-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pw5+5kSBWyL5BEgXvvG8Wf8Fju5tpsuKRKJXKBj8BL+ag/vI6xjR56HGVqwtkHAQ QFd09vd+DygqFKw6zQhN9Q== 0000950147-02-000803.txt : 20020625 0000950147-02-000803.hdr.sgml : 20020625 20020625123005 ACCESSION NUMBER: 0000950147-02-000803 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20020430 FILED AS OF DATE: 20020625 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ING INTERNATIONAL FUND INC CENTRAL INDEX KEY: 0000915643 IRS NUMBER: 223278095 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-08172 FILM NUMBER: 02686249 BUSINESS ADDRESS: STREET 1: ING INTERNATIONAL FUND, INC STREET 2: 7337 E. DOUBLETREE RANCH ROAD CITY: SCOTTSDALE STATE: AZ ZIP: 85258 BUSINESS PHONE: 4804773000 FORMER COMPANY: FORMER CONFORMED NAME: PILGRIM INTERNATIONAL FUND INC DATE OF NAME CHANGE: 20000830 FORMER COMPANY: FORMER CONFORMED NAME: LEXINGTON INTERNATIONAL FUND INC DATE OF NAME CHANGE: 19931201 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ING RUSSIA FUND INC CENTRAL INDEX KEY: 0001011179 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07587 FILM NUMBER: 02686247 BUSINESS ADDRESS: STREET 1: ING PILGRIM FUNDS STREET 2: 7337 E. DOUBLETREE RANCH ROAD CITY: SCOTTSDALE STATE: AZ ZIP: 85258 BUSINESS PHONE: 800-992-0180 MAIL ADDRESS: STREET 1: ING PILGRIM FUNDS STREET 2: 7337 E. DOUBLETREE RANCH ROAD CITY: SCOTTSDALE STATE: AZ ZIP: 85258 FORMER COMPANY: FORMER CONFORMED NAME: PILGRIM RUSSIA FUND DATE OF NAME CHANGE: 20010312 FORMER COMPANY: FORMER CONFORMED NAME: PILGRIM RUSSIA FUND INC DATE OF NAME CHANGE: 20010412 FORMER COMPANY: FORMER CONFORMED NAME: PILGRIM TROIKA DIALOG RUSSIA FUND INC DATE OF NAME CHANGE: 20000906 FORMER COMPANY: FORMER CONFORMED NAME: LEXINGTON TROIKA DIALOG RUSSIA FUND INC DATE OF NAME CHANGE: 19960326 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ING ADVISORY FUNDS INC CENTRAL INDEX KEY: 0000944689 IRS NUMBER: 954532342 STATE OF INCORPORATION: MD FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-09040 FILM NUMBER: 02686248 BUSINESS ADDRESS: STREET 1: 7337 E. DOUBLETREE RANCH ROAD STREET 2: . CITY: SCOTTSDALE STATE: AZ ZIP: 85258-2034 BUSINESS PHONE: 480-477-3000 MAIL ADDRESS: STREET 1: 7337 E. DOUBLETREE RANCH ROAD STREET 2: . CITY: SCOTTSDALE STATE: AZ ZIP: 85258-2034 FORMER COMPANY: FORMER CONFORMED NAME: PILGRIM ADVISORY FUNDS INC DATE OF NAME CHANGE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ING MAYFLOWER TRUST CENTRAL INDEX KEY: 0000911294 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07978 FILM NUMBER: 02686250 BUSINESS ADDRESS: STREET 1: ING PILGRIM FUNDS STREET 2: 7337 E. DOUBLETREE RANCH ROAD CITY: SCOTTSDALE STATE: AZ ZIP: 85258 BUSINESS PHONE: 800-992-0180 MAIL ADDRESS: STREET 1: ING PILGRIM FUNDS STREET 2: 7337 E. DOUBLETREE RANCH ROAD CITY: SCOTTSDALE STATE: AZ ZIP: 85258 FORMER COMPANY: FORMER CONFORMED NAME: NORTHSTAR TRUST DATE OF NAME CHANGE: 19981209 FORMER COMPANY: FORMER CONFORMED NAME: PILGRIM MAYFLOWER TRUST DATE OF NAME CHANGE: 19991029 FORMER COMPANY: FORMER CONFORMED NAME: NORTHSTAR ADVANTAGE TRUST DATE OF NAME CHANGE: 19950620 FORMER COMPANY: FORMER CONFORMED NAME: NWNL NORTHSTAR SERIES TRUST DATE OF NAME CHANGE: 19931108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ING MUTUAL FUNDS CENTRAL INDEX KEY: 0000895430 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-07428 FILM NUMBER: 02686251 BUSINESS ADDRESS: STREET 1: 7337 E DOUBLETREE RANCH ROAD STREET 2:   CITY: SCOTTSDALE STATE: AZ ZIP: 85258 BUSINESS PHONE: 1-800-992-0180 MAIL ADDRESS: STREET 1: 7337 E DOUBLETREE RANCH ROAD STREET 2:   CITY: SCOTTSDALE STATE: AZ ZIP: 85258 FORMER COMPANY: FORMER CONFORMED NAME: PILGRIM MUTUAL FUNDS DATE OF NAME CHANGE: 19990526 FORMER COMPANY: FORMER CONFORMED NAME: NICHOLAS APPLEGATE MUTUAL FUNDS DATE OF NAME CHANGE: 19930328 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ING PRECIOUS METALS FUND INC CENTRAL INDEX KEY: 0000277512 IRS NUMBER: 132855309 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-02881 FILM NUMBER: 02686252 BUSINESS ADDRESS: STREET 1: ING PILGRIM FUNDS STREET 2: 7337 E. DOUBLETREE RANCH ROAD CITY: SCOTTSDALE STATE: AZ ZIP: 85258 BUSINESS PHONE: 800-992-0180 MAIL ADDRESS: STREET 1: ING PILGRIM FUNDS STREET 2: 7337 E. DOUBLETREE RANCH ROAD CITY: SCOTTSDALE STATE: AZ ZIP: 85258 FORMER COMPANY: FORMER CONFORMED NAME: PILGRIM GOLDFUND INC DATE OF NAME CHANGE: 20000828 FORMER COMPANY: FORMER CONFORMED NAME: PILGRIM GOLD FUND INC DATE OF NAME CHANGE: 20000913 FORMER COMPANY: FORMER CONFORMED NAME: PILGRIM PRECIOUS METALS FUND DATE OF NAME CHANGE: 20010312 FORMER COMPANY: FORMER CONFORMED NAME: PILGRIM PRECIOUS METALS FUND INC DATE OF NAME CHANGE: 20010412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ING FUNDS TRUST CENTRAL INDEX KEY: 0001066602 STATE OF INCORPORATION: DE FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-08895 FILM NUMBER: 02686253 BUSINESS ADDRESS: STREET 1: ING PILGRIM FUNDS STREET 2: 7337 E. DOUBLETREE RANCH ROAD CITY: SCOTTSDALE STATE: AZ ZIP: 85258 BUSINESS PHONE: 800-992-0180 MAIL ADDRESS: STREET 1: 7337 E. DOUBLETREE RANCH ROAD CITY: SCOTTSDALE STATE: AZ ZIP: 85258 FORMER COMPANY: FORMER CONFORMED NAME: ING FUNDS TRUST DATE OF NAME CHANGE: 19980721 FORMER COMPANY: FORMER CONFORMED NAME: PILGRIM FUNDS TRUST DATE OF NAME CHANGE: 20010312 N-30D 1 e-8642.txt SEMI-ANNUAL REPORT FOR THE PERIOD ENDED 4/30/02 SEMI-ANNUAL REPORT April 30, 2002 INTERNATIONAL EQUITY FUNDS ING Asia-Pacific Equity Fund CLASSES A, B, C, AND M ING Emerging Countries Fund ING European Equity Fund ING International Core Growth Fund ING International Fund ING International SmallCap Growth Fund ING International Value Fund ING Precious Metals Fund ING Russia Fund GLOBAL EQUITY FUNDS ING Global Communications Fund ING Global Technology Fund ING Global Real Estate Fund ING Worldwide Growth Fund [PHOTO] [LION LOGO] ING FUNDS (formerly the Pilgrim Funds) TABLE OF CONTENTS - -------------------------------------------------------------------------------- President's Letter .......................... 1 Portfolio Managers' Reports: International Equity Funds ................ 2 Global Equity Funds ....................... 20 Index Descriptions .......................... 28 Statements of Assets and Liabilities ........ 30 Statements of Operations .................... 36 Statements of Changes in Net Assets ......... 39 Financial Highlights ........................ 43 Notes to Financial Statements ............... 56 Portfolios of Investments ................... 75 Shareholder Meetings ........................ 112 Director/Trustee and Officer Information .... 117 PRESIDENT'S LETTER - -------------------------------------------------------------------------------- Dear Shareholder: We are pleased to present the April 30, 2002 Semi-Annual Report for the ING Funds (formerly, the Pilgrim Funds). There are thirteen International Funds included in this Semi-Annual Report. There have been some very important changes that have occurred over the past several months regarding the ING Funds. I would like to take this opportunity to share them with you. As you may recall, in September 2000, ING Group acquired ReliaStar Financial Corp., the parent company of the adviser to the Pilgrim Funds. In December 2000, ING Group acquired the financial services of Aetna Inc., including Aeltus Investment Management, Inc., adviser to the Aetna Series Fund. ING Group has embarked upon a plan to integrate some of the operations of its various affiliated mutual fund groups. Effective March 1, 2002, ING Group merged the operations of the Aetna Series Fund into the Pilgrim Funds and renamed the entire fund complex, ING Funds. In addition to the changes noted above, individual product name changes have also occurred within the ING Funds family. These changes are part of ING Group's evolving corporate strategy to create one master brand. The ING Funds family now offers more than 100 open- and closed-end funds and variable products with a wide range of investment objectives and styles. At ING Funds we are dedicated to providing core investments for the serious investors. Our goal is to understand and anticipate your needs and objectives, and manage our products accordingly. We greatly appreciate your continued investment in the ING Funds. Sincerely, /s/ James M. Hennessy James M. Hennessy President ING Funds Services, LLC May 15, 2002 1 ING ASIA-PACIFIC EQUITY FUND Portfolio Managers' Report - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT TEAM: Richard Saler, Portfolio Manager; Philip Schwartz, C.F.A., Portfolio Manager; ING Investments, LLC. GOAL: The ING Asia-Pacific Equity Fund (the "Fund") seeks long term capital appreciation by investing at least 80% of its assets in equity securities listed on stock exchanges in countries in the Asia-Pacific region or issued by companies based in this region. MARKET OVERVIEW: The six-month period ended April 30, 2002 was dominated by the aftermath of the events of September 11th, 2001 and the global economic recovery. By the end of 2001 most investors had concluded that the lowest point in the global downturn had been reached. The outlook was far from clear, however. The U.S. had led the downturn and it seemed obvious that that economy, accounting for about 30% of global output, would lead the rebound. But how strong would this be? Consumer spending had not fallen very much and there was no reason why it should accelerate. The same could be said for housing related demand. In addition, slumping business investment, especially in technology, had put the economies on the downward track and was unlikely to rebound strongly since it would take both substantially improving corporate profits and/or a new impetus to invest. The first would take time. The second was hard to see, given the scale of the over-investment in technology that had taken place. There was little to get enthused over in the international economies, which were earlier in the cycle than the U.S. Almost as important to the Asia Pacific region as the U.S. is Japan. But Japan's problems, deflation and a paralyzed banking system, seemed as intractable as ever. Demand remained weak in most of Europe. By the end of April global conditions had continued to brighten, but the concerns expressed above persisted. Nonetheless the MSCI Far East ex-Japan Index soared 41.0% during the period under review. Because of the nature of many of the goods produced in these economies, their markets tend to be strong in the early days of global recovery. By contrast the more general index of international stocks, MSCI EAFE, rose just 5.7% in dollar terms. PERFORMANCE: For the six-month period ended April 30, 2002, the Fund's Class A shares, excluding sales charges, returned 28.92% compared to the MSCI Far East ex-Japan Index which returned 41.02%. PORTFOLIO SPECIFICS: The portfolio has had low turnover during the six-month period. The vast majority of companies in the Fund are prominent in their industries and were well placed to take advantage of the benefits of early global recovery. The biggest factors affecting performance during the period according to our analysis, was our overweight in the telecommunications sector. This was done at the expense of the technology sector. The technology sector as a whole performed much better than the telecommunications sector. In addition the technology stocks that we did select were disappointing. Given the low turnover, the changes in sector and country weights were mostly small and driven by market movements. Much of the turnover that did take place was the result of trimming holdings in Korea and Taiwan as their prices ran up. MARKET OUTLOOK: The global economy continues its fitful recovery led by the U.S. decelerating inventory reductions and defense related government spending are prominent elements in the acceleration of U.S. GDP growth to 5.6% annualized in the first quarter of 2002. There is evidence that this is causing improved export performance in the next two largest economies, Japan and Germany. Unfortunately business investment in the U.S. continues to fall, albeit at a declining rate. While the early cycle economies of the Fund may continue their run, it is hard to see strong sustained global growth taking hold until business investment improves. We retain our bet on telecommunications stocks. We believe that they will come into favor as global economies gather strength and domestic, as opposed to export-led, demand improves. For this reason we are also overweight consumer discretionary and energy. We are underweight technology after its good run. Our largest country holdings are 29% in Hong Kong/China, 20% in South Korea, 19% in Singapore and 14% in Taiwan. It should be noted, however, that we do not tend to make country specific selections. Stocks are chosen on their own merits, bearing in mind conditions relating to their industry and country of origin. 2 Portfolio Managers' Report ING ASIA-PACIFIC EQUITY FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 ------------------------------------------ SINCE INCEPTION 1 YEAR 5 YEAR 09/01/95 ------ ------ -------- Including Sales Charge: Class A (1) -7.50% -16.44% -12.70% Class B (2) -7.75% -16.43% -12.58% Class M(3) -6.02% -16.52% -12.85% Excluding Sales Charge: Class A -1.87% -15.45% -11.93% Class B -2.89% -16.10% -12.58% Class M -2.64% -15.91% -12.39% MSCI Far East Free ex-Japan Index 14.90% -8.42% -5.23% Based on a $10,000 initial investment, the table above illustrates the total return of ING Asia-Pacific Equity Fund against the MSCI Far East Free ex-Japan Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5% and 2%, respectively, for the 1 year and 5 year returns. (3) Reflects deduction of the maximum Class M sales charge of 3.50%. Effective November 1, 2001, Class A shares liquidated within 30 days of purchase are subject to a 2% redemption fee. PRINCIPAL RISK FACTOR(S): Increased price volatility and other risks that accompany an investment in foreign equities and in securities of issuers in a single region. Currency exchange rates, international, political and economic conditions and other risks affect foreign securities. See accompanying index descriptions on page 28. 3 ING EMERGING COUNTRIES FUND Portfolio Managers' Report - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT TEAM: Richard T. Saler, Philip A. Schwartz, Jan Wim Derks, Eric Anderson, Bratin Sanyal, ING Investments, LLC. GOAL: The ING Emerging Countries Fund (the "Fund") seeks to maximize long-term capital appreciation by investing primarily in equity securities of companies in at least three Emerging Market countries. MARKET OVERVIEW: Emerging markets rallied strongly over the six-month period ending April 30, 2002 in spite of the lackluster performance of developed markets over the same time period. Strong earnings growth prospects combined with a large valuation discount continue to attract new flows into the emerging market asset class. Over the period the IFC Emerging Market Composite Index rose 37.9% while the S&P 500 Index rose 2.3% and the NASDAQ Composite Index closed the period virtually flat. Emerging markets have now outperformed developed markets over the last three years by more than 25%. Asia was the best performing region within the emerging markets rising 50% driven by Korea and Taiwan, which rallied 75% and 53%, respectively. Asian markets are highly geared to a recovery in the global economy and are typically early cycle movers. As signals of an economic recovery began to appear late last year these markets began to perform strongly. In spite of the debilitating devaluation and default in Argentina in January, Latin America rose 29% over the period driven by Brazil and Mexico, which rose 41% and 32%, respectively. Argentina fell 39% over the period but its weight in the composite index is small and thus its overall impact was minimal. The performance of the Brazilian market finally de-coupled from the troubles in neighboring Argentina. The real economic impact on Brazil from the crisis is minimal and the market finally began to recognize that. The Mexican market was driven by the prospects for higher growth as a result of the recovery in the U.S. The EMEA (Europe, Middle East and Africa) markets also performed strongly led by Russia, which continues to benefit from higher oil prices, rising valuations off a very low level and improvements in corporate governance. The Russian market rose 80% over the period led by the energy sector. The South African market struggled late in 2001 and early this year as concerns over election volatility in neighboring Zimbabwe hurt confidence. The South African Rand weakened by more than 30% at one stage but has since recovered most of those losses. With the exception of Telecoms, emerging markets performed well across all sectors. Technology was the best performing sector up 59% over the period. Rising chip and DRAM prices led by expectations of industry consolidation and rising demand triggered a powerful rally in stocks such as Samsung Electronics and Taiwan Semiconductor, two index heavy weights. Materials (+40%), Consumer (+41%), Financials (+29%) and Energy (+29%) all contributed to the strong performance. PERFORMANCE: For the six-month period ended April 30, 2002, the Fund's Class A shares, excluding sales charges, provided a total return of 31.85% compared to the MSCI Emerging Market Free (EMF) Index, which returned 33.67% for the same period. PORTFOLIO SPECIFICS: Over the period we gradually reduced our exposure to non-emerging stocks from 12% to zero as the case for continued out performance of emerging markets relative to developed markets strengthened. Emerging markets tend to perform very well in the early stages of an economic cycle and therefore we positioned accordingly. Within emerging markets we remained overweight in Asia for most of the period, as it is the region most geared to the economic recovery. Korea performed very well and one of our top performers in the Korean market, Samsung Electronics, rose over 120% over the period. Telecom stocks across the asset class continued to disappoint and overweight positions in Korea Telecom and SK Telecom offset strong gains in the Korean Technology and consumer durable sectors. We moved from an underweight to overweight position in Latin America during the period as Mexico began to benefit from the U.S. economic recovery and as Brazil began to de-couple from the crisis in Argentina. Mexico continues to be a good performer and the convergence story with the U.S. continues to gather steam. While the large valuation discount with the U.S. has closed somewhat there is a long way to go. Brazil rallied strongly off of oversold levels and the currency strengthened. However, political risk leading up to the October presidential election has pressured the market more recently. We divested our only holding in Argentina late last year prior to the devaluation and remain on the sidelines for now. In EMEA, we continued to run an overweight position in Russia and we further increased our underweight position in South Africa. Russia continues to power ahead led by the oil stocks which have experienced a tremendous re-rating based on reduced country risk, improved corporate governance and an attractive outlook for production growth and oil prices. One of our largest bets in the Russian oil sector is Yukos, which rallied 163% over the period. South Africa struggled late last year as the currency weakened, which pressured inflation forcing rates higher early this year. With inflation peaking and interest rate expectations stabilizing domestic stocks once again look attractive. We recently increased our position in South African financials. MARKET OUTLOOK: With the global economic cycle turning decisively positive and with commodity prices finally beginning to lift off of depressed levels, we are very constructive on the emerging markets asset class. Given the positive global economic backdrop, we expect a strong earnings recovery in 2002 continuing into 2003. We also expect some multiple expansions as valuations remain at a deep discount to developed markets and that gap should narrow. Significant improvement in corporate governance is one of the variables that should drive valuation multiple convergences. Our strategy is to focus on countries where economic growth is rebounding and on companies with improving cash flows, solid balance sheets and attractive valuations. We are currently finding the best opportunities in Malaysia, Thailand, Indonesia, Brazil, Mexico, Russia, Hungary and Turkey. We remain cautious on South Africa after the recent rebound in the market and the Rand as well as Israel and the smaller markets in Latin America. 4 Portfolio Managers' Report ING EMERGING COUNTRIES FUND - --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 ----------------------------------------------------------------- SINCE INCEPTION SINCE INCEPTION OF CLASS A AND C OF CLASS B 1 YEAR 5 YEAR 11/28/94 05/31/95 ------ ------ -------- -------- Including Sales Charge: Class A (1) 3.64% -1.77% 3.60% -- Class B (2) 4.26% -1.46% -- 4.17% Class C (3) 8.18% -1.10% 3.57% -- Excluding Sales Charge: Class A 9.98% -0.59% 4.43% -- Class B 9.26% -1.09% -- 4.17% Class C 9.18% -1.10% 3.57% -- MSCI EMF Index 10.32% -5.14% -3.44%(4) -2.00%(5)
Based on a $10,000 initial investment, the table above illustrates the total return of ING Emerging Countries Fund against the MSCI EMF Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5% and 2%, respectively, for the 1 year and 5 year returns. (3) Reflects deduction of the Class C deferred sales charge of 1% for the 1 year return. (4) Since inception performance for the index is shown from 12/01/94. (5) Since inception performance for the index is shown from 06/01/95. PRINCIPAL RISK FACTOR(S): Sensitivity to currency exchange rates, international, political and economic conditions and other risks that affect foreign securities. Risks of foreign investing are generally intensified for investments in emerging markets. See accompanying index descriptions on page 28. 5 ING EUROPEAN EQUITY FUND Portfolio Managers' Report - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT TEAM: Managed by a multi-member Investment Committee led by Adrian van Tiggelen, ING Investment Management Advisors, B.V. GOAL: The ING European Equity Fund (the "Fund") seeks growth of capital through investment in a diversified portfolio of primarily European companies. MARKET OVERVIEW: European markets rose just over 5% during the six-month period ending April 30, 2002. The strong liquidity driven recovery, from very oversold levels after the attacks of September 11th, ended in November. European markets remained in a tight trading range for the next five months, neglecting strong economic data, especially from the U.S. Moreover, data in Europe also suggest the worst is over. The market showed a preference for value stocks. Not surprisingly in the context of a global economic recovery, cyclical sectors, like steel, auto's and capital goods, performed strongly. Surprisingly, defensive sectors like beverages and tobacco were among the best performing sectors. In these sectors, companies did not disappoint on earnings and were seen as safe havens in uncertain times. Growth stocks, especially in TMT (technology, media, telecommunications), were sold aggressively, as investors chose to focus on short-term problems, rather than long-term opportunities. PERFORMANCE: For the six-month period ended April 30, 2002, the Fund's Class A shares, excluding sales charges, provided a total return of 2.73% compared to the FT Europe Index which returned 5.08% for the same period. The Euro ended the period unchanged versus the dollar. PORTFOLIO SPECIFICS: A significant weighting in technology, media and telecom stocks, proved to be the greatest drag on performance. Examples of underperforming TMT stocks included Ericsson (-43%), Vivendi Universal (-32%), Vodafone (-30%) and Nokia (-23%). Because of the massive falls in TMT stocks, more and more value is starting to emerge in these sectors and we remain committed to our overweight position. At the start of the period we did increase our cyclical exposure by buying Lufthansa and Renault. The Fund could profit from this increased exposure as both companies rallied strongly. We added to our positions in certain oil stocks on the back of strong rises of crude oil and the defensive qualities of the sector if the increased political tensions in the Middle-East escalate. We funded these buys by reducing pharmaceuticals because of a row of ongoing negative company specific news. We also reduced our exposure to beverages by selling Danone and Heineken. These shares have performed very well and have relatively high valuations. Other defensive names in the Fund that performed very well are Roche (+32%) and Diageo (+33%). MARKET OUTLOOK: After the decline in equity prices and bond yields, the valuation of European equities has become more attractive, given the fact that the earnings-growth outlook for this year and next year is quite favorable. We expect only a subdued economic recovery in Europe, but this may be enough to support a nice earnings rebound from low levels. We have been surprised by the extremely negative sentiment on TMT, where investors are clearly giving up on the possibility of any recovery in the foreseeable future. Valuation support is emerging in the TMT sectors, but valuation alone is not a good timing indicator. We have to see some improvement in the news flow, before we increase our moderate overweight. Defensives (ex pharmaceuticals) are starting to look expensive. Financials and utilities still offer good value. Cyclicals have seen most of their out performance. On fundamentals, we can make a clear case to be positive on European equity markets. However, sentiment is very poor and confidence is not likely to return very fast. We still expect the European equity markets to end 2002 with a clear positive return, but in the short term, the going may remain rough. 6 Portfolio Managers' Report ING EUROPEAN EQUITY FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 ---------------------------- SINCE INCEPTION 1 YEAR 12/15/98 ------ -------- Including Sales Charge: Class A (1) -20.10% -6.27% Class B (2) -20.27% -6.10% Class C (3) -16.80% -5.40% Excluding Sales Charge: Class A -15.22% -4.62% Class B -16.07% -5.31% Class C -15.96% -5.40% FT Europe Index -13.85% -4.51%(4) Based on a $10,000 initial investment, the table above illustrates the total return of ING European Equity Fund against the FT Europe Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charge and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5% and 3%, respectively, for the 1 year and since inception returns. (3) Reflects deduction of the Class C deferred sales charge of 1% for the 1 year return. (4) Since inception performance for the index is shown from 12/01/98. PRINCIPAL RISK FACTOR(S): Price volatility and other risks that accompany an investment in equity securities of issuers in a single region. Currency exchange rates, international, political and economic conditions and other risks affect foreign securities. See accompanying index descriptions on page 28. 7 ING INTERNATIONAL CORE GROWTH FUND Portfolio Managers' Report - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT TEAM: Richard Saler, Portfolio Manager; Philip Schwartz, C.F.A., Portfolio Manager; ING Investments, LLC. GOAL: The ING International Core Growth Fund (the "Fund") seeks maximum long-term capital appreciation. Under normal circumstances the Fund invests at least 65% of its assets in the equity securities of companies located outside the U.S. The Fund may also invest up to 35% of its assets in securities of U.S. issuers, including investment-grade debt securities. MARKET OVERVIEW: The six-month period ended April 30, 2002 was dominated by the aftermath of the events of September 11th, 2001 and the global economic recovery. By the end of 2001 most investors had concluded that the lowest point in the global downturn had been reached. The outlook was far from clear, however. The U.S. had led the downturn and it seemed obvious that that economy, accounting for about 30% of global output, would lead the rebound. But how strong would this be? Consumer spending had not fallen very much and there was no reason why it should accelerate. The same could be said for housing related demand. In addition, slumping business investment, especially in technology, had put the economies on the downward track and was unlikely to rebound strongly since it would take both substantially improving corporate profits and/or a new impetus to invest. The first would take time. The second was hard to see, given the scale of the over-investment in technology that had taken place. There was little to get enthused over in the international economies, which were earlier in the cycle than the U.S. Japan's problems, deflation and a paralyzed banking system, seemed as intractable as ever. Demand remained weak in Europe ex the UK. In the UK, overall conditions were more favorable, with unemployment and interest rates at the lowest levels in a generation, a booming housing market and vibrant consumer demand. But the UK's economy was too small in global terms to make a difference. By the end of April global conditions had continued to brighten, but the concerns expressed above persisted. During the six-month period most markets have been moderately stronger. The MSCI EAFE Index rose 5.7% in dollar terms. Europe ex UK rose 5.7% while the UK rose 3.2%. The Japanese market only rose 0.8%, but this conceals late strength: it rose 7.0% in the first four months of 2002. The brightest spot has been emerging markets especially in Asia. Because of the nature of the goods produced in these economies, their markets tend to be strong in the early days of global recovery. Accordingly, as a whole, emerging markets were up 32.7% in the six months under review. PERFORMANCE: For the six-month period ended April 30, 2002, the Fund's class A shares, excluding sales charges, provided a total return of 5.96% compared to the MSCI EAFE Index, which returned 5.66%. PORTFOLIO SPECIFICS: Given the uncertainties described above, we framed our strategy so as to cover a wide spread of sectors with no large bets, notwithstanding our positive outlook, on balance, for the global economy. Instead we decided to be opportunistic in taking advantage of stocks, which appeared to offer good relative value according to our process. This would drive sector allocations and might result in a defensive or aggressive looking bias from time to time. This approach was successful in that the Fund outperformed its major benchmark, the MSCI EAFE Index. Our analysis indicates that we benefited by being underweight stocks in the worst performing sectors, telecommunications and technology, although we gave some of this back by being underweight the strong energy sector. At least during 2002, value was also added against the benchmark by the stocks that we picked compared to their sector peers. This was true among financial stocks and those in the telecommunications sector. MARKET OUTLOOK: The global economy continues its fitful recovery led by the U.S. decelerating inventory reductions and defense related government spending are prominent elements in the acceleration of U.S. GDP growth to 5.6% annualized in the first quarter of 2002. There is evidence that this is causing improved export performance in the next two largest economies, Japan and Germany. Unfortunately business investment in the U.S. continues to fall, albeit at a declining rate. Other than the early cycle economies of some emerging markets, especially in Asia, it is hard to see strong sustained global growth taking hold until business investment improves. In view of this we will maintain our strategy to avoid big bets on any particular economic outcome or backdrop, but to invest in companies from across the spectrum, which offer good relative value on a stock-by-stock basis. We are about 7% underweight in technology and telecommunications, favoring consumer stocks instead. 8 ING INTERNATIONAL Portfolio Managers' Report CORE GROWTH FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 ---------------------------------------- SINCE INCEPTION 1 YEAR 5 YEAR 02/28/97 ------ ------ -------- Including Sales Charge: Class A (1) -17.74% 5.32% 5.78% Class B (2) -17.72% 5.54% 6.14% Class C (3) -14.28% 5.84% 6.19% Excluding Sales Charge: Class A -12.70% 6.58% 6.99% Class B -13.39% 5.86% 6.29% Class C -13.41% 5.84% 6.19% MSCI EAFE Index -13.62% 1.62% 1.76%(4) Based on a $10,000 initial investment, the table above illustrates the total return of ING International Core Growth Fund against the MSCI EAFE Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5%, 2% and 1%, respectively, for the 1 year, 5 year and since inception returns. (3) Reflects deduction of the Class C deferred sales charge of 1% for the 1 year return. (4) Since inception performance for the index is shown from 03/01/97. Effective November 1, 2001, Class A shares liquidated within 30 days of purchase are subject to a 2% redemption fee. PRINCIPAL RISK FACTOR(S): Price volatility and other risks that accompany an investment in growth-oriented foreign equities. Currency exchange rates, international, political and economic conditions and other risks affect foreign securities. Risks of foreign investing are generally intensified for investments in emerging markets. See accompanying index descriptions on page 28. 9 ING INTERNATIONAL FUND Portfolio Managers' Report - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT TEAM: Richard Saler, Portfolio Manager; Philip Schwartz, C.F.A., Portfolio Manager; ING Investments, LLC. GOAL: The ING International Fund (the "Fund") seeks to maximize long-term growth of capital through investment in equity securities and equity equivalents of companies outside the U.S. The Fund may hold up to 35% of its assets in securities of U.S. issuers, including investment-grade debt securities. MARKET OVERVIEW: The six-month period to the end of April 2002 was dominated by the aftermath of the events of September 11th, 2001 and the global economic recovery. By the end of 2001 most investors had concluded that the lowest point in the global downturn had been reached. The outlook was far from clear, however. The U.S. had led the downturn and it seemed obvious that that economy, accounting for about 30% of global output, would lead the rebound. But how strong would this be? Consumer spending had not fallen very much and there was no reason why it should accelerate. The same could be said for housing related demand. In addition, slumping business investment, especially in technology, had put the economies on the downward track and was unlikely to rebound strongly since it would take both substantially improving corporate profits and/or a new impetus to invest. The first would take time. The second was hard to see, given the scale of the over-investment in technology that had taken place. There was little to get enthused over in the international economies, which were earlier in the cycle than the U.S. Japan's problems, deflation and a paralyzed banking system, seemed as intractable as ever. Demand remained weak in Europe ex the UK. In the UK, overall conditions were more favorable, with unemployment and interest rates at the lowest levels in a generation, a booming housing market and vibrant consumer demand. But the UK's economy was too small in global terms to make a difference. By the end of April global conditions had continued to brighten, but the concerns expressed above persisted. During the six-month period most markets have been moderately stronger. The MSCI EAFE Index rose 5.7% in dollar terms. Europe ex UK rose 5.7% while the UK rose 3.2%. The Japanese market only rose 0.8%, but this conceals late strength: it rose 7.0% in the first four months of 2002. The brightest spot has been emerging markets especially in Asia. Because of the nature of the goods produced in these economies, their markets tend to be strong in the early days of global recovery. Accordingly, as a whole, emerging markets were up 32.7% in the six months under review. PERFORMANCE: For the six-month period ended April 30, 2002, the Fund's Class A shares, excluding sales charges, provided a total return of 6.55% compared to the MSCI EAFE Index, which returned 5.66% for the same period. PORTFOLIO SPECIFICS: Given the uncertainties described above, we framed our strategy so as to cover a wide spread of sectors with no large bets, notwithstanding our positive outlook, on balance, for the global economy. Instead we decided to be opportunistic in taking advantage of stocks, which appeared to offer good relative value according to our process. This would drive sector allocations and might result in a defensive or aggressive looking bias from time to time. This approach was successful in that the Fund outperformed its major benchmark, the MSCI EAFE Index. Our analysis indicates that we benefited by being underweight stocks in the worst performing sectors, telecommunications and technology, although we gave some of this back by being underweight the strong energy sector. At least during 2002, more value was added against the benchmark by the stocks that we picked compared to their sector peers. This was true among financial stocks and those in the telecommunications sector. MARKET OUTLOOK: The global economy continues its fitful recovery led by the U.S. decelerating inventory reductions and defense related government spending are prominent elements in the acceleration of U.S. GDP growth to 5.6% annualized in the first quarter of 2002. There is evidence that this is causing improved export performance in the next two largest economies, Japan and Germany. Unfortunately business investment in the U.S. continues to fall, albeit at a declining rate. Other than the early cycle economies of some emerging markets, especially in Asia, it is hard to see strong sustained global growth taking hold until business investment improves. In view of this we will maintain our strategy to avoid big bets on any particular economic outcome or backdrop, but to invest in companies from across the spectrum, which offer good relative value on a stock-by-stock basis. We are about 7% underweight in technology and telecommunications, favoring consumer stocks instead. 10 Portfolio Managers' Report ING INTERNATIONAL FUND - --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 --------------------------------------------------------------------------------- SINCE INCEPTION SINCE INCEPTION SINCE INCEPTION OF CLASS A OF CLASS B OF CLASS C 1 YEAR 5 YEAR 01/03/94 08/22/00 09/15/00 ------ ------ -------- -------- -------- Including Sales Charge: Class A (1) -16.96% 4.50% 5.91% -- -- Class B (2) -17.01% -- -- -17.38% -- Class C (3) -13.52% -- -- -- -12.63% Excluding Sales Charge: Class A -11.86% 5.74% 6.66% -- -- Class B -12.64% -- -- -15.53% -- Class C -12.64% -- -- -- -12.63% MSCI EAFE Index -13.62% 1.62% 3.91%(4) -16.56%(5) -16.56%(5)
Based on a $10,000 initial investment, the table above illustrates the total return of ING International Fund against the MSCI EAFE Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5% and 4%, respectively, for the 1 year and since inception returns. (3) Reflects deduction of the Class C deferred sales charge of 1% for the 1 year return. (4) Since inception performance for the index is shown from 01/01/94. (5) Since inception performance for the index is shown from 09/01/00. Effective November 1, 2001, Class A shares liquidated within 30 days of purchase are subject to a 2% redemption fee. PRINCIPAL RISK FACTOR(S): In exchange for higher growth potential, investing in stocks of smaller companies may entail greater price volatility than those of larger companies. Price volatility and other risks accompany an investment in growth-oriented foreign equities. Currency exchange rates, international, political and economic conditions and other risks affect foreign securities. The risks of foreign investing are generally intensified for investing in emerging markets. See accompanying index descriptions on page 28. 11 ING INTERNATIONAL SMALLCAP GROWTH FUND Portfolio Managers' Report - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT TEAM: Randall S. Kahn, Portfolio Manager; Loretta J. Morris, Portfolio Manager; Catherine Somhegyi Nicholas, Chief Investment Officer, Nicholas-Applegate Capital Management. GOAL: The ING International Small Cap Growth Fund (the "Fund") seeks to maximize long-term capital appreciation through investments in small-capitalization, non-U.S. securities. MARKET OVERVIEW: Investors endured a number of extraordinary and unparalleled challenges during the six-month period ended April 30, 2002. Already reeling from economic weakness worldwide, the global stock market was rocked by the terrorist attacks of September 11, 2001. In the initial shock that followed, the already depressed major global indices bottomed out in late September, only to stage a powerful rally as investors rebuilt their shattered confidence and sentiment improved. In the wake of the attacks, coordinated action by the world's central bankers led to unprecedented stimulus in the form of interest-rate reductions and injections of liquidity into the markets. The stimulus began to have its desired effect late in 2001 as encouraging economic reports indicated that a recovery was indeed underway. Increasing evidence of a pick-up in economic growth as well as the support of low interest rates buoyed international markets during the first quarter of 2002. While developed markets in Europe and Japan posted modest gains, emerging markets did significantly better. Already skeptical of accounting practices in many countries, investors began to penalize those companies with the most aggressive methods of tallying profits. However, by the second half of the quarter, investor attention shifted towards a steady stream of positive economic news, as the memory of September 11 faded into the background. Later in the reporting period, escalating violence in the Middle East, worries over both the quality and quantity of corporate earnings and rising energy prices pressured equity prices in most developed economies. This decline came despite the International Monetary Fund's World Economic Outlook stating that economic recoveries are now under way in most countries, led by the United States. One notable exception was in Japan, where stocks surged on a combination of technical reforms (new regulations limiting short-selling, for example) and hints that its beleaguered economy might be bottoming. PERFORMANCE: For the six-month period ended April 30, 2002, the Fund's Class A Shares, excluding sales charges, provided a total return of 6.73% compared to the Salomon EPAC EMI (Europe, Pacific Australasia Composite Extended Market Index), which advanced 11.84% during the same period. PORTFOLIO SPECIFICS: The Fund's relative under-performance was primarily caused by poor stock selection and overweight holdings in the commercial/industrial services sector. Stock selection in the healthcare group -- particularly medical supply and biotechnology companies -- also proved negative. A significantly underweight position in consumer services stocks, as well as selection of specific companies, also dragged down relative returns. On the positive side, the Fund benefited from strong stock selection in the financial services, utilities and consumer non-durables sectors. Airlines stocks also surged, lifting the transportation sector in both the portfolio (up nearly 60%) and the benchmark (up more than 55%). By country, relative performance suffered due in part to a lack of holdings in South Korea, whose market advanced sharply as a result of global economic recovery driving demand for products such as automobiles, semiconductors and liquid crystal display (LCD) screens. Negative stock selection and underweight holdings in Australia -- whose stock market was among the world's strongest during the reporting period -- and Japan also hurt performance. Meanwhile, positive stock selection in Ireland, Canada, Italy and Spain helped the Fund generate positive absolute returns. Top-performing stocks for the reporting period included Nitto Denko of Japan, a supplier of industrial materials benefiting from a resurgence in that nation's economy; Anglo Irish Bank, which benefited from strong macroeconomic conditions and rising market share; and Japanese carmaker Mazda Corporation, which advanced as a many-year-long restructuring of dealer relationships and the introduction of attractive new car models began to be translated into accelerating earnings. MARKET OUTLOOK: Our outlook for international small-capitalization equities remains cautiously optimistic. Interest rates remain low. Better economic data from the U.S., Japan and many Eurozone nations continue to point to economic recovery, which should translate into an acceleration in corporate profits. We are also encouraged by investors' willingness to once again reward those companies that exceed earnings estimates. As investors regain confidence in the sustainability of the recoveries in economic and earnings growth, our style should come back into favor again as strong growth is translated into share price appreciation. However, concerns over accounting irregularities, earnings, rising energy prices and Middle East violence have dampened investor sentiment. Until a clear direction is established, the market's recent volatility may continue. As we look forward, we believe one of the most trying times in history for investors is behind us. We appreciate your patience and commend you for staying the course throughout this difficult period. We continue to work toward our mission of providing you with significant capital appreciation over the long term, and we are confident that your patience will be rewarded. 12 ING INTERNATIONAL SMALLCAP GROWTH FUND Portfolio Managers' Report - --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 ----------------------------------------------------------------- SINCE INCEPTION SINCE INCEPTION OF CLASS B OF CLASS A & C 1 YEAR 5 YEAR 5/31/95 08/31/94 ------ ------ ------- -------- Including Sales Charge: Class A (1) -18.60% 14.13% -- 11.79% Class B (2) -18.37% 14.63% 14.34% -- Class C (3) -14.95% 14.81% -- 11.88% Excluding Sales Charge: Class A -13.63% 15.50% -- 12.66% Class B -14.08% 14.86% 14.34% -- Class C -14.09% 14.81% -- 11.88% Salomon EPAC EM Index -5.40% 0.93% 1.72%(4) 0.77%(5)
Based on a $10,000 initial investment, the table above illustrates the total return of ING International SmallCap Growth Fund against the Salomon EPAC EM Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5% and 2%, respectively, for the 1 year and 5 year returns. (3) Reflects deduction of the Class C deferred sales charge of 1% for the 1 year return. (4) Since inception performance for the index is shown from 06/01/95. (5) Since inception performance for the index is shown from 09/01/94. PRINCIPAL RISK FACTOR(S): In exchange for higher growth potential, investing in stocks of smaller companies may entail greater price volatility than investing in larger companies. Price volatility and other risks accompany an investment in growth-oriented foreign equities. Currency exchange rates, international, political and economic conditions and other risks affect foreign securities. Risks of foreign investing are generally intensified for investments in emerging markets. See accompanying index descriptions on page 28. 13 ING INTERNATIONAL VALUE FUND Portfolio Managers' Report - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT TEAM: Brandes' LargeCap Investment Committee, Brandes Investment Partners, L.P. GOAL: The International Value Fund (the "Fund") seeks to maximize long-term capital appreciation by investing primarily in non-U.S. companies with market capitalizations greater than $1 billion. The Fund may hold up to 25% of its assets in companies with smaller market capitalizations. MARKET OVERVIEW: In an environment characterized by conflicting reports of economic strength and mixed corporate earnings, returns for non-U.S. stock markets were generally positive for the six months ended April 30, 2002. During the period, the MSCI EAFE Index gained 5.7%. After losing ground in December and January, Japanese stocks advanced in February, March, and April, resulting in a modest 1.4% gain for the MSCI Japan Index over the six-month period. Reports of economic recovery in the United States helped bolster sentiment for the Japanese economy, although domestic growth in Japan remains tepid. European stocks got a boost early in the period as the European Central Bank (ECB) and the Bank of England lowered key interest rates in November 2001. In April, the European Commission raised its inflation projection for 2002, generating speculation regarding a potential ECB rate hike in the months ahead. For the six months as a whole, the MSCI Europe gained 5.9%. During the period, the MSCI Emerging Markets Free Index (EMF) surged 33.7%. Economic and currency turmoil in Argentina appeared largely isolated: while the MSCI Argentina Index fell 31.2% during the quarter, the MSCI EMF Latin America Index gained 25.7%. Emerging markets in Asia also registered strong returns. The MSCI EMF Asia Index advanced 44.3%. PERFORMANCE: For the six-month period ended April 30, 2002, the Fund's Class A shares, excluding sales charges, provided a total return of 11.11% versus a return of 5.66% for the MSCI EAFE Index. PORTFOLIO SPECIFICS: Advances for positions in the United Kingdom and significant weightings for these holdings helped drive performance during the period. U.K. stocks registering gains included Invensys (machinery, 1.5% of the portfolio), Corus Group (metals & mining, 1.5%), and British American Tobacco (tobacco, 1.5%). Strong returns for positions in select emerging markets also contributed to results. Holdings in Brazil, including Petroleo Brasileiro (oil & gas, 1.8%) and Eletrobras (electric utilities, 2.0%), advanced during the period. Positions in South Korea also registered gains. From an industry perspective, holdings in the banking and beverages industries were among the portfolio's top performers. Positions such as DBS Group Holdings (Singapore, banking, 2.3%) and Unilever (United Kingdom, beverages, 2.2%) advanced sharply during the period. Through the six-month period, we purchased several companies at price levels that we believe offer significant potential for long-term appreciation. In the United Kingdom, for example, we purchased shares of insurers Royal & Sun Alliance (1.3%) and Friends Provident (1.0%), as well as information provider Reuters Group (commercial services & supplies, 1.2%). Other buys included IntesaBci (Italy, banking, 1.9%) and Sankyo (Japan, pharmaceuticals, 1.5%). During the period, we sold a trio of U.K. firms -- Innogy Holdings (electric utilities), BOC Group (chemicals), and Diageo (beverages) -- as their price levels advanced toward our estimates of the value of their businesses. We also sold Bank of Ireland (Ireland -- banking) and Altadis (Spain -- tobacco) after appreciation resulted in share prices that fully reflected our approximations of their fair values. As of April 30, 2002 the Fund's most substantial country weightings remain in the United Kingdom and Japan. Sales during the period reduced exposure to Ireland, while purchases and appreciation boosted weightings for Japan, Italy, and Singapore. On an industry basis, the Fund's largest exposures remain in insurance and diversified telecom services. MARKET OUTLOOK: Our company-by-company search for undervalued businesses in international equity markets continues to focus on investment candidates that offer both long-term appreciation potential and an attractive margin of safety. Regardless of its short-term fluctuations, we believe the broader market will eventually recognize the fundamental strengths of such holdings, resulting in favorable results for investors with a long-term perspective. 14 Portfolio Managers' Report ING INTERNATIONAL VALUE FUND - --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 --------------------------------------------------------------- SINCE INCEPTION SINCE INCEPTION OF CLASS A AND C OF CLASS B 1 YEAR 5 YEAR 03/06/95 04/18/97 ------ ------ -------- -------- Including Sales Charge: Class A (1) -12.79% 10.51% 12.07% -- Class B (2) -12.66% 10.75% -- 10.97% Class C (3) -9.08% 11.02% 12.25% -- Excluding Sales Charge: Class A -7.49% 11.82% 13.00% -- Class B -8.17% 11.01% -- 11.10% Class C -8.19% 11.02% 12.25% -- MSCI EAFE Index -13.62% 1.62% 4.04%(4) 1.62%(5)
Based on a $10,000 initial investment, the table above illustrates the total return of ING International Value Fund against the MSCI EAFE Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5%, 2% and 1%, respectively, for the 1 year, 5 year and since inception returns. (3) Reflects deduction of the Class C deferred sales charge of 1% for the 1 year return. (4) Since inception performance for the index is shown from 03/01/95. (5) Since inception performance for the index is shown from 05/01/97. PRINCIPAL RISK FACTOR(S): In exchange for higher growth potential, investing in stocks of smaller companies may entail greater price volatility than those of larger companies. International investing does pose special risks including currency fluctuation, economic and political risks not found in investments that are solely domestic. The risks of foreign investing are generally intensified for investing in emerging markets. Investing in funds that are concentrated in a smaller number of holdings poses greater risk than those funds with a larger number of holdings because each investment has a greater effect on the Fund's performance. See accompanying index descriptions on page 28. 15 ING PRECIOUS METALS FUND Portfolio Manager's Report - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT: James A. Vail, C.F.A., Portfolio Manager, ING Investments, LLC. GOAL: The ING Precious Metals Fund (the "Fund") seeks to attain capital appreciation and hedge against the loss of buying power of the U.S. Dollar as may be obtained through investment in gold bullion and in the securities of companies engaged in the mining or processing of gold and other precious metals and materials. MARKET OVERVIEW: The fundamentals for the gold sector remain positive, fostered by heightened international tensions, U.S. Dollar weakness, lower interest rates globally, and reduced producer hedging. Additionally, the sector continues to increase consolidation bringing greater discipline to the production equation. Finally, gold as an investment, rather than solely a jewelry item, is slowly emerging as an alternative to financial assets. PERFORMANCE: For the six-month period ended April 30, 2002, the Fund's Class A shares, excluding sales charges, provided a total return of 51.28% compared to the S&P 500 Index, Gold Bullion and Philadelphia Gold and Silver Index which returned 2.31%, 10.57% and 36.59%, respectively, for the same period. PORTFOLIO SPECIFICS: During the last six months, the Fund increased its exposure to unhedged South African gold producers specifically Goldfields Ltd. and Harmony. This produced two results: increase sensitivity to rising gold prices and leverage to the weakening South African Rand. These two securities were among the best performing gold shares in the last six months. Also in the period, the Fund benefited from continuing industry concentration as its holdings in Homestake, Normandy Mining of Australia, and Franco-Nevada in Canada, were acquired by Barrick and Newmont Mining, respectively. MARKET OUTLOOK: Industry fundamentals continue to be strong and gold prices are moving higher to levels not seen in two years. The key going forward should be the weakening U.S. dollar. As gold becomes more affordable in foreign currencies, demand should increase. Demand could also be supported as hedged producers seek to increase exposure to higher metal prices by reducing or eliminating their hedge books. We believe the outlook for the Fund remains strong. 16 Portfolio Manager's Report ING PRECIOUS METALS FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 ----------------------------------- 1 YEAR 5 YEARS 10 YEARS ------ ------- -------- Including Sales Charge: Class A (1) 54.31% -2.04% 2.06% Excluding Sales Charge: Class A 63.61% -0.88% 2.67% S&P 500 Index -12.63% 7.55% 12.22% Gold Bullion 17.12% -1.95% -0.87% Philadelphia Gold and Silver Index 36.05% -3.16% 0.56% Based on a $10,000 initial investment, the table above illustrates the total return of ING Precious Metals Fund against the S&P 500 Index, Gold Bullion and Philadelphia Gold and Silver Index. The Indices have an inherent performance advantage over the Fund since they have no cash in their portfolio, impose no sales charges and incur no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. PRINCIPAL RISK FACTOR(S): Price volatility due to non-diversification and concentration in the gold/precious metals industry. The market for gold and other precious metals is widely unregulated and is located in foreign countries that have the potential for instability. Precious metals earn no income, have higher transaction/storage costs and realize gain only with an increase in market price. International investing does pose special risks including currency fluctuation, economic and political risks not found in investments that are solely domestic. Risks of foreign investing are generally intensified for investments in emerging markets. See accompanying index descriptions on page 28. 17 ING RUSSIA FUND Portfolio Managers' Report - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT TEAM: Samuel Oubadia, Senior Investment Manager -- Emerging Markets Equities; Jan Wim Derks, Director -- Head of Emerging Markets Equities; Michiel Bootsma, Investment Manager -- Emerging Markets Equities, ING Investments, LLC. GOAL: The ING Russia Fund (the "Fund") seeks to maximize long-term capital appreciation through investments in Russian securities. MARKET OVERVIEW: Since the fourth quarter of 2001, the Russian equity market has been one of the world's best performing markets. From the beginning of October until the end of April 2002 the Russian Trading System Index (RTS) has gained a spectacular 114%. This re-rating of the market can be tied to a number of key developments. They are as follows: the progress made by the Russian government in instituting macroeconomic reforms, the effort made by several Russian corporations in adopting better corporate governance policies, and an oil price that has exceeded all expectations and remains relatively high. An indicator of just how much the risk perception of Russia has fallen can be seen in the Russian Eurobond yield spreads over U.S. treasuries. While the spread was as much as 900 basis points at the start of fourth quarter of 2001, by the end of the first quarter of 2002 the yield spread was down to 500 basis points. There were a number of significant developments in the period under review. One of which was the resignation of the former head of Russia's central bank, Viktor Gerashchenko. One of the more daunting challenges facing the Putin administration is the overhaul of Russia's banking sector. Gerashchenko had been an obstacle to such reforms. However, his successor, Sergei Ignatyev is considered more market friendly. So much so that the resignation of Gerashchenko led to a sharp rally in Russia's only traded bank stock, Sberbank. >From the start of the year until April 30, Sberbank shares have gained a stunning 130%. More recently, the equity market received another boost when oil giant British Petroleum (BP) announced that it would increase its stake in the Russian oil company Sidanco to 25%. The move surprised the market, as BP's history with Sidanco has been disappointing. Nevertheless, the move, coupled with stubbornly high oil prices, has drawn attention to the fact that Russian oil assets remain attractively valued in spite of their recent performance. PERFORMANCE: For the six-month period ended April 30, 2002, the Fund's Class A shares, excluding sales charges, provided a total return of 66.79%. In the same period the Russian Trading System Index returned 89.23%. The disparity in performance between the two can be explained by the fact that the RTS Index is dominated by the Oil & Gas sector (about 70%), while the Fund invests in a broader range of Russian equities. PORTFOLIO SPECIFICS: In spite of the Fund's strategy to be more diversified within the Russian market, the Oil & Gas sector continues to make up a substantial part of the Fund. The interest in oil stocks was highlighted by a secondary offering in Yukos earlier in the year. The company was able to sell about 1.0% of its shares in a secondary offering with relative ease (valued at approximately $100 million at the time of the offering). The Fund increased its stake in Yukos over the period. The Fund also added to its position in the oil company Sibneft. The shares of Sibneft have clearly been another one of the market's top performing stocks after the company announced that it planned to increase oil production by over 20% in 2002. As mentioned above, the shares of Sberbank have attracted a great deal of attention in the first quarter of 2002. The Fund began to build a position in Sberbank once the central bank increased the free float of the stock by authorizing that more shares be made available for public trading -- particularly to meet the demand of foreign investors. The bank may also issue ADRs later in the year to increase its investor base. The Fund also has a number of holdings in the fixed-line telecom sector. Currently, there are dozens of regional telecom companies traded in the Russian market. However, this looks set to change later this year, as most of the companies will get folded into much larger regional telecom companies. Aside from the creation of larger and more liquid companies, these fixed-line carriers also look set to benefit from tariff increases. MARKET OUTLOOK: While the investment case for Russia remains very much intact, it is unlikely that the market will continue to deliver the dramatic returns that we have seen over the last year. Whereas the valuations of Russian equities were once well below those of other emerging markets, the gap has narrowed. For Russian equities to continue their positive trend, we would need to see further progress in the areas of fiscal management and inflation. Current forecasts look for the government to finish 2002 with a balanced budget. Consumer Price Index, though falling, still remains somewhat high and will likely end the year in a range between 16-18%. (These forecasts assume an average oil price of $21.00/barrel in 2002.) One key measure of economic reform was stressed by President Putin in his recent `State of the Nation' address. This is the area of deregulation. Deregulation, in this case, refers to the dismantling of the bureaucracy and corruption that impedes new business development (particularly small and medium-sized businesses). Putin emphasized this problem because it is a major obstacle to the higher growth levels that Russia requires for its economy to catch up to the world's developed countries. We would hope to see significant progress in the effort to `deregulate' the Russian economy over the next few months. 18 Portfolio Managers' Report ING RUSSIA FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 ------------------------------------------ SINCE INCEPTION 1 YEAR 5 YEAR 07/03/96 ------ ------ -------- Including Sales Charge: Class A (1) 74.84% -1.01% 4.93% Excluding Sales Charge: Class A 85.48% -0.17% 6.00% Moscow Times Index 123.55% 8.00% 17.10%(2) Russian Trading System Index 116.83% 3.75% 11.54%(2) Based on a $10,000 initial investment, the table above illustrates the total return of ING Russia Fund against the Moscow Times Index and Russian Tradings System Index. The indices have an inherent performance advantage over the Fund since they have no cash in their portfolio, impose no sales charge and incur no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of the maximum sales load. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FOWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Since inception performance for the index is shown from 07/01/96. Redemptions on shares held less than 365 days are subject to a redemption fee of 2% of the redemption proceeds. PRINCIPAL RISK FACTOR(S): Increased price volatility and other risks that accompany an investment in equity securities of issuers in a single region. Currency exchange rates, international, political and economic conditions and other risks affect foreign securities. See accompanying index descriptions on page 28. 19 ING GLOBAL COMMUNICATIONS FUND Portfolio Manager's Report - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT: Daniel Hayes, Portfolio Manager, ING Investment Management Advisors B.V. GOAL: The ING Global Communications Fund (the "Fund") seeks long-term capital appreciation by investing in equity securities of communications companies located throughout the world, including the United States. MARKET OVERVIEW: The horrific events of September 11, 2001 were to punctuate the remaining quarter of 2001. The unprecedented closure of the U.S. financial markets, the military response of the U.S., the ensuing fears of further terrorist attacks and the obvious shock to the world at large preoccupied the markets. The response of central banks around the world was immediate. Federal reserve cut interest rates by 50bp from 3.5% to 3.0%; we now stand at a Fed funds rate of 1.75% with a bias to neutral. The S&P 500 Index touched a low of 950, the NASDAQ Composite Index traded through 1400, and the Dow Jones Industrial Average traded down to just above 8200. The rally from the lows had been strong, driven by expectations of a successful resolution of the Afghan war, burning off of the inventory overhang in the U.S. economy, a slowing in the number of profit warnings coming from the Technology sector, and an expectation that monetary and fiscal policy will lead to increased demand in 2002. The semiconductor sector has been a broad participant in the rebound. Communication Semiconductors posting an average 29% gain from the low. Telecommunication infrastructure stocks also enjoyed a bounce off the low of some 45%. Telecom services companies did not participate to the same extent although initially benefited from their status as "safe" haven investments. Cisco was able to guide for the first time in 12 months to a sequentially up quarter in the fourth quarter of 2001. The handset food chain was also encouraged by positive trading statement from Nokia and Motorola relating to the handset market for the fourth quarter. The semiconductor industry also began showing some signs of stabilization with Dynamic Random Access Memory (DRAM) prices edging higher in the quarter and speculation surrounding industry consolidation also helping sentiment. The foundry company TSMC was also able to positively preannounce the fourth quarter. Restructuring in the communication space continued with KPN issuing $5 billion of stock, British Telecom successfully spinning out its wireless arm mmo2 and Colt Telecom successfully managing a rights issue. Equity holders in XO Communications and McCloud were left with little to cheer about however as restructuring resulted in severe dilution. In the cable space, Comcast revised its bid for AT&T broadband finally settling on a price tag of $72 billion. Moving into 2002, however, the fundamentals continued to undermine a sustained recovery in stocks. The start of the year saw a violent rotation out of U.S. wireless stocks prompted by a concern that growth had slowed in the U.S. subscriber market. This had a knock on effect in the hardware sector hurting handset-related issues both on the component and the Original Equipment Manufacturer (OEM) group. Nokia in all the chaos managed to upside surprise the market for its fourth quarter numbers providing enough positive guidance to keep the bearish sentiment at bay. The value chain continues to be buffeted however by the instability in the Telecom services sector. Global Crossing and McCloud filed for bankruptcy protection, which has resulted in further heavy selling across the group. In such a difficult environment the perceived upturn in technology spending gets pushed out further. Fundamentals appear to be bottoming however; semi conductor companies are almost universally reporting stabilization in revenues and surprisingly average selling prices look reasonably strong with the exception of the wireline semiconductor companies. February saw no relief for the communications investor. Weakness in the wireless services group continued into February as Wall Street began to question the viability of the U.S. wireless market. Pricing pressure, lack of demand, over leveraged balance sheets and looming credit downgrades saw the compression of valuations across the globe. European and Asian wireless stock multiples came lower in sympathy. In wire line BellSouth lowered the street's expectations due they say to concerns relating to currency devaluations and deteriorating conditions in Latin America. Qwest tapped the remainder of its entire commercial bank line of credit to pay off all its $3.2 billion in commercial paper, it also confirmed its intention to issue $1.25 billion of equity-linked paper to speed up its de-leveraging campaign. It had been unable to finance its commercial paper; its debt was downgraded by S&P and Moody's one notch to BBB equivalent. William Communications filed for bankruptcy protection under Chapter 11. Sprint Corporation also announced the intended sale of its directory business in an effort to secure financing for the 2002 business plan. They too suffered a credit downgrade. On the regulatory front the House of Representatives passed the Tauzin/Dingell bill, this was widely expected. This seeks relief for the incumbent carriers relating to the unbundling of services in the local loop. With every Telecom services pre-announcement came further weakness in the outlook for the communications technology stocks. Riverstone pre-announced its first quarter and sited slowing capital expenditure from the service provider segment, then subsequently dropped 40% in the opening seconds of trading. Ciena acquired ONI Systems in a stock deal worth $900 million U.S. Dollars, and then subsequently pre-announced the quarter and guided lower for the remainder of the year. Elsewhere in technology land, indications that the enterprise may be showing some signs of life are emerging, particularly in the PC food chain and Semi-Conductor industry data point to a bottoming in the cycle. The Institute for Supply Management Index (ISM formerly National Association of Purchasing Managers Index, NAPM) improved during the month showing signs of exiting the 18 months Industrial recession. Inventories and shipments in the U.S. economy are also trending positively. Inventory has been reduced while shipment levels have improved. Also decline in capacity utilization for both Technology and Semi-Conductor companies have slowed. Pre-announcements were significantly lower in March 2002 than in March 2001, unfortunately for Communications investors many of these pre-announcements were in the Communications sector. Notables include Lucent, (who warned and at the same time announced a convertible), Juniper and Ciena which acquired ONI Systems and then both companies pre-announced. The wireless sector continued to come under severe selling pressure as in the U.S. as investors questioned the ability of these companies to acquire customers profitably. Speculation is now growing that there will be a rapid move to consolidate the sector most probably along aces technology lines, i.e. Code-Division Multiple Access (CDMA) (Verizon, PCS) and Global System for Mobile Communications (GSM) (Cingular and AT&T wireless) Qwest and Worldcom are both under SEC investigation. Despite efforts by Deutsche Telecom to increase free cash flow by cutting its dividend by 40% and slashing capital expenditure, a delay in its debt reduction plan led to a debt downgrade. Similarly France Telecom has been hit by the ratings agencies. Even the U.S. Regional Bell Operating Companies (RBOCs) have been warned by the ratings agencies on their reliance for short-term debt, prompting Verizon to issue $1.5 billion of bonds to pay down short-term paper exposure. A focus on free cash flow across the globe continues to pressure the prospects for communications technology companies. 20 ING GLOBAL Portfolio Manager's Report COMMUNICATIONS FUND - -------------------------------------------------------------------------------- PERFORMANCE: For the six-month period ended April 30, 2002, the Fund's Class A shares, excluding sales charges, provided a total return of -24.71% compared to the NASDAQ Telecom Index, which returned -33.78% for the same period. PORTFOLIO SPECIFICS: Visibility going into 2002 remains poor, however, we believe that there is an increasing probability that communications technology spending will stabilize and resume growth over the next 12 months. Therefore, we have taken an aggressive approach to the market entering 2002. Telecom spending relative to GDP continues to rise globally. In the past decade, it has risen by 50% to about 3% of GDP. Analysts expect this to double over the next decade, driven by mobile communications and the Internet. It is, however, going to be a wild ride. Our technology bets remain focused on what we perceive to be long-term winners in next generation communications platforms, for example Ciena and Juniper Networks. MARKET OUTLOOK: The U.S. economy is demonstrating the first clear sign of recovery after one of the most aggressive easing cycles in memory. The Communications sector continues to suffer from an overhang of over-investment. Consolidation and further bankruptcy are likely to continue to play out over the coming months. Telecommunications demand, however, usually moves in lockstep with the economy, and this should at least give the services sector an opportunity to stabilize and maybe even grow its revenue stream. What the sector ultimately requires, however, is a product cycle, and this, in our view, will be driven by broadband access technology. Wireless is our best bet as the next big product cycle, but patience is the key ingredient. Investment in that sector remains way down on the average portfolio managers' list. The problems still look bigger than the opportunities. A stronger economy, after a prolonged shakeout, may help to shift some of that uncertainty. AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 ----------------------- SINCE INCEPTION 1 YEAR 3/1/00 ------ ------ Including Sales Charge: Class A (1) -66.41% -61.86% Class B (2) -62.42% -61.63% Class C (3) -65.11% -61.08% Excluding Sales Charge: Class A -64.40% -60.81% Class B -64.66% -61.08% Class C -64.75% -61.08% NASDAQ Telecom Index -60.46% -62.85% Based on a $10,000 initial investment, the table above illustrates the total return of ING Global Communications Fund against the NASDAQ Telecom Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5% and 3%, respectively, for the 1 year and since inception returns. (3) Reflects deduction of the Class C deferred sales charge of 1% for the 1 year return. PRINCIPAL RISK FACTOR(S): Sensitivity to currency exchange rates, international, political and economic conditions and other risks that affect foreign securities. Risks of foreign investing are generally intensified for investments in emerging markets. Because the Fund concentrates its investments in global communications companies, it will tend to have greater volatility than Funds not concentrated in one industry. In exchange for higher growth potential, investing in stocks of smaller and mid-size companies may entail greater price volatility than investing in those of larger companies. See accompanying index descriptions on page 28. 21 ING GLOBAL TECHNOLOGY FUND Portfolio Managers' Report - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT TEAM: Guy Uding, Daniel Hayes, Tycho van Wijk, ING Investment Management Advisors B.V. GOAL: The ING Global Technology Fund (the "Fund") seeks long-term capital appreciation by investing in equity securities of information technology companies located throughout the world, including the United States. MARKET OVERVIEW: The sharp upturn on Wall Street in the fourth quarter 2001 came to an end in January, despite the reasonable macro-economic figures. The rapid collapse of the Enron energy group and the manifest gross negligence of its auditor Arthur Andersen hit sentiment hard. The -- until recently -- highly prestigious energy group had obviously been reporting misleading figures for years. Soon several other companies (e.g. Tyco, Global Crossing) were being associated with dishonest accounting practices, creating great concern among investors. The market was afraid that Enron was not just a single rogue company, but just the tip of the iceberg. Once these fears were seen to be exaggerated and good macro-economic figures continued to come in, the market shifted its focus to the expected economic recovery. Hence, the market climate decidedly brightened in the last week of February. Wall Street gradually recouped the losses it suffered in January and February. However, rising bond yields and the unrest in the Middle East helped to erode equity prices again in the last two weeks of March. Although the market's underlying mood remained upbeat, it became more skeptical about the profit recovery. Global sales of semiconductors were quite strong, with sales of Dynamic Random Access Memory (DRAM) chips rising 24 percent as a result of higher average prices, according to data from the Semiconductor Industry Association(SIA). With market conditions still weaker than in the year-ago boom the SIA also forecasted the second quarter to be slightly stronger with further acceleration of growth in the second half of 2002. Renewed orders for chip-making equipment and firming DRAM memory chip prices clearly confirms this expectation. Strength in the outsourcing sector continued in the fourth quarter and this sector was perceived as the defensive sector within the technology sector. However, after profit warnings from bellwethers as Electronic Data Systems and IBM, this changed. IBM announced their quarterly figures and missed the analyst's forecasts by $1 billion. Sales in semiconductors and hard-disk drive division fell about 35% and revenue was weak across the board. This announcement was the first time since 1991 that they announced a profit warning. IBM announced that they raised their dividend and that they will buy back as much as $3.5 billion more shares. The Electronics Manufacturing Services (EMS) sector experienced an acceleration in outsourcing in the second half of the reporting period with seven (Lucent, Valeo , Alcatel, Hewlett Packard, IBM, NEC and Compaq) divestitures announced that are expected to generate annual revenue of about $4.5 billion. The Valeo announcement with Jabil is the largest Original Equipment Manufacturer (OEM) asset purchase agreement in the automotive sector at an estimated $300 million in annual revenue. As the economy began to weaken in 2001 the structure of OEM asset sales began to change with less land and physical manufacturing infrastructure being acquired by the EMS sector. For example the Lucent agreement with Solectron at the end of the quarter didn't include any equipment or property. Transactions like these are allowing OEM's to benefit from manufacturing the product in a more cost-effective location. The PC sector reported better quarterly figures as Dell raised its forecast on sales and reiterated its earnings. Intel reduces prices on processors for PC's and servers as much as 32% to fuel demand and Compaq reported better than expected earnings and said they won more than $1 billion in business in the healthcare, education and travel markets. The enterprise software sector is clearly being hurt by the economy and the lack of a killer application and is in its worst condition in a very long time. Oracle and PeopleSoft surprised investors with profit warnings. Oracle blamed Asia for the miss, while PeopleSoft cited the late closure of a few large deals suggesting a very back-end loaded quarter. Clearly as buyers are feeling little pressure to upgrade to new systems and thus waiting to the end of the quarter and the opportunity to negotiate better deals. PeopleSoft shares tumbled 33%, their biggest one-day drop, after the announcement, as it took investors by surprise because PeopleSoft managed to meet its forecasts every quarter last year, even as others like Oracle, Siebel and SAP fell short. Later in the month they announced their quarterly figures which were on the earnings front better than what they had forecasted, however, their guidance going forward was set to a lower level. The gaming sector performed very well during the reporting period and reported figures which supported this performance. The successful introduction of the Xbox and GameCube (Nintendo) together with very aggressive price cuts fueled demand. The software gaming companies and component makers for the hardware are clearly benefiting. PERFORMANCE: For the six-month period ended April 30, 2002, the Fund's Class A shares, excluding sales charges, provided a total return of -11.44% compared to the Goldman Sachs Technology Industry Composite Index which returned -6.46% for the same period. PORTFOLIO SPECIFICS: At the second half of the reporting period, we became more positive on the technology sector at least for the short-term as the weakness in some technology companies was overdone. Therefore, we lowered the weighting in the outsourcing sector, which is more defensive, quite significantly by selling Computer Sciences, Electronic Data System, Amdocs and IBM. The Fund increased the weighting in Storage by adding Qlogic to the portfolio and switched Veritas into EMC because of valuations. Adding to the position of Advanced Micro Devices and Fairchild also increased the weighting in the semiconductor sector. After Yahoo announced their quarterly figures, the stock came under some selling pressure as they beat their revenue estimate but fell short of core business revenue estimates due to a slowdown in advertising revenue. After this, we added Yahoo to the portfolio. We reduced our weighting in Oracle as we had 22 Portfolio Managers' Report ING GLOBAL TECHNOLOGY FUND - -------------------------------------------------------------------------------- some doubts on certain contracts they signed some time ago, especially their contract of $140 million with the state of California. MARKET OUTLOOK: Along with an economic recovery in the second half of the year which we expect, the profitability of U.S. public companies should improve considerably. As profits stabilize or rise, companies will loosen up their IT budgets. Recent data suggest that corporations under spent their IT budget around 40% in the first quarter. We expect the PC sector to perform quite well in the coming periods as PC's will be replaced by corporations with a move to Windows 2000. Clearly the semiconductor companies will benefit from this replacement cycle as 60% of the worldwide semiconductors are PC related. Pick up in the enterprise software sector will be back-end loaded as a driver for this sector is still lacking. AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 -------------------------------- SINCE INCEPTION 1 YEAR 12/15/98 ------ -------- Including Sales Charge: Class A (1) -50.39% -8.30% Class B (2) -50.41% -7.85% Class C (3) -48.32% -7.36% Excluding Sales Charge: Class A -47.34% -6.68% Class B -47.87% -7.32% Class C -47.81% -7.36% Goldman Sachs Technology Industry Composite Index -32.64% -6.52%(4) Based on a $10,000 initial investment, the table above illustrates the total return of ING Global Technology Fund against the Goldman Sachs Technology Industry Composite Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5% and 3%, respectively, for the 1 year and since inception returns. (3) Reflects deduction of the Class C deferred sales charge of 1% for the 1 year return. (4) Since inception performance for the index is shown from 12/01/98. PRINCIPAL RISK FACTOR(S): International investing involves special risks including currency fluctuations, lower liquidity, political and economic uncertainties and differences in accounting standards. The Fund concentrates its investments in information technology-related companies and will tend to experience greater volatility than funds with more diversified portfolios. In exchange for higher growth potential, investing in stocks of smaller and mid-sized companies may entail greater price volatility than investing in stocks of larger companies. See accompanying index descriptions on page 28. 23 ING GLOBAL REAL ESTATE FUND Portfolio Managers' Report - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT TEAM: Steven D. Burton, Kenneth D. Campbell, T. Ritson Ferguson, Clarion CRA Securities, L.P. GOAL: The ING Global Real Estate Fund (the "Fund") seeks to achieve high total return with an emphasis on dividend yield by investing in publicly traded real estate companies in the developed countries of North America, Europe and Asia. MARKET OVERVIEW: Property stocks around the world have benefited from strong performance relative to other equities as a result of the defensive nature of real estate. Defensive attributes include high free cash flow, which generates dividend yields in excess of 5% on average, positive earnings growth in a soft economy, attractive valuations and an overall favorable supply/demand relationship of real estate space. Relative outperformance over the past year has been achieved by a +11.7% total return for real estate securities versus negative 10.7% for equities as measured by the Salomon Smith Barney World Equity Index. Taken together, this equals +22.4% relative outperformance by property stocks. Concerns over the past year have focused primarily on slackening demand in office and industrial markets as the result of a soft economic backdrop and the associated slackening of corporate demand for new space worldwide. Most of these concerns reside in the United States since Europe and the U.K. have shown economic resiliency over the current cycle, partly since Europe and the U.K never got as overheated from the technology-induced demand spike experienced in the U.S. in 1999 and 2000. Companies which focus on shopping centers and regional malls worldwide have performed particularly well on the heels of sustained consumer spending and the perception of particular defensive attributes unique to this sector -- in the case of malls, long lease terms and few new malls built each year. Trailing twelve-month total return of the Salomon Smith Barney World Property Index of +11.7% was largely carried on the shoulders of strong performance recorded by property companies in North America (+21.8%), Australia (+21.1%) and Europe (+12.0%). The Asian markets of Japan, Hong Kong and Singapore, which together account for 20% of the total index, each recorded negative total returns for this time period, although each has since rallied back from the ultimate lows reached last fall. Hong Kong property stocks, for example, are up 24.3% in the last six months. PERFORMANCE: For the period from inception (November 5, 2001) through April 30, 2002 the Fund's Class A shares, excluding sales charges, provided a total return of 15.43% compared to the Salomon Smith Barney World Property Index which returned 14.63%. Drivers of outperformance during this time period were Hong Kong (+24.27%), Europe (+18.29%), North America (+17.94%). The Fund, with overweights in North America and Europe, has garnered outperformance generated by these regions. PORTFOLIO SPECIFICS: Key valuation issues for the Fund are: * DISCOUNTS TO NET ASSET VALUE: Real estate companies worldwide continue to trade at a 10% discount to estimated private market value or net asset value (NAV) on average, with particular discounts evident in Hong Kong (17%), Japan (24%) and, despite the strong YTD performance, continental Europe (17%) and the U.K. (20%). This suggests that value remains in many of these regions and companies. * UNITED STATES: With a 54% weight in the Fund, the outlook for real estate companies in the United States is critical. Despite softening real estate market nationwide, real estate investment trusts support well-covered dividend yields of 6.5%, positive earnings growth, strong balance sheets and strong management teams. The Fund favors overweight positions in regional mall, shopping center and industrial stocks in the current environment. MARKET OUTLOOK: Clarion CRA puts forth an annual total return expectation over the next several years in the 8 to 12% range on average with about 6% of the return coming from dividends alone. The remainder of total return is derived from earnings growth, which is projected to be in the 3-5% range over the next several years. We believe the global property markets will be characterized by long-term leases, predictable earnings, a manageable incremental new supply of space, moderate M&A activity as the deep discounts to NAV are realized, and demand which should gradually strengthen in-line with recovering world economic growth. 24 Portfolio Managers' Report ING GLOBAL REAL ESTATE FUND - --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 --------------------------------------------------- SINCE INCEPTION SINCE INCEPTION SINCE INCEPTION OF CLASS A OF CLASS B OF CLASSC 11/05/01 3/15/02 1/8/02 -------- ------- ------ Including Sales Charge: Class A (1) 10.25% -- -- Class B (2) -- -1.60% -- Class C (3) -- -- 5.20% Excluding Sales Charge: Class A 15.43% -- -- Class B -- 3.40% -- Class C -- -- 6.20% Salomon Smith Barney World Property Index 14.63%(4) 8.41%(5) 8.47%(6)
Based upon a $10,000 initial investment, the table above illustrates the total return of ING Global Real Estate Fund against the Salomon Smith Barney World Property Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5% for the since inception return. (3) Reflects deduction of the Class C deferred sales charge of 1% for the since inception return. (4) Since inception performance for the index is shown from 11/01/01. (5) Since inception performance for the index is shown from 3/1/02. (6) Since inception performance for the index is shown from 1/1/02. PRINCIPAL RISK FACTOR(S): Investments in issuers that are principally engaged in real estate, including REITs, may subject the Fund to risks similar to those associated with the direct ownership of real estate (in addition to securities market risks). These companies are sensitive to factors such as changes in real estate values and property taxes, interest rates, cash flow of underlying real estate assets, supply and demand, and the management skill and creditworthiness of the issuer. REITs may also be affected by tax and regulatory requirements. See accompanying index descriptions on page 28. 25 Portfolio Managers' Report ING WORLDWIDE GROWTH FUND - -------------------------------------------------------------------------------- PORTFOLIO MANAGEMENT TEAM: Mary Lisanti, Portfolio Manager; Jeffrey Bernstein, Portfolio Manager; Richard Saler, Portfolio Manager; Philip Schwartz, Portfolio Manager, ING Investments, LLC. GOAL: The ING Worldwide Growth Fund (the "Fund") seeks maximum long-term capital appreciation. MARKET OVERVIEW: DOMESTIC: The six months following the events on September 11th were fraught with uncertainty for investors. The markets rallied strongly off the September bottom, as the prompt action by the Federal Reserve and the fiscal stimulus provided by the government reassured investors that the economy would continue to function, the timing and pace of that recovery was uncertain. The advent of the Enron accounting scandal shortly afterwards further shook investor confidence, as it called into question the veracity of corporate earnings. The net result is the lowest rebound for the S&P 500 Index (S&P 500) in previous "recession-recovery" scenarios, the average return for the S&P 500 is 38%; for the six-months ended April 30, 2002, the S&P 500 returned 2.31%, while the Dow Jones Industrial Average returned 10.59%, the NASDAQ Composite Index was up 0.06%. Following the historical pattern coming out of recessions, small capitalization stocks were the best performing asset class, returning 20.06% in the six months. INTERNATIONAL: The six-month period to the end of April 30, 2002 was dominated by the aftermath of the events of September 11th and the global economic recovery. By the end of 2001 most investors had concluded that the lowest point in the global downturn had been reached. The outlook was far from clear, however. The U.S. had led the downturn and it seemed obvious that that economy, accounting for about 30% of global output, would lead the rebound. But how strong would this be? Consumer spending had not fallen very much and there was no reason why it should accelerate. The same could be said for housing related demand. In addition, slumping business investment, especially in technology, had put the economies on the downward track and was unlikely to rebound strongly since it would take both substantially improving corporate profits and/or a new impetus to invest. The first would take time. The second was hard to see, given the scale of the over-investment in technology that had taken place. There was little to get enthused over in the international economies, which were earlier in the cycle than the U.S. and Japan's problems, deflation and a paralyzed banking system, seemed as intractable as ever. Demand remained weak in Europe ex the U.K. In the U.K., overall conditions were more favorable, with unemployment and interest rates at the lowest levels in a generation, a booming housing market and vibrant consumer demand. But the U.K.'s economy was too small in global terms to make a difference. By the end of April global conditions had continued to brighten, but the concerns expressed above persisted. During the six-month period most markets have been moderately stronger. The MSCI EAFE Index rose 5.7% in dollar terms. Europe ex U.K. rose 5.7% while the U.K. rose 3.2%. The Japanese market only rose 0.8%, but this conceals late strength: it rose 7.0% in the first four months of 2002. The brightest spot has been emerging markets especially in Asia. Because of the nature of the goods produced in these economies, their markets tend to be strong in the early days of global recovery. Accordingly, as a whole, emerging markets were up 32.7% in the six months under review. PERFORMANCE: For the six-month period ended April 30, 2002, the Fund's Class A shares, excluding sales charges, returned 0.58%, compared to the MSCI World Index, which returned 3.47%. PORTFOLIO SPECIFICS: DOMESTIC: In the wake of September 11th, we positioned the portfolio for a cyclical economic recovery. Given the stimulatory actions taken by the Federal Reserve and the spending plan proposed by President Bush, we believed the consumer would be the initial beneficiary, with the industrial sector of the economy following within six to nine months. The Fund is positioned to benefit from an improving economy with a strong weighting in consumer cyclical, energy and financials. We are modestly overweight information technology relative to the index. Our most significant underweight is healthcare, and specifically large pharmaceutical companies. INTERNATIONAL: Given the uncertainties described above, we framed our strategy so as to cover a wide spread of sectors with no large bets, notwithstanding our positive outlook, on balance, for the global economy. Instead we decided to be opportunistic in taking advantage of stocks, which appeared to offer good relative value according to our process. This approach was successful in that the Fund outperformed the MSCI EAFE Index over the six-month period. However, the best results were in the last two months of 2001. In the first four months of 2002 we underperformed the index slightly. During this time we benefited by being underweight stocks in the worst performing sectors, telecommunications and technology, but this was outweighed by adverse stock selection among industrials. MARKET OUTLOOK: DOMESTIC: We have become increasingly optimistic in our outlook for U.S. equities, as the market appears to have had its capitulation. As stocks fell to levels last seen in 1998, valuations became increasingly compelling. For the first time since the 1980's we have had both fiscal and monetary stimulus working together, which implies a recovery is at hand. However, worries remain on the macro side regarding the shape and strength of the recovery. The quality of corporate earnings remains under the "Enron" cloud. In this environment, valuations will probably be capped, at least in the near term, and volatility may remain high. 26 Portfolio Managers' Report ING WORLDWIDE GROWTH FUND - -------------------------------------------------------------------------------- Our strategy looking into 2002 is to focus on companies that have strong operating leverage, the potential for strong earnings growth, and an attractive valuation. We have spent a substantial amount of time analyzing turnaround stories, as these companies offer the potential for appreciation, regardless of the business cycle. After one of the longest and deepest bear markets since the early 1970's, we feel that there are opportunities for significant capital appreciation in the U.S. equity market. A disciplined investment process and good fundamental research will be capabilities needed to uncover those companies with the greatest appreciation potential. To that end, we have strengthened our research capabilities particularly in the healthcare sector and continue to refine our investment process. INTERNATIONAL: The global economy continues its fitful recovery led by the U.S. decelerating inventory reductions and defense related government spending are prominent elements in the acceleration of U.S. Gross Domestic Product growth to 5.6% annualized in the first quarter of 2002. There is evidence that this is causing improved export performance in the next two largest economies, Japan and Germany. Unfortunately business investment in the U.S. continues to fall, albeit at a declining rate. Other than the early cycle economies of some emerging markets, especially in Asia, it is hard to see strong sustained global growth taking hold until business investment improves. In view of this we will maintain our strategy to avoid big bets on any particular economic outcome or backdrop, but to invest in companies from across the spectrum, which offer good relative value on a stock by stock basis. We are about 7% underweight in technology and telecommunications, favoring consumer stocks instead.
AVERAGE ANNUAL TOTAL RETURNS FOR THE PERIODS ENDED APRIL 30, 2002 ----------------------------------------------------------------- SINCE INCEPTION SINCE INCEPTION OF CLASS A AND C OF CLASS B 1 YEAR 5 YEAR 4/19/93 5/31/95 ------ ------ ------- ------- Including Sales Charge: Class A (1) -26.59% 7.05% 9.65% -- Class B (2) -26.50% 7.34% -- 9.70% Class C (3) -23.39% 7.64% 9.68% -- Excluding Sales Charge: Class A -22.11% 8.32% 10.37% -- Class B -22.63% 7.64% -- 9.70% Class C -22.61% 7.64% 9.68% -- MSCI World Index -13.53% 4.32% 8.16%(4) 7.21%(5)
Based on a $10,000 initial investment, the table above illustrates the total return of ING Worldwide Growth Fund against the MSCI World Index. The Index has an inherent performance advantage over the Fund since it has no cash in its portfolio, imposes no sales charges and incurs no operating expenses. An investor cannot invest directly in an index. The Fund's performance is shown both with and without the imposition of sales charges. Performance table does not reflect the deduction of taxes that a shareholder will pay on fund distributions or the redemption of fund shares. Total returns reflect the fact that the Investment Manager has waived certain fees and expenses otherwise payable by the Fund. Total returns would have been lower had there been no waiver to the Fund. PERFORMANCE DATA REPRESENTS PAST PERFORMANCE AND IS NO ASSURANCE OF FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN THE FUND WILL FLUCTUATE. SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. THIS REPORT CONTAINS STATEMENTS THAT MAY BE "FORWARD-LOOKING" STATEMENTS. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN THE "FORWARD-LOOKING" STATEMENTS. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS, ONLY THROUGH THE END OF THE PERIOD AS STATED ON THE COVER. THE PORTFOLIO MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND HOLDINGS ARE SUBJECT TO CHANGE DAILY. (1) Reflects deduction of the maximum Class A sales charge of 5.75%. (2) Reflects deduction of the Class B deferred sales charge of 5% and 2%, respectively, for the 1 year and 5 year returns. (3) Reflects deduction of the Class C deferred sales charge of 1% for the 1 year return. (4) Since inception performance for the index is shown from 05/01/93. (5) Since inception performance for the index is shown from 06/01/95. PRINCIPAL RISK FACTOR(S): Price volatility and other risks that accompany an investment in growth-oriented foreign equities. Sensitivity to currency exchange rates, international, political and economic conditions and other risks that affect foreign securities. The Fund may also invest in small and medium sized companies, which may be more susceptible to price volatility than larger companies. Risks of foreign investing are generally intensified for investments in emerging markets. See accompanying index descriptions on page 28. 27 INDEX DESCRIPTIONS - -------------------------------------------------------------------------------- The S&P 500 INDEX is a widely recognized index of 500 common stocks. The DOW JONES INDUSTRIAL AVERAGE is a price-weighted average of 30 blue-chip stocks that are generally the leaders of their industry. The NASDAQ COMPOSITE INDEX is a broad-based capitalization-weighted index of all NASDAQ National Market & SmallCap stocks. The PHILADELPHIA STOCK EXCHANGE GOLD AND SILVER INDEX (XAU) is a capitalization-weighted index which includes the leading companies involved in the mining of gold and silver. The MSCI EAFE INDEX consists of more than 1,000 securities taken from the largest market capitalization companies based in Europe, Australia and Asia (Australasia), and the Far East. The MSCI EMERGING MARKETS FREE (EMF) INDEX is comprised of companies representative of the market structure of 22 emerging countries in Europe, Latin America and the Pacific Rim Basin. The MSCI WORLD INDEX consists of more than 1,400 securities of the largest publicly traded companies around the world based on market capitalization. The SALOMON EPAC EXTENDED MARKET INDEX measures the performance of securities of smaller-capitalized companies in 22 countries excluding the U.S. and Canada. The MSCI FAR EAST FREE EX-JAPAN INDEX measures performance of securities listed on exchanges in the Far East markets excluding Japan. The MOSCOW TIMES INDEX is an index that measures the performance of the 50 most liquid and highly capitalized Russian stocks. The RUSSIAN TRADING SYSTEM INDEX is a capitalization weighted index that is comprised of 100 stocks traded on the Russian Trading Systems. The GOLD BULLION is a commodity traded on the New York Mercantile Exchange. The NASDAQ TELECOM INDEX is a capitalization-weighted index designated to measure the performance of all NASDAQ stocks in the telecommunications sector. The GOLDMAN SACHS TECHNOLOGY INDUSTRY COMPOSITE INDEX is a modified capitalization-weighted index of selected technology stock. The FT EUROPE INDEX is average weighted by the market value of the performance of securities listed on the Stock Exchange of Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Netherlands, Norway, Spain, Sweden, Switzerland and United Kingdom. The MSCI JAPAN INDEX is a capitalization weighted index that monitors the performance of stocks from the country of Japan. The MSCI EUROPE INDEX is a capitalization weighted index that monitors the performance of stocks from all the countries that make up the continent of Europe. The INSTITUTE FOR SUPPLY MANAGEMENT'S INDEX (ISM, FORMERLY NAPM) is an indicator of economic activity based on a survey of over 250 companies within 21 industries covering all 50 states. The SALOMON SMITH BARNEY WORLD PROPERTY INDEX is an unmanaged market-weighted total return index which consists of many companies from developed markets whose floats are larger than $100 million and derive more than half of their revenue from property-related activities. The MSCI ARGENTINA INDEX is an unmanaged index that measures the performance of the Argentina stock market. The MSCI EMF LATIN AMERICA INDEX is a capitalization-weighted index that monitors the performance of stocks from the EMF Latin America region. The MSCI EMF ASIA INDEX is a capitalization-weighted index that monitors the performance of stocks from the EMF Asian region. All indices are unmanaged. An investor cannot invest directly in an index. 28 (THIS PAGE INTENTIONALLY LEFT BLANK) 29 STATEMENTS OF ASSETS AND LIABILITIES as of April 30, 2002 (Unaudited) - --------------------------------------------------------------------------------
ING ING ING ING INTERNATIONAL ASIA-PACIFIC EMERGING EUROPEAN CORE ING EQUITY COUNTRIES EQUITY GROWTH INTERNATIONAL FUND FUND FUND FUND FUND ------------- ------------- ------------ ------------- ------------- ASSETS: Investments in securities, at value* $ 11,644,368 $ 141,385,862 $ 20,792,030 $ 37,109,941 $ 45,164,808 Short-term investments, at amortized cost -- -- -- -- 1,299,085 Cash -- -- -- 130,012 721,586 Foreign currencies at value** 35,070 1,711,788 42,875 -- -- Receivables: Investment securities sold -- 2,164,478 94,505 -- -- Fund shares sold 122,663 4,261,494 2,239 972,993 625,171 Dividends and interest 33,898 665,818 117,995 160,879 232,655 Other 8,911 96,591 160 202,333 1,550 Other investments (Note 11) 362,800 6,631,900 439,377 3,540,273 4,257,694 Prepaid expenses 15,802 17,260 18,020 11,761 23,534 Reimbursement due from manager 74,226 71,823 -- -- -- ------------- ------------- ------------ ------------- ------------- Total assets 12,297,738 157,007,014 21,507,201 42,128,192 52,326,083 ------------- ------------- ------------ ------------- ------------- LIABILITIES: Payable for investment securities purchased -- 1,082,973 95,544 126,002 241,788 Payable for fund shares redeemed 23,156 822,447 4,233 340,451 808,603 Payable for securities loaned 362,800 6,631,900 439,377 3,540,273 4,257,694 Payable to affiliates 25,244 287,266 40,818 74,096 52,628 Payable to custodian 36,759 3,050,349 226,912 -- -- Other accrued expenses and liabilities 175,161 496,614 151,930 122,881 248,948 ------------- ------------- ------------ ------------- ------------- Total liabilities 623,120 12,371,549 958,814 4,203,703 5,609,661 ------------- ------------- ------------ ------------- ------------- NET ASSETS $ 11,674,618 $ 144,635,465 $ 20,548,387 $ 37,924,489 $ 46,716,422 ============= ============= ============ ============= ============= NET ASSETS WERE COMPRISED OF: Paid-in capital $ 42,748,010 $ 210,674,673 $ 25,718,492 $ 49,805,389 $ 61,013,622 Accumulated net investment loss (39,144) (357,352) (24,615) (183,105) (152,124) Accumulated net realized loss on investments and foreign currencies(net of foreign tax on the sale of Indian investments of $0, $101,295,$0, $0, and $0, respectively -- see note 2) (27,262,102) (91,423,476) (3,088,920) (12,868,278) (14,941,022) Net unrealized appreciation (depreciation) of investments and foreign currencies (3,772,146) 25,741,620 (2,056,570) 1,170,483 795,946 ------------- ------------- ------------ ------------- ------------- NET ASSETS $ 11,674,618 $ 144,635,465 $ 20,548,387 $ 37,924,489 $ 46,716,422 ============= ============= ============ ============= ============= * Cost of securities $ 15,416,664 $ 115,657,106 $ 22,849,534 $ 35,938,595 $ 44,371,705 ** Cost of foreign currencies $ 35,068 $ 1,696,283 $ 42,875 $ -- $ 419
See Accompanying Notes to Financial Statements 30 STATEMENTS OF ASSETS AND LIABILITIES as of April 30, 2002 (Unaudited) - --------------------------------------------------------------------------------
ING ING ING ING INTERNATIONAL ASIA-PACIFIC EMERGING EUROPEAN CORE ING EQUITY COUNTRIES EQUITY GROWTH INTERNATIONAL FUND FUND FUND FUND FUND ------------ ------------- ------------- ------------ ------------- CLASS A: Net assets $ 6,034,554 $ 81,451,341 $ 19,350,161 $ 7,248,671 $ 34,659,613 Shares authorized 24,000,000 unlimited unlimited unlimited 200,000,000 Par value $ 0.01 $ 0.00 $ 0.001 $ 0.00 $ 0.001 Shares outstanding 1,438,646 5,204,380 2,446,712 479,274 4,020,890 Net asset value and redemption price per share $ 4.19 $ 15.65 $ 7.91 $ 15.12 $ 8.62 Maximum offering price per share (5.75%)(1) $ 4.45 $ 16.60 $ 8.39 $ 16.04 $ 9.15 CLASS B: Net assets $ 4,240,535 $ 17,487,906 $ 1,087,451 $ 10,567,230 $ 2,190,599 Shares authorized 24,000,000 unlimited unlimited unlimited 100,000,000 Par value $ 0.01 $ 0.00 $ 0.001 $ 0.00 $ 0.001 Shares outstanding 1,052,864 1,122,713 140,682 704,643 257,627 Net asset value and redemption price per share(2) $ 4.03 $ 15.58 $ 7.73 $ 15.00 $ 8.50 Maximum offering price per share $ 4.03 $ 15.58 $ 7.73 $ 15.00 $ 8.50 CLASS C: Net assets n/a $ 15,123,272 $ 110,775 $ 10,915,383 $ 1,653,862 Shares authorized n/a unlimited unlimited unlimited 50,000,000 Par value n/a $ 0.00 $ 0.001 $ 0.00 $ 0.001 Shares outstanding n/a 1,008,683 14,402 725,931 194,630 Net asset value and redemption price per share(2) n/a $ 14.99 $ 7.69 $ 15.04 $ 8.50 Maximum offering price per share n/a $ 14.99 $ 7.69 $ 15.04 $ 8.50 CLASS I: Net assets n/a n/a n/a n/a $ 8,202,373 Shares authorized n/a n/a n/a n/a 50,000,000 Par value n/a n/a n/a n/a $ 0.001 Shares outstanding n/a n/a n/a n/a 949,069 Net asset value and redemption price per share n/a n/a n/a n/a $ 8.64 Maximum offering price per share n/a n/a n/a n/a $ 8.64 CLASS M: Net assets $ 1,399,529 n/a n/a n/a n/a Shares authorized 12,000,000 n/a n/a n/a n/a Par value $ 0.01 n/a n/a n/a n/a Shares outstanding 344,994 n/a n/a n/a n/a Net asset value and redemption price per share $ 4.06 n/a n/a n/a n/a Maximum offering price per share (3.50%)(3) $ 4.21 n/a n/a n/a n/a CLASS Q: Net assets n/a $ 30,572,946 n/a $ 9,193,205 $ 9,975 Shares authorized n/a unlimited n/a unlimited 50,000,000 Par value n/a $ 0.00 n/a $ 0.001 $ 0.001 Shares outstanding n/a 1,886,308 n/a 581,734 1,157 Net asset value and redemption price per share n/a $ 16.21 n/a $ 15.80 $ 8.62 Maximum offering price per share n/a $ 16.21 n/a $ 15.80 $ 8.62
(1) Maximum offering price is computed at 100/94.25 of net asset value. On purchases of $50,000 or more, the offering price is reduced. (2) Redemption price per share may be reduced for any applicable contingent deferred sales charge. (3) Maximum offering price is computed at 100/96.50 of net asset value. On purchases of $50,000 or more, the offering price is reduced. See Accompanying Notes to Financial Statements 31 STATEMENTS OF ASSETS AND LIABILITIES as of April 30, 2002 (Unaudited) - --------------------------------------------------------------------------------
ING INTERNATIONAL ING ING SMALLCAP INTERNATIONAL PRECIOUS ING GROWTH VALUE METALS RUSSIA FUND FUND FUND FUND -------------- --------------- ------------- ------------- ASSETS: Investments in securities, at value* $ 380,159,556 $ 3,218,150,075 $ 82,059,182 $ 111,462,402 Short-term investments, at amortized cost -- -- 1,200,000 19,169,018 Cash 17,191,980 61,811,524 56,493 296,707 Foreign currencies at value** 157,898 3,894,811 -- -- Receivables: Investment securities sold 9,942,179 25,597,507 433,753 -- Fund shares sold 10,326,581 51,432,357 293,475 769,970 Dividends and interest 1,216,096 21,116,984 73,571 409,146 Other 164,071 -- -- -- Other investments (Note 11) 57,546,707 382,479,452 5,944,800 5,012,400 Unrealized appreciation on forward foreign currency contracts 53,224 -- -- -- Prepaid expenses 30,403 115,995 11,959 13,042 -------------- --------------- ------------- ------------- Total assets 476,788,695 3,764,598,705 90,073,233 137,132,685 -------------- --------------- ------------- ------------- LIABILITIES: Payable for investment securities purchased 9,466,806 55,115,299 -- 5,770,088 Unrealized depreciation on forward foreign currency contracts 1,003,090 -- -- -- Payable for fund shares redeemed 4,576,459 8,429,769 717,305 269,447 Payable for securities loaned 57,546,707 382,479,452 5,944,800 5,012,400 Payable to affiliates 564,257 4,345,917 80,629 154,848 Other accrued expenses and liabilities 440,504 511,253 235,656 274,433 -------------- --------------- ------------- ------------- Total liabilities 73,597,823 450,881,690 6,978,390 11,481,216 -------------- --------------- ------------- ------------- NET ASSETS $ 403,190,872 $ 3,313,717,015 $ 83,094,843 $ 125,651,469 ============== =============== ============= ============= NET ASSETS WERE COMPRISED OF: Paid-in capital $ 583,055,431 $ 3,469,893,981 $ 139,460,764 $ 167,801,908 Accumulated net investment income (loss) (2,733,078) 7,779,218 (164,510) 1,220,110 Accumulated net realized gain (loss) on investments and foreign currencies (205,599,853) 62,482,544 (90,509,622) (72,813,202) Net unrealized appreciation (depreciation) of investments and foreign currencies 28,468,372 (226,438,728) 34,308,211 29,442,653 -------------- --------------- ------------- ------------- NET ASSETS $ 403,190,872 $ 3,313,717,015 $ 83,094,843 $ 125,651,469 ============== =============== ============= ============= * Cost of securities $ 350,773,234 $ 3,444,780,028 $ 47,749,920 $ 82,019,749 ** Cost of foreign currencies $ 156,476 $ 3,904,081 $ -- $ --
See Accompanying Notes to Financial Statements 32 STATEMENTS OF ASSETS AND LIABILITIES as of April 30, 2002 (Unaudited) - --------------------------------------------------------------------------------
ING INTERNATIONAL ING ING SMALLCAP INTERNATIONAL PRECIOUS ING GROWTH VALUE METALS RUSSIA FUND FUND FUND FUND -------------- ---------------- ------------- ------------- CLASS A: Net assets $ 165,631,479 $ 1,650,775,792 $ 83,094,843 $ 125,651,469 Shares authorized unlimited unlimited 500,000,000 500,000,000 Par value $ 0.00 $ 0.01 $ 0.001 $ 0.001 Shares outstanding 7,103,804 123,838,259 18,084,076 9,367,707 Net asset value and redemption price per share $ 23.32 $ 13.33 $ 4.59 $ 13.41 Maximum offering price per share (5.75%)(1) $ 24.74 $ 14.14 $ 4.87 $ 14.23 CLASS B: Net assets $ 74,684,308 $ 492,290,785 n/a n/a Shares authorized unlimited unlimited n/a n/a Par value $ 0.00 $ 0.01 n/a n/a Shares outstanding 3,043,179 37,411,096 n/a n/a Net asset value and redemption price per share(2) $ 24.54 $ 13.16 n/a n/a Maximum offering price per share $ 24.54 $ 13.16 n/a n/a CLASS C: Net assets $ 67,543,328 $ 720,673,880 n/a n/a Shares authorized unlimited unlimited n/a n/a Par value $ 0.00 $ 0.01 n/a n/a Shares outstanding 3,001,310 54,891,858 n/a n/a Net asset value and redemption price per share(2) $ 22.50 $ 13.13 n/a n/a Maximum offering price per share $ 22.50 $ 13.13 n/a n/a CLASS I: Net assets n/a $ 423,295,056 n/a n/a Shares authorized n/a unlimited n/a n/a Par value n/a $ 0.01 n/a n/a Shares outstanding n/a 31,744,121 n/a n/a Net asset value and redemption price per share n/a $ 13.33 n/a n/a Maximum offering price per share n/a $ 13.33 n/a n/a CLASS Q: Net assets $ 95,331,757 $ 26,681,502 n/a n/a Shares authorized unlimited unlimited n/a n/a Par value $ 0.00 $ 0.01 n/a n/a Shares outstanding 3,845,302 1,994,711 n/a n/a Net asset value and redemption price per share $ 24.79 $ 13.38 n/a n/a Maximum offering price per share $ 24.79 $ 13.38 n/a n/a
(1) Maximum offering price is computed at 100/94.25 of net asset value. On purchases of $50,000 or more, the offering price is reduced. (2) Redemption price per share may be reduced for any applicable contingent deferred sales charge. See Accompanying Notes to Financial Statements 33 STATEMENTS OF ASSETS AND LIABILITIES as of April 30, 2002 (Unaudited) - --------------------------------------------------------------------------------
ING ING ING ING GLOBAL GLOBAL GLOBAL WORLDWIDE COMMUNICATIONS TECHNOLOGY REAL ESTATE GROWTH FUND FUND FUND FUND ------------- ------------- ------------ -------------- ASSETS: Investments in securities, at value* $ 10,899,778 $ 32,428,022 $ 28,776,876 $ 266,553,687 Short-term investments, at amortized cost -- -- -- 2,300,000 Cash 659,017 32,995 835,385 59,311 Receivables: Investment securities sold -- -- 242,085 7,651,672 Fund shares sold 2,726 36,200 18,101 4,220,029 Dividends and interest 7,566 6,378 139,933 685,026 Other 46 -- -- -- Other investments (Note 11) 300,000 700,000 -- 21,167,708 Prepaid expenses 15,431 21,321 74,922 44,447 Reimbursement due from manager -- 66,588 74,428 63,476 ------------- ------------- ------------ -------------- Total assets 11,884,564 33,291,504 30,161,730 302,745,356 ------------- ------------- ------------ -------------- LIABILITIES: Payable for investment securities purchased 367,553 -- 810,432 9,198,153 Payable for fund shares redeemed 15,922 148,856 -- 2,271,929 Payable for securities loaned 300,000 700,000 -- 21,167,708 Payable to affiliates 89,913 54,042 32,436 412,882 Other accrued expenses and liabilities 125,115 314,648 74,928 603,930 ------------- ------------- ------------ -------------- Total liabilities 898,503 1,217,546 917,796 33,654,602 ------------- ------------- ------------ -------------- NET ASSETS $ 10,986,061 $ 32,073,958 $ 29,243,934 $ 269,090,754 ============= ============= ============ ============== NET ASSETS WERE COMPRISED OF: Paid-in capital $ 109,019,409 $ 130,251,183 $ 25,940,780 $ 461,089,431 Accumulated net investment income (loss) (135,603) (476,280) 103,437 (2,059,674) Accumulated net realized gain (loss) on investments and foreign currencies (85,185,344) (82,784,953) 474,090 (196,191,243) Net unrealized appreciation (depreciation) of investments and foreign currencies (12,712,401) (14,915,992) 2,725,627 6,252,240 ------------- ------------- ------------ -------------- NET ASSETS $ 10,986,061 $ 32,073,958 $ 29,243,934 $ 269,090,754 ============= ============= ============ ============== * Cost of securities $ 23,612,058 $ 47,344,055 $ 26,052,634 $ 260,297,306
See Accompanying Notes to Financial Statements 34 STATEMENTS OF ASSETS AND LIABILITIES as of April 30, 2002 (Unaudited) - --------------------------------------------------------------------------------
ING ING ING ING GLOBAL GLOBAL GLOBAL WORLDWIDE COMMUNICATIONS TECHNOLOGY REAL ESTATE GROWTH FUND FUND FUND FUND ----------- ------------ ------------- ------------- CLASS A: Net assets $ 5,733,042 $ 16,043,530 $ 29,105,958 $ 106,222,243 Shares authorized unlimited unlimited unlimited unlimited Par value $ 0.001 $ 0.001 $ 0.001 $ 0.00 Shares outstanding 4,385,019 3,141,584 2,560,661 6,835,268 Net asset value and redemption price per share $ 1.31 $ 5.11 $ 11.37 $ 15.54 Maximum offering price per share (5.75%)(1) $ 1.39 $ 5.42 $ 12.06 $ 16.49 CLASS B: Net assets $ 4,218,604 $ 9,412,327 $ 117,315 $ 63,393,304 Shares authorized unlimited unlimited unlimited unlimited Par value $ 0.001 $ 0.001 $ 0.001 $ 0.00 Shares outstanding 3,279,540 1,897,349 11,350 3,680,515 Net asset value and redemption price per share(2) $ 1.29 $ 4.96 $ 10.34 $ 17.22 Maximum offering price per share $ 1.29 $ 4.96 $ 10.34 $ 17.22 CLASS C: Net assets $ 1,034,415 $ 3,111,434 $ 20,661 $ 85,386,058 Shares authorized unlimited unlimited unlimited unlimited Par value $ 0.001 $ 0.001 $ 0.001 $ 0.00 Shares outstanding 803,090 629,099 1,946 5,572,026 Net asset value and redemption price per share(2) $ 1.29 $ 4.95 $ 10.62 $ 15.32 Maximum offering price per share $ 1.29 $ 4.95 $ 10.62 $ 15.32 CLASS I: Net assets n/a $ 3,506,667 n/a n/a Shares authorized n/a unlimited n/a n/a Par value n/a $ 0.001 n/a n/a Shares outstanding n/a 685,645 n/a n/a Net asset value and redemption price per share n/a $ 5.11 n/a n/a Maximum offering price per share n/a $ 5.11 n/a n/a CLASS Q: Net assets n/a n/a n/a $ 14,089,149 Shares authorized n/a n/a n/a unlimited Par value n/a n/a n/a $ 0.00 Shares outstanding n/a n/a n/a 782,730 Net asset value and redemption price per share n/a n/a n/a $ 18.00 Maximum offering price per share n/a n/a n/a $ 18.00
(1) Maximum offering price is computed at 100/94.25 of net asset value. On purchases of $50,000 or more, the offering price is reduced. (2) Redemption price per share may be reduced for any applicable contingent deferred sales charge. See Accompanying Notes to Financial Statements 35 STATEMENTS OF OPERATIONS for the six months ended April 30, 2002 (Unaudited) - --------------------------------------------------------------------------------
ING ING ING ING ASIA-PACIFIC EMERGING EUROPEAN INTERNATIONAL ING EQUITY COUNTRIES EQUITY CORE GROWTH INTERNATIONAL FUND FUND FUND FUND FUND ------------ ------------ ------------ ------------ ------------ INVESTMENT INCOME: Dividends (net of foreign taxes)* $ 88,040 $ 1,193,739 $ 175,156 $ 266,800 $ 347,949 Interest 2,075 10,751 936 37,935 51,064 Other 8,760 -- -- -- -- Securities loaned income 136 613 85 159 168 ------------ ------------ ------------ ------------ ------------ Total investment income 99,011 1,205,103 176,177 304,894 399,181 ------------ ------------ ------------ ------------ ------------ EXPENSES: Investment advisory and management fees 74,366 849,555 118,671 196,330 220,453 Distribution and service fees: Class A 7,769 134,547 33,779 14,322 44,208 Class B 21,421 82,078 5,854 55,584 11,367 Class C -- 71,908 845 61,215 9,345 Class M 5,246 -- -- -- -- Class Q -- 35,309 -- 9,654 10 Transfer agent fees and expenses: Class A 13,762 157,749 17,752 14,137 40,495 Class B 9,472 33,675 1,077 19,133 2,604 Class C -- 29,482 158 21,124 2,139 Class I -- -- -- -- 226 Class M 3,090 -- -- -- -- Class Q -- 2,587 -- 854 2 Administrative service fees 3,437 24,326 10,319 3,184 22,045 Custodian and fund accounting expenses 18,761 117,408 49,722 31,755 80,606 Printing and postage expenses 9,745 33,238 4,612 15,024 19,507 Registration fees 22,322 15,761 29,713 22,737 37,019 Professional fees 7,911 14,424 4,722 10,525 18,164 Trustee expenses 933 5,480 596 1,361 13,939 Miscellaneous expenses 2,111 8,263 2,992 3,257 4,399 ------------ ------------ ------------ ------------ ------------ 200,346 1,615,790 280,812 480,196 526,528 Less: Waived and reimbursed fees 62,191 56,226 80,020 38,676 -- ------------ ------------ ------------ ------------ ------------ Total expenses 138,155 1,559,564 200,792 441,520 526,528 ------------ ------------ ------------ ------------ ------------ Net investment loss (39,144) (354,461) (24,615) (136,626) (127,347) ------------ ------------ ------------ ------------ ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized loss on investments (net of foreign tax on sale of Indian investments of $0, $101,295, $0, $0, and $0, respectively -- Note 2) (1,147,784) (9,485,744) (1,565,654) (2,838,826) (2,569,635) Net realized loss on foreign currencies (196,895) (177,994) (18,765) (15,899) (517,546) Net change in unrealized appreciation of investments and foreign currencies 4,423,850 47,514,673 2,187,979 5,248,525 6,132,657 ------------ ------------ ------------ ------------ ------------ Net realized and unrealized gain on investments and foreign currencies 3,079,171 37,850,935 603,560 2,393,800 3,045,476 ------------ ------------ ------------ ------------ ------------ INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 3,040,027 $ 37,496,474 $ 578,945 $ 2,257,174 $ 2,918,129 ============ ============ ============ ============ ============ * Foreign taxes $ 9,335 $ 152,312 $ 19,312 $ 38,226 $ 37,546
See Accompanying Notes to Financial Statements 36 STATEMENTS OF OPERATIONS for the six months ended April 30, 2002 (Unaudited) - --------------------------------------------------------------------------------
ING INTERNATIONAL ING ING SMALLCAP INTERNATIONAL PRECIOUS ING GROWTH VALUE METALS RUSSIA FUND FUND FUND FUND ------------- ------------- ------------ ------------ INVESTMENT INCOME: Dividends (net of foreign taxes)* $ 2,508,034 $ 34,155,063 $ 395,911 $ 2,010,455 Interest 119,654 530,359 34,254 94,397 Other 8,505 -- -- -- Securities loaned income 18,621 141,111 213 250 ------------- ------------- ------------ ------------ Total investment income 2,654,814 34,826,533 430,378 2,105,102 ------------- ------------- ------------ ------------ EXPENSES: Investment advisory and management fees 1,963,220 14,267,474 313,402 511,125 Distribution and service fees: Class A 283,777 2,112,893 83,800 102,225 Class B 366,511 2,272,692 -- -- Class C 338,079 3,268,703 -- -- Class Q 111,961 38,496 -- -- Transfer agent fees and expenses: Class A 250,022 963,499 70,728 72,091 Class B 112,745 311,338 -- -- Class C 104,008 448,256 -- -- Class I -- 17,493 -- -- Class Q 5,109 2,313 -- -- Administrative service fees 79,444 1,643,747 33,522 40,890 Custodian and fund accounting expenses 192,401 676,288 30,858 104,075 Printing and postage expenses 141,324 503,219 24,591 32,621 Registration fees 48,018 121,522 20,590 10,493 Professional fees 76,545 251,177 7,889 16,709 Trustee expenses 7,492 61,487 3,724 7,459 Miscellaneous expenses 18,883 61,521 2,781 7,306 ------------- ------------- ------------ ------------ 4,099,539 27,017,316 591,885 904,994 Less: Redemption fee proceeds -- -- -- 20,002 ------------- ------------- ------------ ------------ Total expenses 4,099,539 27,017,316 591,885 884,992 ------------- ------------- ------------ ------------ Net investment income (loss) (1,444,725) 7,804,415 (161,507) 1,220,110 ------------- ------------- ------------ ------------ REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized gain (loss) on investments (20,711,101) 62,767,573 671,666 862,945 Net realized gain (loss) on foreign currencies 1,592,751 (241,431) 21,875 -- Net change in unrealized appreciation of investments and foreign currencies 48,227,999 224,052,555 28,439,703 36,458,688 ------------- ------------- ------------ ------------ Net realized and unrealized gain on investments and foreign currencies 29,109,649 286,578,697 29,133,244 37,321,633 ------------- ------------- ------------ ------------ INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 27,664,924 $ 294,383,112 $ 28,971,737 $ 38,541,743 ============= ============= ============ ============ * Foreign taxes $ 381,012 $ 3,341,262 $ -- $ 361,400
See Accompanying Notes to Financial Statements 37 STATEMENTS OF OPERATIONS for the six months ended April 30, 2002 (Unaudited) - --------------------------------------------------------------------------------
ING ING ING ING GLOBAL GLOBAL GLOBAL WORLDWIDE COMMUNICATIONS TECHNOLOGY REAL ESTATE GROWTH FUND FUND FUND FUND ------------- ------------- ----------- ------------- INVESTMENT INCOME: Dividends (net of foreign taxes)* $ 22,344 $ 8,683 $ 740,422 $ 1,166,355 Interest 974 1,619 6,840 141,595 Other -- 3,528 -- 13,847 Securities loaned income -- -- -- 2,371 ------------- ------------- ----------- ------------- Total investment income 23,318 13,830 747,262 1,324,168 ------------- ------------- ----------- ------------- EXPENSES: Investment advisory and management fees 78,189 275,734 124,385 1,550,351 Distribution and service fees: Class A 14,000 44,032 31,075 220,532 Class B 29,917 62,131 12 351,501 Class C 8,271 21,887 9 489,783 Class Q -- -- -- 19,744 Transfer agent fees and expenses: Class A 9,386 42,140 17,401 186,776 Class B 7,081 20,812 7 103,706 Class C 1,940 7,344 5 144,783 Class I -- 108 -- -- Class Q -- -- -- 938 Administrative service fees 5,319 21,919 12,842 62,826 Custodian and fund accounting expenses 15,657 40,143 37,315 132,956 Printing and postage expenses 3,823 23,202 7,463 119,354 Registration fees 23,773 27,610 5,412 62,523 Professional fees 3,716 19,772 5,939 90,984 Trustee expenses 874 3,951 904 23,054 Offering costs -- -- 66,678 -- Organization expense -- -- 40,000 -- Miscellaneous expenses 3,011 6,340 3,149 21,301 ------------- ------------- ----------- ------------- 204,957 617,125 352,596 3,581,112 Less: Waived and reimbursed fees 46,036 127,015 134,855 197,270 ------------- ------------- ----------- ------------- Total expenses 158,921 490,110 217,741 3,383,842 ------------- ------------- ----------- ------------- Net investment income (loss) (135,603) (476,280) 529,521 (2,059,674) ------------- ------------- ----------- ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized gain (loss) on investments (7,412,537) (10,849,341) 484,622 (34,790,690) Net realized gain (loss) on foreign currencies (7,563) 1,364 (10,532) (46,358) Net change in unrealized appreciation of investments and foreign currencies 3,541,309 7,414,113 2,725,627 40,343,170 ------------- ------------- ----------- ------------- Net realized and unrealized gain (loss) on investments and foreign currencies (3,878,791) (3,433,864) 3,199,717 5,506,122 ------------- ------------- ----------- ------------- INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (4,014,394) $ (3,910,144) $ 3,729,238 $ 3,446,448 ============= ============= =========== ============= * Foreign taxes $ 3,034 $ -- $ 29,895 $ 138,018
See Accompanying Notes to Financial Statements 38 STATEMENTS OF CHANGES IN NET ASSETS (Unaudited) - --------------------------------------------------------------------------------
ING ASIA-PACIFIC ING EMERGING ING EUROPEAN EQUITY FUND COUNTRIES FUND EQUITY FUND ----------------------------- ----------------------------- ----------------------------- SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 2002 2001 ------------- ------------- ------------- ------------- ------------- ------------- FROM OPERATIONS: Net investment loss $ (39,144) $ (120,471) $ (354,461) $ (161,993) $ (24,615) $ (3,029) Net realized loss on investments and foreign currencies (1,344,679) (2,128,921) (9,663,738) (36,773,249) (1,584,419) (1,255,057) Net change in unrealized appreciation (depreciation) of investments and foreign currencies 4,423,850 (3,198,125) 47,514,673 (27,496,017) 2,187,979 (5,758,078) ------------- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations 3,040,027 (5,447,517) 37,496,474 (64,431,259) 578,945 (7,016,164) ------------- ------------- ------------- ------------- ------------- ------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Class A -- (134,215) (1,786) -- -- -- Class B -- (79,361) -- -- -- -- Class M -- (85,615) -- -- -- -- Class Q -- -- (1,105) -- -- -- Net realized gains: Class A -- -- -- -- -- (1,376,373) Class B -- -- -- -- -- (44,993) Class C -- -- -- -- -- (4,655) ------------- ------------- ------------- ------------- ------------- ------------- Total distributions -- (299,191) (2,891) -- -- (1,426,021) ------------- ------------- ------------- ------------- ------------- ------------- FROM CAPITAL SHARE TRANSACTIONS: Net proceeds from sale of shares 5,822,247 74,999,492 101,973,244 217,556,814 8,881,676 74,498,593 Shares resulting from dividend reinvestments -- 207,237 2,537 -- -- 1,425,459 Redemption fee proceeds 35,017 -- -- -- -- -- Net assets received in connection with reorganization (Note 14) -- 2,738,406 -- 79,404,743 -- -- ------------- ------------- ------------- ------------- ------------- ------------- 5,857,264 77,945,135 101,975,781 296,961,557 8,881,676 75,924,052 Cost of shares redeemed (7,955,118) (80,326,072) (116,247,446) (304,714,477) (9,223,305) (81,305,974) ------------- ------------- ------------- ------------- ------------- ------------- Net decrease in net assets resulting from capital share transactions (2,097,854) (2,380,937) (14,271,665) (7,752,920) (341,629) (5,381,922) ------------- ------------- ------------- ------------- ------------- ------------- Net increase(decrease) in net assets 942,173 (8,127,645) 23,221,918 (72,184,179) 237,316 (13,824,107) ------------- ------------- ------------- ------------- ------------- ------------- Net assets, beginning of period 10,732,445 18,860,090 121,413,547 193,597,726 20,311,071 34,135,178 ------------- ------------- ------------- ------------- ------------- ------------- Net assets, end of period $ 11,674,618 $ 10,732,445 $ 144,635,465 $ 121,413,547 $ 20,548,387 $ 20,311,071 ============= ============= ============= ============= ============= ============= Accumulated net investment loss $ (39,144) $ -- $ (357,352) $ -- $ (24,615) $ -- ============= ============= ============= ============= ============= =============
See Accompanying Notes to Financial Statements 39 STATEMENTS OF CHANGES IN NET ASSETS (Unaudited) - --------------------------------------------------------------------------------
ING INTERNATIONAL ING ING INTERNATIONAL CORE GROWTH FUND INTERNATIONAL FUND SMALLCAP GROWTH FUND ---------------------------- ---------------------------- ------------------------------- SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 2002 2001 ------------ ------------- ------------ ------------- ------------- --------------- FROM OPERATIONS: Net investment loss $ (136,626) $ (519,750) $ (127,347) $ (330,950) $ (1,444,725) $ (2,561,791) Net realized loss on investments and foreign currencies (2,854,725) (9,375,907) (3,087,181) (11,843,788) (19,118,350) (173,727,639) Net change in unrealized appreciation (depreciation) of investments and foreign currencies 5,248,525 (6,404,908) 6,132,657 (4,519,435) 48,227,999 (47,851,481) ------------ ------------- ------------ ------------- ------------- --------------- Net increase (decrease) in net assets resulting from operations 2,257,174 (16,300,565) 2,918,129 (16,694,173) 27,664,924 (224,140,911) ------------ ------------- ------------ ------------- ------------- --------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Class A -- (383,671) -- -- -- (1,698,448) Class B -- (282,575) -- -- -- (237,496) Class C -- (377,838) -- -- -- (352,852) Class Q -- (252,790) -- -- -- (1,030,266) Net realized gains: Class A -- (977,852) -- (2,511,379) -- (18,413,900) Class B -- (940,067) -- (4,307) -- (8,652,842) Class C -- (1,194,472) -- (7,175) -- (9,261,123) Class Q -- (673,887) -- -- -- (11,008,477) ------------ ------------- ------------ ------------- ------------- --------------- Total distributions -- (5,083,152) -- (2,522,861) -- (50,655,404) ------------ ------------- ------------ ------------- ------------- --------------- FROM CAPITAL SHARE TRANSACTIONS: Net proceeds from sale of shares 17,630,197 250,950,815 32,324,233 105,520,916 416,186,249 1,226,761,083 Shares resulting from dividend reinvestments -- 3,679,161 -- 2,042,018 -- 37,962,104 Redemption fee proceeds -- -- 27,977 -- -- -- Net assets received in connection with reorganization (Note 14) -- -- -- 39,847,064 -- -- ------------ ------------- ------------ ------------- ------------- --------------- 17,630,197 254,629,976 32,352,210 147,409,998 416,186,249 1,264,723,187 Cost of shares redeemed (23,161,877) (274,199,878) (29,524,560) (118,040,395) (429,413,830) (1,302,975,931) ------------ ------------- ------------ ------------- ------------- --------------- Net increase(decrease) in net assets resulting from capital share transactions (5,531,680) (19,569,902) 2,827,650 29,369,603 (13,227,581) (38,252,744) ------------ ------------- ------------ ------------- ------------- --------------- Net increase(decrease) in net assets (3,274,506) (40,953,619) 5,745,779 10,152,569 14,437,343 (313,049,059) ------------ ------------- ------------ ------------- ------------- --------------- Net assets, beginning of period 41,198,995 82,152,614 40,970,643 30,818,074 388,753,529 701,802,588 ------------ ------------- ------------ ------------- ------------- --------------- Net assets, end of period $ 37,924,489 $ 41,198,995 $ 46,716,422 $ 40,970,643 $ 403,190,872 $ 388,753,529 ============ ============= ============ ============= ============= =============== Accumulated net investment loss $ (183,105) $ (46,479) $ (152,124) $ (24,777) $ (2,733,078) $ (1,288,353) ============ ============= ============ ============= ============= ===============
See Accompanying Notes to Financial Statements 40 STATEMENTS OF CHANGES IN NET ASSETS (Unaudited) - --------------------------------------------------------------------------------
ING INTERNATIONAL ING ING VALUE FUND PRECIOUS METALS FUND RUSSIA FUND -------------------------------- --------------------------- --------------------------- SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 2002 2001 -------------- --------------- ------------ ------------ ------------ ------------ FROM OPERATIONS: Net investment income (loss) $ 7,804,415 $ 12,987,389 $ (161,507) $ 355,765 $ 1,220,110 $ (267,077) Net realized gain (loss) on investments and foreign currencies 62,526,142 52,507,012 693,541 (11,404,759) 862,945 (4,965,985) Net change in unrealized appreciation (depreciation) of investments and foreign currencies 224,052,555 (513,633,123) 28,439,703 19,399,682 36,458,688 10,156,063 -------------- --------------- ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations 294,383,112 (448,138,722) 28,971,737 8,350,688 38,541,743 4,923,001 -------------- --------------- ------------ ------------ ------------ ------------ FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Class A (9,049,951) (8,788,538) (302,618) (59,614) -- -- Class B (97,413) (739,366) -- -- -- -- Class C (119,172) (1,348,847) -- -- -- -- Class I (2,526,944) -- -- -- -- -- Class Q (250,540) (219,484) -- -- -- -- Net realized gains: Class A (25,504,406) (116,432,733) -- -- -- -- Class B (8,951,514) (50,270,298) -- -- -- -- Class C (12,776,248) (69,369,907) -- -- -- -- Class I (4,759,757) -- -- -- -- -- Class Q (784,233) (2,854,652) -- -- -- -- -------------- --------------- ------------ ------------ ------------ ------------ Total distributions (64,820,178) (250,023,825) (302,618) (59,614) -- -- -------------- --------------- ------------ ------------ ------------ ------------ FROM CAPITAL SHARE TRANSACTIONS: Net proceeds from sale of shares 1,468,132,675 2,784,350,826 6,899,351 21,463,292 49,388,157 17,289,158 Shares resulting from dividend reinvestments 48,205,060 178,600,219 271,568 54,487 -- -- Net assets received in connection with reorganization (Note 14) -- -- -- 14,557,739 -- -- -------------- --------------- ------------ ------------ ------------ ------------ 1,516,337,735 2,962,951,045 7,170,919 36,075,518 49,388,157 17,289,158 Cost of shares redeemed (914,925,227) (1,770,962,879) (13,308,517) (23,933,244) (11,297,227) (26,829,915) -------------- --------------- ------------ ------------ ------------ ------------ Net increase(decrease) in net assets resulting from capital share transactions 601,412,508 1,191,988,166 (6,137,598) 12,142,274 38,090,930 (9,540,757) -------------- --------------- ------------ ------------ ------------ ------------ Net increase(decrease) in net assets 830,975,442 493,825,619 22,531,521 20,433,348 76,632,673 (4,617,756) -------------- --------------- ------------ ------------ ------------ ------------ Net assets, beginning of period 2,482,741,573 1,988,915,954 60,563,322 40,129,974 49,018,796 53,636,552 -------------- --------------- ------------ ------------ ------------ ------------ Net assets, end of period $3,313,717,015 $ 2,482,741,573 $ 83,094,843 $ 60,563,322 $125,651,469 $ 49,018,796 ============== =============== ============ ============ ============ ============ Accumulated net investment income (loss) $ 7,779,218 $ 12,018,823 $ (164,510) $ 299,614 $ 1,220,110 $ -- ============== =============== ============ ============ ============ ============
See Accompanying Notes to Financial Statements 41 STATEMENTS OF CHANGES IN NET ASSETS (Unaudited) - --------------------------------------------------------------------------------
ING GLOBAL ING GLOBAL COMMUNICATIONS FUND TECHNOLOGY FUND ----------------------------- ----------------------------- SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 ------------- ------------- ------------- ------------- FROM OPERATIONS: Net investment income (loss) $ (135,603) $ (712,996) $ (476,280) $ (1,566,741) Net realized gain (loss) on investments and foreign currencies (7,420,100) (69,456,713) (10,847,977) (71,523,921) Net change in unrealized appreciation (depreciation) of investments and foreign currencies 3,541,309 8,667,180 7,414,113 (34,281,108) ------------- ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations (4,014,394) (61,502,529) (3,910,144) (107,371,770) ------------- ------------- ------------- ------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Class A -- -- -- -- Net realized gains: Class A -- -- -- (30,445,172) Class B -- -- -- (13,746,900) Class C -- -- -- (5,022,431) Class Q -- -- -- -- Tax return of capital -- -- -- -- ------------- ------------- ------------- ------------- Total distributions -- -- -- (49,214,503) ------------- ------------- ------------- ------------- FROM CAPITAL SHARE TRANSACTIONS: Net proceeds from sale of shares 1,952,702 23,102,759 10,009,178 83,127,198 Shares resulting from dividend reinvestments -- -- -- 45,777,717 Net assets received in connection with reorganization (Note 14) -- -- -- 5,497,157 ------------- ------------- ------------- ------------- 1,952,702 23,102,759 10,009,178 134,402,072 Cost of shares redeemed (2,622,423) (41,755,847) (15,486,373) (109,727,837) ------------- ------------- ------------- ------------- Net increase(decrease) in net assets resulting from capital share transactions (669,721) (18,653,088) (5,477,195) 24,674,235 ------------- ------------- ------------- ------------- Net increase(decrease) in net assets (4,684,115) (80,155,617) (9,387,339) (131,912,038) ------------- ------------- ------------- ------------- Net assets, beginning of period 15,670,176 95,825,793 41,461,297 173,373,335 ------------- ------------- ------------- ------------- Net assets, end of period $ 10,986,061 $ 15,670,176 $ 32,073,958 $ 41,461,297 ============= ============= ============= ============= Accumulated net investment income (loss) $ (135,603) $ -- $ (476,280) $ -- ============= ============= ============= ============= ING GLOBAL ING WORLDWIDE REAL ESTATE FUND GROWTH FUND ---------------- ----------------------------- PERIOD SIX MONTHS YEAR ENDED ENDED ENDED APRIL 30, APRIL 30, OCTOBER 31, 2002(1) 2002 2001 ------------- ------------- ------------- FROM OPERATIONS: Net investment income (loss) $ 529,521 $ (2,059,674) $ (4,603,029) Net realized gain (loss) on investments and foreign currencies 474,090 (34,837,048) (155,802,328) Net change in unrealized appreciation (depreciation) of investments and foreign currencies 2,725,627 40,343,170 (80,566,335) ------------- ------------- ------------- Net increase (decrease) in net assets resulting from operations 3,729,238 3,446,448 (240,971,692) ------------- ------------- ------------- FROM DISTRIBUTIONS TO SHAREHOLDERS: Net investment income: Class A (426,084) -- -- Net realized gains: Class A -- -- (7,119,984) Class B -- -- (3,694,167) Class C -- -- (6,151,198) Class Q -- -- (1,259,906) Tax return of capital -- -- (7,156,338) ------------- ------------- ------------- Total distributions (426,084) -- (25,381,593) ------------- ------------- ------------- FROM CAPITAL SHARE TRANSACTIONS: Net proceeds from sale of shares 25,544,544 93,714,227 403,025,732 Shares resulting from dividend reinvestments 405,886 -- 13,156,284 Net assets received in connection with reorganization (Note 14) -- -- 55,730,423 ------------- ------------- ------------- 25,950,430 93,714,227 471,912,439 Cost of shares redeemed (9,650) (154,262,430) (511,257,476) ------------- ------------- ------------- Net increase(decrease) in net assets resulting from capital share transactions 25,940,780 (60,548,203) (39,345,037) ------------- ------------- ------------- Net increase(decrease) in net assets 29,243,934 (57,101,755) (305,698,322) ------------- ------------- ------------- Net assets, beginning of period -- 326,192,509 631,890,831 ------------- ------------- ------------- Net assets, end of period $ 29,243,934 $ 269,090,754 $ 326,192,509 ============= ============= ============= Accumulated net investment income (loss) $ 103,437 $ (2,059,674) $ -- ============= ============= =============
(1) Commenced operations on November 5, 2001. See Accompanying Notes to Financial Statements 42 ING ASIA-PACIFIC EQUITY FUND (UNAUDITED) FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
CLASS A ----------------------------------------------------------------------- SIX FOUR MONTHS YEAR MONTHS ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, YEAR ENDED JUNE 30, 2002 2001 2000(4) 2000 1999 1998 1997 ---- ---- ------- ---- ---- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 3.25 4.99 7.23 7.22 4.46 10.93 10.35 Income from investment operations: Net investment income (loss) $ 0.03 (0.01) 0.08 (0.05) -- 0.03 0.02 Net realized and unrealized gain (loss) on investments $ 0.91 (1.64) (2.32) 0.06 2.76 (6.50) 0.58 Total from investment operations $ 0.94 (1.65) (2.24) 0.01 2.76 (6.47) 0.60 Less distributions from: Net investment income $ -- 0.09 -- -- -- -- -- Tax return of capital $ -- -- -- -- -- -- 0.02 Total distributions $ -- 0.09 -- -- -- -- 0.02 Net asset value, end of period $ 4.19 3.25 4.99 7.23 7.22 4.46 10.93 TOTAL RETURN(1): % 28.92 (33.64) (30.98) 0.14 61.88 (59.29) 5.78 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 6,035 5,740 8,471 11,726 14,417 11,796 32,485 Ratios to average net assets: Net expenses after expense reimbursement(2)(3) % 2.00 2.30 2.05 2.11 2.00 2.00 2.00 Gross expenses prior to expense reimbursement(2) % 3.05 3.42 2.71 2.55 2.98 2.80 2.54 Net investment income (loss) after expense reimbursement(2)(3) % (0.33) (0.42) 4.28 (0.56) 0.01 0.38 0.00 Portfolio turnover rate % 55 26 13 138 111 81 38 CLASS B ----------------------------------------------------------------------- SIX FOUR MONTHS YEAR MONTHS ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, YEAR ENDED JUNE 30, 2002 2001 2000(4) 2000 1999 1998 1997 ---- ---- ------- ---- ---- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 3.14 4.80 6.97 7.02 4.37 10.83 10.31 Income from investment operations: Net investment income (loss) $ (0.04) (0.10) 0.07 (0.11) (0.04) (0.03) (0.07) Net realized and unrealized gain (loss) on investments $ 0.93 (1.51) (2.24) 0.06 2.69 (6.43) 0.59 Total from investment operations $ 0.89 (1.61) (2.17) (0.05) 2.65 (6.46) 0.52 Less distributions from: Net investment income $ -- 0.05 -- -- -- -- -- Tax return of capital $ -- -- -- -- -- -- -- Total distributions $ -- 0.05 -- -- -- -- -- Net asset value, end of period $ 4.03 3.14 4.80 6.97 7.02 4.37 10.83 TOTAL RETURN(1): % 28.34 (33.87) (31.13) (0.71) 60.64 (59.65) 5.04 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 4,241 3,778 7,678 12,228 12,959 9,084 30,169 Ratios to average net assets: Net expenses after expense reimbursement(2)(3) % 2.75 3.17 2.80 2.86 2.75 2.75 2.75 Gross expenses prior to expense reimbursement(2) % 3.80 4.28 3.45 3.30 3.73 3.55 3.29 Net investment income (loss) after expense reimbursement(2)(3) % (1.08) (1.30) 3.48 (1.31) (0.74) (0.39) (0.79) Portfolio turnover rate % 55 26 13 138 111 81 38 CLASS M ----------------------------------------------------------------------- SIX FOUR MONTHS YEAR MONTHS ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, YEAR ENDED JUNE 30, 2002 2001 2000(4) 2000 1999 1998 1997 ---- ---- ------- ---- ---- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 3.16 4.85 7.04 7.07 4.40 10.86 10.32 Income from investment operations: Net investment income (loss) $ (0.04) (0.19) 0.07 (0.11) (0.02) -- (0.05) Net realized and unrealized gain (loss) on investments $ 0.94 (1.41) (2.26) 0.08 2.69 (6.46) 0.59 Total from investment operations $ 0.90 (1.60) (2.19) (0.03) 2.67 (6.46) 0.54 Less distributions from: Net investment income $ -- 0.09 -- -- -- -- -- Total distributions $ -- 0.09 -- -- -- -- -- Net asset value, end of period $ 4.06 3.16 4.85 7.04 7.07 4.40 10.86 TOTAL RETURN(1): $ 28.48 (33.69) (31.11) (0.42) 60.68 (59.48) 5.26 RATIOS/SUPPLEMENTAL DATA: % Net assets, end of period (000's) 1,400 1,215 2,711 3,749 5,184 4,265 11,155 Ratios to average net assets: $ Net expenses after expense reimbursement(2)(3) 2.50 2.78 2.53 2.61 2.50 2.50 2.50 Gross expenses prior to expense % reimbursement(2) % 3.55 3.89 3.18 3.05 3.48 3.30 3.04 Net investment income (loss) after expense reimbursement(2)(3) % (0.82) (0.97) 3.72 (1.06) (0.49) (0.07) (0.55) Portfolio turnover rate % 55 26 13 138 111 81 38
- ---------- (1) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (2) Annualized for periods less than one year. (3) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Investments, LLC within three years. (4) The Fund changed it fiscal year-end from June 30 to October 31. See Accompanying Notes to Financial Statements 43 FINANCIAL HIGHLIGHTS ING EMERGING COUNTRIES FUND (UNAUDITED) - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
CLASS A -------------------------------------------------------------------------------- SIX FOUR THREE MONTHS YEAR MONTHS YEAR MONTHS ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, YEAR ENDED MARCH 31, 2002 2001 2000(5)(6) 2000 1999(1) 1999 1998 ---- ---- ---------- ---- ------- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 11.87 16.33 20.17 16.74 13.43 17.39 17.20 Income from investment operations: Net investment income (loss) $ (0.04) (0.02) (0.24) (0.20) (0.05) (0.06) 0.03 Net realized and unrealized gain (loss) on investments (net of Indian tax) $ 3.82 (4.44) (3.60) 3.63 3.36 (3.81) 1.22 Total from investment operations $ 3.78 (4.46) (3.84) 3.43 3.31 (3.87) 1.25 Less distributions from: Net investment income $ 0.00* -- -- -- -- 0.02 -- Net realized gain on investments $ -- -- -- -- -- 0.07 1.06 Total distributions $ -- -- -- -- -- 0.09 1.06 Net asset value, end of period $ 15.65 11.87 16.33 20.17 16.74 13.43 17.39 TOTAL RETURN(2): % 31.85 (27.31) (19.04) 20.49 24.65 (22.23) 8.06 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 81,451 67,247 59,541 75,311 53,483 47,180 71,014 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 2.25 2.32 2.23 2.19 2.13 2.27 2.26 Gross expenses prior to expense reimbursement(3) % 2.33 2.33 2.38 2.34 2.66 2.56 2.48 Net investment income (loss) after expense reimbursement(3)(4) % (0.47) (0.16) (1.31) (1.15) (1.30) (0.25) 0.55 Portfolio turnover rate % 165 74 94 211 67 213 243 CLASS B -------------------------------------------------------------------------------- SIX FOUR THREE MONTHS YEAR MONTHS YEAR MONTHS ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, YEAR ENDED MARCH 31, 2002 2001 2000(5)(6) 2000 1999(1) 1999 1998 ---- ---- ---------- ---- ------- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 11.85 16.41 20.30 16.98 13.64 17.64 17.29 Income from investment operations: Net investment income (loss) $ 0.00* (0.11) (0.23) (0.35) (0.07) (0.22) (0.07) Net realized and unrealized gain (loss) on investments (net of Indian tax) $ 3.73 (4.45) (3.66) 3.67 3.41 (3.70) 1.26 Total from investment operations $ 3.73 (4.56) (3.89) 3.32 3.34 (3.92) 1.19 Less distributions from: Net investment income $ -- -- -- -- -- -- -- Net realized gain on investments $ -- -- -- -- -- 0.08 0.84 Total distributions $ -- -- -- -- -- 0.08 0.84 Net asset value, end of period $ 15.58 11.85 16.41 20.30 16.98 13.64 17.64 TOTAL RETURN(2): % 31.48 (27.79) (19.16) 19.55 24.49 (22.23) 7.47 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 17,488 14,637 22,707 30,322 26,342 22,338 38,796 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 2.90 2.99 2.98 2.84 2.75 2.91 2.91 Gross expenses prior to expense reimbursement(3) % 2.98 3.00 3.12 2.99 3.28 3.20 3.06 Net investment income (loss) after expense reimbursement(3)(4) % (1.12) (0.72) (1.01) (1.80) (1.92) (0.80) (0.20) Portfolio turnover rate % 165 74 94 211 67 213 243 CLASS C -------------------------------------------------------------------------------- SIX FOUR THREE MONTHS YEAR MONTHS YEAR MONTHS ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, YEAR ENDED MARCH 31, 2002 2001 2000(5)(6) 2000 1999(1) 1999 1998 ---- ---- ---------- ---- ------- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 11.41 15.81 19.56 16.35 13.14 16.98 16.81 Income from investment operations: Net investment loss $ (0.09) (0.12) (0.22) (0.32) (0.07) (0.27) (0.12) Net realized and unrealized gain (loss) on investments (net of Indian tax) $ 3.67 (4.28) (3.53) 3.53 3.28 (3.49) 1.26 Total from investment operations $ 3.58 (4.40) (3.75) 3.21 3.21 (3.76) 1.14 Less distributions from: Net realized gain on investments $ -- -- -- -- -- 0.08 0.97 Total distributions $ -- -- -- -- -- 0.08 0.97 Net asset value, end of period $ 14.99 11.41 15.81 19.56 16.35 13.14 16.98 TOTAL RETURN(2): $ 31.38 (27.83) (19.17) 19.63 24.43 (22.21) 7.47 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 15,123 12,746 22,456 29,610 24,230 19,246 36,986 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 2.90 2.99 2.98 2.84 2.75 2.90 2.91 Gross expenses prior to expense reimbursement(3) % 2.98 3.00 3.09 2.99 3.28 3.19 3.09 Net investment loss after expense reimbursement(3)(4) % (1.15) (0.73) (0.95) (1.80) (1.92) (0.77) (0.26) Portfolio turnover rate % 165 74 94 211 67 213 243
- ---------- (1) Effective May 24, 1999, ING Investments, LLC became the Investment Manager of the Fund, concurrently Nicholas-Applegate Capital Management was appointed as sub-advisor and the Fund changed its fiscal year-end to June 30. (2) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Investments, LLC within three years. (5) Effective October 1, 2000, ING Investments, LLC became the Investment Manager of the Fund, replacing Nicholas-Applegate Capital Management. (6) The Fund changed its fiscal year-end from June 30 to October 31. * Amount represents less than $0.01 per share. See Accompanying Notes to Financial Statements 44 ING EUROPEAN EQUITY FUND (UNAUDITED) FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
CLASS A -------------------------------------------- SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 2002 2001(5) 2000 1999(1) ---- ------- ---- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 7.70 10.95 10.95 10.00 Income from investment operations: Net investment income (loss) $ (0.01) 0.00(6) (0.01) 0.04 Net realized and unrealized gain (loss) on investments $ 0.22 (2.76) 0.34 0.91 Total from investment operations $ 0.21 (2.76) 0.33 0.95 Less distributions from: Net investment income $ -- -- 0.05 -- Net realized gain on investments $ -- 0.49 0.28 -- Total distributions $ -- 0.49 0.33 -- Net asset value, end of period $ 7.91 7.70 10.95 10.95 TOTAL RETURN(2) % 2.73 (26.38) 2.93 9.50 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 19,350 19,056 31,985 28,746 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 1.90 1.74 1.63 1.61 Gross expenses prior to expense reimbursement(3) % 2.68 3.07 2.83 3.06 Net investment income (loss) after expense reimbursement(3)(4) % (0.19) 0.03 (0.09) 0.48 Portfolio turnover rate % 36 79 61 63 CLASS B -------------------------------------------- SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 2002 2001(5) 2000 1999(1) ---- ------- ---- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 7.56 10.83 10.89 10.00 Income from investment operations: Net investment income (loss) $ (0.04) (0.08) (0.08) 0.00(6) Net realized and unrealized gain (loss) on investments $ 0.21 (2.70) 0.33 0.89 Total from investment operations $ 0.17 (2.78) 0.25 0.89 Less distributions from: Net investment income $ -- -- 0.03 -- Net realized gain on investments $ -- 0.49 0.28 -- Total distributions $ -- 0.49 0.31 -- Net asset value, end of period $ 7.73 7.56 10.83 10.89 TOTAL RETURN(2) % 2.25 (26.88) 2.14 8.90 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 1,087 1,168 1,117 849 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 2.65 2.46 2.28 2.27 Gross expenses prior to expense reimbursement(3) % 3.33 3.75 3.08 3.35 Net investment income (loss) after expense reimbursement(3)(4) % (0.98) (0.66) (0.75) (0.08) Portfolio turnover rate % 36 79 61 63 CLASS C -------------------------------------------- SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 2002 2001(5) 2000 1999(1) ---- ------- ---- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 7.51 10.77 10.89 10.00 Income from investment operations: Net investment income (loss) $ (0.04) (0.05) (0.06) (0.01) Net realized and unrealized gain (loss) on investments $ 0.22 (2.72) 0.27 0.90 Total from investment operations $ 0.18 (2.77) 0.21 0.89 Less distributions from: Net investment income $ -- -- 0.05 -- Net realized gain on investments $ -- 0.49 0.28 -- Total distributions $ -- 0.49 0.33 -- Net asset value, end of period $ 7.69 7.51 10.77 10.89 TOTAL RETURN(2) % 2.40 (26.94) 1.76 8.90 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 111 87 188 62 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 2.65 2.48 2.28 2.26 Gross expenses prior to expense reimbursement(3) % 3.33 3.74 3.08 3.34 Net investment income (loss) after expense reimbursement(3)(4) % (0.98) (0.74) (0.68) (0.15) Portfolio turnover rate % 36 79 61 63
- ---------- (1) The Fund commenced operations on December 15, 1998. (2) Total return is calculated assuming reinvestment of all dividend and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Investments, LLC within three years. (5) Effective April 30, 2001, ING Investments, LLC became the Investment Manager of the Fund. (6) Amount represents less than $0.01 per share. See Accompanying Notes to Financial Statements 45 FINANCIAL HIGHLIGHTS ING INTERNATIONAL CORE GROWTH FUND (UNAUDITED) - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
CLASS A ------------------------------------------------------------------------------- SIX FOUR THREE MONTHS YEAR MONTHS YEAR MONTHS ENDED ENDED ENDED ENDED ENDED APRIL 30, OCT. 31, OCT. 31, JUNE 30, JUNE 30, YEAR ENDED MARCH 31, 2002 2001 2000(5)(6) 2000 1999(1) 1999 1998 ---- ---- ---------- ---- ------- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 14.27 20.92 23.84 18.92 17.71 17.01 12.73 Income from investment operations: Net investment income (loss) $ (0.01) (0.13) (0.03) (0.17) 0.04 (0.01) (0.02) Net realized and unrealized gain (loss) on investments $ 0.86 (5.07) (2.89) 6.25 1.17 1.02 4.56 Total from investment operations $ 0.85 (5.20) (2.92) 6.08 1.21 1.01 4.54 Less distributions from: Net investment income $ -- 0.41 -- -- -- 0.18 -- Net realized gain on investments $ -- 1.04 -- 1.16 -- 0.13 0.26 Total distributions $ -- 1.45 -- 1.16 -- 0.31 0.26 Net asset value, end of period $ 15.12 14.27 20.92 23.84 18.92 17.71 17.01 TOTAL RETURN(2): % 5.96 (26.56) (12.25) 32.83 6.83 5.90 36.10 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 7,249 8,707 23,588 23,003 12,409 21,627 12,664 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 1.95 1.94 1.76 1.85 1.77 1.89 1.96 Gross expenses prior to expense reimbursement(3) % 2.15 2.20 1.90 2.16 1.86 2.13 3.02 Net investment income (loss) after expense reimbursement(3)(4) % (0.42) (0.59) (0.48) (0.83) 0.50 (0.51) (0.45) Portfolio turnover rate % 52 198 73 200 67 214 274 CLASS B ------------------------------------------------------------------------------- SIX FOUR THREE MONTHS YEAR MONTHS YEAR MONTHS ENDED ENDED ENDED ENDED ENDED APRIL 30, OCT. 31, OCT. 31, JUNE 30, JUNE 30, YEAR ENDED MARCH 31, 2002 2001 2000(5)(6) 2000 1999(1) 1999 1998 ---- ---- ---------- ---- ------- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 14.20 20.88 23.83 19.08 17.89 17.10 12.68 Income from investment operations: Net investment income (loss) $ (0.12) (0.27) (0.09) (0.30) -- (0.16) (0.11) Net realized and unrealized gain (loss) on investments $ 0.92 (5.05) (2.86) 6.21 1.19 1.05 4.66 Total from investment operations $ 0.80 (5.32) (2.95) 5.91 1.19 0.89 4.55 Less distributions from: Net investment income $ -- 0.32 -- -- -- 0.03 -- Net realized gain on investments $ -- 1.04 -- 1.16 -- 0.07 0.13 Total distributions $ -- 1.36 -- 1.16 -- 0.10 0.13 Net asset value, end of period $ 15.00 14.20 20.88 23.83 19.08 17.89 17.10 TOTAL RETURN(2): % 5.63 (27.14) (12.38) 31.62 6.65 5.24 35.31 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 10,567 11,620 19,116 21,543 12,034 11,033 7,942 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 2.60 2.62 2.41 2.50 2.36 2.53 2.61 Gross expenses prior to expense reimbursement(3) % 2.80 2.88 2.56 2.81 2.45 2.77 3.04 Net investment income (loss) after expense reimbursement(3)(4) % (1.04) (1.27) (1.16) (1.48) (0.09) (1.13) (1.32) Portfolio turnover rate % 52 198 73 200 67 214 274 CLASS C ------------------------------------------------------------------------------- SIX FOUR THREE MONTHS YEAR MONTHS YEAR MONTHS ENDED ENDED ENDED ENDED ENDED APRIL 30, OCT. 31, OCT. 31, JUNE 30, JUNE 30, YEAR ENDED MARCH 31, 2002 2001 2000(5)(6) 2000 1999(1) 1999 1998 ---- ---- ---------- ---- ------- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 14.24 20.96 23.93 19.14 17.94 17.16 12.68 Income from investment operations: Net investment loss $ (0.14) (0.28) (0.08) (0.27) -- (0.05) (0.07) Net realized and unrealized gain (loss) on investments $ 0.94 (5.06) (2.89) 6.22 1.20 0.94 4.55 Total from investment operations $ 0.80 (5.34) (2.97) 5.95 1.20 0.89 4.48 Less distributions from: Net investment income $ -- 0.33 -- -- -- 0.11 -- Net realized gain on investments $ -- 1.05 -- 1.16 -- -- -- Total distributions $ -- 1.38 -- 1.16 -- 0.11 -- Net asset value, end of period $ 15.04 14.24 20.96 23.93 19.14 17.94 17.16 TOTAL RETURN(2): % 5.62 (27.15) (12.41) 31.73 6.69 5.22 35.25 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 10,915 13,213 25,501 26,734 11,936 10,400 3,517 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 2.60 2.61 2.41 2.50 2.36 2.55 2.61 Gross expenses prior to expense reimbursement(3) % 2.80 2.87 2.56 2.81 2.45 2.79 5.10 Net investment loss after expense reimbursement(3)(4) % (1.09) (1.20) (1.16) (1.48) (0.09) (1.19) (1.27) Portfolio turnover rate % 52 198 73 200 67 214 274
- ---------- (1) Effective May 24, 1999, ING Investments, LLC became the Investment Manager of the Fund, concurrently Nicholas-Applegate Capital Management was appointed as sub-advisor and the Fund changed its fiscal year-end to June 30. (2) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) The Investment Manager has agreed to limit expenses, excluding, interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Investments, LLC within three years. (5) Effective October 1, 2000, ING Investments, LLC became the Investment Manager of the Fund, replacing Nicholas-Applegate Capital Management. (6) The Fund changed its fiscal year-end from June 30 to October 31. See Accompanying Notes to Financial Statements 46 FINANCIAL HIGHLIGHTS ING INTERNATIONAL FUND (UNAUDITED) - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
CLASS A -------------------------------------------------------------------- SIX MONTHS YEAR TEN MONTHS ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, YEAR ENDED DECEMBER 31, 2002 2001 2000(4)(6) 1999 1998 1997 ---- ---- ---------- ---- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 8.09 11.22 13.45 11.61 10.10 10.86 Income from investment operations: Net investment income (loss) $ (0.03) (0.05) 0.19 (0.01) 0.17 0.07 Net realized and unrealized gain (loss) on investments $ 0.56 (2.14) (1.48) 5.46 1.74 0.10 Total from investment operations $ 0.53 (2.19) (1.29) 5.45 1.91 0.17 Less distributions from: Net investment income $ -- -- 0.86 0.03 0.06 0.13 Net realized gain on investments $ -- 0.94 0.08 3.58 0.34 0.80 Total distributions $ -- 0.94 0.94 3.61 0.40 0.93 Net asset value, end of period $ 8.62 8.09 11.22 13.45 11.61 10.10 TOTAL RETURN(2): % 6.55 (21.38) (10.22) 47.85 19.02 1.61 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 34,660 37,489 30,653 25,304 24,000 19,949 Ratios to average net assets: Net expenses after expense reimbursement(3)(5) % 2.44 2.51 2.23 1.98 1.75 1.75 Gross expenses prior to expense reimbursement(3) % 2.44 2.51 2.23 1.98 2.25 2.15 Net investment income (loss) after expense reimbursement(3)(5) % (0.69) (0.74) (0.23) (0.21) 0.35 0.53 Portfolio turnover rate % 142 169 113 144 144 123 CLASS B CLASS C ------------------------------------ --------------------------------------- SIX MONTHS YEAR AUGUST 22, SIX MONTHS YEAR SEPTEMBER 15, ENDED ENDED 2000(1) TO ENDED ENDED 2000(1) TO APRIL 30, OCTOBER 31, OCTOBER 31, APRIL 30, OCTOBER 31, OCTOBER 31, 2002 2001 2000(4) 2002 2001 2000(4) ---- ---- ------- ---- ---- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 8.03 11.19 12.28 8.02 11.21 11.67 Income from investment operations: Net investment loss $ (0.06) (0.62) (0.05) (0.07) (0.62) (0.04) Net realized and unrealized gain loss) on investments $ 0.53 (1.60) (1.04) 0.55 (1.63) (0.42) Total from investment operations $ 0.47 (2.22) (1.09) 0.48 (2.25) (0.46) Less distributions from: Net realized gain on investments $ -- 0.94 -- -- 0.94 -- Total distributions $ -- 0.94 -- -- 0.94 -- Net asset value, end of period $ 8.50 8.03 11.19 8.50 8.02 11.21 TOTAL RETURN(2): % 5.85 (21.74) (8.88) 5.98 (21.98) (3.94) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 2,191 1,961 80 1,654 1,514 85 Ratios to average net assets: Net expenses after expense reimbursement(3)(5) % 3.18 3.32 2.76 3.18 3.31 2.96 Gross expenses prior to expense reimbursement(3) % 3.18 3.32 2.76 3.18 3.31 2.96 Net investment loss after expense reimbursement(3)(5) % (1.44) (1.40) (7.02) (1.46) (1.46) (3.97) Portfolio turnover rate % 142 169 113 142 169 113
- ---------- (1) Commencement of offering of shares. (2) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) The Fund changed its fiscal year-end from December 31 to October 31. (5) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Investments, LLC within three years. (6) Effective July 26, 2000 ING Investments, LLC became the Investment Manager of the Fund. See Accompanying Notes to Financial Statements 47 FINANCIAL HIGHLIGHTS ING INTERNATIONAL SMALLCAP GROWTH FUND (UNAUDITED) - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
CLASS A ------------------------------------------------------------------------------------ SIX FOUR THREE MONTHS YEAR MONTHS YEAR MONTHS ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, YEAR ENDED MARCH 31, 2002 2001 2000(1) 2000 1999(2) 1999 1998 ---- ---- ------- ---- ------- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 21.85 36.08 40.94 23.80 21.03 19.29 14.92 Income from investment operations: Net investment income (loss) $ (0.06) (0.11) (0.10) (0.18) (0.03) 0.02 (0.15) Net realized and unrealized gain (loss) on investments $ 1.53 (11.39) (4.76) 19.38 2.80 3.21 5.36 Total from investment operations $ 1.47 (11.50) (4.86) 19.20 2.77 3.23 5.21 Less distributions from: Net investment income $ -- 0.24 -- -- -- -- -- Net realized gain on investments $ -- 2.49 -- 2.06 -- 1.49 0.84 Total distributions $ -- 2.73 -- 2.06 -- 1.49 0.84 Net asset value, end of period $ 23.32 21.85 36.08 40.94 23.80 21.03 19.29 TOTAL RETURN(3): % 6.73 (34.30) (11.90) 82.89 13.17 17.26 36.31 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 165,631 153,804 273,393 278,480 37,490 25,336 11,183 Ratios to average net assets: Net expenses after expense reimbursement (recoupment)(4)(5) % 1.94 1.83 1.67 1.67 1.84 1.94 1.96 Gross expenses prior to expense reimbursement (recoupment)(4) % 1.94 1.83 1.67 1.67 1.86 2.08 2.75 Net investment loss after expense reimbursement (recoupment)(4)(5) % (0.58) (0.33) (0.80) (0.76) (0.69) (0.82) (1.56) Portfolio turnover rate % 250 143 56 164 44 146 198 CLASS B ------------------------------------------------------------------------------------ SIX FOUR THREE MONTHS YEAR MONTHS YEAR MONTHS ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, YEAR ENDED MARCH 31, 2002 2001 2000(1) 2000 1999(2) 1999 1998 ---- ---- ------- ---- ------- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 23.06 38.05 43.27 25.33 22.43 20.16 15.89 Income from investment operations: Net investment income (loss) $ (0.18) (0.32) (0.20) (0.37) (0.07) (0.20) (0.15) Net realized and unrealized gain (loss) on investments $ 1.66 (11.98) (5.02) 20.50 2.97 3.46 5.56 Total from investment operations $ 1.48 (12.30) (5.22) 20.13 2.90 3.26 5.41 Less distributions from: Net investment income $ -- 0.07 -- -- -- -- -- Net realized gain on investments $ -- 2.62 -- 2.19 -- 0.99 1.14 Total distributions $ -- 2.69 -- 2.19 -- 0.99 1.14 Net asset value, end of period $ 24.54 23.06 38.05 43.27 25.33 22.43 20.16 TOTAL RETURN(3): % 6.42 (34.59) (12.05) 81.63 12.93 16.55 35.73 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 74,684 74,541 126,861 132,028 19,331 16,158 12,033 Ratios to average net assets: Net expenses after expense reimbursement (recoupment)(4)(5) % 2.59 2.48 2.32 2.32 2.49 2.59 2.61 Gross expenses prior to expense reimbursement (recoupment)(4) % 2.59 2.48 2.32 2.32 2.51 2.73 2.98 Net investment loss after expense reimbursement (recoupment)(4)(5) % (1.26) (0.98) (1.46) (1.41) (1.34) (1.45) (2.20) Portfolio turnover rate % 250 143 56 164 44 146 198 CLASS C ------------------------------------------------------------------------------------ SIX FOUR THREE MONTHS YEAR MONTHS YEAR MONTHS ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, YEAR ENDED MARCH 31, 2002 2001 2000(1) 2000 1999(2) 1999 1998 ---- ---- ------- ---- ------- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 21.14 34.93 39.71 23.34 20.60 18.53 14.87 Income from investment operations: Net investment loss $ (0.18) (0.38) (0.18) (0.31) (0.06) (0.10) (0.11) Net realized and unrealized gain (loss) on investments $ 1.54 (10.91) (4.60) 18.69 2.80 3.09 5.09 Total from investment operations $ 1.36 (11.29) (4.78) 18.38 2.74 2.99 4.98 Less distributions from: Net investment income $ -- 0.09 -- -- -- -- -- Net realized gain on investments $ -- 2.41 -- 2.01 -- 0.92 1.32 Total distributions $ -- 2.50 -- 2.01 -- 0.92 1.32 Net asset value, end of period $ 22.50 21.14 34.93 39.71 23.34 20.60 18.53 TOTAL RETURN(3): % 6.43 (34.62) (12.04) 80.89 13.31 16.55 35.63 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 67,543 69,320 136,830 144,068 18,354 13,226 8,014 Ratios to average net assets: Net expenses after expense reimbursement (recoupment)(4)(5) % 2.59 2.48 2.32 2.32 2.49 2.59 2.61 Gross expenses prior to expense reimbursement (recoupment)(4) % 2.59 2.48 2.32 2.32 2.51 2.73 3.38 Net investment loss after expense reimbursement (recoupment)(4)(5) % (1.26) (0.98) (1.46) (1.41) (1.34) (1.45) (2.18) Portfolio turnover rate % 250 143 56 164 44 146 198
- ---------- (1) The Fund changed its fiscal year-end from June 30 to October 31. (2) Effective May 24, 1999, ING Investments, LLC became the Investment Manager of the Fund, concurrently Nicholas-Applegate Capital Management was appointed as sub-advisor and the Fund changed its fiscal year-end to June 30. (3) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (4) Annualized for periods less than one year. (5) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Investments, LLC within three years. See Accompanying Notes to Financial Statements 48 ING INTERNATIONAL VALUE FUND (UNAUDITED) FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
CLASS A --------------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 2002 2001 2000 1999 1998 1997 ---- ---- ---- ---- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 12.33 16.68 14.75 11.88 10.90 9.05 Income from investment operations: Net investment income (loss) $ 0.04 0.11 0.15 0.08 0.11 (0.09) Net realized and unrealized gain (loss) on investments $ 1.31 (2.44) 2.58 3.58 0.96 2.30 Total from investment operations $ 1.35 (2.33) 2.73 3.66 1.07 2.21 Less distributions from: Net investment income $ 0.09 0.14 0.11 0.12 -- 0.14 Net realized gain on investments $ 0.26 1.88 0.69 0.67 0.09 0.22 Total distributions $ 0.35 2.02 0.80 0.79 0.09 0.36 Net asset value, end of period $ 13.33 12.33 16.68 14.75 11.88 10.90 TOTAL RETURN(2): % 11.11 (15.89) 18.56 32.55 9.86 27.59 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 1,650,776 1,195,760 920,591 451,815 211,018 60,539 Ratios to average net assets: Net expenses after expense reimbursement (3)(4) % 1.67 1.67 1.64 1.68 1.74 1.80 Gross expenses prior to expense reimbursement(3) % 1.67 1.67 1.64 1.68 1.74 2.07 Net investment income (loss) after expense reimbursement(3)(4) % 0.76 0.88 1.14 0.92 1.62 0.46 Portfolio turnover rate % 11 15 34 29 32 26 CLASS B --------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 2002 2001 2000 1999 1998 1997(1) ---- ---- ---- ---- ---- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 12.13 16.43 14.57 11.76 10.87 10.00 Income from investment operations: Net investment income (loss) $ 0.00* 0.02 0.07 0.01 0.07 (0.02) Net realized and unrealized gain (loss) on investments $ 1.29 (2.41) 2.51 3.51 0.91 0.89 Total from investment operations $ 1.29 (2.39) 2.58 3.52 0.98 0.87 Less distributions from: Net investment income $ 0.00* 0.03 0.03 0.04 -- -- Net realized gain on investments $ 0.26 1.88 0.69 0.67 0.09 -- Total distributions $ 0.26 1.91 0.72 0.71 0.09 -- Net asset value, end of period $ 13.16 12.13 16.43 14.57 11.76 10.87 TOTAL RETURN(2): % 10.76 (16.48) 17.69 31.55 9.16 8.70 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 492,291 421,884 437,765 278,871 145,976 59,185 Ratios to average net assets: Net expenses after expense reimbursement (3)(4) % 2.37 2.37 2.34 2.41 2.47 2.50 Gross expenses prior to expense reimbursement(3) % 2.37 2.37 2.34 2.41 2.47 2.58 Net investment income (loss) after expense reimbursement(3)(4) % 0.03 0.16 0.45 0.18 0.69 (0.71) Portfolio turnover rate % 11 15 34 29 32 26 CLASS C ---------------------------------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 2002 2001 2000 1999 1998 1997 ---- ---- ---- ---- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 12.10 16.41 14.55 11.75 10.86 8.93 Income from investment operations: Net investment income (loss) $ 0.00* 0.02 0.07 -- 0.06 (0.06) Net realized and unrealized gain (loss) on investments $ 1.29 (2.41) 2.52 3.51 0.92 2.20 Total from investment operations $ 1.29 (2.39) 2.59 3.51 0.98 2.14 Less distributions from: Net investment income $ 0.00* 0.04 0.04 0.04 -- 0.04 Net realized gain on investments $ 0.26 1.88 0.69 0.67 0.09 0.17 Total distributions $ 0.26 1.92 0.73 0.71 0.09 0.21 Net asset value, end of period $ 13.13 12.10 16.41 14.55 11.75 10.86 TOTAL RETURN(2): % 10.79 (16.52) 17.76 31.50 9.07 25.92 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 720,674 603,229 605,678 310,227 137,651 62,103 Ratios to average net assets: Net expenses after expense reimbursement (3)(4) % 2.37 2.37 2.34 2.41 2.47 2.50 Gross expenses prior to expense reimbursement(3) % 2.37 2.37 2.34 2.41 2.47 2.74 Net investment income (loss) after expense reimbursement(3)(4) % 0.03 0.16 0.46 0.19 0.68 (0.23) Portfolio turnover rate % 11 15 34 29 32 26
- ---------- (1) Class B commenced offering of shares on April 17, 1997. (2) Total return is calculated assuming reinvestment of all dividends and capital gains distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) Expenses calculated net of advisor reimbursement * Amount represents less than $0.01 per share. See Accompanying Notes to Financial Statements 49 FINANCIAL HIGHLIGHTS ING PRECIOUS METALS FUND (UNAUDITED) - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
CLASS A --------------------------------------------------------------------------- SIX TEN MONTHS YEAR MONTHS ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, YEAR ENDED DECEMBER 31, 2002 2001 2000(3)(4) 1999 1998 1997 ---- ---- ---------- ---- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 3.05 2.27 3.29 3.03 3.24 5.97 Income from investment operations: Net investment income (loss) $ (0.01) 0.02 0.01 (0.01) -- -- Net realized and unrealized gain (loss) on investments $ 1.57 0.76 (1.03) 0.27 (0.21) (2.52) Total from investment operations $ 1.56 0.78 (1.02) 0.26 (0.21) (2.52) Less distributions from: Net investment income $ 0.02 0.00 (5) -- -- -- 0.21 Total distributions $ 0.02 0.00 (5) -- -- -- 0.21 Net asset value, end of period $ 4.59 3.05 2.27 3.29 3.03 3.24 TOTAL RETURN(1): % 51.28 34.56 (30.98) 8.58 (6.39) (42.98) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 83,095 60,563 40,130 72,516 50,841 53,707 Ratios to average net assets: Expenses (2) % 1.79 1.96 2.18 1.94 1.74 1.65 Net investment income (loss) (2) % (0.49) 0.67 0.28 (0.02) 0.08 0.17 Portfolio turnover rate % 55 83 27 79 29 38
- ---------- (1) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (2) Annualized for periods less than one year. (3) The Fund changed its fiscal year-end from December 31 to October 31. (4) Effective July 26, 2000, ING Investments, LLC became the Investment Manager of the Fund. (5) Amount represents less than $0.01 per share. See Accompanying Notes to Financial Statements 50 ING RUSSIA FUND (UNAUDITED) FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
CLASS A -------------------------------------------------------------------------- SIX TEN MONTHS YEAR MONTHS ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, YEAR ENDED DECEMBER 31, 2002 2001 2000(3)(5) 1999 1998 1997 ---- ---- ---------- ---- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 8.04 7.15 6.74 2.64 17.50 11.24 Income from investment operations: Net investment income (loss) $ 0.13 (0.04) (0.07) 0.18 0.15 (0.01) Net realized and unrealized gain (loss) on investments $ 5.24 0.93 0.48 3.99 (14.70) 7.57 Total from investment operations $ 5.37 0.89 0.41 4.17 (14.55) 7.56 Less distributions from: Net investment income $ -- -- -- 0.07 0.07 -- Net realized gain on investments $ -- -- -- -- 0.24 1.30 Total distributions $ -- -- -- 0.07 0.31 1.30 Net asset value, end of period $ 13.41 8.04 7.15 6.74 2.64 17.50 TOTAL RETURN(1): % 66.79 12.45 6.08 159.76 (82.99) 67.50 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 125,651 49,019 53,637 59,011 19,147 137,873 Ratios to average net assets: Net expenses after redemption fee proceeds and expense reimbursement(2)(4) % 2.16 2.23 1.40 2.23 1.84 1.85 Gross expenses prior to redemption fee proceeds and expense reimbursement(2) % 2.21 2.77 2.85 3.32 2.64 2.89 Net investment income (loss) after redemption fee proceeds and expense reimbursement(2)(4) % 2.98 (0.56) (0.90) 4.39 1.36 (0.11) Portfolio turnover rate % 4 28 52 91 66 67
- ---------- (1) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (2) Annualized for periods less than one year. (3) The Fund changed its fiscal year-end from December 31 to October 31. (4) The Investment Manager has agreed to limit expenses excluding, interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Investments, LLC within three years. Redemption fee proceeds are offset against custody and redemption services. (5) Effective July 26, 2000 ING Investments, LLC became the Investment Manager of the Fund. See Accompanying Notes to Financial Statements 51 FINANCIAL HIGHLIGHTS ING GLOBAL COMMUNICATIONS FUND (UNAUDITED) - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
CLASS A CLASS B ---------------------------------------- --------------------------------------- SIX SIX MONTHS YEAR MONTHS YEAR ENDED ENDED PERIOD ENDED ENDED ENDED PERIOD ENDED APRIL 30, OCTOBER 31, OCTOBER 31, APRIL 30, OCTOBER 31, OCTOBER 31, 2002 2001(5) 2000(1) 2002 2001(5) 2000(1) ---- ------- ------- ---- ------- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 1.74 7.30 10.00 1.72 7.27 10.00 Income from investment operations: Net investment loss $ (0.02) (0.07) (0.06) (0.01) (0.09) (0.09) Net realized and unrealized loss on investments $ (0.41) (5.49) (2.64) (0.42) (5.46) (2.64) Total from investment operations $ (0.43) (5.56) (2.70) (0.43) (5.55) (2.73) Net asset value, end of period $ 1.31 1.74 7.30 1.29 1.72 7.27 TOTAL RETURN(2) % (24.71) (76.16) (27.00) (25.00) (76.34) (27.30) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 5,733 8,107 55,459 4,219 6,145 31,035 Ratios to average net assets: Net expenses after expense reimbursement (3)(4) % 1.70 1.59 1.37 2.45 2.30 2.01 Gross expenses prior to expense reimbursement(3) % 2.30 2.24 2.56 2.95 2.98 2.81 Net investment loss after expense reimbursement(3)(4) % (1.36) (1.45) (1.02) (2.12) (2.16) (1.67) Portfolio turnover rate % 78 118 60 78 118 60 CLASS C ---------------------------------------- SIX MONTHS YEAR ENDED ENDED PERIOD ENDED APRIL 30, OCTOBER 31, OCTOBER 31, 2002 2001(5) 2000(1) ---- ------- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 1.72 7.28 10.00 Income from investment operations: Net investment loss $ (0.02) (0.09) (0.09) Net realized and unrealized loss on investments $ (0.41) (5.47) (2.63) Total from investment operations $ (0.43) (5.56) (2.72) Net asset value, end of period $ 1.29 1.72 7.28 TOTAL RETURN(2) % (25.00) (76.37) (27.20) RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 1,034 1,419 7,603 Ratios to average net assets: Net expenses after expense reimbursement (3)(4) % 2.45 2.30 2.01 Gross expenses prior to expense reimbursement(3) % 2.95 2.99 2.81 Net investment loss after expense reimbursement(3)(4) % (2.18) (2.16) (1.68) Portfolio turnover rate % 78 118 60
- ---------- (1) The Fund commenced operations on March 1, 2000. (2) Total return is calculated assuming reinvestment of all dividend and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Investments, LLC within three years. (5) Effective April 30, 2001, ING Investments, LLC became the Investment Manager of the Fund. See Accompanying Notes to Financial Statements 52 ING GLOBAL TECHNOLOGY FUND (UNAUDITED) FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
CLASS A ------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 2002 2001(5) 2000 1999(1) ---- ------- ---- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 5.77 26.62 17.38 10.00 Income from investment operations: Net investment loss $ (0.04) (0.18) (0.33) (0.13) Net realized and unrealized gain (loss) on investments $ (0.62) (13.05) 10.41 7.51 Total from investment operations $ (0.66) (13.23) 10.08 7.38 Less distributions from: Net realized gain on investments $ -- 7.62 0.84 -- Total distributions $ -- 7.62 0.84 -- Net asset value, end of period $ 5.11 5.77 26.62 17.38 TOTAL RETURN(2) % (11.44) (67.57) 58.61 73.80 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 16,044 25,359 108,763 54,798 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 1.95 1.83 1.53 1.57 Gross expenses prior to expense reimbursement(3) % 2.59 2.47 2.65 2.95 Net investment loss after expense reimbursement(3)(4) % (1.90) (1.66) (1.30) (1.29) Portfolio turnover rate % 54 126 77 57 CLASS B ------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 2002 2001(5) 2000 1999(1) ---- ------- ---- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 5.63 26.33 17.28 10.00 Income from investment operations: Net investment loss $ (0.09) (0.27) (0.41) (0.08) Net realized and unrealized gain (loss) on investments $ (0.58) (12.81) 10.30 7.36 Total from investment operations $ (0.67) (13.08) 9.89 7.28 Less distributions from: Net realized gain on investments $ -- 7.62 0.84 -- Total distributions $ -- 7.62 0.84 -- Net asset value, end of period $ 4.96 5.63 26.33 17.28 TOTAL RETURN(2) % (11.90) (67.81) 57.82 72.80 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 9,412 11,726 37,915 5,964 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 2.70 2.54 2.17 2.25 Gross expenses prior to expense reimbursement(3) % 3.24 3.16 2.89 3.22 Net investment loss after expense reimbursement(3)(4) % (2.61) (2.44) (1.94) (2.04) Portfolio turnover rate % 54 126 77 57 CLASS C ------------------------------------------------- SIX MONTHS ENDED APRIL 30, YEAR ENDED OCTOBER 31, 2002 2001(5) 2000 1999(1) ---- ------- ---- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 5.61 26.32 17.28 10.00 Income from investment operations: Net investment loss $ (0.09) (0.26) (0.42) (0.05) Net realized and unrealized gain (loss) on investments $ (0.57) (12.83) 10.30 7.33 Total from investment operations $ (0.66) (13.09) 9.88 7.28 Less distributions from: Net realized gain on investments $ -- 7.62 0.84 -- Total distributions $ -- 7.62 0.84 -- Net asset value, end of period $ 4.95 5.61 26.32 17.28 TOTAL RETURN(2) % (11.76) (67.90) 57.77 72.80 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 3,111 4,376 18,486 2,102 Ratios to average net assets: Net expenses after expense reimbursement(3)(4) % 2.70 2.54 2.17 2.24 Gross expenses prior to expense reimbursement(3) % 3.24 3.16 2.89 3.20 Net investment loss after expense reimbursement(3)(4) % (2.65) (2.33) (1.94) (2.05) Portfolio turnover rate % 54 126 77 57
- ---------- (1) The Fund commenced operations on December 15, 1998. (2) Total return is calculated assuming reinvestment of all dividend and capital gain distribution at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Investments, LLC within three years. (5) Effective April 30, 2001, ING Investments LLC became the Investment Manager of the Fund. See Accompanying Notes to Financial Statements 53 FINANCIAL HIGHLIGHTS ING GLOBAL REAL ESTATE FUND (UNAUDITED) - --------------------------------------------------------------------------------
CLASS A CLASS B CLASS C ------------ ------------ ------------ PERIOD ENDED PERIOD ENDED PERIOD ENDED APRIL 30, APRIL 30, APRIL 30, 2002(1) 2002(2) 2002(3) ------- ------- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 10.01 10.03 9.99 Income from investment operations: Net investment income $ 0.55 0.03 0.08 Net realized and unrealized gain on investments $ 0.99 0.28 0.55 Total from investment operations $ 1.54 0.31 0.63 Less distributions from: Net investment income $ 0.18 -- -- Total distributions $ 0.18 -- -- Net asset value, end of period $ 11.37 10.34 10.62 TOTAL RETURN(4): % 15.43 3.09 6.31 RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 29,106 117 21 Ratios to average net assets: Net expenses after expense reimbursement(5)(6) % 1.75 2.50 2.50 Gross expenses prior to expense reimbursement(5) % 2.82 3.57 3.57 Net investment income after expense reimbursement(5)(6) % 4.23 6.48 4.69 Portfolio turnover rate % 51 51 51
- ---------- (1) The Fund commenced operations on November 5, 2001. (2) Class B commenced offering of shares on March 15, 2002. (3) Class C commenced offering of shares on January 8, 2002. (4) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (5) Annualized for periods less than one year. (6) The Investment Manager has agreed to limit expenses, excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Investments, LLC within three years. See Accompanying Notes to Financial Statements 54 ING WORLDWIDE GROWTH FUND (UNAUDITED) FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Selected data for a share of beneficial interest outstanding throughout each period.
CLASS A ----------------------------------------------------------------------------------------- SIX FOUR THREE MONTHS YEAR MONTHS YEAR MONTHS ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, YEAR ENDED MARCH 31, 2002 2001 2000(5)(6) 2000 1999(1) 1999 1998 ---- ---- ---------- ---- ------- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 15.45 26.36 29.98 23.58 21.39 19.33 16.88 Income from investment operations: Net investment income (loss) $ 0.05 (0.11) (0.07) (0.15) -- (0.02) 0.04 Net realized and unrealized gain (loss) on investments $ 0.04 (9.73) (3.55) 9.62 2.19 5.78 5.33 Total from investment operations $ 0.09 (9.84) (3.62) 9.47 2.19 5.76 5.37 Less distributions from: Net investment income $ -- -- -- -- -- 0.06 -- Net realized gain on investments $ -- 0.77 -- 3.07 -- 3.64 2.92 Tax return of capital $ -- 0.30 -- -- -- -- -- Total distributions $ -- 1.07 -- 3.07 -- 3.70 2.92 Net asset value, end of period $ 15.54 15.45 26.36 29.98 23.58 21.39 19.33 TOTAL RETURN(2): % 0.58 (38.80) (12.07) 42.43 10.24 33.56 34.55 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 106,222 134,152 246,590 235,341 66,245 49,134 38,647 Ratios to average net assets: Net expenses after expense reimbursement(recoupment)(3)(4) % 1.85 1.85 1.61 1.67 1.75 1.86 1.86 Gross expenses prior to expense reimbursement(recoupment)(3) % 1.98 1.95 1.61 1.67 1.75 2.02 2.21 Net investment loss after expense reimbursement(recoupment)(3)(4) % (1.01) (0.65) (0.71) (0.79) (0.03) (0.62) (0.69) Portfolio turnover rate % 199 302 71 169 57 247 202 CLASS B ----------------------------------------------------------------------------------------- SIX FOUR THREE MONTHS YEAR MONTHS YEAR MONTHS ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, YEAR ENDED MARCH 31, 2002 2001 2000(5)(6) 2000 1999(1) 1999 1998 ---- ---- ---------- ---- ------- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 17.19 29.52 33.66 26.64 24.21 20.10 16.02 Income from investment operations: Net investment income (loss) $ (0.18) (0.31) (0.15) (0.28) (0.03) (0.08) (0.17) Net realized and unrealized gain (loss) on investments $ 0.21 (10.82) (3.99) 10.76 2.46 6.25 5.44 Total from investment operations $ 0.03 (11.13) (4.14) 10.48 2.43 6.17 5.27 Less distributions from: Net investment income $ -- -- -- -- -- 0.01 -- Net realized gain on investments $ -- 0.86 -- 3.46 -- 2.05 1.19 Tax return of capital $ -- 0.34 -- -- -- -- -- Total distributions $ -- 1.20 -- 3.46 -- 2.06 1.19 Net asset value, end of period $ 17.22 17.19 29.52 33.66 26.64 24.21 20.10 TOTAL RETURN(2): % 0.23 (39.19) (12.27) 41.54 10.04 32.74 34.03 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 63,393 71,943 126,756 130,988 27,938 18,556 10,083 Ratios to average net assets: Net expenses after expense reimbursement(recoupment)(3)(4) % 2.50 2.51 2.26 2.32 2.40 2.51 2.51 Gross expenses prior to expense reimbursement(recoupment)(3) % 2.63 2.61 2.26 2.32 2.40 2.67 2.70 Net investment loss after expense reimbursement(recoupment)(3)(4) % (1.62) (1.31) (1.37) (1.44) (0.68) (1.31) (1.37) Portfolio turnover rate % 199 302 71 169 57 247 202 CLASS C ----------------------------------------------------------------------------------------- SIX FOUR THREE MONTHS YEAR MONTHS YEAR MONTHS ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, JUNE 30, JUNE 30, YEAR ENDED MARCH 31, 2002 2001 2000(5)(6) 2000 1999(1) 1999 1998 ---- ---- ---------- ---- ------- ---- ---- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period $ 15.29 26.26 29.92 23.69 21.52 19.05 16.92 Income from investment operations: Net investment loss $ (0.28) (0.40) (0.13) (0.33) (0.04) (0.20) (0.19) Net realized and unrealized gain (loss) on investments $ 0.31 (9.50) (3.53) 9.65 2.21 5.83 5.41 Total from investment operations $ 0.03 (9.90) (3.66) 9.32 2.17 5.63 5.22 Less distributions from: Net investment income $ -- -- -- -- -- 0.01 -- Net realized gain on investments $ -- 0.77 -- 3.09 -- 3.15 3.09 Tax return of capital $ -- 0.30 -- -- -- -- -- Total distributions $ -- 1.07 -- 3.09 -- 3.16 3.09 Net asset value, end of period $ 15.32 15.29 26.26 29.92 23.69 21.52 19.05 TOTAL RETURN(2): % 0.26 (39.20) (12.23) 41.48 10.08 32.73 33.72 RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000's) $ 85,386 102,919 213,843 239,432 111,250 98,470 84,292 Ratios to average net assets: Net expenses after expense reimbursement(recoupment)(3)(4) % 2.50 2.51 2.26 2.32 2.40 2.51 2.51 Gross expenses prior to expense reimbursement(recoupment)(3) % 2.63 2.60 2.26 2.32 2.40 2.67 2.77 Net investment loss after expense reimbursement (recoupment)(3)(4) % (1.64) (1.30) (1.37) (1.44) (0.68) (1.28) (1.34) Portfolio turnover rate % 199 302 71 169 57 247 202
- ---------- (1) Effective May 24, 1999, ING Investments, LLC. became the Investment Manager of the Fund, concurrently Nicholas-Applegate Capital Management was appointed as sub-advisor and the Fund changed its fiscal year-end to June 30. (2) Total return is calculated assuming reinvestment of all dividends and capital gain distributions at net asset value and excluding the deduction of sales charges. Total return for less than one year is not annualized. (3) Annualized for periods less than one year. (4) The Investment Manager has agreed to limit expenses excluding interest, taxes, brokerage and extraordinary expenses, subject to possible reimbursement to ING Investments, LLC within three years. (5) Effective October 1, 2000, ING Investments, LLC became the Investment Manager of the Fund, replacing Nicholas-Applegate Capital Management. (6) The Fund changed its fiscal year-end from June 30 to October 31. See Accompanying Notes to Financial Statements 55 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- NOTE 1 -- ORGANIZATION ORGANIZATION. The ING Funds (formerly Pilgrim Funds) are comprised of ING Mutual Funds ("IMF", formerly Pilgrim Mutual Funds), ING Advisory Funds, Inc. ("IAF", formerly Pilgrim Advisory Funds, Inc.), ING Mayflower Trust ("IMT", formerly Pilgrim Mayflower Trust), ING Funds Trust ("IFT", formerly Pilgrim Funds Trust), ING International Fund ("International", formerly Pilgrim International Fund), ING Russia Fund ("Russia", formerly Pilgrim Russia Fund) and ING Precious Metals Fund ("Precious Metals", formerly Pilgrim Precious Metals Fund), all of which are open-end investment management companies registered under the Investment Company Act of 1940, as amended. IMF is a Delaware business trust organized in 1992 with twelve separate series (Portfolios). The four Portfolios in this semi-annual report are ING Emerging Countries Fund ("Emerging Countries", formerly Pilgrim Emerging Countries Fund), ING International Core Growth Fund ("International Core Growth", formerly Pilgrim International Core Growth Fund), ING International SmallCap Growth Fund ("International SmallCap Growth", formerly Pilgrim International SmallCap Growth Fund), and ING Worldwide Growth Fund ("Worldwide Growth", formerly Pilgrim Worldwide Growth Fund). IAF is a Maryland Corporation organized in 1995 with one Portfolio, ING Asia-Pacific Equity Fund ("Asia-Pacific Equity" formerly Pilgrim Asia-Pacific Equity). IMT is a Massachusetts business trust organized in 1992 with three separate series (Portfolios). The one Portfolio in this semi-annual report is ING International Value Fund ("International Value", formerly Pilgrim International Value Fund). IFT is a Delaware business trust established July 30, 1998 and consists of ten separately managed portfolios. Four of the Portfolios in this report are ING European Equity Fund ("European Equity", formerly Pilgrim European Equity Fund), ING Global Communications Fund ("Global Communications", formerly Pilgrim Global Communications Fund), ING Global Real Estate Fund ("Global Real Estate", formerly Pilgrim Global Real Estate Fund) and ING Global Technology Fund ("Global Technology", formerly Pilgrim Global Information Technology Fund). The investment objective of each Fund is described in each Fund's prospectus. Each Fund offers one or more of the following classes of shares: Class A, Class B, Class C, Class I, Class M and Class Q (Class I and Class Q are presented in a different annual report). The separate classes of shares differ principally in the applicable sales charges (if any), distribution fees and shareholder servicing fees and transfer agent fees. Shareholders of each class also bear certain expenses that pertain to that particular class. All shareholders bear the common expenses of the Fund and earn income from the portfolio pro rata based on the average daily net assets of each class, without distinction between share classes. Dividends are determined separately for each class based on income and expenses allocable to each class. Realized gains are allocated to each class pro rata based on the net assets of each class on the date of distribution. No class has preferential dividend rights. Differences in per share dividend rates generally result from the relative weighting of pro rata income and realized gain allocations and from differences in separate class expenses, including distribution, and shareholder servicing fees. Class B shares, along with their pro rata reinvested dividend shares, automatically convert to Class A shares approximately eight years after purchase. On September 1, 2000, ING Groep N.V. (NYSE: ING) acquired ReliaStar, the indirect parent company of Pilgrim Investments, Inc., Adviser to the Funds, Pilgrim Securities, Inc., Distributor to the Funds and Pilgrim Group, Inc., Administrator to the Funds. In conjunction with the acquisition the Adviser, Distributor and Administrator changed their names to ING Pilgrim Investments, Inc., ING Pilgrim Securities, Inc., and ING Pilgrim Group, Inc., respectively, effective September 8, 2000. Effective February 26, 2001, ING Pilgrim Investments, Inc. was merged into the newly formed ING Pilgrim Investments, LLC. Effective February 27, 2001, ING Pilgrim Group, Inc. was merged into the newly formed ING Pilgrim Group, LLC. Effective March 1, 2002, the Adviser, Distributor and Administrator changed their names to ING Investments, LLC, ING Funds Distributor, Inc. and ING Funds Services, LLC, respectively. 56 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- On November 2, 2001, the Board of Directors/Trustees of the Pilgrim Funds approved proposals to reorganize the following "Disappearing Funds" into the following "Surviving Funds" (each a "Reorganization" and collectively, the "Reorganizations"): DISAPPEARING FUNDS SURVIVING FUNDS ------------------ --------------- ING International Core Growth Fund ING International Fund ING Global Communications Fund ING Global Technology Fund ING Internet Fund ING Global Technology Fund Each proposed Reorganization is subject to approval by shareholders of the Disappearing Fund. If shareholder approval is obtained, it is expected that the Reorganizations would take place during the first half of 2002. NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES The following significant accounting policies are consistently followed by the Funds in the preparation of their financial statements, and such policies are in conformity with generally accepted accounting principles for investment companies. A. SECURITY VALUATION. Investments in equity securities traded on a national securities exchange or included on the NASDAQ National Market System are valued at the last reported sale price. Securities traded on an exchange or NASDAQ for which there has been no sale, securities traded in the over-the-counter-market and gold and silver bullion are valued at the mean between the last reported bid and ask prices. All investments quoted in foreign currencies will be valued daily in U.S. dollars on the basis of the foreign currency exchange rates prevailing at the time such valuation is determined by each Fund's custodian. Securities for which market quotations are not readily available are valued at their respective fair values as determined in good faith and in accordance with policies set by the Board of Directors/Trustees. Investments in securities maturing in less than 60 days are valued at amortized cost, which, when combined with accrued interest, approximates market value. B. SECURITY TRANSACTIONS AND REVENUE RECOGNITION. Securities transactions are accounted for on the trade date. Realized gains and losses are reported on the basis of identified cost of securities delivered. Interest income is recorded on an accrual basis. Dividend income is recorded on the ex-dividend date, or for certain foreign securities, when the information becomes available to the Funds. Premium amortization and discount accretion are determined by the effective yield method. C. FOREIGN CURRENCY TRANSLATION. The books and records of the Funds are maintained in U.S. dollars. Any foreign currency amounts are translated into U.S. dollars on the following basis: (1) Market value of investment securities, other assets and liabilities -- at the exchange rates prevailing at the end of the day. (2) Purchases and sales of investment securities, income and expenses -- at the rates of exchange prevailing on the respective dates of such transactions. Although the net assets and the market values are presented at the foreign exchange rates at the end of the day, the Funds do not isolate the portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gains or losses from investments. For securities which are subject to foreign withholding tax upon disposition, liabilities are recorded on the statement of assets and liabilities for the estimated tax withholding based on the securities current market value. Upon disposition, realized gains or losses on such securities are recorded net of foreign withholding tax. Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions, the difference between the amounts of dividends, interest, and foreign withholding taxes recorded on the Fund's books, and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign 57 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- exchange gains and losses arise from changes in the value of assets and liabilities other than investments in securities at fiscal year end, resulting from changes in the exchange rate. Foreign security and currency transactions may involve certain considerations and risks not typically associated with investing in U.S. companies and the U.S. Government. These risks include but are not limited to re-evaluation of currencies and future adverse political and economic developments which could cause securities and their markets to be less liquid and prices more volatile than those of comparable U.S. companies and the U.S. Government. D. FOREIGN CURRENCY TRANSACTIONS. Certain funds may enter into foreign currency exchange transactions to convert to and from different foreign currencies and to and from the U.S. dollar in connection with the planned purchases or sales of securities. The Funds either enter into these transactions on a spot basis at the spot rate prevailing in the foreign currency exchange market or use forward foreign currency contracts to purchase or sell foreign currencies. When the contract is fulfilled or closed, gains or losses are realized. Until then, the gain or loss is included in unrealized appreciation or depreciation. Risks may arise upon entering into forward contracts from the potential inability of counterparties to meet the terms of their forward contracts and from unanticipated movements in the value of foreign currencies relative to the U.S. dollar. Each Fund may enter into futures contracts involving foreign currency, interest rates, securities and securities indices, for hedging purposes only. A futures contract obligates the seller of the contract to deliver and the purchaser of the contract to take delivery of the type of foreign currency, financial instrument or security called for in the contract at a specified future time for a specified price. Upon entering into such a contract, a Fund is required to deposit and maintain as collateral such initial margin as required by the exchange on which the contract is traded. Pursuant to the contract, a Fund agrees to receive from or pay to the broker an amount equal to the daily fluctuations in the value of the contract. Such receipts or payments are known as variation margin and are recorded as unrealized gains or losses by the Fund. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. E. DISTRIBUTIONS TO SHAREHOLDERS. The Funds record distributions to their shareholders on ex-date. Each Fund pays dividends and capital gains, if any annually. The amount of distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from generally accepted accounting principles. These "book/tax" differences are either considered temporary or permanent in nature. Key differences are the treatment of short-term capital gains, foreign currency transactions, organization costs and other temporary differences. To the extent that these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassifications. Distributions which exceed net investment income and net realized capital gains for financial reporting purposes but not for tax purposes, are reported as distributions in excess of net investment income and/or net realized capital gains. To the extent they exceed net investment income and/or net realized capital gains for tax purposes, they are reported as distributions of paid-in capital. F. FEDERAL INCOME TAXES. It is the policy of the Funds, to comply with the requirements of the Internal Revenue Code that are applicable to regulated investment companies and to distribute substantially all of their net investment income and any net realized capital gains to their shareholders. Therefore, a federal income tax provision is not required. Certain Funds may utilize earnings and profits on redemption of shares as part of the dividends paid deduction. In addition, by distributing during each calendar year substantially all of its net investment income and net realized capital gains, each Fund intends not to be subject to any federal excise tax. The Board of Directors/Trustees intends to offset any net capital gains with any available capital loss carryforward until each carryforward has been fully utilized or expires. In addition, no 58 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- capital gain distribution shall be made until the capital loss carryforward has been fully utilized or expires. Capital loss carryforwards were as follows at October 31, 2001: AMOUNT EXPIRATION DATES ------------ ---------------- Asia-Pacific Equity $ 25,917,423 2006 to 2009 Emerging Countries 80,186,243 2006 to 2009 European Equity 673,633 2009 International Core Growth 9,678,221 2009 International 11,054,933 2009 International SmallCap Growth 180,545,805 2008 to 2009 Precious Metals 89,116,544 2002 to 2009 Russia 72,439,571 2006 to 2009 Global Communications 64,104,971 2008 to 2009 Global Technology 61,991,041 2009 Worldwide Growth 149,013,843 2008 to 2009 Under the applicable foreign tax law, a withholding tax may be imposed on interest, dividends and capital gains at various rates. Indian tax regulations require that taxes be paid on capital gains realized by the Fund. In May 2001, Emerging Countries Fund wrote off $1,168,786 of estimated tax liability on Indian investments. G. USE OF ESTIMATES. Management of the Funds has made certain estimates and assumptions relating to the reporting of assets, liabilities, income, and expenses to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from these estimates. H. REPURCHASE AGREEMENTS. Each Fund may invest in repurchase agreements only with government securities dealers recognized by the Board of Governors of the Federal Reserve System or with member banks of the Federal Reserve System. Under such agreements, the seller of the security agrees to repurchase it at a mutually agreed upon time and price. The resale price is in excess of the purchase price and reflects an agreed upon interest rate for the period of time the agreement is outstanding. The period of the repurchase agreements is usually short, from overnight to one week, while the underlying securities generally have longer maturities. Each Fund will always receive as collateral securities acceptable to it whose market value is equal to at least 100% of the amount being invested by the Fund. If the seller defaults, a Fund might incur a loss or delay in the realization of proceeds if the value of security collateralizing the repurchase agreement declines, and it might incur disposition costs in liquidating the collateral. I. SECURITIES LENDING. Each Fund has the option to temporarily loan 33 1/3% of its total assets to brokers, dealers or other financial institutions in exchange for a negotiated lender's fee. The borrower is required to fully collateralize the loans with cash, letters of credit or U.S. Government securities. J. RECENTLY ISSUED ACCOUNTING STANDARDS. In November 2000, a revised AICPA Audit and Accounting Guide (the "Guide"), AUDITS OF INVESTMENT COMPANIES, was issued, and is effective for fiscal years beginning after December 15, 2000. The effective date for the Funds was November 1, 2001. The adoption was not material to the Funds. NOTE 3 -- INVESTMENT TRANSACTIONS For the six-months ended April 30, 2002, the cost of purchases and proceeds from the sales of securities, excluding short-term securities, were as follows: PURCHASES SALES ------------ ------------ Asia-Pacific Equity $ 6,383,916 $ 8,189,097 Emerging Countries 219,427,151 235,829,921 European Equity 7,472,312 7,442,838 International Core Growth 19,070,713 23,097,857 International 61,187,204 57,393,002 International SmallCap Growth 936,706,403 962,508,136 International Value 905,549,714 318,885,876 Precious Metals 35,895,438 43,002,943 Russia 33,863,145 2,877,702 Global Communications 11,913,852 13,148,040 Global Technology 22,910,774 27,707,269 Global Real Estate 38,646,634 13,078,623 Worldwide Growth 591,663,257 650,752,051 NOTE 4 -- REDEMPTION FEE INCOME A 2% redemption fee is charged on shares of the Russia Fund that are redeemed within 365 days or less from their date of purchase. Redemption fee proceeds will be applied to the Russia Fund's aggregate expenses allocable to providing custody and redemption services, including transfer agent fees, postage, printing, telephone costs and employment costs relating to the handling and processing of redemptions. Any excess fee proceeds will be added to the Fund's capital. Total redemption fee proceeds for the six-month period ended April 30, 2002 were $20,002 for the Russia Fund. The entire amount listed above was available for offset against the Russia Fund's expenses and is set forth in the statement of operations. 59 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Effective November 1, 2001, Asia-Pacific Equity, International Core Growth and International began imposing a 2% redemption fee on Class A shares redeemed (including in connection with an exchange) within 30 days or less from their date of purchase. For these funds, the redemption fee is accounted for as an addition to paid-in capital. Total redemption fee proceeds for the six-month period ended April 30, 2002 were $35,017, $0 and $27,977 for Asia-Pacific Equity, International Core Growth and International, respectively, and are set forth in the statements of changes in net assets. NOTE 5 -- INVESTMENT MANAGEMENT AND ADMINISTRATIVE FEES Each of the Funds, except Global Communications, Global Technology and European Equity has entered into an Investment Management Agreement with ING Investments, LLC (the "Manager", the "Investment Manager", or the "Adviser"), a wholly-owned subsidiary of ING Groep N.V. Global Communications, Global Technology and European Equity had entered into an Investment Management Agreement with ING Mutual Funds Management, LLC. On April 30, 2001, ING Mutual Funds Management, LLC merged into ING Investments, LLC. All contracts, obligations and assets of ING Mutual Funds Management, LLC were assumed by ING Investments, LLC pursuant to the merger. The investment management agreements compensate the Manager with a fee, computed daily and payable monthly, based on the average daily net assets of each Fund, at the following annual rates: As a percent of average net assets ---------------------------------- Asia-Pacific Equity 1.25% Emerging Countries 1.25% European Equity 1.15% International Core Growth 1.00% on first $500 million; 0.90% on next $500 million; and 0.85% in excess of $1 billion International 1.00% International SmallCap 1.00% on first $500 million; 0.90% on next Growth $500 million; and 0.85% in excess of $1 billion International Value 1.00% Precious Metals 1.00% on first $50 million; 0.75% thereafter Russia 1.25% Global Communications 1.00% Global Technology 1.25% Global Real Estate 1.00% Worldwide Growth 1.00% on first $500 million; 0.90% on next $500 million; and 0.85% in excess of $1 billion The fees payable to the Manager were discounted for the Global Communications Fund, Global Technology Fund and European Equity Fund by 75% in each Fund's first year of operations and by 50% in each Fund's second year of operations. Nicholas-Applegate Capital Management (NACM), a registered investment advisor, serves as a subadvisor to the International SmallCap Growth Fund pursuant to a subadvisory agreement between the Adviser and NACM. ING Investment Management Advisors, B.V. (IIMA), a registered investment advisor, serves as a subadvisor to the Global Communications Fund, Global Technology Fund and European Equity Fund pursuant to a subadvisory agreement between the Adviser and IIM. Clarion CRA Securities, L.P., a registered investment advisor, serves as a subadvisor to the Global Real Estate Fund pursuant to a subadvisory agreement between the Adviser and CRA. ING Funds Services, LLC (the "Administrator" or "IFS"), serves as administrator to each Fund except Asia-Pacific Fund. The Funds pay the Administrator a fee calculated at an annual rate of 0.10% of each Fund's average daily net assets. Asia-Pacific Fund has entered into a Service Agreement with IFS whereby IFS will act as Shareholder Service Agent for the Fund. The agreement provides that IFS will be compensated for incoming and outgoing shareholder telephone calls and letters, and all reasonable out-of-pocket expenses incurred in connection with the performance of such services. Prior to March 1, 2002, IFS acted as Shareholder Service Agent for the Emerging Countries Fund, International Core Growth Fund, International SmallCap Growth Fund and Worldwide Growth Fund. International Value Fund also pays IFS an annual shareholder account servicing fee of $5.00, payable semi-annually, for each account of beneficial owners of shares. 60 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- NOTE 6 -- DISTRIBUTION AND SERVICE FEES Each share class of the Funds has adopted a Plan pursuant to Rule 12b-1 under the 1940 Act (the "12b-1 Plans"), whereby ING Funds Distributor, Inc. (the "Distributor") is reimbursed or compensated (depending on the class of shares) by the Funds for expenses incurred in the distribution of each Funds' shares ("Distribution Fees"). Pursuant to the 12b-1 Plans, the Distributor is entitled to a payment each month for actual expenses incurred in the distribution and promotion of each Fund's shares, including expenses incurred in printing prospectuses and reports used for sales purposes, expenses incurred in preparing and printing sales literature and other such distribution related expenses, including any distribution or shareholder servicing fees ("Service Fees") paid to securities dealers who have executed a distribution agreement with the Distributor. Under the 12b-1 Plans, each class of shares of the Fund pays the Distributor a combined Distribution and Service Fee based on average daily net assets at the following annual rates:
CLASS A CLASS B CLASS C CLASS I CLASS M CLASS Q ------- ------- ------- ------- ------- ------- Asia-Pacific Equity 0.25% 1.00% N/A N/A 0.75% N/A Emerging Countries 0.35 1.00 1.00 N/A N/A 0.25 European Equity 0.35 1.00 1.00 N/A N/A N/A International Core Growth 0.35 1.00 1.00 N/A N/A 0.25 International 0.25 1.00 1.00 N/A N/A 0.25 International SmallCap Growth 0.35 1.00 1.00 N/A N/A 0.25 International Value 0.30 1.00 1.00 N/A N/A 0.25 Precious Metals 0.25 N/A N/A N/A N/A N/A Russia 0.25 N/A N/A N/A N/A N/A Global Communications 0.35 1.00 1.00 N/A N/A N/A Global Technology 0.35 1.00 1.00 N/A N/A N/A Global Real Estate 0.25 1.00 1.00 N/A N/A 0.25 Worldwide Growth 0.35 1.00 1.00 N/A N/A 0.25
Effective March 1, 2001, the Distributor waived 0.10% of the Distribution fee for Global Communications Fund, Global Technology Fund and European Equity Fund for Class A only. Fees paid to the Distributor by class during the six-months ended April 30, 2002 are shown in the accompanying Statements of Operations. The Distributor also receives the proceeds of the initial sales charge paid by shareholders upon the purchase of Class A shares, and the contingent deferred sales charge paid by shareholders upon certain redemptions for Class A, Class B, and Class C shares. For the six-months ended April 30, 2002, the Distributor earned the following amounts in sales charges: CLASS A CLASS B CLASS C CLASS M SHARES SHARES SHARES SHARES -------- -------- -------- -------- Initial Sales Charges $312,386 N/A N/A $168 Contingent deferred sales charges $196,359 $ 0 $ 90,767 N/A NOTE 7 -- OTHER TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES At April 30, 2002, the Funds had the following amounts recorded in payable to affiliates on the accompanying Statements of Assets and Liabilities (See Notes 5 and 6):
ACCRUED ACCRUED SHAREHOLDER INVESTMENT ACCRUED SERVICES AND RECOUPMENT MANAGEMENT ADMINISTRATIVE DISTRIBUTION OF WAIVED FEES FEES FEES FEES TOTAL ---------- -------------- ---------- ---------- ---------- Asia-Pacific Equity $ 12,119 $ 7,465 $ 5,660 $ -- $ 25,244 Emerging Countries 151,751 67,257 68,258 -- 287,266 European Equity 19,754 1,704 5,012 14,348 40,818 International Core Growth 31,040 5,563 21,916 15,577 74,096 International 38,431 3,843 10,354 -- 52,628 International SmallCap Growth 336,209 41,697 186,351 -- 564,257 International Value 2,682,199 268,220 1,395,498 -- 4,345,917 Precious Metals 62,801 6,529 11,299 -- 80,629 Russia 120,975 9,678 24,195 -- 154,848 Global Communications 58,421 993 6,056 24,443 89,913 Global Technology 36,147 2,892 15,003 -- 54,042 Global Real Estate 23,728 2,777 5,931 -- 32,436 Worldwide Growth 227,509 23,672 161,701 -- 412,882
At April 30, 2002, Lion Connecticut Holdings, Inc., a wholly-owned indirect subsidiary of ING Groep N.V., held 88.6%, 9.1%, 14.9% and 41.8% of the shares outstanding of European Equity, Global Communications, Global Technology and International, respectively. At April 30, 2002, ING National Trust, a wholly-owned indirect subsidiary of ING Groep N.V., held 11.1% and 18.2% of the shares outstanding of Global Technology and International, respectively. At April 30, 2002 ING Investments, LLC, a wholly-owned indirect subsidiary of ING Groep N.V. held 90.9% of the shares outstanding of Global Real Estate. At April 30, 2002, one shareholder held 7.7% of the shares outstanding of Russia. Investment activities of these shareholders could have a material impact on the Funds. 61 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- NOTE 8 -- EXPENSE LIMITATIONS For the following Funds, the Investment Manager has voluntarily agreed to limit expenses, excluding interest, taxes, brokerage and extraordinary expenses to the levels listed below:
MAXIMUM OPERATING EXPENSE LIMIT (AS A PERCENTAGE OF AVERAGE NET ASSETS) ----------------------------------------------------------------- CLASS A CLASS B CLASS C CLASS I CLASS M CLASS Q ------- ------- ------- ------- ------- ------- Asia-Pacific Equity 2.00% 2.75% N/A N/A 2.50% N/A Emerging Countries(1) 2.25 2.90 2.90% N/A N/A 2.15% European Equity(2) 1.90 2.65 2.65 N/A N/A N/A International Core Growth(3) 1.95 2.60 2.60 N/A N/A 1.85 International 2.75 3.50 3.50 2.50% N/A 2.75 International SmallCap Growth(3) 1.95 2.60 2.60 N/A N/A 1.85 International Value N/A N/A N/A N/A N/A N/A Precious Metals 2.75 N/A N/A N/A N/A N/A Russia 3.35 N/A N/A N/A N/A N/A Global Communications(4) 1.70 2.45 2.45 N/A N/A N/A Global Technology(5) 1.95 2.70 2.70 1.70 N/A N/A Global Real Estate 1.75 2.50 2.50 N/A N/A 1.75 Worldwide Growth(6) 1.85 2.50 2.50 N/A N/A 1.75
- ---------- (1) Prior to November 1, 2001, the expense limitation rate for Class Q was 1.90%. (2) Prior to March 1, 2001, the expense limitation rates for Class A, Class B and Class C were 1.62%, 2.27% and 2.27%, respectively. (3) Prior to November 1, 2001, the expense limitation rate for Class Q was 1.65%. (4) Prior to March 1, 2001, the expense limitation rates for Class A, Class B and Class C were 1.53%, 2.18% and 2.18%, respectively. (5) Prior to March 1, 2001, the expense limitation rates for Class A, Class B and Class C were 1.59%, 2.24% and 2.24%, respectively. (6) Prior to November 1, 2001, the expense limitation rate for Class Q was 1.60%. Each Fund will at a later date reimburse the Investment Manager for management fees waived and other expenses assumed by the Investment Manager during the previous 36 months, but only if, after such reimbursement, the Fund's expense ratio does not exceed the percentage described above.Waived and reimbursed fees and any recoupment by the Investment Manager of such waived and reimbursed fees are reflected on the accompanying Statements of Operations for each Fund. NOTE 9 -- LINE OF CREDIT All of the Funds included in this report, in addition to certain other funds managed by the Adviser, have entered into an unsecured committed revolving line of credit agreement (the "Credit Agreement") with State Street Bank and Trust Company for an aggregate amount of $125,000,000. The proceeds may be used only to: (1) temporarily finance the purchase and sale of securities; (2) finance the redemption of shares of an investor in the Funds; and (3) enable the Funds to meet other emergency expenses as defined in the Credit Agreement. The Funds to which the line of credit is available pay a commitment fee equal to 0.08% per annum on the daily unused portion of the committed line amount payable quarterly in arrears. During the six-months ended April 30, 2002, the Funds did not have any loans outstanding. NOTE 10 -- CAPITAL SHARES Transaction in capital shares and dollars were as follows:
CLASS A SHARES CLASS B SHARES CLASS M SHARES ---------------------------- --------------------------- ---------------------------- SIX SIX SIX MONTHS YEAR MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED ENDED ENDED APRIL 30 OCTOBER 31 APRIL 30 OCTOBER 31 APRIL 30 OCTOBER 31 2002 2001 2002 2001 2002 2001 ------------ ------------ ------------ ------------ ------------ ------------ ASIA-PACIFIC EQUITY FUND (NUMBER OF SHARES) Shares sold 1,381,215 13,924,794 105,196 603,862 9,362 3,439,910 Shares issued in merger -- 654,788 -- -- -- -- Shares issued as reinvestment of dividends -- 22,377 -- 12,550 -- 7,605 Shares redeemed (1,710,893) (14,531,504) (253,825) (1,013,571) (48,219) (3,622,216) ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in shares outstanding (329,678) 70,455 (148,629) (397,159) (38,857) (174,701) ============ ============ ============ ============ ============ ============ ASIA-PACIFIC EQUITY FUND ($) Shares sold $ 5,381,915 $ 57,836,760 $ 405,436 $ 2,372,035 $ 34,896 $ 14,790,697 Shares issued in merger -- 2,738,406 -- -- -- -- Shares issued as reinvestment of dividends -- 110,543 -- 60,115 -- 36,579 Redemption fee proceeds 35,017 -- -- -- -- -- Shares redeemed (6,790,480) (60,248,332) (979,777) (4,207,292) (184,861) (15,870,448) ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) $ (1,373,548) $ 437,377 $ (574,341) $ (1,775,142) $ (149,965) $ (1,043,172) ============ ============ ============ ============ ============ ============
62 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES ------------------------------ ------------------------------ SIX SIX MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 ------------- ------------- ------------- ------------- EMERGING COUNTRIES FUND (NUMBER OF SHARES) Shares sold 5,634,717 9,885,556 101,465 117,804 Shares issued in merger -- 5,116,118 -- 262,850 Shares issued as reinvestment of dividends 121 -- -- -- Shares redeemed (6,095,252) (12,983,659) (214,303) (528,765) ------------- ------------- ------------- ------------- Net increase (decrease) in shares outstanding (460,414) 2,018,015 (112,838) (148,111) ============= ============= ============= ============= EMERGING COUNTRIES FUND ($) Shares sold $ 80,548,634 $ 157,053,986 $ 1,463,808 $ 2,704,425 Shares issued in merger -- 71,829,257 -- 3,700,055 Shares issued as reinvestment of dividends 1,567 -- -- -- Shares redeemed (87,584,098) (185,127,818) (3,028,364) (7,454,159) ------------- ------------- ------------- ------------- Net increase (decrease) $ (7,033,897) $ 43,755,425 $ (1,564,556) $ (1,049,679) ============= ============= ============= ============= CLASS C SHARES CLASS Q SHARES ------------------------------ ------------------------------ SIX SIX MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 ------------- ------------- ------------- ------------- EMERGING COUNTRIES FUND (NUMBER OF SHARES) Shares sold 311,871 1,037,359 1,046,090 2,972,540 Shares issued in merger -- 286,653 -- -- Shares issued as reinvestment of dividends -- -- 72 -- Shares redeemed (420,372) (1,627,250) (1,344,444) (6,076,490) ------------- ------------- ------------- ------------- Net decrease in shares outstanding (108,501) (303,238) (298,282) (3,103,950) ============= ============= ============= ============= EMERGING COUNTRIES FUND ($) Shares sold $ 4,442,449 $ 14,634,410 $ 15,518,353 $ 43,163,993 Shares issued in merger -- 3,875,431 -- -- Shares issued as reinvestment of dividends -- -- 970 -- Shares redeemed (5,914,684) (22,140,324) (19,720,300) (89,992,176) ------------- ------------- ------------- ------------- Net decrease $ (1,472,235) $ (3,630,483) $ (4,200,977) $ (46,828,183) ============= ============= ============= =============
63 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES ---------------------------- ---------------------------- SIX SIX MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 ------------ ------------ ------------ ------------ EUROPEAN EQUITY FUND (NUMBER OF SHARES) Shares sold 933,984 7,719,989 162,560 192,944(2) Shares issued as reinvestment of dividends -- 127,559 -- 8,297 Shares redeemed (963,444) (8,293,341) (176,292) (150,031) ------------ ------------ ------------ ------------ Net increase (decrease) in shares outstanding (29,460) (445,793) (13,732) 51,210 ============ ============ ============ ============ EUROPEAN EQUITY FUND ($) Shares sold $ 7,411,273 $ 72,652,569 $ 1,268,559 $ 1,781,871(2) Shares issued as reinvestment of dividends -- 1,332,992 -- 85,626 Shares redeemed (7,666,848) (79,072,632) (1,375,944) (1,276,696) ------------ ------------ ------------ ------------ Net increase (decrease) $ (255,575) $ (5,087,071) $ (107,385) $ 590,801 ============ ============ ============ ============ CLASS C SHARES CLASS X SHARES(1) ---------------------------- ------------------ SIX MONTHS YEAR YEAR ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, 2002 2001 2001 ------------ ------------ ------------ EUROPEAN EQUITY FUND (NUMBER OF SHARES) Shares sold 25,684 8,510 -- Shares issued as reinvestment of dividends -- 666 -- Shares redeemed (22,901) (15,032) (77,908)(2) ------------ ------------ ------------ Net increase (decrease) in shares outstanding 2,783 (5,856) (77,908) ============ ============ ============ EUROPEAN EQUITY FUND ($) Shares sold $ 201,844 $ 64,153 $ -- Shares issued as reinvestment of dividends -- 6,841 -- Shares redeemed (180,513) (130,767) (825,879)(2) ------------ ------------ ------------ Net increase (decrease) $ 21,331 $ (59,773) $ (825,879) ============ ============ ============
(1) Effective November 17, 2000, Class X shares are no longer being offered for sale. (2) Amounts include 77,908 of Class X shares, valued at $825,879, that were converted into Class B shares on November 17, 2000. 64 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES ------------------------------ ------------------------------ SIX SIX MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 ------------- ------------- ------------- ------------- INTERNATIONAL CORE GROWTH FUND (NUMBER OF SHARES) Shares sold 362,924 7,557,378 79,099 249,346 Shares issued as reinvestment of dividends -- 51,993 -- 49,923 Shares redeemed (493,970) (8,126,749) (192,665) (396,727) ------------- ------------- ------------- ------------- Net decrease in shares outstanding (131,046) (517,378) (113,566) (97,458) ============= ============= ============= ============= INTERNATIONAL CORE GROWTH FUND ($) Shares sold $ 5,320,885 $ 130,576,455 $ 1,150,825 $ 4,356,931 Shares issued as reinvestment of dividends -- 985,770 -- 949,044 Shares redeemed (7,301,930) (141,345,380) (2,815,347) (6,792,058) ------------- ------------- ------------- ------------- Net decrease $ (1,981,045) $ (9,783,155) $ (1,664,522) $ (1,486,083) ============= ============= ============= ============= CLASS C SHARES CLASS Q SHARES ------------------------------ ------------------------------ SIX SIX MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 ------------- ------------- ------------- ------------- INTERNATIONAL CORE GROWTH FUND (NUMBER OF SHARES) Shares sold 409,522 6,276,282 336,425 381,350 Shares issued as reinvestment of dividends -- 44,991 -- 44,971 Shares redeemed (611,283) (6,610,145) (269,213) (552,680) ------------- ------------- ------------- ------------- Net increase (decrease) in shares outstanding (201,761) (288,872) 67,212 (126,359) ============= ============= ============= ============= INTERNATIONAL CORE GROWTH FUND ($) Shares sold $ 6,024,017 $ 109,636,025 $ 5,134,470 $ 6,381,404 Shares issued as reinvestment of dividends -- 857,981 -- 886,366 Shares redeemed (8,956,179) (116,359,406) (4,088,421) (9,703,034) ------------- ------------- ------------- ------------- Net increase (decrease) $ (2,932,162) $ (5,865,400) $ 1,046,049 $ (2,435,264) ============= ============= ============= =============
65 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES CLASS C SHARES ----------------------------- ------------------------------ ------------------------------ SIX SIX SIX MONTHS YEAR MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 2002 2001 ------------- ------------- ------------- ------------- ------------- ------------- INTERNATIONAL FUND (NUMBER OF SHARES) Shares sold 2,002,514 10,370,001 161,137 169,710 226,590 90,224 Shares issued in merger -- 3,637,387 -- 238,867 -- 161,005 Shares issued as reinvestment of dividends -- 196,293 -- 270 -- 733 Shares redeemed (2,617,679) (12,300,204) (147,695) (171,842) (220,623) (70,887) ------------- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in shares outstanding (615,165) 1,903,477 13,442 237,005 5,967 181,075 ============= ============= ============= ============= ============= ============= INTERNATIONAL FUND ($) Shares sold $ 16,623,399 $ 102,367,167 $ 1,317,229 $ 1,963,065 $ 1,884,724 $ 1,082,305 Shares issued in merger -- 35,904,902 -- 2,348,731 -- 1,582,478 Shares issued as reinvestment of dividends -- 2,031,659 -- 2,787 -- 7,572 Redemption fee proceeds 27,977 -- -- -- -- -- Shares redeemed (21,788,180) (115,739,447) (1,210,306) (1,617,213) (1,828,319) (657,559) ------------- ------------- ------------- ------------- ------------- ------------- Net increase (decrease) $ (5,136,804) $ 24,564,281 $ 106,923 $ 2,697,370 $ 56,405 $ 2,014,796 ============= ============= ============= ============= ============= =============
CLASS I SHARES CLASS Q SHARES -------------- ------------------------------ SIX PERIOD MONTHS ENDED ENDED PERIOD ENDED APRIL 30, APRIL 30, OCTOBER 31, 2002 (1) 2002 2001 (2) ------------- ------------- ------------- INTERNATIONAL FUND (NUMBER OF SHARES) Shares sold 1,501,585 397 2,434 Shares issued in merger -- -- 1,110 Shares redeemed (552,516) 94 (2,691) ------------- ------------- ------------- Net increase in shares outstanding 949,069 491 853 ============= ============= ============= INTERNATIONAL FUND ($) Shares sold $ 12,495,489 $ 3,392 $ 108,379 Shares issued in merger -- -- 10,953 Shares redeemed (4,696,980) (775) (26,176) ------------- ------------- ------------- Net increase $ 7,798,509 $ 2,617 $ 93,156 ============= ============= ============= (1) Commenced operations on January 15, 2002. (2) Commenced operations on February 26, 2001. 66 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES ------------------------------ ------------------------------ SIX SIX MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 ------------- ------------- ------------- ------------- INTERNATIONAL SMALLCAP GROWTH FUND (NUMBER OF SHARES) Shares sold 14,889,948 33,782,706 330,562 1,092,119 Shares issued as reinvestment of dividends -- 433,341 -- 189,033 Shares redeemed (14,823,843) (34,756,699) (520,473) (1,382,154) ------------- ------------- ------------- ------------- Net decrease in shares outstanding 66,105 (540,652) (189,911) (101,002) ============= ============= ============= ============= INTERNATIONAL SMALLCAP GROWTH FUND ($) Shares sold $ 334,861,021 $ 906,308,851 $ 7,860,764 $ 33,089,408 Shares issued as reinvestment of dividends -- 13,864,436 -- 6,411,987 Shares redeemed (335,422,929) (938,355,263) (12,351,747) (39,029,966) ------------- ------------- ------------- ------------- Net increase (decrease) $ (561,908) $ (18,181,976) $ (4,490,983) $ 471,429 ============= ============= ============= ============= CLASS C SHARES CLASS Q SHARES ------------------------------ ------------------------------ SIX SIX MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 ------------- ------------- ------------- ------------- INTERNATIONAL SMALLCAP GROWTH FUND (NUMBER OF SHARES) Shares sold 683,359 3,312,219 2,450,001 6,794,336 Shares issued as reinvestment of dividends -- 207,388 -- 331,546 Shares redeemed (961,109) (4,157,849) (2,532,286) (7,512,106) ------------- ------------- ------------- ------------- Net decrease in shares outstanding (277,750) (638,242) (82,285) (386,224) ============= ============= ============= ============= INTERNATIONAL SMALLCAP GROWTH FUND ($) Shares sold $ 14,913,716 $ 89,263,930 $ 58,550,748 $ 198,098,894 Shares issued as reinvestment of dividends -- 6,452,890 -- 11,232,791 Shares redeemed (21,004,402) (111,213,151) (60,634,752) (214,377,551) ------------- ------------- ------------- ------------- Net decrease $ (6,090,686) $ (15,496,331) $ (2,084,004) $ (5,045,866) ============= ============= ============= =============
67 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES CLASS C SHARES --------------------------------- ----------------------------- ----------------------------- SIX SIX SIX MONTHS YEAR MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 2002 2001 --------------- --------------- ------------ ------------- ------------- ------------- INTERNATIONAL VALUE FUND (NUMBER OF SHARES) Shares sold 80,933,062 139,418,862 5,174,978 11,159,464 11,454,588 25,120,811 Shares issued as reinvestment of dividends 2,046,200 6,121,206 542,229 2,432,358 774,598 3,490,818 Shares redeemed (56,131,226) (103,751,144) (3,083,152) (5,457,791) (7,177,718) (15,687,139) --------------- --------------- ------------ ------------- ------------- ------------- Net increase in shares outstanding 26,848,036 41,788,924 2,634,055 8,134,031 5,051,468 12,924,490 =============== =============== ============ ============= ============= ============= INTERNATIONAL VALUE FUND ($) Shares sold $ 1,042,218,886 $ 1,987,454,751 $ 65,812,759 $ 157,664,420 $ 145,338,996 $ 355,012,713 Shares issued as reinvestment of dividends 25,679,811 89,795,792 6,739,902 35,342,287 9,605,012 50,605,929 Shares redeemed (725,186,242) (1,461,321,837) (39,041,909) (75,247,514) (90,702,128) (216,919,756) --------------- --------------- ------------ ------------- ------------- ------------- Net increase $ 342,712,455 $ 615,928,706 $ 33,510,752 $ 117,759,193 $ 64,241,880 $ 188,698,886 =============== =============== ============ ============= ============= ============= CLASS I SHARES CLASS Q SHARES ------------------------------ ------------------------------ SIX SIX MONTHS MONTHS YEAR ENDED PERIOD ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001(1) 2002 2001 ------------- ------------- ------------- ------------- INTERNATIONAL VALUE FUND (NUMBER OF SHARES) Shares sold 15,046,674 19,267,313 1,610,704 1,572,970 Shares issued as reinvestment of dividends 431,858 -- 61,189 194,697 Shares redeemed (2,035,775) (965,949) (2,578,181) (358,279) ------------- ------------- ------------- ------------- Net increase (decrease) in shares outstanding 13,442,757 18,301,364 (906,288) 1,409,388 ============= ============= ============= ============= INTERNATIONAL VALUE FUND ($) Shares sold $ 193,857,379 $ 262,398,688 $ 20,904,655 $ 21,820,254 Shares issued as reinvestment of dividends 5,411,186 -- 769,149 2,856,211 Shares redeemed (26,279,690) (12,540,659) (33,715,258) (4,933,113) ------------- ------------- ------------- ------------- Net increase (decrease) $ 172,988,875 $ 249,858,029 $ (12,041,454) $ 19,743,352 ============= ============= ============= =============
(1) Commenced operations on June 18, 2001. 68 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- CLASS A SHARES ---------------------------- SIX MONTHS YEAR ENDED ENDED APRIL 30, OCTOBER 31, 2002 2001 ------------ ------------ PRECIOUS METALS FUND (NUMBER OF SHARES) Shares sold 1,827,304 5,158,331 Shares issued in merger -- 5,620,303 Shares issued as reinvestment of dividends 91,746 24,110 Shares redeemed (3,666,058) (8,684,451) ------------ ------------ Net increase (decrease) in shares outstanding (1,747,008) 2,118,293 ============ ============ PRECIOUS METALS FUND ($) Shares sold $ 6,899,351 $ 21,463,292 Shares issued in merger -- 14,557,739 Shares issued as reinvestment of dividends 271,568 54,487 Shares redeemed (13,308,517) (23,933,244) ------------ ------------ Net increase (decrease) $ (6,137,598) $ 12,142,274 ============ ============ CLASS A SHARES ----------------------------- SIX MONTHS YEAR ENDED ENDED APRIL 30, OCTOBER 31, 2002 2001 ------------ ------------ RUSSIA FUND (NUMBER OF SHARES) Shares sold 4,299,955 2,343,779 Shares redeemed (1,032,373) (3,740,914) ------------ ------------ Net increase (decrease) in shares outstanding 3,267,582 (1,397,135) ============ ============ RUSSIA FUND ($) Shares sold $ 49,388,157 $ 17,289,158 Shares redeemed (11,297,227) (26,829,915) ------------ ------------ Net increase (decrease) $ 38,090,930 $ (9,540,757) ============ ============ 69 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES ---------------------------- ---------------------------- SIX SIX MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 ------------ ------------ ------------ ------------ GLOBAL COMMUNICATIONS FUND (NUMBER OF SHARES) Shares sold 241,666 4,443,108 146,270 634,944(2) Shares redeemed (506,074) (7,388,961) (435,025) (1,336,329) ------------ ------------ ------------ ------------ Net decrease in shares outstanding (264,408) (2,945,853) (288,755) (701,385) ============ ============ ============ ============ GLOBAL COMMUNICATIONS FUND ($) Shares sold $ 424,514 $ 18,723,492 $ 263,501 $ 3,914,528(2) Shares redeemed (887,277) (32,806,341) (771,781) (5,425,723) ------------ ------------ ------------ ------------ Net decrease $ (462,763) $(14,082,849) $ (508,280) $ (1,511,195) ============ ============ ============ ============ CLASS C SHARES CLASS X SHARES(1) -------------------------- ----------------- SIX MONTHS YEAR YEAR ENDED ENDED ENDED APRIL 30, OCTOBER 31, OCTOBER 31, 2002 2001 2001 ----------- ----------- ----------- GLOBAL COMMUNICATIONS FUND (NUMBER OF SHARES) Shares sold 601,336 120,155 327 Shares redeemed (621,563) (340,645) (237,608)(2) ----------- ----------- ----------- Net decrease in shares outstanding (20,227) (220,490) (237,281) =========== =========== =========== GLOBAL COMMUNICATIONS FUND ($) Shares sold $ 1,264,687 $ 462,352 $ 2,387 Shares issued as shares redeemed (963,365) (1,346,798) (2,176,985)(2) ----------- ----------- ----------- Net increase (decrease) $ 301,322 $ (884,446) $(2,174,598) =========== =========== ===========
(1) Effective November 17, 2000, Class X shares are no longer being offered for sale. (2) Amounts include 237,383 of Class X shares, valued at $1,508,875, that were converted into Class B shares on November 17, 2000. 70 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES ---------------------------- --------------------------- SIX SIX MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 ------------ ------------ ------------ ------------ GLOBAL TECHNOLOGY FUND (NUMBER OF SHARES) Shares sold 641,893 5,572,388 73,353 649,338(2) Shares issued in merger -- 614,620 -- -- Shares issued as reinvestment of dividends -- 1,834,157 -- 791,178 Shares redeemed (1,895,197) (7,711,747) (259,833) (796,526) ------------ ------------ ------------ ------------ Net increase (decrease) in shares outstanding (1,253,304) 309,418 (186,480) 643,990 ============ ============ ============ ============ GLOBAL TECHNOLOGY FUND ($) Shares sold $ 4,289,204 $ 71,172,900 $ 458,380 $ 10,071,165(2) Shares issued in merger -- 5,497,157 -- -- Shares issued as reinvestment of dividends -- 28,703,042 -- 12,115,539 Shares redeemed (12,382,865) (91,476,650) (1,591,409) (6,137,863) ------------ ------------ ------------ ------------ Net increase (decrease) $ (8,093,661) $ 13,896,449 $ (1,133,029) $ 16,048,841 ============ ============ ============ ============ CLASS C SHARES CLASS I SHARES CLASS X SHARES(1) -------------------------- -------------- ----------------- SIX MONTHS YEAR YEAR ENDED ENDED PERIOD ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002(3) 2001 ----------- ----------- ------------ ----------- GLOBAL TECHNOLOGY FUND (NUMBER OF SHARES) Shares sold 47,412 144,833 735,353 -- Shares issued as reinvestment of dividends -- 323,794 -- -- Shares redeemed (198,322) (391,012) (49,708) (311,818)(2) ----------- ----------- ----------- ----------- Net increase (decrease) in shares outstanding (150,910) 77,615 685,645 (311,818) =========== =========== =========== =========== GLOBAL TECHNOLOGY FUND ($) Shares sold $ 300,471 $ 1,883,133 $ 4,961,123 $ -- Shares issued as reinvestment of dividends -- 4,959,136 -- -- Shares redeemed (1,228,924) (4,309,151) (283,175) (7,804,173)(2) ----------- ----------- ----------- ----------- Net increase (decrease) $ (928,453) $ 2,533,118 $ 4,677,948 $(7,804,173) =========== =========== =========== ===========
(1) Effective November 17, 2000, Class X shares are no longer being offered for sale. (2) Amounts include 310,202 of Class X shares, valued at $7,287,146, that were converted into Class B shares on November 17, 2000. (3) Commenced operations on January 15, 2002.
CLASS A SHARES CLASS B SHARES CLASS C SHARES -------------- -------------- -------------- PERIOD PERIOD PERIOD ENDED ENDED ENDED APRIL 30, APRIL 30, APRIL 30, 2002(1) 2002(2) 2002(3) ------------ ------------ ------------ GLOBAL REAL ESTATE FUND (NUMBER OF SHARES) Shares sold 2,524,180 11,350 1,946 Shares issued as reinvestment of dividends 37,352 -- -- Shares redeemed (871) -- -- ------------ ------------ ------------ Net increase in shares outstanding 2,560,661 11,350 1,946 ============ ============ ============ GLOBAL REAL ESTATE FUND ($) Shares sold $ 25,407,395 $ 117,696 $ 19,453 Shares issued as reinvestment of dividends 405,886 -- -- Shares redeemed (9,650) -- -- ------------ ------------ ------------ Net increase $ 25,803,631 $ 117,696 $ 19,453 ============ ============ ============
(1) Commenced operations on November 5, 2001. (2) Commenced operations on March 15, 2002. (3) Commenced operations on January 8, 2002. 71 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - --------------------------------------------------------------------------------
CLASS A SHARES CLASS B SHARES ------------------------------ ------------------------------ SIX SIX MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 ------------- ------------- ------------- ------------- WORLDWIDE GROWTH FUND (NUMBER OF SHARES) Shares sold 4,778,288 14,154,594 91,112 855,611 Shares issued in merger -- 1,796,396 -- 309,706 Shares issued as reinvestment of dividends -- 229,876 -- 113,034 Shares redeemed (6,627,860) (16,851,100) (595,199) (1,387,035) ------------- ------------- ------------- ------------- Net decrease in shares outstanding (1,849,572) (670,234) (504,087) (108,684) ============= ============= ============= ============= WORLDWIDE GROWTH FUND ($) Shares sold $ 76,216,682 $ 280,069,792 $ 1,668,720 $ 20,740,917 Shares issued in merger -- 36,578,702 -- 7,048,872 Shares issued as reinvestment of dividends -- 5,578,485 -- 3,071,140 Shares redeemed (105,955,203) (327,284,495) (10,650,807) (29,793,190) ------------- ------------- ------------- ------------- Net increase (decrease) $ (29,738,521) $ (5,057,516) $ (8,982,087) $ 1,067,739 ============= ============= ============= ============= CLASS C SHARES CLASS Q SHARES ------------------------------ ------------------------------ SIX SIX MONTHS YEAR MONTHS YEAR ENDED ENDED ENDED ENDED APRIL 30, OCTOBER 31, APRIL 30, OCTOBER 31, 2002 2001 2002 2001 ------------- ------------- ------------- ------------- WORLDWIDE GROWTH FUND (NUMBER OF SHARES) Shares sold 204,663 3,264,179 673,131 1,521,737 Shares issued in merger -- 597,885 -- -- Shares issued as reinvestment of dividends -- 126,940 -- 51,494 Shares redeemed (1,364,535) (5,401,816) (851,777) (2,083,680) ------------- ------------- ------------- ------------- Net decrease in shares outstanding (1,159,872) (1,412,812) (178,646) (510,449) ============= ============= ============= ============= WORLDWIDE GROWTH FUND ($) Shares sold $ 3,328,749 $ 68,275,479 $ 12,500,076 $ 33,939,544 Shares issued in merger -- 12,102,849 -- -- Shares issued as reinvestment of dividends -- 3,066,876 -- 1,439,783 Shares redeemed (21,750,984) (107,297,591) (15,905,436) (46,882,200) ------------- ------------- ------------- ------------- Net decrease $ (18,422,235) $ (23,852,387) $ (3,405,360) $ (11,502,873) ============= ============= ============= =============
NOTE 11 -- SECURITIES LENDING Under an agreement with Brown Brothers Harriman ("BBH"), the Funds can lend their securities to approved brokers, dealers and other financial institutions. Loans are collateralized by cash, U.S. Government securities or irrevocable performance letters of credit issued by banks approved by the Fund. The collateral must be in an amount equal to at least 105% of the market value of non-U.S. securities loaned and 102% of the market value of U.S. securities loaned. The cash collateral received is invested in Brown Brothers Investment Trust. A portion of the income generated by the investment of the collateral, net of any rebates paid by BBH to borrowers, is remitted to BBH as lending agent, and the remainder is paid to the Funds. Generally, in the event of counterparty default, the Funds have the right to use the collateral to offset losses incurred. There would be a potential loss to the Funds in the event the Funds are delayed or prevented from exercising their right to dispose of the collateral. The Funds bear the risk of loss with respect to the investment of collateral. At April 30, 2002, the Funds had securities on loan with the following market values: FUND VALUE - ---- ------------ Asia-Pacific Equity $ 332,918 Emerging Countries 6,364,465 European Equity 417,699 International Core Growth 3,382,363 International 4,069,171 International SmallCap Growth 54,565,982 International Value 362,280,267 Precious Metals 5,720,556 Russia 4,730,213 Global Communications 266,400 Global Technology 621,600 Worldwide Growth 19,966,106 72 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- NOTE 12 -- CHANGE IN FUND'S YEAR-END Effective October 31, 2000 Worldwide Growth, International Core Growth, International SmallCap Growth, Emerging Countries and Asia-Pacific Equity changed their fiscal year-end from June 30 to October 31. Effective October 31, 2000, International, Russia, and Precious Metals changed their fiscal year-end from December 31 to October 31. This change was done to facilitate the administration of the Funds. NOTE 13 -- ILLIQUID SECURITIES Pursuant to guidelines adopted by the Fund's Board of Directors, the following securities have been deemed to be illiquid. The Funds currently limit investment in illiquid securities to 15% of the Fund's net assets, at market value, at time of purchase.
INITIAL PERCENT ACQUISITION OF NET FUND SECURITY SHARES DATE COST VALUE ASSETS - ---- -------- ----- ---- ---- ----- ------ Asia-Pacific Asia World Online 124,700 12/15/99 $ 321,700 $ -- 0.00% Asustek Computer, Inc. GDR 62,298 03/23/99 293,181 212,436 1.82% Far Eastern Textile Co.Ltd. GDR 29,469 03/15/01 404,783 150,292 1.29% HON HAI Precision Industry GDR 38,547 09/30/99 479,710 341,141 2.92% Synnex Technology International Corp.GDR 21,027 12/03/97 167,919 121,957 1.05% ---------- ---------- ----- 1,667,293 825,826 7.08% ========== ========== ===== Precious Metals TVX Gold, Inc. 500,000 03/26/02 $ 337,017 $ 412,772 0.50% ========== ========== ===== Russia Bashinformsvyaz 6,831,400 06/09/97 2,036,189 512,355 0.41% Chelyabinsksvyazinform 44,610 02/25/97 1,055,627 680,303 0.54% Krasnoyarskenergo 2,998,689 03/25/02 376,135 353,845 0.28% Permenergo 594,000 03/15/02 1,191,463 1,039,500 0.83% Rostov Region Electrosvyaz 238,125 04/20/99 277,600 170,259 0.14% Slavneft-Megionneftegaz 145,982 04/06/00 345,981 987,568 0.79% Trade House GUM 235,000 08/14/97 1,017,250 357,200 0.28% Trade House GUM ADR 10,000 02/16/00 18,000 22,500 0.02% Tyumentelecom 214,000 06/20/97 758,429 406,600 0.32% Tyumentelecom Pfd 419,949 02/06/97 547,672 335,959 0.27% Vladimir Region Electrosvyaz 3,200,000 12/18/01 277,600 320,000 0.25% ---------- ---------- ----- $7,901,946 $5,186,089 4.13% ========== ========== =====
NOTE 14 -- REORGANIZATIONS On February 23, 2001, March 23, 2001 and April 27, 2001, certain Funds, as listed below (each an :"Acquiring Fund"), acquired the assets and certain liabilities of other Funds, also listed below (each an "Acquired Fund"), in a tax-free reorganization in exchange for shares of the Acquiring Fund, pursuant to a plan of reorganization approved by the Acquired Fund's shareholders. The number and value of shares issued by the Acquiring Fund are presented in Note 10 - -- Capital Shares. The Adviser and the Funds split the cost associated with the Reorganization equally, net assets and unrealized appreciation/(depreciation) as of the reorganization date were as follows:
ACQUIRED FUND TOTAL NET TOTAL NET UNREALIZED ASSETS OF ASSETS OF APPRECIATION/ ACQUIRING ACQUIRED ACQUIRED FUND ACQUIRING FUND (DEPRECIATION) FUND FUND (000'S) (000'S) (000'S) ---- ---- ------- ------- ------- Worldwide Growth Global Corporate Leaders $10,838 $489,351 $ 1,710 Global Brand Names 44,892 489,351 (1,860) International International Equity 39,847 16,254 (6,927) Emerging Countries Emerging Markets Value 10,380 121,887 (1,352) Emerging Markets Equity 6,473 134,612 (1,893) Worldwide Emerging Markets 62,552 121,887 (15,060) Global Information Technology Global Technology 5,497 63,045 (7,103) Asia-Pacific Equity SmallCap Asia Growth 2,738 11,985 (1,237) Precious Metals Silver 14,558 41,263 (7,171)
The net assets of Worldwide Growth, International, Emerging Countries, Global Information Technology, Asia-Pacific Equity and Precious Metals after the acquisitions were approximately $545,081,000, $56,101,000, $194,819,000, $68,542,000, $14,723,000 and $55,821,000, respectively. 73 NOTES TO FINANCIAL STATEMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- NOTE 15 -- FORWARD FOREIGN CURRENCY CONTRACTS At April 30, 2002 the following forward foreign currency contracts were outstanding for the ING International SmallCap Growth Fund.
IN NET UNREALIZED SETTLEMENT EXCHANGE APPRECIATION/ CURRENCY BUY/SELL DATE FOR VALUE $ (DEPRECIATION) - -------- -------- ---- --- ------- -------------- Japanese Yen USD JPY 2,840,625,507 Buy 5/22/02 22,083,179 22,136,403 53,224 Japanese Yen USD JPY 3,547,872,779 Sell 5/22/02 26,644,744 27,647,834 (1,003,090) ----------- $ (949,866) ===========
NOTE 16 -- CONCENTRATION OF RISKS FOREIGN SECURITIES (ALL FUNDS). Investments in foreign securities may entail risks not present in domestic investments. Since investments of securities are denominated in foreign currencies, changes in the relationship of these foreign currencies to the U.S. dollar can significantly affect the value of the investments and earnings of the Funds. Foreign investments may also subject the Funds to foreign government exchange restrictions, expropriation, taxation or other political, social or economic developments, as well as from movements in currency, security value and interest rate, all of which could affect the market and/or credit risk of the investments. EMERGING MARKETS INVESTMENTS (ALL FUNDS). Because of less developed markets and economies and, in some countries, less mature govenments and governmental institutions, the risks of investing in foreign securities can be intensified in the case of investments in issuers domiciled or doing substantial business in emerging market countries. INDUSTRY CONCENTRATION (GLOBAL COMMUNICATIONS, GLOBAL TECHNOLOGY AND GLOBAL REAL ESTATE FUNDS). As a result of the Funds concentrating their assets in securities related to a particular industry, the Funds may be subject to greater market fluctuation than a fund which has securities representing a broader range of investment alternatives. REGION CONCENTRATION (ASIA-PACIFIC EQUITY AND RUSSIA FUNDS). As a result of the Funds concentrating their assets in a single region of the world, each Fund's performance may be more volatile than that of a fund that invests globally. If securities in the region that the Fund is concentrated fall out of favor, it may cause the Fund to underperform in relation to funds that focus on other types of stocks. NON-DIVERSIFIED (RUSSIA, PRECIOUS METALS AND GLOBAL REAL ESTATE FUNDS). There is additional risk associated with being non-diversified, since the Fund is not limited in the proportion of its assets in a single issuer. The investment of a large percentage of a Fund's assets in the securities of a small number of issuers may cause that Fund's share price to fluctuate more than that of a diversified fund. NOTE 17 -- SUBSEQUENT EVENTS REORGANIZATIONS. The following proposed reorganizations were approved by the shareholders of the "Disappearing Funds" at a special shareholder meeting held on May 9, 2002. The reorganizations occured after the close of business on May 17, 2002. DISAPPEARING FUNDS SURVIVING FUNDS ------------------ --------------- ING International Core Growth Fund ING International Fund ING Global Communications Fund ING Global Technology Fund ING Internet Fund ING Global Technology Fund CHANGE IN EXPENSE LIMITATION RATES. Effective June 7, 2002 the expense limitation rates for the International Fund are as follows: 1.80%, 2.55%, 2.55%, 1.45% and 1.55% for Classes A ,B, C, I and Q, respectively. These new expense limitation rates will continue through at least June 30, 2003. 74 ING Asia-Pacific Equity Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCK: 99.74% HONG KONG: 29.01% 295,000 APT Satellite Holdings Ltd. $ 113,475 124,700 @,X Asia World Online -- 126,000 Bank of East Asia 264,148 214,000 Beijing Datang Power Generation Co. Ltd. 83,004 20,000 Cheung Kong Holdings Ltd. 190,408 276,000 China Everbright Ltd. 166,328 61,500 @ China Mobile Hong Kong Ltd. 201,476 450,000 China National Aviation 93,473 850,000 China Petroleum & Chemical Corp. 136,235 180,000 @ China Unicom Ltd. 175,406 132,000 Citic Pacific Ltd. 267,417 440,000 Cosco Pacific Ltd. 346,965 128,000 Hong Kong Exchanges and Clearing Ltd. 228,951 27,900 Hutchison Whampoa Ltd. 244,155 495,872 @ Pacific Century CyberWorks Ltd. 126,526 44,000 Sun Hung Kai Properties Ltd. 383,636 75,000 Television Broadcasts Ltd. 365,429 ---------- TOTAL HONG KONG 3,387,032 ---------- MALAYSIA: 6.89% 127,500 Malayan Banking Berhad 308,680 103,000 Resorts World Berhad 284,602 71,000 Tenaga Nasional Berhad 211,129 ---------- TOTAL MALAYSIA 804,411 ---------- SINGAPORE: 18.85% 117,000 City Developments Ltd. 400,232 37,035 DBS Group Holdings Ltd. 286,071 222,000 @ Neptune Orient Lines Ltd. 137,184 36,550 Oversea-Chinese Banking Corp. 262,159 51,000 Singapore Airlines Ltd. 393,942 28,500 Singapore Press Holdings Ltd. 353,803 435,000 Singapore Telecommunications Ltd. 367,210 ---------- TOTAL SINGAPORE 2,200,601 ---------- SOUTH KOREA: 20.36% 5,330 Kookmin Bank $ 243,551 21,400 Korea Electric Power Corp. 406,749 2,500 KT Corp. 112,878 4,430 A KT Corp. ADR 100,340 2,415 LG Home Shopping, Inc. 291,336 1,800 Samsung Electronics 533,437 9,000 SK Corp. 134,756 2,840 SK Telecom 554,119 ---------- TOTAL SOUTH KOREA 2,377,166 ---------- TAIWAN: 14.20% 44,049 Acer, Inc. 61,874 25,300 Asustek Computer, Inc. 91,582 62,298 Asustek Computer, Inc. GDR 212,436 22,498 China Steel Corp. GDR 202,482 116,537 Far Eastern Textile Co. Ltd. 54,117 29,469 Far Eastern Textile Co. Ltd. GDR 150,292 38,547 HON HAI Precision Industry GDR 341,141 21,027 Synnex Technology International Corp. GDR 121,957 22,960 @ Taiwan Semiconductor Manufacturing Co. Ltd. 57,946 69,000 United Microelectronics Corp. 105,480 25,550 @,A United Microelectronics Corp. ADR 258,055 ------------ TOTAL TAIWAN 1,657,362 ------------ THAILAND: 10.43% 259,600 Advanced Info Service Public Co. Ltd. 264,103 165,000 @ Bangkok Bank Public Co. Ltd. 244,162 82,200 PTT Exploration & Production Public Co. Ltd. 201,461 14,800 Siam Cement Public Co. Ltd. 335,353 300,000 @ Siam Commercial Bank Public Co. Ltd. 172,717 ------------ TOTAL THAILAND 1,217,796 ------------ Total Common Stock (Cost $15,416,664) 11,644,368 ------------ TOTAL INVESTMENTS IN SECURITIES (COST $15,416,664)* 99.74% $ 11,644,368 OTHER ASSETS AND LIABILITIES-NET 0.26% 30,250 ------ ------------ NET ASSETS 100.00% $ 11,674,618 ====== ============ @ Non-income producing security ADR American Depository Receipt GDR Global Depository Receipt X Fair Value as determined by ING Valuation Committee appointed by the Fund's Board of Directors. A Loaned security, a portion or all of the security is on loan at April 30, 2002. * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 664,477 Gross Unrealized Depreciation (4,436,773) ------------ Net Unrealized Depreciation $ (3,772,296) ============ See Accompanying Notes to Financial Statements 75 ING Asia-Pacific Equity Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Percentage of Industry Net Assets - -------------------------------------------------------------------------------- Airlines 4.17% Banks 15.26% Building Materials 2.87% Commercial Services 2.97% Computers 3.97% Distribution/Wholesale 0.53% Diversified Financial Services 3.39% Electric 6.00% Electronics 2.60% Entertainment 2.44% Holding Companies-Diversified 4.38% Iron/Steel 1.73% Media 6.16% Oil & Gas 4.05% Real Estate 8.35% Retail 2.50% Semiconductors 8.18% Telecommunications 17.26% Textiles 1.75% Transportation 1.18% Other Assets and Liabilities, Net 0.26% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 76 ING Emerging Countries Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCKS: 97.75% BRAZIL: 11.23% 24,000 A Banco Bradesco SA ADR $ 710,640 18,530,054 Banco Itau SA 1,471,885 14,960 Brasil Telecom Participacoes SA ADR 581,94 68,500,000 Centrais Eletricas Brasileiras SA 950,381 29,000 Cia Brasileira de Distribuicao Grupo Pao de Acucar ADR 681,500 52,075 Companhia de Bebidas das Americas ADR 1,092,013 88,653 Cia Energetica de Minas Gerais ADR 1,338,660 68,402 Cia Paranaense de Energia ADR 487,706 37,500 A Cia Siderurgica Nacional SA ADR 738,750 38,950 @ Cia Vale do Rio Doce ADR 1,062,946 20,300,100 Eletropaulo Metropolitana de Sao Paulo SA 503,095 17,428 Empresa Brasileira de Aeronautica SA ADR 401,367 136,983 A Gerdau SA ADR 1,821,874 124,645 Petroleo Brasileiro SA - Petrobras ADR 2,916,693 100,530 Souza Cruz SA 691,636 64,359 Tele Norte Leste Participacoes SA ADR 812,854 ------------ TOTAL BRAZIL 16,263,944 ------------ CHILE: 0.55% 52,750 Compania Telecomunicaciones de Chile SA ADR 792,833 ------------ TOTAL CHILE 792,833 ------------ CHINA: 0.91% 2,904,000 Beijing Capital International Airport Co. Ltd. 692,577 3,100,000 Beijing North Star Co. 620,076 ------------ TOTAL CHINA 1,312,653 ------------ CZECHOSLOVAKIA: 0.81% 68,000 @ Komercni Banka AS GDR 1,166,200 ------------ TOTAL CZECHOSLOVAKIA 1,166,200 ------------ HONG KONG: 5.56% 940,000 @ China Mobile Hong Kong Ltd. $3,079,478 1,656,500 CNOOC Ltd. 2,198,316 1,670,000 Cosco Pacific Ltd. 1,316,891 1,921,000 Huaneng Power International, Inc. 1,440,926 ------------ TOTAL HONG KONG 8,035,611 ------------ HUNGARY: 1.22% 100,000 @ Opt Bank Rt. GDR 1,765,000 ------------ TOTAL HUNGARY 1,765,000 ------------ INDIA: 3.88% 59,000 # Hindalco Industries Ltd. GDR 958,750 120,000 Hindustan Lever Ltd. 497,364 240,000 @ Larsen & Toubro Ltd. 854,690 28,000 @ Larsen & Toubro Ltd. GDR 192,360 72,500 @ Ranbaxy Laboratories Ltd. GDR 1,377,500 188,000 Reliance Industries Ltd. 1,070,636 55,000 Satyam Computer Services ADR 657,250 ------------ TOTAL INDIA 5,608,550 ------------ INDONESIA: 1.93% 1,201,000 @ Astra International Tbk PT 502,026 750,000 @ HM Sampoerna Tbk PT 351,688 1,900,000 @ Ramayana Lestari Sentosa Tbk PT 748,392 2,627,000 @ Telekomunikasi Indonesia Tbk PT 1,182,572 ------------ TOTAL INDONESIA 2,784,678 ------------ ISRAEL: 1.63% 52,500 @ Check Point Software Technologies 952,875 25,000 Teva Pharmaceutical Industries ADR 1,400,250 ------------ TOTAL ISRAEL 2,353,125 ------------ MALAYSIA: 6.42% 954,000 Gamuda Berhad 1,594,163 394,000 Genting Berhad 1,617,452 555,000 Malayan Banking Berhad 1,343,667 714,000 @ Malaysian Airline System Berhad 770,358 579,000 @ New Straits Times Press Berhad 1,013,237 322,000 Perusahaan Otomobil Nasional 957,514 1,924,000 Public Bank Berhad 1,984,732 ------------ TOTAL MALAYSIA 9,281,123 ------------ MEXICO: 10.75% 1,040,300 @ Alfa SA $2,097,916 98,510 America Movil SA de C.V. ADR 1,837,212 54,235 Cemex SA ADR 1,719,250 330,000 @ GEO Corp. SA 721,831 14,255 @ Fomento Economico Mexicano SA ADR 682,102 71,600 @ Grupo Aeroportuario del Sureste SA ADR 1,210,040 1,544,000 @ Grupo Financiero BBVA Bancomer 1,533,786 86,800 @ Grupo Financiero Inbursa SA 108,361 20,000 @ Grupo Televisa SA ADR 904,000 72,310 Telefonos de Mexico SA ADR 2,736,210 84,510 @ TV Azteca SA ADR 680,306 472,492 Wal-Mart de Mexico SA 1,325,922 ------------ TOTAL MEXICO 15,556,936 ------------ NETHERLANDS: 1.20% 15,000 Merrill Korea Telecom 674,700 1,044,000 Merrill Fubon Financial 1,064,880 ------------ TOTAL NETHERLANDS 1,739,580 ------------ PERU: 0.46% 25,000 Buenaventura SA ADR 666,500 ------------ TOTAL PERU 666,500 ------------ POLAND: 1.33% 70,000 Bank Pekao SA GDR 1,928,500 ------------ TOTAL POLAND 1,928,500 ------------ RUSSIA: 7.05% 25,000 Lukoil-Holdings ADR 1,802,750 32,000 Mobile Telesystems ADR 1,003,200 40,000 A Sibneft ADR 734,000 137,000 Surgutneftegaz ADR 3,116,750 70,000 @ Unified Energy System GDR 1,038,800 17,000 @,A YUKOS ADR 2,499,000 ------------ TOTAL RUSSIA 10,194,500 ------------ SOUTH AFRICA: 4.90% 350,000 ABSA Group Ltd. 1,020,792 33,000 Anglo American Platinum Corp. Ltd. 1,574,090 85,000 Nedcor Ltd. 1,095,588 125,000 Sappi Ltd. 1,538,244 175,000 Sasol Ltd. 1,860,476 ------------ TOTAL SOUTH AFRICA 7,089,190 ------------ See Accompanying Notes to Financial Statements 77 ING Emerging Countries Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- SOUTH KOREA: 21.05% 11,000 Cheil Communications Inc. $ 1,493,406 62,500 @ Daishin Securities Co. 1,132,176 9,300 Hankuk Electric Glass 512,258 145,000 Hotel Shilla Co. 1,237,393 21,000 Hyundai Department Store Co. Ltd. 663,072 65,000 Hyundai Motor Co. 2,420,481 64,551 X Kookmin Bank 2,949,615 65,500 Korea Electric Power Corp. 1,244,957 25,300 A KT Corp. ADR 573,045 14,000 KT Corp. 632,118 25,000 LG Chem Ltd. 758,340 9,000 POSCO 897,207 33,600 Samsung Electro-Mechanics 1,986,284 31,800 Samsung Electronics 9,424,050 46,000 @ Samsung Securities Co. Ltd. 1,552,366 6,850 Shinsegae Co. Ltd. 1,139,895 9,430 SK Telecom 1,839,911 ------------ TOTAL SOUTH KOREA 30,456,574 ------------ TAIWAN: 10.80% 410,325 @ Asustek Computer, Inc. GDR $ 1,399,208 2,235,000 Chinatrust Commercial Bank 1,979,074 956,000 @ Compal Electronics, Inc. 1,284,961 1,437,000 @ Evergreen Marine Corp. 683,891 2,010,000 @ Formosa Chemicals & Fibre Co. 1,808,826 15,612 # @ HON HAI Precision Industry GDR 138,166 136,500 @ HON HAI Precision Industry GDR 1,208,025 476,000 @ Synnex Technology International Corp. 663,131 207,500 @ Synnex Technology International Corp. GDR 1,203,500 86,756 @ Taiwan Semiconductor Manufacturing Co. Ltd. ADR 1,535,581 520,000 @ Taiwan Semiconductor Manufacturing Co. Ltd. 1,312,374 31,335 @A United Microelectronics Corp. ADR 316,484 708,000 @ United Microelectronics Corp. 1,082,319 1,355,000 @ Yuanta Core Pacific Securities Co. 1,004,427 ----------- TOTAL TAIWAN 15,619,967 ----------- THAILAND: 2.72% 420,000 Bangkok Bank PCL $ 621,503 143,000 BEC World PCL 859,653 599,000 @ Land & House Pub Co. Ltd. 976,405 1,752,000 @ National Finance PCL 615,731 38,000 Siam Cement PCL 861,040 ----------- TOTAL THAILAND 3,934,332 ----------- TURKEY: 2.91% 3,000 @ Anadolu Efes Biracilik Ve Malt Sanayii AS 67 40,000,000 @ KOC Holding AS 879,940 210,000,000 @ Sabanci Holding 908,276 180,000,000 @ Turkcell Iletisim Hizmet AS 1,208,054 420,000,000 @ Yapi VE Kredi Bankasi 1,205,817 ------------ TOTAL TURKEY 4,202,154 ------------ VENEZUELA: 0.44% 43,300 Compania Anonima Nacional Telefonos de Venezuela-CANTV ADR 633,912 ------------ TOTAL VENEZUELA 633,912 ------------ TOTAL COMMON STOCKS (COST $115,657,106) 141,385,862 ------------ See Accompanying Notes to Financial Statements 78 ING Emerging Countries Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (COST $ 115,657,106)* 97.75% $141,385,862 OTHER ASSETS AND LIABILITIES-NET 2.25% 3,249,603 ------ ------------ NET ASSETS 100.00% $144,635,465 ====== ============ @ Non-income producing security ADR American Depository Receipt GDR Global Depository Receipt # Securities with purchase pursuant to Rule 144A, under the Security Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. X Fair valued as determined by ING Valuation Committee as appointed by the Fund's Board of Directors. A Loaned security, a portion or all of the security is on loan at April 30, 2002. * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 30,791,403 Gross Unrealized Depreciation $ (5,062,647) ------------ Net Unrealized Appreciation $ 25,728,756 ============ See Accompanying Notes to Financial Statements 79 ING Emerging Countries Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Percentage of Industry Net Assets - -------------------------------------------------------------------------------- Advertising 1.03% Aerospace/Defense 0.28% Agriculture 0.72% Airlines 0.53% Auto Manufacturers 2.34% Banks 13.31% Beverages 1.23% Building Materials 1.78% Chemicals 2.52% Commercial Services 0.91% Computers 3.11% Diversified Financial Services 4.11% Electric 4.84% Electronics 2.69% Engineering & Construction 2.42% Financial 0.74% Food 0.47% Forest Products & Paper 1.06% Holding Companies-Diversified 3.41% Home Builders 1.17% Household Products/Wares 0.34% Internet 0.66% Iron/Steel 2.39% Lodging 1.97% Media 2.39% Mining 2.95% Oil & Gas 10.47% Pharmaceuticals 1.92% Real Estate 0.43% Retail 3.03% Semiconductors 9.45% Software 0.45% Telecommunications 12.16% Transportation 0.47% Other Assets and Liabilities, Net 2.25% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 80 ING European Equity Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCK: 101.19% BELGIUM: 0.46% 1,140 Fortis (B) $ 26,153 2,299 Interbrew 68,369 ------------ TOTAL BELGIUM 94,522 ------------ FINLAND: 2.38% 23,702 Nokia OYJ 383,268 8,408 Stora Enso OYJ 106,815 ------------ TOTAL FINLAND 490,083 ------------ FRANCE: 15.07% 450 Air Liquide 69,606 6,673 Alcatel SA 83,391 4,222 Aventis SA 299,731 10,144 AXA 215,086 5,656 BNP Paribas 295,358 2,384 Cap Gemini SA 138,982 3,510 Carrefour SA 153,113 828 Cie de Saint-Gobain 141,643 101 Groupe Danone 13,367 800 L'OREAL SA 62,628 2,522 Louis Vuitton Moet Hennessy SA 131,813 8,561 @ Orange SA 49,331 438 Pinault-Printemps-Redoute 49,689 3,107 Renault SA 143,926 585 Sanofi-Synthelabo SA 37,422 1,012 Societe Assurances Generales de France 51,025 1,900 Societe Generale 130,011 6,480 Suez SA 192,823 3,532 TotalFinaElf SA 534,882 5,077 A Vivendi Environnement 167,301 4,243 Vivendi Universal SA 135,196 ------------ TOTAL FRANCE 3,096,324 ------------ GERMANY: 12.98% 1,273 Allianz AG 299,144 5,042 A BASF AG 215,175 4,002 Bayer AG 131,697 3,743 Bayerische Hypo-und Vereinsbank AG 131,430 4,481 DaimlerChrysler AG 206,968 2,852 Deutsche Bank AG 188,938 3,196 Deutsche Lufthansa AG 49,206 11,132 Deutsche Telekom 148,135 6,002 E. On AG 310,454 6,821 Infineon Technologies AG 123,685 1,365 Metro AG 43,629 601 Muenchener Rueckversicherungs AG 148,805 1,348 SAP AG 174,405 180 Schering AG 10,955 5,689 Siemens AG 344,205 2,878 Volkswagen AG 141,221 ------------ TOTAL GERMANY 2,668,052 ------------ IRELAND: 0.96% 11,106 Bank of Ireland $ 129,055 3,924 CRH PLC 67,265 ------------ TOTAL IRELAND 196,320 ------------ ITALY: 5.79% 3,865 Assicurazioni Generali 93,330 26,972 Banca Nazionale Del Lavoro S.p.A. 61,318 19,854 ENI-Ente Nazionale Idrocarburi S.p.A. 304,778 29,209 IntesaBci S.p.A. 94,411 6,378 Mediaset S.p.A. 53,405 58,876 A Olivetti S.p.A. 67,586 6,270 Riunione Adriatica di Sicurta S.p.A. 81,291 5,590 Sanpaolo IMI S.p.A. 62,258 26,855 Telecom Italia S.p.A. 185,933 14,518 TIM S.p.A. 63,396 26,152 UniCredito Italiano S.p.A. 121,262 ------------ TOTAL ITALY 1,188,968 ------------ LUXEMBOURG: 0.45% 6,670 @ Arcelor 91,882 ------------ TOTAL LUXEMBOURG 91,882 ------------ NETHERLANDS: 7.15% 5,695 ABN Amro Holding NV 112,805 10,901 Aegon NV 250,275 2,080 Akzo Nobel NV 89,348 3,558 @ ASML Holding NV 80,727 8,131 Fortis NV 186,606 1,349 Heineken Holding NV 45,534 4,301 Koninklijke Ahold NV 107,459 11,790 Koninklijke Philips Electronics NV 363,780 1,940 Numico NV 50,042 479 Reed Elsevier NV 6,641 24,042 Royal KPN NV 108,880 1,844 VNU NV 55,618 1,869 Vodafone Libertel NV 11,611 ------------ TOTAL NETHERLANDS 1,469,326 ------------ PORTUGAL: 0.26% 7,197 @ Portugal Telecom SGPS SA 52,487 ------------ TOTAL PORTUGAL 52,487 ------------ SPAIN: 5.42% 18,675 Banco Bilbao Vizcaya Argentaria SA $ 217,574 3,009 Banco Popular Espanol 123,293 23,430 Banco Santander Central Hispano SA 216,859 11,502 Endesa SA 176,049 29,698 @ Telefonica SA 317,654 1,251 @ Terra Networks SA 8,256 3,100 Union Fenosa SA 54,622 ------------ TOTAL SPAIN 1,114,307 ------------ SWEDEN: 1.06% 9,603 Nordea AB 53,606 5,543 Nordea AB ADR 31,441 4,548 Securitas AB 84,428 19,678 Telefonaktiebolaget LM Ericsson 49,344 ------------ TOTAL SWEDEN 218,819 ------------ SWITZERLAND: 12.61% 16,322 ABB Ltd. 145,939 910 Adecco SA 57,517 4,800 Compagnie Financiere Richemont AG 108,775 5,465 Credit Suisse Group 194,613 240 Holcim Ltd. 55,497 1,900 Nestle SA 448,727 13,101 Novartis AG 548,938 3,168 Roche Holding AG 239,793 4,139 STMicroelectronics NV 128,566 560 Swatch Group AG 54,128 1,332 Swiss Reinsurance 134,292 6,864 UBS AG 330,566 617 Zurich Financial Services AG 143,435 ------------ TOTAL SWITZERLAND 2,590,786 ------------ See Accompanying Notes to Financial Statements 81 ING European Equity Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- UNITED KINGDOM: 36.60% 8,903 Abbey National PLC $ 141,497 6,462 Anglo American PLC 101,854 7,174 AstraZeneca PLC 335,991 10,172 BAE Systems PLC 51,715 29,696 Barclays PLC 259,990 19,220 BG Group PLC 85,816 105,214 BP PLC 897,399 4,744 @ British Sky Broadcasting PLC 53,075 32,875 BT Group PLC 123,558 18,295 CGNU PLC 188,158 12,883 CMG PLC 33,754 22,154 Compass Group PLC 137,805 11,907 Diageo PLC 158,018 23,890 Dixons Group PLC 79,087 25,081 GlaxoSmithKline PLC 606,510 6,654 HBOS PLC 80,647 38,303 HSBC Holdings PLC 451,963 64,389 Lattice Group PLC 173,996 28,139 Lloyds TSB Group PLC 323,423 9,382 Pearson PLC 112,891 10,007 Prudential PLC 106,417 9,681 Reuters Group PLC 67,693 3,458 Rio Tinto PLC 64,227 15,305 Royal Bank of Scotland Group PLC 438,777 14,597 Scottish Power PLC 83,994 130,655 Shell Transport & Trading Co. PLC 929,770 9,781 Standard Chartered PLC 120,400 47,585 Tesco PLC 182,310 28,800 Unilever PLC 263,474 437,874 Vodafone Group PLC 706,444 15,040 WPP Group PLC 159,501 ------------ TOTAL UNITED KINGDOM 7,520,154 ------------ Total Common Stock (Cost $22,849,534) 20,792,030 ------------ TOTAL INVESTMENTS IN SECURITIES (COST $ 22,849,534)* 101.19% $ 20,792,030 OTHER ASSETS AND LIABILITIES-NET -1.19% (243,643) ------- ------------ NET ASSETS 100.00% $ 20,548,387 ======= ============ @ Non-income producing security ADR American Depository Receipt A Loaned security, a portion or all of the security is on loan at April 30, 2002. * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 1,038,329 Gross Unrealized Depreciation (3,095,833) ------------ Net Unrealized Depreciation $ (2,057,504) ============ See Accompanying Notes to Financial Statements 82 ING European Equity Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Percentage of Industry Net Assets - -------------------------------------------------------------------------------- Advertising 0.78% Aerospace/Defense 0.25% Airlines 0.24% Auto Manufacturers 2.39% Banks 22.02% Beverages 1.32% Building Materials 1.29% Chemicals 2.46% Commercial Services 1.35% Computers 0.84% Cosmetics/Personal Care 0.30% Electric 3.04% Electronics 1.77% Engineering & Construction 0.71% Food 6.14% Food Service 0.67% Forest Products & Paper 0.52% Gas 0.85% Holding Companies-Diversified 0.64% Insurance 8.33% Internet 0.04% Iron/Steel 0.45% Media 1.70% Mining 0.81% Miscellaneous Manufacturing 1.68% Oil & Gas 13.40% Pharmaceuticals 10.12% Retail 1.42% Semiconductors 1.62% Software 0.85% Telecommunications 11.44% Water 1.75% Other Assets and Liabilities, Net -1.19% ------- NET ASSETS 100.00% ======= See Accompanying Notes to Financial Statements 83 ING International Core Growth Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCK: 88.66% AUSTRALIA: 1.55% 149,200 QBE Insurance Group Ltd. $ 585,953 ------------ TOTAL AUSTRALIA 585,953 ------------ BELGIUM: 1.06% 9,000 Omega Pharma SA 403,537 ------------ TOTAL BELGIUM 403,537 ------------ BRAZIL: 1.94% 13,300 A Banco Bradesco SA ADR 393,813 14,847 Empresa Brasileira de Aeronautica SA ADR 341,926 ------------ TOTAL BRAZIL 735,739 ------------ CANADA: 4.65% 30,900 Bombardier, Inc. 261,723 10,700 Cameco Corp. 289,435 28,703 EnCana Corp. 902,660 26,600 Placer Dome, Inc. 312,550 ------------ TOTAL CANADA 1,766,368 ------------ DENMARK: 1.51% 7,800 Novo-Nordisk A/S ADR 229,008 11,900 A TDC A/S 342,964 ------------ TOTAL DENMARK 571,972 ------------ FINLAND: 0.70% 20,800 Stora Enso OYJ 263,818 ------------ Total Finland 263,818 ------------ FRANCE: 14.05% 12,400 Aventis SA 880,308 8,493 AXA 180,079 21,400 Credit Agricole SA 452,015 9,400 A France Telecom ADR 231,240 45,600 Havas Advertising 340,764 43,680 A Infogrames Entertainment SA 373,609 8,700 Schneider Electric SA 419,460 11,150 Societe Generale 762,957 3,474 Total FinaElf SA 526,099 14,500 Valeo SA 620,116 3,700 Vivendi Universal SA 117,895 13,224 Vivendi Universal SA ADR 424,755 ------------ TOTAL FRANCE 5,329,297 ------------ GERMANY: 4.22% 2,900 Allianz AG 681,475 13,850 A Deutsche Bank AG 917,531 ------------ TOTAL GERMANY 1,599,006 ------------ HONG KONG: 3.11% 12,800 China Mobile Hong Kong Ltd. ADR $ 212,608 978,000 Cosco Pacific Ltd. 771,209 110,000 Hong Kong Exchanges and Clearing Ltd. 196,755 ------------ TOTAL HONG KONG 1,180,572 ------------ IRELAND: 4.73% 28,600 Bank of Ireland 333,463 23,200 CRH PLC 402,096 25,400 Irish Life & Permanent PLC 345,320 131,610 Ryanair Holdings PLC 713,340 ------------ TOTAL IRELAND 1,794,219 ------------ ISRAEL: 2.17% 14,700 Teva Pharmaceutical Industries ADR 823,347 ------------ TOTAL ISRAEL 823,347 ------------ ITALY: 1.01% 50,000 Banca Fideuram S.p.A. 381,748 ------------ TOTAL ITALY 381,748 ------------ JAPAN: 10.18% 4,600 Advantest Corp. 331,232 3,600 Drake Beam Morin Japan, Inc. 116,301 5,880 Fancl Corp. 187,212 15,000 Nomura Holdings, Inc. 209,014 160 A NTT DoCoMo, Inc. 406,788 6,400 Otsuka Kagu Ltd. 244,123 35,000 Sekisui House Ltd. 240,581 17,700 Sony Corp. 950,724 2,700 Sony Corp. ADR 146,340 4,100 Takefuji Corp. 296,186 17,500 Toyota Motor Corp. 476,802 15,000 Yamato Transport Co. Ltd. 254,554 ------------ TOTAL JAPAN 3,859,857 ------------ NETHERLANDS: 4.60% 11,500 @ ASML Holding NV 260,921 5,100 @ ASML Holding NV ADR 113,883 14,670 Koninklijke Ahold NV 366,526 27,472 Koninklijke Philips Electronics NV 847,648 3,000 Royal Dutch Petroleum Co. 156,780 ------------ Total Netherlands 1,745,758 ------------ NORWAY: 0.46% 9,850 Norske Skogindustrier AS 175,202 ------------ TOTAL NORWAY 175,202 ------------ SINGAPORE: 0.46% 283,000 @ Neptune Orient Lines Ltd. $ 174,879 ------------ TOTAL SINGAPORE 174,879 ------------ SPAIN: 3.24% 17,500 Banco Popular Espanol 717,061 13,400 @ Sogecable SA 277,850 24,528 @ Telefonica SA 233,476 ------------ TOTAL SPAIN 1,228,387 ------------ SWEDEN: 1.91% 91,800 A Swedish Match AB 722,701 ------------ TOTAL SWEDEN 722,701 ------------ SWITZERLAND: 7.44% 1,250 Givaudan 465,561 2,250 Nestle SA 531,387 11,980 Novartis AG ADR 502,801 10,550 Roche Holding AG 798,552 10,800 UBS AG 523,692 ------------ Total Switzerland 2,821,993 ------------ UNITED KINGDOM: 19.31% 56,500 BAA PLC 530,876 24,000 Barclays PLC 210,122 98,800 BP PLC 842,692 40,100 British Sky Broadcasting PLC 448,632 84,879 Cadbury Schweppes PLC 643,585 88,100 Capita Group PLC 489,937 48,277 Diageo PLC 640,684 26,800 Imperial Tobacco Group PLC 379,478 37,000 London Stock Exchange PLC 245,783 39,100 Pearson PLC 470,481 65,400 Provident Financial PLC 676,427 20,800 Reckitt Benckiser PLC 368,150 34,600 Reed Elsevier PLC 338,712 3,600 A Rio Tinto PLC ADR 272,340 10,399 Royal Bank of Scotland Group PLC 298,127 26,100 United Business Media PLC 199,231 166,909 Vodafone Group PLC 269,283 ------------ TOTAL UNITED KINGDOM 7,324,540 ------------ UNITED STATES: 0.36% 2,500 Schlumberger Ltd. 136,875 ------------ Total United States 136,875 ------------ Total Common Stock (Cost $32,529,841) 33,625,768 ------------ See Accompanying Notes to Financial Statements 84 ING International Core Growth Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- PREFERRED STOCK: 2.33% GERMANY: 2.33% 4,661 A Henkel KGAA $ 306,305 10,700 Rhoen Klinikum AG 578,025 ------------ TOTAL GERMANY 884,330 ------------ Total Preferred Stock (Cost $896,235) 884,330 ------------ MUTUAL FUNDS: 3.54% UNITED STATES: 3.54% 63,600 iShares, Inc. (MSCI Germany Index Fund) 947,004 26,700 iShares, Inc. (MSCI United Kingdom Index Fund) 393,825 ------------ TOTAL UNITED STATES 1,340,829 ------------ Total Mutual Funds (Cost $1,199,024) 1,340,829 ------------ Principal Amount Value - -------------------------------------------------------------------------------- U.S. GOVERNMENT OBLIGATIONS: 3.32% $5,600,000 United States Treasury Strip Principal, 0.000%, due 11/15/27 $ 1,259,014 ------------ Total U.S. Government Obligations (Cost $1,313,495) 1,259,014 ----------- TOTAL INVESTMENTS IN SECURITIES (COST $35,938,595)* 97.85% $ 37,109,941 OTHER ASSETS AND LIABILITIES-NET 2.15% 814,548 ------ ------------ NET ASSETS 100.00% $ 37,924,489 ====== ============ @ Non-Income producing security ADR American Depository Receipt A Loaned security, a portion or all of the security is on loan at April 30, 2002. * Cost for federal Income tax purposes is the same as for financial statement purposes. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 3,765,303 Gross Unrealized Depreciation (2,593,957) =----------- Net Unrealized Appreciation $ 1,171,346 ============ See Accompanying Notes to Financial Statements 85 ING International Core Growth Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Percentage of Industry Net Assets - -------------------------------------------------------------------------------- Advertising 0.90% Aerospace/Defense 0.90% Agriculture 2.91% Airlines 1.88% Auto Manufacturers 1.26% Auto Parts & Equipment 1.64% Banks 12.15% Beverages 1.69% Chemicals 1.23% Commercial Services 5.06% Cosmetics/Personal Care 0.49% Diversified Financial Services 6.20% Electronics 3.11% Engineering & Construction 2.46% Equity Fund 3.54% Food 4.06% Forest Products & Paper 1.16% Hand/Machine Tools 1.11% Healthcare-Services 1.52% Home Builders 0.63% Home Furnishings 2.89% Household Products/Wares 1.78% Insurance 3.82% Media 4.57% Mining 2.31% Miscellaneous Manufacturing 0.69% Oil & Gas 6.40% Oil & Gas Services 0.36% Pharmaceuticals 9.59% Retail 0.64% Semiconductors 0.99% Software 0.99% Sovereign 3.32% Telecommunications 4.47% Transportation 1.13% Other Assets and Liabilities, Net 2.15% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 86 ING International Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCKS: 84.14% AUSTRALIA: 1.57% 186,900 QBE Insurance Group Ltd. $ 734,012 ------------ TOTAL AUSTRALIA 734,012 ------------ AUSTRIA: 0.72% 20,900 Wienerberger AG 338,712 ------------ TOTAL AUSTRIA 338,712 ------------ BELGIUM: 1.07% 11,200 Omega Pharma SA 502,179 ------------ TOTAL BELGIUM 502,179 ------------ BRAZIL: 1.80% 16,000 A Banco Bradesco SA ADR 473,760 15,875 Empresa Brasileira de Aeronautica SA ADR 365,601 ------------ TOTAL BRAZIL 839,361 ------------ CANADA: 2.84% 38,100 Bombardier, Inc. 322,707 12,000 Cameco Corp. 324,600 11,000 EnCana Corp. 345,921 28,200 Placer Dome, Inc. 331,350 ------------ TOTAL CANADA 1,324,578 ------------ DENMARK: 1.29% 8,100 Novo-Nordisk A/S 237,370 12,700 A TDC A/S 366,021 ------------ TOTAL DENMARK 603,391 ------------ FINLAND: 0.69% 25,600 Stora Enso OYJ 324,699 ------------ TOTAL FINLAND 324,699 ------------ FRANCE: 10.94% 3,800 Aventis SA ADR 268,470 6,650 Aventis SA 472,101 27,300 Credit Agricole SA 576,636 12,100 A France Telecom ADR 297,660 56,800 Havas Advertising 424,461 28,350 Infogrames Entertainment SA 242,487 9,200 Schneider Electric SA 443,566 11,400 Societe Generale 780,063 3,665 Total FinaElf SA 555,023 8,900 Valeo SA 380,623 10,350 Vivendi Universal SA 329,786 10,536 Vivendi Universal SA ADR 338,416 ------------ TOTAL FRANCE 5,109,292 ------------ GERMANY: 4.40% 2,620 Allianz AG $ 615,677 13,989 A Deutsche Bank AG 926,740 10,000 E.O.N AG 517,251 ------------ TOTAL GERMANY 2,059,668 ------------ HONG KONG: 3.89% 14,200 China Mobile Hong Kong Ltd. ADR 235,862 972,000 Cosco Pacific Ltd. 766,478 151,000 Hong Kong Electric Holdings 573,095 136,000 Hong Kong Exchanges and Clearing Ltd. 243,260 ------------ TOTAL HONG KONG 1,818,695 ------------ IRELAND: 3.37% 30,500 Bank of Ireland 355,616 24,600 @ CRH PLC 426,361 27,000 Irish Life & Permanent PLC 367,073 78,800 Ryanair Holdings PLC 427,267 ------------ TOTAL IRELAND 1,576,317 ------------ ISRAEL: 1.21% 10,100 Teva Pharmaceutical Industries ADR 565,701 ------------ TOTAL ISRAEL 565,701 ------------ ITALY: 0.87% 53,500 Banca Fideuram S.p.A. 408,471 ------------ TOTAL ITALY 408,471 ------------ JAPAN: 9.65% 4,700 Advantest Corp. 338,432 4,400 Drake Beam Morin Japan, Inc. 142,145 7,080 Fancl Corp. 225,418 37,000 Nomura Holdings, Inc. 515,569 165 @,A NTT Docomo, Inc. 419,497 8,000 Otsuka Kagu Ltd. 305,153 33,000 Sekisui House Ltd. 226,833 17,800 Sony Corp. 956,095 4,900 Takefuji Corp. 353,978 26,500 @ Toyota Motor Corp. 722,015 18,000 Yamato Transport Co. Ltd. 305,465 ------------ TOTAL JAPAN 4,510,603 ------------ NETHERLANDS: 6.34% 11,900 @ ASML Holding NV $ 269,997 5,100 @ ASML Holding NV ADR 113,883 14,650 Koninklijke Ahold NV 366,026 40,704 Koninklijke Philips Electronics NV 1,255,922 11,390 Royal Dutch Petroleum Co. 595,241 16,380 TPG NV 354,683 ------------ TOTAL NETHERLANDS 2,955,752 ------------ NEW ZEALAND: 0.63% 232,000 Fletcher Building Ltd. 293,646 ------------ TOTAL NEW ZEALAND 293,646 ------------ NORWAY: 0.46% 12,150 Norske Skogindustrier AS 216,112 ------------ TOTAL NORWAY 216,112 ------------ SINGAPORE: 0.45% 340,000 @ Neptune Orient Lines Ltd. 210,102 ------------ TOTAL SINGAPORE 210,102 ------------ SPAIN: 2.82% 17,750 Banco Popular Espanol 727,305 14,600 @ Sogecable SA 302,732 26,200 @ Telefonica SA 280,239 524 @ Telefonica 5,605 ------------ TOTAL SPAIN 1,315,881 ------------ SWEDEN: 2.51% 40,980 A ForeningsSparbanken AB 511,807 83,922 A Swedish Match AB 660,681 ------------ TOTAL SWEDEN 1,172,488 ------------ SWITZERLAND: 7.04% 1,210 A Givaudan 450,663 2,250 Nestle SA 531,387 12,700 Novartis AG ADR 533,019 6,300 Novartis AG 263,973 12,900 Roche Holding AG 976,429 11,028 UBS AG 534,748 ------------ TOTAL SWITZERLAND 3,290,219 ------------ See Accompanying Notes to Financial Statements 87 ING International Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- UNITED KINGDOM: 17.27% 29,200 Barclays PLC $ 255,648 140,800 BP PLC 1,200,921 40,800 @ British Sky Broadcasting PLC 456,464 110,783 Cadbury Schweppes PLC 839,999 57,600 Capita Group PLC 320,322 48,778 Diageo PLC 647,332 15,625 GlaxoSmithKline PLC 377,845 33,200 Imperial Tobacco Group PLC 470,099 39,000 @ London Stock Exchange PLC 259,068 45,000 Matalan PLC 229,930 39,500 Pearson PLC 475,294 39,400 Provident Financial PLC 407,511 19,900 Reckitt Benckiser PLC 352,220 63,100 Reed Elsevier PLC 617,709 3,800 A Rio Tinto PLC ADR 287,470 12,525 Royal Bank of Scotland Group PLC 359,077 28,000 United Business Media PLC 213,734 177,964 Vodafone Group PLC 287,118 ------------ TOTAL UNITED KINGDOM 8,057,761 ------------ UNITED STATES: 2.31% 11,900 Newmont Mining Corp. 339,269 13,500 Schlumberger Ltd. 739,125 ------------ TOTAL UNITED STATES 1,078,394 ------------ TOTAL COMMON STOCK (COST $38,730,652) 39,518,337 ------------ PREFERRED STOCK: 1.16% GERMANY: 1.16% 3,930 Rhoen Klinikum AG $ 212,303 4,996 A Henkel KGaA 328,320 ------------ TOTAL GERMANY 540,623 ------------ Total Preferred Stock (Cost $473,034) 540,623 ------------ MUTUAL FUNDS: 8.64% UNITED STATES: 8.64% 11,500 iShares, Inc. (MSCI EAFE Index Fund) 1,402,195 95,600 @ iShares, Inc. (MSCI Germany Index Fund) 1,423,484 82,100 iShares , Inc. (MSCI United Kingdom Index Fund) 1,210,975 ------------ TOTAL MUTUAL FUND (COST $3,831,069) 4,036,654 ------------ Principal Amount Value - -------------------------------------------------------------------------------- US GOVERNMENT OBLIGATIONS: 2.74% $5,700,000 U.S. Treasury Strip Principal, 0.000%, due 11/15/27 $ 1,281,497 ------------ TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $1,336,950) 1,281,497 ------------ TOTAL LONG-TERM INVESTMENTS (COST $44,371,705) 45,164,808 ------------ SHORT TERM INVESTMENTS: 2.78% $1,300,000 U.S. Treasury Bill, 1.644%, due 5/16/02 $ 1,299,085 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $1,299,085) 1,299,085 ------------ TOTAL INVESTMENTS IN SECURITIES (COST $45,670,790) 99.46% $ 46,463,897 OTHER ASSETS AND LIABILITIES-NET 0.54% 252,525 ------ ------------ NET ASSETS 100.00% $ 46,716,422 ====== ============ @ Non-income producing security ADR American Depository Receipt GDR Global Depository Receipt A Loaned security, a portion or all of the security is on loan at April 30, 2002. * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 3,877,792 Gross Unrealized Depreciation $ (3,084,685) ------------ Net Unrealized Appreciation $ 793,107 ============ See Accompanying Notes to Financial Statements 88 ING International Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Percentage of Industry Net Assets - -------------------------------------------------------------------------------- Advertising 0.91% Aerospace/Defense 0.78% Agriculture 2.42% Airlines 0.91% Auto Manufacturers 1.55% Auto Parts & Equipment 0.81% Banks 11.78% Beverages 1.39% Building Materials 2.27% Chemicals 0.96% Commercial Services 4.06% Cosmetics/Personal Care 0.48% Diversified Financial Services 5.47% Electric 2.33% Electronics 3.41% Equity Fund 8.64% Food 3.72% Forest Products & Paper 1.16% Hand/Machine Tools 0.95% Healthcare-Services 0.45% Home Builders 0.49% Home Furnishings 2.05% Household Products/Wares 1.46% Insurance 2.89% Media 4.42% Mining 2.75% Miscellaneous Manufacturer 0.69% Oil & Gas 5.77% Oil & Gas Services 1.58% Pharmaceuticals 8.98% Retail 1.15% Semiconductors 0.82% Software 0.52% Sovereign 5.52% Telecommunications 4.05% Transportation 1.86% Other Assets and Liabilities, Net 0.55% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 89 ING International SmallCap Growth Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCK: 92.77% AUSTRALIA: 0.92% 67,217 CSL Ltd. $ 1,410,548 811,600 John Fairfax Holdings Ltd. 1,552,274 989,789 @ Lihir Gold Ltd. 739,152 ------------ TOTAL AUSTRALIA 3,701,974 ------------ BELGIUM: 0.68% 60,900 Omega Pharma SA 2,730,599 ------------ TOTAL BELGIUM 2,730,599 ------------ BRAZIL: 0.28% 57,300,000 Cia Siderurgica Nacional SA 1,133,620 ------------ TOTAL BRAZIL 1,133,620 ------------ CANADA: 9.10% 300,200 Abitibi-Consolidated, Inc. 2,717,253 43,300 @ Angiotech Pharmaceuticals, Inc. 1,665,318 120,700 @,A Ballard Power Systems, Inc. 3,017,500 251,800 CAE, Inc. 1,911,348 192,400 @ Cott Corp. 3,890,328 160,700 Dofasco, Inc. 3,280,219 111,400 Finning Int'l, Inc. 1,804,912 166,100 @ Global Thermoelectric, Inc. 688,684 88,500 @ Industrial-Alliance Life Insurance Co. 2,426,312 144,000 @ Kingsway Financial Services, Inc. 1,653,378 170,600 Molson, Inc. 3,917,586 56,000 @ Precision Drilling Corp. 1,876,560 235,800 Teck Cominco Ltd. 2,078,686 294,900 @ Tesco Corp. 3,342,714 455,700 @ Turbo Genset, Inc. 308,686 108,200 @ Westjet Airlines Ltd. 2,122,313 ------------ TOTAL CANADA 36,701,797 ------------ DENMARK: 2.29% 30,100 Coloplast A/S 2,150,521 51,200 Danisco A/S 1,760,814 99,600 Novozymes A/S 2,074,497 98,800 Vestas Wind Systems A/S 3,230,322 ------------ TOTAL DENMARK 9,216,154 ------------ FINLAND: 1.29% 29,300 Perlos OYJ 211,570 378,700 Sampo OYJ 2,918,639 82,200 Tietoenator OYJ 2,057,444 ------------ TOTAL FINLAND 5,187,653 ------------ FRANCE: 11.06% 136,400 A Air France $ 2,461,067 43,800 A Altran Technologies SA 2,287,249 76,000 A Bouygues Offshore SA 3,387,117 49,900 @ Business Objects SA 1,657,823 57,500 Cie Generale D'Optique Essilor Int'l SA 2,337,939 95,600 CNP Assurances 3,528,151 2,001,473 @,A Eurotunnel SA 1,838,067 218,500 A Havas Advertising 1,632,830 55,900 Ingenico 1,284,411 119,500 @ JC Decaux SA 1,484,767 4,607 A M6-Metropole Television 113,031 29,700 @ NicOx SA 1,561,639 36,300 Pechiney SA 1,755,061 76,300 A Publicis Groupe 2,328,818 51,600 Rexel SA 3,375,178 36,083 A Technip-Coflexip SA 5,087,516 76,500 A Thales SA 2,920,375 52,000 Union du Credit-Bail Immobilier 3,054,888 38,600 A Vinci SA 2,467,499 ------------ TOTAL FRANCE 44,563,426 ------------ GERMANY: 2.68% 23,500 AMB Generali Holding AG 2,623,620 52,700 Celanese AG 1,186,211 106,900 Continental AG 1,795,014 49,300 A Deutsche Boerse AG 2,178,083 31,900 Epcos AG 1,292,452 60,000 @ Suess Microtec 1,728,672 ------------ TOTAL GERMANY 10,804,052 ------------ GREECE: 0.61% 177,300 Coca Cola Hellenic Bottling Co. SA 2,435,985 ------------ TOTAL GREECE 2,435,985 ------------ HONG KONG: 1.60% 2,579,000 Cathay Pacific Airways Ltd. 4,464,198 883,000 Hang Lung Properties Ltd. 990,666 564,000 Hongkong Land Holdings Ltd. 975,720 ------------ TOTAL HONG KONG 6,430,584 ------------ INDIA: 0.46% 156,300 Satyam Computer Services ADR 1,867,785 ------------ TOTAL INDIA 1,867,785 ------------ INDONESIA: 0.61% 5,457,500 Telekomunikasi Indonesia Tbk PT $ 2,456,752 ------------ TOTAL INDONESIA 2,456,752 ------------ IRELAND: 2.87% 1,186,900 Anglo Irish Bank Corp. 6,390,380 49,200 @ Icon PLC ADR 1,494,204 265,100 Irish Life & Permanent PLC 3,581,861 83,980 @ Tullow Oil PLC 119,891 ------------ TOTAL IRELAND 11,586,336 ------------ ITALY: 3.59% 218,300 A Banca Popolare di Verona-Banco S Geminiano e S Prospero Scrl 2,710,375 394,100 A Italcementi S.p.A. 3,796,659 656,100 Parmalat Finanziaria S.p.A. 2,303,807 49,000 Recordati S.p.A. 1,067,635 707,600 Saipem S.p.A. 4,606,144 ------------ TOTAL ITALY 14,484,620 ------------ See Accompanying Notes to Financial Statements 90 ING International SmallCap Growth Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- JAPAN: 18.54% 1,081,000 @ All Nippon Airways Co. Ltd. $ 3,063,086 516,000 (1) Amada Co. Ltd. 2,831,854 48,800 (1) Disco Corp. 3,050,475 42,300 (1) Funai Electric Co. Ltd. 4,465,110 278,000 A Hitachi Chemical Co. Ltd. 3,514,495 591,000 (1) JSR Corp. 4,642,060 1,192,000 (1) Komatsu Ltd. 4,314,806 115,000 (1) Kyorin Pharmaceutical Co. Ltd. 2,600,615 218,500 (1) Marui Co. Ltd. 2,690,853 944,000 A Mazda Motor Corp. 2,821,859 174,900 A Mitsumi Electric Co. Ltd. 2,927,254 42,130 (1) Nichii Gakkan Co. 2,098,957 74,000 A Nidec Corp. 4,931,029 12,500 Nippon System Development Co. Ltd. 488,479 123,600 (1) Nitto Denko Corp. 4,069,967 212,000 (1) NOK Corp. 1,633,816 922,000 (1) NTN Corp. 2,224,973 149,000 (1) Onward Kashiyama Co. Ltd. 1,383,754 108,100 (1) Ryohin Keikaku Co. Ltd. 2,373,050 38,800 (1) Shimamura Co. Ltd. 2,688,152 145,200 (1) THK Co. Ltd. 2,882,298 59,700 A Tokyo Seimitsu Co. Ltd. 2,253,970 72,000 @ Trend Micro, Inc. 1,939,281 36,100 (1) Union Tool Co. 1,826,639 212,000 (1) Ushio, Inc. 2,838,549 90 @,A Yahoo Japan Corp. 2,059,785 465,000 (1) Yaskawa Electric Corp. 2,135,684 ------------ TOTAL JAPAN 74,750,850 ------------ LUXEMBOURG: 0.26% 99,800 @ Thiel Logistik AG 1,060,288 ------------ TOTAL LUXEMBOURG 1,060,288 ------------ NETHERLANDS: 1.97% 80,500 @,A ASM Int'l NV 1,895,304 71,000 Euronext NV 1,492,645 32,200 IHC Caland NV 1,807,606 21,900 ML Infosys Tech Elk 1,651,260 49,400 A Van der Moolen Holding NV 1,115,935 ------------ TOTAL NETHERLANDS 7,962,750 ------------ NORWAY: 4.09% 346,400 Frontline Ltd. $ 3,791,648 168,200 A Gjensidige NOR Sparebank 5,983,557 360,400 @ Tandberg ASA 4,352,243 142,400 @ TGS Nopec Geophysical Co. ASA 2,354,979 ------------ TOTAL NORWAY 16,482,427 ------------ PORTUGAL: 0.58% 475,200 Brisa-Auto Estradas de Portugal SA 2,353,155 ------------ TOTAL PORTUGAL 2,353,155 ------------ SINGAPORE: 0.77% 1,354,000 CapitaLand Ltd. 1,299,876 365,000 City Developments Ltd. 1,248,586 88,000 Great Eastern Holdings Ltd. 548,650 ------------ TOTAL SINGAPORE 3,097,112 ------------ SOUTH AFRICA: 0.39% 128,900 Gold Fields Ltd. 1,554,707 ------------ TOTAL SOUTH AFRICA 1,554,707 ------------ SOUTH KOREA: 1.51% 623,920 @ Good Morning Securities Co. Ltd. 2,976,810 208,600 SK Corp. 3,123,336 ------------ TOTAL SOUTH KOREA 6,100,146 ------------ SPAIN: 5.05% 115,700 Acciona SA 4,327,242 45,000 ACS Actividades Cons y Serv 1,385,639 114,000 A Altadis SA 2,405,879 279,900 @,A Amadeus Global Travel Distribution 1,862,339 372,300 Corp Mapfre SA 2,510,650 205,300 Ebro Puleva SA 2,317,917 117,200 A Fomento de Construcciones Y Contratas SA 3,007,349 194,700 @ NH Hoteles SA 2,541,823 ------------ TOTAL SPAIN 20,358,838 ------------ SWEDEN: 2.08% 86,200 Autoliv, Inc. 1,914,364 229,600 @ Elekta AB 2,008,378 296,000 Eniro AB 2,301,509 13,625 @ Karo Bio AB 312,521 103,800 @,A Modern Times Group AB 1,856,292 ------------ TOTAL SWEDEN 8,393,064 ------------ SWITZERLAND: 2.06% 60,500 @ Converium Holding AG $ 3,324,012 6,100 A Givaudan 2,271,937 58,000 @ Logitech Int'l SA 2,696,676 ------------ TOTAL SWITZERLAND 8,292,625 ------------ TAIWAN: 1.46% 3,871,000 NAN YA Plastic 4,030,663 2,254,000 @ Yageo Corp. 1,872,374 ------------ TOTAL TAIWAN 5,903,037 ------------ UNITED KINGDOM: 15.97% 1,382,400 Aegis Group PLC 2,205,123 1,193,576 Aggregate Industries PLC 1,647,458 200,000 Alliance Unichem PLC 1,813,654 631,000 Amey PLC 2,183,122 580,000 Avis Europe PLC 1,770,097 94,000 @ Cambridge Antibody Technology Group PLC 1,602,134 308,700 Capita Group PLC 1,716,725 225,100 Capital Radio PLC 2,442,962 613,300 Carlton Communications PLC 2,211,226 298,300 @ Celltech Group PLC 2,468,236 93,400 Cobham PLC 1,568,097 194,500 Exel PLC 2,493,373 802,200 FKI PLC 1,974,942 958,500 Friends Provident PLC 2,569,183 144,900 Imperial Tobacco Group PLC 2,051,727 893,900 @ International Power PLC 2,721,575 149,600 Johnson Matthey PLC 2,320,952 1,801,500 Kidde PLC 2,270,050 145,700 Man Group PLC 2,033,340 715,000 Marlborough Stirling PLC 1,723,809 397,200 Nestor Healthcare Group PLC 3,451,475 292,700 Northern Rock PLC 3,016,714 2,099,400 PHS Group PLC 2,553,681 500,600 Premier Farnell PLC 2,315,366 364,700 Rexam PLC 2,653,727 480,400 Safeway PLC 2,127,461 3,019,320 @ Skyepharma PLC 3,232,820 197,900 Smiths Group PLC 2,338,039 87,000 Torex PLC 927,083 ------------ TOTAL UNITED KINGDOM 64,404,151 ------------ TOTAL COMMON STOCK (COST $344,563,941) 374,014,487 ------------ See Accompanying Notes to Financial Statements 91 ING International SmallCap Growth Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- PREFERRED STOCK: 1.32% GERMANY: 0.75% 46,100 A Henkel KGaA $ 3,029,533 ------------ TOTAL GERMANY 3,029,533 ------------ SOUTH KOREA: 0.57% 320,060 @ Daishin Securities Co. 2,309,199 ------------ TOTAL SOUTH KOREA 2,309,199 ------------ TOTAL PREFERRED STOCK (COST $5,495,980) 5,338,732 ------------ RIGHTS: 0.20% UNITED KINGDOM: 0.20% 57,960 @ Imperial Tobacco Group PLC $ 806,337 ------------ TOTAL UNITED KINGDOM 806,337 ------------ Total Rights (Cost $713,313) 806,337 ------------ TOTAL INVESTMENTS IN SECURITIES (COST $350,773,234)* 94.29% $380,159,556 OTHER ASSETS AND LIABILITIES-NET 5.71% 23,031,316 ------ ------------ NET ASSETS 100.00% $403,190,872 ====== ============ @ Non-income producing security ADR American Depository Receipt A Loaned security, a portion or all of the security is on loan at April 30, 2002. (1) Security is designated as collateral for forward foreign currency contracts. * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 47,891,538 Gross Unrealized Depreciation (18,505,216) ------------ Net Unrealized Appreciation $ 29,386,322 ============ See Accompanying Notes to Financial Statements 92 ING International SmallCap Growth Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Percentage of Industry Net Assets - -------------------------------------------------------------------------------- Advertising 1.90% Aerospace/Defense 1.58% Agriculture 1.31% Airlines 3.00% Apparel 0.34% Auto Manufacturers 0.70% Auto Parts & Equipment 1.33% Banks 4.48% Beverages 2.54% Biotechnology 1.30% Building Materials 0.94% Chemicals 4.89% Commercial Services 4.53% Computers 1.73% Diversified Financial Services 4.61% Electric 0.68% Electrical Components & Equipment 2.69% Electronics 4.59% Energy-Alternate Sources 0.75% Engineering & Construction 4.60% Food 2.11% Forest Products & Paper 0.67% Hand/Machine Tools 3.60% Healthcare-Products 1.61% Healthcare-Services 0.86% Household Products/Wares 0.75% Insurance 4.76% Internet 0.99% Iron/Steel 1.09% Lodging 0.63% Machinery-Construction & Mining 1.07% Machinery-Diversified 0.87% Media 2.60% Metal Fabricate/Hardware 0.55% Mining 1.93% Miscellaneous Manufacturing 1.07% Oil & Gas 1.27% Oil & Gas Services 3.40% Packaging &Containers 0.66% Pharmaceuticals 4.29% Real Estate 1.88% Retail 1.92% Semiconductors 0.95% Software 1.69% Technology 0.41% Telecommunications 1.69% Transportation 2.48% Other Assets and Liabilities, Net 5.71% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 93 ING International Value Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCK: 97.12% BERMUDA: 0.96% 695,370 Tyco Intl. Ltd. $ 12,829,577 3,160,236 Jardine Matheson Holdings Ltd. 18,961,416 ------------ TOTAL BERMUDA 31,790,993 ------------ BRAZIL: 7.39% 960,480 A Banco Bradesco SA ADR 28,439,813 8,577,700 Centrais Eletricas Brasileiras SA ADR 64,235,822 1,224,200 Cia de Bebidas das Americas ADR 25,671,474 2,429,300 Petroleo Brasileiro SA ADR 56,845,620 2,532,786 A Tele Norte Leste Participacoes SA ADR 31,989,087 1,208,600 A Telecomunicacoes Brasileiras SA ADR 37,805,008 ------------ TOTAL BRAZIL 244,986,824 ------------ CHINA: 0.68% 110,680,000 PetroChina Co. Ltd. 22,564,441 ------------ TOTAL CHINA 22,564,441 ------------ FRANCE: 5.82% 6,409,800 A Alcatel SA 80,102,360 1,485,000 A Alstom 19,239,714 350,000 A European Aeronautic Defense and Space Co. 5,237,336 1,463,100 Michelin (C.G.D.E.) 56,643,990 225,800 @ Provimi SA 4,452,249 179,492 A TotalFinaElf SA 27,182,066 ------------ TOTAL FRANCE 192,857,715 ------------ GERMANY: 5.94% 805,500 A BASF AG 34,375,993 1,352,400 A Bayerische Hypo-und Vereinsbank AG 47,487,700 4,265,300 Deutsche Telekom 56,759,085 1,124,988 A E.ON AG 58,190,125 ------------ TOTAL GERMANY 196,812,903 ------------ HONG KONG: 1.11% 6,146,000 Swire Pacific Ltd. 36,880,492 ------------ TOTAL HONG KONG 36,880,492 ------------ IRELAND: 1.09% 2,727,800 Allied Irish Banks PLC 36,151,948 ------------ TOTAL IRELAND 36,151,948 ------------ ITALY: 4.12% 3,355,650 A ENI-Ente Nazionale Idrocarburi S.p.A. $ 51,512,474 18,628,000 A IntesaBci S.p.A. 60,210,474 3,129,200 A Telecom Italia S.p.A. 24,877,423 ------------ TOTAL ITALY 136,600,371 ------------ JAPAN: 20.12% 654,000 Daiichi Pharmaceutical Co. Ltd. 12,753,153 5,540,000 Daiwa House Industry Co. Ltd. 35,363,537 4,183,900 Hitachi Ltd. 30,973,757 8,910 Japan Tobacco, Inc. 54,031,527 9,584,000 A Komatsu Ltd. 34,692,200 6,456,000 Matsushita Electric Industrial Co. Ltd. 86,441,850 1,762 @ Millea Holdings, Inc. 13,716,331 10,636,000 Mitsubishi Heavy Industries Ltd. 33,698,054 10,207 Mitsubishi Tokyo Financial Group, Inc. 69,842,387 12,161,000 Nippon Mitsubishi Oil Corp. 53,203,192 13,125 Nippon Telegraph & Telephone Corp. 51,596,801 1,049,000 Ono Pharmaceutical Co. Ltd. 34,297,057 3,186,000 Sankyo Co. Ltd. 48,486,922 11,494,000 Sumitomo Mitsui Banking Corp. 51,179,885 1,035,000 TDK Corp. 56,398,879 ------------ TOTAL JAPAN 666,675,532 ------------ MEXICO: 3.27% 1,275,060 America Movil SA de C.V. ADR 23,779,869 2,233,160 A Telefonos de Mexico SA de C.V. ADR 84,502,774 ------------ TOTAL MEXICO 108,282,643 ------------ NETHERLANDS: 1.23% 945,000 Akzo Nobel NV 40,593,135 ------------ TOTAL NETHERLANDS 40,593,135 ------------ NEW ZEALAND: 1.24% 19,047,466 Telecom Corp. of New Zealand Ltd. 41,061,480 ------------ TOTAL NEW ZEALAND 41,061,480 ------------ PORTUGAL: 1.48% 6,709,676 @ Portugal Telecom SGPS SA 48,932,560 ------------ TOTAL PORTUGAL 48,932,560 ------------ SINGAPORE: 3.61% 3,652,191 DBS Group Holdings Ltd. $ 28,210,804 6,060,800 # DBS Group Holdings Ltd. ADR 46,815,747 6,239,000 Oversea-Chinese Banking Corp. 44,749,924 ------------ TOTAL SINGAPORE 119,776,475 ------------ SOUTH KOREA: 4.48% 4,644,800 A Korea Electric Power Corp. ADR 49,699,360 2,180,500 A KT Corp. ADR 49,388,325 2,015,000 POSCO ADR 49,266,750 ------------ TOTAL SOUTH KOREA 148,354,435 ------------ SPAIN: 7.94% 6,566,533 A Banco Bilbao Vizcaya Argentaria SA 76,503,583 10,487,570 A Repsol YPF SA 128,701,051 5,406,844 @,A Telefonica SA 57,832,458 ------------ TOTAL SPAIN 263,037,092 ------------ SWITZERLAND: 3.61% 91,700 Swisscom AG 27,339,798 396,976 A Zurich Financial Services AG 92,285,843 ------------ TOTAL SWITZERLAND 119,625,641 ------------ UNITED KINGDOM: 22.77% 980,000 Allied Domecq PLC 6,274,368 11,065,900 BAE Systems PLC 56,259,672 4,901,200 British American Tobacco PLC 50,121,558 6,983,730 BT Group PLC 26,247,756 43,633,700 @ Corus Group PLC 50,056,172 11,912,000 Friends Provident PLC 31,929,163 8,852,100 Granada PLC 16,602,694 2,945,600 @ HSBC Holdings PLC 35,030,472 18,801,490 Imperial Chemical Industries PLC 87,234,190 30,391,298 Invensys PLC 47,592,963 12,138,607 Marks & Spencer Group PLC 70,201,176 6,983,730 @ mmO2 PLC 4,425,494 5,421,000 Reuters Group PLC 37,905,800 1,330,000 Rolls-Royce PLC 3,681,207 9,807,000 Royal & Sun Alliance Insurance Group 43,144,769 10,000,000 Safeway PLC 44,285,200 8,735,650 South African Breweries PLC 70,627,403 7,959,000 Unilever PLC 72,812,036 ------------ TOTAL UNITED KINGDOM 754,432,093 ------------ See Accompanying Notes to Financial Statements 94 ING International Value Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- VENEZUELA: 0.26% 596,537 Compania Anonima Nacional Telefonos de Venezuela ADR $ 8,733,302 -------------- TOTAL VENEZUELA 8,733,302 -------------- Total Common Stock (Cost $3,444,780,028) 3,218,150,075 -------------- TOTAL INVESTMENTS IN SECURITIES (COST $3,444,780,028)* 97.12% $3,218,150,075 OTHER ASSETS AND LIABILITIES-NET 2.88% 95,566,940 ------ -------------- NET ASSETS 100.00% $3,313,717,015 ====== ============== @ Non-Income producing security ADR American Depository Receipt # Securities with purchases pursuant to Rule 144A, under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. A Loaned security, a portion or all of the security is on loan at April 30, 2002. * Cost for federal Income tax purposes is the same as for financial statement purposes. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 278,417,607 Gross Unrealized Depreciation (505,047,560) ------------- Net Unrealized Depreciation $(226,629,953) ============= See Accompanying Notes to Financial Statements 95 ING International Value Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Percentage of Industry Net Assets - -------------------------------------------------------------------------------- Aerospace/Defense 1.97% Agriculture 3.28% Auto Parts & Equipment 1.71% Banks 15.83% Beverages 3.10% Chemicals 4.89% Computers 1.70% Electric 5.19% Electrical Components & Equipment 0.93% Food 3.53% Holding Companies-Diversified 1.68% Home Builders 1.07% Home Furnishings 2.61% Insurance 5.46% Iron/Steel 3.00% Machinery-Construction & Mining 1.05% Machinery-Diversified 0.58% Media 1.64% Miscellaneous Manufacturing 2.84% Oil & Gas 10.27% Pharmaceuticals 2.88% Retail 2.12% Telecommunications 19.79% Other Assets and Liabilities, Net 2.88% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 96 ING Precious Metals Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCKS: 98.75% AUSTRALIA: 11.21% 1,805,00 @ Aurion Gold Ltd. $ 3,112,853 6,000,000 @ Lihir Gold Ltd. 4,480,665 500,000 @ Newcrest Mining Ltd. 1,719,200 ------------ TOTAL AUSTRALIA 9,312,718 ------------ CANADA: 35.91% 278,500 Agnico-Eagle Mines Ltd. 3,868,365 82,700 Barrick Gold Corp. 1,659,789 543,900 @ Glamis Gold Ltd. 3,312,351 226,400 A Goldcorp, Inc. 4,032,184 1,248,600 @ Iamgold Corp. 5,614,996 3,000,000 @ Kinross Gold Corp. 5,040,000 188,000 @,A Meridian Gold, Inc. 2,861,360 200,000 @ PAN American Silver Corp. 1,126,000 163,500 Placer Dome, Inc. 1,921,125 500,000 @ TVX Gold, Inc. 412,772 ------------ TOTAL CANADA 29,848,942 ------------ CAYMAN ISLANDS: 1.41% 95,000 @ Apex Silver Mines Ltd. 1,168,500 ------------ TOTAL CAYMAN ISLANDS 1,168,500 ------------ GHANA: 3.01% 500,000 @ # Ashanti Goldfields Co. Ltd. GDR 2,500,000 ------------ TOTAL GHANA 2,500,000 ------------ PERU: 7.33% 150,000 Buenaventura SA ADR 3,999,000 157,009 Buenaventura SA 2,089,947 ------------ TOTAL PERU 6,088,947 ------------ SOUTH AFRICA: 22.82% 30,000 Anglo American Platinum Corp. Ltd. $ 1,430,991 95,000 A Anglogold Ltd. ADR 2,546,000 200,000 A Gold Fields Ltd. ADR 2,420,000 477,900 Gold Fields Ltd. 5,764,115 306,656 Harmony Gold Mining Co. Ltd. 3,946,800 43,960 Impala Platinum Holdings Ltd. 2,862,011 ------------ TOTAL SOUTH AFRICA 18,969,917 ------------ UNITED KINGDOM: 7.20% 1,300,000 @ Brancote Holdings PLC 3,692,862 134,400 Lonmin PLC 2,286,795 ------------ TOTAL UNITED KINGDOM 5,979,657 ------------ UNITED STATES: 9.86% 244,600 @ Freeport-McMoran Copper & Gold, Inc. 4,341,651 135,000 Newmont Mining Corp. 3,848,850 ------------ TOTAL UNITED STATES 8,190,501 ------------ TOTAL COMMON STOCKS (COST $47,749,920) 82,059,182 ------------ SHARES VALUE - -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS: 1.44% U.S GOVERNMENT OBLIGATIONS: 1.44% 1,200,000 Federal Home Loan Mortgage Corporation, 1.815%, due 5/1/02 1,200,000 ------------ Total Short-Term Investments (Cost $1,200,000) 1,200,000 ------------ TOTAL INVESTMENTS IN SECURITIES (COST $48,949,920)* 100.20% $ 83,259,182 OTHER ASSETS AND LIABILITIES-NET -0.20% (164,339) ------ ------------ NET ASSETS 100.00% $ 83,094,843 ====== ============ @ Non-income producing security ADR American Depository Receipt GDR Global Depository Receipt # Securities with purchases pursuant to Rule 144A, under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. A Loaned security, a portion or all of the security is on loan at April 30, 2002. * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 34,309,262 Gross Unrealized Depreciation -- ------------ Net Unrealized Appreciation $ 34,309,262 ============ See Accompanying Notes to Financial Statements 97 ING Precious Metals Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Percentage of Industry Net Assets - -------------------------------------------------------------------------------- Gold Mining 75.03% Metal-Diversified 5.22% Platinum 7.92% Precious Metals 0.50% Silver Mining 10.09% Sovereign Agency 1.44% Other Assets and Liabilities, Net -0.20% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 98 ING Russia Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCK: 80.40% AIRLINES: 0.72% 2,446,350 Aeroflot $ 905,150 ------------ BANKS: 3.71% 13,000 Bank Pekao SA GDR 358,150 50,000 OTP Bank Rt. GDR 882,500 20,000 Sberbank RF 3,430,000 ------------ 4,670,650 ------------ BEVERAGES: 2.86% 750,000 @ Sun Interbrew Ltd. GDR 3,600,000 ------------ ELECTRIC: 7.67% 2,998,689 @ Krasnoyarskenergo 353,845 2,115,000 Lenenergo 740,250 56,050,000 Mosenergo 2,337,285 300,000 A Mosenergo ADR 1,290,000 594,000 @ Permenergo 1,039,500 26,000,000 @ Unified Energy System 3,879,200 ------------ 9,640,080 ------------ ENGINEERING & CONSTRUCTION: 1.25% 256,000 @ United Heavy Machinery Uralmash-Izhora Group ADR 1,573,120 ------------ FOOD: 2.16% 115,000 @ Wimm-Bill-Dann Foods OJSC ADR 2,708,250 ------------ GAS: 2.55% 200,000 Gazprom OAO ADR 3,200,000 ------------ IRON/STEEL: 2.33% 43,000 Cherepovets MK Severstal 2,924,000 ------------ MINING: 4.54% 240,000 @ MMC Norilsk Nickel ADR 5,700,000 ------------ OIL & GAS: 36.41% 200,000 Lukoil 3,550,000 90,000 A Lukoil ADR 6,489,900 35,000 Mol Magyar Olajes Gazipari Rt. GDR 726,250 4,240,000 Sibneft 7,674,400 145,982 Slavneft-Megionneftegaz 987,568 245,000 Surgutneftegaz ADR 4,733,400 223,700 A Tatneft ADR 3,623,940 1,840,000 YUKOS 17,958,400 ------------ 45,743,858 ------------ PHARMACEUTICALS: 0.64% 12,500 Gedeon Richter Rt. GDR $ 798,750 ------------ RETAIL: 0.30% 235,000 Trade House GUM 357,200 10,000 Trade House GUM ADR 22,500 ------------ 379,700 ------------ TELECOMMUNICATIONS: 15.26% 6,831,400 Bashinformsvyaz 512,355 3,500,000 @ Central Telecommunications Co. 1,050,000 44,610 Chelyabinsksvyazinform 680,303 129,600 @ Golden Telecom, Inc. 2,234,304 110,000 Mobile Telesystems ADR 3,448,500 120,000 @ Moscow City Telephone 852,000 384,424 @ North-West Telecom 199,900 1,098,882 Rostelecom 1,604,368 20,000 Rostelecom ADR 180,200 238,125 Rostov Region Electrosvyaz 170,259 39,500 @ Samarasvyazinform 1,066,500 856,000 Svayzinform of Nizhny Novgorod 1,001,520 33,510,200 Syberiantelecom 921,530 214,000 Tyumentelecom 406,600 10,000,000 Uralsvyazinform 122,000 42,500 Uralsvyazinform ADR 107,312 110,000 @ Vimpel-Communications ADR 2,607,000 3,200,000 @ Vladimir Region Electrosvyaz 320,000 24,197,700 @ Yuzhnaya Telecommunication Co. 1,692,743 ------------ 19,177,394 ------------ Total Common Stock (Cost $74,372,852) 101,020,952 ------------ PREFERRED STOCK: 8.31% ELECTRIC: 1.59% 16,000,000 @ Unified Energy System $ 2,000,000 ------------ OIL & GAS: 5.17% 21,570,000 Surgutneftegaz 4,669,905 80,000 Surgutneftegaz ADR 1,820,000 ------------ 6,489,905 ------------ TELECOMMUNICATIONS: 1.55% 2,700,000 @ Central Telecommunications Co. 418,500 189,500 @ Moscow City Telephone 663,250 110,000 @ North-West Telecom 24,200 50,000 Rostelecom 37,750 9,300 @ Samarasvyazinform 126,015 427,000 @ Svayzinform of Nizhny Novgorod 345,871 419,949 Tyumentelecom 335,959 ------------ 1,951,545 ------------ Total Preferred Stock (Cost $7,646,897) 10,441,450 ------------ Total Long-Term Investments (Cost $82,019,749) 111,462,402 ------------ See Accompanying Notes to Financial Statements 99 ING Russia Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Principal Amount Value - -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS: 15.25% U.S. GOVERNMENT OBLIGATIONS: 15.25% $ 5,500,000 Federal Home Loan Mortgage Corporation, 1.815%, due 05/01/02 $ 5,500,000 3,100,000 U.S. Treasury Bills 1.644%, due 05/16/02 3,097,818 2,300,000 U.S. Treasury Bills 1.748%, due 05/30/02 2,296,830 8,300,000 U.S. Treasury Bills 1.720%, due 07/05/02 8,274,370 ------------ 19,169,018 ------------ Total Short-Term Investments (Cost $19,169,018) 19,169,018 ------------ TOTAL INVESTMENTS IN SECURITIES (COST $101,188,767)* 103.96% $130,631,420 OTHER ASSETS AND LIABILITIES-NET -3.96% (4,979,951) ------ ------------ NET ASSETS 100.00% $125,651,469 ====== ============ @ Non-income producing security ADR American Depository Receipt GDR Global Depository Receipt A Loaned security, a portion or all of the security is on loan at April 30, 2002. * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 41,141,258 Gross Unrealized Depreciation (11,698,605) ------------ Net Unrealized Appreciation $ 29,442,653 ============ See Accompanying Notes to Financial Statements 100 ING Global Communications Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCKS 99.21% CANADA: 2.01% 65,100 @ Nortel Networks Corp. $ 221,340 ------------ TOTAL CANADA 221,340 ------------ FINLAND: 4.56% 30,950 Nokia OYJ 500,470 ------------ TOTAL FINLAND 500,470 ------------ GUERNSEY: 3.35% 16,930 @ Amdocs Ltd. 367,889 ------------ TOTAL GUERNSEY 367,889 ------------ HONG KONG: 2.05% 68,720 @ China Mobile Hong Kong Ltd. 225,129 ------------ TOTAL HONG KONG 225,129 ------------ JAPAN: 1.74% 15 NTT Docomo, Inc. 37,950 60 @ NTT Docomo, Inc. 152,732 ------------ TOTAL JAPAN 190,682 ------------ NETHERLANDS: 4.13% 14,700 Koninklijke Philips Electronics NV 453,568 ------------ TOTAL NETHERLANDS 453,568 ------------ SINGAPORE: 2.90% 23,000 @ Flextronics International Ltd. 318,550 ------------ TOTAL SINGAPORE 318,550 ------------ SPAIN: 0.83% 167 @ Telefonica 1,786 8,394 @ Telefonica SA 89,784 ------------ TOTAL SPAIN 91,570 ------------ SWEDEN: 1.11% 48,700 Telefonaktiebolaget LM Ericsson 122,118 ------------ TOTAL SWEDEN 122,118 ------------ SWITZERLAND: 2.43% 8,600 STMicroelectronics NV 267,134 ------------ TOTAL SWITZERLAND 267,134 ------------ UNITED KINGDOM: 7.69% 200,342 @ Colt Telecom Group PLC 99,228 43,790 Logica PLC 202,537 336,295 Vodafone Group PLC 542,562 ------------ TOTAL UNITED KINGDOM 844,327 ------------ UNITED STATES: 66.41% 26,100 @ ADC Telecommunications, Inc. $ 101,529 18,000 @ Applied Micro Circuits Corp. 121,500 13,500 @ Broadcom Corp. 465,750 33,880 @ CIENA Corp. 253,761 33,400 @ Cisco Systems, Inc. 489,310 8,400 @ Comverse Technology, Inc. 101,052 11,440 @ Convergys Corp. 316,545 4,440 @ CSG Systems International 116,417 30,700 @ Extreme Networks 275,993 12,100 @ Intersil Corp. 324,885 44,860 @ JDS Uniphase Corp. 194,692 22,010 @ Juniper Networks, Inc. 222,521 78,800 @,A Lucent Technologies, Inc. 362,480 50,800 @ Micromuse, Inc. 414,528 6,700 @ Micron Technology, Inc. 158,790 29,860 @ Openwave Systems, Inc. 170,799 22,940 @ PMC Sierra, Inc. 356,946 15,340 @ RF Micro Devices, Inc. 266,916 31,400 @ Riverstone Networks, Inc. 147,580 42,700 @ Sanmina Corp. 444,080 15,800 Scientific-Atlanta, Inc. 316,000 30,790 @ Sprint Corp (PCS Group) 345,156 46,460 @ Sycamore Networks, Inc. 157,035 13,500 Texas Instruments, Inc. 417,555 3,000 Verizon Communications, Inc. 120,330 35,720 @ Vitesse Semiconductor Corp. 213,606 43,500 @ WorldCom Inc. 107,837 8,300 @ Xilinx, Inc. 313,408 ------------ TOTAL UNITED STATES 7,297,001 ------------ TOTAL COMMON STOCKS (COST $23,612,058) 10,899,778 ------------ TOTAL INVESTMENTS IN SECURITIES (COST $23,612,058)* 99.21% $ 10,899,778 OTHER ASSETS AND LIABILITIES-NET .79% 86,283 ------ ------------ NET ASSETS 100.00% $ 10,986,061 ====== ============ @ Non-income producing security ADR American Depository Receipt GDR Global Depository Receipt A Loaned security, a portion or all of the security is on loan at April 30, 2002. * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 79,125 Gross Unrealized Depreciation (12,791,404) ------------ Net Unrealized Depreciation $(12,712,280) ============ See Accompanying Notes to Financial Statements 101 ING Global Communications Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Percentage of Industry Net Assets - -------------------------------------------------------------------------------- Commercial Services 2.88% Computers 1.84% Electronics 11.07% Internet 2.90% Semiconductors 24.03% Software 4.83% Telecommunications 51.66% Other Assets and Liabilities, Net 0.79% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 102 ING Global Technology Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCK: 101.10% CANADA: 3.39% 39,300 @ Celestica, Inc. $ 1,088,610 ------------ TOTAL CANADA 1,088,610 ------------ IRELAND: 0.55% 27,705 @ SmartForce PLC ADR 178,670 ------------ TOTAL IRELAND 178,670 ------------ ISRAEL: 1.37% 24,200 @ Check Point Software Technologies 439,230 ------------ TOTAL ISRAEL 439,230 ------------ JAPAN: 1.33% 13 NTT Data Corp. 57,987 65 NTT DoCoMo, Inc. 165,258 3,800 Sony Corp. 204,110 ------------ TOTAL JAPAN 427,355 ------------ NETHERLANDS: 2.37% 33,500 @ ASML Holding NV 760,075 ------------ TOTAL NETHERLANDS 760,075 ------------ UNITED KINGDOM: 4.64% 40,610 @ Amdocs Ltd. 882,455 124,692 CMG PLC 326,695 60,044 Logica PLC 277,714 ------------ TOTAL UNITED KINGDOM 1,486,864 ------------ UNITED STATES: 87.45% 48,250 @ Activision, Inc. $ 1,518,910 88,300 @ Advanced Micro Devices, Inc. 987,194 14,000 @ Analog Devices, Inc. 517,440 37,775 @ AOL Time Warner, Inc. 718,481 38,400 @ Applied Materials, Inc. 933,888 59,400 @ BMC Software, Inc. 858,924 10,500 @ Broadcom Corp. 362,250 76,882 @ Cisco Systems, Inc. 1,126,321 6,993 @ Computer Sciences Corp. 313,636 81,000 @ Compuware Corp. 635,040 21,609 @ Convergys Corp. 597,921 20,400 @ Electronic Arts, Inc. 1,204,620 11,000 Electronic Data Systems Corp. 596,860 129,650 @ EMC Corp.-Mass. 1,185,001 42,500 @ Fairchild Semiconductor Int'l, Inc. 1,144,950 45,171 Intel Corp. 1,292,342 19,062 International Business Machines Corp. 1,596,633 64,900 @ Jabil Circuit, Inc. 1,324,609 153,500 @,A Lucent Technologies, Inc. 706,100 35,900 @ Micromuse, Inc. 292,944 16,040 @ Micron Technology, Inc. 380,148 29,044 @ Microsoft Corp. 1,517,839 33,700 Motorola, Inc. 518,980 11,300 @ Nvidia Corp. 393,353 52,692 @ Oracle Corp. 529,028 41,200 @ Peoplesoft, Inc. 954,604 31,702 @ RF Micro Devices, Inc. 551,615 3,571 @ SAFLINK Corp. 4,928 112,000 @ Sanmina Corp. 1,164,800 122,816 @ Sun Microsystems, Inc. 1,004,635 19,100 Texas Instruments, Inc. 590,763 38,700 @ THQ, Inc. 1,356,822 37,200 @ VeriSign, Inc. 344,100 62,100 @ Vitesse Semiconductor Corp. 371,358 30,500 @ Yahoo, Inc. 450,181 ------------ TOTAL UNITED STATES 28,047,218 ------------ Total Common Stock (Cost $47,344,055) $ 32,428,022 ------------ TOTAL INVESTMENTS IN SECURITIES (COST $47,344,055)* 101.10% $ 32,428,022 OTHER ASSETS AND LIABILITIES-NET -1.10% (354,064) ------ ------------ NET ASSETS 100.00% $ 32,073,958 ====== ============ @ Non-income producing security ADR American Depository A Loaned security, a portion or all of the security is on loan at April 30, 2002. * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized depreciation consists of: Gross Unrealized Appreciation $ 1,222,988 Gross Unrealized Depreciation (16,139,021) ------------- Net Unrealized Depreciation $ (14,916,033) ============= See Accompanying Notes to Financial Statements 103 ING Global Technology Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- PERCENTAGE OF INDUSTRY NET ASSETS - -------------------------------------------------------------------------------- Commercial Services 1.85% Computers 16.53% Electronics 11.17% Home Furnishings 0.64% Internet 3.85% Media 2.24% Semiconductors 24.11% Software 28.21% Telecommunications 12.50% Other Assets and Liabilities, Net -1.10% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 104 ING Global Real Estate Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCK: 98.40% AUSTRALIA: 8.43% 271,000 Centro Properties Group $ 518,317 219,000 General Property Trust 323,559 30,000 Lend Lease Corp. Ltd. 187,447 139,700 Stockland Trust Group 329,486 40,000 Westfield Holdings Ltd. 346,634 422,600 Westfield Trust 760,590 ------------ TOTAL AUSTRALIA 2,466,033 ------------ FRANCE: 2.56% 5,200 Simco SA 383,909 6,200 Union du Credit-Bail Immobilier 364,237 ------------ TOTAL FRANCE 748,146 ------------ GERMANY: 0.52% 13,500 IVG Holding AG 153,757 ------------ TOTAL GERMANY 153,757 ------------ HONG KONG: 9.15% 401,000 Hang Lung Properties Ltd. 449,895 133,000 Henderson Land Development 648,028 105,000 Hongkong Land Holdings Ltd. 181,650 160,000 Sun Hung Kai Properties Ltd. 1,395,042 ------------ TOTAL HONG KONG 2,674,615 ------------ ITALY: 0.98% 513,900 Beni Stabili S.p.A. 285,480 ------------ TOTAL ITALY 285,480 ------------ JAPAN: 4.00% 50,000 Daibiru Corp. 266,620 50 Japan Real Estate Investment Corp. 197,338 40,000 Mitsubishi Estate Co. Ltd. 289,584 100 Office Building Fund of Japan, Inc. 416,472 ------------ TOTAL JAPAN 1,170,014 ------------ NETHERLANDS: 6.40% 21,000 Corio NV 510,877 3,700 Rodamco Europe NV 144,711 19,400 Vastned NV 724,872 9,900 Wereldhave NV 491,132 ------------ TOTAL NETHERLANDS 1,871,592 ------------ SINGAPORE: 1.28% 202,000 CapitaLand Ltd. $ 193,925 53,000 City Developments Ltd. 181,301 ------------ TOTAL SINGAPORE 375,226 ------------ SPAIN: 0.78% 42,800 Inmobiliaria Urbis SA 228,512 ------------ TOTAL SPAIN 228,512 ------------ UNITED KINGDOM: 9.46% 49,000 British Land Co. PLC 402,587 50,000 @ Canary Wharf Group PLC 342,518 110,000 Capital & Regional PLC 459,095 59,900 Land Securities PLC 831,581 22,800 Liberty Intl. PLC 195,132 48,100 Pillar Property PLC 303,402 38,500 Slough Estates PLC 232,472 ------------ TOTAL UNITED KINGDOM 2,766,787 ------------ UNITED STATES: 54.84% 21,600 AMB Property Corp. 605,664 9,400 Apartment Investment & Management Co. 461,540 21,500 Archstone-Smith Trust 579,640 21,700 Arden Realty, Inc. 610,855 7,400 Boston Properties, Inc. 288,452 22,200 Camden Property Trust 883,560 18,100 CarrAmerica Realty Corp. 581,372 27,200 Developers Diversified Realty Corp. 601,120 29,137 Equity Office Properties Trust 834,192 29,200 Equity Residential Properties Trust 823,440 18,400 Federal Realty Investment Trust 495,880 15,800 Glimcher Realty Trust 307,310 15,300 Health Care REIT, Inc. 431,460 14,000 @ Heritage Property Investment Trust 345,100 12,000 Hospitality Properties Trust 408,000 14,500 LaSalle Hotel Properties 232,000 22,000 Liberty Property Trust 702,900 12,900 The Macerich Co. 378,615 13,400 Mack-Cali Realty Corp. 439,520 22,200 New Plan Excel Realty Trust 434,010 28,400 Prologis Trust 630,480 27,000 Regency Centers Corp. 793,800 13,100 RFS Hotel Investors, Inc. 198,858 18,000 The Rouse Co. 582,480 18,200 Simon Property Group, Inc. 614,250 35,900 Starwood Hotels & Resorts Worldwide, Inc. 1,357,020 13,400 Vornado Realty Trust 590,940 86,400 Winston Hotels, Inc. 824,256 ------------ TOTAL UNITED STATES 16,036,714 ------------ Total Common Stock (Cost $26,052,634) $ 28,776,876 ------------ See Accompanying Notes to Financial Statements 105 ING Global Real Estate Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- TOTAL INVESTMENTS IN SECURITIES (COST $ 26,052,634)* 98.40% $ 28,776,876 OTHER ASSETS AND LIABILITIES-NET 1.60% 467,058 ------ ------------ NET ASSETS 100.00% $ 29,243,934 ====== ============ @ Non-income producing security * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 2,991,328 Gross Unrealized Depreciation (267,086) ------------ Net Unrealized Appreciation $ 2,724,242 ============ See Accompanying Notes to Financial Statements 106 ING Global Real Estate Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Percentage of Industry Net Assets - -------------------------------------------------------------------------------- Closed-end Funds 0.49% Hotels & Motels 4.64% Property Trust 6.61% Real Estate Management/Service 13.67% Real Estate Operations/Development 20.69% REITS-Apartments 9.40% REITS-Diversified 4.42% REITS-Health Care 1.48% REITS-Hotels 5.69% REITS-Office Property 11.52% REITS-Regional Malls 5.39% REITS-Shopping Centers 10.17% REITS-Warehouse/Industries 4.23% Other Assets and Liabilities, Net 1.60% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 107 ING Worldwide Growth Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- COMMON STOCK: 95.76% AUSTRALIA: 0.83% 570,400 QBE Insurance Group Ltd. $ 2,240,130 ------------ TOTAL AUSTRALIA 2,240,130 ------------ BELGIUM: 0.57% 34,200 Omega Pharma SA 1,533,440 ------------ TOTAL BELGIUM 1,533,440 ------------ BRAZIL: 1.10% 52,800 A Banco Bradesco SA ADR 1,563,408 61,673 Empresa Brasileira de Aeronautica SA ADR 1,420,329 ------------ TOTAL BRAZIL 2,983,737 ------------ CANADA: 3.05% 52,500 Alcan, Inc. 1,923,075 117,300 @ Bombardier, Inc. 993,531 48,800 Cameco Corp. 1,320,040 82,432 Encana Corp. 2,592,267 117,600 Placer Dome, Inc. 1,381,800 ------------ TOTAL CANADA 8,210,713 ------------ DENMARK: 0.87% 32,800 Novo-Nordisk A/S 961,201 47,700 A TDC A/S 1,374,740 ----------- TOTAL DENMARK 2,335,941 ----------- FINLAND: 0.37% 79,600 Stora Enso OYJ 1,009,612 ----------- TOTAL FINLAND 1,009,612 ----------- FRANCE: 7.35% 44,100 Aventis SA 3,130,774 89,830 AXA 1,904,687 65,800 Credit Agricole SA 1,389,841 36,000 A France Telecom ADR 885,600 77,800 Havas Advertising 581,392 110,355 @,A Infogrames Entertainment SA 943,902 34,500 Schneider Electric SA 1,663,374 44,400 Societe Generale 3,038,141 13,820 Total FinaElf SA 2,092,885 49,500 Valeo SA 2,116,948 63,524 Vivendi Universal SA 2,024,090 ----------- TOTAL FRANCE 19,771,634 ----------- GERMANY: 2.50% 11,700 Allianz AG 2,749,399 38,654 A Deutsche Bank AG 2,560,741 27,600 E.ON AG 1,427,613 ----------- TOTAL GERMANY 6,737,753 ----------- HONG KONG: 1.51% 107,942 @ China Mobile Hong Kong Ltd. ADR $ 1,792,917 2,012,000 Cosco Pacific Ltd. 1,586,578 388,000 Hong Kong Exchanges and Clearing Ltd. 694,008 ----------- TOTAL HONG KONG 4,073,503 ----------- IRELAND: 2.65% 114,300 Bank of Ireland 1,332,685 93,700 CRH PLC 1,623,984 101,600 Irish Life & Permanent PLC 1,381,281 517,890 @ Ryanair Holdings PLC 2,807,019 ----------- TOTAL IRELAND 7,144,969 ----------- ISRAEL: 1.09% 52,250 Teva Pharmaceutical Industries ADR 2,926,523 ----------- TOTAL ISRAEL 2,926,523 ----------- ITALY: 0.57% 199,900 Banca Fideuram S.p.A. 1,526,230 ----------- TOTAL ITALY 1,526,230 ----------- JAPAN: 6.13% 18,700 Advantest Corp. 1,346,528 13,600 Drake Beam Morin Japan, Inc. 439,359 22,560 Fancl Corp. 718,281 60,000 Nomura Holdings, Inc. 836,058 670 A NTT DoCoMo, Inc. 1,703,425 41,000 Otsuka Kagu Ltd. 1,563,911 140,000 Sekisui House Ltd. 962,323 89,300 Sony Corp. 4,796,590 16,200 Takefuji Corp. 1,170,294 70,100 Toyota Motor Corp. 1,909,933 61,000 A Yamato Transport Co. Ltd. 1,035,186 ------------ TOTAL JAPAN 16,481,888 ------------ NETHERLANDS: 4.04% 71,700 @ ASML Holding NV 1,626,788 117,400 @ ASML Holding NV ADR 2,621,542 58,780 Koninklijke Ahold NV 1,468,601 108,223 Koninklijke Philips Electronics NV 3,339,220 34,400 Royal Dutch Petroleum Co 1,821,156 ------------ TOTAL NETHERLANDS 10,877,307 ------------ SINGAPORE: 0.26% 1,119,000 @ Neptune Orient Lines Ltd. $ 691,484 ------------ TOTAL SINGAPORE 691,484 ------------ SPAIN: 1.83% 62,600 Banco Popular Espanol 2,565,031 70,000 @ Sogecable SA 1,451,454 1,650 @ Telefonica 17,649 82,500 @ Telefonica SA 882,433 ------------ TOTAL SPAIN 4,916,567 ------------ SWEDEN: 1.02% 348,200 A Swedish Match AB 2,741,226 ------------ TOTAL SWEDEN 2,741,226 ------------ SWITZERLAND: 4.52% 5,100 A Givaudan 1,899,488 5,570 Nestle SA 1,315,478 50,280 Novartis AG 2,106,756 47,850 Roche Holding AG 3,621,871 29,900 STMicroelectronics NV 920,621 47,460 UBS AG 2,285,642 ------------ TOTAL SWITZERLAND 12,149,856 ------------ TAIWAN: 3.62% 239,300 @ Taiwan Semiconductor Manufacturing Co. Ltd. ADR 4,235,610 544,000 @,A United Microelectronics Corp. ADR 5,494,400 ------------ TOTAL TAIWAN 9,730,010 ------------ See Accompanying Notes to Financial Statements 108 ING Worldwide Growth Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- UNITED KINGDOM: 10.77% 214,300 BAA PLC $ 2,013,571 95,600 Barclays PLC 836,984 377,600 BP PLC 3,220,653 163,100 @ British Sky Broadcasting PLC 1,824,737 458,752 Cadbury Schweppes PLC 3,478,434 410,400 Capita Group PLC 2,282,293 112,114 Diageo PLC 1,487,864 103,100 Imperial Tobacco Group PLC 1,459,856 150,000 London Stock Exchange PLC 996,417 157,600 Pearson PLC 1,896,362 225,900 Provident Financial PLC 2,336,467 88,500 Reckitt Benckiser PLC 1,566,407 164,000 Reed Elsevier PLC 1,605,455 48,650 Rio Tinto PLC 903,604 41,125 Royal Bank of Scotland Group PLC 1,179,006 107,200 United Business Media PLC 818,297 666,122 Vodafone Group PLC 1,074,688 ------------ TOTAL UNITED KINGDOM 28,981,095 ------------ UNITED STATES: 41.11% 21,200 3M Co. 2,666,960 36,300 A Adobe Systems, Inc. 1,450,548 83,200 @ Agilent Technologies, Inc. 2,500,160 55,000 American Express Co. 2,255,550 27,900 Anheuser-Busch Cos., Inc. 1,478,700 123,400 @ Applied Materials, Inc. 3,001,088 102,100 Baker Hughes, Inc. 3,847,128 43,400 Bank of America Corp. 3,145,632 48,700 Baxter Int'l, Inc. 2,771,030 85,000 @ Bed Bath & Beyond, Inc. 3,159,450 42,200 Capital One Financial Corp. 2,527,358 85,600 Carnival Corp. 2,851,336 38,600 @ Cisco Systems, Inc. 565,490 13,099 Citigroup, Inc. 567,186 84,700 @ Concord EFS, Inc. 2,678,544 26,100 General Dynamics Corp. 2,534,049 61,800 General Motors Corp. 3,964,470 125,800 JC Penney Co., Inc. 2,734,892 30,200 @ Kla-Tencor Corp. 1,780,894 33,900 @ Kohls Corp. 2,498,430 16,700 @ Lexmark Int'l, Inc. 998,326 47,200 Linear Technology Corp. 1,834,192 42,600 Lockheed Martin Corp. 2,679,540 105,800 Mattel, Inc. 2,183,712 122,500 Motorola, Inc. 1,886,500 42,500 @ Novellus Systems, Inc. 2,014,500 23,100 The Progressive Corp. 1,328,250 58,800 Schlumberger Ltd. 3,219,300 47,700 Sears Roebuck and Co. 2,516,175 120,000 @ Sprint Corp.-PCS Group 1,345,200 37,000 @ Tenet Healthcare Corp. 2,714,690 121,000 @ Teradyne, Inc. 3,986,950 121,600 Texas Instruments, Inc. 3,761,088 50,500 @ Tricon Global Restaurants, Inc. 3,184,530 118,300 @ Univision Communications, Inc. 4,727,268 80,000 US Bancorp 1,896,000 128,700 @ USA Networks, Inc. 3,849,417 34,100 @ Vertex Pharmaceuticals, Inc. 725,307 76,400 @ Viacom, Inc. 3,598,440 163,400 Walt Disney Co. 3,787,612 48,300 @ Weatherford Int'l, Inc. $ 2,408,721 42,100 @ Wellpoint Health Networks 3,160,868 49,000 Wells Fargo & Co. 2,506,350 22,200 Weyerhaeuser Co. 1,323,342 ------------ TOTAL UNITED STATES 110,615,173 ------------ TOTAL COMMON STOCK (COST $251,157,700) 257,678,791 ------------ See Accompanying Notes to Financial Statements 109 ING Worldwide Growth Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Shares Value - -------------------------------------------------------------------------------- PREFERRED STOCK: 1.52% GERMANY: 1.52% 21,159 A Henkel KGaA $ 1,390,496 49,900 Rhoen Klinikum AG 2,695,648 ------------ TOTAL GERMANY 4,086,144 ------------ TOTAL PREFERRED STOCK (COST $4,143,632) 4,086,144 ------------ Principal Amount Value - -------------------------------------------------------------------------------- U. S. GOVERNMENT OBLIGATIONS: 1.78% $21,300,000 U.S. Treasury Strip, 0.000%, due 11/15/27 $ 4,788,752 ------------ TOTAL U.S. GOVERNMENT OBLIGATIONS (COST $4,995,974) 4,788,752 ------------ TOTAL LONG-TERM INVESTMENTS (COST $260,297,306) 266,553,687 ------------ Principal Amount Value - -------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS: 0.85% $ 2,300,000 Federal Home Loan Mortgage Corporation, 1.815%, due 05/01/2002 $ 2,300,000 ------------ TOTAL SHORT-TERM INVESTMENTS (COST $2,300,000) 2,300,000 ------------ TOTAL INVESTMENTS IN SECURITIES (COST $262,597,306)* 99.91% $268,853,687 OTHER ASSETS AND LIABILITIES-NET 0.09% 237,067 ------ ------------ NET ASSETS 100.00% $269,090,754 ====== ============ @ Non-income producing security ADR American Depository Receipt A Loaned security, a portion or all of the security is on loan at April 30, 2002. * Cost for federal income tax purposes is the same as for financial statement purposes. Net unrealized appreciation consists of: Gross Unrealized Appreciation $ 19,257,358 Gross Unrealized Depreciation (13,000,977) ------------ Net Unrealized Appreciation $ 6,256,381 ============ See Accompanying Notes to Financial Statements 110 ING Worldwide Growth Fund PORTFOLIO OF INVESTMENTS as of April 30, 2002 (Unaudited) (Continued) - -------------------------------------------------------------------------------- Percentage of Industry Net Assets - -------------------------------------------------------------------------------- Advertising 0.21% Aerospace/Defense 2.47% Agriculture 1.56% Airlines 1.04% Auto Manufacturers 2.18% Auto Parts & Equipment 0.79% Banks 9.03% Beverages 1.10% Building Materials 0.60% Chemicals 0.71% Commercial Services 3.35% Computers 0.37% Cosmetics/Personal Care 0.27% Diversified Financial Services 5.31% Electric 0.53% Electronics 2.67% Engineering & Construction 0.75% Food 2.33% Forest Products & Paper 0.87% Hand/Machine Tools 0.62% Healthcare-Products 1.03% Healthcare-Services 3.19% Home Builders 0.36% Home Furnishings 1.78% Household Products/Wares 1.10% Insurance 3.06% Leisure Time 1.06% Media 8.76% Mining 2.05% Miscellaneous Manufacturing 1.36% Oil & Gas 3.61% Oil & Gas Services 3.52% Pharmaceuticals 5.58% Retail 5.82% Semiconductors 11.62% Software 0.89% Sovereign 2.63% Telecommunications 4.28% Toys/Games/Hobbies 0.81% Transportation 0.64% Other Assets and Liabilities, Net 0.09% ------ NET ASSETS 100.00% ====== See Accompanying Notes to Financial Statements 111 SHAREHOLDER MEETING (Unaudited) - -------------------------------------------------------------------------------- A special meeting of shareholders of the ING Retail Funds (formerly Pilgrim Retail funds) and Variable Products held February 21, 2002, at the offices of ING 7337 East Doubletree Ranch Road, Scottsdale, AZ 85258 A brief description of each matter voted upon as well as the results are outlined below:
SHARES VOTED SHARES VOTED AGAINST OR SHARES BROKER TOTAL FOR WITHHELD ABSTAINED NON-VOTE SHARES VOTED ------------ ------------ --------- -------- ------------ 1. To elect twelve (12) members of the Boards of Directors/Trustees to hold office until the election and qualification of their successors. ING International Fund (formerly Pilgrim International Fund) Paul S. Doherty 4,680,712 42,148 -- -- 4,722,860 J. Michael Earley 4,680,712 42,148 -- -- 4,722,860 R. Barbara Gitenstein 4,680,553 42,307 -- -- 4,722,860 Walter H. May 4,680,712 42,148 -- -- 4,722,860 Thomas J. McInerney 4,680,712 42,148 -- -- 4,722,860 Jock Patton 4,680,712 42,148 -- -- 4,722,860 David W.C. Putnam 4,680,712 42,148 -- -- 4,722,860 Blaine E. Rieke 4,680,712 42,148 -- -- 4,722,860 Robert C. Salipante 4,680,712 42,148 -- -- 4,722,860 John G. Turner 4,680,712 42,148 -- -- 4,722,860 Roger B. Vincent 4,680,712 42,148 -- -- 4,722,860 Richard A. Wedemeyer 4,680,553 42,307 -- -- 4,722,860 ING International Value Fund (formerly Pilgrim International Value Fund) Paul S. Doherty 191,290,777 3,658,735 -- -- 194,949,512 J. Michael Earley 191,366,099 3,583,413 -- -- 194,949,512 R. Barbara Gitenstein 191,307,588 3,641,924 -- -- 194,949,512 Walter H. May 191,322,764 3,626,748 -- -- 194,949,512 Thomas J. McInerney 191,296,776 3,652,736 -- -- 194,949,512 Jock Patton 191,263,843 3,685,669 -- -- 194,949,512 David W.C. Putnam 191,346,673 3,602,839 -- -- 194,949,512 Blaine E. Rieke 191,294,242 3,655,270 -- -- 194,949,512 Robert C. Salipante 191,308,684 3,640,828 -- -- 194,949,512 John G. Turner 191,335,679 3,613,833 -- -- 194,949,512 Roger B. Vincent 191,364,776 3,584,736 -- -- 194,949,512 Richard A. Wedemeyer 191,292,876 3,656,636 -- -- 194,949,512 ING Asia-Pacific Equity Fund (formerly Pilgrim Asia-Pacific Equity Fund) Paul S. Doherty 2,441,090 84,178 -- -- 2,525,268 J. Michael Earley 2,441,273 83,995 -- -- 2,525,268 R. Barbara Gitenstein 2,440,126 85,142 -- -- 2,525,268 Walter H. May 2,441,185 84,083 -- -- 2,525,268 Thomas J. McInerney 2,441,273 83,995 -- -- 2,525,268 Jock Patton 2,441,273 83,995 -- -- 2,525,268 David W.C. Putnam 2,441,185 84,083 -- -- 2,525,268 Blaine E. Rieke 2,441,178 84,090 -- -- 2,525,268 Robert C. Salipante 2,441,273 83,995 -- -- 2,525,268 John G. Turner 2,441,185 84,083 -- -- 2,525,268 Roger B. Vincent 2,441,059 84,209 -- -- 2,525,268 Richard A. Wedemeyer 2,441,273 83,995 -- -- 2,525,268 ING Global Real Estate Fund (formerly Pilgrim Global Real Estate Fund) Paul S. Doherty 2,300,256 -- -- -- 2,300,256 J. Michael Earley 2,300,256 -- -- -- 2,300,256 R. Barbara Gitenstein 2,300,256 -- -- -- 2,300,256 Walter H. May 2,300,256 -- -- -- 2,300,256 Thomas J. McInerney 2,300,256 -- -- -- 2,300,256 Jock Patton 2,300,256 -- -- -- 2,300,256 David W.C. Putnam 2,300,256 -- -- -- 2,300,256 Blaine E. Rieke 2,300,256 -- -- -- 2,300,256 Robert C. Salipante 2,300,256 -- -- -- 2,300,256 John G. Turner 2,300,256 -- -- -- 2,300,256 Roger B. Vincent 2,300,256 -- -- -- 2,300,256 Richard A. Wedemeyer 2,300,256 -- -- -- 2,300,256
112 SHAREHOLDER MEETING (Unaudited) - --------------------------------------------------------------------------------
SHARES VOTED SHARES VOTED AGAINST OR SHARES BROKER TOTAL FOR WITHHELD ABSTAINED NON-VOTE SHARES VOTED ------------ ------------ --------- -------- ------------ ING Global Technology Fund (formerly Pilgrim Global Information Technology Fund) Paul S. Doherty 4,681,711 33,188 -- -- 4,714,899 J. Michael Earley 4,680,844 34,055 -- -- 4,714,899 R. Barbara Gitenstein 4,679,977 34,922 -- -- 4,714,899 Walter H. May 4,681,627 33,272 -- -- 4,714,899 Thomas J. McInerney 4,680,733 34,166 -- -- 4,714,899 Jock Patton 4,681,495 33,404 -- -- 4,714,899 David W.C. Putnam 4,681,627 33,272 -- -- 4,714,899 Blaine E. Rieke 4,680,935 33,964 -- -- 4,714,899 Robert C. Salipante 4,680,302 34,597 -- -- 4,714,899 John G. Turner 4,680,060 34,839 -- -- 4,714,899 Roger B. Vincent 4,680,262 34,637 -- -- 4,714,899 Richard A. Wedemeyer 4,681,045 33,854 -- -- 4,714,899 ING European Equity Fund (formerly Pilgrim European Equity Fund) Paul S. Doherty 2,451,688 3,071 -- -- 2,454,759 J. Michael Earley 2,451,688 3,071 -- -- 2,454,759 R. Barbara Gitenstein 2,451,688 3,071 -- -- 2,454,759 Walter H. May 2,451,688 3,071 -- -- 2,454,759 Thomas J. McInerney 2,451,688 3,071 -- -- 2,454,759 Jock Patton 2,451,688 3,071 -- -- 2,454,759 David W.C. Putnam 2,451,688 3,071 -- -- 2,454,759 Blaine E. Rieke 2,451,688 3,071 -- -- 2,454,759 Robert C. Salipante 2,451,688 3,071 -- -- 2,454,759 John G. Turner 2,451,688 3,071 -- -- 2,454,759 Roger B. Vincent 2,451,688 3,071 -- -- 2,454,759 Richard A. Wedemeyer 2,451,688 3,071 -- -- 2,454,759 ING Global Communications Fund (formerly Pilgrim Global Communications Fund) Paul S. Doherty 7,201,840 97,936 -- -- 7,299,776 J. Michael Earley 7,201,471 98,305 -- -- 7,299,776 R. Barbara Gitenstein 7,199,436 100,340 -- -- 7,299,776 Walter H. May 7,200,709 99,067 -- -- 7,299,776 Thomas J. McInerney 7,200,835 98,941 -- -- 7,299,776 Jock Patton 7,201,366 98,410 -- -- 7,299,776 David W.C. Putnam 7,201,050 98,726 -- -- 7,299,776 Blaine E. Rieke 7,201,651 98,125 -- -- 7,299,776 Robert C. Salipante 7,191,462 108,314 -- -- 7,299,776 John G. Turner 7,190,055 109,721 -- -- 7,299,776 Roger B. Vincent 7,191,604 108,172 -- -- 7,299,776 Richard A. Wedemeyer 7,190,993 108,783 -- -- 7,299,776 ING Worldwide Growth Fund (formerly Pilgrim Worldwide Growth Fund) Paul S. Doherty 17,535,279 327,816 -- -- 17,863,095 J. Michael Earley 17,536,622 326,473 -- -- 17,863,095 R. Barbara Gitenstein 17,532,308 330,787 -- -- 17,863,095 Walter H. May 17,540,195 322,900 -- -- 17,863,095 Thomas J. McInerney 17,538,297 324,798 -- -- 17,863,095 Jock Patton 17,531,894 331,201 -- -- 17,863,095 David W.C. Putnam 17,539,662 323,433 -- -- 17,863,095 Blaine E. Rieke 17,536,848 326,247 -- -- 17,863,095 Robert C. Salipante 17,531,467 331,628 -- -- 17,863,095 John G. Turner 17,535,081 328,014 -- -- 17,863,095 Roger B. Vincent 17,536,324 326,771 -- -- 17,863,095 Richard A. Wedemeyer 17,537,813 325,282 -- -- 17,863,095
113 SHAREHOLDER MEETING (Unaudited) - --------------------------------------------------------------------------------
SHARES VOTED SHARES VOTED AGAINST OR SHARES BROKER TOTAL FOR WITHHELD ABSTAINED NON-VOTE SHARES VOTED ------------ ------------ --------- -------- ------------ ING Emerging Countries Fund (formerly Pilgrim Emerging Countries Fund) Paul S. Doherty 6,671,708 129,795 -- -- 6,801,503 J. Michael Earley 6,676,030 125,473 -- -- 6,801,503 R. Barbara Gitenstein 6,671,213 130,290 -- -- 6,801,503 Walter H. May 6,674,008 127,495 -- -- 6,801,503 Thomas J. McInerney 6,675,885 125,618 -- -- 6,801,503 Jock Patton 6,674,877 126,626 -- -- 6,801,503 David W.C. Putnam 6,675,831 125,672 -- -- 6,801,503 Blaine E. Rieke 6,673,647 127,856 -- -- 6,801,503 Robert C. Salipante 6,674,903 126,600 -- -- 6,801,503 John G. Turner 6,675,479 126,024 -- -- 6,801,503 Roger B. Vincent 6,676,573 124,930 -- -- 6,801,503 Richard A. Wedemeyer 6,672,185 129,318 -- -- 6,801,503 ING International Core Growth Fund (formerly Pilgrim International Core Growth Fund) Paul S. Doherty 2,059,530 30,347 -- -- 2,089,877 J. Michael Earley 2,059,530 30,347 -- -- 2,089,877 R. Barbara Gitenstein 2,059,530 30,347 -- -- 2,089,877 Walter H. May 2,059,530 30,347 -- -- 2,089,877 Thomas J. McInerney 2,059,059 30,818 -- -- 2,089,877 Jock Patton 2,058,849 31,028 -- -- 2,089,877 David W.C. Putnam 2,059,530 30,347 -- -- 2,089,877 Blaine E. Rieke 2,059,530 30,347 -- -- 2,089,877 Robert C. Salipante 2,059,059 30,818 -- -- 2,089,877 John G. Turner 2,059,530 30,347 -- -- 2,089,877 Roger B. Vincent 2,059,530 30,347 -- -- 2,089,877 Richard A. Wedemeyer 2,059,530 30,347 -- -- 2,089,877 ING International SmallCap Growth Fund (formerly Pilgrim International SmallCap Growth Fund) Paul S. Doherty 13,128,405 124,123 -- -- 13,252,528 J. Michael Earley 13,134,143 118,385 -- -- 13,252,528 R. Barbara Gitenstein 13,127,855 124,673 -- -- 13,252,528 Walter H. May 13,129,963 122,565 -- -- 13,252,528 Thomas J. McInerney 13,131,813 120,715 -- -- 13,252,528 Jock Patton 13,130,774 121,754 -- -- 13,252,528 David W.C. Putnam 13,132,737 119,791 -- -- 13,252,528 Blaine E. Rieke 13,129,542 122,986 -- -- 13,252,528 Robert C. Salipante 13,129,541 122,987 -- -- 13,252,528 John G. Turner 13,130,613 121,915 -- -- 13,252,528 Roger B. Vincent 13,133,796 118,732 -- -- 13,252,528 Richard A. Wedemeyer 13,128,656 123,872 -- -- 13,252,528 ING Russia Fund (formerly Pilgrim Russia Fund) Paul S. Doherty 4,881,456 126,410 -- -- 5,007,866 J. Michael Earley 4,882,964 124,902 -- -- 5,007,866 R. Barbara Gitenstein 4,877,049 130,817 -- -- 5,007,866 Walter H. May 4,881,918 125,948 -- -- 5,007,866 Thomas J. McInerney 4,869,247 138,619 -- -- 5,007,866 Jock Patton 4,881,694 126,172 -- -- 5,007,866 David W.C. Putnam 4,864,799 143,067 -- -- 5,007,866 Blaine E. Rieke 4,880,420 127,446 -- -- 5,007,866 Robert C. Salipante 4,882,306 125,560 -- -- 5,007,866 John G. Turner 4,883,153 124,713 -- -- 5,007,866 Roger B. Vincent 4,883,929 123,937 -- -- 5,007,866 Richard A. Wedemeyer 4,877,896 129,970 -- -- 5,007,866
114 SHAREHOLDER MEETING (Unaudited) - --------------------------------------------------------------------------------
SHARES VOTED SHARES VOTED AGAINST OR SHARES BROKER TOTAL FOR WITHHELD ABSTAINED NON-VOTE SHARES VOTED ------------ ------------ --------- -------- ------------ ING Precious Metals Fund (formerly Pilgrim Precious Metals Fund) Paul S. Doherty 10,265,419 548,651 -- -- 10,814,070 J. Michael Earley 10,282,188 531,882 -- -- 10,814,070 R. Barbara Gitenstein 10,252,072 561,998 -- -- 10,814,070 Walter H. May 10,267,359 546,711 -- -- 10,814,070 Thomas J. McInerney 10,276,068 538,002 -- -- 10,814,070 Jock Patton 10,275,218 538,852 -- -- 10,814,070 David W.C. Putnam 10,284,097 529,973 -- -- 10,814,070 Blaine E. Rieke 10,259,273 554,797 -- -- 10,814,070 Robert C. Salipante 10,278,835 535,235 -- -- 10,814,070 John G. Turner 10,276,886 537,184 -- -- 10,814,070 Roger B. Vincent 10,282,287 531,783 -- -- 10,814,070 Richard A. Wedemeyer 10,260,424 553,646 -- -- 10,814,070 2. To approve amendments to Declarations of Trust or Trust Instruments, as the case may be, for some of the Funds to, among other things, permit the Boards to determine the number of Directors/Trustees to the Funds. [a] ING European Equity Fund 2,410,420 878 3,023 40,438 2,454,759 ING Global Communications Fund 2,032,941 113,373 83,149 5,070,314 7,299,777 ING Global Technology Fund 2,526,531 58,856 54,485 2,075,027 4,714,899 ING Global Real Estate Fund 2,300,256 -- -- 2,300,256 ING International Value Fund 81,829,159 3,215,941 3,196,960 106,707,452 194,949,512 3. To approve Plans of Reorganization to change only the form of corporate organization of some of the Funds without changing the substance or investment aspects of the Funds. [a][b][c] ING Asia-Pacific Equity Fund 1,588,051 63,071 63,929 820,036 2,535,087 ING International Fund, Inc. 3,662,117 14,730 24,396 1,021,617 4,722,860 ING International Value Fund 83,499,836 1,932,215 2,810,009 106,707,452 194,949,512 ING Precious Metals Fund, Inc. 9,825,383 609,245 780,823 1,848,115 13,063,566 ING Russia Fund, Inc. 3,158,634 121,609 110,201 1,542,388 4,932,832 4. Confirmation of PricewaterhouseCoopers LLP as current independent auditors of certain Funds. ING Asia-Pacific Equity Fund 2,448,203 35,575 51,309 -- 2,535,087 ING Emerging Countries Fund 6,679,767 50,420 71,317 -- 6,801,504 ING European Equity Fund 2,450,772 1,053 2,934 -- 2,454,759 ING Global Communications Fund 7,176,920 53,985 68,872 -- 7,299,777 ING Global Technology Fund 4,661,825 15,997 37,077 -- 4,714,899 ING Global Real Estate Fund 2,300,256 -- -- -- 2,300,256 ING International Core Growth Fund 2,056,857 15,125 17,896 -- 2,089,878 ING International Fund, Inc. 4,673,308 6,624 42,929 -- 4,722,861 ING International SmallCap Growth Fund 13,048,503 68,178 135,849 -- 13,252,530 ING International Value Fund 190,012,143 1,733,190 3,204,179 -- 194,949,512 ING Precious Metals Fund, Inc. 11,867,362 411,169 785,035 -- 13,063,566 ING Russia Fund, Inc. 4,749,004 101,516 82,312 -- 4,932,832 ING Worldwide Growth Fund 17,376,200 235,512 251,384 -- 17,863,096 6. Such other business as may properly come before the Special Meeting or any adjournment(s) or postponement(s) thereof. ING Asia-Pacific Equity Fund 2,355,626 86,450 93,011 -- 2,535,087 ING Emerging Countries Fund 66,497,853 141,325 162,326 -- 66,801,504 ING European Equity Fund 2,449,655 797 4,307 -- 2,454,759 ING Global Communications Fund 7,116,768 79,743 103,266 -- 7,299,777 ING Global Technology Fund 4,593,341 33,504 88,054 -- 4,714,899 ING Global Real Estate Fund 2,300,256 -- -- -- 2,300,256 ING International Core Growth Fund 1,989,374 37,672 62,832 -- 2,089,878 ING International Fund, Inc. 4,662,467 29,718 30,676 -- 4,722,861 ING International SmallCap Growth Fund 12,735,809 200,859 315,860 -- 13,252,528 ING International Value Fund 182,496,783 5,737,274 6,715,455 -- 194,949,512 ING Precious Metals Fund, Inc. 11,361,029 579,766 1,122,771 -- 13,063,566 ING Russia Fund, Inc. 4,617,048 132,492 183,292 -- 4,932,832 ING Worldwide Growth Fund 16,696,750 445,661 720,685 -- 17,863,096
115 SHAREHOLDER MEETING (Unaudited) - -------------------------------------------------------------------------------- A special meeting of shareholders of the ING Global Communications Fund and ING International Core Growth Fund held April 4, 2002, at the offices of ING, 7337 East Doubletree Ranch Road, Scottsdale, AZ 85258. A brief description of each matter voted upon as well as the results are outline below:
SHARES VOTED SHARES VOTED AGAINST OR SHARES BROKER TOTAL FOR WITHHELD ABSTAINED NON-VOTE SHARES VOTED ------------ ------------ --------- -------- ------------ 1. To approve an Agreement and Plan of Reorganization (the "Reorganization Agreement") by and among ING Global Communications Fund and ING Global Technology Fund providing for the merger of ING Global Communications Fund with and into ING Global Technology Fund, as well as ING International Core Growth Fund and ING International Fund providing for the merger of ING International Core Growth Fund with and into ING International Fund. ING Global Communications Fund 3,019,039 85,011 98,374 -- 3,202,424 ING International Core Growth Fund 1,001,321 26,292 37,934 -- 1,065,547 2. To transact such other business, not currently contemplated, that may properly come before the special meeting in the discretion of the proxies or their substitutes. ING Global Communications Fund 2,901,227 135,981 165,216 -- 3,202,424 ING International Core Growth Fund 978,292 37,822 49,433 -- 1,065,547
- ---------- [a] The special Meeting of Shareholders of the ING Retail Funds was adjourned to March 21, 2002, April 9, 2002 and then to April 16, 2002 to permit the further solicitation of shareholders of the ING International Value for their proxies relating to the proposal. This proposal has yet to pass. [b] The special Meeting of Shareholders of the ING Retail Funds was adjourned to March 21, 2002, and then to April 9, 2002 to permit the further solicitation of shareholders of the ING Asia-Pacific Equity Fund and ING Precious Metals Fund for their proxies relating to the proposal. [c] The special Meeting of Shareholders of the ING Retail Funds was adjourned to March 21, 2002, to permit the further solicitation of shareholders of the ING Russia Fund for their proxies relating to the proposal. 116 DIRECTOR/TRUSTEE AND OFFICER INFORMATION (Unaudited) - -------------------------------------------------------------------------------- The business and affairs of the Funds are managed under the direction of the Funds' Board of Directors/Trustees. Information pertaining to the Directors/Trustees and Officers of the Funds is set forth below:
NUMBER OF PRINCIPAL PORFOLIOS IN OTHE TERM OF OFFICE OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE OVERSEEN BY HELD BY AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR ------- -------------- ----------- --------------- -------- -------- Non-Interested Directors: Paul S. Doherty Director/Trustee 10-29-99 Retired. Mr. Doherty was 106 Mr. Doherty is a Trustee 7337 E. Doubletree Ranch Rd. to Present formerly President and of the GCG Trust Scottsdale, AZ 85258 Partner, Doherty, Wallace, (February 2002 to Age: 67 Pillsbury and Murphy, present). P.C.,Attorneys (1996 to 2001); a Director of Tambrands, Inc. (1993 to 1998); and a Trustee of each of the funds managed by Northstar Investment Management Corporation (1993 to 1999). J. Michael Earley Director/Trustee 2-22-02 to President and Chief 106 Mr. Earley is a Trustee 7337 E. Doubletree Ranch Rd. Present Executive Officer of Bankers of the GCG Trust (1997 Scottsdale, AZ 85258 Trust Company, N.A. (1992 to present). Age: 56 to present). R. Barbara Gitenstein Director/Trustee 2-22-02 to President of the College of 106 Dr. Gitenstein is a 7337 E. Doubletree Ranch Rd. Present New Jersey (1999 to Trustee of the GCG Trust Scottsdale, AZ 85258 present); Executive Vice (1997 to present). Age: 53 President and Provost at Drake University (1992 to 1998). Walter H. May Director/Trustee 10-29-99 Retired. Mr. May was 106 Mr. May is a Trustee for 7337 E. Doubletree Ranch Rd. to Present formerly Managing Director the Best Prep Charity Scottsdale, AZ 85258 and Director of Marketing (1991 to present) and Age: 65 for Piper Jaffray, Inc. (an the GCG Trust (February investment banking/ 2002 to present.) underwriting firm). Mr. May was formerly a Trustee of each of the funds managed by Northstar Investment Management Corporation (1996 to 1999). Jock Patton Director/Trustee 8-28-95 to Private Investor. Mr. Patton 106 Mr. Patton is a Trustee 7337 E. Doubletree Ranch Rd. Present was formerly Director and of the GCG Trust Scottsdale, AZ 85258 Chief Executive Officer of (February 2002 to Age: 56 Rainbow Multimedia Group, present); He is also Inc. (January 1999 to Director of Hypercom, December 2001); Director of Inc. and JDA Software Stuart Entertainment, Inc.; Group, Inc. (January Directory of Artisoft, Inc. 1999 to present); (1994 to 1998); President National Airlines, Inc.; and co-owner of StockVal, and BG Associates, Inc.) Inc. (November 1992 to June 1997) and a Partner and Director of the law firm of Streich Lang, P.A. (1972 to 1993).
117 DIRECTOR/TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) - --------------------------------------------------------------------------------
NUMBER OF PRINCIPAL PORFOLIOS IN OTHE TERM OF OFFICE OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE OVERSEEN BY HELD BY AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR ------- -------------- ----------- --------------- -------- -------- David W.C. Putnam Director/Trustee 10-29-99 President and Director of 106 Mr. Putnam is a Trustee 7337 E. Doubletree Ranch Rd. to Present F.L. Putnam Securities of GCG Trust (February Scottsdale, AZ 85258 Company, Inc. and its 2002 to present); Age: 62 affiliates. Mr. Putnam is Director of F.L. Putnam also President, Secretary and Securities Company, Inc. Trustee of The Principled (June 1978 to present); Equity Market Fund. Mr. F.L. Putnam Investment Putnam was formerly a Management Company Director/Trustee of Trust (December 2001 to Realty Corp., Anchor present); Asian American Investment Trust, Bow Ridge Bank and Trust Company Mining Co., and each of the (June 1992 to present); funds managed by and Notre Dame Health Northstar Investment Care Center (1991 to Management Corporation present). He is also a (1994 to 1999). Trustee of The Principled Equity Market Fund (November 1996 to present); Progressive Capital Accumulation Trust (August 1998 to present); Anchor International Bond Trust (December 2000 to present); F.L. Putnam Foundation (December 2000 to present); Mercy Endowment Foundation (1995 to present); and an Honorary Trustee of Mercy Hospital (1973 to present). Blaine E. Rieke Director/Trustee 2-26-01 to General Partner of 106 Mr. Rieke is a 7337 E. Doubletree Ranch Rd. Present Huntington Partners, an Director/Trustee of the Scottsdale, AZ 85258 investment partnership Morgan Chase Trust Co. Age: 68 (1997 to present). Mr. Rieke (January 1998 to was formerly Chairman and present) and the GCG Chief Executive Officer of Trust (February 2002 to Firstar Trust Company (1973 present). to 1996). Mr. Rieke was formerly the Chairman of the Board and a Trustee of each of the funds managed by ING Investment Management Co. LLC. (1998 to 2001). Roger B. Vincent Director/Trustee 2-22-02 to President of Springwell 106 Mr. Vincent is a Trustee 7337 E. Doubletree Ranch Rd. Present Corporation, a corporate of the GCG Trust (1994 Scottsdale, AZ 85258 advisory firm (1989 to to present) and a Age: 56 present). Mr. Vincent was Director of AmeriGas formerly a Director of Propane, Inc. (1998 to Tatham Offshore, Inc. (1996 present). to 2000) and Petrolane, Inc. (1993 to 1995).
118 DIRECTOR/TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) - --------------------------------------------------------------------------------
NUMBER OF PRINCIPAL PORFOLIOS IN OTHE TERM OF OFFICE OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE OVERSEEN BY HELD BY AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR ------- -------------- ----------- --------------- -------- -------- Richard A. Wedemeyer Director/Trustee 2-26-01 to Vice President -- Finance 106 Mr. Wedemeyer is a 7337 E. Doubletree Ranch Rd. Present and Administration -- of Trustee of Touchstone Scottsdale, AZ 85258 the Channel Corporation, an Consulting Group (1997 Age: 65 importer of specialty alloy to present) and the GCG aluminum products (1996 to Trust (February 2002 to present). Mr. Wedemeyer present). was formerly Vice President -- Finance and Administration -- of Performance Advantage, Inc., a provider of training and consultation services (1992 to 1996), and Vice President -- Operations and Administration of Jim Henson Productions (1979 to 1997). Mr. Wedemeyer was a Trustee of each of the funds managed by ING Investment Management Co. LLC. (1998 to 2001). Interested Directors: R. Glenn Hilliard(1) Director/Trustee 2-26-02 to Chairman and CEO of ING 106 Mr. Hilliard serves as a ING Americas Present Americas and a member of member of the Board of 5780 Powers Ferry Road, NW its Americas Executive Directors of the Clemson Atlanta, GA 30327 Committee (1999 to University Foundation, Age: 59 present). Mr. Hilliard was the Board of Councilors formerly Chairman and CEO for the Carter Center, a of ING North America, Trustee of the Woodruff encompassing the U.S., Arts Center and sits on Mexico and Canada regions the Board of Directors (1994 to 1999). for the High Museum of Art. Mr. Hilliard is also a Trustee of the GCG Trust (February 2002 to present).
119 DIRECTOR/TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) - --------------------------------------------------------------------------------
NUMBER OF PRINCIPAL PORFOLIOS IN OTHE TERM OF OFFICE OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE OVERSEEN BY HELD BY AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR ------- -------------- ----------- --------------- -------- -------- Thomas J. McInerey(2) Director/Trustee 2-26-01 to Chief Executive Officer, ING 156 Mr. McInerney serves as 7337 E. Doubletree Ranch Rd. Present U.S. Financial Services a Director/Trustee of Scottsdale, AZ 85258 (October 2001 to present); Aeltus Investment Age: 45 President, Chief Executive Management, Inc. (1997 Officer, and Director of to present); each of the Northern Life Insurance Aetna Funds (April 2002 Company (2001 to present); to present); Ameribest and President and Director Life Insurance Co. (2001 of Aetna Life Insurance and to present); Equitable Annuity Company (1997 to Life Insurance Co. (2001 present), Aetna Retirement to present); First Holdings, Inc. (1997 to Columbine Life Insurance present), Aetna Investment Co. (2001 to present); Adviser Holding Co. (2000 Golden American Life to present), and Aetna Insurance Co. (2001 to Retail Holding Company present); Life Insurance (2000 to present). Mr. Company of Georgia (2001 McInerney was formerly to present); Midwestern General Manager and Chief United Life Insurance Executive Officer of ING Co. (2001 to present); Worksite Division (since ReliaStar Life Insurance December 2000 to October Co. (2001 to present); 2001); President of Aetna Security Life of Denver Financial Services (August (2001 to present); 1997 to December 2000); Security Connecticut Head of National Accounts Life Insurance Co. (2001 and Core Sales and to present); Southland Marketing for Aetna U.S. Life Insurance Co. (2001 Healthcare (April 1996 to to present); USG Annuity March 1997); Head of and Life Company (2001 Corporate Strategies for to present); United Life Aetna Inc. (July 1995 to and Annuity Insurance April 1996); and has held a Co. Inc (2001 to variety of line and present); and the GCG corporate staff positions Trust (February 2002 to since 1978. present). Mr. McInerney is a member of the Board of the National Commission on Retirement Policy, the Governor[0092]s Council on Economic Competitiveness and Technology of Connecticut, the Board of Directors of the Connecticut Business and Industry Association, the Board of Trustees of the Bushnell, the Board for the Connecticut Forum, and the Board of the Metro Hartford Chamber of Commerce, and is Chairman of Concerned Citizens for Effective Government.
120 DIRECTOR/TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) - --------------------------------------------------------------------------------
NUMBER OF PRINCIPAL PORFOLIOS IN OTHE TERM OF OFFICE OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE OVERSEEN BY HELD BY AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR ------- -------------- ----------- --------------- -------- -------- John G. Turner(3) Chairman and 10-29-99 President, Turner Investment 106 Mr. Turner serves as a 7337 E. Doubletree Ranch Rd. Director/Trustee to Present Company (since January member of the Board of Scottsdale, AZ 85258 2002). Mr. Turner was the GCG Trust. Mr. Age: 62 formerly Vice Chairman of Turner also serves as a ING Americas (2000 to Director of the Hormel 2001); Chairman and Chief Foods Corporation (May Executive Officer of 2000 to present), Shopko ReliaStar Financial Corp. and Stores, Inc. (August ReliaStar Life Insurance 1999 to present), and Company (1993 to 2000); M.A. Mortenson Co. Chairman of ReliaStar (March 2002 to present) United Services Life Insurance Company (1995 to 1998); Chairman of ReliaStar Life Insurance Company of New York (1995 to 2001); Chairman of Northern Life Insurance Company (1992 to 2000); Chairman and Director/Trustee of the Northstar affiliated investment companies (1993 to 2001) and Director, Northstar Investment Management Corporation and its affiliates (1993 to 1999).
- ---------- (1) Mr. Hilliard is an "interested person", as defined by the Investment Company Act of 1940, as amended (the "1940 Act"), because of his relationship with ING Americas, an affiliate of ING Investments, LLC. (2) Mr. McInerney is an "interested person", as defined by the 1940 Act, because of his affiliation with ING U.S. Worksite Financial Services, an affiliate of ING Investments, LLC. (3) Mr. Turner is an "interested person", as defined by the 1940 Act, because of his former affiliation with ING Americas, an affiliate of ING Investments, LLC. 121 DIRECTOR/TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) - --------------------------------------------------------------------------------
NUMBER OF PRINCIPAL PORFOLIOS IN OTHE TERM OF OFFICE OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE OVERSEEN BY HELD BY AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR ------- -------------- ----------- --------------- -------- -------- Officers: James M. Hennessy President, March President and Chief -- -- 7337 E. Doubletree Ranch Rd. Chief 2002 to Executive Officer of ING Scottsdale, AZ 85258 Executive Present Capital Corporation, LLC, Age: 52 Officer, and (for the ING Funds Services, LLC, ING Chief ING Funds) Advisors, Inc., ING Operating Investments, LLC, Lexington Officer Funds Distributor, Inc., Express America T.C. Inc. President, February and EAMC Liquidation Corp. Chief 2001 to (since December 2001); Executive March Executive Vice President and Officer, and 2002 (for Chief Operating Officer of Chief the Pilgrim ING Quantitative Operating Funds) Management, Inc. (since Officer October 2001) and ING Funds Distributor, Inc. (since Chief July 2000 June 2000). Formerly, Senior Operating to Executive Vice President Officer February (June 2000 to December 2001 (for 2000) and Secretary (April the Pilgrim 1995 to December 2000) of Funds) ING Capital Corporation, LLC, ING Funds Services, LLC, ING Investments, LLC, ING Advisors, Inc., Express America T.C. Inc., and EAMC Liquidation Corp.; and Executive Vice President, ING Capital Corporation, LLC and its affiliates (May 1998 to June 2000) and Senior Vice President, ING Capital Corporation, LLC and its affiliates (April 1995 to April 1998). Stanley D. Vyner Executive March Executive Vice President of -- -- 7337 E. Doubletree Ranch Rd. Vice President 2002 to ING Advisors, Inc. and ING Scottsdale, AZ 85258 Present Investments, LLC (since July Age: 51 (for the 2000) and Chief Investment ING Funds) Officer of the International Portfolios, ING Investments, Executive July 1996 LLC (since July 1996). Vice President to March Formerly, President and 2002 (for Chief Executive Officer of the ING Investments, LLC international (August 1996 to August portfolios 2000). of the Pilgrim Funds)
122 DIRECTOR/TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) - --------------------------------------------------------------------------------
NUMBER OF PRINCIPAL PORFOLIOS IN OTHE TERM OF OFFICE OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE OVERSEEN BY HELD BY AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR ------- -------------- ----------- --------------- -------- -------- Mary Lisanti Executive March Executive Vice President of -- -- 7337 E. Doubletree Ranch Rd. Vice President 2002 to ING Investments, LLC and Scottsdale, AZ 85258 Present ING Advisors, Inc. (since Age: 45 (for the November 1999) and of ING ING Funds) Quantitative Management, Inc. (since July 2000); Chief Executive May 1998 Investment Officer of the Vice President to March Domestic Equity Portfolios, 2002 (for ING Investments, LLC (since the 1999). Formerly, Executive domestic Vice President and Chief equity Investment Officer for the portfolios Domestic Equity Portfolios of the of Northstar Investment Pilgrim Management Corporation, Funds) whose name changed to Pilgrim Advisors, Inc. and subsequently became part of ING Investments, LLC (May 1998 to October 1999); Portfolio Manager with Strong Capital Management (May 1996 to 1998); a Managing Director and Head of Small- and Mid- Capitalization Equity Strategies at Bankers Trust Corp. (1993 to 1996). Michael J. Roland Executive March Executive Vice President, -- -- 7337 E. Doubletree Ranch Rd. Vice 2002 to Chief Financial Officer and Scottsdale, AZ 85258 President, Present Treasurer of ING Funds Age: 43 Assistant (for the Services, LLC, ING Funds Secretary and ING Funds) Distributor, Inc., ING Principal Advisors, Inc., ING Financial Investments, LLC, ING Offier Quantitative Management, Inc., Lexington Funds Senior Vice June 1998 Distributor, Inc., Express President and to March America T.C. Inc. and EAMC Principal 2002 (for Liquidation Corp. (since Financial the Pilgrim December 2001). Formerly, Officer Funds) Senior Vice President, ING Funds Services, LLC, ING Investments, LLC, and ING Funds Distributor, Inc. (June 1998 to December 2001) and Chief Financial Officer of Endeavor Group (April 1997 to June 1998). Ralph G. Norton III Senior Vice March Senior Vice President of ING -- -- 7337 E. Doubletree Ranch Rd. President 2002 to Investment Advisors, Inc. Scottsdale, AZ 85258 Present and ING Investments, LLC Age: 42 (for the (since October 2001) and ING Funds) Chief Investment Officer of the Fixed Income Portfolios, Senior Vice August ING Investments, LLC (since President 2001 to October 2001). Formerly, March Senior Market Strategist, 2002 (for Aeltus Investment the fixed Management, Inc. (January income 2001 to August 2001) and portfolios Chief Investment Officer, of the ING Investments, LLC (1990 Pilgrim to January 2001). Funds)
123 DIRECTOR/TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) - --------------------------------------------------------------------------------
NUMBER OF PRINCIPAL PORFOLIOS IN OTHE TERM OF OFFICE OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE OVERSEEN BY HELD BY AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR ------- -------------- ----------- --------------- -------- -------- Robert S. Naka Senior Vice March Senior Vice President and -- -- 7337 E. Doubletree Ranch Rd. President and 2002 to Assistant Secretary of ING Scottsdale, AZ 85258 Assistant Present Funds Services, LLC, ING Age: 38 (for the Funds Distributor, Inc., ING ING Funds) Advisors, Inc., ING Investments, LLC, ING Senior Vice November Quantitative Management, President and 1999 to Inc. (since October 2001) Assistant March and Lexington Funds Secretary 2002 (for Distributor, Inc. (since the Pilgrim December 2001). Formerly, Funds) Vice President, ING Investments, LLC (April 1997 Assistant July 1994 to October 1999), ING Funds Secretary to Services, LLC (February 1997 November to August 1999) and 1999 (for Assistant Vice President, ING the Pilgrim Funds Services, LLC (August Funds) 1995 to February 1997). Robyn L. Ichilov Vice President March Vice President of ING Funds -- -- 7337 E. Doubletree Ranch Rd. and Treasurer 2002 to Services, LLC (since October Scottsdale, AZ 85258 Present 2001) and ING Investments, Age: 34 (for the LLC (since August 1997); ING Funds) Accounting Manager, ING Investments, LLC (since Vice President May 1998 November 1995). and Treasurer to March 2002 (for the Pilgrim Funds) Vice President November 1997 to May 1998 (for the Pilgrim Funds) Kimberly A. Anderson Vice President March Vice President for ING -- -- 7337 E. Doubletree Ranch Rd. and Secretary 2002 to Quantitative Management, Scottsdale, AZ 85258 Present Inc. (since October 2001); Age: 37 (for the Vice President and Assistant ING Funds) Secretary of ING Funds Services, LLC, ING Funds February Distributor, Inc., ING 2001 to Advisors, Inc., ING March Investments, LLC (since 2002 (for October 2001) and the Pilgrim Lexington Funds Distributor, Funds) Inc. (since December 2001). Formerly, Assistant Vice President of ING Funds Services, LLC (November 1999 to January 2001) and has held various other positions with ING Funds Services, LLC for more than the last five years.
124 DIRECTOR/TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) - --------------------------------------------------------------------------------
NUMBER OF PRINCIPAL PORFOLIOS IN OTHE TERM OF OFFICE OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE OVERSEEN BY HELD BY AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR ------- -------------- ----------- --------------- -------- -------- Lourdes R. Bernal Vice President March Vice President of ING -- -- 7337 E. Doubletree Ranch Rd. 2002 to Investments, LLC (since Scottsdale, AZ 85258 Present January 2002). Prior to Age: 32 (for joining ING Investments, LLC certain in 2002, Ms. Bernal was a ING Funds) Senior Manager in the Investment Management February Practice, 2002 to PricewaterhouseCoopers LLP Present (July 2000 to December (for the 2001); Manager, Pilgrim PricewaterhouseCoopers LLP Funds) (July 1998 to July 2000); Manager, Coopers & Lybrand LLP (July 1996 to June 1998); Senior Associate, Coopers & Lybrand LLP (July 1992 to June 1996); and Associate, Coopers & Lybrand LLP (August 1990 to June 1992). Todd Modic Assistant Vice March Director of Financial -- -- 7337 E. Doubletree Ranch Rd. President 2002 to Reporting of ING Scottsdale, AZ 85258 Present Investments, LLC (since Age: 34 (for March 2001). Formerly, certain Director of Financial ING Funds) Reporting, Axient Communications, Inc. (May August 2000 to January 2001) and 2001 to Director of Finance, March Rural/Metro Corporation 2002 (for (March 1995 to May 2000). the Pilgrim Funds) Maria M. Anderson Assistant Vice March Assistant Vice President of -- -- 7337 E. Doubletree Ranch Rd. President 2002 to ING Funds Services, LLC Scottsdale, AZ 85258 Present (since October 2001). Age: 43 (for Formerly, Manager of Fund certain Accounting and Fund ING Funds) Compliance, ING Investments, LLC (September August 1999 to November 2001); 2001 to Section Manager of Fund March Accounting, Stein Roe 2002 (for Mutual Funds (July 1998 to the Pilgrim August 1999); and Financial Funds) Reporting Analyst, Stein Roe Mutual Funds (August 1997 to July 1998).
125 DIRECTOR/TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) - --------------------------------------------------------------------------------
NUMBER OF PRINCIPAL PORFOLIOS IN OTHE TERM OF OFFICE OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE OVERSEEN BY HELD BY AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR ------- -------------- ----------- --------------- -------- -------- Jeffrey Bernstein Senior Vice March Senior Vice President (since -- -- 7337 E. Doubletree Ranch Rd. President and 2002 to October 1999) of ING Scottsdale, Arizona 85258 Senior Present Investments, LLC and Senior Age: 35 Portfolio (for Portfolio Manager (since Manager certain October 2001) for ING (Worldwide ING Funds) Advisors, Inc. and ING Growth Fund) Investments, LLC. Formerly, June 2000 Portfolio Manager, to March Northstar Investment 2002 (for Management Corporation, certain whose name changed to Pilgrim Pilgrim Advisors, Inc. and Funds) subsequently became part of ING Investments, LLC (May 1998 to October 1999); Portfolio Manager, Strong Capital Management (1997 to May 1998); and Portfolio Manager, Berkeley Capital (1995 to 1997). James A. Vail Senior Vice March Senior Vice President for -- -- 7337 E. Doubletree Ranch Rd. President and 2002 to ING Investments, LLC (since Scottsdale, Arizona 85258 Portfolio Present June 2001) and Portfolio Age: 57 Manager (for Manager of ING (Precious certain Investments, LLC and ING Metals Fund) ING Funds) Advisors, Inc. (since October 2001). Formerly, Vice June 2000 President, Lexington to March Management Corporation 2002 (for (which was acquired by ING certain Investments, LLC's parent Pilgrim company in July 2000) (1991 Funds) to 2000); and has held investment research positions with Chemical Bank, Oppenheimer & Co., Robert Fleming, Inc. and Beacon Trust Company, where he was a Senior Investment Analyst. Richard T. Saler Senior Vice March Senior Vice President and -- -- 7337 E. Doubletree Ranch Rd. President and 2002 to Director of International Scottsdale, Arizona 85258 Senior Present Equity Investment Strategy Age: 40 Portfolio (for of ING Investments, LLC and Manager certain ING Advisors, Inc. (since (Worldwide ING Funds) October 2001). Formerly, Growth, Senior Vice President and International, June 2000 Director of International Emerging to March Equity Strategy, Lexington Countries, 2002 (for Management Corporation International certain (which was acquired by ING Core Growth, Pilgrim Investments, LLC's parent Asia-Pacific Funds) company in July 2000) (1986 Equity, and to July 2000). Russia Funds)
126 DIRECTOR/TRUSTEE AND OFFICER INFORMATION (Unaudited) (Continued) - --------------------------------------------------------------------------------
NUMBER OF PRINCIPAL PORFOLIOS IN OTHE TERM OF OFFICE OCCUPATION(S) FUND COMPLEX DIRECTORSHIPS NAME, ADDRESS POSITION(S) AND LENGTH OF DURING THE OVERSEEN BY HELD BY AND AGE HELD WITH FUND TIME SERVED PAST FIVE YEARS DIRECTOR DIRECTOR ------- -------------- ----------- --------------- -------- -------- Philip A. Schwartz Senior Vice March Senior Vice President and -- -- 7337 E. Doubletree Ranch Rd. President and 2002 to Director of International Scottsdale, Arizona 85258 Senior Present Equity Investment Strategy Age: 40 Portfolio (for for ING Investments, LLC Manager certain and ING Advisors, Inc. (since (Worldwide ING Funds) October 2001). Formerly, Growth, Senior Vice President and International, June 2000 Director of International Emerging to March Equity Strategy, Lexington Countries, 2002 (for Management Corporation International certain (which was acquired by ING Core Growth, Pilgrim Investments, LLC's parent Asia-Pacific Funds) company in July 2000); Vice Equity, and President of European Russia Funds) Research Sales, Cheuvreux de Virieu in Paris and New York (prior to 1993).
127 ING Funds Distributor, Inc. offers the funds listed below. Investors may obtain a copy of a prospectus of any ING Fund by calling ING Funds Distributor, Inc. at (800) 992-0180. Please read the prospectus carefully before investing or sending money. INTERNATIONAL EQUITY DOMESTIC EQUITY VALUE FUNDS ING Asia-Pacific Equity Fund ING Financial Services Fund ING Emerging Countries Fund ING Large Company Value Fund ING European Equity Fund ING MagnaCap Fund ING International Fund ING Tax Efficient Equity Fund ING International Growth Fund ING Value Opportunity Fund ING International SmallCap Growth Fund ING SmallCap Value Fund ING International Value Fund ING MidCap Value Fund ING Precious Metals Fund ING Russia Fund DOMESTIC EQUITY AND INCOME FUNDS ING Equity and Income Fund INTERNATIONAL GLOBAL EQUITY ING Convertible Fund ING Global Technology Fund ING Balanced Fund ING Global Real Estate Fund ING Growth and Income Fund ING Worldwide Growth Fund FIXED INCOME FUNDS DOMESTIC EQUITY FUNDS ING Bond Fund ING Growth Fund ING Classic Money Market Fund* ING Growth + Value Fund ING Government Fund ING Growth Opportunities Fund ING GNMA Income Fund ING LargeCap Growth Fund ING High Yield Opportunity Fund ING MidCap Opportunities Fund ING High Yield Bond Fund ING Small Company Fund ING Intermediate Bond Fund ING SmallCap Opportunities Fund ING Lexington Money Market Trust* ING Technology Fund ING National Tax Exempt Bond Fund ING Biotechnology Fund ING Money Market Fund* ING Aeltus Money Market Fund* DOMESTIC EQUITY INDEX FUNDS ING Strategic Income Fund ING Index Plus LargeCap Fund ING Index Plus MidCap Fund GENERATION FUNDS ING Index Plus SmallCap Fund ING Ascent Fund ING Research Enhanced Index Fund ING Crossroads Fund ING Legacy Fund LOAN PARTICIPATION FUNDS ING Prime Rate Trust ING Senior Income Fund * An investment in the Fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. INVESTMENT MANAGER ING Investments, LLC 7337 E. Doubletree Ranch Road Scottsdale, Arizona 85258 ADMINISTRATOR ING Funds Services, LLC 7337 E. Doubletree Ranch Road Scottsdale, Arizona 85258 DISTRIBUTOR ING Funds Distributor, Inc. 7337 E. Doubletree Ranch Road Scottsdale, Arizona 85258 1-800-992-0180 TRANSFER AGENT DST Systems, Inc. P.O. Box 419368 Kansas City, Missouri 64141-6368 CUSTODIAN Brown Brothers Harriman 40 Water Street Boston, Massachusetts 02109-3661 LEGAL COUNSEL Dechert 1775 Eye Street, N.W. Washington, D.C. 20006 INDEPENDENT ACCOUNTANTS PricewaterhouseCoopers LLP 1670 Broadway, Suite 1000 Denver, Colorado 80202 Prospectus containing more complete information regarding the Funds, including charges and expenses, may be obtained by calling ING Funds Distributor, Inc., Distributor, at 1-800-992-0180. Please read the prospectus carefully before you invest or send money. [LION LOGO] ING FUNDS INTLSEMIANN043002-062402 -----END PRIVACY-ENHANCED MESSAGE-----