (decrease) from
share transactions................ 4,281 10,927 (101) 8,909
======== ======== ======= ========
</TABLE>
---------
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Continued
247
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Balanced Fund Select Equity Fund
--------------------- ---------------------
Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31,
2001 2000 2001 2000
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (a):
Proceeds from shares issued..... $ 36,618 $ 1,091 $ 973 $ 436
Dividends reinvested............ 4,005 5,207 3 462
Cost of shares redeemed......... (7,226) (21,295) (1,428) (6,784)
-------- --------- ------- -------
33,397 (14,997) (452) (5,886)
-------- --------- ------- -------
Class B Shares:
Proceeds from shares issued..... 3,026 2,135 939 174
Dividends reinvested............ 791 1,412 -- 112
Cost of shares redeemed......... (1,941) (4,908) (267) (1,067)
-------- --------- ------- -------
1,876 (1,361) 672 (781)
-------- --------- ------- -------
Trust Shares (b):
Proceeds from shares issued..... 27,158 49,753 455 946
Dividends reinvested............ 5,486 20,079 11 516
Cost of shares redeemed......... (97,996) (171,356) (25) (4,398)
-------- --------- ------- -------
(65,352) (101,524) 441 (2,936)
-------- --------- ------- -------
Total net increase (decrease)
from capital transactions....... $(30,079) $(117,882) $ 661 $(9,603)
======== ========= ======= =======
SHARE TRANSACTIONS:
Class A Shares (a):
Issued.......................... 2,898 80 92 44
Reinvested...................... 332 412 -- 48
Redeemed........................ (576) (1,628) (143) (667)
-------- --------- ------- -------
2,654 (1,136) (51) (575)
-------- --------- ------- -------
Class B Shares:
Issued.......................... 246 159 87 18
Reinvested...................... 66 112 -- 12
Redeemed........................ (155) (383) (27) (110)
-------- --------- ------- -------
157 (112) 60 (80)
-------- --------- ------- -------
Trust Shares (b):
Issued.......................... 2,206 3,819 43 85
Reinvested...................... 454 1,589 1 54
Redeemed........................ (7,782) (13,401) (2) (432)
-------- --------- ------- -------
(5,122) (7,993) 42 (293)
-------- --------- ------- -------
Total net increase (decrease)
from share transactions......... (2,311) (9,241) 51 (948)
======== ========= ======= =======
</TABLE>
---------
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Continued
248
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Enhanced Market Fund International Equity Fund (c)
--------------------- ------------------------------------
Year Ended Year Ended Year Ended Period Ended Year Ended
July 31, July 31, July 31, July 31, December 31,
2001 2000 2001 2000 (d) 1999
---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (a):
Proceeds from shares
issued................ $ 12,063 $ 14,020 $ 24,793 $ 1,082 $ 926
Dividends reinvested... 285 635 51 3 --
Cost of shares
redeemed.............. (5,181) (9,467) (23,561) (233) (185)
-------- -------- -------- ------- -------
7,167 5,188 1,283 852 741
-------- -------- -------- ------- -------
Class B Shares:
Proceeds from shares
issued................ 2,920 12,747 195 489 206(e)
Dividends reinvested... 258 299 16 1 --
Cost of shares
redeemed.............. (3,629) (2,613) (138) (98) --
-------- -------- -------- ------- -------
(451) 10,433 73 392 206
-------- -------- -------- ------- -------
Trust Shares (b):
Proceeds from shares
issued................ 7,190 27,362 130,169 68,781 16,408
Dividends reinvested... 235 465 2,396 296 --
Cost of shares
redeemed.............. (18,735) (11,755) (58,463) (6,097) (6,232)
-------- -------- -------- ------- -------
(11,310) 16,072 74,102 62,980 10,176
-------- -------- -------- ------- -------
Total net increase
(decrease) from capital
transactions........... $ (4,594) $ 31,693 $ 75,458 $64,224 $11,123
======== ======== ======== ======= =======
SHARE TRANSACTIONS:
Class A Shares (a):
Issued................. 974 980 2,346 86 80
Reinvested............. 21 45 4 -- --
Redeemed............... (388) (657) (2,212) (19) (16)
-------- -------- -------- ------- -------
607 368 138 67 64
-------- -------- -------- ------- -------
Class B Shares:
Issued................. 218 890 18 39 17(e)
Reinvested............. 19 21 1 -- --
Redeemed............... (280) (179) (12) (8) --
-------- -------- -------- ------- -------
(43) 732 7 31 17
-------- -------- -------- ------- -------
Trust Shares (b):
Issued................. 517 1,901 12,408 5,477 1,371
Reinvested............. 18 32 216 22 --
Redeemed............... (1,434) (804) (5,769) (482) (541)
-------- -------- -------- ------- -------
(899) 1,129 6,855 5,017 830
-------- -------- -------- ------- -------
Total net increase
(decrease) from share
transactions........... (335) 2,229 7,000 5,115 911
======== ======== ======== ======= =======
</TABLE>
---------
(a) Formerly Classic Shares for Enhanced Market Fund.
(b) Formerly Premier Shares for Enhanced Market Fund; formerly Institutional
shares for International Equity Fund.
(c) Formerly ISG International Equity Fund.
(d) For the period from January 1, 2000 through July 31, 2000.
(e) For the period from February 2, 1999 (commencement of operations) through
December 31, 1999.
Continued
249
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Strategic Portfolios: Strategic Portfolios:
Aggressive Growth Portfolio (a) Growth Portfolio (g)
------------------------------------ ------------------------------------
Year Ended Period Ended Period Ended Year Ended Period Ended Period Ended
July 31, July 31, December 31, July 31, July 31, December 31,
2001 2000 (b) 1999 (c) 2001 2000 (b) 1999 (h)
---------- ------------ ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................ $ 1,378 $ 86 $ 413 $ 446 $ 760 $ 162(i)
Dividends reinvested... 57 5 1 66 3 --
Cost of shares
redeemed.............. (444) (66) (8) (206) (149) (9)(i)
------- ------- ------- ------- -------- -------
991 25 406 306 614 153
------- ------- ------- ------- -------- -------
Class B Shares:
Proceeds from shares
issued................ 88 99 504(d) 606 353 987(j)
Dividends reinvested... 43 4 1(d) 99 15 6(j)
Cost of shares
redeemed.............. (76) (168) (117)(d) (100) (111) (54)(j)
------- ------- ------- ------- -------- -------
55 (65) 388 605 257 939
------- ------- ------- ------- -------- -------
Trust Shares (f):
Proceeds from shares
issued................ 11,576 4,011 21,605(e) 3,450 26,486 12,019
Dividends reinvested... 2,295 229 37(e) 1,287 235 41
Cost of shares
redeemed.............. (7,509) (2,565) (4,903)(e) (4,126) (18,779) (1,370)
------- ------- ------- ------- -------- -------
6,362 1,675 16,739 611 7,942 10,690
------- ------- ------- ------- -------- -------
Total net increase
(decrease) from capital
transactions........... $ 7,408 $ 1,635 $17,533 $ 1,522 $ 8,813 $11,782
======= ======= ======= ======= ======== =======
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 138 7 40 47 71 16(i)
Reinvested............. 5 -- -- 7 -- --
Redeemed............... (44) (5) -- (22) (14) --
------- ------- ------- ------- -------- -------
99 2 40 32 57 16
------- ------- ------- ------- -------- -------
Class B Shares:
Issued................. 9 9 51(d) 64 34 99(j)
Reinvested............. 4 -- -- 10 1 --
Redeemed............... (7) (15) (11)(d) (10) (11) (5)(j)
------- ------- ------- ------- -------- -------
6 (6) 40 64 24 94
------- ------- ------- ------- -------- -------
Trust Shares (f):
Issued................. 1,084 347 2,101(e) 351 2,518 1,205
Reinvested............. 213 20 4(e) 129 22 4
Redeemed............... (721) (223) (470)(e) (419) (1,756) (138)
------- ------- ------- ------- -------- -------
576 144 1,635 61 784 1,071
------- ------- ------- ------- -------- -------
Total net increase
(decrease) from share
transactions........... 681 140 1,715 157 865 1,181
======= ======= ======= ======= ======== =======
</TABLE>
---------
(a) Formerly ISG Aggressive Growth Portfolio.
(b) For the period January 1, 2000 through July 31, 2000.
(c) For the period from January 13, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from January 27, 1999 (commencement of operations) through
December 31, 1999.
(e) For the period from January 28, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares.
(g) Fomerly ISG Growth Portfolio.
(h) For the period from February 1, 1999 (commencement of operations) through
December 31, 1999.
(i) For the period from February 11, 1999 (commencement of operations) through
December 31, 1999.
(j) For the period from February 15, 1999 (commencement of operations) through
December 31, 1999.
Continued
250
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Strategic Portfolios:
Strategic Portfolios: Moderate Growth and Income Portfolio
Growth and Income Portfolio (a) (g)
------------------------------------ ------------------------------------
Year Ended Period Ended Period Ended Year Ended Period Ended Period Ended
July 31, July 31, December 31, July 31, July 31, December 31,
2001 2000 (b) 1999 (c) 2001 2000 (b) 1999 (h)
---------- ------------ ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares:
Proceeds from shares
issued................ $ 6,905 $ 35 $ 542(d) $ 214 $ 8 $ 171(i)
Dividends reinvested... 58 9 2(d) 4 1 --
Cost of shares
redeemed.............. (623) (313) (31)(d) (32) (134) --
-------- -------- ------- ------- ------- -------
6,340 (269) 513 186 (125) 171
-------- -------- ------- ------- ------- -------
Class B Shares:
Proceeds from shares
issued................ 292 152 1,975 470 152 1,027
Dividends reinvested... 113 22 4 59 17 8
Cost of shares
redeemed.............. (244) (297) (318) (109) (282) (100)
-------- -------- ------- ------- ------- -------
161 (123) 1,661 420 (113) 935
-------- -------- ------- ------- ------- -------
Trust Shares (f):
Proceeds from shares
issued................ 13,644 15,744 88,893(e) 4,064 3,506 27,552(j)
Dividends reinvested... 6,995 1,749 140(e) 1,529 522 93(j)
Cost of shares
redeemed.............. (26,632) (17,178) (6,248)(e) (4,782) (5,529) (6,667)(j)
-------- -------- ------- ------- ------- -------
(5,993) 315 82,785 811 (1,501) 20,978
-------- -------- ------- ------- ------- -------
Total net increase
(decrease) from capital
transactions........... $ 508 $ (77) $84,959 $ 1,417 $(1,739) $22,084
======== ======== ======= ======= ======= =======
SHARE TRANSACTIONS:
Class A Shares:
Issued................. 700 3 54(d) 22 1 17(i)
Reinvested............. 6 1 -- -- -- --
Redeemed............... (63) (29) (3)(d) (3) (13) --
-------- -------- ------- ------- ------- -------
643 (25) 51 19 (12) 17
-------- -------- ------- ------- ------- -------
Class B Shares:
Issued................. 30 15 195 49 15 104
Reinvested............. 11 2 -- 6 2 1
Redeemed............... (24) (28) (31) (11) (29) (10)
-------- -------- ------- ------- ------- -------
17 (11) 164 44 (12) 95
-------- -------- ------- ------- ------- -------
Trust Shares (f):
Issued................. 1,330 1,495 8,840(e) 416 352 2,818(j)
Reinvested............. 693 165 14(e) 156 52 9(j)
Redeemed............... (2,662) (1,630) (604)(e) (489) (554) (684)(j)
-------- -------- ------- ------- ------- -------
(639) 30 8,250 83 (150) 2,143
-------- -------- ------- ------- ------- -------
Total net increase
(decrease) from share
transactions........... 21 (6) 8,465 146 (174) 2,255
======== ======== ======= ======= ======= =======
</TABLE>
---------
(a) Formerly ISG Growth & Income Portfolio.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) For the period from January 27, 1999 (commencement of operations) through
December 31, 1999.
(d) For the period from March 8, 1999 (commencement of operations) through
December 31, 1999.
(e) For the period from February 8, 1999 (commencement of operations) through
December 31, 1999.
(f) Formerly Institutional Shares.
(g) Fomerly ISG Moderate Growth & Income Portfolio.
(h) For the period from January 28, 1999 (commencement of operations) through
December 31, 1999.
(i) For the period from February 9, 1999 (commencement of operations) through
December 31, 1999.
(j) For the period from February 10, 1999 (commencement of operations) through
December 31, 1999.
Continued
251
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Bond Fund
----------------------
Year Ended Year Ended
July 31, July 31,
2001 2000
---------- ----------
<S> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (a):
Proceeds from shares issued............................. $ 11,752 $ 2,266
Proceeds from shares issued in connection with ISG Fund
merger................................................. -- 3,032
Dividends reinvested.................................... 477 351
Cost of shares redeemed................................. (5,478) (3,188)
--------- --------
6,751 2,461
--------- --------
Class B Shares:
Proceeds from shares issued............................. 5,266 1,265
Proceeds from shares issued in connection with ISG Fund
merger................................................. -- 1,228
Dividends reinvested.................................... 143 89
Cost of shares redeemed................................. (1,954) (1,468)
--------- --------
3,455 1,114
--------- --------
Trust Shares (b):
Proceeds from shares issued............................. 196,661 112,521
Proceeds from shares issued in connection with ISG Fund
merger................................................. -- 91,584
Dividends reinvested.................................... 8,356 5,659
Cost of shares redeemed................................. (129,636) (86,602)
--------- --------
75,381 123,162
--------- --------
Total net increase (decrease) from capital transactions.. $ 85,587 $126,737
========= ========
SHARE TRANSACTIONS:
Class A Shares (a):
Issued.................................................. 1,073 216
Issued in connection with ISG Fund merger............... -- 293
Reinvested.............................................. 44 34
Redeemed................................................ (503) (305)
--------- --------
614 238
--------- --------
Class B Shares:
Issued.................................................. 480 121
Issued in connection with ISG Fund merger............... -- 119
Reinvested.............................................. 13 9
Redeemed................................................ (178) (141)
--------- --------
315 108
--------- --------
Trust Shares (b):
Issued.................................................. 18,210 10,782
Issued in connection with ISG Fund merger............... -- 8,849
Reinvested.............................................. 770 542
Redeemed................................................ (11,865) (8,285)
--------- --------
7,115 11,888
--------- --------
Total net increase (decrease) from share transactions.... 8,044 12,234
========= ========
</TABLE>
---------
(a) Formerly Classic Shares.
(b) Formerly Premier Shares.
Continued
252
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Limited Term Bond Government Income
Fund (a) Fund
--------------------- ----------------------
Year Ended Year Ended Year Ended Year Ended
July 31, July 31, July 31, July 31,
2001 2000 2001 2000
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (b):
Proceeds from shares issued.... $ 4,178 $ 929 $ 3,268 $ 589
Proceeds from shares issued in
connection with ISG Fund
merger........................ -- 6,362 -- 3,262
Dividends reinvested........... 310 229 185 165
Cost of shares redeemed........ (2,803) (2,319) (3,955) (3,604)
-------- -------- --------- --------
1,685 5,201 (502) 412
-------- -------- --------- --------
Class B Shares:
Proceeds from shares issued.... 976 950 1,369 109(d)
Proceeds from shares issued in
connection with ISG Fund
merger........................ -- 704 -- 554(d)
Dividends reinvested........... 62 79 23 5(d)
Cost of shares redeemed........ (315) (1,484) (313) (154)(d)
-------- -------- --------- --------
723 249 1,079 514
-------- -------- --------- --------
Trust Shares (c):
Proceeds from shares issued.... 41,363 18,012 51,502 23,598
Proceeds from shares issued in
connection with ISG Fund
merger........................ -- 91,126 -- 364,290
Dividends reinvested........... 2,521 1,363 10,410 4,392
Cost of shares redeemed........ (72,744) (41,746) (132,841) (43,484)
-------- -------- --------- --------
(28,860) 68,755 (70,929) 348,796
-------- -------- --------- --------
Total net increase (decrease)
from capital transactions...... $(26,452) $ 74,205 $ (70,352) $349,722
======== ======== ========= ========
SHARE TRANSACTIONS:
Class A Shares (b):
Issued......................... 401 91 328 62
Issued in connection with ISG
Fund merger................... -- 633 -- 344
Reinvested..................... 30 23 19 17
Redeemed....................... (271) (230) (397) (376)
-------- -------- --------- --------
160 517 (50) 47
-------- -------- --------- --------
Class B Shares:
Issued......................... 93 93 137 12(d)
Issued in connection with ISG
Fund merger................... -- 70 -- 58(d)
Reinvested..................... 6 8 2 --
Redeemed....................... (31) (147) (31) (16)(d)
-------- -------- --------- --------
68 24 108 54
-------- -------- --------- --------
Trust Shares (c):
Issued......................... 3,976 1,781 5,182 2,474
Issued in connection with ISG
Fund merger................... -- 9,061 -- 38,422
Reinvested..................... 244 135 1,054 461
Redeemed....................... (7,003) (4,123) (13,453) (4,555)
-------- -------- --------- --------
(2,783) 6,854 (7,217) 36,802
-------- -------- --------- --------
Total net increase (decrease)
from share transactions........ (2,555) 7,395 (7,159) 36,903
======== ======== ========= ========
</TABLE>
---------
(a) Formerly AmSouth Limited Maturity Fund.
(b) Formerly Classic Shares.
(c) Formerly Premier Shares.
(d) For the period from March 13, 2000 (commencement of operations) through
July 31, 2000.
Continued
253
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Limited Term
U.S. Government Fund (a) Municipal Bond Fund
------------------------------------ ---------------------
Year Ended Period Ended Year Ended Year Ended Year Ended
July 31, July 31, December 31, July 31, July 31,
2001 2000 (b) 1999 2001 2000
---------- ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (c):
Proceeds from shares
issued................ $ 221 $ 769 $ 2,403 $ 4,656 $ 3,905
Proceeds from shares
issued in connection
with ISG Fund merger.. -- -- -- -- 2,085
Dividends reinvested... 74 61 95 165 129
Cost of shares
redeemed.............. (1,212) (626) (1,248) (3,578) (2,348)
-------- ------- -------- -------- --------
(917) 204 1,250 1,243 3,771
-------- ------- -------- -------- --------
Class B Shares:
Proceeds from shares
issued................ 705 16 379 1,207 554
Proceeds from shares
issued in connection
with ISG Fund merger.. -- -- -- -- 317
Dividends reinvested... 14 6 14 26 10
Cost of shares
redeemed.............. (374) (107) (341) (389) (20)
-------- ------- -------- -------- --------
345 (85) 52 844 861
-------- ------- -------- -------- --------
Trust Shares (d):
Proceeds from shares
issued................ 3,313 1,347 8,315 39,296 91,946
Proceeds from shares
issued in connection
with ISG Fund merger.. -- -- -- -- 35,162
Dividends reinvested... 645 566 765 280 334
Cost of shares
redeemed.............. (10,502) (6,687) (11,377) (63,032) (59,488)
-------- ------- -------- -------- --------
(6,544) (4,774) (2,297) (23,456) 67,954
-------- ------- -------- -------- --------
Total net increase
(decrease) from capital
transactions........... $ (7,116) $(4,655) $ (995) $(21,369) $ 72,586
======== ======= ======== ======== ========
SHARE TRANSACTIONS:
Class A Shares (c):
Issued................. 22 78 240 461 406
Issued in connection
with ISG Fund merger.. -- -- -- -- 219
Reinvested............. 7 6 9 17 13
Redeemed............... (120) (64) (125) (357) (244)
-------- ------- -------- -------- --------
(91) 20 124 121 394
-------- ------- -------- -------- --------
Class B Shares:
Issued................. 69 2 38 120 57
Issued in connection
with ISG Fund merger.. -- -- -- -- 33
Reinvested............. 1 -- 1 3 1
Redeemed............... (36) (11) (34) (39) (2)
-------- ------- -------- -------- --------
34 (9) 5 84 89
-------- ------- -------- -------- --------
Trust Shares (d):
Issued................. 329 137 826 3,916 9,577
Issued in connection
with ISG Fund merger.. -- -- -- -- 3,683
Reinvested............. 64 58 76 28 35
Redeemed............... (1,047) (681) (1,129) (6,285) (6,181)
-------- ------- -------- -------- --------
(654) (486) (227) (2,341) 7,114
-------- ------- -------- -------- --------
Total net increase
(decrease) from share
transactions........... (711) (475) (98) (2,136) 7,597
======== ======= ======== ======== ========
</TABLE>
---------
(a) Formerly ISG Limited Term U.S. Government Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) Formerly Classic Shares for Municipal Bond Fund.
(d) Formerly Institutional Shares for Limited Term U.S. Government Fund;
formerly Premier Shares for Municipal Bond Fund.
Continued
254
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Florida Tax-Exempt Tennessee Tax-Exempt
Fund (a) Fund (e)
--------------------- ------------------------------------
Year Ended Year Ended Year Ended Period Ended Year Ended
July 31, July 31, July 31, July 31, December 31,
2001 2000 2001 2000 (f) 1999
---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (b):
Proceeds from shares
issued................ $ 673 $ 83 $ 2,899 $ 1,040 $ 1,950
Dividends reinvested... 100 236 39 35 44
Cost of shares
redeemed.............. (266) (9,694) (2,234) (1,545) (1,382)
-------- -------- -------- -------- --------
507 (9,375) 704 (470) 612
-------- -------- -------- -------- --------
Class B Shares:
Proceeds from shares
issued................ 653 255 624 16 288
Dividends reinvested... 7 6 24 15 21
Cost of shares
redeemed.............. (31) (100) (302) (285) (322)
-------- -------- -------- -------- --------
629 161 346 (254) (13)
-------- -------- -------- -------- --------
Trust Shares (c):
Proceeds from shares
issued................ 6,891 13,793 3,296 803 5,061
Dividends reinvested... 18 8 24 256 107
Cost of shares
redeemed.............. (13,604) (15,043) (13,978) (12,797) (15,822)
-------- -------- -------- -------- --------
(6,695) (1,242) (10,658) (11,738) (10,654)
-------- -------- -------- -------- --------
Total net increase
(decrease) from capital
transactions........... $ (5,559) $(10,456) $ (9,608) $(12,462) $(10,055)
======== ======== ======== ======== ========
SHARE TRANSACTIONS:
Class A Shares (b):
Issued................. 65 8 293 108 196
Reinvested............. 9 24 4 4 4
Redeemed............... (25) (964) (224) (160) (139)
-------- -------- -------- -------- --------
49 (932) 73 (48) 61
-------- -------- -------- -------- --------
Class B Shares:
Issued................. 62 25 62 2 29
Reinvested............. 1 1 3 1 2
Redeemed............... (3) (10) (31) (30) (33)
-------- -------- -------- -------- --------
60 16 34 (27) (2)
-------- -------- -------- -------- --------
Trust Shares (c):
Issued................. 662 1,375 333 84 503
Reinvested............. 2 1 2 27 11
Redeemed............... (1,315) (1,507) (1,410) (1,336) (1,599)
-------- -------- -------- -------- --------
(651) (131) (1,075) (1,225) (1,085)
-------- -------- -------- -------- --------
Total net increase
(decrease) from share
transactions.......... (542) (1,047) (968) (1,300) (1,026)
======== ======== ======== ======== ========
</TABLE>
---------
(a) Formerly AmSouth Florida Tax-Free Fund.
(b) Formerly Classic Shares for Florida Tax-Exempt Fund.
(c) Formerly Premier Shares for Florida Tax-Exempt Fund; formerly Institutional
Shares for Tennessee Tax-Exempt Fund.
(d) For the period from March 16, 1999 (commencement of operations) through
July 31, 1999.
(e) Formerly ISG Tennessee Tax-Exempt Fund.
(f) For the period from January 1, 2000 through July 31, 2000.
Continued
255
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Limited Term Tennessee Tax- Prime
Exempt Fund (a) Money Market Fund (c)
------------------------------------ ------------------------
Year Ended Period Ended Year Ended Year Ended Year Ended
July 31, July 31, December 31, July 31, July 31,
2001 2000 (b) 1999 2001 2000
---------- ------------ ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (d):
Proceeds from shares
issued................ $ 1,307 $ 1,283 $ 5,159 $ 1,013,766 $ 656,332
Proceeds from shares
issued in connection
with ISG Fund merger.. -- -- -- -- 454,062
Dividends reinvested... 23 64 32 27,872 15,105
Cost of shares
redeemed.............. (4,364) (5,408) (4,446) (1,121,937) (616,302)
------- ------- ------- ----------- -----------
(3,034) (4,061) 745 (80,299) 509,197
------- ------- ------- ----------- -----------
Class B Shares:
Proceeds from shares
issued................ 281 -- 205 2,139 1,043
Proceeds from shares
issued in connection
with ISG Fund merger.. -- -- -- -- 568
Dividends reinvested... 6 5 11 40 23
Cost of shares
redeemed.............. (156) (332) (301) (997) (1,131)
------- ------- ------- ----------- -----------
131 (327) (85) 1,182 503
------- ------- ------- ----------- -----------
Trust Shares (e):
Proceeds from shares
issued................ -- -- -- 2,684,111 2,189,421
Proceeds from shares
issued in connection
with ISG Fund merger.. -- -- -- -- 280,171
Dividends reinvested... -- -- -- 4,155 3,036
Cost of shares
redeemed.............. -- -- -- (2,674,366) (2,277,765)
------- ------- ------- ----------- -----------
-- -- -- 13,900 194,863
------- ------- ------- ----------- -----------
Total net increase
(decrease) from capital
transactions........... $(2,903) $(4,388) $ 660 $ (65,217) $ 704,563
======= ======= ======= =========== ===========
SHARE TRANSACTIONS:
Class A Shares (d):
Issued................. 131 132 518 1,013,768 656,329
Issued in connection
with ISG Fund merger.. -- -- -- -- 454,104
Reinvested............. 2 7 3 27,872 15,105
Redeemed............... (438) (559) (446) (1,121,936) (616,302)
------- ------- ------- ----------- -----------
(305) (420) 75 (80,296) 509,236
------- ------- ------- ----------- -----------
Class B Shares:
Issued................. 28 -- 20 2,138 1,043
Issued in connection
with ISG Fund merger.. -- -- -- -- 568
Reinvested............. 1 1 1 40 23
Redeemed............... (16) (35) (31) (997) (1,131)
------- ------- ------- ----------- -----------
13 (34) (10) 1,181 503
------- ------- ------- ----------- -----------
Trust Shares (e):
Issued................. -- -- -- 2,684,112 2,189,421
Issued in connection
with ISG Fund merger.. -- -- -- -- 280,189
Reinvested............. -- -- -- 4,155 3,036
Redeemed............... -- -- -- (2,674,366) (2,277,765)
------- ------- ------- ----------- -----------
-- -- -- 13,901 194,881
------- ------- ------- ----------- -----------
Total net increase
(decrease) from share
transactions........... (292) (454) 65 (65,214) 704,620
------- ------- ------- ----------- -----------
</TABLE>
---------
(a) Formerly ISG Limited Term Tennessee Tax-Exempt Fund.
(b) For the period from January 1, 2000 through July 31, 2000.
(c) Formerly AmSouth Prime Obligations Fund.
(d) Formerly Classic Shares for Prime Money Market Fund.
(e) Formerly Premier Shares for Prime Money Market Fund.
Continued
256
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
U.S. Treasury Treasury Reserve Money Market
Money Market Fund (a) Fund (d)
---------------------- -------------------------------------
Year Ended Year Ended Year Ended Period Ended Year Ended
July 31, July 31, July 31, July 31, December 31,
2001 2000 2001 2000 (e) 1999
---------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (b):
Proceeds from shares
issued................ $ 176,331 $ 31,035 $ 461,649 $ 191,826 $ 541,860
Dividends reinvested... 513 265 627 790 893
Cost of shares
redeemed.............. (87,536) (23,874) (506,401) (191,924) (567,020)
--------- --------- --------- --------- ---------
89,308 7,426 (44,125) 692 (24,267)
--------- --------- --------- --------- ---------
Trust Shares (c):
Proceeds from shares
issued................ 589,335 705,296 640,341 299,903 605,138
Dividends reinvested... 216 191 862 1,412 277
Cost of shares
redeemed.............. (677,007) (739,461) (655,010) (362,572) (573,590)
--------- --------- --------- --------- ---------
(87,456) (33,974) (13,807) (61,257) 31,825
--------- --------- --------- --------- ---------
Total net increase
(decrease) from capital
transactions........... $ 1,852 $ (26,548) $ (57,932) $ (60,565) $ 7,558
========= ========= ========= ========= =========
SHARE TRANSACTIONS:
Class A Shares (b):
Issued................. 176,331 31,035 461,649 191,826 541,860
Reinvested............. 513 265 627 790 893
Redeemed............... (87,536) (23,874) (506,401) (191,924) (567,020)
--------- --------- --------- --------- ---------
89,308 7,426 (44,125) 692 (24,267)
--------- --------- --------- --------- ---------
Trust Shares (c):
Issued................. 589,336 705,296 640,341 299,903 605,138
Reinvested............. 216 191 862 1,412 277
Redeemed............... (677,007) (739,461) (655,012) (362,572) (573,590)
--------- --------- --------- --------- ---------
(87,455) (33,974) (13,809) (61,257) 31,825
--------- --------- --------- --------- ---------
Total net increase
(decrease) from share
transactions........... 1,853 (26,548) (57,934) (60,565) 7,558
========= ========= ========= ========= =========
</TABLE>
---------
(a) Formerly AmSouth U.S. Treasury Fund.
(b) Formerly Classic Shares for U.S. Treasury Money Market Fund.
(c) Formerly Premier Shares for U.S. Treasury Money Market Fund; formerly
Institutional Shares for Treasury Reserve Money Market Fund.
(d) Formerly ISG Treasury Money Market Fund.
(e) For the period from January 1, 2000 through July 31, 2000.
Continued
257
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Tax-Exempt Institutional Prime Obligations
Money Market Fund (a) Money Market Fund
---------------------- ---------------------------------
Year Ended Year Ended Year Ended July
July 31, July 31, 31, Year Ended July
2001 2000 2001 31, 2000
---------- ---------- ---------------- ---------------
<S> <C> <C> <C> <C>
CAPITAL TRANSACTIONS:
Class A Shares (b):*
Proceeds from shares
issued................ $ 71,509 $ 88,657 $ 799,661 $ 436,175
Proceeds from shares
issued in connection
with ISG Fund merger.. -- 4,901 -- --
Dividends reinvested... 1,308 1,064 143 --
Cost of shares
redeemed.............. (83,369) (66,142) (716,707) (366,854)
--------- --------- ---------------- --------------
(10,552) 28,480 83,097 69,321
--------- --------- ---------------- --------------
Class B Shares:**
Proceeds from shares
issued................ -- -- 1,241,105 463,214
Dividends reinvested... -- -- 30 --
Cost of shares
redeemed.............. -- -- (1,060,379) (308,340)
--------- --------- ---------------- --------------
-- -- 180,756 154,874
--------- --------- ---------------- --------------
Trust Shares (c):***
Proceeds from shares
issued................ 288,198 289,623 $ 577,379 305,090
Proceeds from shares
issued in connection
with ISG Fund merger.. -- 96,446 -- --
Dividends reinvested... 62 167 -- --
Cost of shares
redeemed.............. (278,306) (318,134) (522,104) (204,264)
--------- --------- ---------------- --------------
9,954 68,102 55,275 100,826
--------- --------- ---------------- --------------
Total net increase
(decrease) from capital
transactions........... $ (598) $ 96,582 $ 319,128 $ 325,021
========= ========= ================ ==============
SHARE TRANSACTIONS:
Class A Shares (b):*
Issued................. 71,509 88,656 799,661 436,175
Issued in connection
with ISG Fund merger.. -- 4,914 -- --
Reinvested............. 1,308 1,065 143 --
Redeemed............... (83,369) (66,142) (716,707) (366,854)
--------- --------- ---------------- --------------
(10,552) 28,493 83,097 69,321
--------- --------- ---------------- --------------
Class B Shares:**
Issued................. -- -- 1,241,104 463,214
Reinvested............. -- -- 30 --
Redeemed............... -- -- (1,060,379) (308,340)
--------- --------- ---------------- --------------
-- -- 180,755 154,874
--------- --------- ---------------- --------------
Trust Shares (c):***
Issued................. 288,197 289,624 577,379 305,090
Issued in connection
with ISG Fund merger.. -- 96,648 -- --
Reinvested............. 62 167 -- --
Redeemed............... (278,306) (318,134) (522,103) (204,264)
--------- --------- ---------------- --------------
9,953 68,305 55,276 100,826
--------- --------- ---------------- --------------
Total net increase
(decrease) from share
transactions........... (599) 96,798 319,128 325,021
========= ========= ================ ==============
</TABLE>
---------
(a) Formerly AmSouth Tax-Exempt Fund.
(b) Formerly Classic Shares for Tax-Exempt Money Market Fund.
(c) Formerly Premier Shares for Tax-Exempt Money Market Fund.
* Represents Class I Shares for Institutional Prime Obligations Money Market
Fund.
** Represents Class II Shares for Institutional Prime Obligations Money Market
Fund.
*** Represents Class III Shares for Institutional Prime Obligations Money
Market Fund.
Continued
258
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
6.Related Party Transactions:
AmSouth Bank ("AmSouth") has reorganized its investment advisory division to
form AIMCO, a separate, wholly owned subsidiary of AmSouth Bank. On May 12,
2001, AIMCO succeeded AmSouth Bank as the investment advisor to the AmSouth
Funds. The management and investment advisory personnel of AmSouth Bank that
provided investment management services to AmSouth Funds continue to do so as
the personnel of AIMCO.
Under the terms of the investment advisory agreement, AIMCO is entitled to
receive fees based on a percentage of the average daily net assets of each of
the Funds as follows:
<TABLE>
<CAPTION>
Annual Fee as a
Percentage of Average
Daily Net Assets
---------------------
<S> <C>
Value Fund................................................ 0.80%
Growth Fund............................................... 0.80%
Capital Growth............................................ 0.80%
Large Cap................................................. 0.80%
Mid Cap Equity............................................ 1.00%
Small Cap Fund............................................ 1.20%
Equity Income Fund........................................ 0.80%
Balanced Fund............................................. 0.80%
Select Equity Fund........................................ 0.80%
Enhanced Market Fund...................................... 0.45%
International Equity Fund................................. 1.25%
Aggressive Growth Portfolio............................... 0.20%
Growth Portfolio.......................................... 0.20%
Growth and Income Portfolio............................... 0.20%
Moderate Growth and Income Portfolio...................... 0.20%
Bond Fund................................................. 0.65%
Limited Term Bond Fund.................................... 0.65%
Government Income Fund.................................... 0.65%
Limited Term U.S. Government Fund......................... 0.65%
Municipal Bond Fund....................................... 0.65%
Florida Tax-Exempt Fund................................... 0.65%
Tennessee Tax-Exempt Fund................................. 0.65%
Limited Term Tennessee Tax-Exempt Fund.................... 0.65%
Prime Money Market Fund................................... 0.40%
U.S. Treasury Money Market Fund........................... 0.40%
Treasury Reserve Money Market Fund........................ 0.40%
Tax-Exempt Money Market Fund.............................. 0.40%
Institutional Prime Obligations Money Market Fund......... 0.20%
</TABLE>
AmSouth also serves as Custodian for the Trust, with the exception of the
International Equity Fund. Pursuant to the Custodian Agreement with the Trust,
AmSouth receives compensation from each Fund for such services in an amount
equal to an asset-based fee plus fixed fees charged for certain portfolio
transactions and out-of-pocket expenses. Deutsche Bank serves the International
Equity Fund as the custodian.
BISYS Fund Services Limited Partnership d/b/a BISYS Fund Services ("BISYS"),
an Ohio Limited Partnership, BISYS Fund Services Ohio, Inc. ("BISYS Ohio"), and
BISYS Fund Services, Inc. ("BISYS Inc.") are subsidiaries of the BISYS Group,
Inc.
ASO Services Company ("ASO"), a wholly owned subsidiary of the BISYS Group,
Inc., serves the Funds as Administrator ("Administrator"). Under the terms of
the administration agreement, the Administrator receives a fee based on the
average daily net assets of each of the Funds. AmSouth and BISYS Ohio, with
whom certain officers and trustees of the Trust are affiliated, serve as the
Funds' sub-administrators. Such officers and trustees are paid no fees directly
by the Funds for serving as officers
Continued
259
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
and trustees of the Trust. Pursuant to its current agreement with the
Administrator, AmSouth has assumed certain Administration duties, for which
AmSouth receives a fee, paid by the Administrator, based on a percentage of
each Fund's daily average net assets. ASO also serves the Funds as Fund
Accountant for whom ASO receives a fee based on a percentage of each Fund's
average daily net assets.
Pursuant to its agreement with the Administrator, BISYS Ohio, as sub-
administrator, is entitled to compensation as mutually agreed upon from time to
time by it and the Administrator. BISYS serves as the Funds' distributor and is
entitled to receive commissions on sales of shares of the variable net asset
value funds. For the year ended July 31, 2001, BISYS received $1,001,380 from
commissions earned on sales of shares of the Funds' variable net asset value
funds. BISYS reallowed $4,469 to affiliated broker dealers of the Fund's
shares. BISYS receives no fees from the Funds for providing distribution
services to the Funds.
BISYS Ohio, serves the Funds as Transfer Agent. Under the terms of the
Transfer Agent Agreement, BISYS Ohio, receives a fee based on a percentage of
each Fund's average daily net assets, plus out of pocket charges.
Class A and Trust Shares of the Trust are subject to a Shareholder Servicing
Plan (the "Servicing Plan") permitting payment of compensation to financial
institutions that agree to provide certain administrative support services for
their customers or account holders. Each Fund has entered into a specific
arrangement with BISYS for the provision of such services and reimburses BISYS
for its cost of providing these services, subject to a maximum rate of 0.25% of
the Class A Shares and 0.15% of the Trust Shares of the average daily net
assets of each of the Funds.
Class B Shares, Class II Shares and Class III Shares of the Trust are subject
to a Distribution and Shareholder Servicing Plan (the "Distribution Plan")
permitting payment of compensation to a participating organization as payment
for its services or expenses in connection with distribution assistance of the
Funds' Class B Shares, Class II Shares and Class III Shares to the
participating organizations customers. Each Fund has entered into a specific
arrangement with BISYS for the provision of such services and pays BISYS for
its cost of providing such services, subject to a maximum rate of 1.00% of the
average daily net assets of the Class B Shares of each of the Funds, which
includes a Shareholder Servicing Fee of 0.25% of the average daily net assets
of the Class B Shares of each Fund. Class II Shares and Class III Shares are
subject to a maximum rate of 0.25% and 0.50% of daily average net assets,
respectively, for such services.
BISYS Ohio also serves the Funds as administrator for Securities Lending, and
for the year ended July 31, 2001, received $928,199 in fees for its services.
7. Concentration of Credit Risk
The Tennessee Tax-Exempt Fund and Limited Term Tennessee Tax-Exempt Fund
invest substantially all of their assets in a non-diversified portfolio of tax-
exempt debt obligations primarily consisting of securities issued by the State
of Tennessee, its municipalities, counties and other taxing districts. The
issuers' abilities to meet their obligations may be affected by Tennessee's
economic, regional, and political developments.
The Florida Tax-Exempt Fund invests substantially all of its assets in a non-
diversified portfolio of tax-exempt debt obligations primarily consisting of
securities issued by the State of Florida, its municipalities, counties and
other taxing districts. The issuers' abilities to meet their obligations may be
affected by Florida's economic, regional, and political developments.
The Municipal Bond Fund invests a large portion of its assets in tax-exempt
debt obligations issued by the State of Alabama, its municipalities, counties,
and other taxing districts. The issuers' abilities to meet their obligations
may be affected by Alabama's economic, regional, and political developments.
Continued
260
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
8. Common Trust Conversion
On December 11, 2000, the Value Fund issued shares to acquire all of the
assets and liabilities of a certain common trust fund of AmSouth Bank. The
following is a summary of shares issued by the Value Fund, net assets
converted, net asset value per share of the Value Fund, and unrealized
appreciation from the common trust fund as of the conversion date (amounts in
thousands, except per share amounts):
<TABLE>
<CAPTION>
Net Asset
Net Value Per Unrealized
Shares Assets Share Appreciation
------ ------- --------- ------------
<S> <C> <C> <C> <C>
Value Fund................................ 1,283 $23,654 $18.44 $6,315
</TABLE>
9. Eligible Distributions: (Unaudited)
The AmSouth Funds designate the following eligible distributions for the
dividends received deductions for corporations for the year ended July 31,
2001:
<TABLE>
<CAPTION>
Percentage
----------
<S> <C>
Value Fund........................................................... 100.00%
Growth Fund.......................................................... 10.40%
Capital Growth Fund.................................................. 12.10%
Large Cap Fund....................................................... 100.00%
Equity Income Fund................................................... 100.00%
Balanced Fund........................................................ 29.35%
Select Equity Fund................................................... 100.00%
Enhanced Market Fund................................................. 100.00%
Strategic Portfolios: Aggressive Growth Portfolio.................... 10.77%
Strategic Portfolios: Growth Portfolio............................... 4.92%
Strategic Portfolios: Growth and Income Portfolio.................... 4.88%
Strategic Portfolios: Moderate Growth and Income Portfolio........... 4.96%
</TABLE>
10. Exempt-Interest Income Designations (Unaudited):
The AmSouth Funds designate the following exempt-interest dividends for the
taxable year ended July 31, 2001 (amounts in thousands):
<TABLE>
<CAPTION>
Tax-Exempt
Distribution
------------
<S> <C>
Municipal Bond Fund................................................ $15,530
Florida Tax-Exempt Fund............................................ 2,451
Tennessee Tax-Exempt Fund.......................................... 2,432
Limited Term Tennessee Tax-Exempt Fund............................. 427
Tax-Exempt Money Market Fund....................................... 6,077
</TABLE>
Continued
261
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
11. Federal Income Tax Information (Unaudited):
The accompanying table details distributions from long-term capital gains for
the following funds for the year ended July 31, 2001 (amounts in thousands):
<TABLE>
<CAPTION>
Long-Term
Capital
Gains
---------
<S> <C>
Value Fund............................................................ $ 80,149
Growth Fund........................................................... 3,890
Capital Growth Fund................................................... 10,624
Large Cap Fund........................................................ 112,147
Small Cap Fund........................................................ 4,411
Balanced Fund......................................................... 16,833
Enhanced Market Fund.................................................. 1,003
International Equity Fund............................................. 2,855
Strategic Portfolios: Aggressive Growth Portfolio..................... 399
Strategic Portfolios: Growth Portfolio................................ 177
Strategic Portfolios: Growth and Income Portfolio..................... 266
Strategic Portfolios: Moderate Growth and Income Portfolio............ 19
</TABLE>
At July 31, 2001, the following Funds have capital loss carryforwards, which
are available to offset future capital gains, if any on securities transactions
to the extent provided for in the Code (amounts in thousands):
<TABLE>
<CAPTION>
Amount Expires
------- -------
<S> <C> <C>
Value Fund...................................................... $ 451 2007
Capital Growth Fund............................................. 1,283 2009
Mid Cap Fund.................................................... 315 2007
3,640 2008
3,898 2009
Small Cap Fund.................................................. 10,492 2009
Equity Income Fund.............................................. 1,059 2007
283 2008
4,006 2009
Select Equity Fund.............................................. 1,796 2009
International Equity Fund....................................... 37 2009
Limited Term Bond Fund.......................................... 65 2002
730 2003
4 2004
304 2005
117 2006
338 2007
50 2008
518 2009
</TABLE>
Continued
262
<PAGE>
AMSOUTH FUNDS
Notes to Financial Statements, Continued
July 31, 2001
<TABLE>
<CAPTION>
Amount Expires
------ -------
<S> <C> <C>
Government Income Fund........................................... $468 2002
498 2003
973 2004
278 2005
858 2007
227 2009
Limited Term U.S. Government Fund................................ 759 2002
379 2003
77 2008
Florida Tax-Exempt Fund.......................................... 147 2008
204 2009
Tennessee Tax-Exempt Fund........................................ 26 2007
898 2008
Limited Term Tennessee Tax-Exempt Fund........................... 224 2008
Prime Money Market Fund.......................................... 4 2005
52 2006
Treasury Reserve Money Market Fund............................... 6 2003
Tax-Exempt Money Market Fund..................................... $123 2006
92 2007
75 2009
Institutional Prime Obligations Money Market Fund................ 1 2009
</TABLE>
Under current tax law, capital losses realized after October 31, within the
Fund's fiscal year may be deferred and treated as occurring on the first day of
the following fiscal year. The following deferred losses will be treated as
arising on the first day of the fiscal year ended July 31, 2002 (amounts in
thousands):
<TABLE>
<S> <C>
Growth Fund............................................................ $ 6,351
Capital Growth Fund.................................................... 20,393
Mid Cap Fund........................................................... 12,327
Small Cap Fund......................................................... 20,673
Equity Income Fund..................................................... 12,842
International Equity Fund.............................................. 2,972
</TABLE>
Continued
263
<PAGE>
Report of Independent Auditors
The Board of Trustees and Shareholders
AmSouth Funds
We have audited the accompanying statements of assets and liabilities,
including the schedules of portfolio investments, of AmSouth Funds (comprised
of AmSouth Value Fund, AmSouth Growth Fund, AmSouth Capital Growth Fund,
AmSouth Large Cap Fund, AmSouth Mid Cap Fund, AmSouth Small Cap Fund, AmSouth
Equity Income Fund, AmSouth Balanced Fund, AmSouth Select Equity Fund, AmSouth
Enhanced Market Fund, AmSouth International Equity Fund, AmSouth Strategic
Portfolios: Aggressive Growth Portfolio, AmSouth Strategic Portfolios: Growth
Portfolio, AmSouth Strategic Portfolios: Growth and Income Portfolio, AmSouth
Strategic Portfolios: Moderate Growth and Income Portfolio, AmSouth Bond Fund,
AmSouth Limited Term Bond Fund, AmSouth Government Income Fund, AmSouth Limited
Term U.S. Government Fund, AmSouth Municipal Bond Fund, AmSouth Florida Tax-
Exempt Fund, AmSouth Tennessee Tax-Exempt Fund, AmSouth Limited Term Tennessee
Tax-Exempt Fund, AmSouth Prime Money Market Fund, AmSouth U.S. Treasury Money
Market Fund, AmSouth Treasury Reserve Money Market Fund, AmSouth Tax-Exempt
Money Market Fund and AmSouth Institutional Prime Obligations Money Market
Fund) (the Funds) as of July 31, 2001, the related statements of operations for
the year then ended, and the related statements of changes in net assets and
financial highlights for each of the two years or periods then ended. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The
statements of changes in net assets and the financial highlights presented
herein for each of the respective years or periods ended July 31, 1999 were
audited by other auditors whose report dated September 21, 1999 expressed an
unqualified opinion. The statements of changes in net assets and the financial
highlights presented herein for each of the respective years or periods ended
December 31, 1999 were audited by other auditors whose report dated February
22, 2000 expressed an unqualified opinion.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of July 31, 2001, by correspondence with
the custodians and others. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios comprising AmSouth Funds at July 31, 2001, the
results of their operations, the changes in their net assets and their
financial highlights for each of the two years or periods then ended, in
conformity with accounting principles generally accepted in the United States.
[LOGO OF ERNST & YOUNG LLP]
Columbus, Ohio
September 13, 2001
264
<PAGE>
AMSOUTH FUNDS
ANNUAL REPORT
JULY 31, 2001
[Investment Advisor]
------------------------------------------
AmSouth Investment Management Company, LLC
1901 Sixth Avenue North
Birmingham, AL 35203
[Investment Sub-Advisors]
------------------------------------------
(Capital Growth Fund Only)
Peachtree Asset Management
A Division of Salomon Smith Barney
Fund Management, LLC
One Peachtree Center
Atlanta, GA 30308
(Mid Cap Fund Only)
Bennett Lawrence Management, LLC
757 3rd Avenue, 19th Floor
New York, NY 10017
(Small Cap Fund Only)
Sawgrass Asset Management, LLC
1579 The Greens Way, Suite 20
Jacksonville, FL 32224
(Equity Income Fund Only)
Rockhaven Asset Management, LLC
100 First Avenue, Suite 1050
Pittsburgh, PA 15222
(Select Equity and Enhanced Market Funds)
Oakbrook Investments, LLC
701 Warrenville Road, Suite 135
Lisle, IL 60532
(International Equity Fund Only)
Lazard Asset Management
30 Rockefeller Plaza
New York, NY 10112
[Distributor]
--------------------
BISYS Fund Services
3435 Stelzer Road
Columbus, OH 43219
[Legal Counsel]
--------------------
Ropes & Gray
One Franklin Square
1301 K Street, N.W.
Suite 800 East
Washington, DC 20005
[Transfer Agent]
--------------------
BISYS Fund Services Ohio, Inc.
3435 Stelzer Road
Columbus, OH 43219
Auditors
--------------------
Ernst & Young LLP
41 S. High St.
Columbus, OH 43215
9/01
</TEXT>
</DOCUMENT>