UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number        811-21771

YieldQuest Funds Trust

(Exact name of registrant as specified in charter)

3280 Peachtree Road, Suite 2600, Atlanta, GA 30305

(Address of principal executive offices)

(Zip code)

Citi Fund Services Ohio, Inc., 3435 Stelzer Road, Columbus, OH 43219

(Name and address of agent for service)

Registrant’s telephone number, including area code:

404-446-3370

Date of fiscal year end:	October 31
Date of reporting period:	October 31, 2007

Item 1. Reports to Stockholders.

YIELDQUEST CORE EQUITY FUND
YIELDQUEST TOTAL RETURN BOND FUND
YIELDQUEST TAX-EXEMPT BOND FUND
YIELDQUEST FLEXIBLE INCOME FUND
YIELDQUEST LOW DURATION BOND FUND
YIELDQUEST LOW DURATION TAX-EXEMPT BOND FUND

ANNUAL REPORT
OCTOBER 31, 2007

3280 PEACHTREE ROAD, SUITE 2600
ATLANTA, GA 30305
1-877-497-3634
www.YieldQuest-Funds.com

Distributed by YieldQuest Securities, LLC
FINRA Member

SHAREHOLDER LETTER – YIELDQUEST CORE EQUITY FUND

To Our Shareholders:

The YieldQuest Core Equity Fund had a total return of 14.98% for the fiscal year, compared to 14.56% for the Standard & Poor’s 500 Index (S&P 500). At year end, the Fund had net assets of $25.37 million.

The Fund performed well during the year on an absolute basis while beating the return of the S&P 500 for the fiscal year. Performance was aided during the year by overweight allocations to emerging markets, as well as use of our sector rotation strategy. Key detractors for the performance over the entire year were the performance of homebuilders and our overweight allocation to the financial sector including mortgage REITs. Additionally, performance had a significant headwind in the form of discount widening across the closed-end fund universe.

As a part of our strategy, we focus on three opportunities in the Fund’s portfolio in order to add maximum value in our view. First, we continue to rely on the opportunities presented in the closed-end and exchange traded equity fund universe, with multiple funds now trading at record discounts to net asset value. We believe the headwind created by closed-end funds in 2007 provides a tailwind for performance in 2008 as a mean reversion process takes place for closed-end funds.

Due to our investment approach, we may be early in identifying themes we believe to be mispriced by the market, but by holding to our thesis we believe over the coming year our patience may be rewarded. We view opportunities in the financial and consumer discretionary sectors to fit this approach as valuations approach their most attractive level in years. Additionally, we have lowered our allocation to emerging markets based on the degree of outperformance, but maintain an allocation through closed-end funds trading at attractive discount levels. Our investment approach relies on finding segments of the market having favorable fundamental backdrops, in addition to our contrarian approach when analyzing the market.

Our job as manager of your investment in the Fund is to take a daily assessment of value in the marketplace and to seize upon those opportunities that we believe create maximum value over time. We thank you for your continued confidence in our firm as a shareholder of the YieldQuest Core Equity Fund. As always, we welcome your comments and questions.

1

PORTFOLIO REVIEW

COMPARISON OF THE CHANGE IN VALUE OF $10,000 INVESTED IN THE
YIELDQUEST CORE EQUITY FUND VS. BENCHMARK

Average Annual Total Returns as of October 31, 2007
									Net			Gross
	Inception					Since			Expense			Expense
	Date		1-Year			Inception			Ratio†			Ratio†
YieldQuest Core Equity Fund		10/31/05		14.98	%		14.63	%		1.19	%		2.85	%
S&P 500 Index				14.56	%		15.45	%

Current performance of the Fund may be lower or higher than the performance quoted. The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. Performance data current to the most recent month end may be obtained by calling the Fund at 1-877-497-3634.
Past performance is not predictive of future performance. The returns shown do not reflect the reduction of taxes that a shareholder would pay on Fund distributions or on the redemptions of Fund shares.
The total returns above reflect fee reductions in effect from November 1, 2006 through October 31, 2007. Voluntary reductions may be discontinued at any time after October 31, 2008. If such fee reductions had not occurred, the quoted performance would be lower.

The S&P 500^TM Index is an unmanaged index of 500 selected common stocks, most of which are listed on the New York Stock Exchange, that is a measure of the U.S. stock market as a whole. Index returns assume reinvestment of dividends. Investors may not invest in the index directly; unlike the Fund’s returns, the index does not reflect any fees or expenses.

^† The above expense ratios are from the Fund’s prospectus dated December 29, 2006. Additional information pertaining to the Fund’s expense ratios as of October 31, 2007 can be found in the Financial Highlights in this Report.

SIGNIFICANT AREAS OF INVESTMENT AS A PERCENTAGE OF TOTAL INVESTMENTS

2

SHAREHOLDER LETTER – YIELDQUEST TOTAL RETURN BOND FUND

To Our Shareholders:

The YieldQuest Total Return Bond Fund had a total return of -0.86% for the fiscal year, compared to 5.38% for the Lehman Aggregate Bond Index. At year end, the Fund had net assets of $328.50 million.

We attribute the Fund’s level of underperformance below the benchmark index to a set of unique factors that have dominated the market environment during the last several months. In fact, it is fair to say that in the 15 years many of us at YieldQuest have been involved in the financial markets, the severity of the earthquake that has wrenched the financial markets in recent months is unmatched. Effectively, what began as rising subprime defaults in low quality mortgages triggered a domino-like effect of credit product downgrades, forced selling by leveraged players in the market, sizeable bank write-downs, and panic selling by retail investors. Though the Fund itself has very limited exposure to subprime mortgages and/or structured products, the broad-based selling pressure across a variety of fixed income assets did negatively impact our Fund’s performance. This was primarily due to the substantial widening in closed-end fund discounts to net asset value that resulted from retail investors who tended to “sell first and ask questions later” amidst escalating credit market turmoil, sending discounts to multi-year wide levels. In addition, our duration positioning and positive view on the US Dollar also contributed somewhat to our underperformance during this fiscal year, as Treasuries recorded a significant rally on the back of the pronounced “flight to safety” and the US Dollar hit a 40-year low versus foreign currencies. Finally, our credit positioning (net of credit hedges), while still at the high quality end of the spectrum, also contributed to our underperformance, due to the fact that our benchmark contains a much larger percentage of Treasuries than the Fund did throughout the year.

While we are most certainly disappointed with the recent underperformance of the Fund, on both a nominal as well as relative basis, we also believe our investment approach and ability to seize opportunities that present themselves in challenging environments such as this one are the keys to the ongoing long-term success of the Fund. With that in mind, we have therefore attempted to maintain our focused approach in this most challenging of environments by implementing appropriate longer term strategies, such as raising our allocation to closed-end funds, where we view the current level of closed end fund discounts to be extremely attractive on an intermediate to long-term basis. We also believe that our maximum allocation to closed-end funds may provide a significant tailwind to the risk-adjusted performance of our Fund’s fixed income portfolio over the next 12 to 24 months.

We thank you for your continued confidence in our firm as a shareholder of the YieldQuest Total Return Bond Fund. As always, we welcome your comments and questions.

3

PORTFOLIO REVIEW

COMPARISON OF THE CHANGE IN VALUE OF $10,000 INVESTED IN THE
YIELDQUEST TOTAL RETURN BOND FUND VS. BENCHMARK

Average Annual Total Returns as of October 31, 2007
									Net			Gross
	Inception					Since			Expense			Expense
	Date		1-Year			Inception			Ratio†			Ratio†
YieldQuest Total Return Bond Fund		10/31/05		-0.86	%		4.11	%		0.79	%		0.94	%
Lehman Brothers Aggregate Bond Index				5.38	%		5.28	%

Current performance of the Fund may be lower or higher than the performance quoted. The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. Performance data current to the most recent month end may be obtained by calling the Fund at 1-877-497-3634.
Past performance is not predictive of future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemptions of Fund shares.

The total returns above reflect fee reductions in effect from November 1, 2006 through October 31, 2007. Voluntary reductions may be discontinued at any time after October 31, 2008. If such fee reductions had not occurred, the quoted performance would be lower.

The Lehman Brothers Aggregate Bond Index is an unmanaged index which represents the U.S. investment-grade fixed-rate bond market (including government and corporate securities, mortgage pass-through securities and asset-backed securities). Index returns assume reinvestment of dividends. Investors may not invest in the index directly; unlike the Fund’s returns, the index does not reflect any fees or expenses.

^† The above expense ratios are from the Fund’s prospectus dated December 29, 2006. Additional information pertaining to the Fund’s expense ratios as of October 31, 2007 can be found in the Financial Highlights in this Report.

SIGNIFICANT AREAS OF INVESTMENT AS A PERCENTAGE OF TOTAL INVESTMENTS

4

SHAREHOLDER LETTER – YIELDQUEST TAX-EXEMPT BOND FUND

To Our Shareholders:

The YieldQuest Tax-Exempt Bond Fund had a total return of -0.46% for the fiscal year, compared to 3.64% for the Lehman Municipal 7-Year Bond Index. At year end, the Fund had net assets of $191.01 million.

We attribute the Fund’s level of underperformance below the benchmark index to a set of unique factors that have dominated the market environment during the last several months. In fact, it is fair to say that in the 15 years many of us at YieldQuest have been involved in the financial markets, the severity of the earthquake that has wrenched the financial markets in recent months is unmatched. Effectively, what began as rising subprime defaults in low quality mortgages triggered a domino-like effect of credit product downgrades, forced selling by leveraged players in the market, sizeable bank write-downs, and panic selling by retail investors. Though the Fund itself has very limited exposure to subprime mortgages and/or structured products, the broad-based selling pressure across a variety of fixed income assets, including tax-exempt municipal bonds and municipal closed-end bond funds, did negatively impact our Fund performance. This was primarily due to the substantial widening in municipal closed-end fund discounts to net asset value that resulted from retail investors who tended to “sell first and ask questions later” amidst escalating credit market turmoil, sending discounts to multi-year wide levels.

While we are most certainly disappointed with the short-term underperformance of the Fund, on both a nominal as well as relative basis, we also believe our investment approach and ability to seize opportunities that present themselves in challenging environments such as this one are the keys to the ongoing long term success of the Fund. With that in mind, we have therefore attempted to maintain our focused approach in this most challenging of environments by implementing appropriate longer term strategies to meet the Fund’s objective of maximizing the level of current tax-exempt income, such as raising our allocation to closed-end funds that hold a portfolio of municipal bonds, where, based on our proprietary models of the sectors’ historical trading pattern of premium/discounts to net asset value, we view the current level of municipal closed-end fund discounts to be extremely attractive on an intermediate to long-term basis. In addition to the attractiveness of the closed-end fund discount, we also analyze the underlying fund’s portfolio in detail to determine whether it has positive prospects for income in the future. Finally, we closely study the credit risk of these underlying funds by performing fundamental credit analysis on the universe of municipal bonds before purchasing these securities for the Fund. We believe that our maximum allocation to high quality municipal closed-end funds may provide a significant tailwind to the current tax-exempt income of our Fund over the next 12 to 24 months.

In addition, although municipal closed-end funds comprise a significant weighting in the Fund’s portfolio, we also have employed our top-down, value add approach to identify attractively priced individual municipal bonds in this environment of market turmoil. We believe our experience in the municipal bond market provides us with a competitive advantage relative to our competitors and should allow us to incrementally add to the Fund’s yield. We have also identified some opportunities within the taxable fixed income segment that we believe may add to our net after-tax total return potential over time.

Our job as manager of your investment in the Fund is to take a daily assessment of value in the marketplace and seize upon those opportunities that we believe will create maximum value over time.

We thank you for your continued confidence in our firm as a shareholder of the YieldQuest Tax-Exempt Bond Fund. As always, we welcome your comments and questions.

5

PORTFOLIO REVIEW

COMPARISON OF THE CHANGE IN VALUE OF $10,000 INVESTED IN THE
YIELDQUEST TAX-EXEMPT BOND FUND VS. BENCHMARK

Average Annual Total Returns as of October 31, 2007
									Net			Gross
	Inception					Since			Expense			Expense
	Date		1-Year			Inception			Ratio†			Ratio†
YieldQuest Tax-Exempt Bond Fund		10/31/05		-0.46	%		3.93	%		0.79	%		1.09	%
Lehman Brothers 7 Year Municipal Bond Index				3.64	%		4.32	%

Current performance of the Fund may be lower or higher than the performance quoted. The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. Performance data current to the most recent month end may be obtained by calling the Fund at 1-877-497-3634.
Past performance is not predictive of future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemptions of Fund shares.
The total returns above reflect fee reductions in effect from November 1, 2006 through October 31, 2007. Voluntary reductions may be discontinued at any time after October 31, 2008. If such fee reductions had not occurred, the quoted performance would be lower.

The Lehman Brothers 7 Year Municipal Bond Index is an unmanaged index comprised of investment grade municipal bonds with maturities close to seven years. Index returns assume reinvestment of dividends. Investors may not invest in the index directly; unlike the Fund’s returns, the index does not reflect any fees or expenses.

^† The above expense ratios are from the Fund’s prospectus dated December 29, 2006. Additional information pertaining to the Fund’s expense ratios as of October 31, 2007 can be found in the Financial Highlights in this Report.

SIGNIFICANT AREAS OF INVESTMENT AS A PERCENTAGE OF TOTAL INVESTMENTS

6

SHAREHOLDER LETTER – YIELDQUEST FLEXIBLE INCOME FUND

To Our Shareholders:

The YieldQuest Fixed Income Fund had a total non-annualized return since inception on 6/11/2007 of 1.36%, compared to 4.76% over the same period for the Lehman U.S. Government/Credit Index. At year end, the Fund had net assets of $14.58 million.

We attribute the Fund’s level of underperformance below the benchmark index to a set of unique factors that have dominated the market environment during the last several months. In fact, it is fair to say that in the 15 years many of us at YieldQuest have been involved in the financial markets, the severity of the earthquake that has wrenched the financial markets in recent months is unmatched. Effectively, what began as rising subprime defaults in low quality mortgages triggered a domino-like effect of credit product downgrades, forced selling by leveraged players in the market, sizeable bank write-downs, and panic selling by retail investors. Though the Fund itself has very limited exposure to subprime mortgages and/or structured products, the broad-based selling pressure across a variety of fixed income assets did negatively impact our Fund performance. This was primarily due to the substantial widening in closed-end fund discounts to net asset value that resulted from retail investors who tended to “sell first and ask questions later” amidst escalating credit market turmoil, sending discounts to multi-year wide levels. In addition, our duration positioning also contributed somewhat to our underperformance since inception in June, as Treasuries recorded a significant rally on the back of the pronounced “flight to safety”.

Despite the Fund’s short term underperformance, we believe our investment approach and ability to seize opportunities that present themselves in challenging environments such as this one are the keys to the long term success of the Fund. With that in mind, we have therefore attempted to maintain our focused approach in this most challenging of environments by implementing appropriate longer term strategies to meet the Fund’s Flexible Income objectives, such as raising our allocation to closed-end funds, where, based on our proprietary models of the sectors’ historical trading pattern of premium/discounts to net asset value, we view the current level of closed-end fund discounts to be extremely attractive on an intermediate to long-term basis. In addition, as the Fund seeks to benefit from attractive valuations within the fixed income market, our proprietary analytical models have also identified a number of other undervalued sectors that have fallen out of favor with the marketplace, such that we believe the prospects within these sectors for future capital appreciation and income appear positive. In addition, from a credit standpoint, we conduct a detailed fundamental analysis of each individual issuer’s future prospects and ability to make timely interest payment and to repay principal.

We thank you for your continued confidence in our firm as a shareholder of the YieldQuest Flexible Income Fund. As always, we welcome your comments and questions.

7

PORTFOLIO REVIEW

COMPARISON OF THE CHANGE IN VALUE OF $10,000 INVESTED IN THE
YIELDQUEST FLEXIBLE INCOME FUND VS. BENCHMARK

Total Returns as of October 31, 2007
						Net			Gross
	Inception		Since			Expense			Expense
	Date		Inception			Ratio†			Ratio†
YieldQuest Flexible Income Fund		6/11/07		1.36	%		0.95	%		1.03	%
Lehman Government/Credit Index				4.76	%

Current performance of the Fund may be lower or higher than the performance quoted. The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. Performance data current to the most recent month end may be obtained by calling the Fund at 1-877-497-3634.
Past performance is not predictive of future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemptions of Fund shares.
The total returns above reflect fee reductions in effect from the Fund’s inception through October 31, 2007. Voluntary reductions may be discontinued at any time after October 31, 2008. If such fee reductions had not occurred, the quoted performance would be lower.

The Lehman Government/Credit Index is an unmanaged index that tracks the performance of a selection of U.S. government and investment grade U.S. corporate bonds. Index returns assume reinvestment of dividends. Investors may not invest in the index directly; unlike the Fund’s returns, the index does not reflect any fees or expenses.

^† The above expense ratios are from the Fund’s prospectus dated December 29, 2006. Additional information pertaining to the Fund’s expense ratios as of October 31, 2007 can be found in the Financial Highlights in this report.

SIGNIFICANT AREAS OF INVESTMENT AS A PERCENTAGE OF TOTAL INVESTMENTS

8

SHAREHOLDER LETTER – YIELDQUEST LOW DURATION BOND FUND

To Our Shareholders:

The YieldQuest Low Duration Bond Fund had a total non-annualized return since inception on 6/11/2007 of 0.66%, compared to 3.21% over the same period for the Lehman U.S. Aggregate 1-3 year Bond Index. At year end, the Fund had net assets of $8.20 million.

Since the Fund’s inception in June, a number of unique factors have dominated the fixed income market environment and negatively impacted the Fund’s performance to date. In fact, we believe it is fair to say that in the 15 years many of us at YieldQuest have been involved in the financial markets, the severity of the earthquake that has wrenched the financial markets in recent months is unmatched. Effectively, what began as rising subprime defaults in low quality mortgages triggered a domino-like effect of credit product downgrades, forced selling by leveraged players in the market, sizeable bank write-downs, and panic selling by retail investors. Though the Fund itself has very limited exposure to subprime mortgages and/or structured products and seeks to achieve its objectives by investing primarily in a broad range of low duration, investment-grade debt securities, the broad-based selling pressure across a variety of fixed income assets did negatively impact our Fund performance during this period. In addition, the Fund’s performance was also hindered by our duration positioning, given the sharp and swift rally in the Treasury markets that resulted from a significant flight to quality. Finally, the Fund’s closed-end fund holdings were another source of underperformance during this period, as the closed-end fund discounts to net asset value experienced significant widening to multi-year wide levels on the back of heavy retail investor selling amidst escalating credit market turmoil.

Despite the Fund’s short term underperformance, we believe our investment approach and ability to seize opportunities that present themselves in challenging environments such as this one are the keys to the long term success of the Fund. Our yield curve and duration strategies are based on a thorough analysis of a number of factors, including current and expected U.S. economic growth; current and expected interest rates and inflation; the Federal Reserve’s monetary policy; and supply and demand factors related to the bond market and the effect they may have on the returns offered for various bond maturities. Within the closed-end fund sector, we have raised our allocation to closed-end funds, where, based on our proprietary models of the sectors’ historical trading pattern of premium/discounts to net asset value, we view the current level of closed-end fund discounts to be extremely attractive on an intermediate to long-term basis.

We thank you for your continued confidence in our firm as a shareholder of the YieldQuest Low Duration Fund. As always, we welcome your comments and questions.

9

PORTFOLIO REVIEW

COMPARISON OF THE CHANGE IN VALUE OF $10,000 INVESTED IN THE
YIELDQUEST LOW DURATION BOND FUND VS. BENCHMARK

Total Returns as of October 31, 2007
						Net			Gross
	Inception		Since			Expense			Expense
	Date		Inception			Ratio†			Ratio†
YieldQuest Low Duration Bond Fund		6/11/07		0.66	%		0.65	%		0.73	%
Lehman U.S. Aggregate 1-3 Year Bond Index				3.21	%

Current performance of the Fund may be lower or higher than the performance quoted. The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. Performance data current to the most recent month end may be obtained by calling the Fund at 1-877-497-3634.
Past performance is not predictive of future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemptions of Fund shares.
The total returns above reflect fee reductions in effect from the Fund’s inception through October 31, 2007. Voluntary reductions may be discontinued at any time after October 31, 2008. If such fee reductions had not occurred, the quoted performance would be lower.

The Lehman U.S. Aggregate 1-3 Year Bond Index is representative of the U.S. investment grade fixed-income bond market with maturities of one to three years. Index returns assume reinvestment of dividends. Investors may not invest in the index directly; unlike the Fund’s returns, the index does not reflect any fees or expenses.

^† The above expense ratios are from the Fund’s prospectus dated December 29, 2006. Additional information pertaining to the Fund’s expense ratios as of October 31, 2007 can be found in the Financial Highlights in this report.

SIGNIFICANT AREAS OF INVESTMENT AS A PERCENTAGE OF TOTAL INVESTMENTS

10

SHAREHOLDER LETTER – YIELDQUEST LOW DURATION TAX-EXEMPT BOND FUND

To Our Shareholders:

The YieldQuest Low Duration Tax-Exempt Bond Fund had a total non-annualized return since inception on 6/11/2007 of 1.53%, compared to 2.65% over the same period for the Lehman 3-year Municipal Bond Index. At year end, the Fund had net assets of $1.32 million.

Since the Fund’s inception in June, a number of unique factors have dominated the fixed income/municipal bond market environment and negatively impacted the Fund’s performance to date. In fact, we believe it is fair to say that in the 15 years many of us at YieldQuest have been involved in the financial markets, the severity of the earthquake that has wrenched the financial markets in recent months is unmatched. Effectively, what began as rising subprime defaults in low quality mortgages triggered a domino-like effect of credit product downgrades, forced selling by leveraged players in the market, sizeable bank write-downs, and panic selling by retail investors. Though the Fund itself has very limited exposure to subprime mortgages and/or structured products and seeks to achieve its objectives by investing primarily in a broad range of low duration, tax-exempt municipal bonds, the broad-based selling pressure across a variety of fixed income assets, including in the tax-exempt sector, did negatively impact our Fund performance during this period. In addition, the Fund’s performance was also hindered by our duration positioning, given the sharp and swift rally in the Treasury markets that resulted from a significant flight to quality. Finally, the Fund’s municipal bond closed-end fund holdings were another source of underperformance during this period, as municipal closed-end fund discounts to net asset value experienced significant widening to multi-year wide levels on the back of heavy retail investor selling amidst escalating credit market turmoil.

Despite the Fund’s short term underperformance, we believe our investment approach and ability to seize opportunities that present themselves in challenging environments such as this one are the keys to the long term success of the Fund. Our objective is to identify U.S. municipal debt securities that we believe may be underrated or undervalued or that present the highest yield opportunity and thus present compelling opportunities for capital appreciation and income over time. We utilize a top-down analysis to identify potential issuers as well as analyze a number of macro- and micro-economic factors, such as economic conditions, the interest rate cycle, monetary policy, the supply and demand for credit and the characteristics of individual issuers in making our investment selections. Within the closed-end fund sector, we have raised our allocation to closed-end funds, where, based on our proprietary models of the sectors’ historical trading pattern of premium/discounts to net asset value, we view the current level of closed-end fund discounts to be extremely attractive on an intermediate to long-term basis.

We thank you for your continued confidence in our firm as a shareholder of the YieldQuest Low Duration Tax Exempt Fund. As always, we welcome your comments and questions.

11

PORTFOLIO REVIEW

COMPARISON OF THE CHANGE IN VALUE OF $10,000 INVESTED IN THE
YIELDQUEST LOW DURATION TAX-EXEMPT BOND FUND VS. BENCHMARK

Total Returns as of October 31, 2007
						Net			Gross
	Inception		Since			Expense			Expense
	Date		Inception			Ratio†			Ratio†
YieldQuest Low Duration
Tax-Exempt Bond Fund		6/11/07		1.53	%		0.65	%		0.73	%
Lehman 3-Year Municipal Bond Index				2.65	%

Current performance of the Fund may be lower or higher than the performance quoted. The Fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. Performance data current to the most recent month end may be obtained by calling the Fund at 1-877-497-3634.
Past performance is not predictive of future performance. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or on the redemptions of Fund shares.
The total returns above reflect fee reductions in effect from the Fund’s inception through October 31, 2007. Voluntary reductions may be discontinued at any time after October 31, 2008. If such fee reductions had not occurred, the quoted performance would be lower.

The Lehman 3-Year Municipal Bond Index is a broad based, unmanaged index of investment grade bonds with maturities of greater than two years and less than four years. Index returns assume reinvestment of dividends. Investors may not invest in the index directly; unlike the Fund’s returns, the index does not reflect any fees or expenses.

^† The above expense ratios are from the Fund’s prospectus dated December 29, 2006. Additional information pertaining to the Fund’s expense ratios as of October 31, 2007 can be found in the Financial Highlights in this Report.

SIGNIFICANT AREAS OF INVESTMENT AS A PERCENTAGE OF TOTAL INVESTMENTS

12

  YIELDQUEST CORE EQUITY FUND
  SCHEDULE OF INVESTMENTS
October 31, 2007  

% of
Net Assets	Description	Shares		Value
3.54%	COMMON STOCKS
1.30%	Airlines
	Air France-KLM ADR		200	$	7,634
	AirTran Holdings, Inc.*		990		10,306
	British Airways PLC ADR*		220		20,349
	Continental Airlines, Inc.*		1,710		58,738
	Delta Air Lines, Inc.*		3,484		72,467
	Deutsche Lufthansa AG		375		11,086
	Gol Linhas Aereas Inteligentes S.A. ADR		425		11,637
	JetBlue Airways Corp.*		1,080		9,860
	Northwest Airlines Corp.		2,800		51,940
	Singapore Airlines Ltd.		887		12,072
	Southwest Airlines Co.		1,300		18,473
	UAL Corp.*		925		44,307
					328,869
0.51%	Financial Services
	Blackstone Group LP (The)*		800		20,344
	Countrywide Financial Corp.		7,100		110,192
					130,536
1.73%	Home Builders
	Beazer Homes USA, Inc.		1,900		21,337
	Brookfield Homes Corp.		900		13,527
	Cavco Industries Inc.		550		21,621
	Centex Corp.		1,025		25,686
	Champion Enterprises, Inc.*		2,100		24,906
	D.R. Horton, Inc.		2,050		26,014
	Hovnanian Enterprises, Inc.*		1,600		18,192
	KB Home		950		26,258
	Lennar Corp.		1,150		26,277
	Levitt Corp.		7,000		13,510
	M.D.C Holdings, Inc.		575		23,293
	M/I Homes, Inc.		1,175		19,505
	Meritage Homes Corp.*		1,150		18,504
	NVR, Inc.*		50		23,788
	Palm Harbor Homes, Inc.*		1,350		19,211
	Pulte Homes, Inc.		1,700		25,228
	Ryland Group, Inc.		925		26,298
	Skyline Corp.		600		21,264
	Toll Brothers, Inc.*		1,300		29,783
	WCI Communities, Inc.*		2,600		14,196
					438,398
	Total Common Stocks
	(Cost $853,766)				897,803
		Principal
0.04%	CORPORATE BONDS
0.04%	Airline
	Delta Airlines, Inc., 0.00%, 12/15/2029(a)	$	130,000		8,937
	Total Corporate Bonds
	(Cost $17)				8,937
		Shares
117.72%	EXCHANGE TRADED/CLOSED-END FUNDS
79.30%	Equity Closed-End Funds
	Adams Express Co.(b)		16,000		240,320
	Advent/Claymore Enhanced Growth & Income Fund		3,000		52,380

See accompanying notes to financial statements.

13

  YIELDQUEST CORE EQUITY FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
	Equity Closed-End Funds (Continued)
	Alliance All-Market Advantage Fund		5,000	$	68,350
	BlackRock Dividend Acheivers Trust(b)		12,700		173,228
	BlackRock Global Energy & Resources Trust(b)		24,550		789,037
	BlackRock Global Opportunities Equity Trust(b)		4,700		135,172
	BlackRock Health Sciences Trust(b)		18,325		495,691
	BlackRock Real Asset Equity Trust(b)		15,633		274,984
	BlackRock World Investment Trust		18,500		319,680
	Boulder Total Return Fund, Inc.(b)		22,250		525,768
	Calamos Strategic Total Return Fund(b)		34,366		505,180
	Central Europe and Russia Fund, Inc. (The)		6,031		387,190
	Central Securities Corp.		12,575		366,561
	Chartwell Dividend & Income Fund, Inc.		16,900		140,101
	China Fund, Inc.		3,380		174,645
	Claymore/Raymond James SB-1 Equity Fund		9,615		193,935
	Clough Global Allocation Fund(b)		3,748		79,308
	Clough Global Equity Fund(b)		7,055		145,121
	Clough Global Opportunities Fund(b)		9,140		165,160
	Cohen & Steers Closed-End Opportunity Fund, Inc.(b)		18,800		314,900
	Cohen & Steers Premium Income Realty Fund, Inc.		5,500		112,750
	Cohen & Steers Worldwide Realty Income Fund, Inc.		3,900		86,151
	DWS Dreman Value Income Edge Fund(b)		8,300		129,978
	DWS Global Commodities Stock Fund, Inc.(b)		27,200		561,952
	Eaton Vance Enhanced Equity Income Fund II(b)		13,000		250,250
	Eaton Vance Tax-Advantaged Global Dividend Income Fund(b)		15,000		424,500
	Emerging Markets Telecommunications Fund		11,000		308,990
	Fiduciary/Claymore Dynamic Equity Income Fund(b)		7,000		128,520
	First Trust Enhanced Equity Income Fund(b)		11,000		187,990
	Gabelli Dividend & Income Trust(b)		24,450		533,988
	Gabelli Global Gold Natural Resources & Income Trust		4,900		144,305
	Gabelli Global Multimedia Trust, Inc.(b)		20,100		281,802
	H&Q Healthcare Investors		193		3,397
	H&Q Life Sciences Investors(b)		26,680		372,986
	India Fund, Inc.(b)		4,408		285,418
	ING Asia Pacific High Dividend Equity Income Fund(b)		5,200		129,428
	ING Clarion Global Real Estate Income Fund(b)		12,600		246,582
	ING Risk Managed Natural Resources Fund(b)		28,700		506,555
	Japan Equity Fund(b)		65,600		522,832
	Japan Smaller Capitalization Fund, Inc.(b)		35,000		382,550
	JF China Region Fund, Inc.		4,325		148,996
	John Hancock Bank and Thrift Opportunity Fund		59,000		456,660
	John Hancock Patriot Premium Dividend Fund II(b)		37,200		393,948
	John Hancock Tax-Advantaged Dividend Income Fund(b)		19,200		368,832
	Korea Fund, Inc.		3,000		152,400
	Latin America Equity Fund, Inc.(b)		3,000		180,330
	Lazard Global Total Return and Income Fund, Inc.(b)		14,827		339,093
	Liberty All-Star Equity Fund		169		1,404
	Liberty All-Star Growth Fund, Inc.(b)		55,086		332,169
	Mexico Equity & Income Fund, Inc.		3,600		126,648
	Morgan Stanley Asia-Pacific Fund, Inc.(b)		10,700		259,582
	Morgan Stanley China A Share Fund		4,400		281,380
	Morgan Stanley Eastern Europe Fund, Inc.		2,500		112,500
	Morgan Stanley India Investement Fund, Inc.		4,300		260,150
	NASDAQ Premiuim Income & Growth Fund, Inc.(b)		29,200		572,612
	Nicholas-Applegate Convertible & Income Fund		9,000		128,430

See accompanying notes to financial statements.

14

  YIELDQUEST CORE EQUITY FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
	Equity Closed-End Funds (Continued)
	Nicholas-Applegate Convertible & Income Fund II		9,000	$	128,700
	Nuveen Diversified Dividend & Income Fund		14,800		247,160
	Nuveen Equity Premium & Growth Fund(b)		31,000		554,280
	Nuveen Equity Premium Income Fund		6,800		114,580
	Nuveen Equity Premium Opportunity Fund		9,300		156,426
	Nuveen Global Value Opportunities Fund(b)		6,700		126,295
	Old Mutual/Claymore Long-Short Fund		10,000		159,300
	PowerShares Listed Private Equity Portfolio(b)		7,600		194,484
	RMR Asia Pacific Real Estate Fund		10,500		250,950
	Royce Value Trust, Inc.(b)		9,850		188,431
	SunAmerica Focused Alpha Growth Fund, Inc.(b)		6,000		129,300
	Swiss Helvetia Fund, Inc.(b)		17,966		327,520
	Templeton Dragon Fund, Inc.(b)		2,525		92,163
	Templeton Emerging Markets Fund(b)		59,200		1,494,800
	Tri-Continental Corp.(b)		17,796		434,934
	Zweig Fund, Inc.(b)		48,000		256,320
					20,118,412
38.42%	Equity ETF
	Claymore/Clear Global Exchanges, Brokers & Asset Managers Index(b)		5,000		142,300
	Claymore/Robb Report Global Luxury Index(b)		17,800		478,998
	Internet Architecture HOLDRs Trust(b)		6,700		377,746
	iShares Dow Jones U.S. Energy Sector Index Fund(b)		3,000		397,890
	iShares Dow Jones U.S. Technology Sector Index Fund(b)		5,500		368,995
	iShares Dow Jones U.S. Transportation Index Fund(b)		7,455		654,549
	iShares MSCI Brazil Index Fund(b)		8,600		736,590
	iShares MSCI Sweden Index Fund(b)		9,500		342,285
	iShares S&P GSTI Semiconductor Index Fund(b)		1,805		116,784
	iShares S&P GSTI Software Index Fund		2,365		127,000
	Market Vectors Steel Index Fund(b)		1,750		151,550
	Semiconductor HOLDRs Trust		5,600		193,872
	Software HOLDRs Trust		1,700		78,200
	Telecom HOLDRs Trust(b)		2,900		118,900
	Ultra Basic Materials ProShares		2,300		246,652
	Ultra Consumer Goods ProShares		1,500		116,715
	Ultra Consumer Services ProShares		11,150		706,241
	Ultra Financials ProShares(b)		27,100		1,490,771
	Ultra Health Care ProShares(b)		7,900		593,527
	Ultra Industrials ProShares(b)		7,875		704,419
	Ultra Oil & Gas ProShares(b)		3,150		357,525
	Ultra Real Estate ProShares(b)		4,200		198,618
	Ultra Semiconductor ProShares(b)		2,300		192,740
	Ultra Technology ProShares		3,800		370,082
	Ultra Utilities ProShares		850		75,047
	UltraShort Oil & Gas ProShares		1,550		61,101
	UltraShort Real Estate ProShares		2,100		184,170
	Wireless HOLDRs Trust(b)		1,100		87,043
	WisdomTree International Communications Sector Fund(b)		2,025		77,942
					9,748,252
	Total Exchange Traded/Closed-End Funds
	(Cost $26,292,182)				29,866,664

See accompanying notes to financial statements.

15

  YIELDQUEST CORE EQUITY FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
0.21%	PREFERRED STOCKS
0.21%	Financial Services
	Thornburg Mortgage, Inc., Series F, 10.00%, Callable
	9/7/2012 @ $25.00		2,200	$	53,547
	Total Preferred Stocks
	(Cost $50,313)				53,547
		Contracts
0.72%	PURCHASED OPTIONS*
	CBOE SPX Volatility Index, Call @ $17, 11/21/2007		85		23,800
	CBOE SPX Volatility Index, Call @ $19, 11/21/2007		96		19,200
	CBOE SPX Volatility Index, Call @ $27.50, 11/21/2007		208		8,320
	CBOE SPX Volatility Index, Call @ $30, 11/21/2007		313		7,825
	Consumer Discretioinary Select Sector SPDR Fund, Call @ $37, 11/17/2007		262		19,650
	Energy Select Sector SPDR Fund, Put @ $73, 11/17/2007		81		1,094
	Energy Select Sector SPDR Fund, Put @ $74, 11/17/2007		57		5,529
	Energy Select Sector SPDR Fund, Put @ $76, 11/17/2007		37		5,180
	Energy Select Sector SPDR Fund, Put @ $77, 11/17/2007		32		6,272
	Financial Select Sector SPDR Fund, Put @ $32, 11/17/2007		125		3,875
	Financial Select Sector SPDR Fund, Put @ $33, 11/17/2007		77		4,389
	iShares MSCI Brazil Index Fund, Put @ $65, 11/17/2007		210		1,575
	iShares MSCI Brazil Index Fund, Put @ $75, 12/22/2007		55		11,275
	iShares MSCI Brazil Index Fund, Put @ $80, 12/22/2007		55		19,250
	iShares MSCI Brazil Index Fund, Put @ $85, 11/17/2007		31		8,990
	Oil Service Holders Trust, Put @ $185, 11/17/2007		33		10,560
	Oil Service Holders Trust, Put @ $195, 11/17/2007		12		9,900
	Oil Service Holders Trust, Put @ $200, 11/17/2007		8		9,280
	SPDR S&P Homebuilders ETF, Put @ $21, 12/22/2007		68		6,120
	Total Purchased Options
	(Cost $243,674)				182,084
		Shares
1.08%	SHORT-TERM INVESTMENT
	BNY Hamilton Money Fund, 4.96%, 11/1/07		274,307		274,307
	Total Short-Term Investments
	(Cost $274,307)				274,307
123.31%	Total Investments
	(Cost $27,714,259)				31,283,342
(23.31)%	Net other assets (liabilities)				(5,913,301	)
100.00%	NET ASSETS			$	25,370,041

(a)	Default Resolution
(b)	All or a portion of the security is pledged as collateral for securities sold short.
*	Non-income producing securities.
ADR	American Depositary Receipt
ETF	Exchange-Traded Fund
LP	Limited Partnership
PLC	Public Liability Co.

See accompanying notes to financial statements.

16

  YIELDQUEST CORE EQUITY FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description		Shares		Value
	EXCHANGE TRADED / CLOSED-END FUNDS SOLD SHORT
	Cornerstone Strategic Value Fund, Inc.			10,000	$	65,400
	iShares Lehman 20 Plus Year Treasury Bond Fund			8,450		760,416
	iShares MSCI Spain Index Fund			4,000		270,760
	iShares S&P 500 Index Fund			4,900		760,088
	Market Vectors Steel Index Fund			2,800		242,480
	Powershares Golden Dragon Halter USX China Portfolio			17,000		658,240
	SPDR Metal & Mining ETF			3,500		239,575
	Vanguard Emerging Markets ETF			27,000		3,154,140
	Total				$	6,151,099
			Notional		Unrealized
		Contracts	Value		Gain/(Loss)
	FUTURES CONTRACTS PURCHASED
	DJIA Mini, Dec 07, expires 12/20/07	4	$	278,720	$	4,752
	Dow Jones Euro Stoxx 50, Dec 07, expires 12/21/07	7		458,170		22,541
	Russell Mini, Dec 07, expires 12/21/07	5		416,150		12,037
	S&P 500 e-Mini, Dec 07, expires 12/21/07	36		2,798,820		58,774
					$	98,104
	FUTURES CONTRACT SOLD SHORT
	Nasdaq 100 e-Mini, Dec 2007, expires 12/21/07	44		1,982,200	$	(59,157	)
	Total				$	38,947

CREDIT DEFAULT SWAP
	Notional	Buy/Sell	Receive	Expiration		Unrealized
Underlying Instrument	Amount	Protection	Fixed Rate	Date		Gain/(Loss)
CDX North American High
Yield Index, Series 8	$(2,500,000)	Buy	2.75%	6/20/2012	$	69,381

See accompanying notes to financial statements.

17

  YIELDQUEST TOTAL RETURN BOND FUND
  SCHEDULE OF INVESTMENTS
October 31, 2007  

% of
Net Assets	Description	Principal		Value
11.26%	CORPORATE BONDS
4.47%	Airlines
	America West Airlines, Series B, 6.93%, 1/2/2008	$	68,541	$	67,128
	American Airlines, Inc.:
	6.817%, 5/23/2011, Series 01-1		402,000		390,945
	6.977%, 5/23/2021, Series 01-1(d)		987,120		925,504
	7.377%, 5/23/2019, Series 01-1		848,202		797,310
	7.379%, 5/23/2016, Series 01-1		620,325		580,004
	7.858%, 10/1/2011, Series 01-2		100,000		105,625
	AMR Corp.:
	9.75%, 8/15/2021		469,000		436,170
	9.88%, 6/15/2020		343,000		317,275
	10.55%, 3/12/2021		100,000		98,250
	Continental Airlines, Inc.:
	6.648%, 9/15/2017, Series 981A		314,034		316,565
	6.703%, 6/15/2021, Series 01-1		137,814		137,814
	6.748%, 3/15/2017, Series 981B		349,637		337,802
	6.795%, 8/2/2018, Series 991B		214,897		206,301
	6.954%, 8/2/2009, Series 991C		63,872		62,781
	7.033%, 6/15/2011, Series 01-1		258,339		250,981
	7.339%, 4/19/2014, Series C		200,000		190,000
	7.461%, 4/1/2013, Series 971B		86,565		83,968
	7.461%, 4/1/2015, Series 971A		1,334,562		1,321,216
	7.566%, 3/15/2020, Series 99-2		183,948		177,510
	8.388%, 11/1/2020, Series 00-1		195,854		196,833
	8.56%, 7/2/2014, Series 962B		82,441		83,060
	Delta Airlines, Inc.:
	0.00%, 8/15/2008(a)*		500,000		34,375
	0.00%, 12/15/2009(a)*		165,000		11,344
	0.00%, 5/15/2016(a)*		635,000		43,656
	0.00%, 5/15/2021(a)*		165,000		11,344
	0.00%, 3/15/2022(a)*		165,000		10,931
	0.00%, 12/15/2029(a)*		2,550,000		175,313
	6.619%, 3/18/2011, Series 01-1		350,386		352,576
	6.718%, 1/2/2023, Series 02-1		860,638		885,681
	7.711%, 9/18/2011, Series 01-1		925,000		912,859
	7.92%, 11/18/2010, Series 00-1		700,000		699,125
	Northwest Airlines, Inc.:
	7.691%, 4/1/2017, Series 01-B		483,316		474,634
	7.95%, 3/1/2015, Series 992B		834,132		823,705
	Southwest Airlines Co.:
	6.65%, 8/1/2022, Series 07-1(f)		600,000		597,384
	7.22%, 7/1/2013, Series 95A3, Callable 12/24/2007 @ $100		149,424		149,587
	United Airlines, Inc.:
	6.602%, 9/1/2013, Series 01-1		256,872		258,659
	7.032%, 10/1/2010, Series 00-2		532,666		532,666
	7.336%, 7/2/2019(b)		1,010,000		1,011,263
	7.73%, 7/1/2010, Series 00-1		611,683		613,213
					14,681,357
0.52%	Automotive
	Ford Motor Co.:
	7.40%, 11/1/2046		850,000		616,250
	8.90%, 1/15/2032		360,000		319,500
	General Motors, 9.40%, 7/15/2021		800,000		788,000
					1,723,750

See accompanying notes to financial statements.

18

  YIELDQUEST TOTAL RETURN BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Principal		Value
0.70%	Banks
	Bank of America Corp.:
	4.75%, 8/1/2015(d)	$	750,000	$	709,778
	5.30%, 3/15/2017(d)		1,000,000		967,906
	5.75%, 8/15/2016(d)		600,000		601,821
					2,279,505
5.26%	Financial Services
	Bear, Stearns & Co. Inc., 5.55%, 1/22/2017(d)		1,175,000		1,101,232
	Berkshire Hathaway, Inc., 4.125%, 1/15/2010(d)		450,000		443,678
	Citigroup, Inc., 5.50%, 2/15/2017(d)		975,000		958,632
	Credit Suisse First Boston USA, Inc., 6.50%, 1/15/2012		80,000		83,914
	Ford Motor Credit Co., LLC, 9.875%, 8/10/2011(d)		1,000,000		999,396
	General Electric Capital Corp.:
	4.375%, 11/21/2011(d)		230,000		224,717
	5.00%, 1/8/2016(d)		500,000		489,071
	6.00%, 6/15/2012(d)		500,000		519,191
	6.875%, 11/15/2010(d)		250,000		264,519
	7.50%, 2/28/2011, Series EMTN		3,000,000		2,245,231
	8.125%, 5/15/2012(d)		2,000,000		2,242,296
	General Motors Acceptance Corp., LLC:
	5.85%, 1/14/2009(d)		1,115,000		1,076,143
	8.00%, 11/1/2031(d)		710,000		659,263
	General Motors Nova Finance, 6.85%, 10/15/2008		700,000		696,500
	Goldman Sachs Group, Inc.:
	4.50%, 6/15/2010		80,000		78,972
	4.75%, 7/15/2013(d)		800,000		767,692
	5.25%, 4/1/2013(d)		300,000		297,917
	5.625%, 1/15/2017(d)		975,000		946,412
	HSBC Finance Corp., 5.875%, 2/1/2009		80,000		80,808
	Lehman Brothers Holdings, 6.50%, 7/19/2017(d)		1,175,000		1,186,324
	Merrill Lynch & Co., Inc., 5.70%, 5/2/2017(d)		1,000,000		958,300
	Morgan Stanley & Co. Inc., Series MTN, 5.55%, 4/27/2017(d)		1,000,000		975,624
					17,295,832
0.29%	Health Care
	UnitedHealth Group, Inc., 3.30%, 1/30/2008(d)		940,000		936,760
0.02%	Metals & Mining
	Alcoa, Inc., 6.00%, 1/15/2012		80,000		81,758
	Total Corporate Bonds
	(Cost $36,804,283)				36,998,962
3.89%	COLLATERALIZED MORTGAGE OBLIGATIONS
3.89%	U.S. Government & Agency
	Federal Farm Credit Bank, 5.59%, 12/11/2012,
	Series 2006-IAB3, Class 1(d)		1,123,707		1,124,628
	Federal Home Loan Bank, 4.72%, 9/20/2012(d)		1,187,148		1,169,329
	Federal Home Loan Mortgage Corp.:
	4.25%, 12/15/2014(d)		1,964,751		1,881,226
	5.25%, 8/15/2011, Series 3196, Class PA(d)		722,817		724,600
	5.50%, 2/15/2031, Series 3174, Class CB(d)		1,000,000		1,008,217

See accompanying notes to financial statements.

19

  YIELDQUEST TOTAL RETURN BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Principal		Value
	U.S. Government & Agency (Continued)
	5.75%, 12/15/2018, Series R009, Class AJ, REMIC(d)	$	3,922,062	$	3,950,218
	6.00%, 4/15/2018(d)		1,955,970		1,983,506
	Small Business Administration, 8.075%, 4/25/2019(c)		882,066		948,425
	Total Collateralized Mortgage Obligations
	(Cost $12,735,752)				12,790,149
1.24%	U.S. GOVERNMENT & AGENCY
	Federal Farm Credit Bank, 3.50%, 4/15/2009(d)		100,000		98,756
	Federal Home Loan Bank:
	3.875%, 2/12/2010, Series RH10(d)		150,000		148,487
	4.375%, 3/17/2010(d)		150,000		150,186
	5.625%, 6/9/2017(d)		3,000,000		3,161,292
	Federal Home Loan Mortgage Corp., 5.50%, 7/18/2016(d)		500,000		522,189
	Total U.S. Government & Agency
	(Cost $3,921,272)				4,080,910
5.16%	U.S. TREASURY SECURITIES
	U.S. Treasury Bill, 0.00%, 4/3/2008(d)		7,000,000		6,884,178
	U.S. Treasury Inflation Indexed Security, 2.375%, 1/15/2017(d)		4,375,000		4,610,355
	U.S. Treasury Note:
	4.50%, 2/28/2011(d)		290,000		294,713
	4.875%, 8/15/2016(d)		5,000,000		5,164,845
	Total U.S. Treasury Securities
	(Cost $16,422,356)				16,954,091
10.14%	FOREIGN BONDS
1.98%	Banks
	European Investment Bank, 4.50%, 1/14/2013		1,000,000		1,995,197
	Inter-American Development Bank:
	6.00%, 12/15/2017, Series EMTN		1,085,000		749,597
	6.25%, 6/22/2016		1,000,000		704,759
	7.25%, 5/24/2012, Series INTL		1,030,000		772,768
	KfW, Series EMTN, 6.50%, 11/15/2011		3,118,000		2,276,557
					6,498,878
0.72%	Financial Services
	General Electric Capital Corp., Series EMTN, 6.75%, 9/26/2016		3,290,000		2,358,656
7.44%	Sovereign Bonds
	Bundesobligation, Germany, Series 149, 3.50%, 10/14/2011		1,825,000		2,582,644
	Bundesrepublik, Deutschland, 3.50%, 1/4/2016		6,170,000		8,503,960
	Federal Republic of Brazil:
	7.875%, 3/7/2015		475,000		540,787
	12.50%, 1/5/2016		300,000		197,364
	Mexican Fixed Rate Bonds, Series M 10, 8.00%, 12/17/2015		7,500,000		708,666
	New South Wales Treasury Corp.:
	5.50%, 8/1/2014, Series 14RG(b)		4,540,000		3,936,764
	7.00%, 12/1/2010, Series 10RG		2,152,000		2,002,117
	8.00%, 3/1/2008, Series 08RG		425,000		397,208
	New Zealand Government, Series 1111, 6.00%, 11/15/2011		420,000		313,049
	Gilt Edged Securities:
	4.00%, 9/7/2016		1,560,000		3,030,843
	5.00%, 3/7/2008		1,073,000		2,226,166
					24,439,568
	Total Foreign Bonds
	(Cost $30,292,928)				33,297,102

See accompanying notes to financial statements.

20

  YIELDQUEST TOTAL RETURN BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Principal		Value
8.12%	MUNICIPAL BONDS
0.49%	Alabama
	City of Alabaster, Series A, GO, 5.34%, 4/1/2017,
	Callable 4/1/2015 @ 100, XLCA(d)	$	170,000	$	165,340
	Tuscaloosa Alabama, Series A, GO, 4.375%, 7/1/2037,
	Callable 1/1/2017 @ 100, AMBAC(d)		1,500,000		1,443,240
					1,608,580
1.89%	California
	California State:
	4.25%, 12/1/2035, GO, Callable 12/1/2016 @ 100, AMBAC(d)		500,000		457,100
	4.50%, 8/1/2030, GO, Callable 2/1/2017 @ 100, MBIA-IBC(d)		1,000,000		972,180
	4.50%, 8/1/2030, GO, Callable 2/01/2017@ 100(d)		3,135,000		2,959,879
	Howell Mountain Elementary School District Election:
	Zero Coupon, 8/1/2028, GO(d)		190,000		74,284
	Zero Coupon, 8/1/2029, GO(d)		150,000		55,221
	Los Angeles County Pension Obligation, Taxable, Series C,
	Revenue, Zero Coupon, 6/30/2008, MBIA(d)		135,000		130,776
	Solano County, Taxable, Revenue, 5.14%, 1/15/2014(d)		1,280,000		1,263,897
	Thousand Oaks Redevelopment Agency, Taxable, Series B,
	Tax Allocation, 5.00%, 12/1/2009, AMBAC(d)		250,000		249,845
	Watsonville Redevelopment Agency, Taxable, Tax Allocation,
	5.20%, 9/1/2012, FGIC		60,000		59,794
					6,222,976
0.37%	Florida
	Auburndale Florida Water & Sewer, Revenue, 4.375%,
	12/1/2037, Callable 12/1/2017 @ 100, AMBAC(d)		1,275,000		1,212,538
0.08%	Georgia
	College Park Business & Industrial Development Authority, Taxable,
	Revenue, 5.75%, 9/1/2015(d)		250,000		253,907
0.84%	Illinois
	Aurora Metropolitan Exposition Auditorium & Office
	Building Authority, Taxable, Revenue, 3.00%, 7/1/2008(d)		165,000		162,807
	Regional Transportation Authority, Series A, Revenue,
	4.50%, 7/1/2035, Callable 7/1/2016 @ 100, MBIA(d)		1,950,000		1,881,087
	University of Illinois, Revenue, 4.50%, 4/1/2036,
	Callable 4/1/2016 @ 100, MBIA(d)		735,000		714,295
					2,758,189
0.08%	Maine
	City of Auburn, Taxable, GO, 5.125%, 8/1/2011		275,000		274,893
0.52%	Massachusetts
	Massachusetts Water Resources Authority, Series A, Revenue,
	4.375%, 8/1/2032, Callable 2/1/2017 @ 100, FSA(d)		1,785,000		1,713,172
0.38%	Nebraska
	Lincoln Nebraska Electric System, Series A, Revenue,
	4.25%, 9/1/2029, Callable 9/1/2017 @ 100, FGIC(d)		1,330,000		1,262,729
0.31%	Nevada
	Clark County, GO, 4.75%, 11/1/2035, Callable 5/1/2016 @ 100, FGIC(d)		1,000,000		1,006,940
0.01%	New Jersey
	Orange Township, Taxable, Series C, GO, 5.17%, 12/1/2011, FSA		35,000		35,087

See accompanying notes to financial statements.

21

  YIELDQUEST TOTAL RETURN BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Principal		Value
0.05%	North Carolina
	Charlotte Airport, Taxable, Series C, Revenue, 4.05%, 7/1/2009(d)	$	150,000	$	147,918
1.03%	Pennsylvania
	Beaver County, Taxable, GO, 5.00%, 12/15/2011, FSA		60,000		59,558
	Commonwealth Funding Authority, Revenue Bonds,
	5.30%, 6/1/2017, MBIA(d)		2,880,000		2,822,774
	Conneaut School District, Series B, GO, Zero Coupon,
	11/1/2030, FSA State Aid Witholding(d)		690,000		232,413
	Duquesne, Taxable, Series B, GO, 5.00%, 12/15/2013, FSA(d)		170,000		166,404
	Washington, Taxable, Series A, GO, 5.40%, 9/1/2008, FGIC(d)		100,000		100,287
					3,381,436
0.10%	South Carolina
	Richland Lexington Airport District, Taxable, Revenue, 6.59%,
	1/1/2017, FSA(d)		300,000		318,246
0.12%	Tennessee
	Alcoa Tennessee, Taxable, GO, 5.55%, 6/1/2020, Callable
	6/1/2015 @ $100, AMBAC(d)		400,000		399,280
1.85%	Texas
	Anna Independent School District, GO, 4.50%,
	8/15/2035, Callable 8/15/2017 @ $100, PSF-G(d)		1,335,000		1,291,719
	Chapel Hill Independent School District, GO, 4.50%,
	8/15/2032, Callable 8/15/2017 @ $100, PSF-G(d)		3,920,000		3,811,299
	Red Oak Independent School District, GO, 4.50%,
	8/15/2038, Callable 8/15/2017 @ $100, PSF-G(d)		500,000		481,420
	Texas State, GO, 4.50%, 4/1/2033, Callable 4/1/2017 @ $100(d)		500,000		481,650
					6,066,088
	Total Municipal Bonds
	(Cost $26,151,291)				26,661,979
		Shares
0.13%	PREFERRED STOCKS
0.06%	Banks
	BAC Capital Trust I, 7.00%, Callable 12/10/2007 @ $25.00		2,302		57,572.77
	Bank One Capital Trust VI, 7.20%, Callable 12/24/2007 @ $25.00		2,862		71,549.75
	Compass Capital III, 7.35%, Calllable 11/8/2007 @ $25.00		1,568		39,434.95
	Wells Fargo Capital Trust IV, 7.00%, Callable 12/24/2007 @ $25.00		1,165		29,217.95
					197,775.00
0.05%	Financial Services
	Citigroup Capital VII, 6.95%, Callable 12/24/2007 @ $25.00		2,098		52,491.96
	Citigroup Capital VIII, 7.125%, Callable 12/24/2007 @ $25.00		1,168		28,697.76
	Merrill Lynch Preferred Capital Trust III, 7.00%, Callable 3/30/2008 @ $25.00		1,559		37,961.65
	Merrill Lynch Preferred Capital Trust IV, 7.12%, Callable 6/30/2008 @ $25.00		1,320		32,366.40
					151,518.00
0.02%	Telecommunications
	US Cellular Corp., 8.75%, Callable 11/1/2007 @ $25.00		2,526		63,150.00
	Total Preferred Stocks
	(Cost $424,429)				412,444.00

See accompanying notes to financial statements.

22

  YIELDQUEST TOTAL RETURN BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
62.67%	EXCHANGE TRADED / CLOSED-END FUNDS
62.27%	Closed-End Funds
5.21%	Asset Allocation Closed-End Funds
	Chartwell Dividend & Income Fund, Inc.	166,236	$	1,378,096
	Flaherty & Crurine/Claymore Total Return Fund, Inc.	16,675		311,823
	John Hancock Patriot Premium Dividend Fund II(e)	869,813		9,211,318
	LMP Capital and Income Fund, Inc.(e)	242,322		4,817,361
	Pioneer Tax Advantaged Balanced Fund	97,188		1,398,535
				17,117,133
3.56%	Equity Closed-End Funds
	Cohen & Steers Closed-End Opportunity Fund, Inc.	25,848		432,954
	Cohen & Steers Select Utility Fund, Inc.	74,025		2,092,687
	Cohen & Steers Worldwide Realty Income Fund, Inc.	26,525		585,937
	Eaton Vance Enhanced Equity Income Fund II	5,582		107,454
	ING Clarion Global Real Estate Income Fund	138,353		2,707,568
	ING Risk Managed Natural Resources Fund	20,000		353,000
	John Hancock Preferred Income Fund III	16,788		327,030
	Macquarie Global Infrastructure Total Return Fund, Inc.	48,500		1,526,780
	Reaves Utility Income Fund (The)	75,242		1,975,855
	RMR Asia Pacific Real Estate Fund	19,486		465,715
	RMR Hospitality & Real Estate Fund	45,030		814,142
	RMR Real Estate Fund	22,912		321,685
				11,710,807
3.91%	Municipal Closed-End Funds
	Alliance California Municipal Income Fund, Inc.	6,336		87,564
	BlackRock MuniYield Arizona Fund, Inc.	5,952		81,304
	BlackRock Florida Insured Municipal Income Trust	1,664		22,314
	BlackRock Florida Municipal 2020 Term Trust	9,024		118,666
	BlackRock Long-Term Municipal Advantage Trust	40,258		488,732
	BlackRock MuniHoldings California Insured Fund, Inc.	4,545		59,267
	BlackRock MuniHoldings Florida Insured Fund	75,163		942,544
	BlackRock MuniHoldings Fund, Inc.	13,432		198,391
	BlackRock MuniHoldings Insured Fund II, Inc.	4,615		56,072
	BlackRock MuniHoldings Insured Fund, Inc.	37,977		461,041
	BlackRock MuniHoldings New York Insured Fund, Inc.	3,550		47,002
	BlackRock MuniYield Florida Fund	740		9,516
	BlackRock MuniYield Florida Insured Fund	16,835		214,478
	BlackRock MuniYield Michigan Insured Fund, Inc.	17,600		235,840
	BlackRock MuniYield New Jersey Insured Fund, Inc.	6,080		83,296
	BlackRock MuniYield Pennsylvania Insured Fund	11,484		156,986
	BlackRock MuniYield Quality Fund II, Inc.	42,320		490,912
	Delaware Investments Minnesota Municipal Income Fund II, Inc.	8,211		111,670
	DTF Tax Free Income, Inc.	4,920		68,732
	DWS Strategic Municipal Income Trust	12,096		137,894
	Eaton Vance Insured California Municipal Bond Fund II	2,176		29,942
	Eaton Vance Insured Municipal Bond Fund II	6,144		89,764
	Eaton Vance Massachusetts Municipal Income Fund	2,624		35,424
	Eaton Vance Municipal Income Trust	17,729		250,333
	Eaton Vance New Jersey Municipal Income Trust	2,752		37,565
	Eaton Vance New York Municipal Income Trust	4,751		67,654
	Investment Grade Municipal Income Fund	4,497		59,765
	MBIA Capital/Claymore Managed Duration Investment Grade Municipal Fund	15,642		193,961
	MFS High Income Municipal Trust	1,000		5,830

See accompanying notes to financial statements.

23

  YIELDQUEST TOTAL RETURN BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
	Municipal Closed-End Funds (Continued)
	Neuberger Berman California Intermediate Municipal Fund	1,280	$	16,742
	Neuberger Berman Intermediate Municipal Fund, Inc.	26,880		345,677
	Neuberger Berman New York Intermediate Municipal Fund, Inc.	3,872		50,104
	Nuveen Arizona Premium Income Municipal Fund	2,954		37,250
	Nuveen California Dividend Advantage Municipal Fund	21,264		294,081
	Nuveen California Dividend Advantage Municipal Fund II	4,225		56,826
	Nuveen California Investment Quality Municipal	6,360		87,259
	Nuveen California Municipal Market Opportunity Fund	3,292		45,397
	Nuveen California Municipal Value Fund	13,715		128,372
	Nuveen California Premium Income Municipal Fund	4,416		57,850
	Nuveen California Quality Income Municipal Fund	3,379		47,171
	Nuveen California Select Quality Municipal Fund	5,185		70,516
	Nuveen Connecticut Premium Income Municipal Fund	3,840		52,147
	Nuveen Dividend Advantage Municipal Fund	6,285		85,665
	Nuveen Florida Investment Quality Municipal Fund	5,568		73,052
	Nuveen Florida Quality Income Municipal Fund	14,957		197,881
	Nuveen Georgia Premium Income Municipal Fund	7,680		102,221
	Nuveen Insured California Premium Income Municipal Fund II	19,837		265,221
	Nuveen Insured Florida Premium Income Municipal Fund	33,632		455,377
	Nuveen Insured Florida Tax-Free Advantage Municipal Fund	1,408		18,276
	Nuveen Insured Premium Income Municipal Fund	29,555		359,980
	Nuveen Insured Quality Municipal Fund, Inc.	36,709		499,610
	Nuveen Maryland Dividend Advantage Municipal Fund	3,392		46,335
	Nuveen Maryland Dividend Advantage Municipal Fund III	896		11,630
	Nuveen Maryland Premium Income Municipal Fund	11,478		150,247
	Nuveen Massachusetts Premium Income Municipal Fund	8,256		111,043
	Nuveen Michigan Premium Income Municipal Fund	4,224		56,982
	Nuveen Michigan Quality Income Municipal Fund	10,591		143,402
	Nuveen Municipal Advantage Fund	920		12,834
	Nuveen New Jersey Dividend Advantage Municipal Fund	28,616		387,747
	Nuveen New Jersey Investment Quality Municipal Fund	22,643		299,340
	Nuveen New Jersey Premium Income Municipal Fund	3,265		44,110
	Nuveen New York Performance Plus Municipal Fund	4,519		64,215
	Nuveen New York Quality Income Municipal Fund	27,046		356,737
	Nuveen North Carolina Dividend Advantage Municipal Fund II	2,624		36,237
	Nuveen North Carolina Premium Income Municipal Fund	27,334		359,442
	Nuveen Ohio Dividend Advantage Municipal Fund	6,358		87,105
	Nuveen Ohio Quality Income Municipal Fund	768		10,990
	Nuveen Pennsylvania Investment Quality Municipal Fund	20,304		271,058
	Nuveen Pennsylvania Premium Income Municipal Fund II	6,336		80,087
	Nuveen Performance Plus Municipal Fund	6,780		92,140
	Nuveen Premier Insured Municipal Income Fund, Inc.	31,277		414,420
	Nuveen Premium Income Municipal Fund IV	12,975		152,846
	Nuveen Quality Income Municipal Fund	3,774		51,477
	Nuveen Texas Quality Income Municipal Fund	3,000		40,290
	Nuveen Virginia Dividend Advantage Municipal Fund II	12,009		172,810
	Nuveen Virginia Premium Income Municipal Fund	14,549		201,940
	PIMCO New York Municipal Income Fund III	5,565		74,571
	Putnam Municipal Bond Fund	27,296		320,455
	Putnam Municipal Opportunities Trust	34,607		394,520
	Seligman Select Municipal Fund, Inc.	15,040		150,099
	Van Kampen Pennsylvania Value Municipal Income Trust	3,900		52,845
				12,837,088

See accompanying notes to financial statements.

24

  YIELDQUEST TOTAL RETURN BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
49.59%	Taxable Fixed Income Closed-End Funds
	40/86 Strategic Income Fund	130,283	$	1,206,421
	Aberdeen Asia-Pacific Income Fund, Inc.	220,376		1,386,165
	Aberdeen Global Income Fund, Inc.	74,465		965,811
	ACM Income Fund, Inc.(e)	914,760		7,501,032
	ACM Managed Dollar Income Fund	31,783		229,473
	Advent Claymore Convertible Securities & Income Fund	81,204		2,042,281
	Alliance World Dollar Government Fund II	25,255		336,902
	American Income Fund, Inc.	47,800		369,972
	Bancroft Fund Ltd.	15,782		336,788
	BlackRock Core Bond Trust(e)	501,772		6,136,672
	BlackRock Corporate High Yield Fund III, Inc.	12,700		94,234
	BlackRock Corporate High Yield Fund V, Inc.	108,560		1,355,914
	BlackRock Corporate High Yield Fund, Inc.	38,655		291,845
	BlackRock Floating Rate Income Strategies Fund II	27,025		448,885
	BlackRock High Income Shares	243,915		553,687
	BlackRock High Yield Trust	134,773		932,629
	BlackRock Income Trust(e)	1,146,736		6,662,536
	BlackRock Preferred & Corporate Income Strategies Fund, Inc.	44,435		768,281
	BlackRock Preferred Income Strategies Fund, Inc.(e)	367,188		6,220,165
	BlackRock Preferred Opportunity Trust	16,790		334,289
	BlackRock Senior High Income Fund, Inc.	32,485		177,043
	BlackRock Strategic Bond Trust	90,885		1,079,714
	Castle Convertible Fund, Inc.	64,402		1,577,849
	Credit Suisse High Yield Bond Fund	118,699		433,251
	Dreyfus High Yield Strategies Fund(e)	882,853		3,416,641
	Duff & Phelps Utility & Corporate Bond Trust, Inc.(e)	599,703		6,266,896
	DWS Dreman Value Income Edge Fund	21,300		333,558
	DWS Global High Income Fund, Inc.	64,634		557,145
	DWS Strategic Income Trust	54,645		644,265
	Eaton Vance Limited Duration Income Fund	30,562		487,770
	Ellsworth Fund Ltd.	102,831		884,347
	Evergreen Income Advantage Fund	102,082		1,264,796
	Evergreen Multi-Sector Income Fund	64,939		1,053,311
	First Trust/FIDAC Mortgage Income Fund	62,818		1,025,190
	First Trust/Four Corners Senior Floating Rate Income Fund	24,056		382,731
	First Trust/Four Corners Senior Floating Rate Income Fund II	50,407		812,057
	Flaherty & Crumrine/Claymore Preferred Securities Income Fund	172,193		3,125,303
	Franklin Templeton Limited Duration Income Trust	66,363		800,338
	Global High Income Fund, Inc.	24,065		346,055
	Global Income Fund, Inc.	37,300		146,589
	High Yield Plus Fund, Inc. (The)	254,687		837,920
	Hyperion Strategic Mortgage Income Fund, Inc.	55,335		590,424
	Hyperion Total Return Fund	61,025		451,585
	ING Prime Rate Trust	36,174		240,195
	John Hancock Income Securities Trust Fund	23,997		318,920
	MFS Charter Income Trust(e)	1,253,545		10,479,636
	MFS InterMarket Income Trust I	71,631		585,225
	MFS Intermediate High Income Fund	73,418		229,064
	MFS Intermediate Income Trust(e)	2,474,918		15,443,488
	MFS Multimarket Income Trust(e)	1,137,876		6,645,196
	Montgomery Street Income Securities, Inc.	60,024		983,193
	Morgan Stanley Emerging Markets Debt Fund, Inc.	275,077		2,712,259
	Morgan Stanley Emerging Markets Domestic Debt Fund, Inc.	51,695		978,586
	Morgan Stanley Global Opportunity Bond Fund, Inc.	84,462		606,437

See accompanying notes to financial statements.

25

  YIELDQUEST TOTAL RETURN BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description		Shares		Value
	Taxable Fixed Income Closed-End Funds (Continued)
	Morgan Stanley High Yield Fund, Inc.		235,935	$	1,347,189
	Morgan Stanley Income Securities, Inc.		17,496		270,663
	Nuveen Multi-Strategy Income & Growth Fund		204,010		2,425,679
	Nuveen Multi-Strategy Income & Growth Fund 2		229,405		2,723,037
	Pacholder High Yield Fund, Inc.		23,633		211,515
	PCM Fund, Inc.(e)		235,186		2,575,287
	Prospect Street High Income Portfolio, Inc.		356,312		1,072,499
	Putnam High Income Securities Fund		11,885		97,100
	Putnam Master Intermediate Income Trust(e)		636,522		3,952,802
	Putnam Premier Income Trust(e)		1,257,460		7,771,103
	Rivus Bond Fund		8,000		138,640
	Transamerica Income Shares, Inc.		85,069		1,624,818
	Van Kampen Bond Fund		104,120		1,783,576
	Van Kampen High Income Trust II		63,271		228,408
	Western Asset 2008 Worldwide Dollar Government Term Trust, Inc.		10,300		105,266
	Western Asset Emerging Markets Debt Fund, Inc.(e)		462,257		8,376,097
	Western Asset Emerging Markets Floating Rate Fund, Inc.		28,005		334,660
	Western Asset Emerging Markets Income Fund II, Inc.		96,380		1,248,121
	Western Asset Global High Income Fund, Inc.		66,986		806,511
	Western Asset High Income Fund II, Inc.		125,054		1,298,061
	Western Asset High Income Opportunity Fund, Inc.		361,817		2,239,647
	Western Asset Inflation Management Fund, Inc.(e)		203,438		3,287,558
	Western Asset Managed High Income Fund, Inc.		330,515		1,983,090
	Western Asset Variable Rate Strategic Fund, Inc.		65,096		1,077,339
	Western Asset Worldwide Income Fund, Inc.		109,343		1,437,861
	Western Asset Zenix Income Fund, Inc.		20,866		53,626
	Western Asset/Claymore US Treasury Inflation Protected Securities Fund(e)		398,165		4,662,512
	Western Asset/Claymore US Treasury Inflation Protected Securities Fund II(e)		454,155		5,345,404
	Zweig Total Return Fund, Inc. (The)		66,900		319,113
					162,888,141
					204,553,169
0.40%	Equity ETF
	iShares Dow Jones U.S. Real Estate Index Fund		17,020		1,308,668
	Total Exchange Traded / Closed-End Funds
	(Cost $210,210,492)				205,861,837
		Contracts
0.13%	PURCHASED OPTIONS*
	CBOE SPX Volatility Index, Call @ $18, 11/21/2007		389		93,360.00
	CBOE SPX Volatility Index, Call @ $19, 11/21/2007		970		194,000.00
	CBOE SPX Volatility Index, Call @ $20, 11/21/2007		124		21,080.00
	CBOE SPX Volatility Index, Call @ $22.50, 11/21/2007		700		73,500.00
	CBOE SPX Volatility Index, Call @ $27.50, 11/21/2007		546		21,840.00
	CBOE SPX Volatility Index, Call @ $30, 11/21/2007		821		20,525.00
	WTI Crude Oil Future, Put @ $69, 11/13/2007		42		420.00
	WTI Crude Oil Future, Put @ $71, 11/13/2007		30		300.00
	WTI Crude Oil Future, Put @ $73.50, 11/13/2007		20		400.00
	Total Purchased Options
	(Cost $816,934)				425,425.00

See accompanying notes to financial statements.

26

  YIELDQUEST TOTAL RETURN BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description		Principal		Value
2.79%	SHORT-TERM INVESTMENT
	BNY Hamilton Money Fund, 4.96%, 11/1/07	$	9,172,003	$	9,172,003
	Total Short-Term Investments
	(Cost $9,172,003)				9,172,003
105.53%	Total Investments
	(Cost $346,951,740)				346,654,902
(5.53)%	Net other assets (liabilities)				(18,158,882	)
100.00%	NET ASSETS			$	328,496,020

(a)	Default Resolution
(b)	Rule 144A Section 4(2) or other security which is restricted as to resale to institutional investors. The Investment
	Advisor, using board approved procedures has deemed these securities or a portion of these securities liquid.
(c)	Variable rate security.
(d)	All or a portion of the security is pledged as collateral for securities sold short.
(e)	All or a portion of the security is segregated in connection with certain foreign currency and futures contracts.
(f)	Fair value priced security.
*	Non-income producing securities.
AMBAC	Insured by American Municipal Bond Assurance Corp.
ETF	Exchange-Traded Fund
FGIC	Insured by Financial Guaranty Insurance Co.
FSA	Insured by Financial Security Assurance
GO	General Obligation
LLC	Limited Liability Co.
MBIA	Insured by Municipal Bond Insurance Organization Association
MTN	Medium Term Note
XLCA	Insured by XL Capital Assurance

			Shares		Value
EXCHANGE TRADED / CLOSED-END FUNDS SOLD SHORT
Energy Select Sector SPDR Fund			10,665	$	814,273
iShares Lehman 1-3 Year Treasury Bond Fund			135,882		11,054,001
iShares MSCI Australia Index Fund			22,645		786,008
iShares MSCI Brazil Index Fund			24,534		2,101,337
iShares MSCI Emerging Markets Index			10,636		1,776,318
Market Vectors Gold Miners ETF			11,346		572,065
Oil Service HOLDRs Trust			4,786		909,819
Technology Select Sector SPDR Fund			23,966		682,791
Utilities Select Sector SPDR Fund			61,155		2,596,030
Total				$	21,292,642
			Notional		Unrealized
	Contracts		Value		Gain/(Loss)
FUTURES CONTRACTS SOLD SHORT
90 Day Eurodollar, Dec 07, expires 12/17/07	8	$	1,905,000	$	(3,422	)
90 Day Eurodollar, Jun 08, expires 6/16/08	75		17,928,750		24,172
90 Day Eurodollar, Dec 08, expires 12/15/08	84		20,097,000		11,997
U.S. 2 Year Note, Dec 07, expires 12/31/07	134		27,752,656		27,784
U.S. 5 Year Note, Dec 07, expires 12/31/07	90		9,660,938		36,063
U.S. 10 Year Note, Dec 07, expires 12/19/07	46		5,060,719		23,499
U.S. Long Bond, Dec 07, expires 12/19/07	33		3,715,594		19,370
Total				$	139,463

See accompanying notes to financial statements.

27

  YIELDQUEST TOTAL RETURN BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

	Notional			Buy/Sell		Receive			Expiration		Unrealized
Underlying Instrument	Amount			Protection		Fixed Rate			Date		Gain/(Loss)
CREDIT DEFAULT SWAPS
CDX Emerging Market Index,
Series 7	$	(15,000,000	)		Buy		1.25	%	6/20/2012	$	(11,655	)
CDX North American, High Yield,
Series 8		(37,960,000	)		Buy		2.75	%	6/20/2012		1,053,484
Total										$	1,041,829

See accompanying notes to financial statements.

28

  YIELDQUEST TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS
October 31, 2007  

% of
Net Assets	Description	Principal		Value
0.02%	CORPORATE BONDS
0.02%	Airline
	Delta Airlines, Inc., 0.00%, 12/15/2029(a)*	$	600,000	$	41,250
	Total Corporate Bonds
	(Cost $78)				41,250
60.38%	MUNICIPAL BONDS
1.56%	Alabama
	Alabama Agriculture & Mechanical, 5.00%, 11/1/2017(d)		1,900,000		2,058,156
	Alabama State Federal Highway Finance Authority,
	Series A, 5.00%, 3/1/2017		275,000		287,023
	Birmingham Jefferson Civic Center Authority,
	Series A, 4.125%, 7/1/2017		100,000		100,018
	City of Mobile, 5.375%, 8/15/2014		500,000		539,795
					2,984,992
2.09%	Alaska
	Alaska Housing Finance Corp., 3.58%, 12/1/2024(b)		4,000,000		4,000,000
0.12%	Arkansas
	Arkansas Development Finance Authority,
	Series B, 5.00%, 11/1/2014		220,000		236,909
4.41%	California
	Antioch California Union School District, Certificate of
	Participation, 4.25%, 9/1/2021(c)		685,000		675,102
	Berryessa Union School District,
	Series B, 4.75%, 8/1/2016		100,000		104,466
	California State:
	5.00%, 9/1/2016, GO(c)		500,000		536,065
	5.00%, 12/1/2020, Various Purpose, Callable 12/1/2016 @ 100(c)		2,000,000		2,096,520
	4.50%, 8/1/2026, GO, Callable 2/01/2017@ 100(c)		1,350,000		1,303,465
	4.50%, 8/1/2030, GO, Callable 2/01/2017@ 100(c)		1,000,000		944,140
	Chabot-Las Positas Community College District, Zero Coupon, 8/1/2014		500,000		387,715
	Foothill-De Anza Community College, Zero Coupon, 8/1/2018(c)		1,000,000		639,280
	Las Virgenes School District, Series D, Zero Coupon, 9/1/2020(c)		970,000		554,452
	Oakland Redevelopment Agency, 5.50%, 2/1/2014		145,000		153,738
	San Jose, California Parks & Public Safety, 4.00%, 9/1/2019(c)		1,050,000		1,029,105
					8,424,048
0.55%	Colorado
	Arkansas River Power Authority, 5.25%, 10/1/2016		300,000		329,976
	Douglas County School District No. RE1 Douglas & Elber
	Counties, 7.00%, 12/15/2012(c)		585,000		675,593
	Garfield Pitkin & Eagle Counties School District No. RE001
	Roaring Fork, 5.25%, 12/15/2012		35,000		37,758
					1,043,327
4.64%	Florida
	Alachua County Health Facilities Authority, Shands
	Teaching Hospital and Clinics, Inc., Series B, 3.34%, 12/1/2026(b)		3,800,000		3,800,000
	Broward County, Florida Airport System, 5.00%, 10/1/2018(c)		1,000,000		1,054,230
	Dunedin Utility System, 6.25%, 10/1/2011		50,000		54,938
	Jea, St. Johns River Power Park System, Series 22, 4.00%, 10/1/2014(c)		800,000		806,736
	Lakeland, Florida Energy System, 5.00%, 10/1/2024(c)		1,045,000		1,096,236
	Nassau County, Florida, Public Improvement, 5.00%, 5/1/2021(c)		1,260,000		1,364,341
	Orange County Health Facilities Authority, 5.75%, 12/1/2032(c)		600,000		659,010
	Orlando, Florida Utilities Commission, Revenue, 6.00%, 10/1/2010		30,000		32,080
					8,867,571

See accompanying notes to financial statements.

29

  YIELDQUEST TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Principal		Value
1.25%	Georgia
	Atlanta Water & Wastewater, Series A, 5.00%, 11/1/2029(c)	$	35,000	$	36,046
	Fulton County, Georgia Development Authority, Zero Coupon, 5/1/2033		105,000		7,219
	Georgia State, Series H-3, 3.43%, 12/1/2026(b)		2,335,000		2,335,000
					2,378,265
3.87%	Illinois
	Chicago O’ Hare International Airport:
	3.41%, 1/1/2015, Revenue, LOC Societe Generale(b)		2,500,000		2,500,000
	5.25%, 1/1/2016, Series B, Revenue, MBIA		260,000		283,735
	Chicago Transit Authority Capital Grant Receipts, 5.25%, 6/1/2009		500,000		514,030
	City of Bellwood, Series B, 4.45%, 12/1/2020		100,000		101,283
	City of Oak Park, Series B, Zero Coupon, 11/1/2013		500,000		396,045
	City of Orland Park, 4.125%, 12/1/2018		260,000		259,649
	Cook County Community School District No. 97 Oak Park,
	Series B, 9.00%, 12/1/2015		300,000		404,820
	Cook County School District No. 100, 8.10%, 12/1/2015		300,000		389,427
	Cook County Township High School District 225 North Field Township,
	Series A, 5.75%, 12/1/2013(c)		1,000,000		1,067,680
	Illinois State Sales Tax Revenue, First Series, 5.00%, 6/15/2009(c)		1,000,000		1,024,530
	Jackson & Williamson Counties Community High School
	District No. 165, 7.50%, 12/1/2009(d)		250,000		270,333
	Winnebago County, 4.25%, 12/30/2013		175,000		180,537
					7,392,069
3.99%	Indiana
	Decatur Township Marion County Multi-School Building Corp.,
	Series B, 5.00%, 7/15/2015(c)		605,000		653,013
	Franklin, Indiana Coummunity School Building Corp.,
	Revenue, 5.00%, 7/10/2018(c)		1,575,000		1,700,764
	Greenfield Central Community Building Corp., 2.80%, 7/15/2008		100,000		99,376
	Hammond Local Public Improvement Bond Bank,
	Series A, 4.50%, 8/15/2017(c)		895,000		910,179
	Hammond Public Library Leasing Corp., 5.00%, 7/10/2014		410,000		439,516
	Indiana State Fair Common Fairgrounds, Revenue, 4.20%, 1/1/2014		390,000		398,143
	Indiana Transportation Finance Authority, Series C, 5.50%, 12/1/2015(c)		585,000		653,129
	Purdue University Revenues, Series C, 3.33%, 7/1/2032(b)		2,500,000		2,500,000
	Randolph Central School Building Corp., 4.75%, 7/15/2011		250,000		262,232
					7,616,352
0.34%	Iowa
	Sioux City Community School District School Infrastructure,
	Series B, 4.00%, 10/1/2015(c)		650,000		655,057
1.16%	Kansas
	Miami County Unified School District No. 416, 5.00%, 9/1/2016(c)		1,000,000		1,087,620
	Neosho County, Kansas University School
	District No. 413, 5.00%, 9/1/2020(c)		1,075,000		1,132,007
					2,219,627
0.59%	Louisiana
	Louisiana State:
	5.00%, 8/1/2012, Series A, GO, MBIA		350,000		370,997
	5.00%, 7/15/2015, Series B, GO, CIFG(c)		500,000		538,985
	5.25%, 10/15/2015, Series A, GO, Callable 10/15/2014 @ 100, AMBAC		200,000		217,170
					1,127,152
0.29%	Massachusetts
	Massachusetts State:
	5.75%, 10/1/2012, Series C, GO, Prerefunded 10/1/2010 @ 100		500,000		531,800
	6.00%, 11/1/2013, Series D, GO, MBIA		25,000		28,192
					559,992

See accompanying notes to financial statements.

30

  YIELDQUEST TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Principal		Value
1.08%	Michigan
	City of Detroit, Series C, 5.00%, 4/1/2012	$	50,000	$	52,660
	Northville Public Schools, 5.00%, 5/1/2018		500,000		530,220
	Plymouth-Canton Community School District:
	4.50%, 5/1/2012, GO, Callable 5/1/2008 @ 100, FGIC Q-SBLF(c)		1,100,000		1,104,851
	5.25%, 5/1/2015, GO, Callable 5/1/2013 @ 100, Q-SBLF		350,000		377,265
					2,064,996
0.23%	Mississippi
	Itawamba Community College District, 5.00%, 2/1/2011		50,000		52,181
	Mississippi State:
	6.00%, 9/1/2011, GO, FSA		265,000		288,495
	4.25%, 8/1/2016, GO, Callable 8/1/2013 @ 100		100,000		101,368
					442,044
0.81%	Missouri
	Joint Municipal Electric Utility Commission Power
	Project, 5.00%, 1/1/2015(c)		620,000		666,606
	St Louis Airport, Series A, 5.00%, 7/1/2015(c)		825,000		886,784
					1,553,390
1.66%	Nevada
	Clark County:
	5.00%, 11/1/2017, GO, Callable 11/1/2016 @ 100, AMBAC(c)		825,000		888,715
	4.50%, 6/1/2018, GO, Callable 6/1/2016 @ 100, FSA		275,000		283,880
	North Las Vegas Local Improvement, 4.125%, 12/1/2014		290,000		296,513
	Truckee Meadows Water Authority, Series A, 5.25%, 7/1/2034		340,000		360,356
	Washoe County School District, 5.25%, 6/1/2014(c)		1,000,000		1,086,630
	Water Pollution Control, 3.25%, 8/1/2010		250,000		248,310
					3,164,404
0.46%	New Jersey
	City of Clifton, 4.25%, 8/1/2017(c)		560,000		573,535
	New Jersey State Educational Facilities Authority,
	Series A, 4.25%, 3/1/2012		300,000		305,853
					879,388
1.01%	New Mexico
	Gallup Joint Utility, 5.00%, 6/1/2017(c)		820,000		868,413
	New Mexico State Highway Common, Series A, 5.50%, 6/15/2013(c)		1,000,000		1,067,600
					1,936,013
2.54%	New York
	City of New York:
	5.00%, 8/1/2014, Series I, GO, FSA		500,000		539,355
	5.25%, 8/1/2014, Series E, GO, Callable 8/1/2013 @ 100(c)		850,000		916,147
	3.90%, 9/1/2016, Series F-1, GO, Callable 9/1/2015 @ 100		100,000		99,479
	City of Utica Public Improvement, 4.75%, 4/1/2015		335,000		356,922
	Erie County Public Improvement, Series A, 5.00%, 12/1/2015		100,000		108,344
	New York City Municipal Water Finance Authority,
	Series C, 2.375%, 6/15/2010		50,000		47,893
	New York City Transit Finance Authority:
	5.25%, 8/1/2012, Series B, Revenue(c)		750,000		805,118
	5.50%, 5/1/2025, Revenue, Prerefunded 5/1/2009 @ 101		300,000		312,324
	New York St Environmental Facilities Corp., State Clean
	Water & Drinking, 5.00%, 6/15/2018(c)		1,260,000		1,368,032
	Troy Industrial Development Authority Civic Facility,
	Revenue, 4.05%, 4/1/2037(b)		290,000		293,988
					4,847,602

See accompanying notes to financial statements.

31

  YIELDQUEST TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Principal		Value
1.41%	North Carolina
	North Carolina Eastern Municipal Power Agency Power System,
	Series A, 5.00%, 1/1/2017	$	435,000	$	468,721
	North Carolina State, Series G, 3.25%, 5/1/2021(b)		2,215,000		2,215,000
					2,683,721
2.57%	Ohio
	City of Cleveland Various Purpose, 5.50%, 12/1/2013(c)		570,000		618,684
	Hancock County Ohio Hospital, 3.51%, 12/1/2034(b)		3,750,000		3,750,000
	Jefferson County, 5.70%, 12/1/2013		30,000		33,321
	New Albany Plain Local School District, 3.875%, 12/1/2017		500,000		496,075
					4,898,080
0.94%	Oklahoma
	Tulsa County Public Facilities Authority, 6.95%, 11/1/2011(c)		1,670,000		1,784,879
0.40%	Pennsylvania
	Philadelphia Authority for Industrial Development, 5.00%, 12/1/2016(c)		500,000		539,295
	St. Clair Area School District, 2.15%, 11/15/2008		235,000		230,690
					769,985
0.26%	Puerto Rico
	Puerto Rico Commonwealth Highway & Transportation Authority,
	Series AA, 5.50%, 7/1/2016(c)		445,000		501,030
1.02%	South Carolina
	Beaufort County, 8.00%, 3/1/2016		850,000		1,092,777
	State Highway, Series A, 3.00%, 8/1/2020		1,000,000		857,480
					1,950,257
13.34%	Texas
	Aledo Independent School District, Series A, 5.00%, 2/15/2016(c)		530,000		567,291
	Arlington Independent School District, 5.00%, 2/15/2013(c)		1,000,000		1,063,730
	Austin, Texas Water & Wastewater System:
	5.00%, 11/15/2015, Revenue, MBIA(c)		1,005,000		1,085,591
	5.00%, 11/15/2018, Revenue, MBIA(c)		600,000		649,176
	5.00%, 11/15/2021, Revenue, AMBAC(c)		750,000		792,953
	Birdville Independent School District, Zero Coupon, 2/15/2012		465,000		395,673
	Brazoria County Municipal Utility District No. 26, 4.60%, 9/1/2028		100,000		100,197
	Bryan Waterworks & Sewer, 4.25%, 7/1/2018		90,000		90,515
	Cedar Park, Texas, 5.00%, 2/15/2016		500,000		530,910
	City of Corsicana, 4.00%, 2/15/2010		300,000		303,441
	City of Midlothian, 5.50%, 8/15/2013		175,000		191,622
	City of Rowlett, 4.50%, 2/15/2014(c)		715,000		745,931
	City of San Marcos, 4.45%, 8/15/2021		140,000		140,561
	City of Southlake, 4.00%, 2/15/2017		285,000		283,675
	City of Waco, 4.40%, 2/1/2029		340,000		327,253
	Conroe Independent School District, Series A, 5.00%, 2/15/2014(c)		750,000		803,265
	Corpus Christi Utility System, Series A, 5.50%, 7/15/2009		50,000		51,687
	Dallas County Community College District, 5.375%, 2/15/2018(c)		1,095,000		1,141,713
	Dallas Texas, 5.00%, 2/15/2019		275,000		288,560
	Dallas Waterworks & Sewer Systems, Series A, 5.00%, 10/1/2011(c)		600,000		631,896
	Dallas-Fort Worth International Airport Facility Improvement
	Corp., 6.00%, 11/1/2014		140,000		139,912
	El Paso, Texas, 5.00%, 8/15/2021(c)		1,490,000		1,574,885
	Ennis Independent School District, 5.00%, 8/15/2020(c)		875,000		923,921
	Fort Bend County, 5.00%, 3/1/2019		500,000		525,910
	Harris County, Texas, 5.25%, 10/1/2019		250,000		265,203
	La Joya Independent School District, 5.00%, 2/15/2012		500,000		527,700
	Laguna Madre Water District, 4.50%, 3/1/2024(c)		595,000		595,785
	Leander Independent School District, 5.375%, 8/15/2017(c)		550,000		586,003

See accompanying notes to financial statements.

32

  YIELDQUEST TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Principal		Value
	Texas (Continued)
	Lewisville Independent School District, 5.00%, 8/15/2012(c)	$	1,000,000	$	1,061,350
	Lower Colorado River Authority, 5.25%, 1/1/2015		25,000		27,366
	Magnolia Independent School District, 5.00%, 8/15/2019		500,000		535,090
	McLennan County, Texas Junior College, 5.00%, 8/15/2018(c)		1,030,000		1,084,930
	North East Independent School District, 5.25%, 8/1/2011		140,000		148,358
	North Texas Municipal Water District, 5.00%, 9/1/2017(c)		1,125,000		1,210,477
	Northwest Harris County Municipal Utility District No. 5,
	Series A, 5.50%, 5/1/2016(c)		585,000		653,884
	Pearland Waterworks & Sewer Systems:
	6.00%, 9/1/2011, Revenue, AMBAC		135,000		146,314
	5.50%, 9/1/2012, Revenue, MBIA(c)		830,000		897,670
	Port Arthur Independent School District, 5.00%, 2/15/2014(c)		840,000		899,657
	San Benito Consolidated Independent School District, 5.00%, 2/15/2012		450,000		474,930
	State Municipal Power Agency, Zero Coupon, 9/1/2010		250,000		226,115
	State Transportation Community Mobility, Series A, 5.00%, 4/1/2010		170,000		175,948
	State Turnpike Authority Central Texas Turnpike System,
	Series A, Zero Coupon, 8/15/2015		705,000		516,123
	Tarrant County, Texas Health Facilities, 5.00%, 12/1/2019		250,000		259,615
	University of Texas, 5.00%, 7/1/2017(c)		715,000		769,004
	Upper Trinity Regional Water District, 4.00%, 8/1/2020(c)		1,100,000		1,065,735
					25,477,525
0.56%	Utah
	Alpine School District, 4.25%, 3/15/2013		500,000		514,715
	Central Utah Water Conservancy District, Series D, 4.25%, 4/1/2008		50,000		50,164
	Salt Lake City Utah School District, Series A, 4.375%, 3/1/2017(c)		500,000		512,260
					1,077,139
1.12%	Virginia
	Richmond Virginia, Series B, 5.00%, 7/15/2019		2,000,000		2,133,960
4.08%	Washington
	King County, Series B, 5.85%, 12/1/2013		25,000		25,539
	Kitsap County Sewer, 4.20%, 12/1/2007(d)		150,000		150,068
	Klickitat County Public Utility District No. 001,
	Series B, 5.25%, 12/1/2013(c)		1,000,000		1,066,250
	Washington State, Series VR 96A, 3.30%, 6/1/2020(b)		4,900,000		4,900,000
	Washington State University Athletic Facilities:
	4.00%, 10/1/2016, Revenue, AMBAC(c)		570,000		574,235
	4.00%, 10/1/2017, Revenue, Callable 4/1/2017 @ 100, AMBAC(c)		555,000		554,084
	Yakima County School District No. 201 Sunnyside, 4.50%, 12/1/2017		500,000		515,185
					7,785,361
2.03%	Wisconsin
	Milwaukee County, Wisconsin, Series A, 4.125%, 12/1/2021(c)		1,470,000		1,430,898
	Monona Grove School District, 4.50%, 5/1/2019(c)		1,225,000		1,249,255
	State Petroleum Inspection Fee, Series 1, 5.00%, 7/1/2011(c)		900,000		936,999
	Wisconsin State, 6.25%, 5/1/2012		235,000		260,190
					3,877,342
	Total Municipal Bonds
	(Cost $114,612,279)				115,332,477
0.65%	FOREIGN BONDS
0.19%	Financial Services
	General Electric Capital Corp., Series EMTN, 6.75%, 9/26/2016		500,000		358,458

See accompanying notes to financial statements.

33

  YIELDQUEST TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Principal		Value
0.46%	Sovereign Bonds
	Canadian Government, 2.75%, 12/1/2007	$	110,000	$	116,320
	New South Wales Treasury Corp.:
	7.00%, 12/1/2010, Series 10RG		500,000		465,176
	5.50%, 8/1/2014, Series 14RG(e)		120,000		104,055
	New Zealand Government:
	6.00%, 11/15/2011, Series 1111		135,000		100,623
	6.00%, 12/15/2017, Series 1217		135,000		100,645
					886,819
	Total Foreign Bonds
	(Cost $1,099,131)				1,245,277
		Shares
52.38%	EXCHANGE TRADED / CLOSED-END FUNDS
52.38%	Closed-End Funds
1.81%	Asset Allocation Closed-End Funds
	Chartwell Dividend & Income Fund, Inc.		15,600		129,324
	John Hancock Patriot Premium Dividend Fund II		95,779		1,014,300
	LMP Capital and Income Fund, Inc.		38,250		760,410
	TS&W/Claymore Tax-Advantaged Balanced Fund(d)		105,910		1,551,581
					3,455,615
0.65%	Equity Closed-End Funds
	Cohen & Steers Closed-End Opportunity Fund, Inc.		14,876		249,173
	ING Clarion Global Real Estate Income Fund		22,298		436,372
	RMR Asia Pacific Real Estate Fund		6,140		146,746
	RMR Hospitality & Real Estate Fund		19,590		354,187
	RMR Real Estate Fund		4,065		57,073
					1,243,551
43.20%	Municipal Closed-End Funds
	Alliance National Municipal Income Fund, Inc.		20,875		293,920
	BlackRock Florida Insured Municipal 2008 Term Trust		28,913		424,443
	BlackRock Florida Insured Municipal Income Trust		936		12,552
	BlackRock Florida Municipal 2020 Term Trust		30,987		407,479
	BlackRock Insured Municipal Term Trust, Inc.(d)		234,575		2,298,835
	BlackRock Long-Term Municipal Advantage Trust(d)		200,587		2,435,126
	BlackRock MuniEnhanced Fund, Inc.		137,378		1,379,275
	BlackRock MuniHoldings California Insured Fund, Inc.		58,365		761,080
	BlackRock MuniHoldings Florida Insured Fund(d)		192,732		2,416,859
	BlackRock MuniHoldings Fund II, Inc.		10,655		148,211
	BlackRock MuniHoldings Fund, Inc.		32,513		480,217
	BlackRock MuniHoldings Insured Fund II, Inc.(d)		237,043		2,880,072
	BlackRock MuniHoldings Insured Fund, Inc.(d)		163,328		1,982,802
	BlackRock MuniHoldings New York Insured Fund, Inc.		93,093		1,232,551
	BlackRock MuniYield California Fund, Inc.		60,326		799,320
	BlackRock MuniYield California Insured Fund, Inc.		20,600		271,096
	BlackRock MuniYield Florida Fund(d)		114,782		1,476,097
	BlackRock MuniYield Florida Insured Fund(d)		92,955		1,184,247
	BlackRock MuniYield Insured Fund, Inc.		89,906		1,172,374
	BlackRock MuniYield Michigan Insured Fund II, Inc.		32,504		409,875
	BlackRock MuniYield Michigan Insured Fund, Inc.		89,295		1,196,553
	BlackRock MuniYield New Jersey Insured Fund, Inc.		46,266		633,844
	BlackRock MuniYield Pennsylvania Insured Fund		63,959		874,320
	BlackRock MuniYield Quality Fund		67,220		887,304
	BlackRock MuniYield Quality Fund II, Inc.(d)		205,642		2,385,447
	Delaware Investments Minnesota Municipal Income Fund II, Inc.(d)		145,219		1,974,978

See accompanying notes to financial statements.

34

  YIELDQUEST TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
	Municipal Closed-End Funds (Continued)
	Dreyfus Strategic Municipals, Inc.		22,755	$	191,142
	DTF Tax Free Income, Inc.(d)		141,096		1,971,111
	DWS Municipal Income Trust(d)		144,539		1,536,450
	DWS Strategic Municipal Income Trust		63,579		724,801
	Eaton Vance California Municipal Income Trust		24,180		332,717
	Eaton Vance Insured California Municipal Bond Fund II		1,224		16,842
	Eaton Vance Insured Municipal Bond Fund II(d)		95,876		1,400,748
	Eaton Vance Massachusetts Municipal Income Fund		37,559		507,047
	Eaton Vance Municipal Income Trust(d)		140,112		1,978,381
	Eaton Vance New Jersey Municipal Income Trust		31,045		423,764
	Eaton Vance New York Municipal Income Trust		3,372		48,017
	Insured Municipal Income Fund		85,225		1,106,221
	Investment Grade Municipal Income Fund		45,995		611,274
	MBIA Capital/Claymore Managed Duration Investment Grade Municipal Fund(d)		148,047		1,835,783
	MFS High Income Municipal Trust		17,000		99,110
	MFS Investment Grade Municipal Trust		14,000		138,600
	Morgan Stanley Municipal Premium Income Trust		4,967		42,667
	Neuberger Berman California Intermediate Municipal Fund		720		9,418
	Neuberger Berman Intermediate Municipal Fund, Inc.(d)		104,939		1,349,516
	Neuberger Berman New York Intermediate Municipal Fund, Inc.		20,139		260,599
	Nuveen Arizona Premium Income Municipal Fund		19,833		250,094
	Nuveen California Dividend Advantage Municipal Fund		19,086		263,959
	Nuveen California Dividend Advantage Municipal Fund II		7,675		103,229
	Nuveen California Investment Quality Municipal		20,315		278,722
	Nuveen California Municipal Market Opportunity Fund		4,000		55,160
	Nuveen California Municipal Value Fund		7,715		72,212
	Nuveen California Performance Plus Municipal Fund, Inc.		5,209		70,582
	Nuveen California Premium Income Municipal Fund		2,484		32,540
	Nuveen California Quality Income Municipal Fund		42,581		594,431
	Nuveen California Select Quality Municipal Fund		30,215		410,924
	Nuveen Connecticut Premium Income Municipal Fund		2,460		33,407
	Nuveen Dividend Advantage Municipal Fund		23,260		317,034
	Nuveen Florida Investment Quality Municipal Fund(d)		116,439		1,527,680
	Nuveen Florida Quality Income Municipal Fund(d)		116,268		1,538,226
	Nuveen Georgia Premium Income Municipal Fund		69,593		926,283
	Nuveen Insured California Premium Income Municipal Fund II		11,158		149,182
	Nuveen Insured Dividend Advantage Municipal Fund		69,814		958,546
	Nuveen Insured Florida Premium Income Municipal Fund(d)		65,895		892,218
	Nuveen Insured Florida Tax-Free Advantage Municipal Fund		61,634		800,009
	Nuveen Insured Municipal Opportunity Fund, Inc.		21,100		286,116
	Nuveen Insured New York Premium Income Municipal Fund		800		10,712
	Nuveen Insured Premium Income Municipal Fund		76,822		935,692
	Nuveen Insured Quality Municipal Fund, Inc.(d)		141,481		1,925,556
	Nuveen Maryland Dividend Advantage Municipal Fund		1,908		26,063
	Nuveen Maryland Dividend Advantage Municipal Fund II		47,286		644,035
	Nuveen Maryland Dividend Advantage Municipal Fund III		11,284		146,466
	Nuveen Maryland Premium Income Municipal Fund		15,939		208,642
	Nuveen Massachusetts Premium Income Municipal Fund		14,061		189,120
	Nuveen Michigan Premium Income Municipal Fund		2,376		32,052
	Nuveen Michigan Quality Income Municipal Fund		26,709		361,640
	Nuveen Municipal Advantage Fund		1,665		23,227
	Nuveen Municipal Market Opportunity		46,515		629,348
	Nuveen New Jersey Dividend Advantage Municipal Fund		18,996		257,396
	Nuveen New Jersey Investment Quality Municipal Fund(d)		185,175		2,448,013
	Nuveen New Jersey Premium Income Municipal Fund		6,235		84,235

See accompanying notes to financial statements.

35

  YIELDQUEST TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
	Municipal Closed-End Funds (Continued)
	Nuveen New York Investment Quality Municipal Fund		29,622	$	395,157
	Nuveen New York Performance Plus Municipal Fund		15,400		218,834
	Nuveen New York Quality Income Municipal Fund		37,413		493,477
	Nuveen North Carolina Dividend Advantage Municipal Fund II		10,746		148,402
	Nuveen North Carolina Premium Income Municipal Fund		87,990		1,157,069
	Nuveen Ohio Dividend Advantage Municipal Fund		9,277		127,095
	Nuveen Ohio Quality Income Municipal Fund		33,591		480,687
	Nuveen Pennsylvania Investment Quality Municipal Fund(d)		148,193		1,978,377
	Nuveen Pennsylvania Premium Income Municipal Fund II(d)		136,527		1,725,701
	Nuveen Performance Plus Municipal Fund		33,020		448,742
	Nuveen Premier Insured Municipal Income Fund, Inc.(d)		117,488		1,556,716
	Nuveen Premier Municipal Income Fund, Inc.		70,241		930,693
	Nuveen Premium Income Municipal Fund IV		72,184		850,328
	Nuveen Quality Income Municipal Fund		67,465		920,223
	Nuveen Texas Quality Income Municipal Fund		15,000		201,450
	Nuveen Virginia Dividend Advantage Municipal Fund II		25,091		361,059
	Nuveen Virginia Premium Income Municipal Fund		21,483		298,184
	PIMCO California Municipal Income Fund III		21,293		297,676
	PIMCO Municipal Income Fund II		25,803		371,563
	PIMCO New York Municipal Income Fund III		38,060		510,004
	Putnam Investment Grade Municipal Trust		121,159		1,148,587
	Putnam Managed Municipal Income Trust		10,600		76,108
	Putnam Municipal Bond Fund(d)		127,786		1,500,208
	Putnam Municipal Opportunities Trust		85,920		979,488
	Seligman Select Municipal Fund, Inc.		109,160		1,089,417
	Van Kampen Pennsylvania Value Municipal Income Trust		24,832		336,474
	Western Asset Intermediate Municipal Fund, Inc.		26,612		231,524
	Western Asset Managed Municipals Fund, Inc.		44,345		472,718
	Western Asset Municipal Partners Fund, Inc.		55,138		724,513
					82,516,310
6.72%	Taxable Fixed Income Closed-End Funds
	40/86 Strategic Income Fund		26,500		245,390
	Aberdeen Asia-Pacific Income Fund, Inc.		74,580		469,108
	ACM Income Fund, Inc.		84,030		689,046
	Advent Claymore Convertible Securities & Income Fund		20,700		520,605
	Alliance World Dollar Government Fund II		7,315		97,582
	BlackRock Core Bond Trust		27,035		330,638
	BlackRock Corporate High Yield Fund V, Inc.		9,000		112,410
	BlackRock High Yield Trust		8,200		56,744
	BlackRock Income Trust		156,410		908,742
	BlackRock Preferred Income Strategies Fund, Inc.		795		13,467
	BlackRock Preferred Opportunity Trust		3,600		71,676
	BlackRock Strategic Bond Trust		22,720		269,914
	Dreyfus High Yield Strategies Fund		93,300		361,071
	Duff & Phelps Utility & Corporate Bond Trust, Inc.		44,825		468,421
	DWS Strategic Income Trust		4,760		56,120
	Eaton Vance Limited Duration Income Fund		9,498		151,588
	Evergreen Income Advantage Fund		6,480		80,287
	Evergreen Multi-Sector Income Fund		12,930		209,725
	First Trust/FIDAC Mortgage Income Fund		7,065		115,301
	Franklin Templeton Limited Duration Income Trust		6,000		72,360
	Global High Income Fund, Inc.		5,550		79,809
	MFS Charter Income Trust		11,480		95,973
	MFS Intermediate Income Trust(d)		264,025		1,647,516
	MFS Multimarket Income Trust		88,665		517,804

See accompanying notes to financial statements.

36

  YIELDQUEST TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
	Taxable Fixed Income Closed-End Funds (Continued)
	Montgomery Street Income Securities, Inc.		1,800	$	29,484
	Morgan Stanley Emerging Markets Debt Fund, Inc.		43,200		425,952
	Morgan Stanley Emerging Markets Domestic Debt Fund, Inc.		8,323		157,554
	Morgan Stanley High Yield Fund, Inc.		20,000		114,200
	Morgan Stanley Income Securities, Inc.		4,015		62,112
	Nuveen Multi-Strategy Income & Growth Fund		18,490		219,846
	Putnam Master Intermediate Income Trust		77,679		482,387
	Putnam Premier Income Trust		175,507		1,084,633
	Transamerica Income Shares, Inc.		1,220		23,302
	Van Kampen Bond Fund		750		12,848
	Western Asset Emerging Markets Debt Fund, Inc.		44,042		798,041
	Western Asset Emerging Markets Floating Rate Fund, Inc.		16,259		194,295
	Western Asset High Income Fund II, Inc.		19,469		202,088
	Western Asset High Income Opportunity Fund, Inc.		38,555		238,656
	Western Asset Inflation Management Fund, Inc.		8,775		141,804
	Western Asset Managed High Income Fund, Inc.		39,825		238,950
	Western Asset/Claymore US Treasury Inflation Protected Securities Fund		41,678		488,049
	Western Asset/Claymore US Treasury Inflation Protected Securities Fund II		23,500		276,595
					12,832,093
	Total Exchange Traded/Closed-End Funds
	(Cost $102,540,025)				100,047,569
		Contracts
0.12%	PURCHASED OPTIONS*
	CBOE SPX Volatility Index, Call @ $18, 11/21/2007		155		37,200
	CBOE SPX Volatility Index, Call @ $19, 11/21/2007		558		111,600
	CBOE SPX Volatility Index, Call @ $20, 11/21/2007		70		11,900
	CBOE SPX Volatility Index, Call @ $22.50, 11/21/2007		400		42,000
	CBOE SPX Volatility Index, Call @ $27.50, 11/21/2007		319		12,760
	CBOE SPX Volatility Index, Call @ $30, 11/21/2007		478		11,950
	WTI Crude Oil Future, Put @ $69, 11/13/2007		14		140
	WTI Crude Oil Future, Put @ $71, 11/13/2007		11		110
	WTI Crude Oil Future, Put @ $73.50, 11/13/2007		7		140
	Total Purchased Options
	(Cost $411,597)				227,800
		Principal
3.09%	SHORT-TERM INVESTMENT
	Federated Tax-Free Obligations Fund, 3.06%, 11/1/07	$	5,894,619		5,894,619
	Total Short-Term Investments
	(Cost $5,894,619)				5,894,619
116.64%	Total Investments
	(Cost $224,557,729)				222,788,992
(16.64)%	Net other assets (liabilities)				(31,782,479	)
100.00%	NET ASSETS			$	191,006,513

(a)	Default Resolution
(b)	Variable rate security.
(c)	All or a portion of the security is pledged as collateral for securities sold short.
(d)	All or a portion of the security is segregated in connection with certain foreign currency and futures contracts.
(e)	Rule 144A Section 4(2) or other security which is restricted as to resale to institutional investors. The Investment
	Advisor, using board approved procedures has deemed these securities or a portion of these securities liquid.

See accompanying notes to financial statements.

37

  YIELDQUEST TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

*	Non-income producing securities.
AMBAC	Insured by American Municipal Bond Assurance Corp.
AMT	Subject to alternative minimum tax
CIFG	Insured by IXIS Financial Guaranty
ETF	Exchange-Traded Fund
ETM	Escrowed to Maturity
FGIC	Insured by Financial Guaranty Insurance Co.
FHA	Federal Housing Administration
FSA	Insured by Financial Security Assurance
GO	General Obligation
LOC	Letter of Credit
MBIA	Insured by Municipal Bond Insurance Organization Association
Q-SBLF	Qualified School Bond Loan Fund
SPA	Standby Purchase Agreement
XLCA	Insured by XL Capital Assurance

% of
Net Assets	Description	Shares		Value
	EXCHANGE TRADED/CLOSED-END FUNDS SOLD SHORT
	Energy Select Sector SPDR Fund		3,459	$	264,095
	iShares Lehman 1-3 Year Treasury Bond Fund		106,818		8,689,644
	iShares Lehman 20+ Year Treasury Bond Fund		95,500		8,594,045
	iShares Lehman Aggregate Bond Fund		85,800		8,632,338
	iShares MSCI Australia Index Fund		3,459		120,062
	iShares MSCI Emerging Markets Index		2,068		345,377
	Market Vectors Gold Miners ETF		14,331		722,569
	Oil Service HOLDRs Trust		1,729		328,683
	Technology Select Sector SPDR Fund		15,908		453,219
	Utilities Select Sector SPDR Fund		7,130		302,668
	Total			$	28,452,700

			Notional		Unrealized
	Contracts		Value		Gain/(Loss)
FUTURES CONTRACTS PURCHASED
90 Day Eurodollar, Dec 07, expires 12/17/07	21	$	5,000,625	$	(6,357	)
90 Day Eurodollar, Dec 08, expires 12/15/08	33		7,895,250		(21,539	)
90 Day Eurodollar, Jun 08, expires 6/16/08	28		6,693,400		(17,226	)
U.S. 2 Year Note, Dec 07, expires 12/31/07	55		11,391,016		(45,661	)
U.S. 5 Year Note, Dec 07, expires 12/31/07	41		4,401,094		(32,117	)
U.S. 10 Year Note, Dec 07, expires 12/19/07	23		2,530,359		(22,329	)
U.S. Long Bond, Dec 07, expires 12/19/07	16		1,801,500		(21,033	)
				$	(166,262	)
FUTURES CONTRACT SOLD SHORT
S&P 500 e-Mini, Dec 07, expires 12/21/07	3		233,250		(5,220	)
Nasdaq 100 e-Mini Dec 07, expires 12/21/07	6		270,300		(10,756	)
				$	(15,976	)
Total				$	(182,238	)

		Notional		Buy/Sell	Receive	Expiration		Unrealized
Underlying Instrument		Amount		Protection	Fixed Rate	Date		Gain/(Loss)
CREDIT DEFAULT SWAPS
CDX Emerging Markets Index,
Series 7	$	(1,700,000	)	Buy	1.25%	6/20/2012	$	(1,320	)
CDX North American High Yield
Index, Series 8		(2,802,000	)	Buy	2.75%	6/20/2012		77,762
Total							$	76,442

See accompanying notes to financial statements.

38

  YIELDQUEST FLEXIBLE INCOME FUND
  SCHEDULE OF INVESTMENTS
October 31, 2007  

% of
Net Assets	Description	Principal		Value
9.82%	CORPORATE BONDS
5.25%	Airlines
	America West Airlines, Series B, 6.93%, 1/2/2008	$	39,642	$	38,825
	American Airlines, Inc., Series 01-1, 7.377%, 5/23/2019		120,761		113,515
	Continental Airlines, Inc.:
	6.748%, 3/15/2017, Series 981B		28,896		27,918
	7.461%, 4/1/2015, Series 971A		51,900		51,381
	7.566%, 3/15/2020, Series 99-2		36,627		35,345
	8.388%, 11/1/2020, Series 00-1		74,943		75,317
	Delta Airlines, Inc.:
	7.57%, 11/18/2010, Series 00-1		75,000		77,437
	7.92%, 11/18/2010, Series 00-1		75,000		74,906
	Northwest Airlines, Inc.:
	7.691%, 4/1/2017, Series 01-B		80,092		78,654
	7.95%, 3/1/2015, Series 992B		52,793		52,133
	Southwest Airlines Co., Series 07-1, 6.65%, 8/1/2022(d)		100,000		99,564
	United Airlines, Inc., 7.336%, 7/2/2019(a)		40,000		40,050
					765,045
1.17%	Automotive
	Ford Motor Co., 7.45%, 7/16/2031		105,000		83,475
	General Motors Corp., 8.375%, 7/15/2033		95,000		86,925
					170,400
3.31%	Financial Services
	Bank of America Corp.:
	4.75%, 3/15/2016(b)		10,000		9,444
	7.80%, 9/15/2016(b)		50,000		56,028
	Bankers Trust Corp., 7.50%, 11/15/2015(b)		4,000		4,414
	Bear, Stearns Co. Inc., 5.55%, 1/22/2017(b)		25,000		23,431
	Citigroup, Inc., 5.50%, 2/15/2017(b)		75,000		73,741
	Ford Motor Credit Co., LLC, 9.875%, 8/10/2011		85,000		84,949
	General Motors Acceptance Corp., LLC, 7.00%, 2/1/2012		90,000		82,268
	Goldman Sachs Group, Inc., 5.625%, 1/15/2017(b)		25,000		24,267
	Lehman Brothers Holdings, 6.50%, 7/19/2017(b)		25,000		25,241
	Merrill Lynch & Co. Inc., Series C, 6.40%, 8/28/2017(b)		50,000		50,563
	Morgan Stanley & Co. Inc., Series EMTN, 5.45%, 1/9/2017(b)		50,000		48,479
					482,825
0.09%	Industrials
	Occidental Petroleum Corp., 8.75%, 1/15/2023(b)		10,000		13,297
	Total Corporate Bonds
	(Cost $1,430,295)				1,431,567
0.21%	COLLATERALIZED MORTGAGE OBLIGATIONS
	Federal National Mortgage Association, 4.50%, 5/25/2019(b)		31,216		30,127
	Total Collateralized Mortgage Obligations
	(Cost $28,387)				30,127
5.67%	U.S. GOVERNMENT & AGENCY
	Federal Farm Credit Bank, 5.75%, 12/7/2028(b)		43,000		46,035
	Federal Home Loan Bank:
	4.625%, 8/15/2012, Series RM12		200,000		200,179
	5.625%, 6/9/2017		200,000		210,753
	5.685%, 9/17/2018(b)		25,000		26,524
	5.80%, 8/18/2020(b)		10,000		9,934
	7.125%, 2/15/2030(b)		90,000		112,766

See accompanying notes to financial statements.

39

  YIELDQUEST FLEXIBLE INCOME FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Principal		Value
5.67%	U.S. GOVERNMENT & AGENCY
	Federal National Mortgage Association:
	4.625%, 10/15/2014(b)	$	100,000	$	99,020
	8.28%, 1/10/2025(b)		20,000		27,062
	Tennessee Valley Authority, 7.125%, 5/1/2030(b)		75,000		94,900
	Total U.S. Government & Agency
	(Cost $798,350)				827,173
2.83%	U.S. TREASURY SECURITIES
	U.S. Treasury Inflation Indexed Security:
	2.375%, 4/15/2011(b)		75,000		79,846
	2.625%, 7/15/2017(b)		75,000		78,684
	U.S. Treasury Notes:
	4.125%, 8/15/2010(b)		100,000		100,539
	4.625%, 7/31/2012(b)		75,000		76,571
	4.75%, 8/15/2017(b)		75,000		76,740
	Total U.S.Treasury Securities
	(Cost $408,326)				412,380
3.22%	FOREIGN BONDS
1.11%	Banks
	European Investment Bank, 6.00%, 7/15/2009		75,000		55,559
	Inter-American Development Bank, 6.25%, 6/22/2016		150,000		105,714
					161,273
0.55%	Financial Services
	GMAC Australia, 5.00%, 9/17/2008		50,000		51,323
	General Electric Capital Corp., Series EMTN, 6.75%, 9/26/2016		40,000		28,677
					80,000
1.56%	Sovereign Bonds
	Mexican Bonos De Desarrollo, 7.25%, 12/15/2016		220,000		19,809
	Federal Republic of Brazil, 12.50%, 1/5/2016		40,000		26,315
	Canadian Government, 3.75%, 6/1/2012		175,000		181,591
					227,715
	Total Foreign Bonds
	(Cost $432,499)				468,988
5.94%	TAXABLE MUNICIPAL BONDS
1.36%	California
	Kern County Pension Obligation, Revenue, Zero Coupon, 8/15/2020, MBIA		100,000		49,008
	Monrovia Redevelopment Agency Tax Allocation, Revenue, 5.60%,
	5/1/2023, Callable 5/1/2013 @ 102, AMBAC(b)		35,000		34,642
	Pinole Redevelopment Agency, Tax Allocation, 5.60%, 8/1/2020,
	Callable 8/1/2014 @ 102, AMBAC(b)		25,000		24,751
	San Bernardino JT Powers, Tax Allocation, 6.15%, 5/1/2027,
	Callable 5/1/2016 @ 100, MBIA(b)		15,000		15,436
	Santa Fe Springs Community Development, Tax Allocation, 5.35%,
	9/1/2018, Callable 9/1/2016 @ 100, MBIA(b)		25,000		24,916
	Solano County, Revenue, 5.14%, 1/15/2014(b)		50,000		49,371
					198,124
0.20%	District of Columbia
	Metropolitan Washington Airports Authority Airport System Revenue,
	Series C, 5.59%, 10/1/2025, Callable 10/1/2015 @ 100, MBIA		30,000		29,631
0.16%	Florida
	Pembroke Pines Communications Services, Revenue, 4.75%, 10/1/2019,
	Callable 10/1/2014 @ 100, AMBAC(b)		25,000		23,573

See accompanying notes to financial statements.

40

  YIELDQUEST FLEXIBLE INCOME FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Principal		Value
0.67%	Georgia
	College Park, Revenue, 5.868%, 1/1/2021, FGIC(b)	$	70,000	$	71,721
	Savannah Hospital Authority, Revenue, 6.625%, 7/1/2018, Callable 7/1/2013 @ 100, FSA (b)		25,000		26,446
					98,167
0.04%	Illinois
	Developement Finance Authority, Revenue, 6.00%, 3/1/2012, MBIA(b)		5,000		5,127
0.19%	Indiana
	Pike County School Corp., GO, 5.00%, 1/5/2020, Callable 1/5/2015 @ 100, XLCA(b)		30,000		28,230
0.26%	Maryland
	State Transportation Authority, Revenue, 6.48%, 7/1/2022, MBIA(b)		35,000		37,708
0.44%	Michigan
	Flat Rock Tax Increment, GO, 5.375%, 10/1/2011(b)		65,000		64,266
1.38%	New Jersey
	City of Linden, GO, 5.95%, 4/1/2033, MBIA(b)		20,000		21,096
	Union County Improvement Authority Sewer System Lease, Revenue, 6.64%, 4/1/2022, AMBAC		165,000		179,730
					200,826
0.28%	Oregon
	School Boards Association, GO, 5.68%, 6/30/2028, FGIC(b)		40,000		40,937
0.79%	Texas
	Gatesville Texas, GO, 5.70%, 9/1/2019, Callable 9/1/2017 @ 100, CIFG(b)		115,000		114,794
0.17%	Wisconsin
	Menasha Steam Utility, Revenue, 4.35%, 9/1/2009, Callable 3/1/2008 @ 100(b)		25,000		24,770
	Total Taxable Municipal Bonds
	(Cost $844,086)				866,153
		Shares
64.20%	EXCHANGE TRADED / CLOSED-END FUNDS
2.44%	Asset Allocation Closed-End Funds
	BlackRock Preferred And Equity Advantage Trust		590		11,004
	Chartwell Dividend & Income Fund, Inc.		790		6,549
	Dreman/Claymore Dividend & Income Fund		1,755		34,433
	John Hancock Patriot Premium Dividend Fund II(c)		24,687		261,435
	LMP Capital and Income Fund, Inc.		2,110		41,947
					355,368
7.32%	Equity Closed-End Funds
	BlackRock Real Asset Equity Trust		3,625		63,764
	Calamos Strategic Total Return Fund		3,845		56,522
	Clough Global Allocation Fund		1,170		24,757
	Cohen & Steers Closed-End Opportunity Fund, Inc.		3,153		52,813
	Cohen & Steers Select Utility Fund, Inc.		1,690		47,776
	Cohen & Steers Worldwide Realty Income Fund, Inc.		2,046		45,196
	Eaton Vance Enhanced Equity Income Fund II		1,560		30,030
	Fiduciary/Claymore Dynamic Equity Income Fund		1,120		20,563
	Franklin Universal Trust		1,200		8,448
	Gabelli Global Deal Fund		2,440		41,236

See accompanying notes to financial statements.

41

  YIELDQUEST FLEXIBLE INCOME FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
	Equity Closed-End Funds (Continued)
	ING Clarion Global Real Estate Income Fund		4,213	$	82,448
	ING Risk Managed Natural Resources Fund		4,175		73,689
	iShares Dow Jones U.S. Real Estate Index Fund		950		73,046
	Macquarie Global Infrastructure Total Return Fund, Inc.		1,500		47,220
	Nuveen Equity Premium & Growth Fund		4,000		71,520
	RMR Asia Pacific Real Estate Fund		4,555		108,864
	RMR Hospitality & Real Estate Fund		7,285		131,713
	RMR Real Estate Fund		875		12,285
	Zweig Fund, Inc.		14,200		75,828
					1,067,718
3.71%	Municipal Closed-End Funds
	BlackRock Florida Municipal 2020 Term Trust		2,440		32,086
	BlackRock MuniHoldings Florida Insured Fund		1,850		23,199
	BlackRock MuniYield Quality Fund II, Inc.		2,040		23,664
	Neuberger Berman Intermediate Municipal Fund, Inc.		2,440		31,378
	Nuveen California Dividend Advantage Municipal Fund		2,255		31,187
	Nuveen California Municipal Value Fund		3,380		31,637
	Nuveen Florida Quality Income Municipal Fund		2,390		31,620
	Nuveen Insured Florida Premium Income Municipal Fund		4,060		54,972
	Nuveen New Jersey Dividend Advantage Municipal Fund		1,730		23,442
	Nuveen New Jersey Investment Quality Municipal Fund		1,820		24,060
	Nuveen New York Investment Quality Municipal Fund		1,025		13,674
	Nuveen New York Quality Income Municipal Fund		1,810		23,874
	Nuveen North Carolina Premium Income Municipal Fund		1,820		23,933
	Nuveen Ohio Dividend Advantage Municipal Fund		2,265		31,030
	Nuveen Premier Insured Municipal Income Fund, Inc.		2,310		30,607
	Putnam Municipal Bond Fund		4,705		55,237
	Putnam Municipal Opportunities Trust		4,880		55,632
					541,232
50.73%	Taxable Fixed Income Closed-End Funds
	40/86 Strategic Income Fund		7,850		72,691
	Aberdeen Asia-Pacific Income Fund, Inc.		22,215		139,732
	Aberdeen Global Income Fund, Inc.		7,165		92,930
	ACM Income Fund, Inc.		25,384		208,149
	ACM Managed Dollar Income Fund		10,990		79,348
	Advent Claymore Convertible Securities & Income Fund		3,915		98,462
	Alliance World Dollar Government Fund II		2,125		28,347
	American Income Fund, Inc.		10,825		83,785
	BlackRock Core Bond Trust(c)		16,983		207,702
	BlackRock Corporate High Yield Fund III, Inc.		4,805		35,653
	BlackRock Corporate High Yield Fund V, Inc.		5,815		72,629
	BlackRock Corporate High Yield Fund, Inc.		8,270		62,438
	BlackRock Floating Rate Income Strategies Fund II		2,520		41,857
	BlackRock High Income Shares		11,600		26,332
	BlackRock High Yield Trust		12,075		83,559
	BlackRock Income Trust(c)		53,370		310,080
	BlackRock Limited Duration Income Trust		70		1,168
	BlackRock Preferred & Corporate Income Strategies Fund, Inc.		1,285		22,218
	BlackRock Preferred Income Strategies Fund, Inc.		16,210		274,597
	BlackRock Preferred Opportunity Trust		4,725		94,075
	BlackRock Senior High Income Fund, Inc.		3,265		17,794
	BlackRock Strategic Bond Trust		5,695		67,657
	Credit Suisse High Yield Bond Fund		8,735		31,883

See accompanying notes to financial statements.

42

  YIELDQUEST FLEXIBLE INCOME FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
	Taxable Fixed Income Closed-End Funds (Continued)
	Dreyfus High Yield Strategies Fund		15,625	$	60,469
	Duff & Phelps Utility & Corporate Bond Trust, Inc.		4,240		44,308
	DWS Dreman Value Income Edge Fund		425		6,655
	DWS Global High Income Fund, Inc.		6,285		54,177
	DWS Strategic Income Trust		15,435		181,979
	Eaton Vance Limited Duration Income Fund		4,584		73,161
	Ellsworth Fund Ltd.		1,090		9,374
	Evergreen Income Advantage Fund		4,015		49,746
	Evergreen Multi-Sector Income Fund		4,493		72,876
	First Trust/Aberdeen Emerging Opportunity Fund		4,440		86,758
	First Trust/Aberdeen Global Opportunity Income		900		15,939
	First Trust/FIDAC Mortgage Income Fund		7,000		114,240
	First Trust/Four Corners Senior Floating Rate Income Fund		1,905		30,309
	First Trust/Four Corners Senior Floating Rate Income Fund II		2,483		40,001
	Flaherty & Crumrine/Claymore Preferred Securities Income Fund		7,775		141,116
	Fort Dearborn Income Securities, Inc.		2,859		40,455
	Franklin Templeton Limited Duration Income Trust		4,477		53,993
	Global High Income Fund, Inc.		4,820		69,312
	Global Income Fund, Inc.		27,215		106,955
	High Yield Plus Fund, Inc. (The)		16,252		53,469
	Hyperion Strategic Mortgage Income Fund, Inc.		1,950		20,806
	Hyperion Total Return Fund		1,297		9,598
	ING Prime Rate Trust		2,416		16,042
	MFS Charter Income Trust(c)		42,935		358,937
	MFS InterMarket Income Trust I		8,340		68,138
	MFS Intermediate High Income Fund		3,190		9,953
	MFS Intermediate Income Trust(c)		82,285		513,458
	MFS Multimarket Income Trust		23,910		139,634
	Montgomery Street Income Securities, Inc.		1,715		28,092
	Morgan Stanley Emerging Markets Debt Fund, Inc.		16,015		157,908
	Morgan Stanley Emerging Markets Domestic Debt Fund, Inc.		6,629		125,487
	Morgan Stanley High Yield Fund, Inc.		12,360		70,576
	Morgan Stanley Income Securities, Inc.		1,400		21,658
	Nuveen Diversified Dividend & Income Fund		1,470		24,549
	Nuveen Multi-Strategy Income & Growth Fund		8,655		102,908
	Nuveen Multi-Strategy Income & Growth Fund II		11,555		137,158
	Pacholder High Yield Fund, Inc.		3,950		35,352
	PCM Fund, Inc.		7,360		80,592
	Prospect Street High Income Portfolio, Inc.		20,080		60,441
	Putnam High Income Securities Fund		625		5,106
	Putnam Master Intermediate Income Trust(c)		41,495		257,684
	Putnam Premier Income Trust(c)		63,775		394,129
	Reaves Utility Income Fund (The)		1,255		32,956
	Rivus Bond Fund		500		8,665
	Transamerica Income Shares, Inc.		3,801		72,599
	Van Kampen Bond Fund		5,200		89,076
	Van Kampen High Income Trust II		1,640		5,920
	Western Asset Emerging Markets Debt Fund, Inc.		10,850		196,602
	Western Asset Emerging Markets Floating Rate Fund, Inc.		2,800		33,460
	Western Asset Emerging Markets Income Fund II, Inc.		6,595		85,405
	Western Asset Global Partners Income Fund, Inc.		2,785		30,858
	Western Asset High Income Fund, Inc.		3,205		29,646
	Western Asset High Income Fund II, Inc.		5,929		61,543
	Western Asset High Income Opportunity Fund, Inc.		9,070		56,143

See accompanying notes to financial statements.

43

  YIELDQUEST FLEXIBLE INCOME FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
	Taxable Fixed Income Closed-End Funds (Continued)
	Western Asset Inflation Management Fund, Inc.		5,385	$	87,022
	Western Asset Managed High Income Fund, Inc.		12,570		75,420
	Western Asset Variable Rate Strategic Fund, Inc.		1,083		17,924
	Western Asset Worldwide Income Fund, Inc.		3,100		40,765
	Western Asset Zenix Income Fund, Inc.		8,430		21,665
	Western Asset/Claymore US Treasury Inflation Protected Securities Fund		11,920		139,583
	Western Asset/Claymore US Treasury Inflation Protected Securities Fund II(c)		18,257		214,885
					7,396,721
	Total Exchange Traded / Closed-End Funds
	(Cost $9,291,717)				9,361,039
		Contracts
0.11%	PURCHASED OPTIONS*
	CBOE SPX Volatility Index, Call @ $18, 11/21/2007		12		2,880
	CBOE SPX Volatility Index, Call @ $19, 11/21/2007		40		8,000
	CBOE SPX Volatility Index, Call @ $20, 11/21/2007		5		850
	CBOE SPX Volatility Index, Call @ $22.50, 11/21/2007		28		2,940
	CBOE SPX Volatility Index, Call @ $27.50, 11/21/2007		24		960
	CBOE SPX Volatility Index, Call @ $30, 11/21/2007		36		900
	WTI Crude Oil Future, Put @ $69, 11/13/2007		1		10
	WTI Crude Oil Future, Put @ $71, 11/13/2007		1		10
	WTI Crude Oil Future, Put @ $73.50, 11/13/2007		1		20
	Total Purchased Options
	(Cost $31,647)				16,570
		Shares
8.55%	SHORT-TERM INVESTMENTS
	BNY Hamilton Money Fund, 4.96%, 11/1/07		1,245,825		1,245,825
	Total Short-Term Investments
	(Cost $1,245,825)				1,245,825
100.55%	Total Investments
	(Cost $14,511,132)				14,659,822
(0.55)%	Net other assets (liabilities)				(79,919	)
100.00%	NET ASSETS			$	14,579,903

(a)	Rule 144A Section 4(2) or other security which is restricted as to resale to institutional investors. The Investment Advisor, using board approved procedures has deemed these secirities or a portion of these securities liquid.
(b)	All or a portion of the security is pledged as collateral for securities sold short.
(c)	All or a portion of the security is segregated in connection with certain foreign currency and futures contracts.
(d)	Fair value priced security.
*	Non-income producing securities.
AMBAC	Insured by American Municipal Bond Assurance Corp.
CIFG	Insured by IXIS Financial Guaranty
ETF	Exchange-Traded Fund
FGIC	Insured by Financial Guaranty Insurance Co.
FSA	Insured by Financial Security Assurance
GO	General Obligation
LLC	Limited Liability Co.
MBIA	Insured by Municipal Bond Insurance Organization Association
XLCA	Insured by XL Capital Assurance

See accompanying notes to financial statements.

44

  YIELDQUEST FLEXIBLE INCOME FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
	EXCHANGE TRADED/CLOSED-END FUNDS SOLD SHORT
	Energy Select SPDR Fund		882	$	67,341
	iShares MSCI Australia Index Fund		1,516		52,620
	iShares MSCI Brazil Index Fund		1,101		94,301
	iShares MSCI Emerging Markets Index		1,006		168,012
	Market Vectors Gold Miners ETF		1,233		62,168
	Oil Service HOLDRs Trust		385		73,189
	Technology Select Sector SPDR Fund		1,022		29,117
	Utilities Select Sector SPDR Fund		1,135		48,180
	Total			$	594,928

			Notional		Unrealized
	Contracts		Value		Gain/(Loss)
FUTURES CONTRACTS PURCHASED
U.S. 10 Year Note, Dec 07, expires 12/19/07		6	$	660,094		8,644
U.S. Long Bond, Dec 07, expires 12/19/07		5		562,969		11,083
					$	19,727
FUTURES CONTRACT SOLD SHORT
Gold 100 Oz., Dec 07, expires 12/31/07		2		159,060		(12,227	)
Nasdaq 100 e-Mini, Dec 07, expires 12/21/07		2		88,710		(1,785	)
WTI Crude, Dec 07, expires 12/31/07		2		189,060		(16,306	)
					$	(30,318	)
Total					$	(10,591	)

	Notional			Buy/Sell	Receive	Expiration	Unrealized
Underlying Instrument	Amount			Protection	Fixed Rate	Date	Gain/(Loss)
CREDIT DEFAULT SWAPS
CDX Emerging Markets, Series 7	$	(500,000	)	Buy	1.25%	6/20/2012	$	(388	)
CDX North American High Yield, Series 8		(900,000	)	Buy	2.75%	6/20/2012		24,977
Total							$	24,589

See accompanying notes to financial statements.

45

  YIELDQUEST LOW DURATION BOND FUND
  SCHEDULE OF INVESTMENTS
October 31, 2007  

% of
Net Assets	Description	Principal		Value
27.17%	CORPORATE BONDS
2.97%	Airlines
	America West Airlines, Series B, 6.93%, 1/2/2008	$	11,892	$	11,647
	Continental Airlines, Inc.:
	6.748%, 3/15/2017, Series 981B		28,896		27,918
	7.566%, 3/15/2020, Series 99-2		48,836		47,127
	8.388%, 11/1/2020, Series 00-1		17,844		17,933
	Delta Airlines, Inc., Series 00-1, 7.92%, 11/18/2010		35,000		34,956
	Northwest Airlines, Inc., Series 01-B, 7.691%, 4/1/2017		19,333		18,985
	Southwest Airlines Co., Series 07-1, 6.65%, 8/1/2022		50,000		49,782
	United Airlines, Inc., 7.336%, 7/2/2019(a)		35,000		35,044
					243,392
0.61%	Entertainment
	Carnival Corp., 6.15%, 4/15/2008		50,000		50,183
16.79%	Financial Services
	Bank of America Corp., 5.36%, 12/18/2008(b)(d)		250,000		249,908
	Capital One Bank Co., 4.875%, 5/15/2008(d)		250,000		249,705
	Ford Motor Credit Co., LLC, 7.875%, 6/15/2010		50,000		48,229
	General Electric Capital Corp., Series MTN, 4.875%, 10/21/2010		100,000		100,149
	General Motors Acceptance Corp., LLC, 5.85%, 1/14/2009		120,000		115,818
	Goldman Sachs Group, Inc., 5.66%, 6/28/2010(b)(c)		250,000		249,429
	HSBC Finance Corp., 8.00%, 7/15/2010		100,000		106,888
	Principal Life, Inc. Funding, 5.52%, 11/15/2010(b)(d)		250,000		249,440
	Prudential Financial, Inc., 5.00%, 5/15/2013		7,000		6,960
					1,376,526
2.47%	Health Care
	Abbott Laboratories, 5.60%, 5/15/2011		100,000		102,281
	UnitedHealth Group, Inc., 5.54%, 6/21/2010(a)		100,000		100,182
					202,463
1.31%	Retail
	Target Corp., 7.50%, 8/15/2010		100,000		106,889
3.02%	Telecommunications
	Deutsche Telekom International Finance, 3.875%, 7/22/2008(d)		250,000		247,565
	Total Corporate Bonds
	(Cost $2,229,189)				2,227,018
9.81%	U.S. GOVERNMENT & AGENCY
	Federal Home Loan Bank:
	4.20%, 5/19/2010, Series WG10		100,000		99,236
	5.00%, 7/26/2010		150,000		152,406
	5.25%, 6/10/2011		25,000		25,656
	5.40%, 7/16/2009(d)		250,000		251,615
	Federal Home Loan Mortgage Corp.
	5.00%, 9/15/2016(d)		250,000		249,713
	Federal National Mortgage Association, 5.25%, 8/1/2012		25,000		25,508
	Total U.S. Government & Agency
	(Cost $794,858)				804,134
7.92%	U.S. TREASURY SECURITIES
	U.S. Treasury Notes:
	4.00%, 8/31/2009		150,000		150,164
	4.50%, 5/15/2010		65,000		65,940
	4.625%, 2/29/2008(c)		325,000		325,660
	4.875%, 5/31/2009		25,000		25,348

See accompanying notes to financial statements.

46

  YIELDQUEST LOW DURATION BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Principal		Value
7.92%	U.S. TREASURY SECURITIES
	4.875%, 6/30/2009	$	40,000	$	40,584
	4.875%, 6/30/2012		40,000		41,259
	Total U.S. Treasury Securities
	(Cost $643,601)				648,955
6.92%	TAXABLE MUNICIPAL BONDS
0.30%	Florida
	Gainesville Post Taxable-Retiree Health Care, Revenue,
	4.46%, 10/1/2010, MBIA		25,000		24,784
1.24%	Illinois
	Williamson County, Series A, GO, 7.00%, 12/15/2008, FGIC		100,000		101,987
1.54%	Maine
	Lewiston, Series C, GO, 6.60%, 5/15/2008, MBIA		125,000		125,975
0.06%	Mississippi
	Development Bank, GO, 5.90%, 7/1/2011, FSA		5,000		5,020
1.81%	North Carolina
	Durham, Series B, GO, 4.50%, 6/1/2010		150,000		148,632
0.33%	Tennessee
	Johnson City Public Building Authority, Revenue, 7.00%, 9/1/2018,
	Prerefunded 9/1/2011 @ 100		25,000		26,763
1.10%	Washington
	Energy Northwest Electric:
	5.10%, 7/1/2013		25,000		24,865
	5.21%, 7/1/2008, Series B		65,000		65,091
					89,956
0.54%	Wisconsin
	West Allis, Series D, 3.50%, 4/1/2009, Callable 11/26/2007 @ 100		45,000		44,165
	Total Taxable Municipal Bonds
	(Cost $563,833)				567,282
		Shares
33.58%	EXCHANGE TRADED / CLOSED-END FUNDS
33.58%	Closed-End Funds
0.80%	Asset Allocation Closed-End Funds
	John Hancock Patriot Premium Dividend Fund II		2,405		25,469
	Renaissance Capital Growth & Income Fund III, Inc.		3,035		22,853
	TS&W/Claymore Tax-Advantaged Balanced Fund		1,175		17,214
					65,536
0.89%	Equity Closed-End Funds
	Cohen & Steers Closed-End Opportunity Fund, Inc.		668		11,189
	RMR Asia Pacific Real Estate Fund		884		21,128
	RMR Hospitality & Real Estate Fund		1,130		20,430
	RMR Real Estate Fund		1,460		20,498
					73,245
4.22%	Municipal Closed-End Funds
	BlackRock MuniHoldings California Insured Fund, Inc.		1,235		16,104
	BlackRock MuniHoldings Insured Fund II, Inc.		1,640		19,926
	BlackRock MuniHoldings Insured Fund, Inc.		1,535		18,635
	BlackRock MuniYield California Fund, Inc.		1,235		16,364

See accompanying notes to financial statements.

47

  YIELDQUEST LOW DURATION BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
	Municipal Closed-End Funds (Continued)
	BlackRock MuniYield Pennsylvania Insured Fund		1,175	$	16,062
	BlackRock MuniYield Quality Fund II, Inc.		1,835		21,286
	DTF Tax Free Income, Inc.		1,335		18,650
	DWS Municipal Income Trust		1,770		18,815
	Neuberger Berman Intermediate Municipal Fund, Inc.		1,450		18,647
	Nuveen Florida Investment Quality Municipal Fund		1,235		16,203
	Nuveen Florida Quality Income Municipal Fund		1,225		16,207
	Nuveen Insured Premium Income Municipal Fund		1,530		18,635
	Nuveen Ohio Dividend Advantage Municipal Fund		1,175		16,098
	Nuveen Pennsylvania Premium Income Municipal Fund II		1,265		15,990
	Nuveen Premier Municipal Income Fund, Inc.		1,425		18,881
	Nuveen Premium Income Municipal Fund IV		1,595		18,789
	Putnam High Yield Municipal Trust		2,885		19,906
	Putnam Investment Grade Municipal Trust		1,975		18,723
	Seligman Select Municipal Fund, Inc.		2,170		21,657
					345,578
27.67%	Taxable Fixed Income Closed-End Funds
	Aberdeen Global Income Fund, Inc.		2,473		32,075
	ACM Income Fund, Inc.(d)		17,933		147,051
	ACM Managed Dollar Income Fund(d)		4,722		34,093
	Advent Claymore Convertible Securities & Income Fund		745		18,737
	American Income Fund, Inc.(d)		2,690		20,821
	BlackRock Core Bond Trust(d)		7,056		86,295
	BlackRock Income Trust(d)		25,175		146,267
	BlackRock Preferred Income Strategies Fund, Inc.(d)		2,784		47,161
	BlackRock Strategic Bond Trust		1,790		21,265
	Dreyfus High Yield Strategies Fund(d)		18,438		71,355
	Duff & Phelps Utility & Corporate Bond Trust, Inc.		2,040		21,318
	DWS Strategic Income Trust		2,155		25,407
	First Trust/FIDAC Mortgage Income Fund(d)		2,609		42,579
	First Trust/Four Corners Senior Floating Rate Income Fund II		1,340		21,587
	Flaherty & Crumrine/Claymore Preferred Securities Income Fund		1,165		21,145
	Global Income Fund, Inc.(d)		8,820		34,663
	MFS Charter Income Trust(d)		17,937		149,953
	MFS InterMarket Income Trust I		2,640		21,569
	MFS Intermediate Income Trust(d)		52,105		325,135
	MFS Multimarket Income Trust(d)		16,535		96,564
	Montgomery Street Income Securities, Inc.		1,211		19,836
	Morgan Stanley Emerging Markets Debt Fund, Inc.		3,495		34,461
	Morgan Stanley Emerging Markets Domestic Debt Fund, Inc.		1,103		20,880
	Morgan Stanley High Yield Fund, Inc.		5,930		33,860
	Nuveen Multi-Strategy Income & Growth Fund		2,480		29,487
	Nuveen Multi-Strategy Income & Growth Fund 2		2,465		29,259
	Putnam Master Intermediate Income Trust(d)		19,815		123,051
	Putnam Premier Income Trust(d)		21,960		135,713
	Transamerica Income Shares, Inc.		1,360		25,976
	Van Kampen Bond Fund		2,030		34,774
	Van Kampen High Income Trust II		9,290		33,537
	Western Asset 2008 Worldwide Dollar Government Term Trust, Inc.(d)		12,600		128,772
	Western Asset Emerging Markets Debt Fund, Inc.		1,905		34,519
	Western Asset High Income Opportunity Fund, Inc.		4,033		24,964

See accompanying notes to financial statements.

48

  YIELDQUEST LOW DURATION BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
	Taxable Fixed Income Closed-End Funds (Continued)
	Western Asset Inflation Management Fund, Inc.		2,697	$	43,583
	Western Asset Managed High Income Fund, Inc.		3,950		23,700
	Western Asset Variable Rate Strategic Fund, Inc.		1,253		20,737
	Western Asset/Claymore US Treasury Inflation Protected Securities Fund		3,715		43,503
	Western Asset/Claymore US Treasury Inflation Protected Securities Fund 2		3,636		42,796
					2,268,448
	Total Exchange Traded / Closed-End Funds
	(Cost $2,776,154)				2,752,807
		Principal
5.31%	FOREIGN BONDS
1.31%	Banks
	European Investment Bank, 6.00%, 8/15/2009	$	145,000		107,415
4.00%	Sovereign Bonds
	Bundesschatzanweisungen, 4.50%, 6/12/2009		72,000		104,800
	Gilt Edged Securities, 4.00%, 3/7/2009		50,000		102,390
	New South Wales Treasury Corp., 7.00%, 12/1/2010, Series 10		130,000		120,656
					327,846
	Total Foreign Bonds
	(Cost $418,512)				435,261
6.50%	COLLATERALIZED MORTGAGE OBLIGATIONS
6.50%	U.S. Government & Agency
	Federal Home Loan Mortgage Corporation:
	4.00%, 5/15/2016, Series 2675, Class CB(d)		119,326		116,738
	4.00%, 9/15/2016, Series 2672, Class HA		98,275		96,015
	5.50%, 8/15/2016, Series R003, Class VA		85,584		86,454
	Federal National Mortgage Association,
	5.00%, 10/25/2017, Series 2002-63, Class KC(d)		129,338		128,637
	Small Business Administration, 8.075%, 4/25/2019(b)		98,007		105,381
	Total Collateralized Mortgage Obligations
	(Cost $530,106)				533,225
		Contracts
0.10%	PURCHASED OPTIONS*
	CBOE SPX Volatility Index, Call @ $19, 11/21/2007		25		5,000
	CBOE SPX Volatility Index, Call @ $22.50, 11/21/2007		19		1,995
	CBOE SPX Volatility Index, Call @ $27.50, 11/21/2007		14		560
	CBOE SPX Volatility Index, Call @ $30, 11/21/2007		21		525
	Total Purchased Options
	(Cost $13,237)				8,080

See accompanying notes to financial statements.

49

  YIELDQUEST LOW DURATION BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets	Description	Shares		Value
0.89%	SHORT-TERM INVESTMENT
	BNY Hamilton Money Fund, 4.96%, 11/1/07		73,644	$	73,644
	Total Short-Term Investments
	(Cost $73,644)				73,644
98.20%	Total investments
	(Cost $8,043,134)				8,050,406
1.80%	Net other assets (liabilities)				147,509
100.00%	NET ASSETS			$	8,197,915

(a)	Rule 144A Section 4(2) or other security which is restricted as to resale to institutional investors. The Investment Advisor, using board approved procedures has deemed these secirities or a portion of these securities liquid.
(b)	Variable rate security.
(c)	All or a portion of the security is pledged as collateral for securities sold short.
(d)	All or a portion of the security is segregated in connection with certain foreign currency and futures contracts.
*	Non-income producing securities.
AMBAC	Insured by American Municipal Bond Assurance Corp.
ETF	Exchange-Traded Fund
FGIC	Insured by Financial Guaranty Insurance Co.
FSA	Insured by Financial Security Assurance
GO	General Obligation
LLC	Limited Liability Co.
MBIA	Insured by Municipal Bond Insurance Organization Association
MTN	Medium Term Note
XLCA	Insured by XL Capital Assurance

	Shares		Value
EXCHANGE TRADED / CLOSED-END FUNDS SOLD SHORT
iShares MSCI Australia Index Fund		334	$	11,593
iShares MSCI Brazil Index Fund		146		12,505
iShares MSCI Emerging Markets Index		40		6,680
Market Vectors Gold Miners ETF		398		20,067
Oil Service HOLDRs Trust		100		19,010
Power Shares QQQ		208		11,446
SPDR Trust Series 1		140		21,652
Total			$	102,953

		Notional		Unrealized
	Contracts	Value		Gain/(Loss)
FUTURES CONTRACTS SOLD SHORT
90 Day Eurodollar, Dec 07, expires 12/17/07	1	$	238,125		(440	)
90 Day Eurodollar, Dec 08, expires 12/15/08	1		239,600		(453	)
90 Day Eurodollar, Jun 08, expires 6/16/08	1		239,375		(703	)
Nasdaq 100 e-Mini, Dec 07, expires 12/21/07	1		44,355		(1,098	)
U.S. 2 Year Note, Dec 07, expires 12/31/07	2		415,125		(1,285	)
U.S. 5 Year Note, Dec 07, expires 12/31/07	3		323,484		(4,038	)
U.S. 10 Year Note, Dec 07, expires 12/19/07	2		221,313		277
U.S. Long Bond, Dec 07, expires 12/19/07	1		113,594		154
Total				$	(7,586	)

	Notional			Buy/Sell	Receive	Expiration		Unrealized
Underlying Instrument	Amount			Protection	Fixed Rate	Date		Gain/(Loss)
CREDIT DEFAULT SWAP
CDX North American High Yield, Series 8
	$	(580,000	)	Buy	2.75%		6/20/2012		$	17,957

See accompanying notes to financial statements.

50

  YIELDQUEST LOW DURATION TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS
October 31, 2007  

% of
Net Assets		Description	Principal		Value
60.71	%	MUNICIPAL BONDS
1.53	%	Alabama
		Florence, GO, 3.00%, 9/1/2009, FSA	$	10,000	$	9,893
		Mobile County Board School Commerce, Series A, GO, 5.00%, 3/1/2010		10,000		10,351
						20,244
1.93	%	Arizona
		Glendale Industrial Development Authority, Revenue, 5.375%, 5/15/2028,
		Prerefunded 5/15/2008 @ 101		25,000		25,507
2.46	%	California
		California State, GO, 6.25%, 9/1/2012		25,000		27,276
		Golden State Tobacco Securitization, Series 2003-A-1, Revenue,
		5.00%, 6/1/2012, ETM		5,000		5,301
						32,577
3.80	%	Connecticut
		City of Farmington, GO, 3.30%, 9/15/2011, Callable 9/15/2009 @ 100		20,000		19,842
		City of Waterbury, GO, 4.80%, 2/15/2012, Prerefunded 2/15/2008 @ 101(a)		30,000		30,410
						50,252
1.49	%	District of Columbia
		Metropolitan Washington DC Airport Authority System, Series B, Revenue,
		3.00%, 10/1/2009		20,000		19,758
1.55	%	Florida
		Peace River/Manasota, Series A, Revenue, 5.00%, 10/1/2023, Prerefunded
		10/1/2008 @ 101, MBIA		20,000		20,484
0.41	%	Hawaii
		Honolulu City & County, Series A, GO, 6.00%, 11/1/2010, ETM		5,000		5,365
14.24	%	Illinois
		City of Decatur, GO, 5.50%, 3/1/2010, Prerefunded 3/1/2008 @ 100		15,000		15,101
		City of Freeport, 5.50%, 1/1/2034, Prerefunded 1/1/2013 @ 100		20,000		21,773
		Cook & Du Page Counties, High School Dist No. 210, GO, Zero Coupon,
		12/1/2010, ETM		25,000		22,431
		Frankfort Fire District, GO, 4.10%, 1/1/2008, AMBAC		20,000		20,019
		Kane County School District No.131 Aurora Eastside, Series A, GO, Zero
		Coupon, 6/1/2008, FGIC(a)		40,000		39,156
		Motor Fuel Tax, Revenue, 5.375%, 1/1/2014, AMBAC(a)		35,000		38,199
		Wastewater Transmission, Revenue, 5.375%, 1/1/2013, FGIC(a)		30,000		31,795
						188,474
3.32	%	Indiana
		Indianapolis Local Public Improvement, Series D, Revenue, Zero Coupon,
		8/1/2010, ETM		25,000		22,697
		Western School Building Corp., Revenue, 5.25%, 7/15/2012, Callable
		7/15/2011 @ 101, MBIA		20,000		21,321
						44,018
1.60	%	Maryland
		City of Baltimore, Series D, GO, 5.40%, 10/15/2012, AMBAC		20,000		21,159
1.90	%	Michigan
		Lincoln School District, GO, 5.00%, 5/1/2028, Prerefunded 5/1/2008 @ 100, FSA		25,000		25,197

See accompanying notes to financial statements.

51

  YIELDQUEST LOW DURATION TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets		Description	Principal		Value
1.59	%	Nevada
		State Highway Improvement, Revenue, 5.00%, 12/1/2011, MBIA	$	10,000	$	10,533
		Truckee Meadows Nevada Water Authority, Series A, Revenue, 5.125%,
		7/1/2021, Prerefunded 7/1/2011 @ 100		10,000		10,556
						21,089
0.38	%	New Hampshire
		City of Manchester, GO, 4.00%, 6/1/2010		5,000		5,067
1.59	%	New York
		Metropolitan Transport Authority Commuter Facilities, Series D, Revenue,
		5.00%, 7/1/2015, Prerefunded 1/1/2012 @ 100, MBIA		15,000		15,880
		State Environmental Facilities Corp. Clean Water & Drinking, Revenue, 5.50%,
		4/15/2013, Prerefunded 10/15/2009 @ 100		5,000		5,205
						21,085
1.13	%	Ohio
		Avon Lake Water System, Revenue, 3.50%, 10/1/2011, MBIA		15,000		14,983
2.02	%	South Carolina
		Columbia Waterworks & Sewer System, Revenue, 5.375%, 2/1/2012		25,000		26,800
1.54	%	Tennessee
		Knox County, GO, 5.375%, 5/1/2018, Prerefunded 5/1/2008 @ 101		20,000		20,388
11.78	%	Texas
		Cedar Hill, GO, 3.25%, 2/15/2008, AMBAC		25,000		24,981
		Coastal Water Authority Contract, Revenue, 3.50%, 12/15/2014, FGIC		25,000		24,597
		Ferris Independant School District, GO, 3.35%, 8/15/2013, Callable
		8/15/2012 @ 100, PSFG		10,000		9,724
		Harris County Municipal Utility District No. 61 Waterworks & Sewer System, GO,
		3.70%, 9/1/2012, FGIC		10,000		10,070
		Nacogdoches Independant School District, GO, 5.125%, 2/15/2018, Prerefunded
		2/15/2011 @ 100		20,000		21,003
		Pasadena, GO, 5.625%, 4/1/2027, Prerefunded 4/1/2011 @ 100		25,000		26,699
		Trophy Club Municipal Utility District No. 2, GO, 3.10%, 9/1/2013, AMBAC(a)		30,000		28,949
		White Settlement Independant School District, GO, 3.50%, 8/15/2012, PSF-G		10,000		9,960
						155,983
1.17	%	Virginia
		Pocahontas Parkway Association Toll Road, Series A, Revenue, 5.50%,
		8/15/2028, Prerefunded 8/15/2008 @ 102		15,000		15,536
3.21	%	Washington
		Energy Northwest Electric, Series A, Revenue, 5.50%, 7/1/2012, FSA		10,000		10,715
		State Health Care Facilities Authority, Revenue, 5.125%, 10/1/2031,
		Prerefunded 10/1/2011 @ 100(a)		30,000		31,753
						42,468
2.07	%	West Virginia
		Jackson County Residential Mortgage, Revenue, 7.375%, 6/1/2010, ETM		25,000		27,420
		Total Municipal Bonds
		(Cost $788,787)				803,854

See accompanying notes to financial statements.

52

  YIELDQUEST LOW DURATION TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets		Description	Shares		Value
30.74	%	EXCHANGE TRADED / CLOSED-END FUNDS
30.74	%	Closed-End Funds
24.82	%	Municipal Closed-End Funds
		BlackRock Florida Insured Municipal 2008 Term Trust(a)		3,740	$	54,903
		BlackRock Insured Municipal Term Trust, Inc.(a)		6,735		66,003
		BlackRock Long-Term Municipal Advantage Trust		845		10,258
		BlackRock MuniHoldings California Insured Fund, Inc.		785		10,236
		BlackRock MuniHoldings Insured Fund II, Inc.(a)		690		8,384
		BlackRock MuniHoldings Insured Fund, Inc.(a)		700		8,498
		BlackRock MuniYield Michigan Insured Fund, Inc.		610		8,174
		BlackRock MuniYield Pennsylvania Insured Fund		750		10,252
		BlackRock MuniYield Quality Fund II, Inc.(a)		720		8,352
		DTF Tax Free Income, Inc.		730		10,198
		DWS Municipal Income Trust(a)		995		10,577
		Neuberger Berman Intermediate Municipal Fund, Inc.		650		8,359
		Nuveen California Investment Quality Municipal		615		8,438
		Nuveen Florida Investment Quality Municipal Fund		640		8,397
		Nuveen Florida Quality Income Municipal Fund		630		8,335
		Nuveen Insured Premium Income Municipal Fund		685		8,343
		Nuveen New York Quality Income Municipal Fund		635		8,376
		Nuveen Pennsylvania Premium Income Municipal Fund II		650		8,216
		Nuveen Performance Plus Municipal Fund		750		10,192
		Nuveen Premier Insured Municipal Income Fund, Inc.		775		10,269
		Nuveen Premium Income Municipal Fund IV		715		8,423
		Nuveen Quality Income Municipal Fund		760		10,366
		Putnam Municipal Opportunities Trust		740		8,436
		Seligman Select Municipal Fund, Inc.		850		8,483
		Western Asset Managed Municipals Fund, Inc.		760		8,102
						328,570
5.92	%	Taxable Fixed Income Closed-End Funds
		ACM Income Fund, Inc.		620		5,084
		BlackRock Corporate High Yield Fund, Inc.		315		2,378
		BlackRock Income Trust		1,105		6,420
		BlackRock Preferred Income Strategies Fund, Inc.		160		2,710
		First Trust/FIDAC Mortgage Income Fund(a)		245		3,998
		Global Income Fund, Inc.		705		2,771
		MFS Charter Income Trust		540		4,515
		MFS Intermediate Income Trust(a)		1,940		12,106
		Morgan Stanley High Yield Fund, Inc.		430		2,455
		Nuveen Multi-Strategy Income & Growth Fund		235		2,794
		Putnam Master Intermediate Income Trust		720		4,471
		Putnam Premier Income Trust		725		4,481
		Van Kampen Bond Fund		170		2,912
		Van Kampen High Income Trust II		660		2,383
		Western Asset 2008 Worldwide Dollar Government Term Trust, Inc.(a)		1,310		13,388
		Western Asset Emerging Markets Debt Fund, Inc.		150		2,718
		Western Asset Worldwide Income Fund, Inc.		215		2,827
						78,411
		Total Exchange Traded / Closed-End Funds
		(Cost $410,449)				406,981

See accompanying notes to financial statements.

53

  YIELDQUEST LOW DURATION TAX-EXEMPT BOND FUND
  SCHEDULE OF INVESTMENTS (Continued)
October 31, 2007  

% of
Net Assets		Description	Contracts		Value
0.09	%	PURCHASED OPTIONS*
		CBOE SPX Volatility Index, Call @ $19, 11/21/2007		3	$	600
		CBOE SPX Volatility Index, Call @ $22.50, 11/21/2007		3		315
		CBOE SPX Volatility Index, Call @ $27.50, 11/21/2007		4		160
		CBOE SPX Volatility Index, Call @ $30, 11/21/2007		5		125
		Total Purchased Options
		(Cost $2,104)				1,200
			Principal
6.78	%	SHORT-TERM INVESTMENT
		Federated Tax-Free Obligations Fund, 3.06%, 11/1/07	$	89,759		89,759
		Total Short-Term Investments
		(Cost $89,759)				89,759
98.32	%	Total Investments
		(Cost $1,291,099)				1,301,794
1.68	%	Net other assets (liabilities)				22,215
100.00	%	NET ASSETS			$	1,324,009

(a)	All or a portion of the security is segregated in connection with certain foreign currency and futures contracts.
*	Non-income producing securities.
AMBAC	Insured by American Municipal Bond Assurance Corp.
CMO	Collateralized Mortgage Obligation
ETM	Escrowed to Maturity
FGIC	Insured by Financial Guaranty Insurance Co.
FSA	Insured by Financial Security Assurance
GO	General Obligation
LLC	Limited Liability Co.
MBIA	Insured by Municipal Bond Insurance Organization Association
PSFG	Public School Fund Guaranteed
XLCA	Insured by XL Capital Assurance

		Notional		Unrealized
	Contracts	Value		Gain/(Loss)
FUTURES CONTRACTS SOLD SHORT
90 Day Eurodollar, Jun 08, expires 6/16/08	2	$	478,100		$	(2,880	)

See accompanying notes to financial statements.

54

 STATEMENTS OF ASSETS AND LIABILITIES

 October 31, 2007

	YieldQuest Core Equity Fund			YieldQuest Total Return Bond Fund			YieldQuest Tax-Exempt Bond Fund
Assets:
Investments, at cost	$	27,714,259		$	346,951,740		$	224,557,729
Investments in securities, at value	$	31,283,342		$	346,654,902		$	222,788,992
Cash		143,625			826,469			—
Foreign currency, at value (cost $138,845, $446,413
and $47,100)		147,391			464,604			49,420
Unrealized gain on forward foreign exchange contracts		—			311,796			105,019
Unrealized gain on credit default swap agreements
(premiums received $65,625, $1,876,646
and $109,298)		69,381			1,041,829			76,442
Receivable for securities sold		3,968,670			—			—
Interest and dividends receivable		126,347			2,514,373			1,736,620
Reclaims receivable		23			—			—
Receivable for fund shares sold		4,985			23,054			—
Prepaid expenses and other assets		12,544			105,725			119,294
Total Assets		35,756,308			351,942,752			224,875,787
Liabilities:
Payable to Custodian		—			—			4,724,752
Payable for securities purchased		3,928,162			—			—
Unrealized loss on forward foreign exchange contracts		—			1,548,478			265,681
Payable for fund shares redeemed		236,470			375,331			277,923
Common stock sold short, at value
(proceeds $6,101,336, $20,649,228 and $28,309,669)		6,151,099			21,292,642			28,452,700
Variation margin on futures contracts		26,869			—			4,185
Accrued expenses and other payables:
Investment advisor		13,190			162,012			92,485
Administration		4,780			48,415			24,450
Fund accounting fees		2,200			—			—
Custodian fees		1,618			13,323			17,536
Transfer agent fees		3,117			—			2,858
Trustee fees		2,507			—			—
Other accrued expenses		16,255			6,531			6,704
Total Liabilities		10,386,267			23,446,732			33,869,274
Net Assets	$	25,370,041		$	328,496,020		$	191,006,513
Net Assets Consist Of:
Paid in capital		21,418,779			346,284,021			197,599,228
Undistributed net investment income (loss)		410,685			(172,224	)		230,488
Accumulated net realized loss on investment transactions		(38,009	)		(14,988,660	)		(4,556,246	)
Net unrealized appreciation (depreciation) on investments		3,578,586			(2,627,117	)		(2,266,957	)
Net Assets	$	25,370,041		$	328,496,020		$	191,006,513
Net Asset Value Per Share:
Net Assets	$	25,370,041		$	328,496,020		$	191,006,513
Shares of Beneficial Interest Outstanding
(unlimited number authorized, no par value)		1,968,553			33,068,963			18,924,616
Net Asset Value, Offering & Redemption Price
(Net Assets divided by Shares Outstanding)(a)	$	12.89		$	9.93		$	10.09
(a) See “Note 5. Redemption Fees” in the Notes to Financial Statements.

See accompanying notes to financial statements.

55

 STATEMENTS OF ASSETS AND LIABILITIES (Continued)

 October 31, 2007

	YieldQuest Flexible Income Fund			YieldQuest Low Duration Bond Fund			YieldQuest Low Duration Tax-Exempt Bond Fund
Assets:
Investments, at cost	$	14,511,132		$	8,043,134		$	1,291,099
Investments in securities, at value	$	14,659,822		$	8,050,406		$	1,301,794
Cash		364,081			168,759			1,441
Foreign currency, at value (cost $2,577, $1,395 and $0)		3,260			1,424			—
Unrealized gain on forward foreign exchange contracts		54,635			3,818			—
Unrealized gain on credit default swap agreements
(premiums received $25,432, $12,267 and $0)		24,589			17,957			—
Variation margin on futures contracts		—			—			650
Receivable for securities sold		—			1,154			—
Interest and dividends receivable		78,632			70,852			10,418
Receivable due from investment advisor		—			1,486			5,455
Receivable for fund shares sold		24,943			—			—
Prepaid expenses and other assets		23,768			20,368			19,793
Total Assets		15,233,730			8,336,224			1,339,551
Liabilities:
Unrealized loss on forward foreign exchange contracts		35,876			18,867			—
Payable for fund shares redeemed		50			50			—
Common stock sold short, at value
(proceeds $557,751, $97,677, and $0)		594,928			102,953			—
Accrued expenses and other payables:
Investment advisor		5,439			—			—
Administration		2,416			2,442			153
Fund accounting fees		—			508			756
Custodian fees		9,572			9,581			10,061
Transfer agent fees		2,219			2,271			4,079
Trustee fees		30			57			205
Other accrued expenses		3,297			1,580			288
Total Liabilities		653,827			138,309			15,542
Net Assets	$	14,579,903		$	8,197,915		$	1,324,009
Net Assets Consist Of:
Paid in capital		14,522,308			8,332,713			1,330,263
Undistributed net investment income (loss)		44,219			(2,858	)		668
Accumulated net realized loss on investment transactions		(111,880	)		(117,440	)		(14,737	)
Net unrealized appreciation (depreciation) on investments		125,256			(14,500	)		7,815
Net Assets	$	14,579,903		$	8,197,915		$	1,324,009
Net Asset Value Per Share:
Net Assets	$	14,579,903		$	8,197,915		$	1,324,009
Shares of Beneficial Interest Outstanding
(unlimited number authorized, no par value)		1,460,894			826,198			132,016
Net Asset Value, Offering & Redemption Price
(Net Assets divided by Shares Outstanding)(a)	$	9.98		$	9.92		$	10.03
(a) See “Note 5. Redemption Fees” in the Notes to Financial Statements.

See accompanying notes to financial statements.

56

 STATEMENTS OF OPERATIONS

 For the Year Ended October 31, 2007

	YieldQuest Core Equity Fund			YieldQuest Total Return Bond Fund			YieldQuest Tax-Exempt Bond Fund
Investment Income:
Dividend income	$	794,075		$	10,677,893		$	4,031,341
Interest income		3,437			6,915,349			3,043,953
Less: Foreign withholding taxes		(2,086	)		(8,554	)		(4,134	)
Total Investment Income		795,426			17,584,688			7,071,160
Operating Expenses:
Investment advisory fees		212,406			1,627,171			881,785
Administration fees		24,170			168,833			81,085
Fund accounting fees		18,883			21,944			16,588
Custodian fees		47,227			54,907			49,425
Transfer agent fees		16,439			24,043			19,301
Trustees’ fees		1,890			10,356			6,502
Recovery of reimbursed expenses		—			90,174			10,012
Dividend expense for securities sold short		11,265			132,191			36,698
Other expenses		54,986			173,422			115,956
Total Operating Expenses		387,266			2,303,041			1,217,352
Less: Expenses waived and reimbursed		(120,628	)		—			—
Net Operating Expenses		266,638			2,303,041			1,217,352
Net Investment Income		528,788			15,281,647			5,853,808
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) from:
Security transactions		1,332,395			(7,774,506	)		(1,227,085	)
Futures contracts		270,915			(4,439,918	)		(797,683	)
Securities sold short		(1,346,222	)		(1,396,255	)		(496,933	)
Distributions of realized gains from other
investment companies		294,864			1,030,423			128,524
Swap agreements		(5,729	)		(161,043	)		(42,571	)
Foreign currency transactions		54,905			(1,290,331	)		170,427
Option transactions		(546,454	)		(2,519,560	)		(1,824,765	)
Net realized gain (loss)		54,674			(16,551,190	)		(4,090,086	)
Net change in unrealized appreciation (depreciation)
on investments, futures contracts, options, foreign
currency transactions, securities sold short and swaps		2,631,208			(4,751,061	)		(3,811,437	)
Net Realized and Unrealized Gain (Loss)		2,685,882			(21,302,251	)		(7,901,523	)
Net Increase (Decrease) in Net Assets Resulting
From Operations	$	3,214,670		$	(6,020,604	)	$	(2,047,715	)

See accompanying notes to financial statements.

57

 STATEMENTS OF OPERATIONS (Continued)

 For the Period Ended October 31, 2007

	YieldQuest Flexible Income Fund(a)			YieldQuest Low Duration Bond Fund(a)			YieldQuest Low Duration Tax-Exempt Bond Fund(a)
Investment Income:
Dividend income	$	178,916		$	61,026		$	7,924
Interest income		43,656			72,775			11,309
Less: Foreign withholding taxes		(764	)		(324	)		—
Total Investment Income		221,808			133,477			19,233
Operating Expenses:
Investment advisory fees		24,505			10,670			2,053
Administration fees		2,963			3,010			291
Fund accounting fees		1,604			1,901			2,599
Custodian fees		9,572			9,581			10,061
Transfer agent fees		5,877			5,877			7,672
Trustees’ fees		237			237			237
Recovery of reimbursed expenses		—			—			—
Dividend expense for securities sold short		1,910			2,202			—
Other expenses		8,412			8,115			7,707
Total Operating Expenses		55,080			41,593			30,620
Less: Expenses waived and reimbursed		(21,750	)		(23,833	)		(27,631	)
Net Operating Expenses		33,330			17,760			2,989
Net Investment Income		188,478			115,717			16,244
Realized and Unrealized Gain (Loss)
on Investments
Net realized gain (loss) from:
Security transactions		9,612			(23,261	)		(2,471	)
Futures contracts		7,555			(29,526	)		(3,872	)
Securities sold short		(34,497	)		(17,059	)		56
Distributions of realized gains from other
investment companies		2,420			660			10
Swap agreements		(4,310	)		842			—
Foreign currency transactions		26,799			(7,900	)		—
Option transactions		(92,661	)		(49,096	)		(8,460	)
Net realized gain (loss)		(85,082	)		(125,340	)		(14,737	)
Net change in unrealized appreciation (depreciation)
on investments, futures contracts, options, foreign
currency transactions, securities sold short and swaps		125,256			(14,500	)		7,815
Net Realized and Unrealized Gain (Loss)		40,174			(139,840	)		(6,922	)
Change in Net Assets Resulting From Operations	$	228,652		$	(24,123	)	$	9,322
(a) Commenced operations on June 11, 2007.

See accompanying notes to financial statements.

58

 STATEMENTS OF CHANGES IN NET ASSETS

	YieldQuest Core Equity Fund
	Year Ended October 31, 2007			Year Ended October 31, 2006(a)
Operations:
Net investment income	$	528,788		$	118,103
Net realized gain (loss) from investments, futures contracts,
options, foreign currency transactions and swaps		54,674			(52,617	)
Net change in unrealized appreciation (depreciation) on
investments, futures contracts, options, foreign
currency transactions, securities sold short and swaps		2,631,208			947,378
Change in Net Assets Resulting From Operations		3,214,670			1,012,864
Distributions to Shareholders:
From net investment income		(269,413	)		(6,859	)
Total Distributions to Shareholders		(269,413	)		(6,859	)
Share Transactions of Beneficial Interest:
Net proceeds from shares sold		8,222,446			18,162,706
Reinvestment of distributions		268,712			6,859
Redemption fee proceeds		963			753
Cost of shares redeemed		(4,849,248	)		(434,412	)
Change in Net Assets From Share Transactions of
Beneficial Interest		3,642,873			17,735,906
Change in Net Assets		6,588,130			18,741,911
Net Assets:
Beginning of period		18,781,911			40,000
End of period	$	25,370,041		$	18,781,911
Undistributed net investment income	$	410,685		$	135,596
Share Transactions:
Issued		694,143			1,689,074
Reinvested		23,046			668
Redeemed		(402,595	)		(39,783	)
Change in Shares		314,594			1,649,959
(a) Commenced operations on November 1, 2005.

See accompanying notes to financial statements.

59

 STATEMENTS OF CHANGES IN NET ASSETS (Continued)

	YieldQuest Total Return Bond Fund
	Year Ended October 31, 2007			Year Ended October 31, 2006(a)
Operations:
Net investment income	$	15,281,647		$	2,855,154
Net realized gain (loss) from investments, futures contracts,
options, foreign currency transactions and swaps		(16,551,190	)		(74,853	)
Net change in unrealized appreciation (depreciation) on
investments, futures contracts, options, foreign
currency transactions, securities sold short and swaps		(4,751,061	)		2,123,944
Change in Net Assets Resulting From Operations		(6,020,604	)		4,904,245
Distributions to Shareholders:
From net investment income		(13,779,524	)		(2,891,848	)
Total Distributions to Shareholders		(13,779,524	)		(2,891,848	)
Share Transactions of Beneficial Interest:
Net proceeds from shares sold		267,367,162			136,956,813
Reinvestment of distributions		13,647,410			2,870,539
Redemption fee proceeds		12,937			5,990
Cost of shares redeemed		(70,970,330	)		(3,646,770	)
Change in Net Assets From Share Transactions of
Beneficial Interest		210,057,179			136,186,572
Change in Net Assets		190,257,051			138,198,969
Net Assets:
Beginning of period		138,238,969			40,000
End of period	$	328,496,020		$	138,238,969
Undistributed net investment income	$	(172,224	)	$	131,192
Share Transactions:
Issued		25,559,666			13,227,349
Reinvested		1,320,696			276,631
Redeemed		(6,968,809	)		(350,570	)
Change in Shares		19,911,553			13,153,410
(a) Commenced operations on November 1, 2005.

See accompanying notes to financial statements.

60

 STATEMENTS OF CHANGES IN NET ASSETS (Continued)

	YieldQuest Tax-Exempt Bond Fund						YieldQuest Flexible Income Fund
	Year Ended October 31, 2007			Year Ended October 31, 2006(a)			Period Ended October 31, 2007(b)
Operations:
Net investment income	$	5,853,808		$	1,274,993		$	188,478
Net realized gain (loss) from investments,
futures contracts, options, foreign currency
transactions and swaps		(4,090,086	)		(321,809	)		(85,082	)
Net change in unrealized appreciation (depreciation)
on investments, futures contracts, options, foreign
currency transactions, securities sold short and swaps		(3,811,437	)		1,544,480			125,256
Change in Net Assets Resulting From Operations		(2,047,715	)		2,497,664			228,652
Distributions to Shareholders:
From net investment income		(5,770,068	)		(1,275,796	)		(171,057	)
Total Distributions to Shareholders		(5,770,068	)		(1,275,796	)		(171,057	)
Share Transactions of Beneficial Interest:
Net proceeds from shares sold		138,743,711			88,625,559			14,704,070
Reinvestment of distributions		5,752,586			1,271,403			171,057
Redemption fee proceeds		11,238			6,856			—
Cost of shares redeemed		(31,882,581	)		(4,966,344	)		(352,819	)
Change in Net Assets From Share Transactions of
Beneficial Interest		112,624,954			84,937,474			14,522,308
Change in Net Assets		104,807,171			86,159,342			14,579,903
Net Assets:
Beginning of period		86,199,342			40,000			—
End of period	$	191,006,513		$	86,199,342		$	14,579,903
Undistributed net investment income	$	230,488		$	22,477		$	44,219
Share Transactions:
Issued		13,254,349			8,535,914			1,480,378
Reinvested		552,448			122,126			17,092
Redeemed		(3,066,858	)		(477,363	)		(36,576	)
Change in Shares		10,739,939			8,180,677			1,460,894
(a) Commenced operations on November 1, 2005.
(b) Commenced operations on June 11, 2007.

See accompanying notes to financial statements.

61

 STATEMENTS OF CHANGES IN NET ASSETS (Continued)

	YieldQuest Low Duration Bond Fund			YieldQuest Low Duration Tax-Exempt Bond Fund
	Period Ended October 31, 2007(a)			Period Ended October 31, 2007(a)
Operations:
Net investment income	$	115,717		$	16,244
Net realized gain (loss) from investments, futures contracts,
options and foreign currency transactions		(125,340	)		(14,737	)
Net change in unrealized appreciation (depreciation) on
investments, futures contracts, options, foreign currency
transactions, securities sold short and swaps		(14,500	)		7,815
Change in Net Assets Resulting From Operations		(24,123	)		9,322
Distributions to Shareholders:
From net investment income		(110,675	)		(15,576	)
Total Distributions to Shareholders		(110,675	)		(15,576	)
Share Transactions of Beneficial Interest:
Net proceeds from shares sold		8,868,247			1,680,866
Reinvestment of distributions		110,675			15,576
Cost of shares redeemed		(646,209	)		(366,179	)
Change in Net Assets From Share Transactions of
Beneficial Interest		8,332,713			1,330,263
Change in Net Assets		8,197,915			1,324,009
Net Assets:
Beginning of period		—			—
End of period	$	8,197,915		$	1,324,009
Undistributed net investment income (loss)	$	(2,858	)	$	668
Share Transactions:
Issued		879,828			166,837
Reinvested		11,046			1,544
Redeemed		(64,676	)		(36,365	)
Change in Shares		826,198			132,016
(a) Commenced operations on June 11, 2007.

See accompanying notes to financial statements.

62

  NOTES TO FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION
YieldQuest Funds Trust (the “Trust”) is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “Act”). The Trust was organized as a Delaware business trust on June 27, 2005 and is authorized to issue an unlimited number of shares of beneficial interest of no par value which may be issued in more than one series. These notes to financial statements relate to the six portfolios of the Trust (individually referred to as the “Fund”, or collectively as the “Funds”) which are presented herein:

Portfolio Name	Diversification	Investment Objective
YieldQuest Core Equity Fund 1 (“Core Equity Fund”)	diversified	Long-term capital appreciation and, secondarily, income
YieldQuest Total Return Bond Fund 1 (“Total Return Bond Fund”)	diversified	Total return, comprised of both income and capital appreciation
YieldQuest Tax-Exempt Bond Fund 1 (“Tax-Exempt Bond Fund”)	diversified	Maximize current tax-exempt income
YieldQuest Flexible Income Fund 2 (“Flexible Income Fund”)	diversified	Total return, comprised of both income and capital appreciation
YieldQuest Low Duration Bond Fund 2 (“Low Duration Bond Fund”)	diversified	Total return, comprised of both income and capital appreciation
YieldQuest Low Duration Tax-Exempt Bond Fund 2 (“Low Duration Tax-Exempt Bond Fund”)	diversified	Total return, comprised of both income and capital appreciation

1	The Core Equity Fund, Total Return Bond Fund and Tax-Exempt Bond Fund commenced operations on November 1, 2005.
2	The Flexible Income Fund, Low Duration Bond Fund and Low Duration Tax-Exempt Bond Fund commenced operations on June 11, 2007.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed by the Trust in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the period. Actual results could differ from these estimates.

Security Valuation - Portfolio securities and other assets for which market quotes are readily available are stated at market value. Market value is generally determined on the basis of last reported sales prices, or if no sales prices are reported, based on the quotes obtained from a quotation reporting system, established market makers, or pricing services. NASDAQ traded securities are valued at the NASDAQ Official Closing Price. Certain securities or investments for which daily market quotations are not readily available may be valued, pursuant to guidelines established by the Board of Trustees of the Trust (the “Board”), with reference to other securities or indices. Short-term investments having a maturity of 60 days or less are generally valued at amortized cost. Exchange-traded funds, exchange-traded options, futures and options on futures are valued at the settlement price determined by the exchange. Other securities for which market quotes are not readily available are valued at a fair value as determined in good faith by the Board or persons acting at their direction. Investments initially valued in currencies other than the U.S. dollar are converted to U.S. dollars using exchange rates obtained from pricing services.

In unusual circumstances, instead of valuing securities in the usual manner, the Funds may value securities at a fair value as determined in good faith by the Funds’ investment advisor YieldQuest Advisors, LLC (the “Advisor”), according to procedures approved by the Board. Fair value pricing may also be used if extraordinary events occur after the close of the relevant market but prior to the NYSE close. Fair value pricing requires subjective determinations about the value of a security. The Valuation Committee of the Board acts as a liaison between the full Board and the

63

  NOTES TO FINANCIAL STATEMENTS (Continued)

Advisor, with respect to the fair value pricing of securities held in the Funds’ portfolios. The Valuation Committee is responsible for reviewing and approving the price of any security in a Fund’s portfolio that is fair value priced.

As a general principle, a “fair value” of a security is an amount that a Fund might reasonably expect to realize upon its current sale. There is no single standard for determining a fair value of a security. Rather, in determining a fair value of a security, the Valuation Committee shall take into account the relevant factors and surrounding circumstances, which may include: (i) the nature and pricing history (if any) of the security; (ii) whether any dealer quotations for the security are available; (iii) possible valuation methodologies that could be used to determine the fair value of the security; (iv) the recommendation of the Portfolio Manager of the Fund with respect to the valuation of the security; (v) whether the same or similar securities are held by other funds managed by the Advisor or other funds and the method used to price the security in those funds; (vi) the extent to which the fair value to be determined for the security will result from the use of data or formula produced by third parties independent of the Advisor; and (vii) the liquidity or illiquidity of the market for the security.

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement on Financial Accounting Standard (SFAS) No. 157, “Fair Value Measurement”. This standard establishes a single authoritative definition of fair value and sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of October 31, 2007, the Funds do not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, additional disclosures will be required about the inputs used to develop the measurements and the effect of certain of the measurements on changes in net assets for the period.

Investment Transactions and Investment Income - Investment transactions are recorded no later than one business day after trade date throughout the period. For financial reporting purposes, investment transactions are recorded on trade dates on the last business day of the reporting period. In determining net realized gain or loss from the sale of securities, the cost of securities sold is determined on the identified cost basis. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Purchase discounts and premiums on securities are accreted and amortized over the life of the respective securities.

Expenses - Expenses of the Trust which can be directly attributed to a Fund are charged to that Fund. Expenses which are not attributed to a specific Fund, are allocated among the Funds in proportion to each Fund’s relative net assets or other manner as deemed equitable, taking into consideration the nature and type of expense and the relative sizes of the Funds.

Federal Income Taxes - It is the Trust’s policy to comply with Subchapter M provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income and any realized capital gains to its shareholders. Accordingly, no federal income tax provision is required. Each Fund is treated as a separate taxpayer for federal income tax purposes.

In July 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken in the course of preparing the Funds’ tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax benefits of positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax expense in the current year. Adoption of FIN 48 is required no later than the last business day of the first financial statement reporting period for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Management has not completed their analysis on whether the adoption of FIN 48 will have an impact to the financial statements once adopted.

Dividends and Distributions - The Core Equity Fund will pay dividends from net investment income, if any, on an annual basis and will declare and pay distributions from net realized capital gains, if any, at least annually. The Total Return Bond Fund, Tax-Exempt Bond Fund, Flexible Income Fund, Low Duration Bond Fund and Low Duration

64

  NOTES TO FINANCIAL STATEMENTS (Continued)

Tax-Exempt Bond Fund will pay dividends from net investment income on a monthly basis and will declare and pay distributions from net realized capital gains, if any, at least annually. The amounts of distributions from net investment income and capital gains are determined in accordance with federal income tax regulations, which may differ from those amounts determined under GAAP. These “book/tax” differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature (e.g. reclass of market discounts, net operating loss, gain/loss, paydowns and distributions), such amounts are reclassified within the composition of net assets based on their federal tax-basis treatment; temporary differences (e.g. wash sales) do not require reclassification. Dividends to shareholders which exceed net investment income and net realized gains for tax purposes are reported as distributions of capital.

Foreign Currency Translations - Foreign currency transactions are translated into U.S. dollars on the following basis (i) market value of investment securities, assets and liabilities at the daily rates of exchange, and (ii) purchases and sales of investment securities, dividend and interest income and certain expenses at the rates of exchange prevailing on the respective dates of such transactions. For financial reporting purposes, the Funds do not isolate changes in the exchange rate of investment securities from the fluctuations arising from changes in the market prices of securities. However, for federal income tax purposes, the Funds do isolate and treat as ordinary income the effect of changes in foreign exchange rates on realized gain or loss from the sale of investment securities and payables and receivables arising from trade-date and settlement-date differences.

Foreign Currency Contracts - The Funds may invest in forward currency contracts for investment or risk management purposes. A forward currency contract is an obligation to buy or sell a specific currency at a future date, which may be any fixed number of days from the date of the contract agreed upon by the parties, at a price set at the time of the contract. Fluctuations in the value of the forward contracts are recorded as unrealized gains or losses by the Funds. The gains or losses realized upon the closing of such contracts are included in the Statement of Operations. The use of forward currency contracts by a Fund involves risks including the potential inability of counterparties to meet the terms of their contracts and unanticipated movements in the value of the foreign currency relative to the U.S. dollar.

At October 31, 2007, the Total Return Bond Fund, Tax-Exempt Bond Fund, Flexible Income Fund and Low Duration Bond Fund had open forward foreign currency contracts. The unrealized gain (loss) on the contracts reflected in the accompanying financial statements were as follows:

TOTAL RETURN BOND FUND
	Local	Market		Settlement	Unrealized
Foreign Currency	Currency	Value		Date	Gain (Loss)
To Buy:
Australian Dollar	11,509,068	$	10,711,835	11/9/07		$(376,978	)
British Pound	8,780,198		18,249,576	11/9/07		(326,870	)
Canadian Dollar	4,282,204		4,534,513	11/9/07		(142,995	)
Euro	20,374,794		29,515,215	11/9/07		(652,134	)
Japanese Yen	171,243,150		1,486,144	11/9/07		8,856
New Zealand Dollar	9,450,936		7,274,421	11/9/07		(44,578	)
						(1,534,699	)
To Sell:
Australian Dollar	372,208		346,426	11/9/07		16,425
British Pound	2,247,756		4,671,944	11/9/07		71,943
Canadian Dollar	351,432		372,139	11/9/07		12,139
Euro	5,576,041		8,077,532	11/9/07		107,532
Japanese Yen	769,604,324		6,679,056	11/9/07		89,978
						298,017
Total Net Unrealized Gain (Loss) on Open Forward Foreign Currency Contracts					$	(1,236,682	)

65

  NOTES TO FINANCIAL STATEMENTS (Continued)

TAX-EXEMPT BOND FUND
	Local	Market		Settlement	Unrealized
Foreign Currency	Currency	Value		Date	Gain (Loss)
To Buy:
Australian Dollar	1,972,885	$	1,836,223	11/9/07		$(62,194	)
British Pound	1,547,863		3,217,221	11/9/07		(56,359	)
Canadian Dollar	804,600		852,008	11/9/07		(24,624	)
Euro	3,725,291		5,396,509	11/9/07		(117,578	)
Japanese Yen	49,597,710		430,437	11/9/07		2,564
New Zealand Dollar	1,718,677		1,323,511	11/9/07		(4,511	)
						(262,702	)
To Sell:
Australian Dollar	109,971		102,353	11/9/07		4,853
British Pound	657,234		1,366,055	11/9/07		21,056
Canadian Dollar	48,810		51,686	11/9/07		1,686
Euro	1,626,662		2,356,406	11/9/07		31,405
Japanese Yen	225,720,430		1,958,928	11/9/07		26,390
New Zealand Dollar	1,834,743		1,412,890	11/9/07		16,650
						102,040
Total Net Unrealized Gain (Loss) on Open Forward Foreign Currency Contracts					$	(160,662	)
FLEXIBLE INCOME FUND
	Local	Market		Settlement	Unrealized
Foreign Currency	Currency	Value		Date	Gain (Loss)
To Buy:
Australian Dollar	397,413		$369,885	11/9/07		$(13,202	)
British Pound	208,464		433,290	11/9/07		(8,024	)
Canadian Dollar	71,263		75,461	11/9/07		(2,461	)
Euro	299,965		434,534	11/9/07		(9,828	)
Japanese Yen	4,115,880		35,720	11/9/07		280
New Zealand Dollar	92,667		71,361	11/9/07		(2,361	)
						(35,596	)
To Sell:
Australian Dollar	39,477		36,742	11/9/07		1,742
British Pound	95,285		198,050	11/9/07		3,050
Canadian Dollar	1,014,875		1,074,672	11/9/07		34,590
Euro	136,426		197,629	11/9/07		2,629
Japanese Yen	41,249,900		357,990	11/9/07		4,823
New Zealand Dollar	822,451		633,349	11/9/07		7,521
						54,355
Total Net Unrealized Gain (Loss) on Open Forward Foreign Currency Contracts					$	18,759

66

  NOTES TO FINANCIAL STATEMENTS (Continued)

LOW DURATION BOND FUND
	Local	Market		Settlement	Unrealized
Foreign Currency	Currency	Value		Date	Gain (Loss)
To Buy:
Australian Dollar	190,224	$	177,047	11/9/07		$(6,314	)
British Pound	117,420		244,057	11/9/07		(4,382	)
Canadian Dollar	9,729		10,302	11/9/07		(102	)
Euro	238,352		345,280	11/9/07		(7,617	)
Japanese Yen	2,153,382		18,688	11/9/07		112
New Zealand Dollar	101,328		78,030	11/9/07		(433	)
						(18,736	)
To Sell:
Australian Dollar	4,737		4,409	11/9/07		209
British Pound	29,123		60,532	11/9/07		932
Euro	72,412		104,897	11/9/07		1,397
Japanese Yen	9,831,950		85,327	11/9/07		1,149
						3,687
Total Net Unrealized Gain (Loss) on Open Forward Foreign Currency Contracts					$	(15,049	)

Futures Contracts - Each Fund may use futures contracts for hedging or speculative purposes consistent with its investment objective. Upon entering into a futures contract, a Fund must deposit initial margin in addition to segregating cash or liquid assets sufficient to meet its obligation to purchase or provide securities, or to pay the amount owed at the expiration of an index-based futures contract. Such liquid assets may consist of cash, cash equivalents, liquid debt or equity securities or other acceptable assets. Pursuant to the contract, the Fund agrees to receive from, or pay to the broker, an amount of cash equal to the daily fluctuation in value of the contract. Such a receipt of payment is known as a “variation margin” and is recorded by each Fund as an unrealized gain or loss. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the proceeds from (or cost of) the closing transactions and the Fund’s basis in the contract. Futures contracts have market risks, including the risk that the change in the value of the contract may not correlate with changes in the value of the underlying securities. Use of long futures contracts subjects a Fund to risk of loss in excess of the amount shown on the Statement of assets and Liabilities, up to the notional value of the futures contract. Use of short futures subjects a Fund to unlimited risk of loss.

Swap Agreements - The Funds may enter into swap agreements for the purpose of attempting to obtain, enhance, or preserve a particular desired return or spread at a lower cost to that Fund than if that Fund had invested directly in an instrument that yielded that desired return or spread. The value of swap agreements are equal to the Fund’s obligation (or rights) under swap agreements, which will generally be equal to the net amounts to be paid or received under the agreements based upon the relative values of the position held by each party to the agreements. A Fund’s obligation under a swap agreement will be accrued daily (offset against amounts owed to that Fund) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by designating liquid assets on that Fund’s books and records.

Credit default swaps (“CDSs”) are bilateral financial contracts that transfer the credit risk of a third party reference entity or a group of entities from one party to another. A buyer of a CDS receives credit protection or shed credit risk, whereas the seller of a CDS is selling credit protection or assuming credit risk. The seller typically receives a predetermined periodic payment from the other party in consideration for guaranteeing to make a specific payment to the buyer should the third party reference entity suffer a default event. If a default event occurs, the seller would be required to pay the par value of a referenced debt obligation to the counterparty in exchange for a default debt obligation. CDSs are marked-to-market daily based on the mean of bid and asked quotes as obtained from multiple dealers, and changes in value, as well as the accrual of the periodic coupon payments, are recorded as “unrealized gain or loss on credit default swap agreements”. Gains or losses on swap agreements are realized upon termination of the swap contract and the periodic coupon payments. In addition to being exposed to the credit risk of the

67

  NOTES TO FINANCIAL STATEMENTS (Continued)

underlying reference entity, CDSs are subject to counterparty risk, market risk and interest rate risk. CDSs utilized by the Funds may not perform as expected or in a manner similar to the high yield bond markets. A Fund will enter into swap agreements only with counterparties that the Advisor reasonably believes are capable of performing under the swap agreements.

Short Sales - Each Fund may make short sales as part of its overall portfolio management strategies or to offset a potential decline in value of a security. A short sale involves the sale of a security that is borrowed from a broker or other institution. A gain, limited to the price at which the Funds sold the security short, or a loss, unlimited in size, will be recognized upon closing a short sale. Short sales expose a Fund to the risk that it will be required to acquire, convert or exchange securities to replace the borrowed securities at a time when the securities sold short have appreciated in value, thus resulting in a loss to the Fund. A Fund making a short sale must segregate assets determined to be liquid by the Advisor in accordance with procedures established by the Board of Trustees or otherwise cover its position in a permissible manner.

NOTE 3. INVESTMENT ADVISORY FEES AND OTHER RELATED PARTY TRANSACTIONS
The Trust has entered into an investment advisory agreement with the Advisor on behalf of each Fund. The Advisor has overall supervisory responsibility for the general management and investment of each Fund and its securities portfolio, subject to the authority of the Board. The following table sets forth the annual investment advisory fee rates payable by each Fund to the Advisor pursuant to the investment advisory agreement, expressed as a percentage of the Fund’s average daily net assets, along with the investment advisory fees earned during the year ended October 31, 2007.

	Investment			Investment
	Advisory			Advisory
	Fee Rate			Fee*
Core Equity Fund		0.99	%		$212,406
Total Return Bond Fund		0.59	%		1,627,171
Tax-Exempt Bond Fund		0.59	%		881,785
Flexible Income Fund		0.75	%		24,505
Low Duration Bond Fund		0.45	%		10,670
Low Duration Tax-Exempt Bond Fund		0.45	%		2,053

* These figures represent the investment advisory fees charged, excluding the effects of any fee waivers/reimbursements.

The Advisor has contractually agreed to waive its investment advisory fees and/or make payments to limit certain Fund operating expenses, other than brokerage fees and commissions, borrowing costs (such as interest and dividend expenses on securities sold short, if any), taxes, indirect expenses of investing in other investment companies and extraordinary or non-recurring expenses, to the amount described below under “Expense Limitation”, at least until October 31, 2008. The expense limitations, expressed as a percentage of each Fund’s average daily net assets, along with the actual investment advisory fee waivers and expense reimbursements for the year ended October 31, 2007, are disclosed in the table below:

				Investment
				Advisory Fee
	Expense			Waivers/
	Limitation			Reimbursements
Core Equity Fund		1.19	%	$	120,628
Total Return Bond Fund		0.79	%		—
Tax-Exempt Bond Fund		0.79	%		—
Flexible Income Fund		0.95	%		21,750
Low Duration Bond Fund		0.65	%		23,833
Low Duration Tax-Exempt Bond Fund		0.65	%		27,631

68

  NOTES TO FINANCIAL STATEMENTS (Continued)

Each waiver or reimbursement by the Advisor is subject to repayment by a Fund within three fiscal years following the fiscal year in which that particular expense was incurred; provided that the Fund is able to make repayment without exceeding its expense limitation in effect at the time of the waiver or reimbursement.

Subject to policies established by the Board, the Advisor is responsible for each Fund’s portfolio decisions and the placing of each Fund’s portfolio transactions. The Advisor typically executes each Fund’s portfolio transactions through its affiliated broker-dealer, YieldQuest Securities, LLC, on an agency basis; while principal trades on behalf of the Funds are executed solely through independent broker-dealers. In placing portfolio transactions, the Advisor seeks the best qualitative execution for the Funds, taking into account such factors as price (including the applicable brokerage commission or dealer spread), the execution capability, financial responsibility, responsiveness of the broker-dealer, clearance procedures, wire service quotations, statistical and other research services provided by the broker or dealer to the Funds and the Advisor. The Advisor generally seeks favorable prices and commission rates that are reasonable in relation to the benefits received. Under the Investment Company Act of 1940, persons affiliated with an affiliate of the Advisor (such as YieldQuest Securities, LLC) are prohibited from dealing with the Funds as a principal in the purchase and sale of securities. Therefore, YieldQuest Securities, LLC will not serve as dealer in connection with the Fund’s over-the-counter transactions. However, YieldQuest Securities, LLC may serve as broker in the Funds’ over-the-counter transactions conducted on an agency basis and may receive brokerage commissions in connection with such transactions. Such transactions will be executed on a fully disclosed basis through its clearing firm. For the period ended October 31, 2007, YieldQuest Securities, LLC had received brokerage commissions of $119,560, $838,362, $368,999, $25,521, $11,315, and $1,459, respectively, for the Core Equity Fund, Total Return Bond Fund, Flexible Income Fund, Low Duration Bond Fund and the Low Duration Tax-Exempt Bond Fund. The total value of transactions generating brokerage commissions were $194,977,962, $613,909,715, $347,194,055, $16,667,502, $6,006,863, and $1,746,069, respectively, for the Core Equity Fund, Total Return Bond Fund, Tax- Exempt Bond Fund, Flexible Income Fund, Low Duration Bond Fund and the Low Duration Tax-Exempt Bond Fund.

A trustee and certain officers of the Trust are also officers of the Advisor and its affiliates.

Beginning April 13, 2007, pursuant to a Master Services Agreement (“agreement”), Citi Fund Services Ohio, Inc. (formerly BISYS Fund Services Ohio, Inc.) (“Citi”) provides administration, accounting and transfer agency services to the Funds. Under the terms of the agreement, Citi is paid an annual fee, computed daily and payable monthly based on a percentage of average daily net assets, subject to certain minimums and certain transaction fees. Prior to April 13, 2007, Gemini Fund Services, LLC served the Funds in similar capacities.

Contingencies and Commitments - In the normal course of business, the Funds enter into contracts that contain various representations and warranties and provide general indemnifications. The Fund’s maximum exposure under these arrangements is dependent on future claims against the Funds and is presently unknown. However, based on experience, the Funds consider the risk of loss from such potential claims to be remote.

NOTE 4. INVESTMENT TRANSACTIONS
The cost of investment purchases and the proceeds from the sale of securities (excluding securities maturing less than one year from acquisition), for the period ended October 31, 2007 were as follows:

	Purchases		Sales
Core Equity Fund	$	136,626,729	$	119,454,701
Total Return Bond Fund		834,348,546		569,430,969
Tax-Exempt Bond Fund		351,493,096		215,565,023
Flexible Income Fund		24,915,433		5,778,761
Low Duration Bond Fund		11,862,154		2,344,741
Low Duration Tax-Exempt Bond Fund		2,190,088		290,687

NOTE 5. REDEMPTION FEES
Prior to June 18, 2007, each Fund imposed a 2% redemption fee for any redemptions occurring within 90 days of purchase. Such fees amounted to $963, $12,937 and $11,238, respectively, for the Core Equity Fund, the Total Return Bond Fund, and the Tax-Exempt Bond Fund for the year ended October 31, 2007.

69

  NOTES TO FINANCIAL STATEMENTS (Continued)

NOTE 6. RESTRICTED SECURITIES
Restricted securities are restricted as to resale and may have been “fair” valued in good faith by the Advisor pursuant to the Trust’s valuation procedures. The appropriate economic, financial and other pertinent information available are taken into consideration, but because of the inherent uncertainty of valuation, these values may differ significantly from the values that would have been used had a ready market for these securities existed. These differences could be material. At October 31, 2007, investments in restricted securities were as follows:

	Acquisition						Value		% of
Security Description	Date		Cost		Value		Per Unit		Net Assets
Total Return Bond Fund
New South Wales Treasury Corp.		9/19/06	$	3,424,372	$	3,936,764	$	114.96		1.20	%
United Air Lines, Inc.		6/20/07		1,014,558		1,011,263		99.67		0.31	%
Tax-Exempt Bond Fund
New South Wales Treasury Corp.		9/19/06		88,296		104,055		117.85		0.05	%
Flexible Income Fund
United Air Lines, Inc.		7/31/07		39,850		40,050		100.50		0.27	%
Low Duration Bond Fund
United Air Lines, Inc.		8/31/07		34,825		35,044		100.63		0.43	%
UnitedHealth Group, Inc.		8/9/07		99,791		100,182		100.39		1.22	%

NOTE 7. DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF CAPITAL
The tax components of dividends paid during the period ended October 31, 2007 were as follows:

	Ordinary		Tax-Exempt		Long-Term
	Income		Income		Capital Gains		Total
Core Equity Fund		$269,413		$—		$—		$269,413
Total Return Fund		13,787,132		—		—		13,787,132
Tax-Exempt Bond Fund		631,692		5,140,901		—		5,772,593
Flexible Income Fund		171,057		—		—		171,057
Low Duration Bond Fund		110,675		—		—		110,675
Low Duration Tax-Exempt Bond Fund		1,688		13,888		—		15,576

The tax components of dividends paid during the period ended October 31, 2006 were as follows:

	Ordinary		Tax-Exempt		Long-Term
	Income		Income		Capital Gains		Total
Core Equity Fund		$6,859		$—		$—		$6,859
Total Return Fund		2,891,848		—		—		2,891,848
Tax-Exempt Bond Fund		144,791		1,131,005		—		1,275,796

As of each of the fund’s tax year-end, the components of distributable earnings on a tax basis were as follows:

	Capital Loss			Undistributed		Undistributed		Unrealized			Other
	Carry			Ordinary		Tax-Exempt		Appreciation			Accumulated
	Forwards			Income		Income		(Depreciation)			Gains (Losses)			Total
Core Equity Fund		$(25,022	)		$479,767		$—		$3,595,342			$(98,825	)		$3,951,262
Total Return Fund		(14,289,967	)		869,605		—		(2,092,750	)		(2,274,889	)		(17,788,001	)
Tax-Exempt Bond Fund		(4,510,319	)		—		306,930		(2,157,565	)		(231,761	)		(6,592,715	)
Flexible Income Fund		(64,786	)		68,808		—		138,297			(84,724	)		57,595
Low Duration Bond Fund		(137,562	)		15,099		—		4,760			(17,095	)		(134,798	)
Low Duration Tax-Exempt Bond Fund		(18,272	)		—		668		11,350			—			(6,254	)

70

  NOTES TO FINANCIAL STATEMENTS (Continued)

The difference between book basis unrealized appreciation and depreciation is attributable primarily to tax deferral of losses on wash sales and on investments in Passive Foreign Investment Companies, swaps, futures, options and forward currency contracts.

Permanent book and tax differences resulted in reclassifications for the period ended October 31, 2007 as follows:

				Increase (Decrease)
	Increase			Undistributed			Increase (Decrease)
	(Decrease)			Net Investment			Accumulated Net
	Paid in Capital			Income (Loss)			Realized Gain (Loss)
Core Equity Fund		$—			$15,714			$(15,714	)
Total Return Fund		270			(1,805,539	)		1,805,269
Tax-Exempt Bond Fund		(3,200	)		124,271			(121,071	)
Flexible Income Fund		—			26,798			(26,798	)
Low Duration Bond Fund		—			(7,900	)		7,900
Low Duration Tax-Exempt Bond Fund		—			—			—

These reclassifications, related to the differing treatment of foreign currency gains, have no effect on net assets and net asset value per share.

At October 31, 2007, the cost, gross unrealized appreciation and gross unrealized depreciation on securities, for federal income tax purposes, were as follows:

								Net Tax
			Tax					Unrealized
			Unrealized		Tax Unrealized			Appreciation
	Tax Cost		Appreciation		(Depreciation)			(Depreciation)
Core Equity Fund		$27,688,000		$3,720,133		$(124,791	)		$3,595,342
Total Return Fund		348,747,652		5,630,306		(7,723,056	)		(2,092,750	)
Tax-Exempt Bond Fund		224,946,557		1,133,993		(3,291,558	)		(2,157,565	)
Flexible Income Fund		14,521,525		267,604		(129,307	)		138,297
Low Duration Bond Fund		8,045,646		65,366		(60,606	)		4,760
Low Duration Tax-Exempt Bond Fund		1,290,444		17,222		(5,872	)		11,350

As October 31, 2007, the following Funds had net capital loss carryforwards for federal income tax purposes, which will expire in the following years:

	2014		2015
Core Equity Fund		$25,022		$—
Total Return Fund		200,854		14,089,113
Tax-Exempt Bond Fund		303,684		4,206,635
Flexible Income Fund		—		64,786
Low Duration Bond Fund		—		137,562
Low Duration Tax-Exempt Bond Fund		—		18,272

71

 FINANCIAL HIGHLIGHTS

The table sets forth financial data for one share of beneficial interest outstanding throughout the entire period.

	YieldQuest						YieldQuest						YieldQuest
	Core Equity Fund						Total Return Bond Fund						Tax-Exempt Bond Fund
	For the year ended 10/31/2007			For the year ended 10/31/2006(a)			For the year ended 10/31/2007			For the year ended 10/31/2006(a)			For the year ended 10/31/2007			For the year ended 10/31/2006(a)
Net Asset Value, beginning of year	$	11.36		$	10.00		$	10.51		$	10.00		$	10.53		$	10.00
Change in net assets from operations:
Net investment income		0.28			0.13			0.54			0.41			0.40			0.31
Net realized and unrealized gains
(losses) on investments(d)		1.41			1.29			(0.62	)		0.51			(0.44	)		0.53
Total from investment activities		1.69			1.42			(0.08	)		0.92			(0.04	)		0.84
Distributions:
Net investment income		(0.16	)		(0.06	)		(0.50	)		(0.41	)		(0.40	)		(0.31	)
Net realized gains from investments		—			—	(c)		—			—	(c)		—			—	(c)
Total Distributions		(0.16	)		(0.06	)		(0.50	)		(0.41	)		(0.40	)		(0.31	)
Paid-in capital from redemption fees		—	(c)		—	(c)		—	(c)		—	(c)		—	(c)		—	(c)
Net Asset Value, end of year	$	12.89		$	11.36		$	9.93		$	10.51		$	10.09		$	10.53
Net assets at end of year (000’s)	$	25,370		$	18,782		$	328,496		$	138,239		$	191,007		$	86,199
Total return(e), (f)		14.98	%		14.24	%		(0.86	)%		9.31	%		(0.46	)%		8.51	%
Ratios/Supplemental Data:
Ratios of expenses to average net assets:
Before expense waivers/reimbursements		1.80	%		2.85	%		0.83	%		0.94	%		0.81	%		1.09	%
After expense waivers/reimbursements		1.24	%		1.19	%		0.83	%		0.79	%		0.81	%		0.79	%
After expense waivers/reimbursements
excluding interest and dividend
expense for securities sold short, if any		1.19	%		1.19	%		0.79	%		0.79	%		0.79	%		0.79	%
Ratios of net investment income (loss) to average net assets:
Before expense waivers/reimbursements		1.90	%		(0.29	)%		5.53	%		4.70	%		3.91	%		3.25	%
After expense waivers/reimbursements		2.46	%		1.37	%		5.53	%		4.85	%		3.91	%		3.55	%
Portfolio turnover rate		568	%		455	%		220	%		137	%		152	%		72	%

(a)	Commenced operations on November 1, 2005.
(b)	Commenced operations on June 11, 2007.
(c)	Amount represents less than $0.01 per share.
(d)	Includes distributions of capital gains from underlying mutual funds.
(e)	Assumes reinvestment of all dividends and distributions, if any. Total return does not reflect the deductions of taxes that a shareholder would pay on distributions or on the redemption of shares.
(f)	Not annualized for periods less than one year.
(g)	Annualized.

72

 FINANCIAL HIGHLIGHTS (Continued)

	YieldQuest Flexible Income Fund			YieldQuest Low Duration Bond Fund			YieldQuest Low Duration Tax-Exempt Bond Fund
	For the period ended 10/31/2007(b)			For the period ended 10/31/2007(b)			For the period ended 10/31/2007(b)
Net Asset Value, beginning of period	$	10.00		$	10.00		$	10.00
Change in net assets from operations:
Net investment income		0.17			0.16			0.13
Net realized and unrealized gains
(losses) on investments(d)		(0.03	)		(0.09	)		0.02
Total from investment activities		0.14			0.07			0.15
Distributions:
Net investment income		(0.16	)		(0.15	)		(0.12	)
Net realized gains from investments		—			—			—
Total Distributions		(0.16	)		(0.15	)		(0.12	)
Paid-in capital from redemption fees		—			—			—
Net Asset Value, end of period	$	9.98		$	9.92		$	10.03
Net assets at end of period (000’s)	$	14,580		$	8,198		$	1,324
Total return(e), (f)		1.36%			0.66%			1.53%
Ratios/Supplemental Data:
Ratios of expenses to average net assets:
Before expense waivers/reimbursements		1.67%	(g)		1.74%	(g)		6.66%	(g)
After expense waivers/reimbursements		1.01%	(g)		0.74%	(g)		0.65%	(g)
After expense waivers/reimbursements
excluding interest and dividend
expense for securities sold short, if any		0.95%	(g)		0.65%	(g)		0.65%	(g)
Ratios of net investment income (loss) to average net assets:
Before expense waivers/reimbursements		5.04%	(g)		3.84%	(g)		(2.48)%	(g)
After expense waivers/reimbursements		5.70%	(g)		4.84%	(g)		3.53%	(g)
Portfolio turnover rate		79%			51%			30%

73

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of

YieldQuest Funds Trust

Atlanta, Georgia

We have audited the accompanying statements of assets and liabilities of Core Equity Fund, Total Return Bond Fund, Tax-Exempt Bond Fund, Flexible Income Fund, Low Duration Bond Fund, and Low Duration Tax-Exempt Bond Fund, each a series of shares of YieldQuest Funds Trust, (the “Funds”), including the schedules of investments, as of October 31, 2007, and the related statements of operations, for the year then ended, the statements of changes in net assets and the financial highlights, for each of the two years in the period then ended, for Core Equity Fund, Total Return Bond Fund, and Tax-Exempt Bond Fund, and the related statements of operations, the statements of changes in net assets, and the financial highlights, for the period June 11, 2007 to October 31, 2007 for Flexible Income Fund, Low Duration Bond Fund, and Low Duration Tax-Exempt Bond Fund. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2007, by correspondence with the custodian and brokers or by other procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds as of October 31, 2007, the results of their operations, the changes in their net assets, and the financial highlights for the periods indicated above, in conformity with accounting principles generally accepted in the United States of America.

TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania

December 27, 2007

74

 SUPPLEMENTAL INFORMATION (Unaudited)

Shareholders of the YieldQuest Funds will pay two types of expenses; transaction costs on early redemptions of a Fund’s shares and ongoing expenses, such as advisory fees, distribution and other fund expenses. The following examples are intended to help the shareholder understand the ongoing cost (in dollars) of investing in a Fund and to compare these costs with the ongoing costs in investing in other mutual funds. Please note, the expenses shown in the tables are meant to highlight ongoing costs only and do not reflect any transactional costs, such as redemption fees which may be assessed by mutual funds. This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period as indicated below.

Actual Expenses: The first table provides information about actual account values and actual expenses. The shareholder may use the information in this line, together with the amount invested, to estimate the expenses that would be paid over the period. Simply divide the account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number under the heading entitled “Expenses Paid” to estimate the expenses paid on the account during the period.

	Beginning Account Value 5/1/07	Ending Account Value 10/31/07	Expense Paid During Period† 5/1/07 - 10/31/07	Expense Ratio During Period† 5/1/07 - 10/31/07
Actual Expenses
YieldQuest Core Equity Fund	$1,000.00	$1,076.80	$6.75	1.29%
YieldQuest Total Return Bond Fund	1,000.00	958.20	4.29	0.87%
YieldQuest Tax-Exempt Bond Fund	1,000.00	969.40	4.12	0.83%

Excluding interest expense and dividends on short positions, your actual cost of investment in the Core Equity Fund, Total Return Bond Fund and Tax-Exempt Bond Fund would be $6.23, $3.90, and $3.92, respectively.

	Beginning Account Value 6/11/07	Ending Account Value 10/31/07	Expense Paid During Period† 6/11/07 - 10/31/07	Expense Ratio During Period† 6/11/07 - 10/31/07
Actual Expenses
YieldQuest Flexible Income Fund*	$1,000.00	$1,013.60	$3.98	1.01%
YieldQuest Low Duration Bond Fund*	1,000.00	1,006.60	2.91	0.74%
YieldQuest Low Duration     Tax-Exempt Bond Fund*	1,000.00	1,015.30	2.57	0.65%

Excluding interest expense and dividends on short positions, your actual cost of investment in the Flexible Income Fund, Low Duration Bond Fund and Low Duration Tax-Exempt Bond Fund would be $3.75, $2.55, and $2.57, respectively.

^† Expenses are equal to the Fund’s annualized expense ratio, including interest expense and dividends on short positions if any, multiplied by the average account value over the period, multiplied by 184/365. If interest expense and dividends on short positions were excluded, the annualized expense ratios of the Core Equity Fund, Total Return Bond Fund, Tax-Exempt Bond Fund, Flexible Income Fund, Low Duration Bond Fund and Low Duration Tax-Exempt Bond Fund would have been 1.19%, 0.79%, 0.79%, 0.95%, 0.65% and 0.65%, respectively.

* Information shown reflects values using the expense ratios and rates of return for the period June 11, 2007 (date of commencement) to October 31, 2007.

75

  SUPPLEMENTAL INFORMATION (Unaudited) (Continued)

Hypothetical Example for Comparison Purposes: The second table below provides information about hypothetical account values and hypothetical expenses based on each Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses paid for the period. This information may be used to compare the ongoing costs of investing in a Fund and other mutual funds. To do so, a shareholder would compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other mutual funds.

	Beginning Account Value 5/1/07	Ending Account Value 10/31/07	Expense Paid During Period† 5/1/07 - 10/31/07	Expense Ratio During Period† 5/1/07 - 10/31/07
Hypothetical Expenses
YieldQuest Core Equity Fund	$1,000.00	$1,018.70	$6.56	1.29%
YieldQuest Total Return Bond Fund	1,000.00	1,020.82	4.43	0.87%
YieldQuest Tax-Exempt Bond Fund	1,000.00	1,021.02	4.23	0.83%

Excluding interest expense and dividends on short positions, your actual cost of investment in the Core Equity Fund, the Total Return Bond Fund and the Tax-Exempt Bond Fund would be $6.06, $4.02 and $4.02, respectively.

	Beginning Account Value 5/1/07	Ending Account Value 10/31/07	Expense Paid During Period† 5/1/07 - 10/31/07	Expense Ratio During Period† 5/1/07 - 10/31/07
Hypothetical Expenses
YieldQuest Flexible Income Fund*	$1,000.00	$1,020.11	$5.14	1.01%
YieldQuest Low Duration Bond Fund*	1,000.00	1,021.48	3.77	0.74%
YieldQuest Low Duration Tax-Exempt Bond Fund*	1,000.00	1,021.93	3.31	0.65%

Excluding interest expense and dividends on short positions, your actual cost of investment in the Flexible Income Fund, the Low Duration Bond Fund and the Low Duration Tax-Exempt Bond Fund would be $4.84, $3.31 and $3.31, respectively.

^† Expenses are equal to the Fund’s annualized expense ratio, including interest expense and dividends on short positions if any, multiplied by the average account value over the period, multiplied by 184/365. If interest expense and dividends on short positions were excluded, the annualized expense ratios of the Core Equity Fund, Total Return Bond Fund, Tax-Exempt Bond Fund, Flexible Income Fund, Low Duration Bond Fund and Low Duration Tax-Exempt Bond Fund would have been 1.19%, 0.79%, 0.79%, 0.95%, 0.65% and 0.65%, respectively.

* Information shown reflects values using the expense ratios for the period June 11, 2007 (date of commencement) to October 31, 2007.

76

  ADDITIONAL INFORMATION (Unaudited)

CONTROL OWNERSHIP (Unaudited)

A principal shareholder is any person who owns (either of record or beneficially) 5% or more of the outstanding shares of a Fund. A control person is one who owns, either directly or indirectly, more than 25% of the voting securities of a Fund or acknowledges the existence of such control. A controlling shareholder could control the outcome of any proposal submitted to the shareholders for approval. As of the fiscal year end, the following persons were controlling persons or principal shareholders:

	Core Equity Fund			Total Return Bond Fund			Tax-Exempt Bond Fund			Flexible Income Fund			Low Duration Bond Fund			Low Duration Tax-Exempt Bond Fund
Charles Schwab & Co., Inc.		78	%		67	%		71	%		76	%		86	%		49	%
Prudential Investment Management Services LLC		8	%		—			—			—			—			—
TD Ameritrade, Inc.		7	%		13	%		12	%		11	%		—			48	%
National Financial Services LLC		6	%		11	%		12	%		12	%		12	%		—
SEI Private Trust Co.		—			6	%		—			—			—			—
Jay K. Chitnis		6	%		—			—			—			—			—

77

  APPROVAL OF INVESTMENT ADVISORY AGREEMENT

At an in-person meeting of the Board of Trustees of YieldQuest Funds Trust (the “Trust”) held on June 18, 2007, the Trustees, including the Trustees who are not “interested persons” of the Trust (collectively, the “Independent Trustees”), considered the renewal of the Investment Advisory Agreement between the Trust, on behalf of each of the YieldQuest Funds, and YieldQuest Advisors, LLC (the “Advisor”). The Trustees noted that in renewing the Investment Advisory Agreement, they must consider and evaluate the following factors: (i) the investment performance of each Fund and the Advisor; (ii) the nature, extent and quality of the services provided by the Advisor to the Trust; (iii) the cost of the services provided, and the profits realized, by the Advisor and its affiliates from the relationship with the Trust; (iv) the extent to which economies of scale will be realized as the Funds grow; and (v) whether the fee levels reflect these economies of scale to the benefit of the Funds’ shareholders. The Trustees also considered that the Advisor has agreed to waive its advisory fee and to cap certain operating expenses of the Funds in order to maintain each Fund’s total expense ratio at the current level through the fiscal year ending October 31, 2008. Based on the factors considered by the Board in its reasonable business judgment, the Trustees, including the Independent Trustees, determined that each Fund’s advisory fee is reasonable in comparison to fees paid by other comparable funds and in absolute terms.

In advance of their meeting, the Trustees requested and received information of the type required by Section 15(c) of the Investment Company Act of 1940, including: (i) a memorandum from legal counsel setting forth the key factors customarily considered by a board in evaluating mutual fund advisory agreements, (ii) responses from the Advisor to a series of questions from legal counsel regarding, among other things, the Advisor’s services to the Funds, its profitability from managing the Funds and ideas for future growth for the Funds, (iii) a certification from the Advisor that it had adopted a compliance program that is reasonably designed to prevent violations of federal securities laws by the Funds, (iv) the Advisor’s Form ADV Parts I and II and accompanying schedules, (v) recent financial statements for the Advisor, (vi) a report on the brokerage commissions earned by YieldQuest Securities, LLC, an affiliate of the Advisor, from the Funds during the prior fiscal year; and (vii) confidential expense and performance comparison analysis comparing each Fund’s fees, expenses and performance to its Morningstar category peer group.

The Board considered the fees charged by the Advisor in relation to those charged by other mutual fund advisors. The Trustees noted that each Fund’s total expense ratio (after fee waiver and reimbursement by the Advisor) was lower than the average total expense ratio of its Morningstar category peer group. Having considered this comparative data, the Board concluded that the advisory fee charged to each Fund is reasonable.

The Board then gave careful consideration to the nature, extent and quality of the services provided by the Advisor. The Board reviewed the structure and ownership of the Advisor, noted the functions performed by various employees, the compliance monitoring performed by the Advisor, and the levels of insurance coverage maintained by the Trust and the Advisor. The Board reviewed the Advisor’s experience and the capabilities of its personnel, as well as the quality of the reports and other materials received from the Advisor. The Trustees noted that the performance of each the Total Return Bond Fund and Tax-Exempt Bond Fund during the year ended December 31, 2006 and through the end of May 2007 had been very good, and that the performance of the Core Equity Fund was good on a risk-adjusted basis. They also noted that these Funds had been in operation for less than two years, while the YieldQuest Flexible Income Fund, YieldQuest Low Duration Bond Fund and YieldQuest Low Duration Tax-Exempt Bond Fund had only recently commenced investment operations, and that the Advisor was entitled to additional time for its strategies to realize their full potential. The Board determined that the Advisor’s resources appeared sufficient, and specifically noted that the Advisor provides the services of Mr. Jay Chitnis, an experienced portfolio manager, to manage the Funds, as well as various administrative and support staff, including research analysts and traders, and a Chief Compliance Officer who oversees the Funds’ compliance program. Taking into account the personnel involved in servicing the Funds, as well as the materials and services described above, the Board expressed satisfaction with the quality of the services received from the Advisor.

Next, in considering the costs of the services to be provided and the profits to be realized by the Advisor, the Board reviewed a recent copy of the Advisor’s financial statements. The Board also reviewed materials previously provided to the Board that detailed expenses incurred by the Advisor in providing services to the Funds. The Board noted that the Advisor had waived its entire fee earned from the Core Equity Fund, as well as reimbursed additional expenses. They noted that the Advisor reimbursed expenses for the two Bond Funds, but still earned a reasonable profit from managing these Funds. They noted that the Advisor had not received any profits from managing the three new Funds

78

  APPROVAL OF INVESTMENT ADVISORY AGREEMENT (Continued)

which recently had commenced operations. The Trustees also considered that the Advisor does not receive any 12b-1 fees from the Funds, and it does not engage in soft dollar arrangements with respect to the Funds’ brokerage, although an affiliate of the Advisor receives brokerage commissions at a usual and customary rate.

Finally, the Board determined that, although each Fund’s assets were growing, it did not appear that the Advisor had yet began to realize any significant economies of scale from managing the Funds. Based on these factors, the Board determined in the exercise of their reasonable business judgment that the Investment Advisory Agreement was fair and reasonable, that the Advisor’s fees were reasonable in light of the services provided to the Trust and the benefits received by the Advisor, and that renewal of the Investment Advisory Agreement was in the best interests of each Fund and its shareholders.

79

  BOARD OF TRUSTEES & OFFICERS (Unaudited)

Board of Trustees & Officers
The Trust is governed by a Board of Trustees, which oversees the Funds’ operations. Officers are appointed by the Trustees and serve at the pleasure of the Board. The table below shows, for each Trustee and Officer, his or her name, address, and age, the position held with the Trust, the length of time served as Trustee and Officer of the Trust, the Trustee’s or Officer’s principal occupations during the last five years, the number of funds in the YieldQuest Funds Trust overseen by the Trustee or Officer, and other directorships held by the Trustee or Officer.

Name, Address*, (Date of Birth), Position with Fund Complex,** Term of Position with Trust	Principal Occupation During Past 5 Years and Other Trusteeships
Jay K. Chitnis, CFA*** Age 40 Trustee and President, Since 2005	Managing Director of the Advisor, since June 2004; Managing Director of YieldQuest Securities, LLC, a registered broker dealer and member FINRA, since September 2004; Managing Director of YieldQuest Investment Group, a division (firm within a firm) of Register & Akers Investments, Inc., since from June 2004, of McDonald Investments, from September, 2001 to June 2004; and of First Union Securities (Wachovia Securities), from 1998 to September 2001, all FINRA registered broker-dealers and members SIPC; Senior Vice President of CIBC/Oppenheimer Corp., from 1996 to 1998.
David Summers*** Age 39 Treasurer, Since 2005	Senior Vice President and Chief Compliance Officer of the Advisor, since June 2004; Senior Vice President and Chief Compliance Officer of YieldQuest Securities, LLC, September 2004 until October 2006; Senior Vice President and Chief Compliance Officer of YieldQuest Investment Group, a division (firm within a firm) of Register & Akers Investments, Inc., since June 2004; Vice President of YieldQuest Investment Group, a division of McDonald Investments, from September 2001 to June 2004; and Investment Associate at First Union Securities (Wachovia Securities), from 1998 to September 2001, all FINRA registered broker-dealers and members SIPC. Chief Compliance Officer of the YieldQuest Funds, October 2005 until March 2007.
Gary Schwartz*** Age 41 Chief Compliance Officer, Since 2007	Vice President of Compliance, Since 2006 Compliance Officer for YieldQuest Securities, LLC and YieldQuest Advisors, LLC, since 2005; Nasdaq/OTC Trader, Riverstar Trading, 2002 through 2005; Regional Manager, Atlanta Branch Manager and Registered Options Principal for Protrader Securities, an Instinet Company, from 1998 through 2002.
Jerome Davies*** Age 37 Assistant Treasurer, Since 2007	Associate Vice President and Controller of the Advisor and YieldQuest Securities, LLC, since December 2006; Vice President Finance, Merrill Lynch Insurance Group Inc., Treasurer of Roszel Advisors, LLC and Treasurer and Chief Financial Officer of MLIG Variable Insurance Trust, from May 2002 to July 2006.

*	The address for each Trustee and officer is 3280 Peachtree Road, Suite 2600, Atlanta, Georgia 30305
**	Fund Complex refers to YieldQuest Funds Trust. The Fund Complex currently consists of six series.
***	Messrs. Chitnis, Summers, Schwartz and Davies are deemed to be “interested persons” of the Trust because they are officers of the Advisor.

Name, Address*, (Date of Birth), Position with Fund Complex,** Term of Position with Trust	Principal Occupation During Past 5 Years and Other Trusteeships
Denise M. Buchanan Age 45 Independent Trustee, Since 2005	Chief Compliance Officer of CapFinancial Partners, LLC (doing business as CAPTRUST Financial Advisors), a federally registered investment adviser and broker-dealer and member of FINRA/SIPC since 2007 and Director of Compliance from 2003 until 2007; President of Broker/Dealer Sales & Consulting, Inc., a consulting group specializing in compliance guidance for broker-dealers and investment advisers, since 1996; former Chief Compliance Officer of Hatteras Investment Partners, LLC and its affiliates, and the Hatteras Funds (investment companies registered under the 1940 Act), from 2003 until December 2007.
Gary D. Campbell, CFA® Age 55 Independent Trustee, Since 2005	President of Presbyterian Church in America, Retirement & Benefits, 2006 to present; President and Chief Investment Officer of Kennedy Capital Management, Inc., an SEC-registered investment advisor based in St. Louis, Missouri, 2001 to 2005; Executive Vice President and Chief Investment Officer, Commerce Bancshares, Inc./The Commerce Trust Company, an asset management, trust, private banking and other financial advisory services firm with over $10 billion in assets under management; Senior Vice President/Director of Institutional Portfolio Management, Wachovia (First Union Corp.), 1985 to 1990.
Craig Ruff, Ph.D, CFA® Age 47 Independent Trustee, Since 2005	Clinical Associate Professor of Finance at Georgia State University since August 2003 and Assistant Dean, Executive Education since August 2007. Formerly a Vice President in the Educational Products department at the Association for Investment Management and Research (AIMR, now known as the CFA Institute) and Associate Editor of the Financial Analysts Journal until July 2003. Craig has also worked in the areas of equity valuation and quantitative portfolio analysis for Atlanta Capital Management, an institutional money management firm. Prior to joining Georgia State, Craig was a Senior Economist at the Federal Home Loan Bank of Atlanta.

*	The address for each Trustee is 3280 Peachtree Road, Suite 2600, Atlanta, Georgia 30305
**	Fund Complex refers to YieldQuest Funds Trust. The Fund Complex currently consists of six series.

The Trust’s Statement of Additional Information contains additional information about the Trustees and Officers and is available without charge, upon request, by calling 1-877-497-3634.

Each Trustee will serve an indefinite term until his successor, if any, is duly elected and qualified. Officers of the Trust are elected annually.

80

Proxy Voting Policy:   Information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 as well as a description of the policies and procedures that the Funds use to determine how to vote proxies will be available without charge, upon request, by calling 1-877-497-3634 or by referring to the Securities and Exchange Commission’s ("SEC") website at http://www.sec.gov.

Portfolio Holding Disclosure:   Each Fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Each Fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Roon in Washington, DC (1-800-SEC-0330). Each Fund makes the information on Form N-Q available to shareholders without charge, upon request, by calling 1-877-497-3634.

Item 2. Code of Ethics.

(a)	As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.
(b)	For purposes of this item, “code of ethics” means written standards that are reasonably designed to deter wrongdoing and to promote:
	(1)	Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
	(2)	Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant;
	(3)	Compliance with applicable governmental laws, rules, and regulations;
	(4)	The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and
	(5)	Accountability for adherence to the code.
(c)	Amendments: During the period covered by the report, there have not been any amendments to the provisions of the code of ethics.
(d)	Waivers: During the period covered by the report, the registrant has not granted any express or implicit waivers from the provisions of the code of ethics.

Item 3.	Audit Committee Financial Expert.
3(a) (1)	The registrant’s board of directors has determined that the registrant has at least one audit committee financial expert serving on its audit committee.
3(a) (2)	The audit committee financial expert is Craig Ruff, who is “independent” for purposes of this Item 3 of Form N-CSR.
Item 4.	Principal Accountant Fees and Services.

(a)	Audit Fees
		Registrant		Advisor
	FY 10/31/06	$	28,500.00	$	0.00
	FY 10/31/07	$	56,400.00	$	0.00
(b)	Audit-Related Fees
		Registrant		Advisor
	FYE 10/31/06	$	0.00	$	0.00
	FYE 10/31/07	$	0.00	$	0.00
(c)	Tax Fees
		Registrant		Advisor
	FYE 10/31/06	$	7,500.00	$	0.00
	FYE 10/31/07	$	15,600.00	$	0.00

Preparation of Federal & State income tax returns, assistance with calculation of required income, capital gain and excise distributions and preparation of Federal excise tax returns.

(d)	All Other Fees
		Registrant		Advisor
	FYE 10/31/06	$	0.00	$	0.00
	FYE 10/31/07	$	0.00	$	0.00

(e)	(1)	Audit Committee’s Pre-Approval Policies
		The registrant’s Audit Committee is required to pre-approve all audit services and, when appropriate, any non-audit services (including audit-related, tax and all other services) to the registrant. The registrant’s Audit Committee also is required to pre-approve, when appropriate, any non-audit services (including audit-related, tax and all other services) to its adviser, or any entity controlling, controlled by or under common control with the adviser that provides ongoing services to the registrant, to the extent that the services may be determined to have an impact on the operations or financial reporting of the registrant. Services are reviewed on an engagement by engagement basis by the Audit Committee.
	(2)	Percentages of Services Approved by the Audit Committee

	Registrant		Advisor
Audit-Related Fees:	0.00	%	0.00	%
Tax Fees:	0.00	%	0.00	%
All Other Fees:	0.00	%	0.00	%

(f) During the audit of registrant’s financial statements for the most recent fiscal year, less than 50 percent of the hours expended on the principal accountant’s engagement were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees.

(g) The aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant:

	Registrant		Advisor
FYE 10/31/2006	$	0.00	$	0.00
FYE 10/31/2007	$	0.00	$	0.00

(h) The registrant’s audit committee has considered whether the provision of non-audit services to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant, that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant’s independence

Item 5.	Audit Committee of Listed Registrants.
Not applicable.
Item 6.	Schedule of Investments.
Not applicable.
Item 7.	Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8.	Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9.	Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10.	Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11.	Controls and Procedures.

(a)	Based on an evaluation of the registrant’s disclosure controls and procedures as of October 31, 2007, the disclosure controls and procedures are reasonably designed to ensure that the information required in filings on Forms N-CSR is recorded, processed, summarized, and reported on a timely basis.
(b)	There were no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12.	Exhibits.
	(a)(1)  The  code of ethics that is the subject of the disclosure required by Item 2 is attached hereto.
	(a)(2)  Certifications pursuant to Rule 30a-2(a) are attached hereto.
	(a)(3)  Not applicable.
	(b)  Certifications pursuant to Rule 30a-2(b) are furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant)		YieldQuest Funds Trust
By (Signature and Title)*			/s/Jay K. Chitnis
				Jay K. Chitnis, Presdient
Date	1/9/08

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title)*		/s/Jay K. Chitnis
			Jay K. Chitnis, President
Date	1/9/08
By (Signature and Title)*		/s/David Summers
			David Summers, Treasurer
Date	1/9/08

* Print the name and title of each signing officer under his or her signature.