Notes to Financial Statements (Unaudited) CALIFORNIA SERIES
The cost of investments for federal income tax purposes at February 28, 1997 was
$140,137,566 and accordingly, net unrealized appreciation of investments for
federal income tax purposes was $11,973,375 (gross unrealized
appreciation--$12,485,047; gross unrealized depreciation-- $511,672).
For federal income tax purposes, the Series has a capital loss carryforward as
of August 31, 1996 of approximately $4,191,500 which expires in 2003. Such
carryforward is after utilization of approximately $691,000 of net taxable gains
realized and recognized during the year ended August 31, 1996. Accordingly, no
capital gains distribution is expected to be paid to shareholders until net
gains have been realized in excess of such carryforward.
Note 5. Capital
The Series offers Class A, Class B, Class C and Class Z shares. Class A shares
are sold with a front-end sales charge of up to 3%. Class B shares are sold with
a contingent deferred sales charge which declines from 5% to zero depending on
the period of time the shares are held. Class C shares are sold with a
contingent deferred sales charge of 1% during the first year. Class B shares
will automatically convert to Class A shares on a quarterly basis approximately
seven years after purchase. A special exchange privilege is also available for
shareholders who qualified to purchase Class A shares at net asset value.
Effective September 18, 1996 the Fund commenced offering Class Z shares. Class Z
shares are not subject to any sales or redemption charge and are offered
exclusively for sale to a limited group of investors. The Fund has authorized an unlimited number of shares of
beneficial interest for
each class at $.01 par value per share.
Transactions in shares of beneficial interest for the period ended February 28,
1997 and the fiscal year ended August 31, 1996 were as follows:
Class A Shares