-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Vk2W5GWwYGjldjRtcipAqCiGoLHt766FgZTp4MSexeDRGeKCku0S0ksLl7q7v22u 55sMIyeL4Q/XTGmahXqsjg== 0000950144-00-014590.txt : 20001204 0000950144-00-014590.hdr.sgml : 20001204 ACCESSION NUMBER: 0000950144-00-014590 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONS FUNDS TRUST CENTRAL INDEX KEY: 0001097519 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-09645 FILM NUMBER: 781697 BUSINESS ADDRESS: STREET 1: ONE BANK OF AMERICA PLAZA CITY: CHARLOTTE STATE: NC ZIP: 28255 BUSINESS PHONE: 8003217854 MAIL ADDRESS: STREET 1: ONE BANKOF AMERICA PLAZA CITY: CHARLOTTE STATE: NC ZIP: 28255 N-30D 1 g64500fsn-30d.txt FUNDS TRUST (DOMESTIC) 1 [GRAPHIC: PHOTO COLLAGE - COMPUTER Nations Convertible CHIP/OYSTER SHELL] Securities Fund Nations Balanced Assets Fund Nations Asset Allocation Fund Nations Equity Income Fund Nations Value Fund Nations Marsico Growth & Income Fund Nations Blue Chip Fund Nations Strategic Growth Fund Nations Capital Growth Fund Nations Aggressive Growth Fund Nations Marsico Focused Equities Fund Nations MidCap Growth Fund Nations Marsico 21st Century Fund Nations Small Company Fund DOMESTIC STOCK FUNDS SEMIANNUAL REPORT FOR THE PERIOD ENDED SEPTEMBER 30, 2000 [NATIONS FUNDS LOGO] 2 This Report is submitted for the general information of shareholders of Nations Funds. This material must be preceded or accompanied by a current Nations Funds prospectus. Nations Funds distributor: Stephens Inc., which is not affiliated with Bank of America N.A., is not a bank, and securities offered by it are not guaranteed by any bank or insured by the FDIC. Stephens Inc., member NYSE, SIPC. Nations Funds Investment adviser: Banc of America Advisors, Inc. NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE 3 PRESIDENTS' MESSAGE Dear Shareholder: The six-month period ended September 30, 2000 proved to be quite unsettling for mutual fund investors. Several factors led to turbulence in U.S. and overseas markets. The Federal Reserve Board's practice of increasing interest rates in an attempt to slow down the economy and keep inflation at bay took a toll on the stock market. Oil prices soared over the summer causing concern across the country as several cities saw gas prices above $2.00 per gallon. The slowing economy affected earnings at a number of leading U.S. companies, causing additional volatility in the stock market. Overseas, the European Central Bank raised interest rates in August -- the fifth rate hike this year -- and the euro fell to a record low. In Japan, the Bank of Japan increased interest rates for the first time in a decade, adding additional strain to an economy that has struggled over the last several years. The only seemingly bright spot for investors during the past six months has been in the bond market. Because of the federal government's budget surplus, the U.S. Treasury has had to buy back many of its long-term securities. The shortage in long-term securities has generally increased returns on these securities, resulting in an inversion of the yield curve -- whereby short-term securities are yielding more than many longer-term securities. This is the first time in a long time that most bond sectors have outperformed both the Standard & Poor's 500 Composite Stock Price Index and the Nasdaq Composite Index*. Now, you're probably asking yourself "Is this a good time to invest in stocks or bonds?" We think the answer is "Yes." While stocks of all sizes have historically outperformed bonds over the long-term, and bonds have performed well this year, a broadly diversified portfolio -- one consisting of both stocks and bonds -- can help you weather market volatility. Remember that the financial markets tend to be cyclical and while one asset class or investment style may be the flavor of the month, it could be out of favor the next. It's also important to note that volatility tends to keep some investors on the sidelines. But waiting for the right time to invest may result in missed opportunities. Disciplined investing requires staying invested through market highs and lows. Investors can also take advantage of dollar cost averaging** during volatile times -- the practice of systematic investing where you seek to buy more shares when prices are low and fewer shares when prices are high, resulting in a lower average share price over time. Remaining invested and regularly investing is key. Whether it's growth vs. value, large cap vs. small cap, stocks vs. bonds, or U.S. vs. international, no single investment style alone will assure that you achieve your long-term financial goals. We believe diversification is the key to long-term success and an investment professional can help you create a portfolio best suited to your risk tolerance and investment time horizon. *The Standard & Poor's 500 Composite Stock Price Index is an unmanaged index of 500 widely held common stocks. It is unavailable for investment. The Nasdaq Composite Index tracks the performance of domestic common stocks traded on the regular Nasdaq market as National Market System traded foreign stocks and ADRs. It is unmanaged and unavailable for investment. **Dollar cost averaging does not ensure a profit or protect against a loss in a declining market. You should carefully consider your ability to make regular investments through periods of fluctuating market conditions. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. 4 PRESIDENTS' MESSAGE CONTINUED... At Nations Funds, we strongly believe in the value of advice. An investment professional can provide you with market research and analysis, years of investment experience, and work with you to determine the best strategy for surviving short-term volatility and successfully reaching your long-term goals. We remain committed to providing you with world-class investment management and competitive products to help you reach your long-term goals. Should you have any questions or comments on your semiannual report, please contact your investment professional or call us at 1.800.321.7854. You can also visit us online at www.nations-funds.com. Thank you for being a part of the Nations Funds family. Sincerely, /s/ A. Max Walker A. MAX WALKER PRESIDENT AND CHAIRMAN OF THE BOARD NATIONS FUNDS /s/ Robert H. Gordon ROBERT H. GORDON PRESIDENT BANC OF AMERICA ADVISORS, INC. September 30, 2000 5 TABLE OF CONTENTS NATIONS FUNDS SPECTRUM 2 FINANCIAL STATEMENTS Statements of net assets Nations Convertible Securities Fund 3 Nations Balanced Assets Fund 7 Nations Asset Allocation Fund 11 Nations Equity Income Fund 21 Nations Value Fund 23 Nations Marsico Growth & Income Fund 25 Nations Blue Chip Fund 26 Nations Strategic Growth Fund 27 Nations Capital Growth Fund 29 Nations Aggressive Growth Fund 31 Nations Marsico Focused Equities Fund 33 Nations MidCap Growth Fund 34 Nations Marsico 21st Century Fund 36 Nations Small Company Fund 38 Statements of operations 42 Statements of changes in net assets 46 Schedules of capital stock activity 52 Financial highlights 66 Notes to financial statements 94 Statements of net assets -- Nations Master Investment Trust Nations Marsico Growth & Income Master Portfolio 103 Nations Blue Chip Master Portfolio 105 Nations Marsico Focused Equities Master Portfolio 108 Statements of operations 109 Statements of changes in net assets 110 Supplementary data 112 Notes to financial statements 113
------------------------------------------------------------------------------ NATIONS FUNDS [DALBAR MUTUAL FUND RECOGNIZED FOR SERVICE AWARD AND HONORS OUTSTANDING COMMITMENT TO: FINANCIAL CUSTOMER SERVICE INTERMEDIARIES 1999 GRAPHIC] IN RECOGNITION OF ITS COMMITMENT TO DALBAR, Inc., is a well-respected PROVIDE SHAREHOLDERS WITH THE research firm that measures HIGHEST LEVEL OF CUSTOMER SERVICE customer service levels and IN THE MUTUAL FUND INDUSTRY, establishes benchmarks in the NATIONS FUNDS RECEIVED THE DALBAR financial services industry. MUTUAL FUND SERVICE AWARD IN 1999. ------------------------------------------------------------------------------
6 THE NATIONS FUNDS FAMILY OF FUNDS LOWER RISK/REWARD POTENTIAL MONEY MARKET FUNDS Nations Prime Fund Nations Cash Reserves Nations Money Market Reserves Nations Government Money Market Fund Nations Government Reserves Nations Treasury Fund Nations Treasury Reserves Nations Tax Exempt Fund Nations Municipal Reserves Nations California Tax-Exempt Reserves FIXED INCOME FUNDS INCOME FUNDS Nations High Yield Bond Fund Nations Strategic Income Fund Nations U.S. Government Bond Fund Nations Government Securities Fund Nations Bond Fund Nations Intermediate Bond Fund Nations Short-Intermediate Government Fund Nations Short-Term Income Fund TAX-EXEMPT INCOME FUNDS Nations Municipal Income Fund Nations State-Specific Long-Term Municipal Bond Funds (CA, FL, GA, KS, MD, NC, SC, TN, TX, VA) Nations Intermediate Municipal Bond Fund Nations State-Specific Intermediate Municipal Bond Funds (FL, GA, MD, NC, SC, TN, TX, VA) Nations Short-Term Municipal Income Fund DOMESTIC EQUITY FUNDS GROWTH FUNDS Nations Small Company Fund Nations Marsico 21st Century Fund Nations MidCap Growth Fund Nations Marsico Focused Equities Fund Nations Aggressive Growth Fund Nations Capital Growth Fund Nations Strategic Growth Fund Nations Blue Chip Fund GROWTH AND INCOME FUNDS Nations Marsico Growth & Income Fund Nations Value Fund Nations Equity Income Fund Nations Asset Allocation Fund Nations Balanced Assets Fund Nations Convertible Securities Fund INTERNATIONAL FUNDS Nations Emerging Markets Fund Nations Marsico International Opportunities Fund Nations International Equity Fund Nations International Value Fund HIGHER RISK/REWARD POTENTIAL INDEX FUNDS Nations Managed Index Fund Nations LargeCap Index Fund Nations MidCap Index Fund Nations SmallCap Index Fund ASSET ALLOCATION PORTFOLIOS Nations LifeGoal Balanced Growth Portfolio Nations LifeGoal Growth Portfolio Nations LifeGoal Income and Growth Portfolio 2 7 NATIONS FUNDS Nations Convertible Securities Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ COMMON STOCKS -- 11.9% COMMERCIAL BANKING -- 1.7% 50,000 Bank United Corporation, Class A....... $ 2,534 100,000 Washington Mutual, Inc. ............... 3,981 -------- 6,515 -------- COMPUTERS AND OFFICE EQUIPMENT -- 0.3% 50,000 Hutchinson Technology, Inc.(!)......... 1,053 -------- ELECTRIC POWER -- NON NUCLEAR -- 0.5% 80,000 Nisource Inc. ......................... 1,950 -------- ENERGY -- MISCELLANEOUS -- 0.7% 130,000 Avista Corporation..................... 2,925 -------- HEALTH SERVICES -- 1.0% 200,000 Health Management Associates, Inc., Class A(!)........................... 4,162 -------- INSURANCE -- 1.0% 36,700 Lincoln National Corporation Ltd. ..... 1,766 130,000 Penn Treaty American Corporation(!).... 2,365 -------- 4,131 -------- INTEGRATED OIL -- 0.9% 47,500 BP Amoco plc, ADR...................... 2,518 33,300 Unocal Corporation..................... 1,180 -------- 3,698 -------- MEDICAL DEVICES AND SUPPLIES -- 0.7% 50,000 Abbott Laboratories.................... 2,379 7,500 Invitrogen Corporation(!).............. 533 -------- 2,912 -------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT -- 0.3% 25,000 Cisco Systems, Inc. ................... 1,381 -------- OILFIELD SERVICES -- 0.5% 50,000 Diamond Offshore Drilling, Inc. ....... 2,050 -------- PHARMACEUTICALS -- 0.7% 50,000 Schering-Plough Corporation............ 2,325 5,000 Vertex Pharmaceuticals, Inc. .......... 423 -------- 2,748 -------- REAL ESTATE -- 0.8% 25,000 Apartment Investment and Management Company.............................. 1,152 47,000 Equity Residential Properties Trust.... 2,256 -------- 3,408 -------- RESTAURANTS -- 0.5% 70,000 McDonald's Corporation................. 2,113 -------- SEMICONDUCTORS -- 0.7% 56,000 Intel Corporation...................... 2,328 21,000 Motorola, Inc. ........................ 593 -------- 2,921 -------- SOFTWARE -- 0.6% 50,000 Affiliated Computer Services, Inc.(!).. 2,494 1 Microsoft Corporation(!)++............. 0 -------- 2,494 --------
VALUE SHARES (000) - ------------------------------------------------------------ SPECIALTY STORES -- 1.0% 80,000 Home Depot Inc. ....................... $ 4,244 -------- TOTAL COMMON STOCKS (Cost $38,968)....................... 48,705 -------- PRINCIPAL AMOUNT (000) - --------- CONVERTIBLE BONDS AND NOTES -- 52.1% BROADCASTING AND CABLE -- 1.8% $ 4,000 AT&T Corporation - Liberty Media Group, 4.000% 11/15/29...................... 3,735 4,000 Clear Channel Communications, Inc., 1.500% 12/01/02...................... 3,700 -------- 7,435 -------- COMMERCIAL BANKING -- 1.4% 1,697 BankAtlantic Bancorp, Inc., 5.625% 12/01/07...................... 1,219 4,425 JMH Finance Ltd., 4.750% 09/06/07(-)................... 4,541 -------- 5,760 -------- COMMERCIAL SERVICES -- 0.5% 2,820 Quanta Services Inc., 4.000% 07/01/07...................... 2,238 -------- COMPUTERS AND OFFICE EQUIPMENT -- 2.1% 2,850 Affiliated Computer Services, Inc., 4.000% 03/15/05...................... 3,719 4,400 Hewlett-Packard Company, 3.200%** 10/14/17.................... 3,212 1,700 Hutchinson Technology Inc., 6.000% 03/15/05...................... 1,558 -------- 8,489 -------- DIVERSIFIED ELECTRONICS -- 3.8% 1,850 Benchmark Electronics, Inc., 6.000% 08/15/06...................... 2,636 3,110 SCI Systems, Inc., 3.000% 03/15/07...................... 3,098 6,600 Solectron Corporation, 2.100%** 05/08/20.................... 4,406 4,240 Transwitch Corporation, 4.500% 09/12/05(-)................... 5,215 -------- 15,355 -------- DIVERSIFIED MANUFACTURING -- 1.8% 2,000 CommScope, Inc., 4.000% 12/15/06...................... 1,700 3,450 Hutchison Whampoa, 2.875% 09/15/03(-)................... 3,476 2,135 Mark IV Industries, Inc., 4.750% 11/01/04...................... 2,114 -------- 7,290 -------- EXPLORATION AND PRODUCTION -- 2.3% 4,500 Devon Energy Corporation, 4.950% 08/15/08...................... 4,354 3,955 Kerr-McGee Corporation, 5.250% 02/15/10...................... 4,914 -------- 9,268 --------
SEE NOTES TO FINANCIAL STATEMENTS. 3 8 NATIONS FUNDS Nations Convertible Securities Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
PRINCIPAL AMOUNT VALUE (000) (000) - ------------------------------------------------------------- HEALTH SERVICES -- 1.7% $ 2,820 Health Management Associates, Inc., 0.250% 08/16/20(-)................... $ 1,918 8,880 Universal Health Services, Inc., 0.426% 06/23/20(-)................... 4,995 -------- 6,913 -------- INSURANCE -- 1.0% 890 Penn Treaty American Corporation, 6.250% 12/01/03...................... 739 4,180 Penn Treaty American Corporation, 6.250% 12/01/03...................... 3,469 -------- 4,208 -------- MEDICAL DEVICES AND SUPPLIES -- 1.4% 4,750 Invitrogen Corporation, 5.500% 03/01/07(-)................... 4,779 900 Invitrogen Corporation, 5.500% 03/01/07...................... 906 -------- 5,685 -------- METALS AND MINING -- 1.1% 6,450 Agnico-Eagle Mines Ltd., 3.500% 01/27/04...................... 4,322 -------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT -- 0.6% 3,100 Commscope Inc., 4.000% 12/15/06...................... 2,635 -------- OILFIELD SERVICES -- 4.4% 8,400 Diamond Offshore Drilling, Inc., 2.200%** 06/06/20(-)................. 4,211 4,600 Loews Corporation, 3.125% 09/15/07...................... 4,077 2,900 Seacor Holdings, Inc., 5.375% 11/15/06...................... 3,190 1,500 Seacor Holdings, Inc., 5.375% 11/15/06...................... 1,650 7,900 Transocean Sedco Forex Inc., 2.200%** 05/24/20.................... 4,947 -------- 18,075 -------- PHARMACEUTICALS -- 10.0% 1,800 Alpharma Inc., 3.000% 06/01/06...................... 3,679 8,178 Alza Corporation, 2.030%** 07/28/20(-)................. 5,662 4,000 Centocor, Inc., 4.750% 02/15/05...................... 5,120 2,265 COR Therapeutics, Inc., 5.000% 03/01/07...................... 4,493 6,600 Elan International Finance Corporation, 3.280%** 12/14/18.................... 5,280 3,390 IVAX Corporation, 5.500% 05/15/07(-)................... 4,928 3,750 Roche Holdings AG, 5.800%** 01/19/15(-)................. 3,563
PRINCIPAL AMOUNT VALUE (000) (000) - ------------------------------------------------------------- PHARMACEUTICALS -- (CONTINUED) $ 8,800 Roche Holdings, Inc., 2.750%** 05/06/12(-)................. $ 4,202 3,300 Vertex Pharmaceuticals, 5.000% 09/19/07(-)................... 3,828 -------- 40,755 -------- PUBLISHING AND ADVERTISING -- 2.6% 3,400 Interpublic Group of Companies, Inc., 1.870% 06/01/06...................... 3,013 4,150 Lamar Advertising Company, 5.250% 09/15/06...................... 4,140 3,590 Young & Rubicam Inc., 3.000% 01/15/05...................... 3,523 -------- 10,676 -------- RAILROADS, TRUCKING AND SHIPPING -- 1.4% 5,520 United Parcel Service, Inc., 1.750% 09/27/07...................... 5,603 -------- REAL ESTATE -- 1.0% 3,800 EOP Operating, LP, 7.250% 11/15/08(-)................... 3,895 -------- SEMICONDUCTORS -- 2.5% 3,295 Amkor Technologies, Inc., 5.000% 03/15/07(-)................... 2,587 2,120 ASM Lithography Holding N.V., 4.250% 11/30/04(-)................... 2,374 3,765 Cypress Semiconductor Corporation, 3.750% 07/01/05...................... 3,544 775 General Semiconductor, Inc., 5.750% 12/15/06...................... 773 615 Lattice Semiconductor Corporation, 4.750% 11/01/06...................... 888 -------- 10,166 -------- SOFTWARE -- 1.1% 5,750 America Online, Inc., 3.250%** 12/06/19.................... 2,946 4,280 Citrix Systems, Inc., 5.250%** 03/22/19.................... 1,568 -------- 4,514 -------- TELECOMMUNICATIONS SERVICES -- 9.6% 4,050 American Tower Corporation, 5.000% 02/15/10...................... 3,832 4,500 Bell Atlantic Financial Services, 5.750% 04/01/03...................... 4,518 4,300 Bell Atlantic Financial Services, 4.250% 09/15/05(-)................... 4,850 10,325 Cox Communications, Inc., 0.426% 04/19/20...................... 4,285 3,150 ITC Deltacom, Inc., 4.500% 05/15/06...................... 1,906 760 ITC Deltacom, Inc., 4.500% 05/15/06...................... 460 2,370 Motorola, Inc., 1.870%** 09/27/13.................... 2,237 4,500 Nextel Communications, Inc., 5.250% 01/15/10...................... 4,219 4,900 Pinnacle Holdings Inc., 5.500% 09/15/07(-)................... 3,210
SEE NOTES TO FINANCIAL STATEMENTS. 4 9 NATIONS FUNDS Nations Convertible Securities Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
PRINCIPAL AMOUNT VALUE (000) (000) - ------------------------------------------------------------- TELECOMMUNICATIONS SERVICES -- (CONTINUED) $ 3,800 Telefonos de Mexico SA, 4.250% 06/15/04...................... $ 4,764 7,400 US Cellular Corporation, 5.750%** 06/15/15.................... 5,031 -------- 39,312 -------- TOTAL CONVERTIBLE BONDS AND NOTES (Cost $200,619)...................... 212,594 -------- SHARES - --------- CONVERTIBLE PREFERRED STOCKS -- 34.4% AEROSPACE AND DEFENSE -- 0.6% 88,000 Titan Capital Trust(!)(-).............. 2,508 -------- BROADCASTING AND CABLE -- 0.5% 51,600 MediaOne Group, Inc. .................. 1,922 -------- COMMERCIAL BANKING -- 3.3% 19,000 Bank United Corporation................ 1,163 177,300 CNB Capital Trust I.................... 6,759 96,500 Sovereign Capital Trust................ 5,543 -------- 13,465 -------- DIVERSIFIED MANUFACTURING -- 0.2% 20,300 Fleetwood Capital Trust................ 639 -------- ELECTRIC POWER -- NON NUCLEAR -- 4.8% 79,600 AES Trust VII(!)....................... 6,448 89,300 Calpine Capital Trust III(!)(-)........ 6,017 82,000 Nisource Inc. ......................... 3,936 68,700 TXU Corporation........................ 3,207 -------- 19,608 -------- ENERGY -- MISCELLANEOUS -- 0.8% 42,000 CMS Energy Corporation................. 1,339 28,200 SEI Trust.............................. 1,870 -------- 3,209 -------- HEAVY MACHINERY -- 0.8% 190,000 Ingersoll-Rand Company................. 3,420 -------- INSURANCE -- 7.4% 89,500 Ace Limited............................ 7,221 165,000 AmerUs Group Company(!)................ 4,063 86,500 Metlife Capital Trust I................ 7,352 380,000 Philadelphia Consolidated Holdings Corporation.......................... 3,420 65,000 Protective Life Corporation Capital Trust II............................. 3,218 90,000 QBE Insurance Group Ltd.(!)(-)......... 4,905 -------- 30,179 -------- INTEGRATED OIL -- 0.9% 80,000 Unocal Corporation..................... 3,850 -------- NATURAL GAS DISTRIBUTION -- 4.5% 138,600 Coastal Corporation.................... 5,769 90,000 El Paso Energy Capital Trust I......... 7,032 162,000 Enron Corporation...................... 5,761 -------- 18,562 -------- PACKAGING AND CONTAINERS -- 0.7% 68,000 Sealed Air Corporation................. 3,060 --------
VALUE SHARES (000) - ------------------------------------------------------------ PAPER AND FOREST PRODUCTS -- 0.6% 58,100 International Paper Capital Trust...... $ 2,288 -------- PHARMACEUTICALS -- 1.1% 88,000 Monsanto Company....................... 4,609 -------- PUBLISHING AND ADVERTISING -- 0.9% 113,000 Readers Digest Association............. 3,503 -------- RAILROADS, TRUCKING AND SHIPPING -- 1.2% 72,000 Union Pacific Capital Trust............ 2,907 48,400 Union Pacific Capital Trust............ 1,954 -------- 4,861 -------- REAL ESTATE -- 2.1% 139,400 Apartment Investment and Management Company.............................. 3,868 211,200 Equity Residential Properties Trust.... 4,779 -------- 8,647 -------- RESTAURANTS -- 1.0% 87,200 Wendy's International, Inc............. 4,142 -------- TELECOMMUNICATIONS SERVICES -- 3.0% 33,250 Adelphia Communications................ 3,337 80,000 Citizens Utilities Company............. 4,340 18,000 Global Crossing Ltd.................... 4,469 -------- 12,146 -------- TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $128,605)...................... 140,618 --------
SHARES (000) - ------- INVESTMENT COMPANIES -- 1.4% (Cost $5,886) 5,886 Nations Cash Reserves#.................. 5,886 -------- TOTAL INVESTMENTS (Cost $374,078*)............... 99.8% 407,803 -------- OTHER ASSETS AND LIABILITIES (NET).............. 0.2% Receivable for investment securities sold.................................. $ 10,315 Receivable for Fund shares sold......... 2,252 Dividends receivable.................... 558 Interest receivable..................... 1,382 Payable for Fund shares redeemed........ (558) Investment advisory fee payable......... (217) Administration fee payable.............. (77) Shareholder servicing and distribution fees payable.......................... (96) Due to custodian........................ (816) Payable for investment securities purchased............................. (11,866) Accrued Trustees' fees and expenses..... (15) Accrued expenses and other liabilities........................... (87) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................................. 775 -------- NET ASSETS....................... 100.0% $408,578 ========
SEE NOTES TO FINANCIAL STATEMENTS. 5 10 NATIONS FUNDS Nations Convertible Securities Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE (000) - ------------------------------------------------------------- NET ASSETS CONSIST OF: Undistributed net investment income..... $ 402 Accumulated net realized gain on investments sold...................... 41,436 Net unrealized appreciation of investments........................... 33,725 Paid-in capital......................... 333,015 -------- NET ASSETS.............................. $408,578 ======== PRIMARY A SHARES: Net asset value, offering and redemption price per share ($23,365,961 / 1,207,647 shares outstanding).......................... $19.35 ====== INVESTOR A SHARES: Net asset value and redemption price per share ($354,493,753 / 18,332,170 shares outstanding)................... $19.34 ====== Maximum sales charge.................... 5.75% Maximum offering price per share........ $20.52 INVESTOR B SHARES: Net asset value and offering price per share(+) ($24,368,454 / 1,268,095 shares outstanding).......................... $19.22 ====== INVESTOR C SHARES: Net asset value and offering price per share(+) ($6,349,598 / 327,567 shares outstanding).......................... $19.38 ======
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $33,725 on investment securities was comprised of gross appreciation of $55,559 and gross depreciation of $21,834 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $374,078. ** Rate represents annualized yield at date of purchase. (-) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. ++ Amount represents less than $500. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. ABBREVIATIONS: ADR -- American Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 6 11 NATIONS FUNDS Nations Balanced Assets Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
PRINCIPAL AMOUNT VALUE (000) (000) - -------------------------------------------------------------- ASSET-BACKED SECURITIES -- 1.0% ASSET-BACKED -- AUTO LOANS -- 0.3% $ 250 Premier Auto Trust, Series 1998-1, Class B, 5.920% 10/06/04........................ $ 247 ------- ASSET-BACKED -- HOME EQUITY LOANS -- 0.7% 423 CS First Boston Mortgage Securities Corporation, Series 1996-2, Class A4, 6.620% 02/25/18........................ 420 241 IMC Home Equity Loan Trust, Series 1997-7, Class A3, 6.540% 11/20/12........................ 240 ------- 660 ------- TOTAL ASSET-BACKED SECURITIES (Cost $912)............................ 907 ------- SHARES - --------- COMMON STOCKS -- 60.1% AEROSPACE AND DEFENSE -- 1.0% 25,612 Honeywell International Inc. ............ 912 ------- AUTOMOTIVE -- 0.8% 13,350 Johnson Controls Inc. ................... 710 ------- COMMERCIAL BANKING -- 5.8% 27,187 Chase Manhattan Corporation.............. 1,256 30,866 Citigroup Inc. .......................... 1,669 6,225 J.P. Morgan & Company Inc. .............. 1,017 27,125 Wells Fargo Company...................... 1,246 ------- 5,188 ------- COMPUTERS AND OFFICE EQUIPMENT -- 2.1% 7,000 Hewlett-Packard Company.................. 679 10,950 International Business Machines Corporation............................ 1,232 ------- 1,911 ------- CONSUMER CREDIT AND MORTGAGES -- 2.5% 20,850 American Express Company................. 1,267 26,525 MBNA Corporation......................... 1,021 ------- 2,288 ------- DIVERSIFIED MANUFACTURING -- 1.3% 14,125 Eastman Kodak Company.................... 577 9,400 Procter & Gamble Company................. 630 ------- 1,207 ------- ELECTRIC POWER -- NON NUCLEAR -- 5.3% 18,200 Ameren Corporation....................... 762 25,150 Consolidated Edison, Inc. ............... 858 14,400 Dominion Resources, Inc. ................ 836 14,000 FPL Group Inc. .......................... 921 49,975 TECO Energy, Inc. ....................... 1,437 ------- 4,814 ------- ELECTRICAL EQUIPMENT -- 1.0% 13,500 Emerson Electric Company................. 905 ------- FINANCE -- MISCELLANEOUS -- 1.3% 22,250 Freddie Mac.............................. 1,203 -------
VALUE SHARES (000) - ------------------------------------------------------------ FOOD PRODUCTS -- 2.7% 42,850 ConAgra Inc. ............................ $ 860 23,550 H.J. Heinz Company....................... 873 29,450 Kellogg Company.......................... 712 ------- 2,445 ------- HEAVY MACHINERY -- 1.5% 20,500 Caterpillar Inc. ........................ 692 20,575 Parker Hannifin Corporation.............. 694 ------- 1,386 ------- HOUSING AND FURNISHING -- 0.6% 23,300 Stanley Works............................ 537 ------- INSURANCE -- 4.2% 22,000 American International Group, Inc. ...... 2,105 8,925 CIGNA Corporation........................ 932 12,500 MGIC Investment Corporation.............. 764 ------- 3,801 ------- INTEGRATED OIL -- 7.7% 12,200 Anadarko Petroleum Corporation........... 811 11,500 BP Amoco plc, ADR........................ 610 12,675 Chevron Corporation...................... 1,081 29,188 Conoco, Inc. ............................ 786 23,041 Exxon Mobil Corporation.................. 2,053 14,850 Royal Dutch Petroleum Company............ 890 18,025 Unocal Corporation....................... 639 ------- 6,870 ------- INVESTMENT SERVICES -- 2.6% 15,050 Merrill Lynch & Company Inc. ............ 993 15,250 Morgan Stanley Dean Witter & Company..... 1,395 ------- 2,388 ------- MEDICAL DEVICES AND SUPPLIES -- 2.6% 28,375 Abbott Laboratories...................... 1,350 11,250 Cardinal Health, Inc. ................... 992 ------- 2,342 ------- METALS AND MINING -- 1.1% 10,850 Minnesota Mining & Manufacturing Company................................ 989 ------- NATURAL GAS DISTRIBUTION -- 0.9% 13,600 El Paso Energy Corporation............... 838 ------- PHARMACEUTICALS -- 1.5% 24,150 Bristol-Myers Squibb Company............. 1,380 ------- PUBLISHING AND ADVERTISING -- 0.9% 12,900 Dow Jones & Company Inc. ................ 780 ------- RAILROADS, TRUCKING AND SHIPPING -- 1.1% 21,725 FedEx Corporation(!)..................... 963 ------- RESTAURANTS -- 0.3% 8,500 McDonald's Corporation................... 257 ------- SEMICONDUCTORS -- 0.9% 9,450 Intergrated Device Technology, Inc.(!)... 855 -------
SEE NOTES TO FINANCIAL STATEMENTS. 7 12 NATIONS FUNDS Nations Balanced Assets Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ SOFTWARE -- 1.7% 19,775 Electronic Data Systems Corporation...... $ 820 19,425 First Data Corporation................... 759 ------- 1,579 ------- TELECOMMUNICATIONS SERVICES -- 2.2% 22,325 SBC Communications Inc. ................. 1,116 18,165 Verizon Communications................... 880 ------- 1,996 ------- TOBACCO -- 2.3% 39,200 Philip Morris Companies Inc. ............ 1,154 1 R.J. Reynolds Tobacco Holdings, Inc.++... 0 40,850 UST Inc. ................................ 934 ------- 2,088 ------- UTILITIES -- MISCELLANEOUS -- 4.2% 30,175 American Water Works Company, Inc. ...... 832 44,775 AT&T Corporation......................... 1,315 19,650 NICOR Inc. .............................. 711 31,500 Sprint Corporation (FON Group)........... 923 ------- 3,781 ------- TOTAL COMMON STOCKS (Cost $48,551)......................... 54,413 ------- PRINCIPAL AMOUNT (000) - --------- CORPORATE BONDS AND NOTES -- 14.2% AEROSPACE AND DEFENSE -- 0.3% $ 250 Raytheon Company, 6.750% 08/15/07........................ 237 ------- BROADCASTING AND CABLE -- 1.2% 500 Clear Channel Communications, Inc., 7.875% 06/15/05........................ 510 520 Time Warner Inc., 8.110% 08/15/06........................ 542 ------- 1,052 ------- CHEMICALS -- SPECIALTY -- 0.4% 325 Equistar Chemicals, L.P., 8.500% 02/15/04........................ 323 ------- COMMERCIAL BANKING -- 1.5% 500 FCB/NC Capital Trust I, Gtd. Notes, 8.050% 03/01/28........................ 416 750 Popular, Inc., MTN, 6.375% 09/15/03........................ 736 250 Union Planters Capital Trust, 8.200% 12/15/26........................ 214 ------- 1,366 ------- COMMERCIAL SERVICES -- 1.3% 450 Comdisco, Inc., 9.500% 08/15/03........................ 453 650 Service Corporation International, 6.000% 12/15/05........................ 369 500 Xerox Capital Trust I, Gtd. Notes, 8.000% 02/01/27........................ 357 ------- 1,179 -------
PRINCIPAL AMOUNT VALUE (000) (000) - -------------------------------------------------------------- COMPUTER SERVICES -- 0.4% $ 350 Computer Sciences Corporation, 7.500% 08/08/05........................ $ 354 ------- COMPUTERS AND OFFICE EQUIPMENT -- 0.4% 350 Compaq Computer Corporation, 7.450% 08/01/02........................ 351 ------- CONGLOMERATES -- 0.5% 250 USA Waste Services Inc., 7.000% 07/15/28........................ 205 250 Waste Management, Inc., 6.125% 07/15/01........................ 244 ------- 449 ------- DIVERSIFIED MANUFACTURING -- 0.5% 500 Tyco International Group SA, 6.375% 06/15/05........................ 486 ------- ENERGY -- MISCELLANEOUS -- 0.7% 180 PDV America Inc., Gtd. Sr. Notes, 7.875% 08/01/03........................ 173 500 USX Corporation, 6.650% 02/01/06........................ 484 ------- 657 ------- FINANCE -- MISCELLANEOUS -- 2.2% 500 Case Credit Corporation, 6.125% 02/15/03........................ 463 200 CIT Group, Inc., 7.375% 03/15/03........................ 200 500 ERAC USA Finance Company, 6.625% 02/15/05(-)..................... 478 500 Finova Capital Corporation, 7.250% 11/08/04........................ 377 500 General Motors Acceptance Corporation, 6.150% 04/05/07........................ 467 ------- 1,985 ------- FOOD AND DRUG STORES -- 0.6% 500 Safeway Inc., Sr. Notes, 7.250% 09/15/04........................ 499 ------- HEALTH SERVICES -- 0.1% 60 HCA-The Healthcare Corporation, 8.750% 09/01/10........................ 61 ------- INVESTMENT SERVICES -- 2.7% 500 Aristar, Inc., 8.250% 06/15/05........................ 518 500 Bear Stearns Companies, Inc., 7.800% 08/15/07........................ 506 480 Donaldson Lufkin and Jenrette, 5.875% 04/01/02........................ 472 500 Goldman Sachs Group, LP, 6.625% 12/01/04(-)..................... 492 500 Morgan Stanley Dean Witter and Company, 7.750% 06/15/05........................ 515 ------- 2,503 ------- METALS AND MINING -- 0.4% 385 Alcoa Inc., 7.375% 08/01/10........................ 388 -------
SEE NOTES TO FINANCIAL STATEMENTS. 8 13 NATIONS FUNDS Nations Balanced Assets Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
PRINCIPAL AMOUNT VALUE (000) (000) - -------------------------------------------------------------- NATURAL GAS PIPELINES -- 0.5% $ 500 KN Energy, Inc., 6.450% 03/01/03........................ $ 491 ------- TELECOMMUNICATIONS SERVICES -- 0.5% 500 Sprint Capital Corporation, 6.875% 11/15/28........................ 432 ------- TOTAL CORPORATE BONDS AND NOTES (Cost $13,343)......................... 12,813 ------- FOREIGN BONDS AND NOTES -- 1.0% 395 AT&T Canada Inc., Sr. Notes, 7.650% 09/15/06........................ 399 500 Corp Andina De Fomento, 8.875% 06/01/05........................ 522 ------- TOTAL FOREIGN BONDS AND NOTES (Cost $892)............................ 921 ------- MORTGAGE-BACKED SECURITIES -- 21.1% COMMERCIAL MORTGAGE-BACKED SECURITIES -- 8.0% 750 DLJ Commercial Mortgage Corporation, Series 1999-CG1, Class A1B, 6.460% 01/10/09........................ 719 750 DLJ Commercial Mortgage Corporation, Series 1999-CG2, Class A1B, 7.300% 06/10/09........................ 756 750 DLJ Commercial Mortgage Corporation, Series 1999-CG3, Class A1B, 7.340% 09/10/09........................ 752 750 First Union National Bank Commercial Mortgage, Series 1999-C4, Class A2, 7.390% 11/15/09........................ 761 440 First Union-Chase Commercial Mortgage, Series 1999-C2, Class A2, 6.645% 04/15/09........................ 428 750 GMAC Commercial Mortgage Securities Inc., Series 1999-C1, Class A2, 6.175% 05/15/33........................ 704 800 Heller Financial Commercial Mortgage Asset Corporation, Series 2000-PH1, Class A2, 7.750% 11/15/09........................ 828 800 Prudential Securities Secured Financing Corporation, Series 1999-C2, Class A2, 7.193% 04/15/09........................ 802 760 Salomon Brothers Mortgage Securities, Series 2000-C1, Class A2, 7.520% 12/18/09........................ 775 702 Salomon Brothers Mortgage Securities, Series 2000-NL1, Class A1, 6.601% 04/15/08(-)..................... 687 ------- 7,212 ------- FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) CERTIFICATES -- 1.5% 70 8.000% 07/01/10.......................... 71 827 8.000% 09/01/25.......................... 841 438 8.000% 06/01/30.......................... 444 ------- 1,356 -------
PRINCIPAL AMOUNT VALUE (000) (000) - -------------------------------------------------------------- FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) CERTIFICATES -- 11.1% $ 1,130 6.500% 08/01/10.......................... $ 1,117 536 8.500% 08/01/11.......................... 552 828 6.500% 03/01/15.......................... 812 286 7.000% 01/25/21.......................... 282 3,512 6.500% 07/01/29.......................... 3,379 2,627 7.000% 07/01/29.......................... 2,575 1,427 6.500% 05/01/30.......................... 1,371 ------- 10,088 ------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) CERTIFICATES -- 0.5% 464 7.500% 12/15/23.......................... 467 ------- TOTAL MORTGAGE-BACKED SECURITIES (Cost $18,922)....................... 19,123 ------- U.S. TREASURY OBLIGATIONS -- 1.4% U.S. TREASURY STRIPS -- 1.4% 3,720 Principal only 11/15/21.................. 1,038 490 Principal only 08/15/26.................. 106 610 Principal only 02/15/27.................. 128 ------- TOTAL U.S. TREASURY OBLIGATIONS (Cost $1,188)........................ 1,272 -------
SHARES (000) - ------- INVESTMENT COMPANIES -- 2.1% (Cost $1,913) 1,913 Nations Cash Reserves#.................... 1,913 ------- TOTAL INVESTMENTS (Cost $85,721*)................... 100.9% 91,362 ------- OTHER ASSETS AND LIABILITIES (NET)............... (0.9)% Receivable for investment securities sold.................................... $ 7,168 Dividends receivable...................... 86 Interest receivable....................... 346 Collateral on securities loaned........... (206) Payable for Fund shares redeemed.......... (164) Investment advisory fee payable........... (29) Administration fee payable................ (17) Shareholder servicing and distribution fees payable............................ (40) Due to custodian.......................... (31) Payable for investment securities purchased............................... (7,890) Accrued Trustees' fees and expenses....... (33) Accrued expenses and other liabilities.... (42) TOTAL OTHER ASSETS AND LIABILITIES (NET)....................... (852) ------- NET ASSETS........................ 100.0% $90,510 ======= NET ASSETS CONSIST OF: Undistributed net investment income....... $ 184 Accumulated net realized loss on investments sold........................ (773) Net unrealized appreciation of investments............................. 5,641 Paid-in capital........................... 85,458 ------- NET ASSETS................................ $90,510 =======
SEE NOTES TO FINANCIAL STATEMENTS. 9 14 NATIONS FUNDS Nations Balanced Assets Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE - ------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($34,074,802 / 3,334,901 shares outstanding)..................... $10.22 ====== INVESTOR A SHARES: Net asset value and redemption price per share ($10,069,608 / 986,444 shares outstanding)............................ $10.21 ====== Maximum sales charge...................... 5.75% Maximum offering price per share.......... $10.83 INVESTOR B SHARES: Net asset value and offering price per share+ ($45,489,368 / 4,464,564 shares outstanding)............................ $10.19 ====== INVESTOR C SHARES: Net asset value and offering price per share+ ($876,088 / 86,290 shares outstanding)............................ $10.15 ======
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $5,641 on investment securities was comprised of gross appreciation of $7,830 and gross depreciation of $2,189 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $85,721. (-) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. ++ Amount represents less than $500. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. A portion of this amount represents cash collateral received from securities lending activity (Note 8). The portion that represents cash collateral is $206. ABBREVIATIONS: ADR -- American Depository Receipt MTN -- Medium Term Note SEE NOTES TO FINANCIAL STATEMENTS. 10 15 NATIONS FUNDS Nations Asset Allocation Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
PRINCIPAL AMOUNT VALUE (000) (000) - ----------------------------------------------------------- ASSET-BACKED SECURITIES -- 0.7% ASSET-BACKED -- AUTO LOANS -- 0.0% $ 167 AESOP Funding II LLC, Series 1997-1A, Class A1, 6.220% 10/20/01(-)................. $ 167 -------- ASSET-BACKED -- HOME EQUITY LOANS -- 0.7% 500 ContiMortgage Home Equity Loan Trust, Series 1998-1, Class A4, 6.280% 01/15/13.................... 494 650 EQCC Home Equity Loan Trust, Series 1997-2, Class A6, 6.720% 02/15/12.................... 650 787 First Plus Home Loan Trust, Series 1996-3, Class A6, 7.600% 09/20/14.................... 786 650 First Plus Home Loan Trust, Series 1997-1, Class A6, 6.950% 12/10/15.................... 648 100 IMC Home Equity Loan Trust, Series 1997-5, Class A7, 6.900% 01/20/22.................... 99 -------- 2,677 -------- TOTAL ASSET-BACKED SECURITIES (Cost $2,870).................... 2,844 -------- SHARES - --------- COMMON STOCKS -- 61.9% AEROSPACE AND DEFENSE -- 0.8% 2,400 Alliant Techsystems Inc.(!).......... 197 28,100 Boeing Company....................... 1,771 14,100 Northrop Grumman Corporation......... 1,281 -------- 3,249 -------- AIRLINES -- 0.2% 12,300 Delta Air Lines, Inc. ............... 546 1,500 Forward Air Corporation(!)........... 53 1,800 Northwest Airlines Corporation(!).... 44 -------- 643 -------- APPAREL AND TEXTILES -- 0.2% 800 Columbia Sportswear Company(!)....... 37 3,200 Jones Apparel Group, Inc.(!)......... 85 1,050 Kenneth Cole Productions, Inc........ 37 9,500 Liz Claiborne Inc.................... 365 2,800 Reebok International, Ltd.(!)........ 53 1,700 Timberland Company, Class A.......... 70 -------- 647 -------- AUTOMOTIVE -- 0.7% 5,475 ArvinMeritor, Inc. .................. 80 2,600 Copart, Inc. ........................ 36 67,042 Ford Motor Company(!)................ 1,696 12,825 General Motors Corporation........... 834 1,100 Gentex Corporation(!)................ 28 4,050 Lear Corporation(!).................. 83 2,100 Mascotech, Inc. ..................... 35 2,200 Oshkosh Truck Corporation............ 85
VALUE SHARES (000) - ----------------------------------------------------------- AUTOMOTIVE -- (CONTINUED) 1,800 Superior Industries International.... $ 54 2,300 Tower Automotive Inc.(!)............. 22 -------- 2,953 -------- BEVERAGES -- 1.2% 800 Adolph Coors Company, Class B........ 51 50,600 Anheuser-Busch Companies, Inc. ...... 2,140 14,500 Coca-Cola Company.................... 799 2,500 Constellation Brands, Inc.(!)........ 136 46,300 PepsiCo, Inc. ....................... 2,130 -------- 5,256 -------- BROADCASTING AND CABLE -- 1.6% 2,200 Hispanic Broadcasting Corporation.... 61 25,000 Time Warner Inc. .................... 1,956 5,200 Univision Communications, Inc. ...... 194 40,067 Viacom Inc., Class B(!).............. 2,345 51,300 Walt Disney Company.................. 1,962 2,650 Westwood One, Inc. .................. 57 -------- 6,575 -------- CHEMICALS -- BASIC -- 0.6% 11,500 Air Products & Chemicals Inc. ....... 414 9,393 E.I. duPont de Nemours and Company... 389 9,600 Eastman Chemical Company............. 355 16,700 Praxair Inc. ........................ 624 15,400 Union Carbide Corporation............ 581 -------- 2,363 -------- CHEMICALS -- SPECIALTY -- 0.2% 6,000 Albemarle Corporation................ 121 3,300 Arch Chemicals Inc. ................. 60 3,600 Cabot Corporation.................... 114 6,200 Cytec Industries Inc.(!)............. 208 1,500 OM Group, Inc. ...................... 65 2,200 Scotts Company, Class A(!)........... 74 -------- 642 -------- COMMERCIAL BANKING -- 4.0% 4,220 Associated Banc-Corp................. 111 2,800 Astoria Financial Corporation........ 108 22,762 Chase Manhattan Corporation.......... 1,051 134,566 Citigroup Inc. ...................... 7,274 4,100 City National Corporation............ 158 4,500 Cullen Frost Bankers Inc. ........... 146 10,900 Dime Bancorp, Inc. .................. 235 2,600 Downey Financial Corporation......... 103 2,100 First Midwest Bancorp, Inc. ......... 56 2,300 First Virginia Banks Inc. ........... 98 5,900 FirstFed Financial Corporation(!).... 136 63,943 FleetBoston Financial Corporation.... 2,494 5,100 Hibernia Corporation................. 62 2,600 Hudson United Bancorp................ 72 5,300 J.P. Morgan & Company Inc. .......... 866 1,700 MAF Bancorp Inc. .................... 42 33,900 Mellon Financial Corporation......... 1,572 3,000 Mercantile Bankshares Corporation.... 109 2,800 National Commerce Bancorp............ 56 9,600 North Fork Bancorporation, Inc. ..... 208 19,200 PNC Bank Corporation................. 1,248 1,800 Silicon Valley Bancshares............ 105
SEE NOTES TO FINANCIAL STATEMENTS. 11 16 NATIONS FUNDS Nations Asset Allocation Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ----------------------------------------------------------- COMMERCIAL BANKING -- (CONTINUED) 2,300 Southwest Bancorp of Texas(!)........ $ 75 5,100 TCF Financial Corporation............ 192 2,000 Whitney Holding Corporation.......... 73 -------- 16,650 -------- COMMERCIAL SERVICES -- 0.6% 1,200 Administaff, Inc.(!)................. 91 2,800 ADVO Inc.(!)......................... 92 1,800 Apollo Group Inc., Class A(!)........ 72 2,900 Catalina Marketing Corporation....... 109 1,500 ChoicePoint Inc. .................... 69 1,900 Cintas Corporation................... 83 4,300 Comdisco, Inc. ...................... 82 3,900 eLoyalty Corporation(!).............. 50 1,000 F.Y.I. Incorporated(!)............... 37 3,900 Fiserv, Inc.(!)...................... 233 1,200 Heidrick & Struggles International, Inc.(!)............................ 62 600 Learning Tree International, Inc.(!)............................ 29 3,100 Manpower Inc. ....................... 99 8,500 Omnicom Group Inc. .................. 619 1,700 Quanta Services, Inc.(!)............. 47 2,100 Rent-A-Center, Inc.(!)............... 73 5,200 Robert Half International Inc. ...... 180 1,000 SCP Pool Corporation................. 30 1,800 SEI Investment Company............... 127 800 Startek, Inc.(!)..................... 23 1,100 Teletech Holdings Inc.(!)............ 27 2,400 Tetra Tech Inc.(!)................... 69 4,300 True North Communications............ 154 2,700 Viad Corporation..................... 72 -------- 2,529 -------- COMPUTER SERVICES -- 1.1% 37,100 America Online Inc. ................. 1,995 19,100 Automatic Data Processing Inc. ...... 1,277 2,000 CSG Systems International, Inc.(!)... 58 600 Fair, Issac and Company Inc. ........ 26 3,600 MarchFirst, Inc.(!).................. 56 14,100 Paychex, Inc. ....................... 740 3,600 Sapient Corporation.................. 146 3,100 Sungard Data Systems, Inc.(!)........ 133 -------- 4,431 -------- COMPUTERS AND OFFICE EQUIPMENT -- 4.5% 22,300 Apple Computer Inc. ................. 574 3,150 Avocent Corporation(!)............... 174 45,700 Dell Computer Corporation(!)......... 1,408 49,000 EMC Corporation...................... 4,856 20,600 Hewlett-Packard Company.............. 1,998 11,000 International Business Machines Corporation........................ 1,238 23,000 Jabil Circuit, Inc. ................. 1,305 8,600 NCR Corporation(!)................... 325 9,200 Network Appliance, Inc. ............. 1,172 7,000 Palm, Inc.(!)........................ 371 3,400 PerkinElmer, Inc. ................... 355 1,000 Radisys Corporation(!)............... 51 4,500 Sanmina Corporation.................. 421 9,000 Solectron Corporation................ 415 37,850 Sun Microsystems, Inc. .............. 4,418 2,587 Symbol Technologies, Inc. ........... 93
VALUE SHARES (000) - ----------------------------------------------------------- COMPUTERS AND OFFICE EQUIPMENT -- (CONTINUED) 2,100 Tech Data Corporation(!)............. $ 90 400 Tektronix, Inc. ..................... 31 1,700 Zebra Technologies Corporation(!).... 82 -------- 19,377 -------- CONGLOMERATES -- 1.2% 14,200 Dover Corporation.................... 667 1,800 Dycom Industries, Inc. .............. 75 900 Insituform Technologies Inc., Class A(!)............................... 30 500 SPX Corporation(!)................... 71 10,200 Textron Inc. ........................ 470 1,000 The Shaw Group Inc.(!)............... 71 40,200 Tyco International Ltd. ............. 2,085 25,525 United Technologies Corporation...... 1,768 -------- 5,237 -------- CONSUMER CREDIT AND MORTGAGES -- 1.1% 18,000 American Express Company............. 1,094 29,200 Fannie Mae........................... 2,088 2,500 Greenpoint Financial Corporation..... 74 23,200 MBNA Corporation..................... 893 2,000 Metris Companies Inc. ............... 79 2,600 Providian Financial Corporation...... 330 -------- 4,558 -------- DEPARTMENT AND DISCOUNT STORES -- 1.4% 10,100 Kohls Corporation.................... 583 22,600 Sears, Roebuck and Company........... 733 91,200 Wal-Mart Stores, Inc. ............... 4,388 -------- 5,704 -------- DIVERSIFIED ELECTRONICS -- 0.1% 2,200 Aeroflex, Inc. ...................... 107 2,300 Anixter International Inc.(!)........ 67 2,000 Harman International Industries...... 78 1,200 Helix Technology Corporation......... 36 1,900 Kent Electronics Corporation(!)...... 45 2,700 Waters Corporation................... 241 -------- 574 -------- DIVERSIFIED MANUFACTURING -- 2.4% 2,800 Belden Inc. ......................... 66 164,000 General Electric Company............. 9,461 3,000 Harsco Corporation................... 66 2,000 Nordson Corporation.................. 57 3,600 Plexus Corporation................... 254 -------- 9,904 -------- ELECTRIC POWER -- NON NUCLEAR -- 1.9% 4,500 Allegheny Energy, Inc. .............. 172 4,100 Allete(!)............................ 91 3,800 Calpine Corporation.................. 397 6,800 Conectiv, Inc. ...................... 122 15,100 Duke Energy Corporation.............. 1,295 7,200 Dynegy Inc. ......................... 410 6,600 Energy East Corporation.............. 149 18,500 FPL Group Inc. ...................... 1,216 2,200 Idacorp, Inc. ....................... 102 2,610 NSTAR................................ 105 26,300 PECO Energy Company.................. 1,592 2,100 Pinnacle West Capital Corporation.... 107
SEE NOTES TO FINANCIAL STATEMENTS. 12 17 NATIONS FUNDS Nations Asset Allocation Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ----------------------------------------------------------- ELECTRIC POWER -- NON NUCLEAR -- (CONTINUED) 5,400 Public Service Company of New Mexico............................. $ 140 5,200 TECO Energy, Inc. ................... 150 1,800 The Montana Power Company............ 60 1,700 UIL Holdings Corporation............. 87 25,400 Unicom Corporation................... 1,427 3,400 UniSource Energy Corporation......... 56 5,300 UtiliCorp United Inc. ............... 137 -------- 7,815 -------- ELECTRICAL EQUIPMENT -- 0.1% 1,900 AMETEK, Inc. ........................ 40 2,500 C&D Technologies, Inc. .............. 142 2,000 Littelfuse, Inc.(!).................. 59 700 Park Electrochemical Corporation..... 39 -------- 280 -------- EXPLORATION AND PRODUCTION -- 0.0%+ 1,700 Stone Energy Corporation(!).......... 94 -------- FINANCE -- MISCELLANEOUS -- 0.1% 6,800 AmeriCredit Corporation(!)........... 196 6,500 Concord EFS, Inc.(!)................. 231 -------- 427 -------- FOOD AND DRUG STORES -- 0.3% 3,000 Casey's General Stores, Inc. ........ 39 20,600 Safeway, Inc.(!)..................... 961 1,800 Whole Foods Market Inc.(!)........... 97 -------- 1,097 -------- FOOD PRODUCTS -- 1.0% 5,000 Bestfoods............................ 364 40,000 ConAgra Inc. ........................ 803 1,391 Hain Celestial Group, Inc.(!)........ 49 3,500 McCormick and Company, Inc. ......... 104 2,400 Michael Foods Inc. .................. 56 6,500 Nabisco Group Holdings Corporation... 185 2,600 Performance Food Group Company(!).... 98 11,400 Quaker Oats Company.................. 901 7,500 Smithfield Foods Inc.(!)............. 197 2,800 Suiza Foods Corporation(!)........... 142 18,200 SYSCO Corporation.................... 843 9,600 Unilever NV, ADR..................... 463 -------- 4,205 -------- HEALTH SERVICES -- 0.4% 2,400 Cerner Corporation(!)................ 111 3,000 Coventry Health Care Inc.(!)......... 45 1,100 Express Scripts Inc., Class A(!)..... 79 1,300 Invacare Corporation................. 42 3,600 Lincare Holdings Inc.(!)............. 103 2,900 Orthodontic Centers of America(!).... 97 500 Quest Diagnostics Inc.(!)............ 57 5,300 Trigon Healthcare, Inc.(!)........... 279 8,900 UnitedHealth Group Inc.(!)........... 880 1,400 Universal Health Services Inc., Class B(!)............................... 120 750 Wellpoint Health Networks Inc.(!).... 72 -------- 1,885 -------- HEAVY MACHINERY -- 0.3% 2,700 Briggs & Stratton Corporation........ 102 13,500 Deere & Company...................... 449
VALUE SHARES (000) - ----------------------------------------------------------- HEAVY MACHINERY -- (CONTINUED) 6,400 JLG Industries Inc. ................. $ 78 16,500 Parker Hannifin Corporation.......... 557 1,500 Toro Company......................... 47 -------- 1,233 -------- HOUSEHOLD PRODUCTS -- 0.8% 18,700 Avon Products, Inc. ................. 764 1,500 Blyth Industries, Inc. .............. 35 4,400 Church & Dwight Company, Inc. ....... 81 8,700 Colgate-Palmolive Company............ 411 28,100 Kimberly-Clark Corporation........... 1,569 13,100 The Clorox Company................... 518 -------- 3,378 -------- HOUSING AND FURNISHING -- 0.2% 3,500 American Standard Companies Inc.(!).. 156 4,796 D.R. Horton Inc. .................... 82 1,500 Lennar Corporation................... 45 4,100 M.D.C. Holdings, Inc. ............... 107 5,200 Mohawk Industries Inc.(!)............ 113 3,800 Pulte Corporation.................... 125 1,400 Salton, Inc.(!)...................... 45 3,700 The Ryland Group, Inc. .............. 115 1,800 Toll Brothers, Inc.(!)............... 62 -------- 850 -------- INSURANCE -- 2.3% 19,500 American General Corporation......... 1,521 15,150 American International Group, Inc. .............................. 1,450 1,300 Arthur J. Gallagher & Company........ 77 18,400 AXA Financial, Inc. ................. 937 8,000 CIGNA Corporation.................... 835 1,696 Delphi Financial Group Inc., Class A.................................. 69 3,600 Everest Re Group Ltd. ............... 178 2,900 Fidelity National Financial, Inc. ... 72 30,700 Hartford Financial Services Group, Inc. .............................. 2,240 28,500 MGIC Investment Corporation.......... 1,742 7,500 Old Republic International Corporation........................ 180 2,700 PMI Group, Inc. ..................... 183 2,400 Radian Group Inc. ................... 162 1,600 Renaissance Re Holdings Ltd. ........ 102 -------- 9,748 -------- INTEGRATED OIL -- 2.9% 2,200 AGL Resources Inc. .................. 44 16,600 Apache Corporation................... 981 29,000 Chevron Corporation.................. 2,472 2,100 EOG Resources, Inc. ................. 82 78,407 Exxon Mobil Corporation.............. 6,988 1,600 Murphy Oil Corporation............... 104 2,500 Newfield Exploration Company(!)...... 117 30,700 Occidental Petroleum Corporation..... 670 3,200 Pogo Producing Company............... 81 3,200 Ultramar Diamond Shamrock Corporation........................ 81 23,475 USX-Marathon Group Inc. ............. 666 5,500 Vintage Petroleum, Inc. ............. 125 -------- 12,411 -------- INVESTMENT SERVICES -- 2.1% 2,800 A.G. Edwards, Inc. .................. 146 400 Dain Rauscher Corporation............ 37
SEE NOTES TO FINANCIAL STATEMENTS. 13 18 NATIONS FUNDS Nations Asset Allocation Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ----------------------------------------------------------- INVESTMENT SERVICES -- (CONTINUED) 2,000 Eaton Vance Corporation.............. $ 102 1,100 Jefferies Group, Inc. ............... 30 1,900 Legg Mason Inc. ..................... 110 14,300 Lehman Brothers Holdings Inc. ....... 2,113 23,000 Merrill Lynch & Company Inc. ........ 1,518 27,500 Morgan Stanley Dean Witter & Company............................ 2,515 1,600 Raymond James Financial, Inc. ....... 53 15,300 State Street Corporation............. 1,989 2,900 Waddell & Reed Financial, Inc. ...... 90 -------- 8,703 -------- LODGING AND RECREATION -- 0.4% 3,500 Aztar Corporation(!)................. 54 4,050 Brunswick Corporation................ 74 4,000 Darden Restaurants Inc. ............. 83 18,100 Harley-Davidson Inc. ................ 867 12,400 Marriott International Inc., Class A.................................. 452 1,500 MeriStar Hospitality Corporation..... 30 9,900 Park Place Entertainment Corporation(!)..................... 150 2,200 Polaris Industries Inc. ............. 78 700 Sabre Holdings Corporation(!)........ 20 2,900 Winnebago Industries................. 36 -------- 1,844 -------- MEDICAL DEVICES AND SUPPLIES -- 2.0% 2,000 ADAC Laboratories Designs(!)......... 42 14,800 Baxter International Inc. ........... 1,181 1,900 Beckman Coulter, Inc. ............... 147 26,850 Biomet, Inc. ........................ 940 1,400 C.R. Bard, Inc. ..................... 59 17,000 Cardinal Health, Inc. ............... 1,499 1,100 Coherent Inc.(!)..................... 75 2,500 Cooper Companies Inc. ............... 88 2,500 Datascope Corporation................ 84 800 Diagnostic Products Corporation...... 43 30,300 Johnson & Johnson.................... 2,846 2,600 Minimed Inc. ........................ 232 7,100 PE Corp-PE Biosystems Group.......... 827 1,337 Priority Healthcare Corporation(!)... 102 1,900 Respironics, Inc.(!)................. 32 1,900 Stryker Corporation.................. 82 1,000 Techne Corporation(!)................ 112 1,800 Varian Medical Systems, Inc.(!)...... 81 -------- 8,472 -------- METALS AND MINING -- 0.3% 6,200 AK Steel Holding Corporation......... 58 15,200 Barrick Gold Corporation............. 232 2,100 Carpenter Technology Corporation..... 61 700 Mueller Industries Inc.(!)........... 16 2,800 Precision Castparts Corporation...... 107 1,400 Quanex Corporation................... 27 3,700 Reliance Steel & Aluminum Company.... 78 2,200 Texas Industries Inc. ............... 70 28,000 USX U.S. Steel Group Inc. ........... 425 -------- 1,074 -------- NATURAL GAS DISTRIBUTION -- 0.7% 23,300 Coastal Corporation.................. 1,727 5,100 Energen Corporation.................. 152
VALUE SHARES (000) - ----------------------------------------------------------- NATURAL GAS DISTRIBUTION -- (CONTINUED) 8,200 Enron Corporation.................... $ 719 2,200 Equitable Resources Inc. ............ 139 3,650 KeySpan Corporation.................. 146 3,100 Northwest Natural Gas Company........ 71 -------- 2,954 -------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT -- 4.3% 1,300 Adaptive Broadband Corporation....... 25 200 ADC Telecommunications, Inc. ........ 5 2,400 ADTRAN, Inc.(!)...................... 102 800 Advanced Fibre Communications, Inc.(!)............................ 30 2,000 Brocade Communications Systems, Inc. .............................. 472 700 Brooktrout Inc.(!)................... 23 1,800 C-COR Electronics.................... 28 2,850 Cable Design Technologies Corporation........................ 69 4,400 CIENA Corporation.................... 540 145,100 Cisco Systems, Inc. ................. 8,017 6,300 Comverse Technology, Inc. ........... 680 8,500 Corning Inc. ........................ 2,525 2,600 DMC Stratex Networks, Inc.(!)........ 42 1,500 Foundry Networks, Inc. .............. 100 9,200 JDS Uniphase Corporation............. 871 1,800 Juniper Networks, Inc. .............. 394 57,700 Nortel Networks Corporation.......... 3,437 3,000 Plantronics Inc. .................... 114 2,600 Polycom, Inc. ....................... 174 2,800 Powerwave Technologies, Inc. ........ 106 1,000 Proxim, Inc. ........................ 45 700 Rainbow Technologies, Inc.(!)........ 25 12,200 Scientific-Atlanta, Inc. ............ 776 900 Terayon Communication Systems, Inc. .............................. 31 800 ViaSat Inc. ......................... 18 1,300 Westell Technologies, Inc.(!)........ 17 -------- 18,666 -------- OILFIELD SERVICES -- 0.7% 24,050 ENSCO International Inc. ............ 921 3,500 Helmerich & Payne, Inc. ............. 126 4,000 Hughes Supply Inc. .................. 78 4,800 Noble Drilling Corporation(!)........ 241 5,300 Offshore Logistics Inc.(!)........... 95 10,100 Schlumberger Ltd. ................... 831 2,600 Smith International, Inc.(!)......... 212 900 Swift Energy Company(!).............. 37 1,800 UTI Energy Corporation(!)............ 80 2,200 Varco International, Inc.(!)......... 46 4,200 Weatherford International, Inc.(!)... 181 -------- 2,848 -------- PACKAGING AND CONTAINERS -- 0.0%+ 1,300 AptarGroup Inc. ..................... 31 -------- PAPER AND FOREST PRODUCTS -- 0.3% 12,600 Bowater Incorporated................. 585 3,100 Buckeye Technologies Inc.(!)......... 64 1,600 Georgia - Pacific Corporation (Timber Group)............................. 43 5,304 International Paper Company.......... 152
SEE NOTES TO FINANCIAL STATEMENTS. 14 19 NATIONS FUNDS Nations Asset Allocation Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ----------------------------------------------------------- PAPER AND FOREST PRODUCTS -- (CONTINUED) 3,600 United Stationers Inc.(!)............ $ 97 7,400 Weyerhaeuser Company................. 299 -------- 1,240 -------- PHARMACEUTICALS -- 4.8% 13,000 Allergan, Inc. ...................... 1,098 1,900 Alpharma Inc., Class A............... 116 18,300 Amgen Inc. .......................... 1,278 1,500 Barr Laboratories, Inc. ............. 99 3,666 Bindley Western Industries........... 117 7,200 Biogen, Inc.(!)...................... 439 41,500 Bristol-Myers Squibb Company......... 2,370 1,200 Cephalon, Inc.(!).................... 58 5,500 Chiron Corporation(!)................ 248 2,300 COR Therapeutics, Inc. .............. 143 2,100 Dura Pharmaceuticals Inc.(!)......... 74 7,100 Eli Lilly and Company................ 576 200 Enzo Biochem, Inc.(!)................ 10 2,700 Forest Laboratories, Inc.(!)......... 310 2,800 Genzyme Corporation(!)............... 191 1,200 Gilead Sciences, Inc.(!)............. 132 1,900 ICN Pharmaceuticals Incorporated..... 63 900 IDEC Pharmaceuticals Corporation..... 158 2,000 Incyte Pharmaceuticals, Inc. ........ 82 2,350 IVAX Corporation..................... 108 1 King Pharmaceuticals, Inc.(!)++...... 0 2,000 Medicis Pharmaceutical Corporation, Class A(!)......................... 123 58,400 Merck & Company, Inc. ............... 4,346 1,300 Millennium Pharmaceuticals, Inc. .... 190 3,100 NBTY, Inc.(!)........................ 20 600 Noven Pharmaceuticals, Inc.(!)....... 26 119,800 Pfizer Inc. ......................... 5,383 700 Protein Design Labs, Inc. ........... 84 1,000 Regeneron Pharmaceuticals, Inc.(!)... 33 49,700 Schering-Plough Corporation.......... 2,311 200 Sepracor Inc.(!)..................... 25 1,400 Syncor International Corporation..... 52 2,200 Vertex Pharmaceuticals, Inc. ........ 186 -------- 20,449 -------- PUBLISHING AND ADVERTISING -- 0.4% 1,000 Harcourt General Inc. ............... 59 1,600 Harte-Hanks, Inc. ................... 44 1,700 John H. Harland Company.............. 26 12,700 McGraw-Hill Companies, Inc. ......... 807 12,300 New York Times Company, Class A...... 484 1,200 Penton Media Inc. ................... 33 4,250 Readers Digest Association, Inc. .... 150 2,100 Scholastic Corporation(!)............ 167 38 The Washington Post Company.......... 20 -------- 1,790 -------- RAILROADS, TRUCKING AND SHIPPING -- 0.3% 3,500 American Freightways Corporation(!).. 56 4,500 Arkansas Best Corporation(!)......... 69 1,500 C.H. Robinson Worldwide, Inc. ....... 85 1,600 CNF Transportation Inc. ............. 36 2,400 Expeditors International of Washington, Inc. .................. 108
VALUE SHARES (000) - ----------------------------------------------------------- RAILROADS, TRUCKING AND SHIPPING -- (CONTINUED) 2,300 GATX Corporation..................... $ 96 1,800 Heartland Express Inc.(!)............ 31 2,600 Kirby Corporation(!)................. 51 3,600 Roadway Express, Inc. ............... 65 15,600 Union Pacific Corporation............ 606 -------- 1,203 -------- RESTAURANTS -- 0.2% 3,800 Brinker International, Inc.(!)....... 114 3,800 CEC Entertainment Inc.(!)............ 122 4,500 Jack in the Box Inc.(!).............. 96 5,500 Ruby Tuesday Inc. ................... 62 16,000 Starbucks Corporation(!)............. 641 -------- 1,035 -------- SEMICONDUCTORS -- 3.8% 1,900 Actel Corporation(!)................. 68 3,000 Alliance Semiconductor Corporation(!)..................... 60 2,500 Alpha Industries, Inc. .............. 85 14,500 Altera Corporation................... 692 13,100 Analog Devices, Inc. ................ 1,082 22,900 Applied Materials, Inc. ............. 1,357 1,700 Applied Micro Circuits Corporation(!)..................... 352 2,900 Arrow Electronics, Inc.(!)........... 99 4,800 Atmel Corporation.................... 73 2,200 Avnet, Inc. ......................... 62 5,500 Broadcom Corporation, Class A........ 1,341 2,000 Cognex Corporation(!)................ 79 1,300 Credence Systems Corporation......... 39 3,600 Cypress Semiconductor Corporation(!)..................... 150 2,900 Dallas Semiconductor Corporation..... 95 1,600 Electro Scientific Industries, Inc. .............................. 56 2,100 General Semiconductor, Inc.(!)....... 26 78,650 Intel Corporation.................... 3,268 3,300 Intergrated Device Technology, Inc.(!)............................ 299 2,400 International Rectifier Corporation(!)..................... 121 4,400 KEMET Corporation.................... 122 6,900 KLA-Tencor Corporation............... 284 700 Lattice Semiconductor Corporation(!)..................... 38 7,600 Linear Technology Corporation........ 492 1,300 Micrel Inc. ......................... 87 4,725 Microchip Technology Inc. ........... 156 14,000 Micron Technology, Inc. ............. 644 7,500 National Semiconductor Corporation(!)..................... 302 2,200 Nvidia Corporation................... 180 2,300 PMC - Sierra, Inc. .................. 495 1,700 QLogic Corporation................... 150 1,300 Sawtek, Inc.(!)...................... 50 2,075 SDL, Inc. ........................... 642 1,600 Semtech Corporation.................. 69 2,800 Silicon Valley Group, Inc.(!)........ 74 1,100 Technitrol Inc. ..................... 111 5,900 Teradyne, Inc.(!).................... 207 29,300 Texas Instruments Inc. .............. 1,382 2,600 TranSwitch Corporation............... 166 2,600 TriQuint Semiconductor, Inc. ........ 95 4,350 Vishay Intertechnology, Inc. ........ 134 10,100 Xilinx, Inc. ........................ 865 -------- 16,149 --------
SEE NOTES TO FINANCIAL STATEMENTS. 15 20 NATIONS FUNDS Nations Asset Allocation Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ----------------------------------------------------------- SOFTWARE -- 3.9% 3,600 Adobe Systems Inc. .................. $ 559 1,000 Affiliated Computer Services, Inc.(!)............................ 50 1,800 Aspen Technology, Inc.(!)............ 81 2,300 Avid Technology, Inc.(!)............. 32 2,750 BroadVision, Inc. ................... 71 7,200 Cadence Design Systems, Inc.(!)...... 185 2,550 Dendrite International, Inc. ........ 68 2,800 DST Systems, Inc.(!)................. 329 1,600 Electronic Arts Inc. ................ 79 1,800 FileNET Corporation(!)............... 33 16,775 First Data Corporation............... 655 900 HNC Software Inc.(!)................. 74 1,600 Hyperion Solutions Corporation(!).... 41 11,300 Intuit Inc. ......................... 644 800 J.D.Edwards and Company(!)........... 21 2,000 Jack Henry & Associates.............. 87 1,200 Macromedia Inc.(!)................... 97 300 Mercury Interactive Corporation...... 47 83,400 Microsoft Corporation(!)............. 5,029 1,400 National Instruments Corporation(!).. 62 58,400 Oracle Corporation................... 4,598 1,000 Project Software & Development, Inc. .............................. 16 4,200 Rational Software Corporation........ 291 2,000 RSA Security Inc.(!)................. 86 6,200 Siebel Systems, Inc. ................ 690 5,500 Sybase, Inc.(!)...................... 127 2,250 Symantec Corporation(!).............. 99 1,300 The BISYS Group, Inc.(!)............. 101 2,100 Veritas DGC Inc.(!).................. 61 6,900 VERITAS Software Corporation......... 980 1,700 Verity, Inc. ........................ 61 11,300 Yahoo! Inc. ......................... 1,028 -------- 16,382 -------- SPECIALTY STORES -- 1.5% 3,700 Abercrombie & Fitch Company(!)....... 71 23,600 Bed Bath & Beyond, Inc. ............. 576 13,100 Best Buy Company, Inc.(!)............ 833 3,700 BJ's Wholesale Club, Inc.(!)......... 126 3,000 CDW Computer Centers, Inc. .......... 207 2,100 Cost Plus, Inc.(!)................... 63 1,700 Dollar Tree Stores, Inc. ............ 69 1,600 Dress Barn Inc.(!)................... 34 1,400 Footstar Inc.(!)..................... 45 37,750 Home Depot Inc. ..................... 2,002 1,500 Insight Enterprises Inc. ............ 41 41,200 Limited Inc. ........................ 909 2,500 Linens 'N Things Inc.(!)............. 64 1,600 Michaels Stores Inc.(!).............. 64 4,600 Pier 1 Imports Inc. ................. 62 1,600 Talbots, Inc. ....................... 106 6,200 The Men's Wearhouse Inc.(!).......... 176 20,900 Tiffany & Company.................... 806 2,700 Zale Corporation(!).................. 88 -------- 6,342 -------- TELECOMMUNICATIONS SERVICES -- 3.6% 67,350 BellSouth Corporation................ 2,711 2,500 Broadwing Inc.(!).................... 64
VALUE SHARES (000) - ----------------------------------------------------------- TELECOMMUNICATIONS SERVICES -- (CONTINUED) 14,800 Nextel Communications, Inc. ......... $ 692 49,300 Qwest Communications International, Inc.(!)............................ 2,369 79,966 SBC Communications Inc. ............. 3,999 3,500 TALK.com, Inc.(!).................... 15 1,600 Telephone and Data Systems, Inc. .... 177 49,239 Verizon Communications............... 2,385 85,286 WorldCom, Inc.(!).................... 2,591 -------- 15,003 -------- TOBACCO -- 0.4% 49,600 Philip Morris Companies Inc. ........ 1,460 2,200 R.J. Reynolds Tobacco Holdings, Inc. .............................. 71 -------- 1,531 -------- UTILITIES -- MISCELLANEOUS -- 0.0%+ 1,800 Philadelphia Suburban Corporation.... 42 -------- TOTAL COMMON STOCKS (Cost $194,715).................... 260,473 -------- CONVERTIBLE PREFERRED STOCKS -- 0.1% (Cost $245) PACKAGING AND CONTAINERS -- 0.1% 4,845 Sealed Air Corporation............... 218 -------- PRINCIPAL AMOUNT (000) - --------- CORPORATE BONDS AND NOTES -- 14.8% AEROSPACE AND DEFENSE -- 0.4% $ 1,770 Raytheon Company, 7.900% 03/01/03(-)................. 1,800 -------- AUTOMOTIVE -- 0.3% 1,200 Delphi Automotive Systems Corporation, 6.125% 05/01/04.................... 1,145 -------- BEVERAGES -- 0.2% 1,035 Pepsi Bottling Holdings, Inc., 5.375% 02/17/04(-)................. 987 -------- BROADCASTING AND CABLE -- 1.3% 1,150 British Sky Broadcasting Group plc, 6.875% 02/23/09.................... 998 1,750 Clear Channel Communications, Inc., 7.875% 06/15/05.................... 1,785 1,200 Cox Radio, Inc., 6.250% 05/15/03.................... 1,172 1,500 USA Networks, Inc., 6.750% 11/15/05.................... 1,459 -------- 5,414 -------- CHEMICALS -- SPECIALTY -- 0.4% 1,500 Praxair, Inc., 6.750% 03/01/03.................... 1,487 -------- COMMERCIAL BANKING -- 0.7% 1,425 Chase Manhattan Corporation, 5.750% 04/15/04.................... 1,369 1,600 First Union Corporation, 7.550% 08/18/05.................... 1,620 -------- 2,989 --------
SEE NOTES TO FINANCIAL STATEMENTS. 16 21 NATIONS FUNDS Nations Asset Allocation Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
PRINCIPAL AMOUNT VALUE (000) (000) - ----------------------------------------------------------- COMMERCIAL SERVICES -- 0.4% $ 1,650 Comdisco, Inc., 9.500% 08/15/03.................... $ 1,662 260 Xerox Capital Trust I, Gtd. Notes, 8.000% 02/01/27.................... 186 -------- 1,848 -------- COMPUTERS AND OFFICE EQUIPMENT -- 0.3% 1,200 Compaq Computer Corporation, 7.450% 08/01/02.................... 1,205 -------- CONGLOMERATES -- 0.2% 1,000 USA Waste Services Inc., 7.000% 07/15/28.................... 819 -------- CONSUMER CREDIT AND MORTGAGES -- 0.4% 1,725 Capital One Bank, 8.250% 06/15/05(++)................ 1,751 -------- DIVERSIFIED MANUFACTURING -- 0.3% 1,200 Tyco International Group SA, 7.000% 06/15/28.................... 1,059 -------- ELECTRIC POWER -- NON NUCLEAR -- 0.3% 1,300 Consumers Energy Company, 6.200% 05/01/03.................... 1,237 135 SCANA Corporation, 6.050% 01/13/03.................... 132 -------- 1,369 -------- ENERGY -- MISCELLANEOUS -- 0.6% 800 PDV America Inc., Gtd. Sr. Notes, 7.875% 08/01/03.................... 768 1,650 USX Corporation, 6.650% 02/01/06.................... 1,599 -------- 2,367 -------- FINANCE -- MISCELLANEOUS -- 3.6% 1,400 Case Credit Corporation, 6.125% 02/15/03.................... 1,295 1,800 Caterpillar Financial Services Corporation, 6.875% 08/01/04.................... 1,780 1,050 Crown Cork & Seal Financial plc, 6.750% 12/15/03.................... 940 1,695 Finova Capital Corporation, 7.250% 11/08/04.................... 1,277 1,500 Ford Motor Credit Company, 7.600% 08/01/05.................... 1,617 1,060 General Motors Acceptance Corporation, 6.150% 04/05/07.................... 991 1,680 Heller Financial, Inc., 6.000% 03/19/04.................... 1,617 1,725 Household Finance Corporation, 8.000% 05/09/05.................... 1,782 1,200 Newcourt Credit Group Inc., 6.875% 02/16/05.................... 1,185 1,250 Paine Webber Group, Inc., 6.375% 05/15/04.................... 1,220 1,600 Washington Mutual, Inc., 7.500% 08/15/06.................... 1,603 -------- 15,307 --------
PRINCIPAL AMOUNT VALUE (000) (000) - ----------------------------------------------------------- FOOD AND DRUG STORES -- 0.7% $ 1,500 Nabisco Inc., 6.125% 02/01/33.................... $ 1,438 1,700 Safeway Inc., Sr. Notes, 7.250% 09/15/04.................... 1,697 -------- 3,135 -------- HEALTH SERVICES -- 0.1% 215 HCA The Healthcare Corporation, 8.750% 09/01/10.................... 220 -------- HEAVY MACHINERY -- 0.3% 1,500 Thermo Electron Corporation, 7.625% 10/30/08.................... 1,428 -------- HOUSING AND FURNISHING -- 0.3% 1,350 Hanson Overseas B.V., 7.375% 01/15/03.................... 1,349 -------- INSURANCE -- 0.4% 1,675 American General Finance Corporation, 7.450% 01/15/05.................... 1,692 -------- INTEGRATED OIL -- 0.4% 1,500 Occidental Petroleum Corporation, Sr. Notes, 7.650% 02/15/06.................... 1,520 -------- INVESTMENT SERVICES -- 1.4% 1,650 Bear Stearns Companies, Inc., 7.800% 08/15/07.................... 1,670 1,300 Lehman Brothers Holdings Inc., 6.625% 04/01/04.................... 1,274 1,500 MCN Investment Corporation, 6.890% 01/15/02.................... 1,492 1,300 Salomon Smith Barney Holdings, Inc., 6.250% 05/15/03.................... 1,280 -------- 5,716 -------- NATURAL GAS PIPELINES -- 0.8% 1,815 KN Energy, Inc., 6.450% 03/01/03.................... 1,782 1,700 Williams Companies, Inc., 6.500% 08/01/06.................... 1,631 -------- 3,413 -------- PHARMACEUTICALS -- 0.3% 1,500 Pharmacia Corporation, 6.600% 12/01/28.................... 1,335 -------- TELECOMMUNICATIONS SERVICES -- 0.7% 1,650 AirTouch Communications, Inc., 6.350% 06/01/05.................... 1,598 1,400 MCI Worldcom, Inc., 6.400% 08/15/05.................... 1,363 75 Sprint Capital Corporation, 5.875% 11/15/28.................... 65 -------- 3,026 -------- TOTAL CORPORATE BONDS AND NOTES (Cost $63,290)..................... 62,381 --------
SEE NOTES TO FINANCIAL STATEMENTS. 17 22 NATIONS FUNDS Nations Asset Allocation Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
PRINCIPAL AMOUNT VALUE (000) (000) - ----------------------------------------------------------- FOREIGN BONDS AND NOTES -- 1.0% $ 2,275 AT&T Canada Inc., 8.680%** 06/15/08(++).............. $ 1,855 1,000 Banco Latinoamericano, 7.200% 05/28/02(-)(++)............. 983 1,463 Pemex Finance Ltd., 5.720% 11/15/03.................... 1,429 70 Tyco International Group SA, 6.875% 01/15/29.................... 61 -------- TOTAL FOREIGN BONDS AND NOTES (Cost $4,403)...................... 4,328 -------- MORTGAGE-BACKED SECURITIES -- 20.0% COMMERCIAL MORTGAGE-BACKED SECURITIES -- 7.9% 750 Commercial Mortgage Acceptance Corporation, Series 1999-C1, Class A2, 7.030% 05/15/09.................... 743 1,239 Criimi Mae CMBS Corporation, Series 1998-1, Class A1, 5.697% 10/20/01(-)................. 1,217 1,880 CS First Boston Mortgage Securities Corporation, Series 1998-C1, Class A1B, 6.480% 05/17/08(++)................ 1,806 2,735 DLJ Commercial Mortgage Corporation, Series 1998-CG1, Class A1B, 6.410% 05/10/08(++)................ 2,623 2,600 DLJ Commercial Mortgage Corporation, Series 1999-CG1, Class A1B, 6.460% 01/10/09(++)................ 2,493 1,000 DLJ Commercial Mortgage Corporation, Series 2000-CF1, Class A1B, 7.620% 05/10/10.................... 1,027 2,300 First Union National Bank Commercial Mortgage, Series 1999-C4, Class A2, 7.390% 11/15/09.................... 2,333 2,650 GMAC Commercial Mortgage Securities Inc., Series 1999-C1, Class A2, 6.175% 05/15/33(++)................ 2,485 2,600 GMAC Commercial Mortgage Securities Inc., Series 1999-C2, Class A2, 6.945% 09/15/33(++)................ 2,561 6,596 JP Morgan Commercial Mortgage Finance Corporation, Series 1997-C4, Class X, Interest only, 1.290%** 12/26/28.................. 364 2,750 Mortgage Capital Funding, Inc., Series 1998-MC2, Class A2, 6.423% 05/18/08(++)................ 2,629 2,050 Nomura Asset Securities Corporation, Series 1998-D6, Class A1B, 6.590% 03/17/28(++)................ 1,990 2,000 PNC Mortgage Acceptance Corporation, Series 1999-CM1, Class A1B, 7.330% 10/10/09.................... 2,018 1,750 Prudential Securities Secured Financing Corporation, Series 1999-C2, Class A2, 7.193% 04/15/09.................... 1,753
PRINCIPAL AMOUNT VALUE (000) (000) - ----------------------------------------------------------- COMMERCIAL MORTGAGE-BACKED SECURITIES -- (CONTINUED) $ 2,715 Prudential Securities Secured Financing Corporation, Series 1999-NRF1, Class A2, 6.480% 01/15/09(++)................ $ 2,601 1,715 Salomon Brothers Mortgage Securities, Series 2000-C1, Class A2, 7.520% 12/18/09.................... 1,748 1,600 Salomon Brothers Mortgage Securities, Series 2000-C2, Class A2, 7.455% 04/18/10.................... 1,623 168 Salomon Brothers Mortgage Securities, Series 2000-NL1, Class A1, 6.601% 04/15/08(-)................. 165 42,911 Vendee Mortgage Trust, Series 1998-1, Class 2, IO, .453%(--) 09/15/27(++)............. 748 46,495 Vendee Mortgage Trust, Series 1998-3, Class 1, IO, .314%(--) 03/15/29(++)............. 608 -------- 33,535 -------- FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) CERTIFICATES -- 1.9% 64 8.000% 01/01/04...................... 65 400 6.500% 04/01/09...................... 397 1,554 6.500% 07/01/10...................... 1,533 2,909 6.500% 06/01/14...................... 2,853 7 10.500% 04/01/19..................... 8 3,070 7.000% 10/01/29...................... 3,006 -------- 7,862 -------- FEDERAL HOUSING AUTHORITY (FHA) CERTIFICATES -- 0.5% 275 7.000% 01/15/27...................... 271 593 6.750% 01/01/40...................... 558 419 7.000% 01/01/40...................... 400 287 6.850% 02/01/40...................... 271 640 6.530% 10/01/40...................... 592 -------- 2,092 -------- FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) CERTIFICATES -- 7.5% 191 6.500% 01/01/06...................... 188 174 6.500% 10/01/10...................... 172 440 7.500% 10/01/11...................... 444 1,974 6.500% 02/01/13...................... 1,941 430 10.000% 09/01/18..................... 460 5,081 6.500% 12/01/27(++).................. 4,883 2,574 7.000% 05/01/28...................... 2,524 2,459 7.000% 08/01/28(++).................. 2,415 180 6.000% 02/01/29...................... 168 691 6.500% 02/01/29...................... 663 3,174 7.000% 10/01/29(++).................. 3,110 6,493 8.000% 11/01/29(++).................. 6,583 7,794 6.500% 05/01/30...................... 7,487 529 7.354%(--) 08/01/36.................. 544 -------- 31,582 --------
SEE NOTES TO FINANCIAL STATEMENTS. 18 23 NATIONS FUNDS Nations Asset Allocation Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
PRINCIPAL AMOUNT VALUE (000) (000) - ----------------------------------------------------------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) CERTIFICATES -- 1.8% $ 802 6.750% 09/15/01...................... $ 759 410 6.600% 11/15/01...................... 383 15 10.000% 02/15/16..................... 16 124 9.000% 10/15/19...................... 129 97 9.000% 11/15/19...................... 101 468 9.000% 12/15/19...................... 489 151 9.000% 01/15/20...................... 157 1,934 8.000% 07/15/27(++).................. 1,969 336 8.000% 09/15/27...................... 343 192 7.000% 11/15/27...................... 189 90 8.000% 04/15/28...................... 91 2,592 8.000% 06/15/28(++).................. 2,639 305 6.550% 03/15/40...................... 285 -------- 7,550 -------- GOVERNMENT NATIONAL MORTGAGE ASSOCIATION II (GNMA) CERTIFICATES -- 0.4% 494 6.650% 01/15/34...................... 469 1,193 7.375% 10/15/34...................... 1,187 -------- 1,656 -------- TOTAL MORTGAGE-BACKED SECURITIES (Cost $85,189)................... 84,277 -------- U.S. TREASURY OBLIGATIONS -- 1.4% U.S. TREASURY STRIPS -- 1.4% 1,250 Interest only 05/15/20............... 381 14,885 Principal only 11/15/21.............. 4,154 6,000 Principal only 02/15/27.............. 1,259 -------- TOTAL U.S. TREASURY OBLIGATIONS (Cost $5,483)...................... 5,794 --------
SHARES VALUE (000) (000) - ---------------------------------------------------------- INVESTMENT COMPANIES -- 0.0%+ (Cost $11) 11 Nations Cash Reserves#.............. $ 11 -------- TOTAL INVESTMENTS (Cost $356,206*).......... 99.9% 420,326 -------- OTHER ASSETS AND LIABILITIES (NET)......... 0.1% Receivable for investment securities sold.............................. $ 2,140 Receivable for Fund shares sold..... 415 Dividends receivable................ 205 Interest receivable................. 1,585 Receivable for variation margin..... 36 Variation margin/due to broker...... (28) Payable for Fund shares redeemed.... (709) Investment advisory fee payable..... (228) Administration fee payable.......... (81) Shareholder servicing and distribution fees payable...................... (162) Due to custodian.................... (98) Payable for investment securities purchased......................... (2,373) Accrued Trustees' fees and expenses.......................... (16) Accrued expenses and other liabilities....................... (115) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)............................. 571 -------- NET ASSETS.................. 100.0% $420,897 ======== NET ASSETS CONSIST OF: Undistributed net investment income............................ $ 669 Accumulated net realized gain on investments sold and futures contracts......................... 12,478 Net unrealized appreciation of investments and futures contracts......................... 63,936 Paid-in capital..................... 343,814 -------- NET ASSETS.......................... $420,897 ========
SEE NOTES TO FINANCIAL STATEMENTS. 19 24 NATIONS FUNDS Nations Asset Allocation Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE - ---------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($17,934,129 / 754,634 shares outstanding)...................... $23.77 ====== INVESTOR A SHARES: Net asset value and redemption price per share ($277,103,861 / 11,663,078 shares outstanding)............... $23.76 ====== Maximum sales charge................ 5.75% Maximum offering price per share.... $25.21 INVESTOR B SHARES: Net asset value and offering price per share(+) ($123,134,728 / 5,207,504 shares outstanding)..... $23.65 ====== INVESTOR C SHARES: Net asset value and offering price per share(+) ($2,723,922 / 115,060 shares outstanding)............... $23.67 ======
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $64,120 on investment securities was comprised of gross appreciation of $76,921 and gross depreciation of $12,801 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $356,206. ** Rate represents annualized yield at date of purchase. (-) Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. (--) Variable rate security. The interest rate shown reflects the rate in effect at September 30, 2000. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. (++) All or a portion of security segregated as collateral for futures contracts. + Amount represents less than 0.1%. ++ Amount represents less than $500. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. ABBREVIATIONS: ADR -- American Depositary Receipt IO -- Interest Only SEE NOTES TO FINANCIAL STATEMENTS. 20 25 NATIONS FUNDS Nations Equity Income Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ COMMON STOCKS -- 99.7% AEROSPACE AND DEFENSE -- 1.1% 172,900 Honeywell International Inc. ........... $ 6,160 -------- AUTOMOTIVE -- 1.6% 217,000 Genuine Parts Company................... 4,137 87,000 Johnson Controls Inc. .................. 4,627 -------- 8,764 -------- BEVERAGES -- 1.3% 126,000 Coca-Cola Company....................... 6,946 -------- CHEMICALS -- BASIC -- 1.1% 144,000 E.I. duPont de Nemours and Company...... 5,967 -------- COMMERCIAL BANKING -- 4.1% 298,666 Citigroup Inc. ......................... 16,147 40,000 J.P. Morgan & Company Inc. ............. 6,535 -------- 22,682 -------- COMPUTER SERVICES -- 1.2% 102,000 Automatic Data Processing Inc. ......... 6,821 -------- COMPUTERS AND OFFICE EQUIPMENT -- 9.2% 122,000 EMC Corporation......................... 12,093 90,000 Hewlett-Packard Company................. 8,730 111,000 International Business Machines Corporation........................... 12,487 134,000 Pitney Bowes, Inc. ..................... 5,285 105,000 Sun Microsystems, Inc. ................. 12,258 -------- 50,853 -------- CONSUMER CREDIT AND MORTGAGES -- 2.7% 135,000 American Express Company................ 8,201 176,000 MBNA Corporation........................ 6,776 -------- 14,977 -------- DEPARTMENT AND DISCOUNT STORES -- 2.6% 302,000 Wal-Mart Stores, Inc. .................. 14,534 -------- DIVERSIFIED ELECTRONICS -- 0.7% 157,000 Hubbell Incorporated.................... 3,935 -------- DIVERSIFIED MANUFACTURING -- 7.7% 85,000 Eastman Kodak Company................... 3,474 159,000 Fortune Brands Inc. .................... 4,214 435,000 General Electric Company................ 25,093 174,000 Gillette Company........................ 5,372 66,000 Procter & Gamble Company................ 4,422 -------- 42,575 -------- ELECTRIC POWER -- NON NUCLEAR -- 6.4% 138,000 Consolidated Edison, Inc. .............. 4,709 161,000 Dominion Resources, Inc. ............... 9,348 70,000 Duke Energy Corporation................. 6,003 151,000 FPL Group Inc. ......................... 9,928 182,000 TECO Energy, Inc. ...................... 5,233 -------- 35,221 -------- FINANCE -- MISCELLANEOUS -- 1.4% 138,000 Freddie Mac............................. 7,461 -------- FOOD PRODUCTS -- 1.6% 191,000 ConAgra Inc. ........................... 3,832 128,000 H.J. Heinz Company...................... 4,744 -------- 8,576 --------
VALUE SHARES (000) - ------------------------------------------------------------ HEAVY MACHINERY -- 1.7% 123,000 Caterpillar Inc. ....................... $ 4,151 93,000 Illinois Tool Works, Inc. .............. 5,197 -------- 9,348 -------- INSURANCE -- 2.6% 152,000 American International Group, Inc. ..... 14,545 -------- INTEGRATED OIL -- 7.3% 73,000 Anadarko Petroleum Corporation.......... 4,852 74,000 BP Amoco plc, ADR....................... 3,922 79,000 Chevron Corporation..................... 6,735 208,000 Exxon Mobil Corporation................. 18,537 122,700 Texaco Inc. ............................ 6,442 -------- 40,488 -------- INVESTMENT SERVICES -- 2.7% 102,000 Merrill Lynch & Company Inc. ........... 6,732 91,000 Morgan Stanley Dean Witter & Company.... 8,321 -------- 15,053 -------- MEDICAL DEVICES AND SUPPLIES -- 4.3% 178,000 Abbott Laboratories..................... 8,466 89,000 Guidant Corporation(!).................. 6,291 94,000 Johnson & Johnson....................... 8,830 -------- 23,587 -------- METALS AND MINING -- 1.1% 66,000 Minnesota Mining & Manufacturing Company............................... 6,014 -------- NATURAL GAS DISTRIBUTION -- 1.4% 85,000 Enron Corporation....................... 7,448 -------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT --4.6% 350,200 Cisco Systems, Inc. .................... 19,349 100,000 Nortel Networks Corporation............. 5,956 -------- 25,305 -------- PHARMACEUTICALS -- 6.4% 100,000 Bristol-Myers Squibb Company............ 5,713 171,000 Merck & Company, Inc. .................. 12,729 373,450 Pfizer Inc. ............................ 16,781 -------- 35,223 -------- PUBLISHING AND ADVERTISING -- 0.9% 81,000 McGraw-Hill Companies, Inc. ............ 5,149 -------- RAILROADS, TRUCKING AND SHIPPING -- 0.7% 69,000 United Parcel Service, Inc. ............ 3,890 -------- REAL ESTATE -- 3.4% 98,000 Avalonbay Communities, Inc. ............ 4,673 168,000 Equity Office Properties Trust.......... 5,218 99,000 Equity Residential Properties Trust..... 4,752 168,000 Simon Property Group, Inc. ............. 3,938 -------- 18,581 -------- REAL ESTATE INVESTMENT TRUSTS (REITS) -- 0.8% 108,000 Boston Properties Inc. ................. 4,637 -------- SEMICONDUCTORS -- 3.6% 374,000 Intel Corporation....................... 15,544 88,000 Texas Instruments Inc. ................. 4,153 -------- 19,697 --------
SEE NOTES TO FINANCIAL STATEMENTS. 21 26 NATIONS FUNDS Nations Equity Income Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ SOFTWARE -- 5.1% 240,000 Microsoft Corporation(!)................ $ 14,475 172,000 Oracle Corporation...................... 13,545 -------- 28,020 -------- SPECIALTY STORES -- 1.0% 120,000 Lowe's Companies Inc. .................. 5,385 -------- TELECOMMUNICATIONS SERVICES -- 4.0% 227,000 SBC Communications Inc. ................ 11,350 221,000 Verizon Communications.................. 10,705 -------- 22,055 -------- TOBACCO -- 2.6% 280,000 Philip Morris Companies Inc. ........... 8,243 269,000 UST Inc. ............................... 6,153 -------- 14,396 -------- UTILITIES -- MISCELLANEOUS -- 2.8% 177,000 American Water Works Company, Inc. ..... 4,879 217,000 AT&T Corporation........................ 6,374 123,000 NICOR Inc. ............................. 4,451 -------- 15,704 -------- TOTAL COMMON STOCKS (Cost $445,127)....................... 549,997 --------
SHARES (000) - ------- INVESTMENT COMPANIES -- 0.3% (Cost $1,638) 1,638 Nations Cash Reserves#................... 1,638 -------- TOTAL INVESTMENTS (Cost $446,765*)............... 100.0% 551,635 -------- OTHER ASSETS AND LIABILITIES (NET).............. 0.0% Receivable for investment securities sold................................... $ 563 Receivable for Fund shares sold.......... 734 Dividends receivable..................... 1,006 Interest receivable...................... 34 Payable for Fund shares redeemed......... (1,860) Investment advisory fee payable.......... (259) Administration fee payable............... (108) Shareholder servicing and distribution fees payable........................... (61) Due to custodian......................... (4) Accrued Directors' fees and expenses..... (20) Accrued expenses and other liabilities... (72) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET).................................. (47) -------- NET ASSETS....................... 100.0% $551,588 ========
VALUE (000) - -------------------------------------------------------------- NET ASSETS CONSIST OF: Undistributed net investment income...... $ 338 Accumulated net realized gain on investments sold....................... 24,523 Net unrealized appreciation of investments............................ 104,869 Paid-in capital.......................... 421,858 -------- NET ASSETS............................... $551,588 ======== PRIMARY A SHARES: Net asset value, offering and redemption price per share ($458,237,256 / 41,091,624 shares outstanding)........................... $11.15 ====== INVESTOR A SHARES: Net asset value and redemption price per share ($29,049,783 / 2,611,497 shares outstanding)........................... $11.12 ====== Maximum sales charge..................... 5.75% Maximum offering price per share......... $11.80 INVESTOR B SHARES: Net asset value and offering price per share(+) ($60,707,291 / 5,463,600 shares outstanding).................... $11.11 ====== INVESTOR C SHARES: Net asset value and offering price per share(+) ($3,593,179 / 319,304 shares outstanding)........................... $11.25 ======
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $104,870 on investment securities was comprised of gross appreciation of $122,619 and gross depreciation of $17,749 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $446,765. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. ABBREVIATIONS: ADR -- American Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 22 27 NATIONS FUNDS Nations Value Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------- COMMON STOCKS -- 94.8% AEROSPACE AND DEFENSE -- 1.7% 652,000 Honeywell International Inc. ........ $ 23,228 ---------- AUTOMOTIVE -- 1.3% 345,000 Johnson Controls Inc. ............... 18,350 ---------- COMMERCIAL BANKING -- 8.9% 497,000 Chase Manhattan Corporation.......... 22,955 742,000 Citigroup Inc. ...................... 40,114 186,000 J.P. Morgan & Company Inc. .......... 30,388 668,000 Wells Fargo Company.................. 30,686 ---------- 124,143 ---------- COMPUTERS AND OFFICE EQUIPMENT -- 3.7% 166,000 Hewlett-Packard Company.............. 16,102 311,000 International Business Machines Corporation........................ 34,988 ---------- 51,090 ---------- CONSUMER CREDIT AND MORTGAGES -- 4.1% 520,000 American Express Company............. 31,590 635,000 MBNA Corporation..................... 24,448 ---------- 56,038 ---------- DIVERSIFIED MANUFACTURING -- 1.1% 216,000 Procter & Gamble Company............. 14,472 ---------- ELECTRIC POWER -- NON NUCLEAR -- 8.9% 450,000 Ameren Corporation................... 18,844 661,000 Consolidated Edison, Inc. ........... 22,557 356,000 Dominion Resources, Inc. ............ 20,670 344,000 FPL Group Inc. ...................... 22,618 1,293,000 TECO Energy, Inc. ................... 37,173 ---------- 121,862 ---------- ELECTRICAL EQUIPMENT -- 1.7% 342,000 Emerson Electric Company............. 22,914 ---------- FINANCE -- MISCELLANEOUS -- 4.6% 861,000 Associates First Capital Corporation........................ 32,718 555,100 Freddie Mac.......................... 30,010 ---------- 62,728 ---------- FOOD PRODUCTS -- 4.3% 1,023,000 ConAgra Inc. ........................ 20,524 562,000 H.J. Heinz Company................... 20,829 716,000 Kellogg Company...................... 17,318 ---------- 58,671 ---------- HEAVY MACHINERY -- 1.1% 4,400 Caterpillar Inc. .................... 149 447,000 Parker Hannifin Corporation.......... 15,086 ---------- 15,235 ---------- HOUSING AND FURNISHING -- 1.1% 651,000 Stanley Works........................ 15,014 ---------- INSURANCE -- 6.9% 548,000 American International Group, Inc. .............................. 52,436 222,000 CIGNA Corporation.................... 23,177 311,000 MGIC Investment Corporation.......... 19,010 ---------- 94,623 ----------
VALUE SHARES (000) - ------------------------------------------------------------- INTEGRATED OIL -- 9.2% 293,000 Anadarko Petroleum Corporation....... $ 19,472 325,000 BP Amoco plc, ADR.................... 17,225 46,000 Chevron Corporation.................. 3,922 759,000 Conoco, Inc. ........................ 20,445 576,000 Exxon Mobil Corporation.............. 51,335 431,000 Unocal Corporation................... 15,274 ---------- 127,673 ---------- INVESTMENT SERVICES -- 4.2% 384,000 Merrill Lynch & Company Inc. ........ 25,344 355,000 Morgan Stanley Dean Witter & Company............................ 32,460 ---------- 57,804 ---------- MEDICAL DEVICES AND SUPPLIES -- 4.0% 641,000 Abbott Laboratories.................. 30,488 284,000 Cardinal Health, Inc. ............... 25,045 ---------- 55,533 ---------- METALS AND MINING -- 1.8% 266,000 Minnesota Mining & Manufacturing Company............................ 24,239 ---------- NATURAL GAS DISTRIBUTION -- 1.7% 324,000 El Paso Energy Corporation........... 19,966 31,825 Enron Corporation.................... 2,789 ---------- 22,755 ---------- PHARMACEUTICALS -- 2.5% 600,000 Bristol-Myers Squibb Company......... 34,275 ---------- PUBLISHING AND ADVERTISING -- 1.4% 308,000 Dow Jones & Company Inc. ............ 18,634 ---------- RAILROADS, TRUCKING AND SHIPPING -- 1.7% 520,000 FedEx Corporation(!)................. 23,057 ---------- RESTAURANTS -- 0.5% 218,000 McDonald's Corporation............... 6,581 ---------- SEMICONDUCTORS -- 1.6% 247,000 Intergrated Device Technology, Inc.(!)............................ 22,354 ---------- SOFTWARE -- 2.8% 487,000 Electronic Data Systems Corporation........................ 20,211 450,000 First Data Corporation............... 17,578 ---------- 37,789 ---------- TELECOMMUNICATIONS SERVICES -- 3.6% 560,000 SBC Communications Inc. ............. 28,000 449,000 Verizon Communications............... 21,748 ---------- 49,748 ---------- TOBACCO -- 3.7% 978,000 Philip Morris Companies Inc. ........ 28,790 976,000 UST Inc. ............................ 22,326 ---------- 51,116 ---------- UTILITIES -- MISCELLANEOUS -- 6.7% 740,000 American Water Works Company, Inc. .............................. 20,396 1,106,000 AT&T Corporation..................... 32,489
SEE NOTES TO FINANCIAL STATEMENTS. 23 28 NATIONS FUNDS Nations Value Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------- UTILITIES -- MISCELLANEOUS -- (CONTINUED) 484,000 NICOR Inc. .......................... $ 17,515 755,000 Sprint Corporation (FON Group)....... 22,131 ---------- 92,531 ---------- TOTAL COMMON STOCKS (Cost $1,055,404).................. 1,302,457 ----------
SHARES (000) - --------- INVESTMENT COMPANIES -- 3.1% (Cost $42,329) 42,329 Nations Cash Reserves#............... 42,329 ---------- TOTAL INVESTMENTS (Cost $1,097,733*)......... 97.9% 1,344,786 ---------- OTHER ASSETS AND LIABILITIES (NET).......... 2.1% Cash................................. $ 6,108 Receivable for investment securities sold............................... 78,077 Receivable for Fund shares sold...... 463 Dividends receivable................. 2,412 Interest receivable.................. 16 Collateral on securities loaned...... (42,329) Line of credit payable............... (6,147) Payable for Fund shares redeemed..... (8,707) Investment advisory fee payable...... (743) Administration fee payable........... (263) Shareholder servicing and distribution fees payable.......... (114) Accrued Trustees' fees and expenses........................... (89) Accrued expenses and other liabilities........................ (199) ---------- TOTAL OTHER ASSETS AND LIABILITIES (NET).............................. 28,485 ---------- NET ASSETS................... 100.0% $1,373,271 ========== NET ASSETS CONSIST OF: Distributions in excess of net investment income.................. $ (231) Accumulated net realized gain on investments sold................... 163,726 Net unrealized appreciation of investments........................ 247,053 Paid-in capital...................... 962,723 ---------- NET ASSETS........................... $1,373,271 ==========
VALUE - ------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($1,176,252,410 / 82,021,879 shares outstanding)....................... $14.34 ====== INVESTOR A SHARES: Net asset value and redemption price per share ($79,126,043 / 5,520,925 shares outstanding)................ $14.33 ====== Maximum sales charge................. 5.75% Maximum offering price per share..... $15.21 INVESTOR B SHARES: Net asset value and offering price per share(+) ($108,290,633 / 7,690,030 shares outstanding)....................... $14.08 ====== INVESTOR C SHARES: Net asset value and offering price per share(+) ($9,601,858 / 682,285 shares outstanding)................ $14.07 ======
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $247,053 on investment securities was comprised of gross appreciation of $267,458 and gross depreciation of $20,405 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $1,097,733. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. Represents cash collateral received from securities lending activity (Note 8). ABBREVIATIONS: ADR -- American Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 24 29 NATIONS FUNDS Nations Marsico Growth & Income Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE (000) - ----------------------------------------------------------- INVESTMENT COMPANIES -- 100.1% Investment in Nations Master Investment Trust, Marsico Growth & Income Master Portfolio*............ $685,255 -------- TOTAL INVESTMENTS............. 100.1% 685,255 -------- OTHER ASSETS AND LIABILITIES (NET)....................... (0.1)% Administration fee payable............ $ (74) Shareholder servicing and distribution fees payable........................ (346) Accrued Trustees' fees and expenses... (22) Accrued expenses and other liabilities......................... (114) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)............................... (556) -------- NET ASSETS.................... 100.0% $684,699 ======== NET ASSETS CONSIST OF: Distributions in excess of net investment income................... $ (2,202) Accumulated net realized loss on investments sold.................... (36,844) Net unrealized appreciation of investments......................... 157,771 Paid-in capital....................... 565,974 -------- NET ASSETS............................ $684,699 ========
VALUE - ----------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($110,347,507 / 5,505,825 shares outstanding)........................ $20.04 ====== INVESTOR A SHARES: Net asset value and redemption price per share ($208,787,355 / 10,430,093 shares outstanding)................. $20.02 ====== Maximum sales charge.................. 5.75% Maximum offering price per share...... $21.24 INVESTOR B SHARES: Net asset value and offering price per share(+) ($324,700,890 / 16,517,691 shares outstanding)................. $19.66 ====== INVESTOR C SHARES: Net asset value and offering price per share(+) ($40,862,966 / 2,076,142 shares outstanding)................. $19.68 ======
- --------------- * The financial statements of the Nations Marsico Growth & Income Master Portfolio, including its portfolio of investments, are included elsewhere within this report and should be read in conjunction with the Nations Marsico Growth & Income Fund's financial statements. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. SEE NOTES TO FINANCIAL STATEMENTS. 25 30 NATIONS FUNDS Nations Blue Chip Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE (000) - ----------------------------------------------------------- INVESTMENT COMPANIES -- 100.1% Investment in Nations Master Investment Trust, Blue Chip Master Portfolio*.......................... $966,294 -------- TOTAL INVESTMENTS............. 100.1% 966,294 -------- OTHER ASSETS AND LIABILITIES (NET)........... (0.1)% Receivable for Fund shares sold....... $ 3 Administration fee payable............ (146) Shareholder servicing and distribution fees payable........................ (265) Accrued Trustees' fees and expenses... (17) Accrued expenses and other liabilities......................... (91) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)............................... (516) -------- NET ASSETS.................... 100.0% $965,778 ======== NET ASSETS CONSIST OF: Distributions in excess of net investment income................... $ (520) Accumulated net realized gain on investments sold.................... 19,389 Net unrealized appreciation of investments......................... 256,105 Paid-in capital....................... 690,804 -------- NET ASSETS............................ $965,778 ========
VALUE (000) - ----------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($37,538,274 / 1,084,439 shares outstanding)........................ $34.61 ====== INVESTOR A SHARES: Net asset value and redemption price per share ($815,715,104 / 23,663,601 shares outstanding)................. $34.47 ====== Maximum sales charge.................. 5.75% Maximum offering price per share...... $36.57 INVESTOR B SHARES: Net asset value and offering price per share(+) ($92,718,368 / 2,733,275 shares outstanding)................. $33.92 ====== INVESTOR C SHARES: Net asset value and offering price per share(+) ($19,806,004 / 585,533 shares outstanding)........................ $33.82 ======
- --------------- * The financial statements of the Nations Blue Chip Master Portfolio, including its portfolio of investments, are included elsewhere within this report and should be read in conjunction with the Nations Blue Chip Fund's financial statements. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. SEE NOTES TO FINANCIAL STATEMENTS. 26 31 NATIONS FUNDS Nations Strategic Growth Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------- COMMON STOCKS -- 98.9% AEROSPACE AND DEFENSE -- 0.5% 181,700 Honeywell International Inc. ........ $ 6,473 ---------- BEVERAGES -- 2.2% 377,050 Anheuser-Busch Companies, Inc. ...... 15,954 94,900 Coca-Cola Company.................... 5,231 155,000 PepsiCo, Inc. ....................... 7,130 ---------- 28,315 ---------- BROADCASTING AND CABLE -- 4.5% 251,075 Clear Channel Communications, Inc.(!)............................ 14,186 356,000 Comcast Corporation, Class A(!)...... 14,574 207,300 Time Warner Inc. .................... 16,221 236,000 Viacom Inc., Class B(!).............. 13,806 ---------- 58,787 ---------- COMMERCIAL BANKING -- 4.2% 330,000 Bank of New York Inc. ............... 18,501 685,996 Citigroup Inc. ...................... 37,086 ---------- 55,587 ---------- COMMERCIAL SERVICES -- 1.0% 183,900 Omnicom Group Inc. .................. 13,413 ---------- COMPUTER SERVICES -- 2.1% 227,340 America Online Inc. ................. 12,220 228,000 Automatic Data Processing Inc. ...... 15,247 ---------- 27,467 ---------- COMPUTERS AND OFFICE EQUIPMENT -- 9.1% 435,450 EMC Corporation...................... 43,163 237,175 International Business Machines Corporation........................ 26,682 250,000 Palm, Inc.(!)........................ 13,234 322,600 Sun Microsystems, Inc. .............. 37,664 ---------- 120,743 ---------- CONGLOMERATES -- 4.1% 479,475 Tyco International Ltd. ............. 24,873 421,600 United Technologies Corporation...... 29,196 ---------- 54,069 ---------- CONSUMER CREDIT AND MORTGAGES -- 4.0% 266,540 Fannie Mae........................... 19,058 480,000 MBNA Corporation..................... 18,480 115,000 Providian Financial Corporation...... 14,605 ---------- 52,143 ---------- CONSUMER SERVICES -- 1.6% 265,525 Costco Wholesale Corporation......... 9,277 325,100 Estee Lauder Companies Inc. ......... 11,907 ---------- 21,184 ---------- DEPARTMENT AND DISCOUNT STORES -- 2.7% 426,000 Target Corporation................... 10,916 515,125 Wal-Mart Stores, Inc. ............... 24,791 ---------- 35,707 ---------- DIVERSIFIED MANUFACTURING -- 4.5% 1,022,625 General Electric Company............. 58,993 ---------- ELECTRIC POWER -- NON NUCLEAR -- 1.2% 232,150 AES Corporation...................... 15,902 ---------- ELECTRICAL EQUIPMENT -- 1.0% 201,375 Emerson Electric Company............. 13,492 ----------
VALUE SHARES (000) - ------------------------------------------------------------- FINANCE -- MISCELLANEOUS -- 0.5% 178,900 Concord EFS, Inc.(!)................. $ 6,354 ---------- INSURANCE -- 2.6% 354,562 American International Group, Inc. .............................. 33,927 ---------- INTEGRATED OIL -- 2.6% 118,400 BP Amoco plc, ADR.................... 6,275 316,700 Exxon Mobil Corporation.............. 28,226 ---------- 34,501 ---------- INVESTMENT SERVICES -- 4.6% 194,037 Charles Schwab Corporation........... 6,888 371,300 Merrill Lynch & Company Inc. ........ 24,506 197,075 Morgan Stanley Dean Witter & Company............................ 18,020 120,850 Northern Trust Corporation........... 10,741 ---------- 60,155 ---------- MEDICAL DEVICES AND SUPPLIES -- 4.9% 216,800 Abbott Laboratories.................. 10,312 168,800 Baxter International Inc. ........... 13,472 277,225 Guidant Corporation(!)............... 19,597 137,000 Johnson & Johnson.................... 12,869 150,160 Medtronic, Inc. ..................... 7,780 ---------- 64,030 ---------- NATURAL GAS DISTRIBUTION -- 1.5% 271,225 Coastal Corporation.................. 20,105 ---------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT -- 6.8% 70,400 CIENA Corporation.................... 8,646 768,050 Cisco Systems, Inc. ................. 42,434 274,000 Lucent Technologies, Inc. ........... 8,374 311,200 Nokia Corporation, Class A, ADR...... 12,390 294,000 Nortel Networks Corporation.......... 17,511 ---------- 89,355 ---------- OILFIELD SERVICES -- 0.8% 120,900 Schlumberger Ltd. ................... 9,952 ---------- PHARMACEUTICALS -- 9.0% 320,650 Amgen Inc. .......................... 22,389 164,825 Bristol-Myers Squibb Company......... 9,416 169,425 Eli Lilly and Company................ 13,745 217,550 Merck & Company, Inc. ............... 16,194 1,033,475 Pfizer Inc. ......................... 46,441 205,475 Schering-Plough Corporation.......... 9,555 ---------- 117,740 ---------- PUBLISHING AND ADVERTISING -- 1.1% 227,125 McGraw-Hill Companies, Inc. ......... 14,437 ---------- SEMICONDUCTORS -- 6.4% 752,250 Intel Corporation.................... 31,265 211,550 Linear Technology Corporation........ 13,698 373,000 Motorola, Inc. ...................... 10,537 209,100 Texas Instruments Inc. .............. 9,867 218,300 Xilinx, Inc. ........................ 18,692 ---------- 84,059 ----------
SEE NOTES TO FINANCIAL STATEMENTS. 27 32 NATIONS FUNDS Nations Strategic Growth Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------- SOFTWARE -- 6.5% 744,075 Microsoft Corporation(!)............. $ 44,877 235,770 Oracle Corporation................... 18,567 46,600 Phone.com, Inc. ..................... 5,295 120,000 VERITAS Software Corporation......... 17,040 ---------- 85,779 ---------- SPECIALTY STORES -- 3.1% 132,500 Best Buy Company, Inc.(!)............ 8,430 127,540 Circuit City Stores - Circuit City Group.............................. 2,933 325,400 Home Depot Inc. ..................... 17,267 175,350 Lowe's Companies Inc. ............... 7,869 104,825 Walgreen Company..................... 3,977 ---------- 40,476 ---------- TELECOMMUNICATIONS SERVICES -- 5.8% 395,175 Nextel Communications, Inc. ......... 18,474 111,950 QUALCOMM Inc. ....................... 7,976 512,600 Qwest Communications International, Inc.(!)............. 24,637 142,000 Sprint Corporation (PCS Group)....... 4,979 304,000 Western Wireless Corporation(!)...... 10,830 313,675 WorldCom, Inc.(!).................... 9,528 ---------- 76,424 ---------- TOTAL COMMON STOCKS (Cost $1,008,914).................. 1,299,569 ----------
SHARES (000) - --------- INVESTMENT COMPANIES -- 2.7% (Cost $35,638) 35,638 Nations Cash Reserves#................ 35,638 ---------- TOTAL INVESTMENTS (Cost $1,044,552*)......... 101.6% 1,335,207 ---------- OTHER ASSETS AND LIABILITIES (NET).... ..... (1.6)% Cash.................................. $ 1,874 Receivable for investment securities sold................................ 33,751 Receivable for Fund shares sold....... 3,950 Dividends receivable.................. 325 Interest receivable................... 178 Collateral on securities loaned....... (19,484) Payable for Fund shares redeemed...... (1,717) Investment advisory fee payable....... (716) Administration fee payable............ (253) Shareholder servicing and distribution fees payable........................ (11) Payable for investment securities purchased........................... (38,484) Accrued Trustees' fees and expenses... (17) Accrued expenses and other liabilities......................... (98) ---------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................... (20,702) ---------- NET ASSETS................... 100.0% $1,314,505 ==========
VALUE (000) - -------------------------------------------------------------- NET ASSETS CONSIST OF: Distributions in excess of net investment income................... $ (1,373) Accumulated net realized loss on investments sold.................... (24,746) Net unrealized appreciation of investments......................... 290,655 Paid-in capital....................... 1,049,969 ---------- NET ASSETS............................ $1,314,505 ========== PRIMARY A SHARES: Net asset value, offering and redemption price per share ($1,290,918,980 / 80,439,550 shares outstanding)........................ $16.05 ====== INVESTOR A SHARES: Net asset value and redemption price per share ($13,376,558 / 834,488 shares outstanding)................. $16.03 ====== Maximum sales charge.................. 5.75% Maximum offering price per share...... $17.01 INVESTOR B SHARES: Net asset value and offering price per share(+) ($7,891,907 / 496,501 shares outstanding)........................ $15.89 ====== INVESTOR C SHARES: Net asset value and offering price per share(+) ($2,317,682 / 145,695 shares outstanding)........................ $15.91 ======
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $290,655 on investment securities was comprised of gross appreciation of $335,047 and gross depreciation of $44,392 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $1,044,552. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. A portion of this amount represents cash collateral received from securities lending activity (Note 8). The portion that represents cash collateral is $19,484. ABBREVIATIONS: ADR -- American Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 28 33 NATIONS FUNDS Nations Capital Growth Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ COMMON STOCKS -- 99.8% BEVERAGES -- 2.2% 260,000 Anheuser-Busch Companies, Inc. ......... $ 11,002 67,000 Coca-Cola Company....................... 3,693 105,000 PepsiCo, Inc. .......................... 4,830 -------- 19,525 -------- BROADCASTING AND CABLE -- 4.6% 160,000 Clear Channel Communications, Inc.(!)... 9,040 250,000 Comcast Corporation, Class A(!)......... 10,234 135,445 Time Warner Inc. ....................... 10,599 180,625 Viacom Inc., Class B(!)................. 10,567 -------- 40,440 -------- COMMERCIAL BANKING -- 4.4% 230,000 Bank of New York Inc. .................. 12,894 470,933 Citigroup Inc. ......................... 25,460 -------- 38,354 -------- COMMERCIAL SERVICES -- 0.6% 76,100 Omnicom Group Inc. ..................... 5,551 -------- COMPUTER SERVICES -- 2.9% 274,160 America Online Inc. .................... 14,736 164,000 Automatic Data Processing Inc. ......... 10,968 -------- 25,704 -------- COMPUTERS AND OFFICE EQUIPMENT -- 11.3% 368,780 EMC Corporation......................... 36,554 166,470 International Business Machines Corporation........................... 18,728 200,000 Palm, Inc.(!)........................... 10,588 280,525 Sun Microsystems, Inc. ................. 32,751 -------- 98,621 -------- CONGLOMERATES -- 4.5% 392,160 Tyco International Ltd. ................ 20,343 273,615 United Technologies Corporation......... 18,948 -------- 39,291 -------- CONSUMER CREDIT AND MORTGAGES -- 5.0% 184,315 Fannie Mae.............................. 13,179 528,590 MBNA Corporation........................ 20,350 77,500 Providian Financial Corporation......... 9,843 -------- 43,372 -------- CONSUMER SERVICES -- 1.4% 125,000 Costco Wholesale Corporation............ 4,367 212,800 Estee Lauder Companies Inc. ............ 7,794 -------- 12,161 -------- DEPARTMENT AND DISCOUNT STORES -- 2.8% 288,810 Target Corporation...................... 7,401 355,175 Wal-Mart Stores, Inc. .................. 17,093 -------- 24,494 -------- DIVERSIFIED MANUFACTURING -- 4.9% 741,270 General Electric Company................ 42,762 -------- ELECTRIC POWER -- NON NUCLEAR -- 1.3% 161,000 AES Corporation......................... 11,029 -------- ELECTRICAL EQUIPMENT -- 1.1% 144,000 Emerson Electric Company................ 9,648 --------
VALUE SHARES (000) - ------------------------------------------------------------ FINANCE -- MISCELLANEOUS -- 2.3% 226,170 Capital One Financial Corporation....... $ 15,846 120,700 Concord EFS, Inc.(!).................... 4,287 -------- 20,133 -------- INSURANCE -- 2.0% 187,143 American International Group, Inc. ..... 17,907 -------- INTEGRATED OIL -- 2.0% 193,900 Exxon Mobil Corporation................. 17,281 -------- INVESTMENT SERVICES -- 3.2% 131,000 Charles Schwab Corporation.............. 4,651 209,200 Merrill Lynch & Company Inc. ........... 13,806 106,800 Morgan Stanley Dean Witter & Company.... 9,766 -------- 28,223 -------- MEDICAL DEVICES AND SUPPLIES -- 4.9% 140,250 Baxter International Inc. .............. 11,194 182,205 Guidant Corporation(!).................. 12,880 367,825 Medtronic, Inc. ........................ 19,057 -------- 43,131 -------- NATURAL GAS DISTRIBUTION -- 0.5% 65,000.. Coastal Corporation..................... 4,818 -------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT --6.9% 554,870 Cisco Systems, Inc. .................... 30,656 343,300 Nokia Corporation, Class A, ADR......... 13,668 264,110 Nortel Networks Corporation............. 15,731 -------- 60,055 -------- OILFIELD SERVICES -- 2.1% 246,955 Halliburton Company..................... 12,086 77,185 Schlumberger Ltd. ...................... 6,353 -------- 18,439 -------- PHARMACEUTICALS -- 8.6% 135,000 Amgen Inc. ............................. 9,427 111,575 Bristol-Myers Squibb Company............ 6,374 113,000 Eli Lilly and Company................... 9,167 162,665 Merck & Company, Inc. .................. 12,108 756,691 Pfizer Inc. ............................ 34,003 94,840 Schering-Plough Corporation............. 4,410 -------- 75,489 -------- PUBLISHING AND ADVERTISING -- 1.1% 155,925 McGraw-Hill Companies, Inc. ............ 9,911 -------- SEMICONDUCTORS -- 4.4% 506,420 Intel Corporation....................... 21,049 267,654 Motorola, Inc. ......................... 7,561 111,700 Xilinx, Inc. ........................... 9,564 -------- 38,174 -------- SOFTWARE -- 6.7% 487,730 Microsoft Corporation(!)................ 29,416 217,560 Oracle Corporation...................... 17,133 85,000 VERITAS Software Corporation............ 12,070 -------- 58,619 --------
SEE NOTES TO FINANCIAL STATEMENTS. 29 34 NATIONS FUNDS Nations Capital Growth Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ SPECIALTY STORES -- 2.1% 71,010 Best Buy Company, Inc.(!)............... $ 4,518 188,065 Circuit City Stores - Circuit City Group................................. 4,325 118,035 Home Depot Inc. ........................ 6,263 80,840 Lowe's Companies Inc. .................. 3,628 -------- 18,734 -------- TELECOMMUNICATIONS SERVICES -- 6.0% 377,200 Nextel Communications, Inc. ............ 17,634 352,000 Qwest Communications International, Inc.(!)............................... 16,918 104,000 Sprint Corporation (PCS Group).......... 3,647 207,500 Western Wireless Corporation(!)......... 7,392 227,555 WorldCom, Inc.(!)....................... 6,912 -------- 52,503 -------- TOTAL COMMON STOCKS (Cost $526,218)....................... 874,369 --------
SHARES (000) - ------- INVESTMENT COMPANIES -- 4.2% (Cost $37,024) 37,024 Nations Cash Reserves#................... 37,024 -------- TOTAL INVESTMENTS (Cost $563,242*).............. 104.0% 911,393 -------- OTHER ASSETS AND LIABILITIES (NET)............. (4.0)% Cash..................................... $ 24 Receivable for investment securities sold................................... 32,743 Receivable for Fund shares sold.......... 818 Dividends receivable..................... 310 Interest receivable...................... 33 Collateral on securities loaned.......... (34,209) Payable for Fund shares redeemed......... (341) Investment advisory fee payable.......... (482) Administration fee payable............... (171) Shareholder servicing and distribution fees payable........................... (75) Payable for investment securities purchased.............................. (33,749) Accrued Trustees' fees and expenses...... (57) Accrued expenses and other liabilities... (126) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET).................................. (35,282) -------- NET ASSETS...................... 100.0% $876,111 ========
VALUE (000) - ------------------------------------------------------------- NET ASSETS CONSIST OF: Distributions in excess of net investment income................................. $ (2,235) Accumulated net realized gain on investments sold....................... 118,110 Net unrealized appreciation of investments............................ 348,151 Paid-in capital.......................... 412,085 -------- NET ASSETS............................... $876,111 ======== PRIMARY A SHARES: Net asset value, offering and redemption price per share ($746,098,335 / 55,516,461 shares outstanding)........................... $13.44 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($55,498,826 / 4,184,342 shares outstanding)........................... $13.26 ======== Maximum sales charge..................... 5.75% Maximum offering price per share......... $14.07 INVESTOR B SHARES: Net asset value and offering price per share(+) ($69,608,677 / 5,611,667 shares outstanding)........................... $12.40 ======== INVESTOR C SHARES: Net asset value and offering price per share(+) ($4,905,425 / 391,872 shares outstanding)........................... $12.52 ========
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $348,151 on investment securities was comprised of gross appreciation of $365,157 and gross depreciation of $17,006 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $563,242. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. A portion of this amount represents cash collateral received from securities lending activity (Note 8). The portion that represents cash collateral is $34,209. ABBREVIATIONS: ADR -- American Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 30 35 NATIONS FUNDS Nations Aggressive Growth Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ COMMON STOCKS -- 99.1% BEVERAGES -- 1.2% 44,700 Coca-Cola Company ...................... $ 2,464 31,975 PepsiCo, Inc. .......................... 1,471 -------- 3,935 -------- BROADCASTING AND CABLE -- 0.9% 52,050 Viacom Inc., Class B(!)................. 3,045 -------- COMMERCIAL BANKING -- 0.3% 16,933 Citigroup Inc. ......................... 915 -------- COMPUTER SERVICES -- 6.3% 127,125 America Online Inc. .................... 6,833 37,475 I2 Technologies Inc.(!)................. 7,010 32,675 VeriSign, Inc. ......................... 6,619 -------- 20,462 -------- COMPUTERS AND OFFICE EQUIPMENT -- 8.2% 99,750 EMC Corporation......................... 9,887 56,250 International Business Machines Corporation............................. 6,328 35,625 Palm, Inc.(!)........................... 1,886 70,550 Sun Microsystems, Inc. ................. 8,237 -------- 26,338 -------- CONGLOMERATES -- 1.6% 43,075 Tyco International Ltd. ................ 2,235 42,175 United Technologies Corporation......... 2,920 -------- 5,155 -------- CONSUMER CREDIT AND MORTGAGES -- 1.6% 134,600 MBNA Corporation........................ 5,182 -------- CONSUMER SERVICES -- 0.6% 54,575 Estee Lauder Companies Inc. ............ 1,999 -------- DEPARTMENT AND DISCOUNT STORES -- 2.3% 65,400 Target Corporation...................... 1,676 118,600 Wal-Mart Stores, Inc. .................. 5,708 -------- 7,384 -------- DIVERSIFIED MANUFACTURING -- 4.8% 266,725 General Electric Company................ 15,387 -------- ELECTRIC POWER -- NON NUCLEAR -- 0.5% 14,700 AES Corporation......................... 1,007 6,850 Calpine Corporation..................... 715 -------- 1,722 -------- FINANCE -- MISCELLANEOUS -- 0.5% 47,600 Concord EFS, Inc.(!).................... 1,691 -------- FOOD PRODUCTS -- 0.8% 32,325 Quaker Oats Company..................... 2,558 -------- HEAVY MACHINERY -- 0.6% 35,325 Illinois Tool Works, Inc. .............. 1,974 -------- INSURANCE -- 1.1% 37,762 American International Group, Inc. ..... 3,613 -------- INVESTMENT SERVICES -- 2.2% 58,575 Charles Schwab Corporation.............. 2,079 56,475 Morgan Stanley Dean Witter & Company.... 5,164 -------- 7,243 --------
VALUE SHARES (000) - ------------------------------------------------------------ MEDICAL DEVICES AND SUPPLIES -- 6.3% 35,175 Cardinal Health, Inc. .................. $ 3,102 88,700 Guidant Corporation(!).................. 6,270 94,425 Medtronic, Inc. ........................ 4,892 51,750 PE Corp-PE Biosystems Group............. 6,029 -------- 20,293 -------- NATURAL GAS DISTRIBUTION -- 2.8% 82,425 Coastal Corporation..................... 6,110 32,300 Enron Corporation....................... 2,830 -------- 8,940 -------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT -- 14.2% 116,050 3Com Corporation(!)..................... 2,227 42,275 Ariba, Inc. ............................ 6,057 30,300 CIENA Corporation....................... 3,721 220,800 Cisco Systems, Inc. .................... 12,200 47,275 Commerce One, Inc. ..................... 3,711 39,650 Comverse Technology, Inc. .............. 4,282 97,125 Lucent Technologies, Inc. .............. 2,968 84,400 Nokia Corporation, Class A, ADR......... 3,360 85,900 Nortel Networks Corporation............. 5,116 17,500 Sycamore Networks, Inc. ................ 1,890 -------- 45,532 -------- PHARMACEUTICALS -- 10.3% 91,325 Allergan, Inc. ......................... 7,711 50,025 Eli Lilly and Company................... 4,058 37,375 Genentech, Inc. ........................ 6,940 45,550 Millennium Pharmaceuticals, Inc. ....... 6,653 177,250 Pfizer Inc. ............................ 7,966 -------- 33,328 -------- SEMICONDUCTORS -- 9.0% 134,350 Altera Corporation...................... 6,415 75,425 Analog Devices, Inc. ................... 6,227 200,175 Intel Corporation....................... 8,320 152,875 Motorola, Inc. ......................... 4,319 77,875 Texas Instruments Inc. ................. 3,675 -------- 28,956 -------- SOFTWARE -- 15.9% 30,750 BEA Systems, Inc.(!).................... 2,395 10,850 Check Point Software Technologies....... 1,709 60,600 E. Piphany, Inc.(!)..................... 4,670 72,600 Electronic Arts Inc. ................... 3,585 108,800 First Data Corporation.................. 4,250 45,800 Mercury Interactive Corporation......... 7,179 189,625 Microsoft Corporation(!)................ 11,436 100,100 Oracle Corporation...................... 7,883 34,600 Phone.com, Inc. ........................ 3,931 28,225 VERITAS Software Corporation............ 4,008 -------- 51,046 -------- SPECIALTY STORES -- 3.6% 81,875 Best Buy Company, Inc.(!)............... 5,209 105,450 Home Depot Inc. ........................ 5,596 15,250 Lowe's Companies Inc. .................. 684 -------- 11,489 --------
SEE NOTES TO FINANCIAL STATEMENTS. 31 36 NATIONS FUNDS Nations Aggressive Growth Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ TELECOMMUNICATIONS SERVICES -- 3.5% 102,725 Global Crossing, Ltd.(!)................ $ 3,185 59,783 Qwest Communications International, Inc.(!)................................. 2,873 26,275 Voicestream Wireless Corporation(!)..... 3,050 62,525 Western Wireless Corporation(!)......... 2,227 -------- 11,335 -------- TOTAL COMMON STOCKS (Cost $251,406)....................... 319,522 --------
SHARES (000) - ------- INVESTMENT COMPANIES -- 8.3% (Cost $26,928) 26,928 Nations Cash Reserves#.................. 26,928 -------- TOTAL INVESTMENTS (Cost $278,334*)............. 107.4% 346,450 -------- OTHER ASSETS AND LIABILITIES (NET)........................ (7.4)% Cash.................................... $ 3 Receivable for investment securities sold.................................. 12,140 Receivable for Fund shares sold......... 3 Dividends receivable.................... 111 Interest receivable..................... 20 Collateral on securities loaned......... (22,949) Payable for Fund shares redeemed........ (547) Investment advisory fee payable......... (180) Administration fee payable.............. (64) Shareholder servicing and distribution fees payable.......................... (39) Payable for investment securities purchased............................. (12,207) Accrued Trustees' fees and expenses..... (28) Accrued expenses and other liabilities........................... (43) TOTAL OTHER ASSETS AND LIABILITIES (NET)................................. (23,780) -------- NET ASSETS..................... 100.0% $322,670 ========
VALUE (000) - ------------------------------------------------------------- NET ASSETS CONSIST OF: Distributions in excess of net investment income..................... $ (1,081) Accumulated net realized gain on investments sold...................... 56,794 Net unrealized appreciation of investments........................... 68,116 Paid-in capital......................... 198,841 -------- NET ASSETS.............................. $322,670 ======== PRIMARY A SHARES: Net asset value, offering and redemption price per share ($245,349,465 / 11,811,044 shares outstanding).......................... $20.77 ======== INVESTOR A SHARES: Net asset value and redemption price per share ($42,657,858 / 2,072,849 shares outstanding).......................... $20.58 ======== Maximum sales charge.................... 5.75% Maximum offering price per share........ $21.83 INVESTOR B SHARES: Net asset value and offering price per share(+) ($33,529,569 / 1,712,318 shares outstanding).......................... $19.58 ======== INVESTOR C SHARES: Net asset value and offering price per share(+) ($1,133,093 / 56,748 shares outstanding).......................... $19.97 ========
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $68,116 on investment securities was comprised of gross appreciation of $83,221 and gross depreciation of $15,105 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $278,334. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. A portion of this amount represents cash collateral received from securities lending activity (Note 8). The portion that represents cash collateral is $22,949. ABBREVIATIONS: ADR -- American Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 32 37 NATIONS FUNDS Nations Marsico Focused Equities Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE (000) - ------------------------------------------------------------ INVESTMENT COMPANIES -- 100.1% Investment in Nations Master Investment Trust, Marsico Focused Equities Master Portfolio*......... $2,591,431 ---------- TOTAL INVESTMENTS........... 100.1% 2,591,431 ---------- OTHER ASSETS AND LIABILITIES (NET)......... (0.1)% Administration fee payable........... $ (279) Shareholder servicing and distribution fees payable.......... (1,275) Accrued Trustees' fees and expenses........................... (23) Accrued expenses and other liabilities........................ (344) ---------- TOTAL OTHER ASSETS AND LIABILITIES (NET).............................. (1,921) ---------- NET ASSETS.................. 100.0% $2,589,510 ========== NET ASSETS CONSIST OF: Distributions in excess of net investment income.................. $ (9,256) Accumulated net realized loss on investments sold and foreign currencies and net other assets.... (121,636) Net unrealized appreciation of investments........................ 534,994 Paid-in capital...................... 2,185,408 ---------- NET ASSETS........................... $2,589,510 ========== PRIMARY A SHARES: Net asset value, offering and redemption price per share ($481,999,761 / 22,487,271 shares outstanding)....................... $21.43 ------ ------ INVESTOR A SHARES: Net asset value and redemption price per share ($766,609,804 / 35,860,946 shares outstanding)....................... $21.38 ------ ------ Maximum sales charge................. 5.75% Maximum offering price per share..... $22.68 INVESTOR B SHARES: Net asset value and offering price per share(+) ($1,056,425,834 / 50,257,058 shares outstanding)....................... $21.02 ------ ------ INVESTOR C SHARES: Net asset value and offering price per share(+) ($284,474,295 / 13,491,886 shares outstanding)....................... $21.08 ------ ------
- --------------- * The financial statements of the Nations Marsico Focused Equities Master Portfolio, including its portfolio of investments, are included elsewhere within this report and should be read in conjunction with the Nations Marsico Focused Equities Fund's financial statements. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. SEE NOTES TO FINANCIAL STATEMENTS. 33 38 NATIONS FUNDS Nations MidCap Growth Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ COMMON STOCKS -- 94.7% BROADCASTING AND CABLE -- 6.3% 78,000 Clear Channel Communications, Inc.(!)... $ 4,407 55,000 Entravision Communications Corporation(!).......................... 956 136,700 Hispanic Broadcasting Corporation....... 3,811 299,146 Metro-Goldwyn-Mayer, Inc.(!)............ 7,179 28,740 Radio One, Inc., Class A(!)............. 239 112,500 Radio One, Inc., Class D(!)............. 795 160,000 Univision Communications, Inc. ......... 5,979 -------- 23,366 -------- BUILDING MATERIALS -- 0.4% 40,000 Lamar Advertising Company(!)............ 1,515 -------- COMMERCIAL BANKING -- 3.7% 241,500 Charter One Financial, Inc. ............ 5,886 110,000 City National Corporation............... 4,249 114,000 SouthTrust Corporation.................. 3,584 -------- 13,719 -------- COMPUTER SERVICES -- 4.7% 173,500 CSG Systems International, Inc.(!)...... 5,032 41,250 McData Corporation(!)................... 5,069 175,000 Sungard Data Systems, Inc.(!)........... 7,492 -------- 17,593 -------- COMPUTERS AND OFFICE EQUIPMENT -- 2.3% 100,000 Solectron Corporation................... 4,613 105,000 Symbol Technologies, Inc. .............. 3,773 -------- 8,386 -------- CONGLOMERATES -- 0.7% 100,000 Pentair, Inc. .......................... 2,675 -------- CONSUMER CREDIT AND MORTGAGES -- 2.0% 58,000 Providian Financial Corporation......... 7,366 -------- DIVERSIFIED ELECTRONICS -- 0.8% 100,000 ECI Telecom Ltd. ....................... 3,063 -------- DIVERSIFIED MANUFACTURING -- 0.7% 69,000 Martin Marietta Materials, Inc. ........ 2,641 -------- ELECTRIC POWER -- NON NUCLEAR -- 6.8% 180,000 AES Corporation......................... 12,330 124,600 Calpine Corporation..................... 13,005 -------- 25,335 -------- ENERGY -- MISCELLANEOUS -- 0.2% 27,300 Southern Energy, Inc.(!)................ 857 -------- FINANCE -- MISCELLANEOUS -- 2.4% 253,000 Concord EFS, Inc.(!).................... 8,985 -------- HEALTH SERVICES -- 2.2% 397,500 Health Management Associates, Inc., Class A(!)............................ 8,273 -------- INVESTMENT SERVICES -- 5.9% 150,998 Legg Mason Inc. ........................ 8,777 80,000 Northern Trust Corporation.............. 7,110 189,750 Waddell & Reed Financial, Inc. ......... 5,882 -------- 21,769 -------- LODGING AND RECREATION -- 0.6% 60,000 International Speedway Corporation...... 2,340 --------
VALUE SHARES (000) - ------------------------------------------------------------ MEDICAL DEVICES AND SUPPLIES -- 1.3% 111,200 Stryker Corporation..................... $ 4,775 -------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT -- 6.7% 170,000 ADC Telecommunications, Inc. ........... 4,571 117,500 Comverse Technology, Inc. .............. 12,691 16,500 Corvis Corporation(!)................... 1,007 16,500 Cosine Communications, Inc.(!).......... 917 11,000 Exfo Electro-Optical Engineering Inc.(!)................................. 479 4,100 Inrange Technologies Corporation(!)..... 217 45,000 Sycamore Networks, Inc. ................ 4,860 -------- 24,742 -------- OILFIELD SERVICES -- 6.9% 115,000 BJ Services Company(!).................. 7,028 74,000 ENSCO International Inc. ............... 2,831 141,500 Global Marine Inc.(!)................... 4,369 55,000 Grant Prideco Inc.(!)................... 1,207 65,000 Smith International, Inc.(!)............ 5,302 112,000 Weatherford International, Inc.(!)...... 4,816 -------- 25,553 -------- PHARMACEUTICALS -- 7.2% 37,000 Affymetrix, Inc. ....................... 1,845 46,000 Alkermes, Inc.(!)....................... 1,777 60,000 Biogen, Inc.(!)......................... 3,660 35,000 Caliper Technologies Corporation(!)..... 2,028 60,000 MedImmune Inc. ......................... 4,635 50,800 Millennium Pharmaceuticals, Inc. ....... 7,420 82,600 Watson Pharmaceutical, Inc.(!).......... 5,359 -------- 26,724 -------- SEMICONDUCTORS -- 8.3% 61,000 Altera Corporation...................... 2,913 102,000 Linear Technology Corporation........... 6,605 95,000 Maxim Integrated Products............... 7,641 83,000 Vitesse Semiconductor Corporation....... 7,381 70,500 Xilinx, Inc. ........................... 6,037 -------- 30,577 -------- SOFTWARE -- 11.3% 13,700 AvantGo, Inc.(!)........................ 274 116,500 BMC Software, Inc.(!)................... 2,228 83,000 Check Point Software Technologies....... 13,072 175,000 Citrix Systems, Inc. ................... 3,511 156,700 Convergys Corporation(!)................ 6,091 44,500 E. Piphany, Inc.(!)..................... 3,429 73,000 Intuit Inc. ............................ 4,161 62,500 Jack Henry & Associates................. 2,711 31,000 Phone.com, Inc. ........................ 3,522 42,000 Quest Software, Inc. ................... 2,609 -------- 41,608 -------- SPECIALTY STORES -- 4.5% 296,000 Bed Bath & Beyond, Inc. ................ 7,220 65,500 Best Buy Company, Inc.(!)............... 4,167 86,500 Staples Inc.(!)......................... 1,227 140,000 The Men's Wearhouse Inc.(!)............. 3,964 -------- 16,578 --------
SEE NOTES TO FINANCIAL STATEMENTS. 34 39 NATIONS FUNDS Nations MidCap Growth Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ TELECOMMUNICATIONS SERVICES -- 7.3% 106,925 Allegiance Telecom, Inc.(!)............. $ 3,983 96,000 American Power Conversion Corporation(!).......................... 1,842 146,200 Broadwing Inc.(!)....................... 3,737 30,000 Next Level Communication, Inc.(!)....... 1,984 165,000 Nextlink Communications, Inc.(!)........ 5,806 70,000 Research In Motion Ltd.(!).............. 6,900 62,000 Time Warner Telecom, Inc.(!)............ 2,995 -------- 27,247 -------- UNIT INVESTMENT TRUST -- 1.5% 57,000 S&P Mid-Cap 400 Depositary Receipts..... 5,600 -------- TOTAL COMMON STOCKS (Cost $192,218)....................... 351,287 --------
SHARES (000) - ------- INVESTMENT COMPANIES -- 22.9% (Cost $84,750) 84,750 Nations Cash Reserves#.................. 84,750 -------- TOTAL INVESTMENTS (Cost $276,968*)............. 117.6% 436,037 -------- OTHER ASSETS AND LIABILITIES (NET)............ (17.6)% Cash.................................... $ 4 Receivable for Fund shares sold......... 2,290 Dividends receivable.................... 44 Interest receivable..................... 131 Collateral on securities loaned......... (62,963) Investment advisory fee payable......... (195) Administration fee payable.............. (69) Shareholder servicing and distribution fees payable.......................... (53) Payable for investment securities purchased............................. (4,356) Accrued Trustees' fees and expenses..... (37) Accrued expenses and other liabilities........................... (50) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................................. (65,254) -------- NET ASSETS..................... 100.0% $370,783 ========
VALUE (000) - ------------------------------------------------------------- NET ASSETS CONSIST OF: Distributions in excess of net investment income..................... $ (929) Accumulated net realized gain on investments sold...................... 40,387 Net unrealized appreciation of investments........................... 159,069 Paid-in capital......................... 172,256 -------- NET ASSETS.............................. $370,783 ======== PRIMARY A SHARES: Net asset value, offering and redemption price per share ($288,307,149 / 13,150,488 shares outstanding).......................... $21.92 ====== INVESTOR A SHARES: Net asset value and redemption price per share ($22,515,225 / 1,057,078 shares outstanding).......................... $21.30 ====== Maximum sales charge.................... 5.75% Maximum offering price per share........ $22.60 INVESTOR B SHARES: Net asset value and offering price per share(+) ($56,336,159 / 2,865,241 shares outstanding).......................... $19.66 ====== INVESTOR C SHARES: Net asset value and offering price per share(+) ($3,624,126 / 183,369 shares outstanding).......................... $19.76 ======
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $159,069 on investment securities was comprised of gross appreciation of $170,059 and gross depreciation of $10,990 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $276,968. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. A portion of this amount represents cash collateral received from securities lending activity (Note 8). The portion that represents cash collateral is $62,963. SEE NOTES TO FINANCIAL STATEMENTS. 35 40 NATIONS FUNDS Nations Marsico 21st Century Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ COMMON STOCKS -- 94.0% BROADCASTING AND CABLE -- 2.6% 55,006 Clear Channel Communications, Inc.(!)... $ 3,108 -------- COMMERCIAL BANKING -- 3.5% 76,312 Citigroup Inc. ......................... 4,126 -------- COMPUTER SERVICES -- 4.3% 50,885 America Online Inc. .................... 2,735 36,588 Automatic Data Processing Inc. ......... 2,447 -------- 5,182 -------- COMPUTERS AND OFFICE EQUIPMENT -- 7.4% 64,476 EMC Corporation......................... 6,391 20,476 Sun Microsystems, Inc. ................. 2,391 -------- 8,782 -------- ELECTRIC POWER -- NON NUCLEAR -- 2.5% 28,589 Calpine Corporation..................... 2,984 -------- ELECTRICAL EQUIPMENT -- 3.1% 10,000 Cabot Microelectronics Corporation(!)... 480 43,925 Celestica Inc.(!)....................... 3,042 6,000 TTM Technologies, Inc.(!)............... 141 -------- 3,663 -------- ENERGY -- MISCELLANEOUS -- 2.0% 5,000 Proton Energy Systems, Inc.(!).......... 143 70,000 Southern Energy, Inc.(!)................ 2,196 -------- 2,339 -------- HEALTH SERVICES -- 0.9% 33,171 Large Scale Biology Corporation(!)...... 1,086 -------- INVESTMENT SERVICES -- 2.2% 40,614 Merrill Lynch & Company Inc. ........... 2,681 -------- MEDICAL DEVICES AND SUPPLIES -- 8.5% 50,000 Cytyc Corporation(!).................... 2,156 58,861 Guidant Corporation(!).................. 4,161 70,423 Intermune Pharmaceuticals, Inc.(!)...... 3,820 -------- 10,137 -------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT -- 13.5% 13,357 Avici Systems Inc.(!)................... 1,271 18,002 Corning Inc. ........................... 5,346 43,271 Floware Wireless Systems Ltd.(!)........ 1,078 55,000 Liberate Technologies, Inc.(!).......... 1,592 68,171 Nortel Networks Corporation............. 4,060 15,000 Vitria Technology, Inc.(!).............. 699 34,598 Wireless Facilities Inc.(!)............. 1,996 -------- 16,042 --------
VALUE SHARES (000) - ------------------------------------------------------------ OILFIELD SERVICES -- 4.7% 50,093 Cooper Cameron Corporation(!)........... 3,692 35,266 Halliburton Company..................... 1,726 3,227 Teekay Shipping Corporation(!).......... 151 -------- 5,569 -------- PHARMACEUTICALS -- 5.1% 15,000 Genentech, Inc. ........................ 2,784 22,309 Merck & Company, Inc. .................. 1,661 35,505 Pfizer Inc. ............................ 1,596 -------- 6,041 -------- SEMICONDUCTORS -- 18.8% 65,000 Advanced Micro Devices.................. $ 1,536 56,161 Agilent Technologies Inc.(!)............ 2,748 56,000 Analog Devices, Inc. ................... 4,624 25,152 Applied Micro Circuits Corporation(!)... 5,209 86,300 Parthus Technologies plc(!)............. 344 13,089 PMC - Sierra, Inc. ..................... 2,817 35,000 QLogic Corporation...................... 3,080 25,000 Xilinx, Inc. ........................... 2,141 -------- 22,499 -------- SOFTWARE -- 8.0% 12,698 Adobe Systems Inc. ..................... 1,971 41,896 Exodus Communications, Inc.(!).......... 2,069 17,237 Interwoven, Inc. ....................... 1,949 27,363 Oracle Corporation...................... 2,154 7,908 Software.Com, Inc.(!)................... 1,435 -------- 9,578 -------- SPECIALTY STORES -- 2.1% 46,444 Home Depot Inc. ........................ 2,464 -------- TELECOMMUNICATIONS SERVICES -- 4.8% 13,910 Level 3 Communications, Inc.(!)......... 1,073 43,613 QUALCOMM Inc. .......................... 3,108 44,761 Sprint Corporation (PCS Group).......... 1,569 -------- 5,750 -------- TOTAL COMMON STOCKS (Cost $103,874)....................... 112,031 -------- PRINCIPAL AMOUNT (000) - --------- U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 11.1% (Cost $13,298) FEDERAL HOME LOAN BANK (FHLB) -- 11.1% $13,300 Discount note 10/02/00.................. 13,295 --------
SEE NOTES TO FINANCIAL STATEMENTS. 36 41 NATIONS FUNDS Nations Marsico 21st Century Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
SHARES VALUE (000) (000) - ----------------------------------------------------------- INVESTMENT COMPANIES -- 0.0%+ (Cost $42) 42 Nations Cash Reserves#................ $ 42 -------- TOTAL INVESTMENTS 105.1% 125,368 (Cost $117,214*)........... -------- OTHER ASSETS AND (5.1)% LIABILITIES (NET).......... Cash.................................. $ 636 Receivable for investment securities 13,568 sold................................ Dividends receivable.................. 14 Prepaid expenses...................... 13 Investment advisory fee payable....... (73) Administration fee payable............ (22) Shareholder servicing and distribution (75) fees payable........................ Payable for investment securities (20,172) purchased........................... Accrued Trustees' fees and expenses... (4) -------- TOTAL OTHER ASSETS AND LIABILITIES (6,115) (NET)............................... -------- NET ASSETS................... 100.0% $119,253 ======== NET ASSETS CONSIST OF: Distributions in excess of net $ (535) investment income................... Accumulated net realized loss on (2,192) investments sold.................... Net unrealized appreciation of 8,153 investments......................... Paid-in capital....................... 113,827 -------- NET ASSETS............................ $119,253 ========
VALUE - ----------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($6,939,429 / 687,485 shares outstanding)................. $10.09 ====== INVESTOR A SHARES: Net asset value and redemption price per share ($30,346,981 / 3,010,242 shares outstanding)................. $10.08 ====== Maximum sales charge.................. 5.75% Maximum offering price per share...... $10.70 INVESTOR B SHARES: Net asset value and offering price per share(+) ($72,720,646 / 7,239,594 shares outstanding)................. $10.04 ====== INVESTOR C SHARES: Net asset value and offering price per share(+) ($9,245,940 / 920,463 shares outstanding)........................ $10.04 ======
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $8,154 on investment securities was comprised of gross appreciation of $13,590 and gross depreciation of $5,436 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $117,214. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. + Amount represents less than 0.1%. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. SEE NOTES TO FINANCIAL STATEMENTS. 37 42 NATIONS FUNDS Nations Small Company Fund STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------- COMMON STOCKS -- 94.3% AIRLINES -- 1.2% 232,600 SkyWest, Inc. ....................... $ 11,921 ---------- APPAREL AND TEXTILES -- 4.9% 214,900 Columbia Sportswear Company(!)....... 9,859 381,300 Kenneth Cole Productions, Inc. ...... 13,465 748,050 Quiksilver, Inc.(!).................. 14,399 629,800 Tefron Ltd.(!)....................... 7,400 98,800 Timberland Company, Class A.......... 4,051 ---------- 49,174 ---------- BROADCASTING AND CABLE -- 1.0% 210,000 Entercom Communications Corporation(!)....................... 6,287 310,650 Salem Communications Corporation(!).. 3,941 ---------- 10,228 ---------- COMMERCIAL BANKING -- 3.1% 203,100 Boston Private Financial Holdings, Inc.(!).............................. 3,351 441,000 City National Corporation............ 17,034 539,000 National Commerce Bancorp............ 10,746 ---------- 31,131 ---------- COMMERCIAL SERVICES -- 4.2% 726,200 AHL Services, Inc.(!)................ 6,263 659,398 Encompass Services Corporation(!).... 5,358 322,000 Iron Mountain Incorporated(!)........ 11,915 850 Lante Corporation(!)................. 4 363,500 Luminant Worldwide Corporation(!).... 1,079 206,400 MedQuist Inc.(!)..................... 4,167 324,695 Nova Corporation(!).................. 5,560 772,400 SCB Computer Technology, Inc.(!)..... 502 144,600 The Profit Recovery Group International, Inc.(!)............... 1,428 412,800 Trammell Crow Company(!)............. 6,192 ---------- 42,468 ---------- COMPUTERS AND OFFICE EQUIPMENT -- 3.0% 481,912 Avocent Corporation(!)............... 26,566 65,900 Zebra Technologies Corporation(!).... 3,167 ---------- 29,733 ---------- CONSUMER SERVICES -- 4.6% 372,200 Blue Rhino Corporation(!)............ 1,442 612,400 Career Education Corporation......... 27,252 422,000 ITT Educational Services, Inc.(!).... 11,447 76,200 Macrovision Corporation.............. 6,172 ---------- 46,313 ---------- DEPARTMENT AND DISCOUNT STORES -- 0.3% 262,800 ShopKo Stores, Inc.(!)............... 2,727 ---------- DIVERSIFIED ELECTRONICS -- 9.1% 653,000 Aeroflex, Inc. ...................... 31,752 288,850 Anaren Microwave, Inc. .............. 39,175 253,100 AstroPower, Inc.(!).................. 10,029 262,000 Camtek Ltd.(!)....................... 2,211 156,200 Dionex Corporation(!)................ 4,315 100,000 Sipex Corporation(!)................. 4,206 ---------- 91,688 ----------
VALUE SHARES (000) - ------------------------------------------------------------- DIVERSIFIED MANUFACTURING -- 3.7% 642,000 Actuant Corporation, Class A(!)...... $ 2,528 209,911 Lennox International Inc. ........... 1,968 398,500 Plexus Corporation................... 28,094 603,300 Polymer Group, Inc. ................. 4,449 ---------- 37,039 ---------- ELECTRICAL EQUIPMENT -- 1.4% 283,800 APW Limited(!)....................... 13,835 ---------- ENERGY -- MISCELLANEOUS -- 1.8% 383,000 Kinder Morgan Energy Partners, L.P. ................................ 18,145 8,700 Proton Energy Systems, Inc.(!)....... 249 ---------- 18,394 ---------- FINANCE -- MISCELLANEOUS -- 2.2% 392,900 Affiliated Managers Group, Inc.(!)... 22,371 ---------- HEALTH SERVICES -- 5.7% 153,800 Aspect Medical Systems, Inc.(!)...... 1,903 22,800 Lifepoint Hospitals, Inc.(!)......... 809 501,600 OrthAlliance, Inc.(!)................ 3,072 691,100 Orthodontic Centers of America(!).... 23,022 615,450 Province Healthcare Company.......... 24,581 823,600 US Oncology, Inc.(!)................. 3,732 ---------- 57,119 ---------- HOUSING AND FURNISHING -- 1.4% 301,412 Ethan Allen Interiors, Inc. ......... 8,533 195,100 Kaufman & Broad Home Corporation..... 5,256 ---------- 13,789 ---------- INSURANCE -- 1.7% 276,397 Delphi Financial Group Inc., Class A.................................... 11,194 207,900 Triad Guaranty, Inc.(!).............. 6,185 ---------- 17,379 ---------- LODGING AND RECREATION -- 0.8% 576,150 Station Casinos, Inc. ............... 8,210 ---------- MEDICAL DEVICES AND SUPPLIES -- 1.6% 87,700 Ciphergen Biosystems, Inc.(!)........ 2,806 295,000 Cooper Companies Inc. ............... 10,436 69,200 Datascope Corporation................ 2,318 ---------- 15,560 ---------- METALS AND MINING -- 0.6% 256,700 Mueller Industries Inc.(!)........... 5,760 ---------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT -- 12.2% 229,600 AudioCodes Ltd.(!)................... 19,544 8,500 Avici Systems Inc.(!)................ 809 247,100 Breezecom Ltd.(!).................... 8,139 815,300 C-COR Electronics.................... 12,484 8,400 Finisar Corporation.................. 406 140,700 Harmonic Lightwaves, Inc. ........... 3,377 1,017,100 P-Com, Inc.(!)....................... 6,738 315,000 Plantronics Inc. .................... 11,970 335,000 Proxim, Inc. ........................ 14,908 901,950 REMEC, Inc. ......................... 26,550 379,100 Spectrian Corporation(!)............. 5,876 121,000 Three-Five Systems, Inc. ............ 3,539 46,700 Tollgrade Communications, Inc. ...... 6,483 ---------- 120,823 ----------
SEE NOTES TO FINANCIAL STATEMENTS. 38 43 NATIONS FUNDS Nations Small Company Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------- OILFIELD SERVICES -- 2.8% 600,200 Marine Drilling Companies, Inc.(!)... $ 17,144 244,700 Precision Drilling Corporation(!).... 8,717 60,100 UTI Energy Corporation(!)............ 2,682 ---------- 28,543 ---------- PHARMACEUTICALS -- 7.4% 415,600 Allos Therapeutics Inc.(!)........... 3,766 338,400 Alpharma Inc., Class A............... 20,686 132,800 Gemini Genomics plc(!)............... 1,909 54,800 Human Genome Sciences, Inc. ......... 9,487 491,247 Martek Biosciences Corporation(!).... 9,579 373,100 Shire Pharmaceuticals, ADR(!)........ 19,261 353,579 Vical, Inc.(!)....................... 9,149 ---------- 73,837 ---------- RESTAURANTS -- 0.7% 252,700 Garden Fresh Restaurant Corporation(!)....................... 2,953 195,000 Jack in the Box Inc.(!).............. 4,181 ---------- 7,134 ---------- SEMICONDUCTORS -- 5.0% 278,600 Alpha Industries, Inc. .............. 9,490 72,000 Cymer, Inc.(!)....................... 2,210 153,800 Oak Technology, Inc.(!).............. 4,210 8,700 Omnivision Technologies, Inc.(!)..... 315 296,000 RF Micro Devices, Inc. .............. 9,472 462,800 Sawtek, Inc.(!)...................... 17,825 15,400 SDL, Inc. ........................... 4,763 27,600 Virata Corporation................... 1,825 ---------- 50,110 ---------- SOFTWARE -- 6.0% 524,700 Dendrite International, Inc. ........ 14,068 328,865 Hyperion Solutions Corporation(!).... 8,509 8,600 OTG Software, Inc.(!)................ 352 105,300 Prosoft Private Placement(!)......... 1,501 211,400 ProsoftTraining.Com(!)............... 3,012 474,250 Rogue Wave Software(!)............... 2,549 453,200 Segue Software, Inc.(!).............. 3,739 76,700 Software.Com, Inc.(!)................ 13,916 452,500 TTI Team Telecom International Ltd.(!).............................. 9,220 557,800 USinternetworking, Inc. ............. 3,722 ---------- 60,588 ---------- SPECIALTY STORES -- 0.5% 342,000 Fossil, Inc.(!)...................... 4,553 ---------- TELECOMMUNICATIONS SERVICES -- 5.5% 194,600 AirGate PCS, Inc.(!)................. 8,733 321,700 Gilat Communications Ltd.(!)......... 3,559 323,400 Gilat Satellite Networks Ltd.(!)..... 24,861 304,200 PNV.net, Inc.(!)..................... 304
VALUE SHARES (000) - ------------------------------------------------------------- TELECOMMUNICATIONS -- (CONTINUED) 818,200 Spectrasite Holdings, Inc.(!)........ 15,188 107,900 Triton PCS Holdings, Inc., Class A(!)................................. 2,967 ---------- 55,612 ---------- UNIT INVESTMENT TRUST -- 1.9% 198,100 S&P Mid-Cap 400 Depositary Receipts............................. $ 19,463 ---------- TOTAL COMMON STOCKS (Cost $634,133).................... 945,502 ----------
SHARES (000) - --------- INVESTMENT COMPANIES -- 17.5% (Cost $175,153) 175,153 Nations Cash Reserves#................ 175,153 ---------- TOTAL INVESTMENTS (Cost $809,286*)........... 111.8% 1,120,655 ---------- OTHER ASSETS AND LIABILITIES (NET).......... (11.8)% Cash.................................. $ 29 Receivable for investment securities sold................................ 21,832 Receivable for Fund shares sold....... 13,164 Dividends receivable.................. 192 Interest receivable................... 232 Collateral on securities loaned....... (133,643) Payable for Fund shares redeemed...... (324) Investment advisory fee payable....... (696) Administration fee payable............ (190) Shareholder servicing and distribution fees payable........................ (63) Payable for investment securities purchased........................... (18,874) Accrued Directors' fees and expenses............................ (20) Accrued expenses and other liabilities......................... (71) ---------- TOTAL OTHER ASSETS AND LIABILITIES (NET)............................... (118,432) ---------- NET ASSETS................... 100.0% $1,002,223 ========== NET ASSETS CONSIST OF: Distributions in excess of net investment income................... $ (2,626) Accumulated net realized gain on investments sold.................... 72,836 Net unrealized appreciation of investments......................... 311,369 Paid-in capital....................... 620,644 ---------- NET ASSETS............................ $1,002,223 ==========
SEE NOTES TO FINANCIAL STATEMENTS. 39 44 NATIONS FUNDS Nations Small Company Fund STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE - -------------------------------------------------------------- PRIMARY A SHARES: Net asset value, offering and redemption price per share ($756,236,458 / 35,671,223 shares outstanding)........................ $21.20 ------ ------ INVESTOR A SHARES: Net asset value and redemption price per share ($225,961,800 / 10,776,318 shares outstanding)................. $20.97 ------ ------ Maximum sales charge.................. 5.75% Maximum offering price per share...... $22.25 INVESTOR B SHARES: Net asset value and offering price per share(+) ($16,142,977 / 791,707 shares outstanding)................. $20.39 ------ ------ INVESTOR C SHARES: Net asset value and offering price per share(+) ($3,881,242 / 187,859 shares outstanding)................. $20.66 ------ ------
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $311,369 on investment securities was comprised of gross appreciation of $405,844 and gross depreciation of $94,475 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $809,286. (!) Non-income producing security. (+) The redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. A portion of this amount represents cash collateral received from securities lending activity (Note 8). The portion that represents cash collateral is $133,643. ABBREVIATIONS: ADR -- American Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 40 45 [This page intentionally left blank] 41 46 NATIONS FUNDS STATEMENTS OF OPERATIONS (UNAUDITED) For the six months ended September 30, 2000
CONVERTIBLE BALANCED SECURITIES ASSETS ---------------------------------------- (IN THOUSANDS) INVESTMENT INCOME: Dividends (Net of foreign withholding taxes of $3, $3, $13, $38, $119, $0 and $0, respectively)....................... $ 4,561 $ 615 Dividends allocated from Portfolio (Net of foreign withholding taxes of $0, $0, $0, $0, $0, $11 and $51, respectively)+............................................ -- -- Interest.................................................... 3,678 1,720 Interest allocated from Portfolio+.......................... -- -- Securities lending.......................................... -- 3 Expenses allocated from Portfolio+.......................... -- -- -------------- -------------- Total investment income................................. 8,239 2,338 -------------- -------------- EXPENSES: Investment advisory fee..................................... 1,263 310 Administration fee.......................................... 447 110 Transfer agent fees......................................... 62 18 Custodian fees.............................................. 20 10 Legal and audit fees........................................ 34 32 Registration and filing fees................................ 30 19 Trustees'/Directors' fees and expenses...................... 8 8 Interest expense............................................ -- -- Printing expense............................................ 48 50 Other....................................................... 9 4 -------------- -------------- Subtotal................................................ 1,921 561 Shareholder servicing and distribution fees: Investor A Shares......................................... 438 13 Investor B Shares......................................... 79 243 Investor C Shares......................................... 20 5 Seafirst Shares**......................................... -- -- -------------- -------------- Total expenses.......................................... 2,458 822 Fees waived by investment advisor, administrator and/or distributor............................................... (11) (100) Fees reduced by credits allowed by the custodian............ (7) --* -------------- -------------- Net expenses............................................ 2,440 722 -------------- -------------- NET INVESTMENT INCOME/(LOSS)................................ 5,799 1,616 -------------- -------------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: Net realized gain/(loss) from: Security transactions..................................... 22,723 916 Security transactions allocated from Portfolio+........... -- -- Futures contracts......................................... -- -- Foreign currency and net other assets..................... -- -- Foreign currency and net other assets allocated from Portfolio+.............................................. -- -- -------------- -------------- Net realized gain/(loss) on investments..................... 22,723 916 -------------- -------------- Change in unrealized appreciation/(depreciation) of: Securities (Note 10)...................................... (26,185) (466) Securities allocated from Portfolio (Note 10)+............ -- -- Futures contracts......................................... -- -- -------------- -------------- Net change in unrealized appreciation/(depreciation) of investments............................................... (26,185) (466) -------------- -------------- Net realized and unrealized gain/(loss) on investments...... (3,462) 450 -------------- -------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................................ $ 2,337 $ 2,066 ============== ==============
- --------------- * Amount represents less than $500. ** Seafirst Shares converted into Investor A Shares on June 23, 2000. + Allocated from Growth & Income Master Portfolio and Blue Chip Master Portfolio, respectively. SEE NOTES TO FINANCIAL STATEMENTS. 42 47 NATIONS FUNDS STATEMENTS OF OPERATIONS (CONTINUED) (UNAUDITED)
ASSET EQUITY GROWTH & BLUE ALLOCATION INCOME VALUE INCOME CHIP - -------------------------------------------------------------------------------------- $ 1,235 $ 5,472 $ 16,701 $ -- $ -- -- -- -- 1,362 4,742 6,015 358 413 -- -- -- -- -- 1,882 604 -- 1 118 -- -- -- -- -- (2,754) (3,473) -------------- -------------- -------------- -------------- -------------- 7,250 5,831 17,232 490 1,873 -------------- -------------- -------------- -------------- -------------- 1,384 1,606 4,728 -- -- 490 670 1,673 412 875 70 86 256 166 152 25 24 61 -- -- 48 37 42 28 29 26 26 29 64 44 8 8 9 8 9 1 6 19 -- -- 81 50 66 75 65 16 12 21 9 16 -------------- -------------- -------------- -------------- -------------- 2,149 2,525 6,904 762 1,190 234 39 107 230 778 608 337 575 1,514 422 13 21 49 183 92 117 -- -- -- 265 -------------- -------------- -------------- -------------- -------------- 3,121 2,922 7,635 2,689 2,747 (199) -- -- -- (283) (5) (4) (13) -- -- -------------- -------------- -------------- -------------- -------------- 2,917 2,918 7,622 2,689 2,464 -------------- -------------- -------------- -------------- -------------- 4,333 2,913 9,610 (2,199) (591) -------------- -------------- -------------- -------------- -------------- 3,672 25,142 152,330 -- -- -- -- -- (33,810) 19,899 (20) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -------------- -------------- -------------- -------------- -------------- 3,652 25,142 152,330 (33,810) 19,899 -------------- -------------- -------------- -------------- -------------- (2,073) (42,011) (144,659) -- -- -- -- -- (3,689) (34,716) (205) -- -- -- -- -------------- -------------- -------------- -------------- -------------- (2,278) (42,011) (144,659) (3,689) (34,716) -------------- -------------- -------------- -------------- -------------- 1,374 (16,869) 7,671 (37,499) (14,817) -------------- -------------- -------------- -------------- -------------- $ 5,707 $ (13,956) $ 17,281 $ (39,698) $ (15,408) ============== ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 43 48 NATIONS FUNDS STATEMENTS OF OPERATIONS (CONTINUED) (UNAUDITED) For the six months ended September 30, 2000
STRATEGIC CAPITAL GROWTH GROWTH ---------------------------------------- (IN THOUSANDS) INVESTMENT INCOME: Dividends (Net of foreign withholding taxes of $8, $0, $1, $0, $3, $0 and $0, respectively).......................... $ 3,121 $ 2,161 Dividends allocated from Portfolio (Net of foreign withholding taxes of $0, $0, $0, $74, $0, $0 and $0, respectively)+............................................ -- -- Interest.................................................... 1,060 285 Interest allocated from Portfolio+.......................... -- -- Securities lending.......................................... 34 30 Expenses allocated from Portfolio+.......................... -- -- -------------- -------------- Total investment income................................. 4,215 2,476 -------------- -------------- EXPENSES: Investment advisory fee..................................... 3,837 2,918 Administration fee.......................................... 1,358 1,032 Transfer agent fees......................................... 141 146 Custodian fees.............................................. 57 32 Legal and audit fees........................................ 39 38 Registration and filing fees................................ 45 21 Trustees'/Directors' fees and expenses...................... 8 9 Interest expense............................................ 1 6 Printing expense............................................ 35 40 Other....................................................... 18 15 -------------- -------------- Subtotal................................................ 5,539 4,257 Shareholder servicing and distribution fees: Investor A Shares......................................... 11 71 Investor B Shares......................................... 31 359 Investor C Shares......................................... 10 24 -------------- -------------- Total expenses.......................................... 5,591 4,711 Fees waived by investment advisor, administrator and/or distributor............................................... -- -- Fees reduced by credits allowed by the custodian............ (3) --* -------------- -------------- Net expenses............................................ 5,588 4,711 -------------- -------------- NET INVESTMENT INCOME/(LOSS)................................ (1,373) (2,235) -------------- -------------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: Net realized gain/(loss) from: Security transactions..................................... (24,745) 119,573 Security transactions allocated from Portfolio+........... -- -- Futures contracts......................................... -- -- Foreign currency and net other assets..................... -- -- Foreign currency and net other assets allocated from Portfolio+.............................................. -- -- -------------- -------------- Net realized gain/(loss) on investments..................... (24,745) 119,573 -------------- -------------- Change in unrealized appreciation/(depreciation) of: Securities (Note 10)...................................... (20,128) (157,424) Securities allocated from Portfolio (Note 10)+............ -- -- Futures contracts......................................... -- -- -------------- -------------- Net change in unrealized appreciation/(depreciation) of investments............................................... (20,128) (157,424) -------------- -------------- Net realized and unrealized gain/(loss) on investments...... (44,873) (37,851) -------------- -------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................................ $ (46,246) $ (40,086) ============== ==============
- --------------- * Amount represents less than $500. + Allocated from Focused Equities Master Portfolio. (a) 21st Century commenced operations on April 10, 2000. SEE NOTES TO FINANCIAL STATEMENTS. 44 49 NATIONS FUNDS STATEMENTS OF OPERATIONS (CONTINUED) (UNAUDITED)
AGGRESSIVE FOCUSED MIDCAP 21ST SMALL GROWTH EQUITIES GROWTH CENTURY(a) COMPANY - -------------------------------------------------------------------------------------- $ 845 $ -- $ 358 $ 103 $ 1,130 -- 4,599 -- -- -- 174 -- 602 288 1,755 -- 5,813 -- -- -- 22 -- 41 -- 126 -- (9,988) -- -- -- -------------- -------------- -------------- -------------- -------------- 1,041 424 1,001 391 3,011 -------------- -------------- -------------- -------------- -------------- 1,222 -- 1,089 333 4,123 432 1,508 386 105 1,054 69 646 55 29 133 20 -- 11 6 29 38 35 35 31 37 22 132 20 48 28 8 8 9 8 8 -- -- -- -- -- 39 201 35 34 57 7 42 6 3 45 -------------- -------------- -------------- -------------- -------------- 1,857 2,572 1,646 597 5,514 55 878 27 28 272 180 4,937 245 270 70 6 1,293 14 34 18 -------------- -------------- -------------- -------------- -------------- 2,098 9,680 1,932 929 5,874 -- -- -- -- (235) (2) -- (1) (3) (2) -------------- -------------- -------------- -------------- -------------- 2,096 9,680 1,931 926 5,637 -------------- -------------- -------------- -------------- -------------- (1,055) (9,256) (930) (535) (2,626) -------------- -------------- -------------- -------------- -------------- 60,383 -- 40,333 (2,192) 75,265 -- (115,108) -- -- -- -- -- -- -- -- -- -- -- --* -- -- (2) -- -- -- -------------- -------------- -------------- -------------- -------------- 60,383 (115,110) 40,333 (2,192) 75,265 -------------- -------------- -------------- -------------- -------------- (54,771) -- (18,457) 8,153 (56,796) -- 24,616 -- -- -- -- -- -- -- -- -------------- -------------- -------------- -------------- -------------- (54,771) 24,616 (18,457) 8,153 (56,796) -------------- -------------- -------------- -------------- -------------- 5,612 (90,494) 21,876 5,961 18,469 -------------- -------------- -------------- -------------- -------------- $ 4,557 $ (99,750) $ 20,946 $ 5,426 $ 15,843 ============== ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 45 50 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS CONVERTIBLE SECURITIES BALANCED ASSETS ----------------------------------------------- ------------------------------ SIX MONTHS SIX MONTHS ENDED ENDED 9/30/00 PERIOD ENDED PERIOD ENDED 9/30/00 YEAR ENDED (UNAUDITED) 3/31/00 5/14/99(a) (UNAUDITED) 3/31/00 --------------------------------------------------------------------------------- (IN THOUSANDS) Net investment income/(loss)......... $ 5,799 $ 7,795 $ 2,273 $ 1,616 $ 2,556 Net realized gain/(loss) on investments........................ 22,723 69,747 12,894 916 1,268 Net change in unrealized appreciation/ (depreciation) of investments........................ (26,185) 26,348 6,835 (466) (3,486) -------------- -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets resulting from operations.......... 2,337 103,890 22,002 2,066 338 Distributions to shareholders from net investment income: Primary A Shares................... (357) (204) -- (674) (1,132) Primary B Shares................... -- -- (2,168) -- -- Investor A Shares.................. (5,880) (7,793) (17) (190) (381) Investor B Shares.................. (258) (117) (21) (687) (1,144) Investor C Shares.................. (64) (47) -- (14) (27) Seafirst Shares**.................. -- -- -- -- -- Distributions to shareholders from net realized gain on investments: Primary A Shares................... (1,915) (577) -- -- -- Primary B Shares................... -- -- -- -- -- Investor A Shares.................. (41,129) (23,353) -- -- -- Investor B Shares.................. (1,526) (449) -- -- -- Investor C Shares.................. (400) (150) -- -- -- Seafirst Shares**.................. -- -- -- -- -- Net increase/(decrease) in net assets from Fund share transactions....... 60,386 (34,193) (22,853) (11,206) (41,140) -------------- -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets............................. 11,194 37,007 (3,057) (10,705) (43,486) NET ASSETS: Beginning of period.................. 397,384 360,377 363,434 101,215 144,701 -------------- -------------- -------------- -------------- -------------- End of period........................ $ 408,578 $ 397,384 $ 360,377 $ 90,510 $ 101,215 ============== ============== ============== ============== ============== Undistributed net investment income/(loss)/(distributions in excess of net investment income) at end of period...................... $ 402 $ 1,161 $ 1,527 $ 184 $ 134 ============== ============== ============== ============== ==============
- --------------- ** Seafirst Shares converted into Investor A Shares on June 23, 2000. (a) Represents financial information for the Pacific Horizon Capital Income Fund, which was reorganized into Convertible Securities on May 21, 1999. (b) Represents financial information for the Pacific Horizon Asset Allocation Fund, which was reorganized into Asset Allocation on May 21, 1999. SEE NOTES TO FINANCIAL STATEMENTS. 46 51 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) EQUITY INCOME VALUE ASSET ALLOCATION ------------------------------------------------ ------------------------------- ------------------------------- SIX MONTHS SIX MONTHS SIX MONTHS ENDED ENDED ENDED 9/30/00 PERIOD ENDED PERIOD ENDED 9/30/00 YEAR ENDED 9/30/00 YEAR ENDED (UNAUDITED) 3/31/00 5/14/99(b) (UNAUDITED) 3/31/00 (UNAUDITED) 3/31/00 - ------------------------------------------------------------------------------------------------------------------------- $ 4,333 $ 7,051 $ 1,317 $ 2,913 $ 7,014 $ 9,610 $ 10,874 3,652 23,761 9,905 25,142 8,707 152,330 358,083 (2,278) 5,470 1,712 (42,011) 16,930 (144,659) (366,372) -------------- -------------- -------------- -------------- -------------- -------------- -------------- 5,707 36,282 12,934 (13,956) 32,651 17,281 2,585 (249) (208) -- (2,398) (6,631) (9,155) (10,165) -- -- (352) -- -- -- -- (1,819) (1,207) (27) (115) (457) (526) (456) (721) (937) (8) (58) (334) (364) (18) (16) (18) (1,429) (4) (18) (31) (1) (1,266) (4,797) -- -- -- -- -- (441) (430) -- -- (6,078) (148,103) (181,165) -- -- -- -- -- -- -- (2,189) (2,658) -- -- (521) (10,946) (13,331) (3,251) (3,480) -- -- (1,172) (14,726) (15,816) (68) (64) -- -- (64) (1,223) (1,251) (7,246) (8,339) -- -- -- -- -- 3,755 116,201 (22) 58,740 (247,899) 22,194 (504,038) -------------- -------------- -------------- -------------- -------------- -------------- -------------- (7,804) 130,345 11,096 42,209 (230,523) (145,599) (723,656) 428,701 298,356 287,260 509,379 739,902 1,518,870 2,242,526 -------------- -------------- -------------- -------------- -------------- -------------- -------------- $ 420,897 $ 428,701 $ 298,356 $ 551,588 $ 509,379 $ 1,373,271 $ 1,518,870 ============== ============== ============== ============== ============== ============== ============== $ 669 $ 405 $ 499 $ 338 $ -- $ (231) $ 234 ============== ============== ============== ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 47 52 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) GROWTH & INCOME BLUE CHIP -------------------------------- ----------------------------------------------- SIX MONTHS SIX MONTHS ENDED ENDED 9/30/00 YEAR ENDED 9/30/00 PERIOD ENDED PERIOD ENDED (UNAUDITED) 3/31/00(a) (UNAUDITED) 3/31/00 5/14/99(b) -------------------------------------------------------------------------------- (IN THOUSANDS) Net investment income/(loss).......... $ (2,199) $ (3,482) $ (591) $ 163 $ 218 Net realized gain/(loss) on investments......................... -- (2,435)# -- -- -- Net realized gain/(loss) on investments allocated from Portfolio(+)........................ (33,810) 9,153 19,899 79,588 53,032 Net change in unrealized appreciation/ (depreciation) of investments....... -- 257,111# -- -- -- Net change in unrealized appreciation/ (depreciation) of investments allocated from Portfolio(+)......... (3,689) (121,686) (34,716) 44,368 10,012 -------------- -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets resulting from operations........... (39,698) 138,661 (15,408) 124,119 63,262 Distributions to shareholders from net investment income: Primary A Shares.................... -- -- -- (28) -- Primary B Shares.................... -- -- -- -- -- Investor A Shares................... -- -- -- -- (3) Investor B Shares................... -- -- -- -- -- Investor C Shares................... -- -- -- -- -- Seafirst Shares**................... -- -- -- (438) (343) Distributions to shareholders from net realized gain on investments:*** Primary A Shares.................... (720) (175) (2,040) (2,964) -- Primary B Shares.................... -- -- -- -- -- Investor A Shares................... (1,110) (156) (22,272) (34,227) -- Investor B Shares................... (1,968) (353) (4,746) (4,060) -- Investor C Shares................... (236) (19) (1,052) (1,239) -- Seafirst Shares**................... -- -- (30,470) (45,811) -- Net increase/(decrease) in net assets from Fund share transactions........ 99,152 293,210 48,656 54,280 (4,053) -------------- -------------- -------------- -------------- -------------- Net increase/(decrease) in net assets.............................. 55,420 431,168 (27,332) 89,632 58,863 NET ASSETS: Beginning of period................... 629,279 198,111 993,110 903,478 844,615 -------------- -------------- -------------- -------------- -------------- End of period......................... $ 684,699 $ 629,279 $ 965,778 $ 993,110 $ 903,478 ============== ============== ============== ============== ============== Undistributed net investment income/ (loss)/(distributions in excess of net investment income) at end of period.............................. $ (2,202) $ (3,481) $ (520) $ 71 $ 152 ============== ============== ============== ============== ==============
- --------------- ** Seafirst Shares converted into Investor A Shares on June 23, 2000. *** Amount includes distributions in excess of realized gains in the amount of $3,275 for Aggressive Growth. # Amount represents results from operations prior to conversion to master-feeder structure. (+) Allocated from Growth & Income Master Portfolio and Blue Chip Master Portfolio, respectively. (a) As of October 8, 1999, Growth & Income converted to a master-feeder structure. (b) Represents financial information for the Pacific Horizon Blue Chip Fund, which was reorganized into Blue Chip on May 21, 1999. SEE NOTES TO FINANCIAL STATEMENTS. 48 53 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED) STRATEGIC GROWTH CAPITAL GROWTH AGGRESSIVE GROWTH - ----------------------------------- ------------------------------- ------------------------------- SIX MONTHS SIX MONTHS SIX MONTHS ENDED ENDED ENDED 9/30/00 YEAR ENDED 9/30/00 YEAR ENDED 9/30/00 YEAR ENDED (UNAUDITED) 3/31/00 (UNAUDITED) 3/31/00 (UNAUDITED) 3/31/00 - ------------------------------------------------------------------------------------------------------- $ (1,373) $ (503) $ (2,235) $ (4,116) $ (1,055) $ 100 (24,745) 2,255 119,573 91,754 60,383 30,721 -- -- -- -- -- -- (20,128) 123,466 (157,424) 140,970 (54,771) (33,570) -- -- -- -- -- -- -------------- -------------- -------------- -------------- -------------- -------------- (46,246) 125,218 (40,086) 228,608 4,557 (2,749) -- -- -- -- -- (82) -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (1,357) (4,912) (28,070) (50,238) -- (48,417) -- -- -- -- -- -- (10) (4) (2,198) (3,711) -- (7,321) (9) (3) (2,859) (4,876) -- (6,431) (3) (2) (184) (309) -- (220) -- -- -- -- -- -- 489,864 485,146 (9,345) (71,428) (98,906) (49,719) -------------- -------------- -------------- -------------- -------------- -------------- 442,239 605,443 (82,742) 98,046 (94,349) (114,939) 872,266 266,823 958,853 860,807 417,019 531,958 -------------- -------------- -------------- -------------- -------------- -------------- $ 1,314,505 $ 872,266 $ 876,111 $ 958,853 $ 322,670 $ 417,019 ============== ============== ============== ============== ============== ============== $ (1,373) $ -- $ (2,235) $ -- $ (1,081) $ (26) ============== ============== ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 49 54 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOCUSED EQUITIES ------------------------------------- SIX MONTHS ENDED 9/30/00 YEAR ENDED (UNAUDITED) 3/31/00(a) ------------------------------------- (IN THOUSANDS) Net investment income/(loss)................................ $ (9,256) $ (12,382) Net realized gain/(loss) on investments..................... -- (5,148)# Net realized gain/(loss) on investments allocated from Portfolio(+).............................................. (115,110) 22,127 Net change in unrealized appreciation/(depreciation) of investments............................................... -- 40,122# Net change in unrealized appreciation/(depreciation) of investments allocated from Portfolio(+)................... 24,616 376,082 ------------- ----------- Net increase/(decrease) in net assets resulting from operations................................................ (99,750) 420,801 Distributions to shareholders from net investment income: Primary A Shares.......................................... -- -- Primary B Shares.......................................... -- -- Investor A Shares......................................... -- -- Investor B Shares......................................... -- -- Investor C Shares......................................... -- -- Seafirst Shares**......................................... -- -- Distributions to shareholders from net realized gain on investments: Primary A Shares.......................................... (1,197) (1,702) Primary B Shares.......................................... -- -- Investor A Shares......................................... (2,627) (3,761) Investor B Shares......................................... (3,864) (5,232) Investor C Shares......................................... (993) (435) Seafirst Shares**......................................... -- -- Net increase/(decrease) in net assets from Fund share transactions.............................................. 429,681 1,194,947 ------------- ----------- Net increase/(decrease) in net assets....................... 321,250 1,604,618 NET ASSETS: Beginning of period......................................... 2,268,260 663,642 ------------- ----------- End of period............................................... $ 2,589,510 $ 2,268,260 ============= ============== Undistributed net investment income/(loss)/(distributions in excess of net investment income) at end of period......... $ (9,256) $ -- ============= ==============
- --------------- ** Seafirst Shares converted into Investor A Shares on June 23, 2000. # Amount represents results from operations prior to conversion to master-feeder structure. (+) Allocated from Focused Equities Master Portfolio. (a) As of October 8, 1999, Focused Equities converted to a master-feeder structure. (b) 21st Century commenced operations on April 10, 2000. SEE NOTES TO FINANCIAL STATEMENTS. 50 55 NATIONS FUNDS STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
MIDCAP GROWTH 21ST CENTURY SMALL COMPANY - ------------------------------------------ -------------- -------------------------------------- SIX MONTHS PERIOD SIX MONTHS ENDED ENDED ENDED 9/30/00 YEAR ENDED 9/30/00(b) 9/30/00 YEAR ENDED (UNAUDITED) 3/31/00 (UNAUDITED) (UNAUDITED) 3/31/00 - ------------------------------------------------------------------------------------------------------------------ $ (930) $ (1,619) $ (535) $ (2,626) $ (4,427) 40,333 45,199 (2,192) 75,265 94,410 -- -- -- -- -- (18,457) 110,683 8,153 (56,796) 342,129 -- -- -- -- -- -------------- -------------- -------------- -------------- -------------- 20,946 154,263 5,426 15,843 432,112 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- (21,269) (7,942) -- (35,298) (682) -- -- -- -- -- (1,682) (711) -- (12,377) (268) (4,087) (1,551) -- (799) (12) (225) (71) -- (211) (4) -- -- -- -- -- 20,174 (17,593) 113,827 124,388 128,329 -------------- -------------- -------------- -------------- -------------- 13,857 126,395 119,253 91,546 559,475 356,926 230,531 -- 910,677 351,202 -------------- -------------- -------------- -------------- -------------- $ 370,783 $ 356,926 $ 119,253 $ 1,002,223 $ 910,677 ============== ============== ============== ============== ============== $ (929) $ -- $ (535) $ (2,626) $ -- ============== ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 51 56 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY
CONVERTIBLE SECURITIES SIX MONTHS ENDED SEPTEMBER 30, 2000 PERIOD ENDED PERIOD ENDED (UNAUDITED) MARCH 31, 2000 MAY 14, 1999(a) ------------------ ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS ------------------------------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold........................................ 636 $ 12,436 738 $ 13,925 -- $ -- Issued as reinvestment of dividends......... 22 418 15 284 -- -- Redeemed.................................... (68) (1,317) (136) (2,464) -- -- ------ -------- ------ -------- ------ -------- Net increase/(decrease)..................... 590 $ 11,537 617 $ 11,745 -- $ -- ====== ======== ====== ======== ====== ======== INVESTOR A SHARES: Sold........................................ 680 $ 13,399 859 $ 16,460 249 $ 4,450 Issued as reinvestment of dividends......... 2,349 43,828 1,556 28,423 110 1,937 Redeemed.................................... (1,365) (26,738) (4,975) (94,506) (1,666) (29,719) ------ -------- ------ -------- ------ -------- Net increase/(decrease)..................... 1,664 $ 30,489 (2,560) $(49,623) (1,307) $(23,332) ====== ======== ====== ======== ====== ======== INVESTOR B SHARES: Sold........................................ 708 $ 13,683 294 $ 5,681 52 $ 918 Issued as reinvestment of dividends......... 92 1,713 30 541 1 17 Redeemed.................................... (38) (744) (58) (1,115) (6) (113) ------ -------- ------ -------- ------ -------- Net increase/(decrease)..................... 762 $ 14,652 266 $ 5,107 47 $ 822 ====== ======== ====== ======== ====== ======== INVESTOR C SHARES: Sold........................................ 185 $ 3,613 72 $ 1,364 23 $ 417 Issued as reinvestment of dividends......... 23 422 11 196 1 21 Redeemed.................................... (17) (327) (158) (2,982) (43) (781) ------ -------- ------ -------- ------ -------- Net increase/(decrease)..................... 191 $ 3,708 (75) $ (1,422) (19) $ (343) ====== ======== ====== ======== ====== ======== Total net increase/(decrease)............... 3,207 $ 60,386 (1,752) $(34,193) (1,279) $(22,853) ====== ======== ====== ======== ====== ========
- --------------- (a) Represents financial information for the Pacific Horizon Capital Income Fund, which was reorganized into Convertible Securities on May 21, 1999. SEE NOTES TO FINANCIAL STATEMENTS. 52 57 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
BALANCED ASSETS SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 25 $ 250 149 $ 1,589 Issued as reinvestment of dividends....................... 58 580 93 950 Redeemed.................................................. (274) (2,825) (1,371) (14,441) ------ -------- ------ -------- Net increase/(decrease)................................... (191) $ (1,995) (1,129) $(11,902) ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 19 $ 196 123 $ 1,296 Issued as reinvestment of dividends....................... 17 173 34 352 Redeemed.................................................. (156) (1,595) (1,072) (11,093) ------ -------- ------ -------- Net increase/(decrease)................................... (120) $ (1,226) (915) $ (9,445) ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... 95 $ 958 418 $ 4,430 Issued as reinvestment of dividends....................... 65 652 106 1,091 Redeemed.................................................. (904) (9,152) (2,433) (25,045) ------ -------- ------ -------- Net increase/(decrease)................................... (744) $ (7,542) (1,909) $(19,524) ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 5 $ 45 23 $ 242 Issued as reinvestment of dividends....................... 1 14 3 27 Redeemed.................................................. (50) (502) (52) (538) ------ -------- ------ -------- Net increase/(decrease)................................... (44) $ (443) (26) $ (269) ====== ======== ====== ======== Total net increase/(decrease)............................. (1,099) $(11,206) (3,979) $(41,140) ====== ======== ====== ========
SEE NOTES TO FINANCIAL STATEMENTS. 53 58 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
ASSET ALLOCATION SIX MONTHS ENDED SEPTEMBER 30, 2000 PERIOD ENDED PERIOD ENDED (UNAUDITED) MARCH 31, 2000 MAY 14, 1999(a) ------------------- ----------------- ---------------- SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS -------------------------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold............................................ 61 $ 1,471 677 $ 15,720 -- $ -- Issued in exchange for assets of Boatmen's Trust Company Balanced Investment Fund (Note 10).... 595 13,617 -- -- -- -- Issued as reinvestment of dividends............. 23 521 16 366 -- -- Redeemed........................................ (562) (13,309) (55) (1,271) -- -- ------- --------- ------ -------- ---- ------- Net increase/(decrease)......................... 117 $ 2,300 638 $ 14,815 -- $ -- ======= ========= ====== ======== ==== ======= INVESTOR A SHARES: Sold............................................ 8,601 $ 198,428 301 $ 7,189 129 $ 3,014 Issued in exchange for: A Shares of Time Horizon Portfolio I (Note 10)......................................... -- -- 336 7,832 -- -- A Shares of Time Horizon Portfolio II (Note 10)......................................... -- -- 489 11,379 -- -- A Shares of Time Horizon Portfolio III (Note 10)......................................... -- -- 529 12,317 -- -- Issued as reinvestment of dividends............. 163 3,767 153 3,514 15 338 Redeemed........................................ (527) (12,581) (1,468) (34,435) (261) (6,117) ------- --------- ------ -------- ---- ------- Net increase/(decrease)......................... 8,237 $ 189,614 340 $ 7,796 (117) $(2,765) ======= ========= ====== ======== ==== ======= INVESTOR B SHARES: Sold............................................ 413 $ 9,716 1,127 $ 26,086 199 $ 4,627 Issued in exchange for: B Shares of Time Horizon Portfolio I (Note 10)......................................... -- -- 1,063 24,689 -- -- B Shares of Time Horizon Portfolio II (Note 10)......................................... -- -- 1,381 32,027 -- -- B Shares of Time Horizon Portfolio III (Note 10)......................................... -- -- 1,641 38,074 -- -- Issued as reinvestment of dividends............. 151 3,412 159 3,640 1 27 Redeemed........................................ (374) (8,840) (797) (18,438) (6) (130) ------- --------- ------ -------- ---- ------- Net increase/(decrease)......................... 190 $ 4,288 4,574 $106,078 194 $ 4,524 ======= ========= ====== ======== ==== ======= INVESTOR C SHARES: Sold............................................ 24 $ 557 77 $ 1,782 26 $ 611 Issued in exchange for: K Shares of Time Horizon Portfolio I (Note 10)......................................... -- -- --* 11 -- -- K Shares of Time Horizon Portfolio II (Note 10)......................................... -- -- --* 8 -- -- K Shares of Time Horizon Portfolio III (Note 10)......................................... -- -- --* 1 -- -- Issued as reinvestment of dividends............. 3 80 3 82 -- 8 Redeemed........................................ (7) (167) (84) (1,978) (7) (176) ------- --------- ------ -------- ---- ------- Net increase/(decrease)......................... 20 $ 470 (4) $ (94) 19 $ 443 ======= ========= ====== ======== ==== ======= SEAFIRST SHARES:** Sold............................................ 3 $ 1,428 118 $ 2,600 211 $ 3,725 Issued as reinvestment of dividends............. 511 8,511 763 13,135 82 1,428 Redeemed........................................ (11,904) (202,856) (1,584) (28,129) (418) (7,377) ------- --------- ------ -------- ---- ------- Net increase/(decrease)......................... (11,390) $(192,917) (703) $(12,394) (125) $(2,224) ======= ========= ====== ======== ==== ======= Total net increase/(decrease)................... (2,826) $ 3,755 4,845 $116,201 (29) $ (22) ======= ========= ====== ======== ==== =======
- --------------- * Amount represents less than 500 shares and/or $500, as applicable. ** Seafirst Shares converted into Investor A Shares on June 23, 2000. (a) Represents financial information for the Pacific Horizon Asset Allocation Fund, which was reorganized into Asset Allocation on May 21, 1999. SEE NOTES TO FINANCIAL STATEMENTS. 54 59 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
EQUITY INCOME SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 -------------------- -------------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 404 $ 4,569 3,880 $ 45,563 Issued in exchange for assets of Boatmen's Trust Company Equity Income Fund (Note 10)............................ 8,529 95,694 -- -- Issued in exchange for assets of BCA Equity Income Fund (Note 10)............................................... 8,236 92,411 -- -- Issued as reinvestment of dividends....................... 1 14 45 515 Redeemed.................................................. (10,446) (118,976) (20,182) (237,504) ------- --------- ------- --------- Net increase/(decrease)................................... 6,724 $ 73,712 (16,257) $(191,426) ======= ========= ======= ========= INVESTOR A SHARES: Sold...................................................... 1,499 $ 16,914 516 $ 6,159 Issued as reinvestment of dividends....................... 9 100 76 886 Redeemed.................................................. (1,811) (20,452) (2,210) (26,050) ------- --------- ------- --------- Net increase/(decrease)................................... (303) $ (3,438) (1,618) $ (19,005) ======= ========= ======= ========= INVESTOR B SHARES: Sold...................................................... 37 $ 424 160 $ 1,918 Issued as reinvestment of dividends....................... 5 54 124 1,422 Redeemed.................................................. (1,003) (11,373) (3,384) (39,252) ------- --------- ------- --------- Net increase/(decrease)................................... (961) $ (10,895) (3,100) $ (35,912) ======= ========= ======= ========= INVESTOR C SHARES: Sold...................................................... 11 $ 122 19 $ 226 Issued as reinvestment of dividends....................... --* 3 7 82 Redeemed.................................................. (66) (764) (158) (1,864) ------- --------- ------- --------- Net increase/(decrease)................................... (55) $ (639) (132) $ (1,556) ======= ========= ======= ========= Total net increase/(decrease)............................. 5,405 $ 58,740 (21,107) $(247,899) ======= ========= ======= =========
- --------------- * Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 55 60 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
VALUE SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 -------------------- -------------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 8,976 $ 125,509 6,945 $ 118,586 Issued in exchange for assets of Boatmen's Trust Company Equity Value Fund (Note 10)............................. 8,401 119,967 -- -- Issued in exchange for assets of Bank IV Kansas Stock Fund (Note 10)............................................... 3,322 47,444 -- -- Issued as reinvestment of dividends....................... 5,378 75,376 4,592 79,800 Redeemed.................................................. (23,514) (340,638) (38,909) (661,959) ------- --------- ------- --------- Net increase/(decrease)................................... 2,563 $ 27,658 (27,372) $(463,573) ======= ========= ======= ========= INVESTOR A SHARES: Sold...................................................... 1,227 $ 17,908 3,144 $ 54,395 Issued as reinvestment of dividends....................... 711 9,962 702 12,174 Redeemed.................................................. (2,221) (32,522) (5,568) (94,505) ------- --------- ------- --------- Net increase/(decrease)................................... (283) $ (4,652) (1,722) $ (27,936) ======= ========= ======= ========= INVESTOR B SHARES: Sold...................................................... 157 $ 2,258 968 $ 17,110 Issued as reinvestment of dividends....................... 1,046 14,399 889 15,224 Redeemed.................................................. (1,262) (18,210) (2,666) (44,195) ------- --------- ------- --------- Net increase/(decrease)................................... (59) $ (1,553) (809) $ (11,861) ======= ========= ======= ========= INVESTOR C SHARES: Sold...................................................... 41 $ 589 105 $ 1,806 Issued as reinvestment of dividends....................... 88 1,215 71 1,219 Redeemed.................................................. (75) (1,063) (221) (3,693) ------- --------- ------- --------- Net increase/(decrease)................................... 54 $ 741 (45) $ (668) ======= ========= ======= ========= Total net increase/(decrease)............................. 2,275 $ 22,194 (29,948) $(504,038) ======= ========= ======= =========
SEE NOTES TO FINANCIAL STATEMENTS. 56 61 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
GROWTH & INCOME SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 2,153 $ 41,894 6,082 $110,230 Issued as reinvestment of dividends....................... 18 337 7 118 Redeemed.................................................. (1,895) (37,189) (4,363) (78,685) ------ -------- ------ -------- Net increase/(decrease)................................... 276 $ 5,042 1,726 $ 31,663 ====== ======== ====== ======== INVESTOR A SHARES: Sold...................................................... 3,914 $ 75,578 6,807 $128,700 Issued as reinvestment of dividends....................... 58 1,063 6 95 Redeemed.................................................. (1,677) (32,953) (1,580) (28,598) ------ -------- ------ -------- Net increase/(decrease)................................... 2,295 $ 43,688 5,233 $100,197 ====== ======== ====== ======== INVESTOR B SHARES: Sold...................................................... 2,874 $ 55,496 8,825 $156,540 Issued as reinvestment of dividends....................... 101 1,838 21 328 Redeemed.................................................. (799) (15,549) (1,190) (21,099) ------ -------- ------ -------- Net increase/(decrease)................................... 2,176 $ 41,785 7,656 $135,769 ====== ======== ====== ======== INVESTOR C SHARES: Sold...................................................... 583 $ 11,337 1,506 $ 27,336 Issued as reinvestment of dividends....................... 12 217 1 15 Redeemed.................................................. (149) (2,917) (94) (1,770) ------ -------- ------ -------- Net increase/(decrease)................................... 446 $ 8,637 1,413 $ 25,581 ====== ======== ====== ======== Total net increase/(decrease)............................. 5,193 $ 99,152 16,028 $293,210 ====== ======== ====== ========
SEE NOTES TO FINANCIAL STATEMENTS. 57 62 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
BLUE CHIP SIX MONTHS ENDED SEPTEMBER 30, 2000 PERIOD ENDED PERIOD ENDED (UNAUDITED) MARCH 31, 2000 MAY 14, 1999(a) -------------------- ------------------- ------------------ SHARES DOLLARS SHARES DOLLARS SHARES DOLLARS --------------------------------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold..................................... 212 $ 7,382 1,263 $ 45,270 -- $ -- Issued as reinvestment of dividends...... 30 999 33 1,102 -- -- Redeemed................................. (131) (4,668) (321) (11,193) -- -- ------- --------- ------ --------- ---- -------- Net increase/(decrease).................. 111 $ 3,713 975 $ 35,179 -- $ -- ======= ========= ====== ========= ==== ======== INVESTOR A SHARES: Sold..................................... 13,711 $ 471,024 1,493 $ 53,082 520 $ 18,418 Issued as reinvestment of dividends...... 603 20,373 914 30,421 -- 6 Redeemed................................. (1,234) (43,607) (3,608) (128,588) (721) (25,590) ------- --------- ------ --------- ---- -------- Net increase/(decrease).................. 13,080 $ 447,790 (1,201) $ (45,085) (201) $ (7,166) ======= ========= ====== ========= ==== ======== INVESTOR B SHARES: Sold..................................... 714 $ 24,748 1,525 $ 53,125 210 $ 7,461 Issued as reinvestment of dividends...... 135 4,507 117 3,877 -- -- Redeemed................................. (168) (5,821) (177) (5,879) (9) (311) ------- --------- ------ --------- ---- -------- Net increase/(decrease).................. 681 $ 23,434 1,465 $ 51,123 201 $ 7,150 ======= ========= ====== ========= ==== ======== INVESTOR C SHARES: Sold..................................... 125 $ 4,305 296 $ 10,373 58 $ 2,048 Issued as reinvestment of dividends...... 31 1,043 37 1,233 -- -- Redeemed................................. (37) (1,258) (288) (10,175) (37) (1,319) ------- --------- ------ --------- ---- -------- Net increase/(decrease).................. 119 $ 4,090 45 $ 1,431 21 $ 729 ======= ========= ====== ========= ==== ======== SEAFIRST SHARES:* Sold..................................... 45 $ 1,381 273 $ 8,531 350 $ 10,944 Issued as reinvestment of dividends...... 1,047 30,470 1,597 46,245 11 343 Redeemed................................. (15,610) (462,222) (1,389) (43,144) (513) (16,053) ------- --------- ------ --------- ---- -------- Net increase/(decrease).................. (14,518) $(430,371) 481 $ 11,632 (152) $ (4,766) ======= ========= ====== ========= ==== ======== Total net increase/(decrease)............ (527) $ 48,656 1,765 $ 54,280 (131) $ (4,053) ======= ========= ====== ========= ==== ========
- --------------- * Seafirst Shares converted into Investor A Shares on June 23, 2000. (a) Represents financial information for the Pacific Horizon Blue Chip Fund, which was reorganized into Blue Chip on May 21, 1999. SEE NOTES TO FINANCIAL STATEMENTS. 58 63 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
STRATEGIC GROWTH SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 ------------------ ------------------ SHARES DOLLARS SHARES DOLLARS ------------------------------------------ (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 16,292 $265,977 36,734 $556,572 Issued in exchange for assets of BCA Diversified Stock Fund (Note 10).......................................... 19,506 307,415 -- -- Issued as reinvestment of dividends....................... 8 130 38 543 Redeemed.................................................. (5,886) (96,040) (5,508) (83,129) ------ -------- ------ -------- Net increase/(decrease)................................... 29,920 $477,482 31,264 $473,986 ====== ======== ====== ======== INVESTOR A SHARES:+ Sold...................................................... 754 $ 12,312 365 $ 5,684 Issued as reinvestment of dividends....................... 1 9 --* 3 Redeemed.................................................. (245) (3,979) (41) (630) ------ -------- ------ -------- Net increase/(decrease)................................... 510 $ 8,342 324 $ 5,057 ====== ======== ====== ======== INVESTOR B SHARES:+ Sold...................................................... 239 $ 3,888 301 $ 4,692 Issued as reinvestment of dividends....................... 1 8 --* 3 Redeemed.................................................. (35) (588) (9) (145) ------ -------- ------ -------- Net increase/(decrease)................................... 205 $ 3,308 292 $ 4,550 ====== ======== ====== ======== INVESTOR C SHARES:+ Sold...................................................... 48 $ 779 101 $ 1,555 Issued as reinvestment of dividends....................... --* 3 --* 2 Redeemed.................................................. (3) (50) --* (4) ------ -------- ------ -------- Net increase/(decrease)................................... 45 $ 732 101 $ 1,553 ====== ======== ====== ======== Total net increase/(decrease)............................. 30,680 $489,864 31,981 $485,146 ====== ======== ====== ========
- --------------- * Amount represents less than 500 shares and/or $500, as applicable. + Strategic Growth Investor A, Investor B and Investor C Shares commenced operations on August 2, 1999. SEE NOTES TO FINANCIAL STATEMENTS. 59 64 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
CAPITAL GROWTH SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 ------------------- -------------------- SHARES DOLLARS SHARES DOLLARS --------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 7,996 $ 109,513 10,051 $ 130,555 Issued as reinvestment of dividends....................... 842 11,154 1,564 18,939 Redeemed.................................................. (9,268) (129,141) (16,881) (216,390) ------ --------- ------- --------- Net increase/(decrease)................................... (430) $ (8,474) (5,266) $ (66,896) ====== ========= ======= ========= INVESTOR A SHARES: Sold...................................................... 7,833 $ 104,864 12,595 $ 159,304 Issued as reinvestment of dividends....................... 138 1,803 268 3,217 Redeemed.................................................. (8,066) (108,207) (13,011) (164,173) ------ --------- ------- --------- Net increase/(decrease)................................... (95) $ (1,540) (148) $ (1,652) ====== ========= ======= ========= INVESTOR B SHARES: Sold...................................................... 206 $ 2,626 462 $ 5,452 Issued as reinvestment of dividends....................... 226 2,779 418 4,739 Redeemed.................................................. (407) (5,188) (1,117) (13,279) ------ --------- ------- --------- Net increase/(decrease)................................... 25 $ 217 (237) $ (3,088) ====== ========= ======= ========= INVESTOR C SHARES: Sold...................................................... 38 $ 488 68 $ 824 Issued as reinvestment of dividends....................... 13 167 26 299 Redeemed.................................................. (16) (203) (74) (915) ------ --------- ------- --------- Net increase/(decrease)................................... 35 $ 452 20 $ 208 ====== ========= ======= ========= Total net increase/(decrease)............................. (465) $ (9,345) (5,631) $ (71,428) ====== ========= ======= =========
SEE NOTES TO FINANCIAL STATEMENTS. 60 65 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
AGGRESSIVE GROWTH SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 ------------------- ------------------- SHARES DOLLARS SHARES DOLLARS -------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 296 $ 16,534 3,001 $ 77,380 Issued in exchange for assets of BCA Retail Trust Equity Fund (Note 10).......................................... 1,485 28,949 -- -- Issued as reinvestment of dividends....................... -- -- 1,774 37,908 Redeemed.................................................. (5,892) (132,585) (6,497) (150,271) ------ --------- ------ --------- Net increase/(decrease)................................... (4,111) $ (87,102) (1,722) $ (34,983) ====== ========= ====== ========= INVESTOR A SHARES: Sold...................................................... 972 $ 19,918 2,593 $ 57,533 Issued as reinvestment of dividends....................... -- -- 318 6,776 Redeemed.................................................. (1,230) (25,152) (3,479) (75,702) ------ --------- ------ --------- Net increase/(decrease)................................... (258) $ (5,234) (568) $ (11,393) ====== ========= ====== ========= INVESTOR B SHARES: Sold...................................................... 22 $ 413 369 $ 9,218 Issued as reinvestment of dividends....................... -- -- 304 6,194 Redeemed.................................................. (343) (6,613) (900) (18,890) ------ --------- ------ --------- Net increase/(decrease)................................... (321) $ (6,200) (227) $ (3,478) ====== ========= ====== ========= INVESTOR C SHARES: Sold...................................................... 2 $ 29 25 $ 577 Issued as reinvestment of dividends....................... -- -- 10 218 Redeemed.................................................. (20) (399) (31) (660) ------ --------- ------ --------- Net increase/(decrease)................................... (18) $ (370) 4 $ 135 ====== ========= ====== ========= Total net increase/(decrease)............................. (4,708) $ (98,906) (2,513) $ (49,719) ====== ========= ====== =========
SEE NOTES TO FINANCIAL STATEMENTS. 61 66 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
FOCUSED EQUITIES SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 ------------------- --------------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 16,996 $ 352,747 19,546 $ 392,072 Issued as reinvestment of dividends....................... 29 574 53 923 Redeemed.................................................. (9,004) (185,504) (11,452) (235,823) ------ --------- ------- ---------- Net increase/(decrease)................................... 8,021 $ 167,817 8,147 $ 157,172 ====== ========= ======= ========== INVESTOR A SHARES: Sold...................................................... 11,014 $ 225,675 23,689 $ 469,267 Issued as reinvestment of dividends....................... 128 2,494 189 3,274 Redeemed.................................................. (5,878) (121,011) (7,516) (147,452) ------ --------- ------- ---------- Net increase/(decrease)................................... 5,264 $ 107,158 16,362 $ 325,089 ====== ========= ======= ========== INVESTOR B SHARES: Sold...................................................... 7,331 $ 149,914 29,697 $ 567,819 Issued as reinvestment of dividends....................... 188 3,603 281 4,822 Redeemed.................................................. (2,348) (48,093) (3,330) (63,436) ------ --------- ------- ---------- Net increase/(decrease)................................... 5,171 $ 105,424 26,648 $ 509,205 ====== ========= ======= ========== INVESTOR C SHARES: Sold...................................................... 3,277 $ 67,245 10,976 $ 217,458 Issued as reinvestment of dividends....................... 48 925 16 285 Redeemed.................................................. (916) (18,888) (730) (14,262) ------ --------- ------- ---------- Net increase/(decrease)................................... 2,409 $ 49,282 10,262 $ 203,481 ====== ========= ======= ========== Total net increase/(decrease)............................. 20,865 $ 429,681 61,419 $1,194,947 ====== ========= ======= ==========
SEE NOTES TO FINANCIAL STATEMENTS. 62 67 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
MIDCAP GROWTH SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 ------------------- -------------------- SHARES DOLLARS SHARES DOLLARS --------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 1,803 $ 36,941 1,226 $ 23,013 Issued as reinvestment of dividends....................... 809 14,957 362 5,621 Redeemed.................................................. (2,044) (40,661) (2,368) (37,950) ------ --------- ------- --------- Net increase/(decrease)................................... 568 $ 11,237 (780) $ (9,316) ====== ========= ======= ========= INVESTOR A SHARES: Sold...................................................... 5,993 $ 118,158 13,817 $ 222,914 Issued as reinvestment of dividends....................... 76 1,370 45 688 Redeemed.................................................. (6,052) (119,222) (14,206) (228,626) ------ --------- ------- --------- Net increase/(decrease)................................... 17 $ 306 (344) $ (5,024) ====== ========= ======= ========= INVESTOR B SHARES: Sold...................................................... 361 $ 6,765 191 $ 3,200 Issued as reinvestment of dividends....................... 238 3,954 107 1,516 Redeemed.................................................. (167) (3,079) (572) (8,217) ------ --------- ------- --------- Net increase/(decrease)................................... 432 $ 7,640 (274) $ (3,501) ====== ========= ======= ========= INVESTOR C SHARES: Sold...................................................... 62 $ 1,140 57 $ 944 Issued as reinvestment of dividends....................... 12 211 5 70 Redeemed.................................................. (19) (360) (46) (766) ------ --------- ------- --------- Net increase/(decrease)................................... 55 $ 991 16 $ 248 ====== ========= ======= ========= Total net increase/(decrease)............................. 1,072 $ 20,174 (1,382) $ (17,593) ====== ========= ======= =========
SEE NOTES TO FINANCIAL STATEMENTS. 63 68 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
21ST CENTURY PERIOD ENDED SEPTEMBER 30, 2000 (UNAUDITED) ------------------ SHARES DOLLARS ------------------ (IN THOUSANDS) PRIMARY A SHARES:+ Sold...................................................... 925 $ 8,910 Issued as reinvestment of dividends....................... -- -- Redeemed.................................................. (238) (2,433) ------ -------- Net increase/(decrease)................................... 687 $ 6,477 ====== ======== INVESTOR A SHARES:+ Sold...................................................... 3,190 $ 30,753 Issued as reinvestment of dividends....................... -- -- Redeemed.................................................. (180) (1,739) ------ -------- Net increase/(decrease)................................... 3,010 $ 29,014 ====== ======== INVESTOR B SHARES:+ Sold...................................................... 7,403 $ 71,085 Issued as reinvestment of dividends....................... -- -- Redeemed.................................................. (163) (1,574) ------ -------- Net increase/(decrease)................................... 7,240 $ 69,511 ====== ======== INVESTOR C SHARES:+ Sold...................................................... 954 $ 9,140 Issued as reinvestment of dividends....................... -- -- Redeemed.................................................. (33) (315) ------ -------- Net increase/(decrease)................................... 921 $ 8,825 ====== ======== Total net increase/(decrease)............................. 11,858 $113,827 ====== ========
- --------------- + 21st Century Primary A, Investor A, Investor B and Investor C Shares commenced operations on April 10, 2000. SEE NOTES TO FINANCIAL STATEMENTS. 64 69 NATIONS FUNDS SCHEDULES OF CAPITAL STOCK ACTIVITY (CONTINUED)
SMALL COMPANY SIX MONTHS ENDED SEPTEMBER 30, 2000 YEAR ENDED (UNAUDITED) MARCH 31, 2000 -------------------- -------------------- SHARES DOLLARS SHARES DOLLARS ---------------------------------------------- (IN THOUSANDS) PRIMARY A SHARES: Sold...................................................... 13,243 $ 266,599 19,767 $ 320,356 Issued in exchange for assets of Boatmen's Trust Company Managed Small Capitalization Fund (Note 10)............. 4,939 88,407 -- -- Issued as reinvestment of dividends....................... 1,440 25,020 35 524 Redeemed.................................................. (12,541) (250,656) (19,725) (312,274) ------- --------- ------- --------- Net increase/(decrease)................................... 7,081 $ 129,370 77 $ 8,606 ======= ========= ======= ========= INVESTOR A SHARES: Sold...................................................... 18,861 $ 369,347 22,290 $ 343,670 Issued in exchange for A Shares of Pacific Horizon Aggressive Growth Fund (Note 10)........................ -- -- 12,965 159,453 Issued as reinvestment of dividends....................... 680 11,678 17 250 Redeemed.................................................. (19,701) (389,547) (25,748) (386,849) ------- --------- ------- --------- Net increase/(decrease)................................... (160) $ (8,522) 9,524 $ 116,524 ======= ========= ======= ========= INVESTOR B SHARES: Sold...................................................... 182 $ 3,562 248 $ 4,544 Issued in exchange for B Shares of Pacific Horizon Aggressive Growth Fund (Note 10)........................ -- -- 49 591 Issued as reinvestment of dividends....................... 44 741 1 12 Redeemed.................................................. (66) (1,268) (124) (1,696) ------- --------- ------- --------- Net increase/(decrease)................................... 160 $ 3,035 174 $ 3,451 ======= ========= ======= ========= INVESTOR C SHARES: Sold...................................................... 40 $ 785 62 $ 1,002 Issued in exchange for K Shares of Pacific Horizon Aggressive Growth Fund (Note 10)........................ -- -- 337 4,122 Issued as reinvestment of dividends....................... 12 205 --* 4 Redeemed.................................................. (25) (485) (409) (5,380) ------- --------- ------- --------- Net increase/(decrease)................................... 27 $ 505 (10) $ (252) ======= ========= ======= ========= Total net increase/(decrease)............................. 7,108 $ 124,388 9,765 $ 128,329 ======= ========= ======= =========
- --------------- * Amount represents less than 500 shares and/or $500, as applicable. SEE NOTES TO FINANCIAL STATEMENTS. 65 70 NATIONS FUNDS FINANCIAL HIGHLIGHTS For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME GAINS ----------------------------------------------------------------------------------------- CONVERTIBLE SECURITIES PRIMARY A SHARES Six months ended 9/30/2000# (unaudited)........................ $22.18 $0.32 $(0.32) $ 0.00 $(0.34) $(2.49) Period ended 3/31/2000***#........... 18.15 0.42 5.52 5.94 (0.50) (1.41) INVESTOR A SHARES* Six months ended 9/30/2000# (unaudited)........................ $22.17 $0.30 $(0.32) $(0.02) $(0.32) $(2.49) Period ended 3/31/2000#.............. 18.31 0.46 5.26 5.72 (0.45) (1.41) Period ended 5/14/1999............... 17.34 0.12 0.96 1.08 (0.11) -- Year ended 2/28/1999................. 17.28 0.51 0.25 0.76 (0.52) (0.18) Year ended 2/28/1998................. 17.35 0.58 2.89 3.47 (0.59) (2.95) Year ended 2/28/1997**............... 16.42 0.57 2.34 2.91 (0.57) (1.41) Year ended 2/29/1996................. 13.65 0.62 2.84 3.46 (0.69) -- INVESTOR B SHARES* Six months ended 9/30/2000# (unaudited)........................ $22.06 $0.21 $(0.29) $(0.08) $(0.27) $(2.49) Period ended 3/31/2000#.............. 18.27 0.44 5.12 5.56 (0.36) (1.41) Period ended 5/14/1999............... 17.30 0.09 0.96 1.05 (0.27) -- Period ended 2/28/1999***............ 17.67 0.22 (0.17) 0.05 (0.24) (0.18) INVESTOR C SHARES* Six months ended 9/30/2000# (unaudited)........................ $22.23 $0.21 $(0.30) $(0.09) $(0.27) $(2.49) Period ended 3/31/2000#.............. 18.35 0.38 5.22 5.60 (0.31) (1.41) Period ended 5/14/1999............... 17.37 0.10 0.97 1.07 (0.09) -- Year ended 2/28/1999................. 17.24 0.40 0.31 0.71 (0.40) (0.18) Year ended 2/28/1998................. 17.30 0.48 2.89 3.37 (0.48) (2.95) Period ended 2/28/1997***............ 16.24 0.32 2.43 2.75 (0.28) (1.41)
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * The financial information for the fiscal periods through May 14, 1999 reflect the financial information for the Pacific Horizon Capital Income Fund A, B and K Shares, which were reorganized into the Convertible Securities Investor A, Investor B and Investor C Shares, respectively, as of May 21, 1999. Prior to May 21, 1999, the Fund's investment adviser was Bank of America National Trust and Savings Association. Effective May 21, 1999, its investment adviser became Banc of America Advisors, Inc. and its investment sub-adviser became Banc of America Capital Management, Inc. ** As of July 22, 1996, the Portfolio designated the existing series of shares as "A" Shares. *** Convertible Securities Primary A, Investor B and Investor C Shares commenced operations on May 21, 1999, July 15, 1998 and October 21, 1996, respectively. # Per share net investment income has been calculated using the monthly average shares method. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. (b) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 66 71 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS - -------------------------------------------------------------------------------------------------------------------- $(2.83) $19.35 0.70% $ 23,366 0.98%+(a) 3.26%+ 31% 0.99%+(a) (1.91) 22.18 35.21 13,688 0.97+(b) 2.21+ 65 0.98+ $(2.81) $19.34 0.53% $354,494 1.23%+(a) 3.01%+ 31% 1.24%+(a) (1.86) 22.17 33.68 369,488 1.22+(b) 1.96+ 65 1.23+ (0.11) 18.31 6.25 352,000 1.30+ 3.07+ 16 1.32+ (0.70) 17.34 4.64 356,000 1.15(a) 2.97 66 1.16(a) (3.54) 17.28 21.54 391,000 1.10(a) 3.35 69 1.12(a) (1.98) 17.35 18.53 309,000 1.18(a) 3.40 124 1.19(a) (0.69) 16.42 25.96 247,000 1.23(a) 4.05 57 1.26(a) $(2.76) $19.22 0.21% $ 24,368 1.98%+(a) 2.26%+ 31% 1.99%+(a) (1.77) 22.06 32.76 11,175 1.97+(b) 1.21+ 65 1.98+ (0.08) 18.27 6.10 4,000 2.06+ 2.34+ 16 2.08+ (0.42) 17.30 0.44 3,000 1.96+(a) 2.14+ 66 1.97(a)+ $(2.76) $19.38 0.15% $ 6,350 1.98%+(a) 2.26%+ 31% 1.99%+(a) (1.72) 22.23 32.81 3,033 1.97+(b) 1.21+ 65 1.98+ (0.09) 18.35 6.17 4,000 1.80+ 2.56+ 16 2.07+ (0.58) 17.37 4.29 4,000 1.65(a) 2.45 66 1.91(a) (3.43) 17.24 20.97 3,000 1.60 2.85 69 1.86 (1.69) 17.30 17.47 1,000 1.66+ 2.85+ 124 1.91+
SEE NOTES TO FINANCIAL STATEMENTS. 67 72 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME GAINS ----------------------------------------------------------------------------------------- BALANCED ASSETS PRIMARY A SHARES Six months ended 9/30/2000# (unaudited)........................ $10.17 $0.20 $ 0.05 $ 0.25 $(0.20) $ -- Year ended 3/31/2000#................ 10.39 0.30 (0.22) 0.08 (0.30) -- Year ended 3/31/1999#................ 11.49 0.26 (0.39) (0.13) (0.23) (0.74) Year ended 3/31/1998................. 11.15 0.29 2.68 2.97 (0.29) (2.34) Year ended 3/31/1997................. 11.65 0.39 1.03 1.42 (0.38) (1.54) Period ended 3/31/1996*.............. 12.68 0.11 0.45 0.56 (0.18) (1.41) Year ended 11/30/1995................ 10.44 0.38 2.21 2.59 (0.33) (0.02) INVESTOR A SHARES Six months ended 9/30/2000# (unaudited)........................ $10.16 $0.19 $ 0.05 $ 0.24 $(0.19) $ -- Year ended 3/31/2000#................ 10.38 0.24 (0.19) 0.05 (0.27) -- Year ended 3/31/1999#................ 11.47 0.23 (0.38) (0.15) (0.20) (0.74) Year ended 3/31/1998................. 11.13 0.27 2.68 2.95 (0.27) (2.34) Year ended 3/31/1997................. 11.64 0.34 1.05 1.39 (0.36) (1.54) Period ended 3/31/1996*.............. 12.66 0.11 0.45 0.56 (0.17) (1.41) Year ended 11/30/1995................ 10.42 0.34 2.23 2.57 (0.31) (0.02) INVESTOR B SHARES Six months ended 9/30/2000# (unaudited)........................ $10.14 $0.15 $ 0.05 $ 0.20 $(0.15) $ -- Year ended 3/31/2000#................ 10.36 0.17 (0.20) (0.03) (0.19) -- Year ended 3/31/1999#................ 11.45 0.15 (0.38) (0.23) (0.12) (0.74) Year ended 3/31/1998................. 11.11 0.19 2.68 2.87 (0.19) (2.34) Year ended 3/31/1997................. 11.62 0.29 1.04 1.33 (0.30) (1.54) Period ended 3/31/1996*.............. 12.63 0.09 0.45 0.54 (0.14) (1.41) Year ended 11/30/1995................ 10.40 0.28 2.22 2.50 (0.25) (0.02) INVESTOR C SHARES Six months ended 9/30/2000# (unaudited)........................ $10.10 $0.15 $ 0.05 $ 0.20 $(0.15) $ -- Year ended 3/31/2000#................ 10.32 0.17 (0.20) (0.03) (0.19) -- Year ended 3/31/1999#................ 11.41 0.15 (0.38) (0.23) (0.12) (0.74) Year ended 3/31/1998................. 11.08 0.20 2.67 2.87 (0.20) (2.34) Year ended 3/31/1997................. 11.60 0.33 1.02 1.35 (0.33) (1.54) Period ended 3/31/1996*.............. 12.61 0.09 0.45 0.54 (0.14) (1.41) Year ended 11/30/1995................ 10.38 0.26 2.21 2.47 (0.22) (0.02)
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * Fiscal year end changed to March 31. Prior to this, the fiscal year end was November 30. # Per share net investment income has been calculated using the monthly average shares method. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. (b) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 68 73 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS - -------------------------------------------------------------------------------------------------------------------- $(0.20) $10.22 2.50% $ 34,075 0.96%+(a) 3.93%+ 64% 1.17%+(a) (0.30) 10.17 0.73 35,850 1.01(a)(b) 2.61 103 1.15(a) (0.97) 10.39 (1.20) 48,373 1.00(a)(b) 2.43 126 1.00(a) (2.63) 11.49 30.35 20,299 1.08(a)(b) 2.70 276 1.08(a) (1.92) 11.15 12.50 135,731 1.00(a) 3.31 264 1.00(a) (1.59) 11.65 4.90 164,215 1.00+ 2.91+ 83 1.00+ (0.35) 12.68 25.27 163,198 0.99 3.25 174 0.99 $(0.19) $10.21 2.37% $ 10,070 1.21%+(a) 3.68%+ 64% 1.42%+(a) (0.27) 10.16 0.47 11,240 1.26(a)(b) 2.36 103 1.40(a) (0.94) 10.38 (1.36) 20,979 1.25(a)(b) 2.18 126 1.25(a) (2.61) 11.47 30.13 16,009 1.33(a)(b) 2.45 276 1.33(a) (1.90) 11.13 12.18 9,075 1.25(a) 3.06 264 1.25(a) (1.58) 11.64 4.86 6,261 1.25+ 2.66+ 83 1.25+ (0.33) 12.66 25.01 5,276 1.24 3.00 174 1.24 $(0.15) $10.19 1.99% $ 45,489 1.96%+(a) 2.93%+ 64% 2.17%+(a) (0.19) 10.14 (0.30) 52,810 2.01(a)(b) 1.61 103 2.15(a) (0.86) 10.36 (2.13) 73,735 2.00(a)(b) 1.43 126 2.00(a) (2.53) 11.45 29.35 78,813 2.00(a)(b) 1.78 276 2.00(a) (1.84) 11.11 11.62 64,058 1.75(a) 2.56 264 1.75(a) (1.55) 11.62 4.69 65,764 1.75+ 2.16+ 83 1.75+ (0.27) 12.63 24.35 62,275 1.74 2.50 174 1.74 $(0.15) $10.15 1.96% $ 876 1.96%+(a) 2.93%+ 64% 2.17%+(a) (0.19) 10.10 (0.27) 1,315 2.01(a)(b) 1.61 103 2.15(a) (0.86) 10.32 (2.17) 1,614 2.00(a)(b) 1.43 126 2.00(a) (2.54) 11.41 29.43 1,947 1.91(a)(b) 1.87 276 1.91(a) (1.87) 11.08 11.85 1,396 1.50(a) 2.81 264 1.50(a) (1.55) 11.60 4.71 1,187 1.62+ 2.29+ 83 1.62+ (0.24) 12.61 24.03 992 1.99 2.25 174 1.99
SEE NOTES TO FINANCIAL STATEMENTS. 69 74 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME GAINS ----------------------------------------------------------------------------------------- ASSET ALLOCATION PRIMARY A SHARES Six months ended 9/30/2000# (unaudited)........................ $24.35 $0.29 $0.03 $0.32 $(0.25) $(0.65) Period ended 3/31/2000***#........... 23.06 0.49 1.93 2.42 (0.41) (0.72) INVESTOR A SHARES*,**** Six months ended 9/30/2000# (unaudited)........................ $24.35 $0.25 $0.04 $0.29 $(0.23) $(0.65) Period ended 3/31/2000#.............. 23.40 0.43 1.59 2.02 (0.35) (0.72) Period ended 5/14/1999............... 22.50 0.10 0.91 1.01 (0.11) -- Year ended 2/28/1999................. 21.41 0.55 2.48 3.03 (0.45) (1.49) Year ended 2/28/1998................. 19.40 0.52 3.72 4.24 (0.47) (1.76) Year ended 2/28/1997**............... 17.52 0.48 2.50 2.98 (0.46) (0.64) Year ended 2/29/1996................. 15.15 0.52 2.86 3.38 (0.53) (0.48) INVESTOR B SHARES* Six months ended 9/30/2000# (unaudited)........................ $24.24 $0.17 $0.03 $0.20 $(0.14) $(0.65) Period ended 3/31/2000#.............. 23.32 0.47 1.39 1.86 (0.22) (0.72) Period ended 5/14/1999............... 22.45 0.06 0.89 0.95 (0.08) -- Period ended 2/28/1999***............ 23.17 0.22 0.75 0.97 (0.20) (1.49) INVESTOR C SHARES* Six months ended 9/30/2000# (unaudited)........................ $24.27 $0.17 $0.02 $0.19 $(0.14) $(0.65) Period ended 3/31/2000#.............. 23.33 0.42 1.43 1.85 (0.19) (0.72) Period ended 5/14/1999............... 22.45 0.05 0.92 0.97 (0.09) -- Year ended 2/28/1999................. 21.36 0.44 2.49 2.93 (0.35) (1.49) Year ended 2/28/1998................. 19.40 0.41 3.66 4.07 (0.36) (1.75) Period ended 2/28/1997***............ 17.23 0.19 2.80 2.99 (0.18) (0.64)
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * The financial information for the fiscal periods through May 14, 1999 reflect the Financial information for the Pacific Horizon Asset Allocation Fund A, B, and K Shares, which were reorganized into the Asset Allocation Investor A, Investor B, and Investor C Shares, respectively, as of May 21, 1999. Prior to May 21, 1999, the Fund's investment adviser was Bank of America National Trust and Savings Association. Effective May 21, 1999, its investment adviser became Banc of America Advisors, Inc. and its investment, sub-adviser became Banc of America Capital Management, Inc. ** As of July 22, 1996, the Fund designated the existing series of shares as "A" Shares. *** Asset Allocation Primary A, Investor B, and Investor C Shares commenced operations on May 21, 1999, July 15, 1998, and July 22, 1996, respectively. **** Seafirst Shares converted into Investor A Shares on June 23, 2000. # Per share net investment income has been calculated using the monthly average shares method. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. (b) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 70 75 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS - -------------------------------------------------------------------------------------------------------------------- $(0.90) $23.77 1.45% $ 17,934 0.96%+(a)(b) 2.44%+ 36% 1.01%+(a) (1.13) 24.35 10.88 15,532 0.95+(a)(b) 1.85+ 84 1.02+(a) $(0.88) $23.76 1.29% $277,104 1.21%+(a)(b) 2.19%+ 36% 1.26%+(a) (1.07) 24.35 8.99 83,412 1.20+(a)(b) 1.60+ 84 1.27+(a) (0.11) 23.40 4.50 72,000 1.18+ 2.01+ 20 1.20+ (1.94) 22.50 14.72 72,000 0.94 2.64 114 0.94 (2.23) 21.41 23.07 49,000 1.03 2.67 67 1.09 (1.10) 19.40 17.64 35,000 1.25 2.59 116 1.94 (1.01) 17.52 22.80 22,000 0.62 3.49 157 2.92 $(0.79) $23.65 0.94% $123,135 1.96%+(a)(b) 1.44%+ 36% 2.01%+(a) (0.94) 24.24 8.31 121,644 1.95+(a)(b) 0.85+ 84 2.02+(a) (0.08) 23.32 4.26 10,000 1.95+ 1.26+ 20 1.97+ (1.69) 22.45 4.59 6,000 1.74+ 1.92+ 114 1.74 $(0.79) $23.67 0.91% $ 2,724 1.96%+(a)(b) 1.44%+ 36% 2.01%+(a) (0.91) 24.27 8.24 2,305 1.95+(a)(b) 0.85+ 84 2.02+(a) (0.09) 23.33 4.31 2,000 1.67+ 1.52+ 20 1.96+ (1.84) 22.45 14.23 2,000 1.44 2.14 114 1.69 (2.11) 21.36 22.10 2,000 1.52 2.17 67 1.58 (0.82) 19.40 17.69 1,000 1.94+ 2.31+ 116 3.26+
SEE NOTES TO FINANCIAL STATEMENTS. 71 76 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME GAINS ----------------------------------------------------------------------------------------- EQUITY INCOME PRIMARY A SHARES Six months ended 9/30/2000 (unaudited)........................ $11.57 $0.07 $(0.43) $(0.36) $(0.06) $ -- Year ended 3/31/2000................. 11.36 0.15 0.36 0.51 (0.15) (0.15) Year ended 3/31/1999#................ 13.94 0.23 (1.45) (1.22) (0.23) (1.13) Year ended 3/31/1998#................ 12.30 0.29 3.79 4.08 (0.28) (2.16) Year ended 3/31/1997................. 13.14 0.43 1.55 1.98 (0.41) (2.41) Period ended 3/31/1996*.............. 11.81 0.30 1.77 2.07 (0.37) (0.37) Year ended 5/31/1995................. 11.43 0.42 1.11 1.53 (0.42) (0.73) INVESTOR A SHARES Six months ended 9/30/2000 (unaudited)........................ $11.52 $0.05 $(0.41) $(0.36) $(0.04) $ -- Year ended 3/31/2000................. 11.31 0.12 0.36 0.48 (0.12) (0.15) Year ended 3/31/1999#................ 13.89 0.20 (1.45) (1.25) (0.20) (1.13) Year ended 3/31/1998#................ 12.26 0.26 3.77 4.03 (0.24) (2.16) Year ended 3/31/1997................. 13.11 0.36 1.58 1.94 (0.38) (2.41) Period ended 3/31/1996*.............. 11.78 0.27 1.77 2.04 (0.34) (0.37) Year ended 5/31/1995................. 11.41 0.40 1.10 1.50 (0.40) (0.73) INVESTOR B SHARES Six months ended 9/30/2000 (unaudited)........................ $11.51 $0.01 $(0.40) $(0.39) $(0.01) $ -- Year ended 3/31/2000................. 11.31 0.03 0.36 0.39 (0.04) (0.15) Year ended 3/31/1999#................ 13.87 0.11 (1.45) (1.34) (0.09) (1.13) Year ended 3/31/1998#................ 12.25 0.17 3.77 3.94 (0.16) (2.16) Year ended 3/31/1997................. 13.10 0.31 1.57 1.88 (0.32) (2.41) Period ended 3/31/1996*.............. 11.77 0.22 1.76 1.98 (0.28) (0.37) Year ended 5/31/1995................. 11.40 0.34 1.11 1.45 (0.35) (0.73) INVESTOR C SHARES Six months ended 9/30/2000 (unaudited)........................ $11.66 $0.01 $(0.41) $(0.40) $(0.01) $ -- Year ended 3/31/2000................. 11.45 0.03 0.37 0.40 (0.04) (0.15) Year ended 3/31/1999#................ 14.01 0.12 (1.44) (1.32) (0.11) (1.13) Year ended 3/31/1998#................ 12.35 0.18 3.83 4.01 (0.19) (2.16) Year ended 3/31/1997................. 13.19 0.33 1.59 1.92 (0.35) (2.41) Period ended 3/31/1996*.............. 11.83 0.21 1.78 1.99 (0.26) (0.37) Year ended 5/31/1995................. 11.47 0.32 1.08 1.40 (0.31) (0.73)
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * Fiscal year end changed to March 31. Prior to this, the fiscal year end was May 31. # Per share net investment income has been calculated using the monthly average shares method. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. (b) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 72 77 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS - -------------------------------------------------------------------------------------------------------------------- $(0.06) $11.15 (3.16)% $458,237 0.86%+(a)(b) 1.14%+ 67% 0.87%+(a) (0.30) 11.57 4.51 397,479 0.85(a)(b) 1.25 54 0.85(a) (1.36) 11.36 (9.40) 575,076 0.80(a)(b) 1.92 69 0.80(a) (2.44) 13.94 37.21 915,630 0.86(a) 2.22 74 0.86(a) (2.82) 12.30 15.62 200,772 0.91(a) 3.09 102 0.91(a) (0.74) 13.14 17.98 283,142 0.90+ 2.84+ 59 0.90+ (1.15) 11.81 14.79 283,082 0.92 3.75 158 0.93 $(0.04) $11.12 (3.11)% $ 29,050 1.11%+(a)(b) 0.89%+ 67% 1.12%+(a) (0.27) 11.52 4.26 33,569 1.10(a)(b) 1.00 54 1.10(a) (1.33) 11.31 (9.87) 51,278 1.05(a)(b) 1.67 69 1.05(a) (2.40) 13.89 36.92 68,006 1.11(a) 1.97 74 1.11(a) (2.79) 12.26 15.30 47,891 1.16(a) 2.84 102 1.16(a) (0.71) 13.11 17.75 42,606 1.15+ 2.59+ 59 1.15+ (1.13) 11.78 14.53 35,538 1.17 3.50 158 1.18 $(0.01) $11.11 (3.39)% $ 60,708 1.86%+(a)(b) 0.14%+ 67% 1.87%+(a) (0.19) 11.51 3.43 73,966 1.85(a)(b) 0.25 54 1.85(a) (1.22) 11.31 (10.49) 107,747 1.80(a)(b) 0.92 69 1.80(a) (2.32) 13.87 36.02 144,929 1.78(a) 1.30 74 1.78(a) (2.73) 12.25 14.76 108,055 1.66(a) 2.34 102 1.66(a) (0.65) 13.10 17.21 104,026 1.65+ 2.09+ 59 1.65+ (1.08) 11.77 14.03 75,371 1.67 3.00 158 1.68 $(0.01) $11.25 (3.43)% $ 3,593 1.86%+(a)(b) 0.14%+ 67% 1.87%+(a) (0.19) 11.66 3.46 4,365 1.85(a)(b) 0.25 54 1.85(a) (1.24) 11.45 (10.28) 5,801 1.64(a)(b) 1.08 69 1.80(a) (2.35) 14.01 36.28 10,348 1.69(a) 1.39 74 1.69(a) (2.76) 12.35 15.01 5,007 1.41(a) 2.59 102 1.41(a) (0.63) 13.19 17.20 4,612 1.75+ 1.99+ 59 1.75+ (1.04) 11.83 13.49 4,278 1.92 2.75 158 1.93
SEE NOTES TO FINANCIAL STATEMENTS. 73 78 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME GAINS ---------------------------------------------------------------------------------------------- VALUE PRIMARY A SHARES Six months ended 9/30/2000 (unaudited).................. $16.24 $ 0.10 $ 0.08 $ 0.18 $(0.11) $(1.97) Year ended 3/31/2000#.......... 18.16 0.11 (0.06) 0.05 (0.11) (1.86) Year ended 3/31/1999#.......... 19.92 0.13 0.64 0.77 (0.14) (2.39) Year ended 3/31/1998#.......... 17.87 0.20 5.98 6.18 (0.19) (3.94) Year ended 3/31/1997........... 16.60 0.26 2.69 2.95 (0.26) (1.42) Period ended 3/31/1996*........ 16.21 0.07 1.06 1.13 (0.12) (0.62) Year ended 11/30/1995.......... 12.98 0.27 3.91 4.18 (0.28) (0.67) INVESTOR A SHARES Six months ended 9/30/2000 (unaudited).................. $16.24 $ 0.09 $ 0.06 $ 0.15 $(0.09) $(1.97) Year ended 3/31/2000#.......... 18.16 0.07 (0.07) 0.00 (0.06) (1.86) Year ended 3/31/1999#.......... 19.92 0.09 0.63 0.72 (0.09) (2.39) Year ended 3/31/1998#.......... 17.87 0.15 5.98 6.13 (0.14) (3.94) Year ended 3/31/1997........... 16.60 0.21 2.70 2.91 (0.22) (1.42) Period ended 3/31/1996*........ 16.21 0.05 1.06 1.11 (0.10) (0.62) Year ended 11/30/1995.......... 12.98 0.23 3.92 4.15 (0.25) (0.67) INVESTOR B SHARES Six months ended 9/30/2000 (unaudited).................. $16.00 $ 0.03 $ 0.07 $ 0.10 $(0.05) $(1.97) Year ended 3/31/2000#.......... 18.00 (0.06) (0.08) (0.14) (0.00)## (1.86) Year ended 3/31/1999#.......... 19.81 (0.05) 0.63 0.58 -- (2.39) Year ended 3/31/1998#.......... 17.81 0.02 5.96 5.98 (0.04) (3.94) Year ended 3/31/1997........... 16.55 0.14 2.68 2.82 (0.14) (1.42) Period ended 3/31/1996*........ 16.15 0.03 1.05 1.08 (0.06) (0.62) Year ended 11/30/1995.......... 12.94 0.17 3.89 4.06 (0.18) (0.67) INVESTOR C SHARES Six months ended 9/30/2000 (unaudited).................. $15.99 $ 0.03 $ 0.07 $ 0.10 $(0.05) $(1.97) Year ended 3/31/2000#.......... 17.98 (0.06) (0.07) (0.13) (0.00)## (1.86) Year ended 3/31/1999#.......... 19.75 (0.02) 0.65 0.63 (0.01) (2.39) Year ended 3/31/1998#.......... 17.75 0.04 5.95 5.99 (0.05) (3.94) Year ended 3/31/1997........... 16.50 0.17 2.68 2.85 (0.18) (1.42) Period ended 3/31/1996*........ 16.09 0.04 1.05 1.09 (0.06) (0.62) Year ended 11/30/1995.......... 12.90 0.13 3.88 4.01 (0.15) (0.67)
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * Fiscal year end changed to March 31. Prior to this, the fiscal year end was November 30. # Per share net investment income has been calculated using the monthly average shares method. ## Amount represents less than $0.01 per share. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. (b) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 74 79 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS RATIO OF AND/OR EXPENSE OPERATING REIMBURSEMENTS RATIO OF EXPENSES TO --------------- OPERATING AVERAGE NET RATIO OF NET RATIO OF TOTAL NET ASSETS EXPENSES TO ASSETS INVESTMENT OPERATING DIVIDENDS NET ASSET END OF AVERAGE INCLUDING INCOME/(LOSS) TO PORTFOLIO EXPENSES TO AND VALUE TOTAL PERIOD NET INTEREST AVERAGE NET TURNOVER AVERAGE NET DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS EXPENSE ASSETS RATE ASSETS - ------------------------------------------------------------------------------------------------------------------------------------ $(2.08) $14.34 1.45% $1,176,252 0.94%+(a) 0.95%+ 1.42%+ 69% 0.95%+(a) (1.97) 16.24 (0.16) 1,290,572 0.93(a)(b) -- 0.65 95 0.93(a) (2.53) 18.16 4.15 1,939,704 0.94(a)(b) -- 0.76 38 0.94(a) (4.13) 19.92 38.53 2,248,460 0.95(a) -- 1.04 79 0.95(a) (1.68) 17.87 18.07 1,200,853 0.97(a) -- 1.51 47 0.97(a) (0.74) 16.60 7.20 998,957 0.96+ -- 1.30+ 12 0.96+ (0.95) 16.21 34.53 956,669 0.94 -- 1.90 63 0.94 $(2.06) $14.33 1.26% $ 79,126 1.19%+(a) 1.20%+ 1.17%+ 69% 1.20%+(a) (1.92) 16.24 (0.47) 94,256 1.18(a)(b) -- 0.40 95 1.18(a) (2.48) 18.16 3.96 136,691 1.19(a)(b) -- 0.51 38 1.19(a) (4.08) 19.92 38.22 149,167 1.20(a) -- 0.79 79 1.20(a) (1.64) 17.87 17.80 70,305 1.22(a) -- 1.26 47 1.22(a) (0.72) 16.60 7.07 54,341 1.21+ -- 1.05+ 12 1.21+ (0.92) 16.21 34.22 48,440 1.19 -- 1.65 63 1.19 $(2.02) $14.08 0.89% $ 108,291 1.94%+(a) 1.95%+ 0.42%+ 69% 1.95%+(a) (1.86) 16.00 (1.24) 124,000 1.93(a)(b) -- (0.35) 95 1.93(a) (2.39) 18.00 3.11 154,025 1.94(a)(b) -- (0.24) 38 1.94(a) (3.98) 19.81 37.29 149,635 1.87(a) -- 0.12 79 1.87(a) (1.56) 17.81 17.21 99,999 1.72(a) -- 0.76 47 1.72(a) (0.68) 16.55 6.90 88,861 1.71+ -- 0.55+ 12 1.71+ (0.85) 16.15 33.55 83,699 1.69 -- 1.15 63 1.69 $(2.02) $14.07 0.89% $ 9,602 1.94%+(a) 1.95%+ 0.42%+ 69% 1.95%+(a) (1.86) 15.99 (1.18) 10,042 1.93(a)(b) -- (0.32) 95 1.93(a) (2.40) 17.98 3.39 12,106 1.70(a)(b) -- 0.00 38 1.94(a) (3.99) 19.75 37.55 13,969 1.78(a) -- 0.21 79 1.78(a) (1.60) 17.75 17.51 6,519 1.47(a) -- 1.01 47 1.47(a) (0.68) 16.50 6.99 4,633 1.58+ -- 0.68+ 12 1.58+ (0.82) 16.09 33.15 4,185 1.94 -- 0.90 63 1.94
SEE NOTES TO FINANCIAL STATEMENTS. 75 80 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DISTRIBUTIONS NET ASSET VALUE NET AND UNREALIZED (DECREASE) IN FROM NET VALUE BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE REALIZED END OF OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS GAINS PERIOD --------------------------------------------------------------------------------------------- GROWTH & INCOME PRIMARY A SHARES Six months ended 9/30/2000# (unaudited)................... $21.61 $(0.01) $(1.43) $(1.44) $(0.13) $20.04 Year ended 3/31/2000............ 14.91 (0.07) 6.81 6.74 (0.04) 21.61 Year ended 3/31/1999#........... 12.03 0.00## 2.89 2.89 (0.01) 14.91 Period ended 3/31/1998*#........ 10.00 0.01 2.02 2.03 -- 12.03 INVESTOR A SHARES Six months ended 9/30/2000# (unaudited)................... $21.62 $(0.03) $(1.44) $(1.47) $(0.13) $20.02 Year ended 3/31/2000............ 14.95 (0.11) 6.82 6.71 (0.04) 21.62 Year ended 3/31/1999#........... 12.02 (0.03) 2.97 2.94 (0.01) 14.95 Period ended 3/31/1998*#........ 10.00 0.00## 2.02 2.02 -- 12.02 INVESTOR B SHARES Six months ended 9/30/2000# (unaudited)................... $21.31 $(0.11) $(1.41) $(1.52) $(0.13) $19.66 Year ended 3/31/2000............ 14.85 (0.24) 6.74 6.50 (0.04) 21.31 Year ended 3/31/1999#........... 12.02 (0.12) 2.96 2.84 (0.01) 14.85 Period ended 3/31/1998*#........ 10.00 (0.02) 2.04 2.02 -- 12.02 INVESTOR C SHARES Six months ended 9/30/2000# (unaudited)................... $21.34 $(0.11) $(1.42) $(1.53) $(0.13) $19.68 Year ended 3/31/2000............ 14.86 (0.25) 6.77 6.52 (0.04) 21.34 Year ended 3/31/1999#........... 12.02 (0.12) 2.97 2.85 (0.01) 14.86 Period ended 3/31/1998*#........ 10.00 (0.02) 2.04 2.02 -- 12.02
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * Growth & Income Primary A, Investor A, Investor B and Investor C Shares commenced operations on December 31, 1997. # Per share net investment income has been calculated using the monthly average shares method. ## Amount represents less than $0.01 per share. ### Amount represents results prior to conversion to a master-feeder structure. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 76 81 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF NET ASSETS OPERATING NET INVESTMENT OPERATING END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE NET RETURN++ (000) ASSETS ASSETS RATE ASSETS - ---------------------------------------------------------------------------------------- (6.61)% $110,348 1.11%+ (0.08)%+ -- 1.11%+ 45.33 113,028 1.23(a) (0.37) 55%### 1.23(a) 24.05 52,229 1.25(a) 0.05 150 1.25(a) 20.30 2,517 1.09+(a) 0.38+ 22 1.97+(a) (6.75)% $208,787 1.36%+ (0.33)%+ -- 1.36%+ 45.01 175,859 1.48(a) (0.62) 55%### 1.48(a) 24.38 43,392 1.50(a) (0.20) 150 1.50(a) 20.20 1,141 1.34+(a) 0.13+ 22 2.22+(a) (7.08)% $324,701 2.11%+ (1.08)%+ -- 2.11%+ 43.90 305,607 2.23(a) (1.37) 55%### 2.23(a) 23.55 99,257 2.25(a) (0.95) 150 2.25(a) 20.20 7,907 2.09+(a) (0.62)+ 22 2.97+(a) (7.07)% $ 40,863 2.11%+ (1.08)%+ -- 2.11%+ 43.93 34,785 2.23(a) (1.37) 55%### 2.23(a) 23.63 3,233 2.25(a) (0.95) 150 2.25(a) 20.20 518 2.09+(a) (0.62)+ 22 2.97+(a)
SEE NOTES TO FINANCIAL STATEMENTS. 77 82 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME GAINS ---------------------------------------------------------------------------------------------- BLUE CHIP PRIMARY A SHARES Six months ended 9/30/2000# (unaudited).................. $37.33 $ 0.03 $(0.62) $(0.59) $ -- $(2.13) Period ended 3/31/2000***#..... 35.00 0.06 5.65 5.71 (0.03) (3.35) INVESTOR A SHARES*,**** Six months ended 9/30/2000# (unaudited).................. $37.24 $(0.02) $(0.62) $(0.64) $ -- $(2.13) Period ended 3/31/2000#........ 35.92 0.02 4.65 4.67 -- (3.35) Period ended 5/14/1999......... 33.43 0.00## 2.49 2.49 -- -- Year ended 2/28/1999........... 29.90 0.09 5.26 5.35 (0.10) (1.72) Year ended 2/28/1998........... 25.22 0.16 7.91 8.07 (0.15) (3.24) Year ended 2/28/1997**......... 20.53 0.23 5.21 5.44 (0.22) (0.53) Year ended 2/29/1996........... 15.81 0.26 4.96 5.22 (0.28) (0.22) INVESTOR B SHARES* Six months ended 9/30/2000# (unaudited).................. $36.80 $(0.15) $(0.60) $(0.75) $ -- $(2.13) Period ended 3/31/2000#........ 35.77 (0.26) 4.64 4.38 -- (3.35) Period ended 5/14/1999......... 33.34 (0.02) 2.45 2.43 -- -- Period ended 2/28/1999***...... 33.73 (0.05) 1.39 1.34 (0.01) (1.72) INVESTOR SHARES C* Six months ended 9/30/2000# (unaudited).................. $36.71 $(0.15) $(0.61) $(0.76) $ -- $(2.13) Period ended 3/31/2000#........ 35.69 (0.24) 4.61 4.37 -- (3.35) Period ended 5/14/1999......... 33.24 (0.04) 2.49 2.45 -- -- Year ended 2/28/1999........... 29.79 (0.06) 5.23 5.17 -- (1.72) Year ended 2/28/1998........... 25.20 0.04 7.83 7.87 (0.04) (3.24) Period ended 2/28/1997***...... 20.38 0.07 5.35 5.42 (0.07) (0.53)
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * The financial information for the fiscal periods through May 14, 1999 reflect the financial information for the Pacific Horizon Blue Chip Fund A, B, and K Shares, which were reorganized into the Blue Chip Investor A, Investor B, and Investor C Shares, respectively, as of May 21, 1999. Prior to May 21, 1999, the Fund's investment adviser was Bank of America National Trust and Savings Association. Effective May 21, 1999, its investment adviser became Banc of America Advisors, Inc. and its investment sub-adviser became Banc of America Capital Management, Inc. ** As of July 22, 1996, the Fund designated the existing series of shares as "A" Shares. *** Blue Chip Primary A, Investor B, and Investor C Shares commenced operations on May 21, 1999, July 15, 1998, and July 22, 1996. **** Seafirst Shares converted into Investor A Shares on June 23, 2000. # Per share net investment income has been calculated using the monthly average shares method. ## Amount represents less than $0.01. SEE NOTES TO FINANCIAL STATEMENTS. 78 83 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO EXPENSES TO AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET AVERAGE DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS NET ASSETS - ------------------------------------------------------------------------------------------------------------ $(2.13) $34.61 (1.48)% $ 37,538 0.95%+ 0.14%+ 0.96%+ (3.38) 37.33 17.54 36,393 0.95+ 0.17+ 0.98+ $(2.13) $34.47 (1.62)% $815,715 1.20%+ (0.11)%+ 1.21%+ (3.35) 37.24 14.10 394,071 1.20+ (0.08)+ 1.23+ -- 35.92 7.45 423,000 1.29+ (0.03)+ 1.33+ (1.82) 33.43 18.58 401,000 1.16 0.31 1.17 (3.39) 29.90 33.96 288,000 1.18 0.63 1.22 (0.75) 25.22 27.01 153,000 1.28 0.99 1.71 (0.50) 20.53 33.39 67,000 0.83 1.63 2.28 $(2.13) $33.92 (1.98)% $ 92,719 1.95%+ (0.86)%+ 1.96%+ (3.35) 36.80 13.37 75,538 1.95+ (0.83)+ 1.98+ -- 35.77 7.29 21,000 2.05+ (0.77)+ 2.09+ (1.73) 33.34 4.53 13,000 1.97+ (0.58)+ 1.99+ $(2.13) $33.82 (1.96)% $ 19,806 1.95%+ (0.86)%+ 1.96%+ (3.35) 36.71 13.35 17,123 1.95+ (0.83)+ 1.98+ -- 35.69 7.37 15,000 1.80+ (0.54)+ 2.08+ (1.72) 33.24 17.96 13,000 1.66 (0.22) 1.92 (3.28) 29.79 33.08 7,000 1.67 0.12 1.69 (0.60) 25.20 26.96 1,000 1.92+ 0.45+ 2.12+
SEE NOTES TO FINANCIAL STATEMENTS. 79 84 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS NET ASSET VALUE NET AND UNREALIZED (DECREASE) IN FROM NET VALUE BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE REALIZED END OF OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS GAINS PERIOD ---------------------------------------------------------------------------------------------- STRATEGIC GROWTH PRIMARY A SHARES Six months ended 9/30/2000# (unaudited).................. $17.03 $(0.02) $(0.93) $(0.95) $(0.03) $16.05 Year ended 3/31/2000#.......... 13.86 (0.02) 3.39 3.37 (0.20) 17.03 Period ended 3/31/1999*#....... 10.00 0.00## 3.87 3.87 (0.01) 13.86 INVESTOR A SHARES Six months ended 9/30/2000# (unaudited).................. $16.98 $(0.04) $(0.88) $(0.92) $(0.03) $16.03 Period ended 3/31/2000**#...... 13.88 (0.03) 3.19 3.16 (0.06) 16.98 INVESTOR B SHARES Six months ended 9/30/2000# (unaudited).................. $16.90 $(0.10) $(0.88) $(0.98) $(0.03) $15.89 Period ended 3/31/2000**#...... 13.88 (0.10) 3.18 3.08 (0.06) 16.90 INVESTOR C SHARES Six months ended 9/30/2000# (unaudited).................. $16.92 $(0.10) $(0.88) $(0.98) $(0.03) $15.91 Period ended 3/31/2000**#...... 13.88 (0.10) 3.20 3.10 (0.06) 16.92
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * Strategic Growth Primary A Shares commenced operations on October 2, 1998. ** Strategic Growth Investor A, Investor B and Investor C Shares commenced operations on August 2, 1999. # Per share net investment income has been calculated using the monthly average shares method. ## Amount represents less than $0.01 per share. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. (b) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 80 85 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF NET ASSETS OPERATING NET INVESTMENT OPERATING END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE RETURN++ (000) ASSETS ASSETS RATE NET ASSETS - ---------------------------------------------------------------------------------------- (5.60)% $1,290,919 0.94%+(a)(b) (0.22)%+ 22% 0.94%+(a) 24.63 860,124 0.97 (0.10) 23 0.97 38.65 266,823 1.07+(a) (0.03)+ 34 1.07+(a) (5.44)% $ 13,376 1.19%+(a)(b) (0.47)%+ 22% 1.19%+(a) 22.86 5,503 1.22+ (0.35)+ 23 1.22+ (5.76)% $ 7,892 1.94%+(a)(b) (1.22)%+ 22% 1.94%+(a) 22.29 4,934 1.97+ (1.10)+ 23 1.97+ (5.76)% $ 2,318 1.94%+(a)(b) (1.22)%+ 22% 1.94%+(a) 22.36 1,706 1.97+ (1.10)+ 23 1.97+
SEE NOTES TO FINANCIAL STATEMENTS. 81 86 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME GAINS ---------------------------------------------------------------------------------------------- CAPITAL GROWTH PRIMARY A SHARES Six months ended 9/30/2000# (unaudited).................. $14.59 $(0.03) $(0.60) $(0.63) $ -- $(0.52) Year ended 3/31/2000........... 12.05 (0.05) 3.47 3.42 -- (0.88) Year ended 3/31/1999#.......... 13.30 0.00## 1.59 1.59 -- (2.84) Year ended 3/31/1998#.......... 11.70 0.02 5.27 5.29 (0.01) (3.68) Year ended 3/31/1997#.......... 13.43 0.05 1.66 1.71 (0.05) (3.39) Period ended 3/31/1996*........ 14.24 0.02 0.38 0.40 (0.02) (1.19) Year ended 11/30/1995.......... 11.23 0.09 3.28 3.37 (0.10) (0.26) INVESTOR A SHARES Six months ended 9/30/2000# (unaudited).................. $14.43 $(0.04) $(0.61) $(0.65) $ -- $(0.52) Year ended 3/31/2000........... 11.97 (0.08) 3.42 3.34 -- (0.88) Year ended 3/31/1999#.......... 13.26 (0.03) 1.58 1.55 -- (2.84) Year ended 3/31/1998#.......... 11.67 (0.01) 5.28 5.27 -- (3.68) Year ended 3/31/1997#.......... 13.41 0.02 1.65 1.67 (0.02) (3.39) Period ended 3/31/1996*........ 14.22 0.01 0.38 0.39 (0.01) (1.19) Year ended 11/30/1995.......... 11.21 0.06 3.28 3.34 (0.07) (0.26) INVESTOR B SHARES Six months ended 9/30/2000# (unaudited).................. $13.58 $(0.09) $(0.57) $(0.66) $ -- $(0.52) Year ended 3/31/2000........... 11.39 (0.17) 3.24 3.07 -- (0.88) Year ended 3/31/1999#.......... 12.83 (0.11) 1.51 1.40 -- (2.84) Year ended 3/31/1998#.......... 11.47 (0.10) 5.14 5.04 -- (3.68) Year ended 3/31/1997#.......... 13.31 (0.08) 1.63 1.55 -- (3.39) Period ended 3/31/1996*........ 14.15 (0.02) 0.37 0.35 -- (1.19) Year ended 11/30/1995.......... 11.17 (0.03) 3.27 3.24 -- (0.26) INVESTOR C SHARES Six months ended 9/30/2000# (unaudited).................. $13.70 $(0.09) $(0.57) $(0.66) $ -- $(0.52) Year ended 3/31/2000........... 11.48 (0.16) 3.26 3.10 -- (0.88) Year ended 3/31/1999#.......... 12.92 (0.11) 1.51 1.40 -- (2.84) Year ended 3/31/1998#.......... 11.50 (0.08) 5.18 5.10 -- (3.68) Year ended 3/31/1997#.......... 13.26 (0.01) 1.64 1.63 -- (3.39) Period ended 3/31/1996*........ 14.09 0.00## 0.36 0.36 -- (1.19) Year ended 11/30/1995.......... 11.14 (0.03) 3.24 3.21 -- (0.26)
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * Fiscal year end changed to March 31. Prior to this, the fiscal year end was November 30. # Per share net investment income has been calculated using the monthly average shares method. ## Amount represents less than $0.01 per share. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. (b) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 82 87 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS - -------------------------------------------------------------------------------------------------------------------- $(0.52) $13.44 (4.28)% $746,098 0.95%+(a)(b) (0.40)%+ 38% 0.95%+(a) (0.88) 14.59 29.90 816,371 0.96(a)(b) (0.38) 39 0.96(a) (2.84) 12.05 14.99 737,620 0.96(a) (0.04) 39 0.96(a) (3.69) 13.30 53.89 872,150 0.95(a)(b) 0.13 113 0.95(a) (3.44) 11.70 11.88 533,168 0.96(b) 0.39 75 0.96 (1.21) 13.43 3.14 839,300 0.96+ 0.38+ 25 0.96+ (0.36) 14.24 30.96 867,361 0.98 0.71 80 0.98 $(0.52) $13.26 (4.47)% $ 55,499 1.20%+(a)(b) (0.65)%+ 38% 1.20%+(a) (0.88) 14.43 29.41 61,756 1.21(a)(b) (0.63) 39 1.21(a) (2.84) 11.97 14.70 52,987 1.21(a) (0.29) 39 1.21(a) (3.68) 13.26 53.83 43,380 1.20(a)(b) (0.12) 113 1.20(a) (3.41) 11.67 11.58 20,465 1.21(b) 0.14 75 1.21 (1.20) 13.41 3.02 18,311 1.21+ 0.13+ 25 1.21+ (0.33) 14.22 30.70 16,770 1.23 0.46 80 1.23 $(0.52) $12.40 (4.77)% $ 69,609 1.95%+(a)(b) (1.40)%+ 38% 1.95%+(a) (0.88) 13.58 28.42 75,844 1.96(a)(b) (1.38) 39 1.96(a) (2.84) 11.39 13.86 66,338 1.96(a) (1.04) 39 1.96(a) (3.68) 12.83 52.52 59,496 1.95(a)(b) (0.87) 113 1.95(a) (3.39) 11.47 10.68 41,933 1.96(b) (0.61) 75 1.96 (1.19) 13.31 2.77 41,045 1.96+ (0.62)+ 25 1.96+ (0.26) 14.15 29.80 40,868 1.98 (0.29) 80 1.98 $(0.52) $12.52 (4.72)% $ 4,905 1.95%+(a)(b) (1.40)%+ 38% 1.95%+(a) (0.88) 13.70 28.46 4,883 1.96(a)(b) (1.38) 39 1.96(a) (2.84) 11.48 13.76 3,862 1.96(a) (1.04) 39 1.96(a) (3.68) 12.92 53.02 6,176 1.78(a)(b) (0.70) 113 1.78(a) (3.39) 11.50 11.39 5,752 1.46(b) (0.11) 75 1.46 (1.19) 13.26 2.86 3,655 1.58+ (0.24)+ 25 1.58+ (0.26) 14.09 29.61 3,322 1.98 (0.29) 80 1.98
SEE NOTES TO FINANCIAL STATEMENTS. 83 88 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME GAINS ---------------------------------------------------------------------------------------------- AGGRESSIVE GROWTH PRIMARY A SHARES Six months ended 9/30/2000# (unaudited).................. $20.61 $(0.04) $ 0.20 $ 0.16 $ -- $ -- Year ended 3/31/2000#.......... 23.36 0.03 (0.03) 0.00 (0.01) (2.74) Year ended 3/31/1999........... 22.17 0.02 3.22 3.24 (0.01)### (2.04) Year ended 3/31/1998#.......... 18.47 0.08 7.88 7.96 (0.03) (4.23) Year ended 3/31/1997........... 17.19 0.14 2.79 2.93 (0.14) (1.51) Period ended 3/31/1996*........ 17.06 0.05 0.35 0.40 (0.04) (0.23) Year ended 11/30/1995.......... 13.08 0.10 3.96 4.06 (0.08) -- INVESTOR A SHARES Six months ended 9/30/2000# (unaudited).................. $20.43 $(0.07) $ 0.22 $ 0.15 $ -- $ -- Year ended 3/31/2000#.......... 23.23 (0.02) (0.04) (0.06) -- (2.74) Year ended 3/31/1999........... 22.09 (0.03) 3.21 3.18 -- (2.04) Year ended 3/31/1998#.......... 18.44 0.02 7.87 7.89 (0.01) (4.23) Year ended 3/31/1997........... 17.16 0.08 2.80 2.88 (0.09) (1.51) Period ended 3/31/1996*........ 17.04 0.04 0.35 0.39 (0.04) (0.23) Year ended 11/30/1995.......... 13.06 0.09 3.96 4.05 (0.07) -- INVESTOR B SHARES Six months ended 9/30/2000# (unaudited).................. $19.51 $(0.14) $ 0.21 $ 0.07 $ -- $ -- Year ended 3/31/2000#.......... 22.47 (0.18) (0.04) (0.22) -- (2.74) Year ended 3/31/1999........... 21.57 (0.17) 3.11 2.94 -- (2.04) Year ended 3/31/1998#.......... 18.20 (0.12) 7.72 7.60 -- (4.23) Year ended 3/31/1997........... 17.00 (0.05) 2.76 2.71 -- (1.51) Period ended 3/31/1996*........ 16.89 (0.01) 0.35 0.34 -- (0.23) Year ended 11/30/1995.......... 13.02 0.03 3.87 3.90 (0.03) -- INVESTOR C SHARES Six months ended 9/30/2000# (unaudited).................. $19.90 $(0.14) $ 0.21 $ 0.07 $ -- $ -- Year ended 3/31/2000#.......... 22.86 (0.18) (0.04) (0.22) -- (2.74) Year ended 3/31/1999........... 21.92 (0.17) 3.15 2.98 -- (2.04) Year ended 3/31/1998#.......... 18.41 (0.09) 7.83 7.74 -- (4.23) Year ended 3/31/1997........... 17.10 0.04 2.79 2.83 (0.01) (1.51) Period ended 3/31/1996*........ 16.97 0.01 0.35 0.36 -- (0.23) Period ended 11/30/1995**...... 14.08 0.00## 2.92 2.92 (0.03) --
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * Fiscal year end changed to March 31. Prior to this, the fiscal year end was November 30. ** Aggressive Growth Investor C Shares commenced operations on May 10, 1995. # Per share net investment income has been calculated using the monthly average shares method. ## Amount represents less than $0.01 per share. ### Amount includes distributions in excess of net investment income of less than $0.01 per share. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. (b) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 84 89 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS NET ASSET END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO AND VALUE TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS - -------------------------------------------------------------------------------------------------------------------- $ -- $20.77 0.78% $245,349 0.98%+(a) (0.43)%+ 65% 0.98%+(a) (2.75) 20.61 (0.16) 328,219 0.98(a)(b) 0.15 79 0.98(a) (2.05) 23.36 15.74 412,176 0.97(a)(b) 0.12 72 0.97(a) (4.26) 22.17 48.65 132,504 0.98(a)(b) 0.37 79 0.98+(a) (1.65) 18.47 17.00 100,260 1.04(b) 0.70 120 1.04 (0.27) 17.19 2.44 116,469 1.02+ 0.82+ 47 1.02+ (0.08) 17.06 31.13 109,939 1.30 0.85 124 1.30 $ -- $20.58 0.73% $ 42,658 1.23%+(a) (0.68)%+ 65% 1.23%+(a) (2.74) 20.43 (0.41) 47,624 1.23(a)(b) (0.10) 79 1.23(a) (2.04) 23.23 15.49 67,356 1.22(a)(b) (0.13) 72 1.22(a) (4.24) 22.09 48.28 21,725 1.23(a)(b) 0.12 79 1.23(a) (1.60) 18.44 16.76 6,837 1.29(b) 0.45 120 1.29 (0.27) 17.16 2.35 4,722 1.12+ 0.72+ 47 1.12+ (0.07) 17.04 31.05 3,234 1.40 0.75 124 1.40 $ -- $19.58 0.36% $ 33,530 1.98%+(a) (1.43)%+ 65% 1.98%+(a) (2.74) 19.51 (1.19) 39,680 1.98(a)(b) (0.85) 79 1.98(a) (2.04) 22.47 14.69 50,797 1.97(a)(b) (0.88) 72 1.97(a) (4.23) 21.57 47.14 38,079 1.98(a)(b) (0.63) 79 1.98(a) (1.51) 18.20 15.86 20,257 2.04(b) (0.30) 120 2.04 (0.23) 17.00 2.08 18,412 2.02+ (0.18)+ 47 2.02+ (0.03) 16.89 29.94 16,874 2.30 (0.15) 124 2.30 $ -- $19.97 0.35% $ 1,133 1.98%+(a) (1.43)%+ 65% 1.98%+(a) (2.74) 19.90 (1.16) 1,496 1.98(a)(b) (0.85) 79 1.98(a) (2.04) 22.86 14.64 1,629 1.97(a)(b) (0.88) 72 1.97(a) (4.23) 21.92 47.38 1,199 1.81(a)(b) (0.46) 79 1.81(a) (1.52) 18.41 16.45 446 1.54(b) 0.20 120 1.54 (0.23) 17.10 2.19 283 1.65+ 0.19+ 47 1.65+ (0.03) 16.97 20.78 322 2.30+ (0.15)+ 124 2.30+
SEE NOTES TO FINANCIAL STATEMENTS. 85 90 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DISTRIBUTIONS NET ASSET VALUE NET AND UNREALIZED (DECREASE) IN FROM NET VALUE BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE REALIZED END OF OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS GAINS PERIOD --------------------------------------------------------------------------------------------- FOCUSED EQUITIES PRIMARY A SHARES Six months ended 9/30/2000# (unaudited)................... $22.59 $(0.02) $(1.06) $(1.08) $(0.08) $21.43 Year ended 3/31/2000#........... 16.69 (0.01) 6.14 6.13 (0.23) 22.59 Year ended 3/31/1999#........... 12.13 (0.01) 4.58 4.57 (0.01) 16.69 Period ended 3/31/1998*#........ 10.00 (0.01) 2.14 2.13 -- 12.13 INVESTOR A SHARES Six months ended 9/30/2000# (unaudited)................... $22.56 $(0.05) $(1.05) $(1.10) $(0.08) $21.38 Year ended 3/31/2000#........... 16.73 (0.03) 6.09 6.06 (0.23) 22.56 Year ended 3/31/1999#........... 12.14 (0.04) 4.64 4.60 (0.01) 16.73 Period ended 3/31/1998*#........ 10.00 (0.01) 2.15 2.14 -- 12.14 INVESTOR B SHARES Six months ended 9/30/2000# (unaudited)................... $22.26 $(0.12) $(1.04) $(1.16) $(0.08) $21.02 Year ended 3/31/2000#........... 16.62 (0.09) 5.96 5.87 (0.23) 22.26 Year ended 3/31/1999#........... 12.13 (0.12) 4.62 4.50 (0.01) 16.62 Period ended 3/31/1998*#........ 10.00 (0.04) 2.17 2.13 -- 12.13 INVESTOR C SHARES Six months ended 9/30/2000# (unaudited)................... $22.33 $(0.12) $(1.05) $(1.17) $(0.08) $21.08 Year ended 3/31/2000#........... 16.67 (0.08) 5.97 5.89 (0.23) 22.33 Year ended 3/31/1999#........... 12.13 (0.14) 4.69 4.55 (0.01) 16.67 Period ended 3/31/1998*#........ 10.00 (0.04) 2.17 2.13 -- 12.13
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * Focused Equities Primary A, Investor A, Investor B and Investor C Shares commenced operations on December 31, 1997. # Per share net investment income has been calculated using the monthly average shares method. ### Amount represents results prior to conversion to a master-feeder structure. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 86 91 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF NET ASSETS OPERATING NET INVESTMENT OPERATING END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE RETURN++ (000) ASSETS ASSETS RATE NET ASSETS - ---------------------------------------------------------------------------------------- (4.74)% $ 482,000 1.08%+ (0.20)%+ -- 1.08%+ 37.13 326,745 1.16(a) (0.35) 53%### 1.16(a) 37.73 105,458 1.06(a) 0.05 177 1.06(a) 21.30 8,808 1.52+(a) (0.30)+ 25 1.52+(a) (4.83)% $ 766,610 1.33%+ (0.45)%+ -- 1.33%+ 36.62 690,166 1.41(a) (0.60) 53%### 1.41(a) 37.94 238,137 1.31(a) (0.20) 177 1.31(a) 21.40 6,056 1.77+(a) (0.55)+ 25 1.77+(a) (5.17)% $1,056,426 2.08%+ (1.20)%+ -- 2.08%+ 35.71 1,003,840 2.16(a) (1.35) 53%### 2.16(a) 37.15 306,365 2.06(a) (0.95) 177 2.06(a) 21.30 20,446 2.52+(a) (1.30)+ 25 2.52+(a) (5.20)% $ 284,474 2.08%+ (1.20)%+ -- 2.08%+ 35.72 247,509 2.16(a) (1.35) 53%### 2.16(a) 37.56 13,682 2.06(a) (0.95) 177 2.06(a) 21.30 469 2.52+(a) (1.30)+ 25 2.52+(a)
SEE NOTES TO FINANCIAL STATEMENTS. 87 92 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DISTRIBUTIONS NET ASSET VALUE NET AND UNREALIZED (DECREASE) IN FROM NET VALUE BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE REALIZED END OF OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS GAINS PERIOD --------------------------------------------------------------------------------------------- MIDCAP GROWTH PRIMARY A SHARES Six months ended 9/30/2000# (unaudited)................... $22.41 $(0.04) $ 1.24 $ 1.20 $(1.69) $21.92 Year ended 3/31/2000#........... 13.31 (0.07) 9.81 9.74 (0.64) 22.41 Year ended 3/31/1999#........... 16.56 (0.04) (0.94) (0.98) (2.27) 13.31 Year ended 3/31/1998#........... 12.86 (0.06) 5.55 5.49 (1.79) 16.56 Year ended 3/31/1997#........... 14.04 (0.04) 0.20 0.16 (1.34) 12.86 Period ended 3/31/1996#*........ 14.28 0.00## 1.26 1.26 (1.50) 14.04 Year ended 11/30/1995........... 11.41 0.01 3.26 3.27 (0.40) 14.28 INVESTOR A SHARES Six months ended 9/30/2000# (unaudited)................... $21.87 $(0.06) $ 1.18 $ 1.12 $(1.69) $21.30 Year ended 3/31/2000#........... 13.04 (0.12) 9.59 9.47 (0.64) 21.87 Year ended 3/31/1999#........... 16.30 (0.07) (0.92) (0.99) (2.27) 13.04 Year ended 3/31/1998#........... 12.69 (0.10) 5.50 5.40 (1.79) 16.30 Year ended 3/31/1997#........... 13.91 (0.07) 0.19 0.12 (1.34) 12.69 Period ended 3/31/1996#*........ 14.17 (0.01) 1.25 1.24 (1.50) 13.91 Year ended 11/30/1995........... 11.35 (0.01) 3.23 3.22 (0.40) 14.17 INVESTOR B SHARES Six months ended 9/30/2000# (unaudited)................... $20.38 $(0.13) $ 1.10 $ 0.97 $(1.69) $19.66 Year ended 3/31/2000#........... 12.28 (0.22) 8.96 8.74 (0.64) 20.38 Year ended 3/31/1999#........... 15.58 (0.15) (0.88) (1.03) (2.27) 12.28 Year ended 3/31/1998#........... 12.29 (0.20) 5.28 5.08 (1.79) 15.58 Year ended 3/31/1997#........... 13.61 (0.18) 0.20 0.02 (1.34) 12.29 Period ended 3/31/1996#*........ 13.93 (0.05) 1.23 1.18 (1.50) 13.61 Year ended 11/30/1995........... 11.24 (0.07) 3.16 3.09 (0.40) 13.93 INVESTOR C SHARES Six months ended 9/30/2000# (unaudited)................... $20.47 $(0.13) $ 1.11 $ 0.98 $(1.69) $19.76 Year ended 3/31/2000#........... 12.33 (0.22) 9.00 8.78 (0.64) 20.47 Year ended 3/31/1999#........... 15.63 (0.15) (0.88) (1.03) (2.27) 12.33 Year ended 3/31/1998#........... 12.31 (0.18) 5.29 5.11 (1.79) 15.63 Year ended 3/31/1997#........... 13.56 (0.10) 0.19 0.09 (1.34) 12.31 Period ended 3/31/1996#*........ 13.87 (0.03) 1.22 1.19 (1.50) 13.56 Year ended 11/30/1995........... 11.20 (0.08) 3.15 3.07 (0.40) 13.87
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * Fiscal year end changed to March 31. Prior to this, the fiscal year end was November 30. # Per share net investment income has been calculated using the monthly average shares method. ## Amount represents less than $0.01 per share. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. (b) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 88 93 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS RATIO OF AND/OR EXPENSE OPERATING REIMBURSEMENTS EXPENSES --------------- RATIO OF INCLUDING RATIO OF RATIO OF NET ASSETS OPERATING INTEREST NET INVESTMENT OPERATING END OF EXPENSES TO EXPENSE INCOME/(LOSS) TO PORTFOLIO EXPENSES TO TOTAL PERIOD AVERAGE NET TO AVERAGE AVERAGE NET TURNOVER AVERAGE RETURN++ (000) ASSETS NET ASSETS ASSETS RATE NET ASSETS - ------------------------------------------------------------------------------------------------------ 6.76% $288,307 0.98%+(a) --% (0.38)%+ 23% 0.98%+(a) 75.34 281,951 1.00(a)(b) -- (0.45) 46 1.00(a) (7.21) 177,861 0.98(a)(b) -- (0.29) 43 0.98(a) 45.09 318,584 0.98(a) 0.99 (0.42) 76 0.98(a) 0.48 267,319 0.98(a) -- (0.26) 93 0.98(a) 9.87 295,764 0.99+ -- (0.06)+ 39 0.99+ 29.95 269,484 0.98 -- 0.08 139 0.98 6.54% $ 22,516 1.23%+(a) --% (0.63)%+ 23% 1.23%+(a) 74.82 22,741 1.25(a)(b) -- (0.70) 46 1.25(a) (7.41) 18,042 1.23(a)(b) -- (0.54) 43 1.23(a) 44.86 21,591 1.23(a) -- (0.67) 76 1.23(a) 0.18 12,126 1.23(a) -- (0.51) 93 1.23(a) 9.80 7,802 1.24+ -- (0.31)+ 39 1.24+ 29.65 5,765 1.23 -- (0.17) 139 1.23 6.27% $ 56,336 1.98%+(a) --% (1.38)%+ 23% 1.98%+(a) 73.47 49,606 2.00(a)(b) -- (1.45) 46 2.00(a) (8.10) 33,245 1.98(a)(b) -- (1.29) 43 1.98(a) 43.64 45,451 1.98(a) 1.99 (1.42) 76 1.98(a) (0.57) 33,342 1.98(a) -- (1.26) 93 1.98(a) 9.52 34,989 1.99+ -- (1.06)+ 39 1.99+ 28.75 32,349 1.98 -- (0.92) 139 1.98 6.29% $ 3,624 1.98%+(a) --% (1.38)%+ 23% 1.98%+(a) 73.50 2,628 2.00(a)(b) -- (1.45) 46 2.00(a) (8.08) 1,383 1.98(a)(b) -- (1.29) 43 1.98(a) 43.80 2,266 1.81(a) 1.82 (1.25) 76 1.81(a) (0.04) 1,437 1.48(a) -- (0.76) 93 1.48(a) 9.64 936 1.61+ -- (0.68)+ 39 1.61+ 28.67 805 1.98 -- (0.92) 139 1.98
SEE NOTES TO FINANCIAL STATEMENTS. 89 94 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ VALUE NET AND UNREALIZED (DECREASE) IN NET ASSET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE VALUE OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS END OF PERIOD -------------------------------------------------------------------------------- 21ST CENTURY PRIMARY A SHARES Period ended 9/30/2000*# (unaudited)......... $10.00 $(0.02) $0.11 $0.09 $10.09 INVESTOR A SHARES Period ended 9/30/2000*# (unaudited)......... $10.00 $(0.04) $0.12 $0.08 $10.08 INVESTOR B SHARES Period ended 9/30/2000*# (unaudited)......... $10.00 $(0.08) $0.12 $0.04 $10.04 INVESTOR C SHARES Period ended 9/30/2000*# (unaudited)......... $10.00 $(0.07) $0.11 $0.04 $10.04
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * 21st Century Primary A, Investor A, Investor B and Investor C Shares commenced operations on April 10, 2000. # Per share net investment income has been calculated using the monthly average shares method. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 90 95 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF NET ASSETS OPERATING NET INVESTMENT OPERATING END OF EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO TOTAL PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE RETURN++ (000) ASSETS ASSETS RATE NET ASSETS - ----------------------------------------------------------------------------------------- 0.90% $ 6,939 1.34%+(a) (0.44)%+ 214% 1.34%+(a) 0.80% $30,347 1.59%+(a) (0.69)%+ 214% 1.59%+(a) 0.40% $72,721 2.34%+(a) (1.44)%+ 214% 2.34%+(a) 0.40% $ 9,246 2.34%+(a) (1.44)%+ 214% 2.34%+(a)
SEE NOTES TO FINANCIAL STATEMENTS. 91 96 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED) For a share outstanding throughout each period.
NET ASSET NET REALIZED NET INCREASE/ DIVIDENDS DISTRIBUTIONS VALUE NET AND UNREALIZED (DECREASE) IN FROM NET FROM NET BEGINNING INVESTMENT GAIN/(LOSS) ON NET ASSET VALUE INVESTMENT REALIZED OF PERIOD INCOME/(LOSS) INVESTMENTS FROM OPERATIONS INCOME GAINS ---------------------------------------------------------------------------------------------- SMALL COMPANY PRIMARY A SHARES* Six months ended 9/30/2000# (unaudited).................. $22.66 $(0.05) $(0.19) $(0.24) $ -- $(1.22) Year ended 3/31/2000#.......... 11.50 (0.10) 11.29 11.19 -- (0.03) Year ended 3/31/1999#.......... 15.79 (0.05) (3.11) (3.16) -- (1.13) Period ended 3/31/1998......... 12.07 0.01 4.43 4.44 (0.01) (0.71) Period ended 5/16/1997......... 10.65 0.04 1.47 1.51 (0.04) (0.05) Period ended 8/31/1996**....... 10.00 0.09 0.64 0.73 (0.08) -- INVESTOR A SHARES* Six months ended 9/30/2000# (unaudited).................. $22.44 $(0.07) $(0.18) $(0.25) $ -- $(1.22) Year ended 3/31/2000#.......... 11.43 (0.15) 11.19 11.04 -- (0.03) Year ended 3/31/1999#.......... 15.74 (0.07) (3.11) (3.18) -- (1.13) Period ended 3/31/1998......... 12.05 (0.02) 4.42 4.40 -- (0.71) Period ended 5/16/1997......... 10.64 0.03 1.46 1.49 (0.03) (0.05) Period ended 8/31/1996**....... 10.00 0.05 0.64 0.69 (0.05) -- INVESTOR B SHARES* Six months ended 9/30/2000# (unaudited).................. $21.94 $(0.15) $(0.18) $(0.33) $ -- $(1.22) Year ended 3/31/2000#.......... 11.23 (0.25) 10.99 10.74 -- (0.03) Year ended 3/31/1999#.......... 15.59 (0.11) (3.12) (3.23) -- (1.13) Period ended 3/31/1998......... 12.03 (0.08) 4.35 4.27 -- (0.71) Period ended 5/16/1997......... 10.65 (0.03) 1.46 1.43 -- (0.05) Period ended 8/31/1996**....... 10.00 0.01 0.65 0.66 (0.01) -- INVESTOR C SHARES Six months ended 9/30/2000# (unaudited).................. $22.21 $(0.15) $(0.18) $(0.33) $ -- $(1.22) Year ended 3/31/2000#.......... 11.38 (0.23) 11.09 10.86 -- (0.03) Year ended 3/31/1999#.......... 15.74 (0.12) (3.11) (3.23) -- (1.13) Period ended 3/31/1998***...... 15.18 (0.08) 1.35 1.27 -- (0.71)
- --------------- + Annualized. ++ Total return represents aggregate total return for the period indicated, assumes reinvestment of all distributions, and does not reflect the deduction of any applicable sales charges. * The financial information for the fiscal periods prior to May 23, 1997 reflects the financial information for the Pilot Small Capitalization Equity Fund Pilot, Class A and Class B Shares, which were reorganized into the Small Company Primary A, Investor A and Investor B Shares, respectively, as of the close of business on May 23, 1997. Prior to May 23, 1997, the investment manager to Small Company was Boatmen's Trust Company. Effective May 23, 1997, the investment manager to Small Company became TradeStreet Investment Associates, Inc. (now known as Banc of America Capital Management, Inc.) ** Represents the period from December 12, 1995 (commencement of operations) to August 31, 1996. *** Small Company Investor C Shares commenced operations on September 22, 1997. # Per share net investment income has been calculated using the monthly average shares method. (a) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. (b) The effect of interest expense on the operating expense ratio was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 92 97 NATIONS FUNDS FINANCIAL HIGHLIGHTS (CONTINUED)
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF RATIO OF TOTAL NET ASSETS OPERATING NET INVESTMENT OPERATING DIVIDENDS NET ASSET END EXPENSES TO INCOME/(LOSS) TO PORTFOLIO EXPENSES TO AND VALUE TOTAL OF PERIOD AVERAGE NET AVERAGE NET TURNOVER AVERAGE DISTRIBUTIONS END OF PERIOD RETURN++ (000) ASSETS ASSETS RATE NET ASSETS - ------------------------------------------------------------------------------------------------------------------------ $(1.22) $21.20 0.11% $756,237 1.15%+(a) (0.50)%+ 22% 1.20%+(a) (0.03) 22.66 97.46 647,825 1.13(a)(b) (0.65) 63 1.22(a) (1.13) 11.50 (21.05) 327,981 0.95(a) (0.42) 87 1.22(a) (0.72) 15.79 37.27 235,427 0.95+(a) 0.05+ 59 1.26+(a) (0.09) 12.07 14.21 109,450 0.98+ 0.54+ 48 1.41+ (0.08) 10.65 7.37 70,483 1.00+ 1.06+ 31 1.54+ $(1.22) $20.97 0.07% $225,962 1.40%+(a) (0.75)%+ 22% 1.45%+(a) (0.03) 22.44 96.91 245,425 1.38(a)(b) (0.90) 63 1.47(a) (1.13) 11.43 (21.32) 16,143 1.20(a) (0.67) 87 1.47(a) (0.71) 15.74 37.02 6,772 1.20+(a) (0.20)+ 59 1.51+(a) (0.08) 12.05 13.98 3,697 1.23+ 0.30+ 48 1.66+ (0.05) 10.64 6.88 2,611 1.25+ 0.66+ 31 1.65+ $(1.22) $20.39 (0.32)% $ 16,143 2.15%+(a) (1.50)%+ 22% 2.20%+(a) (0.03) 21.94 95.79 13,839 2.13(a)(b) (1.65) 63 2.22(a) (1.13) 11.23 (21.86) 5,127 1.95(a) (1.42) 87 2.22(a) (0.71) 15.59 36.06 3,384 1.87+(a) (0.87)+ 59 2.18+(a) (0.05) 12.03 13.43 2,635 1.97+ (0.45)+ 48 2.41+ (0.01) 10.65 6.65 1,878 2.01+ (0.07)+ 31 2.44+ $(1.22) $20.66 (0.32)% $ 3,881 2.15%+(a) (1.50)%+ 22% 2.20%+(a) (0.03) 22.21 95.76 3,588 2.13(a)(b) (1.65) 63 2.22(a) (1.13) 11.38 (21.66) 1,951 1.70(a) (1.17) 87 2.22(a) (0.71) 15.74 8.75 3,122 1.95+(a) (0.95)+ 59 2.26+(a)
SEE NOTES TO FINANCIAL STATEMENTS. 93 98 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Nations Fund Trust (the "Trust"), Nations Fund, Inc. (the "Company"), Nations Reserves ("Reserves") and Nations Funds Trust ("Funds Trust") are each registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end investment company. At September 30, 2000, the Trust offered thirty-four separate portfolios, the Company offered six separate portfolios, Reserves offered sixteen separate portfolios and Funds Trust offered five separate portfolios. These financial statements pertain only to certain domestic stock portfolios of the Trust, the Company, Reserves and Funds Trust: Convertible Securities Fund, Balanced Assets Fund, Asset Allocation Fund, Equity Income Fund, Value Fund, Growth & Income Fund, Blue Chip Fund, Strategic Growth Fund, Capital Growth Fund, Aggressive Growth Fund (formerly Disciplined Equity Fund), Focused Equities Fund, MidCap Growth Fund, 21st Century Fund and Small Company Fund (each a "Fund" and collectively, the "Funds"). Financial statements for the other portfolios of the Trust, the Company, Reserves and Funds Trust are presented under separate cover. The Funds currently offer four classes of shares: Primary A Shares, Investor A Shares, Investor B Shares and Investor C Shares. Seafirst Shares of Asset Allocation Fund and Blue Chip Fund were converted into Investor A Shares on June 23, 2000. Shareholders of a Fund have equal voting rights on matters affecting all shareholders of the Fund. In addition, each class of shares of a Fund has exclusive voting rights on matters that relate solely to that class and separate voting rights on matters in which the interests of one class differ from the interests of any other class. Growth & Income Fund, Blue Chip Fund and Focused Equities Fund (the "Feeder Funds") seek to achieve their investment objectives by investing substantially all of their assets in Growth & Income Master Portfolio, Blue Chip Master Portfolio and Focused Equities Master Portfolio, respectively (the "Master Portfolios"), each a series of Nations Master Investment Trust (the "Master Trust"), another open-end management investment company in the Nations Funds family. The Master Portfolios each have the same investment objective as that of its corresponding Feeder Fund. The value of the Feeder Funds' investments in the respective Master Portfolios included in the Statements of net assets reflect the Feeder Funds' proportionate beneficial interests in the net assets of the respective Master Portfolios (97.8% at September 30, 2000 for Growth & Income Master Portfolio, 95.2% for Blue Chip Master Portfolio and 98.9% for Focused Equities Master Portfolio, respectively). The financial statements of the Master Portfolios, including their schedules of investments, are included elsewhere within this report and should be read in conjunction with the Feeder Funds' financial statements. Other funds not registered under the 1940 Act managed by Banc of America Advisors, Inc. ("BAAI"), whose financial statements are not presented here, also invest in the Master Portfolios. On April 10, 2000, 21st Century Fund commenced operations in a master-feeder structure. The Fund seeks to achieve its investment objective by investing substantially all of its assets in 21st Century Master Portfolio of the Master Trust, which has the same investment objective as the Fund. Because the value of the Fund's investment in the 21st Century Master Portfolio at September 30, 2000 represented substantially all of the beneficial interests in the 21st Century Master Portfolio, financial statements for the 21st Century Master Portfolio have not been prepared and references in this report to 21st Century Fund should be read to include references to the corresponding Master Portfolio. 1. SIGNIFICANT ACCOUNTING POLICIES The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. Securities valuation: Securities traded on a recognized exchange or on NASDAQ are valued at the last sale price on the exchange or market on which such securities are primarily traded. Securities traded only over-the-counter are valued at the last sale price, or if no sale occurred on such day, at the mean of the current bid and asked prices. Certain securities may be valued using broker quotations or on the basis of prices provided by pricing services. Restricted securities, securities for which market quotations are not readily available, and certain other assets may be valued under procedures adopted by the Board of Trustees/Directors. Short-term investments that mature in 60 days or less are valued at amortized cost, which approximates current market value. The valuation of each Feeder Fund's investment in its corresponding Master Portfolio is based on the reported net asset value of that Master Portfolio. The Master 94 99 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) Portfolios use valuation policies consistent with those described above. Futures contracts: All Funds may invest in futures contracts. Upon entering into a futures contract, a Fund is required to deposit with the broker an amount of cash or liquid securities equal to a specified percentage of the contract amount. This is known as the "initial margin." Subsequent payments ("variation margin") are made or received by a Fund each day, depending on the daily fluctuation of the value of the contract. During the period the futures contract is open, changes in the value of the contract are recognized as unrealized gain or loss by "marking-to-market" on a daily basis to reflect the market value of the contract. When the contracts are closed, a Fund records a realized gain or loss equal to the difference between the value of the contracts on the closing date and the value of the contracts when originally entered into. Risks of investments in futures contracts include the possible adverse movement of the securities or indices underlying the contracts, the possibility that there may not be a liquid secondary market for the contracts, that a change in the value of the contract may not correlate with changes in the value of the underlying securities, or that the counterparty to a contract may default on its obligation to perform. Securities transactions and investment income: Securities transactions are accounted for on trade date. Realized gains and losses are computed based on the specific identification of securities sold. Interest income, adjusted for accretion of discounts and amortization of premiums, is earned from settlement date and recorded on an accrual basis. Dividend income is recorded on ex- dividend date. Each Fund's investment income and realized and unrealized gains and losses are allocated among its share classes based upon the relative net assets of each class of shares. The Feeder Funds record their share of the investment income and realized and unrealized gains and losses reported by the Master Portfolios on a daily basis. The investment income and realized and unrealized gains and losses are allocated daily to investors in the Master Portfolios based upon the value of their investments in the Master Portfolios. Dividends and distributions to shareholders: Distributions from net investment income are declared and paid each calendar quarter by the Convertible Securities, Balanced Assets, Asset Allocation, Growth & Income, Blue Chip, Focused Equities, MidCap Growth and 21st Century Funds; all other Funds declare and pay distributions monthly. Each Fund will distribute net realized capital gains (including net short-term capital gains) at least annually after the fiscal year in which the capital gains were earned, unless offset by any available capital loss carryforward. Income distributions and capital gain distributions on a Fund level are determined in accordance with federal income tax regulations which may differ from accounting principles generally accepted in the United States of America. Federal income tax: Each Fund intends to continue to qualify as a regulated investment company by complying with the applicable requirements of the Internal Revenue Code of 1986, as amended, and by distributing substantially all of its earnings to its shareholders. Therefore, no provision is made for federal income or excise taxes. Expenses: General expenses of the Trust, the Company, Reserves and Funds Trust are allocated to the Funds based upon their relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to a Fund or class of shares are charged to such Fund or class. The Feeder Funds record their share of the expenses reported by the Master Portfolios on a daily basis. The expenses are allocated daily to investors in the Master Portfolios based upon the value of the Feeder Funds' investments in the Master Portfolios. 2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED PARTY TRANSACTIONS Each of the Trust, the Company, Reserves and Funds Trust has entered into an investment advisory agreement (the "Investment Advisory Agreements") with BAAI, a wholly-owned subsidiary of Bank of America, N.A. ("Bank of America"), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, pursuant to which BAAI provides investment advisory services to the Funds. Under the terms of the Investment Advisory Agreements, BAAI is entitled to receive an advisory fee, calculated daily and payable 95 100 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) monthly, based on the following annual rates multiplied by the average daily net assets of each Fund:
ANNUAL RATE ------ Convertible Securities, Balanced Assets, Asset Allocation, Value, Strategic Growth, Capital Growth, Aggressive Growth, MidCap Growth.... 0.65% 21st Century.................................. 0.75% Small Company................................. 0.90%
FEES ON NET ASSETS FEES ON FEES ON UP TO NET ASSETS NET ASSETS $100 BETWEEN $100 EXCEEDING MILLION AND $250 MILLION $250 MILLION ---------------------------------------------- Equity Income........ 0.65% 0.60% 0.50%
The Feeder Funds indirectly pay for investment advisory services through their investments in their corresponding Master Portfolios (See Note 2 of Notes to financial statements of the Master Portfolios). Each of the Trust, the Company, Reserves and Funds Trust has entered into a sub-advisory agreement with BAAI and Banc of America Capital Management, Inc. ("BACAP"), a wholly-owned subsidiary of Bank of America, pursuant to which BACAP is entitled to receive a sub-advisory fee from BAAI at the following maximum annual rate of each Fund's average daily net assets:
ANNUAL RATE ------ Equity Income................................. 0.20% Convertible Securities, Balanced Assets, Value, Strategic Growth, Capital Growth, Aggressive Growth, MidCap Growth, Small Company..................................... 0.25%
Reserves has, on behalf of the Asset Allocation Fund, entered into a sub-advisory agreement with BAAI and BACAP, pursuant to which BACAP is entitled to receive a sub-advisory fee from BAAI for management of the fixed income and money market portions of the Fund at the maximum annual rate of 0.25% of the Fund's average daily net assets. Reserves has, on behalf of the Asset Allocation Fund, entered into a sub-advisory agreement with BAAI and Chicago Equity Partners LLC ("Chicago Equity"), pursuant to which Chicago Equity is entitled to receive a sub-advisory fee from BAAI for management of the equity portion of the Fund at the maximum annual rate of 0.25% of the Fund's average daily net assets. Funds Trust has, on behalf of the 21st Century Fund, entered into a sub-advisory agreement with BAAI and Marsico Capital Management, LLC ("Marsico"), pursuant to which Marsico is entitled to receive a sub-advisory fee from BAAI at the maximum annual rate of 0.45% of the Fund's average daily net assets. Marsico Management Holdings, LLC, a partially-owned subsidiary of Bank of America, owns 50% of the equity of Marsico. On June 28, 2000, the Bank of America announced its intention to purchase the remaining 50% equity interest in Marsico. The proposed purchase is not expected to result in any change in the Marsico personnel who manage the Fund or in the way that the Fund is managed. The Feeder Funds indirectly pay for sub-advisory services through their investments in their corresponding Master Portfolios (See Note 2 of Notes to financial statements of the Master Portfolios). Stephens Inc. ("Stephens") and BAAI serve as co-administrators of the Trust, the Company, Reserves and Funds Trust. Under the co-administration agreements, Stephens and BAAI are currently entitled to receive a combined fee, computed daily and paid monthly, at the maximum annual rate of 0.23% of the average daily net assets of all Funds except for Blue Chip Fund, which pays a monthly fee at the maximum annual rate of 0.18% of its average daily net assets and Growth & Income and Focused Equities Funds, which pay a monthly fee at the maximum annual rate of 0.13% of their average daily net assets. The Bank of New York ("BNY") serves as sub-administrator of the Trust, the Company, Reserves and Funds Trust pursuant to agreements with BAAI. For the six months ended September 30, 2000, Stephens and BAAI earned 0.06% and 0.08%, respectively, of the Funds' average daily net assets for their co-administration services. BAAI and/or the sub-advisers and Stephens may, from time to time, reduce their fees payable by each Fund. Effective August 1, 2000, BAAI and/or the sub-advisers and Stephens agreed to reimburse expenses and/or waive their fees until July 31, 2001 to the extent that total expenses (excluding shareholder servicing and distribution fees), as a percentage of the respective Fund's average daily net assets, exceed the following annual rates: 1.15% for the Small Company Fund and a percentage of Balanced Assets Fund's average daily net assets, not to exceed the annual rate maintained for the Asset Allocation Fund. BNY serves as the custodian of the Trust's, the Company's, Reserves' and Funds Trust's assets. For the 96 101 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) six months ended September 30, 2000, expenses of the Funds were reduced by $39,051 under expense offset arrangements with BNY. The Funds could have invested a portion of the assets utilized in connection with the expense offset arrangements in an income producing asset if they had not entered into such arrangements. No officer, director or employee of Bank of America, BAAI or BACAP, or any affiliate thereof, receives any compensation from the Trust, the Company, Reserves and Funds Trust for serving as Trustee/Director or Officer of the Trust, the Company, Reserves and Funds Trust. PFPC Inc. ("PFPC") serves as the transfer agent for the Funds' shares. Bank of America serves as the sub-transfer agent for the Primary A and Primary B Shares of the Funds. For the six months ended September 30, 2000, Bank of America earned approximately $27,505 for providing such services. Stephens also serves as distributor of the Funds' shares. For the six months ended September 30, 2000, the Funds were informed that the distributor received $366,794 in front-end sales charges for sales of Investor A Shares and $1,573,133 in contingent deferred sales charges from redemption of shares which were subject to such charges. A substantial portion of these fees is paid to affiliates of Bank of America. The Trust's, the Company's, Reserves' and Funds Trust's eligible Trustees/Directors may participate in non-qualified deferred compensation and retirement plans which may be terminated at any time. All benefits provided under these plans are unfunded and any payments to plan participants are paid solely out of the Funds' assets. Income earned on each plan participant's deferral account is tied to the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, to the rate of return of Nations Treasury Fund, a portfolio of the Company. The expense for the deferred compensation and retirement plans is included in "Trustees'/Directors' fees and expenses" in the Statements of operations. Certain Funds have made daily investments of cash balances in Nations Cash Reserves, a portfolio of Reserves, pursuant to an exemptive order received from the Securities and Exchange Commission. For the six months ended September 30, 2000, the Funds earned $4,749,982 in the aggregate from such investments, which is included in interest income. A significant portion of each Fund's Primary A Shares represents investments by fiduciary accounts over which Bank of America has either sole or joint investment discretion. 3. SHAREHOLDER SERVICING AND DISTRIBUTION PLANS The Trust, the Company, Reserves and Funds Trust each has adopted shareholder servicing plans and distribution plans for the Investor B and Investor C Shares of each Fund, a combined distribution and shareholder servicing plan for Investor A Shares of each Fund and a shareholder servicing plan for Seafirst Shares of Asset Allocation and Blue Chip Funds. The shareholder servicing plans permit the Funds to compensate or reimburse servicing agents for shareholder services provided by the servicing agents. The distribution plans, adopted pursuant to Rule 12b-1 under the 1940 Act, permit the Funds to compensate or reimburse the distributor (and for Investor A Shares, the distributor and/or selling agents) for activities or expenses primarily intended to result in the sale of the classes' shares. Payments are made at an annual rate, as a percentage of average daily net assets, set from time to time by the Board of Trustees/Directors, and are charged as expenses of each Fund directly to the applicable class. A substantial portion of the expenses incurred pursuant to these plans is paid to affiliates of Bank of America and BAAI. At September 30, 2000, the rates in effect and plan limits, as a percentage of average daily net assets, were as follows:
CURRENT PLAN RATE LIMIT ---------------- Investor A Combined Distribution and Shareholder Servicing Plan......... 0.25% 0.25% Investor B and Investor C Shareholder Servicing Plans........ 0.25% 0.25% Investor B Distribution Plan......... 0.75% 0.75% Investor C Distribution Plan......... 0.75% 0.75% Seafirst Shareholder Servicing Plan*.............................. N/A 0.25%
- --------------- * Seafirst Shares converted into Investor A Shares on June 23, 2000. 4. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, excluding long-term U.S. government 97 102 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) securities and short-term investments, for the six months ended September 30, 2000 were as follows:
PURCHASES SALES (000) (000) ----------------------- Convertible Securities........ $155,444 $ 118,277 Balanced Assets............... 48,136 54,395 Asset Allocation.............. 130,820 124,924 Equity Income................. 382,144 371,827 Value......................... 975,704 1,233,939 Strategic Growth.............. 640,624 253,788 Capital Growth................ 337,519 375,250 Aggressive Growth............. 237,137 343,693 MidCap Growth................. 74,528 84,195 21st Century.................. 270,707 164,640 Small Company................. 278,363 193,411
The aggregate cost of purchases and proceeds from sales of long-term U.S. government securities for the six months ended September 30, 2000 were as follows:
PURCHASES SALES (000) (000) -------------------- Balanced Assets................... $11,963 $17,150 Asset Allocation.................. 23,169 37,114
5. FUTURES CONTRACTS At September 30, 2000, the following Funds had futures contracts open:
VALUE OF MARKET UNREALIZED CONTRACT VALUE OF APPRECIATION NUMBER OF WHEN OPENED CONTRACTS (DEPRECIATION) DESCRIPTION CONTRACTS (000) (000) (000) - --------------------------------------------------------------------------- ASSET ALLOCATION: U.S. 5 year Treasury note (short position) expiring December 2000(a)... 255 $25,635 $25,452 $(183) U.S. 10 year Treasury note (long position) expiring December 2000(a)... 125 12,482 12,527 45 U.S. 30 year Treasury bond (long position) expiring December 2000(a)... 39 3,894 3,847 (47)
- --------------- (a) Securities have been segregated as collateral for the Asset Allocation Fund for open futures contracts. 6. SHARES OF BENEFICIAL INTEREST/CAPITAL STOCK As of September 30, 2000, an unlimited number of shares of beneficial interest without par value were authorized for each of the Trust, Reserves and Funds Trust and 480,000,000,000 shares of $.001 par value capital stock were authorized for the Company. The Trust's, Reserves' and Funds Trust's Declarations of Trust and the Company's Articles of Incorporation authorize the Board of Trustees/Directors to classify or reclassify any authorized, but unissued shares into one or more additional classes or series of shares. See Schedules of capital stock activity. 7. LINES OF CREDIT The Trust, the Company, Reserves and Funds Trust each participate with other Nations Funds in an uncommitted line of credit provided by BNY under a line of credit agreement (the "Agreement"). Advances under the Agreement are taken primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest on borrowings is payable at a specified Federal Funds rate plus 0.50% on an annualized basis. Each participating Fund maintains a ratio of no less than 4 to 1 net assets (not including amounts borrowed pursuant to the Agreement) to the aggregate amount of indebtedness pursuant to the Agreement. For the six months ended September 30, 2000, borrowings by the Funds under the Agreement were as follows:
AVERAGE AMOUNT AVERAGE OUTSTANDING INTEREST FUND (000) RATE - --------------------------------------------------------- Asset Allocation................ $ 33 6.97% Equity Income................... 168 6.91 Value........................... 516 6.84 Strategic Growth................ 20 7.00 Capital Growth.................. 187 6.61
The average amount outstanding was calculated based on daily balances during the period. The Trust, the Company, Reserves and Funds Trust also participate with other Nations Funds in a committed line of credit provided by BNY. Interest on borrowings under the committed line is payable at a specified Federal Funds rate plus 0.50% on an annualized basis. A facility fee of 0.09% per annum of the total amounts available under the line of credit is charged, of which each Fund pays its pro rata share. This fee is paid quarterly in arrears. Each participating Fund is required to maintain an asset coverage ratio of at least 300% under the terms of the arrangement. For the six months ended September 30, 98 103 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 2000, there were no borrowings by the Funds under the committed line of credit. 8. SECURITIES LENDING Under an agreement with BNY, the Funds can lend their securities to approved brokers, dealers and other financial institutions. Loans are collateralized by cash, in an amount at least equal to the market value of the securities loaned. The cash collateral received is invested in Nations Cash Reserves. A portion of the income generated by the investment of the collateral, net of any rebates paid by BNY to borrowers, is remitted to BNY as lending agent, and the remainder is paid to the Fund. Generally, in the event of counterparty default, the Fund has the right to use the collateral to offset losses incurred. There would be a potential loss to the Fund in the event the Fund is delayed or prevented from exercising its right to dispose of the collateral. The Fund bears the risk of loss with respect to the investment of collateral. At September 30, 2000, the following Funds had securities on loan:
MARKET VALUE OF LOANED MARKET VALUE SECURITIES OF COLLATERAL FUND (000) (000) - ---------------------------------------------------------- Balanced Assets............ $ 202 $ 206 Value...................... 39,947 42,329 Strategic Growth........... 18,208 19,484 Capital Growth............. 32,337 34,209 Aggressive Growth.......... 21,964 22,949 MidCap Growth.............. 61,491 62,963 Small Company.............. 124,569 133,643
9. CAPITAL LOSS CARRYFORWARD At March 31, 2000, Balanced Assets Fund had available for federal income tax purposes unused capital losses expiring March 31, 2007 of $1,459,711. At March 31, 2000, Balanced Assets Fund utilized capital losses of $1,132,849 during the year. Under the current tax law, capital and currency losses realized after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For the year ended March 31, 2000, the following Funds elected to defer losses occurring between November 1, 1999 and March 31, 2000 under these rules:
POST-OCTOBER CAPITAL/CURRENCY LOSSES DEFERRED FUND (000) - --------------------------------------------------------- Equity Income.......................... $ 25 Growth & Income........................ 3 Aggressive Growth...................... 3,524
10. REORGANIZATIONS ACQUISITION OF PACIFIC HORIZON FUNDS On May 14, 1999, the Small Company Growth Fund (the "Acquiring Fund"), acquired the assets and liabilities of the Pacific Horizon Aggressive Growth Fund (the "Acquired Fund"), in a tax-free reorganization in exchange for shares of the Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired Fund's shareholders. The number and value of shares issued by the Acquiring Fund are presented in the Schedules of capital stock activity. Net assets and unrealized appreciation as of the reorganization date were as follows:
TOTAL NET ASSETS OF ACQUIRED FUND TOTAL NET ASSETS OF TOTAL NET ASSETS OF ACQUIRING FUND UNREALIZED ACQUIRED FUND ACQUIRING FUND AFTER ACQUISITION APPRECIATION (000) (000) (000) (000) - ------------------------------------------------------------------------------ $164,166 $366,213 $530,379 $12,433
On May 21, 1999, the Capital Income Fund, Asset Allocation Fund and Blue Chip Fund, newly established portfolios, acquired the assets and liabilities of the Pacific Horizon Capital Income Fund, Pacific Horizon Asset Allocation Fund and Pacific Horizon Blue Chip Fund, respectively, pursuant to a plan of reorganization approved by its shareholders. The 99 104 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) acquisition was accomplished by a tax-free exchange of shares of Capital Income Fund, Asset Allocation Fund and Blue Chip Fund in an amount equal to the value of the outstanding shares of the Pacific Horizon Capital Income Fund, Pacific Horizon Asset Allocation Fund and Pacific Horizon Blue Chip Fund, respectively. The financial statements of the Capital Income Fund, Asset Allocation Fund and Blue Chip Fund reflect the historical financial results of the Pacific Horizon Capital Income Fund, Pacific Horizon Asset Allocation Fund and Pacific Horizon Blue Chip Fund prior to the reorganization.
PACIFIC HORIZON FUND SHARE CLASS CORRESPONDING RESERVES SHARE CLASS - --------------------------------------------------------------------- Capital Income Nations Capital Income A Shares Investor A Shares B Shares Investor B Shares K Shares Investor C Shares Asset Allocation Nations Asset Allocation A Shares Investor A Shares B Shares Investor B Shares K Shares Investor C Shares SRF Shares Seafirst Shares Blue Chip Nations Blue Chip A Shares Investor A Shares B Shares Investor B Shares K Shares Investor C Shares SRF Shares Seafirst Shares
ACQUISITION OF TIME HORIZON FUNDS On August 20, 1999, the Asset Allocation Fund (the "Acquiring Fund"), acquired the assets and liabilities of the Time Horizon Funds, listed below (each an "Acquired Fund"), in a tax-free reorganization in exchange for shares of the Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired Funds' shareholders. The number and value of shares issued by the Acquiring Fund are presented in the Schedules of capital stock activity. Net assets and unrealized appreciation as of the reorganization date were as follows:
TOTAL NET ASSETS TOTAL NET ASSETS TOTAL NET ASSETS OF ACQUIRING FUND ACQUIRED FUND OF ACQUIRED FUND OF ACQUIRING FUND AFTER ACQUISITION UNREALIZED APPRECIATION ACQUIRING FUND ACQUIRED FUND (000) (000) (000) (000) - -------------------------------------------------------------------------------------------------------------------------------- Asset Time Horizon Allocation Portfolio I $32,506 $293,022 $419,334 $1,890 Asset Time Horizon Allocation Portfolio II 43,414 293,022 419,334 3,206 Asset Time Horizon Allocation Portfolio III 50,392 293,022 419,334 5,511
CHANGE OF REGISTERED INVESTMENT COMPANY On August 20, 1999, the Growth & Income and Focused Equities Funds, newly established shell portfolios of Reserves (the "Successor Funds"), acquired the assets and liabilities of their predecessor funds, which were series of the Trust, pursuant to a plan of reorganization approved by each predecessor fund's shareholders. The predecessor funds had the same name, investment objective and principal investment strategies as the Successor Funds. The acquisition was accomplished by a tax-free exchange of shares of the Successor Funds in an amount equal to the value of the outstanding shares of the predecessor funds. The financial statements of the Successor Funds reflect the historical financial results of the predecessor funds prior to the reorganizations. CONVERSION OF COMMON TRUST FUNDS On May 12, 2000, certain Funds, as listed below (each an "Acquiring Fund"), acquired the assets of certain common trust funds, managed by Bank of America, N.A., also listed below (each an "Acquired Fund"), in a tax-free exchange 100 105 NATIONS FUNDS NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) for shares of the Acquiring Fund. The number and value of shares issued by the Acquiring Fund are presented in the Schedules of capital stock activity. Net assets and unrealized appreciation as of the conversion date were as follows:
TOTAL NET ASSETS TOTAL NET ASSETS TOTAL NET ASSETS OF ACQUIRING FUND ACQUIRED FUND OF ACQUIRED FUND OF ACQUIRING FUND AFTER CONVERSION UNREALIZED APPRECIATION ACQUIRING FUND ACQUIRED FUND (000) (000) (000) (000) - -------------------------------------------------------------------------------------------------------------------------------- Asset Allocation Boatmen's Trust Company Balanced Investment Fund $ 13,617 $ 410,438 $ 424,055 $ 1,099 Equity Income Boatmen's Trust Company Equity Income Fund 95,694 463,209 558,903 15,874 Equity Income BCA Equity Income Fund 92,411 463,209 555,620 28,871 Value Boatmen's Trust Company Equity Value Fund 119,967 1,364,400 1,484,367 34,539 Value Bank IV Kansas Stock Fund 47,444 1,364,400 1,411,844 8,399 Strategic Growth BCA Diversified Stock Fund 307,415 858,884 1,166,299 115,146 Aggressive Growth BCA Retail Trust Equity Fund 28,949 383,624 412,573 12,864 Small Company Boatmen's Trust Company Managed Small Capitalization Fund 88,407 769,936 858,343 27,179
On August 23, 2000, the Boards of Trustees of the Trust and Reserves approved an Agreement and Plan of Reorganization pursuant to which Asset Allocation Fund would acquire all of the assets of Balanced Assets Fund in exchange for shares of Asset Allocation Fund. Additionally, the Board of Trustees of Reserves approved the reorganization of the Asset Allocation Fund into a new shell fund of Funds Trust. The principal effects of this reorganization would be to bring the assets of Balanced Assets into Asset Allocation and to redomicile the Funds in Delaware, under a Delaware business trust structure that management believes provides greater flexibility and efficiency in certain corporate and organizational matters. The Asset Allocation Fund will retain its name, investment objective and principal investment strategies. If approved by shareholders, it is anticipated that the reorganization would take place in the second quarter of 2001. On August 23, 2000, the Board of Trustees of Reserves approved the reorganization of the Growth & Income and Focused Equities Funds into new shell funds of Funds Trust. The principal effect of these reorganizations would be to redomicile the Funds in Delaware, under a Delaware business trust structure that management believes provides greater flexibility and efficiency in certain corporate and organizational matters. The Growth & Income and Focused Equities Funds will retain their name, investment objectives and principal investment strategies without change. If approved by shareholders, it is anticipated that the reorganization would take place in the second quarter of 2001. 101 106 NATIONS MASTER INVESTMENT TRUST Nations Marsico Growth & Income Master Portfolio, Nations Blue Chip Master Portfolio and Nations Marsico Focused Equities Master Portfolio Semi-Annual Report SEPTEMBER 30, 2000 (UNAUDITED) The following pages should be read in conjunction with the Nations Marsico Growth & Income, Nations Blue Chip and Nations Marsico Focused Equities Funds' Semi-Annual Report. 102 107 NATIONS MASTER INVESTMENT TRUST Nations Marsico Growth & Income Master Portfolio STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------- COMMON STOCKS -- 98.2% AEROSPACE AND DEFENSE -- 4.2% 197,067 Boeing Company......................... $ 12,415 272,286 General Dynamics Corporation........... 17,103 -------- 29,518 -------- AUTOMOTIVE -- 0.1% 29,183 Ford Motor Company(!).................. 739 -------- BEVERAGES -- 3.4% 440,688 Anheuser-Busch Companies, Inc. ........ 18,647 135,303 Coca-Cola Enterprises Inc. ............ 2,156 93,853 Pepsi Bottling Group, Inc. ............ 2,821 -------- 23,624 -------- BROADCASTING AND CABLE -- 5.5% 127,641 Clear Channel Communications, Inc.(!).. 7,212 320,469 Comcast Corporation, Class A(!)........ 13,119 229,239 Time Warner Inc. ...................... 17,938 -------- 38,269 -------- COMMERCIAL BANKING -- 3.3% 423,790 Citigroup Inc. ........................ 22,911 -------- COMMERCIAL SERVICES -- 0.3% 25,384 Omnicom Group Inc. .................... 1,851 -------- COMPUTER SERVICES -- 2.1% 259,279 America Online Inc. ................... 13,936 10,811 Automatic Data Processing Inc. ........ 723 -------- 14,659 -------- COMPUTERS AND OFFICE EQUIPMENT -- 9.8% 451,426 EMC Corporation........................ 44,748 13,144 Sanmina Corporation.................... 1,231 190,744 Sun Microsystems, Inc. ................ 22,269 -------- 68,248 -------- CONSUMER CREDIT AND MORTGAGES -- 1.8% 202,744 American Express Company............... 12,317 -------- CONSUMER SERVICES -- 2.3% 433,688 Costco Wholesale Corporation........... 15,152 30,630 Estee Lauder Companies Inc. ........... 1,122 -------- 16,274 -------- DEPARTMENT AND DISCOUNT STORES -- 2.3% 337,710 Wal-Mart Stores, Inc. ................. 16,252 -------- DIVERSIFIED ELECTRONICS -- 3.2% 273,309 Flextronics International Ltd. ........ 22,446 -------- DIVERSIFIED MANUFACTURING -- 3.5% 419,297 General Electric Company............... 24,188 -------- ELECTRIC POWER -- NON NUCLEAR -- 0.7% 47,463 Calpine Corporation.................... 4,954 -------- ELECTRICAL EQUIPMENT -- 2.0% 9,050 Celestica Inc.(!)...................... 627 134,455 Sony Corporation, ADR.................. 13,571 -------- 14,198 -------- ENERGY -- MISCELLANEOUS -- 0.6% 137,868 Southern Energy, Inc.(!)............... 4,326 --------
VALUE SHARES (000) - ------------------------------------------------------------- FINANCE -- MISCELLANEOUS -- 3.5% 215,920 Goldman Sachs Group, Inc.(!)........... $ 24,601 -------- FOOD AND DRUG STORES -- 0.2% 28,946 Safeway, Inc.(!)....................... 1,351 -------- HOUSING AND FURNISHING -- 0.2% 67,191 M.D.C. Holdings, Inc. ................. 1,747 -------- INTEGRATED OIL -- 1.6% 213,375 BP Amoco plc, ADR...................... 11,309 -------- INVESTMENT SERVICES -- 8.5% 33,580 Lehman Brothers Holdings Inc. ......... 4,961 433,152 Merrill Lynch & Company Inc. .......... 28,589 232,809 Morgan Stanley Dean Witter & Company... 21,287 53,561 Northern Trust Corporation............. 4,760 -------- 59,597 -------- LODGING AND RECREATION -- 1.8% 173,262 Four Seasons Hotels Inc. .............. 12,681 -------- MEDICAL DEVICES AND SUPPLIES -- 2.8% 200,123 Guidant Corporation(!)................. 14,146 70,769 Priority Healthcare Corporation(!)..... 5,396 -------- 19,542 -------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT -- 9.1% 370,541 Cisco Systems, Inc. ................... 20,472 94,570 Corning Inc. .......................... 28,088 255,142 Nortel Networks Corporation............ 15,197 -------- 63,757 -------- PHARMACEUTICALS -- 9.5% 200,527 Genentech, Inc. ....................... 37,236 86,694 Merck & Company, Inc. ................. 6,453 506,374 Pfizer Inc. ........................... 22,755 -------- 66,444 -------- SEMICONDUCTORS -- 0.9% 30,669 Applied Micro Circuits Corporation(!).. 6,350 -------- SOFTWARE -- 6.4% 99,087 Adobe Systems Inc. .................... 15,383 359,877 Oracle Corporation..................... 28,341 10,077 VERITAS Software Corporation........... 1,431 -------- 45,155 -------- SPECIALTY STORES -- 6.6% 578,075 Home Depot Inc. ....................... 30,675 411,784 Tiffany & Company...................... 15,879 -------- 46,554 -------- TELECOMMUNICATIONS SERVICES -- 2.0% 384,105 General Motors Corporation, Class H.... 14,281 -------- TOTAL COMMON STOCKS (Cost $530,426)...................... 688,143 -------- CONVERTIBLE PREFERRED STOCKS -- 0.9% ENERGY -- MISCELLANEOUS -- 0.9% 100,000 SEI Trust.............................. 6,631 --------
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $5,000)......................... 6,631 --------
SEE NOTES TO FINANCIAL STATEMENTS. 103 108 NATIONS MASTER INVESTMENT TRUST Nations Marsico Growth & Income Master Portfolio STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
PRINCIPAL AMOUNT VALUE (000) (000) - ------------------------------------------------------------- CORPORATE BONDS AND NOTES -- 0.1% (Cost $536) HOUSING AND FURNISHING -- 0.1% $ 550 M.D.C. Holdings, Inc., 8.375% 02/01/08........................ $ 523 -------- U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 3.6% (Cost $24,996) FEDERAL HOME LOAN BANK (FHLB) -- 3.6% 25,000 Discount note 10/02/00................. 24,991 --------
SHARES (000) - ------- INVESTMENT COMPANIES -- 2.4% (Cost $16,731) 16,731 Nations Cash Reserves#.................. 16,731 -------- TOTAL INVESTMENTS (Cost $577,689*)............ 105.2% 737,019 -------- OTHER ASSETS AND LIABILITIES (NET)....................... (5.2)% Cash................................... $ 2,968 Receivable for investment securities sold................................. 28,797 Dividends receivable................... 212 Interest receivable.................... 8 Collateral on securities loaned........ (16,641) Investment advisory fee payable........ (436) Administration fee payable............. (58) Payable for investment securities purchased............................ (51,264) Accrued Trustees' fees and expenses.... (10) Accrued expenses and other liabilities.......................... (47) -------- TOTAL OTHER ASSETS AND LIABILITIES (NET).................... (36,471) -------- NET ASSETS.................... 100.0% $700,548 ========
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $159,330 on investment securities was comprised of gross appreciation of $171,241 and gross depreciation of $11,911 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $577,689. (!) Non-income producing security. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. A portion of this amount represents cash collateral received from securities lending activity (Note 8). The portion that represents cash collateral is $16,641. ABBREVIATIONS: ADR -- American Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 104 109 NATIONS MASTER INVESTMENT TRUST Nations Blue Chip Master Portfolio STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------- COMMON STOCKS -- 98.3% AEROSPACE AND DEFENSE -- 1.3% 122,900 Boeing Company....................... $ 7,743 63,200 Northrop Grumman Corporation......... 5,743 ---------- 13,486 ---------- AIRLINES -- 0.3% 57,500 Delta Air Lines, Inc. ............... 2,552 ---------- APPAREL AND TEXTILES -- 0.1% 33,300 Liz Claiborne Inc. .................. 1,282 ---------- AUTOMOTIVE -- 1.1% 282,505 Ford Motor Company(!)................ 7,151 56,200 General Motors Corporation........... 3,653 ---------- 10,804 ---------- BEVERAGES -- 2.2% 224,200 Anheuser-Busch Companies, Inc. ...... 9,487 61,900 Coca-Cola Company.................... 3,412 201,700 PepsiCo, Inc. ....................... 9,278 ---------- 22,177 ---------- BROADCASTING AND CABLE -- 2.7% 110,900 Time Warner Inc. .................... 8,678 175,400 Viacom Inc., Class B(!).............. 10,261 226,800 Walt Disney Company.................. 8,675 ---------- 27,614 ---------- CHEMICALS -- BASIC -- 1.0% 51,000 Air Products & Chemicals Inc. ....... 1,836 41,300 E.I. duPont de Nemours and Company... 1,711 42,000 Eastman Chemical Company............. 1,551 73,700 Praxair Inc. ........................ 2,756 67,000 Union Carbide Corporation............ 2,529 ---------- 10,383 ---------- COMMERCIAL BANKING -- 6.2% 98,650 Chase Manhattan Corporation.......... 4,556 588,000 Citigroup Inc. ...................... 31,789 273,400 FleetBoston Financial Corporation.... 10,663 23,100 J.P. Morgan & Company Inc. .......... 3,774 148,300 Mellon Financial Corporation......... 6,877 85,900 PNC Bank Corporation................. 5,584 ---------- 63,243 ---------- COMMERCIAL SERVICES -- 0.3% 38,600 Omnicom Group Inc. .................. 2,815 ---------- COMPUTER SERVICES -- 1.8% 165,600 America Online Inc. ................. 8,901 85,400 Automatic Data Processing Inc. ...... 5,711 61,800 Paychex, Inc. ....................... 3,245 14,600 Sapient Corporation.................. 594 ---------- 18,451 ---------- COMPUTERS AND OFFICE EQUIPMENT -- 8.0% 97,500 Apple Computer Inc. ................. 2,511 199,800 Dell Computer Corporation(!)......... 6,156 214,300 EMC Corporation...................... 21,241 90,700 Hewlett-Packard Company.............. 8,798 48,600 International Business Machines Corporation........................ 5,468 78,900 Jabil Circuit, Inc. ................. 4,478
VALUE SHARES (000) - ------------------------------------------------------------- COMPUTERS AND OFFICE EQUIPMENT -- (CONTINUED) 34,900 NCR Corporation(!)................... $ 1,320 43,000 Network Appliance, Inc. ............. 5,477 31,100 Palm, Inc.(!)........................ 1,646 15,200 PerkinElmer, Inc. ................... 1,587 17,600 Sanmina Corporation.................. 1,648 38,700 Solectron Corporation................ 1,785 165,600 Sun Microsystems, Inc. .............. 19,333 ---------- 81,448 ---------- CONGLOMERATES -- 2.2% 61,600 Dover Corporation.................... 2,891 46,500 Textron Inc. ........................ 2,145 175,700 Tyco International Ltd. ............. 9,115 112,000 United Technologies Corporation...... 7,756 ---------- 21,907 ---------- CONSUMER CREDIT AND MORTGAGES -- 1.9% 80,000 American Express Company............. 4,860 130,700 Fannie Mae........................... 9,344 101,500 MBNA Corporation..................... 3,908 11,500 Providian Financial Corporation...... 1,461 ---------- 19,573 ---------- DEPARTMENT AND DISCOUNT STORES -- 2.5% 45,100 Kohls Corporation.................... 2,602 99,300 Sears, Roebuck and Company........... 3,219 398,400 Wal-Mart Stores, Inc. ............... 19,173 ---------- 24,994 ---------- DIVERSIFIED MANUFACTURING -- 4.1% 717,300 General Electric Company(++)......... 41,379 ---------- ELECTRIC POWER -- NON NUCLEAR -- 2.4% 67,500 Duke Energy Corporation.............. 5,788 81,200 FPL Group Inc. ...................... 5,339 114,400 PECO Energy Company.................. 6,928 110,400 Unicom Corporation................... 6,203 ---------- 24,258 ---------- FOOD AND DRUG STORES -- 0.4% 94,800 Safeway, Inc.(!)..................... 4,426 ---------- FOOD PRODUCTS -- 1.5% 22,000 Bestfoods............................ 1,601 172,600 ConAgra Inc. ........................ 3,463 28,500 Nabisco Group Holdings Corporation... 812 51,000 Quaker Oats Company.................. 4,035 80,200 SYSCO Corporation.................... 3,714 43,100 Unilever NV, ADR..................... 2,080 ---------- 15,705 ---------- HEALTH SERVICES -- 0.4% 38,400 UnitedHealth Group Inc.(!)........... 3,792 ---------- HEAVY MACHINERY -- 0.4% 58,100 Deere & Company...................... 1,932 70,500 Parker Hannifin Corporation.......... 2,379 ---------- 4,311 ---------- HOUSEHOLD PRODUCTS -- 1.4% 81,900 Avon Products, Inc. ................. 3,348 38,600 Colgate-Palmolive Company............ 1,822
SEE NOTES TO FINANCIAL STATEMENTS. 105 110 NATIONS MASTER INVESTMENT TRUST Nations Blue Chip Master Portfolio STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------- HOUSEHOLD PRODUCTS -- (CONTINUED) 125,100 Kimberly-Clark Corporation........... $ 6,981 57,800 The Clorox Company................... 2,287 ---------- 14,438 ---------- INSURANCE -- 3.8% 85,400 American General Corporation......... 6,661 64,950 American International Group, Inc. .............................. 6,215 80,300 AXA Financial, Inc. ................. 4,090 34,900 CIGNA Corporation.................... 3,644 134,100 Hartford Financial Services Group, Inc. .............................. 9,781 126,000 MGIC Investment Corporation.......... 7,702 ---------- 38,093 ---------- INTEGRATED OIL -- 5.0% 72,900 Apache Corporation................... 4,310 124,700 Chevron Corporation.................. 10,631 342,177 Exxon Mobil Corporation.............. 30,496 134,200 Occidental Petroleum Corporation..... 2,927 100,000 USX-Marathon Group Inc. ............. 2,838 ---------- 51,202 ---------- INVESTMENT SERVICES -- 3.6% 64,100 Lehman Brothers Holdings Inc. ....... 9,471 101,200 Merrill Lynch & Company Inc. ........ 6,679 119,800 Morgan Stanley Dean Witter & Company............................ 10,954 69,800 State Street Corporation............. 9,074 ---------- 36,178 ---------- LODGING AND RECREATION -- 0.6% 79,000 Harley-Davidson Inc. ................ 3,782 54,200 Marriott International Inc., Class A.................................. 1,975 ---------- 5,757 ---------- MEDICAL DEVICES AND SUPPLIES -- 3.2% 65,600 Baxter International Inc. ........... 5,236 111,750 Biomet, Inc. ........................ 3,911 77,000 Cardinal Health, Inc. ............... 6,790 134,800 Johnson & Johnson.................... 12,663 31,400 PE Corp-PE Biosystems Group.......... 3,658 ---------- 32,258 ---------- METALS AND MINING -- 0.3% 67,200 Barrick Gold Corporation............. 1,025 123,300 USX - U.S. Steel Group Inc. ......... 1,872 ---------- 2,897 ---------- NATURAL GAS DISTRIBUTION -- 1.1% 104,200 Coastal Corporation.................. 7,724 35,800 Enron Corporation.................... 3,137 ---------- 10,861 ---------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT -- 7.6% 1,000 ADC Telecommunications, Inc. ........ 27 8,100 Brocade Communications Systems, Inc. .............................. 1,912 17,800 CIENA Corporation.................... 2,186 631,200 Cisco Systems, Inc. ................. 34,873 27,700 Comverse Technology, Inc. ........... 2,992 37,500 Corning Inc. ........................ 11,138 6,400 Foundry Networks, Inc. .............. 428 40,550 JDS Uniphase Corporation............. 3,840 7,700 Juniper Networks, Inc. .............. 1,686
VALUE SHARES (000) - ------------------------------------------------------------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT -- (CONTINUED) 252,000 Nortel Networks Corporation.......... $ 15,009 53,200 Scientific-Atlanta, Inc. ............ 3,385 ---------- 77,476 ---------- OILFIELD SERVICES -- 0.6% 74,400 ENSCO International Inc. ............ 2,846 44,400 Schlumberger Ltd. ................... 3,654 ---------- 6,500 ---------- PAPER AND FOREST PRODUCTS -- 0.4% 48,000 Bowater Incorporated................. 2,230 23,477 International Paper Company.......... 673 32,400 Weyerhaeuser Company................. 1,308 ---------- 4,211 ---------- PHARMACEUTICALS -- 7.7% 56,800 Allergan, Inc. ...................... 4,796 81,400 Amgen Inc. .......................... 5,684 32,300 Biogen, Inc.(!)...................... 1,970 181,300 Bristol-Myers Squibb Company......... 10,357 30,800 Eli Lilly and Company................ 2,499 255,200 Merck & Company, Inc. ............... 18,996 523,725 Pfizer Inc. ......................... 23,535 217,200 Schering-Plough Corporation.......... 10,100 ---------- 77,937 ---------- PUBLISHING AND ADVERTISING -- 0.6% 55,700 McGraw-Hill Companies, Inc. ......... 3,540 53,000 New York Times Company, Class A...... 2,084 ---------- 5,624 ---------- RAILROADS, TRUCKING AND SHIPPING -- 0.3% 66,100 Union Pacific Corporation............ 2,570 ---------- RESTAURANTS -- 0.3% 71,600 Starbucks Corporation(!)............. 2,868 ---------- SEMICONDUCTORS -- 5.8% 1 Agilent Technologies Inc.(!)++....... 0 64,300 Altera Corporation................... 3,070 57,500 Analog Devices, Inc. ................ 4,747 101,500 Applied Materials, Inc. ............. 6,020 7,700 Applied Micro Circuits Corporation(!)..................... 1,594 24,700 Broadcom Corporation, Class A........ 6,021 349,200 Intel Corporation.................... 14,514 30,100 KLA-Tencor Corporation............... 1,240 33,700 Linear Technology Corporation........ 2,182 61,300 Micron Technology, Inc. ............. 2,820 33,000 National Semiconductor Corporation(!)..................... 1,328 10,300 PMC - Sierra, Inc. .................. 2,217 9,200 SDL, Inc. ........................... 2,846 26,500 Teradyne, Inc.(!).................... 928 128,000 Texas Instruments Inc. .............. 6,040 44,600 Xilinx, Inc. ........................ 3,819 ---------- 59,386 ---------- SOFTWARE -- 6.0% 16,100 Adobe Systems Inc. .................. 2,500 12,300 BroadVision, Inc. ................... 316 74,800 First Data Corporation............... 2,922 25,700 Intuit Inc. ......................... 1,465
SEE NOTES TO FINANCIAL STATEMENTS. 106 111 NATIONS MASTER INVESTMENT TRUST Nations Blue Chip Master Portfolio STATEMENT OF NET ASSETS (CONTINUED) SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------- SOFTWARE -- (CONTINUED) 365,400 Microsoft Corporation(!)(++)......... $ 22,037 255,600 Oracle Corporation................... 20,129 27,100 Siebel Systems, Inc. ................ 3,017 30,700 VERITAS Software Corporation......... 4,359 50,200 Yahoo! Inc. ......................... 4,568 ---------- 61,313 ---------- SPECIALTY STORES -- 2.2% 105,600 Bed Bath & Beyond, Inc. ............. 2,576 58,900 Best Buy Company, Inc.(!)............ 3,748 166,250 Home Depot Inc. ..................... 8,821 182,100 Limited Inc. ........................ 4,017 82,800 Tiffany & Company.................... 3,193 ---------- 22,355 ---------- TELECOMMUNICATIONS SERVICES -- 6.4% 294,500 BellSouth Corporation................ 11,854 66,000 Nextel Communications, Inc. ......... 3,086 215,200 Qwest Communications International, Inc.(!)............................ 10,343 348,901 SBC Communications Inc. ............. 17,444 215,216 Verizon Communications............... 10,425 385,650 WorldCom, Inc.(!).................... 11,714 ---------- 64,866 ---------- TOBACCO -- 0.6% 217,700 Philip Morris Companies Inc. ........ 6,409 ---------- TOTAL COMMON STOCKS (Cost $723,517).................... 997,799 ---------- PRINCIPAL AMOUNT (000) - --------- U.S. TREASURY OBLIGATIONS -- 0.3% (Cost $2,931) U.S. TREASURY BILLS -- 0.3% $ 3,000 Discount note 02/15/01............... 2,932 ----------
SHARES VALUE (000) (000) - ------------------------------------------------------------- INVESTMENT COMPANIES -- 2.5% (Cost $25,458) 25,458 Nations Cash Reserves#................ $ 25,458 ----------
TOTAL INVESTMENTS (Cost $751,906*)........... 101.1% 1,026,189 ---------- OTHER ASSETS AND LIABILITIES (NET)...................... (1.1)% Cash.................................. $ 98 Receivable for investment securities sold................................ 8,852 Dividends receivable.................. 837 Interest receivable................... 77 Receivable for variation margin....... 101 Collateral on securities loaned....... (10,351) Investment advisory fee payable....... (554) Administration fee payable............ (43) Payable for investment securities purchased........................... (9,791) Accrued Trustees' fees and expenses... (11) Accrued expenses and other liabilities......................... (57) ---------- TOTAL OTHER ASSETS AND LIABILITIES (NET)................... (10,842) ---------- NET ASSETS................... 100.0% $1,015,347 ==========
- --------------- * Federal Income Tax Information: Net unrealized appreciation of $274,283 on investment securities was comprised of gross appreciation of $306,516 and gross depreciation of $32,233 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $751,906. (!) Non-income producing security. (++) Security segregated as collateral for futures contracts. ++ Amount represents less than $500. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. A portion of this amount represents cash collateral received from securities lending activity (Note 8). The portion that represents cash collateral is $10,351. ABBREVIATIONS: ADR -- American Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 107 112 NATIONS MASTER INVESTMENT TRUST Nations Marsico Focused Equities Master Portfolio STATEMENT OF NET ASSETS SEPTEMBER 30, 2000 (UNAUDITED)
VALUE SHARES (000) - ------------------------------------------------------------ COMMON STOCKS -- 94.8% AEROSPACE AND DEFENSE -- 4.2% 740,082 Boeing Company...................... $ 46,625 1,021,683 General Dynamics Corporation........ 64,175 ---------- 110,800 ---------- BEVERAGES -- 1.8% 1,101,994 Anheuser-Busch Companies, Inc. ..... 46,628 ---------- BROADCASTING AND CABLE -- 3.5% 476,602 Clear Channel Communications, Inc.(!)........................... 26,928 843,172 Time Warner Inc. ................... 65,978 ---------- 92,906 ---------- COMMERCIAL BANKING -- 4.3% 2,094,609 Citigroup Inc. ..................... 113,240 ---------- COMPUTER SERVICES -- 2.9% 1,419,950 America Online Inc. ................ 76,322 ---------- COMPUTERS AND OFFICE EQUIPMENT -- 12.1% 1,886,278 EMC Corporation..................... 186,978 1,097,902 Sun Microsystems, Inc. ............. 128,180 ---------- 315,158 ---------- CONSUMER CREDIT AND MORTGAGES -- 1.4% 612,500 American Express Company............ 37,209 ---------- CONSUMER SERVICES -- 2.8% 2,075,691 Costco Wholesale Corporation........ 72,519 ---------- DEPARTMENT AND DISCOUNT STORES -- 2.3% 1,251,490 Wal-Mart Stores, Inc. .............. 60,228 ---------- DIVERSIFIED MANUFACTURING -- 3.6% 1,616,978 General Electric Company............ 93,279 ---------- FINANCE -- MISCELLANEOUS -- 3.0% 686,675 Goldman Sachs Group, Inc.(!)........ 78,238 ---------- INTEGRATED OIL -- 2.1% 1,058,533 BP Amoco plc, ADR................... 56,102 ---------- INVESTMENT SERVICES -- 8.5% 126,058 Lehman Brothers Holdings Inc. ...... 18,625 1,407,826 Merrill Lynch & Company Inc. ....... 92,917 1,221,936 Morgan Stanley Dean Witter & Company........................... 111,730 ---------- 223,272 ---------- LODGING AND RECREATION -- 1.9% 688,849 Four Seasons Hotels Inc. ........... 50,415 ---------- MEDICAL DEVICES AND SUPPLIES -- 1.6% 579,504 Guidant Corporation(!).............. 40,964 ---------- NETWORKING AND TELECOMMUNICATIONS EQUIPMENT -- 8.9% 743,822 Cisco Systems, Inc. ................ 41,096 432,656 Corning Inc. ....................... 128,499 1,082,121 Nortel Networks Corporation......... 64,454 ---------- 234,049 ---------- PHARMACEUTICALS -- 10.9% 959,437 Genentech, Inc. .................... 178,156 315,522 Merck & Company, Inc. .............. 23,487 840,169 Pfizer Inc. ........................ 82,693 ---------- 284,336 ----------
VALUE SHARES (000) - ------------------------------------------------------------ SOFTWARE -- 7.4% 529,108 Adobe Systems Inc. ................. 82,144 1,421,411 Oracle Corporation.................. 111,936 ---------- 194,080 ---------- SPECIALTY STORES -- 8.5% 3,075,343 Home Depot Inc. .................... $ 163,185 1,515,094 Tiffany & Company................... 58,426 ---------- 221,611 ---------- TELECOMMUNICATIONS SERVICES -- 3.1% 2,173,322 General Motors Corporation, Class H................................. 80,804 ---------- TOTAL COMMON STOCKS (Cost $1,942,062)................. 2,482,160 ---------- PRINCIPAL AMOUNT (000) - --------- U.S. GOVERNMENT AND AGENCY OBLIGATIONS -- 6.9% (Cost $180,769) FEDERAL HOME LOAN BANK (FHLB) -- 6.9% $ 180,800 Discount note 10/02/00.............. 180,738 ----------
SHARES (000) - --------- INVESTMENT COMPANIES -- 2.5% (Cost $66,040) 66,040 Nations Cash Reserves#.............. 66,040 ----------
TOTAL INVESTMENTS (Cost $2,188,871*)......... 104.2% 2,728,938 ---------- OTHER ASSETS AND LIABILITIES (NET)...................... (4.2)% Cash................................. $ 5,162 Receivable for investment securities sold............................... 195,486 Dividends receivable................. 696 Interest receivable.................. 1 Miscellaneous receivables............ 1 Collateral on securities loaned...... (65,929) Investment advisory fee payable...... (1,631) Administration fee payable........... (218) Payable for investment securities purchased.......................... (242,689) Accrued Trustees' fees and expenses........................... (11) Accrued expenses and other liabilities........................ (37) ---------- TOTAL OTHER ASSETS AND LIABILITIES (NET).............................. (109,169) ---------- NET ASSETS................... 100.0% $2,619,769 ==========
--------------- * Federal Income Tax Information: Net unrealized appreciation of $540,067 on investment securities was comprised of gross appreciation of $576,926 and gross depreciation of $36,859 for federal income tax purposes. At September 30, 2000, the aggregate cost of securities for federal income tax purposes was $2,188,871. (!) Non-income producing security. # Money market mutual fund registered under the Investment Company Act of 1940, as amended, and sub-advised by Banc of America Capital Management, Inc. A portion of this amount represents cash collateral received from securities lending activity (Note 8). The portion that represents cash collateral is $65,929. ABBREVIATIONS: ADR -- American Depository Receipt SEE NOTES TO FINANCIAL STATEMENTS. 108 113 NATIONS MASTER INVESTMENT TRUST STATEMENTS OF OPERATIONS (UNAUDITED) For the six months ended September 30, 2000
GROWTH & FOCUSED INCOME BLUE CHIP EQUITIES MASTER MASTER MASTER PORTFOLIO PORTFOLIO PORTFOLIO --------------------------------------------------- (IN THOUSANDS) INVESTMENT INCOME: Dividends (Net of foreign withholding taxes of $12, $53 and $75, respectively)........................................ $ 1,382 $ 4,979 $ 4,649 Interest.................................................... 1,857 598 5,631 Securities lending income................................... 50 36 246 -------------- -------------- -------------- Total investment income................................. 3,289 5,613 10,526 -------------- -------------- -------------- EXPENSES: Investment advisory fee..................................... 2,415 3,325 8,803 Administration fee.......................................... 322 256 1,174 Custodian fees.............................................. 34 37 67 Legal and audit fees........................................ 23 22 30 Trustees' fees and expenses................................. 12 9 12 Other....................................................... 3 -- 14 -------------- -------------- -------------- Total expenses.......................................... 2,809 3,649 10,100 Fees reduced by credits allowed by the custodian............ (16) (2) (2) -------------- -------------- -------------- Net expenses............................................ 2,793 3,647 10,098 -------------- -------------- -------------- NET INVESTMENT INCOME....................................... 496 1,966 428 -------------- -------------- -------------- NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS: Net realized gain/(loss) from: Security transactions..................................... (34,985) 21,623 (118,432) Futures contracts......................................... -- 450 -- Foreign currency and net other assets..................... -- -- (2) -------------- -------------- -------------- Net realized gain/(loss) on investments..................... (34,985) 22,073 (118,434) Change in unrealized appreciation/(depreciation) of: Securities (Note 7)....................................... (2,677) (35,742) 26,987 Futures contracts......................................... -- (1,696) -- Foreign currency and net other assets..................... -- -- --* -------------- -------------- -------------- Net change in unrealized appreciation/(depreciation) of investments............................................... (2,677) (37,438) 26,987 -------------- -------------- -------------- Net realized and unrealized gain/(loss) on investments...... (37,662) (15,365) (91,447) -------------- -------------- -------------- NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................................ $ (37,166) $ (13,399) $ (91,019) ============== ============== ==============
- --------------- * Amount represents less than $500. SEE NOTES TO FINANCIAL STATEMENTS. 109 114 NATIONS MASTER INVESTMENT TRUST STATEMENTS OF CHANGES IN NET ASSETS
GROWTH & INCOME MASTER PORTFOLIO ----------------------------------- SIX MONTHS ENDED 9/30/00 PERIOD ENDED (UNAUDITED) 3/31/00(a) ----------------------------------- (IN THOUSANDS) Net investment income....................................... $ 496 $ (90) Net realized gain/(loss) on investments..................... (34,985) 9,101 Net change in unrealized appreciation/(depreciation) of investments............................................... (2,677) 43,475 -------------- -------------- Net increase/(decrease) in net assets resulting from operations................................................ (37,166) 52,486 Contributions............................................... 203,532 670,827 Withdrawals................................................. (95,317) (93,814) -------------- -------------- Net increase/(decrease) in net assets....................... 71,049 629,499 NET ASSETS: Beginning of period......................................... 629,499 -- -------------- -------------- End of period............................................... $ 700,548 $ 629,499 ============== ==============
- --------------- (a) Growth and Income Master Portfolio commenced operations on October 8, 1999. (b) Represents financial information for the Pacific Horizon Blue Chip Portfolio, which was reorganized into Blue Chip Master Portfolio on May 21, 1999. (c) Focused Equities Master Portfolio commenced operations on October 8, 1999. SEE NOTES TO FINANCIAL STATEMENTS. 110 115 NATIONS MASTER INVESTMENT TRUST STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
FOCUSED EQUITIES BLUE CHIP MASTER PORTFOLIO MASTER PORTFOLIO ------------------------------------------------ ------------------------------- SIX MONTHS SIX MONTHS ENDED ENDED 9/30/00 PERIOD ENDED PERIOD ENDED 9/30/00 PERIOD ENDED (UNAUDITED) 3/31/00 5/14/99(b) (UNAUDITED) 3/31/00(c) ---------------------------------------------------------------------------------- $ 1,966 $ 3,435 $ 1,287 $ 428 $ (540) 22,073 86,647 57,394 (118,434) 24,535 (37,438) 44,620 10,459 26,987 137,004 -------------- -------------- -------------- -------------- -------------- (13,399) 134,702 69,140 (91,019) 160,999 5,569 37,026 45,223 862,643 2,482,428 (23,926) (96,955) (49,779) (415,021) (380,261) -------------- -------------- -------------- -------------- -------------- (31,756) 74,773 64,584 356,603 2,263,166 1,047,103 972,330 907,746 2,263,166 -- -------------- -------------- -------------- -------------- -------------- $ 1,015,347 $ 1,047,103 $ 972,330 $ 2,619,769 $ 2,263,166 ============== ============== ============== ============== ==============
SEE NOTES TO FINANCIAL STATEMENTS. 111 116 NATIONS MASTER INVESTMENT TRUST SUPPLEMENTARY DATA
WITHOUT WAIVERS AND/OR EXPENSE REIMBURSEMENTS --------------- RATIO OF RATIO OF NET RATIO OF OPERATING INVESTMENT OPERATING EXPENSES INCOME/(LOSS) PORTFOLIO EXPENSES TO TO AVERAGE TO AVERAGE TURNOVER AVERAGE NET ASSETS NET ASSETS RATE NET ASSETS ------------------------------------------------------------------ GROWTH & INCOME MASTER PORTFOLIO: Six months ended 9/30/00 (unaudited)..................... 0.87%+(d) 0.15%+ 49% 0.87%+(d) Period ended 3/31/2000(a)................................ 0.86+(d) (0.04)+ 60 0.86+(d) BLUE CHIP MASTER PORTFOLIO: Six months ended 9/30/00 (unaudited)..................... 0.71%+(d) 0.38%+ 28% 0.71%+(d) Period ended 3/31/2000................................... 0.73+(d) 0.40+ 47 0.73+(d) Period ended 5/14/1999(b)................................ 0.61+ 0.65+ 19 0.61 Year ended 2/28/1999(b).................................. 0.62 0.85 57 0.62 Year ended 2/28/1998(b).................................. 0.65 1.11 67 1.06 Year ended 2/28/1997(b).................................. 0.62 1.62 91 1.34 Year ended 2/29/1996(b).................................. 0.31 2.16 108 1.57 FOCUSED EQUITIES MASTER PORTFOLIO: Six months ended 9/30/00 (unaudited)..................... 0.86%+(d) 0.04%+ 60% 0.86%+(d) Period ended 3/31/2000(c)................................ 0.84+(d) (0.07)+ 84 0.84+(d)
- --------------- + Annualized. (a) Growth & Income Master Portfolio commenced operations on October 8, 1999. (b) Represents financial information for the Pacific Horizon Blue Chip Portfolio, which was reorganized into Blue Chip Master Portfolio on May 21, 1999. (c) Focused Equities Master Portfolio commenced operations on October 8, 1999. (d) The effect of the custodial expense offset (Note 2) on the operating expense ratio, with and without waivers and/or expense reimbursements, was less than 0.01%. SEE NOTES TO FINANCIAL STATEMENTS. 112 117 NATIONS MASTER INVESTMENT TRUST NOTES TO FINANCIAL STATEMENTS (UNAUDITED) Nations Master Investment Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company. At September 30, 2000, the Trust offered nine separate portfolios. These financial statements pertain only to Growth & Income Master Portfolio, Blue Chip Master Portfolio and Focused Equities Master Portfolio (each a "Master Portfolio" and collectively, the "Master Portfolios"). Financial statements for the other portfolios of the Trust are presented under separate cover. The following investors were invested in the Master Portfolios at September 30, 2000: Growth & Income Master Portfolio: Nations Marsico Growth & Income Fund......... 97.8% Nations Marsico Growth & Income Fund (Offshore)................................. 1.1% Banc of America Capital Management Funds I -- Growth & Income Fund....................... 1.1% Blue Chip Master Portfolio: Nations Blue Chip Fund....................... 95.2% Nations Blue Chip Fund (Offshore)............ 4.8% Focused Equities Master Portfolio: Nations Marsico Focused Equities Fund........ 98.9% Nations Marsico Focused Equities Fund (Offshore)................................. 0.7% Banc of America Capital Management Funds I -- Focused Equities Fund...................... 0.4%
1. SIGNIFICANT ACCOUNTING POLICIES The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates. The following is a summary of significant accounting policies followed by the Master Portfolios in the preparation of their financial statements. Securities valuation: Securities traded on a recognized exchange or on NASDAQ are valued at the last sale price on the exchange or market on which such securities are primarily traded. Securities traded only over-the-counter are valued at the last sale price, or if no sale occurred on such day, at the mean of the current bid and asked prices. Certain securities may be valued using broker quotations or on the basis of prices provided by pricing services. Restricted securities, securities for which market quotations are not readily available, and certain other assets may be valued under procedures adopted by the Board of Trustees. Short-term investments that mature in 60 days or less are valued at amortized cost, which approximates current market value. Futures contracts: All Master Portfolios may invest in futures contracts. Upon entering into a futures contract, a Master Portfolio is required to deposit with the broker an amount of cash or liquid securities equal to a specified percentage of the contract amount. This is known as the "initial margin." Subsequent payments ("variation margin") are made or received by a Master Portfolio each day, depending on the daily fluctuation of the value of the contract. During the period the futures contract is open, changes in the value of the contract are recognized as an unrealized gain or loss by "marking-to-market" on a daily basis to reflect the market value of the contract. When the contracts are closed, a Master Portfolio records a realized gain or loss equal to the difference between the value of the contracts on the closing date and the value of the contracts when originally entered into. Risks of investments in futures contracts include the possible adverse movement of the securities or indices underlying the contracts, the possibility that there may not be a liquid secondary market for the contracts, that a change in the value of the contract may not correlate with changes in the value of the underlying securities, or that the counterparty to a contract may default on its obligation to perform. Securities transactions and investment income: Securities transactions are accounted for on trade date. Realized gains and losses are computed based on the specific identification of securities sold. Interest income, adjusted for accretion of discounts and amortization of premiums, is earned from settlement date and recorded on an accrual basis. Dividend income is recorded on ex- dividend date. Federal income taxes: The Master Portfolios are treated as partnerships for federal income tax purposes and therefore are not subject to federal income tax. Each investor in the Master Portfolios will be taxed on its allocated share of the Master Portfolio's ordinary income and capital gains. Expenses: General expenses of the Trust are allocated to the Master Portfolios based upon their relative net assets or other expense allocation methodologies determined by the nature of the expense. Expenses directly attributable to a Master Portfolio are charged to such Master Portfolio. 113 118 NATIONS MASTER INVESTMENT TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 2. INVESTMENT ADVISORY FEE, SUB-ADVISORY FEE, ADMINISTRATION FEE AND RELATED PARTY TRANSACTIONS The Trust has entered into an investment advisory agreement (the "Investment Advisory Agreement") with Banc of America Advisors, Inc. ("BAAI"), a wholly- owned subsidiary of Bank of America, N.A. ("Bank of America"), which in turn is a wholly-owned banking subsidiary of Bank of America Corporation, a bank holding company organized as a Delaware corporation, pursuant to which BAAI provides investment advisory services to the Master Portfolios. Under the terms of the Investment Advisory Agreement, BAAI is entitled to receive an advisory fee, calculated daily and payable monthly, based on the following annual rates multiplied by the average daily net assets of each Master Portfolio:
ANNUAL RATE ------ Growth & Income Master Portfolio.............. 0.75% Blue Chip Master Portfolio.................... 0.65% Focused Equities Master Portfolio............. 0.75%
The Trust has, on behalf of the Growth & Income and Focused Equities Master Portfolios, entered into a sub-advisory agreement with BAAI and Marsico Capital Management, LLC ("Marsico"), pursuant to which Marsico is entitled to receive a sub-advisory fee from BAAI at the maximum annual rate of 0.45% of each Master Portfolio's average daily net assets. Marsico Management Holdings, LLC, a partially-owned subsidiary of Bank of America, owns 50% of the equity of Marsico. On June 28, 2000, Bank of America announced its intention to purchase the remaining 50% equity interest in Marsico. The proposed purchase is not expected to result in any change in the Marsico personnel who manage the Master Portfolios or in the way that the Master Portfolios are managed. The Trust has, on behalf of the Blue Chip Master Portfolio, entered into a sub-advisory agreement with BAAI and Chicago Equity Partners LLC ("Chicago Equity"), pursuant to which Chicago Equity is entitled to receive a sub-advisory fee from BAAI at the maximum annual rate of 0.25% of the Master Portfolio's average daily net assets. Stephens Inc. ("Stephens") and BAAI serve as co-administrators of the Trust. Under the co-administration agreements, Stephens and BAAI are currently entitled to receive a combined fee, computed daily and paid monthly, at the maximum annual rate of 0.05% of the Blue Chip Master Portfolio's average daily net assets and 0.10% of the Growth & Income and Focused Equities Master Portfolios' average daily net assets. The Bank of New York ("BNY") serves as sub-administrator of the Trust pursuant to an agreement with BAAI. For the six months ended September 30, 2000, BAAI earned 0.10%, 0.05% and 0.10%, respectively, from the average daily net assets of the Growth & Income, Blue Chip and Focused Equities Master Portfolios for its co-administration services. BNY serves as the custodian of the Trust's assets. For the six months ended September 30, 2000, expenses of the Master Portfolios were reduced by $20,208 under expense offset arrangements with BNY. The Master Portfolios could have invested a portion of the assets utilized in connection with the expense offset arrangements in an income producing asset if they had not entered into such arrangements. No officer, director or employee of Bank of America or BAAI, or any affiliate thereof, receives any compensation from the Trust for serving as a Trustee or Officer of the Trust. For the six months ended September 30, 2000, Growth & Income Master Portfolio and Focused Equities Master Portfolio paid commissions of $18,662 and $37,952, respectively, to certain affiliates of BAAI in connection with the execution of various portfolio transactions. The Trust's eligible Trustees may participate in non-qualified deferred compensation and retirement plans which may be terminated at any time. All benefits provided under these plans are unfunded and any payments to plan participants are paid solely out of the Master Portfolios' assets. Income earned on each plan participant's deferral account is tied to the rate of return of the eligible mutual funds selected by the participants or, if no funds are selected, to the rate of return of Nations Treasury Fund, a portfolio of Nations Fund, Inc., another registered investment company in the Nations Funds family. The expense for the deferred compensation and retirement plans is included in "Trustees' fees and expenses" in the Statements of operations. The Master Portfolios have made daily investments of cash balances in Nations Cash Reserves, a portfolio of Nations Reserves, pursuant to an exemptive order received from the Securities and Exchange Commission. For the six months ended September 30, 2000, the Master Portfolios earned $519,392 in the aggregate from such investments, which is included in interest income. 3. PURCHASES AND SALES OF SECURITIES The aggregate cost of purchases and proceeds from sales of securities, excluding long-term U.S. government 114 119 NATIONS MASTER INVESTMENT TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) securities and short-term investments, for the six months ended September 30, 2000 were as follows:
PURCHASES SALES (000) (000) ------------------------ Growth & Income Master Portfolio................. $ 424,342 $ 295,922 Blue Chip Master Portfolio................. 277,710 282,853 Focused Equities Master Portfolio................. 1,685,518 1,310,270
There were no purchases and sales of long-term U.S. government securities for the six months ended September 30, 2000. 4. FUTURES CONTRACTS At September 30, 2000, the following Master Portfolio had futures contracts open:
VALUE OF CONTRACT MARKET WHEN VALUE OF UNREALIZED NUMBER OF OPENED CONTRACTS DEPRECIATION DESCRIPTION CONTRACTS (000) (000) (000) - ----------------------------------------------------------------------- BLUE CHIP MASTER PORTFOLIO: S&P 500 Futures (long position) expiring December 2000(a)... 25 $9,470 $9,086 $(384)
- --------------- (a) Securities have been segregated as collateral for the Blue Chip Master Portfolio for open futures contracts. 5. LINES OF CREDIT The Trust participates with other Nations Funds in an uncommitted line of credit provided by BNY under a line of credit agreement (the "Agreement"). Advances under the Agreement are taken primarily for temporary or emergency purposes, including the meeting of redemption requests that otherwise might require the untimely disposition of securities. Interest on borrowings is payable at a specified Federal Funds rate plus 0.50% on an annualized basis. Each participating Master Portfolio maintains a ratio of no less than 4 to 1 net assets (not including amounts borrowed pursuant to the Agreement) to the aggregate amount of indebtedness pursuant to the Agreement. At September 30, 2000, there were no loans outstanding under this Agreement. For the six months ended September 30, 2000, there were no borrowings by the Master Portfolios under the Agreement. The average amount outstanding was calculated based on daily balances during the period. The Trust also participates with other Nations Funds in a committed line of credit provided by BNY. Interest on borrowings under the committed line is payable at a specified Federal Funds rate plus 0.50% on an annualized basis. A facility fee of 0.09% per annum of the total amounts available under the line of credit is charged, of which each Master Portfolio pays its pro rata share. This fee is paid quarterly in arrears. Each participating Master Portfolio is required to maintain an asset coverage ratio of at least 300% under the terms of the arrangement. For the six months ended September 30, 2000, there were no borrowings by the Master Portfolios under the committed line of credit. 6. SECURITIES LENDING Under an agreement with BNY, the Master Portfolios can lend their securities to approved brokers, dealers and other financial institutions. Loans are collateralized by cash, in an amount at least equal to the market value of the securities loaned. The cash collateral received is invested in Nations Cash Reserves. A portion of the income generated by the investment of the collateral, net of any rebates paid by BNY to borrowers, is remitted to BNY as lending agent, and the remainder is paid to the Master Portfolios. Generally, in the event of counterparty default, the Master Portfolio has the right to use the collateral to offset losses incurred. There would be a potential loss to the Master Portfolio in the event the Master Portfolio is delayed or prevented from exercising its right to dispose of the collateral. The Master Portfolio bears the risk of loss with respect to the investment of collateral. At September 30, 2000, the following Master Portfolios had securities on loan:
MARKET VALUE OF LOANED MARKET VALUE SECURITIES OF COLLATERAL PORTFOLIO (000) (000) - ---------------------------------------------------------- Growth & Income Master Portfolio................ $15,231 $16,641 Blue Chip Master Portfolio................ 9,800 10,351 Focused Equities Master Portfolio................ 61,428 65,929
115 120 NATIONS MASTER INVESTMENT TRUST NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED) 7. REORGANIZATION OF MASTER INVESTMENT TRUST, SERIES I On May 21, 1999, Blue Chip Master Portfolio, a newly established portfolio, acquired the assets and liabilities of the Pacific Horizon Blue Chip Master Portfolio ("Acquired Portfolio"), a series of Master Investment Trust, Series I, pursuant to a plan of reorganization approved by its investors. The acquisition was accomplished by a tax-free exchange of shares of Blue Chip Master Portfolio in an amount equal to the outstanding interests of the Acquired Portfolio. The financial statements of the Blue Chip Master Portfolio reflect the historical financial results of the Acquired Portfolio prior to the reorganization. Additionally, the fiscal year end of the Blue Chip Master Portfolio for financial reporting purposes was changed to coincide with that of the Trust. 116 121 [This page intentionally left blank.] 122 P.O. Box 34602 Charlotte, NC 28254-4602 Toll free 1.800.321.7854 NATIONS FUNDS DOMSTKSAR (9/00) -----END PRIVACY-ENHANCED MESSAGE-----